OTE

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. The Company’s

two

operating segments are Lighting and Graphics, with

one

executive team under the organizational structure reporting directly to the CODM with responsibilities for managing each segment. 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 Company’s markets, primarily petroleum / convenience stores, automotive dealerships, quick-service restaurants, grocery and pharmacy stores, and retail/national accounts. The Company also services lighting product customers through the commercial industrial, stock and flow, and renovation channels. 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, equity compensation expense for various equity awards 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 was

concentration of consolidated net sales in the

three

months ended

September 30, 2019

2018.

There was

concentration of accounts receivable at

September 30, 2018

June 30, 2019.

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

September 30, 2019

and

September 30, 2018:

	Three Months Ended
( In thousands)	September 30
	2019			2018
Net Sales:
Lighting Segment	$	63,191		$	61,432
Graphics Segment		25,510			23,525
	$	88,701		$	84,957

Operating Income (Loss):
Lighting Segment	$	9,159		$	3,850
Graphics Segment		1,017			2,387
Corporate and Eliminations		(3,337	)		(3,303	)
	$	6,839		$	2,934

Capital Expenditures:
Lighting Segment	$	330		$	276
Graphics Segment		--			266
Corporate and Eliminations		25			106
	$	355		$	648

Depreciation and Amortization:
Lighting Segment	$	1,778		$	1,990
Graphics Segment		386			395
Corporate and Eliminations		235			258
	$	2,399		$	2,643

	September 30, 2019		June 30, 2019
Identifiable Assets:
Lighting Segment	$	141,647	$	142,105
Graphics Segment		44,467		40,914
Corporate and Eliminations		17,407		18,081
	$	203,521	$	201,100

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.

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
	September 30
(In thousands)	2019		2018

Lighting Segment inter-segment net sales	$	811	$	409

Graphics Segment inter-segment net sales	$	24	$	31

The Company’s operations are located solely within the United States. As a result, the geographic distribution of the Company’s net sales and long-lived assets originate within the United States.