Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.20.1
Segment Information
 12 Months Ended
Mar. 31, 2020
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 evaluates 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
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 cellular 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 products, and T1 network interface units (“NIUs”).
Segment information for the fiscal years ended March 31, 2020 and 2019, is set forth below:
 
Fiscal Year Ended March 31, 2020
 
(in thousands)
IBW
 
ISM
 
CNS
 
Total
 
Revenue
$
10,021

 
$
10,101

 
$
9,834

 
$
29,956

 
Cost of revenue
7,408

 
4,865

 
8,036

 
20,309

 
Gross profit
2,613

 
5,236

 
1,798

 
9,647

 
Gross margin
26.1
%
 
51.8
%
 
18.3
%
 
32.2
%
 
Research and development
1,757

 
2,237

 
1,352

 
5,346

 
Segment profit
$
856

 
$
2,999

 
$
446

 
4,301

 
Operating expenses:
 
 
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
 
7,592

 
General and administrative
 
 
 
 
 
 
4,757

 
Intangible amortization
 
 
 
 
 
 
1,233

 
Restructuring
 
 
 
 
 
 
234

 
Long-lived assets impairment
 
 
 
 
 
 
1,007

 
Operating income (loss) from continuing operations
 
 
 
 
 
 
(10,522
)
 
Other income (expense), net
 
 
 
 
 
 
456

 
Income tax (expense) benefit
 
 
 
 
 
 
(36
)
 
Net income (loss) from continuing operations
 
 
 
 
 
 
$
(10,102
)
 
 
 
 
 
 
 
 
 
 
 
Fiscal Year Ended March 31, 2019
 
(in thousands)
IBW
 
ISM
 
CNS
 
Total
 
Revenue
$
12,474

 
$
17,263

 
$
13,833

 
$
43,570

 
Cost of revenue
7,272

 
8,223

 
9,711

 
25,206

 
Gross profit
5,202

 
9,040

 
4,122

 
18,364

 
Gross margin
41.7
%

52.4
%
 
29.8
%
 
42.1
%
 
Research and development
2,755

 
2,390

 
1,645

 
6,790

 
Segment profit
$
2,447

 
$
6,650

 
$
2,477

 
11,574

 
Operating expenses:
 
 
 
 
 
 


 
Sales and marketing
 
 
 
 
 
 
8,342

 
General and administrative
 
 
 
 
 
 
6,699

 
Intangible amortization
 
 
 
 
 
 
3,435

 
Restructuring
 
 
 
 
 
 
—

 
Long-lived assets impairment
 
 
 
 
 
 
4,722

 
Operating income (loss) from continuing operations
 
 
 
 
 
 
(11,624
)
 
Other income (expense), net
 
 
 
 
 
 
626

 
Income tax (expense) benefit
 
 
 
 
 
 
(39
)
 
Net income (loss) from continuing operations
 
 
 
 
 
 
$
(11,037
)
 

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 2020 and 2019. 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,
 
2020
 
2019
Verizon
9.9
%
 
23.1
%
AT&T
7.3
%
 
11.4
%

Verizon and AT&T 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,
 
2020
 
2019
Verizon
12.5
%
 
27.5
%
AT&T
10.8
%
 
8.0
%