LSI Industries Inc. (NASDAQ:LYTS)
today:
- reported first quarter net sales of $85,925,000, an increase of
10% as compared to $78,466,000 in the same period of the prior
fiscal year;
- reported first quarter net income of $3,750,000, or $0.15 per
share, an increase of 146% as compared to $1,527,000 or $0.06 per
share for the same period of the prior fiscal year; and
- declared the new higher regular quarterly cash dividend of
$0.04 per share payable November 10, 2015 to shareholders of record
November 2, 2015.
Financial
Highlights |
(In thousands, except per share data;
unaudited) |
Three
Months Ended |
|
September 30 |
|
|
2015 |
|
|
2014 |
|
% Change |
|
|
|
|
Net Sales |
$ |
85,925 |
|
$ |
78,466 |
|
|
10 |
% |
|
|
|
|
Operating Income as reported |
$ |
5,763 |
|
$ |
2,534 |
|
|
127 |
% |
(Loss) on sale of assets,
net |
-- |
|
222 |
|
n/m |
Operating Income as adjusted (a) |
$ |
5,763 |
|
$ |
2,756 |
|
|
109 |
% |
|
|
|
|
Net Income as reported |
$ |
3,750 |
|
$ |
1,527 |
|
|
146 |
% |
Net Income as adjusted |
$ |
3,750 |
|
$ |
1,767 |
|
|
112 |
% |
|
|
|
|
Earnings per share as reported |
$ |
0.15 |
|
$ |
0.06 |
|
|
150 |
% |
Earnings per share as adjusted |
$ |
0.15 |
|
$ |
0.07 |
|
|
114 |
% |
|
|
|
|
|
9/30/2015 |
6/30/2015 |
Working Capital |
$ |
89,429 |
|
$ |
83,967 |
|
Total Assets |
$ |
188,408 |
|
$ |
182,379 |
|
Long-Term Debt |
$ nil |
$ nil |
Shareholders’ Equity |
$ |
149,084 |
|
$ |
142,952 |
|
(a) The Company sold a manufacturing facility as well as a
subsidiary in the first quarter of fiscal 2015, both of which
netted to a pre-tax net loss of $222,000. Operating income, net
income, and earnings per share (diluted) before the sale of assets
and tax effect of the utilization of a long-term capital loss are
Non-GAAP financial measures (see pages 3 and 4).
Management Comments and Outlook
Dennis W. Wells, Chief Executive Officer and President,
commented, "I view the first quarter of fiscal 2016 just ended as
the first period of LSI Industries' continuous improvement
phase. As such, I am pleased to report solid sales growth and
substantial increases in the gross and operating profits of the
business. And we have truly just begun. Each day we are
realizing the benefits of the LSI Business System in terms of
sharper sales initiatives, greater operating efficiencies, the
pursuit of new opportunities, and improved management team harmony
and effectiveness. Our customer-centric philosophy is front
and center as we work to provide best-in-class service and
innovative new products.
"Once again, from a strategic standpoint, our high-priority
focus is to demonstrate to customers how LSI can be their
value-added, trusted partner in developing superior image solutions
through our world-class lighting, graphics, and technology
capabilities. Image is fundamental to our growth
strategy.
"I look forward to reporting a number of exciting developments
to you during the second quarter. Solid and measurable
continuous improvement is LSI Industries' theme for fiscal 2016 and
beyond.
“Our Annual Shareholders’ Meeting will be held on Thursday,
November 19, 2015 at 10:00 a.m. at the Company’s headquarters
located at 10000 Alliance Road, Cincinnati, Ohio. You are
cordially invited to attend.”
