Note 8 - Segment Information

9 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

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 three and nine month periods ending December 31, 2014 and 2013:

Three Months Ended  December 31, 2014	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales	$	4,455,399	$	574,698	$	5,030,097		-		$	5,030,097
Cost of sales		3,015,359		468,951		3,484,310		-			3,484,310
Gross margin		1,440,040		105,747		1,545,787		-			1,545,787
Engineering, research, and development						494,721		-			494,721
Selling, general and administrative						323,862		501,399			825,261
Amortization of debt discount						-		14,373			14,373
Amortization of deferred financing costs						-		13,648			13,648
Loss on extinguishment of debt						-		188,102			188,102
Change in fair value of common stock warrants						-		(37,330	)		(37,330	)
Interest expense, net						-		39,137			39,137
Total expenses						818,583		719,329			1,537,912
Income (loss) before income taxes					$	727,204	$	(719,329	)	$	7,875

Three Months Ended  December 31, 2013	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items		Total
Net sales	$	3,797,272		291,757		4,089,029		-		4,089,029
Cost of sales		2,415,427		277,915		2,693,342		-		2,693,342
Gross margin		1,381,845		13,842		1,395,687		-		1,395,687
Engineering, research, and development						449,477				449,477
Selling, general, and administrative						375,255		322,664		697,919
Amortization of debt discount								27,120		27,120
Amortization of deferred financing costs								27,827		27,827
Change in fair value of common stock warrants								229,726		229,726
Interest (income) expense, net								50,699		50,699
Total expenses						824,732		658,036		1,482,768
Income (loss) before income taxes					$	570,955	$	(658,036)	$	(87,081	)

Nine Months Ended  December 31, 2014	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales	$	10,002,850	$	1,743,997	$	11,746,847		-		$	11,746,847
Cost of sales		6,800,031		1,411,468		8,211,499		-			8,211,499
Gross margin		3,202,819		332,529		3,535,348		-			3,535,348
Engineering, research, and development						1,476,343		-			1,476,343
Selling, general and administrative						899,579		1,464,909			2,364,488
Amortization of debt discount						-		75,308			75,308
Amortization of deferred financing costs						-		67,808			67,808
Loss on extinguishment of debt								188,102			188,102
Change in fair value of common stock warrants						-		68,750			68,750
Interest expense, net						-		159,004			159,004
Total expenses						2,375,922		2,023,881			4,399,803
Income (loss) before income taxes					$	1,159,426	$	(2,023,881	)	$	(864,455	)

Nine Months Ended  December 31, 2013	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales		10,054,033		1,269,552		11,323,585		-			11,323,585
Cost of Sales		6,497,178		968,813		7,465,991		-			7,465,991
Gross Margin		3,556,855		300,739		3,857,594		-			3,857,594
Engineering, research, and development						1,378,426					1,378,426
Selling, general and administrative						933,033		1,089,546			2,022,579
Amortization of debt discount								75,707			75,707
Amortization of deferred financing costs								81,987			81,987
Loss on extinguishment of debt								26,600			26,600
Change in fair value of common stock warrants								272,499			272,499
Interest expense, net								252,132			252,132
Total expenses						2,311,459		1,798,471			4,109,930
Income (loss) before income taxes					$	1,546,135	$	(1,798,471	)	$	(252,336	)