Note 3 - Segment Reporting Information

6 Months Ended

Dec. 31, 2015

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. In the third quarter of fiscal 2015, the Company realigned its operating segments to be in alignment with the financial information received by the then new Chief Executive Officer. The Company’s three operating segments are Lighting, Graphics, and Technology, each of which has a president who is responsible for that business and reports to the CODM. An All Other Category as well as Corporate and Eliminations will also be reported in the segment information. As a result of the realignment of the Company’s operating segments in the third quarter of fiscal 2015, all prior period segment information has been revised so as to be comparable with the new segment reporting structure.

The changes made and realignment of the Company’s operating segments involved the following:

1) The segment formerly known as the Electronic Components Segment was renamed as the Technology Segment.

2) The LED Video Screen product line was moved out of the Lighting Segment and into the Technology Segment.

3) The Company’s installation management business (LSI Adapt) and the menu board business (LSI Images) were moved out of the All Other Category and into the Graphics Segment.

The Lighting Segment includes outdoor, indoor, and landscape lighting utilizing both traditional and LED light sources, that have been fabricated and assembled for the commercial, industrial and multi-site retail lighting markets, the Company’s primary niche markets (petroleum / convenience store market, automotive dealership market, and quick service restaurant market).

The Graphics Segment designs, manufactures and installs exterior and interior visual image elements related to traditional graphics, active digital signage along with the management of media content related to digital signage, and menu board systems that are either digital or traditional by design. These products are used in visual image programs in several markets, including the petroleum / convenience store market, multi-site retail operations, banking, and restaurants. The Graphics Segment implements, installs and provides program management services related to products sold by the Graphics Segment and by the Lighting Segment.

The Technology Segment designs and manufactures electronic circuit boards, assemblies and sub-assemblies, various control system products used in other applications (including the control of solid-state LED lighting and metal halide lighting), and solid state LED video screens, scoreboards and advertising ribbon boards. This operating segment sells its products directly to customers (primarily in the transportation, original equipment manufacturers and medical markets) and also has significant inter-segment sales to the Lighting Segment.

The All Other Category includes only the Company’s former subsidiary that designed and produced high-performance light engines, large format video screens using solid-state LED technology, and certain specialty LED lighting. This subsidiary was sold on September 30, 2014 (See Note 13).

The Company’s corporate administration activities are reported in a line item titled Corporate and Eliminations.  This primarily includes 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, stock option expense for options 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, and deferred income tax assets.

The Company’s Lighting Segment and Graphics Segment net sales to a petroleum / convenience store customer represented approximately $17,045,000 or 10% of consolidated net sales in the six months ended December 31, 2015. There was no concentration of consolidated net sales in the three months ended December 31, 2015 or in the three and six months ended December 31, 2014.  The Company’s Graphics Segment accounts receivable balance related to this customer at December 31, 2015 was $4,690,000 or 11% of consolidated net accounts receivable. There was no concentration of accounts receivable at June 30, 2015.

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of December 31, 2015 and December 31, 2014:

( In thousands)	Three Months Ended December 31						Six Months Ended December 31
	2015			2014			2015			2014
Net Sales:
Lighting Segment	$	59,601		$	59,796		$	118,676		$	115,517
Graphics Segment		21,034			20,269			42,787			36,293
Technology Segment		4,052			4,650			9,149			11,330
All Other Category		--			--			--			41
	$	84,687		$	84,715		$	170,612		$	163,181
Operating Income (Loss):
Lighting Segment	$	5,182		$	4,090		$	10,864		$	8,317
Graphics Segment		2,035			1,065			4,196			1,118
Technology Segment		993			499			2,333			1,131
All Other Category		--			--			--			(183	)
Corporate and Eliminations		(2,830	)		(3,430	)		(6,250	)		(5,625	)
	$	5,380		$	2,224		$	11,143		$	4,758
Capital Expenditures:
Lighting Segment	$	1,160		$	599		$	1,849		$	1,181
Graphics Segment		604			533			1,109			867
Technology Segment		108			241			224			285
All Other Category		--			--			--			4
Corporate and Eliminations		150			61			202			67
	$	2,022		$	1,434		$	3,384		$	2,404
Depreciation and Amortization:
Lighting Segment	$	717		$	729		$	1,422		$	1,451
Graphics Segment		213			256			428			506
Technology Segment		364			325			719			663
All Other Category		--			--			--			31
Corporate and Eliminations		304			242			605			487
	$	1,598		$	1,552		$	3,174		$	3,138

	December 31, 2015		June 30, 2015
Identifiable Assets:
Lighting Segment	$	87,209	$	90,713
Graphics Segment		36,306		29,477
Technology Segment		29,956		28,423
All Other Category		--		--
Corporate and Eliminations		34,063		33,766
	$	187,534	$	182,379

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 including impairment of goodwill, but excluding interest expense and interest income. Identifiable assets are those assets used by each segment in its operations. Corporate identifiable assets primarily consist of cash, invested cash (if any), refundable income taxes, and deferred income tax assets.

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:

	Three Months Ended December 31				Six Months Ended December 31
(In thousands)	2015		2014		2015		2014
Lighting Segment inter-segment net sales	$	814	$	445	$	1,428	$	1,497
Graphics Segment inter-segment net sales	$	562	$	125	$	1,006	$	256
Technology inter-segment net sales	$	8,932	$	7,675	$	18,316	$	14,947
All Other Category inter-segment net sales	$	--	$	--	$	--	$	308

The Company considers its geographic areas to be:  1) the United States, and 2) Canada.  The Company’s operations are in the United States, with one operation previously in Canada.  As a result of the sale of a subsidiary on September 30, 2014, the Company no longer has a presence in Canada (See Note 13). The geographic distribution of the Company’s net sales and long-lived assets are as follows:

( In thousands)	Three Months Ended December 31				Six Months Ended December 31
	2015		2014		2015		2014
Net Sales (a):
United States	$	84,687	$	84,715	$	170,612	$	163,140
Canada		--		--		--		41
	$	84,687	$	84,715	$	170,612	$	163,181

	December 31, 2015		June 30, 2015
Long-lived Assets (b):
United States	$	45,395	$	44,965
Canada		--		--
	$	45,395	$	44,965

a. Net sales are attributed to geographic areas based upon the location of the operation making the sale.

b. Long-lived assets include property, plant and equipment, and other long-term assets.  Goodwill and intangible assets are not included in long-lived assets.