NOTE

— BUSINESS SEGMENT 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. 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. Corporate and Eliminations, which captures the Company’s corporate administrative activities, is also be reported in the segment information.

The Lighting Segment includes outdoor and indoor lighting utilizing both traditional and LED light sources that have been fabricated and assembled for the commercial, industrial market, the petroleum / convenience store market, the automotive dealership market, the quick service restaurant market, along with other markets the Company serves.

The Graphics Segment designs, manufactures and installs exterior and interior visual image elements such as traditional graphics, active digital signage along with the management of media content related to digital signage, LED video screens, and menu board systems that are either digital or traditional by design. These products are used in visual image programs in several markets including, but

not

limited to 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.

LED video screens that were previously reported in the Technology Segment in prior years’ results have been reclassified to the Graphics Segment. The movement of the LED video screen product line was the result of a change in management responsibility of this product line to the Graphics Segment president during the

first

quarter of fiscal

2017.

This movement aligns the product line with other digital visual image elements sold to graphics customers and is consistent with how the Company’s CODM manages the business. The movement of the video screen product line resulted in a reclassification of

$183,000

of operating loss from the Technology Segment to the Graphics Segment in fiscal

2016,

and

$204,000

of operating loss in fiscal

2015.

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

The Company’s corporate administration activities are reported in the Corporate and Eliminations line item. These activities primarily include 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 (if any), and deferred income taxes

There were

customers or customer programs representing a concentration of

10%

or more of the Company’s net sales in the fiscal years ended

June

30,

2017,

2016

and

2015.

There was

concentration of accounts receivable at

June

30,

2017

2016.

Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of

June

30,

2017,

June 30, 2016

, and

June 30, 2015:

(In thousands)	201 7			2016			2015
Net Sales:
Lighting Segment	$	239,005		$	226,889		$	219,920
Graphics Segment		72,395			77,968			67,152
Technology Segment		19,992			17,339			20,744
All Other Category		—			—			41
Total Net Sales		331,392		$	322,196		$	307,857

Operating Income (Loss):
Lighting Segment	$	10,566		$	15,785		$	14,775
Graphics Segment		2,439			5,246			952
Technology Segment		3,885			4,028			3,153
All Other Category		—			—			(183	)
Corporate and Eliminations		(13,281	)		(11,103	)		(11,164	)
Total Operating Income	$	3,609		$	13,956		$	7,533

Capital Expenditures:
Lighting Segment	$	4,010		$	4,255		$	1,905
Graphics Segment		1,748			3,688			1,105
Technology Segment		239			1,852			1,141
All Other Category		—			—			4
Corporate and Eliminations		636			416			599
Total Capital Expenditures	$	6,633		$	10,211		$	4,754


Depreciation and Amortization:
Lighting Segment	$	4,337		$	2,930		$	2,965
Graphics Segment		1,474			1,104			1,042
Technology Segment		1,312			1,429			1,278
All Other Category		—			—			31
Corporate and Eliminations		1,139			1,214			1,015
Total Depreciation and Amortization	$	8,262		$	6,677		$	6,331

	June 30,		June 30,
	201 7		2016
Identifiable Assets:
Lighting Segment	$	186,111	$	95,168
Graphics Segment		33,144		33,490
Technology Segment		28,294		28,348
Corporate and Eliminations		9,131		38,554
Total Identifiable Assets	$	256,680	$	195,560

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:

(In thousands)	2017		2016		2015

Lighting Segment intersegment net sales	$	2,559	$	2,935	$	2,752
Graphics Segment intersegment net sales	$	1,135	$	1,760	$	559
Technology Segment intersegment net sales	$	33,981	$	35,733	$	29,412
All Other Category intersegment net sales	$	—	$	—	$	308

The Company’s operations are located solely within the United States due to the sale of a subsidiary on

September 30, 2014,

the Company

longer has a presence in Canada (See Note

). As a result, the geographic distribution of the Company’s net sales and long-lived assets originate within the United States.

(In thousands)	2017		2016		2015
Net Sales (a):
United States	$	331,392	$	322,196	$	307,816
Canada		—		—		41
Total Net Sales	$	331,392	$	322,196	$	307,857

	June 30,		June 30,		June 30,
	2017		2016		2015
Long-Lived Assets (b):
United States	$	52,844	$	51,723	$	46,430
Canada		—		—		—
Total Long-Lived Assets	$	52,844	$	51,723	$	46,430

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

Long-lived assets include property, plant and equipment, and other long term assets. Goodwill and intangible assets are

not

included in long-lived assets.