Note 7 - Goodwill and Other Intangible Assets

3 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE

GOODWILL AND OTHER INTANGIBLE ASSETS

Carrying values of goodwill and other intangible assets with indefinite lives are reviewed at least annually for possible impairment. The Company

may

first

assess qualitative factors in order to determine if goodwill and indefinite-lived intangible assets are impaired. If through the qualitative assessment it is determined that it is more likely than

not

that goodwill and indefinite-lived assets are

not

impaired,

further testing is required. If it is determined more likely than

not

that goodwill and indefinite-lived assets are impaired, or if the Company elects

not

first

assess qualitative factors, the Company

’s impairment testing continues with the estimation of the fair value of reporting units and indefinite-lived intangible assets using a combination of a market approach and an income (discounted cash flow) approach, at the reporting unit level. The estimation of the fair value of reporting units and intangible assets requires significant management judgment with respect to revenue and expense growth rates, changes in working capital and the selection and use of an appropriate discount rate. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment. The use of different assumptions would increase or decrease estimated discounted future operating cash flows and could increase or decrease an impairment charge. Company management uses its judgment in assessing whether assets

may

have become impaired between annual impairment tests. Indicators such as adverse business conditions, a sustained significant drop in the Company’s stock price, economic factors, technological change, or competitive activities

may

signal that an asset has become impaired.

The Company identified its reporting units in conjunction with its annual goodwill impairment testing.

The Company has a total of

three

reporting units that contain goodwill. There are

two

reporting units within the Lighting Segment and

one

reporting unit within the Graphics Segment. One reporting unit previously reported in the Technology Segment has been transferred to the Lighting Segment as a result of the merge of the Technology Segment with the Lighting Segment (See Note

). The Company relies upon a number of factors, judgments and estimates when conducting its impairment testing including, but

not

limited to, the Company’s stock price, operating results, forecasts, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and judgments in applying them to the analysis of goodwill impairment.

A sustained and significant

decline in the Company’s stock price in the

first

quarter of fiscal

2018

led management to believe that a triggering event occurred and that an interim goodwill impairment test was required for

one

the reporting units in the Lighting Segment that contains goodwill, as of

September 30, 2017.

Because the Company has elected to early adopt

ASU

2017

04,

“Simplifying the Test for Goodwill Impairment”, the requirement to perform step

in the impairment test was

not

required. The result of the impairment test on the reporting unit in the Lighting Segment indicated that goodwill was impaired by

$28,000,000.

The following table presents information about the Company's goodwill on the dates or for the periods indicated

Goodwill
(In thousands)	Lighting			Graphics
	Segment			Segment			Total
Balance as of June 30, 2017
Goodwill	$	94,564		$	28,690		$	123,254
Accumulated impairment losses		(37,191	)		(27,525	)		(64,716	)
Goodwill, net as of June 30, 2017	$	57,373		$	1,165		$	58,538

Goodwill Impairment		(28,000	)		--			(28,000	)

Balance as of September 30, 2017
Goodwill	$	94,564			28,690			123,254
Accumulated impairment losses		(65,191	)		(27,525	)		(92,716	)
Goodwill, net as of September 30, 2017	$	29,373		$	1,165		$	30,538

The gross carrying amount and accumulated amortization by major other intangible asset class is as follows:

	September 30, 2017
Other Intangible Assets	Gross
(In thousands)	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	35,563	$	8,471	$	27,092
Patents		338		193		145
LED technology firmware, software		16,066		11,378		4,688
Trade name		2,658		526		2,132
Non-compete agreements		710		710		--
Total Amortized Intangible Assets		55,335		21,278		34,057

Indefinite-lived Intangible Assets
Trademarks and trade names		3,422		--		3,422
Total Indefinite-lived Intangible Assets		3,422		--		3,422

Total Other Intangible Assets	$	58,757	$	21,278	$	37,479

	June 30, 2017
Other Intangible Assets	Gross
(In thousands)	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	35,563	$	7,956	$	27,607
Patents		338		186		152
LED technology firmware, software		16,066		11,237		4,829
Trade name		2,658		499		2,159
Non-compete agreements		710		710		-
Total Amortized Intangible Assets		55,335		20,588		34,747

Indefinite-lived Intangible Assets
Trademarks and trade names		3,422		--		3,422
Total Indefinite-lived Intangible Assets		3,422		--		3,422

Total Other Intangible Assets	$	58,757	$	20,588	$	38,169

(In thousands)	Amortization Expense of Other Intangible Assets
	September 30, 201 7		September 30, 201 6

Three Months Ended	$	690	$	107

The Company expects to record

annual amortization expense as follows:

(In thousands)

201 8	$	2,760
201 9	$	2,760
2020	$	2,687
2021	$	2,682
2022	$	2,461
After 202 2	$	21,397

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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