Note 8. Business Segments

Beginning in the second quarter of fiscal year 2012, the Company modified the structure of its internal organization. As a result of this modification, the Company concluded that changes to its reportable segments were warranted. The Company now evaluates its business in two segments – commercial and retail. The commercial segment includes: (1) public carriers, contractors and program managers that are generally responsible for building and maintaining the infrastructure system and provide airtime service to individual subscribers; (2) private system operators and governments including commercial entities such as major utilities and transportation companies, federal agencies and state and local governments that run wireless networks for their own use; and (3) commercial dealers and resellers that sell, install and/or service cellular telephone, wireless networking, broadband and two-way radio communications equipment primarily for the enterprise market. The retail segment includes: (1) retailers, dealer agents and Tier 2 and 3 carriers; and (2) Tier 1 carriers (including the Company's largest customer AT&T Mobility, Inc.).

The Company evaluates revenue, gross profit and net profit contribution for each of its segments. Net profit contribution is defined as gross profit less any expenses that can be directly attributed or allocated to each segment. This includes sales, product management, purchasing, credit and collections and distribution team expenses, plus freight out and internal and external marketing costs. Corporate support expenses, which are not allocated to each segment, includes administrative costs – finance, human resources, information technology, operating facility occupancy expenses, depreciation, amortization and interest, plus the company-wide pay on performance bonus expense.

The Company does not segregate assets by segments, for internal reporting, for evaluating performance or for allocating capital. The Company has, however, allocated all goodwill and indefinite lived intangible assets to the applicable segments (and reporting units within segments, where applicable) for purposes of its annual impairment tests. The Company's goodwill at September 25, 2011 relates to acquisitions within its commercial segment. Certain cost of sales and other applicable expenses have been allocated to each segment based on a percentage of revenues and/or gross profit, where appropriate.

The segment information for the periods ended September 26, 2010 below have been restated to reflect the current year segment presentation.

Segment activity for the second quarter and first six months of fiscal years 2012 and 2011 is as follows (in thousands):

	Three months ended September 25, 2011
	Commercial Segment		Retail Segment		Total
Revenues
Public carrier, contractor & program manager market	$	20,065	$	-	$	20,065
Private system operator & government market		31,268		-		31,268
Commercial dealer & reseller market		31,257		-		31,257
Retailer, dealer agent & Tier 2/3 carrier market		-		26,847		26,847
Revenues, excluding Tier 1 carrier market		82,590		26,847		109,437
Tier 1 carrier market		-		39,400		39,400
Total revenues		82,590		66,247		148,837

Gross Profit
Public carrier, contractor & program manager market		4,309		-		4,309
Private system operator & government market		8,763		-		8,763
Commercial dealer & reseller market		8,962		-		8,962
Retailer, dealer agent & Tier 2/3 carrier market		-		5,911		5,911
Gross profit, excluding Tier 1 carrier market		22,034		5,911		27,945
Tier 1 carrier market		-		6,045		6,045
Total gross profit		22,034		11,956		33,990

Directly allocatable expenses		10,322		6,701		17,023
Segment net profit contribution	$	11,712	$	5,255		16,967
Corporate support expenses						11,210
Income before provision for income taxes					$	5,757

	Six months ended September 25, 2011
	Commercial Segment		Retail Segment		Total
Revenues
Public carrier, contractor & program manager market	$	38,231	$	-	$	38,231
Private system operator & government market		62,541		-		62,541
Commercial dealer & reseller market		60,136		-		60,136
Retailer, dealer agent & Tier 2/3 carrier market		-		55,542		55,542
Revenues, excluding Tier 1 carrier market		160,908		55,542		216,450
Tier 1 carrier market		-		95,902		95,902
Total revenues		160,908		151,444		312,352

Gross Profit
Public carrier, contractor & program manager market		8,658		-		8,658
Private system operator & government market		18,132		-		18,132
Commercial dealer & reseller market		17,112		-		17,112
Retailer, dealer agent & Tier 2/3 carrier market		-		11,995		11,995
Gross profit, excluding Tier 1 carrier market		43,902		11,995		55,897
Tier 1 carrier market		-		15,293		15,293
Total gross profit		43,902		27,288		71,190

Directly allocatable expenses		20,346		13,518		33,864
Segment net profit contribution	$	23,556	$	13,770		37,326
Corporate support expenses						24,149
Income before provision for income taxes					$	13,177

	Three months ended September 26, 2010
	Commercial Segment		Retail Segment		Total
Revenues
Public carrier, contractor & program manager market	$	24,229	$	-	$	24,229
Private system operator & government market		26,652		-		26,652
Commercial dealer & reseller market		31,681		-		31,681
Retailer, dealer agent & Tier 2/3 carrier market		-		26,165		26,165
Revenues, excluding Tier 1 carrier market		82,562		26,165		108,727
Tier 1 carrier market		-		56,299		56,299
Total revenues		82,562		82,464		165,026

