UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010.

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                      TO                     .

LSI Industries Inc.

State of Incorporation — Ohio          IRS Employer I.D. No. 31-0888951

10000 Alliance Road

Cincinnati, Ohio 45242

(513) 793-3200

Indicate by checkmark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES o NO o

Indicate by checkmark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of April 22, 2010 there were 24,048,163 shares of the Registrant’s common stock outstanding.

 

 

LSI INDUSTRIES INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2010

INDEX

		Begins on
		Page
PART I. Financial Information
ITEM 1. Financial Statements
Condensed Consolidated Statements of Operations			3
Condensed Consolidated Balance Sheets			4
Condensed Consolidated Statements of Cash Flows			5
Notes to Condensed Consolidated Financial Statements			6
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk			42
ITEM 4. Controls and Procedures			42
PART II. Other Information
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds			43
ITEM 6. Exhibits			43
Signatures			43
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This Form 10-Q contains certain forward-looking statements that are subject to numerous assumptions, risks or uncertainties. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “expects,” “intends,” “believes,” “seeks,” “may,” “will,” “should” or the negative versions of those words and similar expressions, and by the context in which they are used. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Actual results could differ materially from those contained in or implied by such forward-looking statements as a result of a variety of risks and uncertainties. These risks and uncertainties include, but are not limited to, the impact of competitive products and services, product demand and market acceptance risks, potential costs associated with litigation and regulatory compliance, reliance on key customers, financial difficulties experienced by customers, the cyclical and seasonal nature of our business, the adequacy of reserves and allowances for doubtful accounts, fluctuations in operating results or costs, unexpected difficulties in integrating acquired businesses, the ability to retain key employees of acquired businesses, unfavorable economic and market conditions, the results of asset impairment assessments and the other risk factors that are identified herein. In addition to the factors described in this paragraph, the risk factors identified in our Form 10-K and other filings the Company may make with the SEC constitute risks and uncertainties that may affect the financial performance of the Company and are incorporated herein by reference. The Company has no obligation to update any forward-looking statements to reflect subsequent events or circumstances.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

		Three Months Ended								Nine Months Ended
		March 31								March 31
(in thousands, except per share data)		2010				2009				2010				2009
Net sales		$	53,466			$	46,989			$	190,516			$	183,614
Cost of products and services sold			43,954				38,215				148,107				143,404
Loss on sale of a subsidiary			639				—				639				—
Total cost of products and services sold			44,593				38,215				148,746				143,404
Gross profit			8,873				8,774				41,770				40,210
Selling and administrative expenses			12,687				11,612				40,154				39,589
Goodwill impairment			—				957				—				14,207
Operating income (loss)			(3,814	)			(3,795	)			1,616				(13,586	)
Interest (income)			(4	)			(18	)			(11	)			(101	)
Interest expense			37				12				110				99
Income (loss) before income taxes			(3,847	)			(3,789	)			1,517				(13,584	)
Income tax expense (benefit)			(1,315	)			(1,322	)			820				(427	)
Net income (loss)		$	(2,532	)		$	(2,467	)		$	697			$	(13,157	)
Earnings (loss) per common share (see Note 5)
Basic		$	(0.10	)		$	(0.11	)		$	0.03			$	(0.60	)
Diluted		$	(0.10	)		$	(0.11	)		$	0.03			$	(0.60	)
Weighted average common shares outstanding
Basic			24,277				21,801				24,078				21,799
Diluted			24,277				21,801				24,085				21,799

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

		March 31,				June 30,
(In thousands, except share amounts)		2010				2009
ASSETS
Current Assets
Cash and cash equivalents		$	15,629			$	13,986
Accounts and notes receivable, net			28,904				29,681
Inventories			41,015				40,196
Refundable income taxes			3,125				3,619
Other current assets			5,113				4,635
Total current assets			93,786				92,117
Property, Plant and Equipment, net			44,661				42,043
Goodwill			10,766				1,558
Other Intangible Assets, net			15,903				12,981
Other Assets			2,190				4,419
TOTAL ASSETS		$	167,306			$	153,118
LIABILITIES & SHAREHOLDERS’ EQUITY
Current Liabilities
Current portion, long-term debt		$	31			$	—
Accounts payable			10,163				9,249
Accrued expenses			9,857				10,368
Total current liabilities			20,051				19,617
Long-Term Debt			1,108				—
Other Long-Term Liabilities			3,019				3,028
Commitments and contingencies (Note 12)			—				—
Shareholders’ Equity
Preferred shares, without par value;
Authorized 1,000,000 shares; none issued			—				—
Common shares, without par value;
Authorized 40,000,000 shares;
Outstanding 24,045,502 and 21,579,741 shares, respectively			98,397				82,833
Retained earnings			44,731				47,640
Total shareholders’ equity			143,128				130,473
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY		$	167,306			$	153,118

