Business Segments

9 Months Ended

Dec. 29, 2013

Business Segments [Abstract]

Business Segments

Note 7. Business Segments

Beginning in the first quarter of fiscal year 2014, the Company modified the structure of its internal organization in order to streamline its operations and have all sales operations report to one individual. Each of the Company's product lines is sold to each of its customer markets; assets are not segmented; and support resources are shared between all sales teams.  As a result of this modification, the Company concluded that changes to its reportable segments were warranted. The Company now evaluates its business as one segment as the chief operating decision maker reviews results as one unit. However, to provide investors with increased visibility into the markets it serves, the Company also reports revenue and gross profit by the following customer market units:  (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; (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;  (4) retailers, dealer agents and carriers; and (5) our Major 3PL relationship that was fully transitioned at the end of fiscal year 2013. All prior periods have been restated to reflect this change.

The Company evaluates revenue, gross profit, net profit contribution and income before provision for income taxes in the aggregate. Net profit contribution is defined as gross profit less any expenses that can be directly attributed.  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 include administrative costs – finance, human resources, information technology, operating facility occupancy expenses, depreciation, amortization and interest, plus the company-wide pay on performance bonus expense.

Certain cost of sales and other applicable expenses have been allocated to each market unit based on a percentage of revenues and/or gross profit, where appropriate.

Market unit activity for the third quarter and first nine months of fiscal years 2014 and 2013 is as follows (in thousands):

	Three Months Ended
	December 29,2013		December 30,2012
Revenues
Public Carriers, Contractors & Program Managers	$	37,550	$	32,554
Private & Government System Operators		29,944		30,199
Commercial Dealers & Resellers		36,630		36,786
Retailer, Independent Dealer Agents & Carriers		40,791		46,010
Revenue, excluding Major 3PL relationship		144,915		145,549
Major 3PL relationship		--		58,910
Total revenues		144,915		204,459
Gross Profit
Public Carriers, Contractors & Program Managers		7,875		6,832
Private & Government System Operators		8,190		8,476
Commercial Dealers & Resellers		10,295		10,227
Retailer, Independent Dealer Agents & Carriers		9,782		10,058
Gross profit, excluding Major 3PL relationship		36,142		35,593
Major 3PL relationship		--		3,377
Total gross profit		36,142		38,970
Direct expenses		18,583		18,855
Segment net profit contribution		17,559		20,115
Corporate support expenses		10,429		11,385
Income before provision for income taxes	$	7,130	$	8,730

	Nine Months Ended
	December 29,2013		December 30,2012
Revenues
Public Carriers, Contractors & Program Managers	$	115,881	$	78,383
Private & Government System Operators		88,896		94,063
Commercial Dealers & Resellers		109,107		104,049
Retailer, Independent Dealer Agents & Carriers		121,666		131,043
Revenue, excluding Major 3PL relationship		435,550		407,538
Major 3PL relationship		--		186,577
Total revenues		435,550		594,115
Gross Profit
Public Carriers, Contractors & Program Managers		24,784		16,925
Private & Government System Operators		24,368		25,867
Commercial Dealers & Resellers		30,635		28,826
Retailer, Independent Dealer Agents & Carriers		28,286		28,130
Gross profit, excluding Major 3PL relationship		108,073		99,748
Major 3PL relationship		--		13,340
Total gross profit		108,073		113,088
Direct expenses		53,995		54,197
Segment net profit contribution		54,078		58,891
Corporate support expenses		32,517		34,562
Income before provision for income taxes	$	21,561	$	24,329

To provide investors with better visibility, the Company also discloses 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, 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, two-way radios 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 device accessories 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. 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.

Supplemental revenue and gross profit information by product category for the third quarter and first nine months of fiscal years 2014 and 2013 are as follows (in thousands):

	Three months ended December 29,2013		Three months ended December 30,2012
Revenues
Base station infrastructure	$	59,833	$	61,400
Network systems		26,856		19,649
Installation, test and maintenance		13,681		13,357
Mobile device accessories		44,545		110,053
Total revenues	$	144,915	$	204,459
Gross Profit
Base station infrastructure	$	17,117	$	17,726
Network systems		4,703		3,784
Installation, test and maintenance		3,073		3,077
Mobile device accessories		11,249		14,383
Total gross profit	$	36,142	$	38,970

	Nine months ended December 29,2013		Nine months ended December 30,2012
Revenues
Base station infrastructure	$	197,262	$	167,580
Network systems		67,757		59,551
Installation, test and maintenance		36,031		36,137
Mobile device accessories		134,500		330,847
Total revenues	$	435,550	$	594,115
Gross Profit
Base station infrastructure	$	54,771	$	48,886
Network systems		12,266		11,422
Installation, test and maintenance		8,203		8,443
Mobile device accessories		32,833		44,337
Total gross profit	$	108,073	$	113,088