Note 5. Segment Reporting

9 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

During the nine-month periods ended March 31, 2014 and 2013, 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 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.

The table below sets forth the income/losses from continuing operations for the three-month periods ended March 31, 2014 and 2013 (in thousands).

	Sonomed-Escalon					Corporate						Total
	2014		2013			2014			2013			2014		2013
Revenues, net:
Product revenue	$	3,152	$	2,725		$	—		$	—		$	3,152	$	2,725
Total revenue, net	3,152		2,725			—			—			3,152		2,725
Costs and expenses:
Cost of goods sold	1,473		1,337			—			—			1,473		1,337
Marketing, general & administration	1,166		1,340			84			69			1,250		1,409
Research & development	316		273			—			—			316		273
Total costs and expenses	2,955		2,950			84			69			3,039		3,019
(Loss) income from operations	197		(225		)	(84		)	(69		)	113		(294		)
Other income:
Other income	—		—			—			11			—		11
Total other income and (expense)	—		—			—			11			—		11
(Loss) income before taxes	197		(225		)	(84		)	(58		)	113		(284		)
Income taxes (benefits) from continuing operations	—		—			—			—			—		—
Net (loss) income from continuing operations	$	197	$	(225	)	$	(84	)	$	(58	)	$	113	$	(284	)

The table below sets forth the income/losses from continuing operations for the nine-month periods ended March 31, 2014 and 2013 (in thousands).

	Sonomed-Escalon					Corporate						Total
	2014		2013			2014			2013			2014		2013
Revenues, net:
Product revenue	$	9,360	$	8,635		$	—		$	—		$	9,360	$	8,635
Total revenue, net	9,360		8,635			—			—			9,360		8,635
Costs and expenses:
Cost of goods sold	4,540		4,310			—			—			4,540		4,310
Marketing, general & admin	3,498		4,023			246			281			3,744		4,304
Research & development	1,016		803			—			—			1,016		803
Total costs and expenses	9,054		9,136			246			281			9,300		9,417
Income (loss) from operations	306		(501		)	(246		)	(281		)	60		(782		)
Other (expense) and income:
Other income	—		—			8			80			8		80
Interest expense	—		—			—			(79		)	—		(79		)
Total other (expense) and income	—		—			8			1			8		1
Income (loss) before taxes	306		(501		)	(238		)	(280		)	68		(781		)
Income taxes (benefits) from continuing operations	—		—			—			—			—		—
Net income (loss) from continuing operations	$	306	$	(501	)	$	(238	)	$	(280	)	$	68	$	(781	)

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 nine-month periods ended March 31, 2014 and 2013, 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.