17. Segment Information

12 Months Ended

Mar. 31, 2012

Segment Reporting Disclosure [Text Block]

17.                   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 for the years ended March 31:

2012	Avionics Government		Avionics Commercial		Avionics Total		Corporate/ Reconciling Items			Total
Net sales	$	14,013,807	$	2,494,871	$	16,508,678	$	-		$	16,508,678
Cost of Sales		8,424,141		1,644,095		10,068,236		-			10,068,236
Gross Margin		5,589,666		850,776		6,440,442		-			6,440,442
Engineering, research, and  development						2,794,478					2,794,478
Selling, general, and admin.						1,488,114		1,481,842			2,969,956
Amortization of debt discount						-		53,570			53,570
Amortization of debt expense						-		108,321			108,321
Change in fair value of     common stock warrant						-		(10,847	)		(10,847	)
Gain on sale of asset						-		(500	)		(500	)
Proceeds from life insurance						-		(300,029	)		(300,029	)
Interest expense, net					-			398,758			398,758
						4,282,592		1,731,115			6,013,707
Income (loss) before income taxes					$	2,157,850	$	(1,731,115	)	$	426,735
Segment Assets	$	7,743,372	$	755,620	$	8,498,992	$	4,007,417		$	12,506,409

2011	Avionics Government		Avionics Commercial		Avionics Total		Corporate/ Reconciling Items			Total
Net sales	$	10,951,159	$	2,589,441	$	13,540,600	$	-		$	13,540,600
Cost of Sales		5,667,799		1,550,966		7,218,765		-			7,218,765
Gross Margin		5,283,360		1,038,475		6,321,835		-			6,321,835
Engineering, research, and  development						3,256,306					3,256,306
Selling, general, and admin.						1,427,156		1,474,602			2,901,758
Amortization of debt discount						-		52,838			52,838
Amortization of debt expense						-		60,178			60,178
Change in fair value of     common stock warrant						-		84,481			84,481
Gain on sale of asset						-		(3,600	)		(3,600	)
Interest expense, net					-			276,286			276,286
						4,683,462		1,944,785			6,628,247
Income (loss) before income taxes					$	1,638,373	$	(1,944,785	)	$	(306,412	)
Segment Assets	$	6,724,010	$	298,610	$	7,022,620	$	3,635,119		$	10,657,739