Business Segments

9 Months Ended

Dec. 27, 2015

Business Segments

Business Segments

Note 9. Business Segments

The Company evaluates its business as one segment, as the chief operating decision maker assesses performance and allocates resources on a consolidated basis. 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) government system operators including federal agencies and state and local governments that run wireless networks for their own use;  (3) private system operators including commercial entities such as enterprise customers, major utilities and transportation companies; (4) commercial dealers and resellers that sell, install and/or service cellulartelephone, wireless networking, broadband and two-way radio communications equipment primarily for the enterprise market; and (5) retailers, independent dealer agents and carriers. Beginning in the third quarter of fiscal 2015, the Company began reporting private system operators and government system operators as two separate market units. All prior periods have been restated to reflect this change.

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 systems. 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, distributed antenna systems (DAS), 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.

The Company evaluates revenue, gross profit, and income before provision for income taxes at a consolidated level.  Certain cost of sales and other applicable expenses have been allocated to each market unit or product type 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 2016 and 2015 are as follows1 (in thousands):

	Three Months Ended
	December 27, 2015		December 28, 2014
Revenues
Public Carriers, Contractors & Program Managers	$	22,381	$	22,847
Government System Operators		9,849		7,781
Private System Operators		21,634		25,422
Commercial Dealers & Resellers		32,566		30,786
Retailer, Independent Dealer Agents & Carriers		53,081		48,353
Total revenues	$	139,511	$	135,189
Gross Profit
Public Carriers, Contractors & Program Managers	$	3,678	$	4,283
Government System Operators		2,220		1,801
Private System Operators		5,093		5,599
Commercial Dealers & Resellers		8,706		8,060
Retailer, Independent Dealer Agents & Carriers		9,756		9,078
Total gross profit	$	29,453	$	28,821
	Nine Months Ended
	December 27, 2015		December 28, 2014
Revenues
Public Carriers, Contractors & Program Managers	$	73,335	$	105,118
Government System Operators		26,514		23,948
Private System Operators		66,712		67,705
Commercial Dealers & Resellers		100,109		105,850
Retailer, Independent Dealer Agents & Carriers		149,858		134,036
Total revenues	$	416,528	$	436,657
Gross Profit
Public Carriers, Contractors & Program Managers	$	12,485	$	17,006
Government System Operators		6,260		5,927
Private System Operators		16,293		16,332
Commercial Dealers & Resellers		26,289		27,539
Retailer, Independent Dealer Agents & Carriers		27,620		26,523
Total gross profit	$	88,947	$	93,327

1 See Note 2 for a discussion of the reclassification of indirect inventory costs from selling, general, and administrative expenses to cost of goods sold, as it relates to the three and nine months ended December 28, 2014 as well as the nine months ended December 27, 2015. The financial information presented above in this Note 9 reflects such reclassification.

Supplemental revenue and gross profit information by product category for the third quarter and first nine months of fiscal years 2016 and 2015 are as follows2 (in thousands):

	Three months ended		Three months ended
	December 27, 2015		December 28, 2014
Revenues
Base station infrastructure	$	51,571	$	50,631
Network systems		22,922		20,299
Installation, test and maintenance		9,851		11,938
Mobile device accessories		55,167		52,321
Total revenues	$	139,511	$	135,189
Gross Profit
Base station infrastructure	$	13,381	$	13,018
Network systems		3,717		3,361
Installation, test and maintenance		1,687		2,314
Mobile device accessories		10,668		10,128
Total gross profit	$	29,453	$	28,821
	Nine months ended		Nine months ended
	December 27, 2015		December 28, 2014
Revenues
Base station infrastructure	$	161,669	$	177,647
Network systems		66,541		78,339
Installation, test and maintenance		27,481		33,523
Mobile device accessories		160,837		147,148
Total revenues	$	416,528	$	436,657
Gross Profit
Base station infrastructure	$	41,139	$	44,415
Network systems		10,200		10,904
Installation, test and maintenance		5,184		6,682
Mobile device accessories		32,424		31,326
Total gross profit	$	88,947	$	93,327

2 See Note 2 for a discussion of the reclassification of indirect inventory costs from selling, general, and administrative expenses to cost of goods sold, as it relates to the three and nine months ended December 28, 2014 as well as the nine months ended December 27, 2015. The financial information presented above in this Note 9 reflects such reclassification.