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Nine Months Ended
		March 31
(In thousands)		2010				2009
Cash Flows from Operating Activities
Net income (loss)		$	697			$	(13,157	)
Non-cash items included in net income (loss)
Depreciation and amortization			5,903				5,896
Loss on sale of a subsidiary			639				—
Goodwill impairment			—				14,207
Deferred income taxes			(27	)			(779	)
Deferred compensation plan			5				48
Stock option expense			1,102				908
Issuance of common shares as compensation			36				31
Loss on disposition of fixed assets			28				5
Allowance for doubtful accounts			(124	)			(27	)
Inventory obsolescence reserve			300				165
Changes in certain assets and liabilities, net of acquisition
Accounts and notes receivable			2,581				8,776
Inventories			1,769				10,973
Accounts payable and other			48				(12,532	)
Customer prepayments			(709	)			(1,123	)
Net cash flows from operating activities			12,248				13,391
Cash Flows from Investing Activities
Purchases of property, plant and equipment			(4,572	)			(1,156	)
Proceeds from sale of fixed assets			505				2
Acquisition of business, net of cash received			(675	)			—
Net cash flows (used in) investing activities			(4,742	)			(1,154	)
Cash Flows from Financing Activities
Payment of long-term debt			(2,230	)			(1,282	)
Proceeds from issuance of long-term debt			—				1,282
Cash dividends paid			(3,606	)			(5,393	)
Purchase of treasury shares			(102	)			(175	)
Issuance of treasury shares			75				52
Net cash flows (used in) financing activities			(5,863	)			(5,516	)
Increase in cash and cash equivalents			1,643				6,721
Cash and cash equivalents at beginning of year			13,986				6,992
Cash and cash equivalents at end of period		$	15,629			$	13,713
Supplemental Cash Flow Information
Interest paid		$	109			$	58
Income taxes paid		$	455			$	377
Issuance of common shares as compensation		$	36			$	31
Issuance of common shares for acquisition		$	14,448			$	—

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

LSI INDUSTRIES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1: INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The interim condensed consolidated financial statements are unaudited and are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, and rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of Management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of March 31, 2010, the results of its operations for the three and nine month periods ended March 31, 2010 and 2009, and its cash flows for the nine month periods ended March 31, 2010 and 2009. These statements should be read in conjunction with the financial statements and footnotes included in the fiscal 2009 annual report. Financial information as of June 30, 2009 has been derived from the Company’s audited consolidated financial statements.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation:

The consolidated financial statements include the accounts of LSI Industries Inc. (an Ohio corporation) and its subsidiaries, all of which are wholly owned. All intercompany transactions and balances have been eliminated in consolidation.

Revenue Recognition:

Revenue is recognized when title to goods and risk of loss have passed to the customer, there is persuasive evidence of a purchase arrangement, delivery has occurred or services have been rendered, and collectibility is reasonably assured. Revenue is typically recognized at time of shipment. In certain arrangements with customers, as is the case with the sale of some of our solid-state LED (light emitting diode) video screens, revenue is recognized upon customer acceptance of the video screen at the job site. Sales are recorded net of estimated returns, rebates and discounts. Amounts received from customers prior to the recognition of revenue are accounted for as customer pre-payments and are included in accrued expenses.

The Company has four sources of revenue: revenue from product sales; revenue from installation of products; service revenue generated from providing integrated design, project and construction management, site engineering and site permitting; and revenue from shipping and handling.

Product revenue is recognized on product-only orders upon passing of title and risk of loss, generally at time of shipment. However, product revenue related to orders where the customer requires the Company to install the product is recognized when the product is installed. Other than normal product warranties or the possibility of installation or post-shipment service, support and maintenance of certain solid state LED video screens, billboards, or active digital signage, the Company has no post-shipment responsibilities.

Installation revenue is recognized when the products have been fully installed. The Company is not always responsible for installation of products it sells and has no post-installation responsibilities, other than normal warranties.

Service revenue from integrated design, project and construction management, and site permitting is recognized when all products have been installed at each individual retail site of the customer on a proportional performance basis.

Shipping and handling revenue coincides with the recognition of revenue from sale of the product.

The Company evaluates the appropriateness of revenue recognition in accordance with Accounting Standards Codification (ASC) Subtopic 605-25, Revenue Recognition: Multiple-Element Arrangements, and ASC Subtopic 985-605, Software: Revenue Recognition. Our solid-state LED video screens, billboards and active digital signage contain software elements which the Company has determined are incidental and excluded from the scope of ASC Subtopic 985-605.

Credit and Collections:

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 collectibility problems of customers’ 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, and historical trends. 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.

The following table presents the Company’s net accounts and notes receivable at the dates indicated.

		March 31,				June 30,
(In thousands)		2010				2009
Accounts and notes receivable		$	29,321			$	30,213
less Allowance for doubtful accounts			(417	)			(532	)
Accounts and notes receivable, net		$	28,904			$	29,681

Cash and Cash Equivalents:

The cash balance includes cash and cash equivalents which have original maturities of less than three months. At March 31, 2010 and June 30, 2009, there were no bank balances in excess of FDIC insurance limits.

Inventories:

Inventories are stated at the lower of cost or market. Cost is determined on the first-in, first-out basis.

Property, Plant and Equipment and Related Depreciation:

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		28 – 40 years
Machinery and equipment		3 – 10 years
Computer software		3 – 8 years

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 in accordance with ASC Subtopic 350-40, Intangibles — Goodwill and Other: Internal-Use Software. Leasehold improvements are depreciated over the shorter of fifteen years or the remaining term of the lease.

The following table presents the Company’s property, plant and equipment at the dates indicated.

		March 31,				June 30,
(In thousands)		2010				2009
Property, plant and equipment, at cost		$	108,207			$	103,280
less Accumulated depreciation			(63,546	)			(61,237	)
Property, plant and equipment, net		$	44,661			$	42,043

The Company recorded $1,327,000 and $1,401,000 of depreciation expense in the third quarter of fiscal 2010 and 2009, respectively, and $3,995,000 and $4,338,000 of depreciation expense in the first nine months of fiscal 2010 and 2009, respectively.

