Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.8.0.1
Segment Information
 12 Months Ended
Mar. 31, 2018
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. The CODM continues to evaluate segment profit on 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.
The Company’s three reportable segments are as follows:
In-Building Wireless (IBW) Segment
The IBW segment solutions enable cellular coverage in stadiums, arenas, malls, buildings, and other indoor areas not served well or at all by the existing "macro" outdoor cellular network. For commercial service, the IBW segment solutions include distributed antenna system (DAS) conditioners and digital repeaters. For the public safety market, the IBW segment solutions include half-watt and two-watt repeaters and a battery backup unit. The Company’s IBW segment also offers ancillary products that consist of passive system components and antennas for both the commercial and public safety markets.
Intelligent Site Management and Services (ISMS) Segment
The ISMS segment solutions include a suite of remote units which provide machine-to-machine (M2M) communications that enable operators to remotely monitor, manage, and control site infrastructure and support systems. Remote units can be and often are combined with the Company’s Optima management software system. The Company also offers support services (i.e., maintenance agreements) and deployment services (i.e., installation).
Communications Network Solutions (CNS) Segment
The CNS segment solutions include a broad range of outdoor network infrastructure offerings consisting of integrated cabinets, power distribution products, copper and fiber connectivity panels, T1 network interface units (NIUs), and tower mounted amplifiers (TMAs).
Segment information for the fiscal years ended March 31, 2018 and 2017, is set forth below:
 
Fiscal Year Ended March 31, 2018
 
(in thousands)
IBW
 
ISMS
 
CNS
 
Total
 
Revenue
$
23,265

 
$
19,350

 
$
15,962

 
$
58,577

 
Gross profit
10,653

 
9,959

 
4,555

 
25,167

 
Gross margin
45.8
%
 
51.5
%
 
28.5
%
 
43.0
%
 
Research and development
4,141

 
2,264

 
970

 
7,375

 
Segment profit
$
6,512

 
$
7,695

 
$
3,585

 
17,792

 
Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
8,290

 
General and administrative
 
 
 
 
 
 
6,602

 
Intangible amortization
 
 
 
 
 
 
4,189

 
Restructuring
 
 
 
 
 
 
165

 
Long-lived assets impairment
 
 
 
 
 
 
—

 
Operating income (loss) from continuing operations
 
 
 
 
 
 
(1,454
)
 
Other income (expense), net
 
 
 
 
 
 
888

 
Income tax (expense) benefit
 
 
 
 
 
 
597

 
Net income (loss) from continuing operations
 
 
 
 
 
 
$
31

 
 
 
 
 
 
 
 
 
 
 
Fiscal Year Ended March 31, 2017
 
(in thousands)
IBW
 
ISMS
 
CNS
 
Total
 
Revenue
$
25,933

 
$
19,321

 
$
17,711

 
$
62,965

 
Gross profit
8,671

 
9,778

 
5,300

 
23,749

 
Gross margin
33.4
%
(1) 
50.6
%
 
29.9
%
 
37.7
%
(1) 
Research and development
6,738

 
3,955

 
1,674

 
12,367

 
Segment profit
$
1,933

 
$
5,823

 
$
3,626

 
11,382

 
Operating expenses:
 
 
 
 
 
 


 
Sales and marketing
 
 
 
 
 
 
10,344

 
General and administrative
 
 
 
 
 
 
7,991

 
Intangible amortization
 
 
 
 
 
 
4,764

 
Restructuring
 
 
 
 
 
 
3,155

 
Long-lived assets impairment
 
 
 
 
 
 
1,181

 
Operating income (loss) from continuing operations
 
 
 
 
 
 
(16,053
)
 
Other income (expense), net
 
 
 
 
 
 
170

 
Income tax (expense) benefit
 
 
 
 
 
 
(58
)
 
Net income (loss) from continuing operations
 
 
 
 
 
 
$
(15,941
)
 
(1) The fiscal year ended March 31, 2017, includes E&O expense for ClearLink DAS inventory and pipeline inventory. See Note 10, Restructuring Charges.
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 2018 and 2017. 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,
 
2018
 
2017
Verizon
18.0
%
 
21.9
%
AT&T
12.5
%
 
16.3
%
American Tower
7.2
%
 
10.0
%

Verizon, AT&T and American Tower are customers of all reporting segments.
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,
 
2018
 
2017
Verizon
36.2
%
 
19.0
%
AT&T
14.4
%
 
22.4
%
T-Mobile
8.4
%
 
13.3
%