1 unchanged sentence
Disclosure Controls and Procedures
−Removed: The Company maintains disclosure controls and procedures (as such term is defined Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by the Company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods specified in the SEC’s rules and forms.
+Added: The Company maintains disclosure controls and procedures (as such term is defined Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by the Company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods specified in the SEC’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
−Removed: We conducted, under the supervision of our management, including the Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.
+Added: We conducted, under the supervision of our management, including the Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act.
Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2021, our disclosure controls and procedures were effective.
−Removed: Management believes that the consolidated financial statements included in this Annual Report on Form 10-K are fairly presented in all material respects in accordance with U.S GAAP, and the Company’s Chief Executive Officer and Chief Financial Officer have certified that, based on their knowledge, the consolidated financial statements included in this report fairly present in all material respects the Company’s financial condition, results of operations, statement of shareholders’ equity, and cash flows for each of the periods presented in this report.
+Added: Management believes that the consolidated financial statements included in this Annual Report on Form 10-K are fairly presented in all material respects in accordance with U.S GAAP, and the Company’s Chief Executive Officer and Chief Financial Officer have certified that, based on their knowledge, the consolidated financial statements included in this report fairly present in all material respects the Company’s financial condition, results of operations, statement of shareholders’
+Added: equity, and cash flows for each of the periods presented in this report.
+Added: The Company acquired JSI on May 21, 2021.
+Added: Management excluded JSI from its evaluation of the effectiveness of the internal control over financial reporting as of June 30, 2021.
+Added: Including goodwill and acquired intangible assets, JSI represented 39% of the Company’s total consolidated assets as of June 30, 2021, and 3% of the Company’s total consolidated sales for the fiscal year ended June 30, 2021.
Management's Report on Internal Control over Financial Reporting appearing on page 29 of this report is incorporated by reference in this Item 9A.
Changes in Internal Control
−Removed: There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
−Removed: See Management’s Report On Internal Control Over Financial Reporting on page 28.
+Added: There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
+Added: See Management’s Report On Internal Control Over Financial Reporting on page 29.
OTHER INFORMATION
Not applicable.
+Added: ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
−Removed: Information about our directors and officers may be found under the captions “Nominees for Board of Directors” and “Executive Officers” in our Proxy Statement for the Annual Meeting of Shareholders to be held November 10, 2020 (the “Proxy Statement”).
−Removed: Information about our Audit Committee may be found under the caption “Committees of the Board” in the Proxy Statement.
+Added: Information about our directors and officers may be found under the captions “Nominees for Board of Directors”
+Added: and “Executive Officers”
+Added: in our Proxy Statement for the Annual Meeting of Shareholders to be held November 2, 2021 (the “Proxy Statement”).
+Added: Information about our Audit Committee may be found under the caption “Committees of the Board”
+Added: in the Proxy Statement.
That information is incorporated herein by reference.
2 unchanged sentences
If we make any substantive amendments to the code of ethics or grant any waiver, including any implicit waiver, from a provision of the code to our Chief Executive Officer, Chief Financial Officer, or Chief Accounting Officer, we will disclose the nature of the amendment or waiver on that website or in a report on Form 8-K.
+Added: ITEM 11.
EXECUTIVE COMPENSATION
−Removed: The information in the Proxy Statement set forth under the captions “Director Compensation,” “Compensation Discussion and Analysis” “Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” is incorporated herein by reference.
+Added: The information in the Proxy Statement set forth under the captions “Director Compensation,”
+Added: “Compensation Discussion and Analysis”
+Added: “Compensation Committee Interlocks and Insider Participation,”
+Added: and “Compensation Committee Report”
+Added: is incorporated herein by reference.
+Added: ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
−Removed: The information in the Proxy Statement set forth under the captions “Security Ownership,” and “Equity Compensation Plan Information” is incorporated herein by reference.
−Removed: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
−Removed: The information set forth in the Proxy Statement under the captions “Corporate Governance” and “Related Person Transactions” is incorporated herein by reference.
+Added: The information in the Proxy Statement set forth under the captions “Security Ownership,”
+Added: and “Equity Compensation Plan Information”
+Added: is incorporated herein by reference.
+Added: ITEM 13.
+Added: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
+Added: The information set forth in the Proxy Statement under the captions “Corporate Governance”
+Added: and “Related Person Transactions”
+Added: is incorporated herein by reference.
+Added: ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
−Removed: Information concerning principal accountant fees and services appears in the Proxy Statement under the headings “Ratification of Appointment of Independent Registered Public Accounting Firm” and “Committees of the Board” and is incorporated herein by reference.
+Added: Information concerning principal accountant fees and services appears in the Proxy Statement under the headings “Ratification of Appointment of Independent Registered Public Accounting Firm”
+Added: and “Committees of the Board”
+Added: and is incorporated herein by reference.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
−Removed: The following documents are filed as part of this report:
+Added: (a)         The following documents are filed as part of this report:
Consolidated Financial Statements appear as part of Item 8 of this Form 10-K.
−Removed: Exhibits – Exhibits set forth below are either on file with the Securities and Exchange Commission and are incorporated by reference as exhibits hereto, or are filed with this Form 10-K.
+Added: Exhibits – Exhibits set forth below are either on file with the Securities and Exchange Commission and are incorporated by reference as exhibits hereto, or are filed with this Form 10-K.
Exhibit Description
−Removed: Certificate of Amended Articles of Incorporation of LSI.
−Removed: Amended and Restated Code of Regulations of LSI
−Removed: Description of Securities (incorporated by reference to Exhibit 4.1 of LSI’s Annual Report on Form 10-K filed on September 6, 2019).
+Added: Stock Purchase Agreement dated as of May 21, 2021 among LSI Fresh Subsidiary Inc., JSI Holding Corp., Fresh Seller Rep, LLC and the Sellers identified therein ++ (incorporated by reference to Exhibit 2.1 to LSI’s Form 8-K filed on May 24, 2021)
+Added: Certificate of Amended Articles of Incorporation of LSI (incorporated by reference to Exhibit 3.1 to LSI’s Form 10-K filed on September 11, 2020).
+Added: Amended and Restated Code of Regulations of LSI (incorporated by reference to Exhibit 3.2 to LSI’s Form 10-K filed on September 11, 2020).
+Added: Description of Securities (incorporated by reference to Exhibit 4.1 to LSI’s Annual Report on Form 10-K filed on September 6, 2019).
Warrant Agreement issued by LSI Industries Inc.
−Removed: (incorporated by reference to Exhibit 4.1 to LSI’s Form 8-K filed on February 21, 2017).
−Removed: Third Amendment to Loan Documents dated February 21, 2017 between LSI and PNC Bank, National Association (incorporated by reference to Exhibit 4.2 to LSI’s Form 8-K filed on February 21, 2017).
−Removed: Fourth Amendment to Loan Documents dated February 28, 2019 between LSI and PNC Bank, National Association (incorporated by reference to Exhibit 10.2 to LSI’s Form 10-Q filed on May 8, 2019).
−Removed: Amended and Restated Loan Agreement dated as of June 19, 2014 between LSI and PNC Bank, National Association (incorporated by reference to Exhibit 10.1 of LSI’s Form 10-K filed on September 10, 2014)
−Removed: Amended and Restated 2012 Stock Incentive Plan amended as of November 17, 2016 (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on February 3, 2017).
−Removed: Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 of LSI’s Form 8-K filed on June 23, 2016)
+Added: (incorporated by reference to Exhibit 4.1 to LSI’s Form 8-K filed on February 21, 2017).
+Added: Third Amendment to Loan Documents dated February 21, 2017 between LSI and PNC Bank, National Association (incorporated by reference to Exhibit 4.2 to LSI’s Form 8-K filed on February 21, 2017).
+Added: Fourth Amendment to Loan Documents dated February 28, 2019 between LSI and PNC Bank, National Association (incorporated by reference to Exhibit 10.2 to LSI’s Form 10-Q filed on May 8, 2019).
+Added: Amended and Restated Loan Agreement dated as of June 19, 2014 between LSI and PNC Bank, National Association (incorporated by reference to Exhibit 10.1 of LSI’s Form 10-K filed on September 10, 2014)
+Added: Amended and Restated 2012 Stock Incentive Plan amended as of November 17, 2016 (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on February 3, 2017).
+Added: Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to LSI’s Form 8-K filed on June 23, 2016)
LSI Industries Inc.
−Removed: Nonqualified Deferred Compensation Plan (Amended and Restated as of December 30, 2019) (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on February 6, 2020).
+Added: Nonqualified Deferred Compensation Plan (Amended and Restated as of December 30, 2019) (incorporated by reference to Exhibit 10.2 to LSI’s Form 10-Q filed on February 6, 2020).
Employment Agreement between LSI and James A.
−Removed: Clark (incorporated by reference to Exhibit 10.1 to LSI’s 8-K filed on October 17, 2018).
+Added: Clark (incorporated by reference to Exhibit 10.1 to LSI’s 8-K filed on October 17, 2018).
Employment Offer Letter between LSI and James E.
−Removed: Galeese (incorporated by reference to Exhibit 10.1 to LSI’s Form 8-K filed on June 13, 2017).
+Added: Galeese (incorporated by reference to Exhibit 10.1 to LSI’s Form 8-K filed on June 13, 2017).
Employment Offer Letter between LSI and Thomas A.
−Removed: Caneris (incorporated by reference to Exhibit 10.1 to LSI’s Form 8-K filed on August 5, 2019).
+Added: Caneris (incorporated by reference to Exhibit 10.1 to LSI’s Form 8-K filed on August 5, 2019).
Employment Offer Letter between LSI and Michael C.
−Removed: Beck (incorporated by reference to Exhibit 10.1 to LSI’s Form 8-K filed on January 16, 2019).
−Removed: Change of Control Policy (incorporated by reference to Exhibit 10 to LSI’s Form 8-K filed on October 3, 2011).
−Removed: Form of Restricted Stock Unit Award Agreement – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to LSI’s Form 8-K filed on July 6, 2015).
−Removed: Form of Non-qualified Stock Option Agreement / Inducement Awards – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on November 7, 2018).
−Removed: Form of Nonqualified Stock Option Award Agreement - Service-Based – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.5 to LSI’s Form 8-K filed on July 6, 2015).
−Removed: Form of Nonqualified Stock Option Award Agreement – Performance-Based – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to LSI’s Form 8-K filed on July 6, 2015).
−Removed: Form of Incentive Stock Option Award Agreement – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.6 to LSI’s Form 8-K filed on July 6, 2015).
−Removed: FY20 Long Term Incentive Plan*++ (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on November 7, 2019).
−Removed: FY20 Short Term Incentive Plan*++ (incorporated by reference to Exhibit 10.2 to LSI’s Form 10-Q filed on November 7, 2019).
−Removed: Form of Performance Share Unit Award Agreement – Amended and Restated 2012 Stock Incentive Plan*++ (incorporated by reference to Exhibit 10.3 to LSI’s Form 10-Q filed on November 7, 2019).
−Removed: 2019 Omnibus Award Plan (incorporated by reference to Exhibit 10.1 to LSI’s Form S-8 Registration Statement File No.
+Added: Beck (incorporated by reference to Exhibit 10.1 to LSI’s Form 8-K filed on January 16, 2019).
+Added: Form of Change in Control Agreement (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on January 29, 2021).
+Added: Form of Restricted Stock Unit Award Agreement – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to LSI’s Form 8-K filed on July 6, 2015).
+Added: Form of Non-qualified Stock Option Agreement / Inducement Awards – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on November 7, 2018).
+Added: Form of Nonqualified Stock Option Award Agreement - Service-Based – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.5 to LSI’s Form 8-K filed on July 6, 2015).
+Added: Form of Nonqualified Stock Option Award Agreement – Performance-Based – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to LSI’s Form 8-K filed on July 6, 2015).
+Added: Form of Incentive Stock Option Award Agreement – Amended and Restated 2012 Stock Incentive Plan (incorporated by reference to Exhibit 10.6 to LSI’s Form 8-K filed on July 6, 2015).
+Added: FY20 Long Term Incentive Plan*++ (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on November 7, 2019).
+Added: FY20 Short Term Incentive Plan*++ (incorporated by reference to Exhibit 10.2 to LSI’s Form 10-Q filed on November 7, 2019).
+Added: Form of Performance Share Unit Award Agreement – Amended and Restated 2012 Stock Incentive Plan*++ (incorporated by reference to Exhibit 10.3 to LSI’s Form 10-Q filed on November 7, 2019).
+Added: 2019 Omnibus Award Plan (incorporated by reference to Exhibit 10.1 to LSI’s Form S-8 Registration Statement File No.
333-234556 filed on November 7, 2019).
−Removed: Code of Ethics (incorporated by reference to exhibit 14 to LSI’s Form 10-K for the fiscal year ended June 30, 2004).
+Added: Fifth Amendment to Loan Documents dated as of March 30, 2021 between LSI and PNC Bank, National Association (incorporated by reference to Exhibit 10.1 to LSI’s Form 8-K filed on April 1, 2021).
+Added: Form of Supplemental Benefits Agreement (incorporated by reference to Exhibit 10.2 to LSI’s Form 10-Q filed on January 29, 2021)
+Added: Fiscal Year 2021 Long-Term Incentive Plan (LTIP)++ (incorporated by reference to Exhibit 10.1 to LSI’s Form 10-Q filed on November 5, 2020)
+Added: Fiscal Year 2021 Short-Term Incentive Plan (STIP)++ (incorporated by reference to Exhibit 10.2 to LSI’s Form 10-Q filed on November 5, 2020)
+Added: Form of 2019 Omnibus Award Plan Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.3 to LSI’s Form 10-Q filed on November 5, 2020)
+Added: Form of 2019 Omnibus Award Plan Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 to LSI’s Form 10-Q filed on November 5, 2020)
+Added: Form of 2019 Omnibus Award Plan Performance Stock Unit Award Agreement++ (incorporated by reference to Exhibit 10.5 to LSI’s Form 10-Q filed on November 5, 2020)
+Added: Code of Conduct
Subsidiaries of the Registrant
1 unchanged sentence
Power of Attorney (included as part of signature page)
−Removed: Certification of Principal Executive Officer required by Rule 13a-14(a)
−Removed: Certification of Principal Financial Officer required by Rule 13a-14(a)
−Removed: Section 1350 Certification of Principal Executive Officer
−Removed: Section 1350 Certification of Principal Financial Officer
−Removed: XBRL Instance Document
−Removed: XBRL Taxonomy Extension Schema
−Removed: XBRL Taxonomy Extension Calculation Linkbase
−Removed: XBRL Taxonomy Extension Label Linkbase
−Removed: XBRL Taxonomy Extension Presentation Linkbase
−Removed: XBRL Taxonomy Extension Definition Document
+Added: Certification of Principal Executive Officer required by Rule 13a-14(a)
+Added: Certification of Principal Financial Officer required by Rule 13a-14(a)
+Added: Section 1350 Certification of Principal Executive Officer
+Added: Section 1350 Certification of Principal Financial Officer
+Added: Inline XBRL Instance Document
+Added: Inline XBRL Taxonomy Extension Schema
+Added: Inline XBRL Taxonomy Extension Calculation Linkbase
+Added: Inline XBRL Taxonomy Extension Label Linkbase
+Added: Inline XBRL Taxonomy Extension Presentation Linkbase
+Added: Inline XBRL Taxonomy Extension Definition Document
+Added: Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)
*Management compensatory agreement.
2 unchanged sentences
The Registrant hereby agrees to furnish a copy of any omitted portion to the SEC upon request.
−Removed: LSI will provide shareholders with any exhibit upon the payment of a specified reasonable fee, which fee shall be limited to LSI’s reasonable expenses in furnishing such exhibit.
+Added: LSI will provide shareholders with any exhibit upon the payment of a specified reasonable fee, which fee shall be limited to LSI’s reasonable expenses in furnishing such exhibit.
The exhibits identified herein as being filed with the SEC have been so filed with the SEC but may not be included in this version of the Annual Report to Shareholders.
1 unchanged sentence
Not included.
−Removed: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
+Added: Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
LSI INDUSTRIES INC.
17 unchanged sentences
/s/ Robert P.
+Added: Director 
September 10, 2021
/s/ Ronald D.
+Added: Director  
September 10, 2021
+Added: Director  
September 10, 2021
1 unchanged sentence
September 10, 2021
−Removed: September 11, 2020
/s/ Wilfred T.
+Added: O’Gara
Chairman of the Board of Directors
+Added: O’Gara
September 10, 2021
−Removed: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: The Company’s “forward looking statements” and disclosures as presented earlier in this Form 10-K in the “Safe Harbor” Statement, as well as the Company’s consolidated financial statements and accompanying notes presented later in this Form 10-K should be referred to when reading Management’s Discussion and Analysis of Financial Condition and Results of Operations.
−Removed: LSI Industries is a leading producer of high-performance, American-made lighting solutions.
−Removed: Our strength in outdoor lighting applications creates opportunities for us to introduce additional solutions to our valued customers.
−Removed: LSI’s indoor and outdoor products and services, including our digital and print graphics capabilities, are valued by architects, engineers, distributors and contractors for their quality, reliability and innovation.
−Removed: Our products are used extensively in automotive dealerships, petroleum stations, quick service restaurants, grocery stores and pharmacies, retail establishments, sports complexes, parking lots and garages, and commercial and industrial buildings.
+Added: MANAGEMENT ’
+Added: S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
+Added: The Company’s “forward looking statements”
+Added: and disclosures as presented earlier in this Form 10-K in the “Safe Harbor”
+Added: Statement, as well as the Company’s consolidated financial statements and accompanying notes presented later in this Form 10-K should be referred to when reading Management’s Discussion and Analysis of Financial Condition and Results of Operations.
+Added: LSI is a leading producer of non-residential lighting and retail display solutions.
+Added: Non-residential lighting consists of high-performance, American-made lighting products.
+Added: The Company’s strength in outdoor lighting applications creates opportunities for it to introduce additional solutions to its customers.
+Added: Retail display solutions consist of graphics solutions, digital signage, and technically advanced food display equipment for strategic vertical markets.
+Added: LSI’s team of internal specialists also provide comprehensive project management services in support of large-scale rollouts.
COVID-19 Pandemic
−Removed: Our business is significantly vulnerable to the economic effects of pandemics and other public health crises, including the ongoing novel coronavirus (“COVID-19”) outbreak that continues to spread in the U.S.
−Removed: and globally.
−Removed: During the fourth quarter of fiscal 2020, we experienced a decline in the demand for our products and services across all of our markets as a result of the impact of the spread of COVID-19 and the resulting disruptions to the non-residential construction market.
−Removed: We continue to assess the ongoing impact of COVID-19 on our business results and remain committed to taking actions to address the health, safety and welfare of our employees, customers, agents and suppliers as well as the negative effects from demand disruption and production impacts, including, but not limited to, the following:
−Removed: Operating our business with a focus on our employee health and safety, which includes minimizing travel, implementing appropriate distancing programs, enhanced and more frequent cleaning within our facilities, and requiring use of personal protective equipment;
−Removed: Monitoring of our liquidity, reduction of supply flows into our manufacturing facilities, disciplined inventory management, and continued scrutiny of our capital expenditures;
−Removed: Continuously reviewing our financial strategy to strengthen financial flexibility in these volatile financial markets.
−Removed: We continue to maintain a strong balance sheet with a cash balance of $3.5 million and no long-term debt as of June 30, 2020.
