Quarterly report pursuant to Section 13 or 15(d)

Interim Segment Information (Notes)

v3.20.2
Interim Segment Information (Notes)
 6 Months Ended
Sep. 30, 2020
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 defines 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, 2020, 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 cellular service, solutions include distributed antenna system (“DAS") conditioners and digital repeaters. For the public safety market, solutions include Class A repeaters, Class B repeaters, and battery backup units. IBW also offers ancillary products that consist of passive system components and antennas for both the cellular service and public safety markets.
Intelligent Site Management (“ISM") Segment
ISM segment solutions include a suite of remote units, which provide machine-to-machine (“M2M") communications that enable operators to remotely monitor, manage, and control physical site infrastructure and support systems. Remote units can be and often are combined with the Company's 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, and T1 network interface units (“NIUs").

Segment information for the three and six months ended September 30, 2020, and 2019, is set forth below: 
Three months ended September 30, 2020
(in thousands) IBW ISM CNS Total
Revenue $ 3,021  $ 1,908  $ 3,391  $ 8,320 
Cost of revenue 1,987 

883  2,659  5,529 
Gross profit 1,034  1,025  732  2,791 
Gross margin 34.2  % 53.7  % 21.6  % 33.5  %
Research and development 315  404  195  914 
Segment profit $ 719  $ 621  $ 537  1,877 
Operating expenses:
Sales and marketing 1,448 
General and administrative 1,102 
Intangible amortization 225 
Operating profit (loss) (898)
Other income, net 15 
Income tax benefit (expense) (2)
Net income (loss) $ (885)
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 (loss) $ 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) $ (3,561)
  Six months ended September 30, 2020
(in thousands) IBW ISM CNS Total
Revenue $ 5,970  $ 3,955  $ 5,745  $ 15,670 
Cost of revenue 3,736 

1,775  4,526  10,037 
Gross profit 2,234  2,180  1,219  5,633 
Gross margin 37.4  % 55.1  % 21.2  % 35.9  %
Research and development 664  786  409  1,859 
Segment profit $ 1,570  $ 1,394  $ 810  3,774 
Operating expenses:
Sales and marketing 2,824 
General and administrative 2,312 
Intangible amortization 451 
Operating profit (loss) (1,813)
Other income, net 45 
Income tax benefit (expense) 58 
Net income (loss) $ (1,710)
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 (loss) $ 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)
Segment asset information is not reported to or used by the CODM.