Business Segments

9 Months Ended

Dec. 25, 2016

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 cellular telephone, 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 third quarter and first nine months of fiscal years 2017 and 2016 are as follows (in thousands):

	Three Months Ended
	December 25, 2016		December 27, 2015
Revenues
Public Carriers, Contractors & Program Managers	$	25,851	$	22,381
Government System Operators		8,250		9,849
Private System Operators		27,120		21,634
Commercial Dealers & Resellers		29,913		32,566
Retailer, Independent Dealer Agents & Carriers		56,064		53,081
Total revenues	$	147,198	$	139,511
Gross Profit
Public Carriers, Contractors & Program Managers	$	4,070	$	3,678
Government System Operators		1,843		2,220
Private System Operators		6,230		5,093
Commercial Dealers & Resellers		8,362		8,706
Retailer, Independent Dealer Agents & Carriers		9,464		9,756
Total gross profit	$	29,969	$	29,453

	Nine Months Ended
	December 25, 2016		December 27, 2015
Revenues
Public Carriers, Contractors & Program Managers	$	60,961	$	73,335
Government System Operators		27,092		26,514
Private System Operators		72,370		66,712
Commercial Dealers & Resellers		95,599		100,109
Retailer, Independent Dealer Agents & Carriers		154,670		149,858
Total revenues	$	410,692	$	416,528
Gross Profit
Public Carriers, Contractors & Program Managers	$	10,323	$	12,485
Government System Operators		6,075		6,260
Private System Operators		16,623		16,293
Commercial Dealers & Resellers		26,269		26,289
Retailer, Independent Dealer Agents & Carriers		26,540		27,620
Total gross profit	$	85,830	$	88,947

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

	Three months ended		Three months ended
	December 25, 2016		December 27, 2015
Revenues
Base station infrastructure	$	52,193	$	51,571
Network systems		25,242		22,922
Installation, test and maintenance		9,633		9,851
Mobile device accessories		60,130		55,167
Total revenues	$	147,198	$	139,511
Gross Profit
Base station infrastructure	$	13,857	$	13,381
Network systems		3,186		3,717
Installation, test and maintenance		1,594		1,687
Mobile device accessories		11,332		10,668
Total gross profit	$	29,969	$	29,453

	Nine months ended		Nine months ended
	December 25, 2016		December 27, 2015
Revenues
Base station infrastructure	$	157,090	$	161,669
Network systems		65,133		66,541
Installation, test and maintenance		25,269		27,481
Mobile device accessories		163,200		160,837
Total revenues	$	410,692	$	416,528
Gross Profit
Base station infrastructure	$	40,738	$	41,139
Network systems		9,505		10,200
Installation, test and maintenance		4,538		5,184
Mobile device accessories		31,049		32,424
Total gross profit	$	85,830	$	88,947