Note 2 - Business Segment Information

12 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 2 — BUSINESS SEGMENT

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 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, engineers, 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, sports, 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 15).

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.

There were no customers or customer programs representing a concentration of 10% or more of the Company’s net sales in the fiscal years ended June 30, 2016, 2015 and 2014. There was no concentration of accounts receivable at June 30, 2016 or 2015

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Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of June 30, 2016, June 30, 2015, June 30, 2014: 

(In thousands)	201 6			2015		2014
Net S ales:
Lighting Segment	$	226,889		$	219,920	$	222,604
Graphics Segment		77,039			64,895		50,970
Technology Segment		18,268			23,001		24,515
All Other Category		—			41		1,374
Total Net Sales	$	322,196		$	307,857	$	299,463
Operating I ncome ( L oss):
Lighting Segment	$	15,785		$	14,775	$	10,524
Graphics Segment		5,429			1,156		(2,086	)
Technology Segment		3,845			2,949		1,633
All Other Category		—			(183		(854	)
Corporate and Eliminations		(11,103	)		(11,164		(6,899	)
Total Operating Income	$	13,956		$	7,533	$	2,318
Capital Expenditures:
Lighting Segment	$	4,255		$	1,905	$	3,294
Graphics Segment		3,605			1,100		461
Technology Segment		1,935			1,146		726
All Other Category		—			4		20
Corporate and Eliminations		416			599		744
Total Capital Expenditures	$	10,211		$	4,754	$	5,245
Depreciation and A mortization:
Lighting Segment	$	2,930		$	2,965	$	2,779
Graphics Segment		1,015			979		950
Technology Segment		1,518			1,341		1,563
All Other Category		—			31		161
Corporate and Eliminations		1,214			1,015		773
Total Depreciation and Amortization	$	6,677		$	6,331	$	6,226

	June 30,		June 30,
	201 6		2015
Identifiable A ssets:
Lighting Segment	$	95,168	$	90,713
Graphics Segment		32,450		29,477
Technology Segment		29,388		28,423
All Other Category		—		—
Corporate and Eliminations		38,554		32,077
Total Identifiable Assets	$	195,560	$	180,690

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. 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:

(In thousands)	201 6		2015		2014
Lighting Segment intersegment net sales	$	2,935	$	2,752	$	3,534
Graphics Segment intersegment net sales	$	1,760	$	559	$	1,088
Technology Segment intersegment net sales	$	35,733	$	29,412	$	34,238
All Other Category intersegment net sales	$	—	$	308	$	2,286

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 15). The geographic distribution of the Company’s net sales and long-lived assets are as follows:

(In thousands)	201 6		2015		2014
Net S ales (a):
United States	$	322,196	$	307,816	$	298,089
Canada		—		41		1,374
Total Net Sales	$	322,196	$	307,857	$	299,463

	June 30,		June 30,		June 30,
	201 6		2015		2014
Long-L ived A ssets (b):
United States	$	51,723	$	46,430	$	47,125
Canada		—		—		190
Total Long-Lived Assets	$	51,723	$	46,430	$	47,315

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.