Quarterly report pursuant to Section 13 or 15(d)

Interim Segment Information

v2.4.0.8
Interim Segment Information
 6 Months Ended
Sep. 30, 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; Goleta, California; 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 six months ended September 30, 2014, and 2013 is set forth below: 

 
 
Three months ended September 30, 2014
(in thousands)
 
CSG
 
IBW
 
Total
Revenue
 
$
12,525

 
$
11,121

 
$
23,646

Cost of revenue
 
8,828

 
6,753

 
15,581

Gross profit
 
3,697

 
4,368

 
8,065

Gross margin
 
29.5
%
 
39.3
%
 
34.1
%
Research and development
 
2,197

 
2,103

 
4,300

Segment profit
 
$
1,500

 
$
2,265

 
3,765

Operating expenses:
 
 
 
 
 
 
Sales and marketing
 
 
 
 
 
2,924

General and administrative
 
 
 
 
 
3,280

Intangible amortization
 
 
 
 
 
1,710

Restructuring
 
 
 
 
 
(2
)
Goodwill impairment
 
 
 
 
 
10,555

Operating income (loss)
 
 
 
 
 
(14,702
)
Other income (expense), net
 
 
 
 
 
(16
)
Income tax benefit (expense)
 
 
 
 
 
69

Net income (loss) from continuing operations
 
 
 
 
 
$
(14,649
)
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2013
(in thousands)
 
CSG
 
IBW
 
Total
Revenue
 
$
27,920

 
$
2,040

 
$
29,960

Cost of revenue
 
16,633

 
1,305

 
17,938

Gross profit
 
11,287

 
735

 
12,022

Gross margin
 
40.4
%
 
36.0
%
 
40.1
%
Research and development
 
2,438

 
181

 
2,619

Segment profit
 
$
8,849

 
$
554

 
9,403

Operating expenses:
 
 
 
 
 


Sales and marketing
 
 
 


 
3,485

General and administrative
 
 
 


 
3,226

Intangible amortization
 
 
 
 
 
1,229

Restructuring
 
 
 


 
169

Operating income (loss)
 
 
 
 
 
1,294

Other income (expense), net
 
 
 


 
98

Income tax benefit (expense)
 
 
 


 
(68
)
Net income (loss) from continuing operations
 
 
 
 
 
$
1,324

 
 
 
 
 
 
 

 
 
Six months ended September 30, 2014
(in thousands)
 
CSG
 
IBW
 
Total
Revenue
 
$
26,253

 
$
25,218

 
$
51,471

Cost of revenue
 
18,683

 
15,039

 
33,722

Gross profit
 
7,570

 
10,179

 
17,749

Gross margin
 
28.8
%
 
40.4
%
 
34.5
%
Research and development
 
4,477

 
4,298

 
8,775

Segment profit
 
$
3,093

 
$
5,881

 
8,974

Operating expenses:
 
 
 
 
 


Sales and marketing
 
 
 
 
 
6,345

General and administrative
 
 
 
 
 
6,334

Intangible amortization
 
 
 
 
 
3,295

Restructuring
 
 
 
 
 
55

Goodwill impairment
 
 
 
 
 
10,555

Operating income (loss)
 
 
 
 
 
(17,610
)
Other income (expense), net
 
 
 
 
 
45

Income tax benefit (expense)
 
 
 
 
 
98

Net income (loss) from continuing operations
 
 
 
 
 
$
(17,467
)
 
 
 
 
 
 
 
 
 
Six months ended September 30, 2013
(in thousands)
 
CSG
 
IBW
 
Total
Revenue
 
$
49,349

 
$
3,067

 
$
52,416

Cost of revenue
 
29,940

 
2,037

 
31,977

Gross profit
 
19,409

 
1,030

 
20,439

Gross margin
 
39.3
%

33.6
%
 
39.0
%
Research and development
 
4,945

 
373

 
5,318

Segment profit
 
$
14,464

 
$
657

 
15,121

Operating expenses:
 
 
 
 
 


Sales and marketing
 
 
 
 
 
6,544

General and administrative
 
 
 
 
 
6,798

Intangible amortization
 
 
 
 
 
2,851

Restructuring
 
 
 
 
 
235

Operating income (loss)
 
 
 


 
(1,307
)
Other income (expense), net
 
 
 
 
 
(32
)
Income tax benefit (expense)
 
 
 
 
 
(87
)
Net income (loss) from continuing operations
 
 
 


 
$
(1,426
)
 
 
 
 
 
 
 


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