Business Segment Information

12 Months Ended

Feb. 24, 2012

Business Segment Information [Abstract]

Business Segment Information

10. Business Segment Information

For fiscal 2012, we have changed our reporting segments to Aerospace Solutions ("Aerospace") and Commercial/Industrial Systems ("CIS") from Training Services Group ("TSG") and Control Systems Group ("CSG").  We believe that this change more closely describes our markets, and aligns our products with how ETC manages its business and approaches these markets.  The most significant change is that our altitude chamber business has moved from CSG into Aerospace, because these chambers are primarily used to provide hypoxia training and are marketed along with our other Aerospace products.  What is left in the former CSG is marketed to commercial and industrial customers, thus a name change for the segment to CIS.  Fiscal 2011 segment financial information has been restated to reflect this change in segments.

As indicated, we operate in two business segments - Aerospace and CIS.

Aerospace encompasses the design, manufacture, and sale of (1) software driven products and services used to create and monitor the physiological effects of flight, including high performance jet tactical flight simulation, upset recovery and spatial disorientation, and both suborbital and orbital commercial human spaceflight, (2) altitude (hypobaric) chambers; and (3) ADMS, as well as integrated logistics support for customers who purchase these products.  These products and services provide customers with an offering of comprehensive solutions for improved readiness and reduced operational costs.

CIS operations encompass the design, manufacture, and sale of core technologies including (1) steam and gas (ethylene oxide) sterilizers; (2) environmental testing and simulation devices for the automotive industry; and (3) hyperbaric (100% oxygen) chambers for one person (monoplace chambers) and multiple persons (multiplace chambers), as well as parts and service support.

Segment operating income consists of net sales less applicable costs and expenses relating to these revenues.  Unallocated expenses including general corporate expenses, letter of credit fees, and income taxes have been excluded from the determination of the total profit for segments.  For presentation purposes, income, expenses, and assets not specifically identifiable to an individual business group or applicable to all groups and  general corporate expenses, primarily central administrative office expenses, are reflected in the Corporate category.  Property, plant, and equipment associated with the Company's NASTAR Center are included in the Aerospace Solutions segment; the remaining property, plant, and equipment are not identified with specific business segments because most of these assets are used in each of the segments.

In fiscal 2012, International sales totaling at least $500 per country, listed in order of magnitude, were made to customers in South Korea, Saudi Arabia, Japan, Spain, Poland, Malaysia, Kazakhstan, and Japan.  In fiscal 2011, International sales totaling at least $500,000 per country, listed in order of magnitude, were made to customers in South Korea, Saudi Arabia,Malaysia and Japan.  Fluctuations in sales to international countries from year to year primarily reflect revenue recognition on the level and stage of development and production on multi-year long-term contracts.

In both fiscal 2012 and fiscal 2011, three customers, (two with U.S. defense agencies and one with an international customer), each in the Aerospace Solutions segment, represented 10.0% or more of total sales.  In fiscal 2012, sales to these three customers totaling $37,818 represented 57.0% of net sales; in fiscal 2011, sales to these same three customers totaling $38,123 represented 68.8% of net sales.

Included in the segment information for the fiscal years ended February 24, 2012 and February 25, 2011 are export sales of $22,478 and $19,999, respectively.  Sales to the U.S. Government and its agencies aggregated $27,181 and $23,271 for the fiscal years ended February 24, 2012 and February 25, 2011, respectively.

