Note 2 - Business Segment Information

12 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE

2

— 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

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 LED light sources that have been fabricated and assembled for the Company's markets, primarily petroleum / convenience stores, parking lot and garage markets, 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 which are 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 and menu board systems that are either digital or traditional by design. These products are used in visual image programs in several markets including the petroleum/convenience store market, quick-service restaurant market, the grocery store and pharmacy markets, as well as customers with multi-site retail operations. 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 were

no

customers or customer programs representing a concentration of

10%

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

June 

30,

2020

and

2019.

There was

no

concentration of accounts receivable at

June 

30,

2020

or

2019.

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

June 

30,

2020

and

June 30, 2019:

(In thousands)
	2020			2019
Net Sales:
Lighting Segment	$	206,199		$	235,114
Graphics Segment		99,359			93,738
	$	305,558		$	328,852
Operating Income (Loss):
Lighting Segment	$	16,123		$	(12,211	)
Graphics Segment		8,218			3,112
Corporate and Eliminations		(11,265	)		(10,791	)
	$	13,076		$	(19,890	)
Capital Expenditures:
Lighting Segment	$	1,386		$	2,239
Graphics Segment		1,093			342
Corporate and Eliminations		260			37
	$	2,739		$	2,618
Depreciation and Amortization:
Lighting Segment	$	6,714		$	7,648
Graphics Segment		1,436			1,594
Corporate and Eliminations		504			979
	$	8,654		$	10,221

	June 30, 2020		June 30, 2019
Identifiable Assets:
Lighting Segment	$	118,819	$	142,105
Graphics Segment		35,021		40,914
Corporate and Eliminations		18,423		18,081
	$	172,263	$	201,100

The segment net sales reported above represent sales to external customers. Segment operating income (loss), 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:

(In thousands)
	2020		2019
Lighting Segment inter-segment net sales	$	3,718	$	2,043
Graphics Segment inter-segment net sales	$	552	$	928