Intangible Assets:

Intangible assets consisting of customer relationships, trade names and trademarks, patents, technology and software, and non-compete agreements are recorded on the Company’s balance sheet. The definite-lived intangible assets are being amortized to expense over periods ranging between two and twenty years. The Company periodically evaluates definite-lived intangible assets for permanent impairment. 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 intangibles in Note 7.

Fair Value of Financial Instruments:

The Company has financial instruments consisting primarily of cash and cash equivalents, revolving lines of credit, 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.

Product Warranties:

The Company offers a limited warranty that its products are free of defects in workmanship and materials. The specific terms and conditions vary somewhat by product line, but generally cover defective product returned within one to five 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 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 amounts as necessary.

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:

		Nine Months Ended				Twelve Months Ended
		March 31,				June 30,
(In thousands)		2010				2009
Balance at beginning of the period		$	223			$	257
Additions charged to expense			1,135				557
Addition from acquisition			5				—
Deductions for repairs and replacements			(974	)			(591	)
Balance at end of the period		$	389			$	223

Research and Development Costs:

Research and development expenses are costs 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, supplies, depreciation and other administrative costs. All costs are expensed as incurred and are classified as operating expenses. The Company follows the requirements of ASC Subtopic 985-20, Software: Costs of Software to be Sold, Leased, or Marketed, by expensing as research and development all costs associated with development of software used in solid-state LED products. Research and development costs incurred related to both product and software development totaled $1,209,000 and $962,000 for the three month periods ended March 31, 2010 and 2009, respectively, and $3,662,000 and $3,028,000 for the nine month periods ended March 31, 2010 and 2009, respectively.

Earnings Per Common Share:

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 non-qualified deferred compensation plan. 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, contingently issuable shares and common shares to be issued under a deferred compensation plan, all of which totaled 233,000 shares and 229,000 shares for the three months ended March 31, 2010 and 2009, respectively, and 240,000 shares and 225,000 shares for the nine months ended March 31, 2010 and 2009, respectively. See also Note 5.

New Accounting Pronouncements

In February 2010, the Financial Accounting Standards Board issued ASU 2010-09, “Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements.” The amendments in the ASU remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. The amended guidance was effective on February 24, 2010, the issuance date of the ASU. The Company adopted this ASU during the three months ended March 31, 2010.

In February 2010, the Financial Accounting Standards Board issued ASU 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements.” The ASU amends the disclosure requirements related to Fair Value Measurements and Disclosures — Overall Subtopic (Subtopic 820-10) of the FASB Accounting Standards Codification, originally issued as FASB Statement No. 157, Fair Value Measurements. The intent of the amended guidance is improved disclosure and increased transparency related to Fair Value Measurement in financial reporting. This amended guidance is effective for interim and annual periods beginning after December 15, 2009, except for the disaggregation requirement for the reconciliation disclosure of Level 3 measurements, which is effective for fiscal years beginning after December 15, 2010 and for interim periods within those years. The Company adopted the new guidance during the three months ended March 31, 2010 and there was no impact on the Company’s consolidated results of operations, cash flows or financial position.

Comprehensive Income:

The Company does not have any comprehensive income items other than net income.

Subsequent Events:

The Company has evaluated subsequent events for potential recognition and disclosure for the quarter ended March 31, 2010.

Use of Estimates:

The preparation of the 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 financial statements and accompanying notes. Actual results could differ from those estimates.

NOTE 3: MAJOR CUSTOMER CONCENTRATIONS

The Company’s Lighting Segment and Graphics Segment net sales to 7-Eleven, Inc. represented approximately $7,254,000 or 14%, and $33,055,000 or 17% of consolidated net sales in the three and nine months ended March 31, 2010, respectively. There were no concentrations of net sales for the three or nine months ended March 31, 2009. There was no concentration of accounts receivable at March 31, 2010 or 2009.

NOTE 4: BUSINESS SEGMENT INFORMATION

Accounting Standards Codification Topic 280, 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 interim financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s President and Chief Executive Officer) in making decisions on how to allocate resources and assess performance. While the Company has thirteen operating segments, it has only four reportable operating business segments (Lighting, Graphics, Technology, and Electronic Components) and an All Other Category.

The Lighting Segment includes outdoor, indoor, and landscape lighting that has been fabricated and assembled for the commercial, industrial and multi-site retail lighting markets, including the petroleum/convenience store market. The Lighting Segment includes the operations of LSI Ohio Operations, LSI Metal Fabrication, LSI MidWest Lighting, LSI Lightron and LSI Greenlee Lighting. These operations have been integrated, have similar economic characteristics and meet the other requirements for aggregation in segment reporting.

The Graphics Segment designs, manufactures and installs exterior and interior visual image elements related to image programs, solid state LED digital advertising billboards, and solid state LED digital sports video screens. These products are used in visual image programs in several markets, including the petroleum/convenience store market, multi-site retail operations, sports and advertising. The Graphics Segment includes the operations of Grady McCauley, LSI Retail Graphics and LSI Integrated Graphic Systems, which have been aggregated as such facilities manufacture two-dimensional graphics with the use of screen and digital printing, fabricate three-dimensional structural graphics sold in the multi-site retail and petroleum/convenience store markets, and exhibit each of the similar economic characteristics and meet the other requirements for aggregation in segment reporting.

The Technology Segment designs and produces high-performance light engines, large format video screens using solid-state LED technology, and certain specialty LED lighting. The primary markets served with LED video screens are the entertainment market, outdoor advertising billboard and sports markets not served by our Graphics Segment. The Technology Segment includes the operations of LSI Saco Technologies.

