| Segment Information |
NOTE 11 – SEGMENT INFORMATION
Following the acquisition of Ecessa during the quarter and the merging of certain operations, the Company classifies its remaining businesses into two segments as follows:
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Electronics & Software: designs, develops and sells Intelligent Edge solutions that provide connectivity and power through PoE products and actionable intelligence to end devices in an IoT ecosystem through embedded and cloud-based management software. In addition, this segment continues to generate revenue from its traditional products consisting of, media converters, NICs, and Ethernet switches that offer the ability to affordably integrate the benefits of fiber optics into any data network; and
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·
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Services & Support: 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.
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Management has chosen to organize the Company and disclose reportable segments based on our products and services. Intersegment revenues are eliminated upon consolidation. “Other” includes non-allocated corporate overhead costs. As a result of our treatment of Suttle as discontinued operations, “Other” includes amounts previously allocated to Suttle that do not meet the criteria to be included in income from discontinued operations. The Company has reclassified its 2019 financial statements to conform to its new segment reporting.
Information concerning the Company’s continuing operations in these two segments for the three and six-month periods ended June 30, 2020 and 2019 are as follows:
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Electronics &
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Services &
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Intersegment
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Software
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Support
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Other
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Eliminations
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Total
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Three Months Ended June 30, 2020
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Sales
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$
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8,287,000
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$
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1,525,000
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$
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-
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$
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(184,000)
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$
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9,628,000
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Cost of sales
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5,192,000
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982,000
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-
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(26,000)
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6,148,000
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Gross profit
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3,095,000
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543,000
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-
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(158,000)
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3,480,000
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Selling, general and
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administrative expenses
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3,638,000
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483,000
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769,000
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(158,000)
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4,732,000
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Acquisition costs
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-
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-
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394,000
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-
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394,000
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Operating (loss) income
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(543,000)
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60,000
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(1,163,000)
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-
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(1,646,000)
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Other income
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3,000
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-
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276,000
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-
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279,000
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Income (loss) before income tax
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$
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(540,000)
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$
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60,000
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$
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(887,000)
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$
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-
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$
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(1,367,000)
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Depreciation and amortization
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$
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76,000
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$
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19,000
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$
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123,000
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$
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-
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$
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218,000
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Capital expenditures
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$
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24,000
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$
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-
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$
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8,000
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$
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-
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$
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32,000
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Assets
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$
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16,825,000
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$
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6,569,000
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$
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33,984,000
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$
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(27,000)
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$
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57,351,000
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Electronics &
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Services &
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Intersegment
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Software
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Support
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Other
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Eliminations
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Total
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Three Months Ended June 30, 2019
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Sales
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$
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9,936,000
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$
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951,000
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$
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-
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$
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(182,000)
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$
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10,705,000
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Cost of sales
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5,775,000
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|
700,000
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-
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(11,000)
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6,464,000
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Gross profit
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4,161,000
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251,000
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-
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(171,000)
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4,241,000
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Selling, general and
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administrative expenses
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4,300,000
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331,000
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910,000
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(171,000)
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5,370,000
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Operating loss
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(139,000)
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(80,000)
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(910,000)
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-
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(1,129,000)
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Other income
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2,000
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-
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65,000
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-
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67,000
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Loss before income tax
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$
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(137,000)
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$
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(80,000)
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$
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(845,000)
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$
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-
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$
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(1,062,000)
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Depreciation and amortization
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$
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89,000
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$
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26,000
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$
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147,000
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$
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-
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$
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262,000
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Capital expenditures
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$
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5,000
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$
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-
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$
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28,000
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$
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-
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$
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33,000
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Assets
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$
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19,421,000
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$
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1,658,000
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$
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33,024,000
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$
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(27,000)
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$
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54,076,000
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Electronics &
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Services &
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Intersegment
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Software
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Support
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Other
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Eliminations
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Total
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Six Months Ended June 30, 2020
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Sales
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$
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16,823,000
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$
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2,352,000
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$
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-
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$
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(384,000)
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$
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18,791,000
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Cost of sales
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9,999,000
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1,602,000
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-
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(27,000)
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11,574,000
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Gross profit
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6,824,000
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750,000
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-
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(357,000)
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7,217,000
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Selling, general and
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administrative expenses
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7,535,000
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811,000
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1,683,000
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(357,000)
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9,672,000
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Acquisition costs
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-
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-
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415,000
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-
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415,000
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Operating loss
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(711,000)
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(61,000)
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(2,098,000)
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-
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(2,870,000)
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Other income
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17,000
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-
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673,000
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-
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690,000
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Loss before income tax
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$
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(694,000)
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$
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(61,000)
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$
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(1,425,000)
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$
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-
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$
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(2,180,000)
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Depreciation and amortization
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$
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147,000
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$
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32,000
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$
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251,000
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$
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-
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$
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430,000
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Capital expenditures
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$
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68,000
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$
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1,000
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$
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20,000
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$
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-
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$
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89,000
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Electronics &
|
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Services &
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Intersegment
|
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Software
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Support
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Other
|
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Eliminations
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Total
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Six Months Ended June 30, 2019
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Sales
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$
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19,227,000
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$
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3,160,000
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$
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-
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$
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(466,000)
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$
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21,921,000
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Cost of sales
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11,139,000
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2,040,000
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-
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(125,000)
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|
13,054,000
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Gross profit
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8,088,000
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1,120,000
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-
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(341,000)
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|
8,867,000
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Selling, general and
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|
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|
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administrative expenses
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8,696,000
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|
707,000
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1,756,000
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(341,000)
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10,818,000
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Operating (loss) income
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(608,000)
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|
413,000
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(1,756,000)
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-
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(1,951,000)
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Other income (expense)
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|
1,000
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(10,000)
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102,000
|
|
-
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|
93,000
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(Loss) income before income tax
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$
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(607,000)
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$
|
403,000
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$
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(1,654,000)
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$
|
-
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$
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(1,858,000)
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|
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|
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|
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Depreciation and amortization
|
$
|
188,000
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$
|
54,000
|
$
|
299,000
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$
|
-
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$
|
541,000
|
|
|
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|
|
|
|
|
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Capital expenditures
|
$
|
12,000
|
$
|
36,000
|
$
|
195,000
|
$
|
-
|
$
|
243,000
|
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