−Removed: We believe that our liquidity position is adequate to meet our projected needs in the reasonably foreseeable future.
−Removed: Future developments, such as the potential of additional outbreaks of COVID-19 in the U.S.
−Removed: and globally and the actions taken by governmental authorities in response to future resurgence, that are highly uncertain and not able to be predicted will determine the extent to which the COVID-19 outbreak continues to impact our results of operations and financial conditions.
−Removed: See Item 1A, Risk Factors, included in Part I of this Annual Report on Form 10-K for an additional discussion of risks related to COVID-19.
+Added: The COVID-19 pandemic continues to impact business activity across industries in the U.S.
+Added: and worldwide, including, but not limited to, workforce and supply chain disruptions.
+Added: We remain committed to taking actions to address the health, safety and welfare of our employees, customers, agents and suppliers.
+Added: Future developments, such as the actions taken by governmental authorities in response to future outbreaks that are highly uncertain and unpredictable, will determine the extent to which COVID-19 continues to impact our results of operations and financial conditions.
+Added: See the risk factor captioned “Our financial condition and results of operations for future periods may be adversely affected by the COVID-19 outbreak or other outbreaks of infectious disease or similar public health threats and the resulting economic impact”
+Added: in Item 1A, Risk Factors, included in Part I of this Annual Report on Form 10-K for an additional discussion of risks related to COVID-19.
Summary of Consolidated Results
2 unchanged sentences
Lighting Segment
−Removed: Graphics Segment
+Added: Display Solutions Segment
Total Net Sales
2 unchanged sentences
Lighting Segment
−Removed: Graphics Segment
+Added: Display Solutions Segment
Corporate and Eliminations
−Removed: Total Operating Income (Loss)
−Removed: Fiscal 2020 net sales of $305.6 million decreased $23.3 million or 7% as compared to fiscal 2019 net sales of $328.9 million.
−Removed: Net sales were favorably influenced by increased net sales in the Graphics Segment (up $5.6 million or 6%) and were unfavorably influenced by decreased net sales in the Lighting Segment (down $28.9 million or 12%).
−Removed: Fiscal 2020 operating income of $13.1 million represents a $33.0 million increase from fiscal 2019 operating loss of ($19.9) million.
−Removed: The $33.0 million improvement from operating loss in fiscal 2019 was favorably impacted by the $4.8 million pre-tax gain on the sale of the New Windsor, New York facility and the $3.7 million pre-tax gain on the sale of the North Canton, Ohio facility, both of which occurred in fiscal 2020, and a $20.2 million pre-tax goodwill impairment charge in fiscal 2019 in the Lighting Segment.
−Removed: The year over year increase in operating income was partially offset by a one-time adjustment to a Company benefit plan in fiscal 2019 which resulted in a favorable pre-tax adjustment to earnings of $1.2 million.
+Added: Total Operating Income
+Added: Fiscal 2021 net sales of $315.6 million increased $10.0 million or 3% as compared to fiscal 2020 net sales of $305.6 million.
+Added: Net sales were favorably influenced by increased net sales in the Display Solutions Segment (up $27.3 million or 27%) and were unfavorably influenced by decreased net sales in the Lighting Segment (down $17.2 million or 8%).
+Added: Fiscal 2021 operating income of $8.0 million represents a $5.1 million decrease from fiscal 2020 operating income of $13.1 million.
+Added: Current year results include $2.9 million of transaction costs related to the acquisition of JSI.
+Added: Prior year results were favorably impacted by the $4.8 million pre-tax gain on the sale of the New Windsor, New York facility and the $3.7 million pre-tax gain on the sale of the North Canton, Ohio facility.
Non-GAAP adjusted operating income in fiscal 2021 of $13.0 million increased $6.0 million or 86% from adjusted fiscal 2020 operating income of $7.0 million.
−Removed: Refer to “Non-GAAP Financial Measures” below for a reconciliation of Non-GAAP financial measures to U.S.
+Added: Refer to “Non-GAAP Financial Measures”
+Added: below for a reconciliation of Non-GAAP financial measures to U.S.
GAAP measures.
−Removed: The increase in adjusted operating income was the net result of a higher-value sales mix, lower selling and administrative expenses and cost savings from the closure of the New Windsor, New York facility, partially offset by a decrease in net sales.
+Added: The increase in adjusted operating income was the net result of an increase in net sales, higher-value sales mix and lower selling and administrative expenses.
Non-GAAP Financial Measures
1 unchanged sentence
GAAP operating income, net income, and earnings per share.
−Removed: Adjusted operating income, net income and earnings per share, which exclude the impact of restructuring and plant closure (gains) costs, severance costs, goodwill impairment charges, and transition and re-alignment costs are Non-GAAP financial measures.
−Removed: Also included below are Non-GAAP financial measures including Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA and Adjusted EBITDA), Free Cash Flow and Net Debt.
+Added: Adjusted operating income, net income and earnings per share, which exclude the impact of acquisition costs, stock compensation expense, severance costs and restructuring and plant closure (gains) costs are Non-GAAP financial measures.
+Added: Also included below are Non-GAAP financial measures including Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA and Adjusted EBITDA), Free Cash Flow, Net Debt and Organic Sales Growth.
We believe that these adjusted supplemental measures are useful in assessing the operating performance of our business.
5 unchanged sentences
Therefore, these measures should only be used to evaluate our results in conjunction with corresponding GAAP measures.
−Removed: Below is a reconciliation of these non-GAAP measures to operating income, net income, and earnings per share for the periods indicated along with the calculation of EBITDA and Adjusted EBITDA, Free Cash Flow and Net Debt.
−Removed: Reconciliation of operating income (loss) to adjusted operating income:
+Added: Below is a reconciliation of these non-GAAP measures to operating income, net income, and earnings per share for the periods indicated along with the calculation of EBITDA and Adjusted EBITDA, Free Cash Flow, Net Debt and Organic Sales Growth. 
+Added: Reconciliation of operating income to adjusted operating income:
(In thousands)
−Removed: Operating Income (Loss) as reported
−Removed: Restructuring, plant closure (gain) costs and related inventory write-downs
+Added: Operating Income as reported
+Added: Acquisition costs
+Added: Stock compensation expense
Severance costs
−Removed: Goodwill impairment
−Removed: Transition and re-alignment costs
+Added: Restructuring, plant closure (gain) costs and related inventory write-downs
Adjusted Operating Income
−Removed: Reconciliation of net income (loss) to adjusted net income
+Added: Reconciliation of net income to adjusted net income
(In thousands, except per share data)
−Removed: Net Income (Loss) as reported
−Removed: Restructuring, plant closure (gain) costs and related inventory write-downs
+Added: Net Income as reported
+Added: Acquisition costs
+Added: Stock compensation expense
Severance costs
−Removed: Goodwill impairment
−Removed: Transition and re-alignment costs
−Removed: Tax impact from the anticipated sale of New Windsor assets
+Added:  (3) 
+Added: Restructuring, plant closure (gain) costs and related inventory write-downs
Tax impact due to the change in the estimated annual tax rate used for GAAP reporting purposes
Net Income adjusted
−Removed: The following represents the income tax effects of the adjustments in the tables above, which were calculated using the estimated combined U.S.
−Removed: and Mexico effective income tax rates for the periods indicated:
−Removed: The reconciliation of reported earnings per share to adjusted earnings per share may not produce identical amounts due to rounding differences and due to the difference between basic and dilutive weighted average shares outstanding in the computation of earnings per share.
−Removed: Reconciliation of operating income (loss) to EBITDA and Adjusted EBITDA
+Added: The following represents the income tax effects of the adjustments in the tables above, which were calculated using the estimated combined U.S., Canada and Mexico effective income tax rates for the periods indicated:
+Added: The reconciliation of reported earnings per share to adjusted earnings per share may not produce identical amounts due to rounding differences.
+Added: Reconciliation of operating income to EBITDA and Adjusted EBITDA
(In thousands)
−Removed: Operating Income (Loss) as reported
+Added: Operating Income as reported
Depreciation and Amortization
−Removed: Restructuring, plant closure (gain) costs and related inventory write-downs
+Added: Acquisition costs
+Added: Stock compensation expense
Severance costs
−Removed: Goodwill impairment
−Removed: Transition and re-alignment costs
+Added: Restructuring, plant closure (gain) costs and related inventory write-downs
Adjusted EBITDA
9 unchanged sentences
Cash and cash equivalents as reported
+Added: Reconciliation of net sales to organic net sales
+Added: (In thousands)
+Added: Lighting Segment
+Added: Display Solutions Segment
+Added: Total net sales
+Added: Total organic net sales
Results of Operations
−Removed: 20 20 Compared to 201 9
+Added: 2021 Compared to 2020          
Lighting Segment
(In thousands)
−Removed: Operating Income (Loss)
−Removed: Lighting Segment net sales of $206.2 million in fiscal 2020 decreased 12% from fiscal 2019 same period net sales of $235.1 million.
−Removed: The 12% drop in sales is attributed to the impact of COVID-19 disruptions on construction markets in the fourth quarter of fiscal 2020, inventory de-stocking by distributors, and continued competitiveness in our project and stock and flow markets.
−Removed: Gross profit of $56.9 million in fiscal 2020 increased $1.7 million or 3% from the same period of fiscal 2019 and increased from 23.4% to 27.1% as a percentage of Lighting Segment net sales.
−Removed: The growth in gross profit and gross profit as a percentage of sales reflects the progress in transitioning toward a higher-value sales mix, cost savings from the closure of the New Windsor facility, the successful introduction of new products and operating cost reductions.
−Removed: Selling and administrative expenses of $40.7 million in fiscal year 2020 decreased $26.6 million or 39% from the same period of fiscal 2019 selling and administrative expenses of $67.3 million, primarily due to the $4.8 million pre-tax gain on the sale of the New Windsor facility in fiscal 2020 and the $20.2 million pre-tax goodwill impairment charge in fiscal 2019.
−Removed: When the $4.8 million gain is removed from fiscal 2020 results and the goodwill impairment charge is removed from fiscal 2019 results, there was a $1.6 million or 3% decrease in selling and administrative expenses.
−Removed: The decrease in selling and administrative expenses is mostly driven by lower commission expense in fiscal 2020 as a result of lower sales and a conscientious effort to reduce spending as a result of the pandemic, partially offset by a one-time adjustment to a Company benefit plan in fiscal 2019 with no comparable event in fiscal 2020.
−Removed: The Lighting Segment fiscal 2020 operating income of $16.1 increased $28.3 million from an operating loss of ($12.2) million in the same period of fiscal 2019 primarily due to the $4.8 million pre-tax gain on the sale of the New Windsor facility in fiscal 2020 and a $20.2 million pre-tax goodwill impairment charge in fiscal 2019.
−Removed: Fiscal 2020 Non-GAAP adjusted operating income of $11.6 million was $0.4 million higher than fiscal 2019 on-GAAP adjusted operating income of $11.2 million (refer to the Non-GAAP table below for a reconciliation of Lighting Segment operating income (loss) to adjusted operating income).
+Added: Operating Income
+Added: Lighting Segment net sales of $189.0 million in fiscal 2021 decreased 8% from fiscal 2020 net sales of $206.2 million.
+Added: The 8% decrease is due to the impact of COVID-19 disruptions in construction markets.
+Added: However, in the fiscal fourth quarter, the Lighting Segment generated sales growth of 30% compared to the prior year fourth quarter, with recovery in the construction market and significant increases in both project business and sales through distributor stock.
+Added: Gross profit of $57.0 million in fiscal 2021 remained relatively consistent with the same period of fiscal 2020.
+Added: Gross profit as a percentage of net sales was 30.2% in fiscal 2021 compared to 27.6% in fiscal 2020.
+Added: The growth in gross profit as a percentage of net sales reflects our continued focus on the entire lighting model, including higher value applications, price management, new and cost reduced products and supply chain and operations productivity.
+Added: Operating expenses of $43.7 million in fiscal 2021 increased $3.0 million or 7% from fiscal 2020 operating expenses of $40.7 million, primarily due to the $4.8 million pre-tax gain on the sale of the New Windsor facility in fiscal 2020 with no comparable event in fiscal 2021.
+Added: When the $4.8 million gain is removed from the fiscal 2020 results, operating expenses in fiscal 2021 decreased from the prior year, driven by programs to reduce spending resulting from the pandemic.
+Added: The Lighting Segment fiscal 2021 operating income of $13.3 decreased $2.8 million from an operating income of $16.1 million in the same period of fiscal 2020 primarily due to the $4.8 million pre-tax gain on the sale of the New Windsor facility in fiscal 2020.
+Added: Fiscal 2021 Non-GAAP adjusted operating income of $13.6 million increased $1.9 million from fiscal 2020 Non-GAAP adjusted operating income of $11.7 million (refer to the Non-GAAP table below for a reconciliation of Lighting Segment operating income to adjusted operating income).
The increase in Non-GAAP adjusted operating income is primarily due to a favorable mix of sales on lower sales volume, improved productivity from manufacturing facility consolidation, and lower operating expenses.
−Removed: Reconciliation of Lighting Segment operating income (loss) to adjusted operating income:
+Added: Reconciliation of Lighting Segment operating income to adjusted operating income:
(In thousands)
−Removed: Operating Income (Loss)
+Added: Operating Income
+Added: Stock compensation expense
Restructuring and plant closure (gain) costs
−Removed: Goodwill impairment
Adjusted operating income
−Removed: Graphics Segment
+Added: Display Solutions Segment
(In thousands)
Operating Income
−Removed: Graphics Segment net sales of $99.4 million increased $5.6 million or 6% from fiscal 2019 net sales of $93.7 million.
−Removed: Growth was realized across the petroleum market and digital sales, partially offset by interruptions to product installation schedules in the fourth quarter of fiscal 2020 caused by COVID-19 restrictions limiting construction activity in many states.
−Removed: Gross profit of $16.6 million in fiscal 2020 decreased $2.0 million or 10% from the fiscal 2019.
−Removed: Gross profit as a percentage of segment net sales (customer plus inter-segment net sales) decreased from 19.8% in fiscal 2019 to 16.7% in fiscal 2020.
−Removed: The decrease in the amount of gross profit is due to the net effect of increased net sales (customer plus inter-segment net sales) offset by a change in customer program mix.
−Removed: Graphics gross margin was unfavorably impacted by new and early stage petroleum products and start-up costs associated therewith and the cost associated with the re-alignment of manufacturing resources required to support the transition from print to digital in certain market applications.
−Removed: Selling and administrative expenses of $8.4 million in fiscal 2020 decreased $7.1 million or 46% from the same period of fiscal 2019, primarily as a result of the $3.7 million pre-tax gain on the sale of the North Canton facility in fiscal 2020.
−Removed: When the $3.7 million gain is removed from fiscal 2020 results, there was a $3.3 million or 21% decrease in selling and administrative expenses.
−Removed: The decrease in selling and administrative expenses was due to lower operating costs as a result of an organizational realignment executed earlier in the fiscal year and overall cost management.
−Removed: Graphics Segment fiscal 2020 operating income of $8.2 million increased $5.1 million from operating income of $3.1 million in the same period of fiscal 2019.
−Removed: The increase of $5.1 million was primarily the result of the $3.7 million pre-tax gain on the sale of the North Canton facility and lower operating costs.
+Added: Display Solutions Segment net sales of $126.6 million increased $27.2 million or 27% from fiscal 2020 net sales of $99.4 million.
+Added: Of the $27.2 million increase, $9.1 million is a result of the acquisition of JSI.
+Added: The remaining increase in sales is due to growth in our Quick-Service Restaurants and Grocery verticals partially offset by a reduction in our Petroleum vertical. 
+Added: Gross profit of $22.0 million in fiscal 2021 increased $5.3 million or 32% from fiscal 2020.
+Added: Gross profit as a percentage of net sales increased to 17.4% in fiscal 2021 compared to 16.8% in fiscal 2020, primarily within our Petroleum and Grocery verticals.
+Added: Operating expenses of $12.1 million in fiscal 2021 increased $3.7 million or 43% from fiscal 2020.
+Added: Operating expenses in fiscal 2020 were impacted by the $3.7 million pre-tax gain on the sale of the North Canton, Ohio facility with no comparable event in fiscal 2021.
+Added: Display Solutions Segment fiscal 2021 operating income of $9.9 million increased $1.7 million from operating income of $8.2 million in fiscal 2020.
+Added: Non-GAAP adjusted operating income was $10.0 million in fiscal 2021 compared to adjusted operating income of $5.9 million in fiscal 2020 (refer to the Non-GAAP table below for a reconciliation of Display Solutions Segment operating income to adjusted operating income).
+Added: The increase is primarily due to improved gross profit margin.
+Added: Reconciliation of Display Solutions Segment operating income to adjusted operating income:
+Added: (In thousands)
+Added: Operating Income
+Added: Stock compensation expense
+Added: Restructuring and plant closure (gain) costs
+Added: Adjusted operating income
Corporate and Eliminations
(In thousands)
−Removed: Gross Profit (Loss)
+Added: Gross (Loss) Profit
Operating (Loss)
−Removed: The gross profit (loss) relates to the intercompany profit in inventory elimination.
−Removed: Administrative expenses of $11.3 million in fiscal 2020 increased $0.5 million or 5% from the same period of the prior year.
−Removed: The increase is primarily the result of filling key vacancies in corporate administration.
+Added: The gross (loss) profit relates to the intercompany profit in inventory elimination.
+Added: Operating expenses of $15.2 million in fiscal 2021 increased $3.9 million or 35% from fiscal 2020.
+Added: The increase is primarily due to $2.9 million of transaction costs related to the acquisition of JSI, an increase in stock compensation expense due to prior fiscal year forfeitures and an increase in the employer match related to the deferred compensation plan.
Consolidated Results
We reported $0.3 million net interest expense in fiscal 2021 compared to $0.9 million net interest expense in fiscal 2020.
−Removed: The decrease in interest expense from fiscal 2019 to fiscal 2020 is the result of reduced borrowings against our line of credit.
−Removed: We also recorded other expense of $0.5 million in fiscal 2020 and $0.1 million in fiscal 2019, both of which relate to net foreign currency transaction losses through our Mexican subsidiary.
−Removed: The increase in other expense was due to the devaluation of the Mexican Peso as a result of market conditions surrounding the COVID-19 pandemic.
+Added: The decrease in interest expense from fiscal 2020 to fiscal 2021 is the result of reduced average borrowings against our line of credit.
+Added: We also recorded other income of $0.1 million in fiscal 2021 and other expense of $0.5 million in fiscal 2020, both of which relate to net foreign currency transaction gains/losses through our Mexican and Canadian subsidiaries.
+Added: The $2.0 million of income tax expense represents a consolidated effective tax rate of 25.9%.
+Added: The effective tax rate is impacted by non-deductible transaction costs related to the acquisition of JSI.
The $2.1 million income tax expense in fiscal 2020 represents a consolidated effective tax rate of 18.0%.
−Removed: The effective tax rate is mostly driven by the following:
−Removed: 1) a tax rate benefit resulting from carryback of a net operating loss (NOL) allowed due to the enactment of the Coronavirus Aid, Relief and Economic Security (CARES) Act;
−Removed: 2) the utilization of a capital loss carryforward related to the capital gain on the sale of the North Canton facility, and;
−Removed: 3) a discrete item related to stock-based compensation expense.
