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Note 8 - Segment Information
 9 Months Ended
Jul. 31, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note 8 – Segment information

 

We aggregate operating divisions into two reporting segments that have similar economic characteristics primarily in the following areas: (1) the nature of the product and services; (2) the nature of the production process; (3) the type or class of customer for their products and services; (4) the methods used to distribute their products or services; and (5) if applicable, the nature of the regulatory environment. Based upon this evaluation, as of July 31, 2024, we had two reportable segments – RF Connector and Cable Assembly (“RF Connector”) segment and Custom Cabling Manufacturing and Assembly (“Custom Cabling”) segment.

 

Management identifies segments based on strategic business units that are, in turn, based along market lines. These strategic business units offer products and services to different markets in accordance with their customer base and product usage. For segment reporting purposes, the RF Connector, C Enterprises and Microlab divisions constitute the RF Connector segment, and the Cables Unlimited, Rel-Tech,  and Schrofftech divisions constitute the Custom Cabling segment.

 

On August 1, 2023, C Enterprises moved and transitioned its physical operations into the RF Connector office in San Diego, CA. Given the synergies in consolidating both the operating divisions into one building, C Enterprises has been included in the RF Connector segment since August 1, 2023. Further, since the acquisition of C Enterprises in 2019, the customer base for the division has shifted more towards distribution as opposed to direct to end customer which is more aligned with the RF Connector segment. The segment change of including C Enterprise as part of the RF Connector segment was made retroactive to the beginning of our fiscal year starting November 1, 2022 and reclassified for fiscal 2022 for comparative purposes. In annual and interim periods reported prior to the transition on August 1, 2023, C Enterprises was included in the Custom Cabling segment.

 

The RF Connector segment consists of three divisions and the Custom Cabling segment consists of three divisions. The six divisions that met the quantitative thresholds for segment reporting are the RF Connector and Cable Assembly division (“RF Connector division”), Cables Unlimited, Rel-Tech, C Enterprises, Schrofftech, and Microlab. While each segment has similar products and services, there was little overlapping of these services to their customer base. The biggest difference in segments is in the channels of sales: sales or product and services for the RF Connector segment were primarily through the distribution channel, while the Custom Cabling segment sales were through a combination of distribution and direct to the end customer.

 

As reviewed by our chief operating decision maker, we evaluate the performance of each segment based on income or loss before income taxes. We charge depreciation and amortization directly to each division within the segment. Accounts receivable, inventory, property and equipment, right-of-use assets, goodwill and intangible assets are the only assets identified by segment. Except as discussed above, the accounting policies for segment reporting are the same for the Company as a whole.

 

 

All of our operations are conducted in the United States; however, we derive a portion of our revenue from export sales. We attribute sales to geographic areas based on the location of the customers. The following table presents the sales by geographic area for the three and nine months ended July 31, 2024 and 2023 (in thousands):

 

   

Three Months Ended July 31,

    

Nine Months Ended July 31,

  
   

2024

    

2023

    

2024

    

2023

  
                                 

United States

   $ 15,473     $ 13,955     $ 41,948     $ 50,967  

Foreign Countries:

                                

Canada

     765       703       2,595       1,875  

Italy

     85       300       270       1,692  

Mexico

     -       -       3       3  

All Other

     513       694       1,588       1,757  
      1,363       1,697       4,456       5,327  
                                 

Totals

   $ 16,836     $ 15,652     $ 46,404     $ 56,294  

 

Net sales to external customers, (loss) income before provision (benefit) for income taxes and other related segment information for the three months ended July 31, 2024 and 2023 are as follows (in thousands):

 

   

RF Connector

    

Custom Cabling

                  
   

and

   

Manufacturing and

                 

2024

  

Cable Assembly

    

Assembly

    

Corporate

    

Total

  

Net sales

   $ 9,697     $ 7,139     $ -     $ 16,836  

(Loss) income before benefit for income taxes

     (715 )     297       (339 )     (757 )

Depreciation and amortization

     525       113       -       638  

Total assets

     49,355       18,112       4,393       71,860  
                                 

2023

                                

Net sales

   $ 10,515     $ 5,137     $ -     $ 15,652  

(Loss) income before benefit for income taxes

     (1,392 )     (424 )     (311 )     (2,127 )

Depreciation and amortization

     507       124       -       631  

Total assets

     52,358       17,345       8,353       78,056  

 

Net sales to external customers, income (loss) before provision (benefit) for income taxes and other related segment information for the nine months ended July 31, 2024 and 2023 are as follows (in thousands):

 

   

RF Connector

    

Custom Cabling

                  
   

and

   

Manufacturing and

                 

2024

  

Cable Assembly

    

Assembly

    

Corporate

    

Total

  

Net sales

   $ 28,406     $ 17,998     $ -     $ 46,404  

(Loss) income before benefit from income taxes

     (3,104 )     386       (877 )     (3,595 )

Depreciation and amortization

     1,610       294       -       1,904  

Total assets

     49,355       18,112       4,393       71,860  
                                 

2023

                                

Net sales

   $ 34,861     $ 21,433     $ -     $ 56,294  

(Loss) income before benefit for income taxes

     (1,027 )     (958 )     (1,047 )     (3,032 )

Depreciation and amortization

     1,418       377       -       1,795  

Total assets

     52,358       17,345       8,353       78,056