Note 3- Business Segment Information

6 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

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 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 utilizing both traditional and LED light sources, 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. 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 traditional graphics and active digital signage along with the management of media content related to digital signage. 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 each facility manufactures two-dimensional graphics with the use of screen and digital printing, fabricate three-dimensional structural graphics sold in the multi-site retail, petroleum / convenience store markets and with other 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 other applications including the control of solid-state LED lighting and metal halide lighting.  The Electronic Components Segment includes the operations of LSI ADL Technology as well as LSI Controls (formerly LSI Virticus). LSI ADL Technology sells electronic circuit boards, assemblies and sub-assemblies directly to customers and also has significant inter-segment sales to the Lighting Segment. LSI Controls sells lighting control systems directly to customers and to the Lighting Segment. 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 All Other Category includes the Company’s operating segments that historically 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 (designed and produced 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. LSI Saco Technologies was sold on September 30, 2014 (See Note 13).

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, expense related to the Company’s Board of Directors, stock option expense for options granted to corporate administration employees, 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, and deferred income tax assets.

There was no concentration of consolidated net sales in the three or six months ended December 31, 2014 or 2013.  There was no concentration of accounts receivable at December 31, 2014 or June 30, 2014.

Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of December 31, 2014 and June 30, 2014:

	Three Months Ended						Six Months Ended
(In thousands)	December 31						December 31
	2014			2013			2014			2013
Net Sales:
Lighting Segment	$	59,848		$	57,380		$	116,369		$	116,851
Graphics Segment		18,740			12,954			32,551			26,962
Electronic Components Segment		4,598			4,073			10,478			9,153
All Other Category		1,529			1,716			3,783			3,643
	$	84,715		$	76,123		$	163,181		$	156,609
Operating Income (Loss):
Lighting Segment	$	3,964		$	2,157		$	8,084		$	5,968
Graphics Segment		460			(275	)		246			(112	)
Electronic Components Segment		625			1,041			1,364			2,013
All Other Category		605			124			689			128
Corporate and Eliminations		(3,430	)		(1,536	)		(5,625	)		(3,647	)
	$	2,224		$	1,511		$	4,758		$	4,350
Capital Expenditures:
Lighting Segment	$	599		$	696		$	1,186		$	1,187
Graphics Segment		523			177			857			234
Electronic Components Segment		241			413			280			483
All Other Category		10			10			14			39
Corporate and Eliminations		61			195			67			778
	$	1,434		$	1,491		$	2,404		$	2,721
Depreciation and Amortization:
Lighting Segment	$	744		$	703		$	1,482		$	1,409
Graphics Segment		251			232			499			453
Electronic Components Segment		310			367			632			733
All Other Category		5			42			38			82
Corporate and Eliminations		242			217			487			292
	$	1,552		$	1,561		$	3,138		$	2,969

	December 31, 2014		June 30, 2014
Identifiable Assets:
Lighting Segment	$	92,385	$	96,499
Graphics Segment		26,230		22,312
Electronic Components Segment		30,093		30,788
All Other Category		4,443		4,987
Corporate and Eliminations		20,627		15,302
	$	173,778	$	169,888

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, but excluding interest expense and interest income. Identifiable assets are those assets used by each segment in its operations. Corporate identifiable assets primarily consist of cash, invested cash (if any), refundable income taxes, and deferred income tax assets.

The Company records a 10% mark-up on intersegment revenues. Any intersegment profit in inventory is eliminated in consolidation. Intersegment revenues were eliminated in consolidation as follows:

	Three Months Ended				Six Months Ended
	December 31				December 31
(In thousands)	2014		2013		2014		2013
Lighting Segment inter-segment net sales	$	445	$	925	$	1,497	$	1,823
Graphics Segment inter-segment net sales	$	147	$	195	$	856	$	400
Electronic Components inter-segment net sales	$	7,675	$	9,450	$	14,947	$	17,954
All Other Category inter-segment net sales	$	3,618	$	2,037	$	5,171	$	4,192

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.  As a result of the sale of LSI Saco Technologies Inc., the Company no longer has a presence in Canada as of September 30, 2014 (See Note 13). The geographic distribution of the Company’s net sales and long-lived assets are as follows:

	Three Months Ended				Six Months Ended
(In thousands)	December 31				December 31
	2014		2013		2014		2013
Net Sales (a):
United States	$	84,715	$	76,060	$	163,140	$	155,733
Canada		--		63		41		876
	$	84,715	$	76,123	$	163,181	$	156,609

	December 31,		June 30,
	2014		2014
Long-lived Assets (b):
United States	$	45,980	$	45,886
Canada		--		190
	$	45,980	$	46,076

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.