−Removed: The $5.9 million income tax benefit in fiscal 2019 represents a consolidated effective tax rate of 26.6%, which is inclusive of a $0.9 million tax benefit from the sale of the New Windsor facility.
−Removed: The tax benefit results from the reduction of a valuation allowance for a capital loss deferred tax asset that can be utilized against the gain on sale.
−Removed: The effective tax rate also varied from the statutory rate due to a 30% tax rate on our Mexican subsidiary’s profits and certain permanent book-tax differences and adjustments related to uncertain income tax positions.
−Removed: We reported net income of $9.6 million in fiscal 2020 compared to net loss of ($16.3) million in fiscal 2019.
−Removed: The change from net loss from fiscal 2019 to net income in fiscal 2020 is mostly driven by the $3.7 million pre-tax gain on the sale of the North Canton facility and the $4.8 million pre-tax gain on the sale of the New Windsor facility in fiscal 2020 and the $20.2 million pre-tax goodwill impairment charge in fiscal 2019.
−Removed: Also contributing to the period-over-period results is a one-time adjustment to the Company’s benefit policy in the first quarter of fiscal 2019 which resulted in a favorable pre-tax adjustment to earnings of $1.2 million.
−Removed: When the impact of all Non-GAAP items is removed from both fiscal years, the fiscal 2020 Non-GAAP adjusted net income of $3.2 million increased $2.2 million from fiscal 2019 adjusted net income of $1.0 million (Refer to the Non-GAAP tables above).
−Removed: The increase in Non-GAAP adjusted net income is primarily the net result of an improved gross profit margin and a decrease in interest expense, partially offset by decreased net sales and higher foreign currency transaction losses.
−Removed: Diluted earnings per share of $0.36 was reported in fiscal 2020 compared to diluted loss per share of ($0.63) in fiscal 2019.
−Removed: The weighted average common shares outstanding for purposes of computing diluted earnings per share in fiscal 2020 were 26,473,000 shares as compared to 26,109,000 shares in the same period last year.
+Added: The effective tax rate was impacted by the following:
+Added: 1) a tax rate benefit resulting from carryback of a net operating loss (NOL) allowed due to the enactment of the Coronavirus Aid, Relief and Economic Security (CARES) Act, and;
+Added: 2) the utilization of a capital loss carryforward related to the capital gain on the sale of the North Canton facility.
+Added: We reported net income of $5.9 million in fiscal 2021 compared to net income of $9.6 million in fiscal 2020.
+Added: Non-GAAP adjusted net income was $9.8 million in fiscal 2021 compared to adjusted net income of $4.1 million in fiscal 2020 (Refer to the Non-GAAP tables above).
+Added: The increase in Non-GAAP adjusted net income is primarily the net result of an increase in net sales, improved gross profit margin and decreased interest expense and other expense.
+Added: Diluted earnings per share of $0.21 was reported in fiscal 2021 compared to $0.36 diluted earnings per share in fiscal 2020.
+Added: The weighted average common shares outstanding for purposes of computing diluted earnings per share in fiscal 2021 were 27,440,000 shares compared to 26,473,000 shares in fiscal 2020.
Liquidity and Capital Resources
2 unchanged sentences
At June 30, 2021 we had working capital of $54.1 million, compared to $51.2 million at June 30, 2020.
−Removed: The ratio of current assets to current liabilities was 2.48 to 1 as compared to a ratio of 2.78 to 1 at June 30, 2019.
−Removed: The balance sheet at June 30, 2019 included as asset held for sale of $7.5 million which was sold in the first quarter of fiscal 2020.
−Removed: When June 30, 2019 current assets are revised to exclude the asset held for sale, adjusted working capital, a non-GAAP financial measure, and the ratio of current assets to current liability are $63.6 million and 2.59 to 1, respectively, as of June 30, 2019.
−Removed: The $12.4 million decrease in working capital from June 30, 2019 to June 30, 2020 (as adjusted and excludes held for sale assets) is primarily driven by a $16.9 million decrease in accounts receivable, a $4.8 million decrease in inventory, a $4.4 million decrease in accounts payable, partially offset by a $2.6 million increase in cash and a $1.9 million increase in refundable taxes.
−Removed: We generated $29.7 million of cash from operating activities in fiscal 2020 compared to $11.5 million in fiscal 2019.
−Removed: The $18.2 million increase in net cash flows from operating activity is the result of our improved earnings as well as our ongoing strategy to aggressively manage our working capital which includes the reduction in accounts receivable days sales outstanding (DSO), increasing inventory turns while simultaneously reducing inventory levels, and effectively managing our supply chain which includes partnering with our suppliers to find the appropriate service level while effectively managing payment terms.
+Added: The ratio of current assets to current liabilities was 1.76 to 1 as of June 30, 2021 compared to a ratio of 2.48 to 1 as of June 30, 2020.
+Added: The $2.9 million increase in working capital from June 30, 2020 to June 30, 2021 is primarily driven by a $20.1 million increase in inventory, a $19.8 million increase in accounts receivable, partially offset by a $18.8 million increase in accounts payable and a $17.5 million increase in accrued expenses.
Net accounts receivable were $57.7 million and $37.8 million at June 30, 2021 and June 30, 2020, respectively.
−Removed: DSO decreased from 63 days at June 30, 2019 to 56 days at June 30, 2020.
+Added: Some of the increase in accounts receivable is due to the acquisition of JSI.
+Added: DSO was 56 days at both June 30, 2021 and June 30, 2020.
We believe that our receivables are ultimately collectible or recoverable, net of certain reserves, and that aggregate allowances for doubtful accounts are adequate.
−Removed: Net inventories of $38.8 million at June 30, 2020 decreased $4.8 million from $43.5 million at June 30, 2019.
−Removed: The decrease of $4.8 million is the result of a decrease in gross inventory of $5.5 million and a decrease in obsolescence reserves of $0.7 million.
−Removed: Based on a strategy of balancing inventory reductions with customer service and the timing of shipments, net inventory decreased $3.4 million in the Graphics Segment and decreased $1.4 million in the Lighting Segment in fiscal 2020.
+Added: Net inventories of $58.9 million at June 30, 2021 increased $20.1 million from $38.8 million at June 30, 2020.
+Added: The increase of $20.1 million is the result of an increase in gross inventory of $21.4 million and an increase in obsolescence reserves of $1.2 million.
+Added: Lighting Segment net inventory increased $9.0 million, in anticipation of an increase in market demand and ongoing supply chain challenges.
+Added: Net inventory in the Display Solutions Segment increased $11.2 million, primarily due to the acquisition of JSI.
Cash generated from operations and borrowing capacity under our line of credit is our primary source of liquidity.
−Removed: We have a secured $75 million revolving line of credit with our bank, with $75 million of the credit line available as of August 26, 2020.
−Removed: We amended our revolving line of credit in the third quarter of fiscal 2019 and reduced our available line of credit from $100 million to $75 million in order to better match our financing needs with an appropriate borrowing capacity.
−Removed: This line of credit is a $75 million five-year credit line expiring in the third quarter of fiscal 2022.
+Added: In March 2021, the Company amended its secured line of credit to a $100 million facility from a $75 million facility, with $24 million of the credit line available as of August 26, 2021.
+Added: This $100 million five-year credit line expires in the third quarter of fiscal 2026.
We are in compliance with all of our loan covenants.
−Removed: We believe that our $75 million line of credit plus cash flows from operating activities are adequate for calendar year 2020 operational and capital expenditure needs.
−Removed: However, as the impact of COVID-19 on the economy evolves, we will continue to assess our liquidity needs.
−Removed: We had a source of cash of $17.4 million in investing activities in fiscal 2020 as compared to a use of cash of $2.6 million in fiscal 2019, resulting in a favorable change of $20.0 million.
−Removed: Capital expenditures increased from $2.6 million in fiscal 2019 to $2.7 million in fiscal 2020.
−Removed: We sold our New Windsor manufacturing facility for $12.3 million and our North Canton facility for $7.7 million in fiscal 2020, which were the primary contributing factors to the increase in cash flow from investing activities from fiscal 2019 to fiscal 2020.
−Removed: We used $44.4 million of cash related to financing activities in fiscal 2020 compared to $11.1 million in fiscal 2019.
−Removed: The $33.3 million change in cash flow was primarily the net result of payments of long-term debt in excess of borrowings which was primarily driven by the cash flow from operations and the sale of the New Windsor and North Canton facilities.
+Added: We believe that our $100 million line of credit plus cash flows from operating activities are adequate for fiscal 2021 operational and capital expenditure needs.
+Added: However, as the impact of COVID-19 on the economy and our operations continues to evolve, we will continue to assess our liquidity needs.
+Added: We have on file with the SEC a shelf registration statement which allows us to sell any combination of common stock, preferred stock warrants, senior or subordinated debt securities or other securities in one or more offerings if we choose to do so in the future.
+Added: We expect to maintain the effectiveness of this shelf registration statement for the foreseeable future.
+Added: We generated $28.0 million of cash from operating activities in fiscal 2021 compared to $29.7 million in fiscal 2020.
+Added: The $1.7 million decrease in net cash flows from operating activity is the net result of increases in accounts receivable and inventory, partially offset by our improved earnings as well as increases in accounts payable, customer project prepayments and accrued FICA from deferred payroll taxes allowed under the CARES Act.
+Added: We used $93.0 million of cash in investing activities in fiscal 2021 compared to a source of cash of $17.4 million in fiscal 2020, resulting in a decrease of $110.4 million.
+Added: Capital expenditures decreased from $2.7 million in fiscal 2020 to $2.3 million in fiscal 2021.
+Added: We acquired JSI in May 2021 for $90.7 million, net of cash acquired.
+Added: In addition, we sold our New Windsor manufacturing facility for $12.3 million and our North Canton facility for $7.7 million in fiscal 2020, which contributed to the source of cash.
+Added: The acquisition of JSI and the sale of our two facilities were the primary contributing factors for the change in investing activities from fiscal 2020 to fiscal 2021.
+Added: We had a source of $63.6 million of cash related to financing activities in fiscal 2021 compared to use of cash of $44.4 million in fiscal 2020.
+Added: The $108.0 million change in cash flow was primarily the net result of borrowings of long-term debt in excess of payments which was primarily driven by the acquisition of JSI.
We have on our balance sheet financial instruments consisting primarily of cash and cash equivalents, revolving lines of credit, and long-term debt.
6 unchanged sentences
The Board of Directors has adopted a policy regarding dividends which indicates that dividends will be determined by the Board of Directors at its discretion based upon its evaluation of earnings, cash flow requirements, financial conditions, debt levels, stock repurchases, future business developments and opportunities, and other factors deemed relevant.
−Removed: Critical Accounting Policies and Estimates
−Removed: A summary of our significant accounting policies is included in Note 1 to the audited consolidated financial statements of the Company’s fiscal 2020 Annual Report on Form 10-K.
−Removed: We are required to make estimates and judgments in the preparation of our financial statements that affect the reported amounts of assets, liabilities, revenues and expenses, and related footnote disclosures.
−Removed: We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.
−Removed: We continually review these estimates and their underlying assumptions to ensure they remain appropriate.
−Removed: We believe the items discussed below are among its most significant accounting policies because they utilize estimates about the effect of matters that are inherently uncertain and therefore are based on management’s judgment.
−Removed: Significant changes in the estimates or assumptions related to any of the following critical accounting policies could possibly have a material impact on the financial statements.
−Removed: M ANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
+Added: Critical Accounting Policies and Use of Estimates
+Added: The preparation of the consolidated financial statements in conformity with U.S.
+Added: GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
+Added: We believe that such estimates have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements.
+Added: Actual results could differ from these estimates.
+Added: Accounting policies are an integral part of our financial statements.
+Added: A thorough understanding of these accounting policies is essential when reviewing our reported results of operations and financial position.
+Added: Management believes that the critical accounting policies and estimates involve the most difficult management judgments due to the sensitivity of the methods and assumptions used.
+Added: We believe the following accounting topics represent our critical accounting estimates:
+Added: warranty reserve, impairment of goodwill, stock-based compensation, income tax valuation allowance, revenue recognition and valuation of acquired intangible assets.
+Added: Our significant accounting policies are described in Note 2 in the accompanying consolidated financial statements of this Annual Report on Form 10-K.
+Added: MANAGEMENT ’
+Added: S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Management of LSI Industries Inc.
−Removed: and subsidiaries (the “Company” or “LSI”) is responsible for the preparation and accuracy of the financial statements and other information included in this report.
−Removed: LSI’s Management is also responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Securities Exchange Act Rules 13a-15(f).
−Removed: Under the supervision and with the participation of Management, including LSI’s principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of internal control over financial reporting as of June 30, 2020, based on the criteria set forth in “the 2013 Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
+Added: and subsidiaries (the “Company”
+Added: or “LSI”) is responsible for the preparation and accuracy of the financial statements and other information included in this report.
+Added: LSI’s Management is also responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Securities Exchange Act Rules 13a-15(f).
+Added: Under the supervision and with the participation of Management, including LSI’s principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of internal control over financial reporting as of June 30, 2021, based on the criteria set forth in “the 2013 Internal Control –
+Added: Integrated Framework”
+Added: issued by the Committee of Sponsoring Organizations of the Treadway Commission.
A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met.
6 unchanged sentences
Additionally, the Company has an Internal Audit Department to assist in monitoring compliance with financial policies and procedures.
−Removed: The Board of Directors meets its responsibility for overview of the Company’s financial statements through its Audit Committee which is composed entirely of independent Directors who are not employees of the Company.
+Added: The Board of Directors meets its responsibility for overview of the Company’s financial statements through its Audit Committee which is composed entirely of independent Directors who are not employees of the Company.
The Audit Committee meets periodically with Management and Internal Audit to review and assess the activities of each in meeting their respective responsibilities.
Grant Thornton LLP has full access to the Audit Committee to discuss the results of their audit work, the adequacy of internal accounting controls, and the quality of financial reporting.
−Removed: Based upon LSI’s evaluation, the Company’s principal executive officer and principal financial officer concluded that internal control over financial reporting was effective as of June 30, 2020.
−Removed: We reviewed the results of Management’s assessment with the Audit Committee of our Board of Directors.
−Removed: Additionally, our independent registered public accounting firm audited and independently assessed the effectiveness of the Company’s internal control over financial reporting.
−Removed: Grant Thornton LLP, an independent registered public accounting firm, has issued an opinion on the effectiveness of the Company’s internal control over financial reporting, which is presented in the financial statements.
+Added: The Company acquired JSI Store Fixtures (JSI) on May 21, 2021.
+Added: Management excluded JSI from its evaluation of the effectiveness of the internal control over financial reporting as of June 30, 2021.
+Added: Including goodwill and acquired intangible assets, JSI represented 39% of the Company’s total consolidated assets as of June 30, 2021, and 3% of the Company’s total consolidated sales for the fiscal year ended June 30, 2021.
+Added: Based upon LSI’s evaluation, the Company’s principal executive officer and principal financial officer concluded that internal control over financial reporting was effective as of June 30, 2021.
+Added: We reviewed the results of Management’s assessment with the Audit Committee of our Board of Directors.
+Added: Additionally, our independent registered public accounting firm audited and independently assessed the effectiveness of the Company’s internal control over financial reporting.
+Added: Grant Thornton LLP, an independent registered public accounting firm, has issued an opinion on the effectiveness of the Company’s internal control over financial reporting, which is presented in the financial statements.
President and Chief Executive Officer
7 unchanged sentences
We have audited the internal control over financial reporting of LSI Industries Inc.
−Removed: (an Ohio corporation) and subsidiaries (the “Company”) as of June 30, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
−Removed: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended June 30, 2020, and our report dated September 11, 2020 expressed an unqualified opinion on those financial statements.
+Added: (an Ohio Corporation) and subsidiaries (the “Company”) as of June 30, 2021, based on criteria established in the 2013 Internal Control —
+Added: Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
+Added: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2021, based on criteria established in the 2013 Internal Control —
+Added: Integrated Framework issued by COSO.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended June 30, 2021, and our report dated September 10, 2021 expressed an unqualified opinion on those financial statements.
Basis for opinion
−Removed: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report On Internal Control Over Financial Reporting.
−Removed: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
+Added: The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.
+Added: Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
4 unchanged sentences
We believe that our audit provides a reasonable basis for our opinion.
+Added: Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of JSI Holding Corp.
+Added: (“JSI”), a wholly-owned subsidiary, whose financial statements reflect total assets and revenues constituting 39 percent and 3 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30, 2021.
+Added: As indicated in Management’s Report on Internal Control Over Financial Reporting, JSI was acquired during the fiscal year 2021.
+Added: Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of JSI.
Definition and limitations of internal control over financial reporting
−Removed: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
+Added: A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
−Removed: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
+Added: and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
8 unchanged sentences
We have audited the accompanying consolidated balance sheets of LSI Industries Inc.
−Removed: (an Ohio corporation) and subsidiaries (the “Company”) as of June 30, 2020 and 2019, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the two years in the period ended June 30, 2020, and the related notes and financial statement schedules included under Item 15(a) (collectively referred to as the “financial statements”).
+Added: (an Ohio corporation) and subsidiaries (the “Company”) as of June 30, 2021 and 2020, the related consolidated statements of operations, comprehensive income, shareholders’
+Added: equity, and cash flows for each of the two years in the period ended June 30, 2021, and the related notes and financial statement schedules included under Item 15(a) (collectively referred to as the “financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of June 30, 2020, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated September 11, 2020 expressed an unqualified opinion.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of June 30, 2021, based on criteria established in the 2013 Internal Control —
+Added: Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated September 10, 2021 expressed an unqualified opinion.
Basis for opinion
−Removed: These financial statements are the responsibility of the Company’s management.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
+Added: These financial statements are the responsibility of the Company’s management.
+Added: Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
3 unchanged sentences
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
+Added: Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Change in Accounting Principle
−Removed: As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for leases in the year ended June 30, 2020 due to the adoption of Account Standards Update 2016-02, Leases (Topic 842) .
−Removed: /s/ GRANT THORNTON LLP
−Removed: We have served as the Company’s auditor since fiscal 2010.
+Added: Critical audit matters
+Added: The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:
+Added: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Estimation of product warranty reserves
+Added: As discussed in Note 1 to the consolidated financial statements, the Company provides warranty terms based upon the type of product sold. 
+Added: The Company estimates the amount of warranty costs associated with future product warranty claims, which are accrued at the time revenue is recognized.
+Added: The estimate of the likelihood and cost of future claims considers various factors, including historical warranty costs, warranty terms, current trends, product mix and sales.
+Added: The Company’s product warranty accrual as of June 30, 2021 was $5.3 million.
+Added: The principal considerations for our determination that the estimation of product warranty reserves is a critical audit matter is due to a higher risk of estimation uncertainty related to the determination of the likelihood and cost of future claims.
+Added: The evaluation of the warranty accrual required a high degree of auditor judgement and an increased effort in assessing the reasonableness of management’s estimates of the likelihood and cost of future claims
+Added: The primary procedures we performed to address this critical audit matter included the following:
+Added: Tested management’s internal controls over the Company’s product warranty accrual process including controls over the inputs to the estimate as well as controls over the process of capturing warranty claims
+Added: Tested the completeness and accuracy of the underlying claims used to develop the estimate
+Added: Evaluated the relevance, reliability, and sufficiency of the sources of claims used by the Company in developing the estimate
+Added: Evaluated the methods and assumptions used by management by:
+Added: Developing an estimation for the warranty accrual and comparing the results to the Company’s product warranty accrual estimate
+Added: Performing a retrospective review comparing management’s prior period assumptions of likelihood of claims and related costs to actual claim rate activity to evaluate management’s ability to estimate the warranty accrual
+Added: Business Combination
+Added: As discussed in Note 2 to the consolidated financial statements, the Company completed an acquisition agreement wherein the Company acquired 100% ownership of JSI Holdings Corp.
