LSI Industries Inc. (NASDAQ: LYTS, “LSI” or the “Company”) a
leading U.S. based manufacturer of indoor/outdoor lighting and
graphics solutions, today announced results for the third quarter
fiscal 2021.
Third Quarter 2021 Summary
- Net Sales of $72.2 million, growth of 2% versus prior year
- Net Income of $1.5 million; EPS of $0.05 per diluted share
- Adjusted Net Income of $1.8 million, or $0.07 per diluted
share
- Adjusted EBITDA of $4.4 million, compared to $1.6 million in
prior year period
- Free cash flow of $10.6 million versus $3.5 million prior
year
For the three months ended March 31, 2021, LSI reported
year-over-year growth in net sales, adjusted net income, adjusted
EBITDA and cash flow. LSI reported GAAP net income of $1.5 million,
or $0.05 per diluted share in the fiscal third quarter, versus $1.9
million, or $0.07 per diluted share in the prior period. The
Company’s prior year fiscal third quarter results included a
non-recurring, pre-tax gain of $3.7 million, or $0.12 per diluted
share, resulting from the sale of the North Canton, Ohio facility.
Fiscal third quarter adjusted EBITDA was $4.4 million, an increase
of $2.8 million when compared to the prior year period.
LSI generated free cash flow of $10.6 million for the quarter,
increasing its total cash and equivalents to $23.5 million as of
March 31, 2021. On March 30, 2021, LSI extended the maturity of its
revolving credit facility from March 2022 to March 2026 and
increased total availability by $25 million to $100 million. As of
March 31, 2021, LSI had cash and total availability on its credit
facility of $23.5 million and $100 million, respectively. The
Company had no long-term debt at the end of the quarter.
The Company declared a regular cash dividend of $0.05 per share
payable May 11, 2021 to shareholders of record on May 3, 2021.
Management Commentary
James A. Clark, President and Chief Executive Officer commented,
“We reported positive year-over-year growth in net sales during the
third quarter despite the lingering effects of the pandemic and
weather-related disruptions that occurred in the period. Our team
has continued to respond to changing market conditions, as the
first two months of the quarter were sluggish but followed by a
stair-step increase in market activity for March, allowing us to
enter the fiscal fourth quarter with increased momentum. These
efforts are reflected in our strong third quarter results, as gross
margin, adjusted net income, operating cash flow and adjusted
EBITDA all improved when compared to the prior
year.
Our Graphics segment sales increased by 20% versus the prior
year quarter, with positive activity across multiple market
verticals. Our $100 million digital program with a major QSR
customer is progressing as forecasted and is anticipated to operate
at current levels for the next twelve months. We have over 4,000
site installations remaining on this program, with the outdoor
program scheduled through June 2022. The $25 million indoor phase
of the program is expected to begin in fiscal 2022. Separately, we
continue to evaluate potential applications for our digital
technology solutions, including discussions with a national
pharmacy retailer on an innovative “secure kiosk” pilot program
which utilizes concepts from solutions we have deployed with our
QSR customers.
Sales in the petroleum/c-store vertical were adversely impacted
by six days of lost production during February, as inclement
weather in Texas resulted in regional utility outages impacting our
Houston manufacturing facility. Program backlog within the vertical
remains strong, as are design requests for potential new programs.
We continue to see increasing renovation opportunities in the
grocery vertical, with customers focusing on higher-end features
and finishes throughout the store interior, including architectural
and dimensional signage, lighting and décor elements.
Our increased focus on providing comprehensive program
management solutions to our customers continues to generate growth.
The Program Management team manages complex, multi-site
construction, engineering and branding projects that must be
aligned with our clients’ corporate identity standards, providing
an in-depth, custom, turn-key solution. This team is engaged
with our large QSR program and is working with the nation’s largest
petroleum/c-store chain on project activity across the country.
Program Management fiscal year-to-date sales have increased over
50%, while project commitments continue to increase.
The Lighting segment continues to recover, with sales down 7%
when compared to prior year. The sales gap versus prior year
continues to narrow, having improved each quarter of the current
fiscal year. Sales in the third quarter, which is historically the
slowest quarter of the year, increased sequentially from Q2. We
have experienced a sizeable uptick in project quote activity in the
Northeast and Northwest regions of the country as businesses reopen
and construction activity resumes. Distributors who reduced
inventory levels significantly during the peak of the pandemic are
also beginning to restock inventory in anticipation of improving
market demand.
