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. In the

first

quarter of fiscal

2018,

the Company merged its Technology Segment with the Lighting Segment to be in alignment with the financial information received by the Chief Executive Officer and how the business is managed. The Company’s

two

operating segments are Lighting and Graphics, 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 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 Lighting Segment also includes the design, engineering, and manufacturing of electronic circuit boards, assemblies and sub-assemblies used to manufacture certain LED light fixtures and sold directly to customers.

The Graphics Segment designs, manufactures and installs exterior and interior visual image elements such as traditional graphics, interior branding, electrical and architectural signage, 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.

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,

2018,

2017,

and

2016.

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,

2018,

June 30, 2017,

and

June 30, 2016:

(In thousands)	201 8			2017			2016
Net Sales:
Lighting Segment	$	260,613		$	258,997		$	244,228
Graphics Segment		81,410			72,395			77,968
Total Net Sales		342,023		$	331,392		$	322,196

Operating Income (Loss):
Lighting Segment	$	(12,795	)	$	14,116		$	19,301
Graphics Segment		5,618			2,439			5,246
Corporate and Eliminations		(14,475	)		(12,946	)		(10,591	)
Total Operating (Loss) Income	$	(21,652	)	$	3,609		$	13,956

Capital Expenditures:
Lighting Segment	$	2,203		$	4,249		$	6,107
Graphics Segment		1,038			1,748			3,688
Corporate and Eliminations		165			636			416
Total Capital Expenditures	$	3,406		$	6,633		$	10,211

Depreciation and Amortization:
Lighting Segment	$	7,573		$	5,649		$	4,359
Graphics Segment		1,542			1,474			1,104
Corporate and Eliminations		1,107			1,139			1,214
Total Depreciation and Amortization	$	10,222		$	8,262		$	6,677

	June 30,		June 30,
	201 8		2017
Identifiable Assets:
Lighting Segment	$	172,799	$	214,070
Graphics Segment		39,881		33,144
Corporate and Eliminations		16,837		9,466
Total Identifiable Assets	$	229,517	$	256,680

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)	201 8		2017		2016

Lighting Segment intersegment net sales	$	2,672	$	2499	$	2771
Graphics Segment intersegment net sales	$	1,276	$	1,135	$	1,760