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; and (2) value-added resellers and integrators, which is a newly identified market within our internal structure resulting from the Company’s recent implementation of an enhanced go-to-market strategy and the consolidation of our previously identified value-added resellers, government channels and private system operator markets. This new strategy and the corresponding consolidation of these customer markets is expected to increase sales opportunities across the consolidated group as well as provide better coverage to customers and better align territories with supplier partners. In conjunction with our identification of the value-added resellers and integrators as a newly identified market, as described above, market revenue and gross profit as reported for the prior periods reflected in this Quarterly Report on Form 10 Q have been reclassified accordingly.

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 third quarter and first nine months of fiscal years 2019 and 2018 are as follows (in thousands):


	Three Months Ended
	December 30, 2018						December 24, 2017
	Commercial		Retail				Commercial		Retail
	Segment		Segment		Total		Segment		Segment		Total
Revenues
Public Carrier	$	33,593	$	—	$	33,593	$	22,721	$	—	$	22,721
Value-added resellers and integrators		65,373		—		65,373		69,081		—		69,081
Retail		—		53,329		53,329		—		54,458		54,458
Total revenues	$	98,966	$	53,329	$	152,295	$	91,802	$	54,458	$	146,260

Gross Profit
Public Carrier	$	4,583	$	—	$	4,583	$	3,178	$	—	$	3,178
Value-added resellers and integrators		16,013		—		16,013		16,073		—		16,073
Retail		—		10,403		10,403		—		10,349		10,349
Total gross profit	$	20,596	$	10,403	$	30,999	$	19,251	$	10,349	$	29,600

Directly allocable expenses		8,079		4,038		12,117		7,418		3,899		11,317
Segment net profit contribution	$	12,517	$	6,365		18,882	$	11,833	$	6,450		18,283
Corporate support expenses						15,626						16,211
Income before provision for income taxes					$	3,256					$	2,072


	Nine Months Ended
	December 30, 2018						December 24, 2017
	Commercial		Retail				Commercial		Retail
	Segment		Segment		Total		Segment		Segment		Total
Revenues
Public Carrier	$	113,647	$	—	$	113,647	$	76,742	$	—	$	76,742
Value-added resellers and integrators		199,570		—		199,570		203,791		—		203,791
Retail		—		148,633		148,633		—		150,822		150,822
Total revenues	$	313,217	$	148,633	$	461,850	$	280,533	$	150,822	$	431,355

Gross Profit
Public Carrier	$	14,989	$	—	$	14,989	$	11,083	$	—	$	11,083
Value-added resellers and integrators		48,842		—		48,842		48,053		—		48,053
Retail		—		29,261		29,261		—		29,554		29,554
Total gross profit	$	63,831	$	29,261	$	93,092	$	59,136	$	29,554	$	88,690

Directly allocable expenses		24,722		12,391		37,113		23,736		11,365		35,101
Segment net profit contribution	$	39,109	$	16,870		55,979	$	35,400	$	18,189		53,589
Corporate support expenses						49,488						47,208
Income before provision for income taxes					$	6,491					$	6,381

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


	Three Months Ended
	December 30, 2018		December 24, 2017
Revenues
Base station infrastructure	$	67,988	$	57,282
Network systems		21,477		24,024
Installation, test and maintenance		8,306		9,255
Mobile device accessories		54,524		55,699
Total revenues	$	152,295	$	146,260

Gross Profit
Base station infrastructure	$	14,822	$	13,280
Network systems		3,453		3,420
Installation, test and maintenance		1,623		1,759
Mobile device accessories		11,101		11,141
Total gross profit	$	30,999	$	29,600




	Nine Months Ended
	December 30, 2018		December 24, 2017
Revenues
Base station infrastructure	$	217,817	$	175,800
Network systems		66,818		77,041
Installation, test and maintenance		24,628		23,927
Mobile device accessories		152,587		154,587
Total revenues	$	461,850	$	431,355

Gross Profit
Base station infrastructure	$	46,072	$	41,423
Network systems		10,677		11,170
Installation, test and maintenance		4,899		4,611
Mobile device accessories		31,444		31,486
Total gross profit	$	93,092	$	88,690