+Added: in May 2021 for total consideration of approximately $93.7M resulting in the addition of $45.8M of intangible assets.
+Added: The acquisition was accounted for as a business combination.
+Added: The principal considerations for our determination that the valuation of acquired intangible assets is a critical audit matter is that the valuation of the acquired intangible assets was considered especially challenging and required significant auditor judgment due to the complex determination by management of the appropriate assumptions, such as discount rates, revenue projections, and projected profit margins, for the valuation of the acquired intangible assets.
+Added: The Company, utilizing third-party specialists, used income valuation models including Relief from Royalty Method and the Multi-Period Excess Earning Method (MPEEM) to measure the identified intangible assets.
+Added: This required a high degree of auditor judgment and an increased extent of effort, including the need to involve professionals having expertise in the valuation of acquired intangible assets, when performing audit procedures to evaluate management’s judgments and conclusions related to the valuation of the intangible assets.
+Added: The primary procedures we performed to address this critical audit matter included the following:
+Added: Tested management’s process and related internal controls for developing fair value estimates including the development of key assumptions such as discount rates, revenue projections, and projected profit margins
+Added: Tested the completeness and accuracy of the underlying data used to develop the fair value estimates
+Added: Evaluated the appropriateness of the valuation models and methodologies used by management
+Added: Assessed the reasonableness of management’s forecast by comparing the projections to historical results and external sources including industry trends and peer companies’ historical data
+Added: Involved professionals with specialized skills and knowledge to assist in the evaluation of the significant assumptions used by management including the discount rates, revenue projections, and projected profit margins
+Added: /s/ GRANT THORNTON LLP 
+Added: We have served as the Company’s auditor since fiscal 2010.
Cincinnati, Ohio
1 unchanged sentence
LSI INDUSTRIES INC.
−Removed: CONSOLIDATED S TATEMENTS OF OPERATION S
−Removed: For the years ended June 30, 20 20 and 20 1 9
+Added: CONSOLIDATED STATEMENTS OF OPERATIONS
+Added: For the years ended June  
+Added: 30, 2021 and 2020
(In thousands, except per share data)
+Added: $ 315,612  
+Added: $ 305,558  
Cost of products and services sold
−Removed: Restructuring costs
+Added: 236,637  
+Added: 230,944  
Severance costs
−Removed: Selling and administrative expenses
Restructuring (gains) costs
+Added: ( 14 )  
+Added: 78,974  
+Added: 73,530  
+Added: Selling and administrative expenses
+Added: 70,918  
+Added: 68,783  
Severance costs
−Removed: Impairment of goodwill
−Removed: Transition and realignment costs
−Removed: Operating income (loss)
+Added: Restructuring gains
+Added: Operating income
+Added: 13,076  
Interest (income)
+Added: ( 19 )  
Interest expense
−Removed: Other expense
−Removed: Income (loss) before income taxes
−Removed: Income tax expense (benefit)
−Removed: Net income (loss)
−Removed: Earnings (loss) per common share (see Note 3)
+Added: Other (income) expense
+Added: ( 154 )  
+Added: Income before income taxes
+Added: 11,693  
+Added: Income tax expense
+Added: $ 5,868  
+Added: $ 9,592  
+Added: Earnings per common share (see Note 4)
+Added: $ 0.22  
+Added: $ 0.37  
+Added: $ 0.21  
+Added: $ 0.36  
Weighted average common shares outstanding
+Added: 26,692  
+Added: 26,274  
+Added: 27,440  
+Added: 26,473  
The accompanying notes are an integral part of these financial statements.
LSI INDUSTRIES INC.
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
−Removed: For the years ended June 30, 20 20 and 201 9
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
+Added: For the years ended June  
+Added: 30, 2021 and 2020
(In thousands)
−Removed: Net Income (Loss)
+Added: $ 5,868  
+Added: $ 9,592  
Foreign currency translation adjustment
−Removed: Comprehensive Income (Loss)
+Added: Comprehensive Income
+Added: $ 6,010  
+Added: $ 9,483  
The accompanying notes are an integral part of these financial statements.
1 unchanged sentence
CONSOLIDATED BALANCE SHEETS
−Removed: June 30, 20 20 and 20 19
+Added: 30, 2021 and 2020
(In thousands, except shares)
1 unchanged sentence
Cash and cash equivalents
+Added: $ 2,282  
+Added: $ 3,517  
Accounts receivable, less allowance for doubtful accounts of $256 and $273 , respectively
+Added: 57,685  
+Added: 37,836  
+Added: 58,941  
+Added: 38,752  
Refundable income tax
−Removed: Asset held for sale
Other current assets
Total current assets
+Added: 125,008  
+Added: 85,858  
Property, Plant and Equipment, at cost
+Added: 24,393  
+Added: 20,638  
Machinery and equipment
+Added: 65,928  
+Added: 67,796  
Buildings under finance leases
Construction in progress
+Added: 97,271  
+Added: 94,840  
Less accumulated depreciation
+Added: ( 66,719 )  
Net property, plant and equipment
+Added: 30,552  
+Added: 26,535  
+Added: 43,788  
+Added: 10,373  
Other Intangible Assets, net
+Added: 72,773  
+Added: 29,960  
Operating Lease Right-of-Use Assets
+Added: 11,579  
Other Long-Term Assets, net
+Added: 10,874  
+Added: $ 286,821  
+Added: $ 172,263  
The accompanying notes are an integral part of these financial statements.
2 unchanged sentences
Accounts payable
+Added: $ 32,977  
+Added: $ 14,216  
Accrued expenses
+Added: 37,918  
+Added: 20,433  
Total current liabilities
+Added: 70,895  
+Added: 34,649  
Long-Term Debt
+Added: 68,178  
Finance Lease Liabilities
Operating Lease Liabilities
+Added: 10,890  
Other Long-Term Liabilities
6 unchanged sentences
Outstanding 26,517,836 and 26,286,009 shares, respectively
+Added: 132,526  
+Added: 127,713  
Treasury shares, without par value
+Added: ( 2,450 )  
Deferred compensation plan
Retained (loss)
−Removed: Accumulated other comprehensive (loss) income
+Added: ( 1,405 )  
+Added: Accumulated other comprehensive income (loss)
Total shareholders' equity
+Added: 131,170  
+Added: 125,700  
Total liabilities & shareholders' equity
+Added: $ 286,821  
+Added: $ 172,263  
The accompanying notes are an integral part of these financial statements.
LSI INDUSTRIES INC.
−Removed: CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ EQUITY
−Removed: For the years ended June 30, 20 20 and 20 19
+Added: CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’
+Added: For the years ended June  
+Added: 30, 2021 and 2020
(In thousands, except shares)
7 unchanged sentences
Balance at June 30, 2019
−Removed: Other comprehensive income
+Added: 26,176  
+Added: $ 125,729  
+Added: ( 209 )  
+Added: $ ( 1,468 )  
+Added: $ 1,468  
+Added: $ ( 5,808 )  
+Added: $ 119,937  
+Added: Other comprehensive loss
+Added: ( 109 )  
Stock compensation awards
3 unchanged sentences
Deferred stock compensation
+Added: ( 347 )  
Stock-based compensation expense
−Removed: Dividends — $0.20 per share
+Added: Stock options exercised, net
+Added: Dividends —
+Added: $0.20 per share
+Added: ( 5,276 )  
Cumulative effect of adoption of accounting guidance
+Added: ( 428 )  
Balance at June 30, 2020
−Removed: Other comprehensive loss
+Added: 26,466  
+Added: $ 127,713  
+Added: ( 180 )  
+Added: $ ( 1,121 )  
+Added: $ 1,121  
+Added: $ ( 93 )  
+Added: $ ( 1,920 )  
+Added: $ 125,700  
+Added: Other comprehensive income
Stock compensation awards
2 unchanged sentences
Activity of treasury shares, net
+Added: ( 166 )  
+Added: ( 1,329 )  
Deferred stock compensation
1 unchanged sentence
Stock options exercised, net
−Removed: Dividends — $0.20 per share
−Removed: Cumulative effect of adoption of accounting guidance
+Added: Dividends —
+Added: $0.20 per share
+Added: ( 5,353 )  
Balance at June 30, 2021
+Added: 26,863  
+Added: $ 132,526  
+Added: ( 346 )  
+Added: $ ( 2,450 )  
+Added: $ 2,450  
+Added: $ ( 1,405 )  
+Added: $ 131,170  
The accompanying notes are an integral part of these financial statements.
1 unchanged sentence
CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: For the years ended June 30, 20 20 and 20 1 9
+Added: For the years ended June  
+Added: 30, 2021 and 2020
(In thousands)
Cash Flows from Operating Activities
−Removed: Net income (loss)
−Removed: Non-cash items included in net income (loss)
+Added: Non-cash items included in net income
Depreciation and amortization
Deferred income taxes
−Removed: Impairment of goodwill
Deferred compensation plan
1 unchanged sentence
Issuance of common shares as compensation
−Removed: Gain on disposition of fixed assets
+Added: Loss (gain) on disposition of fixed assets
Allowance for doubtful accounts
Inventory obsolescence reserve
−Removed: Changes in certain assets and liabilities
+Added: Changes in certain assets and liabilities, net of acquisition
Accounts receivable
5 unchanged sentences
Cash Flows from Investing Activities
−Removed: Proceeds from the sale of fixed assets
+Added: Acquisition of JSI, excluding cash aquired
Purchases of property, plant and equipment
−Removed: Net cash flows provided by (used in) investing activities
+Added: Proceeds from the sale of fixed assets
+Added: Net cash flows (used in) provided by investing activities
Cash Flows from Financing Activities
5 unchanged sentences
Proceeds from stock option exercises
−Removed: Net cash flows used in financing activities
+Added: Net cash flows provided by (used in) financing activities
Change related to foreign currency
−Removed: Increase (decrease) in cash and cash equivalents
+Added: (Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
2 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+Added: NOTE 1 —
+Added: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation:
The consolidated financial statements include the accounts of LSI Industries Inc.
−Removed: (an Ohio corporation) and its subsidiaries (collectively, the “Company”), all of which are wholly owned.
−Removed: All intercompany transactions and balances have been eliminated in consolidation.
−Removed: Impact of COVID-19:
−Removed: The COVID-19 pandemic has impacted and could further impact the Company’s business and operations and the operations of its suppliers, vendors and customers.
−Removed: The pandemic continues to significantly impact global economic conditions and in the U.S.
−Removed: as federal, state and local governments react to the public health crisis with mitigation measures, creating significant uncertainties in the U.S.
−Removed: and global economies.
−Removed: The extent to which the pandemic will continue to affect the Company’s business, operations and financial results will depend on numerous factors that it may not be able to accurately predict and which may cause the actual results to differ from the estimates and assumptions the Company is required to make in preparation of financial statements according to U.S.
−Removed: See Risk Factors in Part I, Item 1A of this Form 10-K for further discussion of the possible impact of the COVID-19 pandemic on the Company’s business .
+Added: (an Ohio corporation) and its subsidiaries (collectively, the “Company”), all of which are wholly owned. All intercompany transactions and balances have been eliminated in consolidation.
+Added: COVID- 19 Pandemic:
+Added: The COVID- 19 pandemic continues to impact business activity across industries in the U.S.
+Added: and worldwide, including, but not limited to, workforce and supply chain disruptions.
+Added: The Company remains committed to taking actions to address the health, safety and welfare of its employees, customers, agents and suppliers.
+Added: Future developments, such as the actions taken by governmental authorities in response to future outbreaks that are highly uncertain and unpredictable, will determine the extent to which COVID- 19 continues to impact the Company’s results of operations and financial conditions.
+Added: See the risk factor captioned “Our financial condition and results of operations for future periods may be adversely affected by the COVID- 19 outbreak or other outbreaks of infectious disease or similar public health threats and the resulting economic impact”
+Added: in Item 1A, Risk Factors, included in Part I of this Annual Report on Form 10 -K for an additional discussion of risks related to COVID- 19.
Revenue Recognition:
The Company recognizes revenue when it satisfies the performance obligations in its customer contracts or purchase orders.
−Removed: Most of the Company’s products have a single performance obligation which is satisfied at a point in time when control is transferred to the customer.
+Added: Most of the Company’s products have a single performance obligation which is satisfied at a point in time when control is transferred to the customer.
Control is generally transferred at time of shipment when title and risk of ownership passes to the customer.
5 unchanged sentences
The Company is not always responsible for installation of products it sells and has no post-installation responsibilities other than standard warranties.
−Removed: A number of the Company's graphics and select lighting products are highly customized for specific customers.
+Added: A number of the Company's graphics elements and select lighting products are highly customized for specific customers.
As a result, these customized products do not have an alternative use.
6 unchanged sentences
Digital signage and related media content
−Removed: The Company also offers installation services for its graphics and select lighting products.
+Added: The Company also offers installation services for its display solutions elements and select lighting products.
Installation revenue is recognized over time as our customer simultaneously receives and consumes the benefits provided through the installation process.
9 unchanged sentences
Products and services transferred at a point in time
+Added: $ 165,062  
+Added: $ 66,123  
Products and services transferred over time
+Added: 23,938  
+Added: 60,489  
+Added: $ 189,000  
+Added: $ 126,612  
Type of Product and Services
LED lighting, digital signage solutions, electronic circuit boards
−Removed: Legacy products
−Removed: Turnkey services and other
−Removed: Legacy products include lighting fixtures utilizing light sources other than LED technology, poles used to mount the fixtures and printed two and three dimensional graphic products.
−Removed: Turnkey services and other includes installation services along with shipping and handling charges.
+Added: $ 164,778  
+Added: $ 35,976  
+Added: Poles and other display solutions elements
+Added: 22,492  
+Added: 61,919  
+Added: Project management, installation services, shipping and handling
+Added: 28,717  
+Added: $ 189,000  
+Added: $ 126,612  
Practical Expedients and Exemptions
−Removed: The Company’s contracts with customers have an expected duration of one year or less, as such the Company applies the practical expedient to expense sales commissions as incurred, and have omitted disclosures on the amount of remaining performance obligations.
+Added: The Company’s contracts with customers have an expected duration of one year or less, as such the Company applies the practical expedient to expense sales commissions as incurred, and have omitted disclosures on the amount of remaining performance obligations.
Shipping costs that are not material in context of the delivery of products are expensed as incurred.
−Removed: The Company’s accounts receivable balance represents the Company’s unconditional right to receive payment from its customers with contracts.
+Added: The Company’s accounts receivable balance represents the Company’s unconditional right to receive payment from its customers with contracts.
Payments are generally due within 30 to 90 days of completion of the performance obligation and invoicing, therefore, payments do not contain significant financing components.
2 unchanged sentences
Credit and Collections:
−Removed: The Company maintains allowances for doubtful accounts receivable for probable estimated losses resulting from either customer disputes or the inability of its customers to make required payments.
−Removed: If the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against income.
−Removed: The Company determines its allowance for doubtful accounts by first considering all known collectability problems of customers’ accounts, and then applying certain percentages against the various aging categories based on the due date of the remaining receivables.
−Removed: The resulting allowance for doubtful accounts receivable is an estimate based upon the Company’s knowledge of its business and customer base, the current economic climate and historical trends.
−Removed: Receivables deemed uncollectable are written-off against the allowance for doubtful accounts receivable after all reasonable collection efforts have been exhausted.
−Removed: The Company also establishes allowances, at the time revenue is recognized, for returns, discounts, pricing and other possible customer deductions.
−Removed: These allowances are based upon historical trends.
−Removed: The following table presents the Company’s net accounts receivable at the dates indicated.
+Added: The Company maintains allowances for doubtful accounts receivable for probable estimated losses resulting from either customer disputes or the inability of its customers to make required payments. If the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make the required payments, the Company may be required to record additional allowances or charges against income. The Company determines its allowance for doubtful accounts by first considering all known collectability problems of customers’
+Added: accounts, and then applying certain percentages against the various aging categories based on the due date of the remaining receivables. The resulting allowance for doubtful accounts receivable is an estimate based upon the Company’s knowledge of its business and customer base, the current economic climate and historical trends. Receivables deemed uncollectable are written-off against the allowance for doubtful accounts receivable after all reasonable collection efforts have been exhausted.
+Added: The Company also establishes allowances, at the time revenue is recognized, for returns, discounts, pricing and other possible customer deductions. These allowances are based upon historical trends.
+Added: The following table presents the Company’s net accounts receivable at the dates indicated.
(In thousands)
2 unchanged sentences
Accounts receivable
+Added: $ 57,941  
+Added: $ 38,109  
Allowance for doubtful accounts
+Added: ( 256 )  
Accounts receivable, net
+Added: $ 57,685  
+Added: $ 37,836  
Cash and Cash Equivalents:
1 unchanged sentence
Cash and cash equivalents consist primarily of bank deposits and a bank money market account that is stated at cost, which approximates fair value.
−Removed: The Company maintains balances at financial institutions in the United States and Mexico.
−Removed: In the United States, the FDIC limit for insurance coverage on non-interest bearing accounts is $250,000.
+Added: The Company maintains balances at financial institutions in the United States, Canada and Mexico. In the United States, the FDIC limit for insurance coverage on non-interest-bearing accounts is $250,000.
As of June 30, 2021 and June 30, 2020, the Company had bank balances of $ 2.3 million and $ 3.7 million, respectively, without insurance coverage.
−Removed: Inventories and Inventory Reserves:
−Removed: Inventories are stated at the lower of cost or net realizable value.
−Removed: Cost of inventories includes the cost of purchased raw materials and purchased components, direct labor, as well as manufacturing overhead which is generally applied to inventory based on direct labor and on material content, is determined on the first-in, first-out basis.
+Added: Inventories, Net and Inventory Reserves:
+Added: Inventories are stated at the lower of cost or net realizable value. Cost of inventories includes the cost of purchased raw materials and purchased components, direct labor, as well as manufacturing overhead which is generally applied to inventory based on direct labor and on material content, is determined on the first -in, first -out basis.
The Company maintains an inventory reserve for obsolete and excess inventory.
1 unchanged sentence
The Company uses various tools, in addition to inventory turns, to identify which inventory items have the potential to become obsolete.
−Removed: Judgment is used to establish excess and obsolete inventory reserves and management adjusts these reserves as more information becomes available about the ultimate disposition of the inventory item.
+Added: Judgment is used to establish excess and obsolete inventory reserves and management adjusts these reserves as more information becomes available about the ultimate disposition of the inventory item.  
Property, Plant and Equipment and Related Depreciation:
−Removed: Property, plant and equipment are stated at cost.
−Removed: Major additions and betterments are capitalized while maintenance and repairs are expensed.
−Removed: For financial reporting purposes, depreciation is computed on the straight-line method over the estimated useful lives of the assets as follows:
+Added: Property, plant and equipment are stated at cost. Major additions and betterments are capitalized while maintenance and repairs are expensed. For financial reporting purposes, depreciation is computed on the straight-line method over the estimated useful lives of the assets as follows:
Buildings (in years)
+Added: 28 - 40  
Machinery and equipment (in years)
+Added: 3 - 10  
Computer software (in years)
−Removed: Costs related to the purchase, internal development, and implementation of the Company’s fully integrated enterprise resource planning/business operating software system are either capitalized or expensed.
