SEGMENT REPORTING

12 Months Ended

Dec. 31, 2019

NOTE 14-SEGMENT REPORTING

The Company’s reporting segments are as follows:

•

Equipment- Sales of equipment, 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 our 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 their internal management system and currently evaluate the operating performance and allocates resources to the reporting segments based on segment revenue, gross profit and income 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 before income taxes for the years ended December 31, 2019, 2018 and 2017 based on the current reporting segment structure.

	Years Ended December 31,
			% of				% of				% of
			net				net				net
Sales by Segment	2019		sales		2018		sales		2017		sales
	(in thousands, except percentages)
Equipment	$	43,722	67	%	$	97,680	84	%	$	77,283	79	%
Services		21,901	33	%		18,264	16	%		21,009	21	%
Total	$	65,623	100	%	$	115,944	100	%	$	98,292	100	%

	Years Ended December 31,
			Gross					Gross				Gross
			Profit					Profit				Profit
Gross profit by Segment	2019		%			2018		%		2017		%
	(in thousands, except percentages)
Equipment	$	14,156		32	%	$	25,598	26	%	$	26,647	34	%
Services		10,001		46	%		6,670	37	%		6,499	31	%
Total	$	24,157		37	%	$	32,268	28	%	$	33,146	34	%

	Years ended December 31,
Segment income and income (loss) before income taxes	2019			2018			2017
	(in thousands)
Equipment	$	51		$	13,398		$	16,847
Services		10,001			6,670			6,499
Total Segment income		10,052			20,068			23,346
General and Corporate		(13,996	)		(15,626	)		(15,102	)
Income (loss) before income taxes	$	(3,944	)	$	4,442		$	8,244

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.

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,
			% of net					% of net					% of net
	2019		Sales			2018		sales			2017		sales
	(in thousands, except percentages)
Net Sales by Region
China	$	2,439		4	%	$	3,146		3	%	$	2,926	3	%
India		37,206		57	%		70,106		60	%		42,352	43	%
Japan		21,761		33	%		35,504		31	%		49,185	50	%
Taiwan		3,515		5	%		6,445		6	%		3,018	3	%
Other		702		1	%		743		1	%		811	1	%
Total	$	65,623	100		%	$	115,944	100		%	$	98,292	100	%

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

	December 31,
	2019		2018
	(in thousands)
China	$	962	$	1,058
Other	130		200
Total long-lived assets	$	1,092	$	1,258