Note 8 Segment Information

6 Months Ended

Sep. 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.

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

Three Months Ended September 30, 2011	Avionics Gov’t		Avionics Comm’l.		Avionics Total		Corporate Items			Total
Net sales		3,161,291		513,063		3,674,354		-			3,674,354
Cost of Sales		1,826,234		364,893		2,191,127		-			2,191,127
Gross Margin		1, 335,057		148,170		1,483,227		-			1,483,227
Engineering, research, and development						677,933					677,933
Selling, general, and admin.						326,027		341,847			667,874
Amortization of debt discount						-		13,396			13,396
Amortization of debt expense						-		27,080			27,080
Change in fair value of common stock warrants						-		(104,891	)		(104,891	)
Interest (income) expense, net						-		96,315			96,315
Total expenses						1,003,960		373,747			1,377,707
Income (loss) before income taxes					$	479,267	$	(373,747	)	$	105,520

Three Months Ended September 30, 2010	Avionics Gov’t		Avionics Comm’l.		Avionics Total		Corporate Items			Total
Net sales	$	2,397,847	$	658,086	$	3,055,933	$	-		$	3,055,933
Cost of Sales	1,179,606		407,092			1,586,698		-			1,586,698
Gross Margin		1,218,241		250,994		1,469,235		-			1,469,235
Engineering, research, and development						861,090		-			861,090
Selling, general, and admin.						347,704		344,927			692,631
Amortization of debt discount								8,745			8,745
Amortization of debt expense								6,018			6,018
Interest (income) expense, net						-		47,093			47,093
Total expenses						1,208,794		406,783			1,615,577
Income (loss) before income taxes					$	260,441	$	(406,783	)	$	(146,342	)

Six Months Ended September 30, 2011	Avionics Gov’t		Avionics Comm’l.		Avionics Total		Corporate Items			Total
Net sales		6,306,883		1,357,682		7,664,565		-			7,664,565
Cost of Sales		3,501,047		818,660		4,319,707		-			4,319,707
Gross Margin		2,805,836		539,022		3,344,858		-			3,344,858
Engineering, research, and development						1,526,971					1,526,971
Selling, general, and admin.						687,843		778,853			1,466,696
Amortization of debt discount						-		26,791			26,791
Amortization of debt expense						-		54,160			54,160
Change in fair value of common stock warrants						-		63,695			63,695
Proceeds from life insurance						-		(300,029	)		(300,029	)
Interest (income) expense, net						-		198,916			198,916
Total expenses						2,214,814		822,386			3,037,200
Income (loss) before income taxes					$	1,130,044	$	(822,386	)	$	307,658

Six Months Ended September 30, 2010	Avionics Gov’t		Avionics Comm’l.		Avionics Total		Corporate Items			Total
Net sales	$	4,246,320	$	1,264,893	$	5,511,213	$	-		$	5,511,213
Cost of Sales	_2,120,278		_839,320			2,959,598		-			2,959,598
Gross Margin		2,126,042		425,573		2,551,615		-			2,551,615
Engineering, research, and  Development						1,618,436		-			1,618,436
Selling, general, and admin.						695,799	$	754,876			1,450,675
Gain on sale of asset						-		(3,600	)		(3,600	)
Amortization of debt discount								14,514			14,514
Amortization of debt expense								6,018			6,018
Interest (income) expense, net						-		70,551			70,551
Total expenses						2,314,235		842,349			3,156,594
Income (loss) before income taxes					$	237,380	$	(842,349	)	$	(604,979	)