Segmental Information

9 Months Ended

Mar. 31, 2012

Segmental Information [Abstract]

Segmental Information

5. Segmental Information

During the three-month and nine-month periods ended March 31, 2012 and 2011, 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 Corporate 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 period 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 March 31,
	ECD						Sonomed-Escalon					Corporate						Total
	2012			2011			2012		2011			2012			2011			2012			2011
Revenues, net:
Product revenue	$	2,968		$	3,395		$	3,098	$	3,004		$	0		$	0		$	6,066		$	6,399
Other revenue		0			0			0		0			0			0			0			0
Total revenue, net		2,968			3,395			3,098		3,004			0			0			6,066			6,399
Costs and expenses:
Cost of goods sold		2,094			2,562			1,499		1,508			0			0			3,593			4,070
Research & Development		114			172			300		223			0			0			414			395
Marketing, General & Admin		1,349			1,769			1,147		822			126			124			2,622			2,715
Goodwill impairment		0			0			0		906			0			0			0			906
Total costs and expenses		3,557			4,503			2,946		3,459			126			124			6,629			8,086
(Loss) income from operations		(589	)		(1,108	)		152		(455	)		(126	)		(124	)		(563	)		(1,687	)
Other (expense) and income:
Equity in OTM		0			0			0		0			0			(38	)		0			(38	)
Interest income		0			0			0		0			0			1			0			1
Interest expense		(1	)		(84	)		0		0			(75	)		0			(76	)		(84	)
Total other (expense) income		(1	)		(84	)		0		0			(75	)		(37	)		(76	)		(121	)
(Loss)income before taxes		(590	)		(1,192	)		152		(455	)		(201	)		(161	)		(639	)		(1,808	)
Income taxes		0			0			0		0			0			0			0			0
Net (loss) income from continuing operations	$	(590	)	$	(1,192	)	$	152	$	(455	)	$	(201	)	$	(161	)	$	(639	)	$	(1,808	)

	Segment Statements of Operations (in thousands) - Nine-months ended March 31,
	ECD						Sonomed-Escalon					Corporate						Total
	2012			2011			2012		2011			2012			2011			2012			2011
Revenues, net:
Product revenue	$	9,675		$	10,423		$	8,691	$	8,653		$	0		$	0		$	18,366		$	19,076
Other revenue		0			7			0		0			0			0			0			7
Total revenue, net		9,675			10,430			8,691		8,653			0			0			18,366			19,083
Costs and expenses:
Cost of goods sold		7,261			7,735			4,185		4,601			0			0			11,446			12,336
Research & Development		386			544			730		654			0			0			1,116			1,198
Marketing, General & Admin		4,198			5,284			3,109		2,517			363			356			7,669			8,157
Goodwill impairment		0			0			0		906			0			0			0			906
Total costs and expenses		11,845			13,563			8,024		8,678			363			356			20,232			22,597
(Loss) income from operations		(2,170	)		(3,133	)		667		(25	)		(363	)		(356	)		(1,866	)		(3,514	)
Other (expense) income:
Equity in OTM		0			0			0		0			1			(72	)		1			(72	)
Loss on Disposal of Assets		(87	)		0			0		0			0			0			(87	)		0
Interest income		0			0			0		0			0			0			0			0
Interest expense		(164	)		(244	)		0		0			(83	)		0			(247	)		(244	)
Total other (expense) income		(251	)		(244	)		0		0			(82	)		(72	)		(333	)		(316	)
(Loss) income before taxes		(2,421	)		(3,377	)		667		(25	)		(444	)		(428	)		(2,199	)		(3,830	)
Income taxes		0			0			0		0			0			0			0			0
Net (loss) income from continuing Operations	$	(2,421	)	$	(3,377	)	$	667	$	(25	)	$	(444	)	$	(428	)	$	(2,199	)	$	(3,830	)

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 the three- and nine-month periods ended March 31, 2012 and 2011, 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, pachymeters, digital imaging products, ISPAN™ gas products and various disposable ophthalmic surgical products.