Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.3.0.814
Segment Information
 12 Months Ended
Mar. 31, 2015
Segment Reporting [Abstract]  
Segment Information
Segment and Related 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. In 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 CSI acquisition. The CODM continues to evaluate segment profit on gross profit less research and development expenses. In order to provide information that is comparable year to year, fiscal 2014 and 2013 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:
In-Building Wireless (IBW) Segment
The IBW segment solutions include distributed antenna systems (DAS) conditioners, high-performance digital repeaters and bi-directional amplifiers (BDAs), and system components and antennas, all used by wireless service providers and neutral-party hosts to fine tune radio frequency (RF) signals that helps extend coverage to areas not served well or at all by traditional cell sites.
Communication Solutions Group (CSG) Segment
The CSG segment solutions include intelligent site management (ISM), cell site optimization (CSO), and outside plant (OSP) as follows:
• ISM solutions include a suite of Remote monitoring and control devices which, when combined with the Company's Optima management system, provides comprehensive machine-to-machine (M2M) communications that enable operators to remotely monitor, manage, and control site infrastructure and support systems.
• CSO solutions consist of tower mounted amplifiers (TMAs), small outdoor-hardened units mounted next to antennas on cell towers, enabling wireless service providers to improve the overall performance of a cell site, including increasing data throughput and reducing dropped connections.
• OSP solutions, which are sold to wireline and wireless service providers as well as industrial network operators, consist of a broad range of offerings, including cabinets, enclosures, and mountings; synchronous optical networks/time division multiplexing (SONET/TDM) network interface units; power distribution units; copper and fiber connectivity panels; hardened Ethernet switches; and systems integration services.
Segment information for the fiscal years ended March 31, 2015, 2014 and 2013, is set forth below:
 
Fiscal Year Ended March 31, 2015 (as restated (1))
(in thousands)
IBW
 
CSG
 
Total
Revenue
$
37,714

 
$
46,413

 
$
84,127

Gross profit
13,715

 
13,095

 
26,810

Gross margin
36.4
%
 
28.2
%
 
31.9
%
Research & development
8,955

 
8,393

 
17,348

Segment profit
$
4,760

 
$
4,702

 
9,462

Operating expenses:
 
 
 
 
 
Sales & marketing
 
 
 
 
12,407

General & administrative
 
 
 
 
14,678

Intangible amortization
 
 
 
 
6,377

Restructuring
 
 
 
 
3,243

Goodwill impairment
 
 
 
 
31,997

Operating income (loss)
 
 
 
 
(59,240
)
Other income (expense), net
 
 
 
 
(2
)
Income tax (expense) benefit
 
 
 
 
201

Net income (loss) from continuing operations
 
 
 
 
$
(59,041
)
(1) See Note 1 for restatement information.
 
 
 
 
 
 
Fiscal Year Ended March 31, 2014 (as restated (1))
(in thousands)
IBW
 
CSG
 
Total
Revenue
$
13,096

 
$
88,977

 
$
102,073

Gross profit
4,161

 
36,300

 
40,461

Gross margin
31.8
%

40.8
%
 
39.6
%
Research & development
1,360

 
9,979

 
11,339

Segment profit
$
2,801

 
$
26,321

 
29,122

Operating expenses:
 
 
 
 


Sales & marketing
 
 
 
 
13,304

General & administrative
 
 
 
 
14,027

Intangible amortization
 
 
 
 
4,889

Restructuring
 
 
 
 
335

Operating income (loss)
 
 
 
 
(3,433
)
Other income (expense), net
 
 
 
 
(56
)
Income tax (expense) benefit
 
 
 
 
7,910

Net income (loss) from continuing operations
 
 
 
 
$
4,421

(1) See Note 1 for restatement information.

 
Fiscal Year Ended March 31, 2013
(in thousands)
IBW
 
CSG
 
Total
Revenue
$
904

 
$
37,904

 
$
38,808

Gross profit
391

 
12,225

 
12,616

Gross margin
43.3
%
 
32.3
%
 
32.5
%
Research & development
305

 
5,623

 
5,928

Segment profit
$
86

 
$
6,602

 
6,688

Operating expenses:
 
 
 
 
 
Sales & marketing
 
 
 
 
6,783

General & administrative
 
 
 
 
9,310

Intangible amortization
 
 
 
 
887

Restructuring
 
 
 
 
149

Goodwill impairment
 
 
 
 
2,884

Operating income (loss)
 
 
 
 
(13,325
)
Other income (expense), net
 
 
 
 
175

Income tax (expense) benefit
 
 
 
 
(29,392
)
Net income (loss) from continuing operations
 
 
 
 
$
(42,542
)
 
Segment asset information is not reported to or used by the CODM.
Enterprise-wide and Geographic Information
More than 90% of the Company’s revenues were generated in the United States in fiscal years 2015, 2014 and 2013. More than 90% of the Company's long-lived assets are located in the United States.
Significant Customers and Concentration of Credit
The Company is dependent on certain major companies operating in telecommunications markets 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,
 
2015
 
2014
 
2013
Verizon
30.5
%
 
23.9
%
 
17.1
%
Telamon
5.8
%
 
30.3
%
 
12.4
%
Time Warner Cable
2.6
%
 
2.3
%
 
10.4
%

Major companies operating in telecommunications markets 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,
 
2015
 
2014
Verizon
30.4
%
 
30.6
%
AT&T
12.7
%
 
16.7
%