Note 3 - Segment Reporting Information

3 Months Ended

Sep. 30, 2023

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 Display Solutions (formerly known as the Graphics Segment), 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 non-residential outdoor and indoor lighting fixtures utilizing LED light sources that have been fabricated and assembled for the Company’s markets, primarily the refueling and convenience store markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports court and field market. The Company also services lighting product customers through the commercial and industrial project, stock and flow, and renovation channels. In addition to the manufacture and sale of lighting fixtures, the Company offers a variety of lighting controls to complement its lighting fixtures which include sensors, photocontrols, dimmers, motion detection and Bluetooth systems. 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 Display Solutions Segment manufactures, sells and installs exterior and interior visual image and display elements, including printed graphics, structural graphics, digital signage, menu board systems, display fixtures, refrigerated displays, and custom display elements. These products are used in visual image programs in several markets including the refueling and convenience store markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports court and field market. The Display Solutions Segment also provides a variety of project management services to complement our display elements, such as installation management, site surveys, permitting, and content management which are offered to our customers to support our digital signage.

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 consolidated net sales in the three months ended September 30, 2023, or 2022. There was no concentration of accounts receivable at September 30, 2023. One customer in the Display Solutions Segment represents $8.5 million or 11% of accounts receivable at September 30, 2022.

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of September 30, 2023, and September 30, 2022:

	Three Months Ended
(In thousands)	September 30
	2023			2022
Net Sales:
Lighting Segment	$	67,641		$	67,533
Display Solutions Segment		55,800			59,536
	$	123,441		$	127,069
Operating Income (Loss):
Lighting Segment	$	8,753		$	9,158
Display Solutions Segment		7,219			6,496
Corporate and Eliminations		(4,944	)		(5,633	)
	$	11,028		$	10,021
Capital Expenditures:
Lighting Segment	$	862		$	249
Display Solutions Segment		519			162
Corporate and Eliminations		12			23
	$	1,393		$	434
Depreciation and Amortization:
Lighting Segment	$	1,309		$	1,387
Display Solutions Segment		976			974
Corporate and Eliminations		86			60
	$	2,371		$	2,421

	September 30, 2023		June 30, 2023
Total Assets:
Lighting Segment	$	145,085	$	142,941
Display Solutions Segment		149,306		145,307
Corporate and Eliminations		7,377		7,901
	$	301,768	$	296,149

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
(In thousands)	September 30
	2023		2022
Lighting Segment inter-segment net sales	$	6,864	$	6,143
Display Solutions Segment inter-segment net sales	$	455	$	66