Quarterly report pursuant to Section 13 or 15(d)

Interim Segment Information (Notes)

v3.19.3.a.u2
Interim Segment Information (Notes)
 9 Months Ended
Dec. 31, 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 nine months ended December 31, 2019, and 2018, is set forth below: 
 
 
Three months ended December 31, 2019
(in thousands)
 
IBW
 
ISM
 
CNS
 
Total
Revenue
 
$
2,466

 
$
2,456

 
$
2,237

 
$
7,159

Cost of revenue
 
1,657


991

 
1,731

 
4,379

Gross profit
 
809

 
1,465

 
506

 
2,780

Gross margin
 
32.8
%
 
59.6
%
 
22.6
%
 
38.8
%
Research and development
 
470

 
505

 
247

 
1,222

Segment profit
 
$
339

 
$
960

 
$
259

 
1,558

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
 
1,556

General and administrative
 
 
 
 
 
 
 
1,093

Intangible amortization
 
 
 
 
 
 
 
308

Restructuring
 
 
 
 
 
 
 
234

Operating profit (loss)
 
 
 
 
 
 
 
(1,633
)
Other income, net
 
 
 
 
 
 
 
109

Income tax benefit (expense)
 
 
 
 
 
 
 
(20
)
Net income (loss) from continuing operations
 
 
 
 
 
 
 
$
(1,544
)
 
 
 
 
 
 
 
 
 
 
 
Three months ended December 31, 2018
(in thousands)
 
IBW
 
ISM
 
CNS
 
Total
Revenue
 
$
2,794

 
$
5,116

 
$
2,812

 
$
10,722

Cost of revenue
 
1,725

 
2,217

 
2,190

 
6,132

Gross profit
 
1,069

 
2,899

 
622

 
4,590

Gross margin
 
38.3
%
 
56.7
%
 
22.1
%
 
42.8
%
Research and development
 
682

 
570

 
484

 
1,736

Segment profit
 
$
387

 
$
2,329

 
$
138

 
2,854

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
 
1,999

General and administrative
 
 
 
 
 
 
 
1,738

Intangible amortization
 
 
 
 
 
 
 
830

Operating profit (loss)
 
 
 
 
 
 
 
(1,713
)
Other income, net
 
 
 
 
 
 
 
158

Income tax benefit (expense)
 
 
 
 
 
 
 
(1
)
Net income (loss) from continuing operations
 
 
 
 
 
 
 
$
(1,556
)
 
 
Nine months ended December 31, 2019
(in thousands)
 
IBW
 
ISM
 
CNS
 
Total
Revenue
 
$
8,007

 
$
8,197

 
$
7,526

 
$
23,730

Cost of revenue
 
5,813


4,111

 
6,201

 
16,125

Gross profit
 
2,194

 
4,086

 
1,325

 
7,605

Gross margin
 
27.4
%
 
49.8
%
 
17.6
%
 
32.0
%
Research and development
 
1,272

 
1,825

 
1,130

 
4,227

Segment profit
 
$
922

 
$
2,261

 
$
195

 
3,378

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
 
6,147

General and administrative
 
 
 
 
 
 
 
3,706

Intangible amortization
 
 
 
 
 
 
 
924

Restructuring
 
 
 
 
 
 
 
234

Operating profit (loss)
 
 
 
 
 
 
 
(7,633
)
Other income, net
 
 
 
 
 
 
 
398

Income tax benefit (expense)
 
 
 
 
 
 
 
(27
)
Net income (loss) from continuing operations
 
 
 
 
 
 
 
$
(7,262
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended December 31, 2018
(in thousands)
 
IBW
 
ISM
 
CNS
 
Total
Revenue
 
$
9,997

 
$
13,506

 
$
10,362

 
$
33,865

Cost of revenue
 
5,574

 
6,237

 
7,336

 
19,147

Gross profit
 
4,423

 
7,269

 
3,026

 
14,718

Gross margin
 
44.2
%

53.8
%
 
29.2
%
 
43.5
%
Research and development
 
2,071

 
1,697

 
1,243

 
5,011

Segment profit (loss)
 
$
2,352

 
$
5,572

 
$
1,783

 
9,707

Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
 
6,012

General and administrative
 
 
 
 
 
 
 
4,672

Intangible amortization
 
 
 
 
 
 
 
2,652

Operating profit (loss)
 
 
 
 
 
 
 
(3,629
)
Other income, net
 
 
 
 
 
 
 
442

Income tax benefit (expense)
 
 
 
 
 
 
 
(11
)
Net income (loss) from continuing operations
 
 
 
 
 
 
 
$
(3,198
)


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