Segment Information

12 Months Ended

Jul. 31, 2014

Segment Reporting [Abstract]

Segment Information

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 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 BFT-1 and MTS programs, which are currently in a sustainment mode. We currently perform engineering services and satellite network operations on a cost-plus-fixed fee basis and program management services on a firm-fixed-price basis and we license certain of our intellectual property to the U.S. Army.

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

	Fiscal Year Ended July 31, 2014
	Telecommunications Transmission		RF Microwave Amplifiers	Mobile Data Communications		Unallocated		Total
Net sales	$	231,462,000	87,977,000	27,711,000		—		$	347,150,000
Operating income (loss)	40,779,000		4,533,000	13,131,000		(14,545,000	)	43,898,000
Interest income and other	2,000		21,000	12,000		878,000		913,000
Interest expense (income)	247,000		—	(3,000	)	6,060,000		6,304,000
Depreciation and amortization	8,891,000		3,784,000	270,000		4,324,000		17,269,000
Expenditure for long-lived assets, including intangibles	4,060,000		561,000	299,000		17,000		4,937,000
Total assets at July 31, 2014	230,555,000		87,454,000	5,929,000		149,914,000		473,852,000

	Fiscal Year Ended July 31, 2013
	Telecommunications Transmission			RF Microwave Amplifiers		Mobile Data Communications		Unallocated		Total
Net sales	$	194,643,000		86,939,000		38,215,000		—		$	319,797,000
Operating income (loss)	31,686,000			4,104,000		12,288,000		(13,589,000	)	34,489,000
Interest income and other (expense)	(38,000		)	(42,000	)	18,000		1,229,000		1,167,000
Interest expense (income)	352,000			—		(7,000	)	7,818,000		8,163,000
Depreciation and amortization	9,591,000			3,939,000		500,000		3,265,000		17,295,000
Expenditure for long-lived assets, including intangibles	4,179,000			842,000		317,000		9,000		5,347,000
Total assets at July 31, 2013	225,626,000			96,298,000		7,873,000		352,018,000		681,815,000

	Fiscal Year Ended July 31, 2012
	Telecommunications Transmission		RF Microwave Amplifiers		Mobile Data Communications	Unallocated		Total
Net sales	$	210,006,000	102,497,000		112,567,000	—		$	425,070,000
Operating income (loss)	41,709,000		7,622,000		19,924,000	(17,978,000	)	51,277,000
Interest income and other (expense)	42,000		(21,000	)	30,000	1,544,000		1,595,000
Interest expense	651,000		—		—	8,181,000		8,832,000
Depreciation and amortization	10,088,000		4,395,000		2,173,000	3,758,000		20,414,000
Expenditure for long-lived assets, including intangibles	5,490,000		733,000		190,000	—		6,413,000
Total assets at July 31, 2012	244,285,000		98,864,000		11,217,000	365,412,000		719,778,000

Operating income in our telecommunications transmission segment for fiscal 2014, 2013 and 2012 includes $239,000, $3,267,000 and $918,000, respectively, of a benefit related to a change in fair value of the earn-out liability associated with our acquisition of Stampede. See Note (2) - “Acquisitions.”

Operating income in our mobile data communications segment for fiscal 2014 includes a net pre-tax benefit of $56,000 relating to the reversal of previously accrued costs that were lower than expected and, for fiscal 2013 and fiscal 2012, includes $458,000 and $2,577,000 respectively, of net pre-tax restructuring charges related to the wind-down of our microsatellite product line. See Note (7) – “Cost Reduction Actions.”

Unallocated expenses result from such corporate expenses as executive compensation, accounting, legal and other regulatory compliance related costs. In addition, unallocated expenses for fiscal 2014, 2013 and 2012, include $4,263,000, $3,130,000 and $3,572,000, respectively, of stock-based compensation expense. Unallocated operating loss for fiscal 2012 also includes $2,638,000 of professional fees related to a withdrawn contested proxy solicitation in connection with our fiscal 2011 annual meeting of stockholders. 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 at July 31, 2014 consist principally of cash and deferred tax assets.

Substantially all of our long-lived assets are located in the U.S.

Intersegment sales in fiscal 2014, 2013 and 2012 by the telecommunications transmission segment to the RF microwave amplifiers segment were $1,726,000, $2,312,000 and $5,378,000, respectively.

Intersegment sales in fiscal 2014, 2013 and 2012 by the telecommunications transmission segment to the mobile data communications segment were $525,000, $2,656,000 and $11,161,000, respectively.

Intersegment sales in fiscal 2014, 2013 and 2012 by the RF microwave amplifiers segment to the telecommunications transmission segment were $137,000, $9,000 and $382,000, respectively.

All intersegment sales have been eliminated from the tables above.