−Removed: Leasehold improvements are depreciated over the shorter of fifteen years or the remaining term of the lease.
+Added: Costs related to the purchase, internal development, and implementation of the Company’s fully integrated enterprise resource planning/business operating software system are either capitalized or expensed. Leasehold improvements are depreciated over the shorter of fifteen years or the remaining term of the lease.
The Company recorded $ 5.2 million and $ 6.0 million of depreciation expense in the years ended June 30, 2021 and, 2020 respectively.
Goodwill and Intangible Assets:
−Removed: Intangible assets consisting of customer relationships, trade names and trademarks, patents, technology and software are recorded on the Company's balance sheet.
−Removed: The definite-lived intangible assets are being amortized to expense over periods ranging between eight and twenty years.
−Removed: The Company evaluates definite-lived intangible assets for possible impairment when triggering events are identified.
−Removed: Neither indefinite-lived intangible assets nor the excess of cost over fair value of assets acquired ("goodwill") are amortized, however, they are subject to review for impairment.
−Removed: See additional information about goodwill and intangibles in Note 6.
−Removed: The Company has financial instruments consisting primarily of cash and cash equivalents, revolving lines of credit, accounts receivable, accounts payable, and long-term debt.
−Removed: The fair value of these financial instruments approximates carrying value because of their short-term maturity and/or variable, market-driven interest rates.
−Removed: The Company has no financial instruments with off-balance sheet risk.
−Removed: Fair value measurements of nonfinancial assets and nonfinancial liabilities are primarily used in goodwill and other intangible asset impairment analyses and long-lived asset impairment analyses.
+Added: Intangible assets consisting of customer relationships, trade names and trademarks, patents, technology and software are recorded on the Company's balance sheet. The definite-lived intangible assets are being amortized to expense over periods ranging between five and twenty years. The Company evaluates definite-lived intangible assets for possible impairment when triggering events are identified.
+Added: Neither indefinite-lived intangible assets nor the excess of cost over fair value of assets acquired ("goodwill") are amortized, however, they are subject to review for impairment. See additional information about goodwill and intangible assets in Note 7.
+Added: The Company has financial instruments consisting primarily of cash and cash equivalents, revolving lines of credit, accounts receivable, accounts payable, and long-term debt. The fair value of these financial instruments approximates carrying value because of their short-term maturity and/or variable, market-driven interest rates. The Company has no financial instruments with off-balance sheet risk.
+Added: Fair value measurements of nonfinancial assets and nonfinancial liabilities are primarily used in goodwill and other intangible asset impairment analyses, long-lived asset impairment analyses and valuation of acquired assets and assumed liabilities.
The accounting guidance on fair value measurement was used to measure the fair value of these nonfinancial assets and nonfinancial liabilities.
Product Warranties:
−Removed: The Company offers a limited warranty that its products are free from defects in workmanship and materials.
−Removed: The specific terms and conditions vary somewhat by product line, but generally cover defective products returned within one to five years, with some exceptions where the terms extend to 10 years, from the date of shipment.
−Removed: The Company records warranty liabilities to cover the estimated future costs for repair or replacement of defective returned products as well as products that need to be repaired or replaced in the field after installation.
−Removed: The Company calculates its liability for warranty claims by applying estimates based upon historical claims as a percentage of sales to cover unknown claims, as well as estimating the total amount to be incurred for known warranty issues.
−Removed: The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amount as necessary.
−Removed: Changes in the Company’s warranty liabilities, which are included in accrued expenses in the accompanying consolidated balance sheets, during the periods indicated below were as follows:
+Added: The Company offers a limited warranty that its products are free from defects in workmanship and materials.  The specific terms and conditions vary somewhat by product line, but generally cover defective products returned within one to five years, with some exceptions where the terms extend to 10 years, from the date of shipment. The Company records warranty liabilities to cover the estimated future costs for repair or replacement of defective returned products as well as products that need to be repaired or replaced in the field after installation. The Company calculates its liability for warranty claims by applying estimates based upon historical claims as a percentage of sales to cover unknown claims, as well as estimating the total amount to be incurred for known warranty issues. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amount as necessary.
+Added: Changes in the Company’s warranty liabilities, which are included in accrued expenses in the accompanying consolidated balance sheets, during the periods indicated below were as follows:
(In thousands)
2 unchanged sentences
Balance at beginning of the period
+Added: $ 6,956  
+Added: $ 7,687  
+Added: Additions from company acquired
Additions charged to expense
Deductions for repairs and replacements
+Added: ( 2,768 )  
Balance at end of the period
+Added: $ 5,295  
+Added: $ 6,956  
Employee Benefit Plans:
−Removed: The Company has a 401(k) retirement plan whereby employee’s contributions to the 401(k) are matched by the Company.
+Added: The Company has a 401 (k) retirement plan whereby employee’s contributions to the 401 (k) are matched by the Company.
The 401 (k) match program covers substantially all of its employees.
4 unchanged sentences
Research and development costs are directly attributable to new product development, including the development of new technology for both existing and new products, and consist of salaries, payroll taxes, employee benefits, materials, outside legal costs and filing fees related to obtaining patents, supplies, depreciation and other administrative costs.
−Removed: The Company expenses as research and development all costs associated with development of software used in solid-state LED products.
−Removed: All costs are expensed as incurred and are included in selling and administrative expenses.
+Added: The Company expenses as research and development all costs associated with development of software used in solid-state LED products. All costs are expensed as incurred and are included in selling and administrative expenses.
Research and development costs related to both product and software development totaled $ 3.7 million and $ 3.6 million for the fiscal years ended June 30, 2021 and 2020, respectively.
2 unchanged sentences
Cost of products sold also includes the cost to distribute products to customers, inbound freight costs, internal transfer costs, warehousing costs and other shipping and handling activity.
−Removed: Cost of services sold is primarily comprised of the internal and external labor costs required to support the Company’s installation and service revenue along with the management of media content.
−Removed: Earnings (Loss) Per Common Share:
−Removed: The computation of basic earnings (loss) per common share is based on the weighted average common shares outstanding for the period net of treasury shares held in the Company’s nonqualified deferred compensation plan.
−Removed: The computation of diluted earnings (loss) per share is based on the weighted average common shares outstanding for the period and includes common share equivalents.
−Removed: Common share equivalents include the dilutive effect of stock options, restricted stock units, stock warrants, contingently issuable shares and common shares to be issued under a deferred compensation plan, all of which totaled 368,000 shares and 324,000 shares in fiscal 2020 and 2019, respectively.
+Added: Cost of services sold is primarily comprised of the internal and external labor costs required to support the Company’s installation and service revenue along with the management of media content.
+Added: Earnings Per Common Share:
+Added: The computation of basic earnings per common share is based on the weighted average common shares outstanding for the period net of treasury shares held in the Company’s nonqualified deferred compensation plan.
+Added: The computation of diluted earnings per share is based on the weighted average common shares outstanding for the period and includes common share equivalents. Common share equivalents include the dilutive effect of stock options, restricted stock units, stock warrants, contingently issuable shares and common shares to be issued under a deferred compensation plan, all of which totaled 1,029,000 shares and 368,000 shares in fiscal 2021 and 2020, respectively.
See further discussion in Note 4.
Income Taxes:
−Removed: The Company accounts for income taxes in accordance with the accounting guidance for income taxes.
−Removed: Accordingly, deferred income taxes are provided on items that are reported as either income or expense in different time periods for financial reporting purposes than they are for income tax purposes.
−Removed: Deferred income tax assets are reported on the Company’s balance sheet.
−Removed: Significant management judgment is required in developing the Company’s income tax provision, including the estimation of taxable income and the effective income tax rates in the multiple taxing jurisdictions in which the Company operates, the estimation of the liability for uncertain income tax positions, the determination of deferred tax assets and liabilities, and any valuation allowances that might be required against deferred tax assets.
+Added: The Company accounts for income taxes in accordance with the accounting guidance for income taxes.  Accordingly, deferred income taxes are provided on items that are reported as either income or expense in different time periods for financial reporting purposes than they are for income tax purposes. Deferred income tax assets are reported on the Company’s balance sheet. Significant management judgment is required in developing the Company’s income tax provision, including the estimation of taxable income and the effective income tax rates in the multiple taxing jurisdictions in which the Company operates, the estimation of the liability for uncertain income tax positions, the determination of deferred tax assets and liabilities, and any valuation allowances that might be required against deferred tax assets.
Foreign Exchange:
−Removed: The functional currency of the Company’s Mexican subsidiary is the Mexican Peso.
+Added: The functional currency of the Company’s Mexican subsidiary is the Mexican Peso and the functional currency of the Company’s Canadian subsidiary is the Canadian Dollar.
Assets and liabilities of foreign operations are translated using period end exchange rates.
Revenue and expenses are translated using average exchange rates during each period reported.
−Removed: Translation losses (gains) are reported in accumulated other comprehensive loss (gain) as a component of shareholders equity and were $109,000 and ($16,000) as of June 30, 2020 and 2019, respectively.
−Removed: The Company recognizes foreign currency transaction (gains) and losses on certain assets and liabilities that are denominated in the Mexican Peso.
+Added: Translation losses (gains) are reported in accumulated other comprehensive loss (gain) as a component of shareholders equity and were ($ 0.1 ) million and $ 0.1 million as of June 30, 2021 and 2020, respectively.
+Added: The Company recognizes foreign currency transaction (gains) and losses on certain assets and liabilities that are denominated in the Mexican Peso and Canadian Dollar.
These transaction (gains) and losses are reported in other expense in the consolidated statements of operations and were $ 0.2 million and $ 0.5 million for the twelve months ended June 30, 2021 and 2020, respectively.
New Accounting Pronouncements:
−Removed: In June 2016, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update (“ASU”) 2016-13 (“ASU 2016-13), "Financial Instruments - Credit Losses (Topic 326):
+Added: In June 2016, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update (“ASU”) 2016 - 13 (“ASU 2016 - 13 ), "Financial Instruments - Credit Losses (Topic 326 ):
Measurement of Credit Losses on Financial Instruments" (ASC 326 or "CECL"), which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables.
1 unchanged sentence
ASU 2016 - 13 is effective for public companies for annual periods beginning after December 13, 2019, including interim periods within those fiscal years.
−Removed: The Company will adopt this guidance effective in the first quarter of fiscal 2021.
−Removed: The Company does not expect the adoption of ASU 2016-13 to have a material impact on the its consolidated financial statements and disclosures.
−Removed: On July 1, 2018, the Company adopted ASU 2014-09.
−Removed: “Revenue from Contracts with Customers,” (Topic 606) using the modified retrospective adoption method which requires a cumulative effect adjustment to the opening balance of retained earnings.
−Removed: This approach was applied to contracts that were not completed as of June 30, 2018.
−Removed: Results for reporting periods beginning July 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and were reported under the accounting standards in effect for the prior period.
−Removed: The Company recorded a net increase to beginning retained earnings of $591,000 on July 1, 2018 due to the cumulative impact of adopting Topic 606, as described below.
−Removed: (In thousands)
−Removed: Balance as of
−Removed: Balance as of
−Removed: June 30, 2018
−Removed: Accounts receivable, net
−Removed: Inventories, net
−Removed: Other long-term assets, net
−Removed: Shareholder's Equity:
−Removed: Retained earnings
−Removed: On July 1, 2019, the Company adopted ASU 2016-02, “Leases,” using a modified-retrospective transition method, under which it elected not to adjust comparative periods.
+Added: The Company adopted this guidance in the first quarter of fiscal 2021.
+Added: The adoption of ASU 2016 - 13 did not have a material impact on the consolidated financial statements and disclosures.
+Added: On July 1, 2019, the Company adopted ASU 2016 - 02, “Leases,”
+Added: using a modified-retrospective transition method, under which it elected not to adjust comparative periods.
The Company elected the package of practical expedients permitted under the new guidance.
−Removed: In addition, the Company elected accounting policies to not record short-term leases on the balance sheet and to not separate lease and non-lease components.
−Removed: The Company’s most significant leases are those related to certain manufacturing facilities along with a small office space.
+Added: In addition, the Company adopted an accounting policy to not record short-term leases on the balance sheet and elected the practical expedient to not separate lease and non-lease components.
+Added: The Company’s most significant leases are those related to certain manufacturing facilities along with a small office space.
Besides these real estate leases, most other leases are insignificant and consist of leases related to a vehicle, forklifts and various office equipment.
−Removed: The adoption of the new lease standard resulted in the recognition of right-of-use assets (ROU assets) of $10.4 million, lease liabilities of $10.8 million which includes the impact of existing deferred rents and tenant improvement allowances and a $0.4 million adjustment to retained earnings on the consolidated balance sheets as of July 1, 2019 for the Company’s real estate leases.
+Added: The adoption of the new lease standard resulted in the recognition of right-of-use assets (ROU assets) of $ 10.4 million, lease liabilities of $ 10.8 million which includes the impact of existing deferred rents and tenant improvement allowances and a $ 0.4 million adjustment to retained earnings on the consolidated balance sheets as of July 1, 2019 for the Company’s real estate leases.
The adoption of the standard resulted in no material impact to the consolidated statements of operations or consolidated statements of cash flow.
Refer to Note 11.
+Added: In March 2020, the FASB issued ASU No.
+Added: 2020 - 04,  “Reference Rate Reform”
+Added: (Topic 848 ) (“ASU 2020 - 04”
+Added: ), which provides optional expedients and exceptions for applying U.S.
+Added: GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued.
+Added: The amendments are effective for all entities as of March 12, 2020 and expire on December 31, 2022.
+Added: The provisions of ASU 2020 - 04 did not have a material effect on the Company’s financial condition, results of operations or cash flows as of 
+Added: June 30, 2021.
+Added: The Company will continue to monitor any impacts of the standard and reference rate reform on its financial instruments.
Use of Estimates:
−Removed: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
−Removed: Actual results could differ from those estimates.
+Added: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Reclassifications:
−Removed: Certain amounts reported in the prior year in Note 10 have been reclassified to conform to the current year’s presentation.
+Added: Certain amounts reported in the prior year in Note 6 have been reclassified to conform to the current year’s presentation.
Subsequent Events:
−Removed: The Company has evaluated subsequent events for potential recognition and disclosure through the date the consolidated financial statements were filed.
+Added: The Company has evaluated subsequent events for potential recognition and disclosure through the date the consolidated financial statements were filed. 
No items were identified during this evaluation that required adjustment to or disclosure in the accompanying consolidated financial statements.
−Removed: NOTE 2 — BUSINESS SEGMENT INFORMATION
+Added: NOTE 2 —
+Added: ACQUISITION OF JSI STORE FIXTURES
+Added: On May 21, 2021, the Company acquired 100 % of the issued and outstanding shares of capital stock of JSI Store Fixtures (JSI), a Maine-based provider of retail commercial display solutions, for $ 93.7 million.
+Added: The acquisition of JSI will significantly increase the Company’s total addressable markets within the grocery and convenience store verticals.
+Added: The Company funded the acquisition with a combination of cash on hand and $ 71.6 million from the $ 100 million revolving line of credit.
+Added: The Company accounted for this transaction as a business combination.
+Added: The Company has preliminarily allocated the purchase price of approximately $ 93.7 million which includes an estimate of customary post-closing purchase price adjustments to the assets acquired and liabilities assumed at estimated fair values, and the excess of the purchase price over the aggregate fair values is recorded as goodwill.
+Added: This preliminary allocation is subject to the final determination of the purchase price which will be finalized in fiscal 2022, as well as potential revision resulting from the finalization of pre-acquisition tax filings.
+Added: The Company is in the process of finalizing third party valuations of certain assets.
+Added: The preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed as of May 21, 2021, is as follows:
+Added: (In thousands)
+Added: Cash and cash equivalents
+Added: $ 4,067  
+Added: Accounts receivable
+Added: Property, plant and equipment
+Added: Intangible assets
+Added: 45,760  
+Added: Accounts payable
+Added: Accrued liabilities
+Added: Deferred tax liability
+Added: Identifiable assets
+Added: 60,277  
+Added: 33,415  
+Added: Net purchase consideration
+Added: $ 93,692  
+Added: The gross amount of accounts receivable is $ 9.3 million.
+Added: Goodwill recorded from the acquisition of JSI is attributable to the impact of the positive cash flow from JSI in addition to expected synergies from the business combination.
+Added: The goodwill resulting from the acquisition is deductible for tax purposes.
+Added: The intangible assets include amounts recognized for the fair value of the trade name, technology assets, non-compete agreements and customer relationships.
+Added: The fair value of the intangible assets was determined based upon the income (discounted cash flow) approach.
+Added: The following table presents the details of the intangible assets acquired at the date of acquisition:
+Added: Estimated Useful
+Added: (In thousands)
+Added: $ 8,680  
+Added: Indefinite life
+Added: Technology asset
+Added: Customer relationship
+Added: 31,920  
+Added: $ 45,760  
+Added: The fair market value write-up of the property, plant, and equipment totaled $ 1.8 million.
+Added: Transaction costs related to the acquisition totaled $ 2.9 million in fiscal 2021 and are recorded in selling and administrative expenses on the consolidated statements of operations.
+Added: JSI’s post-acquisition results of operations for the period from May 21, 2021 through June 30, 2021 are included in the Company’s Consolidated Statements of Operations.
+Added: Since the acquisition date, net sales of JSI for the period from May 21, 2021 through June 30, 2021 were $ 9.1 million and operating income was $ 0.7 million.
+Added: The operating results of JSI are included in the Display Solutions Segment.
+Added: Pro Forma Impact of the Acquisition of JSI  
+Added: The following table represents unaudited pro forma results of operations and gives effect to the acquisition of JSI as if the transaction had occurred on July 1, 2019.
+Added: The unaudited pro forma results of operations have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or the results that may occur in the future.
+Added: Furthermore, the unaudited pro forma financial information does not reflect the impact of any synergies or operating efficiencies resulting from the acquisition of JSI .
+Added: The unaudited pro forma financial information for the twelve months ended June 30, 2021 and June 30, 2020 is prepared using the acquisition method of accounting and has been adjusted to effect to the pro forma events that are:
+Added: ( 1 ) directly attributable to the acquisition;
+Added: ( 2 ) factually supportable;
+Added: and ( 3 ) expected to have a continuing impact on the combined results.
+Added: The unaudited pro forma operating income of $ 19.3 million excludes acquisition-related expenses of $ 2.9 million.
+Added: Twelve Months Ended
+Added: (In thousands, unaudited)
+Added: $ 391,000  
+Added: $ 362,541  
+Added: $ 97,947  
+Added: $ 86,399  
+Added: Operating income
+Added: $ 19,312  
+Added: $ 13,878  
+Added: NOTE 3 —
+Added: 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.
−Removed: 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.
−Removed: The Company’s two operating segments are Lighting and Graphics, with one executive team under the organizational structure reporting directly to the CODM with responsibilities for managing each segment.
−Removed: Corporate and Eliminations, which captures the Company’s corporate administrative activities, is also reported in the segment information.
−Removed: The Lighting Segment includes outdoor and indoor lighting utilizing LED light sources that have been fabricated and assembled for the Company’s markets, primarily petroleum / convenience stores, parking lot and garage markets, automotive dealerships, quick-service restaurants, grocery and pharmacy stores, and retail/national accounts.