In collaboration with our independent sales agency partners, LSI
is the exclusive lighting provider to a large regional
petroleum/c-store chain whose differentiated concept is generating
rapid growth of new sites. We provide the complete indoor and
outdoor lighting solution for these large sites, including area
lighting, canopy lighting, wall packs, poles and controls as
required. Our customers value LSI’s turnkey solution, one that
fully integrates product procurement, customer service and
technical support capabilities under one umbrella.
The Lighting adjusted gross margin rate was 31% for the quarter,
or 530 bps above prior year. This improvement 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. Adjusted operating
income for the Lighting segment was more than triple prior year
levels in the third quarter.
In March, we amended and extended our bank financing agreement,
providing us with increased balance sheet optionality to more
actively pursue organic and inorganic growth opportunities.
To date, we have been successful in aligning our cost structure
to demand levels, navigating various global supply chain challenges
while continuing to make critical investments. I am confident the
business is positioned to capitalize on improving market conditions
as we transition into the fourth quarter and fiscal 2022.”
CONFERENCE CALL
A conference call will be held today at 11:00 A.M. ET to review
the Company’s financial results and conduct a question-and-answer
session.
A webcast of the conference call and accompanying presentation
materials will be available in the Investor Relations section of
LSI Industries’ website at www.lsicorp.com. Individuals can also
participate by teleconference dial-in. To listen to a live
broadcast, go to the site at least 15 minutes prior to the
scheduled start time to register, download and install any
necessary audio software.
Details of the conference call are as follows:
Call Dial-In: |
877-407-4018 |
Conference ID: |
13718045 |
|
|
Call Replay: |
844-512-2921 |
Replay Passcode: |
13718045 |
A replay of the conference call will be
available between April 22, 2021 and May 6, 2021. To listen
to a replay of the teleconference via webcast, please visit the
Investor Relations section of LSI Industries’ website at
www.lsicorp.com
ABOUT LSI INDUSTRIES
Headquartered in Blue Ash, Ohio (Greater Cincinnati), LSI
Industries is a leading producer of high-performance, American-made
lighting solutions. The Company’s strength in outdoor lighting
applications creates opportunities for it to introduce additional
solutions to its valued customers. LSI’s indoor and outdoor
products and services, including its digital and print graphics
capabilities, are valued by architects, engineers, distributors and
contractors for their quality, reliability and innovation. The
Company’s 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. LSI has
approximately 1,100 employees at seven manufacturing plants in the
United States, including its corporate headquarters. Additional
information about LSI is available at www.lsicorp.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements.
Forward-looking statements may be identified by words such as
“estimates,” “anticipates,” “encourage,” “projects,” “plans,”
“expects,” “can,” “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. For details
on the uncertainties that may cause our actual results to be
materially different than those expressed in our forward-looking
statements, visit https://investors.lsicorp.com as well as our
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q
which contain risk factors.
INVESTOR CONTACT
Noel Ryan,
IRC720.778.2415LYTS@vallumadvisors.com
MEDIA CONTACT
Mike WallnerSenior Manager,
Communications513.372.3417mike.wallner@lsi-industries.com
Financial Highlights
|
Three Months EndedMarch 31 |
|
|
|
Nine Months EndedMarch 31 |
|
|
(Unaudited) |
|
|
2021 |
|
2020 |
|
% Change |
|
(In thousands, except per share data) |
|
2021 |
|
2020 |
|
% Change |
|
$ |
72,204 |
|
$ |
71,010 |
|
|
2% |
|
Net Sales |
|
$ |
218,597 |
|
$ |
242,088 |
|
|
-10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,096 |
|
|
2,631 |
|
|
n/m |
|
Operating Income as reported |
|
|
6,984 |
|
|
11,230 |
|
|
-38% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
415 |
|
|
(103 |
) |
|
|
|
Stock compensation expense |
|
|
1,317 |
|
|
494 |
|
|
|
|
|
- |
|
|
19 |
|
|
|
|
Severance costs |
|
|
21 |
|
|
73 |
|
|
|
|
|
- |
|
|
(3,055 |
) |
|
|
|
Restructuring and plant closure costs (gains) |
|
|
3 |
|
|
(7,367 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,511 |
|
$ |
(508 |
) |
|
NM |
|
Operating Income (Loss) as adjusted |
|
$ |
8,325 |
|
$ |
4,430 |
|
|
88% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,472 |
|
