SEGMENT REPORTING

9 Months Ended

Feb. 25, 2017

Segment Reporting [Abstract]

SEGMENT REPORTING

11. SEGMENT REPORTING

In accordance with ASC 280-10, Segment Reporting, we have identified three operating and reportable segments as follows:

Power and Microwave Technologies Group (“PMT”) combines our core engineered solutions, power grid and microwave tube business with new RF and power technologies. As a manufacturer and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities. We provide solutions and add value through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair—all through our existing global infrastructure. PMT’s focus is on products for power, RF and microwave applications for customers in alternative energy, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets. PMT focuses on various applications including broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology. PMT also offers its customers technical services for both microwave and industrial equipment.

Canvys provides customized display solutions serving the corporate enterprise, financial, healthcare, industrial, and medical original equipment manufacturers (“OEM”) markets.

Healthcare manufactures, distributes and services high value replacement parts for the healthcare market including hospitals, medical centers, independent service organizations, and multi-vendor service providers. Products include power grid tubes, hydrogen thyratrons, klystrons, magnetrons; Image Systems medical displays and workstations for picture archiving and communication systems (“PACS”); visual solutions for operating rooms/surgical environments; digital radiography solutions including replacement flat panel detectors and upgrades; and additional replacement components currently under development for the diagnostic imaging service market. Through a combination of newly developed products and partnerships, service offerings, and training programs, we believe we can help our customers improve efficiency and deliver better clinical outcomes while lowering the cost of healthcare delivery.

The CEO evaluates performance and allocates resources primarily based on the gross profit of each segment. 

Operating results by segment are summarized in the following table (in thousands):

	Three Months Ended				Nine Months Ended
	February 25,		February 27,		February 25,		February 27,
	2017		2016		2017		2016
PMT
Net Sales	$	24,763	$	23,008	$	75,373	$	75,365
Gross Profit		8,075		7,140		23,803		22,793
Canvys
Net Sales	$	4,824	$	5,190	$	14,883	$	17,773
Gross Profit		1,331		1,204		4,222		4,439
Healthcare
Net Sales	$	2,726	$	3,093	$	9,257	$	9,310
Gross Profit		1,286		1,406		3,871		4,215

Geographic net sales information is primarily grouped by customer destination into five areas: North America; Asia/Pacific; Europe; Latin America; and Other.

Net sales and gross profit by geographic region are summarized in the following table (in thousands):

	Three Months Ended						Nine Months Ended
	February 25,			February 27,			February 25,			February 27,
	2017			2016			2017			2016
Net Sales
North America	$	13,607		$	14,215		$	40,715		$	47,039
Asia/Pacific		5,916			6,081			20,192			18,045
Europe		10,950			9,659			32,418			32,782
Latin America		1,792			1,402			6,138			4,464
Other (1)		48			(66	)		50			118
Total	$	32,313		$	31,291		$	99,513		$	102,448
Gross Profit
North America	$	5,258		$	5,163		$	15,090		$	16,500
Asia/Pacific		2,085			2,094			7,012			5,909
Europe		3,764			2,908			10,540			9,763
Latin America		643			555			2,337			1,729
Other (1)		(1,058	)		(970	)		(3,083	)		(2,454	)
Total	$	10,692		$	9,750		$	31,896		$	31,447

(1) Other includes primarily net sales not allocated to a specific geographical region, unabsorbed value-add costs, and other unallocated expenses.

We sell our products to customers in diversified industries and perform periodic credit evaluations of our customers’ financial condition. Terms are generally on open account, payable net 30 days in North America, and vary throughout Asia/Pacific, Europe, and Latin America. Estimates of credit losses are recorded in the financial statements based on monthly reviews of outstanding accounts.