+Added: 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.
+Added: 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.
+Added: Corporate and Eliminations, which captures the Company’s corporate administrative activities, is also reported in the segment information.
+Added: The Lighting Segment includes non-residential outdoor and indoor lighting utilizing LED light sources that have been fabricated and assembled for the Company’s markets, primarily the petroleum/convenience markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports complex market.
+Added: 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 industrial, 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.
−Removed: The Graphics Segment designs, manufactures and installs exterior and interior visual image elements such as traditional graphics, interior branding, electrical and architectural signage, active digital signage along with the management of media content related to digital signage and menu board systems that are either digital or traditional by design.
−Removed: These products are used in visual image programs in several markets including the petroleum/convenience store market, quick-service restaurant market, the grocery store and pharmacy markets, as well as customers with multi-site retail operations.
−Removed: The Graphics Segment implements, installs and provides program management services related to products sold by the Graphics Segment and by the Lighting Segment.
−Removed: The Company’s corporate administration activities are reported in the Corporate and Eliminations line item.
−Removed: 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.
+Added: 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.
+Added: 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.
+Added: These products are used in visual image programs in several markets including the petroleum/convenience markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports complex market.
+Added: The Display Solutions Segment implements, installs and provides program management services related to products sold by the Display Solutions Segment and by the Lighting Segment.
+Added: The Company’s corporate administration activities are reported in the Corporate and Eliminations line item.
+Added: 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.
−Removed: There were no customers or customer programs representing a concentration of 10% or more of the Company’s net sales in the fiscal years ended June 30, 2020 and 2019.
−Removed: There was no concentration of accounts receivable at June 30, 2020 or 2019.
−Removed: Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of June 30, 2020 and June 30, 2019:
+Added: One customer program in the Display Solutions Segment represents $ 32.4 million or 10.3 % of the Company’s net sales in the fiscal year ended June 
+Added: 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, 2020.
+Added: There was no concentration of accounts receivable at June 
+Added: 30, 2021 or 2020.
+Added: Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of June 
+Added: 30, 2021 and June 30, 2020:
(In thousands)
Lighting Segment
−Removed: Graphics Segment
+Added: $ 189,000  
+Added: $ 206,199  
+Added: Display Solutions Segment
+Added: 126,612  
+Added: 99,359  
+Added: $ 315,612  
+Added: $ 305,558  
Operating Income (Loss):
Lighting Segment
−Removed: Graphics Segment
+Added: $ 13,328  
+Added: $ 16,123  
+Added: Display Solutions Segment
Corporate and Eliminations
+Added: ( 15,162 )  
+Added: $ 8,030  
+Added: $ 13,076  
Capital Expenditures:
Lighting Segment
−Removed: Graphics Segment
+Added: $ 1,596  
+Added: $ 1,386  
+Added: Display Solutions Segment
Corporate and Eliminations
+Added: $ 2,233  
+Added: $ 2,739  
Depreciation and Amortization:
Lighting Segment
−Removed: Graphics Segment
+Added: $ 6,306  
+Added: $ 6,714  
+Added: Display Solutions Segment
Corporate and Eliminations
+Added: $ 8,114  
+Added: $ 8,654  
June 30, 2021
2 unchanged sentences
Lighting Segment
−Removed: Graphics Segment
+Added: $ 132,169  
+Added: $ 118,819  
+Added: Display Solutions Segment
+Added: 147,354  
+Added: 35,021  
Corporate and Eliminations
+Added: 18,423  
+Added: $ 286,821  
+Added: $ 172,263  
The segment net sales reported above represent sales to external customers.
−Removed: Segment operating income (loss), which is used in management’s evaluation of segment performance, represents net sales less all operating expenses.
+Added: 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.
−Removed: The Company records a 10% mark-up on intersegment revenues.
+Added: The Company records a 10 % mark-up on most intersegment revenues.
Any intersegment profit in inventory is eliminated in consolidation.
2 unchanged sentences
Lighting Segment inter-segment net sales
−Removed: Graphics Segment inter-segment net sales
−Removed: NOTE 3 — EARNINGS (LOSS) PER COMMON SHARE
−Removed: The following table presents the amounts used to compute basic and diluted earnings (loss) per common share, as well as the effect of dilutive potential common shares on weighted average shares outstanding:
+Added: $ 28,449  
+Added: $ 3,718  
+Added: Display Solutions Segment inter-segment net sales
+Added: NOTE 4 —
+Added: EARNINGS PER COMMON SHARE
+Added: The following table presents the amounts used to compute basic and diluted earnings per common share, as well as the effect of dilutive potential common shares on weighted average shares outstanding:
(In thousands, except per share data)
−Removed: BASIC EARNINGS (LOSS) PER SHARE
−Removed: Net income (loss)
+Added: BASIC EARNINGS PER SHARE
+Added: $ 5,868  
+Added: $ 9,592  
Weighted average shares outstanding during the period, net of treasury shares
+Added: 26,411  
+Added: 26,105  
Weighted average vested restricted stock units outstanding
1 unchanged sentence
Weighted average shares outstanding
−Removed: Basic income (loss) per share
−Removed: DILUTED EARNINGS (LOSS) PER SHARE
−Removed: Net income (loss)
+Added: 26,692  
+Added: 26,274  
+Added: Basic income per share
+Added: $ 0.22  
+Added: $ 0.37  
+Added: DILUTED EARNINGS PER SHARE
+Added: $ 5,868  
+Added: $ 9,592  
Weighted average shares outstanding
+Added: 26,692  
+Added: 26,274  
Effect of dilutive securities (a):
1 unchanged sentence
Weighted average shares outstanding
−Removed: Diluted income (loss) per share
+Added: 27,440  
+Added: 26,473  
+Added: Diluted income per share
+Added: $ 0.21  
+Added: $ 0.36  
Anti-dilutive securities (b)
−Removed: Calculative using the “Treasury Stock” method as if dilutive securities were exercised and the funds were used to purchase common shares at the average market price during the period.
−Removed: Anti-dilutive securities were excluded in the computation of diluted earnings per share for the year ended June 30, 2020 because the exercise price was greater than the fair market price of the common shares or because the assumed proceeds from the award’s exercise or vesting was greater than the average fair market price of the common shares.
−Removed: For the year ended June 30, 2019, the effect of dilutive securities was not included in the calculation of diluted loss per share because there was a net loss for the period.
−Removed: NOTE 4 — INVENTORIES
+Added: Calculative using the “Treasury Stock” method as if dilutive securities were exercised and the funds were used to purchase common shares at the average market price during the period.
+Added: Anti-dilutive securities were excluded in the computation of diluted earnings per share for the year ended June 30, 2021 and June 30, 2020 because the exercise price was greater than the fair market price of the common shares or because the assumed proceeds from the award’s exercise or vesting was greater than the average fair market price of the common shares.
+Added: NOTE 5 —
+Added: INVENTORIES, NET
The following information is provided as of the dates indicated:
3 unchanged sentences
Raw materials
+Added: $ 40,567  
+Added: $ 27,331  
Work-in-progress
Finished goods
+Added: 13,617  
Total Inventories
−Removed: NOTE 5 — A CCRUED EXPENSES
+Added: $ 58,941  
+Added: $ 38,752  
+Added: NOTE 6  —
+Added: ACCRUED EXPENSES
The following information is provided as of the dates indicated:
3 unchanged sentences
Accrued Expenses:
−Removed: Compensation and benefits
Customer prepayments
−Removed: Accrued sales commissions
+Added: $ 11,352  
+Added: $ 1,698  
+Added: Compensation and benefits
+Added: 10,051  
Accrued warranty
+Added: Accrued sales commissions
Operating lease liabilities
+Added: Accrued income tax
Finance lease liabilities
1 unchanged sentence
Total Accrued Expenses
−Removed: NOTE 6 — GOODWILL AND OTHER INTANGIBLE ASSETS
+Added: $ 37,918  
+Added: $ 20,433  
+Added: NOTE 7  — 
+Added: 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.
1 unchanged sentence
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.
−Removed: 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 the reporting unit using a combination of a market approach and an income (discounted cash flow) approach, at the reporting unit level.
−Removed: The estimation of the fair value of reporting unit 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.
−Removed: The estimates of the fair value of reporting units are based on the best information available as of the date of the assessment.
−Removed: The use of different assumptions would increase or decrease estimated discounted future operating cash flows and could increase or decrease an impairment charge.
−Removed: Company management uses its judgment in assessing whether assets may have become impaired between annual impairment tests.
−Removed: Indicators such as adverse business conditions, economic factors and technological change or competitive activities may signal that an asset has become impaired.
+Added: 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 the reporting unit using a combination of a market approach and an income (discounted cash flow) approach, at the reporting unit level.
+Added: The estimation of the fair value of reporting unit 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 the 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.
−Removed: The Company currently has two reporting units that contain goodwill.
−Removed: There is one reporting unit within the Lighting Segment and one reporting unit within the Graphics Segment.
−Removed: 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.
+Added: Prior to the acquisition of JSI, the Company had two reporting units that contain goodwill.
+Added: One reporting unit is within the Lighting Segment and one reporting unit is within the Display Solutions Segment.
+Added: The tradename intangible asset has an indefinite life and is also tested separately on an annual basis.
+Added: 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.
−Removed: Fiscal 20 20 :
As of March 1, 2021, the Company performed its annual goodwill impairment test on the two reporting units that contain goodwill.
The goodwill impairment test of the reporting unit in the Lighting Segment passed with a business enterprise value of $ 28.2 million or 26 % above the carrying value of this reporting unit including goodwill.
−Removed: The goodwill impairment test of the reporting unit in the Graphics Segment passed with a business enterprise value of $4.7 million or 619% above the carrying value of the reporting unit including goodwill.
−Removed: A significant decline in the Company’s stock price during March 2020 related to the COVID-19 pandemic led management to conclude that a triggering event occurred.
−Removed: As a result, an interim goodwill impairment test subsequent to the March 1 testing date was required for both reporting units as of March 31, 2020 .
−Removed: The result of the impairment test on both reporting units indicated that goodwill was not impaired .
−Removed: The Company has performed an assessment of its goodwill from the date of the interim test as of March 31, 2020 through the balance sheet date for possible triggering events and has concluded that there were no triggering events that would indicate the assets are impaired.
−Removed: A sustained and significant decline in the Company’s stock price in the second quarter of fiscal 2019 led management to believe that a triggering event occurred and that an interim goodwill impairment test was required for one of the two reporting units in the Lighting Segment that contained goodwill, as of December 31, 2018.
−Removed: The result of the impairment test on the reporting unit in the Lighting Segment indicated that goodwill was fully impaired by $20.2 million.
−Removed: As a result of the full impairment of the goodwill of this reporting unit, the Company has two remaining reporting units that contain goodwill;
−Removed: one reporting unit in the Lighting Segment and one reporting unit in the Graphics Segment.
−Removed: As of March 1, 2019, the Company performed its annual goodwill impairment test on the two remaining reporting units that contain goodwill.
−Removed: The preliminary goodwill impairment test on one reporting unit in the Lighting Segment passed with a business enterprise value that was $38.9 million or 54% above the carrying value of this reporting unit including goodwill.
−Removed: The goodwill impairment test of the reporting unit with goodwill in the Graphics Segment passed with an estimated business enterprise value that was $3.0 million or 297% above the carrying value of the reporting unit including goodwill.
−Removed: The Company has performed an assessment of its goodwill from the date of the annual test through the balance sheet date for possible triggering events and has concluded that there were no triggering events that would indicate the assets are impaired.
+Added: The goodwill impairment test of the reporting unit in the Display Solutions Segment passed with a business enterprise value of $ 11.4 million or 2,065 % above the carrying value of the reporting unit including goodwill.
+Added: The Company also performed its annual review of its indefinite-lived intangible asset as of March 1, 2021 and determined there was no impairment.
+Added: The indefinite-lived intangible impairment test passed with a fair market value that was $ 15.7 million or 358 % above its carrying value.
+Added: The Company has performed an assessment of its goodwill and intangible assets from the date of the interim test as of March 1, 2021 through the balance sheet date for possible triggering events and has concluded that there were no triggering events that would indicate the assets are impaired.
+Added: The Company acquired JSI on May 21, 2021 ( see Note 2 ).
+Added: The total purchase price exceeded the estimated fair value of net assets by approximately $ 33.4 million, which was allocated to goodwill.
+Added: Goodwill and intangible assets related to JSI are included in the assets of the Display Solutions Segment.
+Added: Refer to Note 2 for additional information on the intangible assets of JSI.
+Added: Beginning in fiscal 2022, JSI goodwill will be subject to annual impairment testing as a separate reporting unit.
+Added: As of March 1, 2020, the Company performed its annual goodwill impairment test on the two reporting units that contain goodwill.
+Added: The goodwill impairment test of the reporting unit in the Lighting Segment passed with a business enterprise value of $ 31.6 million or 33 % above the carrying value of this reporting unit including goodwill.
+Added: The goodwill impairment test of the reporting unit in the Display Solutions Segment passed with a business enterprise value of $ 4.7 million or 619 % above the carrying value of the reporting unit including goodwill.
+Added: The Company also performed its annual review of its indefinite-lived intangible asset as of March 1, 2020 and determined there was no impairment.
+Added: The indefinite-lived intangible impairment test passed with a fair market value that was $ 16.8 million or 392 % above its carrying value.
+Added: A significant decline in the Company’s stock price during March 2020 related to the COVID- 19 pandemic led management to conclude that a triggering event occurred.
+Added: As a result, an interim goodwill impairment test subsequent to the March 1 testing date was required for both reporting units as of March 31, 2020 .
+Added:  The result of the impairment test on both reporting units indicated that goodwill was not impaired .
The following table presents information about the Company's goodwill on the dates or for the periods indicated:
1 unchanged sentence
Balance as of June 30, 2020
+Added: $ 86,711  
+Added: $ 28,690  
+Added: $ 115,401  
Accumulated impairment losses
+Added: ( 77,503 )  
+Added: ( 27,525 )  
Goodwill, net as of June 30, 2020
+Added: $ 9,208  
+Added: $ 1,165  
+Added: $ 10,373  
Balance as of June 30, 2021
+Added: $ 70,971  
+Added: $ 28,690  
+Added: $ 99,661  
+Added: Goodwill acquired
+Added: 33,415  
+Added: 33,415  
Accumulated impairment losses
+Added: ( 61,763 )  
+Added: ( 27,525 )  
Goodwill, net as of June 30, 2021
−Removed: In fiscal 2020, the Company wrote-off the goodwill and impairment loss for a dissolved entity.
+Added: $ 9,208  
+Added: $ 34,580  
+Added: $ 43,788  
+Added: In fiscal 2021 ,  the Company wrote-off the goodwill and impairment loss for a dissolved entity.
The net impact to the consolidated financial statements, including the goodwill, net balance, was zero.
−Removed: The Company performed its annual review of its indefinite-lived intangible asset as of March 1, 2020 and determined there was no impairment.
−Removed: The indefinite-lived intangible impairment test passed with a fair market value that was $16.8 million or 392% above its carrying value.
−Removed: The Company has performed an assessment of its intangible asset from the date of the annual test through the balance sheet date for possible triggering events and has concluded that there were no triggering events that would indicate the asset is impaired.
−Removed: The Company performed its annual review of its indefinite-lived intangible asset as of March 1, 2019 and determined there was no impairment.
−Removed: The indefinite-lived intangible impairment test passed with a fair market value that was $19.2 million or 462% above its carrying value.
The gross carrying amount and accumulated amortization by major other intangible asset class is as follows:
−Removed: Other Intangible Assets
June 30, 2021
2 unchanged sentences
Customer relationships
+Added: $ 62,083  
+Added: $ 10,967  
+Added: $ 51,116  
LED technology firmware, software
+Added: 20,966  
+Added: 13,415  
Total Amortized Intangible Assets
+Added: 86,235  
+Added: 25,564  
+Added: 60,671  
Indefinite-lived Intangible Assets
Trademarks and trade names
+Added: 12,102  
+Added: 12,102  
Total indefinite-lived Intangible Assets
+Added: 12,102  
+Added: 12,102  
Total Other Intangible Assets
−Removed: Other Intangible Assets
+Added: $ 98,337  
+Added: $ 25,564  
+Added: $ 72,773  
June 30, 2020
2 unchanged sentences
Customer relationships
+Added: $ 35,563  
+Added: $ 14,129  
+Added: $ 21,434  
LED technology firmware, software
+Added: 16,066  
+Added: 12,852  
Total Amortized Intangible Assets
+Added: 54,625  
+Added: 28,087  
+Added: 26,538  
Indefinite-lived Intangible Assets
2 unchanged sentences
Total Other Intangible Assets
+Added: $ 58,047  
+Added: $ 28,087  
+Added: $ 29,960  
+Added: In the fiscal 
+Added: 2021 ,  the Company wrote-off intangible assets’
+Added: gross carrying amount and accumulated amortization for a dissolved entity.
+Added: The net impact to the consolidated financial statements, including the total other intangible assets, was zero.
(In thousands)
Amortization expense of other intangible assets
+Added: $ 2,948  
+Added: $ 2,687  
The Company expects to record annual amortization expense as follows:
(In thousands)
−Removed: NOTE 7 — REVOLVING LINE OF CREDIT AND LONG-TERM DEBT
−Removed: In February 2019, the Company amended its secured line of credit to a $75 million facility from a $100 million facility in order to better match its financing needs with an appropriate borrowing capacity.
−Removed: The line of credit expires in the third quarter of fiscal 2022.
−Removed: Interest on the revolving line of credit is charged based upon an increment over the LIBOR rate as periodically determined, or at the bank’s base lending rate, at the Company’s option.
−Removed: The increment over the LIBOR borrowing rate, as periodically determined, fluctuates between 125 and 250 basis points depending upon the ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (“EBITDA”), as defined in the line of credit agreement.
−Removed: The increment over LIBOR borrowing rate will be 125 basis points for the first quarter of fiscal 2021.
−Removed: The fee on the unused balance of the $75 million committed line of credit is 20 basis points.
−Removed: Under the terms of this line of credit, the Company has agreed to a negative pledge of real estate assets and is required to comply with financial covenants that limit the ratio of indebtedness to EBITDA and require a minimum fixed charge coverage ratio.
−Removed: As of June 30, 2020, there were no borrowings against the line of credit, and $75.0 million was available as of that date.
+Added: $ 4,808  
+Added: $ 4,760  
+Added: $ 4,760  
+Added: $ 4,760  
+Added: $ 4,754  
+Added: $ 36,829  
+Added: NOTE 8 —
+Added: REVOLVING LINE OF CREDIT AND LONG-TERM DEBT
+Added: March 2021 ,  the Company amended its secured line of credit to a $ 100  million facility from a $ 75  million facility that expires in the 
+Added: third  quarter of fiscal 
+Added:  Interest on the revolving line of credit is charged based upon an increment over the LIBOR rate or a base rate, at the Company’s option.
+Added: The base rate is calculated as the highest of (a) the Prime rate, (b) the sum of the Overnight Funding Rate plus 
+Added: 50  basis points and (c) the sum of the Daily LIBOR Rate plus 
+Added: 100  basis points as long as a Daily LIBOR rate is offered, ascertainable and 
+Added: not  unlawful.
