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SEGMENT REPORTING
 12 Months Ended
Dec. 31, 2016
SEGMENT REPORTING  
SEGMENT REPORTING

 

NOTE 14-SEGMENT REPORTING

 

The Company’s reporting segments are as follows:

 

· Equipment-Focusing on the Company’s equipment sales including network infrastructure and application products. Network infrastructure products mainly include broadband products. Network application products mainly include Wireless infrastructure technologies.

 

· Services-Providing services and support for the Company’s equipment products and also the new operational support segment.

 

The Company’s Chief Operating Decision Makers make financial decisions and resource allocations based on information they receive from its internal management system and currently evaluate the operating performance and allocates resources to the reporting segments based on segment revenue, gross profit and income (loss) before income taxes. Cost of sales and direct expenses in relation to production are assigned to the reporting segments. The accounting policies used in measuring segment assets and operating performance are the same as those used at the consolidated level.

 

Summarized below are the Company’s segment net sales, gross profit and income (loss) before income taxes for the years ended December 31, 2016, 2015 and 2014 based on the current reporting segment structure.

 

 

 

Years ended December 31,

 

Net Sales by
Segment

 

2016

 

%
of
net
sales

 

2015

 

%
of
net
sales

 

2014

 

% of
net
sales

 

 

 

(in thousands, except percentages)

 

Equipment

 

$
61,735

 
71

%

$
87,361

 
75

%

$
105,988

 
82

%

Services

 
24,777

 
29

%
29,742

 
25

%
23,432

 
18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Sales

 

$
86,512

 
100

%

$
117,103

 
100

%

$
129,420

 
100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

Gross profit/(loss) by
Segment

 

2016

 

Gross
profit
%

 

2015

 

Gross
profit
%

 

2014

 

Gross
profit
%

 

 

 

(in thousands, except percentages)

 

Equipment

 

$
20,263

 
33

%

$
21,470

 
25

%

$
21,000

 
20

%

Services

 
8,093

 
33

%
6,398

 
22

%
1,128

 
5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Gross profit

 

$
28,356

 
33

%

$
27,868

 
24

%

$
22,128

 
17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years ended December 31,

 

Segment Margin and Income ( loss )before income taxes

 

2016

 

2015

 

2014

 

 

 

(in thousands)

 

Equipment

 

$
12,010

 

$
12,097

 

$
6,583

 

Services

 
8,093

 
6,399

 
1,083

 

Total

 
20,103

 
18,496

 
7,666

 

 

 

 

 

 

 

 

 

General and Corporate

 
(19,183

)
(49,816

)
(36,312

)

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

$
920

 

$
(31,320

)

$
(28,646

)

 

 

 

 

 

 

 

 

 

 

 

 

General and corporate expenses include all un-allocated expenses such as sales and marketing, general and administration and common R&D expenses, equity income (loss) of associates and investment impairment etc.

 

Sales are attributed to a geographical area based upon the location of the customer. Sales data by geographical area are as follows:

 

 

 

Years Ended December 31,

 

 

 

2016

 

% of net
sales

 

2015

 

% of net
sales

 

2014

 

% of net
sales

 

 

 

(in thousands, except percentages)

 

Net Sales by Region

 

 

 

 

 

 

 

 

 

 

 

 

 

China

 

$
4,021

 
5

%

$
9,490

 
8

%

$
15,465

 
12

%

Japan

 
45,561

 
52

%
57,483

 
49

%
58,999

 
46

%

India

 
33,021

 
38

%
34,836

 
30

%
37,424

 
29

%

Taiwan

 
3,217

 
4

%
7,904

 
7

%
6,706

 
5

%

Other

 
692

 
1

%
7,390

 
6

%
10,826

 
8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
86,512

 
100

%

$
117,103

 
100

%

$
129,420

 
100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-lived assets, consisting of property, plant and equipment, by geographical area are as follows:

 

 

 

December 31,

 

 

 

2016

 

2015

 

 

 

(in thousands)

 

China

 

$
1,357

 

$
1,100

 

Other

 
253

 
410

 

 

 

 

 

 

 

 

 

 

 

 

 

Total long-lived assets

 

$
1,610

 

$
1,510