3. SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

Segment Reporting

In accordance with the provisions of ASC 280, Segment Reporting (“ASC 280”), the Company has determined that it has six operating segments (Semiconductor Test, Semiconductor Handlers, Contactors, PCB Test, Probes / Pins, and Fixtures). Based on the aggregation criteria of ASC 280, the Company determined that several of the operating segments can be aggregated due to these segments having similar economic characteristics and meeting all of the other aggregation criteria in ASC 280. Consequently, the Company has two reportable segments: the Semiconductor Test Solutions (“STS”) reportable segment, which is comprised of the Semiconductor Test, Semiconductor Handlers and Contactors operating segments, and the Electronic Manufacturing Solutions (“EMS”) reportable segment, which is comprised of the PCB Test, Probes / Pins and Fixtures operating segments.

The Semiconductor Test operating segment includes operations related to the design, manufacture and sale of automated test equipment for the semiconductor industry that is used to test system-on-a-chip, digital, analog and mixed signal integrated circuits. The Semiconductor Handlers operating segment includes operations related to the design, manufacture and sale of test handlers used in the testing of integrated circuits. The Contactors segment includes operations related to the design, manufacture and sale of test contactors which serve as the interface between the test handler and the semiconductor device under test. The PCB Test operating segment includes operations related to design, manufacture and sale of equipment used in the testing of bare and printed circuit boards. The Probes / Pins operating segment includes operations related to the design, manufacture and sale of the physical devices used to connect electronic test equipment to the device under test. The Fixtures segment includes operations related to the design, manufacture and sale of PCB Test fixtures that enable the transmission of test signals from the loaded PCB to the tester. Each operating segment has a segment manager who is directly accountable to and maintains regular contact with the Company’s chief operating decision maker (chief executive officer and chief operating officer) to discuss operating activities, financial results, forecasts, and plans for the segment.

The Company evaluates performance using several factors, of which the primary financial measures are revenue and operating segment operating income. The accounting policies of the operating segments are the same as those described in Note 2 “Summary of Significant Accounting Policies”.

Segment information for the three and six months ended January 31, 2018 and 2017 is as follows (in thousands):


	Semiconductor Test Solutions		Electronic Manufacturing Solutions			Consolidated
Three months ended January 31, 2018
Net sales	$	91,841	$	18,435		$	110,276
Income (loss) from operations	$	12,314	$	(1,029	)	$	11,285
Depreciation and amortization expense	$	1,386	$	274		$	1,660
Three months ended January 31, 2017
Net sales	$	64,270	$	15,854		$	80,124
Income (loss) from operations	$	1,464	$	(254	)	$	1,210
Depreciation and amortization expense	$	1,350	$	210		$	1,560

	Semiconductor Test Solutions		Electronic Manufacturing Solutions			Consolidated
Six months ended January 31, 2018
Net sales	$	191,897	$	38,665		$	230,562
Income from operations	$	31,584	$	400		$	31,984
Depreciation and amortization expense	$	2,729	$	551		$	3,280
Six months ended January 31, 2017
Net sales	$	129,083	$	31,126		$	160,209
Income from operations	$	1,147	$	369		$	1,516
Depreciation and amortization expense	$	2,700	$	406		$	3,106

The Company is not disclosing total assets for each of its reportable segments, as total assets by reportable segment is not a key metric utilized by the Company’s chief operating decision maker.

Geographic Information

The Company’s net sales by geographic area for the three and six months ended January 31, 2018 and 2017, along with its long-lived assets by location at January 31, 2018 and July 31, 2017, are summarized as follows:


	Three Months Ended January 31,				Six Months Ended January 31,
	2018		2017		2018		2017
	(in thousands)
Net sales:
United States	$	11,650	$	16,500	$	23,978	$	26,705
Philippines		29,017		6,423		54,111		18,393
Taiwan		18,970		8,944		28,518		25,554
Thailand		9,187		6,284		20,840		11,966
Hong Kong/China		8,866		9,104		19,972		16,521
Singapore		7,448		7,273		12,146		12,267
Germany		7,066		7,649		16,500		14,079
Malaysia		6,361		8,618		15,376		13,129
All other countries		11,711		9,329		39,121		21,595

Total Net Sales	$	110,276	$	80,124	$	230,562	$	160,209


	January 31, 2018		July 31, 2017
	(in thousands)
Long-lived assets:
United States	$	13,872	$	14,426
Germany		8,509		8,579
Malaysia		4,491		3,069
Taiwan		907		375
China		901		285
Japan		681		791
Singapore		354		416
Philippines		42		82
All other countries		334		486

Total long-lived assets	$	30,091	$	28,509

Transfer prices on products sold to foreign subsidiaries are intended to produce profit margins that correspond to the subsidiary’s sales and support efforts.