Segmental Information

6 Months Ended

Dec. 31, 2011

Segmental Information [Abstract]

Segmental Information

5. Segmental Information

During the three-month and six-month periods ended December 31, 2011 and 2010, the Company's operations were classified into three principal reportable business units that provide different products or services.

Management reviews financial information, allocates resources, and manages the business as three segments, ECD, Sonomed-Escalon and Escalon Medical Corp. ("Corporate"). The ECD segment consists of Drew Scientific, Inc., and its wholly owned subsidiary JAS. ECD develops and sells clinical diagnostic instruments, reagents and chemistries. 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 Escalon Medical Corp. segment includes the administrative corporate operations of the consolidated group. The Company began to include redesignated reporting segments beginning with Form 10-K for the year ended June 30, 2011, and prior period segment information has been reclassified to conform with the current year presentation.

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

	Segment Statements of Operations (in thousands) – Three months ended December 31,
	ECD						Sonomed-Escalon				Corporate						Total
	2011			2010			2011		2010		2011			2010			2011			2010
Revenues, net:
Product revenue	$	3,093		$	3,388		$	3,186	$	3,174	$	0		$	0		$	6,279		$	6,562
Other revenue		—			—			—		—		—			—			—			—
Total revenues, net		3,093			3,388			3,186		3,174		—			—			6,279			6,562
Costs and expenses:
Cost of goods sold		2,822			2,454			1,462		1,724		—			—			4,284			4,178
Research & Development		110			183			211		224		—			—			321			407
Marketing, General & Admin		1,268			1,734			1,064		937		239			106			2,571			2,777
Total costs and expenses		4,200			4,371			2,737		2,885		239			106			7,176			7,362
(Loss) income from operations		(1,107	)		(983	)		449		289		(239	)		(106	)		(897	)		(800	)
Other (expense) income:
Loss on Disposal of Assets		(87	)		—			—		—		—			—			(87	)		—
Equity in OTM		—			—			—		—		—			(11	)		—			(11	)
Interest income		—			—			—		—		—			—			—			—
Interest expense		(80	)		(78	)		—		—		(8	)		—			(88	)		(78	)
Total other (expense) income		(167	)		(78	)		—		—		(8	)		(11	)		(175	)		(89	)
(Loss) income before taxes		(1,274	)		(1,061	)		449		289		(247	)		(117	)		(1,072	)		(889	)
Income taxes		—			—			—		—		—			—			—			—
Net (loss) income from continuing operations	($	1,274	)	($	1,061	)	$	449	$	289	($	247	)	($	117	)	($	1,072	)	($	889	)

	Segment Statements of Operations (in thousands) – Six months ended December  31,
	ECD						Sonomed-Escalon				Corporate						Total
	2011			2010			2011		2010		2011			2010			2011			2010
Revenues, net:
Product revenue	$	6,707		$	7,028		$	5,593	$	5,649	$	0		$	0		$	12,300		$	12,677
Other revenue		—			7			—		—		—			—			—			7
Total revenues, net		6,707			7,035			5,593		5,649		—			—			12,300			12,684
Costs and expenses:
Cost of goods sold		5,166			5,173			2,686		3,093		—			—			7,852			8,266
Research & Development		272			372			430		431		—			—			702			803
Marketing, General & Admin		2,768			3,515			2,043		1,695		237			232			5,048			5,442
Total costs and expenses		8,206			9,060			5,159		5,219		237			232			13,602			14,511
(Loss) income from operations		(1,499	)		(2,025	)		434		430		(237	)		(232	)		(1,302	)		(1,827	)
Other (expense) income:
Equity in OTM		—			—			—		—		1			(34	)		1			(34	)
Loss on Disposal of Assets		(87	)		—			—		—		—			—			(87	)		—
Interest income		—			—			—		—		—			(1	)		—			(1	)
Interest expense		(164	)		(160	)		—		—		(7	)		—			(171	)		(160	)
Total other (expense) income		(251	)		(160	)		—		—		(6	)		(35	)		(257	)		(195	)
(Loss) income before taxes		(1,750	)		(2,185	)		434		430		(243	)		(267	)		(1,559	)		(2,022	)
Income taxes		—			—			—		—		—			—			—			—
Net (loss) income from continuing operations	($	1,750	)	($	2,025	)	$	434	$	430	($	243	)	($	267	)	($	1,559	)	($	2,022	)

The Company operates in the healthcare market, specializing in the development, manufacture and marketing of (1) ophthalmic medical devices and pharmaceuticals; (2) in-vitro diagnostic ("IVD") instrumentation and consumables for use in human and veterinary hematology. On April 30, 2010, the Company sold its Vascular business. 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 Form 10-K for the year ended June 30, 2011. 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 three- and six-month periods ended December 31, 2011 and 2010, ECD derived its revenue from the sale of instrumentation and consumables for blood cell counting and blood analysis in the areas of diabetes, cardiovascular diseases and human and veterinary hematology. Sonomed-Escalon derived its revenue from the sale of A-Scans, B-Scans and pachymeters. These products are used for diagnostic or biometric applications in ophthalmology. Revenue is from the sale of ISPAN™ gas products and various disposable ophthalmic surgical products and from CFA digital imaging systems and related products.