10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 10-Q

X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2018.
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________ TO ________________.

Commission File No. 0-13375

LSI Industries Inc.

State of Incorporation - Ohio        IRS Employer I.D. No. 31-0888951

10000 Alliance Road

Cincinnati, Ohio  45242

(513) 793-3200

Indicate by checkmark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  YES    X     NO ____

Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

YES    X      NO ____

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [    ]	Accelerated filer [ X ]                  Emerging growth company [    ]
Non-accelerated filer [    ]	Smaller reporting company [    ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ____  NO    X

As of January 27, 2019 there were 25,888,975 shares of the registrant's common stock, no par value per share, outstanding.

LSI INDUSTRIES INC.

FORM 10-Q

FOR THE QUARTER ENDED DECEMBER 31, 2018

INDEX

PART I.  Financial Information			Begins on Page
	ITEM 1.	Financial Statements (Unaudited)
		Condensed Consolidated Statements of Operations	3
		Condensed Consolidated Balance Sheets	4
		Condensed Consolidated Statements of Cash Flows	6
		Notes to Condensed Consolidated Financial Statements	7
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	25
	ITEM 4.	Controls and Procedures	25
PART II.  Other Information
	ITEM 1A.	Risk Factors	26
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
	ITEM 6.	Exhibits	26
Signatures			26

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This Form 10-Q contains certain forward-looking statements that are subject to numerous assumptions, risks or uncertainties.  The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements.  Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “expects,” “intends,” “believes,” “seeks,” “may,” “will,” “should” or the negative versions of those words and similar expressions, and by the context in which they are used.  Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made.  Actual results could differ materially from those contained in or implied by such forward-looking statements as a result of a variety of risks and uncertainties over which the Company may have no control.  These risks and uncertainties include, but are not limited to the following: the impact of competitive products and services; product and pricing demands, and market acceptance risks; potential costs associated with litigation and regulatory compliance; the Company’s ability to develop, produce and market quality products that meet customers’ needs; additional restructuring costs or a failure to realize anticipated savings or benefits from past or future cost reduction actions; failure to realize all of the anticipated benefits from initiatives to increase our productivity, efficiency and cash flow and to reduce costs; inventory management decisions and sourcing practices; compliance with financial and other restrictive covenants in debt agreements; information technology security threats and computer crime; reliance on key customers; financial difficulties experienced by customers; the cyclical and seasonal nature of our business; the adequacy of reserves and allowances for doubtful accounts; fluctuations in operating results or costs whether as a result of uncertainties inherent in tax and accounting matters or otherwise; failure of an acquisition or acquired company to achieve its plans or objectives generally; unexpected difficulties in integrating acquired businesses; the ability to retain key employees, including key employees of acquired businesses; unfavorable economic and market conditions; the results of asset impairment assessments; the ability to maintain an effective system of internal control over financial reporting; the ability to remediate any material witnesses in internal control over financial reporting; and the other risk factors that are identified herein.  You are cautioned to not place undue reliance on these forward-looking statements.  In addition to the factors described in this paragraph, the risk factors identified in our Form 10-K and other filings the Company may make with the SEC constitute risks and uncertainties that may affect the financial performance of the Company and are incorporated herein by reference.  The Company does not undertake and hereby disclaims any duty to update any forward-looking statements to reflect subsequent events or circumstances.

Page 2

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Six Months Ended
	December 31						December 31
(In thousands, except per share data)	2018			2017			2018			2017
Net sales	$	89,541		$	92,305		$	174,498		$	179,771
Cost of products and services sold		69,486			66,998			133,027			130,761
Restructuring costs		376			--			531			--
Severance costs		23			--			23			--
Gross profit		19,656			25,307			40,917			49,010
Selling and administrative expenses		19,148			20,677			37,475			41,194
Impairment of goodwill		20,165			--			20,165			28,000
Transition and realignment costs		120			--			120			--
Severance costs		469			83			469			83
Restructuring costs		25			--			25			--
Operating (loss) income		(20,271	)		4,547			(17,337	)		(20,267	)
Interest (income)		(17	)		(8	)		(31	)		(16	)
Interest expense		632			425			1,164			836
(Loss) income before income taxes		(20,886	)		4,130			(18,470	)		(21,087	)
Income tax (benefit) expense		(5,104	)		5,598			(4,437	)		(3,990	)
Net loss	$	(15,782	)	$	(1,468	)	$	(14,033	)	$	(17,097	)
Loss per common share (see Note 4)
Basic	$	(0.61	)	$	(0.06	)	$	(0.54	)	$	(0.66	)
Diluted	$	(0.61	)	$	(0.06	)	$	(0.54	)	$	(0.66	)
Weighted average common shares outstanding
Basic		26,083			25,858			26,058			25,824
Diluted		26,083			25,858			26,058			25,824

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

Page 3

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except shares)	December 31,			June 30,
	2018			2018
ASSETS
Current Assets
Cash and cash equivalents	$	9,563		$	3,178
Accounts receivable, less allowance for doubtful accounts of $301 and $409, respectively		56,430			50,609
Inventories		54,093			50,994
Refundable income tax		1,000			1,784
Other current assets		3,936			3,516
Total current assets		125,022			110,081
Property, Plant and Equipment, at cost
Land		6,770			6,470
Buildings		35,608			35,961
Machinery and equipment		77,865			77,108
Construction in progress		1,135			1,340
		121,378			120,879
Less accumulated depreciation		(80,129	)		(77,176	)
Net property, plant and equipment		41,249			43,703
Goodwill		10,373			30,538
Other Intangible Assets, net		34,029			35,409
Other Long-Term Assets, net		14,405			9,786
Total assets	$	225,078		$	229,517

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

Page 4

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31,			June 30,
(In thousands, except shares)	2018			2018
LIABILITIES & SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	26,679		$	17,927
Accrued expenses		23,730			24,272
Total current liabilities		50,409			42,199
Long-Term Debt		48,372			45,360
Other Long-Term Liabilities		1,972			2,707
Commitments and Contingencies (Note 11)		--			--
Shareholders’ Equity
Preferred shares, without par value; Authorized 1,000,000 shares, none issued		--			--
Common shares, without par value; Authorized 40,000,000 shares; Outstanding 25,861,114 and 25,641,913 shares, respectively		125,200			124,104
Treasury shares, without par value		(1,561	)		(2,110	)
Deferred compensation plan		1,591			2,133
Retained earnings		(905	)		15,124
Total shareholders’ equity		124,325			139,251
Total liabilities & shareholders’ equity	$	225,078		$	229,517

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

Page 5

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)	Six Months Ended
	December 31
	2018			2017
Cash Flows from Operating Activities
Net (loss)	$	(14,033	)	$	(17,097	)
Non-cash items included in net income
Depreciation and amortization		5,235			5,124
Deferred income taxes		(4,701	)		(5,667	)
Impairment of goodwill		20,165			28,000
Deferred compensation plan		196			224
Stock compensation expense		727			1,463
Issuance of common shares as compensation		180			156
Gain on disposition of fixed assets		(10	)		(29	)
Allowance for doubtful accounts		256			115
Inventory obsolescence reserve		2,043			1,033
Changes in certain assets and liabilities:
Accounts receivable		(1,142	)		(10,975	)
Inventories		(9,309	)		313
Refundable income taxes		784			775
Accounts payable		8,704			(2,626	)
Accrued expenses and other		(1,873	)		(631	)
Customer prepayments		406			(221	)
Net cash flows provided by (used in) operating activities		7,628			(43	)
Cash Flows from Investing Activities
Purchases of property, plant and equipment		(1,579	)		(1,190	)
Proceeds from sale of fixed assets		10			1,527
Net cash flows (used in) provided by investing activities		(1,569	)		337
Cash Flows from Financing Activities
Payments of long-term debt		(52,066	)		(48,553	)
Borrowings of long-term debt		55,078			51,004
Cash dividends paid		(2,587	)		(2,564	)
Exercise of stock options		--			175
Purchase of treasury shares		--			(107	)
Shares withheld for employee taxes		(99	)		(111	)
Net cash flows provided by (used in) financing activities		326			(156	)
Increase in cash and cash equivalents		6,385			138
Cash and cash equivalents at beginning of period		3,178			3,039
Cash and cash equivalents at end of period	$	9,563		$	3,177

 The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

Page 6

LSI INDUSTRIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The interim condensed consolidated financial statements are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of December 31, 2018, the results of its operations for the three and six month periods ended December 31, 2018 and 2017, and its cash flows for the six month periods ended December 31, 2018 and 2017. These statements should be read in conjunction with the financial statements and footnotes included in the fiscal 2018 Annual Report on Form 10-K.  Financial information as of June 30, 2018 has been derived from the Company’s audited consolidated financial statements.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation:

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company’s fiscal 2018 Annual Report on Form 10-K. Significant changes to our accounting policies as a result of adopting ASU-2014-09 “Revenue from Contracts with Customers” (Topic 606) are discussed below.

Revenue Recognition:

The Company recognizes revenue when it satisfies the performance obligation in its customer contracts or purchase orders. Most of the Company’s products have a single performance obligation which is satisfied at a point in time when control is transferred to the customer. Control is generally transferred at time of shipment when title and risk of ownership passes to the customer. For customer contracts with multiple performance obligations, the Company allocates the transaction price and any discounts to each performance obligation based on relative standalone selling prices. Payment terms are typically within 30 to 90 days from the shipping date, depending on our terms with the customer. The Company offers standard warranties that do not represent separate performance obligations.

Installation is a separate performance obligation, except for our digital signage products. For digital signage products, installation is not a separate performance obligation as the product and installation is the combined item promised in digital signage contracts. The Company is not always responsible for installation of products it sells and has no post-installation responsibilities other than standard warranties.

A number of the Company's products are highly customized. As a result, these customized products do not have an alternative use. For these products, the Company has a legal right to payment for performance to date and generally does not accept returns on these items. The measurement of performance is based upon cost plus a reasonable profit margin for work completed. Because there is no alternative use and there is a legal right to payment, the Company transfers control of the item as the item is being produced and therefore, recognizes revenue over time. The customized product types are as follows:

● Customer specific print graphics branding

● Electrical components based on customer specifications

● Digital signage and related media content

The Company also offers installation services. Installation revenue is recognized over time as our customer simultaneously receives and consumes the benefits provided through the installation process.

For these customized products and installation services, revenue is recognized using a cost-based input method: recognizing revenue and gross profit as work is performed based on the relationship between the actual cost incurred and the total estimated cost for the contract.

Page 7

Disaggregation of Revenue

The Company disaggregates the revenue from contracts with customers by the timing of revenue recognition because the Company believes it best depicts the nature, amount, and timing of our revenue and cash flows. The table presents a reconciliation of the disaggregation by reportable segments.

	Three Months Ended				Six Months Ended
(In thousands)	December 31				December 31
	Lighting Segment		Graphics Segment		Lighting Segment		Graphics Segment
Timing of revenue recognition
Products and services transferred at a point in time	$	57,318	$	14,758	$	111,567	$	32,452
Products and services transferred over time		6,336		11,129		13,519		16,960
	$	63,654	$	25,887	$	125,086	$	49,412
Type of Product and Services
New technology products	$	56,271	$	2,349	$	107,576	$	4,751
Legacy products		6,947		18,222		16,023		34,186
Turnkey services and other		436		5,316		1,487		10,475
	$	63,654	$	25,887	$	125,086	$	49,412

New technology products include LED lighting and controls, electronic circuit boards, and digital signage solutions. Legacy products include lighting fixtures utilizing light sources other than LED technology and printed two and three dimensional graphic products. Turnkey services and other includes installation services along with shipping and handling charges.

Practical Expedients and Exemptions

● The Company’s contracts with customers have an expected duration of one year or less, as such the Company applies the practical expedient to expense sales commissions as incurred, and have omitted disclosures on the amount of remaining performance obligations.

● Shipping costs that are not material in context of the delivery of products are expensed as incurred.

● The Company’s accounts receivable balance represents the Company’s unconditional right to receive payment from its customers with contracts. Payments are generally due within 30 to 90 days of completion of the performance obligation and invoicing, therefore, payments do not contain significant financing components.

● The Company collects sales tax and other taxes concurrent with revenue-producing activities which are excluded from revenue. Shipping and handling costs are treated as fulfillment activities and included in cost of products and services sold on the Consolidated Statements of Operations.

New Accounting Pronouncements:

On July 1, 2018, the Company adopted ASU 2014-09. “Revenue from Contracts with Customers,” (Topic 606) using the modified retrospective adoption method which requires a cumulative effect adjustment to the opening balance of retained earnings. This approach was applied to contracts that were not completed as of June 30, 2018. Results for reporting periods beginning July 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. The Company recorded a net increase to beginning retained earnings of $591,000 on July 1, 2018 due to the cumulative impact of adopting Topic 606, as described below.

(In thousands)	Balance as of June 30, 2018		Adjustments			Opening Balance as of July 1, 2018
Assets:
Accounts receivable, net	$	50,609	$	4,935		$	55,544
Inventories, net	$	50,994	$	(4,167	)	$	46,827
Other long-term assets, net	$	9,786	$	(177	)	$	9,609
Stockholders' Equity:
Retained earnings	$	15,124	$	591		$	15,715

Page 8

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, “Leases.” The amended guidance requires an entity to recognize assets and liabilities that arise from leases. The amended guidance is effective for financial statements issued for fiscal years and interim periods within those years, beginning after December 15, 2018, or the Company’s fiscal year 2020, with early adoption permitted. The Company has an implementation team tasked with reviewing our lease obligations and determining the impact of the new standard to its financial statements. The implementation team has completed a qualitative assessment of the Company’s active leases and is compiling related data in a central repository. The Company will continue to evaluate the new standard’s impact to its financial statements.  

Subsequent Events:

The Company has evaluated subsequent events for potential recognition and disclosure through the date the consolidated financial statements were filed.  No items were identified during this evaluation that required adjustment to or disclosure in the accompanying financial statements other than noted below.

On January 16, 2019, the Company appointed Michael C. Beck as the Company’s Senior Vice President - Operations. Mr. Beck entered into an Employment Offer Letter as of January 11, 2019 which provides that his employment with the Company shall begin on February 11, 2019. The Employment Offer Letter also defines his compensation and benefit package.

Reclassifications:

Certain prior year amounts have been reclassified to conform to the current year presentation within the cash flows from operating activities section and cash flows from financing activities section of the statement of cash flows. These reclassifications have no impact on net income or earnings per share.

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. The Company’s two operating segments are Lighting and Graphics, with one executive team under the new organizational structure reporting directly to the CODM with responsibilities for managing each segment. Corporate and Eliminations, which captures the Company’s corporate administrative activities, is also reported in the segment information.

The Lighting Segment includes outdoor and indoor lighting utilizing both traditional and LED light sources that have been fabricated and assembled for the Company’s markets, primarily petroleum / convenience stores, automotive dealerships, quick-service restaurants, grocery and pharmacy store, and retail/national accounts. The Company also addresses lighting product customers through the commercial industrial, stock and flow, and renovation channels. The Lighting Segment also includes the design, engineering, and manufacturing of electronic circuit boards, assemblies and sub-assemblies used to manufacture certain LED light fixtures and sold directly to customers.

The Graphics Segment designs, manufactures and installs exterior and interior visual image elements such as traditional graphics, interior branding, electrical and architectural signage, active digital signage along with the management of media content related to digital signage, LED video screens, and menu board systems that are either digital or traditional by design. These products are used in visual image programs in several markets including, but not limited to 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 Company’s corporate administration activities are reported in the Corporate and Eliminations line item.  These activities primarily include 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, equity compensation expense for various equity awards 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 (if any), and deferred income taxes.

