Note 3 - Business Segment Information

9 Months Ended

Mar. 31, 2013

Segment Reporting Disclosure [Text Block]

NOTE 3  — BUSINESS SEGMENT INFORMATION

ASC Topic 280, “Segment Reporting,” establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s Chief Executive Officer) in making decisions on how to allocate resources and assess performance. While the Company has twelve operating segments, it has only three reportable operating business segments (Lighting, Graphics, and Electronic Components), an All Other Category, and Corporate and Eliminations.

The Lighting Segment includes outdoor, indoor, and landscape lighting that has been fabricated and assembled for the commercial, industrial and multi-site retail lighting markets, the Company’s primary niche markets (petroleum / convenience store market, automotive dealership market, and quick service restaurant market), and LED solid state digital sports video screens.  LED video screens are designed and manufactured by the Company’s Lighting Segment and by LSI Saco in the All Other Category. The Lighting Segment includes the operations of LSI Ohio Operations, LSI Metal Fabrication, LSI MidWest Lighting and LSI Lightron.   These operations have been integrated, have similar economic characteristics and meet the other requirements for aggregation in segment reporting.    

The Graphics Segment designs, manufactures and installs exterior and interior visual image elements related to graphics. These products are used in visual image programs in several markets, including the petroleum / convenience store market and multi-site retail operations. The Graphics Segment includes the operations of Grady McCauley, LSI Retail Graphics and LSI Integrated Graphic Systems, which have been aggregated as such facilities manufacture two-dimensional graphics with the use of screen and digital printing, fabricate three-dimensional structural graphics sold in the multi-site retail and petroleum / convenience store markets, and each exhibit similar economic characteristics and meet the other requirements for aggregation in segment reporting.

The Electronic Components Segment designs, engineers and manufactures custom designed electronic circuit boards, assemblies and sub-assemblies, and various products used in various applications including the control of solid-state LED lighting and metal halide lighting.  Products produced by this segment may have applications in the Company’s other LED product lines such as digital scoreboards, advertising ribbon boards and billboards.  The Electronic Components Segment includes the operations of LSI ADL Technology and LSI Virticus.

The All Other Category includes the Company’s operating segments that neither meet the aggregation criteria, nor the criteria to be a separate reportable segment.  The Operations of LSI Images (menu board systems), LSI Adapt (implementation, installation and program management services related to products of the Graphics and Lighting Segments) and LSI Saco Technologies (designs and produces high-performance light engines, large format video screens using solid-state LED technology, and certain specialty LED lighting) are combined in the All Other Category.

The Company’s corporate administration activities are reported in a line item titled Corporate and Eliminations.  This primarily includes intercompany profit in inventory eliminations, expense related to certain corporate officers and support staff, the Company’s internal audit staff, the Company’s Board of Directors, stock option expense, certain consulting expenses, investor relations activities, and a portion of the Company’s legal, auditing and professional fee expenses. Corporate identifiable assets primarily consist of cash, invested cash (if any), refundable income taxes (if applicable), and deferred income tax assets.

There was no concentration of consolidated net sales in the three or nine months ended March 31, 2013 or 2012.  The accounts receivable balance from Ahold U.S.A., Inc. at March 31, 2013 was $4,840,000 or 12.5% of consolidated net accounts receivable.  There was no concentration of accounts receivable at June 30, 2012.

Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of March 31, 2013 and June 30, 2012:

(In thousands)	Three Months Ended March 31						Nine Months Ended March 31
	2013			2012			2013			2012
Net Sales:
Lighting Segment	$	47,372		$	46,714		$	156,906		$	149,411
Graphics Segment		13,110			8,940			34,387			29,519
Electronic Components Segment		4,395			4,609			15,108			13,228
All Other Category		1,275			2,674			5,552			5,048
	$	66,152		$	62,937		$	211,953		$	197,206
Operating Income (Loss):
Lighting Segment	$	1,650		$	2,555		$	8,640		$	8,691
Graphics Segment		5			(767	)		(1,490	)		(2,216	)
Electronic Components Segment		(372	)		1,057			(1,145	)		2,811
All Other Category		(186	)		(680	)		(1,617	)		(1,047	)
Corporate and Eliminations		(1,603	)		(2,071	)		(4,576	)		(4,748	)
	$	(506	)	$	94		$	(188	)	$	3,491
Capital Expenditures:
Lighting Segment	$	721		$	376		$	1,615		$	1,315
Graphics Segment		--			48			363			494
Electronic Components Segment		982			228			1,311			339
All Other Category		41			29			98			163
Corporate and Eliminations		800			188			2,290			235
	$	2,544		$	869		$	5,677		$	2,546
Depreciation and Amortization:
Lighting Segment	$	1,062		$	1,251		$	3,366		$	3,709
Graphics Segment		230			221			676			661
Electronic Components Segment		331			274			984			804
All Other Category		46			55			139			165
Corporate and Eliminations		69			107			249			513
	$	1,738		$	1,908		$	5,414		$	5,852

	March 31, 2013		June 30, 2012
Identifiable Assets:
Lighting Segment	$	87,038	$	93,661
Graphics Segment		26,581		27,377
Electronic Components Segment		30,399		31,805
All Other Category		6,125		8,185
Corporate and Eliminations		18,223		14,198
	$	168,366	$	175,226

The segment net sales reported above represent sales to external customers.  Segment operating income, which is used in management’s evaluation of segment performance, represents net sales less all operating expenses including impairment of goodwill and intangible assets, but excluding interest expense and interest income.  Identifiable assets are those assets used by each segment in its operations.  Inter-segment revenues were eliminated in consolidation as follows:

	Three Months Ended March 31				Nine Months Ended March 31
(In thousands)	2013		2012		2013		2012
Lighting Segment inter-segment net sales	$	583	$	522	$	2,095	$	1,690
Graphics Segment inter-segment net sales	$	318	$	576	$	1,604	$	901
Electronic Components inter-segment net sales	$	6,654	$	7,117	$	20,273	$	16,854
All Other Category inter-segment net sales	$	2,227	$	783	$	4,481	$	4,274

The Company considers its geographic areas to be:  1) the United States, and 2) Canada.  The majority of the Company’s operations are in the United States, with one operation in Canada.  The geographic distribution of the Company’s net sales and long-lived assets are as follows:

(In thousands)	Three Months Ended March 31				Nine Months Ended March 31
	2013		2012		2013		2012
Net Sales (a):
United States	$	66,085	$	62,457	$	211,738	$	196,057
Canada		67		480		215		1,149
	$	66,152	$	62,937	$	211,953	$	197,206

	March 31, 2013		June 30, 2012
Long-lived Assets (b):
United States	$	46,442	$	44,286
Canada		352		322
	$	46,794	$	44,608

a. Net sales are attributed to geographic areas based upon the location of the operation making the sale.

b. Long-lived assets include property, plant and equipment, and other long term assets.  Goodwill and intangible assets are not included in long-lived assets.