Note 3 - Segment Reporting Information

9 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 3 - SEGMENT

REPORTING

INFORMATION

The accounting guidance on 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 or “CODM”) in making decisions on how to allocate resources and assess performance. In the third quarter of fiscal 2015, the Company realigned its operating segments to be in alignment with the financial information received by the then new Chief Executive Officer. The Company’s three operating segments are Lighting, Graphics, and Technology, each of which has a president who is responsible for that business and reports to the CODM. An All Other Category as well as Corporate and Eliminations will also be reported in the segment information. As a result of the realignment of the Company’s operating segments in the third quarter of fiscal 2015, all prior period segment information has been revised so as to be comparable with the new segment reporting structure.

The changes made and realignment of the Company’s operating segments involved the following:

1) The segment formerly known as the Electronic Components Segment was renamed as the Technology Segment.

2) The LED Video Screen product line was moved out of the Lighting Segment and into the Technology Segment.

3) The Company’s installation management business (LSI Adapt) and the menu board business (LSI Images) were moved out of the All Other Category and into the Graphics Segment.

The Lighting Segment includes outdoor, indoor, and landscape lighting utilizing both traditional and LED light sources, that have been fabricated and assembled for several markets including 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).

The Graphics Segment designs, manufactures and installs exterior and interior visual image elements related to traditional graphics, active digital signage along with the management of media content related to digital signage, and menu board systems that are either digital or traditional by design. These products are used in visual image programs in several markets, including the petroleum / convenience store market, multi-site retail operations, banking, and restaurants. The Graphics Segment implements, installs and provides program management services related to products sold by the Graphics Segment and by the Lighting Segment.

The Technology Segment designs and manufactures electronic circuit boards, assemblies and sub-assemblies, various control system products used in other applications (including the control of solid-state LED lighting and metal halide lighting), and solid state LED video screens, scoreboards and advertising ribbon boards. This operating segment sells its products directly to customers (primarily in the transportation, original equipment manufacturers and medical markets) and also has significant inter-segment sales to the Lighting Segment.

The All Other Category includes only the Company’s former subsidiary that designed and produced high-performance light engines, large format video screens using solid-state LED technology, and certain specialty LED lighting. This subsidiary 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 nine months ended March 31, 2016 or in the three and nine months ended March 31, 2015.  There was no concentration of accounts receivable at March 31, 2016 or June 30, 2015.

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of March 31, 2016 and June 30, 2015:

( In thousands)	Three Months Ended March 31						Nine Months Ended March 31
	2016			2015			2016			2015
Net Sales:
Lighting Segment	$	49,331		$	48,865		$	168,007		$	164,382
Graphics Segment		17,162			13,363			59,949			49,656
Technology Segment		4,247			6,375			13,396			17,705
All Other Category		--			--			--			41
	$	70,740		$	68,603		$	241,352		$	231,784
Operating Income (Loss):
Lighting Segment	$	1,106		$	2,913		$	11,970		$	11,230
Graphics Segment		1,174			(320	)		5,370			798
Technology Segment		888			855			3,221			1,986
All Other Category		--			--			--			(183	)
Corporate and Eliminations		(2,436	)		(2,866	)		(8,686	)		(8,491	)
	$	732		$	582		$	11,875		$	5,340
Capital Expenditures:
Lighting Segment	$	1,074		$	319		$	2,923		$	1,529
Graphics Segment		2,145			29			3,254			935
Technology Segment		1,626			97			1,850			448
All Other Category		--			--			--			4
Corporate and Eliminations		181			437			383			523
	$	5,026		$	882		$	8,410		$	3,439
Depreciation and Amortization:
Lighting Segment	$	730		$	778		$	2,152		$	2,229
Graphics Segment		293			262			721			768
Technology Segment		392			281			1,111			944
All Other Category		--			--			--			31
Corporate and Eliminations		314			269			919			756
	$	1,729		$	1,590		$	4,903		$	4,728

	March 31, 2016		June 30, 2015
Identifiable Assets:
Lighting Segment	$	87,654	$	90,713
Graphics Segment		33,060		29,477
Technology Segment		30,140		28,423
All Other Category		--		--
Corporate and Eliminations		39,408		33,766
	$	190,262	$	182,379

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. 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 March 31				Nine Months Ended March 31
(In thousands)	2016		2015		2016		2015
Lighting Segment inter-segment net sales	$	715	$	533	$	2,143	$	2,030
Graphics Segment inter-segment net sales	$	275	$	132	$	1,281	$	388
Technology inter-segment net sales	$	8,920	$	6,788	$	27,236	$	21,735
All Other Category inter-segment net sales	$	--	$	--	$	--	$	308

The Company considers its geographic areas to be:  1) the United States, and 2) Canada.  The Company’s operations are in the United States, with one operation previously in Canada.  As a result of the sale of a subsidiary on September 30, 2014, the Company no longer has a presence in Canada (See Note 13). 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
	2016		2015		2016		2015
Net Sales (a):
United States	$	70,740	$	68,603	$	241,352	$	231,743
Canada		--		--		--		41
	$	70,740	$	68,603	$	241,352	$	231,784

	March 31, 2016		June 30, 2015
Long-lived Assets (b):
United States	$	48,959	$	44,965
Canada		--		--
	$	48,959	$	44,965

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.