Note 8 - Segment Information

9 Months Ended

Dec. 31, 2016

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. 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 December 31, 2016 and 2015:

Three Months Ended  December 31, 2016	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	3,771,384	$	465,135	$	4,236,519	$	-		$	4,236,519
Cost of sales		2,297,157		305,111		2,602,268		-			2,602,268
Gross margin		1,474,227		160,024		1,634,251		-			1,634,251
Engineering, research, and development						615,007		-			615,007
Selling, general and administrative						256,599		608,771			865,370
Amortization of deferred financing costs						-		1,359			1,359
Change in fair value of common stock warrants						-		(37,000	)		(37,000	)
Interest expense, net						-		11,620			11,620
Total expenses						871,606		584,750			1,456,356
Income (loss) before income taxes					$	762,645	$	(584,750	)	$	177,895

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

Nine Months Ended  December 31, 2016	Avionics Government		Avionics Commercial		Avionics Total		Corporate Items			Total
Net sales	$	12,981,768	$	1,673,149	$	14,654,917	$	-		$	14,654,917
Cost of sales		8,067,636		1,250,789		9,318,425		-			9,318,425
Gross margin		4,914,132		422,360		5,336,492		-			5,336,492
Engineering, research, and development						1,783,655		-			1,783,655
Selling, general and administrative						946,589		1,705,663			2,652,252
Amortization of deferred financing costs						-		4,072			4,072
Change in fair value of common stock warrants						-		(288,203	)		(288,203	)
Interest expense, net						-		46,953			46,953
Total expenses						2,730,244		1,468,485			4,198,729
Income (loss) before income taxes					$	2,606,248	$	(1,468,485	)	$	1,137,763

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