Business Segments

The Company reports its financial results in two reportable business segments: Wind and Grid.

Through the Company’s Windtec Solutions, the Wind business segment enables manufacturers to field wind turbines with exceptional power output, reliability and affordability. The Company supplies advanced power electronics and control systems, licenses its highly engineered wind turbine designs, and provides extensive customer support services to wind turbine manufacturers. The Company’s design portfolio includes a broad range of drive trains and power ratings of 2 megawatts ("MWs") and higher. The Company provides a broad range of power electronics and software-based control systems that are highly integrated and designed for optimized performance, efficiency, and grid compatibility.

Through the Company’s Gridtec Solutions, the Grid business segment enables electric utilities and renewable energy project developers to connect, transmit and distribute power with exceptional efficiency, reliability and affordability. The sales process is enabled by transmission planning services that allow it to identify power grid congestion, poor power quality and other risks, which helps the Company determine how its solutions can improve network performance. These services often lead to sales of grid interconnection solutions for wind farms and solar power plants, power quality systems, and transmission and distribution cable systems. The Company also sells ship protection products to the U.S. Navy through its Grid business segment.

The operating results for the two business segments are as follows (in thousands):



	Three months ended December 31,				Nine months ended December 31,
	2017		2016		2017		2016
Revenues:
Wind	$	2,633	$	18,248	$	10,465	$	36,822
Grid	12,300		8,900		24,439		22,178
Total	$	14,933	$	27,148	$	34,904	$	59,000



	Three months ended December 31,						Nine months ended December 31,
	2017			2016			2017			2016
Operating loss:
Wind	$	(1,684	)	$	1,044		$	(7,557	)	$	(3,220	)
Grid	(1,011		)	(4,491		)	(15,279		)	(15,068		)
Unallocated corporate expenses	(1,156		)	(613		)	(3,514		)	(2,266		)
Total	$	(3,851	)	$	(4,060	)	$	(26,350	)	$	(20,554	)

The accounting policies of the business segments are the same as those for the consolidated Company. The Company’s business segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities. The Company evaluates performance based upon several factors, of which the primary financial measures are segment revenues and segment operating loss. The disaggregated financial results of the segments reflect allocation of certain functional expense categories consistent with the basis and manner in which Company management internally disaggregates financial information for the purpose of assisting in making internal operating decisions. In addition, certain corporate expenses which the Company does not believe are specifically attributable or allocable to either of the two business segments have been excluded from the segment operating loss.

Unallocated corporate expenses primarily consist of stock-based compensation expense of $0.9 million and $0.6 million in the three months ended December 31, 2017 and 2016, respectively. Unallocated corporate expenses primarily consist of stock-based compensation expense of $2.1 million and $2.3 million in the nine months ended December 31, 2017 and 2016, respectively. Additionally, a restructuring charge of $1.3 million is included in the nine months ended December 31, 2017, as well as losses for the change in fair value of the contingent consideration of $0.3 million and $0.1 million in the three and nine months ended December 31, 2017.

Total assets for the two business segments as of December 31, 2017 and March 31, 2017 are as follows (in thousands):



	December 31, 2017		March 31, 2017
Wind	$	15,303	$	18,346
Grid	36,165		31,060
Corporate assets	45,303		50,838
Total	$	96,771	$	100,244

The following table sets forth customers who represented 10% or more of the Company’s total revenues for the three and nine months ended December 31, 2017 and 2016:



	Three months ended December 31,				Nine months ended December 31,
	2017		2016		2017		2016
Inox Wind Limited	15	%	66	%	27	%	58	%
Vestas Middle East S.L.U.	27	%	—	%	11	%	—	%
SSE Generation Ltd.	17	%	—	%	<10%		—	%
Hidalgo Wind Farm LLC	<10%		17	%	<10%		<10%