The Electronic Components Segment designs, engineers and manufactures custom designed electronic circuit boards, assemblies and sub-assemblies used in various applications including the control of solid-state LED lighting. Capabilities of this Segment also have applications in the Company’s other LED product lines such as digital scoreboards, advertising ribbon boards and billboards. The Electronic Components Segment includes the operations of LSI ADL Technology, which was acquired by the Company on July 22, 2009. See further discussion in Note 13.

The All Other Category includes the Company’s operating segments that do not meet the aggregation criteria, nor the criteria to be a separate reportable segment. Operations of LSI Images (menu board systems) and LSI Adapt (surveying, permitting and installation management services related to products of the Graphics Segment) are combined in the All Other Category. Operations of LSI Marcole (electrical wire harnesses) are included in the All Other Category, although this business was sold in March 2010. Additionally, the Company’s Corporate Administration expense is included in the All Other Category.

Summarized financial information for the Company’s reportable business segments for the three and nine month periods ended March 31, 2010 and 2009, and as of March 31, 2010 and June 30, 2009 is as follows:

		Three Months Ended								Nine Months Ended
		March 31								March 31
(In thousands)		2010				2009				2010				2009
Net sales:
Lighting Segment		$	35,458			$	33,562			$	118,787			$	126,489
Graphics Segment			10,900				11,327				52,321				46,354
Technology Segment			1,282				439				2,578				4,429
Electronic Components Segment			4,014				—				11,661				—
All Other Category			1,812				1,661				5,169				6,342
		$	53,466			$	46,989			$	190,516			$	183,614
Operating income (loss):
Lighting Segment		$	(71	)		$	(209	)		$	6,648			$	(5,691	)
Graphics Segment			(896	)			72				2,629				1,742
Technology Segment			(37	)			(187	)			74				185
Electronic Components Segment			657				—				1,462				—
All Other Category			(3,467	)			(3,471	)			(9,197	)			(9,822	)
		$	(3,814	)		$	(3,795	)		$	1,616			$	(13,586	)
Capital expenditures:
Lighting Segment		$	549			$	145			$	1,654			$	878
Graphics Segment			1,607				117				1,963				213
Technology Segment			—				7				10				25
Electronic Components Segment			53				—				537				—
All Other Category			83				(1	)			408				40
		$	2,292			$	268			$	4,572			$	1,156
Depreciation and amortization:
Lighting Segment		$	793			$	862			$	2,398			$	2,624
Graphics Segment			263				309				790				976
Technology Segment			71				111				251				332
Electronic Components Segment			234				—				617				—
All Other Category			614				638				1,847				1,964
		$	1,975			$	1,920			$	5,903			$	5,896

		March 31,				June 30,
		2010				2009
Identifiable assets:
Lighting Segment		$	72,845			$	72,222
Graphics Segment			30,922				32,280
Technology Segment			12,677				12,317
Electronic Components Segment			22,721				—
All Other Category			28,141				36,299
		$	167,306			$	153,118

Segment net sales represent sales to external customers. Intersegment revenues, which were eliminated in consolidation, were as follows:

		Three Months Ended								Nine Months Ended
		March 31								March 31
(In thousands)		2010				2009				2010				2009
Lighting Segment intersegment net sales		$	575			$	1,092			$	5,674			$	5,131
Graphics Segment intersegment net sales		$	175			$	168			$	707			$	916
Technology Segment intersegment net sales		$	49			$	85			$	3,356			$	3,801
Electronic Components Segment intersegment net sales		$	1,275			$	—			$	3,978			$	—
All Other Category intersegment net sales		$	1,015			$	473			$	2,514			$	3,425

Segment operating income, which is used in management’s evaluation of segment performance, represents net sales less all operating expenses including impairment of goodwill and intangible assets, but excluding interest expense and interest income.

Identifiable assets are those assets used by each segment in its operations. Corporate assets, which consist primarily of cash and cash equivalents, refundable income taxes and certain intangible assets are included in the All Other Category.

The Company considers its geographic areas to be: 1) the United States, and 2) Canada. The majority of the Company’s operations are in the United States; one operation is in Canada. The geographic distribution of the Company’s net sales and long-lived assets are as follows:

		Three Months Ended								Nine Months Ended
		March 31								March 31
(In thousands)		2010				2009				2010				2009
Net sales (a):
United States		$	52,184			$	46,550			$	187,938			$	179,185
Canada			1,282				439				2,578				4,429
		$	53,466			$	46,989			$	190,516			$	183,614

		March 31,				June 30,
		2010				2009
Long-lived assets (b):
United States		$	46,454			$	45,898
Canada			397				564
		$	46,851			$	46,462

NOTE 5: EARNINGS PER COMMON SHARE

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 (in thousands, except per share data):

		Three Months Ended								Nine Months Ended
		March 31								March 31
		2010				2009				2010				2009
BASIC EARNINGS (LOSS) PER SHARE
Net income (loss)		$	(2,532	)		$	(2,467	)		$	697			$	(13,157	)
Weighted average shares outstanding during the period, net of treasury shares (a)			24,044				21,572				23,845				21,574
Weighted average shares outstanding in the Deferred Compensation Plan during the period			233				229				233				225
Weighted average shares outstanding			24,277				21,801				24,078				21,799
Basic earnings (loss) per share		$	(0.10	)		$	(0.11	)		$	0.03			$	(0.60	)
DILUTED EARNINGS (LOSS) PER SHARE
Net income (loss)		$	(2,532	)		$	(2,467	)		$	697			$	(13,157	)
Weighted average shares outstanding — Basic			24,277				21,801				24,078				21,799
Effect of dilutive securities (b):
Impact of common shares to be issued under stock option plans, and contingently issuable shares, if any			—				—				7				—
Weighted average shares outstanding (c)			24,277				21,801				24,085				21,799
Diluted earnings (loss) per share		$	(0.10	)		$	(0.11	)		$	0.03			$	(0.60	)

