Note 7 - Segment Information

9 Months Ended

Dec. 31, 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 nine month periods ending December 31, 2015 and 2014:

Three Months Ended  December 31, 2015	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales	$	5,658,695	$	312,170	$	5,970,865	$	-		$	5,970,865
Cost of sales		3,709,998		226,110		3,936,108		-			3,936,108
Gross margin		1,948,697		86,060		2,034,757		-			2,034,757
Engineering, research, and development						541,502		-			541,502
Selling, general and administrative						203,249		564,674			767,923
Amortization of deferred financing costs						-		1,357			1,357
Change in fair value of common stock warrants						-		246,751			246,751
Interest expense, net						-		23,687			23,687
Total expenses						744,751		836,469			1,581,220
Income (loss) before income taxes					$	1,290,006	$	(836,469	)	$	453,537

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

Nine Months Ended  December 31, 2015	Avionics  Government		Avionics  Commercial		Avionics  Total		Corporate  Items			Total
Net sales	$	17,248,766	$	1,386,408	$	18,635,174	$	-		$	18,635,174
Cost of sales		11,506,710		1,034,946		12,541,656		-			12,541,656
Gross margin		5,742,056		351,462		6,093,518		-			6,093,518
Engineering, research, and development						1,477,290		-			1,477,290
Selling, general and administrative						908,829		1,608,658			2,517,487
Amortization of deferred financing costs						-		4,072			4,072
Change in fair value of common stock warrants						-		697,579			697,579
Interest expense, net						-		79,156			79,156
Total expenses						2,386,119		2,389,465			4,775,584
Income (loss) before income taxes					$	3,707,399	$	(2,389,465	)	$	1,317,934

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	)