Business Segments

3 Months Ended

Jun. 26, 2016

Business Segments

Business Segments

Note 10. 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.

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 first quarter of fiscal years 2017 and 2016 are as follows1 (in thousands):

	Three Months Ended
	June 26, 2016		June 28, 2015
Revenues
Public Carriers, Contractors & Program Managers	$	16,578	$	25,151
Government System Operators		9,852		7,883
Private System Operators		21,515		22,022
Commercial Dealers & Resellers		33,430		33,488
Retailer, Independent Dealer Agents & Carriers		47,485		46,120
Total revenues	$	128,860	$	134,664
Gross Profit
Public Carriers, Contractors & Program Managers	$	3,017	$	4,414
Government System Operators		2,140		1,947
Private System Operators		4,964		5,659
Commercial Dealers & Resellers		8,983		8,771
Retailer, Independent Dealer Agents & Carriers		8,002		8,191
Total gross profit	$	27,106	$	28,982

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 months ended June 28, 2015. The financial information presented above in this Note 10 reflects such reclassification.

Supplemental revenue and gross profit information by product category for the first quarter of fiscal years 2017 and 2016 are as follows2 (in thousands):

	Three months ended		Three months ended
	June 26, 2016		June 28, 2015
Revenues
Base station infrastructure	$	52,395	$	53,823
Network systems		18,430		21,194
Installation, test and maintenance		8,755		8,618
Mobile device accessories		49,280		51,029
Total revenues	$	128,860	$	134,664
Gross Profit
Base station infrastructure	$	13,428	$	14,096
Network systems		2,898		3,111
Installation, test and maintenance		1,568		1,630
Mobile device accessories		9,212		10,145
Total gross profit	$	27,106	$	28,982

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 months ended June 28, 2015. The financial information presented above in this Note 10 reflects such reclassification.