NOTE 6: BALANCE SHEET DATA

The following information is provided as of the dates indicated (in thousands):

		March 31, 2010				June 30, 2009
Inventories
Raw materials		$	19,408			$	20,498
Work-in-process			7,734				7,097
Finished goods			13,873				12,601
		$	41,015			$	40,196
Accrued Expenses
Compensation and benefits		$	5,421			$	5,788
Customer prepayments			1,107				1,816
Accrued commissions			870				919
Other accrued expenses			2,459				1,845
		$	9,857			$	10,368

NOTE 7: GOODWILL AND OTHER INTANGIBLE ASSETS

In accordance with Accounting Standards Codification (ASC) Topic 350, Intangibles — Goodwill and Other, the Company is required to perform an annual impairment test of its goodwill and indefinite-lived intangible assets. The Company performs this test as of July 1^st of each fiscal year and on an interim basis when an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company uses a combination of the market approach and the income (discounted cash flow) approach in determining the fair value of its reporting units. Under ASC Topic 350, the goodwill impairment test is a two-step process. Under the first step, the fair value of the Company’s reporting unit is compared to its respective carrying value. An indication that goodwill is impaired occurs when the fair value of a reporting unit is less than the carrying value. When there is an indication that goodwill is impaired, the Company is required to perform a second step. In step two, the actual impairment of goodwill is calculated by comparing the implied fair value of the goodwill with the carrying value of the goodwill.

The Company identified its reporting units in conjunction with its annual goodwill impairment testing. The Company relies upon a number of factors, judgments and estimates when conducting its impairment testing. These include operating results, forecasts, anticipated future cash flows and marketplace data, to name a few. There are inherent uncertainties related to these factors and judgments in applying them to the analysis of goodwill impairment.

Due to economic conditions, the effects of the recession on the Company’s markets and the decline in the Company’s stock price since the previous goodwill impairment test, management believed that an additional goodwill impairment test was required as of December 31, 2008. Based upon the Company’s analysis, it was determined that the goodwill associated with three of the five remaining reporting units that contain goodwill was either fully or partially impaired. The total amount of the goodwill impairment was $13,250,000, of which $11,185,000 was impaired in the Lighting Segment, $716,000 was impaired in the Graphics Segment and $1,349,000 was impaired in the All Other Category. The impairment charge was due to a combination of a decline in the market capitalization of the Company at December 31, 2008 and a decline in the estimated forecasted discounted cash flows since the annual goodwill impairment test was performed. The impairment charge was recorded in the second quarter of fiscal 2009.

Due to economic conditions, the effects of the recession on the Company’s markets and the decline in the Company’s stock price since the previous goodwill impairment test as of December 31, 2008, management believed that an additional goodwill impairment test was required as of March 31, 2009. Based upon the Company’s analysis, it was determined that the goodwill associated with one reporting unit in the All Other Category was partially impaired in the amount of $957,000. The impairment was due to a combination of a decline in the market capitalization of the Company at March 31, 2009 and a decline in the estimated forecasted discounted cash flows since the previous goodwill impairment test was performed. The impairment charge was recorded in the third quarter of fiscal 2009.

A similar analysis was performed in fiscal 2009 as of July 1, 2008 for the annual impairment test and there was no impairment of goodwill.

The following tables present information about the Company’s goodwill and other intangible assets on the dates or for the periods indicated.

										Electronic
		Lighting				Graphics				Components				All Other
(In thousands)		Segment				Segment				Segment				Category				Total
Balance as of June 30, 2008		$	11,320			$	974			$	—			$	3,731			$	16,025
Impairment			(11,185	)			(716	)			—				(2,566	)			(14,467	)
Balance as of June 30, 2009			135				258				—				1,165				1,558
Acquisition			—				—				9,208				—				9,208
Balance as of March 31, 2010		$	135			$	258			$	9,208			$	1,165			$	10,766

The acquisition of LSI ADL Technology resulted in the following amortizable intangible assets being recorded on the Company’s balance sheet as of the July 22, 2009 acquisition date: customer relationships $2,880,000; Technology $780,000; trade name $460,000 and non-compete agreements $710,000. See further discussion in Note 13.

