Note 3 - Segment Reporting Information

9 Months Ended

Mar. 31, 2020

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. 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 store, and retail/national accounts. The Company also addresses 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 quick-service 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 expenses, 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

no

concentration of consolidated net sales in the

three

and

nine

months ended

March 31, 2020

and

2019.

  There was

no

concentration of accounts receivable at

March 31, 2020

or

June 30, 2019. 

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

March 31, 2020

and

March 31, 2019:

	Three Months Ended						Nine Months Ended
(In thousands)	March 31						March 31
	2020			2019			2020			2019
Net Sales:
Lighting Segment	$	49,013		$	52,785		$	165,640		$	177,871
Graphics Segment		21,997			20,047			76,448			69,459
	$	71,010		$	72,832		$	242,088		$	247,330
Operating Income (Loss):
Lighting Segment	$	1,102		$	691		$	13,411		$	(13,911	)
Graphics Segment		4,015			(898	)		6,394			2,350
Corporate and Eliminations		(2,486	)		(2,066	)		(8,575	)		(8,049	)
	$	2,631		$	(2,273	)	$	11,230		$	(19,610	)
Capital Expenditures:
Lighting Segment	$	126		$	769		$	1,013		$	1,633
Graphics Segment		234			-			279			515
Corporate and Eliminations		59			-			246			200
	$	419		$	769		$	1,538		$	2,348
Depreciation and Amortization:
Lighting Segment	$	1,650		$	1,925		$	5,089		$	5,867
Graphics Segment		347			391			1,107			1,183
Corporate and Eliminations		83			236			435			737
	$	2,080		$	2,552		$	6,631		$	7,787

	March 31, 2020		June 30, 2019
Identifiable Assets:
Lighting Segment	$	130,370	$	142,105
Graphics Segment		35,213		40,914
Corporate and Eliminations		16,649		18,081
	$	182,232	$	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:

Inter-segment sales
	Three Months Ended				Nine Months Ended
(In thousands)	March 31				March 31
	2020		2019		2020		2019
Lighting Segment inter-segment net sales	$	744	$	479	$	2,415	$	1,758
Graphics Segment inter-segment net sales	$	153	$	96	$	251	$	171

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