Note 7. Business Segments

The Company 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 retail market which includes 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. Base station infrastructure service offerings include 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 the segment level. Certain cost of sales and other applicable expenses have been allocated to each segment based on a percentage of revenues and/or gross profit, where appropriate.

Segment activity for the first quarter of fiscal years 2019 and 2018 are as follows (in thousands):


	Three Months Ended
	July 1, 2018						June 25, 2017
	Commercial		Retail				Commercial		Retail
	Segment		Segment		Total		Segment		Segment		Total
Revenues
Public Carrier	$	40,360	$	—	$	40,360	$	26,598	$	—	$	26,598
Government		9,231		—		9,231		8,445		—		8,445
Private System Operators		21,634		—		21,634		21,042		—		21,042
Value-Added Resellers		34,682		—		34,682		35,040		—		35,040
Retail		—		45,012		45,012		—		48,886		48,886
Total revenues	$	105,907	$	45,012	$	150,919	$	91,125	$	48,886	$	140,011

Gross Profit
Public Carrier	$	5,626	$	—	$	5,626	$	4,128	$	—	$	4,128
Government		2,137		—		2,137		2,004		—		2,004
Private System Operators		4,865		—		4,865		4,607		—		4,607
Value-Added Resellers		8,915		—		8,915		8,961		—		8,961
Retail		—		9,155		9,155		—		9,467		9,467
Total gross profit	$	21,543	$	9,155	$	30,698	$	19,700	$	9,467	$	29,167

Directly allocable expenses		8,081		3,809		11,890		8,522		3,750		12,272
Segment net profit contribution	$	13,462	$	5,346		18,808	$	11,178	$	5,717		16,895
Corporate support expenses						17,246						15,678
Income before provision for income taxes					$	1,562					$	1,217

Supplemental revenue and gross profit information by product category for the first quarter of fiscal years 2019 and 2018 are as follows (in thousands):


	Three Months Ended
	July 1, 2018		June 25, 2017
Revenues
Base station infrastructure	$	74,314	$	59,070
Network systems		22,777		23,837
Installation, test and maintenance		7,431		6,993
Mobile device accessories		46,397		50,111
Total revenues	$	150,919	$	140,011

Gross Profit
Base station infrastructure	$	15,716	$	14,057
Network systems		3,663		3,829
Installation, test and maintenance		1,473		1,419
Mobile device accessories		9,846		9,862
Total gross profit	$	30,698	$	29,167