v3.26.1
Note 5 - Segment Reporting Information
 9 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

NOTE 5 - 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 Display Solutions, with one executive leadership team reporting directly to the CODM with responsibilities for managing the performance across the segments.

 

The Company’s methods for measuring profitability under GAAP on a reportable segment basis and used by the CODM to assess performance is adjusted net income. These measurements are used to monitor performance compared to prior periods and forecasted results. The CODM does not look at disaggregated expenses at the segment level. The CODM does review expenses on a consolidated basis which is consistent with the categories of expense reported on the consolidated statements of operations.

 

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 services lighting product customers through the commercial and industrial project, stock and flow, and renovation channels. In addition to the manufacture and sale of lighting fixtures, the Company offers a variety of lighting controls to complement its lighting fixtures which include sensors, photocontrols, dimmers, motion detection and Bluetooth systems. 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 Display Solutions Segment manufactures, sells and installs exterior and interior visual image and display elements, including printed graphics, structural graphics, digital signage, non-digital signage, menu board systems, millwork and metal display fixtures, refrigerated displays, heated displays, food equipment, countertops, and other custom display elements. These products are used in visual image programs in several markets including the refueling and convenience store markets, quick-service and casual restaurant market, retail and grocery store, and other retail markets. The Company accesses its customers primarily through a direct sale model utilizing its own sales force. Sales through distribution represent a small portion of Display Solutions sales. 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 Unallocated corporate expenses net of tax line item. These activities primarily include 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 consolidated net sales in the three and nine months ended March 31, 2026, or 2025. There was no concentration of accounts receivable at March 31, 2026, or 2025. There is no concentration of revenues or assets outside of United States.

 

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of March 31, 2026, and March 31, 2025:

 

(In thousands)

 

Three Months Ended

  

Nine Months Ended

 
  

March 31, 2026

  

March 31, 2026

 
          

Segment

          

Segment

 
  

Lighting

  

Display

  

Total

  

Lighting

  

Display

  

Total

 

Total sales

 $62,860  $90,630  $153,490  $205,080  $259,698  $464,778 

Inter-segment sales

  (2,822)  (143)  (2,965)  (9,316)  (686)  (10,002)

Net sales

  60,038   90,487   150,525   195,764   259,012   454,776 
                         

Other segment items *

  (53,637)  (82,922)  (136,559)  (175,802)  (238,388)  (414,190)
                         

Adjusted net income

  6,401   7,565   13,966   19,962   20,624   40,586 
                         

Unallocated corporate expenses

          (3,893)          (11,025)

Interest expense

          (474)          (1,794)

Long-term performance based compensation

          (597)          (2,264)

Amortization expense on acquired intangible assets

          (1,377)          (3,653)

Restructuring / severance costs

          (19)          35 

Acquisition costs

          (4,898)          (5,205)

Lease expense on the step-up basis of acquired leases

          (241)          (340)

Foreign currency transaction loss on intercompany loan

          147           (207)

Tax rate difference between reported and adjusted net income

          (523)          (430)
                         

Net income

         $2,091          $15,703 

 

* Costs of products and services sold, selling and administrative expenses, other income and expense, and income tax expense

 

(In thousands)

 

Three Months Ended

  

Nine Months Ended

 
  

March 31, 2025

  

March 31, 2025

 
          

Segment

          

Segment

 
  

Lighting

  

Display

  

Total

  

Lighting

  

Display

  

Total

 

Total sales

 $62,302  $73,796  $136,098  $190,984  $243,284  $434,268 

Inter-segment sales

  (3,334)  (283)  (3,617)  (15,371)  (587)  (15,958)

Net sales

  58,968   73,513   132,481   175,613   242,697   418,310 
                         

Other segment items *

  (53,196)  (67,466)  (120,662)  (159,677)  (224,475)  (384,152)
                         

Adjusted net income

  5,772   6,047   11,819   15,936   18,222   34,158 
                         

Unallocated corporate expenses

          (4,827)          (9,587)

Interest expense

          (661)          (2,264)

Long-term performance based compensation

          (879)          (3,039)

Amortization expense on acquired intangible assets

          (1,128)          (3,260)

Restructuring / severance costs

          -           (45)

Acquisition costs

          (577)          (627)

Lease expense on the step-up basis of acquired leases

          (52)          (155)

Consulting expense: commercial growth initiatives

          -           (62)

Tax rate difference between reported and adjusted net income

          188           1,093 
                         

Net income

         $3,883          $16,212 

 

* Costs of products and services sold, selling and administrative expenses, other income and expense, and income tax expense

 

(In thousands)

 

Three Months Ended

  

Nine Months Ended

 
  

March 31,

  

March 31,

 
  

2026

  

2025

  

2026

  

2025

 

Capital Expenditures:

                

Lighting Segment

 $490  $246  $1,228  $1,467 

Display Solutions Segment

  251   358   2,062   934 
  $741  $604  $3,290  $2,401 
                 

Total segment capital expenditures

 $741  $604  $3,290  $2,401 

Other unallocated capital expenditures

  (34)  86   68   114 

Consolidated capital expenditures

 $707  $690  $3,358  $2,515 
                 

Income Tax Expense:

                

Lighting Segment

 $1,201  $2,063  $5,147  $5,103 

Display Solutions Segment

  2,245   992   5,700   5,298 
  $3,446  $3,055  $10,847  $10,401 
                 

Total segment income tax expense

 $3,446  $3,055  $10,847  $10,401 

Other unallocated income tax (credit)

  (2,179)  (1,342)  (5,102)  (5,352)

Consolidated income tax expense

 $1,267  $1,713  $5,745  $5,049 
                 

Depreciation and Amortization:

                

Lighting Segment

 $1,279  $1,284  $3,816  $3,778 

Display Solutions Segment

  2,012   1,693   5,703   4,984 
  $3,291  $2,977  $9,519  $8,762 
                 

Total segment depreciation and amortization

 $3,291  $2,977  $9,519  $8,762 

Other unallocated depreciation and amortization

  101   84   301   258 

Consolidated depreciation and amortization

 $3,392  $3,061  $9,820  $9,020 

 

  

March 31, 2026

  

June 30, 2025

 

Identifiable Assets:

        

Lighting Segment

 $130,617  $132,960 

Display Solutions Segment

  664,562   253,299 
  $795,179  $386,259 
         

Total Segment assets

 $795,179  $386,259 

Deferred tax assets

  -   5,495 

Other unallocated assets

  5,370   4,608 

Consolidated assets

 $800,549  $396,362 

 

The segment net sales reported above represent sales to external customers. Identifiable assets are those assets used by each segment in its operations.