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Note 7 - Goodwill and Other Intangible Assets | 9 Months Ended
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Mar. 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 goodwill and indefinite-lived intangible assets 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 goodwill and intangible assets 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 fair value of reporting units are based on the best information available as of the date of the assessment. The use of different assumptions would increase or decrease estimated discounted future operating cash flows and could increase or decrease an impairment charge. Company management uses its judgment in assessing whether assets may have become impaired between annual impairment tests. Indicators such as adverse business conditions, economic factors and technological change or competitive activities may signal that an asset has become impaired. The Company identified its reporting units in conjunction with its annual goodwill impairment testing. The Company has a total of three reporting units that contain goodwill. There are two reporting units within the Lighting Segment and one reporting unit within the Graphics Segment. One reporting unit previously reported in the Technology Segment has been transferred to the Lighting Segment as a result of the merge of the Technology Segment with the Lighting Segment (See Note 3 ). The Company relies upon a number of factors, judgments and estimates when conducting its impairment testing including, but not limited to, the Company’s stock price, operating results, forecasts, anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and judgments in applying them to the analysis of goodwill impairment. A sustained and significant decline in the Company’s stock price in the first quarter of fiscal 2018 led management to believe that a triggering event occurred and that an interim goodwill impairment test was required for one of the reporting units in the Lighting Segment that contains goodwill, as of September 30, 2017. Because the Company elected to early adopt ASU 2017 - 04, “Simplifying the Test for Goodwill Impairment”, 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 $28,000,000. The Company will continue to monitor market conditions and other events that may result in a sustained and significant drop in its stock price whereby an interim goodwill impairment test will be required. As of March 1, 2018, the Company performed its annual goodwill impairment test on the three reporting units that contain goodwill. The preliminary goodwill impairment test on one reporting unit in the Lighting Segment passed with a business enterprise value that was $21.4 million or 15% above the carrying value of this reporting unit including goodwill. The preliminary goodwill impairment test of a second reporting unit in the Lighting Segment that contains goodwill passed with an estimated business enterprise value that was $16.1 million or 69% above the carrying value of this reporting unit including goodwill. The preliminary goodwill impairment test of the reporting unit with goodwill in the Graphics Segment passed with an estimated business enterprise value that was $3.3 million or 319% above the carrying value of the reporting unit including goodwill. The impairment test is expected to be completed in the fourth quarter of fiscal 2018. It is anticipated that the results of the test will not change when the test is complete. The following table presents information about the Company's goodwill on the dates or for the periods indicated:
Goodwill |  |  |  |  |  |  |  |  |  |  |  |
(In thousands) |  | Lighting |  |  | Graphics |  |  |  |  |
|  | Segment |  |  | Segment |  |  | Total |
Balance as of June 30, 2017 |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 94,564 |  |  | $ | 28,690 |  |  | $ | 123,254 |
Accumulated impairment losses |  |  | (37,191 | ) |  |  | (27,525 | ) |  |  | (64,716 | )
Goodwill, net as of June 30, 2017 |  | $ | 57,373 |  |  | $ | 1,165 |  |  | $ | 58,538 |
Goodwill Impairment |  |  | (28,000 | ) |  |  | -- |  |  |  | (28,000 | )
Balance as of March 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | $ | 94,564 |  |  |  | 28,690 |  |  |  | 123,254 |
Accumulated impairment losses |  |  | (65,191 | ) |  |  | (27,525 | ) |  |  | (92,716 | )
Goodwill, net as of March 31, 2018 |  | $ | 29,373 |  |  | $ | 1,165 |  |  | $ | 30,538 |
The Company performed its annual review of indefinite-lived intangible assets as of March 1, 2018 and determined there was no impairment. The preliminary indefinite-lived intangible impairment test passed with a fair market value that was $20.6 million or 604% above its carrying value. The impairment test is expected to be completed in the fourth quarter of fiscal 2018. It is anticipated that the results of the test will not change when the test is complete. The gross carrying amount and accumulated amortization by major other intangible asset class is as follows:
|  | March 31, 2018 |
Other Intangible Assets |  | Gross |  |  |  |  |  |  |  |  |
(In thousands) |  | Carrying |  |  | Accumulated |  |  | Net |
|  | Amount |  |  | Amortization |  |  | Amount |
Amortized Intangible Assets |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 35,563 |  |  | $ | 9,496 |  |  | $ | 26,067 |
Patents |  |  | 338 |  |  |  | 210 |  |  |  | 129 |
LED technology firmware, software |  |  | 16,066 |  |  |  | 11,661 |  |  |  | 4,404 |
Trade name |  |  | 2,658 |  |  |  | 582 |  |  |  | 2,076 |
Non-compete agreements |  |  | 710 |  |  |  | 710 |  |  |  | -- |
Total Amortized Intangible Assets |  |  | 55,335 |  |  |  | 22,659 |  |  |  | 32,676 |
Indefinite-lived Intangible Assets |  |  |  |  |  |  |  |  |  |  |  |
Trademarks and trade names |  |  | 3,422 |  |  |  | -- |  |  |  | 3,422 |
Total Indefinite-lived Intangible Assets |  |  | 3,422 |  |  |  | -- |  |  |  | 3,422 |
Total Other Intangible Assets |  | $ | 58,757 |  |  | $ | 22,659 |  |  | $ | 36,098 |
|  | June 30, 2017 |
Other Intangible Assets |  | Gross |  |  |  |  |  |  |  |  |
|  | Carrying |  |  | Accumulated |  |  | Net |
(In thousands) |  | Amount |  |  | Amortization |  |  | Amount |
Amortized Intangible Assets |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  | $ | 35,563 |  |  | $ | 7,956 |  |  | $ | 27,607 |
Patents |  |  | 338 |  |  |  | 186 |  |  |  | 152 |
LED technology firmware, software |  |  | 16,066 |  |  |  | 11,237 |  |  |  | 4,829 |
Trade name |  |  | 2,658 |  |  |  | 499 |  |  |  | 2,159 |
Non-compete agreements |  |  | 710 |  |  |  | 710 |  |  |  | - |
Total Amortized Intangible Assets |  |  | 55,335 |  |  |  | 20,588 |  |  |  | 34,747 |
Indefinite-lived Intangible Assets |  |  |  |  |  |  |  |  |  |  |  |
Trademarks and trade names |  |  | 3,422 |  |  |  | -- |  |  |  | 3,422 |
Total Indefinite-lived Intangible Assets |  |  | 3,422 |  |  |  | -- |  |  |  | 3,422 |
Total Other Intangible Assets |  | $ | 58,757 |  |  | $ | 20,588 |  |  | $ | 38,169 |
(In thousands) |  | Amortization Expense of Other Intangible Assets |
|  | March 31, 2018 |  |  | March 31, 2017 |
Three Months Ended |  | $ | 691 |  |  | $ | 359 |
Nine Months Ended |  | $ | 2,071 |  |  | $ | 567 |
The Company expects to record annual amortization expense as follows:
(In thousands) |  |  |  |
2018 |  | $ | 2,760 |
2019 |  | $ | 2,760 |
2020 |  | $ | 2,687 |
2021 |  | $ | 2,682 |
2022 |  | $ | 2,461 |
After 2022 |  | $ | 21,397 |

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -URI http://asc.fasb.org/topic&trid=2144416 + Details
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