First Quarter Fiscal 2016 Results
Net sales in the first quarter of fiscal 2016 were $85,925,000,
an increase of 10% as compared to last year’s first quarter net
sales of $78,466,000. Lighting Segment net sales increased
6.0% to $59,075,000; Graphics Segment net sales increased 35.8% to
$21,753,000; Technology Segment net sales decreased 23.7% to
$5,097,000 and All Other Category net sales decreased to zero as a
result of the sale early in fiscal 2015 of the only subsidiary
reported therein. In the first quarter of fiscal 2015 the
Company recorded a $343,000 pre-tax gain on the sale of a
manufacturing facility in the Graphics Segment, sold a subsidiary
in the All Other Category for $1,928,000 and recorded a pre-tax
loss of $565,000 in Corporate Administrative expenses, and recorded
a $101,000 income tax benefit related to the utilization of a
portion of this long-term capital loss, all with no comparable
items in the first quarter of fiscal 2016. The fiscal 2016
first quarter net income of $3,750,000, or $0.15 per share,
increased 146% as compared to fiscal 2015 first quarter net income
of $1,527,000, or $0.06 per share. Earnings per share
represents diluted earnings per share.
Balance Sheet
The balance sheet at September 30, 2015 included current assets
of $126.6 million, current liabilities of $37.2 million and working
capital of $89.4 million, which includes cash of $28.4
million. The current ratio was 3.4 to 1. The Company
has shareholders’ equity of $149.1 million, no long-term debt, and
borrowing capacity on its commercial bank facility as of September
30, 2015 of $30.0 million. With continued strong cash flow, a
sound and conservatively capitalized balance sheet, and $30 million
in credit facilities, LSI Industries believes its financial
condition is sound and capable of supporting the Company’s planned
growth, including acquisitions, if any.
Cash Dividend Actions
The Board of Directors declared a regular quarterly cash
dividend of $0.04 per share in connection with the first quarter of
fiscal 2016 payable November 10, 2015 to shareholders of record as
of November 2, 2015. This represents a 33% increase over the
fourth quarter fiscal 2015 dividend declaration of $0.03 per share.
The fiscal 2016 indicated annual cash dividend rate is $0.16
per share. The Board of Directors has adopted a policy regarding
dividends which indicates that dividends will be determined by the
Board of Directors in its discretion based upon its evaluation of
earnings, cash flow requirements, financial condition, debt levels,
stock repurchases, future business developments and opportunities,
and other factors deemed relevant.
Non-GAAP Financial Measures
This press release includes adjustments to GAAP net income and
earnings per share for the three month period ended September 30,
2014. Adjusted net income and earnings per share, which
exclude the impact of the sale of a manufacturing facility, the
sale of a subsidiary, and the tax benefit of utilization of a
portion of the related long-term capital loss are non-GAAP
financial measures. We believe that these 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 these non-recurring items because they
are not representative of the ongoing results of operations of our
business. Below is a reconciliation of these non-GAAP
financial measures to the net income and earnings per share
reported for the periods indicated.
(in thousands, except per share data;
unaudited) |
First Quarter |
|
Diluted |
Diluted |
|
FY 2016 |
EPS |
FY 2015 |
EPS |
Reconciliation of net income to adjusted net
income: |
|
|
|
|
|
|
|
|
|
Net income and earnings per share
as reported |
$ |
3,750 |
|
$ |
0.15 |
|
$ |
1,527 |
|
$ |
0.06 |
|
|
|
|
|
|
Adjustment for the gain on the sale
of a manufacturing facility, inclusive of the income tax
effect |
-- |
-- |
|
(224 |
) |
|
(0.01 |
) |
|
|
|
|
|
Adjustment for the loss on sale of
a subsidiary |
-- |
-- |
|
565 |
|
|
0.02 |
|
|
|
|
|
|
Income tax effect of utilization of
a long-term capital loss |
-- |
-- |
|
(101 |
) |
-- |
|
|
|
|
|
Adjusted net income and earnings
per share |
$ |
3,750 |
|
$ |
0.15 |
|
$ |
1,767 |
|
$ |
0.07 |
|
"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 “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 over which the
Company may have no control. 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
whether as a result of uncertainties inherent in tax and accounting
matters or otherwise, 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, the Company’s ability
to maintain an effective system of internal control over financial
reporting, our ability to remediate any material weaknesses in our
internal control over financial reporting and any other risk
factors that are identified herein. You are cautioned to
not place undue reliance on these forward-looking
statements. 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 does not undertake and hereby disclaims any duty to update
any forward-looking statements to reflect subsequent events or
circumstances.
