Business Segments Information

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Business Segment Information / Major Customers

Business Segment Information / Major Customers

As part of its integration of Qumu’s enterprise video communications product line and preparation for the introduction in the second quarter of 2012 of Signal, its internally developed secure online content delivery solution, the Company modified its reporting structure during the first quarter of 2012 to align with changes in how the business is managed. Reportable segments are defined primarily by the nature of the Company’s products and markets. The Company was previously organized under one reportable segment which consisted of its disc publishing business. As a result of the changes in the business described above, the Company has identified two reportable segments: disc publishing and enterprise content distribution software (previously referred to as online publishing). The Company’s disc publishing business supplies customers in North America, Europe and Asia with industry-leading solutions that archive, distribute and protect content on CDs, DVDs and Blu-ray Discs. The Company’s enterprise content distribution software business enables online distribution of content through two delivery systems, 1) live and on-demand streaming video through its enterprise video communications product line, acquired as part of the acquisition of Qumu, and 2) secure push-based content delivery to tablets, smart phones and personal computers through its Signal secure online content delivery solution.

Management evaluates segment performance based on revenue and operating income (loss). The measurement of operating income (loss) excludes interest income and expense, other non-operating items and income taxes. The operating income (loss) for the Company’s enterprise content distribution software and disc publishing segments include all the direct costs of each business. Additionally, the disc publishing segment includes all corporate and other unallocated amounts, a portion of which were incurred to support the enterprise content distribution software segment. The Company has not provided specific asset information by segment, as it is not regularly provided to the Company’s chief operating decision maker for review at a segment specific level.

Net revenue and operating income (loss) were as follows (in thousands):

Reportable Segments	Disc Publishing		Enterprise Content Distribution Software			Total
2012
Revenues	$	69,607	$	9,836		$	79,443
Operating income (loss) (1)	3,484		(43,228		)	(39,744		)
2011
Revenues	81,874		1,760			83,634
Operating income (loss) (1)	9,659		(5,211		)	4,448
2010
Revenues	88,731		—			88,731
Operating income (loss) (2)	12,572		(1,000		)	11,572

1. Operating loss for the enterprise content distribution software segment in 2012 and 2011 includes amortization expense of $1.7 million and $0.4 million, respectively, for amortization of intangible assets established as part of the Qumu acquisition. Operating loss for this segment also includes recognized asset impairment charges consisting of $22.2 million of goodwill and $7.3 million of other intangible assets for 2012. Operating income for the disc publishing segment in 2011 includes $1.7 million of nonrecurring transaction costs associated with the acquisition of Qumu. See Note 9, “Goodwill and Intangible Assets,” for additional information regarding the Company’s intangible assets.

2. Operating loss for the enterprise content distribution software segment in 2010 consists of expenses incurred to develop and support the Company's Signal secure online content delivery solution.

The following represents sales amounts and related accounts receivable balances generated by the Company’s unaffiliated customers that provided more than 10% of consolidated revenues (in thousands):

Revenues	Years Ended December 31,
	2012		2011		2010
Customer A	$	8,044	$	13,667	$	15,577

Accounts Receivable	December 31,
	2012		2011		2010
Customer A	$	369	$	430	$	2,045

The Company’s revenues from each of its principal geographic regions are presented based on customer location as follows (in thousands):

Revenues by geography	Years Ended December 31,
	2012		2011		2010
North America	$	51,413	$	51,706	$	57,301
Europe	19,414		22,083		23,050
Other (Asia and Latin America)	8,616		9,845		8,380
Total	$	79,443	$	83,634	$	88,731

Net property and equipment of the Company were located as follows (in thousands):

Net property by geography	December 31,
	2012		2011
North America	$	5,553	$	5,664
Germany	356		453
Asia	57		60
Total	$	5,966	$	6,177

The Company’s revenues from each of its principal products and services were as follows (in thousands):

	Years Ended December 31,
	2012				2011				2010
Disc publishing
Disc publishing equipment:
Producer	$	12,285	15	%	$	15,788	19	%	$	15,339	17	%
Professional	9,517		12	%	11,939		14	%	21,928		25	%
Desktop	1,977		2	%	2,697		3	%	3,575		4	%
Total disc publishing equipment	23,779		30	%	30,424		36	%	40,842		46	%
Recurring:
Consumables and parts	33,819		43	%	40,038		48	%	37,904		43	%
Service	12,009		15	%	11,412		14	%	9,985		11	%
Total recurring	45,828		58	%	51,450		62	%	47,889		54	%
Total disc publishing	69,607		88	%	81,874		98	%	88,731		100	%
Enterprise content distribution software
Software licenses and appliances	4,320		5	%	693		1	%	—		—	%
Service	5,516		7	%	1,067		1	%	—		—	%
Total enterprise content distribution software	9,836		12	%	1,760		2	%	—		—	%
Total revenue	$	79,443	100	%	$	83,634	100	%	$	88,731	100	%