The gross carrying amount and accumulated amortization by major other intangible asset class is as follows:

		March 31, 2010
		Gross
		Carrying				Accumulated				Net
(In thousands)		Amount				Amortization				Amount
Amortized Intangible Assets
Customer relationships		$	10,352			$	4,752			$	5,600
Patents			110				64				46
LED Technology firmware, software			11,228				5,651				5,577
Trade name			460				63				397
Non-compete agreements			890				166				724
			23,040				10,696				12,344
Indefinite-lived Intangible Assets
Trademarks and trade names			3,559				—				3,559
			3,559				—				3,559
Total Intangible Assets		$	26,599			$	10,696			$	15,903

		June 30, 2009
		Gross
		Carrying				Accumulated				Net
(In thousands)		Amount				Amortization				Amount
Amortized Intangible Assets
Customer relationships		$	7,472			$	4,173			$	3,299
Patents			110				59				51
LED Technology firmware, software			10,448				4,478				5,970
Trade name			—				—				—
Non-compete agreements			630				528				102
			18,660				9,238				9,422
Indefinite-lived Intangible Assets
Trademarks and trade names			3,559				—				3,559
			3,559				—				3,559
Total Intangible Assets		$	22,219			$	9,238			$	12,981

		Amortization Expense of Other Intangible Assets
		March 31, 2010				March 31, 2009
Three Months Ended		$	648			$	519
Nine Months Ended		$	1,908			$	1,558

The Company expects to record amortization expense through fiscal 2015 as follows: 2010 — $2,559,000; 2011 through 2012 — $2,590,000 per year; 2013 — $2,327,000; 2014 — $621,000; and 2015 — $537,000.

NOTE 8: REVOLVING LINES OF CREDIT AND LONG-TERM DEBT

The Company has a $30 million unsecured revolving line of credit with its bank group in the U.S., all of which was available as of March 31, 2010. The line of credit expires in the third quarter of fiscal 2013. Annually in the third quarter, the credit facility is renewable with respect to adding an additional year of commitment, if the bank group so chooses, to replace the year just ended. Interest on the revolving lines 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. The increment over the LIBOR borrowing rate, as periodically determined, fluctuates between 225 and 265 basis points depending upon the ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (EBITDA), as defined in the credit facility. The fee on the unused balance of the $30 million committed line of credit is 25 basis points. Under terms of this credit facility, the Company has agreed to a negative pledge of assets, to maintain minimum levels of profitability and net worth, and is subject to certain maximum levels of leverage. A second U.S. revolving line of credit in the amount of $10 million, which the Company chose to not renew, expired in the third quarter of fiscal 2010.

The Company also has a $5 million line of credit for its Canadian subsidiary. The line of credit expires in the fourth quarter of fiscal 2010. Interest on the Canadian subsidiary’s line of credit is charged based upon a 250 basis point increment over the LIBOR rate or based upon an increment over the United States base rates if funds borrowed are denominated in U.S. dollars or an increment over the Canadian prime rate if funds borrowed are denominated in Canadian dollars. There are no borrowings against this line of credit as of March 31, 2010.

The Company assumed a mortgage loan with the acquisition of AdL Technology in July 2009. Monthly principal payments of approximately $10,000 are to be made through August, 2012 at an interest rate of 7.76%, at which time the balance is payable in full. The real estate of LSI ADL Technology has been pledged as collateral for the mortgage.

(In thousands)		March 31, 2010
Total mortgage balance		$	1,139
Less current maturities			31
Long-term debt		$	1,108

The Company also assumed approximately $2.2 million of additional long-term debt with the acquisition of AdL Technology and paid it off at the time of the acquisition. The Company is in compliance with all of its loan covenants as of March 31, 2010.

NOTE 9: RESERVE FOR UNCERTAIN TAX POSITIONS

For the three and nine month periods ended March 31, 2010, the Company recognized $(5,000) and $39,000 of tax (benefit) expense, respectively, related to the change in reserves for uncertain tax positions. For the three and nine month periods ended March 31, 2009, the Company recognized $(25,000) and $6,000 of tax (benefit) expense, respectively, related to the change in reserves for uncertain tax positions. As of March 31, 2010, the reserve for uncertain income tax positions is $2,774,000, net of potential federal tax benefits. The Company is recording estimated interest and penalties related to potential underpayment of income taxes as a component of tax expense in the Condensed Consolidated Statements of Operations. The reserve for uncertain tax positions is not expected to change significantly in the next 12 months.

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. With limited exceptions, the Company is no longer subject to U.S. Federal, state and local tax examinations by tax authorities for fiscal years ending prior to June 30, 2007.

NOTE 10: CASH DIVIDENDS

The Company paid cash dividends of $3,606,000 and $5,393,000 in the nine month periods ended March 31, 2010 and 2009, respectively. In April, 2010, the Company’s Board of Directors declared a $0.05 per share regular quarterly cash dividend (approximately $1,202,000) payable on May 11, 2010 to shareholders of record as of May 4, 2010.

NOTE 11: EQUITY COMPENSATION

Stock Options

The Company has an equity compensation plan that was approved by shareholders which covers all of its full-time employees, outside directors and advisors. The options granted or stock awards made pursuant to this plan are granted at fair market value at date of grant or award. Options granted to non-employee directors become exercisable 25% each ninety days (cumulative) from date of grant and options granted to employees generally become exercisable 25% per year (cumulative) beginning one year after the date of grant. If a stock option holder’s employment with the Company terminates by reason of death, disability or retirement, as defined in the Plan, any award shall be fully vested. The number of shares reserved for issuance is 2,800,000, of which 803,807 shares were available for future grant or award as of March 31, 2010. This plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted and unrestricted stock awards, performance stock awards, and other stock awards. As of March 31, 2010, a total of 2,172,336 options for common shares were outstanding from this plan as well as two previous stock option plans (both of which had also been approved by shareholders), and of these, a total of 1,054,936 options for common shares were vested and exercisable. The approximate unvested stock option expense as of March 31, 2010 that will be recorded as expense in future periods is $2,662,000. The weighted average time over which this expense will be recorded is approximately 20 months.

The fair value of each option on the date of grant was estimated using the Black-Scholes option pricing model. The below listed weighted average assumptions were used for grants in the periods indicated.