There was no concentration of consolidated net sales in the three and six months ended December 31, 2018 or 2017.  There was no concentration of accounts receivable at December 31, 2018 or June 30, 2018.

Page 9

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of December 31, 2018 and December 31, 2017:

	Three Months Ended						Six Months Ended
(In thousands)	December 31						December 31
	2018			2017			2018			2017
Net Sales:
Lighting Segment	$	63,654		$	69,174		$	125,086		$	137,602
Graphics Segment		25,887			23,131			49,412			42,169
	$	89,541		$	92,305		$	174,498		$	179,771
Operating (Loss) Income:
Lighting Segment	$	(18,452	)	$	5,275		$	(14,602	)	$	(17,655	)
Graphics Segment		861			2,255			3,248			3,731
Corporate and Eliminations		(2,680	)		(2,983	)		(5,983	)		(6,343	)
	$	(20,271	)	$	4,547		$	(17,337	)	$	(20,267	)
Capital Expenditures:
Lighting Segment	$	588		$	499		$	864		$	760
Graphics Segment		249			157			515			339
Corporate and Eliminations		94			36			200			91
	$	931		$	692		$	1,579		$	1,190
Depreciation and Amortization:
Lighting Segment	$	1,952		$	1,885		$	3,942		$	3,786
Graphics Segment		397			384			792			763
Corporate and Eliminations		243			283			501			575
	$	2,592		$	2,552		$	5,235		$	5,124

	December 31, 2018		June 30, 2018
Identifiable Assets:
Lighting Segment	$	152,586	$	172,799
Graphics Segment		46,878		39,881
Corporate and Eliminations		25,614		16,837
	$	225,078	$	229,517

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.

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				Six Months Ended
	December 31				December 31
(In thousands)	2018		2017		2018		2017
Lighting Segment inter-segment net sales	$	870	$	992	$	1,279	$	1,707
Graphics Segment inter-segment net sales	$	44	$	1,040	$	75	$	1,071

The Company’s operations are located solely within North America. As a result, the geographic distribution of the Company’s net sales and long-lived assets originate within North America.

Page 10

NOTE 4 - EARNINGS PER COMMON SHARE

The following table presents the amounts used to compute basic and diluted earnings per common share, as well as the effect of dilutive potential common shares on weighted average shares outstanding (in thousands, except per share data):

	Three Months Ended						Six Months Ended
	December 31						December 31
	2018			2017			2018			2017
BASIC EARNINGS PER SHARE
Net (loss)	$	(15,782	)	$	(1,468	)	$	(14,033	)	$	(17,097	)
Weighted average shares outstanding during the period, net of treasury shares (a)		25,838			25,551			25,795			25,528
Weighted average vested restricted stock units outstanding		33			63			43			52
Weighted average shares outstanding in the Deferred Compensation Plan during the period		212			244			220			244
Weighted average shares outstanding		26,083			25,858			26,058			25,824
Basic loss per share	$	(0.61	)	$	(0.06	)	$	(0.54	)	$	(0.66	)
DILUTED EARNINGS PER SHARE
Net (loss)	$	(15,782	)	$	(1,468	)	$	(14,033	)	$	(17,097	)
Weighted average shares outstanding
Basic		26,083			25,858			26,058			25,824
Effect of dilutive securities (b):
Impact of common shares to be issued under stock option plans, and contingently issuable shares, if any		--			--			--			--
Weighted average shares outstanding (c)		26,083			25,858			26,058			25,824
Diluted (loss) per share	$	(0.61	)	$	(0.06	)	$	(0.54	)	$	(0.66	)

(a) Includes shares accounted for like treasury stock.

(b) Calculated using the “Treasury Stock” method as if dilutive securities were exercised and the funds were used to purchase common shares at the average market price during the period.

(c) Options to purchase 3,536,732 common shares and 3,569,762 common shares for the three months ended December 31, 2018 and 2017, respectively, were not included in the computation of the three month diluted loss per share because the exercise price was greater than the average fair market value of the common shares. Additionally, options to purchase 3,356,101 common shares and 3,549,705 common shares for the six months ended at December 31, 2018 and 2017, respectively, were not included in the computation of the six month diluted loss per share because the exercise price was greater than the average fair market value of the common shares. For the three months ended and the six months ended in December 31, 2018 and December 31, 2017, the effect of dilutive securities was not included in the calculation of diluted loss per share because there was a net loss for the period.

Page 11

NOTE 5 - INVENTORIES

The following information is provided as of the dates indicated:

	December 31,		June 30,
(In thousands)	2018		2018
Inventories:
Raw materials	$	33,467	$	31,795
Work-in-process		2,116		3,833
Finished goods		18,510		15,366
Total Inventories	$	54,093	$	50,994

NOTE 6 - ACCRUED EXPENSES

The following information is provided as of the dates indicated:

	December 31,		June 30,
(In thousands)	2018		2018
Accrued Expenses:
Compensation and benefits	$	6,842	$	9,394
Customer prepayments		1,476		1,070
Accrued sales commissions		1,702		2,274
Accrued warranty		7,136		6,876
Other accrued expenses		6,574		4,658
Total Accrued Expenses	$	23,730	$	24,272

NOTE 7 - 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, no 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 to 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 fair value measurements of the reporting units are based on significant inputs not observable in the market and thus represent Level 3 measurements as defined by ASC 820 “Fair Value Measurements.”  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. 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 second quarter of fiscal 2019 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 December 31, 2018. In accordance with ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” which was adopted in a prior period, the requirement to perform step 2 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 $20,165,000.

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, 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
Goodwill Impairment	$	(20,165	)	$	--		$	(20,165	)
Balance as of December 31, 2018
Goodwill	$	94,564		$	28,690		$	123,254
Accumulated impairment losses		(85,356	)		(27,525	)		(112,881	)
Goodwill, net as of December 31, 2018	$	9,208		$	1,165		$	10,373

Page 12

The following table presents the gross carrying amount and accumulated amortization by each major asset class:

	December 31, 2018
Other Intangible Assets	Gross
(In thousands)	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	35,563	$	11,040	$	24,523
Patents		338		231		107
LED technology firmware, software		16,066		12,083		3,983
Trade name		2,658		664		1,994
Total Amortized Intangible Assets		54,625		24,018		30,607
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	$	58,047	$	24,018	$	34,029

	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
Total Amortized Intangible Assets		54,625		22,638		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	$	58,047	$	22,638	$	35,409

Amortization expense for intangible assets was $689,000 and $690,000 for the three months ended December 31, 2018 and 2017, respectively, and $1,380 and $1,380 for the six months ended December 31, 2018 and 2017, respectively. Future amortization expense (in thousands) associated with these intangible assets is expected to be $2,761 in 2019, $2,687 in 2020, $2,682 in 2021, $2,460 in 2022, $2,412 in 2023, and $18,985 after 2023.

NOTE 8 - REVOLVING LINE OF CREDIT

In February 2017, the Company amended its secured line of credit to a $100 million facility. The line of credit expires in the third quarter of fiscal 2022. Interest on the revolving line of credit is charged based upon an increment over the LIBOR rate as periodically determined, or at the bank’s base lending rate, at the Company’s option.  The increment over the LIBOR borrowing rate, as periodically determined, fluctuates between 125 and 250 basis points depending upon the ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined in the line of credit agreement. The increment over LIBOR borrowing rate will be 200 basis points for the third quarter. The fee on the unused balance of the $100 million committed line of credit is 20 basis points.  Under the terms of this line of credit, the Company has agreed to a negative pledge of real estate assets and is required to comply with financial covenants that limit the ratio of indebtedness to EBITDA and require a minimum fixed charge coverage ratio. As of December 31, 2018, there was $48.4 million borrowed against the line of credit, and $51.6 million was available as of that date. Based on the terms of the line of credit and the maturity date, the debt has been classified as long term.

Page 13

The Company is in compliance with all of its loan covenants as of December 31, 2018.

NOTE 9 - CASH DIVIDENDS

The Company paid cash dividends of $2,587,000 and $2,564,000 in the six months ended December 31, 2018 and 2017, respectively. Dividends on restricted stock units in the amount of $34,631 and $38,463 were accrued as of December 31, 2018 and 2017, respectively. These dividends will be paid upon the vesting of the restricted stock units when shares are issued to the award recipients. In January 2019, the Board of Directors declared a regular quarterly cash dividend of $0.05 per share payable February 12, 2019 to shareholders of record as of February 4, 2019. The indicated annual cash dividend rate is $0.20 per share.

NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION

(In thousands)	Six Months Ended December 31
	2018		2017
Cash payments:
Interest	$	1,133	$	767
Income taxes	$	3	$	1,232
Non-cash investing and finance activities:
Issuance of common shares as compensation	$	180	$	156
Issuance of common shares to fund deferred compensation plan	$	190	$	261

NOTE 11 - COMMITMENTS AND CONTINGENCIES

The Company is party to various negotiations, customer bankruptcies, and legal proceedings arising in the normal course of business. The Company provides reserves for these matters when a loss is probable and reasonably estimable. The Company does not disclose a range of potential loss because the likelihood of such a loss is remote. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations, cash flows or liquidity.

The Company may occasionally issue a standby letter of credit in favor of third parties. As of December 31, 2018, there were no standby letter of credit agreements.

NOTE 12 – SEVERANCE COSTS

The Company recorded severance expense of $492,000 and $83,000 in the six months ended December 31, 2018 and 2017, respectively. This severance expense was related to reductions in staffing not related to plant restructuring. See further discussion of restructuring expenses in Note 13.

The activity in the Company’s accrued severance liability is as follows for the periods indicated:

	Six			Six			Fiscal
	Months Ended			Months Ended			Year Ended
(In thousands)	December 31,			December 31,			June 30,
	2018			2017			2018
Balance at beginning of the period	$	1,772		$	235		$	235
Accrual of expense		492			83			1,900
Payments		(549	)		(218	)		(363	)
Adjustments		--			(14	)		--
Balance at end of the period	$	1,715		$	86		$	1,772

Of the total $1,715,000 severance reserve reported as of December 31, 2018, $869,000 has been classified as a current liability and will be paid out over the next twelve months. The remaining $846,000 has been classified as a long-term liability.

Page 14

NOTE 13 – RESTRUCTURING COSTS

On October 29, 2018, the Company announced plans to close its lighting facility in New Windsor, New York. The closure is part of ongoing actions to align the Company’s supply chain to more cost effectively serve the changing requirements of the lighting market. The Company will move production to its other existing facilities. The closure will allow the Company to improve utilization of existing manufacturing capacity, and will generate annual savings of approximately $4.0 million. The Company will record an estimated range of restructuring costs of $0.8 million to $1.5 million mostly over the next two quarters and up until the time the facility is ultimately sold.  The transfer of production is expected to be completed by June 30, 2019. As of December 31, 2018, the Company has incurred restructuring costs of $401,000 related to the closure of the New Windsor facility. The Company also incurred $919,000 of expense to write-down inventory which is not included in the tables below.

In the first quarter of fiscal 2019, management approved the closure of its 12,000 square foot leased facility in Hawthorne, California. The facility was used as a warehouse and for light assembly of light fixtures. The Company has moved the light assembly to its Blue Ash, Ohio facility. The restructuring charges consist primarily of transportation costs to move inventory to Blue Ash, the impairment of equipment, costs to restore the leased facility, and severance benefits. As of December 31, 2018, the Company has incurred restructuring costs of $155,000 related to the closure of the Hawthorne facility. The Company also incurred $148,000 of expense to write-down inventory which is a re-valuation of the previous estimate and which is not included in the tables below.

The following table presents information about restructuring costs for the periods indicated:

	Three		Six Months		Three		Six Months
	Months Ended		Ended		Months Ended		Ended
(In thousands)	December 31,		December 31,		December 31,		December 31,
	2018		2018		2017		2017
Severance and other termination benefits	$	202	$	221	$	--	$	--
Facility repairs		7		47		--		--
Impairment of fixed assets and accelerated depreciation		185		228		--		--
Other restructuring costs		7		60		--		--
Total	$	401	$	556	$	--	$	--

The following table presents restructuring costs incurred by line item in the consolidated statement of operations in which the costs are included:

	Three Months Ended		Six Months Ended
(In thousands)	December 31		December 31
	2018		2018
Cost of Goods Sold	$	376	$	531
Operating Expenses		25		25
Total	$	401	$	556

Additionally, the above tables do not include expense of $632,000 and $1,067,000 recorded during the three months ended and during the six months ended December 31, 2018, respectively, related to the write-down of inventory included as cost of sales as part of facility closures.

Page 15

The following table presents a roll forward of the beginning and ending liability balances related to the restructuring costs:

(In thousands)
	Balance as of June 30, 2018		Restructuring Expense		Payments			Adjustments		Balance as of December 31, 2018
Severance and termination benefits	$	--	$	221	$	(21	)	$	--	$	200
Facility Repairs		--		47		(8	)		--		39
Other restructuring costs		--		60		(52	)		--		8
Total	$	--	$	328	$	(81	)	$	--	$	247

The above table does not include fixed asset impairment and accelerated depreciation expense of $228,000 recorded in the first six months of fiscal 2019.

Refer to Note 12 for information regarding additional severance expenses that are not included in the restructuring costs identified in this footnote.

NOTE 14 – INCOME TAXES

The Company's effective income tax rate is based on expected income, statutory rates and tax planning opportunities available in the various jurisdictions in which it operates. For interim financial reporting, the Company estimates the annual income tax rate based on projected taxable income for the full year and records a quarterly income tax provision or benefit in accordance with the anticipated annual rate. The Company refines the estimates of the year's taxable income as new information becomes available, including actual year-to-date financial results. This continual estimation process often results in a change to the expected effective income tax rate for the year. When this occurs, the Company adjusts the income tax provision during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the expected income tax rate. Significant judgment is required in determining the effective tax rate and in evaluating tax positions. In the second quarter of fiscal 2019, a deferred tax asset of $4.8 million was created as a result of the impairment of goodwill in the Lighting reporting unit. In the first quarter of fiscal 2018, a deferred tax asset of $10.7 million was created as a result of the impairment of goodwill in the Lighting reporting unit.

The Tax Cuts and Jobs Act (the “Act”) was signed into law in December 2017 and makes numerous changes to the Internal Revenue Code. Among other changes, the Act reduces the U.S. corporate income tax rate to 21% effective January 1, 2018. Because the Act became effective mid-way through the Company’s fiscal 2018 tax year, the Company had a U.S. statutory income tax rate of 34% in the first quarter of fiscal 2018, before the new tax law was enacted, and will have a 21% U.S statutory income tax rate for fiscal years 2019 and after.

