Business Segments

6 Months Ended

Jan. 31, 2012

Business Segments [Abstract]

Business Segments

8. Business Segments

The Company's business segments are internally organized primarily by geographic location of the operating facilities. In accordance with GAAP regarding disclosures about business segments, the Company has segregated the Netherlands operation and the United States operations into separate reportable segments. Segment revenue for the Netherlands operation includes only revenue generated out of the Netherlands subsidiary and does not include rest of world revenue attributable to the United States operations. The Company evaluates the performance of and allocates resources to each of the segments based on their operating results. Unaudited information concerning our operating business segments is as follows for the periods indicated (in thousands):

		Three months ended January 31, 2012
		United States		Netherlands			Eliminations				Consolidated
Revenue - external customers	$	5,306		$	195		$	-			$	5,501
Revenue - intercompany		68			8			(76	)	1		-
Cost of revenue		1,222			105			(76	)	1		1,251
Operating expense		3,970			110			-				4,080
Interest expense		59			35			(35	)	2		59
Other expense (income)		(45	)		(1	)		35		2		(11	)
Income (loss) before provision
for income taxes	$	168		$	(46	)	$	-			$	122
		Six months ended January 31, 2012
		United States		Netherlands			Eliminations				Consolidated
Revenue - external customers	$	10,511		$	400		$	-			$	10,911
Revenue - intercompany		140			18			(158	)	1		-
Cost of revenue		2,343			202			(158	)	1		2,387
Operating expense		7,623			235			-				7,858
Interest expense		121			75			(75	)	2		121
Other expense (income)		(91	)		(1	)		75		2		(17	)
Income (loss) before provision
for income taxes	$	655		$	(93	)	$	-			$	562
					As of January 31, 2012
		United States		Netherlands			Eliminations				Consolidated
Total assets	$	21,153		$	203		$	(1,473	)	3	$	19,883

1 The Netherlands segment charges the United States segment for customer support services and the United States segment charges the Netherlands segment for software royalties.

2 The United States segment charges the Netherlands segment for interest on the intercompany loan at a rate of 8%.

3 Includes $1,315,000 for a United States intercompany note receivable and $158,000 for intercompany trade accounts recevable.

		Three months ended January 31, 2011
		United States		Netherlands			Eliminations				Consolidated
Revenue - external customers	$	5,051		$	187		$	-			$	5,238
Revenue - intercompany		-			-			-				-
Cost of revenue		1,060			26			-				1,086
Operating expense		3,731			167			-	1			3,898
Interest expense		203			-			-				203
Other expense (income)		(6	)		-			-				(6	)
Income (loss) before provision
for income taxes	$	63		$	(6	)	$	-			$	57
		Six months ended January 31, 2011
		United States		Netherlands			Eliminations				Consolidated
Revenue - external customers	$	10,189		$	373		$	-			$	10,562
Revenue - intercompany		-			-			-				-
Cost of revenue		2,204			49			-				2,253
Operating expense		7,232			378			-	1			7,610
Interest expense		404			-			-				404
Other expense (income)		(6	)		-			-				(6	)
Income (loss) before provision
for income taxes	$	355		$	(54	)	$	-			$	301
					As of January 31, 2011
		United States		Netherlands			Eliminations				Consolidated
Total assets	$	22,368		$	342		$	(1,611		) 2	$	21,099

1 The United States segment charges the Netherlands segment for software royalties at 35% of revenue, which off-set in the overhead elimination and are included in the United States receivables.

2 Includes $1,480,000 for the United States intercompany note receivable and $131,000 for