NOTE

—

GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying values of goodwill and other intangible assets with indefinite lives are reviewed at least annually for possible impairment. The Company

may

first

assess qualitative factors in order to determine if goodwill and indefinite-lived intangible assets are impaired. If through the qualitative assessment it is determined that it is more likely than

not

that goodwill and indefinite-lived assets are

not

impaired,

further testing is required. If it is determined more likely than

not

that goodwill and indefinite-lived assets are impaired, or if the Company elects

not

first

assess qualitative factors, the Company’s impairment testing continues with the estimation of the fair value of the reporting unit using a combination of a market approach and an income (discounted cash flow) approach, at the reporting unit level. The estimation of the fair value of reporting unit requires significant management judgment with respect to revenue and expense growth rates, changes in working capital and the selection and use of an appropriate discount rate. The estimates of the fair value of reporting units are based on the best information available as of the date of the assessment. The use of different assumptions would increase or decrease estimated discounted future operating cash flows and could increase or decrease an impairment charge. Company management uses its judgment in assessing whether assets

may

have become impaired between annual impairment tests. Indicators such as adverse business conditions, economic factors and technological change or competitive activities

may

signal that an asset has become impaired.

The Company identified its reporting units in conjunction with its annual goodwill impairment testing. The Company has a total of

three

reporting units that contain goodwill. There are

two

reporting units within the Lighting Segment and

one

reporting unit within the Graphics Segment. One reporting unit previously reported in the Technology Segment has been transferred to the Lighting Segment as a result of the merge of the Technology Segment with the Lighting Segment (See Note

). The Company relies upon a number of factors, judgments and estimates when conducting its impairment testing including, but

not

limited to, the Company’s stock price, operating results, forecasts, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and judgments in applying them to the analysis of goodwill impairment.

A sustained and significant decline in the Company’s stock price in the

first

quarter of fiscal

2018

led management to believe that a triggering event occurred and that an interim goodwill impairment test was required for

one

of the reporting units in the Lighting Segment that contains goodwill, as of

September 30, 2017.

This particular reporting unit was tested because its fair market value was marginally higher than its carrying value. The other reporting units had considerable clearance between its fair market value and carrying value. Because the Company elected to early adopt ASU

2017

04,

“Simplifying the Test for Goodwill Impairment”, the requirement to perform step

in the impairment test was

not

required. The result of the impairment test on the reporting unit in the Lighting Segment indicated that goodwill was impaired by

$28,000,000.

As of

March 1, 2018,

the Company performed its annual goodwill impairment test on the

three

reporting units that contain goodwill. The goodwill impairment test on

one

reporting unit in the Lighting Segment passed with a business enterprise value that was

$21.4

million or

15%

above the carrying value of this reporting unit. The goodwill impairment test of a

second

reporting unit in the Lighting Segment that contains goodwill passed with an estimated business enterprise value that was

$16.1

million or

69%

above the carrying value of this reporting unit. The goodwill impairment test of the reporting unit with goodwill in the Graphics Segment passed with an estimated business enterprise value that was

$3.3

million or

319%

above the carrying value of the reporting unit. The Company has performed an assessment of goodwill from the date of the annual test through the balance sheet date for possible triggering events and has concluded that other than the impairment analysis that was performed in the

fourth

quarter on the reporting unit in the Lighting Segment (see below), there were

triggering events that would indicate the assets are impaired.

Another sustained and significant decline in the Company’s stock price in the

fourth

quarter of fiscal

2018

led management to believe that a triggering event occurred and that an interim goodwill impairment test was required for

one

of the reporting units in the Lighting Segment that contains goodwill, as of

May 31, 2018.

2017

04,

“Simplifying the Test for Goodwill Impairment”, the requirement to perform step

in the impairment test was

not

required. The goodwill impairment test of the reporting unit in the Lighting Segment passed with a business enterprise value that was

$13.7

million or

11%

above the carrying value of this reporting unit including goodwill.