	Three Months Ended						Six Months Ended
	December 31						December 31
	2018			2017			2018			2017
Reconciliation to effective tax rate:
Provision for income taxes at the anticipated annual tax rate		23.0	%		28.9	%		23.0	%		28.9	%
Enactment of tax law changes		--			111.2			--			(22.2	)
Uncertain tax positions		0.8			(4.8	)		0.8			0.5
Difference between deferred and current tax rate related to the impairment of goodwill		0.6			--			0.7			12.1
Tax impact related to share based compensation		--			0.3			(0.5	)		(0.4	)
Effective tax rate		24.4	%		135.6	%		24.0	%		18.9	%

Page 16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company’s condensed consolidated financial statements, accompanying notes and the “Safe Harbor” Statement, each as appearing earlier in this report, should be referred to in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Net Sales by Business Segment
(In thousands)	Three Months Ended				Six Months Ended
	December 31				December 31
	2018		2017		2018		2017
Lighting Segment	$	63,654	$	69,174	$	125,086	$	137,602
Graphics Segment		25,887		23,131		49,412		42,169
	$	89,541	$	92,305	$	174,498	$	179,771

Operating (Loss) Income by Business Segment
(In thousands)	Three Months Ended						Six Months Ended
	December 31						December 31
	2018			2017			2018			2017
Lighting Segment	$	(18,452	)	$	5,275		$	(14,602	)	$	(17,655	)
Graphics Segment		861			2,255			3,248			3,731
Corporate and Eliminations		(2,680	)		(2,983	)		(5,983	)		(6,343	)
	$	(20,271	)	$	4,547		$	(17,337	)	$	(20,267	)

Summary Comments

We are in the business of designing, manufacturing and marketing lighting, graphics and technology solutions for both indoor and outdoor applications. Historically, sales of our products have been subject to cyclical variations caused by competitive pressures that affect selling prices, changes in general economic conditions, and other factors. Our operating results in the fiscal 2019 second quarter reflect the continued softness and competitiveness in both our project and stock and flow markets, a shift in focus to pursue higher value-add customer opportunities, a mix of new larger customers, a shift in product mix, and pricing below prior year levels for the quarter driven by select price moves in key vertical markets and meeting specific competitive levels. This combination of factors resulted in lower gross margins and operating earnings compared to prior year. The cyclical nature of our business could continue to adversely affect our liquidity and financial results.

Fiscal 2019 second quarter net sales of $89,541,000 decreased $2.8 million or 3% as compared to second quarter fiscal 2018 net sales of $92,305,000. Net sales were favorably influenced by increased net sales of the Graphics Segment (up $2.8 million or 12%) more than offset by decreased net sales of the Lighting Segment (down $5.5 million or 8%).

Fiscal 2019 first half net sales of $174,498,000 decreased $5.3 million or 3% as compared to first half fiscal 2018 net sales of $179,771,000. Net sales were favorably influenced by increased net sales of the Graphics Segment (up $7.2 million or 17%) more than offset by decreased net sales of the Lighting Segment (down $12.5 million or 9%).

Fiscal 2019 second quarter operating loss of $(20.3) million represents a $24.8 million change from operating income of $4.6 million in the second quarter of fiscal 2018. The $24.8 million change from operating income in fiscal 2018 to an operating loss in fiscal 2019 was mostly the result of a pre-tax $20.2 million goodwill impairment charge in the Lighting Segment in the second quarter of fiscal 2019. Adjusted fiscal 2019 second quarter operating income of $1.5 million decreased $3.1 million or 66% from adjusted fiscal 2018 operating income of $4.6 million. Refer to “Non-GAAP Financial Measures” below. The decrease in adjusted operating income was the result of decreased net sales and decreased gross profit slightly offset by a decrease in selling and administrative expenses.

Fiscal 2019 first half operating loss of $(17.3) million represents a $2.9 million improvement from an operating loss of $(20.3) million in the first half of fiscal 2018. Both fiscal years recorded goodwill impairment charges in the Lighting Segment. There was a $20.2 million goodwill impairment charge in fiscal 2019 and a $28 million goodwill impairment charge in fiscal 2018. Adjusted first half fiscal 2019 operating income of $5.1 million decreased $2.8 million or 35% from adjusted fiscal 2018 operating income of $7.8 million. Refer to “Non-GAAP Financial Measures” below. The decrease in adjusted operating income was the result of decreased net sales and decreased gross profit slightly offset by a decrease in selling and administrative expenses. Also contributing to the period-over-period results is a one-time adjustment to the Company’s paid-time-off policy in fiscal 2019 which resulted in a favorable pre-tax adjustment to earnings of $1.2 million.    

Page 17

Non-GAAP Financial Measures

The Company believes it is appropriate to evaluate its performance after making adjustments to the as-reported U.S. GAAP operating income, net income, and earnings per share. Adjusted operating income, net income and earnings per share, which exclude the impact of goodwill impairment, severance costs, transition and re-alignment costs, and restructuring and plant closure costs, are non-GAAP financial measures. We believe that these adjusted supplemental measures are useful in assessing the operating performance of our business. These supplemental measures are used by our management, including our chief operating decision maker, to evaluate business results. We exclude these items because they are not representative of the ongoing results of operations of our business. Below is a reconciliation of these non-GAAP measures to operating income, net income, and earnings per share for the periods indicated.

(in thousands, unaudited)	Second Quarter
	FY 2019			FY 2018
Reconciliation of operating (loss) income to adjusted operating income:
Operating (loss) income as reported	$	(20,271	)	$	4,547
Adjustment for goodwill impairment		20,165			--
Adjustment for severance cost		492			83
Adjustment for transition and re-alignment costs		120			--
Adjustment for restructuring, plant closure costs, and related inventory write-downs		1,033			--
Adjusted operating income	$	1,539		$	4,630

(in thousands, except per share data; unaudited)	Second Quarter
	FY 2019			Diluted EPS			FY 2018			Diluted EPS
Reconciliation of net loss to adjusted net income:
Net (loss) and (loss) per share as reported	$	(15,782	)	$	(0.61	)	$	(1,468	)	$	(0.06	)
Adjustment for goodwill impairment, inclusive of the income tax effect		15,361	(1)		0.60			--			--
Adjustment for severance costs, inclusive of the income tax effect		385	(2)		0.01			59	(5)		--
Adjustment for transition and re-alignment costs, inclusive of the income tax effect		94	(3)		--			--			--
Tax impact from the reduction of the deferred tax assets		--			--			4,676			0.18
Adjustment for restructuring, plant closure costs, and related inventory write-downs inclusive of the income tax effect		817	(4)		0.03			--			--
Adjusted net income and earnings per share	$	875		$	0.03		$	3,267		$	0.12

The income tax effects of the adjustments in the tables above were calculated using the estimated U.S. effective income tax rates for the periods indicated. The income tax effects were as follows (in thousands):

⁽¹⁾ 4,804

⁽²⁾ 107

⁽³⁾ 26

⁽⁴⁾ 216

⁽⁵⁾ 24

Page 18

(in thousands, unaudited)	First Half
	FY 2019			FY 2018
Reconciliation of operating loss to adjusted operating income:
Operating (loss) as reported	$	(17,337	)	$	(20,267	)
Adjustment for goodwill impairment		20,165			28,000
Adjustment for severance cost		492			83
Adjustment for transition and re-alignment costs		120			--
Adjustment for restructuring, plant closure costs, and related inventory write-downs		1,623			--
Adjusted operating income	$	5,063		$	7,816

(in thousands, except per share data; unaudited)	First Half
	FY 2019			Diluted EPS			FY 2018			Diluted EPS
Reconciliation of net loss to adjusted net income:
Net (loss) and (loss) per share as reported	$	(14,033	)	$	(0.54	)	$	(17,097	)	$	(0.66	)
Adjustment for goodwill impairment, inclusive of the income tax effect		15,361	(1)		0.60			17,361	(5)		0.67
Adjustment for severance costs, inclusive of the income tax effect		385	(2)		0.01			59	(6)		--
Adjustment for transition and re-alignment costs, inclusive of the income tax effect		94	(3)		--			--			--
Tax impact from the reduction of the deferred tax assets		--			--			4,676			0.18
Adjustment for restructuring, plant closure costs, and related inventory write-downs inclusive of the income tax effect		1,271	(4)		0.05			--			--
Adjusted net income and earnings per share	$	3,078		$	0.12		$	5,001		$	0.19

The reconciliation of reported net income and earnings per share to adjusted net income and earnings per share may not agree due to rounding differences and due to the difference between basic and dilutive weighted average shares outstanding in the computation of earnings per share

The income tax effects of the adjustments in the tables above were calculated using the estimated U.S. effective income tax rates for the periods indicated. The income tax effects were as follows (in thousands):

⁽¹⁾ 4,804

⁽²⁾ 107

⁽³⁾ 26

⁽⁴⁾ 352

⁽⁵⁾ 10,639

⁽⁶⁾ 24

Page 19

Results of Operations

THREE MONTHS ENDED DECEMBER 31, 2018 COMPARED TO THREE MONTHS ENDED DECEMBER 31, 2017

Lighting Segment

(In thousands)	Three Months Ended
	December 31
	2018			2017
Net Sales	$	63,654		$	69,174
Gross Profit	$	4,742		$	19,259
Operating (Loss) Income	$	(18,452	)	$	5,275

Lighting Segment net sales of $63,654,000 in the second quarter of fiscal 2019 decreased 8% from fiscal 2018 same period net sales of $69,174,000. The 8% drop in sales is attributed to continued softness and competitiveness in the Company’s project and stock and flow markets.

Gross profit of $14,742,000 in the second quarter of fiscal 2019 decreased $4.5 million or 23% from the same period of fiscal 2018, and decreased from 27.4% to 22.8% as a percentage of Lighting Segment net sales (customer plus inter-segment net sales). The Company incurred restructuring and plant closure costs that were recorded in cost of sales related to the closure of its New Windsor, New York facility of $1,008,000 in fiscal 2019 with no comparable costs in fiscal 2018. The remaining decrease in amount of gross profit is due to the effect of reduced sales volume, competitive pricing pressures, and inflationary pressures of certain commodities, partially offset by manufacturing efficiencies as a result of the Company’s lean initiatives.

Selling and administrative expenses of $33,194,000 in the second quarter of fiscal year 2019 increased $19.2 million from the same period of fiscal 2018 selling and administrative expenses of $13,984,000, primarily due to the $20.2 million goodwill impairment charge in the second quarter of fiscal 2019. When the goodwill impairment charge is removed from fiscal 2019 results, there was a $1.0 million or 7% reduction in selling and administrative expenses. The reduction in selling and administrative expenses is mostly driven by lower commission expense due to lower sales volume.

The Lighting Segment second quarter fiscal 2019 operating loss of $(18,452,000) decreased $23.7 million from operating income of $5,275,000 in the same period of fiscal 2018 primarily due to a $20.2 million pre-tax goodwill impairment charge. When the impact of the goodwill charge and the restructuring and plant closure costs of $1,033,000 ($1,008,000 in cost of sales and $25,000 in selling and administrative expenses) are removed from the fiscal 2019 results, fiscal 2019 adjusted operating income of $2,929,000 was $2.3 million lower than fiscal 2018 adjusted operating income of $5,275,000. The reduction in sales volume and gross profit was partially offset by lower selling and administrative expenses.

Graphics Segment

(In thousands)	Three Months Ended
	December 31
	2018		2017
Net Sales	$	25,887	$	23,131
Gross Profit	$	4,927	$	6,046
Operating Income	$	861	$	2,255

Graphics Segment net sales of $25,887,000 in the second quarter of fiscal 2019 increased $2.8 million or 12% from fiscal 2018 same period net sales of $23,131,000. Most of the increase in sales is from growth in sales to the Petroleum market.

Gross profit of $4,927,000 in the second quarter of fiscal 2019 decreased $1.1 million or 19% from the same period of fiscal 2018. Gross profit as a percentage of segment net sales (customer plus inter-segment net sales) decreased from 25% in the second quarter of fiscal 2018 to 19% in the second quarter of fiscal 2019. The reduction in gross profit on higher sales is partially due to a mix shift to large customers in both the print and digital technology applications. These large projects, with lengthy life cycles, are competitive and initially generate lower margins. The business will work to improve the margins on these projects over its life cycle.  

Selling and administrative expenses of $4,066,000 in the second quarter of fiscal 2019 increased $0.3 million or 7% from the same period of fiscal 2018 primarily as a result of an increase in outside service expense and bad debt expense.

Page 20

The Graphics Segment second quarter fiscal 2019 operating income of $861,000 decreased $1.4 million or 62% from operating income of $2,255,000 in the same period of fiscal 2018. The decrease of $1.4 million was primarily the net result of a shift in customer mix on higher sales and an increase in selling and administrative expenses.

Corporate and Eliminations

(In thousands)	Three Months Ended
	December 31
	2018			2017
Gross (Loss) Profit	$	(13	)	$	2
Operating (Loss)	$	(2,680	)	$	(2,983	)

The gross (loss) profit relates to the change in the intercompany profit in inventory elimination.

Administrative expenses of $2,667,000 in the second quarter of fiscal 2019 decreased $0.3 million from the same period of the prior year. The change is primarily the result of a reduction in wage and benefit expense partially offset by an increase in legal and professional fees.

Consolidated Results

The Company reported $615,000 net interest expense in the second quarter of fiscal 2019 compared to $417,000 net interest expense in the second quarter of fiscal 2018. The change in interest expense from fiscal 2018 to fiscal 2019 is the result of higher interest rates on the Company’s line of credit and higher commitment fees on its unused portion of the line of credit.

The $5,104,000 income tax benefit in the second quarter of fiscal 2019 represents a consolidated effective tax rate of 24.4%, which is slightly higher than the expected annual rate of 23% due to the goodwill impairment. The second quarter FY 2018 effective tax rate of 135.6% and income tax expense of $5,598,000 was caused by a $4.7 million re-valuation of the Company’s deferred tax assets for the US tax rate change on the enactment date of the Tax Cut and Jobs Act in the quarter.

The Company reported a net loss of $(15,782,000) in the second quarter of fiscal 2019 compared to net loss of $(1,468,000) in the same period of the prior year. The change in the net loss in fiscal 2018 to the net loss in the second quarter of fiscal 2019 is mostly driven by the $20.2 million goodwill impairment charge in the second quarter of fiscal 2019 with no comparable charge in the second quarter of fiscal 2018. Also contributing to the quarter-over-quarter change is a $4.7 million charge in the second quarter of fiscal 2018 related to the re-valuation of the Company’s deferred tax assets with no comparable charge in fiscal 2019. To a lesser degree, there were other non-GAAP charges in both fiscal years besides the goodwill impairment and the re-valuation of the deferred tax assets impacting the comparable quarter-over-quarter results (refer to the non-GAAP tables above.) When the impact of all non-GAAP charges is removed from both fiscal years, the fiscal 2019 adjusted net income of $875,000 decreased $2.4 million from fiscal 2018 adjusted net income of $3,267,000. The change in adjusted net income is primarily the net result of decreased net sales, decreased gross profit, decreased selling and administrative expenses, increased interest expense, and a lower tax rate. Diluted loss per share of $(0.61) was reported in the second quarter of fiscal 2019 as compared to $(0.06) diluted loss per share in the same period of fiscal 2018. The weighted average common shares outstanding for purposes of computing diluted earnings per share in the second quarter of fiscal 2019 were 26,083,000 shares as compared to 25,858,000 shares in the same period last year.

Page 21

SIX MONTHS ENDED DECEMBER 31, 2018 COMPARED TO SIX MONTHS ENDED DECEMBER 31, 2017

Lighting Segment

(In thousands)	Six Months Ended
	December 31
	2018			2017
Net Sales	$	125,086		$	137,602
Gross Profit	$	30,217		$	37,932
Operating (Loss)	$	(14,602	)	$	(17,655	)

Lighting Segment net sales of $125,086,000 in the second half of fiscal 2019 decreased 9% from fiscal 2018 same period net sales of $137,602,000. The 9% drop in sales is attributed to continued softness and competitiveness in the Company’s project and stock and flow markets.

