Note 3 - Business Segment Information

12 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 3 — BUSINESS SEGMENT INFORMATION

The accounting guidance on Segment Reporting establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s Chief Executive Officer or “CODM”) in making decisions on how to allocate resources and assess performance. The Company’s two operating segments are Lighting and Display Solutions (formerly known as the Graphics Segment), with one executive team under the 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 non-residential outdoor and indoor lighting fixtures utilizing LED light sources that have been fabricated and assembled for the Company’s markets, primarily the refueling and convenience store markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports court and field market. The Company also offers a variety of lighting controls to complement its lighting fixtures which include sensors, photocontrols, dimmers, motion detection and Bluetooth systems. The Company also services lighting product customers through the commercial and industrial project, stock and flow, and renovation channels. The Lighting Segment also includes the design, engineering and manufacturing of electronic circuit boards, assemblies and sub-assemblies which are sold directly to customers.

The Company acquired JSI in the fourth quarter of fiscal 2021, and consolidated it into the former Graphics Segment, which has been rebranded as the Display Solutions Segment, to more closely align the Company’s comprehensive product offering with the markets it serves. The Display Solutions Segment manufactures, sells and installs exterior and interior visual image and display elements, including printed graphics, structural graphics, digital signage, menu board systems, display fixtures, refrigerated displays, and custom display elements. These products are used in visual image programs in several markets including the refueling and convenience store markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports court and field market. The Display Solutions Segment also provides a variety of project management services to complement our display elements, such as installation management, site surveys, permitting, and content management which are offered to our customers to support our digital signage.

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 were no customers or customer programs representing a concentration of 10% or more of the Company’s net sales in the fiscal year ended June 30, 2022. There was no concentration of accounts receivable at June 30, 2022, or 2021.One customer program in the Display Solutions Segment represents $35.2 million or 11.2% of the Company’s net sales in the fiscal year ended June 30, 2021. Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of June 30, 2022, and June 30, 2021:

(In thousands)	Twelve Months Ended
	June 30
Net Sales:
Lighting Segment	$	233,449		$	189,000
Display Solutions Segment		221,671			126,612
	$	455,120		$	315,612
Operating Income (Loss):
Lighting Segment	$	20,942		$	13,328
Display Solutions Segment		17,589			9,864
Corporate and Eliminations		(17,330	)		(15,162	)
	$	21,201		$	8,030
Capital Expenditures:
Lighting Segment	$	1,017		$	1,596
Display Solutions Segment		1,162			177
Corporate and Eliminations		(57	)		460
	$	2,122		$	2,233
Depreciation and Amortization:
Lighting Segment	$	5,782		$	6,306
Display Solutions Segment		4,073			1,525
Corporate and Eliminations		263			283
	$	10,118		$	8,114

	June 30, 2022		June 30, 2021
Identifiable Assets:
Lighting Segment	$	152,431	$	132,169
Display Solutions Segment		152,302		147,354
Corporate and Eliminations		6,347		7,298
	$	311,080	$	286,821

The segment net sales reported above represent sales to external customers. Segment operating income (loss), 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 most intersegment revenues. Any intersegment profit in inventory is eliminated in consolidation. Intersegment revenues were eliminated in consolidation as follows:

	Twelve Months Ended
(In thousands)	June 30
	2022		2021
Lighting Segment inter-segment net sales	$	38,310	$	28,449
Display Solutions Segment inter-segment net sales	$	352	$	219