Segment reporting and concentrations

6 Months Ended

Jun. 30, 2011

Segment reporting and concentrations

7. Segment reporting and concentrations

For the three months and six months ended June 30, 2011, the Company’s operations are classified into two reportable segments: Content Services and IADS.

The Content Services segment provides business process, technology and consulting services to assist clients in creating, managing, using and distributing digital content.

In the second quarter of 2011, the Company launched its IADS segment to perform advanced data analysis. IADS operates through two divisions. The Synodex Division of IADS offers a range of data analysis services in the healthcare, medical and insurance areas. The docGenix division of IADS provides software products and services that facilitate the generation and analysis of standardized and non-standardized documents for swaps, derivatives, repos, securities lending, prime brokerage, investment management and clearing.

A significant portion of the Company’s revenues are generated from its production facilities in the Philippines, India, Sri Lanka and Israel.

Revenues from external customers and segment operating profit, and other reportable segment information were as follows (in thousands):

	Three months ended			Six months ended
	June 30, 2011			June 30, 2011
Revenues:
Content Services	$	16,257		$	30,958
IADS		-			-
Total consolidated	$	16,257		$	30,958
Income before provision for income taxes:
Content Services	$	1,246		$	1,330
IADS		(260	)		(260	)
Total consolidated	$	986		$	1,070

	June 30, 2011
Total assets:
Content Services	$	52,461
IADS		665
Total consolidated	$	53,126

The following table summarizes revenues by geographic region (determined based upon customer’s domicile) (in thousands):

	Three months ended				Six months ended
	June 30,				June 30,
	2011		2010		2011		2010
Unites States	$	11,101	$	9,755	$	20,385	$	20,312
United Kingdom		2,099		2,537		4,221		4,484
The Netherlands		2,088		1,813		4,280		3,683
Other - principally Europe		969		1,281		2,072		2,381
	$	16,257	$	15,386	$	30,958	$	30,860

Long-lived assets as of June 30, 2011 and December 31, 2010, respectively, by geographic regions are comprised of (in thousands):

	2011		2010
United States	$	1,432	$	1,066
Foreign countries:
Philippines		2,044		2,300
India		718		895
Sri Lanka		523		495
Israel		123		203
Total foreign		3,408		3,893
	$	4,840	$	4,959

Two customers generated approximately 31% and 25% of our revenues for the three months ended June 30, 2011 and 2010, respectively. Another customer accounted for less than 10% of  revenues for the three months ended June 30, 2011, and 13% of  revenues for the three months ended June 30, 2010.  No other customer accounted for 10% or more of revenues in either period. Further, for the three months ended June 30, 2011 and 2010, revenues from non-US customers accounted for 32% and 37%, respectively, of the Company's revenues.

Two customers generated approximately 32% and 25% of our revenues for the six months ended June 30, 2011 and 2010, respectively. Another customer accounted for less than 10% of  revenues for the six months ended June 30, 2011, and 12% of our revenues for the six months ended June 30, 2010. No other customer accounted for 10% or more of revenues in either period. Further, for the six months ended June 30, 2011 and 2010, revenues from non-US customers accounted for 34% of the Company's revenues.

A significant amount of the Company's revenues is derived from customers in the publishing industry. Accordingly, the Company's accounts receivable generally include significant amounts due from such customers. In addition, as of June 30, 2011, approximately 35% of the Company's accounts receivable were from foreign (principally European) customers and 47% of accounts receivable were due from three customers. As of December 31, 2010, approximately 34% of the Company's accounts receivable were from foreign (principally European) customers and 37% of accounts receivable were due from three customers.