Gross profit of $30,217,000 in the first half of fiscal 2019 decreased $7.7 million or 20% from the same period of fiscal 2018 and decreased from 27.2% to 23.9% as a percentage of Lighting Segment net sales (customer plus inter-segment net sales). The Company incurred restructuring and plant closure costs that were recorded in cost of sales related to the closure of its Hawthorne, California and New Windsor, New York facilities of $1,598,000 in fiscal 2019 with no comparable costs in fiscal 2018. The remaining decrease in amount of gross profit is due to the effect of reduced sales volume, competitive pricing pressures, and inflationary pressures of certain commodities, partially offset by manufacturing efficiencies as a result of the Company’s lean initiatives.

Selling and administrative expenses of $44,819,000 in the first half of fiscal year 2019 decreased $10.8 million from the same period of fiscal 2018 selling and administrative expenses of $55,587,000, primarily due to the $20.2 million and $28 million goodwill impairment charges in the first half of fiscal 2019 and fiscal 2018 respectively. When the goodwill impairment charges are removed from both fiscal year results, there was a $2.9 million or 12% reduction in selling and administrative expenses. The reduction in selling and administrative expenses is mostly driven by lower commission expense which is due to lower sales volume.

The Lighting Segment first half fiscal 2019 operating loss of $(14,602,000) increased $3.1 million from an operating loss of $(17,655,000) in the same period of fiscal 2018 primarily due to a $20.2 million pre-tax goodwill impairment charge in fiscal 2019 compared to a $28 million pre-tax goodwill impairment charge in fiscal 2018. When the goodwill impairment charges and the restructuring charges of $1,623,000 ($1,598,000 in cost of sales and $25,000 in selling and administrative expenses) are removed from both fiscal years, fiscal 2019 adjusted operating income of $7,369,000 was $3.0 million lower than fiscal 2018 adjusted operating income of $10,345,000. The reduction in sales volume and gross profit was partially offset by lower selling and administrative expenses.

Graphics Segment

(In thousands)	Six Months Ended
	December 31
	2018		2017
Net Sales	$	49,412	$	42,169
Gross Profit	$	10,709	$	11,109
Operating Income	$	3,248	$	3,731

Graphics Segment net sales of $49,412,000 in the first half of fiscal 2019 increased $7.2 million or 17% from fiscal 2018 same period net sales of $42,169,000. Most of the increase in sales is from growth in sales to the Petroleum and Quick Service Restaurant markets including digital technology.

Gross profit of $10,709,000 in the first half of fiscal 2019 decreased $0.4 million or 4% from the same period of fiscal 2018. Gross profit as a percentage of segment net sales (customer plus inter-segment net sales) decreased from 25.7% in the second quarter of fiscal 2018 to 21.6% in the first half of fiscal 2019. The reduction in gross profit on higher sales is partially due to a mix shift to large customers in both the print and digital technology applications. These large projects, with lengthy life cycles, are competitive and initially generate lower margins. The business will work to improve the margins on these projects over its life cycle.  

Selling and administrative expenses of $7,461,000 in the first half of fiscal 2019 increased $0.1 million or 1% from the same period of fiscal 2018. A reduction in wage and benefit was offset by an increase in bad debt expense and outside service expense.

Page 22

The Graphics Segment first half fiscal 2019 operating income of $3,248,000 decreased $0.5 million or 13% from operating income of $3,731,000 in the same period of fiscal 2018. The decrease of $0.5 million was primarily the net result of a shift in customer mix on higher sales and a modest increase in selling and administrative expenses.

Corporate and Eliminations

(In thousands)	Six Months Ended
	December 31
	2018			2017
Gross (Loss)	$	(9	)	$	(31	)
Operating (Loss)	$	(5,983	)	$	(6,343	)

The gross (loss) relates to the change in the intercompany profit in inventory elimination.

Administrative expenses of $5,974,000 in the first half of fiscal 2019 decreased $0.3 million from the same period of the prior year. The change is primarily the result of a reduction in wage and benefit expense partially offset by an increase in legal and professional fees.

Consolidated Results

The Company reported $1,133,000 net interest expense in the first half of fiscal 2019 compared to $820,000 net interest expense in the first half of fiscal 2019. The change in interest expense from fiscal 2018 to fiscal 2019 is the result of higher interest rates on the Company’s line of credit and higher commitment fees on its unused portion of the line of credit.

The $4,437,000 income tax benefit in the first half of fiscal 2019 represents a consolidated effective tax rate of 24.0%, which is slightly higher than the expected annual rate of 23% due to the goodwill impairment. The first half  FY 2018 effective tax rate of 18.9% and income tax benefit of $3,990,000 was most notably influenced by the first quarter goodwill impairment partially offset by a $4.7 million re-valuation of the Company’s deferred tax assets for the US tax rate change on the enactment date of the Tax Cut and Jobs Act.

The Company reported a net loss of $(14,033,000) in the first half of fiscal 2019 compared to net loss of $(17,097,000) in the same period of the prior year. The change from the net loss in fiscal 2018 to the net loss in the second half of fiscal 2019 is mostly driven by the $20.2 million and the $28 million goodwill impairment charges in the first of fiscal 2019 and fiscal 2018, respectively. Also contributing to the year-over-year change is a $4.7 million charge in the first half of fiscal 2018 related to the re-valuation of the Company’s deferred tax assets with no comparable charge in fiscal 2019. To a lesser degree, there were other non-GAAP charges in both fiscal years besides the goodwill impairment and the re-valuation of the deferred tax assets impacting the comparable year-over-year results. (Refer to the non-GAAP tables above.) When the impact of all non-GAAP charges is removed from both fiscal years, the fiscal 2019 adjusted net income of $3,078,000 decreased $1.9 million from fiscal 2018 adjusted net income of $5,001,000. The change in adjusted net income is primarily the net result of decreased net sales, decreased gross profit, decreased selling and administrative expenses, increased interest expense, and a larger tax benefit. Diluted loss per share of $(0.54) was reported in the first half of fiscal 2019 as compared to $(0.66) diluted loss per share in the same period of fiscal 2018. The weighted average common shares outstanding for purposes of computing diluted earnings per share in the first half of fiscal 2019 were 26,058,000 shares as compared to 25,824,000 shares in the same period last year.

Liquidity and Capital Resources 

The Company considers its level of cash on hand, borrowing capacity, current ratio and working capital levels to be its most important measures of short-term liquidity. For long-term liquidity indicators, the Company believes its ratio of long-term debt to equity and its historical levels of net cash flows from operating activities to be the most important measures.

At December 31, 2018, the Company had working capital of $74.8 million, compared to $67.9 million at June 30, 2018.  The ratio of current assets to current liabilities was 2.49 to 1 as compared to a ratio of 2.61 to 1 at June 30, 2018.  The $6.9 million increase in working capital from June 30, 2018 to December 31, 2018 was primarily related to the net effect of increased cash and cash equivalents ($6.4 million), increased net accounts receivable ($5.8 million), increased net inventory ($3.1 million), an increase in accrued expenses ($0.7 million), a decrease in refundable income taxes ($0.8 million), and an increase in accounts payable ($8.8 million). Of the $5.8 million increase in accounts receivable, $5.3 million is attributed to the adoption of the new revenue guidance. The Company proactively manages its working capital, including reduction of the accounts receivable days sales outstanding (DSO) and reduction of inventory levels, without reducing service to its customers.

Page 23

The Company generated $7.6 million of cash from operating activities in the first half of fiscal 2019 as compared to a use of cash of $43,000 in the same period of the prior year. This $7.7 million increase in net cash flows from operating activities is primarily the net result of an increase rather than a decrease in accounts payable (favorable change of $11.3 million), a smaller increase in net accounts receivable (favorable change of $9.8 million), an increase rather than a decrease in net inventory (unfavorable change of $9.6 million), a greater decrease in accrued expenses and other (unfavorable change of $1.2 million), and an improvement in net loss from fiscal 2018 to fiscal 2019 more than offset by several non-cash add-backs to the net loss in both fiscal years (unfavorable change of $3.3 million).

Net accounts receivable were $56.4 million and $50.6 million at December 31, 2018 and June 30, 2018, respectively. DSO was 53 days at December 31, 2018 and June 30, 2018. The Company believes that its receivables are ultimately collectible or recoverable, net of certain reserves, and that aggregate allowances for doubtful accounts are adequate.

Net inventories of $54.1 million at December 31, 2018 increased $3.1 million from $51.0 million at June 30, 2018. The increase of $3.1 million is the result of an increase in gross inventory of $3.8 million and an increase in obsolescence reserves of $0.7 million. Based on a strategy of balancing inventory reductions with customer service and the timing of shipments, net inventory increased 4.8 million in the first half of fiscal 2019 in the Graphics Segment which was partially offset by a decrease in net inventory in the Lighting Segment of $1.7 million.

Cash generated from operations and borrowing capacity under the Company’s line of credit is the Company’s primary source of liquidity. The Company has a secured $100 million revolving line of credit with its bank, with $48.4 million of the credit line available as of January 28, 2019. This line of credit is a $100 million five-year credit line expiring in the third quarter of fiscal 2022. The Company believes that its $100 million line of credit plus cash flows from operating activities are adequate for the Company’s fiscal 2019 operational and capital expenditure needs. The Company is in compliance with all of its loan covenants.

The Company used cash of $1.6 million related to investing activities in the first half of fiscal 2019 as compared to a source of $0.3 million in the same period of the prior year, resulting in an unfavorable change of $1.9 million. Capital expenditures for the first half of fiscal 2019 increased $0.4 million to $1.6 million from the same period in fiscal 2018. The Company sold its Woonsocket manufacturing facility for $1.5 million in the first half of fiscal 2018 which contributed to the change in cash flow from investing activities from fiscal 2018 to fiscal 2019.

The Company had a $0.3 million source of cash related to financing activities in the first half of fiscal 2019 compared to a use of cash of $0.2 million in the first half of fiscal 2018. The $0.5 million favorable change in cash flow was primarily the net result of borrowings in excess of payments of long-term debt.

The Company has, or could have, on its balance sheet financial instruments consisting primarily of cash and cash equivalents, short-term investments, revolving lines of credit, and long-term debt. The fair value of these financial instruments approximates carrying value because of their short-term maturity and/or variable, market-driven interest rates.

Off-Balance Sheet Arrangements

The Company has no financial instruments with off-balance sheet risk and has no off-balance sheet arrangements, except for various operating leases. However, none of these operating leases, individually or in the aggregate have or are reasonably likely to have a current effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material.

Cash Dividends

In January 2019, the Board of Directors declared a regular quarterly cash dividend of $0.05 per share payable February 12, 2019 to shareholders of record as of February 4, 2019. The indicated annual cash dividend rate for fiscal 2019 is $0.20 per share. The Board of Directors has adopted a policy regarding dividends which indicates that dividends will be determined by the Board of Directors in its discretion based upon its evaluation of earnings, cash flow requirements, financial condition, debt levels, stock repurchases, future business developments and opportunities, and other factors deemed relevant. 

Page 24

Critical Accounting Policies and Estimates

A summary of the Company’s significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company’s fiscal 2018 Annual Report on Form 10-K.

New Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, “Leases.” The amended guidance requires an entity to recognize assets and liabilities that arise from leases. The amended guidance is effective for financial statements issued for fiscal and interim periods within those years, beginning after December 15, 2018, or the Company’s fiscal 2020, with early adoption permitted. The Company has an implementation team tasked with reviewing our lease obligations and determining the impact of the new standard to its financial statements. The implementation team has completed a qualitative assessment of the Company’s active leases and is compiling related data in a central repository. The Company will continue to evaluate the new standard’s impact on its financial statements. 

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company’s exposure to market risk since June 30, 2018.  Additional information can be found in Item 7A, Quantitative and Qualitative Disclosures About Market Risk, which appears on page 13 of the Annual Report on Form 10-K for the fiscal year ended June 30, 2018.

 ITEM 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as such term is defined Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We conducted, under the supervision of our management, including the Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2018, our disclosure controls and procedures were effective. Management believes that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are fairly presented in all material respects in accordance with GAAP for interim financial statements, and the Company’s Chief Executive Officer and Chief Financial Officer have certified that, based on their knowledge, the condensed consolidated financial statements included in this report fairly present in all material respects the Company’s financial condition, results of operations and cash flows for each of the periods presented in this report.

Changes in Internal Control

During the first six months ended December 31, 2018, the Company enacted additional controls related to the adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2018, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, except as otherwise described in this Item 4.

Page 25

PART II.  OTHER INFORMATION

ITEM 1A.  RISK FACTORS

The following risk factor is added to the risk factors included in Item 1A of Part I of the Company’s Annual Report on Form 10-K:

Our stock price has experienced a significant decline, which could further adversely affect our ability to raise additional capital.

The market price of our common stock has experienced a significant decline from which it has not fully recovered. During the last twelve months, the sales price of our common stock, as reported on the Nasdaq Global Select Market, declined from a high of $8.69 in February 2018 to a low of $3.17 on January 30, 2019. Most recently, on February 1, 2019, the market price of our common stock, as reported on the Nasdaq Global Select Market, closed at a price of $3.20 per share. Our progress in developing and commercializing our products, our quarterly operating results, announcements of new products by us or our competitors, our perceived prospects, changes in general conditions in the economy or the financial markets, adverse events related to our strategic relationships, and other developments affecting us or our competitors could cause the market price of our common stock to fluctuate substantially. In addition, in recent years, including in the first half of fiscal 2019, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant effect on the market prices of securities issued by many companies for reasons unrelated to their operating performance. These market fluctuations, regardless of the cause, may materially and adversely affect our stock price, regardless of our operating results.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

NONE

ITEM 6.  EXHIBITS

Exhibits:

10.1	LSI Industries Inc. Employment Offer Letter with Michael C. Beck dated January 11, 2019 (incorporated by reference from the registrant’s Current Report on Form 8-K filed on January 16, 2019)
31.1	Certification of Principal Executive Officer required by Rule 13a-14(a)

31.2 Certification of Principal Financial Officer required by Rule 13a-14(a)

32.1 Section 1350 Certification of Principal Executive Officer

32.2 Section 1350 Certification of Principal Financial Officer

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LSI Industries Inc.
	By:	/s/ James A. Clark
		James A. Clark
		Chief Executive Officer and President
		(Principal Executive Officer)
	By:	/s/ James E. Galeese
		James E. Galeese
		Executive President and Chief Financial Officer
		(Principal Financial Officer)
February 6, 2019

Page 26

EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer

Pursuant to Rule 13a-14(a)

I, James A. Clark, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of LSI Industries Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)         Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  February 6, 2019	/s/ James A. Clark
	Principal Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of Principal Financial Officer

Pursuant to Rule 13a-14(a)

I, James E. Galeese, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of LSI Industries Inc.;

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)        Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.        The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)        All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  February 6, 2019	/s/ James E. Galeese
	Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF JAMES A. CLARK

Pursuant to Section 1350 of Chapter 63 of the

United States Code and Rule 13a-14b

In connection with the filing with the Securities and Exchange Commission of the Quarterly Report of LSI Industries Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2018 (the “Report”), I, James A. Clark, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James A. Clark

James A. Clark

Chief Executive Officer and President

Date: February 6, 2019

A signed original of this written statement required by Section 906 has been provided to LSI Industries Inc. and will be retained by LSI Industries Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF JAMES E. GALEESE

Pursuant to Section 1350 of Chapter 63 of the

United States Code and Rule 13a-14b

In connection with the filing with the Securities and Exchange Commission of the Quarterly Report of LSI Industries Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2018 (the “Report”), I, James E. Galeese, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ James E. Galeese