As of

March 1, 2017,

the Company performed its annual goodwill impairment test on the

three

reporting units that contain goodwill (excluding Atlas Lighting Products). The goodwill impairment test on

two

reporting units in the Lighting Segment passed with a business enterprise value that was

$60.0

million or

80%

above the carrying value for

one

of the reporting units and a business enterprise value that was

$23.2

million or

95%

above the carrying value for the

second

reporting unit. The goodwill impairment test of the

one

reporting unit with goodwill in the Graphics Segment passed with an estimated business enterprise value that was

$4.2

million or

424%

above the carrying value of the reporting unit.

The following table presents information about the Company's goodwill on the dates or for the periods indicated:

Goodwill
(In thousands)	Lighting			Graphics
	Segment			Segment			Total
Balance as of June 30, 2017
Goodwill	$	94,564		$	28,690		$	123,254
Accumulated impairment losses		(37,191	)		(27,525	)		(64,716	)
Goodwill, net as of June 30, 2017	$	57,373		$	1,165		$	58,538

Goodwill impairment	$	(28,000	)	$	--		$	(28,000	)

Balance as of June 30, 2018
Goodwill	$	94,564		$	28,690		$	123,254
Accumulated impairment losses		(65,191	)		(27,525	)		(92,716	)
Goodwill, net as of June 30, 2018	$	29,373		$	1,165		$	30,538

The Company performed its annual review of indefinite-lived intangible assets as of

March 1, 2018

and determined there was

impairment. The indefinite-lived intangible impairment test passed with a fair market value that was

$20.6

million or

604%

above its carrying value. The Company has performed an assessment of its intangible assets from the date of the annual test through the balance sheet date for possible triggering events and has concluded that there were

triggering events that would indicate the assets are impaired.

As of

March 1, 2017,

the Company performed its annual review of indefinite-lived intangible assets and determined there was

impairment. The indefinite-lived intangible asset impairment test passed with a fair market value that was

$15.2

million or

445%

above its carrying value.

March 2017,

a customer relationship intangible asset with a net book value of

$479,000

related to the LED video screen product line in the Graphics Segment was determined to be fully impaired. The Company deemed that distribution channels and corresponding projected future cash flows that support the customer list intangible asset are

not

adequate to support the asset.

The gross carrying amount and accumulated amortization by major other intangible asset class is as follows:

	June 30, 2018
Other Intangible Assets	Gross
(In thousands)	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	35,563	$	10,011	$	25,552
Patents		338		217		121
LED technology firmware, software		16,066		11,801		4,265
Trade name		2,658		609		2,049
Non-compete agreements		710		710		-
Total Amortized Intangible Assets		55,335		23,348		31,987

Indefinite-lived Intangible Assets
Trademarks and trade names		3,422		--		3,422
Total Indefinite-lived Intangible Assets		3,422		--		3,422

Total Other Intangible Assets	$	58,757	$	23,348	$	35,409

	June 30, 2017
Other Intangible Assets	Gross
(In thousands)	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	35,563	$	7,956	$	27,607
Patents		338		186		152
LED technology firmware, software		16,066		11,237		4,829
Trade name		2,658		499		2,159
Non-compete agreements		710		710
Total Amortized Intangible Assets		55,335		20,588		34,747

Indefinite-lived Intangible Assets
Trademarks and trade names		3,422		--		3,422
Total Indefinite-lived Intangible Assets		3,422		--		3,422

Total Other Intangible Assets	$	58,757	$	20,588	$	38,169

	Amortization Expense of Other Intangible Assets
(In thousands)	2018		2017		2016

Amortization Expense	$	2,760	$	1,257	$	506

The Company expects to record annual amortization expense as follows:

(In thousands)

2019	$	2,760
2020	$	2,687
2021	$	2,682
2022	$	2,460
2023	$	2,411
After 2023	$	18,987