Segment Information | NOTE 12 – SEGMENT INFORMATION Effective January 1, 2019, the Company realigned the financial reporting for its business units. As a result of this realignment, certain corporate general and administrative expenses that were previously included within the business unit level as fully allocated costs are now categorized as “Other”. The Company classifies its businesses into the four segments as follows: · Transition Networks manufactures media converters, NIDs, NICs, Ethernet switches and other connectivity products that offer customers the ability to affordably integrate the benefits of fiber optics into any data network; · Suttle manufactures and markets connectivity infrastructure products for broadband and voice communications; · JDL Technologies provides technology solutions that address prevalent IT challenges, including virtualization and cloud solutions, managed services, wired and wireless network design and implementation, and converged infrastructure configuration and deployment ; and · Net2Edge develops, manufactures and sells edge network access products to telecommunications carriers . Management has chosen to organize the Company and disclose reportable segments based on our products and services. Intersegment revenues are eliminated upon consolidation. In order to conform to the 2019 presentation, the Company has reclassified the 2018 corporate expenses previously allocated to reportable segments to the “Other” section. Information concerning the Company’s continuing operations in the various segments for the three and six-month periods ended June 30, 2019 and 2018 are as follows: Transition JDL Intersegment Networks Suttle Technologies Net2Edge Other Eliminations Total Three Months Ended June 30, 2019 Sales $ 9,175,000 $ 4,747,000 $ 951,000 $ 796,000 $ - $ (269,000) $ 15,400,000 Cost of sales 5,232,000 3,280,000 700,000 543,000 - (63,000) 9,692,000 Gross profit 3,943,000 1,467,000 251,000 253,000 - (206,000) 5,708,000 Selling, general and administrative expenses 3,575,000 938,000 331,000 760,000 574,000 (206,000) 5,972,000 Operating income (loss) 368,000 529,000 (80,000) (507,000) (574,000) - (264,000) Other income (expense) (1,000) 2,980,000 - 3,000 62,000 - 3,044,000 Income (loss) before income tax $ 367,000 $ 3,509,000 $ (80,000) $ (504,000) $ (512,000) $ - $ 2,780,000 Depreciation and amortization $ 71,000 $ 220,000 $ 26,000 $ 18,000 $ - $ - $ 335,000 Capital expenditures $ 4,000 $ - $ - $ 1,000 $ 28,000 $ - $ 33,000 Assets $ 16,397,000 $ 9,747,000 $ 1,658,000 $ 3,024,000 $ 23,276,000 $ (27,000) $ 54,075,000 Transition JDL Intersegment Networks Suttle Technologies Net2Edge Other Eliminations Total Three Months Ended June 30, 2018 Sales $ 7,834,000 $ 5,873,000 $ 913,000 $ 681,000 $ - $ (263,000) $ 15,038,000 Cost of sales 4,327,000 5,414,000 841,000 501,000 - (30,000) 11,053,000 Gross profit 3,507,000 459,000 72,000 180,000 - (233,000) 3,985,000 Selling, general and administrative expenses 3,266,000 1,903,000 422,000 820,000 529,000 (233,000) 6,707,000 Operating (loss) income 241,000 (1,444,000) (350,000) (640,000) (529,000) - (2,722,000) Other income (expense) 6,000 (4,000) 3,000 20,000 44,000 - 69,000 Income (loss) before income tax $ 247,000 $ (1,448,000) $ (347,000) $ (620,000) $ (485,000) $ - $ (2,653,000) Depreciation and amortization $ 100,000 $ 386,000 $ 41,000 $ 14,000 $ - $ - $ 541,000 Capital expenditures $ 18,000 $ 232,000 $ - $ 98,000 $ - $ - $ 348,000 Assets $ 15,058,000 $ 15,748,000 $ 912,000 $ 2,468,000 $ 20,780,000 $ (27,000) $ 54,939,000 Transition JDL Intersegment Networks Suttle Technologies Net2Edge Other Eliminations Total Six Months Ended June 30, 2019 Sales $ 18,065,000 $ 10,268,000 $ 3,160,000 $ 1,244,000 $ - $ (614,000) $ 32,123,000 Cost of sales 10,368,000 7,000,000 2,040,000 771,000 - (191,000) 19,988,000 Gross profit 7,697,000 3,268,000 1,120,000 473,000 - (423,000) 12,135,000 Selling, general and administrative expenses 7,270,000 1,996,000 707,000 1,508,000 1,160,000 (423,000) 12,218,000 Operating (loss) income 427,000 1,272,000 413,000 (1,035,000) (1,160,000) - (83,000) Other income (expense) (1,000) 2,989,000 (10,000) 2,000 98,000 - 3,078,000 Income (loss) before income tax $ 426,000 $ 4,261,000 $ 403,000 $ (1,033,000) $ (1,062,000) $ - $ 2,995,000 Depreciation and amortization $ 150,000 $ 513,000 $ 54,000 $ 38,000 $ - $ - $ 755,000 Capital expenditures $ 4,000 $ 16,000 $ 36,000 $ 8,000 $ 196,000 $ - $ 260,000 Transition JDL Intersegment Networks Suttle Technologies Net2Edge Other Eliminations Total Six Months Ended June 30, 2018 Sales $ 16,988,000 $ 12,846,000 $ 1,622,000 $ 846,000 $ - $ (490,000) $ 31,812,000 Cost of sales 9,554,000 11,012,000 1,568,000 563,000 - (49,000) 22,648,000 Gross profit 7,434,000 1,834,000 54,000 283,000 - (441,000) 9,164,000 Selling, general and administrative expenses 6,731,000 3,877,000 845,000 1,724,000 1,124,000 (441,000) 13,860,000 Operating (loss) income 703,000 (2,043,000) (791,000) (1,441,000) (1,124,000) - (4,696,000) Other income 4,000 20,000 3,000 12,000 152,000 - 191,000 Income (loss) before income tax $ 707,000 $ (2,023,000) $ (788,000) $ (1,429,000) $ (972,000) $ - $ (4,505,000) Depreciation and amortization $ 241,000 $ 799,000 $ 105,000 $ 28,000 $ - $ - $ 1,173,000 Capital expenditures $ 38,000 $ 459,000 $ - $ 115,000 $ - $ - $ 612,000 |