James E. Galeese

Executive Vice President and Chief

Financial Officer

Date:  February 6, 2019

A signed original of this written statement required by Section 906 has been provided to LSI Industries Inc. and will be retained by LSI Industries Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Jan. 27, 2019
Document Information [Line Items]
Entity Registrant Name	LSI INDUSTRIES INC
Entity Central Index Key	0000763532
Trading Symbol	lyts
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding (in shares)		25,888,975
Document Type	10-Q
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Net sales		$ 89,541	$ 92,305	$ 174,498	$ 179,771
Cost of products and services sold		69,486	66,998	133,027	130,761
Restructuring costs		376		531
Severance costs		23		23
Gross profit		19,656	25,307	40,917	49,010
Selling and administrative expenses		19,148	20,677	37,475	41,194
Impairment of goodwill		20,165		20,165	28,000
Transition and realignment costs		120		120
Severance costs		469	83	469	83
Restructuring costs		25		25
Operating (loss) income		(20,271)	4,547	(17,337)	(20,267)
Interest (income)		(17)	(8)	(31)	(16)
Interest expense		632	425	1,164	836
(Loss) income before income taxes		(20,886)	4,130	(18,470)	(21,087)
Income tax (benefit) expense		(5,104)	5,598	(4,437)	(3,990)
Net loss		$ (15,782)	$ (1,468)	$ (14,033)	$ (17,097)
Loss per common share (see Note 4)
Basic (in dollars per share)		$ (0.61)	$ (0.06)	$ (0.54)	$ (0.66)
Diluted (in dollars per share)		$ (0.61)	$ (0.06)	$ (0.54)	$ (0.66)
Weighted average common shares outstanding
Basic (in shares)		26,083	25,858	26,058	25,824
Diluted (in shares)	[1]	26,083	25,858	26,058	25,824

[1] Options to purchase 3,536,732 common shares and 3,569,762 common shares for the three months ended December 31, 2018 and 2017, respectively, were not included in the computation of the three month diluted loss per share because the exercise price was greater than the average fair market value of the common shares. Additionally, options to purchase 3,356,101 common shares and 3,549,705 common shares for the six months ended at December 31, 2018 and 2017, respectively, were not included in the computation of the six month diluted loss per share because the exercise price was greater than the average fair market value of the common shares. For the three months ended and the six months ended in December 31, 2018 and December 31, 2017, the effect of dilutive securities was not included in the calculation of diluted loss per share because there was a net loss for the period.

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
ASSETS
Cash and cash equivalents	$ 9,563	$ 3,178
Accounts receivable, less allowance for doubtful accounts of $301 and $409, respectively	56,430	50,609
Inventories	54,093	50,994
Refundable income tax	1,000	1,784
Other current assets	3,936	3,516
Total current assets	125,022	110,081
Property, Plant and Equipment, at cost
Land	6,770	6,470
Buildings	35,608	35,961
Machinery and equipment	77,865	77,108
Construction in progress	1,135	1,340
	121,378	120,879
Less accumulated depreciation	(80,129)	(77,176)
Net property, plant and equipment	41,249	43,703
Goodwill	10,373	30,538
Other Intangible Assets, net	34,029	35,409
Other Long-Term Assets, net	14,405	9,786
Total assets	225,078	229,517
LIABILITIES & SHAREHOLDERS’ EQUITY
Accounts payable	26,679	17,927
Accrued expenses	23,730	24,272
Total current liabilities	50,409	42,199
Long-Term Debt	48,372	45,360
Other Long-Term Liabilities	1,972	2,707
Commitments and Contingencies (Note 11)
Shareholders’ Equity
Preferred shares, without par value; Authorized 1,000,000 shares, none issued
Common shares, without par value; Authorized 40,000,000 shares; Outstanding 25,861,114 and 25,641,913 shares, respectively	125,200	124,104
Treasury shares, without par value	(1,561)	(2,110)
Deferred compensation plan	1,591	2,133
Retained earnings	(905)	15,124
Total shareholders’ equity	124,325	139,251
Total liabilities & shareholders’ equity	$ 225,078	$ 229,517

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Allowance for doubtful accounts	$ 301	$ 409
Preferred shares, par value (in dollars per share)	$ 0	$ 0
Preferred shares, authorized shares (in shares)	1,000,000	1,000,000
Preferred shares, issued (in shares)	0	0
Common shares, par value (in dollars per share)	$ 0	$ 0
Common shares, authorized shares (in shares)	40,000,000	40,000,000
Common shares, outstanding (in shares)	25,861,114	25,641,913

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash Flows from Operating Activities
Net (loss)	$ (14,033)	$ (17,097)
Non-cash items included in net income
Depreciation and amortization	5,235	5,124
Deferred income taxes	(4,701)	(5,667)
Impairment of goodwill	20,165	28,000
Deferred compensation plan	196	224
Stock compensation expense	727	1,463
Issuance of common shares as compensation	180	156
Gain on disposition of fixed assets	(10)	(29)
Allowance for doubtful accounts	256	115
Inventory obsolescence reserve	2,043	1,033
Changes in certain assets and liabilities:
Accounts receivable	(1,142)	(10,975)
Inventories	(9,309)	313
Refundable income taxes	784	775
Accounts payable	8,704	(2,626)
Accrued expenses and other	(1,873)	(631)
Customer prepayments	406	(221)
Net cash flows provided by (used in) operating activities	7,628	(43)
Cash Flows from Investing Activities
Purchases of property, plant and equipment	(1,579)	(1,190)
Proceeds from sale of fixed assets	10	1,527
Net cash flows (used in) provided by investing activities	(1,569)	337
Cash Flows from Financing Activities
Payments of long-term debt	(52,066)	(48,553)
Borrowings of long-term debt	55,078	51,004
Cash dividends paid	(2,587)	(2,564)
Exercise of stock options		175
Purchase of treasury shares		(107)
Shares withheld for employee taxes	(99)	(111)
Net cash flows provided by (used in) financing activities	326	(156)
Increase in cash and cash equivalents	6,385	138
Cash and cash equivalents at beginning of period	3,178	3,039
Cash and cash equivalents at end of period	$ 9,563	$ 3,177

XML

Note 1 - Interim Condensed Consolidated Financial Statements

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Condensed Financial Statements [Text Block]

NOTE

1

 -

 INTERIM

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The interim condensed consolidated financial statements are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of

December 31, 2018,

the results of its operations for the

three

and

six

month periods ended

December 31, 2018

and

2017,

and its cash flows for the

six

month periods ended

December 31, 2018

and

2017.

These statements should be read in conjunction with the financial statements and footnotes included in the fiscal

2018

Annual Report on Form

10

-K.  Financial information as of

June 30, 2018

has been derived from the Company’s audited consolidated financial statements.

XML

Note 2 - Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE

2

 - SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation:

A summary of the Company’s significant accounting policies is included in Note

1

to the audited consolidated financial statements of the Company’s fiscal

2018

Annual Report on Form

10

-K. Significant changes to our accounting policies as a result of adopting ASU-

2014

-

09

“Revenue from Contracts with Customers” (Topic

606

) are discussed below.

Revenue Recognition:

The Company recognizes revenue when it satisfies the performance obligation in its customer contracts or purchase orders. Most of the Company’s products have a single performance obligation which is satisfied at a point in time when control is transferred to the customer. Control is generally transferred at time of shipment when title and risk of ownership passes to the customer. For customer contracts with multiple performance obligations, the Company allocates the transaction price and any discounts to each performance obligation based on relative standalone selling prices. Payment terms are typically within

30

to

90

days from the shipping date, depending on our terms with the customer. The Company offers standard warranties that do

not

represent separate performance obligations.

Installation is a separate performance obligation, except for our digital signage products. For digital signage products, installation is

not

a separate performance obligation as the product and installation is the combined item promised in digital signage contracts. The Company is

not

always responsible for installation of products it sells and has

no

post-installation responsibilities other than standard warranties.

A number of the Company's products are highly customized. As a result, these customized products do

not

have an alternative use. For these products, the Company has a legal right to payment for performance to date and generally does

not

accept returns on these items. The measurement of performance is based upon cost plus a reasonable profit margin for work completed. Because there is

no

alternative use and there is a legal right to payment, the Company transfers control of the item as the item is being produced and therefore, recognizes revenue over time. The customized product types are as follows:

● Customer specific print graphics branding

● Electrical components based on customer specifications

● Digital signage and related media content

The Company also offers installation services. Installation revenue is recognized over time as our customer simultaneously receives and consumes the benefits provided through the installation process.

For these customized products and installation services, revenue is recognized using a cost-based input method: recognizing revenue and gross profit as work is performed based on the relationship between the actual cost incurred and the total estimated cost for the contract.

Disaggregation of Revenue

The Company disaggregates the revenue from contracts with customers by the timing of revenue recognition because the Company believes it best depicts the nature, amount, and timing of our revenue and cash flows. The table presents a reconciliation of the disaggregation by reportable segments.

	Three Months Ended				Six Months Ended
( In thousands)	December 31				December 31
	Lighting Segment		Graphics Segment		Lighting Segment		Graphics Segment
Timing of revenue recognition
Products and services transferred at a point in time	$	57,318	$	14,758	$	111,567	$	32,452
Products and services transferred over time		6,336		11,129		13,519		16,960
	$	63,654	$	25,887	$	125,086	$	49,412
Type of Product and Services
New technology products	$	56,271	$	2,349	$	107,576	$	4,751
Legacy products		6,947		18,222		16,023		34,186
Turnkey services and other		436		5,316		1,487		10,475
	$	63,654	$	25,887	$	125,086	$	49,412

New technology products include LED lighting and controls, electronic circuit boards, and digital signage solutions. Legacy products include lighting fixtures utilizing light sources other than LED technology and printed

two

and

three

dimensional graphic products. Turnkey services and other includes installation services along with shipping and handling charges.

Practical Expedients and Exemptions

● The Company’s contracts with customers have an expected duration of one year or less, as such the Company applies the practical expedient to expense sales commissions as incurred, and have omitted disclosures on the amount of remaining performance obligations.

● Shipping costs that are not material in context of the delivery of products are expensed as incurred.

● The Company’s accounts receivable balance represents the Company’s unconditional right to receive payment from its customers with contracts. Payments are generally due within 30 to 90 days of completion of the performance obligation and invoicing, therefore, payments do not contain significant financing components.

● The Company collects sales tax and other taxes concurrent with revenue-producing activities which are excluded from revenue. Shipping and handling costs are treated as fulfillment activities and included in cost of products and services sold on the Consolidated Statements of Operations.

New Accounting Pronouncements:

On

July 1, 2018,

the Company adopted ASU

2014

-

09.

“Revenue from Contracts with Customers,” (Topic

606

) using the modified retrospective adoption method which requires a cumulative effect adjustment to the opening balance of retained earnings. This approach was applied to contracts that were

not

completed as of

June 30, 2018.

Results for reporting periods beginning

July 1, 2018

are presented under Topic

606,

while prior period amounts are

not

adjusted and continue to be reported under the accounting standards in effect for the prior period. The Company recorded a net increase to beginning retained earnings of

$591,000

on

July 1, 2018

due to the cumulative impact of adopting Topic

606,

as described below.

( In thousands)	Balance as of June 30, 2018		Adjustments			Opening Balance as of July 1, 2018
Assets:
Accounts receivable, net	$	50,609	$	4,935		$	55,544
Inventories, net	$	50,994	$	(4,167	)	$	46,827
Other long-term assets, net	$	9,786	$	(177	)	$	9,609
S tockholders' Equity:
Retained earnings	$	15,124	$	591		$	15,715

In

February 2016,

the Financial Accounting Standards Board issued ASU

2016

-

02,

“Leases.” The amended guidance requires an entity to recognize assets and liabilities that arise from leases. The amended guidance is effective for financial statements issued for fiscal years and interim periods within those years, beginning after

December 15, 2018,

or the Company’s fiscal year

2020,

with early adoption permitted. The Company has an implementation team tasked with reviewing our lease obligations and determining the impact of the new standard to its financial statements. The implementation team has completed a qualitative assessment of the Company’s active leases and is compiling related data in a central repository. The Company will continue to evaluate the new standard’s impact to its financial statements.  

Subsequent Events:

The Company has evaluated subsequent events for potential recognition and disclosure through the date the consolidated financial statements were filed.  

No

items were identified during this evaluation that required adjustment to or disclosure in the accompanying financial statements other than noted below.

On

January 16, 2019,

the Company appointed Michael C. Beck as the Company’s Senior Vice President - Operations. Mr. Beck entered into an Employment Offer Letter as of

January 11, 2019

which provides that his employment with the Company shall begin on

February 11, 2019.

The Employment Offer Letter also defines his compensation and benefit package.

Reclassifications:

Certain prior year amounts have been reclassified to conform to the current year presentation within the cash flows from operating activities section and cash flows from financing activities section of the statement of cash flows. These reclassifications have

no

impact on net income or earnings per share.

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Note 3 - Segment Reporting Information

6 Months Ended

Dec. 31, 2018

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. The Company’s

two

operating segments are Lighting and Graphics, with

one

executive team under the new organizational structure reporting directly to the CODM with responsibilities for managing each segment. Corporate and Eliminations, which captures the Company’s corporate administrative activities, is also reported in the segment information.

The Lighting Segment includes outdoor and indoor lighting utilizing both traditional and LED light sources that have been fabricated and assembled for the Company’s markets, primarily petroleum / convenience stores, automotive dealerships, quick-service restaurants, grocery and pharmacy store, and retail/national accounts. The Company also addresses lighting product customers through the commercial industrial, stock and flow, and renovation channels. The Lighting Segment also includes the design, engineering, and manufacturing of electronic circuit boards, assemblies and sub-assemblies used to manufacture certain LED light fixtures and sold directly to customers.

The Graphics Segment designs, manufactures and installs exterior and interior visual image elements such as traditional graphics, interior branding, electrical and architectural signage, active digital signage along with the management of media content related to digital signage, LED video screens, and menu board systems that are either digital or traditional by design. These products are used in visual image programs in several markets including, but

not

limited to 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 Company’s corporate administration activities are reported in the Corporate and Eliminations line item.  These activities primarily include 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, equity compensation expense for various equity awards 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 (if any), and deferred income taxes.

There was

no

concentration of consolidated net sales in the

three

and

six

months ended

December 31, 2018

or

2017.

  There was

no

concentration of accounts receivable at

December 31, 2018

or

June 30, 2018.

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of

December 31, 2018

and

December 31, 2017:

	Three Months Ended						Six Months Ended
( In thousands)	December 31						December 31
	2018			2017			2018			2017
Net Sales:
Lighting Segment	$	63,654		$	69,174		$	125,086		$	137,602
Graphics Segment		25,887			23,131			49,412			42,169
	$	89,541		$	92,305		$	174,498		$	179,771
Operating (Loss) Income :
Lighting Segment	$	(18,452	)	$	5,275		$	(14,602	)	$	(17,655	)
Graphics Segment		861			2,255			3,248			3,731
Corporate and Eliminations		(2,680	)		(2,983	)		(5,983	)		(6,343	)
	$	(20,271	)	$	4,547		$	(17,337	)	$	(20,267	)
Capital Expenditures:
Lighting Segment	$	588		$	499		$	864		$	760
Graphics Segment		249			157			515			339
Corporate and Eliminations		94			36			200			91
	$	931		$	692		$	1,579		$	1,190
Depreciation and Amortization:
Lighting Segment	$	1,952		$	1,885		$	3,942		$	3,786
Graphics Segment		397			384			792			763
Corporate and Eliminations		243			283			501			575
	$	2,592		$	2,552		$	5,235		$	5,124

	December 31, 2018		June 30, 2018
Identifiable Assets:
Lighting Segment	$	152,586	$	172,799
Graphics Segment		46,878		39,881
Corporate and Eliminations		25,614		16,837
	$	225,078	$	229,517

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.

