| Information Concerning Industry Segments And Major Customers |
NOTE 12- INFORMATION CONCERNING INDUSTRY SEGMENTS AND MAJOR CUSTOMERS
Effective January 1, 2016, the Company realigned its business operations. As a result of the realignment, the Company has segregated its Transition Networks subsidiary TN EMEA (now renamed Net2Edge) as a separate operating segment because Net2Edge’s business has a distinct product offering, requires different management and addresses a different market opportunity. Following this realignment, the Company classifies its businesses into four segments as follows:
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Suttle manufactures and markets connectivity infrastructure products for broadband and voice communications;
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Transition Networks manufactures media converters, NIDs, NICs, Ethernet switches and other connectivity products that offer the ability to affordably integrate the benefits of fiber optics into any data network;
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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
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Net2Edge develops, manufactures and sells products that enable telecommunications carriers to connect legacy networks to high-speed services.
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Management has chosen to organize the enterprise and disclose reportable segments based on products and services. Intersegment revenues are eliminated upon consolidation. To conform to the 2016 presentation, the Company has reclassified 2015 and 2014 segment information to present the Net2Edge business unit as a separate segment.
Suttle products are sold principally to U.S. customers. Suttle operates manufacturing facilities in the U.S. and Costa Rica. Net long-lived assets held in foreign countries were approximately $2,914,000 and $2,932,000 at December 31, 2016 and 2015, respectively. Transition Networks manufactures its products in the United States and makes sales in both the U.S. and international markets. JDL Technologies operates in the U.S. and makes sales in the U.S. Net2Edge operates in the U.K. and primarily makes sales in the international markets. Consolidated sales to U.S. customers were approximately 85%, 81% and 86% of sales from continuing operations in 2016, 2015 and 2014 respectively. In 2016, sales to one of Suttle’s customers accounted for 12.0% of consolidated sales and one of JDL’s customers accounted for 11.3% of consolidated sales. In 2015, sales to one of Suttle’s customers accounted for 16.2% of consolidated sales and one of JDL’s customers accounted for 10.9% of consolidated sales. In 2014, sales to one of Suttle’s customers accounted for 33.6% of consolidated sales. At December 31, 2016, Suttle had one customer that made up 25% of consolidated accounts receivables and Transition Networks had one customer that made up 17% of consolidated accounts receivable. At December 31, 2015, Suttle had one customer that made up 29% of consolidated accounts receivable and Transition Networks had one customer that made up 15% of consolidated accounts receivable.
Information concerning the Company’s operations in the various segments for the twelve-month periods ended December 31, 2016, 2015 and 2014 is as follows:
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Transition
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JDL
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Intersegment
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Suttle
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Networks
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Technologies
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Net2Edge
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Other
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Eliminations
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Total
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2016
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Sales
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$
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42,076,000
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$
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41,093,000
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$
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15,464,000
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$
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1,873,000
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$
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-
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$
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(1,153,000)
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$
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99,353,000
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Cost of sales
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38,193,000
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23,607,000
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10,245,000
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904,000
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-
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(177,000)
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72,772,000
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Gross profit
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3,883,000
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17,486,000
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5,219,000
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969,000
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-
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(976,000)
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26,581,000
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Selling, general and
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administrative expenses
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12,525,000
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17,180,000
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3,296,000
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3,141,000
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-
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(956,000)
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35,186,000
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Pension liability adjustments
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-
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-
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-
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-
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(4,148,000)
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-
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(4,148,000)
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Operating (loss) income
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$
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(8,642,000)
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$
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306,000
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$
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1,923,000
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$
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(2,172,000)
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$
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4,148,000
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$
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(20,000)
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$
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(4,457,000)
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Depreciation and amortization
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$
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2,461,000
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$
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852,000
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$
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267,000
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$
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103,000
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$
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-
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$
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-
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$
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3,683,000
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Capital expenditures
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$
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1,625,000
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$
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188,000
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$
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232,000
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$
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18,000
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$
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244,000
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$
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(20,000)
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$
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2,287,000
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Assets
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$
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33,555,000
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$
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17,518,000
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$
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4,767,000
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$
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1,464,000
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$
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15,900,000
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$
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(27,000)
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$
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73,177,000
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Transition
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JDL
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Intersegment
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Suttle
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Networks
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Technologies
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Net2Edge
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Other
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Eliminations
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Total
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2015
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Sales
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$
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50,082,000
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$
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41,469,000
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$
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15,672,000
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$
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1,353,000
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$
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-
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$
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(906,000)
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$
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107,670,000
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Cost of sales
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41,232,000
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23,702,000
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10,866,000
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638,000
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-
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(314,000)
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76,124,000
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Gross profit
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8,850,000
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17,767,000
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4,806,000
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715,000
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-
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(592,000)
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31,546,000
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Selling, general and
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administrative expenses
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15,285,000
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19,005,000
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3,635,000
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3,490,000
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-
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(585,000)
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40,830,000
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Pension settlement costs
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-
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-
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-
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-
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1,222,000
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-
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1,222,000
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Operating income (loss)
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$
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(6,435,000)
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$
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(1,238,000)
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$
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1,171,000
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$
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(2,775,000)
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$
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(1,222,000)
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$
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(7,000)
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$
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(10,506,000)
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Depreciation and amortization
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$
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2,125,000
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$
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897,000
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$
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150,000
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$
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141,000
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$
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-
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$
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-
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$
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3,313,000
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Capital expenditures
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$
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1,710,000
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$
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288,000
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$
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263,000
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$
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25,000
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$
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115,000
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$
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(7,000)
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$
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2,394,000
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Assets
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$
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38,163,000
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$
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21,729,000
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$
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5,964,000
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$
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1,783,000
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$
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20,284,000
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$
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(7,000)
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$
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87,916,000
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Transition
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JDL
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Intersegment
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Suttle
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Networks
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Technologies
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Net2Edge
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Other
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Eliminations
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Total
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2014
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Sales
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$
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67,331,000
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$
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41,945,000
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$
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8,567,000
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$
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1,619,000
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$
|
-
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$
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(390,000)
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$
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119,072,000
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Cost of sales
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46,339,000
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23,539,000
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6,599,000
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826,000
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-
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(390,000)
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76,913,000
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Gross profit
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20,992,000
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18,406,000
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|
1,968,000
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|
793,000
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-
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|
-
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42,159,000
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Selling, general and
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|
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|
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|
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administrative expenses
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14,389,000
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18,645,000
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2,846,000
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2,748,000
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-
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|
-
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38,628,000
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Restructuring expense
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-
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238,000
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-
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|
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-
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-
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|
238,000
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Operating income (loss)
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$
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6,603,000
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$
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(477,000)
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$
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(878,000)
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$
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(1,955,000)
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$
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-
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$
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-
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$
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3,293,000
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Depreciation and amortization
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$
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1,386,000
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$
|
797,000
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$
|
152,000
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$
|
147,000
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$
|
-
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$
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-
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$
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2,482,000
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Capital expenditures
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$
|
4,471,000
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$
|
563,000
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$
|
43,000
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$
|
26,000
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$
|
474,000
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$
|
-
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$
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5,577,000
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Assets
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$
|
38,083,000
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$
|
24,123,000
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$
|
3,816,000
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$
|
2,385,000
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$
|
31,879,000
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$
|
-
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$
|
100,286,000
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