About the Company
We are a customer-centric company that positions itself as a
value-added, trusted partner in developing superior image solutions
through our world-class lighting, graphics, and technology
capabilities. Our core strategy of "Lighting + Graphics +
Technology = Complete Image Solutions" differentiates us from our
competitors.
We are committed to advancing solid-state LED technology to make
affordable, high performance, energy-efficient lighting and custom
graphic products that bring value to our customers. We have a
vast offering of innovative solutions for virtually any lighting or
graphics application. In addition, we provide sophisticated
lighting and energy management control solutions to help customers
manage their energy performance. Further, we provide a full
range of design support, engineering, installation and project
management services to our customers.
We are a vertically integrated U.S.-based manufacturer
concentrating on serving customers in North America and Latin
America. Our major markets include commercial / industrial
lighting, petroleum / convenience store and multi-site retail
(including automobile dealerships, restaurants and national retail
accounts). Headquartered in Cincinnati, Ohio, LSI has
facilities in Ohio, Kansas, Kentucky, New York, North Carolina,
Oregon, Rhode Island and Texas. The Company’s common shares
are traded on the NASDAQ Global Select Market under the symbol
LYTS.
For further information, contact either Dennis
Wells, 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.
Condensed Consolidated
Statements of Operations |
|
|
Three Months
Ended |
(in thousands, except per share data;
unaudited) |
September 30 |
|
|
2015 |
|
|
2014 |
|
|
|
|
Net sales |
$ |
85,925 |
|
$ |
78,466 |
|
|
|
|
|
|
|
|
Cost of products and services sold |
|
62,576 |
|
|
59,858 |
|
|
|
|
Gross profit |
|
23,349 |
|
|
18,608 |
|
|
|
|
Gain on sale of facility |
-- |
|
(343 |
) |
|
|
|
Loss on sale of subsidiary |
-- |
|
565 |
|
|
|
|
Selling and administrative expenses |
|
17,586 |
|
|
15,852 |
|
|
|
|
Operating income (loss) |
|
5,763 |
|
|
2,534 |
|
|
|
|
Interest expense, net |
-- |
|
8 |
|
|
|
|
Income (loss) before income
taxes |
|
5,763 |
|
|
2,526 |
|
Income tax expense |
|
2,013 |
|
|
999 |
|
Net income (loss) |
$ |
3,750 |
|
$ |
1,527 |
|
|
|
|
|
|
|
|
Income (loss) per common share |
|
|
Basic |
$ |
0.15 |
|
$ |
0.06 |
|
Diluted |
$ |
0.15 |
|
$ |
0.06 |
|
|
|
|
Weighted average common shares outstanding |
|
|
Basic |
|
24,764 |
|
|
24,436 |
|
Diluted |
|
25,194 |
|
|
24,508 |
|
|
|
|
Condensed Consolidated
Balance Sheets |
(in thousands, unaudited) |
September 30, |
June 30, |
|
|
2015 |
|
|
2015 |
|
Current Assets |
$ |
126,587 |
|
$ |
120,814 |
|
Property, Plant and Equipment,
net |
|
43,574 |
|
|
43,188 |
|
Other Assets |
|
18,247 |
|
|
18,377 |
|
|
$ |
188,408 |
|
$ |
182,379 |
|
|
|
|
Current Liabilities |
$ |
37,158 |
|
$ |
36,847 |
|
Long-Term Debt |
-- |
-- |
Other Long-Term Liabilities |
|
2,166 |
|
|
2,580 |
|
Shareholders’ Equity |
|
149,084 |
|
|
142,952 |
|
|
$ |
188,408 |
|
$ |
182,379 |
|
DENNIS WELLS or
RON STOWELL
(513) 793-3200
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