Note 8 Segment Information

9 Months Ended

Dec. 31, 2011

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 December 31, 2011 and 2010:

Three Months Ended December 31, 2011	Avionics Gov’t		Avionics Comm’l.		Avionics Total		Corporate Items			Total
Net sales	$	3,163,220	$	510,015	$	3,673,235	$	-		$	3,673,235
Cost of Sales		1,841,826		386,030		2,227,856		-			2,227,856
Gross Margin		1,321,394		123,985		1,445,379		-			1,445,379
Engineering, research, and Development						633,136		-			633,136
Selling, general, and admin.						358,388		366,248			724,636
Amortization of debt discount						-		13,386			13,386
Amortization of debt expense						-		27,081			27,081
Change in fair value of common stock warrants						-		(130,433	)		(130,433	)
Interest (income) expense, net						-		102,431			102,431
Total expenses						991,524		378,713			1,370,237
Income (loss) before income taxes					$	453,855	$	(378,713	)	$	75,142

Three Months Ended December 31, 2010	Avionics Gov’t		Avionics Comm’l.		Avionics Total		Corporate Items			Total
Net sales	$	3,696,348	$	564,874	$	4,261,222	$	-		$	4,261,222
Cost of Sales		2,087,951		307,255		2,395,206		-			2,395,206
Gross Margin		1,608,397		257,619		1,866,016		-			1,866,016
Engineering, research, and Development						767,366		-			767,366
Selling, general, and admin.						364,957		321,423			686,380
Amortization of debt discount								19,164			19,164
Amortization of debt expense								27,080			27,080
Change in fair value of common stock warrants						-		129,684			129,684
Interest (income) expense, net						-		101,945			101,945
Total expenses						1,132,323		599,296			1,731,619
Income (loss) before income taxes					$	733,693	$	(599,296	)	$	134,397

Nine Months Ended  December 31, 2011	Avionics Gov’t		Avionics Comm’l.		Avionics Total		Corporate Items			Total
Net sales		9,470,103		1,867,697		11,337,800		-			11,337,800
Cost of Sales		5,342,873		1,204,690		6,547,563		-			6,547,563
Gross Margin		4,127,230		663,007		4,790,237		-			4,790,237
Engineering, research, and Development						2,160,107		-			2,160,107
Selling, general, and admin.						1,046,231		1,145,101			2,191,332
Amortization of debt discount						-		40,177			40,177
Amortization of debt expense						-		81,241			81,241
Change in fair value of common stock warrants						-		(66,738	)		(66,738	)
Proceeds from life insurance						-		(300,029	)		(300,029	)
Interest (income) expense, net						-		301,347			301,347
Total expenses						3,206,338		1,201,099			4,407,437
Income (loss) before income taxes					$	1,583,899	$	(1,201,099	)	$	382,800

Nine Months Ended December 31, 2010	Avionics Gov’t		Avionics Comm’l.		Avionics Total		Corporate Items			Total
Net sales	$	7,942,668	$	1,829,767	$	9,772,435	$	-		$	9,772,435
Cost of Sales		4,208,229		1,146,575		5,354,804		-			5,354,804
Gross Margin		3,374,439		683,192		4,417,631		-			4,417,631
Engineering, research, and Development						2,385,802		-			2,385,802
Selling, general, and admin.						1,060,756	$	1,076,299			2,137,055
Gain on sale of asset						-		(3,600	)		(3,600	)
Amortization of debt discount								33,678			33,678
Amortization of debt expense								33,098			33,098
Change in fair value of common stock warrants						-		129,684			129,684
Interest (income) expense, net						-		172,496			172,496
Total expenses						3,446,558		1,441,655			4,888,213
Income (loss) before income taxes					$	971,073	$	(1,441,655	)	$	(470,582	)