| Segment Information |
NOTE 12 – SEGMENT INFORMATION
Effective January 1, 2019, the Company realigned the financial reporting for its business units. As a result of this realignment, certain corporate general and administrative expenses that were previously included within the business unit level as fully allocated costs are now categorized as “Other”. The Company classifies its businesses into the four segments as follows:
|
·
|
|
Transition Networks manufactures media converters, NIDs, NICs, Ethernet switches and other connectivity products that offer customers the ability to affordably integrate the benefits of fiber optics into any data network;
|
|
·
|
|
Suttle manufactures and markets connectivity infrastructure products for broadband and voice communications;
|
|
·
|
|
JDL Technologies provides technology solutions that address prevalent IT challenges, including virtualization and cloud solutions, managed services, wired and wireless network design and implementation, and converged infrastructure configuration and deployment; and
|
|
·
|
|
Net2Edge develops, manufactures and sells edge network access products to telecommunications carriers.
|
Management has chosen to organize the Company and disclose reportable segments based on our products and services. Intersegment revenues are eliminated upon consolidation. In order to conform to the 2019 presentation, the Company has reclassified the 2018 corporate expenses previously allocated to reportable segments to the “Other” section.
Information concerning the Company’s continuing operations in the various segments for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transition
|
|
|
|
JDL
|
|
|
|
|
|
Intersegment
|
|
|
|
|
|
Networks
|
|
Suttle
|
|
Technologies
|
|
Net2Edge
|
|
Other
|
|
Eliminations
|
|
Total
|
|
Three Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
12,483,000
|
$
|
4,651,000
|
$
|
783,000
|
$
|
611,000
|
$
|
-
|
$
|
(305,000)
|
$
|
18,223,000
|
|
Cost of sales
|
|
6,441,000
|
|
3,198,000
|
|
603,000
|
|
328,000
|
|
-
|
|
(85,000)
|
|
10,485,000
|
|
Gross profit
|
|
6,042,000
|
|
1,453,000
|
|
180,000
|
|
283,000
|
|
-
|
|
(220,000)
|
|
7,738,000
|
|
Selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expenses
|
|
3,810,000
|
|
888,000
|
|
349,000
|
|
653,000
|
|
629,000
|
|
(220,000)
|
|
6,109,000
|
|
Operating income (loss)
|
|
2,232,000
|
|
565,000
|
|
(169,000)
|
|
(370,000)
|
|
(629,000)
|
|
-
|
|
1,629,000
|
|
Other income (expense)
|
|
(11,000)
|
|
5,000
|
|
-
|
|
22,000
|
|
76,000
|
|
-
|
|
92,000
|
|
Income (loss) before income tax
|
$
|
2,221,000
|
$
|
570,000
|
$
|
(169,000)
|
$
|
(348,000)
|
$
|
(553,000)
|
$
|
-
|
$
|
1,721,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
$
|
74,000
|
$
|
223,000
|
$
|
26,000
|
$
|
11,000
|
$
|
-
|
$
|
-
|
$
|
334,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
$
|
7,000
|
$
|
-
|
$
|
4,000
|
$
|
-
|
$
|
72,000
|
$
|
-
|
$
|
83,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
$
|
18,487,000
|
$
|
9,212,000
|
$
|
1,419,000
|
$
|
2,627,000
|
$
|
25,989,000
|
$
|
(27,000)
|
$
|
57,707,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transition
|
|
|
|
JDL
|
|
|
|
|
|
Intersegment
|
|
|
|
|
|
Networks
|
|
Suttle
|
|
Technologies
|
|
Net2Edge
|
|
Other
|
|
Eliminations
|
|
Total
|
|
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
9,231,000
|
$
|
5,009,000
|
$
|
859,000
|
$
|
405,000
|
$
|
-
|
$
|
(212,000)
|
$
|
15,292,000
|
|
Cost of sales
|
|
4,883,000
|
|
4,093,000
|
|
712,000
|
|
365,000
|
|
-
|
|
(2,000)
|
|
10,051,000
|
|
Gross profit
|
|
4,348,000
|
|
916,000
|
|
147,000
|
|
40,000
|
|
-
|
|
(210,000)
|
|
5,241,000
|
|
Selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expenses
