Note 9 - Segment information

The Company aggregates operating divisions into operating segments that have similar economic characteristics primarily in the following areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer for their products and services; (4) the methods used to distribute their products or services; (5) if applicable, the nature of the regulatory environment. As of July 31, 2017, the Company has two segments based upon this evaluation: 1) RF Connector and Cable Assembly and 2) Custom Cabling Manufacturing and Assembly based.

The RF Connector and Cable Assembly segment consisted of one division and the Custom Cabling Manufacturing and Assembly segment was composed of three divisions. The four divisions that met the quantitative thresholds for segment reporting are Connector and Cable Assembly, Cables Unlimited, Comnet and Rel-Tech. The specific customers are different for each division; however, there is some overlapping of product sales to them. The methods used to distribute products are similar within each division aggregated.

Management identifies the Company’s segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the Connector and Cable Assembly division constitutes the RF Connector and Cable Assembly segment, and the Cables Unlimited, Comnet and Rel-Tech divisions constitute the Custom Cabling Manufacturing and Assembly segment.

As reviewed by the Company’s chief operating decision maker, the Company evaluates the performance of each segment based on income or loss before income taxes. The Company charges depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, goodwill and intangible assets are the only assets identified by segment. Except as discussed above, the accounting policies for segment reporting are the same for the Company as a whole.

Substantially all of the Company’s operations are conducted in the United States; however, the Company derives a portion of its revenue from export sales. The Company attributes sales to geographic areas based on the location of the customers. The following table presents the sales of the Company by geographic area for the three and nine months ended July 31, 2017 and 2016 (in thousands):

	Three Months Ended July 31,				Nine Months Ended July 31,
	2017		2016		2017		2016

United States	$	7,603	$	7,441	$	21,557	$	21,536
Foreign countries:
Canada		180		90		356		236
Israel		-		1		-		63
Mexico		-		85		77		234
All other		25		23		75		90
		205		199		508		623

Totals	$	7,808	$	7,640	$	22,065	$	22,159

Net sales, income (loss) from continuing operations before provision (benefit) for income taxes and other related segment information for the three months ended July 31, 2017 and 2016 are as follows (in thousands):

	RF Connector		Custom Cabling
	and		Manufacturing and
	Cable Assembly		Assembly		Corporate		Total
2017
Net sales	$	2,964	$	4,844	$	-	$	7,808
Income from continuing operations before benefit for income taxes		153		31		5		189
Depreciation and amortization		43		172		-		215

	Cable Assembly		Assembly		Corporate		Total
2016
Net sales	$	2,576	$	5,064	$	-	$	7,640
Loss from continuing operations before benefit for income taxes		(541)		(126)		(32)		(699)
Depreciation and amortization		49		192		-		241

Net sales, income (loss) from continuing operations before provision (benefit) for income taxes and other related segment information for the nine months ended July 31, 2017 and 2016 are as follows (in thousands):

	RF Connector		Custom Cabling
	and		Manufacturing and
	Cable Assembly		Assembly		Corporate		Total
2017
Net sales	$	8,106	$	13,959	$	-	$	22,065
Income (loss) from continuing operations before provision (benefit) for income taxes		236		(345)		23		(86)
Depreciation and amortization		131		518		-		649

	Cable Assembly		Assembly		Corporate		Total
2016
Net sales	$	6,611	$	15,548	$	-	$	22,159
Income (loss) from continuing operations before provision (benefit) for income taxes		(1,243)		(111)		34		(1,320)
Depreciation and amortization		146		623		-		769