$ |
1,861 |
|
|
-21% |
|
Net Income as reported |
|
$ |
5,670 |
|
$ |
8,079 |
|
|
-30% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,830 |
|
$ |
(1,074 |
) |
|
NM |
|
Net Income (Loss) as adjusted |
|
$ |
6,447 |
|
$ |
2,265 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.05 |
|
$ |
0.07 |
|
|
-24% |
|
Earnings per share (diluted) as reported |
|
$ |
0.21 |
|
$ |
0.31 |
|
|
-33% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.07 |
|
$ |
(0.04 |
) |
|
NM |
|
Earnings (Loss) per share (diluted) as
adjusted |
$ |
0.24 |
|
$ |
0.09 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in
thousands) |
|
|
March
31, |
|
June
30, |
|
|
2021 |
|
2020 |
Working Capital |
|
$ |
61,097 |
|
$ |
51,209 |
Total Assets |
|
$ |
197,094 |
|
$ |
172,263 |
Long-Term Debt |
|
$ |
- |
|
$ |
- |
Other Long-Term Liabilities |
|
$ |
10,719 |
|
$ |
11,914 |
Shareholders' Equity |
|
$ |
131,070 |
|
$ |
125,700 |
|
|
|
|
|
Three Months Ended March 31, 2021 Results
Net sales for the three months ended March 31, 2021 were $72.2
million, up 2% from the three months ended March 31, 2020 net sales
of $71.0 million. Lighting Segment net sales of $45.7 million
decreased 7% and Graphics Segment net sales of $26.5 million
increased 20% from last year’s third quarter net sales. Net income
for the three months ended March 31, 2021 was $1.5 million, or
$0.05 per share, compared to $1.9 million or $0.07 per share for
the three months ended March 31, 2020. Earnings per share
represents diluted earnings per share.
Nine Months Ended March 31, 2021
Results
Net sales for the nine months ended March 31, 2021 were $218.6
million, down 10% from the nine months ended March 31, 2020 net
sales of $242.1 million. Lighting Segment net sales of $136.3
million decreased 18% and Graphics Segment net sales of $82.3
million increased 8% from last year’s net sales. Net income for the
nine months ended March 31, 2021 was $5.7 million, or $0.21 per
share, compared to $8.1 million or $0.31 per share for the nine
months ended March 31, 2020. Earnings per share represents diluted
earnings per share.
Balance
Sheet The
balance sheet at March 31, 2021 included current assets of $116.4
million, current liabilities of $55.3 million and working capital
of $61.1 million, which includes cash of $23.5 million. The current
ratio was 2.1 to 1. The balance sheet also included shareholders’
equity of $131.1 million and no long-term debt. It is the Company’s
priority to continuously generate sufficient cash flow, coupled
with an approved credit facility, to adequately fund
operations.
Cash Dividend Actions
The Board of Directors declared a regular quarterly cash
dividend of $0.05 per share in connection with the third quarter of
fiscal 2021, payable May 11, 2021 to shareholders of record as of
the close of business on May 3, 2021. The indicated annual cash
dividend rate is $0.20 per share. The Board of Directors has
adopted a policy regarding dividends which provides that dividends
will be determined by the Board of Directors in its discretion
based upon its evaluation of earnings both on a GAAP and non-GAAP
basis, cash flow requirements, financial condition, debt levels,
stock repurchases, future business developments and opportunities,
and other factors deemed relevant by the Board.
Non-GAAP Financial Measures
This press release includes adjustments to GAAP operating
income, net income and earnings per share for the three and nine
months ended March 31, 2021 and 2020. Operating income, net income
and earnings per share, which exclude the impact of stock
compensation expense, severance costs and restructuring and plant
closure costs (gains), are non-GAAP financial measures. We exclude
these items because we believe they are not representative of the
ongoing results of operations of the business. Also included in
this press release are non-GAAP financial measures, including
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA and Adjusted EBITDA) and Free Cash Flow. 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, and are frequently referenced by those
who follow the Company. These non-GAAP measures may be different
from non-GAAP measures used by other companies. In addition, the
non-GAAP measures are not based on any comprehensive set of
accounting rules or principles. Non-GAAP measures have limitations,
in that they do not reflect all amounts associated with our results
as determined in accordance with U.S. GAAP. Therefore, these
measures should be used only to evaluate our results in conjunction
with corresponding GAAP measures. Below is a reconciliation of
these non-GAAP measures to net income and earnings per share
reported for the periods indicated along with the calculation of
EBITDA, Adjusted EBITDA and Free Cash Flow.
