Segment Information

3 Months Ended

Oct. 31, 2013

Segment Reporting [Abstract]

Segment Information

(15)    Segment Information

Reportable operating segments are determined based on Comtech’s management approach. The management approach, as defined by FASB ASC 280, “Segment Reporting,” is based on the way that the chief operating decision-maker organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our chief operating decision-maker is our President and Chief Executive Officer.

While our results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker also manages the enterprise in three operating segments: (i) telecommunications transmission, (ii) RF microwave amplifiers, and (iii) mobile data communications.

Telecommunications transmission products include satellite earth station products (such as analog and digital modems, frequency converters, power amplifiers, transceivers and voice gateways) and over-the-horizon microwave communications products and systems (such as digital troposcatter modems).

RF microwave amplifier products include traveling wave tube amplifiers and solid-state, high-power narrow and broadband amplifier products that use the microwave and radio frequency spectrums.

Mobile data communications products and services substantially relate to our support of the U.S. Army's Blue Force Tracking (“BFT-1”) and the U.S. Army's Movement Tracking System (“MTS”) programs, which are currently in a sustainment mode. We license certain of our intellectual property to the U.S. Army and provide satellite network and related engineering services (including program management) on a cost-plus-fixed-fee basis.

Corporate management defines and reviews segment profitability based on the same allocation methodology as presented in the segment data tables below:

	Three months ended October 31, 2013
	Telecommunications Transmission		RF Microwave Amplifiers		Mobile Data Communications	Unallocated		Total
Net sales	$	54,365,000	20,197,000		8,806,000	—		$	83,368,000
Operating income (loss)	8,929,000		591,000		4,106,000	(3,527,000	)	10,099,000
Interest income and other (expense)	6,000		(5,000	)	3,000	269,000		273,000
Interest expense (income)	59,000		—		—	1,959,000		2,018,000
Depreciation and amortization	2,259,000		943,000		74,000	963,000		4,239,000
Expenditure for long-lived assets, including intangibles	933,000		94,000		—	—		1,027,000
Total assets at October 31, 2013	243,851,000		92,774,000		7,236,000	338,714,000		682,575,000

	Three months ended October 31, 2012
	Telecommunications Transmission			RF Microwave Amplifiers		Mobile Data Communications	Unallocated		Total
Net sales	$	53,327,000		25,289,000		12,337,000	—		$	90,953,000
Operating income (loss)	12,259,000			1,718,000		3,471,000	(4,086,000	)	13,362,000
Interest income and other (expense)	(9,000		)	(22,000	)	9,000	298,000		276,000
Interest expense	159,000			—		—	1,952,000		2,111,000
Depreciation and amortization	2,436,000			980,000		152,000	784,000		4,352,000
Expenditure for long-lived assets, including intangibles	841,000			207,000		15,000	—		1,063,000
Total assets at October 31, 2012	233,446,000			95,785,000		8,511,000	367,852,000		705,594,000

Operating income in our telecommunications transmission segment for the three months ended October 31, 2013 and 2012 includes $239,000 and $2,378,000, respectively, of a benefit related to a change in fair value of the earn-out liability associated with our acquisition of Stampede. See Note (8) - "Accrued Expenses and Other Current Liabilities."

Operating income in our mobile data communications segment, for the three months ended October 31, 2012, includes a pre-tax restructuring charge of $822,000 related to the wind-down of our microsatellite product line. See Note (9) - "Cost Reduction Actions."

Unallocated expenses include corporate expenses such as executive compensation, accounting, legal and other regulatory compliance related costs. In addition, for the three months ended October 31, 2013 and 2012, unallocated expenses include $947,000 and $745,000, respectively, of stock-based compensation expense. Interest expense (which includes amortization of deferred financing costs) associated with our convertible senior notes and our Credit Facility is not allocated to the operating segments. Depreciation and amortization includes amortization of stock-based compensation. Unallocated assets consist principally of cash, deferred financing costs and deferred tax assets. Substantially all of our long-lived assets are located in the U.S.

Intersegment sales for the three months ended October 31, 2013 and 2012 by the telecommunications transmission segment to the RF microwave amplifiers segment were $301,000 and $1,234,000, respectively.

Intersegment sales by the telecommunications transmission segment to the mobile data communications segment were immaterial for the three months ended October 31, 2013 and $2,507,000 for the three months ended October 31, 2012.

All intersegment sales have been eliminated from the tables above.