Operating Segments

12 Months Ended

Apr. 01, 2018

Operating Segments

Operating Segment

Note 10. Operating Segments

Beginning with the first quarter of fiscal year 2018, the Company modified the structure of its internal organization in an effort to better serve the market place. Retail inventory typically has a shorter more defined life cycle and is, typically, ultimately used by individual end users. Commercial inventory typically has a life cycle that tends to be tied to changes in regulation or technology and includes products typically used by business entities or governments. Reflective of these differences, our sales and product teams have been reorganized and each now report to either a retail or commercial leader. The Company concluded that corresponding changes to its reportable segments are warranted and now evaluates its business within two segments: commercial and retail. The commercial segment consists of the following customer markets: (1) public carriers, that are generally responsible for building and maintaining the infrastructure system and provide airtime service to individual subscribers; (2) government, including federal agencies and state and local governments that run wireless networks for their own use as well as value-added resellers who specialize in selling to the government; (3) private system operators including commercial entities such as enterprise customers, major utilities and transportation companies; and (4) value-added 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 consists of the market which includes retailers, independent dealer agents and carriers. All prior periods have been restated to reflect this change.

During the first quarter of fiscal year 2018, in conjunction with the modification of the structure of the internal organization of the Company, as described above, the Company reviewed several customer types, including a large repair center customer, and reclassified them from the private system operators market to either the value-added resellers market or the retail segment, based on their purchase history. The Company has restated prior periods to reflect these changes.

The Company evaluates revenue, gross profit and net profit contribution, and income before provision for income taxes in the in the aggregate for both the commercial and retail segments. 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 based on a percentage of revenues and/or gross profit, where appropriate.

Segment activity for the fiscal years ended 2018, 2017 and 2016 is as follows (in thousands):

	Year Ended
	April 1, 2018
	Commercial		Retail
	Segment		Segment		Total
Revenues
Public Carrier	$	115,061	$	—	$	115,061
Government		40,481		—		40,481
Private System Operators		93,246		—		93,246
Value-Added Resellers		136,888		—		136,888
Retail		—		194,599		194,599
Total revenues	$	385,676	$	194,599	$	580,275
Gross Profit
Public Carrier	$	16,707	$	—	$	16,707
Government		8,954		—		8,954
Private System Operators		20,363		—		20,363
Value-Added Resellers		35,303		—		35,303
Retail		—		38,901		38,901
Total gross profit	$	81,327	$	38,901	$	120,228
Directly allocable expenses		32,592		15,535		48,127
Segment net profit contribution	$	48,735	$	23,366		72,101
Corporate support expenses						64,628
Income before provision for income taxes					$	7,473

	Year Ended
	March 26, 2017
	Commercial		Retail
	Segment		Segment		Total
Revenues
Public Carrier	$	82,015	$	—	$	82,015
Government		36,676		—		36,676
Private System Operators		82,508		—		82,508
Value-Added Resellers		130,486		—		130,486
Retail		—		201,610		201,610
Total revenues	$	331,685	$	201,610	$	533,295
Gross Profit
Public Carrier	$	13,706	$	—	$	13,706
Government		8,235		—		8,235
Private System Operators		18,073		—		18,073
Value-Added Resellers		35,530		—		35,530
Retail		—		36,224		36,224
Total gross profit	$	75,544	$	36,224	$	111,768
Directly allocable expenses		32,455		16,399		48,854
Segment net profit contribution	$	43,089	$	19,825		62,914
Corporate support expenses						60,428
Income before provision for income taxes					$	2,486

	Year Ended
	March 27, 2016
	Commercial		Retail
	Segment		Segment		Total
Revenues
Public Carrier	$	89,171	$	—	$	89,171
Government		33,009		—		33,009
Private System Operators		76,809		—		76,809
Value-Added Resellers		132,403		—		132,403
Retail		—		199,290		199,290
Total revenues	$	331,392	$	199,290	$	530,682
Gross Profit
Public Carrier	$	15,155	$	—	$	15,155
Government		7,713		—		7,713
Private System Operators		18,071		—		18,071
Value-Added Resellers		34,840		—		34,840
Retail		—		36,187		36,187
Total gross profit	$	75,779	$	36,187	$	111,966
Directly allocable expenses		46,422		27,985		74,407
Segment net profit contribution	$	29,357	$	8,202		37,559
Corporate support expenses						28,687
Income before provision for income taxes					$	8,872

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, 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, distributed antenna 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, and maintain 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. 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 fiscal years 2018, 2017 and 2016 are as follows (in thousands):

	April 1, 2018		March 26, 2017		March 27, 2016
Revenues
Base station infrastructure	$	248,949	$	209,869	$	206,604
Network systems		98,642		87,222		83,480
Installation, test and maintenance		33,200		31,851		34,936
Mobile device accessories		199,484		204,353		205,662
Total revenues	$	580,275	$	533,295	$	530,682
Gross Profit
Base station infrastructure		58,015		54,280		51,610
Network systems		14,649		11,897		12,893
Installation, test and maintenance		6,266		5,921		6,607
Mobile device accessories		41,298		39,670		40,856
Total gross profit	$	120,228	$	111,768	$	111,966