Note 17 - Financial Information by Segment and Geographic Area

12 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

1

7

. 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.

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, who is the Company's CEO, 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, 20 20
	North America			International			Unallocated			Total
Sales 1	$	121,834		$	79,617		$	-		$	201,451
Goodwill and intangibles impairment		(6,496	)		-			-			(6,496	)
Restructuring		(341	)		(1,239	)		-			(1,580	)
Operating income		(2,055	)		3,841			(7,090	)		(5,303	)
Capital expenditures and software development		6,992			3,608			-			10,600
Depreciation and amortization		4,942			2,253			-			7,195
Current assets 4		35,030			55,610			13,458			104,098
Long-lived assets 5		34,354			13,213			21,018			68,585

	Year Ended June 30, 201 9
	North America		International		Unallocated			Total
Sales 2	$	136,387	$	91,635	$	-		$	228,022
Operating income (loss)		9,468		8,043		(6,209	)		11,221
Capital expenditures and software development		3,617		6,610		-			7,227
Depreciation and amortization		5,022		2,316		-			7,338
Current assets 4		41,188		63,205		15,582			119,975
Long-lived assets 5		35,638		14,168		20,306			70,112

	Year Ended June 30, 201 8
	North America		International		Unallocated			Total
Sales 3	$	128,442	$	87,886	$	-		$	216,328
Operating income (loss)		8,175		2,128		(5,579	)		4,724
Capital expenditures and software development		3,426		2,336		-			5,762
Depreciation and amortization		4,923		2,588		-			7,511
Current assets 4		37,546		60,855		14,827			113,228
Long-lived assets 5		37,489		13,010		18,559			69,058

1

Excludes

$4,040

of North American segment intercompany sales to the International segment and

$13,820

intercompany sales of the International segment to the North American segment.

2

Excludes

$4,879

of North American segment intercompany sales to the International segment and

$16,187

intercompany sales of the International segment to the North American segment.

3

Excludes

$6,468

of North American segment intercompany sales to the International segment and

$14,239

intercompany 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.

5

Long lived assets consist of property, plant and equipment, net taxes receivable, deferred tax assets, net intangible assets & goodwill.

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

Sales	Year Ended June 30,
	20 20		201 9		201 8
North America
United States	$	113,989	$	127,359	$	119,226
Canada & Mexico		7,845		9,028		9,216
		121,834		136,387		128,442
International
Brazil		49,254		54,324		49,726
United Kingdom		18,869		24,042		25,099
China		6,048		7,370		7,323
Australia & New Zealand		5,446		5,899		5,738
		79,617		91,635		87,886
Total Sales	$	201,451	$	228,022	$	216,328

Long-lived Assets	Year Ended June 30,
	2020		2019		2018
North America
United States	$	34,264	$	35,594	$	37,437
Canada & Mexico		90		44		52
		34,354		35,638		37,489
International
Brazil		8,050		10,067		8,662
United Kingdom		1,948		2,046		1,876
China		2,881		1,944		2,346
Australia & New Zealand		334		111		126
		13,213		14,168		13,010
Total Long-Lived Assets	$	47,567	$	49,806	$	50,499