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				Six Months Ended
	December 31				December 31
(In thousands)	2018		2017		2018		2017
Lighting Segment inter-segment net sales	$	870	$	992	$	1,279	$	1,707
Graphics Segment inter-segment net sales	$	44	$	1,040	$	75	$	1,071

The Company’s operations are located solely within North America. As a result, the geographic distribution of the Company’s net sales and long-lived assets originate within North America.

XML

Note 4 - Earnings Per Common Share

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

4

- EARNINGS PER COMMON SHARE

The following table presents the amounts used to compute basic and diluted earnings per common share, as well as the effect of dilutive potential common shares on weighted average shares outstanding (in thousands, except per share data):

	Three Months Ended						Six Months Ended
	December 31						December 31
	2018			2017			2018			2017
BASIC EARNINGS PER SHARE
Net (loss)	$	(15,782	)	$	(1,468	)	$	(14,033	)	$	(17,097	)
Weighted average shares outstanding during the period, net of treasury shares (a)		25,838			25,551			25,795			25,528
Weighted average vested restricted stock units outstanding		33			63			43			52
Weighted average shares outstanding in the Deferred Compensation Plan during the period		212			244			220			244
Weighted average shares outstanding		26,083			25,858			26,058			25,824
Basic loss per share	$	(0.61	)	$	(0.06	)	$	(0.54	)	$	(0.66	)
DILUTED EARNINGS PER SHARE
Net (loss)	$	(15,782	)	$	(1,468	)	$	(14,033	)	$	(17,097	)
Weighted average shares outstanding
Basic		26,083			25,858			26,058			25,824
Effect of dilutive securities (b):
Impact of common shares to be issued under stock option plans, and contingently issuable shares, if any		--			--			--			--
Weighted average shares outstanding (c)		26,083			25,858			26,058			25,824
Diluted (loss) per share	$	(0.61	)	$	(0.06	)	$	(0.54	)	$	(0.66	)

(a) Includes shares accounted for like treasury stock.

(b) Calculated using the “Treasury Stock” method as if dilutive securities were exercised and the funds were used to purchase common shares at the average market price during the period.

(c) Options to purchase 3,536,732 common shares and 3,569,762 common shares for the three months ended December 31, 2018 and 2017, respectively, were not included in the computation of the three month diluted loss per share because the exercise price was greater than the average fair market value of the common shares. Additionally, options to purchase 3,356,101 common shares and 3,549,705 common shares for the six months ended at December 31, 2018 and 2017, respectively, were not included in the computation of the six month diluted loss per share because the exercise price was greater than the average fair market value of the common shares. For the three months ended and the six months ended in December 31, 2018 and December 31, 2017, the effect of dilutive securities was not included in the calculation of diluted loss per share because there was a net loss for the period.

XML

Note 5 - Inventories

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE

5

 - INVENTORIES

The following information is provided as of the dates indicated:

	December 31,		June 30,
(In thousands)	2018		2018
Inventories:
Raw materials	$	33,467	$	31,795
Work-in-process		2,116		3,833
Finished goods		18,510		15,366
Total Inventories	$	54,093	$	50,994

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Note 6 - Accrued Expenses

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]

NOTE

6

 - ACCRUED EXPENSES

The following information is provided as of the dates indicated:

	December 31,		June 30,
(In thousands)	2018		2018
Accrued Expenses:
Compensation and benefits	$	6,842	$	9,394
Customer prepayments		1,476		1,070
Accrued sales commissions		1,702		2,274
Accrued warranty		7,136		6,876
Other accrued expenses		6,574		4,658
Total Accrued Expenses	$	23,730	$	24,272

XML

Note 7 - Goodwill and Other Intangible Assets

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE

7

 - 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,

no

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

to

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 fair value measurements of the reporting units are based on significant inputs

not

observable in the market and thus represent Level

3

measurements as defined by ASC

820

“Fair Value Measurements.”  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. 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

second

quarter of fiscal

2019

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

December 31, 2018.

In accordance with ASU

2017

-

04,

“Simplifying the Test for Goodwill Impairment,” which was adopted in a prior period, the requirement to perform step

2

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

$20,165,000.

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, 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
Goodwill Impairment	$	(20,165	)	$	--		$	(20,165	)
Balance as of December 31, 2018
Goodwill	$	94,564		$	28,690		$	123,254
Accumulated impairment losses		(85,356	)		(27,525	)		(112,881	)
Goodwill, net as of December 31, 2018	$	9,208		$	1,165		$	10,373

The following table presents the gross carrying amount and accumulated amortization by each major asset class:

	December 31, 2018
Other Intangible Assets	Gross
(In thousands)	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	35,563	$	11,040	$	24,523
Patents		338		231		107
LED technology firmware, software		16,066		12,083		3,983
Trade name		2,658		664		1,994
Total Amortized Intangible Assets		54,625		24,018		30,607
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	$	58,047	$	24,018	$	34,029

	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
Total Amortized Intangible Assets		54,625		22,638		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	$	58,047	$	22,638	$	35,409

Amortization expense for intangible assets was

$689,000

and

$690,000

for the 

three

months ended

December 31, 2018

and

2017,

respectively, and

$1,380

and

$1,380

for the

six

 months ended

December 31, 2018

and

2017,

respectively. Future amortization expense (in thousands) associated with these intangible assets is expected to be

$2,761

 in

2019,

$2,687

in

2020,

$2,682

in

2021,

$2,460

in

2022,

$2,412

in

2023,

and

$18,985

 after

2023.

XML

Note 8 - Revolving Line of Credit

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

8

 - REVOLVING

LINE OF CREDIT

In

February 2017,

the Company amended its secured line of credit to a

$100

million facility. The line of credit expires in the

third

quarter of fiscal

2022.

Interest on the revolving line of credit is charged based upon an increment over the LIBOR rate as periodically determined, or at the bank’s base lending rate, at the Company’s option.  The increment over the LIBOR borrowing rate, as periodically determined, fluctuates between

125

and

250

basis points depending upon the ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined in the line of credit agreement. The increment over LIBOR borrowing rate will be

200

basis points for the

third

quarter. The fee on the unused balance of the

$100

million committed line of credit is

20

basis points.  Under the terms of this line of credit, the Company has agreed to a negative pledge of real estate assets and is required to comply with financial covenants that limit the ratio of indebtedness to EBITDA and require a minimum fixed charge coverage ratio. As of

December 31, 2018,

there was

$48.4

million borrowed against the line of credit, and

$51.6

million was available as of that date. Based on the terms of the line of credit and the maturity date, the debt has been classified as long term.

The Company is in compliance with all of its loan covenants as of

December 31, 2018.

XML

Note 9 - Cash Dividends

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

9

 -

 CASH

DIVIDENDS

The Company paid cash dividends of

$2,587,000

and

$2,564,000

in the

six

months ended

December 31, 2018

and

2017,

respectively. Dividends on restricted stock units in the amount of

$34,631

and

$38,463

were accrued as of

December 31, 2018

and

2017,

respectively. These dividends will be paid upon the vesting of the restricted stock units when shares are issued to the award recipients. In

January 2019,

the Board of Directors declared a regular quarterly cash dividend of

$0.05

per share payable

February 12, 2019

to shareholders of record as of

February 4, 2019

.

The indicated annual cash dividend rate is

$0.20

per share.

XML

Note 10 - Supplemental Cash Flow Information

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

NOTE

10

 -

 SUPPLEMENTAL

CASH FLOW INFORMATION

(In thousands)	Six Months Ended December 31
	2018		2017
Cash payments:
Interest	$	1,133	$	767
Income taxes	$	3	$	1,232
Non-cash investing and finance activities:
Issuance of common shares as compensation	$	180	$	156
Issuance of common shares to fund deferred compensation plan	$	190	$	261

XML

Note 11 - Commitments and Contingencies

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

1

1

-

COMMITMENTS AND CONTINGENCIES

The Company is party to various negotiations, customer bankruptcies, and legal proceedings arising in the normal course of business. The Company provides reserves for these matters when a loss is probable and reasonably estimable. The Company does

not

disclose a range of potential loss because the likelihood of such a loss is remote. In the opinion of management, the ultimate disposition of these matters will

not

have a material adverse effect on the Company’s financial position, results of operations, cash flows or liquidity.

The Company

may

occasionally issue a standby letter of credit in favor of

third

parties. As of

December 31, 2018,

there were

no

standby letter of credit agreements.

XML

Note 12 - Severance Costs

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

NOTE

1

2

– SEVERANCE COSTS

The Company recorded severance expense of

$492,000

and

$83,000

in the

six

months ended

December 31, 2018

and

2017,

respectively. This severance expense was related to reductions in staffing

not

related to plant restructuring. See further discussion of restructuring expenses in Note

13.

The activity in the Company’s accrued severance liability is as follows for the periods indicated:

	Six			Six			Fiscal
	Months Ended			Months Ended			Year Ended
(In thousands)	December 31,			December 31,			June 30,
	2018			2017			2018
Balance at beginning of the period	$	1,772		$	235		$	235
Accrual of expense		492			83			1,900
Payments		(549	)		(218	)		(363	)
Adjustments		--			(14	)		--
Balance at end of the period	$	1,715		$	86		$	1,772

Of the total

$1,715,000

severance reserve reported as of

December 31, 2018,

$869,000

has been classified as a current liability and will be paid out over the next

twelve

months. The remaining

$846,000

has been classified as a long-term liability.

XML

Note 13 - Restructuring Costs

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

NOTE

1

3

– RESTRUCTURING COSTS

On

October 29, 2018,

the Company announced plans to close its lighting facility in New Windsor, New York. The closure is part of ongoing actions to align the Company’s supply chain to more cost effectively serve the changing requirements of the lighting market. The Company will move production to its other existing facilities. The closure will allow the Company to improve utilization of existing manufacturing capacity, and will generate annual savings of approximately

$4.0

million. The Company will record an estimated range of restructuring costs of

$0.8

million to

$1.5

million mostly over the next

two

quarters and up until the time the facility is ultimately sold.  The transfer of production is expected to be completed by

June 30, 2019.

As of

December 31, 2018,

the Company has incurred restructuring costs of

$401,000

related to the closure of the New Windsor facility. The Company also incurred

$919,000

of expense to write-down inventory which is

not

included in the tables below.

In the

first

quarter of fiscal

2019,

management approved the closure of its

12,000

square foot leased facility in Hawthorne, California. The facility was used as a warehouse and for light assembly of light fixtures. The Company has moved the light assembly to its Blue Ash, Ohio facility. The restructuring charges consist primarily of transportation costs to move inventory to Blue Ash, the impairment of equipment, costs to restore the leased facility, and severance benefits. As of

December 31, 2018,

the Company has incurred restructuring costs of

$155,000

related to the closure of the Hawthorne facility. The Company also incurred

$148,000

of expense to write-down inventory which is a re-valuation of the previous estimate and which is

not

included in the tables below.

The following table presents information about restructuring costs for the periods indicated:

	Three		Six Months		Three		Six Months
	Months Ended		Ended		Months Ended		Ended
(In thousands)	December 31,		December 31,		December 31,		December 31,
	2018		2018		2017		2017
Severance and other termination benefits	$	202	$	221	$	--	$	--
Facility repairs		7		47		--		--
Impairment of fixed assets and accelerated depreciation		185		228		--		--
Other restructuring costs		7		60		--		--
Total	$	401	$	556	$	--	$	--

The following table presents restructuring costs incurred by line item in the consolidated statement of operations in which the costs are included:

	Three Months Ended		Six Months Ended
(In thousands)	December 31		December 31
	2018		2018
Cost of Goods Sold	$	376	$	531
Operating Expenses		25		25
Total	$	401	$	556

Additionally, the above tables do

not

include expense of

$632,000

and

$1,067,000

recorded during the

three

months ended and during the

six

months ended

December 31, 2018

, respectively,related to the write-down of inventory included as cost of sales as part of facility closures.

The following table presents a roll forward of the beginning and ending liability balances related to the restructuring costs:

(In thousands)
	Balance as of June 30, 2018		Restructuring Expense		Payments			Adjustments		Balance as of December 31, 2018
Severance and termination benefits	$	--	$	221	$	(21	)	$	--	$	200
Facility Repairs		--		47		(8	)		--		39
Other restructuring costs		--		60		(52	)		--		8
Total	$	--	$	328	$	(81	)	$	--	$	247

The above table does

not

include fixed asset impairment and accelerated depreciation expense of

$228,000

recorded in the

first

six

months of fiscal

2019.

Refer to Note

12

for information regarding additional severance expenses that are

not

included in the restructuring costs identified in this footnote.

XML

Note 14 - Income Taxes

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

14

– INCOME TAXES

The Company's effective income tax rate is based on expected income, statutory rates and tax planning opportunities available in the various jurisdictions in which it operates. For interim financial reporting, the Company estimates the annual income tax rate based on projected taxable income for the full year and records a quarterly income tax provision or benefit in accordance with the anticipated annual rate. The Company refines the estimates of the year's taxable income as new information becomes available, including actual year-to-date financial results. This continual estimation process often results in a change to the expected effective income tax rate for the year. When this occurs, the Company adjusts the income tax provision during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the expected income tax rate. Significant judgment is required in determining the effective tax rate and in evaluating tax positions. In the

second

quarter of fiscal

2019,

a deferred tax asset of

$4.8

million was created as a result of the impairment of goodwill in the Lighting reporting unit. In the

first

quarter of fiscal

2018,

a deferred tax asset of

$10.7

million was created as a result of the impairment of goodwill in the Lighting reporting unit.

The Tax Cuts and Jobs Act (the “Act”) was signed into law in

December 2017

and makes numerous changes to the Internal Revenue Code. Among other changes, the Act reduces the U.S. corporate income tax rate to

21%

effective

January 1, 2018.

Because the Act became effective mid-way through the Company’s fiscal

2018

tax year, the Company had a U.S. statutory income tax rate of

34%

in the

first

quarter of fiscal

2018,

before the new tax law was enacted, and will have a

21%

U.S statutory income tax rate for fiscal years

2019

and after.

	Three Months Ended						Six Months Ended
	December 31						December 31
	2018			2017			2018			2017
Reconciliation to effective tax rate:
Provision for income taxes at the anticipated annual tax rate		23.0	%		28.9	%		23.0	%		28.9	%
Enactment of tax law changes		--			111.2			--			(22.2	)
Uncertain tax positions		0.8			(4.8	)		0.8			0.5
Difference between deferred and current tax rate related to the impairment of goodwill		0.6			--			0.7			12.1
Tax impact related to share based compensation		--			0.3			(0.5	)		(0.4	)
Effective tax rate		24.4	%		135.6	%		24.0	%		18.9	%

XML

Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Consolidation:

A summary of the Company’s significant accounting policies is included in Note

1

to the audited consolidated financial statements of the Company’s fiscal

2018

Annual Report on Form

10

-K. Significant changes to our accounting policies as a result of adopting ASU-

2014

-

09

“Revenue from Contracts with Customers” (Topic

606

) are discussed below.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition:

The Company recognizes revenue when it satisfies the performance obligation in its customer contracts or purchase orders. Most of the Company’s products have a single performance obligation which is satisfied at a point in time when control is transferred to the customer. Control is generally transferred at time of shipment when title and risk of ownership passes to the customer. For customer contracts with multiple performance obligations, the Company allocates the transaction price and any discounts to each performance obligation based on relative standalone selling prices. Payment terms are typically within

30

to

90

days from the shipping date, depending on our terms with the customer. The Company offers standard warranties that do

not

represent separate performance obligations.

