Note 3 - Segment Reporting Information

6 Months Ended

Dec. 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, parking lot and garage markets, automotive dealerships, quick-service restaurants, grocery and pharmacy stores, and retail/national accounts. The Company serves these 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 print 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 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 six months ended December 31, 2020 and 2019. There was no concentration of accounts receivable at December 31, 2020 or June 30, 2020. 

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of December 31, 2020 and December 31, 2019:

	Three Months Ended						Six Months Ended
(In thousands)	December 31						December 31
	2020			2019			2020			2019
Net Sales:
Lighting Segment	$	45,126		$	53,436		$	90,531		$	116,627
Graphics Segment		31,261			28,941			55,862			54,451
	$	76,387		$	82,377		$	146,393		$	171,078
Operating Income (Loss):
Lighting Segment	$	2,134		$	3,150		$	5,722		$	12,309
Graphics Segment		3,143			1,362			4,966			2,379
Corporate and Eliminations		(2,591	)		(2,752	)		(5,800	)		(6,089	)
	$	2,686		$	1,760		$	4,888		$	8,599
Capital Expenditures:
Lighting Segment	$	275		$	557		$	644		$	887
Graphics Segment		40			45			67			45
Corporate and Eliminations		160			162			169			187
	$	475		$	764		$	880		$	1,119
Depreciation and Amortization:
Lighting Segment	$	1,610		$	1,661		$	3,229		$	3,439
Graphics Segment		304			374			662			760
Corporate and Eliminations		76			117			132			352
	$	1,990		$	2,152		$	4,023		$	4,551

	December 31, 2020		June 30, 2020
Identifiable Assets:
Lighting Segment	$	115,265	$	118,819
Graphics Segment		37,085		35,021
Corporate and Eliminations		28,931		18,423
	$	181,281	$	172,263

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				Six Months Ended
(In thousands)	December 31				December 31
	2020		2019		2020		2019
Lighting Segment inter-segment net sales	$	5,038	$	860	$	9,118	$	1,671
Graphics Segment inter-segment net sales	$	75	$	74	$	113	$	98

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.