NOTE

– RESTRUCTURING COSTS

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

for information regarding additional severance expenses that are

not

included in the restructuring costs identified in this footnote.