Note 5. Segment Reporting

3 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

5. Segment Reporting

During the three-month periods ended September 30, 2013 and 2012, the Company's continuing operations were classified into two principal reportable business units that provide different products or services.

Management reviews financial information, allocates resources, and manages the business as two segments: Sonomed-Escalon and Escalon Medical Corp. (“Corporate”). The Sonomed-Escalon segment consists of Sonomed, Inc., EMI and Trek, all of which are engaged in the development and sale of ophthalmic medical devices. The Corporate segment includes the administrative corporate operations of the consolidated group. The ECD segment which consisted of Drew Scientific, Inc., and its wholly owned subsidiary JAS, was reported under discontinued operations beginning with the Form 10-Q for three months ended September 30, 2012.

Separate management of each unit is required because each business unit is subject to different marketing, production and technology strategies.

The table below sets forth the income/losses from continuing operations for the three-months ended September 30, 2013 and 2012 (in thousands).

	Sonomed-Escalon					Corporate						Total
	2013		2012			2013			2012			2013		2012
Revenues, net:
Product revenue	$	3,130	$	2,270		$	—		$	—		$	3,130	$	2,270
Total revenue, net	3,130		2,270			—			—			3,130		2,270
Costs and expenses:
Cost of goods sold	1,556		1,196			—			—			1,556		1,196
Marketing, general & admin	1,138		1,304			75			102			1,213		1,406
Research & development	323		264			—			—			323		264
Total costs and expenses	3,018		2,764			75			102			3,092		2,866
(Loss) from operations	112		(494		)	(75		)	(102		)	38		(596		)
Other (expense) and income:
Interest income	—		—			—			—			—		—
Other income	—		—			1			65			1		65
Interest expense	—		—			—			(93		)	—		(93		)
Total other (expense) and income	—		—			1			(28		)	1		(28		)
Income (loss) before taxes	112		(494		)	(74		)	(130		)	39		(624		)
Income taxes (benefits) from continuing operations	—		—			—			—			—		—
Net income (loss) from continuing operations	$	112	$	(494	)	$	(74	)	$	(130	)	$	39	$	(624	)

The Company operates in the healthcare market, specializing in the development, manufacture and marketing of ophthalmic medical devices and pharmaceuticals. The business segments reported above are the segments for which separate financial information is available and for which operating results are evaluated regularly by executive management in deciding how to allocate resources and assessing performance. The accounting policies of the business segments are the same as those described in the summary of significant accounting policies in the Company's Form 10-K for the year ended June 30, 2013. For the purposes of this illustration, corporate expenses, which consist primarily of executive management and administrative support functions, are allocated across the business segments based upon a methodology that has been established by the Company, which includes a number of factors and estimates and that has been consistently applied across the business segments. These expenses are otherwise included in the corporate segment.

During the three-month periods ended September 30, 2013 and 2012, Sonomed-Escalon derived its revenue from the sale of A-Scans, B-Scans, UBM, pachymeters, Digital imaging products, ISPAN™ gas products and various disposable ophthalmic surgical products.