		Three Months								Nine Months
		Ended March 31								Ended March 31
		2010				2009				2010				2009
Dividend yield			3.09	%			—				3.09	%			5.16	%
Expected volatility			51	%			—				51	%			41	%
Risk-free interest rate			2.44	%			—				2.40	%			3.1	%
Expected life			4.3 yrs.				—				4.3 yrs.				4.3 yrs.

At March 31, 2010, the 644,000 options granted in the first nine months of fiscal 2010 to both employees and non-employee directors had exercise prices ranging from $5.93 to $8.40, fair values ranging from $2.03 to $2.87 per option, and remaining contractual lives of between nine years and eight months and ten years.

At March 31, 2009, the 339,300 options granted in the first nine months of fiscal 2009 to both employees and non-employee directors had exercise prices ranging from $4.60 to $8.98, fair values ranging from $1.12 to $2.21 per option, and remaining contractual lives of between four years and eight months and nine years and eight months.

The Company calculates stock option expense using the Black-Scholes method, and records the expense on a straight line basis with an estimated 6.6% forfeiture rate. 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’ 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. The Company recorded $378,200 and $262,500 of expense related to stock options in the three months ended March 31, 2010 and 2009, respectively, and $1,101,800 and $907,600 in the nine month periods ended March 31, 2010 and 2009, respectively. As of March 31, 2010, the Company expects that approximately 1,044,300 outstanding stock options having a weighted average exercise price of $10.50, intrinsic value of $85,500 and weighted average remaining contractual terms of 8.6 years will vest in the future.

Information related to all stock options for the periods ended March 31, 2010 and 2009 is shown in the table below:

		Nine Months Ended
		March 31, 2010
						Weighted				Weighted
						Average				Average				Aggregate
						Exercise				Remaining				Intrinsic
		Shares				Price				Contractual Term				Value
Outstanding at 6/30/09			1,537,212			$	13.07			6.4 years				$	33,800
Granted			644,000			$	8.26
Forfeitures			(8,876	)		$	12.48
Exercised			—				n/a
Outstanding at 3/31/10			2,172,336			$	11.64			6.8 years				$	106,455
Exercisable at 3/31/10			1,054,936			$	12.98			4.8 years				$	13,498

		Nine Months Ended
		March 31, 2009
						Weighted				Weighted
						Average				Average				Aggregate
						Exercise				Remaining				Intrinsic
		Shares				Price				Contractual Term				Value
Outstanding at 6/30/08			1,197,482			$	14.44			6.5 years				$	—
Granted			339,300			$	8.89
Forfeitures			(24,195	)		$	12.92
Exercised			—				n/a
Outstanding at 3/31/09			1,512,587			$	13.22			6.6 years				$	3,420
Exercisable at 3/31/09			816,162			$	12.51			5.0 years				$	855

No options were exercised in the nine month periods ended March 31, 2010 and March 31, 2009.

Information related to unvested stock options for the nine months ended March 31, 2010 is shown in the table below:

						Weighted				Weighted
						Average				Average				Aggregate
						Exercise				Remaining				Intrinsic
		Shares				Price				Contractual Term				Value
Outstanding unvested stock options at 6/30/09			707,125			$	13.72			8.3 years				$	31,245
Vested			(232,225	)		$	14.58
Forfeitures			(1,500	)		$	14.01
Granted			644,000			$	8.26
Outstanding unvested stock options at 3/31/10			1,117,400			$	10.39			8.6 years				$	92,958

Stock Compensation Awards

The Company awarded a total of 4,456 and 4,152 common shares, respectively, in the nine months ended March 31, 2010 and 2009, with the number of shares issued in each nine month period valued at their approximate $36,000 and $31,000 fair market values, respectively, on the dates of issuance pursuant to employee service awards and primarily the compensation program for non-employee Directors who receive a portion of their compensation as an award of Company stock. Stock compensation awards are made in the form of newly issued common shares of the Company.

Deferred Compensation Plan

The Company’s Non-qualified Deferred Compensation Plan provides for both Company contributions and participant deferrals of compensation. The Plan is fully funded in a Rabbi Trust. All Plan investments are in common shares of the Company. As of March 31, 2010 there were 31 participants, all with fully vested account balances. A total of 232,123 common shares with a cost of $2,483,000, and 222,832 common shares with a cost of $2,455,900 were held in the Plan as of March 31, 2010 and June 30, 2009, respectively, and, accordingly, have been recorded as treasury shares. The change in the number of shares held by this Plan is the net result of share purchases and sales on the open stock market for compensation deferred into the Plan and for distributions to terminated employees. The Company does not issue new common shares for purposes of the non-qualified deferred compensation plan. The Company accounts for assets held in the non-qualified deferred compensation plan in accordance with Accounting Standards Codification Topic 710, Compensation — General. For fiscal year 2010, the Company estimates the Rabbi Trust for the Nonqualified Deferred Compensation Plan will make net repurchases in the range of 16,000 to 18,000 common shares of the Company. During the nine months ended March 31, 2010 and 2009, the Company used approximately $102,200 and $174,900, respectively, to purchase common shares of the Company in the open stock market for either employee salary deferrals or Company contributions into the non-qualified deferred compensation plan. The Company does not currently repurchase its own common shares for any other purpose.

NOTE 12: COMMITMENTS AND CONTINGENCIES

The Company is party to various negotiations, customer bankruptcies, and legal proceedings arising in the normal course of business. The Company provides reserves for these matters when a loss is probable and reasonably estimable. 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.

