SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Jun. 02, 2018

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

11. SEGMENT AND GEOGRAPHIC INFORMATION

In accordance with ASC 280-10, Segment Reporting, we have identified three reportable segments: PMT, Canvys and Healthcare.

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 markets. Our engineers design, manufacture, source and support a full spectrum of solutions to match the needs of our customers. We offer long term availability and proven custom display solutions that include touch screens, protective panels, custom enclosures, all-in-ones, specialized cabinet finishes and application specific software packages and certification services. Our volume commitments are lower than those of the large display manufacturers, making us the ideal choice for companies with very specific design requirements. We partner with both private label manufacturing companies and leading branded hardware vendors to offer the highest quality display and touch solutions and customized computing platforms.

Healthcare manufactures, refurbishes and distributes high value replacement parts for the healthcare market including hospitals, medical centers, asset management companies, independent service organizations and multi-vendor service providers. Products include Diagnostic Imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; CT service training; MRI coils, cold heads and RF amplifiers; hydrogen thyratrons, klystrons, magnetrons; flat panel detector upgrades; and additional replacement solutions 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):

	Fiscal Year Ended
	June 2,  2018		May 27,  2017		May 28,  2016
PMT
Net Sales	$	128,296	$	104,226	$	105,554
Gross Profit		43,254		33,382		33,088
Canvys
Net Sales	$	26,683	$	20,534	$	23,453
Gross Profit		8,410		5,752		6,017
Healthcare
Net Sales	$	8,233	$	12,112	$	13,009
Gross Profit		3,418		4,749		5,730

A reconciliation of assets to the relevant consolidated amount is as follows (in thousands):

	June 2,  2018		May 27,  2017
Segment assets	$	90,981	$	80,105
Cash and cash equivalents		60,465		55,327
Investments - current		—		6,429
Other current assets(1)		3,830		3,330
Net property, plant and equipment		10,126		8,752
Investments - non-current		—		2,419
Other assets - non-current deferred income taxes		927		1,102
Total assets	$	166,329	$	157,464

(1) Other current assets include miscellaneous receivables and prepaid expenses.

Assets are not disclosed by reportable segment as the Company does not track assets by reportable segment and certain assets are not specific to any reportable segment.

Capital expenditures for our Healthcare segment during fiscal 2018 and 2017 were approximately $1.9 million and $3.4 million, respectively. In addition, we also had capital expenditures during fiscal 2018 related to the Company’s ERP system as well as facilities that were not specific to any particular reportable segment and capital expenditures during fiscal 2017 related to the Company’s ERP system that was not specific to any reportable segment.

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):

	Fiscal Year Ended
	June 2,  2018			May 27,  2017			May 28,  2016
Net Sales
North America	$	67,662		$	55,963		$	66,365
Asia/Pacific		32,607			27,997			24,564
Europe		53,818			44,296			44,634
Latin America		9,123			8,552			6,347
Other(1)		2			64			106
Total	$	163,212		$	136,872		$	142,016
Gross Profit
North America	$	25,996		$	20,597		$	23,506
Asia/Pacific		10,794			9,630			8,212
Europe		18,071			14,418			13,541
Latin America		3,602			3,250			2,397
Other(1)		(3,381	)		(4,012	)		(2,821	)
Total	$	55,082		$	43,883		$	44,835

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

 Major Customers

During fiscal 2018, LAM Research Corporation (“LAM”) individually accounted for 11 percent of the Company’s consolidated net sales. No other customer accounted for more than 10 percent of the Company’s consolidated net sales in fiscal 2018. No one customer accounted for more than 10 percent of the Company’s consolidated net sales in fiscal 2017 or fiscal 2016. LAM sales were included in the PMT segment.

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.

Net assets by geographic region are summarized in the following table (in thousands):

	Fiscal Year Ended
	June 2,  2018		May 27,  2017		May 28,  2016
Net Assets
North America	$	77,857	$	62,085	$	65,832
Asia/Pacific		17,254		34,990		42,547
Europe		37,911		32,794		31,495
Latin America		2,159		2,458		1,801
Total	$	135,181	$	132,327	$	141,675

The Company had long-lived assets of $21.2 million as of June 2, 2018 and $19.3 million as of May 27, 2017. The long-lived assets, which include our fixed assets and intangibles, were primarily in the US. There were approximately $1.0 million of long-lived assets that belong to our foreign affiliates as of June 2, 2018 and $1.2 million as of May 27, 2017.

The Company had depreciation and amortization expense of $3.0 million, $2.7 million and $2.4 million for fiscal 2018, fiscal 2017 and fiscal 2016, respectively. The depreciation and amortization, which includes our fixed assets and intangibles, were primarily in the US. Depreciation and amortization expense that belong to our foreign affiliates was approximately $0.3 million for fiscal 2018, fiscal 2017 and fiscal 2016.