Reportable Segments

3 Months Ended

Sep. 28, 2014

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

The Company's operating and reportable segments are:

• LED Products

• Lighting Products

• Power and RF Products

Reportable Segments Description

The Company's LED Products segment includes LED chips, LED components and SiC materials. The Company's Lighting Products segment primarily consists of LED lighting systems and bulbs. The Company's Power and RF Products segment includes power devices and RF devices.

Financial Results by Reportable Segment

The table below reflects the results of the Company's reportable segments as reviewed by the Chief Operating Decision Maker (CODM) for the three months ended September 28, 2014 and September 29, 2013. The Company's CODM is the Chief Executive Officer. The Company used the same accounting policies to derive the segment results reported below as those used in the Company's consolidated financial statements.

The Company's CODM does not review inter-segment transactions when evaluating segment performance and allocating resources to each segment, and inter-segment transactions are not included in the segment revenue presented in the table below. As such, total segment revenue in the table below is equal to the Company's consolidated revenue.

The Company's CODM reviews gross profit as the lowest and only level of segment profit. As such, all items below gross profit in the Consolidated Statements of Income must be included to reconcile the consolidated gross profit presented in the table below to the Company's consolidated income before income taxes.

In order to determine gross profit for each reportable segment, the Company allocates direct costs and indirect costs to each segment's cost of revenue. The Company allocates indirect costs, such as employee benefits for manufacturing employees, shared facilities services, information technology, purchasing, and customer service, when the costs are identifiable and beneficial to the reportable segment. The Company allocates these indirect costs based on a reasonable measure of utilization that considers the specific facts and circumstances of the costs being allocated.

Unallocated costs in the table below consist primarily of manufacturing employees' stock-based compensation, expenses for profit sharing and quarterly or annual incentive plans and matching contributions under the Company's 401(k) plan. These costs were not allocated to the reportable segments’ gross profit because the Company’s CODM does not review them regularly when evaluating segment performance and allocating resources.

Revenue, gross profit and gross margin for each of the Company's segments were as follows (in thousands, except percentages):

	Three Months Ended
	September 28, 2014			September 29, 2013
Revenue:
LED Products revenue		$173,590			$218,023
Lighting Products revenue	223,086			147,918
Power and RF Products revenue	30,996			25,065
Total revenue		$427,672			$391,006
Gross Profit and Gross Margin:
LED Products gross profit		$67,624			$101,653
LED Products gross margin	39.0		%	46.6		%
Lighting Products gross profit	55,592			39,818
Lighting Products gross margin	24.9		%	26.9		%
Power and RF Products gross profit	17,857			13,456
Power and RF Products gross margin	57.6		%	53.7		%
Total segment gross profit	141,073			154,927
Unallocated costs	(5,253		)	(4,170		)
Consolidated gross profit		$135,820			$150,757
Consolidated gross margin	31.8		%	38.6		%

Assets by Reportable Segment

Inventories are the only assets reviewed by the Company's CODM when evaluating segment performance and allocating resources to the segments.

Unallocated inventories in the table below were not allocated to the reportable segments because the Company’s CODM does not review them when evaluating performance and allocating resources to each segment. Unallocated inventories consisted primarily of manufacturing employees’ stock-based compensation, profit sharing and quarterly or annual incentive compensation and matching contributions under the Company’s 401(k) plan.

The Company does not allocate assets other than inventories to the reportable segments because the Company's CODM does not review them when assessing segment performance and allocating resources. The CODM reviews all of the Company's assets other than inventories on a consolidated basis.

Inventories for each of the Company's segments are as follows (in thousands):

	September 28, 2014		June 29, 2014
LED Products	$	149,654	$	123,249
Lighting Products	147,982		148,757
Power and RF Products	8,732		8,019
Total segment inventories	306,368		280,025
Unallocated inventories	4,412		4,755
Consolidated inventories	$	310,780	$	284,780