Note 17 - Financial Information by Segment and Geographic Area

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

17.

FINANCIAL INFORMATION BY SEGMENT & GEOGRAPHIC AREA

The Company offers its broad array of measuring and cutting products to the market through multiple channels of distribution throughout the world. The Company’s products include precision tools, electronic gages, gage blocks, optical vision and laser measuring equipment, custom engineered granite solutions, tape measures, levels, chalk products, squares, band saw blades, hole saws, hacksaw blades, jig saw blades, reciprocating saw blades, M1

® lubricant and precision ground flat stock. The Company reviews and manages its business geographically and has historically made decisions based on worldwide operations. In fiscal 2016, the Company changed its reportable business segment from one reportable segment to two reportable segments, specifically, North American Operations and International Operations. The Company has recast its segment information disclosure for all periods presented to conform to this segment presentation.

The North American segment’s operations include all manufacturing and sales in the United States, Canada and Mexico. The International segment’s operations include all locations outside North America, primarily in Brazil, United Kingdom and China. The chief operating decision maker reviews operations on a geographical basis and decisions about where to invest the Company’s resources are made based on the current results and forecasts of operations in those geographies. Since the markets for the Company’s products are sufficiently different in North America than they are in the rest of the world and in view of the significant impact that currency fluctuation plays outside the United States on the revenue of the Company, the Company’s business review separates North America from operations outside North America. For this reason, the Company is reflecting two operating segments that align with management’s review of operations and decisions to allocate resources.

Segment income is measured for internal reporting purposes by excluding corporate expenses, other income and expense including interest income and interest expense and income taxes. Corporate expenses consist primarily of executive compensation, certain professional fees, and costs associated with the Company’s global headquarters. Financial results for each reportable segment are as follows (in thousands):

	Year Ended June 30, 2016
	North America			International			Unallocated			Total 1
Sales	$	130,108		$	79,577		$			$	209,685
Operating income		(8,311	)		(3,117	)		(9,017	)		(20,445	)
Asset impairment		(4,114	)		-						(4,114	)
Capital expenditures		5,040			3,200						8,240
Depreciation and amortization		4,537			2,677						7,214
Current assets 4		33,787			62,810			24,314			120,911
Long-lived assets 5		36,539			13,995			30,153			80,687

	Year Ended June 30, 2015
	North America		International		Unallocated			Total 2
Sales	$	137,085	$	104,465	$			$	241,550
Operating income		13,353		1,333		(6,083	)		8,603
Capital expenditures		3,449		2,251					5,700
Depreciation and amortization		5,604		3,113					8,717
Current assets 4		41,240		68,656		23,517			133,413
Long-lived assets 5		40,506		14,066		24,287			78,859

	Year Ended June 30, 2014
	North America		International		Unallocated			Total 3
Sales	$	129,287	$	117,847	$			$	247,134
Operating income		11,231		7,831		(7,147	)		11,915
Capital expenditures		3,116		5,720					8,836
Depreciation and amortization		5,948		3,410					9,358
Current assets 4		40,716		75,193		30,993			146,902
Long-lived assets 5		43,127		19,203		22,211			84,541

1

Excludes $8,259 of North American segment sales to the International segment and $9,282 sales of the International segment to the North American segment.

2

Excludes $12,276 of North American segment sales to the International segment and $9,842 sales of the International segment to the North American segment.

3

Excludes $17,692 of North American segment sales to the International segment and $8,585 sales of the International segment to the North American segment.

4

Current assets primarily consist of accounts receivable, inventories and prepaid expenses. Assets not allocated to the segments include cash and cash equivalents, deferred income taxes, and other non-current assets.

Geographic information about the Company’s sales and long-lived assets are as follows (in thousands):

Sales

	Year Ended June 30,
North America	2016		2015		2014
United States	$	119,638	$	125,534	$	117,249
Canada & Mexico		10,470		11,551		12,038
		130,108		137,085		129,287
International
Brazil		43,283		63,961		74,478
United Kingdom		24,485		26,691		28,322
China		7,207		8,357		9,322
Australia & New Zealand		4,602		5,456		5,725
		79,577		104,465		117,847
Total Sales	$	209,685	$	241,550	$	247,134

Long-lived Assets

	Year Ended June 30,
North America	2016		2015		2014
United States	$	36,189	$	40,146	$	42,740
Canada & Mexico		350		360		387
		36,539		40,506		43,127
International
Brazil		8,818		7,986		12,334
United Kingdom		2,143		2,647		3,093
China		2,887		3,291		3,558
Australia & New Zealand		147		142		218
		13,995		14,066		19,203
Total Long Lived Assets	$	50,534	$	54,572	$	62,330

5

Long lived assets consist of property, plant and equipment, goodwill, and other intangible assets. Long term deferred and other tax assets not allocated to the segments.