Gross Profit
Public carrier, contractor & program manager market		5,618		-		5,618
Private system operator & government market		6,915		-		6,915
Commercial dealer & reseller market		8,284		-		8,284
Retailer, dealer agent & Tier 2/3 carrier market		-		6,095		6,095
Gross profit, excluding Tier 1 carrier market		20,817		6,095		26,912
Tier 1 carrier market		-		9,858		9,858
Total gross profit		20,817		15,953		36,770

Directly allocatable expenses		12,211		8,433		20,644
Segment net profit contribution	$	8,606	$	7,520		16,126
Corporate support expenses						10,689
Income before provision for income taxes					$	5,437

	Six months ended September 26, 2010
	Commercial Segment		Retail Segment		Total
Revenues
Public carrier, contractor & program manager market	$	45,988	$	-	$	45,988
Private system operator & government market		50,667		-		50,667
Commercial dealer & reseller market		59,745		-		59,745
Retailer, dealer agent & Tier 2/3 carrier market		-		51,083		51,083
Revenues, excluding Tier 1 carrier market		156,400		51,083		207,483
Tier 1 carrier market		-		99,496		99,496
Total revenues		156,400		150,579		306,979

Gross Profit
Public carrier, contractor & program manager market		10,590		-		10,590
Private system operator & government market		13,722		-		13,722
Commercial dealer & reseller market		15,856		-		15,856
Retailer, dealer agent & Tier 2/3 carrier market		-		11,234		11,234
Gross profit, excluding Tier 1 carrier market		40,168		11,234		51,402
Tier 1 carrier market		-		17,718		17,718
Total gross profit		40,168		28,952		69,120

Directly allocatable expenses		23,818		16,495		40,313
Segment net profit contribution	$	16,350	$	12,457		28,807
Corporate support expenses						20,010
Income before provision for income taxes					$	8,797

The Company also reviews revenue and gross profit by its four product categories:

Base station infrastructure products are used to build, repair and upgrade wireless telecommunications. Products include base station antennas, cable and transmission lines, small towers, lightning protection devices, connectors, power systems, miscellaneous hardware, two way radios and mobile antennas. Our base station infrastructure service offering includes connector installation, custom jumper assembly, site kitting and logistics integration.

Network systems products are used to build and upgrade computing and Internet networks. Products include fixed and mobile broadband equipment, wireless networking, filtering systems and security and surveillance products. This product category also includes training classes, technical support and engineering design services.

Installation, test and maintenance products are used to install, tune, maintain and repair wireless communications equipment. Products include sophisticated analysis equipment and various frequency-, voltage- and power-measuring devices, as well as an assortment of tools, hardware, GPS, safety and replacement and component parts and supplies required by service technicians.

Mobile devices and accessory products include cellular phone and data device accessories such as replacement batteries, cases, speakers, mobile amplifiers, power supplies, headsets, mounts, car antennas, music accessories and data and memory cards as well as two-way radios and related accessories. Retail merchandising displays, promotional programs, customized order fulfillment services and affinity-marketing programs, including private label Internet sites, complement our mobile devices and accessory product offering.

Base station infrastructure, network systems and installation, test and maintenance products are primarily sold into the commercial segment, while mobile device and accessories products are primarily sold into the retail segment.

Supplemental revenue and gross profit information by product category for the second quarter and first six months of fiscal years 2012 and 2011 is as follows (in thousands):

	Three months ended September 25, 2011		Six months ended September 25, 2011
Revenues
Base station infrastructure	$	49,464	$	96,672
Network systems		19,140		38,613
Installation, test and maintenance		12,129		22,076
Mobile device accessories		68,104		154,991
Total revenues		148,837		312,352

Gross Profit
Base station infrastructure		14,928		29,903
Network systems		3,771		7,645
Installation, test and maintenance		2,616		4,920
Mobile device accessories		12,675		28,722
Total gross profit		33,990		71,190

	Three months ended September 26, 2010		Six months ended September 26, 2010
Revenues
Base station infrastructure	$	49,584	$	96,022
Network systems		20,558		36,795
Installation, test and maintenance		10,188		20,039
Mobile device accessories		84,696		154,123
Total revenues		165,026		306,979

Gross Profit
Base station infrastructure		13,116		25,147
Network systems		4,170		7,635
Installation, test and maintenance		2,441		4,878
Mobile device accessories		17,043		31,460
Total gross profit		36,770		69,120