|
|
3,481,000
|
|
1,756,000
|
|
380,000
|
|
809,000
|
|
627,000
|
|
(210,000)
|
|
6,843,000
|
|
Operating (loss) income
|
|
867,000
|
|
(840,000)
|
|
(233,000)
|
|
(769,000)
|
|
(627,000)
|
|
-
|
|
(1,602,000)
|
|
Other income (expense)
|
|
(1,000)
|
|
(5,000)
|
|
-
|
|
19,000
|
|
42,000
|
|
-
|
|
55,000
|
|
Income (loss) before income tax
|
$
|
866,000
|
$
|
(845,000)
|
$
|
(233,000)
|
$
|
(750,000)
|
$
|
(585,000)
|
$
|
-
|
$
|
(1,547,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
$
|
96,000
|
$
|
374,000
|
$
|
40,000
|
$
|
13,000
|
$
|
-
|
$
|
-
|
$
|
523,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
$
|
31,000
|
$
|
48,000
|
$
|
-
|
$
|
(7,000)
|
$
|
14,000
|
$
|
-
|
$
|
86,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
$
|
17,644,000
|
$
|
13,277,000
|
$
|
1,177,000
|
$
|
2,421,000
|
$
|
17,764,000
|
$
|
(27,000)
|
$
|
52,256,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transition
|
|
|
|
JDL
|
|
|
|
|
|
Intersegment
|
|
|
|
|
|
Networks
|
|
Suttle
|
|
Technologies
|
|
Net2Edge
|
|
Other
|
|
Eliminations
|
|
Total
|
|
Nine Months Ended September 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
30,548,000
|
$
|
14,918,000
|
$
|
3,942,000
|
$
|
1,856,000
|
$
|
-
|
$
|
(918,000)
|
$
|
50,346,000
|
|
Cost of sales
|
|
16,809,000
|
|
10,198,000
|
|
2,643,000
|
|
1,099,000
|
|
-
|
|
(275,000)
|
|
30,474,000
|
|
Gross profit
|
|
13,739,000
|
|
4,720,000
|
|
1,299,000
|
|
757,000
|
|
-
|
|
(643,000)
|
|
19,872,000
|
|
Selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expenses
|
|
11,080,000
|
|
2,883,000
|
|
1,056,000
|
|
2,162,000
|
|
1,789,000
|
|
(643,000)
|
|
18,327,000
|
|
Operating (loss) income
|
|
2,659,000
|
|
1,837,000
|
|
243,000
|
|
(1,405,000)
|
|
(1,789,000)
|
|
-
|
|
1,545,000
|
|
Other income (expense)
|
|
(12,000)
|
|
2,994,000
|
|
(10,000)
|
|
25,000
|
|
173,000
|
|
-
|
|
3,170,000
|
|
Income (loss) before income tax
|
$
|
2,647,000
|
$
|
4,831,000
|
$
|
233,000
|
$
|
(1,380,000)
|
$
|
(1,616,000)
|
$
|
-
|
$
|
4,715,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
$
|
224,000
|
$
|
735,000
|
$
|
80,000
|
$
|
50,000
|
$
|
-
|
$
|
-
|
$
|
1,089,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
$
|
11,000
|
$
|
16,000
|
$
|
40,000
|
$
|
8,000
|
$
|
268,000
|
$
|
-
|
$
|
343,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transition
|
|
|
|
JDL
|
|
|
|
|
|
Intersegment
|
|
|
|
|
|
Networks
|
|
Suttle
|
|
Technologies
|
|
Net2Edge
|
|
Other
|
|
Eliminations
|
|
Total
|
|
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
26,219,000
|
$
|
17,855,000
|
$
|
2,482,000
|
$
|
1,251,000
|
$
|
-
|
$
|
(703,000)
|
$
|
47,104,000
|
|
Cost of sales
|
|
14,436,000
|
|
15,105,000
|
|
2,281,000
|
|
929,000
|
|
-
|
|
(51,000)
|
|
32,700,000
|
|
Gross profit
|
|
11,783,000
|
|
2,750,000
|
|
201,000
|
|
322,000
|
|
-
|
|
(652,000)
|
|
14,404,000
|
|
Selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expenses
|
|
10,212,000
|
|
5,633,000
|
|
1,225,000
|
|
2,533,000
|
|
1,751,000
|
|
(652,000)
|
|
20,702,000
|
|
Operating (loss) income
|
|
1,571,000
|
|
(2,883,000)
|
|
(1,024,000)
|
|
(2,211,000)
|
|
(1,751,000)
|
|
-
|
|
(6,298,000)
|
|
Other income
|
|
3,000
|
|
15,000
|
|
3,000
|
|
31,000
|
|
194,000
|
|
-
|
|
246,000
|
|
Income (loss) before income tax
|
$
|
1,574,000
|
$
|
(2,868,000)
|
$
|
(1,021,000)
|
$
|
(2,180,000)
|
$
|
(1,557,000)
|
$
|
-
|
$
|
(6,052,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
$
|
337,000
|
$
|
1,173,000
|
$
|
144,000
|
$
|
41,000
|
$
|
-
|
$
|
-
|
$
|
1,695,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
$
|
69,000
|
$
|
508,000
|
$
|
-
|
$
|
109,000
|
$
|
14,000
|
$
|
-
|
$
|
700,000
|
|