Segment and Geographic Information

12 Months Ended

May 28, 2022

Segment Reporting [Abstract]

Segment and Geographic Information

9. SEGMENT AND GEOGRAPHIC INFORMATION

We have three operating and reportable segments. Starting with our first quarter earnings release in October for fiscal 2023, we will introduce our new Green Energy Solutions (“GES”) segment. This segment is carved out of our existing PMT segment as we continue to focus on power management applications that support the green energy market globally. Accordingly, in the first quarter of fiscal 2023, we will begin reporting on four segments.  

The reportable segments for fiscal 2022, fiscal 2021 and fiscal 2020 were: PMT, Canvys and Healthcare.

Power and Microwave Technologies (“PMT”) combines our core engineered solutions capabilities, power grid and microwave tube business with new disruptive RF, Wireless and Power technologies. As a designer, manufacturer, technology partner and authorized distributor, PMT’s strategy is to provide specialized technical expertise and engineered solutions based on our core engineering and manufacturing capabilities on a global basis. 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 5G, 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-One computers, specialized cabinet finishes and application specific software packages and certification services. 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, repairs, refurbishes and distributes high value replacement parts and equipment 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; pre-owned CT systems; 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 while lowering the cost of healthcare delivery.

The CEO, who is the chief operating decision maker, 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
	May 28, 2022		May 29, 2021		May 30, 2020
PMT
Net Sales	$	178,056	$	137,280	$	118,480
Gross Profit		58,041		45,951		38,288
Canvys
Net Sales	$	35,187	$	29,319	$	28,926
Gross Profit		11,252		10,274		9,313
Healthcare
Net Sales	$	11,377	$	10,338	$	8,492
Gross Profit		2,407		2,600		2,072

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

	May 28, 2022		May 29, 2021
Segment assets	$	120,696	$	100,638
Cash and cash equivalents		35,495		43,316
Investments - current		5,000		—
Other current assets (1)		2,686		1,918
Net property, plant and equipment		9,435		9,300
Operating lease ROU asset		1,894		732
Financing lease ROU asset		215		308
Other assets - non-current deferred income taxes		4,398		541
Total assets	$	179,819	$	156,753

(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 2022 and fiscal 2021 were approximately $1.0 million and $1.7 million, respectively. In addition, we also had capital expenditures during fiscal 2022 and fiscal 2021 related to the Company’s ERP system as well as facilities that were not specific to any particular 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
	May 28, 2022			May 29, 2021			May 30, 2020
Net Sales
North America	$	98,527		$	73,625		$	65,259
Asia/Pacific		49,235			40,839			32,979
Europe		64,435			52,549			49,394
Latin America		12,439			9,651			8,308
Other (1)		(16	)		273			(42	)
Total	$	224,620		$	176,937		$	155,898
Gross Profit
North America	$	36,548		$	28,639		$	24,494
Asia/Pacific		15,728			13,520			10,629
Europe		19,215			16,958			15,483
Latin America		4,340			3,405			2,804
Other (1)		(4,131	)		(3,697	)		(3,737	)
Total	$	71,700		$	58,825		$	49,673

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

During fiscal 2022, fiscal 2021 and fiscal 2020, no one customer accounted for more than 10 percent of the Company’s consolidated net sales. 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
	May 28, 2022		May 29, 2021
Net Assets
North America	$	90,979	$	77,698
Asia/Pacific		11,514		10,547
Europe		30,873		31,289
Latin America		2,481		2,026
Total	$	135,847	$	121,560

The Company had long-lived assets of $19.0 million as of May 28, 2022 and $19.3 million as of May 29, 2021. The long-lived assets, which include our fixed assets and intangibles, were primarily in the US. There were approximately $0.4 million of long-lived assets that belong to our foreign affiliates as of May 28, 2022 and $0.4 million as of May 29, 2021.

The Company had depreciation and amortization expense of $3.4 million, $3.4 million and $3.4 million for fiscal 2022, fiscal 2021 and fiscal 2020, respectively. The depreciation and amortization, which includes our fixed assets and intangibles, were primarily in the US. Depreciation and amortization expense that belongs to our foreign affiliates was approximately $0.1 million for fiscal 2022, $0.3 million for fiscal 2021 and $0.3 million for fiscal 2020, respectively.