Quarterly report pursuant to Section 13 or 15(d)

Interim Segment Information

v2.4.1.9
Interim Segment Information
 9 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Interim Segment Information
Interim Segment Information
Westell’s Chief Executive Officer is the chief operating decision maker (CODM). In the first quarter of fiscal 2015, the Company revised its segment reporting structure to realign internal reporting as a result of the full integration of Kentrox into Westell, and the recent CSI acquisition. The CODM continues to define segment profit as gross profit less research and development expenses. In order to provide information that is comparable year to year, fiscal year 2014 segment information has been restated to reflect the new reporting structure. 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:
Communication Solutions Group (CSG) Segment
The CSG segment consists of all the intelligent site management, cell site optimization, and outside plant solutions product offerings. CSG segment products and solutions are developed at the Company’s design centers in Dublin, Ohio; Aurora, Illinois; and Regina, Canada. The CSG operations are managed centrally at the Aurora facility, where products are assembled, tested, packaged, and shipped to customers.
In-Building Wireless (IBW) Segment
The IBW segment consists of all the in-building wireless solutions products, which include the comprehensive suite of products and solutions acquired with the addition of CSI, as well as the Westell developed DAS interface panels. IBW segment products and solutions are developed at the Company’s design center in Manchester, New Hampshire. IBW operations are managed centrally at our Manchester facility, where products other than the Westell developed DAS panels, are assembled, tested, packaged, and shipped to customers. The Westell developed DAS panels are assembled, tested, packaged, and shipped from Aurora, Illinois.
Segment information for the three and nine months ended December 31, 2014, and 2013 is set forth below: 

 
 
Three months ended December 31, 2014
(in thousands)
 
CSG
 
IBW
 
Total
Revenue
 
$
8,629

 
$
5,414

 
$
14,043

Cost of revenue
 
6,144

 
3,504

 
9,648

Gross profit
 
2,485

 
1,910

 
4,395

Gross margin
 
28.8
%
 
35.3
%
 
31.3
%
Research and development
 
2,011

 
2,342

 
4,353

Segment profit (loss)
 
$
474

 
$
(432
)
 
42

Operating expenses:
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
2,719

General and administrative
 
 
 
 
 
2,797

Intangible amortization
 
 
 
 
 
1,562

Goodwill impairment
 
 
 
 
 
20,547

Operating income (loss)
 
 
 
 
 
(27,583
)
Other income (expense), net
 
 
 
 
 
(29
)
Income tax benefit (expense)
 
 
 
 
 
72

Net income (loss) from continuing operations
 
 
 
 
 
$
(27,540
)
 
 
 
 
 
 
 
 
 
Three months ended December 31, 2013
(in thousands)
 
CSG
 
IBW
 
Total
Revenue
 
$
23,425

 
$
1,811

 
$
25,236

Cost of revenue
 
12,037

 
1,267

 
13,304

Gross profit
 
11,388

 
544

 
11,932

Gross margin
 
48.6
%
 
30.0
%
 
47.3
%
Research and development
 
2,347

 
180

 
2,527

Segment profit
 
$
9,041

 
$
364

 
9,405

Operating expenses:
 
 
 
 
 


Sales and marketing
 
 
 


 
3,205

General and administrative
 
 
 


 
3,402

Intangible amortization
 
 
 
 
 
737

Restructuring
 
 
 


 
38

Operating income (loss)
 
 
 
 
 
2,023

Other income (expense), net
 
 
 


 
(31
)
Income tax benefit (expense)
 
 
 


 
(38
)
Net income (loss) from continuing operations
 
 
 
 
 
$
1,954

 
 
 
 
 
 
 

 
 
Nine months ended December 31, 2014
(in thousands)
 
CSG
 
IBW
 
Total
Revenue
 
$
34,882

 
$
30,632

 
$
65,514

Cost of revenue
 
24,827

 
18,543

 
43,370

Gross profit
 
10,055

 
12,089

 
22,144

Gross margin
 
28.8
%
 
39.5
%
 
33.8
%
Research and development
 
6,488

 
6,640

 
13,128

Segment profit
 
$
3,567

 
$
5,449

 
9,016

Operating expenses:
 
 
 
 
 


Sales and marketing
 
 
 
 
 
9,064

General and administrative
 
 
 
 
 
9,131

Intangible amortization
 
 
 
 
 
4,857

Restructuring
 
 
 
 
 
55

Goodwill impairment
 
 
 
 
 
31,102

Operating income (loss)
 
 
 
 
 
(45,193
)
Other income (expense), net
 
 
 
 
 
16

Income tax benefit (expense)
 
 
 
 
 
170

Net income (loss) from continuing operations
 
 
 
 
 
$
(45,007
)
 
 
 
 
 
 
 
 
 
Nine months ended December 31, 2013
(in thousands)
 
CSG
 
IBW
 
Total
Revenue
 
$
72,774

 
$
4,878

 
$
77,652

Cost of revenue
 
41,977

 
3,304

 
45,281

Gross profit
 
30,797

 
1,574

 
32,371

Gross margin
 
42.3
%

32.3
%
 
41.7
%
Research and development
 
7,292

 
553

 
7,845

Segment profit
 
$
23,505

 
$
1,021

 
24,526

Operating expenses:
 
 
 
 
 


Sales and marketing
 
 
 
 
 
9,749

General and administrative
 
 
 
 
 
10,200

Intangible amortization
 
 
 
 
 
3,588

Restructuring
 
 
 
 
 
273

Operating income (loss)
 
 
 


 
716

Other income (expense), net
 
 
 
 
 
(63
)
Income tax benefit (expense)
 
 
 
 
 
(125
)
Net income (loss) from continuing operations
 
 
 


 
$
528

 
 
 
 
 
 
 

Asset information, although available, is not reported to or used by the CODM.