LSI Industries Inc. (Nasdaq:LYTS) today:
-
reported third quarter net sales of $53,466,000, an increase of
13.8% compared to the same period of the prior fiscal year;
-
reported a third quarter net loss of $(2,532,000) or $(0.10) per
share, compared to a net loss of $(2,467,000) or $(0.11) per share
for the same period of the prior fiscal year;
-
reported nine month net sales of $190,516,000, an increase of
3.8% compared to the same period of the prior fiscal year;
-
reported nine month net income of $697,000 or $0.03 per share,
as compared to a net loss of $(13,157,000) or $(0.60) per share for
the same period of the prior fiscal year; and
-
declared a regular quarterly cash dividend of $0.05 per share
payable May 11, 2010 to shareholders of record May 4, 2010.
-
commented that for the fiscal year ending June 30, 2010 net
sales are expected to be between [$248 million and $260 million],
net income between [$1.8 million and $2.6 million], and diluted per
share earnings between [$0.07 and $0.10].
Financial Highlights
|
|
|
|
|
|
|
(In thousands, except per
|
Three Months Ended
|
Nine Months Ended
|
share data; unaudited)
|
March 31
|
March 31
|
|
2010
|
2009
|
% Change
|
2010
|
2009
|
% Change
|
|
|
|
|
|
|
|
Net Sales
|
$53,466
|
$46,989
|
13.8%
|
$190,516
|
$183,614
|
3.8%
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
$(3,814)
|
$(3,795)
|
|
$1,616
|
$(13,586)
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
$(2,532)
|
$(2,467)
|
|
$697
|
$(13,157)
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Share (diluted)
|
$(0.10)
|
$(0.11)
|
|
$0.03
|
$(0.60)
|
|
|
|
|
|
|
|
|
|
3/31/10
|
6/30/09
|
|
|
|
Working Capital
|
$73,735
|
$72,500
|
Total Assets
|
$167,306
|
$153,118
|
Long-Term Debt
|
$1,108
|
$ --
|
Shareholders' Equity
|
$143,128
|
$130,473
|
Third Quarter Fiscal 2010 Results
Net sales in the third quarter of fiscal 2010 were $53,466,000,
an increase of 13.8% over last year's third quarter net sales of
$46,989,000. Lighting Segment net sales increased 5.6% to
$35,458,000 (sales to the Commercial / Industrial lighting market
decreased 20%), Graphics Segment net sales decreased 3.8% to
$10,900,000, Technology Segment net sales increased 192% to
$1,282,000, Electronic Components Segment (a new segment in fiscal
2010) net sales were $4,014,000 and net sales of the All Other
Category increased 9.1% to $1,812,000. The fiscal 2010 third
quarter net loss of $(2,532,000) or $(0.10) per share, compares to
a fiscal 2009 third quarter net loss of $(2,467,000), or $(0.11)
per share. Third quarter fiscal 2010 results include a pre-tax
loss on the sale of LSI Marcole of $639,000 and a pre-tax expense
for an acquisition-related fair value inventory adjustment of
$30,000 related to purchase accounting requirements of LSI ADL
Technology's finished goods and work-in-process
inventory. Third quarter fiscal 2009 results include a
$957,000 pre-tax goodwill impairment charge. Earnings per
share represent diluted earnings per share.
Nine Month Fiscal 2010 Results
Net sales in the first nine months of fiscal 2010 were
$190,516,000, an increase of 3.8% over last year's nine month net
sales of $183,614,000. Lighting Segment net sales decreased
6.1% to $118,787,000 (sales to the Commercial / Industrial lighting
market decreased 25%), Graphics Segment net sales increased 12.9%
to $52,321,000, Technology Segment net sales decreased 41.8% to
$2,578,000, Electronic Components Segment (a new segment in fiscal
2010) net sales were $11,661,000 and net sales of the All Other
Category decreased 18.5% to $5,169,000. The fiscal 2010 nine
month net income of $697,000 or $0.03 per share compares to a
fiscal 2009 nine month net loss of $(13,157,000) or $(0.60) per
share. Fiscal 2010 nine month net income includes a pre-tax
loss on the sale of LSI Marcole of $639,000, acquisition-related
costs of $520,000 and an acquisition-related fair value inventory
adjustment of $643,000 related to purchase accounting requirements
of LSI ADL Technology's finished goods and work-in-process
inventory. The fiscal 2009 nine month net loss includes a
$14,207,000 pre-tax goodwill impairment charge.
