Note 7 - Goodwill and Other Intangible Assets

6 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 7 - GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying values of goodwill and other intangible assets with indefinite lives are reviewed at least annually for possible impairment. The Company may first assess qualitative factors in order to determine if goodwill and indefinite-lived intangible assets are impaired. If through the qualitative assessment it is determined that it is more likely than not that goodwill and indefinite-lived assets are not impaired, no further testing is required. If it is determined more likely than not that goodwill and indefinite-lived assets are impaired, or if the Company elects not to first assess qualitative factors, the Company’s impairment testing continues with the estimation of the fair value of the reporting unit using a combination of a market approach and an income (discounted cash flow) approach, at the reporting unit level. The estimation of the fair value of reporting unit requires significant management judgment with respect to revenue and expense growth rates, changes in working capital and the selection and use of an appropriate discount rate. The estimates of the fair value of reporting units are based on the best information available as of the date of the assessment. The use of different assumptions would increase or decrease estimated discounted future operating cash flows and could increase or decrease an impairment charge. Company management uses its judgment in assessing whether assets may have become impaired between annual impairment tests. Indicators such as adverse business conditions, economic factors and technological change or competitive activities may signal that an asset has become impaired.

The Company identified its reporting units in conjunction with its annual goodwill impairment testing. The Company has a total of three reporting units that contain goodwill. One reporting unit is within the Lighting Segment and two reporting units are within the Display Solutions Segment. The tradename intangible assets have an indefinite life and are also tested separately on an annual basis. The Company relies upon a number of factors, judgments and estimates when conducting its impairment testing including, but not limited to, the Company’s stock price, operating results, forecasts, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and judgments in applying them to the analysis of goodwill impairment.

The following table presents information about the Company's goodwill on the dates or for the periods indicated:

Goodwill
(In thousands)				Display
	Lighting			Solutions
	Segment			Segment			Total
Balance as of December 31, 2022
Goodwill	$	70,971		$	63,347		$	134,318
Accumulated impairment losses		(61,763	)		(27,525	)		(89,288	)
Goodwill, net as of December 31, 2022	$	9,208		$	35,822		$	45,030
Balance as of June 30, 2022
Goodwill	$	70,971		$	63,347		$	134,318
Accumulated impairment losses		(61,763	)		(27,525	)		(89,288	)
Goodwill, net as of June 30, 2022	$	9,208		$	35,822		$	45,030

The gross carrying amount and accumulated amortization by each major intangible asset class is as follows:

Other Intangible Assets
	December 31, 2022
(In thousands)	Gross
	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	62,083	$	16,108	$	45,975
Patents		268		268		-
LED technology firmware, software		20,966		15,191		5,775
Trade name		2,658		1,102		1,556
Non-compete		260		84		176
Total Amortized Intangible Assets		86,235		32,753		53,482
Indefinite-lived Intangible Assets
Trademarks and trade names		12,102		-		12,102
Total indefinite-lived Intangible Assets		12,102		-		12,102
Total Other Intangible Assets	$	98,337	$	32,753	$	65,584

Other Intangible Assets
	June 30, 2022
(In thousands)	Gross
	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	62,083	$	14,400	$	47,683
Patents		268		268		-
LED technology firmware, software		20,966		14,598		6,368
Trade name		2,658		1,049		1,609
Non-compete		260		58		202
Total Amortized Intangible Assets		86,235		30,373		55,862
Indefinite-lived Intangible Assets
Trademarks and trade names		12,102		-		12,102
Total indefinite-lived Intangible Assets		12,102		-		12,102
Total Other Intangible Assets	$	98,337	$	30,373	$	67,964

	Three Months Ended				Six Months Ended
	December 31				December 31
(In thousands)	2022		2021		2022		2021
Amortization Expense of Other Intangible Assets	$	1,190	$	1,198	$	2,380	$	2,413

The Company expects to record annual amortization expense as follows:

(In thousands)
2023	$	4,808
2024		4,760
2025		4,760
2026		4,760
2027		4,754
After 2027		32,020