| 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:
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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;
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·
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Suttle manufactures and markets connectivity infrastructure products for broadband and voice communications;
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·
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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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·
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Net2Edge develops, manufactures and sells edge network access products to telecommunications carriers.
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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. 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:
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Transition
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JDL
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Intersegment
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Networks
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Suttle
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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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Three Months Ended June 30, 2019
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Sales
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$
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9,175,000
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$
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4,747,000
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$
|
951,000
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$
|
796,000
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$
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-
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$
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(269,000)
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$
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15,400,000
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Cost of sales
|
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5,232,000
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3,280,000
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|
700,000
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|
543,000
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-
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(63,000)
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9,692,000
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Gross profit
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3,943,000
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1,467,000
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251,000
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253,000
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-
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(206,000)
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5,708,000
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Selling, general and
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administrative expenses
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3,575,000
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938,000
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331,000
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760,000
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574,000
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(206,000)
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5,972,000
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Operating income (loss)
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368,000
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529,000
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(80,000)
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(507,000)
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(574,000)
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-
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(264,000)
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Other income (expense)
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(1,000)
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2,980,000
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-
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3,000
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62,000
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-
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3,044,000
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Income (loss) before income tax
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$
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367,000
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$
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3,509,000
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$
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(80,000)
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$
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(504,000)
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$
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(512,000)
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$
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-
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$
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2,780,000
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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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220,000
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$
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26,000
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$
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18,000
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$
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-
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$
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-
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$
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335,000
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Capital expenditures
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$
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4,000
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$
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-
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$
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-
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$
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1,000
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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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16,397,000
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$
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9,747,000
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$
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1,658,000
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$
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3,024,000
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$
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23,276,000
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$
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(27,000)
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$
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54,075,000
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Transition
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JDL
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Intersegment
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Networks
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Suttle
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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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Three Months Ended June 30, 2018
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Sales
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$
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7,834,000
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$
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5,873,000
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$
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913,000
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$
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681,000
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$
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-
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$
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(263,000)
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$
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15,038,000
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Cost of sales
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4,327,000
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5,414,000
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841,000
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501,000
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-
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(30,000)
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11,053,000
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Gross profit
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3,507,000
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|
459,000
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|
72,000
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|
180,000
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-
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(233,000)
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3,985,000
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Selling, general and
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administrative expenses
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3,266,000
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1,903,000
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422,000
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820,000
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529,000
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(233,000)
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6,707,000
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Operating (loss) income
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241,000
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(1,444,000)
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(350,000)
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(640,000)
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(529,000)
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-
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(2,722,000)
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Other income (expense)
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6,000
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(4,000)
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3,000
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20,000
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44,000
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-
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69,000
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Income (loss) before income tax
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$
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247,000
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$
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(1,448,000)
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$
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(347,000)
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$
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(620,000)
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$
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(485,000)
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$
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-
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$
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(2,653,000)
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Depreciation and amortization
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$
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100,000
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$
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386,000
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$
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41,000
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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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-
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$
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541,000
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Capital expenditures
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$
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18,000
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$
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232,000
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$
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-
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$
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98,000
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$
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-
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$
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-
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$
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348,000
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Assets
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$
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15,058,000
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$
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15,748,000
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$
|
912,000
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$
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2,468,000
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$
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20,780,000
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$
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(27,000)
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$
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54,939,000
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Transition
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JDL
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Intersegment
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Networks
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Suttle
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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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Six Months Ended June 30, 2019
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Sales
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$
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18,065,000
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$
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10,268,000
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$
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3,160,000
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$
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1,244,000
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$
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-
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$
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(614,000)
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$
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32,123,000
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Cost of sales
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10,368,000
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7,000,000
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2,040,000
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|
771,000
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-
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(191,000)
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19,988,000
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Gross profit
|
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7,697,000
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3,268,000
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1,120,000
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|
473,000
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-
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(423,000)
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|
12,135,000
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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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|
7,270,000
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|
1,996,000
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707,000
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1,508,000
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1,160,000
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(423,000)
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12,218,000
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Operating (loss) income
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|
427,000
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|
1,272,000
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|
413,000
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(1,035,000)
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(1,160,000)
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-
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(83,000)
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Other income (expense)
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|
(1,000)
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|
2,989,000
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(10,000)
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|
2,000
|
|
98,000
|
|
-
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|
3,078,000
|
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Income (loss) before income tax
|
$
|
426,000
|
$
|
4,261,000
|
$
|
403,000
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$
|
(1,033,000)
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$
|
(1,062,000)
|
$
|
-
|
$
|
2,995,000
|
|
|
|
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|
|
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|
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|
|
|
|
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Depreciation and amortization
|
$
|
150,000
|
$
|
513,000
|
$
|
54,000
|
$
|
38,000
|
$
|
-
|
$
|
-
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$
|
755,000
|
|
|
|
|
|
|
|
|
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|
|
|
|
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Capital expenditures
|
$
|
4,000
|
$
|
16,000
|
$
|
36,000
|
$
|
8,000
|
$
|
196,000
|
$
|
-
|
$
|
260,000
|
|
|
|
|
|
|
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|
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|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
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|
|
|
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Transition
|
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|
|
JDL
|
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Intersegment
|
|
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Networks
|
|
Suttle
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Technologies
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Net2Edge
|
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Other
|
|
Eliminations
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Total
|
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Six Months Ended June 30, 2018
|
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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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Capital expenditures
|
$
|
38,000
|
$
|
459,000
|
$
|
-
|
$
|
115,000
|
$
|
-
|
$
|
-
|
$
|
612,000
|
|