Business Segments

12 Months Ended

Dec. 31, 2011

Business Segments

Business Segments

(13)Business Segments

As of December 31, 2011, we operated through five reportable business segments: (i) Learning Solutions, (ii) Professional & Technical Services, (iii) Sandy Training & Marketing (“Sandy”), (iv) RWD, and (v) Energy Services. Our Learning Solutions segment represents an aggregation of two operating groups in accordance with the aggregation criteria in U.S. GAAP, while all of the other reportable segments each represent one operating segment. We are organized by operating group, primarily based upon the markets served by each group and/or the services performed. Each operating group consists of business units which are focused on providing specific products and services to certain classes of customers or within targeted markets. Marketing and communications, accounting, finance, legal, human resources, information systems and other administrative services are organized at the corporate level. Business development and sales resources are aligned with operating groups to support existing customer accounts and new customer development.

Effective October 1, 2011, we made two management reporting changes which resulted in a change to our reportable segments. Our Learning Solutions group and our Europe group which were both formerly part of the Manufacturing & BPO segment are aggregated into a separate segment named “Learning Solutions.” In addition, our Manufacturing group, which was also part of the Manufacturing & BPO segment, assumed management responsibility for the former Process & Government group and this newly combined group is a separate reportable segment named “Professional & Technical Services.” We have reclassified the segment financial information herein for all prior years to reflect this change and conform to the current year’s presentation. Further information regarding each business segment is discussed below. We continually review our reportable business segments and change them from time to time as appropriate to reflect organizational changes.

In connection with the acquisition of RWD on April 15, 2011, a portion of the acquired business constitutes a separate reportable segment which is named RWD, and certain other business units of RWD are included in the Professional & Technical Services and Sandy segments.

Learning Solutions.The Learning Solutions segment delivers training, curriculum design and development, e-Learning services, system hosting, training business process outsourcing and consulting services primarily to large companies in the electronics and semiconductors, healthcare, software, financial and other industries as well as to government agencies. This segment’s ability to deliver a wide range of training services on a global basis allows it to take over the entire learning function for the client, including their training personnel.

Professional & Technical Services. Consisting of our former Manufacturing and Process & Government groups, this segment has over four decades of experience providing training, consulting, engineering and technical services, including lean consulting, emergency preparedness, safety and regulatory compliance, chemical demilitarization and environmental services primarily to large companies in the manufacturing, steel, pharmaceutical and petrochemical industries,  federal and state government agencies and large government contractors. This segment also provides services to users of alternative fuels, including designing and constructing LNG and hydrogen fueling stations, as well as supplying fuel and equipment.

Sandy Training & Marketing.The Sandy segment provides custom product sales training and has been a leader in serving manufacturing customers in the U.S. automotive industry for over 30 years. Sandy provides custom product sales training designed to better educate customer sales forces with respect to new vehicle features and designs, in effect rapidly increasing the sales force knowledge base and enabling them to address detailed customer queries. Furthermore, Sandy helps our clients assess their customer relationship marketing strategy, measure performance against competitors and connect with their customers on a one-to-one basis. This segment also provides technical training services to automotive customers.

RWD. The RWD segment represents a portion of the consulting business acquired from RWD Technologies, LLC in April 2011. Certain of the other acquired RWD business units are managed within the Professional & Technical Services and Sandy segments discussed above. The RWD segment provides human capital management and IT consulting services, end-user training, change management, knowledge management and operator effectiveness management solutions in industries such as manufacturing, aerospace, healthcare, life sciences, consumer products, financial, telecommunications, services and higher education as well as the public sector.

Energy Services. The Energy Services segment provides engineering services, products and training primarily to electric power utilities. Our proprietary EtaProTM Performance Monitoring and Optimization System provides a suite of performance solutions for power generation plants and is installed at approximately 900 power generating units in over 30 countries. In addition to providing custom training solutions, this segment provides web-based training through our GPiLearnTM portal to over 30,000 power plant personnel in the U.S. and in over 40 countries.

We do not allocate the following items to the segments: other income and interest expense; certain corporate selling, general and administrative expense; and income tax expense.  Inter-segment revenue is eliminated in consolidation and is not significant.

The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated income before income tax expense (in thousands):

	Years ended December 31,
	2011			2010			2009
Revenue:
Learning Solutions	$	130,392		$	118,922		$	73,172
Professional & Technical Services	85,285			70,893			77,760
Sandy Training & Marketing	54,604			47,153			45,634
RWD	40,079			—			—
Energy Services	22,807			22,958			22,674
	$	333,167		$	259,926		$	219,240
Operating income (loss):
Learning Solutions (a)	$	10,249		$	9,672		$	3,417
Professional & Technical Services (a)	8,067			3,824			(5,366		)
Sandy Training & Marketing	3,410			1,890			2,411
RWD	898			—			—
Energy Services	5,671			5,468			4,474
Corporate and other	(1,910		)	(1,630		)	(1,808		)
Gain on reversal of deferred rent liability	1,041			—			—
Gain on change in fair value of contingent consideration, net	517			1,313			—
Operating income	27,943			20,537			3,128
Interest expense	(209		)	(236		)	(217		)
Other income	657			551			484
Income before income tax expense	$	28,391		$	20,852		$	3,395

(a)During the year ended December 31, 2009, we recognized a goodwill and intangible asset impairment loss totaling $10,163,000, of which $2,079,000 was attributable to our Learning Solutions segment and $8,084,000 was attributable to our Professional & Technical Services segment.

Additional information relating to our business segments is as follows (in thousands):

	December 31,
	2011		2010
Identifiable assets:
Learning Solutions	$	95,389	$	92,258
Professional & Technical Services	59,675		55,204
Sandy Training & Marketing	16,819		19,151
RWD	25,747		—
Energy Services	13,946		16,583
Total assets	$	211,576	$	183,196

Corporate and other assets which consist primarily of cash and cash equivalents, other assets, and deferred tax assets and liabilities are allocated to the segments based on their respective percentage of consolidated revenues.

	Years ended December 31,
	2011		2010		2009
Additions to property, plant and equipment:
Learning Solutions	$	1,116	$	380	$	305
Professional & Technical Services	1,068		336		222
Sandy Training & Marketing	6		9		3
RWD	161		—		—
Energy Services	48		31		38
Corporate and other	1,576		775		606
	$	3,975	$	1,531	$	1,174
Depreciation and amortization:
Learning Solutions	$	2,695	$	1,824	$	833
Professional & Technical Services	294		327		533
Sandy Training & Marketing	424		478		581
RWD	871		—		—
Energy Services	353		386		397
Corporate and other	1,550		1,215		1,036
	$	6,187	$	4,230	$	3,380

Information about our revenue in different geographic regions, which are attributable to our wholly owned subsidiaries located in the United Kingdom, Canada, Mexico, Colombia, Singapore, China and India is as follows (in thousands):

	Years ended December 31,
	2011		2010		2009
United States	$	274,010	$	214,194	$	188,181
United Kingdom	50,969		39,734		24,163
Other	8,188		5,998		6,896
	$	333,167	$	259,926	$	219,240

Information about our total assets in different geographic regions is as follows (in thousands):

	December 31,
	2011		2010
United States	$	165,482	$	151,168
United Kingdom	39,033		28,441
Other	7,061		3,587
	$	211,576	$	183,196