I. Industry Segments

We provide our software solutions through three major business segments, which are further broken down into a total of four major product and service groups. The three business segments are (1) Enterprise Resource Planning (“ERP”), (2) Supply Chain Management (“SCM”), and (3) Information Technology (“IT”) Consulting.

The ERP segment consists of (i) American Software ERP, which provides purchasing and materials management, customer order processing, financial, e-commerce and traditional manufacturing solutions, and (ii) New Generation Computing (“NGC”), which provides industry-specific business software to both retailers and manufacturers in the apparel, sewn products and furniture industries. The SCM segment, which consists of Logility, a wholly-owned subsidiary, as well as its subsidiary, DMI, provides collaborative supply chain solutions to streamline and optimize the forecasting, inventory, production, supply, allocation, distribution and management of products between trading partners. The IT Consulting segment consists of The Proven Method, Inc., an IT staffing and consulting services firm. We also provide support for our software products, such as software enhancements, documentation, updates, customer education, consulting, systems integration services, maintenance and support services.

Our chief operating decision maker is the Principal Executive Officer (“PEO”). While the PEO is apprised of a variety of financial metrics and information, we manage our business primarily on a segment basis, with the PEO evaluating performance based upon segment operating profit or loss that includes an allocation of common expenses, but excludes certain unallocated expenses, which are included in the ERP segment.

All of our revenues are derived from external customers. We do not have any inter-segment revenue. Our income taxes and dividends are paid at a consolidated level. Consequently, it is not practical to show these items by operating segment.

In the following table, we have broken down the intersegment transactions applicable to the three months ended July 31, 2017 and 2016 (in thousands):


	Three Months Ended July 31,
	2017			2016
Revenues:
Enterprise Resource Planning	$	2,806		$	3,008
Collaborative Supply Chain Management		19,711			19,411
IT Consulting		4,369			5,014

	$	26,886		$	27,433

Operating income (loss) before intersegment eliminations:
Enterprise Resource Planning	$	(1,515	)	$	(1,416	)
Collaborative Supply Chain Management		4,904			2,852
IT Consulting		233			210

	$	3,622		$	1,646

Intersegment eliminations:
Enterprise Resource Planning	$	(956	)	$	(906	)
Collaborative Supply Chain Management		956			896
IT Consulting		—			10

	$	—		$	—

Operating income (loss) after intersegment eliminations:
Enterprise Resource Planning	$	(2,471	)	$	(2,322	)
Collaborative Supply Chain Management		5,860			3,748
IT Consulting		233			220

	$	3,622		$	1,646

Capital expenditures:
Enterprise Resource Planning	$	114		$	42
Collaborative Supply Chain Management		17			102
IT Consulting		2			—

	$	133		$	144

Capitalized Software:
Enterprise Resource Planning	$	—		$	—
Collaborative Supply Chain Management		1,287			636
IT Consulting		—			—

	$	1,287		$	636

Depreciation and amortization:
Enterprise Resource Planning	$	56		$	144
Collaborative Supply Chain Management		1,328			1,261
IT Consulting		1			2

	$	1,385		$	1,407

Earnings (loss) before income taxes:
Enterprise Resource Planning	$	(1,077	)	$	(729	)
Collaborative Supply Chain Management		5,065			2,825
IT Consulting		233			210

	$	4,221		$	2,306

Major Customer

No one customer accounted for more than 10% of total revenues for the three months ended July 31, 2017 and 2016.