Company Comments
Robert J. Ready, President and Chief Executive Officer,
commented, "Recessionary influences continue to negatively affect
LSI Industries' business. Our Lighting Segment net sales,
while up 5.6% for the third quarter, experienced a 20% decline in
sales to the Commercial / Industrial market, a particularly weak
area at the present time. Similarly, our Graphics Segment net
sales decreased nearly 4% over the same quarterly period a year
earlier. In addition, our third quarter, which historically
has lower sales volume due to seasonal considerations, was
negatively impacted by harsh winter weather conditions this year
which caused the loss of eleven workdays across three of our
lighting manufacturing operations.
"There do not appear to be any clear signs of widespread
improving conditions in the markets that LSI
serves. Construction spending in the non-residential market
continues depressed as a result of the recent economic recession
and a tighter lending environment. This market lags the
general economy and we expect improvement to follow the next
economic recovery. We continue to be encouraged from
time-to-time by important new business such as the re-imaging
program for a large national convenience store customer utilizing
our solid-state LED lighting for over 2,800 non-petroleum
sites. This follow-on project with the same customer certainly
validates our growing presence and strong capabilities in the
solid-state LED space. We don't believe we are losing market
share to our competitors, the fundamental problem is the lack of
overall growth in the markets we serve. This places us in a
holding pattern until market conditions improve. As stated
previously, we have taken numerous actions to reduce costs, improve
efficiency, and maintain financial strength during this weak
economic period.
"While waiting for better market conditions, we continue to
invest in developing new solid-state LED products and underlying
technologies. We are steadfast in our conviction that this
type of lighting will continue to gain market share and displace
other less energy-efficient lighting. When the economy and our
markets begin to grow again, both our lighting and graphics
business units will enjoy higher sales and increased
profitability. We are well positioned with the work that has
been done over the last couple of years, some of which
includes: opening our iZone Technology Center which is
dedicated to innovative new technology for our lighting and
graphics products; upgrading our sales force; developing and
introducing new lighting products and graphics capabilities;
venturing into new geographic markets abroad, including early
success with our recent entry into markets in Europe and the Middle
East; and vertically integrating through our acquisition of AdL
Technology.
"Fiscal 2010 will undoubtedly be viewed as a very challenging
year for LSI Industries and the lighting and graphics markets that
it serves. Although operating results will certainly be well
below those of earlier years when our markets were strong and
growing, operations are expected to be profitable, cash flow
positive, and financial condition highly liquid and
sound. Management's best estimate for the fiscal year ending
June 30, 2010 is for net sales between [$248 million and $260
million], net income between [$1.8 million and $2.6 million], and
diluted per share earnings between [$0.07 and $0.10]. When a
recovery in our lighting and graphics markets occurs, LSI
Industries will be in a position to capitalize on higher revenues
and enjoy positive operating leverage and sharply higher
profitability.
"As stated previously but worth repeating, taking a longer view
of the future, we believe LSI Industries is very well positioned to
capitalize on the growth of the lighting industry over the next
decade. Clearly, the already present trends of energy
efficiency, environmental legislation and cost effectiveness will
drive the direction of lighting products and related technologies
in the future. LSI is truly a leader in providing and
developing state-of-the-art efficient LED lighting and dynamic LED
graphic signage. The potential of LSI Industries resides in
how we think about our long-term growth strategies while we employ
short-term oriented tactics and actions to cut costs, improve
efficiencies, and remain financially sound. In short, we are
in a mode where we are working to optimize results in challenging
market conditions and, at the same time, are preparing the Company
for further growth opportunities through carefully selected
investments and resource deployment."
