Annual report pursuant to Section 13 and 15(d)

Note 11 - Significant Customers and Industry Segment Information

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Note 11 - Significant Customers and Industry Segment Information
12 Months Ended
Mar. 27, 2021
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
Note
11.
Significant Customers and Industry Segment Information
 
The Company has
two
reportable segments: Microsource and the Giga-tronics Division. Microsource's primary business is the design of custom Microwave Integrated Components (“MIC”) as well as the production of MIC components using chip and wire assembly methods. Microsource offers a line of tunable, synthesized Band Reject Filters for solving interference problems in RADAR/EW applications. Self-protection systems onboard high-performance military aircrafts often require RADAR filters to block electromagnetic interference generated by other onboard electronic systems, particularly the aircraft's main RADAR system. These high-speed, tunable notch filters can quickly block interference from both continuous wave and wide bandwidth emissions. Using proprietary driver and phase lock technology, these filters offer tuning speeds that are up to
ten
times faster than traditional filter designs. We design these filters specifically for each application. Microsource's
two
largest customers are prime contractors for which it develops and manufactures RADAR filters used in fighter jet aircrafts.
 
The Giga-tronics Division designs, manufactures and markets a family of functional test products for the RADAR/EW segment of the defense electronics market. Our RADAR/EW test products are used to evaluate and improve the performance of RADAR/EW systems.
 
The accounting policies for the segments are the same as those described in the “Summary of Significant Accounting Policies”. The Company evaluates the performance of its segments and allocates resources to them based on earnings before income taxes. Segment net revenue include revenue to external customers. Inter-segment activities are eliminated in consolidation. Assets include accounts receivable, inventories, equipment, cash, deferred income taxes, prepaid expenses and other long- term assets. The Company accounts for inter-segment revenue and transfers at terms that allow a reasonable profit to the seller. During the periods reported there were
no
significant inter-segment revenue or transfers.
 
The Company's reportable operating segments are strategic business units that offer different products and services. They are managed separately because each business utilizes different technology and requires different accounting systems. The Company's chief operating decision maker is considered to be the Company's Chief Executive Officer (“CEO”). The CEO reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenues and pre-tax income or loss by operating segment.
 
The tables below present information for fiscal years ended
March 27, 2021
and
March 28, 2020.
 
March 27, 2021 (Dollars in thousands)
 
Giga-tronics Division
   
Microsource
   
Total
 
Revenue
  $
3,670
    $
9,382
    $
13,052
 
Interest expense, net
  $
(97
)   $
    $
(97
)
Depreciation and amortization
  $
253
    $
    $
253
 
Income (loss) before income taxes
  $
(642
)   $
251
    $
(391
)
Assets
  $
5,281
    $
2,566
    $
7,847
 
 
March 28, 2020 (Dollars in thousands)
 
Giga-tronics Division
   
Microsource
   
Total
 
Revenue
  $
3,521
    $
8,247
    $
11,768
 
Interest expense, net
  $
(252
)   $
    $
(252
)
Depreciation and amortization
  $
315
    $
    $
315
 
Income (loss) before income taxes
  $
(802
)   $
117
    $
(685
)
Assets
  $
6,011
    $
2,915
    $
8,926
 
 
The Company's Giga-tronics Division and Microsource segment sell to agencies of the U.S. government and U.S. defense- related customers. In fiscal
2021
and
2020,
U.S. government and U.S. defense-related customers accounted for
99%
and
85%
of revenue, respectively. During fiscal
2021,
two
 prime contractors accounted for
66%
of the Company's consolidated revenues and were included in the Microsource segment. A
third
customer accounted for
14%
of the Company's consolidated revenues during fiscal
2021
and was included in the Giga-tronics Division.
 
During fiscal
2020,
two
 prime contractors accounted for
64%
of the Company's consolidated revenues and were included in the Microsource segment. A
third
customer accounted for
18%
of the Company's consolidated revenues during fiscal
2020
and was included in the Giga-tronics Division.
 
Export revenue accounted for less than
1%
of the Company's revenue for fiscal
2021
and
2020.