Three Months Ended |
|
|
|
Nine Months Ended |
March 31 |
|
|
|
March 31 |
2021 |
|
|
2020 |
|
|
(In thousands, except per share data) |
|
2021 |
|
|
2020 |
|
|
DilutedEPS |
|
|
DilutedEPS |
|
|
|
|
DilutedEPS |
|
|
DilutedEPS |
|
|
|
|
Reconciliation of net income to adjusted net
income |
|
|
|
|
$ |
1,472 |
$ |
0.05 |
|
$ |
1,861 |
|
$ |
0.07 |
|
|
Net Income as reported |
|
$ |
5,670 |
|
$ |
0.21 |
|
|
$ |
8,079 |
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
314 |
|
0.01 |
|
|
(86 |
) |
|
- |
|
|
Stock compensation expense |
|
|
1,012 |
|
|
0.04 |
|
|
|
373 |
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
- |
|
|
16 |
|
|
- |
|
|
Severance costs |
|
|
17 |
|
|
- |
|
|
|
60 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
- |
|
|
(2,565 |
) |
|
(0.10 |
) |
|
Restructuring and plant closure costs (gains) |
|
|
2 |
|
|
- |
|
|
|
(5,788 |
) |
|
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44 |
|
- |
|
|
(300 |
) |
|
(0.01 |
) |
|
Tax impact due to the change in the estimated annual
taxrate used for GAAP reporting purposes |
|
|
(254 |
) |
|
(0.01 |
) |
|
|
(459 |
) |
|
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,830 |
$ |
0.07 |
|
$ |
(1,074 |
) |
$ |
(0.04 |
) |
|
Net Income (Loss) adjusted |
|
$ |
6,447 |
|
$ |
0.24 |
|
|
$ |
2,265 |
|
$ |
0.09 |
|
NOTE: All adjustments are net of tax except for the
adjustment of the tax impact from the change in the estimated
annual tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedMarch 31 |
|
(Unaudited; In thousands) |
|
Nine Months EndedMarch 31 |
|
|
EBITDA and Adjusted EBITDA |
|
|
2021 |
|
2020 |
|
% Change |
|
|
2021 |
|
2020 |
|
% Change |
|
$ |
2,096 |
|
|
$ |
2,631 |
|
|
-20% |
|
Operating Income as reported |
|
$ |
6,984 |
|
|
$ |
11,230 |
|
|
-38% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,920 |
|
|
|
2,080 |
|
|
|
|
Depreciation and Amortization |
|
|
5,943 |
|
|
|
6,631 |
|
|
|
|
$ |
4,016 |
|
|
$ |
4,711 |
|
|
-15% |
|
EBITDA |
|
$ |
12,927 |
|
|
$ |
17,861 |
|
|
-28% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
415 |
|
|
|
(103 |
) |
|
|
|
Stock compensation expense |
|
|
1,317 |
|
|
|
494 |
|
|
|
|
|
- |
|
|
|
19 |
|
|
|
|
Severance costs |
|
|
21 |
|
|
|
73 |
|
|
|
|
|
- |
|
|
|
(3,055 |
) |
|
|
|
Restructuring and plant closure costs (gains) |
|
|
3 |
|
|
|
(7,367 |
) |
|
|
|
$ |
4,431 |
|
|
$ |
1,572 |
|
|
NM |
|
Adjusted EBITDA |
|
$ |
14,268 |
|
|
$ |
11,061 |
|
|
29% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedMarch 31 |
|
(Unaudited; In thousands) |
|
Nine Months EndedMarch 31 |
|
|
Free Cash Flow |
|
|
2021 |
|
2020 |
|
% Change |
|
|
2021 |
|
2020 |
|
% Change |
|
$ |
11,217 |
|
|
$ |
(3,806 |
) |
|
NM |
|
Cash Flow From Operations |
|
$ |
24,634 |
|
|
$ |
17,097 |
|
|
44% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,700 |
|
|
|
|