Balance Sheet
The balance sheet at March 31, 2010 included current assets of
$93.8 million, current liabilities of $20.1 million and working
capital of $73.7 million. The current ratio was 4.68 to 1.
The Company has shareholders' equity of $143.1 million, $1.1
million of long-term debt, and has borrowing capacity on its
commercial bank facilities as of March 31, 2010 of $35
million. With continued strong cash flow, a sound and
conservatively capitalized balance sheet, and $35 million in credit
facilities, LSI Industries believes its financial condition is
sound and capable of supporting the Company's planned growth,
including acquisitions.
Cash Dividend Actions
The Board of Directors declared a regular quarterly cash
dividend of $0.05 per share payable May 11, 2010 to shareholders of
record as of May 4, 2010. The indicated annual cash dividend
rate for fiscal 2010 is $0.20 per share. LSI Industries has
paid regular cash dividends since 1989. The declaration and
amount of any cash and stock dividends will be determined by the
Board of Directors in its discretion based upon its evaluation of
earnings, cash flow requirements and future business developments
and opportunities, including acquisitions.
Non-GAAP Financial Measures
This press release includes adjustments to the GAAP net income
for the three and nine month periods ended March 31, 2010 and
2009. Adjusted net income and earnings per share, which
exclude goodwill impairment, the loss on the sale of LSI Marcole
and the impact of the LSI ADL Technology acquisition deal costs and
acquisition-related fair value inventory adjustment, are non-GAAP
financial measures. We believe these results are useful as
supplemental measures in assessing the operating performance of our
business. These measures are used by our management, including
our chief operating decision maker, to evaluate business
results. We exclude the items identified above because they
are not representative of the ongoing results of operations of our
business. Reconciliations of these non-GAAP measures to net
income and earnings per share for the periods indicated are
presented below.
(in thousands, except per share); unaudited
|
Third Quarter
|
|
|
Diluted
|
|
Diluted
|
|
FY 2010
|
EPS
|
FY 2009
|
EPS
|
Reconciliation of net (loss) to adjusted net (loss):
|
|
|
|
|
|
|
|
|
|
Net (loss) as reported
|
$(2,532)
|
$(0.10)
|
$(2,467)
|
$(0.11)
|
|
|
|
|
|
Adjustment for the loss on sale of LSI Marcole inclusive of the
income tax effect
|
300
|
0.01
|
--
|
--
|
|
|
|
|
|
Adjustment for the acquisition deal costs and
acquisition-related fair value inventory adjustment, inclusive of
the income tax effect
|
16
|
--
|
--
|
--
|
|
|
|
|
|
Goodwill impairment, inclusive of the income tax effect
|
--
|
--
|
746
|
0.03
|
|
|
|
|
|
Adjusted net (loss) and earnings per share
|
$(2,216)
|
$(0.09)
|
$(1,721)
|
$(0.08)
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share); unaudited
|
Nine Months
|
|
|
Diluted
|
|
Diluted
|
|
FY 2010
|
EPS
|
FY 2009
|
EPS
|
Reconciliation of net income (loss) to adjusted net income:
|
|
|
|
|
|
|
|
|
|
Net income (loss) as reported
|
$697
|
$0.03
|
$(13,157)
|
$(0.60)
|
|
|
|
|
|
Adjustment for the loss on sale of LSI Marcole inclusive of the
income tax effect
|
300
|
0.01
|
--
|
--
|
|
|
|
|
|
Adjustment for the acquisition deal costs and
acquisition-related fair value inventory adjustment, inclusive of
the income tax effect
|
545
|
0.02
|
--
|
--
|
|
|
|
|
|
Goodwill impairment, inclusive of the income tax effect
|
--
|
--
|
13,383
|
0.61
|
|
|
|
|
|
Adjusted net income and earnings per share
|
$1,542
|
$0.06
|
$226
|
$0.01
|
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
This document 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 "guidance," "forecasts," "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, including statements contained herein
regarding anticipated trends in the Company's business, 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, reliance on key customers, financial difficulties
experienced by customers, potential costs associated with
litigation and regulatory compliance, the adequacy of reserves and
allowances for doubtful accounts, fluctuations in operating results
or costs, unexpected difficulties in integrating acquired
businesses, the cyclical and seasonal nature of our business, the
ability to retain key employees of acquired businesses and any
other factors that may be identified in our reports filed with the
Securities and Exchange Commission, including our Annual Report on
Form 10-K. The Company has no obligation to update any
forward-looking statements to reflect subsequent events or
circumstances.
