Quarterly report pursuant to Section 13 or 15(d)

Interim Segment Information (Notes)

v3.19.3
Interim Segment Information (Notes)
 6 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Interim Segment Information
Interim Segment 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 define segment profit as 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 included in the Company's Annual Report on Form 10-K for year ended March 31, 2019, and as updated in this filing.
The Company’s three reportable segments are as follows:
In-Building Wireless (IBW) Segment
The IBW segment solutions enable cellular and public safety coverage in stadiums, arenas, malls, buildings, and other indoor areas not served well or at all by the existing "macro" outdoor wireless network. For commercial service, solutions include distributed antenna systems (DAS) conditioners and digital repeaters. For the public safety market, solutions include half-watt and two-watt Class B repeaters, our Class A repeater product suite and battery backup units. IBW also offers ancillary products that consist of passive system components and antennas for both the commercial and public safety markets.
Intelligent Site Management (ISM) Segment
ISM segment solutions include a suite of remote units, which are network devices used for on-site processing. Remotes provide on-site machine-to-machine (M2M) communications that enable operators to remotely monitor, manage, and control site infrastructure and support systems. Remotes can be and often are combined with our Optima management software system. ISM also offers support services (i.e., maintenance agreements) and deployment services (i.e., installation).
Communications Network Solutions (CNS) Segment
CNS segment solutions include a broad range of hardened network infrastructure offerings suitable for both indoor and outdoor use.  The offerings consist of integrated cabinets, power distribution products, copper and fiber network connectivity panels, fiber access products and T1 network interface units (NIUs).
Segment information for the three and six months ended September 30, 2019, and 2018, is set forth below: 
 
 
Three months ended September 30, 2019
(in thousands)
 
IBW
 
ISM
 
CNS
 
Total
Revenue
 
$
2,618

 
$
2,646

 
$
2,305

 
$
7,569

Cost of revenue
 
2,205


1,604

 
2,181

 
5,990

Gross profit
 
413

 
1,042

 
124

 
1,579

Gross margin
 
15.8
%
 
39.4
%
 
5.4
%
 
20.9
%
Research and development
 
403

 
619

 
427

 
1,449

Segment profit
 
$
10

 
$
423

 
$
(303
)
 
130

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
 
2,259

General and administrative
 
 
 
 
 
 
 
1,249

Intangible amortization
 
 
 
 
 
 
 
308

Operating profit (loss)
 
 
 
 
 
 
 
(3,686
)
Other income, net
 
 
 
 
 
 
 
125

Income tax benefit (expense)
 
 
 
 
 
 
 
—

Net income (loss) from continuing operations
 
 
 
 
 
 
 
$
(3,561
)
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2018
(in thousands)
 
IBW
 
ISM
 
CNS
 
Total
Revenue
 
$
3,646

 
$
2,646

 
$
3,814

 
$
10,106

Cost of revenue
 
1,954

 
1,224

 
2,735

 
5,913

Gross profit
 
1,692

 
1,422

 
1,079

 
4,193

Gross margin
 
46.4
%
 
53.7
%
 
28.3
%
 
41.5
%
Research and development
 
867

 
558

 
418

 
1,843

Segment profit
 
$
825

 
$
864

 
$
661

 
2,350

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
 
1,876

General and administrative
 
 
 
 
 
 
 
1,400

Intangible amortization
 
 
 
 
 
 
 
832

Operating profit (loss)
 
 
 
 
 
 
 
(1,758
)
Other income, net
 
 
 
 
 
 
 
165

Income tax benefit (expense)
 
 
 
 
 
 
 
(10
)
Net income (loss) from continuing operations
 
 
 
 
 
 
 
$
(1,603
)
 
 
Six months ended September 30, 2019
(in thousands)
 
IBW
 
ISM
 
CNS
 
Total
Revenue
 
$
5,541

 
$
5,741

 
$
5,289

 
$
16,571

Cost of revenue
 
4,156


3,120

 
4,470

 
11,746

Gross profit
 
1,385

 
2,621

 
819

 
4,825

Gross margin
 
25.0
%
 
45.7
%
 
15.5
%
 
29.1
%
Research and development
 
802

 
1,320

 
883

 
3,005

Segment profit
 
$
583

 
$
1,301

 
$
(64
)
 
1,820

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
 
4,591

General and administrative
 
 
 
 
 
 
 
2,613

Intangible amortization
 
 
 
 
 
 
 
616

Operating profit (loss)
 
 
 
 
 
 
 
(6,000
)
Other income, net
 
 
 
 
 
 
 
289

Income tax benefit (expense)
 
 
 
 
 
 
 
(7
)
Net income (loss)
 
 
 
 
 
 
 
$
(5,718
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended September 30, 2018
(in thousands)
 
IBW
 
ISM
 
CNS
 
Total
Revenue
 
$
7,203

 
$
8,390

 
$
7,550

 
$
23,143

Cost of revenue
 
3,849

 
4,020

 
5,146

 
13,015

Gross profit
 
3,354

 
4,370

 
2,404

 
10,128

Gross margin
 
46.6
%

52.1
%
 
31.8
%
 
43.8
%
Research and development
 
1,389

 
1,127

 
759

 
3,275

Segment profit (loss)
 
$
1,965

 
$
3,243

 
$
1,645

 
6,853

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
 
4,013

General and administrative
 
 
 
 
 
 
 
2,934

Intangible amortization
 
 
 
 
 
 
 
1,822

Operating profit (loss)
 
 
 
 
 
 
 
(1,916
)
Other income, net
 
 
 
 
 
 
 
284

Income tax benefit (expense)
 
 
 
 
 
 
 
(10
)
Net income (loss)
 
 
 
 
 
 
 
$
(1,642
)


Segment asset information is not reported to or used by the CODM.