Proceeds from Sale of Fixed Assets |
|
|
- |
|
|
|
20,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(637 |
) |
|
|
(419 |
) |
|
|
|
Capital Expenditures |
|
|
(1,517 |
) |
|
|
(1,538 |
) |
|
|
|
$ |
10,580 |
|
|
$ |
3,475 |
|
|
NM |
|
Free Cash Flow |
|
$ |
23,117 |
|
|
$ |
35,591 |
|
|
-35% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of
Operations
Three Months EndedMarch 31 |
|
|
Nine MonthsEnded March 31 |
(Unaudited) |
|
2021 |
2020 |
|
(In thousands, except per share data) |
|
2021 |
|
2020 |
$ |
72,204 |
|
$ |
71,010 |
|
|
Net Sales |
|
$ |
218,597 |
|
|
$ |
242,088 |
|
|
|
|
|
|
|
|
|
|
|
54,112 |
|
|
54,834 |
|
|
Cost of Products Sold |
|
|
162,519 |
|
|
|
183,558 |
|
|
- |
|
|
11 |
|
|
Severance Costs |
|
|
5 |
|
|
|
11 |
|
|
- |
|
|
223 |
|
|
Restructuring Costs |
|
|
3 |
|
|
|
758 |
|
|
|
|
|
|
|
|
|
|
|
18,092 |
|
|
15,942 |
|
|
Gross Profit |
|
|
56,070 |
|
|
|
57,761 |
|
|
|
|
|
|
|
|
|
|
|
15,996 |
|
|
17,032 |
|
|
Selling and Administrative Costs |
|
|
49,070 |
|
|
|
55,045 |
|
|
- |
|
|
8 |
|
|
Severance Costs |
|
|
16 |
|
|
|
62 |
|
|
- |
|
|
(3,729 |
) |
|
Restructuring Costs (Gains) |
|
|
- |
|
|
|
(8,576 |
) |
|
|
|
|
|
|
|
|
|
|
2,096 |
|
|
2,631 |
|
|
Operating Income |
|
|
6,984 |
|
|
|
11,230 |
|
|
|
|
|
|
|
|
|
|
|
43 |
|
|
642 |
|
|
Other Expense (Income) |
|
|
(197 |
) |
|
|
633 |
|
|
52 |
|
|
128 |
|
|
Interest Expense, net |
|
|
171 |
|
|
|
792 |
|
|
|
|
|
|
|
|
|
|
|
2,001 |
|
|
1,861 |
|
|
Income Before Taxes |
|
|
7,010 |
|
|
|
9,805 |
|
|
|
|
|
|
|
|
|
|
|
529 |
|
|
- |
|
|
Income Tax |
|
|
1,340 |
|
|
|
1,726 |
|
|
|
|
|
|
|
|
|
|
$ |
1,472 |
|
$ |
1,861 |
|
|
Net Income |
|
$ |
5,670 |
|
|
$ |
8,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding |
|
|
|
|
26,771 |
|
|
26,301 |
|
|
Basic |
|
|
26,642 |
|
|
|
26,250 |
|
|
27,727 |
|
|
26,623 |
|
|
Diluted |
|
|
27,352 |
|
|
|
26,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share |
|
|
|
|
$ |
0.05 |
|
$ |
0.07 |
|
|
Basic |
|
$ |
0.21 |
|
|
$ |
0.31 |
|
$ |
0.05 |
|
$ |
0.07 |
|
|
Diluted |
|
$ |
0.21 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
Condensed Balance Sheet
|
|
(amounts in thousands) |
|
|
|
March 31, |
|
June 30, |
|
|
|
2021 |
|
2020 |
|
Current Assets |
|
$ |
116,402 |
|
$ |
85,858 |
|
Property, Plant and Equipment, net |
|
|
24,152 |
|
|
26,535 |
|
Other Assets |
|
|
56,540 |
|
|
59,870 |
|
Total Assets |
|
$ |
197,094 |
|
$ |
172,263 |
|
|
|
|
|
|
|
Current Liabilities |
|
$ |
55,305 |
|
$ |
34,649 |
|
Long-Term Debt |
|
|
- |
|
|
- |
|
Other Long-Term Liabilities |
|
|
10,719 |
|
|
11,914 |
|
Shareholders' Equity |
|
|
131,070 |
|
|
125,700 |
|
|
|
$ |
197,094 |
|
$ |
172,263 |
|
|
|
|
|
|
|
LSI Industries (NASDAQ:LYTS)
Historical Stock Chart
Von Jul 2024 bis Aug 2024
LSI Industries (NASDAQ:LYTS)
Historical Stock Chart
Von Aug 2023 bis Aug 2024