+Added: The increment over the LIBOR borrowing rate fluctuates between 
+Added: 100  and 
+Added: 200  basis points, and the increment over the Base Rate fluctuates between 
+Added: 0  and 
+Added: 100  basis points, both of which depend upon the ratio of indebtedness to earnings before interest, taxes, depreciation, and amortization (“EBITDA”), as defined in the line of credit agreement.
+Added: The increment over LIBOR borrowing for the first quarter of fiscal 2022 has not been determined pending the outcome of a further amendment to the line of credit (See below). The fee on the unused balance of the $ 100  million committed line of credit fluctuates between 
+Added: 15  and 
+Added: 22.5  basis points.
+Added: Under the terms of this line of credit, the Company has agreed to a negative pledge of real estate assets and is required to comply with financial covenants that limit the ratio of indebtedness to EBITDA and require a minimum interest coverage ratio.
+Added: June 30, 2021 ,  there were $ 68.2  borrowings against the line of credit, and $ 31.8  million was available as of that date.
Based on the terms of the line of credit and the maturity date, the debt has been classified as long term.
−Removed: The Company is in compliance with all of its loan covenants as of June 30, 2020.
−Removed: NOTE 8 — CASH DIVIDENDS
−Removed: The Company paid cash dividends of $5.3 million and $5.2 million in fiscal years 2020 and 2019, respectively.
−Removed: Dividends on restricted stock units in the amount of $63,796 and $28,158 were accrued as of June 30, 2020 and 2019, respectively.
+Added: The Company is in the process of amending its secured line of credit as a result of the acquisition of JSI.
+Added: One of the changes to the line of credit will allow for the historical EBITDA results of JSI in the computation of the debt covenants.
+Added: The Company expects to be in compliance with its debt covenants once the amendments are in place.
+Added: For the period ending June 30, 2021, the Company has obtained a waiver from its bank in relation to its loan covenants until the amended line of credit has been finalized.
+Added: NOTE 9 —
+Added: CASH DIVIDENDS
+Added: The Company paid cash dividends of $ 5.3 million in both fiscal years 2021 and 2020.
+Added: Dividends on restricted stock units in the amount of $ 0.1 million were accrued as of both June 30, 2021 and 2020.
These dividends are paid upon the vesting of the restricted stock units when shares are issued to the award recipients.
In August 2021, the Board of Directors declared a regular quarterly cash dividend of $ 0.05 per share payable September 7, 2021 to shareholders of record August 30, 2021 .
−Removed: NOTE 9 — EQUITY COMPENSATION
−Removed: In November 2019, the Company’s shareholders approved the 2019 Omnibus Award Plan (“2019 Omnibus Plan”).
+Added: NOTE 10 —
+Added: EQUITY COMPENSATION
+Added: In November 2019, the Company’s shareholders approved the 2019 Omnibus Award Plan ( “2019 Omnibus Plan”).
The purpose of the 2019 Omnibus Plan is to provide a means through which the Company may attract and retain key personnel and to provide a means by which directors, officers, and employees can acquire and maintain an equity interest in the Company.
−Removed: The 2019 Omnibus Plan replaced the 2012 Stock Incentive Plan (“2012 Stock Plan”).
+Added: The 2019 Omnibus Plan replaced the 2012 Stock Incentive Plan ( “2012 Stock Plan”).
The number of shares of common stock authorized for issuance under the 2019 Omnibus Plan is 2,650,000 which were combined with the remaining shares available under the 2012 Stock Plan.
2 unchanged sentences
The 2019 Omnibus Plan allows for the grant of non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance stock units and other stock-based awards.
−Removed: The Company has made time-based and performance-based stock option awards.
−Removed: Options generally have a three- or four-year ratable vesting period beginning one year after the date of grant.
−Removed: The maximum exercise period of service-based and performance-based stock options granted under the Plan is ten years.
−Removed: Inducement stock option agreements are granted by the Company to attract and retain key executives.
−Removed: Inducement stock options are separately registered securities and are not part of the 2019 Omnibus Plan.
−Removed: Some options granted have a three-year ratable vesting period whereas other options vest upon specific performance of the Company’s stock.
−Removed: All Inducement stock options have a term of ten years only if the employee is employed for three years from the date of grant.
−Removed: In fiscal 2020, 280,000 Inducement stock options were granted.
−Removed: Restricted Stock Units (RSUs) ratably vest over a three- or four-year period beginning one year after the date of award.
−Removed: Performance Stock Units (PSUs) vest if the Company meets certain financial metrics over a three-year period.
+Added: Inducement awards are granted by the Company to attract and retain key executives.
+Added: Inducement awards are separately registered securities and are not part of the 2019 Omnibus Plan.
+Added: In fiscal 2021, 75,000 inducement options, 30,626 RSUs and 122,509 PSUs were granted.
+Added: In fiscal 2020, 280,000 inducement options were granted.
Stock Warrants
8 unchanged sentences
Fair value per share
+Added: $ 2.87  
Stock Options
6 unchanged sentences
Fair value per share
−Removed: The Company calculates stock option expense using the Black-Scholes model.
−Removed: Stock option expense is recorded on a straight-line basis, or sooner if the grantee is retirement eligible as defined in the Plan, net of forfeitures.
+Added: $ 2.40  
+Added: $ 1.22  
+Added: Stock option expense is recorded on a straight-line basis, or sooner if the grantee is retirement eligible as defined in the 2019 Omnibus Plan, net of forfeitures.
The forfeiture rate is based on historical rates and reduces the compensation expense recognized.
−Removed: The expected volatility of the Company’s stock was calculated based upon the historic monthly fluctuation in stock price for a period approximating the expected life of option grants.
−Removed: The risk-free interest rate is the rate of a five-year Treasury security at constant, fixed maturity on the approximate date of the stock option grant.
−Removed: The expected life of outstanding options is determined to be less than the contractual term for a period equal to the aggregate group of option holders’ estimated weighted average time within which options will be exercised.
−Removed: It is the Company’s policy that when stock options are exercised, new common shares shall be issued.
+Added: The expected volatility of the Company’s stock was calculated based upon the historic monthly fluctuation in stock price for a period approximating the expected life of option grants. The risk-free interest rate is the rate of a five -year Treasury security at constant, fixed maturity on the approximate date of the stock option grant. The expected life of outstanding options is determined to be less than the contractual term for a period equal to the aggregate group of option holders’
+Added: estimated weighted average time within which options will be exercised. It is the Company’s policy that when stock options are exercised, new common shares shall be issued.    
+Added: Service-based options have a three -year ratable vesting period beginning one year after the date of grant.
+Added: Inducement stock options have a term of ten years only if the employee is employed for three years from the date of grant.
+Added: The maximum exercise period of service-based and performance-based stock options granted under the 2019 Omnibus Plan is ten years. 
The Company recorded $ 0.8 million and $ 0.4 million of expense related to stock options in fiscal years 2021 and 2020, respectively.
1 unchanged sentence
Outstanding at June 30, 2020
+Added: 2,282,938  
+Added: $ 6.20  
+Added: $ 2,731,949  
+Added: 318,406  
+Added: $ 6.86  
+Added: ( 139,367 )  
+Added: $ 7.38  
+Added: ( 132,329 )  
+Added: $ 8.84  
+Added: ( 2,500 )  
+Added: $ 7.29  
Outstanding at June 30, 2021
+Added: 2,327,148  
+Added: $ 6.07  
+Added: $ 5,320,456  
Exercisable at June 30, 2021
+Added: 1,013,157  
+Added: $ 7.58  
+Added: $ 1,239,663  
Vested and expected to vest at June 30, 2021
−Removed: The aggregate intrinsic value of options exercised during the years ended June 30, 2020 and June 30, 2019 was $0.1 million and $0, respectively.
−Removed: The Company received $0.6 million of proceeds from stock options exercises in fiscal 2020.
−Removed: There were no exercises of stock options in fiscal 2019.
+Added: 2,256,565  
+Added: $ 6.08  
+Added: $ 5,165,389  
+Added: The aggregate intrinsic value of options exercised during the years ended June 30, 2021 and June 30, 2020 was $ 0.2 million and $ 0.1 million, respectively.
+Added: The Company received $ 1.0 million and $ 0.6 million of proceeds from stock options exercises in fiscal 2021 and 2020, respectively.
As of June 30, 2021, there was $ 0.9 million of unrecognized compensation cost, net of forfeitures, related to stock options, which is expected to be recognized over a weighted-average remaining period of 1.8 years.
−Removed: For fiscal year 2020, the Company recognized a current income tax benefit of $43,000 for tax deductions related to equity compensation.
−Removed: A discrete tax expense of $0.4 million was recognized to reduce deferred tax assets for cancelled awards and detriments in excess of the tax deductions.
For fiscal year 2021, the Company recognized a current income tax benefit of $ 0.1 million for tax deductions related to equity compensation.
A discrete tax expense of $ 0.1 million was recognized to reduce deferred tax assets for cancelled awards and detriments in excess of the tax deductions.
+Added: For fiscal year 2020, the Company recognized a current income tax benefit of $ 43,000 for tax deductions related to equity compensation.
+Added: A discrete tax expense of $ 0.4 million was recognized to reduce deferred tax assets for cancelled awards and detriments in excess of the tax deductions.
Restricted Stock Units
A total of 163,752 RSUs with a weighted average fair value of $ 7.08 per share were awarded to employees during fiscal 2021.
−Removed: There were no RSUs awarded to employees during fiscal 2019.
−Removed: RSUs awarded during fiscal 2020 have a three-year ratable vesting period.
+Added: Inducement RSUs awarded during fiscal 2021 vest after three years of service.
+Added: All other RSUs awarded during fiscal 2021 have a three -year vesting period, with 50 % vesting on the first anniversary date of the award and 25 % vesting on the second and third anniversary of the award.
The Company determined the fair value of the awards based on the closing price of the Company stock on the date the RSUs were awarded.
−Removed: The unvested RSUs are non-voting, but accrue cash dividends at the same per share rate as those cash dividends declared and paid on LSI’s common stock.
+Added: The unvested RSUs are non-voting, but accrue cash dividends at the same per share rate as those cash dividends declared and paid on LSI’s common stock.
Dividends on RSUs in the amount of $ 42,085 and $ 16,931 were accrued as of June 30, 2021 and 2020, respectively.
Accrued dividends are paid to the holder upon vesting of the RSUs and issuance of shares.
−Removed: The Company recorded $0.1 million of expense related to RSUs during fiscal year 2020.
+Added: The Company recorded $ 0.6 million and $ 0.1 million of expense related to RSUs during fiscal year 2021 and 2020, respectively.
A summary of outstanding and unvested RSU activity as of June 30, 2021 and changes during the period from July 1, 2020 through June 30, 2021 are as follows:
2 unchanged sentences
Unvested at June 30, 2020
+Added: 72,820  
+Added: $ 4.03  
+Added: 163,752  
+Added: $ 7.08  
+Added: ( 28,051 )  
+Added: $ 4.34  
+Added: ( 7,800 )  
+Added: $ 5.49  
Unvested at June 30, 2021
+Added: 200,721  
+Added: $ 6.42  
As of June 30, 2021, there was $ 0.6 million of unrecognized compensation cost, net of forfeitures, related to RSUs, which is expected to be recognized over a weighted-average remaining period of 2.2 years.
3 unchanged sentences
The Company determined the fair value of the awards based on the closing price of the Company stock on the date the PSUs were awarded.
−Removed: The PSUs are non-voting, but accrue cash dividends at the same per share rate as those cash dividends declared and paid on LSI’s common stock.
+Added: PSUs vest if the Company meets certain financial metrics over a three -year period.
+Added: The PSUs are non-voting, but accrue cash dividends at the same per share rate as those cash dividends declared and paid on LSI’s common stock.
+Added: This applies to PSUs granted under the 2012 Stock Plan only.
Dividends on PSUs in the amount of $ 86,196 and $ 46,865 were accrued as of June 30, 2021 and 2020, respectively.
5 unchanged sentences
Unvested at June 30, 2020
+Added: 206,974  
+Added: $ 3.98  
+Added: 256,526  
+Added: $ 7.50  
+Added: ( 6,613 )  
+Added: $ 4.48  
Unvested at June 30, 2021
+Added: 456,887  
+Added: $ 5.95  
As of June 30, 2021, there was $ 1.6 million of unrecognized compensation cost, net of forfeitures, related to PSUs, which is expected to be recognized over a weighted-average remaining period of 2.1 years.
1 unchanged sentence
The Company awarded a total of 43,049 and 71,581 common shares as stock compensation awards in fiscal years 2021 and 2020, respectively.
−Removed: These common shares were valued at their approximate $0.3 million and $0.4 million fair market values based on their stock price at dates of issuance multiplied by the number of common shares awarded, respectively, pursuant to the compensation programs for non-employee directors who receive a portion of their compensation as an award of Company stock and for employees who received a nominal recognition award in the form of Company stock.
+Added: These common shares were valued at their approximate $ 0.3 million fair market values based on their stock price at dates of issuance multiplied by the number of common shares awarded, pursuant to the compensation programs for non-employee directors who receive a portion of their compensation as an award of Company stock and for employees who received a nominal recognition award in the form of Company stock.
Stock compensation awards are made in the form of newly issued common shares of the Company.
Deferred Compensation Plan
−Removed: The Company has a non-qualified deferred compensation plan providing for both Company contributions and participant deferrals of compensation.
+Added: The Company has a non-qualified deferred compensation plan providing for both Company matching contributions and participant funded deferrals of compensation.
This plan is fully funded in a Rabbi Trust.
1 unchanged sentence
As of June 30, 2021, there were 31 participants, all with fully vested account balances.
−Removed: A total of 180,264 common shares with a cost of $1.1 million, and 208,965 common shares with a cost of $1.5 million were held in the plan as of June 30, 2020 and 2019, respectively, and, accordingly, have been recorded as treasury shares.
−Removed: The change in the number of shares held by this plan is the net result of purchases of shares on the open stock market or newly issued shares as compensation deferred into the plan offset by distributions to terminated employees.
+Added: A total of 345,875 common shares with a cost of $ 2.5 million, and 180,264 common shares with a cost of $ 1.1 million, both of which included the Company contributions and the participant deferrals, were held in the plan as of June 
+Added: 30, 2021 and 2020, respectively, and, accordingly, have been recorded as treasury shares.
+Added: The change in the number of shares held by this plan is the net result of newly issued shares as compensation deferred into the plan offset by distributions to terminated employees.
The Company issued 193,510 and 85,560 new common shares for purposes of the non-qualified deferred compensation plan during fiscal 2021 and during fiscal 2020, respectively.
−Removed: The Company’s non-qualified deferred compensation is no longer funded by purchases in the open market of LSI stock as of September 30, 2017.
−Removed: This plan is now solely funded by newly issued shares that are authorized from the Plan.
−Removed: NOTE 10 — LEASES AND PURCHASE COMMITMENTS
−Removed: Purchase commitments of the Company totaled $14.3 million and $19.7 million as of June 30, 2020 and June 30, 2019, respectively.
+Added: NOTE 11 —
+Added: LEASES AND PURCHASE COMMITMENTS
+Added: Purchase commitments of the Company totaled $ 29.0 million and $ 14.3 million as of June 30, 2021 and June 
+Added: 30, 2020, respectively.
The Company leases certain manufacturing facilities along with a small office space, a company vehicle, several forklifts, several small tooling items and various items of office equipment.
−Removed: All but one of the Company’s leases are operating.
−Removed: Leases have a remaining term of one to five years some of which have an option to renew.
+Added: The Company also acquired buildings, machinery and forklift leases with the acquisition of JSI, as well as one sublease.
+Added: All but two of the Company’s leases are operating.
+Added: Leases have a remaining term of one to seven years, some of which have an option to renew.
The Company does not assume renewals in determining the lease term unless the renewals are deemed reasonably certain.
2 unchanged sentences
The Company elected not to record these leases on the balance sheet.
−Removed: The rent expense for these leases is immaterial for fiscal 2020.
+Added: The rent expense for these leases was immaterial for fiscal 2021.
The Company has certain leases that contain lease and non-lease components and has elected to utilize the practical expedient to account for these components together as a single lease component.
1 unchanged sentence
The Company used its incremental borrowing rate when determining the present value of lease payments.
−Removed: The adoption of the new lease standard resulted in the recognition of right-of-use (ROU) assets of $10.4 million and lease liabilities of $10.8 million which includes the impact of existing deferred rents and tenant improvement allowances on the consolidated balance sheets as of July 1, 2019 for the Company’s real estate leases.
+Added: The adoption of the new lease standard resulted in the recognition of right-of-use (ROU) assets of $ 10.4 million and lease liabilities of $ 10.8 million which includes the impact of existing deferred rents and tenant improvement allowances on the consolidated balance sheets as of July 1, 2019 for the Company’s real estate leases.
The adoption of the new standard resulted in no material impact to the consolidated statements of operations or consolidated statements of cash flow.
1 unchanged sentence
Operating lease cost
+Added: $ 2,428  
+Added: $ 2,308  
Financing lease cost:
2 unchanged sentences
Variable lease cost
+Added: Sublease income
+Added: ( 43 )  
Total lease cost
+Added: $ 2,777  
+Added: $ 2,378  
Supplemental Cash Flow Information:
2 unchanged sentences
Fixed payments - operating cash flows
+Added: $ 2,412  
+Added: $ 2,296  
Liability reduction - operating cash flows
+Added: $ 1,983  
+Added: $ 1,810  
Cash flows from finance leases
2 unchanged sentences
Operating Leases:
−Removed: At June 30, 2020
+Added: June 30, 2021
+Added: June 30, 2020
Total operating right-of-use assets
+Added: $ 11,579  
+Added: $ 8,663  
Accrued expenses (Current liabilities)
+Added: $ 1,424  
Long-term operating lease liability
+Added: 10,890  
Total operating lease liabilities
+Added: $ 12,314  
+Added: $ 9,397  
Weighted Average remaining Lease Term (in years)
Weighted Average Discount Rate
+Added: 4.81 %  
Finance Leases:
−Removed: At June 30, 2020
+Added: June 30, 2021
+Added: June 30, 2020
Buildings under finance leases
+Added: $ 2,033  
+Added: $ 2,033  
+Added: Equipment under finance leases
Accumulated depreciation
+Added: ( 339 )  
Total finance lease assets, net
+Added: $ 1,724  
+Added: $ 1,985  
Accrued expenses (Current liabilities)
1 unchanged sentence
Total finance lease liabilities
+Added: $ 1,784  
+Added: $ 1,994  
Weighted Average remaining Lease Term (in years)
Weighted Average Discount Rate
+Added: 4.86 %  
Maturities of Lease Liability:
−Removed: Operating Lease
−Removed: Finance Lease
+Added: Operating Lease  
+Added: Finance Lease  
+Added: Operating  
+Added: Net Lease  
+Added: $ 3,558  
+Added: $ ( 377 )  
+Added: $ 3,523  
+Added: ( 377 )  
+Added: ( 377 )  
+Added: ( 31 )  
Total lease payments
+Added: $ 13,510  
+Added: $ 2,049  
+Added: $ ( 1,162 )  
+Added: $ 14,397  
+Added: ( 1,196 )  
+Added: ( 265 )  
Present Value of Lease Liabilities
−Removed: NOTE 11 — INCOME TAXES
−Removed: The following information is provided for the years ended June 30:
+Added: $ 12,314  
+Added: $ 1,784  
+Added: $ 12,936  
+Added: NOTE 12 —
+Added: The following information is provided for the years ended June 
(In thousands)
−Removed: Components of income (loss) before income taxes:
+Added: Components of income before income taxes:
United States
−Removed: Income (loss) before income taxes
+Added: $ 7,117  
+Added: $ 11,494  
+Added: Income before income taxes
+Added: $ 7,916  
+Added: $ 11,693  
Provision for income taxes
+Added: $ 2,425  
State and local
Total current
+Added: ( 1,058 )  
Total provision for income taxes
+Added: $ 2,048  
+Added: $ 2,101  
(In thousands)
4 unchanged sentences
Federal tax credits
+Added: ( 1.5 )  
Valuation allowance
+Added: ( 25.9 )  
+Added: New York state tax credits
Expiration of capital loss carryforward
+Added: Transaction costs
Uncertain tax position activity
+Added: ( 0.1 )  
Stock-based compensation
Tax rate changes
+Added: ( 0.3 )  
+Added: ( 0.2 )  
Effective tax rate
−Removed: The favorable tax rate change for the year ended June 30, 2020 is due to the enactment of the CARES Act.
