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Segment Information
 9 Months Ended
Apr. 30, 2012
Segment Information [Abstract]  
Segment Information

(16)                Segment Information

 

Reportable operating segments are determined based on Comtech's management approach. The management approach, as defined by accounting standards which have been codified into FASB ASC 280, "Segment Reporting," is based on the way that the chief operating decision-maker organizes the segments within an enterprise for making decisions about resources to be allocated and assessing their performance. Our chief operating decision-maker is our President and Chief Executive Officer.

 

While our results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker also manages the enterprise in three operating segments: (i) telecommunications transmission, (ii) RF microwave amplifiers, and (iii) mobile data communications.

 

Telecommunications transmission products include satellite earth station products (such as analog and digital modems, frequency converters, power amplifiers, transceivers and voice gateways) and over-the-horizon microwave communications products and systems (such as digital troposcatter modems).

 

RF microwave amplifier products include traveling wave tube amplifiers and solid-state, high-power broadband amplifier products that use the microwave and radio frequency spectrums.

 

Mobile data communications products include satellite-based mobile location tracking and messaging hardware (such as mobile satellite transceivers and third-party produced ruggedized computers) and related services and the design and production of microsatellites.

 

Corporate management defines and reviews segment profitability based on the same allocation methodology as presented in the segment data tables below:

 

 

Three months ended April 30, 2012

 

Telecommunications Transmission

RF Microwave Amplifiers

Mobile Data Communications

Unallocated

Total

Net sales

$      48,044,000

   28,111,000

        23,638,000

                    -

$    99,793,000

Operating income (loss)

          8,463,000

     2,587,000

          2,638,000

     (3,122,000)

      10,566,000

Interest income and other

               15,000

            9,000

                 7,000

          339,000

           370,000

Interest expense

             163,000

                  -

                        -  

       2,029,000

        2,192,000

Depreciation and amortization

          2,530,000

     1,121,000

             366,000

          856,000

        4,873,000

Expenditures for long-lived assets, including intangibles

          1,581,000

        155,000

               71,000

                    -

       1,807,000

Total assets at April 30, 2012

      244,208,000

 102,816,000

        37,203,000

   362,133,000

   746,360,000

 

 

Three months ended April 30, 2011

 

Telecommunications Transmission

RF Microwave Amplifiers

Mobile Data Communications

Unallocated

Total

Net sales

$        62,443,000

   23,050,000

         45,588,000

                    -

$  131,081,000

Operating income (loss)

          15,447,000

     1,197,000

           9,127,000

     (3,853,000)

      21,918,000

Interest income and other (expense)

                 12,000

          (3,000)

                  9,000

          539,000

           557,000

Interest expense

               159,000

                  -

                        -

       1,976,000

        2,135,000

Depreciation and amortization

            2,831,000

     1,140,000

           1,874,000

       1,178,000

        7,023,000

Expenditures for long-lived assets, including intangibles

            1,037,000

        241,000

              140,000

                    -

        1,418,000

Total assets at April 30, 2011

        257,720,000

   102,754,000

         28,587,000

    590,473,000

    979,534,000

 

 

Nine months ended April 30, 2012

 

Telecommunications Transmission

RF Microwave Amplifiers

Mobile Data Communications

Unallocated

Total

Net sales

$     156,168,000

    71,661,000

        84,466,000

                    -

$  312,295,000

Operating income (loss)

         29,816,000

      4,105,000

        16,409,000

   (13,351,000)

      36,979,000

Interest income and other

               35,000

             3,000

               23,000

      1,239,000

        1,300,000

Interest expense

             495,000

                   -

                        -

      6,026,000

        6,521,000

Depreciation and amortization

          7,604,000

      3,325,000

          1,183,000

      2,862,000

      14,974,000

Expenditures for long-lived assets, including intangibles

          3,651,000

         630,000

             186,000

                    -

        4,467,000

Total assets at April 30, 2012

      244,208,000

  102,816,000

        37,203,000

   362,133,000

    746,360,000

 

 

Nine months ended April 30, 2011

 

Telecommunications Transmission

RF Microwave Amplifiers

Mobile Data Communications

Unallocated

Total

Net sales

$      173,852,000

   69,739,000

        228,461,000

                     -

$  472,052,000

Operating income (loss)

          39,217,000

     2,241,000

          48,510,000

      (2,705,000)

      87,263,000

Interest income and other (expense)

                 99,000

           (5,000)

                 33,000

        1,750,000

        1,877,000

Interest expense

               399,000

                  -

                          -

        5,889,000

        6,288,000

Depreciation and amortization

            8,483,000

      3,383,000

            4,357,000

        4,170,000

      20,393,000

Expenditures for long-lived assets, including intangibles

            8,909,000

         547,000

               768,000

            47,000

     10,271,000

Total assets at April 30, 2011

        257,720,000

  102,754,000

          28,587,000

   590,473,000

   979,534,000

 

 

Unallocated operating income for the nine months ended April 30, 2012 included $2,638,000 of costs related to a contested proxy solicitation in connection with our fiscal 2011 annual meeting of stockholders. This contested proxy solicitation was initiated by a third party who publicly announced, on November 18, 2011, that it would not proceed with its proxy solicitation. There was no agreement with, consideration paid to, or any accommodation granted to this third party by us. Unallocated operating income for the nine months ended April 30, 2011 includes the receipt of a net termination fee of $12,500,000 related to a Termination and Release Agreement dated September 7, 2010, by which we and CPI International, Inc. ("CPI") terminated a previously announced Merger Agreement dated May 8, 2010. There was no such benefit recorded for the nine months ended April 30, 2012.

 

Unallocated expenses result from such corporate expenses as legal, accounting and executive compensation. In addition, for the three and nine months ended April 30, 2012, unallocated expenses include $809,000 and $2,718,000, respectively, of stock-based compensation expense and for the three and nine months ended April 30, 2011, unallocated expenses include $1,118,000 and $3,977,000, respectively, of stock-based compensation expense. Interest expense (which includes amortization of deferred financing costs) associated with our convertible senior notes and our Credit Facility is not allocated to the operating segments. Depreciation and amortization includes amortization of stock-based compensation. Unallocated assets consist principally of cash, deferred financing costs and deferred tax assets. Substantially all of our long-lived assets are located in the U.S.

 

For the three months ended April 30, 2012 and 2011, intersegment sales by the telecommunications transmission segment to the RF microwave amplifiers segment were $1,333,000 and $729,000, respectively. Intersegment sales for the nine months ended April 30, 2012 and 2011 by the telecommunications transmission segment to the RF microwave amplifiers segment were $3,032,000 and $2,591,000, respectively.

 

Intersegment sales for the three months ended April 30, 2012 and 2011 by the telecommunications transmission segment to the mobile data communications segment were $1,047,000 and $5,976,000, respectively. For the nine months ended April 30, 2012 and 2011, intersegment sales by the telecommunications transmission segment to the mobile data communications segment were $5,937,000 and $20,285,000, respectively.

 

Intersegment sales for the three months ended April 30, 2012 and 2011 by the RF microwave amplifiers segment to the telecommunications transmission segment were $34,000 and $1,000, respectively. Intersegment sales for the nine months ended April 30, 2012 and 2011 by the RF microwave amplifiers segment to the telecommunications transmission segment were $119,000 and $32,000, respectively.

 

All intersegment sales have been eliminated from the tables above.