| Segment Information |
NOTE 11 – SEGMENT INFORMATION
Following the acquisition of Ecessa during the second quarter of 2020 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 network resiliency, security products and services, network virtualization, and cloud migrations, IT managed services, wired and wireless network design and implementation, and converged infrastructure configuration, deployment and management.
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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 nine-month periods ended September 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 September 30, 2020
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Sales
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$
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8,755,000
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$
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3,530,000
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$
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-
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$
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(175,000)
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$
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12,110,000
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Cost of sales
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4,746,000
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2,190,000
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-
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(8,000)
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6,928,000
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Gross profit
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4,009,000
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1,340,000
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-
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(167,000)
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5,182,000
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Selling, general and
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administrative expenses
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3,281,000
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909,000
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782,000
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(167,000)
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4,805,000
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Acquisition costs
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-
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-
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71,000
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-
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71,000
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Operating income (loss)
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728,000
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431,000
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(853,000)
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-
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306,000
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Other (expense) income
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(18,000)
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-
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275,000
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-
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257,000
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Income (loss) before income tax
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$
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710,000
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$
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431,000
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$
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(578,000)
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$
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-
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$
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563,000
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Depreciation and amortization
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$
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71,000
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$
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146,000
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$
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94,000
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$
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-
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$
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311,000
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Capital expenditures
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$
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14,000
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$
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-
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$
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79,000
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$
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-
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$
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93,000
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Assets
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$
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16,600,000
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$
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9,034,000
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$
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30,110,000
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$
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(27,000)
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$
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55,717,000
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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 September 30, 2019
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Sales
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$
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13,035,000
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$
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783,000
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$
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-
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$
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(196,000)
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$
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13,622,000
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Cost of sales
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6,753,000
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603,000
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-
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(19,000)
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7,337,000
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Gross profit
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6,282,000
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180,000
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-
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(177,000)
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6,285,000
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Selling, general and
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administrative expenses
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4,419,000
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349,000
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922,000
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(177,000)
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5,513,000
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Operating income (loss)
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1,863,000
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(169,000)
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(922,000)
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-
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772,000
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Other income
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11,000
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-
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77,000
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-
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88,000
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Income (loss) before income tax
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$
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1,874,000
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$
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(169,000)
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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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860,000
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Depreciation and amortization
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$
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86,000
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$
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25,000
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$
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154,000
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$
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-
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$
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265,000
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Capital expenditures
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$
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8,000
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$
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4,000
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$
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71,000
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$
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-
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$
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83,000
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Assets
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$
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21,114,000
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$
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1,419,000
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$
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35,201,000
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$
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(27,000)
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$
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57,707,000
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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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Nine Months Ended September 30, 2020
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Sales
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$
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25,579,000
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$
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5,882,000
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$
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-
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$
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(561,000)
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$
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30,900,000
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Cost of sales
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14,745,000
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3,792,000
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-
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(36,000)
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18,501,000
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Gross profit
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10,834,000
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2,090,000
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-
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(525,000)
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12,399,000
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Selling, general and
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administrative expenses
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10,816,000
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1,720,000
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2,466,000
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(525,000)
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14,477,000
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Acquisition costs
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-
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-
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486,000
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-
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486,000
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Operating income (loss)
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18,000
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370,000
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(2,952,000)
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-
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(2,564,000)
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Other (expense) income
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(1,000)
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-
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947,000
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-
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946,000
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Income (loss) before income tax
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$
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17,000
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$
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370,000
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$
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(2,005,000)
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$
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-
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$
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(1,618,000)
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Depreciation and amortization
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$
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218,000
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$
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178,000
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$
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345,000
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$
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-
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$
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741,000
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Capital expenditures
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$
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82,000
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$
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1,000
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$
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100,000
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$
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-
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$
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183,000
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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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Nine Months Ended September 30, 2019
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Sales
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$
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32,262,000
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$
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3,942,000
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$
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-
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$
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(661,000)
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$
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35,543,000
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Cost of sales
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17,892,000
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2,643,000
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-
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(144,000)
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20,391,000
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Gross profit
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14,370,000
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1,299,000
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-
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(517,000)
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15,152,000
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Selling, general and
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administrative expenses
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13,116,000
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1,056,000
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2,676,000
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(517,000)
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16,331,000
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Operating income (loss)
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1,254,000
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243,000
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(2,676,000)
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-
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(1,179,000)
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Other income (expense)
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12,000
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(10,000)
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179,000
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-
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181,000
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Income (loss) before income tax
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$
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1,266,000
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$
|
233,000
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$
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(2,497,000)
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$
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-
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$
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(998,000)
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Depreciation and amortization
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$
|
274,000
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$
|
80,000
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$
|
452,000
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$
|
-
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$
|
806,000
|
|
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|
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Capital expenditures
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$
|
19,000
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$
|
39,000
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$
|
268,000
|
$
|
-
|
$
|
326,000
|
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