About the Company
LSI Industries is an Image Solutions company, dedicated to
advancing solid-state LED technology in lighting and graphics
applications. We combine integrated technology, design, and
manufacturing to supply high quality, environmentally friendly
lighting fixtures and graphics elements for commercial, retail and
specialty niche market applications. LSI is a U.S.
manufacturer with marketing / sales efforts throughout the world
with concentration currently on North American, South American,
Asian, Australian, New Zealand and European markets.
Building upon its success with the Crossover® LED
canopy fixture, LSI is committed to producing affordable, high
performance, energy efficient lighting products, including
solid-state LED light fixtures, for indoor and outdoor
use. The Company also designs, produces, markets and manages a
wide array of custom indoor and outdoor graphics programs including
signage, menu board systems, decorative fixturing, LED displays and
digital signage, and large format billboard and sports screens
using solid-state LED technology. In addition, we provide
design support, engineering, installation and project management
for custom rollout programs for today's retail
environment. The Company's technology R&D operation
located in Montreal, Canada designs, produces and supports high
performance light engines and large format billboard, sports and
entertainment video screens using solid-state LED technology.
LSI's major markets are the commercial / industrial lighting,
petroleum / convenience store, multi-site retail (including
automobile dealerships, restaurants and national retail accounts),
sports and entertainment markets. LSI employs approximately
1,300 people in facilities located in Ohio, New York, North
Carolina, Kansas, Kentucky, Rhode Island, Texas and Montreal,
Canada. The Company's common shares are traded on the NASDAQ
Global Select Market under the symbol LYTS.
The LSI Industries Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3646
For further information, contact either Bob
Ready, Chief Executive Officer and President, or Ron Stowell, Vice
President, Chief Financial Officer, and Treasurer at (513)
793-3200.
Additional note: Today's news release,
along with past releases from LSI Industries, is available on the
Company's internet site at www.lsi-industries.com or by email or
fax, by calling the Investor Relations Department at (513)
793-3200. More information on LSI's quarterly earnings,
including additional financial analysis and an earnings overview
presentation, will also be available at this site after the
Investor Call to be held at 3:00 p.m. Eastern Time on Thursday,
April 22, 2010.
LSI Industries Inc.
|
|
|
|
|
Condensed Statements of Operations
|
|
|
|
|
|
|
|
|
|
(in thousands, except per
|
Three Months Ended
|
Nine Months Ended
|
share data; unaudited)
|
March 31
|
March 31
|
|
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 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 expense, net
|
33
|
(6)
|
99
|
(2)
|
|
|
|
|
|
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)
|
|
|
|
|
|
Income (loss) per common share
|
|
|
|
|
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
|
|
|
|
Condensed Balance Sheets
|
|
|
(in thousands, unaudited)
|
March 31,
|
June 30,
|
|
2010
|
2009
|
|
|
|
Current Assets
|
$93,786
|
$92,117
|
Property, Plant and Equipment, net
|
44,661
|
42,043
|
Other Assets
|
28,859
|
18,958
|
|
$167,306
|
$153,118
|
|
|
|
Current Liabilities
|
$20,051
|
$19,617
|
Long-Term Debt
|
1,108
|
--
|
Other Long-Term Liabilities
|
3,019
|
3,028
|
Shareholders' Equity
|
143,128
|
130,473
|
|
$167,306
|
$153,118
|
CONTACT: LSI Industries Inc.
Bob Ready
Ron Stowell
(513) 793-3200
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