Segment and Geographic Information

12 Months Ended

Jun. 01, 2024

Segment Reporting [Abstract]

Segment and Geographic Information

10.SEGMENT AND GEOGRAPHIC INFORMATION

As described in Note 1, Description of the Company, the Company reports its financial performance based on the operating and reportable segments which are defined as follows:

Power and Microwave Technologies ("PMT") combines our core engineered solutions capabilities, power grid and microwave tube business with new disruptive RF, Wireless and Power technologies. As a designer, manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair - all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in 5G, aviation, broadcast, communications, industrial, marine, medical, military, scientific and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and

induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment.

Green Energy Solutions ("GES") combines our key technology partners and engineered solutions capabilities to design and manufacture innovative products for the fast-growing energy storage market and power management applications. As a designer, manufacturer, technology partner and authorized distributor, GES’s strategy is to provide specialized technical expertise and engineered solutions using our core design engineering and manufacturing capabilities on a global basis. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics and aftermarket technical service and repair - all through our existing global infrastructure. GES’s focus is on products for numerous green energy applications such as wind, solar, hydrogen and Electric Vehicles, and other power management applications that support green solutions such as synthetic diamond manufacturing.

Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial and medical original equipment manufacturers markets. Our engineers design, manufacture, source and support a full spectrum of solutions to match the needs of our customers. We offer long-term availability and proven custom display solutions that include touch screens, protective panels, custom enclosures, All-In-One computers, specialized cabinet finishes and application specific software packages and certification services. We partner with both private label manufacturing companies and leading branded hardware vendors to offer the highest quality display and touch solutions and customized computing platforms.

Healthcare manufactures, repairs, refurbishes and distributes high value replacement parts and equipment for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions currently under development for the diagnostic imaging service market. Through a combination of newly developed products and partnerships, service offerings and training programs, we believe we can help our customers improve efficiency while lowering the cost of healthcare delivery.

The CEO, who is the chief operating decision maker, evaluates performance and allocates Company resources primarily based on the gross profit of each segment.

Operating results by segment are summarized in the following table (in thousands):

	Fiscal Year Ended
	June 1, 2024		May 27, 2023		May 28, 2022
PMT
Net Sales	$	128,697	$	164,299	$	155,445
Gross Profit		38,717		54,089		50,810
GES
Net Sales	$	23,233	$	47,596	$	22,611
Gross Profit		6,607		13,719		7,231
Canvys
Net Sales	$	32,444	$	39,331	$	35,187
Gross Profit		10,973		12,375		11,252
Healthcare
Net Sales	$	12,086	$	11,432	$	11,377
Gross Profit		3,669		3,506		2,407

A reconciliation of assets to the relevant consolidated amount is as follows (in thousands):

	June 1, 2024		May 27, 2023
Segment assets	$	144,027	$	149,976
Cash and cash equivalents		24,263		24,981
Other current assets (1)		2,447		2,771
Net property, plant and equipment		15,079		14,124
Right of use lease assets		920		1,403
Other non-current assets		209		267
Other assets - non-current deferred income taxes		5,500		4,526
Total assets	$	192,445	$	198,048

(1)Other current assets include miscellaneous receivables and prepaid expenses.

Assets are not disclosed by reportable segment as the Company does not track assets by reportable segment and certain assets are not specific to any reportable segment.

PMT capital expenditures totaled $0.1 million for fiscal 2024 and fiscal 2023. Canvys capital expenditures totaled less than $0.1 million for fiscal 2023. Healthcare capital expenditures totaled $0.2 million for fiscal 2024 and $0.6 million for fiscal 2023. We also had capital expenditures of $3.7 million during fiscal 2024 and $6.6 million during fiscal 2023 related to the Company’s ERP system and facilities that were not specific to any particular reportable segment.

Geographic net sales information is primarily grouped by customer destination into five areas: North America; Asia/Pacific; Europe; Latin America; and Other.

Net sales and gross profit by geographic region are summarized in the following table (in thousands):

	Fiscal Year Ended
	June 1, 2024			May 27, 2023			May 28, 2022
Net Sales
North America	$	77,269		$	112,214		$	98,527
Asia/Pacific		45,264			59,557			49,235
Europe		61,476			62,017			64,435
Latin America		10,908			28,924			12,439
Other (1)		1,543			(54	)		(16	)
Total	$	196,460		$	262,658		$	224,620
Gross Profit
North America	$	29,306		$	43,580		$	36,548
Asia/Pacific		13,682			18,775			15,728
Europe		18,516			18,760			19,215
Latin America		3,983			7,735			4,340
Other (1)		(5,521	)		(5,161	)		(4,131	)
Total	$	59,966		$	83,689		$	71,700

(1)Includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add cost and other unallocated expenses.

We sell our products to customers in diversified industries and perform periodic credit evaluations of our customers’ financial condition. Terms are generally on open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe and Latin America. Estimates of credit losses are recorded in the financial statements based on monthly reviews of outstanding accounts.

Net assets by geographic region are summarized in the following table (in thousands):

	Fiscal Year Ended
	June 1, 2024		May 27, 2023
Net Assets
North America	$	100,550	$	106,528
Asia/Pacific		10,895		12,347
Europe		44,521		37,843
Latin America		1,986		2,602
Total	$	157,952	$	159,320

The Company had long-lived assets of $22.3 million as of June 1, 2024, and $22.7 million as of May 27, 2023. The long-lived assets, which include our fixed assets and intangibles, were primarily in the U.S. There were approximately $0.3 million of long-lived assets that belong to our foreign affiliates as of June 1, 2024 and $0.3 million as of May 27, 2023.

The Company had depreciation and amortization expense of $4.3 million, $3.7 million and $3.4 million for fiscal 2024, fiscal 2023 and fiscal 2022, respectively. The depreciation and amortization, which includes our fixed assets and intangibles, were primarily in the U.S. Depreciation and amortization expense that belongs to our foreign affiliates was approximately $0.1 million for fiscal 2024, $0.1 million for fiscal 2023 and $0.1 million for fiscal 2022, respectively.