Installation is a separate performance obligation, except for our digital signage products. For digital signage products, installation is

not

a separate performance obligation as the product and installation is the combined item promised in digital signage contracts. The Company is

not

always responsible for installation of products it sells and has

no

post-installation responsibilities other than standard warranties.

A number of the Company's products are highly customized. As a result, these customized products do

not

have an alternative use. For these products, the Company has a legal right to payment for performance to date and generally does

not

accept returns on these items. The measurement of performance is based upon cost plus a reasonable profit margin for work completed. Because there is

no

alternative use and there is a legal right to payment, the Company transfers control of the item as the item is being produced and therefore, recognizes revenue over time. The customized product types are as follows:

● Customer specific print graphics branding

● Electrical components based on customer specifications

● Digital signage and related media content

The Company also offers installation services. Installation revenue is recognized over time as our customer simultaneously receives and consumes the benefits provided through the installation process.

For these customized products and installation services, revenue is recognized using a cost-based input method: recognizing revenue and gross profit as work is performed based on the relationship between the actual cost incurred and the total estimated cost for the contract.

Disaggregation of Revenue

The Company disaggregates the revenue from contracts with customers by the timing of revenue recognition because the Company believes it best depicts the nature, amount, and timing of our revenue and cash flows. The table presents a reconciliation of the disaggregation by reportable segments.

	Three Months Ended				Six Months Ended
( In thousands)	December 31				December 31
	Lighting Segment		Graphics Segment		Lighting Segment		Graphics Segment
Timing of revenue recognition
Products and services transferred at a point in time	$	57,318	$	14,758	$	111,567	$	32,452
Products and services transferred over time		6,336		11,129		13,519		16,960
	$	63,654	$	25,887	$	125,086	$	49,412
Type of Product and Services
New technology products	$	56,271	$	2,349	$	107,576	$	4,751
Legacy products		6,947		18,222		16,023		34,186
Turnkey services and other		436		5,316		1,487		10,475
	$	63,654	$	25,887	$	125,086	$	49,412

New technology products include LED lighting and controls, electronic circuit boards, and digital signage solutions. Legacy products include lighting fixtures utilizing light sources other than LED technology and printed

two

and

three

dimensional graphic products. Turnkey services and other includes installation services along with shipping and handling charges.

Practical Expedients and Exemptions

● The Company’s contracts with customers have an expected duration of one year or less, as such the Company applies the practical expedient to expense sales commissions as incurred, and have omitted disclosures on the amount of remaining performance obligations.

● Shipping costs that are not material in context of the delivery of products are expensed as incurred.

● The Company’s accounts receivable balance represents the Company’s unconditional right to receive payment from its customers with contracts. Payments are generally due within 30 to 90 days of completion of the performance obligation and invoicing, therefore, payments do not contain significant financing components.

● The Company collects sales tax and other taxes concurrent with revenue-producing activities which are excluded from revenue. Shipping and handling costs are treated as fulfillment activities and included in cost of products and services sold on the Consolidated Statements of Operations.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements:

On

July 1, 2018,

the Company adopted ASU

2014

-

09.

“Revenue from Contracts with Customers,” (Topic

606

) using the modified retrospective adoption method which requires a cumulative effect adjustment to the opening balance of retained earnings. This approach was applied to contracts that were

not

completed as of

June 30, 2018.

Results for reporting periods beginning

July 1, 2018

are presented under Topic

606,

while prior period amounts are

not

adjusted and continue to be reported under the accounting standards in effect for the prior period. The Company recorded a net increase to beginning retained earnings of

$591,000

on

July 1, 2018

due to the cumulative impact of adopting Topic

606,

as described below.

( In thousands)	Balance as of June 30, 2018		Adjustments			Opening Balance as of July 1, 2018
Assets:
Accounts receivable, net	$	50,609	$	4,935		$	55,544
Inventories, net	$	50,994	$	(4,167	)	$	46,827
Other long-term assets, net	$	9,786	$	(177	)	$	9,609
S tockholders' Equity:
Retained earnings	$	15,124	$	591		$	15,715

In

February 2016,

the Financial Accounting Standards Board issued ASU

2016

-

02,

“Leases.” The amended guidance requires an entity to recognize assets and liabilities that arise from leases. The amended guidance is effective for financial statements issued for fiscal years and interim periods within those years, beginning after

December 15, 2018,

or the Company’s fiscal year

2020,

with early adoption permitted. The Company has an implementation team tasked with reviewing our lease obligations and determining the impact of the new standard to its financial statements. The implementation team has completed a qualitative assessment of the Company’s active leases and is compiling related data in a central repository. The Company will continue to evaluate the new standard’s impact to its financial statements.  

Subsequent Events, Policy [Policy Text Block]

Subsequent Events:

The Company has evaluated subsequent events for potential recognition and disclosure through the date the consolidated financial statements were filed.  

No

items were identified during this evaluation that required adjustment to or disclosure in the accompanying financial statements other than noted below.

On

January 16, 2019,

the Company appointed Michael C. Beck as the Company’s Senior Vice President - Operations. Mr. Beck entered into an Employment Offer Letter as of

January 11, 2019

which provides that his employment with the Company shall begin on

February 11, 2019.

The Employment Offer Letter also defines his compensation and benefit package.

Reclassification, Policy [Policy Text Block]

Reclassifications:

Certain prior year amounts have been reclassified to conform to the current year presentation within the cash flows from operating activities section and cash flows from financing activities section of the statement of cash flows. These reclassifications have

no

impact on net income or earnings per share.

XML

Note 2 - Summary of Significant Accounting Policies (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended				Six Months Ended
( In thousands)	December 31				December 31
	Lighting Segment		Graphics Segment		Lighting Segment		Graphics Segment
Timing of revenue recognition
Products and services transferred at a point in time	$	57,318	$	14,758	$	111,567	$	32,452
Products and services transferred over time		6,336		11,129		13,519		16,960
	$	63,654	$	25,887	$	125,086	$	49,412
Type of Product and Services
New technology products	$	56,271	$	2,349	$	107,576	$	4,751
Legacy products		6,947		18,222		16,023		34,186
Turnkey services and other		436		5,316		1,487		10,475
	$	63,654	$	25,887	$	125,086	$	49,412

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

( In thousands)	Balance as of June 30, 2018		Adjustments			Opening Balance as of July 1, 2018
Assets:
Accounts receivable, net	$	50,609	$	4,935		$	55,544
Inventories, net	$	50,994	$	(4,167	)	$	46,827
Other long-term assets, net	$	9,786	$	(177	)	$	9,609
S tockholders' Equity:
Retained earnings	$	15,124	$	591		$	15,715

XML

Note 3 - Segment Reporting Information (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended						Six Months Ended
( In thousands)	December 31						December 31
	2018			2017			2018			2017
Net Sales:
Lighting Segment	$	63,654		$	69,174		$	125,086		$	137,602
Graphics Segment		25,887			23,131			49,412			42,169
	$	89,541		$	92,305		$	174,498		$	179,771
Operating (Loss) Income :
Lighting Segment	$	(18,452	)	$	5,275		$	(14,602	)	$	(17,655	)
Graphics Segment		861			2,255			3,248			3,731
Corporate and Eliminations		(2,680	)		(2,983	)		(5,983	)		(6,343	)
	$	(20,271	)	$	4,547		$	(17,337	)	$	(20,267	)
Capital Expenditures:
Lighting Segment	$	588		$	499		$	864		$	760
Graphics Segment		249			157			515			339
Corporate and Eliminations		94			36			200			91
	$	931		$	692		$	1,579		$	1,190
Depreciation and Amortization:
Lighting Segment	$	1,952		$	1,885		$	3,942		$	3,786
Graphics Segment		397			384			792			763
Corporate and Eliminations		243			283			501			575
	$	2,592		$	2,552		$	5,235		$	5,124

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

	December 31, 2018		June 30, 2018
Identifiable Assets:
Lighting Segment	$	152,586	$	172,799
Graphics Segment		46,878		39,881
Corporate and Eliminations		25,614		16,837
	$	225,078	$	229,517

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Three Months Ended				Six Months Ended
	December 31				December 31
(In thousands)	2018		2017		2018		2017
Lighting Segment inter-segment net sales	$	870	$	992	$	1,279	$	1,707
Graphics Segment inter-segment net sales	$	44	$	1,040	$	75	$	1,071

XML

Note 4 - Earnings Per Common Share (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended						Six Months Ended
	December 31						December 31
	2018			2017			2018			2017
BASIC EARNINGS PER SHARE
Net (loss)	$	(15,782	)	$	(1,468	)	$	(14,033	)	$	(17,097	)
Weighted average shares outstanding during the period, net of treasury shares (a)		25,838			25,551			25,795			25,528
Weighted average vested restricted stock units outstanding		33			63			43			52
Weighted average shares outstanding in the Deferred Compensation Plan during the period		212			244			220			244
Weighted average shares outstanding		26,083			25,858			26,058			25,824
Basic loss per share	$	(0.61	)	$	(0.06	)	$	(0.54	)	$	(0.66	)
DILUTED EARNINGS PER SHARE
Net (loss)	$	(15,782	)	$	(1,468	)	$	(14,033	)	$	(17,097	)
Weighted average shares outstanding
Basic		26,083			25,858			26,058			25,824
Effect of dilutive securities (b):
Impact of common shares to be issued under stock option plans, and contingently issuable shares, if any		--			--			--			--
Weighted average shares outstanding (c)		26,083			25,858			26,058			25,824
Diluted (loss) per share	$	(0.61	)	$	(0.06	)	$	(0.54	)	$	(0.66	)

XML

Note 5 - Inventories (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	December 31,		June 30,
(In thousands)	2018		2018
Inventories:
Raw materials	$	33,467	$	31,795
Work-in-process		2,116		3,833
Finished goods		18,510		15,366
Total Inventories	$	54,093	$	50,994

XML

Note 6 - Accrued Expenses (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	December 31,		June 30,
(In thousands)	2018		2018
Accrued Expenses:
Compensation and benefits	$	6,842	$	9,394
Customer prepayments		1,476		1,070
Accrued sales commissions		1,702		2,274
Accrued warranty		7,136		6,876
Other accrued expenses		6,574		4,658
Total Accrued Expenses	$	23,730	$	24,272

XML

Note 7 - Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Goodwill [Table Text Block]

Goodwill
(In thousands)	Lighting			Graphics
	Segment			Segment			Total
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
Goodwill Impairment	$	(20,165	)	$	--		$	(20,165	)
Balance as of December 31, 2018
Goodwill	$	94,564		$	28,690		$	123,254
Accumulated impairment losses		(85,356	)		(27,525	)		(112,881	)
Goodwill, net as of December 31, 2018	$	9,208		$	1,165		$	10,373

Schedule of Intangible Assets and Goodwill [Table Text Block]

	December 31, 2018
Other Intangible Assets	Gross
(In thousands)	Carrying		Accumulated		Net
	Amount		Amortization		Amount
Amortized Intangible Assets
Customer relationships	$	35,563	$	11,040	$	24,523
Patents		338		231		107
LED technology firmware, software		16,066		12,083		3,983
Trade name		2,658		664		1,994
Total Amortized Intangible Assets		54,625		24,018		30,607
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	$	58,047	$	24,018	$	34,029

	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
Total Amortized Intangible Assets		54,625		22,638		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	$	58,047	$	22,638	$	35,409

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Note 10 - Supplemental Cash Flow Information (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

(In thousands)	Six Months Ended December 31
	2018		2017
Cash payments:
Interest	$	1,133	$	767
Income taxes	$	3	$	1,232
Non-cash investing and finance activities:
Issuance of common shares as compensation	$	180	$	156
Issuance of common shares to fund deferred compensation plan	$	190	$	261

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Note 12 - Severance Costs (Tables)

6 Months Ended

Dec. 31, 2018

Employee Severance [Member]

Notes Tables

Schedule of Accrued Severance Liability [Table Text Block]

	Six			Six			Fiscal
	Months Ended			Months Ended			Year Ended
(In thousands)	December 31,			December 31,			June 30,
	2018			2017			2018
Balance at beginning of the period	$	1,772		$	235		$	235
Accrual of expense		492			83			1,900
Payments		(549	)		(218	)		(363	)
Adjustments		--			(14	)		--
Balance at end of the period	$	1,715		$	86		$	1,772

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Note 13 - Restructuring Costs (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Restructuring and Related Costs [Table Text Block]

	Three		Six Months		Three		Six Months
	Months Ended		Ended		Months Ended		Ended
(In thousands)	December 31,		December 31,		December 31,		December 31,
	2018		2018		2017		2017
Severance and other termination benefits	$	202	$	221	$	--	$	--
Facility repairs		7		47		--		--
Impairment of fixed assets and accelerated depreciation		185		228		--		--
Other restructuring costs		7		60		--		--
Total	$	401	$	556	$	--	$	--

Restructuring and Related Costs, Summary of Costs Incurred by Line Item in the Statement of Operations [Table Text Block]

	Three Months Ended		Six Months Ended
(In thousands)	December 31		December 31
	2018		2018
Cost of Goods Sold	$	376	$	531
Operating Expenses		25		25
Total	$	401	$	556

Schedule of Liability Balances Related to Restructuring Costs [Table Text Block]

(In thousands)
	Balance as of June 30, 2018		Restructuring Expense		Payments			Adjustments		Balance as of December 31, 2018
Severance and termination benefits	$	--	$	221	$	(21	)	$	--	$	200
Facility Repairs		--		47		(8	)		--		39
Other restructuring costs		--		60		(52	)		--		8
Total	$	--	$	328	$	(81	)	$	--	$	247

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Note 14 - Income Taxes (Tables)

6 Months Ended

Dec. 31, 2018

Notes Tables

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Three Months Ended						Six Months Ended
	December 31						December 31
	2018			2017			2018			2017
Reconciliation to effective tax rate:
Provision for income taxes at the anticipated annual tax rate		23.0	%		28.9	%		23.0	%		28.9	%
Enactment of tax law changes		--			111.2			--			(22.2	)
Uncertain tax positions		0.8			(4.8	)		0.8			0.5
Difference between deferred and current tax rate related to the impairment of goodwill		0.6			--			0.7			12.1
Tax impact related to share based compensation		--			0.3			(0.5	)		(0.4	)
Effective tax rate		24.4	%		135.6	%		24.0	%		18.9	%

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Note 2 - Summary of Significant Accounting Policies (Details Textual)	Jul. 01, 2018 USD ($)
Accounting Standards Update 2014-09 [Member]
Cumulative Effect on Retained Earnings, Net of Tax, Total	$ 591,000

