SEGMENT INFORMATION

3 Months Ended

Oct. 31, 2012

SEGMENT INFORMATION

(10) SEGMENT INFORMATION

The Company has six operating segments: Americas; Asia; Europe; e-Business; ModusLink PTS and TFL. Based on the information provided to the Company’s chief operating decision-maker (“CODM”) for purposes of making decisions about allocating resources and assessing performance and quantitative thresholds, the Company has determined that it has four reportable segments: Americas; Asia; Europe and TFL. The Company reports the ModusLink PTS operating segment in aggregation with the Americas operating segment as part of the Americas reportable segment. In addition to its four reportable segments, the Company reports an All other category. The All other category represents the e-Business operating segment. The Company also has Corporate-level activity, which consists primarily of costs associated with certain corporate administrative functions such as legal and finance, which are not allocated to the Company’s reportable segments and administration costs related to the Company’s venture capital activities. The Corporate-level activity balance sheet information includes cash and cash equivalents, available-for-sale securities, investments and other assets, which are not identifiable to the operations of the Company’s operating segments.

Management evaluates segment performance based on segment net revenue, operating income (loss) and “adjusted operating income”, which is defined as the operating income (loss) excluding net charges related to depreciation, long-lived asset impairment, restructuring, amortization of intangible assets and share-based compensation. These items are excluded because they may be considered to be of a non-operational or non-cash nature. Historically, the Company has recorded significant impairment and restructuring charges and therefore management uses adjusted operating income to assist in evaluating the performance of the Company’s core operations.

Summarized financial information of the Company’s continuing operations by operating segment is as follows:

	Three Months Ended October 31,
	2012			2011 (As Restated)
Net revenue:
Americas	$	63,909		$	69,511
Asia		56,375			60,739
Europe		68,930			57,605
TFL		3,605			8,079
All other		7,837			9,974
	$	200,656		$	205,908
Operating income (loss):
Americas	$	(2,036	)	$	(120	)
Asia		7,174			9,292
Europe		(3,829	)		(1,688	)
TFL		(832	)		(1,395	)
All other		405			856
Total Segment operating income		882			6,945
Corporate-level activity		(8,987	)		(4,759	)
Total operating income (loss)	$	(8,105	)	$	2,186
Adjusted operating income:
Americas	$	(604	)	$	1,326
Asia		9,026			10,965
Europe		(1,999	)		(296	)
TFL		(816	)		(1,315	)
All other		848			1,343
Total Segment Adjusted operating income		6,455			12,023
Corporate-level activity		(8,685	)		(4,120	)
Total Adjusted operating income (loss)	$	(2,230	)	$	7,903
Adjusted operating income (loss)	$	(2,230	)	$	7,903
Adjustments:
Depreciation		(3,618	)		(3,748	)
Amortization of intangible assets		(285	)		(332	)
Share-based compensation		(493	)		(882	)
Restructuring, net		(1,479	)		(755	)
Operating income (loss)	$	(8,105	)	$	2,186
Other income (expense), net		(1,650	)		830
Income tax expense		(909	)		(1,871	)
Income from discontinued operations		4			—
Net income (loss)	$	(10,660	)	$	1,145

	October 31, 2012		July 31, 2012
	(in thousands)
Total assets of continuing operations:
Americas	$	114,646	$	101,931
Asia		114,408		111,660
Europe		116,999		105,472
TFL		1,155		2,750
All other		24,782		20,758
Sub-total		371,990		342,571
Corporate-level activity		14,705		16,311
	$	386,695	$	358,882

As of October 31, 2012, approximately 60%, 17% and 23% of the Company’s long-lived assets were located in the Americas, Asia and Europe, respectively. As of July 31, 2012, approximately 63%, 18% and 19%, of the Company’s long-lived assets were located in the Americas, Asia and Europe, respectively. As of October 31, 2012, approximately, $9.1 million, $5.1 million, $3.3 million, $2.2 million, and $2.7 million of the Company’s long-lived assets were located in Singapore, Ireland, China, the Netherlands, and the Czech Republic, respectively. As of July 31, 2012, approximately, $9.2 million, $4.8 million, $3.3 million, $2.3 million and $3.4 million of the Company’s long-lived assets were located in Singapore, Ireland, China, the Netherlands, and the Czech Republic, respectively.

During the three months ended October 31, 2012, the Company generated revenue of approximately $38.4 million and $22.5 million in China and the Netherlands, respectively. During the three months ended October 31, 2011, the Company generated revenue of approximately $41.2 million and $32.4 million in China and the Netherlands, respectively.