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Reportable Segments
 3 Months Ended
Sep. 25, 2016
Segment Reporting [Abstract]  
Reportable Segments
Reportable Segments

The Company's operating and reportable segments are:
•
Lighting Products
•
LED Products

As discussed more fully in Note 2, “Discontinued Operations,” on July 13, 2016, the Company executed a definitive agreement to sell the Wolfspeed business to Infineon. As a result, the Company has classified the results of the Wolfspeed business as discontinued operations in its consolidated statements of income (loss) for all periods presented. For comparative purposes, the prior segment results have been revised to conform to the current segment presentation.
Reportable Segments Description
The Company's Lighting Products segment primarily consists of LED lighting systems and bulbs. The Company's LED Products segment includes LED chips and LED components.
Financial Results by Reportable Segment
The table below reflects the results of the Company's reportable segments as reviewed by the Chief Operating Decision Maker (CODM) for the three months ended September 25, 2016 and September 27, 2015. The Company's CODM is the Chief Executive Officer. The Company used the same accounting policies to derive the segment results reported below as those used in the Company's consolidated financial statements.
The Company's CODM does not review inter-segment transactions when evaluating segment performance and allocating resources to each segment, and inter-segment transactions are not included in the segment revenue presented in the table below. As such, total segment revenue in the table below is equal to the Company's consolidated revenue.
The Company's CODM reviews gross profit as the lowest and only level of segment profit. As such, all items below gross profit in the consolidated statements of income (loss) must be included to reconcile the consolidated gross profit presented in the table below to the Company's consolidated loss from continuing operations before income taxes.
In order to determine gross profit for each reportable segment, the Company allocates direct costs and indirect costs to each segment's cost of revenue. The Company allocates indirect costs, such as employee benefits for manufacturing employees, shared facilities services, information technology, purchasing, and customer service, when the costs are identifiable and beneficial to the reportable segment. The Company allocates these indirect costs based on a reasonable measure of utilization that considers the specific facts and circumstances of the costs being allocated.
Unallocated costs in the table below consisted primarily of manufacturing employees’ stock-based compensation, expenses for profit sharing and quarterly or annual incentive plans and matching contributions under the Company’s 401(k) plan. These costs were not allocated to the reportable segments’ gross profit because the Company’s CODM does not review them regularly when evaluating segment performance and allocating resources.
Revenue, gross profit and gross margin for each of the Company's segments were as follows (in thousands, except percentages):
 
Three Months Ended
 
 
September 25,
2016
 
September 27,
2015
 
Revenue:
 
 
 
 
Lighting Products revenue

$183,836

 

$248,031

 
LED Products revenue
137,493

 
133,518

 
Total revenue

$321,329

 

$381,549

 
 
 
 
 
 
Gross Profit and Gross Margin:
 
 
 
 
Lighting Products gross profit

$49,290

 

$69,081

 
Lighting Products gross margin
26.8
%
 
27.9
%
 
LED Products gross profit
41,770

 
41,869

 
LED Products gross margin
30.4
%
 
31.4
%
 
Total segment gross profit
91,060

 
110,950

 
Unallocated costs
(4,719
)
 
(3,758
)
 
Consolidated gross profit

$86,341

 

$107,192

 
Consolidated gross margin
26.9
%
 
28.1
%
 


Assets by Reportable Segment
Inventories are the only assets reviewed by the Company's CODM when evaluating segment performance and allocating resources to the segments. The CODM reviews all of the Company's assets other than inventories on a consolidated basis.
Unallocated inventories in the table below were not allocated to the reportable segments because the Company’s CODM does not review them when evaluating performance and allocating resources to each segment. Unallocated inventories consisted primarily of manufacturing employees’ stock-based compensation, profit sharing and quarterly or annual incentive compensation and matching contributions under the Company’s 401(k) plan.
Inventories for each of the Company's segments were as follows (in thousands):
 
September 25,
2016
 
June 26,
2016
Lighting Products

$183,529

 

$172,261

LED Products
103,540

 
104,544

Total segment inventories
287,069

 
276,805

Unallocated inventories
4,464

 
4,866

Consolidated inventories

$291,533

 

$281,671