The following segment information by quarter for fiscal 2012 reflects the accrual basis of accounting:

Fiscal 2012
Aerospace Solutions	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
Net sales	$	12,092		$	12,469		$	12,860		$	11,480		$	48,901
Interest expense, net		111			163			145			122			541
Depreciation and amortization		263			322			339			252			1,176
Operating income (loss)		2,473			2,479			1,848			397			7,197
Income tax provision (benefit)		-			-			-			-			-
Identifiable assets		29,708			34,511			38,507			40,046			40,046
Expenditures for segment assets		299			519			324			528			1,670
Commercial/Industrial Systems
Net sales	$	4,182		$	3,382		$	4,399		$	5,430		$	17,393
Interest expense, net		39			44			50			60			193
Depreciation and amortization		89			84			110			232			515
Operating income (loss)		1,238			810			884			1,126			4,058
Income tax provision (benefit)		-			-			-			-			-
Identifiable assets		4,757			9,696			10,725			8,315			8,315
Expenditures for segment assets		92			89			61			62			304
Corporate
Net sales	$	-		$	-		$	-		$	-		$	-
Interest expense, net		-			-			-			-			-
Depreciation and amortization		-			12			37			20			69
Operating income (loss)		(836	)		(630	)		(696	)		(956	)		(3,118	)
Income tax provision (benefit)		992			952			996			(320	)		2,620
Identifiable assets		25,106			19,975			18,113			19,425			19,425
Expenditures for segment assets		-			91			45			34			170
Company Total
Net sales	$	16,274		$	15,851		$	17,259		$	16,910		$	66,294
Interest expense, net		150			207			195			182			734
Depreciation and amortization		352			418			486			504			1,760
Operating income (loss)		2,875			2,659			2,036			567			8,137
Income tax provision (benefit)		992			952			996			(320	)		2,620
Identifiable assets		59,571			64,182			67,345			67,786			67,786
Expenditures for segment assets		391			699			430			624			2,144

The following segment information by quarter for fiscal 2011 reflects the accrual basis of accounting:

Fiscal 2011
Aerospace Solutions	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
Net sales	$	8,895		$	11,198		$	12,975		$	10,686		$	43,754
Interest expense, net		167			160			165			158			650
Depreciation and amortization		241			326			306			182			1,055
Operating income (loss)		1,709			2,178			2,981			2,170			9,038
Income tax provision (benefit)		-			-			-			-			-
Identifiable assets		19,225			22,749			26,959			26,208			26,208
Expenditures for segment assets		376			198			315			(314	)		575
Commercial/Industrial Systems
Net sales	$	3,226		$	2,046		$	3,173		$	3,252		$	11,697
Interest expense, net		61			29			40			44			174
Depreciation and amortization		105			55			76			63			299
Operating income (loss)		810			8			534			784			2,136
Income tax provision (benefit)		-			-			-			-			-
Identifiable assets		5,752			1,963			4,383			7,066			7,066
Expenditures for segment assets		81			119			147			(57	)		290
Corporate
Net sales	$	-		$	-		$	-		$	-		$	-
Interest expense, net		-			-			-			-			-
Depreciation and amortization		-			-			-			-			-
Operating income (loss)		(278	)		(275	)		(903	)		(1,428	)		(2,884	)
Income tax provision (benefit)		-			-			-			(7,665	)		(7,665	)
Identifiable assets		16,081			19,688			20,032			17,517			17,517
Expenditures for segment assets		122			62			44			(228	)		-
Company Total
Net sales	$	12,121		$	13,244		$	16,148		$	13,938		$	55,451
Interest expense, net		228			189			205			202			824
Depreciation and amortization		346			381			382			245			1,354
Operating income (loss)		2,241			1,911			2,612			1,526			8,290
Income tax provision (benefit)		-			-			-			(7,665	)		(7,665	)
Identifiable assets		41,058			44,400			51,374			50,791			50,791
Expenditures for segment assets		579			379			506			(599	)		865

Reconciliation to consolidated	Fiscal year ended
net income attributable to Environmental Tectonics Corporation	February 24, 2012			February 25, 2011
Operating income	$	8,137		$	8,290
Interest expense, net		(734	)		(824	)
Other income (expense), net		85			(589	)
Income tax (provision) benefit		(2,620	)		7,665
Expense (income) attributable to non-controlling interest		5			(8	)
Net income attributable to Environmental Tectonics Corporation	$	4,873		$	14,534