NOTE 13: ACQUISITION

On July 22, 2009, the Company completed the acquisition of certain net assets and 100% of the business of three related companies (AdL Technology, AdL Engineering and Kelmilfeen - collectively, “AdL” or “AdL Technology”), which were privately owned and based in Columbus, Ohio. This new 100% owned subsidiary operates under the name of LSI ADL Technology Inc. Consideration for the asset purchase of these businesses totaled $15,781,480, and consisted of 2,469,676 shares of LSI’s unregistered common stock (the fair value of which was determined based upon the closing market price of LSI’s common shares on the acquisition date) and cash of $1,333,875. The purchase price exceeded the fair value of the net assets being acquired, and therefore goodwill in the amount of $9,208,000 was recorded with this acquisition. Additionally, LSI assumed long-term debt of $3,368,874 in the purchase of substantially all net assets of these businesses. The goodwill associated with this acquisition consists largely of the synergies expected from combining AdL and LSI Industries and the vertical integration of the design and manufacture of electronic circuit boards used in many of the Company’s products. None of the goodwill will be deductible by the Company for tax purposes. There were no contingent liabilities or assets associated with the purchase of AdL. There were $520,000 of acquisition transaction costs included in the financial results for the nine month period ended March 31, 2010 in selling and administrative expenses, and $640,000 of expense in cost of products sold related to the roll-out of fair value inventory adjustments for LSI ADL Technology’s sales of products that were in finished goods or work-in-process inventory on the acquisition date and therefore were valued at fair value, as opposed to manufactured cost, in the opening balance sheet in accordance with the requirements of purchase accounting. The operations of LSI ADL Technology are included in the Company’s operating results beginning July 23, 2009. The results of LSI ADL Technology are reported in a separate reportable business segment named the Electronic Components Segment.

The recognized amounts of identifiable assets acquired and liabilities assumed with the acquisition of AdL Technology were as follows:

(In thousands)
Financial assets		$	2,398
Inventory			3,677
Property, plant and equipment			3,094
Identifiable intangible assets			4,830
Financial liabilities			(7,426	)
Total identifiable net assets			6,573
Goodwill			9,208
Total purchase consideration		$	15,781

A liability of $5,000 has been recognized in the opening balance sheet (included in financial liabilities above) for expected warranty claims on products sold by AdL Technology prior to acquisition.

LSI ADL Technology Inc. designs, engineers, and manufactures custom designed circuit boards, assemblies, and sub-assemblies used in various applications including the control of solid-state LED lighting. With the acquisition of AdL, we made a decision to further establish and advance our leadership position in LED lighting by vertically integrating our capabilities in connection with designing, engineering, and producing the solid-state electronics that control and power LEDs. LSI ADL Technology allows us to stay on the leading edge of product development, while at the same time provide opportunities to drive down manufacturing costs and control delivery of key components. LSI ADL’s capabilities also have applications in our other LED product lines such as digital scoreboards, advertising ribbon boards and billboards. The management team and substantially all employees of the acquired companies remain with LSI ADL Technology.

NOTE 14: SALE OF LSI MARCOLE

On January 20, 2010, the Board of Directors approved a plan to close the LSI Marcole facility in Manchester, Tennessee. This facility manufactures wire harnesses used in the manufacture of LSI’s light fixtures and also sells wire harness to select outside customers. The Company decided to sell this facility primarily due to low cost competition of wire harnesses produced outside the United States. While the Company expected to cease production at the facility by April 2, 2010, an interested buyer came forward and purchased certain assets and the business of LSI Marcole on March 30, 2010. The Company received $500,000 of the sales proceeds in cash as well as interest bearing promissory notes in the amount of $669,682 to be paid in full via quarterly payments through June 2011. The Company recorded a $638,747 loss on the sale of certain LSI Marcole assets in cost of products and services sold in the third quarter of fiscal 2010. Subsequent to the sale of the LSI Marcole assets, the Company will continue to purchase wire harnesses from the new owner of the facility pursuant to a manufacturing and supply agreement. The operating results of LSI Marcole are reported under the All Other Category.

The assets and liabilities of LSI Marcole were comprised of the following on the dates indicated:

		March 31,				December 31,				June 30,
(In thousands)		2010				2009				2009
Accounts receivable, net		$	487			$	349			$	316
Notes receivable, current portion			632				—				—
Inventory			—				1,520				1,491
Other current assets			—				143				160
Property, plant and equipment, net			—				978				1,024
Other assets			38				1				2
Total Assets		$	1,157			$	2,991			$	2,993

The net customer sales and operating (loss) of LSI Marcole for the periods indicated were as follows:

		Three Months Ended								Nine Months Ended
		March 31								March 31
(In thousands)		2010				2009				2010				2009
Net sales		$	1,088			$	906			$	2,886			$	3,358
Operating (loss)		$	(816	)		$	(291	)		$	(1,034	)		$	(452	)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company’s “forward looking statements” and disclosures as presented earlier in this Form 10-Q in the “Safe Harbor” Statement should be referred to when reading Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Net Sales by Business Segment

		Three Months Ended								Nine Months Ended
		March 31								March 31
(In thousands)		2010				2009				2010				2009
Lighting Segment		$	35,458			$	33,562			$	118,787			$	126,489
Graphics Segment			10,900				11,327				52,321				46,354
Technology Segment			1,282				439				2,578				4,429
Electronic Components Segment			4,014				—				11,661				—
All Other Category			1,812				1,661				5,169				6,342
		$	53,466			$	46,989			$	190,516			$	183,614