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, 2019, and as updated in this filing. 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, solutions include distributed antenna systems (DAS) conditioners and digital repeaters. For the public safety market, solutions include half-watt and two-watt repeaters and a battery backup unit. IBW also offers ancillary products that consist of passive system components and antennas for both the commercial and public safety markets. In addition, in fiscal year 2019, IBW, in partnership with ip.access, a leading small cell solutions partner based in the U.K., began developing an OnGo small cell for the private LTE market. Intelligent Site Management (ISM) Segment ISM segment solutions include a suite of remote units, which are network devices used for on-site processing. Remotes provide on-site machine-to-machine (M2M) communications that enable operators to remotely monitor, manage, and control site infrastructure and support systems. Remotes can be and often are combined with our Optima management software system. ISM also offers support services (i.e., maintenance agreements) and deployment services (i.e., installation). Communications Network Solutions (CNS) Segment CNS segment solutions include a broad range of outdoor network infrastructure offerings consisting of integrated cabinets, power distribution products, copper and fiber network connectivity panels, fiber access products, T1 network interface units (NIUs), and tower mounted amplifiers (TMAs). Segment information for the three months ended June 30, 2019 , and 2018 , is set forth below: Three months ended June 30, 2019 (in thousands) IBW ISM CNS Total Revenue $ 2,923 $ 3,095 $ 2,984 $ 9,002 Cost of revenue 1,951 1,516 2,289 5,756 Gross profit 972 1,579 695 3,246 Gross margin 33.3 % 51.0 % 23.3 % 36.1 % Research and development 399 701 456 1,556 Segment profit $ 573 $ 878 $ 239 1,690 Operating expenses: Sales and marketing 2,332 General and administrative 1,364 Intangible amortization 308 Operating profit (loss) (2,314 ) Other income, net 164 Income tax benefit (expense) (7 ) Net income (loss) $ (2,157 ) Three months ended June 30, 2018 (in thousands) IBW ISM CNS Total Revenue $ 3,557 $ 5,744 $ 3,736 $ 13,037 Cost of revenue 1,895 2,796 2,411 7,102 Gross profit 1,662 2,948 1,325 5,935 Gross margin 46.7 % 51.3 % 35.5 % 45.5 % Research and development 522 569 341 1,432 Segment profit (loss) $ 1,140 $ 2,379 $ 984 4,503 Operating expenses: Sales and marketing 2,137 General and administrative 1,534 Intangible amortization 990 Operating profit (loss) (158 ) Other income, net 119 Income tax benefit (expense) — Net income (loss) $ (39 ) Segment asset information is not reported to or used by the CODM. |