Note 7 - Segment Information

6 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 7 – 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 within the avionics business for the three and six month periods ending September 30, 2015 and 2014:

Three Months Ended  September 30, 2015	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales	$	6,328,752	$	489,638	$	6,818,390	$	-		$	6,818,390
Cost of sales		4,235,118		339,806		4,574,924		-			4,574,924
Gross margin		2,093,634		149,832		2,243,466		-			2,243,466
Engineering, research, and development						443,656		-			443,656
Selling, general and administrative						344,951		538,925			883,876
Amortization of deferred financing costs						-		1,358			1,358
Change in fair value of common stock warrants						-		518,588			518,588
Interest expense, net						-		25,835			25,835
Total expenses						788,607		1,084,706			1,873,313
Income (loss) before income taxes					$	1,454,859	$	(1,084,706	)	$	370,153

The table below presents information about reportable segments within the avionics business for the three and six month periods ending September 30, 2015 and 2014:

Three Months Ended  September 30, 2014	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales	$	3,026,728	$	560,946	$	3,587,674	$	-		$	3,587,674
Cost of sales		2,270,257		448,073		2,718,330		-			2,718,330
Gross margin		756,471		112,873		869,344		-			869,344
Engineering, research, and development						497,726		-			497,726
Selling, general and administrative						283,434		376,600			660,034
Amortization of debt discount						-		30,061			30,061
Amortization of deferred financing costs						-		27,080			27,080
Change in fair value of common stock warrants						-		(27,801	)		(27,801	)
Interest expense, net						-		57,387			57,387
Total expenses						781,160		463,327			1,244,487
Income (loss) before income taxes					$	88,184	$	(463,327	)	$	(375,143	)

Six Months Ended  September 30, 2015	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales	$	11,590,071	$	1,074,238	$	12,664,309	$	-		$	12,664,309
Cost of sales		7,796,712		808,836		8,605,548		-			8,605,548
Gross margin		3,793,359		265,402		4,058,761		-			4,058,761
Engineering, research, and development						935,788		-			935,788
Selling, general and administrative						705,580		1,043,984			1,749,564
Amortization of deferred financing costs						-		2,715			2,715
Change in fair value of common stock warrants						-		450,828			450,828
Interest expense, net						-		55,469			55,469
Total expenses						1,641,368		1,552,996			3,194,364
Income (loss) before income taxes					$	2,417,393	$	(1,552,996	)	$	864,397

Six Months Ended  September 30, 2014	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales	$	5,547,451	$	1,169,299	$	6,716,750	$	-		$	6,716,750
Cost of sales		3,784,672		942,517		4,727,189		-			4,727,189
Gross margin		1,762,779		226,782		1,989,561		-			1,989,561
Engineering, research, and development						981,622		-			981,622
Selling, general and administrative						575,717		963,510			1,539,227
Amortization of debt discount						-		60,935			60,935
Amortization of deferred financing costs						-		54,160			54,160
Change in fair value of common stock warrants						-		106,080			106,080
Interest expense, net						-		119,867			119,867
Total expenses						1,557,339		1,304,552			2,861,891
Income (loss) before income taxes					$	432,222	$	(1,304,552	)	$	(872,330	)