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Note 2 - Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Revenue	$ 89,541	$ 92,305	$ 174,498	$ 179,771
Lighting Segment [Member]
Revenue	63,654	69,174	125,086	137,602
Lighting Segment [Member] | New Technology Products [Member]
Revenue	56,271		107,576
Lighting Segment [Member] | Legacy Products [Member]
Revenue	6,947		16,023
Lighting Segment [Member] | Turnkey Services and Other [Member]
Revenue	436		1,487
Graphics Segment [Member]
Revenue	25,887	$ 23,131	49,412	$ 42,169
Graphics Segment [Member] | New Technology Products [Member]
Revenue	2,349		4,751
Graphics Segment [Member] | Legacy Products [Member]
Revenue	18,222		34,186
Graphics Segment [Member] | Turnkey Services and Other [Member]
Revenue	5,316		10,475
Transferred at Point in Time [Member] | Lighting Segment [Member]
Revenue	57,318		111,567
Transferred at Point in Time [Member] | Graphics Segment [Member]
Revenue	14,758		32,452
Transferred over Time [Member] | Lighting Segment [Member]
Revenue	6,336		13,519
Transferred over Time [Member] | Graphics Segment [Member]
Revenue	$ 11,129		$ 16,960

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Note 2 - Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jul. 01, 2018	Jun. 30, 2018
Accounts receivable, net	$ 56,430	$ 55,544	$ 50,609
Inventories, net	54,093	46,827	50,994
Other long-term assets, net	14,405	9,609	9,786
Retained earnings	$ (905)	15,715	$ 15,124
Restatement Adjustment [Member]
Accounts receivable, net		4,935
Inventories, net		(4,167)
Other long-term assets, net		(177)
Retained earnings		$ 591

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Note 3 - Segment Reporting Information (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Number of Operating Segments			2
Intersegment Revenue Markup Percentage			10.00%
Sales Revenue, Net [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage	0.00%	0.00%	0.00%	0.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Concentration Risk, Percentage			0.00%		0.00%

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Note 3 - Segment Reporting Information - Summarized Financial Information by Reportable Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Net sales	$ 89,541	$ 92,305	$ 174,498	$ 179,771
Operating income (loss)	(20,271)	4,547	(17,337)	(20,267)
Capital expenditures	931	692	1,579	1,190
Depreciation and amortization	2,592	2,552	5,235	5,124
Corporate and Eliminations [Member]
Operating income (loss)	(2,680)	(2,983)	(5,983)	(6,343)
Capital expenditures	94	36	200	91
Depreciation and amortization	243	283	501	575
Lighting Segment [Member]
Net sales	63,654	69,174	125,086	137,602
Lighting Segment [Member] | Operating Segments [Member]
Operating income (loss)	(18,452)	5,275	(14,602)	(17,655)
Capital expenditures	588	499	864	760
Depreciation and amortization	1,952	1,885	3,942	3,786
Graphics Segment [Member]
Net sales	25,887	23,131	49,412	42,169
Graphics Segment [Member] | Operating Segments [Member]
Operating income (loss)	861	2,255	3,248	3,731
Capital expenditures	249	157	515	339
Depreciation and amortization	$ 397	$ 384	$ 792	$ 763

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Note 3 - Segment Reporting Information - Identifiable Assets by Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Identifiable assets	$ 225,078	$ 229,517
Corporate and Eliminations [Member]
Identifiable assets	25,614	16,837
Lighting Segment [Member] | Operating Segments [Member]
Identifiable assets	152,586	172,799
Graphics Segment [Member] | Operating Segments [Member]
Identifiable assets	$ 46,878	$ 39,881

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Note 3 - Segment Reporting Information - Intersegment Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Inter-segment Revenues	$ 89,541	$ 92,305	$ 174,498	$ 179,771
Lighting Segment [Member]
Inter-segment Revenues	63,654	69,174	125,086	137,602
Graphics Segment [Member]
Inter-segment Revenues	25,887	23,131	49,412	42,169
Intersegment Eliminations [Member] | Lighting Segment [Member]
Inter-segment Revenues	870	992	1,279	1,707
Intersegment Eliminations [Member] | Graphics Segment [Member]
Inter-segment Revenues	$ 44	$ 1,040	$ 75	$ 1,071

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Note 4 - Earnings Per Common Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,536,732	3,569,762	3,356,101	3,549,705

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Note 4 - Earnings Per Common Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
		Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
BASIC EARNINGS PER SHARE
Net loss		$ (15,782)	$ (1,468)	$ (14,033)	$ (17,097)
Weighted average shares outstanding during the period, net of treasury shares (a) (in shares)	[1]	25,838	25,551	25,795	25,528
Weighted average vested restricted stock units outstanding (in shares)		212	244	220	244
Weighted average shares outstanding (in shares)		26,083	25,858	26,058	25,824
Basic loss per share (in dollars per share)		$ (0.61)	$ (0.06)	$ (0.54)	$ (0.66)
DILUTED EARNINGS PER SHARE
Net loss		$ (15,782)	$ (1,468)	$ (14,033)	$ (17,097)
Basic (in shares)		26,083	25,858	26,058	25,824
Impact of common shares to be issued under stock option plans, and contingently issuable shares, if any (in shares)	[2]
Weighted average shares outstanding (c) (in shares)	[3]	26,083	25,858	26,058	25,824
Diluted loss per share (in dollars per share)		$ (0.61)	$ (0.06)	$ (0.54)	$ (0.66)
Restricted Stock Units (RSUs) [Member]
BASIC EARNINGS PER SHARE
Weighted average vested restricted stock units outstanding (in shares)		33	63	43	52

[1] Includes shares accounted for like treasury stock.

[2] Calculated using the "Treasury Stock" method as if dilutive securities were exercised and the funds were used to purchase common shares at the average market price during the period.

[3] Options to purchase 3,536,732 common shares and 3,569,762 common shares for the three months ended December 31, 2018 and 2017, respectively, were not included in the computation of the three month diluted loss per share because the exercise price was greater than the average fair market value of the common shares. Additionally, options to purchase 3,356,101 common shares and 3,549,705 common shares for the six months ended at December 31, 2018 and 2017, respectively, were not included in the computation of the six month diluted loss per share because the exercise price was greater than the average fair market value of the common shares. For the three months ended and the six months ended in December 31, 2018 and December 31, 2017, the effect of dilutive securities was not included in the calculation of diluted loss per share because there was a net loss for the period.

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Note 5 - Inventories - Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jul. 01, 2018	Jun. 30, 2018
Inventories:
Raw materials	$ 33,467		$ 31,795
Work-in-process	2,116		3,833
Finished goods	18,510		15,366
Total Inventories	$ 54,093	$ 46,827	$ 50,994

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Note 6 - Accrued Expenses - Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Accrued Expenses:
Compensation and benefits	$ 6,842	$ 9,394
Customer prepayments	1,476	1,070
Accrued sales commissions	1,702	2,274
Accrued warranty	7,136	6,876
Other accrued expenses	6,574	4,658
Total Accrued Expenses	$ 23,730	$ 24,272

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Note 7 - Goodwill and Other Intangible Assets (Details Textual)	3 Months Ended		6 Months Ended		9 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Number of Reporting Units			3
Goodwill, Impairment Loss	$ 20,165,000		$ 20,165,000	$ 28,000,000
Amortization of Intangible Assets, Total	689,000	$ 690,000			$ 1,380,000	$ 1,380,000
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	2,761,000		2,761,000		2,761,000
Finite-Lived Intangible Assets, Amortization Expense, Year Two	2,687,000		2,687,000		2,687,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	2,682,000		2,682,000		2,682,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	2,460,000		2,460,000		2,460,000
Finite-Lived Intangible Assets, Amortization Expense, Year Five	2,412,000		2,412,000		2,412,000
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	$ 18,985,000		$ 18,985,000		$ 18,985,000
Lighting Segment [Member]
Number of Reporting Units			2
Goodwill, Impairment Loss			$ 20,165,000
Graphics Segment [Member]
Number of Reporting Units			1
Goodwill, Impairment Loss

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Note 7 - Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Goodwill	$ 123,254,000		$ 123,254,000		$ 123,254,000
Accumulated impairment losses	(112,881,000)		(112,881,000)		(92,716,000)
Goodwill, net	10,373,000		10,373,000		30,538,000
Goodwill Impairment	(20,165,000)		(20,165,000)	$ (28,000,000)
Lighting Segment [Member]
Goodwill	94,564,000		94,564,000		94,564,000
Accumulated impairment losses	(85,356,000)		(85,356,000)		(65,191,000)
Goodwill, net	9,208,000		9,208,000		29,373,000
Goodwill Impairment			(20,165,000)
Graphics Segment [Member]
Goodwill	28,690,000		28,690,000		28,690,000
Accumulated impairment losses	(27,525,000)		(27,525,000)		(27,525,000)
Goodwill, net	$ 1,165,000		1,165,000		$ 1,165,000
Goodwill Impairment

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Note 7 - Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Jun. 30, 2018
Amortized intangible assets, gross	$ 54,625	$ 54,625
Accumulated amortization	24,018	22,638
Amortized intangible assets, net	30,607	31,987
Indefinite-lived intangible assets, gross	3,422	3,422
Total other intangible assets, gross	58,047	58,047
Total other intangible assets, net	34,029	35,409
Trademarks and Trade Names [Member]
Indefinite-lived intangible assets, gross	3,422	3,422
Customer Relationships [Member]
Amortized intangible assets, gross	35,563	35,563
Accumulated amortization	11,040	10,011
Amortized intangible assets, net	24,523	25,552
Patents [Member]
Amortized intangible assets, gross	338	338
Accumulated amortization	231	217
Amortized intangible assets, net	107	121
Technology-Based Intangible Assets [Member]
Amortized intangible assets, gross	16,066	16,066
Accumulated amortization	12,083	11,801
Amortized intangible assets, net	3,983	4,265
Trade Names [Member]
Amortized intangible assets, gross	2,658	2,658
Accumulated amortization	664	609
Amortized intangible assets, net	$ 1,994	$ 2,049

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Note 8 - Revolving Line of Credit (Details Textual) - USD ($) $ in Millions	1 Months Ended	3 Months Ended	6 Months Ended
	Feb. 28, 2017	Mar. 31, 2019	Dec. 31, 2018
Long-term Line of Credit, Total			$ 48.4
Line of Credit Facility, Remaining Borrowing Capacity			$ 51.6
London Interbank Offered Rate (LIBOR) [Member] | Scenario, Forecast [Member]
Debt Instrument, Basis Spread on Variable Rate		2.00%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	1.25%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.50%
UNITED STATES
Line of Credit Facility, Maximum Borrowing Capacity	$ 100.0
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.20%

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Note 9 - Cash Dividends (Details Textual) - USD ($)	1 Months Ended	6 Months Ended
	Jan. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Payments of Dividends, Total		$ 2,587,000	$ 2,564,000
Dividends Accrued		$ 34,631	$ 38,463
Subsequent Event [Member]
Quarterly Indicated Per Share Dividend Rate	$ 0.05
Annual Indicated per Share Dividend Rate	$ 0.20
Dividends Payable, Date to be Paid	Feb. 12, 2019
Dividends Payable, Date of Record	Feb. 04, 2019

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Note 10 - Supplemental Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash payments:
Interest	$ 1,133	$ 767
Income taxes	3	1,232
Issuance of common shares as compensation	180	156
Issuance of common shares to fund deferred compensation plan	$ 190	$ 261

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Note 11 - Commitments and Contingencies (Details Textual) $ in Thousands	Dec. 31, 2018 USD ($)
Standby Letters of Credit [Member]
Letters of Credit Outstanding, Amount	$ 0

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Note 12 - Severance Costs (Details Textual) - USD ($)	6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Severance Expense	$ 492,000	$ 83,000	$ 1,900,000
Restructuring Reserve, Ending Balance	247,000		$ 0
Employee Severance [Member]
Restructuring Reserve, Ending Balance	1,715,000
Restructuring Reserve, Current	869,000
Restructuring Reserve, Noncurrent	$ 846,000

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Note 12 - Severance Costs - Accrued Severance Liability Activity (Details) - USD ($)	6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Balance	$ 1,772,000	$ 235,000	$ 235,000
Accrual of expense	492,000	83,000	1,900,000
Payments	(549,000)	(218,000)	(363,000)
Adjustments		(14,000)
Balance	$ 1,715,000	$ 86,000	$ 1,772,000

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Note 13 - Restructuring Costs (Details Textual)		3 Months Ended		6 Months Ended
	Oct. 29, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 ft²
Restructuring and Related Cost, Incurred Cost (Gain)		$ 401,000		$ 556,000
Inventory Write-down				2,043,000	$ 1,033,000
Fixed Asset Impairment and Accelerated Depreciation Expense				228,000
Closure of Lighting Facility in New Windsor, New York [Member]
Expected Annual Savings from Closure of Facility	$ 4,000,000
Restructuring and Related Cost, Expected Cost, Total	800,000
Expected Write-down of Inventory	$ 1,500,000
Restructuring and Related Cost, Incurred Cost (Gain)				401,000
Inventory Write-down				919,000
Closure of Leased Facility in Hawthorne, California [Member]
Restructuring and Related Cost, Incurred Cost (Gain)				155,000
Inventory Write-down				148,000
Area of Real Estate Property | ft²						12,000
Closure of Leased Facility in Hawthorne, California [Member] | Cost of Sales [Member]
Inventory Write-down		$ 632,000		$ 1,067,000

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Note 13 - Restructuring Costs - Summary of Restructuring Costs for the Period (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Restructuring and related costs	$ 401		$ 556
Severance and Other Termination Benefits [Member]
Restructuring and related costs	202		221
Facility Repairs [Member]
Restructuring and related costs	7		47
Restructuring Impairment of Fixed Assets and Accelerated Depreciation [Member]
Restructuring and related costs	185		228
Other Restructuring [Member]
Restructuring and related costs	$ 7		$ 60

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Note 13 - Restructuring Costs - Cost Incurred by Line Items on the Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2018
Restructuring and related costs, incurred cost	$ 401	$ 556
Cost of Goods Sold [Member]
Restructuring and related costs, incurred cost	376	531
Operating Expense [Member]
Restructuring and related costs, incurred cost	$ 25	$ 25

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Note 13 - Restructuring Costs - Liability Balances Related to Restructuring Costs (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2018 USD ($)
Balance, beginning	$ 0
Restructuring Expense	328
Payments	(81)
Adjustments	0
Balance, ending	247
Severance and Other Termination Benefits [Member]
Balance, beginning	0
Restructuring Expense	221
Payments	(21)
Adjustments	0
Balance, ending	200
Lease Obligation Restructuring [Member]
Balance, beginning	0
Restructuring Expense	47
Payments	(8)
Adjustments	0
Balance, ending	39
Other Restructuring [Member]
Balance, beginning	0
Restructuring Expense	60
Payments	(52)
Adjustments	0
Balance, ending	$ 8

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Note 14 - Income Taxes (Details Textual) - USD ($) $ in Millions	3 Months Ended			6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2019
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	23.00%	28.90%	34.00%	23.00%	28.90%
Scenario, Forecast [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent						21.00%
Lighting Reporting Unit [Member]
Deferred Tax Assets, Increase During Period, Impairment of Goodwill	$ 4.8		$ 10.7

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Note 14 - Income Taxes - Reconciliation of Income Tax Rate (Details)	3 Months Ended			6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2018	Dec. 31, 2017
Provision for income taxes at the anticipated annual tax rate	23.00%	28.90%	34.00%	23.00%	28.90%
Enactment of tax law changes		111.20%			(22.20%)
Uncertain tax positions	0.80%	(4.80%)		0.80%	0.50%
Difference between deferred and current tax rate related to the impairment of goodwill	0.60%			0.70%	12.10%
Tax impact related to share based compensation		0.30%		(0.50%)	(0.40%)
Effective tax rate	24.40%	135.60%		24.00%	18.90%