Note 8 - Segment Information

3 Months Ended

Jun. 30, 2012

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 June 30, 2012 and 2011:

Three Months Ended	Avionics		Avionics		Avionics			Corporate
June 30, 2012	Gov’t		Comm’l.		Total			Items			Total
Net sales		549,966		627,322		1,177,288			-			1,177,288
Cost of Sales		315,929		577,665		893,594			-			893,594
Gross Margin		234,037		49,657		283,694			-			283,694
Engineering, research, and development						578,604						578,604
Selling, general, and admin.						316,989			336,899			653,888
Amortization of debt discount									13,392			13,392
Amortization of debt expense									27,080			27,080
Change in fair value of common stock warrants									(249,394	)		(249,393	)
Interest (income) expense, net						0			92,468			92,467
Total expenses						895,593			220,445			1,116,038
Loss before income						(611,899	)		(220,445	)		(832,344	)

Three Months Ended	Avionics		Avionics		Avionics		Corporate
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						650,777		(448,639	)		202,138