Note 2. Segment Reporting

We have organized our business into five segments which meet the definition of reportable segments under ASC 280-10, Segment Reporting: Commercial, Live Events, High School Park and Recreation, Transportation, and International. These segments are based on the customer type or geography and are the same as our business units.

Our Commercial business unit primarily consists of sales of our integrated video display systems, digital billboards, Galaxy^® and Fuelight^™ product lines, and dynamic messaging systems to resellers (primarily sign companies), out-of-home ("OOH") companies, national retailers, quick-serve restaurants, casinos, commercial building owners, and petroleum retailers. Our Live Events business unit primarily consists of sales of integrated scoring and video display systems to college and professional sports facilities and convention centers and sales of our mobile display technology to video rental organizations and other live events type venues. Our High School Park and Recreation business unit primarily consists of sales of scoring systems, Galaxy^® displays and video display systems to primary and secondary education facilities and resellers (primarily sign companies). Our Transportation business unit primarily consists of sales of intelligent transportation system dynamic messaging signs for road management, mass transit, and aviation applications and other electronic signage for advertising and way-finding needs, which includes our Vanguard^® and Galaxy^® product lines and other intelligent transportation systems dynamic message signs, to governmental transportation departments, transportation industry contractors, airlines and other transportation related customers. Our International business unit consists of sales of all product lines outside the United States and Canada. In our International business unit, we focus on product lines related to integrated scoring and video display systems for sports and commercial applications, OOH advertising products, architectural lighting, and transportation related products to the related type of company, including sports and commercial business facilities, OOH companies, and governmental transportation agencies.

We evaluate segment performance based on operating results through contribution margin, which is comprised of gross profit less selling expense. Gross profit is net sales less cost of sales. Cost of sales consists primarily of inventory and components, consumables, salaries, other employee-related costs, facilities-related costs for manufacturing locations, machinery and equipment maintenance and depreciation, site sub-contractors, warranty costs, enterprise resource and service management systems, inventory obsolescence and write-downs, inventory procurement and handling costs, and other manufacturing, installation, and service delivery expenses. Selling expenses consist primarily of salaries, other employee-related costs, travel and entertainment expenses, facilities-related costs for sales and service offices, bad debt expenses, third-party commissions and expenditures for marketing efforts, including the costs of collateral materials, conventions and trade shows, product demonstrations, customer relationship management systems, and supplies. Contribution margin excludes general and administration expense, product design and development expense, non-operating income and expense and income tax expense. Assets are not allocated to the segments. Depreciation and amortization are allocated to each segment based on various financial measures; however, some depreciation and amortization are corporate in nature and remain unallocated. Our segments follow the same accounting policies as those described in "Note 1. Nature of Business and Summary of Significant Accounting Policies." Some expenses or services are not directly allocable to a sale or segment or the resources and related expenses are shared across business segment areas. These expenses are allocated using estimates and allocation methodologies based on some financial measures and professional judgment. Shared or unabsorbed manufacturing costs are allocated to the business unit benefiting most from that manufacturing location's production capabilities. Shared or unabsorbed costs of domestic field sales and services infrastructure, including most field administrative staff, are allocated to the Commercial, Live Events, High School Park and Recreation, and Transportation business units based on cost of sales. Shared manufacturing, buildings and utilities, and procurement costs are allocated based on payroll dollars, square footage and various other financial measures.

We do not maintain information on sales by products; therefore, disclosure of such information is not practical.

The following table sets forth certain financial information for each of our five reporting segments for the periods indicated:



	Year Ended
	April 28, 2018			April 29, 2017			April 30, 2016
Net sales:
Commercial	$	134,535		$	148,073		$	148,261
Live Events	236,333			213,982			205,151
High School Park and Recreation	87,627			82,798			70,035
Transportation	59,578			52,426			52,249
International	92,457			89,260			94,472
	610,530			586,539			570,168

Gross profit:
Commercial	$	26,665		$	36,514		$	29,147
Live Events	49,755			40,810			36,568
High School Park and Recreation	29,317			26,388			20,624
Transportation	21,247			18,027			16,572
International	18,685			18,676			18,108
	145,669			140,415			121,019

Contribution margin: (1)
Commercial	7,986			18,046			13,210
Live Events	35,439			27,750			23,178
High School Park and Recreation	18,317			16,114			10,314
Transportation	17,048			13,465			12,466
International	4,119			3,353			3,039
	82,909			78,728			62,207

Non-allocated operating expenses:
General and administrative	34,919			34,226			32,801
Product design and development	35,530			29,081			26,911
Operating income	12,460			15,421			2,495

Nonoperating income (expense):
Interest income	723			751			987
Interest expense	(217		)	(230		)	(228		)
Other (expense) income, net	(537		)	(354		)	(128		)

Income before income taxes	12,429			15,588			3,126
Income tax expense	6,867			5,246			1,065
Net income	$	5,562		$	10,342		$	2,061

Depreciation, amortization and impairment:
Commercial	$	6,199		$	6,337		$	4,925
Live Events	4,783			5,032			4,970
High School Park and Recreation	1,646			1,725			1,722
Transportation	1,138			1,267			1,364
International	1,163			2,317			1,227
Unallocated corporate depreciation	2,855			2,714			2,735
	$	17,784		$	19,392		$	16,943

(1) Contribution margin consists of gross profit less selling expense.

No single geographic area comprises a material amount of our net sales or property and equipment, net of accumulated depreciation, other than the United States. The following table presents information about net sales and property and equipment, net of accumulated depreciation, in the United States and elsewhere:



	Year Ended
	April 28, 2018		April 29, 2017		April 30, 2016
Net sales:
United States	$	502,701	$	486,573	$	465,598
Outside United States	107,829		99,966		104,570
	$	610,530	$	586,539	$	570,168
Property and equipment, net of accumulated depreciation:
United States	$	61,206	$	62,425	$	68,233
Outside United States	6,853		4,324		4,930
	$	68,059	$	66,749	$	73,163

We have numerous customers worldwide for sales of our products and services, and no customers accounted for 10% or more of net sales; therefore, we are not economically dependent on a limited number of customers for the sale of our products and services except with respect to our dependence on two major digital billboard customers in our Commercial business unit.

We have numerous raw material and component suppliers, and no supplier accounts for 10% or more of our cost of sales; however, we have a number of single-source suppliers that could limit our supply or cause delays in obtaining raw material and components needed in manufacturing.