Note 8. Segment Information

3 Months Ended

Jun. 30, 2010

Segment Reporting Disclosure [Text Block]

Note 8                      Segment Information

In accordance with FASB ASC 280, “Disclosures about Segments of an Enterprise and related information”, the Company determined it has two reportable segments - avionics government and avionics commercial.  There are no inter-segment revenues.

The Company is organized primarily on the basis of its avionics products.  The avionics government segment consists primarily of the design, manufacture, and sale of test equipment to the U.S. and foreign governments and militaries either directly or through distributors.  The avionics commercial segment consists of design, manufacture, and sale of test equipment to domestic and foreign airlines, directly or through commercial distributors, and to general aviation repair and maintenance shops. The Company develops and designs test equipment for the avionics industry and as such, the Company’s products and designs cross segments.

Management evaluates the performance of its segments and allocates resources to them based on gross margin. The Company’s general and administrative costs and sales and marketing expenses, and engineering costs are not segment specific. As a result, all operating expenses are not managed on a segment basis.  Net interest includes expenses on debt and income earned on cash balances, both maintained at the corporate level. Segment assets include accounts receivable and work-in-process inventory. Asset information, other than accounts receivable and work-in-process inventory, is not reported, since the Company does not produce such information internally.  All long-lived assets are located in the U.S.

The table below presents information about reportable segments within the avionics business for the periods ending June 30, 2011 and 2010:

	Avionics		Avionics		Avionics		Corporate
Three Months Ended June 30, 2011	Gov’t		Comm’l.		Total		Items			Total
Net sales		3,145,592		844,619		3,990,211		-			3,990,211
Cost of Sales		1,674,813		453,767		2,128,580		-			2,128,580
Gross Margin		1,470,779		390,852		1,861,631		-			1,861,631
Engineering, research, and   development						849,038					849,038
Selling, general, and admin.						361,816		437,006			798,822
Amortization of debt discount						-		13,395			13,395
Amortization of debt expense						-		27,080			27,080
Change in fair value of   common stock warrants						-		168,586			168,586
Proceeds from life insurance						-		(300,029	)		(300,029	)
Interest (income) expense, net						-		102,601			102,601
Total expenses						1,210,854		448,639			1,659,493
Income (loss) before income   taxes					$	650,777	$	(448,639	)	$	202,138

	Avionics		Avionics		Avionics			Corporate
Three Months Ended June 30, 2010	Gov’t		Comm’l.		Total			Items			Total
Net sales		1,848,473	$	606,807	$	2,455,280		$	-		$	2,455,280
Cost of Sales		940,672		432,228		1,372,900			-			1,372,900
Gross Margin		907,801		174,579		1,082,380			-			1,082,380
Engineering, research, and development						757,346			-			757,346
Selling, general, and admin.						348,095			409,949			758,044
Gain on sale of asset									(3,600	)		(3,600	)
Interest (income) expense,net									29,227			29,227
Total expenses						1,105,441			435,576			1,541,017
Income (loss) before income   taxes					$	(23,061	)	$	(435,576	)	$	(458,637	)