−Removed: The CARES Act allows the Company to carryback a federal net operating loss to prior tax years, offset taxable income in those earlier tax years, and obtain a refund of income taxes that were paid at a higher statutory tax rate.
−Removed: The components of deferred income tax assets and (liabilities) at June 30, 2020 and 2019 are as follows:
+Added: The favorable tax rate change for the year ended
+Added: June 30, 2020 is due to the enactment of the CARES Act.
+Added: The CARES Act allows the Company to carryback a federal net operating loss to prior tax years, offset taxable income in those earlier tax years, and obtain a refund of income taxes that were paid at a higher statutory tax rate. 
+Added: The components of deferred income tax assets and (liabilities) at June 
+Added: 30, 2021 and 2020 are as follows:
(In thousands)
5 unchanged sentences
State net operating loss carryover and credits
−Removed: Long term capital loss carryforward
−Removed: Right of use asset
+Added: Lease liability
Goodwill, acquisition costs and intangible assets
1 unchanged sentence
Deferred income tax asset before valuation allowance
+Added: 13,323  
+Added: 16,394  
Valuation allowance
+Added: ( 108 )  
Deferred income tax asset
−Removed: Lease liability
+Added: 13,215  
+Added: 14,200  
+Added: ( 2,677 )  
+Added: Right of use assets
+Added: ( 4,299 )  
+Added: Goodwill, acquisition costs and intangible assets
+Added: ( 3,683 )  
Deferred income tax liability
+Added: ( 10,659 )  
Net deferred income tax asset
−Removed: The Company has deferred tax assets for US federal net operating loss carry forwards of $0.1 million and $0.9 million at June 30, 2020 and June 30, 2019, respectively.
−Removed: The $0.1 million was acquired from Virticus Corporation and will expire over a 3-year period beginning in June 30, 2029.
−Removed: The acquired federal net operating loss is subject to Internal Revenue Code Section 382.
−Removed: The Company has determined, more likely than not, the amount will be realized before expiration.
−Removed: The Company has deferred tax assets for research and development credits of $0.1 million and $0.2 million, at June 30, 2020 and June 30, 2019, respectively.
−Removed: Of the $0.1 million, $45,000 will expire on June 30, 2039 and the remainder, which was acquired from Virticus Corporation, will expire over a 2-year period beginning June 30, 2029.
−Removed: The acquired credit is limited by Internal Revenue Code Section 382.
−Removed: The Company has determined, more likely than not, the amount will be realized before expiration.
−Removed: The Company has state net operating loss carryovers and credits of $2.4 million at both June 30, 2020 and June 30, 2019.
−Removed: The amount recognized in fiscal 2020 relates to net deferred tax assets of $0.1 million from various state net operating losses.
−Removed: Also related to the acquisition of Virticus Corporation, the Company has recorded a deferred state income tax asset related to a state net operating loss carryover and a state research and development credit in Oregon in the amount of $0.1 million for both fiscal years 2020 and 2019.
−Removed: The Company has determined this asset, more likely than not, will not be realized and that a full valuation reserve is required.
−Removed: The Oregon net operating loss will expire over a period of 4 years, beginning in June 30, 2027.
−Removed: The Company has recorded a deferred state income tax asset net of federal tax benefits related to non-refundable New York state tax credits in the amount of $2.1 million at both June 30, 2020 and June 30, 2019.
−Removed: These credits do not expire, but pursuant to New York state legislation enacted in fiscal 2014, the Company has determined that this asset, more likely than not, will not be realized.
−Removed: As of June 30, 2020, and 2019, the Company has recorded a full valuation reserve in the amount of $2.1 million.
+Added: $ 2,556  
+Added: $ 10,371  
+Added: The Company has U.S.
+Added: federal net operating loss carry forward deferred tax assets of $ 1.5 million and $ 0.1 million at June 30, 2021 and June 30, 2020, respectively.
+Added: The increase of $ 1.4 million for the year is from the acquisition of JSI and has an unlimited carryforward period.
+Added:  The remaining $ 0.1 million will expire over a three -year period beginning June 30, 2029.
+Added: The Company has deferred tax assets for research and development credits of $ 0.1 million at both June 30, 2021 and June 30, 2020.
+Added: Utilization of the federal net operating losses and research and development credits are limited by Internal Revenue Code Section 382, but are expected to be realized before expiration.
+Added: The Company has state net operating loss carryovers and tax credit deferred tax assets of $ 0.6 million and $ 2.2 million at June 30, 2021 and June 30, 2020, respectively.
+Added: At June 30, 2021, there was $ 0.3 million of state net operating losses from the acquisition of JSI and $ 0.3 million other state net operating losses and tax credits.
+Added: A valuation allowance of $ 0.1 million exists at June 30, 2021 against Oregon tax credits not expected to be used. 
+Added: The Oregon credits are otherwise expected to expire over a 4 -year period beginning June 30, 2027.
+Added: At June 30, 2020, there was $ 2.1 million of New York tax credits and $ 0.1 million of Oregon tax credits. A full valuation allowance existed for both credits not expected to be used of $ 2.2 million.
+Added: During fiscal year 2021, the Company eliminated the deferred tax asset and related valuation allowance for the New York tax credits of $ 2.1 million when the entity holding the New York credits was dissolved. There was no impact to the consolidated financial statements.
The Company had a capital loss carry forward of $ 10.7 million at June 30, 2019 that was generated from the sale of a Canadian subsidiary during fiscal 2015.
−Removed: During fiscal 2020, the Company sold its North Canton, Ohio and New Windsor, New York facilities, resulting in taxable capital gain and expects to use $6.6 million of the capital loss carry forward to offset the gain.
−Removed: The remaining capital loss carryforward of $4.2 million expired unused.
−Removed: The Company recognized the tax benefits of utilizing the capital loss of $0.6 million and $0.8 million in the fiscal years 2020 and 2019 by releasing the related valuation allowance.
−Removed: Considering all items discussed above, the Company has recorded valuation reserves of $2.2 million and $3.8 million as of June 30, 2020 and 2019, respectively.
−Removed: At June 30, 2020, tax, interest, and penalties, net of potential federal tax benefits, were $0.5 million, $0.3 million, and $0.1 million, respectively, of the total reserve for uncertain tax positions of $0.9 million.
+Added:  During fiscal 2020, the Company sold its North Canton, Ohio and New Windsor, New York facilities, resulting in taxable capital gain;
+Added: $ 6.4 million of the capital loss carry forward was used to offset the gain. The remaining capital loss carryforward of $ 4.3 million expired unused in fiscal 2020.
+Added:  The Company recognized the tax benefit of utilizing the capital loss of $ 0.6 million in the fiscal year 2020 by releasing the related valuation allowance.
+Added: At June 
+Added: 30, 2021, tax, interest, and penalties, net of potential federal tax benefits, were $ 0.7 million, $ 0.3 million and $ 0.2 million, respectively, of the total reserve for uncertain tax positions of $ 1.2 million.
The entire uncertain tax position of $ 0.7 million net of federal tax benefit, would impact the effective tax rate if recognized.
−Removed: At June 30, 2019, tax, interest, and penalties, net of potential federal tax benefits, were $0.6 million, $0.2 million and $0.2 million, respectively, of the total reserve for uncertain tax positions of $1.0 million.
+Added: At June 
+Added: 30, 2020, tax, interest, and penalties, net of potential federal tax benefits, were $ 0.5 million, $ 0.3 million, and $ 0.1 million, respectively, of the total reserve for uncertain tax positions of $ 0.9 million.
The entire uncertain tax position of $ 0.5 million, net of federal tax benefit, would impact the effective tax rate if recognized.
8 unchanged sentences
Decreases - tax positions in prior period
+Added: ( 52 )  
Increase - tax positions in current period
1 unchanged sentence
Settlements and payments
−Removed: Lapse of statute of limitations
Balance at end of the fiscal year
−Removed: The Company files a consolidated federal income tax return in the United States, and files various combined and separate tax returns in several state and local jurisdictions and Mexico.
+Added: The Company files a consolidated federal income tax return in the United States, and files various combined and separate tax returns in several state and local jurisdictions, and also in Canada and Mexico.
With limited exceptions, the Company is no longer subject to U.S.
−Removed: Federal, state and local tax examinations by tax authorities for fiscal years ending prior to June 30, 2017.
−Removed: NOTE 12 — SUPPLEMENTAL CASH FLOW INFORMATION
+Added: Federal, state and local tax examinations by tax authorities for fiscal years ending prior to June 
+Added: NOTE 13 —
+Added: SUPPLEMENTAL CASH FLOW INFORMATION
(In thousands)
3 unchanged sentences
Issuance of common shares to fund deferred compensation plan
−Removed: NOTE 13 — COMMITMENTS AND CONTINGENCIES
+Added: $ 1,534  
+Added: NOTE 14 —
+Added: COMMITMENTS AND CONTINGENCIES
The Company is party to various negotiations, customer bankruptcies, and legal proceedings arising in the normal course of business.
1 unchanged sentence
The Company does not disclose a range of potential loss because the likelihood of such a loss is remote.
−Removed: In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations, cash flows or liquidity.
+Added: In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations, cash flows or liquidity.
The Company may occasionally issue a standby letter of credit in favor of third parties.
2 unchanged sentences
For details regarding this incident, see risk factor on page 8 of this Form 10 -K.
−Removed: NOTE 14 – SEVERANCE COSTS
−Removed: The Company recorded severance charges of $0.3 million and $0.6 million in fiscal 2020 and 2019, respectively.
+Added: NOTE 15 –
+Added: SEVERANCE COSTS
+Added: The Company recorded severance charges of less than $ 0.1 million and $ 0.3 million in fiscal 2021 and 2020, respectively.
This severance expense was related to reductions in staffing not related to plant restructuring.
See further discussion of restructuring expenses in Note 16.
−Removed: The activity in the Company’s accrued severance liability was as follows for the twelve months ended June 30, 2020 and 2019:
+Added: The activity in the Company’s accrued severance liability was as follows for the twelve months ended June 30, 2021 and 2020:
(In thousands)
Balance at beginning of period
+Added: $ 1,134  
Accrual of expense
+Added: ( 667 )  
Balance at end of period
−Removed: The $0.6 million severance reserve reported as of June 30, 2020 has been classified as a current liability and will be paid out over the next twelve months.
−Removed: NOTE 1 5 – RESTRUCTURING COSTS
−Removed: In fiscal 2019, the Company closed its 12,000 square foot leased facility in Hawthorne, California.
−Removed: The facility was used as a warehouse and for light assembly of light fixtures.
−Removed: The Company moved the light assembly to its Cincinnati, Ohio facility.
−Removed: The restructuring charges consist primarily of transportation costs to move inventory to Cincinnati, the impairment of equipment, costs to restore the leased facility, and severance benefits.
−Removed: As of June 30, 2019, the Company incurred restructuring costs of $0.1 million related to the closure of the Hawthorne facility.
−Removed: The Company also incurred $0.1 million of expense to write-down inventory which is a re-valuation of the previous estimate and which is not included in the tables below.
−Removed: Also occurring in fiscal 2019, the Company announced plans to close its lighting manufacturing facility in New Windsor, New York.
−Removed: The closure was part of ongoing actions to align the Company’s supply chain to more cost effectively serve the changing requirements of the lighting market.
−Removed: The Company moved production to its other existing facilities in the second half of fiscal 2019.
−Removed: The closure allowed the Company to improve utilization of existing manufacturing capacity and will generate annual savings of approximately $4.0 million.
−Removed: The sale of the facility is listed as an asset held for sale as of June 30, 2019.
−Removed: As of June 30, 2019, the Company incurred restructuring costs of $1.7 million related to the closure of the New Windsor facility.
−Removed: The Company also incurred $1.1 million of expense in fiscal 2019 to write-down inventory which is not included in the tables below.
+Added: The severance reserve reported as of June 30, 2021 has been classified as a current liability and will be paid out over the next twelve months.
+Added: NOTE 16 –
+Added: RESTRUCTURING COSTS
+Added: In fiscal 2019, the Company announced plans to close its lighting manufacturing facility in New Windsor, New York.
+Added: The closure was part of ongoing actions to align the Company’s supply chain to more cost effectively serve the changing requirements of the lighting market.
The sale of the New Windsor facility occurred during the first quarter of fiscal 2020.
3 unchanged sentences
The Company relocated the production at the North Canton facility to smaller, leased facility in Akron, Ohio during the fourth quarter of fiscal 2020.
−Removed: The Company also incurred $0.6 million of expense to write-down inventory which is not includes in the tables below.
−Removed: Other restructuring costs incurred in 2020 relate to the realignment of the Company’s manufacturing footprint at its Houston, Texas facility.
+Added: The Company also incurred $ 0.6 million of expense to write-down inventory which is not included in the tables below.
+Added: Other restructuring costs incurred in fiscal 2020 related to the realignment of the Company’s manufacturing footprint at its Houston, Texas facility.
The realignment occurred as the result of the movement of equipment related to the closure of the New Windsor facility along with preparations to receive additional equipment resulting from the relocation of the North Canton facility.
1 unchanged sentence
(In thousands)
−Removed: Severance benefits
+Added: $ ( 14 )  
Impairment of fixed assets and accelerated depreciation
1 unchanged sentence
Manufacturing realignment costs
+Added: $ ( 14 )  
The following table presents restructuring (gains) costs incurred by line item in the consolidated statement of operations in which the costs are included:
1 unchanged sentence
Cost of goods sold
+Added: $ ( 14 )  
Operating expenses
+Added: $ ( 14 )  
The following table presents information about restructuring (gains) costs by segment for the periods indicated:
1 unchanged sentence
Lighting Segment
−Removed: Graphics Segment
+Added: Display Solutions Segment
+Added: ( 14 )  
Corporate and Eliminations
+Added: $ ( 14 )  
The following table presents a roll forward of the beginning and ending liability balances related to the restructuring costs:
5 unchanged sentences
Other restructuring costs
+Added: ( 14 )  
+Added: $ ( 14 )  
Refer to Note 15 for information regarding additional severance expenses that are not included in the restructuring costs identified in this footnote.
−Removed: NOTE 1 6 — RELATED PARTY TRANSACTIONS
−Removed: Wesco International, of which one of the Company’s independent outside directors is a director, purchases lighting fixtures from the Company.
+Added: NOTE 17 —
+Added: RELATED PARTY TRANSACTIONS
+Added: One of the Company’s former independent outside directors is a director of Wesco International (Wesco).
+Added: Wesco purchases lighting fixtures from the Company.
+Added: Wesco will no longer be considered a related party after fiscal 2021.
The Company has recognized revenue related to the following related party transactions in the fiscal years indicated:
1 unchanged sentence
Wesco International
+Added: $ 2,013  
+Added: $ 1,575  
As of the balance sheet date indicated, the Company had the following accounts receivable recorded with respect to related party transactions:
1 unchanged sentence
Wesco International
−Removed: NOTE 1 7 — SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
+Added: NOTE 18 —
+Added: SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
Quarter Ended
(In thousands except per share data)
−Removed: Net Income (loss)
−Removed: Earnings (loss) per share
+Added: $ 70,006  
+Added: $ 76,387  
+Added: $ 72,204  
+Added: $ 97,015  
+Added: $ 315,612  
+Added: 18,272  
+Added: 19,706  
+Added: 18,092  
+Added: 22,904  
+Added: 78,974  
+Added: Earnings per share
+Added: $ 0.08  
+Added: $ 0.08  
+Added: $ 0.05  
+Added: $ 0.01  
+Added: $ 0.22  (a)
+Added: $ 0.07  
+Added: $ 0.08  
+Added: $ 0.05  
+Added: $ 0.01  
+Added: $ 0.21  (a)
Range of share prices
−Removed: Net Income (loss)
−Removed: Earnings (loss) per share
+Added: $ 7.34  
+Added: $ 9.01  
+Added: $ 10.78  
+Added: $ 9.54  
+Added: $ 10.78  
+Added: $ 5.52  
+Added: $ 6.75  
+Added: $ 8.09  
+Added: $ 7.55  
+Added: $ 5.52  
+Added: $ 88,701  
+Added: $ 82,377  
+Added: $ 71,010  
+Added: $ 63,470  
+Added: $ 305,558  
+Added: 21,855  
+Added: 19,964  
+Added: 15,942  
+Added: 15,769  
+Added: 73,530  
+Added: Earnings per share
+Added: $ 0.17  
+Added: $ 0.07  
+Added: $ 0.07  
+Added: $ 0.06  
+Added: $ 0.37  (a)
+Added: $ 0.17  
+Added: $ 0.07  
+Added: $ 0.07  
+Added: $ 0.06  
+Added: $ 0.36  (a)
Range of share prices
+Added: $ 5.22  
+Added: $ 6.30  
+Added: $ 7.28  
+Added: $ 6.81  
+Added: $ 7.28  
+Added: $ 3.63  
+Added: $ 4.90  
+Added: $ 2.59  
+Added: $ 3.51  
+Added: $ 2.59  
The total of the earnings per share for each of the four quarters does not equal the total earnings per share for the full year because the calculations are based on the average shares outstanding during each of the individual periods.
There is no difference between basic and diluted shares due to losses.
−Removed: LSI I NDUSTRIES INC.
+Added: LSI INDUSTRIES INC.
AND SUBSIDIARIES
−Removed: SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
+Added: SCHEDULE II —
+Added: VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JUNE 30, 2021 and 2020
−Removed: (In t housands)
+Added: (In thousands)
Allowance for Doubtful Accounts:
Year Ended June 30, 2021
+Added: $ ( 60 )  
Year Ended June 30, 2020
+Added: $ ( 625 )  
Inventory Obsolescence Reserve:
Year Ended June 30, 2021
+Added: $ 3,821  
+Added: $ 1,754  
+Added: $ ( 905 )  
+Added: $ 5,050  
Year Ended June 30, 2020
+Added: $ 4,605  
+Added: $ 2,454  
+Added: $ ( 3,248 )  
+Added: $ 3,821  
Deferred Tax Asset Valuation Reserve:
Year Ended June 30, 2021
+Added: $ 2,194  
+Added: $ ( 2,086 )  
Year Ended June 30, 2020
+Added: $ 3,820  
+Added: $ ( 1,626 )  
+Added: $ 2,194  
For Allowance for Doubtful Accounts, deductions are uncollectible accounts charged off, less recoveries.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.