Note 10. Segment and Related Information:

In the third quarter of fiscal year 2012, the Company completed the sale of the ConferencePlus segment. The Company's two remaining reportable segments are as follows:

Westell: The Company's Westell product family consists of next-generation indoor and outdoor cabinets, enclosures and mountings; power distribution products; network interface devices ("NIDs"); industrial switches and connectivity panels; T1 demarcation equipment; span powering equipment; remote monitoring devices; and customized systems integration ("CSI"). The Company's new eSmartAccess family of Ethernet NID solutions allows cellular backhaul providers to deliver native Ethernet from the same CellPak cabinet they are using today for T1 demarcation. These solutions are optimized for backhaul of cellular traffic, service delivery to business enterprises and a variety of industrial applications including smart grid, security and transportation. Traditional products are sold primarily into wireline markets, but the Company also is actively moving to develop revenues from wireless telecommunications products. The power distribution and remote monitoring products are designed and provided through the Company's Noran Tel subsidiary located in Regina, Saskatchewan, Canada. The Company is relocating the majority of the Canadian operations to its location in Aurora, Illinois. The remaining operations in Canada will consist of research and development as well as sales in support of the U.S. operations. The Company expects to complete this transition by July 31, 2012.

CNS: The Company's CNS family of broadband products enables high-speed routing and networking of voice, data, video, and other advanced services in the home. The products allow service providers to deliver services, content, and applications over existing copper, fiber, coax, and wireless infrastructures. CNS products are typically installed in consumer residences or small businesses as a key component of broadband service packages. During the first quarter of fiscal year 2012, the Company completed the CNS asset sale. The Company retained a major CNS customer relationship and contract. The Company completed the remaining product shipments under this contract in December 2011. The Company also retained the Homecloud product development program.

Performance of these segments is primarily evaluated utilizing revenue and segment operating income (loss). 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 defines segment operating income (loss) as gross profit less direct expenses, including direct expenses from research and development expenses, sales and marketing expenses, and general and administrative ("G&A") expenses. Certain operating expenses are allocated between the Westell and CNS segments, including certain rent, information technology costs, and accounting costs. The Westell segment was allocated 72%, 38% and 35% of these resource costs and the CNS segment received 28%, 62% and 65% of the costs in fiscal years 2012, 2011 and 2010, respectively. Segment operating income (loss) excludes certain unallocated Westell, Inc. G&A costs. Rent associated with resources supporting the CNS assets sold to NETGEAR was not reallocated between the segments and is reflected in unallocated corporate costs. Segment operating income (loss) excludes certain unallocated G&A costs.

 

Segment information for the fiscal years ended March 31, 2012, 2011 and 2010, excluding the results of the discontinued ConferencePlus segment, is set forth below:

 

		Fiscal Year Ended March 31, 2012
(in thousands)		Westell				CNS				Unallocated				Total
Revenue		$	43,629			$	26,026			$	—			$	69,655
Gross profit			17,272				5,985				—				23,257
Gross margin			39.6	%			23.0	%			—				33.4	%
Operating expenses:
Sales & marketing			5,573				923				—				6,496
Research & development			5,117				2,610				—				7,727
General & administrative			2,834				976				3,805				7,615
Intangible amortization			544				4				—				548
Restructuring			275				275				—				550
Operating expenses			14,343				4,788				3,805				22,936
Operating income (loss)		$	2,929			$	1,197				(3,805	)			321
Other income (expense), net											31,985				31,985
Interest (expense)											—				—
Income taxes											(12,875	)			(12,875	)
Net income from continuing operations										$	15,305			$	19,431
		Fiscal Year Ended March 31, 2011
(in thousands)		Westell				CNS				Unallocated				Total
Revenue		$	58,770			$	89,079			$	—			$	147,849
Gross profit			25,667				15,885				—				41,552
Gross margin			43.7	%			17.8	%			—				28.1	%
Operating expenses:
Sales & marketing			5,922				4,891				—				10,813
Research & development			3,825				7,949				—				11,774
General & administrative			2,023				3,365				3,235				8,623
Intangible amortization			540				5				—				545
Restructuring			—				—				—				—
Operating expenses			12,310				16,210				3,235				31,755
Operating income (loss)		$	13,357			$	(325	)			(3,235	)			9,797
Other income (expense), net											29				29
Interest (expense)											(9	)			(9	)
Income taxes											53,304				53,304
Net income from continuing operations										$	50,089			$	63,121

 

		Fiscal Year Ended March 31, 2010
(in thousands)		Westell				CNS				Unallocated				Total
Revenue		$	52,516			$	87,248			$	—			$	139,764
Gross profit			23,042				14,348				—				37,390
Gross margin			43.9	%			16.4	%			—				26.8	%
Operating expenses:
Sales & marketing			4,998				5,772				—				10,770
Research & development			2,339				9,024				—				11,363
General & administrative			1,998				3,244				3,778				9,020
Intangible amortization			528				1				—				529
Restructuring			46				414				—				460
Operating expenses			9,909				18,455				3,778				32,142
Operating income (loss)		$	13,133			$	(4,107	)			(3,778	)			5,248
Other income (expense), net											17				17
Interest (expense)											(4	)			(4	)
Income taxes											814				814
Net income (loss) from continuing operations										$	(2,951	)		$	6,075

 

		Fiscal Year Ended March 31,
Depreciation and amortization (in thousands)		2012				2011				2010
Westell depreciation and amortization		$	955			$	809			$	1,023
CNS depreciation and amortization			121				428				1,280
Total depreciation and amortization		$	1,076			$	1,237			$	2,303

The Westell and CNS segments use many of the same assets. For internal reporting purposes, the Company does not allocate assets between the Westell and CNS segments and therefore no asset or capital expenditure information by each of these segments is available.

Enterprise-wide Information

More than 90% of the Company's revenues were generated in the United States in fiscal years 2012, 2011 and 2010.

Significant Customers and Concentration of Credit

The Company is dependent on certain major telephone companies 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,
		2012				2011				2010
Verizon			31.2	%			39.4	%			54.0	%
AT&T			6.1	%			8.1	%			12.7	%
Century Link			3.5	%			11.4	%			6.0	%
Frontier			2.1	%			10.8	%			0.0	%

 

Major telephone companies 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,
		2012				2011
Verizon			22.4	%			19.8	%
Century Link			6.4	%			10.8	%
Frontier			0.1	%			11.5	%
Telemon			13.6	%			2.9	%
Time Warner Cable			14.8	%			0.4	%

Geographic Information

The Company's financial information by geographic area was as follows for the fiscal years ended March 31:

 

(in thousands)		Domestic				International				Total
2012
Revenue		$	63,974			$	5,681			$	69,655
Operating income (loss)			798				(477	)			321
Total assets			192,137				5,289				197,426
2011
Revenue		$	140,848			$	7,001			$	147,849
Operating income			9,491				306				9,797
Total assets			192,457				8,930				201,387
2010
Revenue		$	133,410			$	6,354			$	139,764
Operating income			4,971				277				5,248
Total assets			113,461				8,373				121,834

International identifiable assets, revenues and operating income (loss) are related to Noran Tel, Inc. which is located in Regina, Saskatchewan, Canada. International identifiable assets for fiscal years 2011 and 2010 also include the assets of Conference Plus Global Services, Ltd., which was located in Dublin, Ireland and London, England. Conference Plus Global Services, Ltd was sold on December 31, 2011 with ConferencePlus.