Interim Segment Information | Interim Segment Information Segment information is presented in accordance with a “management approach", which designates the internal reporting used by the chief operating decision-maker (CODM) for making decisions and assessing performance as the source of the Company's reportable segments. Westell’s Chief Executive Officer is the CODM. The CODM continues to define segment profit as gross profit less research and development expenses. The accounting policies of the segments are the same as those for Westell Technologies, Inc. described in the summary of significant accounting policies included in the Company's Annual Report on Form 10-K for year ended March 31, 2017. The Company’s three reportable segments are as follows: In-Building Wireless (IBW) Segment The IBW segment solutions enable cellular coverage in stadiums, arenas, malls, buildings, and other indoor areas not served well or at all by the existing "macro" outdoor cellular network. For commercial service, the IBW segment solutions include distributed antenna systems (DAS) conditioners and digital repeaters. For the public safety market, the IBW segment solutions include half-watt and two-watt repeaters and a battery backup unit. The Company’s IBW segment also offers ancillary products that consist of passive system components and antennas for both the commercial and public safety markets. Intelligent Site Management and Services (ISMS) Segment The ISMS segment solutions include a suite of remote units which provide machine-to-machine (M2M) communications that enable operators to remotely monitor, manage, and control site infrastructure and support systems. Remote units can be and often are combined with the Company’s Optima management software system. The Company also offers support agreement services (i.e., maintenance) and deployment services (i.e., installation). Communications Network Solutions (CNS) Segment The CNS segment solutions include a broad range of outdoor network infrastructure offerings consisting of integrated cabinets, power distribution products, copper and fiber connectivity panels, T1 network interface units (NIUs), and tower mounted amplifiers (TMAs). Segment information for the three and six months ended September 30, 2017 , and 2016 , is set forth below: Three months ended September 30, 2017 (in thousands) IBW ISMS CNS Total Revenue $ 7,919 $ 4,730 $ 4,583 $ 17,232 Cost of revenue 4,269 2,511 3,177 9,957 Gross profit 3,650 2,219 1,406 7,275 Gross margin 46.1 % 46.9 % 30.7 % 42.2 % Research and development 1,443 523 239 2,205 Segment profit $ 2,207 $ 1,696 $ 1,167 5,070 Operating expenses: Sales and marketing 1,992 General and administrative 1,809 Intangible amortization 1,048 Restructuring 165 Long-lived assets impairment — Operating profit (loss) 56 Other income, net 677 Income tax expense (13 ) Net income (loss) $ 720 Three months ended September 30, 2016 (in thousands) IBW ISMS CNS Total Revenue $ 6,644 $ 5,109 $ 6,027 $ 17,780 Cost of revenue 4,411 (1) 2,702 4,300 11,413 (1) Gross profit 2,233 (1) 2,407 1,727 6,367 (1) Gross margin 33.6 % (1) 47.1 % 28.7 % 35.8 % (1) Research and development 1,594 1,237 496 3,327 Segment profit $ 639 $ 1,170 $ 1,231 3,040 Operating expenses: Sales and marketing 2,896 General and administrative 2,218 Intangible amortization 1,201 Restructuring 2,601 Long-lived assets impairment — Operating profit (loss) (5,876 ) Other income, net 74 Income tax expense (8 ) Net income (loss) $ (5,810 ) (1) The three and six months ended September 30, 2016, includes E&O expense for ClearLink DAS inventory and pipeline inventory. See Note 2, Restructuring Charges . Six months ended September 30, 2017 (in thousands) IBW ISMS CNS Total Revenue $ 14,875 $ 8,860 $ 10,071 $ 33,806 Cost of revenue 8,211 4,515 7,038 19,764 Gross profit 6,664 4,345 3,033 14,042 Gross margin 44.8 % 49.0 % 30.1 % 41.5 % Research and development 2,906 1,088 487 4,481 Segment profit $ 3,758 $ 3,257 $ 2,546 9,561 Operating expenses: Sales and marketing 4,328 General and administrative 3,520 Intangible amortization 2,095 Restructuring 165 Long-lived assets impairment — Operating profit (loss) (547 ) Other income, net 720 Income tax expense (25 ) Net income (loss) $ 148 Six months ended September 30, 2016 (in thousands) IBW ISMS CNS Total Revenue $ 12,765 $ 9,248 $ 10,583 $ 32,596 Cost of revenue 9,538 (1) 4,822 7,304 21,664 (1) Gross profit 3,227 (1) 4,426 3,279 10,932 (1) Gross margin 25.3 % (1) 47.9 % 31.0 % 33.5 % (1) Research and development 3,958 2,531 1,115 7,604 Segment profit (loss) $ (731 ) $ 1,895 $ 2,164 3,328 Operating expenses: Sales and marketing 6,277 General and administrative 4,563 Intangible amortization 2,401 Restructuring 2,565 Long-lived assets impairment 1,181 Operating profit (loss) (13,659 ) Other income, net 91 Income tax expense (10 ) Net income (loss) $ (13,578 ) (1) The three and six months ended September 30, 2016, includes E&O expense for ClearLink DAS inventory and pipeline inventory. See Note 2 , Restructuring Charges . Segment asset information is not reported to or used by the CODM. | [1] |