Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.4.0.3
Segment Information
 12 Months Ended
Mar. 31, 2016
Segment Reporting [Abstract]  
Segment Information
Segment and Related Information:
Segment information is presented in accordance with a “management approach", which designates the internal reporting used by the chief operating decision-maker (CODM) for making decisions and assessing performance as the source of the Company's reportable segments. Westell’s Chief Executive Officer is the CODM. The CODM continues to evaluate segment profit on gross profit less research and development expenses. The accounting policies of the segments are the same as those for Westell Technologies, Inc. described in the summary of significant accounting policies.
The Company’s two reportable segments are as follows:
In-Building Wireless (IBW) Segment
The IBW segment solutions include distributed antenna systems (DAS) conditioners, high-performance digital repeaters and bi-directional amplifiers (BDAs), and system components and antennas, all used by wireless service providers and neutral-party hosts to fine tune radio frequency (RF) signals that helps extend coverage to areas not served well or at all by traditional cell sites.
Communication Solutions Group (CSG) Segment
The CSG segment solutions include intelligent site management (ISM), cell site optimization (CSO), and outside plant (OSP) as follows:
• ISM solutions include a suite of remote monitoring and control devices which, when combined with the Company's Optima management system, provides comprehensive machine-to-machine (M2M) communications that enable operators to remotely monitor, manage, and control site infrastructure and support systems.
• CSO solutions consist of tower mounted amplifiers (TMAs), small outdoor-hardened units mounted next to antennas on cell towers, enabling wireless service providers to improve the overall performance of a cell site, including increasing data throughput and reducing dropped connections.
• OSP solutions, which are sold to wireless and wireline service providers as well as to industrial network operators, consist of a broad range of offerings, including integrated cabinets, power distribution panels; copper and fiber connectivity; and synchronous optical networks/time division multiplexing (SONET/TDM) network interface units.
Segment information for the fiscal years ended March 31, 2016, 2015 and 2014, is set forth below:
 
Fiscal Year Ended March 31, 2016
(in thousands)
IBW
 
CSG
 
Total
Revenue
$
34,407

 
$
53,796

 
$
88,203

Gross profit
13,944

 
20,572

 
34,516

Gross margin
40.5
%
 
38.2
%
 
39.1
%
Research and development
11,059

 
8,258

 
19,317

Segment profit
$
2,885

 
$
12,314

 
15,199

Operating expenses:
 
 
 
 
 
Sales and marketing
 
 
 
 
15,817

General and administrative
 
 
 
 
9,836

Intangible amortization
 
 
 
 
5,554

Restructuring
 
 
 
 
748

Operating income (loss) from continuing operations
 
 
 
 
(16,756
)
Other income (expense), net
 
 
 
 
169

Income tax (expense) benefit
 
 
 
 
102

Net income (loss) from continuing operations
 
 
 
 
$
(16,485
)
 
 
 
 
 
 
 
Fiscal Year Ended March 31, 2015
(in thousands)
IBW
 
CSG
 
Total
Revenue
$
37,714

 
$
46,413

 
$
84,127

Gross profit
13,715

 
13,095

 
26,810

Gross margin
36.4
%

28.2
%
 
31.9
%
Research and development
8,955

 
8,393

 
17,348

Segment profit
$
4,760

 
$
4,702

 
9,462

Operating expenses:
 
 
 
 


Sales and marketing
 
 
 
 
12,407

General and administrative
 
 
 
 
14,678

Intangible amortization
 
 
 
 
6,377

Restructuring
 
 
 
 
3,243

Goodwill impairment
 
 
 
 
31,997

Operating income (loss) from continuing operations
 
 
 
 
(59,240
)
Other income (expense), net
 
 
 
 
(2
)
Income tax (expense) benefit
 
 
 
 
201

Net income (loss) from continuing operations
 
 
 
 
$
(59,041
)
 
Fiscal Year Ended March 31, 2014
(in thousands)
IBW
 
CSG
 
Total
Revenue
$
13,096

 
$
88,977

 
$
102,073

Gross profit
4,161

 
36,300

 
40,461

Gross margin
31.8
%
 
40.8
%
 
39.6
%
Research and development
1,360

 
9,979

 
11,339

Segment profit
$
2,801

 
$
26,321

 
29,122

Operating expenses:
 
 
 
 
 
Sales and marketing
 
 
 
 
13,304

General and administrative
 
 
 
 
14,027

Intangible amortization
 
 
 
 
4,889

Restructuring
 
 
 
 
335

Operating income (loss) from continuing operations
 
 
 
 
(3,433
)
Other income (expense), net
 
 
 
 
(56
)
Income tax (expense) benefit
 
 
 
 
7,910

Net income (loss) from continuing operations
 
 
 
 
$
4,421

 
Segment asset information is not reported to or used by the CODM.
Enterprise-wide and Geographic Information
More than 90% of the Company’s revenues were generated in the United States in fiscal years 2016, 2015 and 2014. More than 90% of the Company's long-lived assets are located in the United States.
Significant Customers and Concentration of Credit
The Company is dependent on certain major companies operating in telecommunications markets that represent more than 10% of the total revenue. Sales to major customers and successor companies that exceed 10% of total revenue are as follows:
 
Fiscal Year Ended March 31,
 
2016
 
2015
 
2014
Verizon
23.1
%
 
30.5
%
 
23.9
%
AT&T
11.1
%
 
9.2
%
 
8.8
%
Telamon
4.4
%
 
5.8
%
 
30.3
%


Verizon, AT&T and Telamon are customers of both reporting segments.
Major companies operating in telecommunications markets comprise a significant portion of the Company’s trade receivables. Receivables from major customers that exceed 10% of total accounts receivable balance are as follows:
 
Fiscal Year Ended March 31,
 
2016
 
2015
Verizon
32.8
%
 
30.4
%
AT&T
12.8
%
 
12.7
%