LSI Industries Inc. (Nasdaq:LYTS)
today:
- reported fourth quarter net sales of $63,886,000, an increase
of 27.3% compared to the same period of the prior fiscal year;
reported fourth quarter net income of $727,000 or $0.03 per share,
compared to a net loss of $(257,000) or $(0.01) per share for the
same period of the prior fiscal year;
- reported fiscal 2010 net sales of $254,402,000, an increase of
8.8% compared to fiscal 2009; reported fiscal 2010 net income of
$1,424,000 or $0.06 per share, compared to a net loss of
$(13,414,000) or $(0.62) per share in fiscal 2009. Pre-tax
non-cash goodwill and intangible asset impairment charges of
$153,000 and $14,467,000 are included in the results of fiscal 2010
and 2009, respectively;
- declared a regular quarterly cash dividend of $0.05 per share
payable September 7, 2010 to shareholders of record August 31,
2010; and
- set the annual indicated cash dividend rate at $0.20 per share
for fiscal 2011
Financial
Highlights |
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(In thousands, except per |
Three Months Ended |
Year Ended |
share data; unaudited) |
June 30 |
June 30 |
|
2010 |
2009 |
% Change |
2010 |
2009 |
% Change |
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|
|
|
Net Sales |
$63,886 |
$50,185 |
27.3% |
$254,402 |
$233,799 |
8.8% |
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|
|
|
|
|
Operating Income (Loss) |
$293 |
$(825) |
|
$1,909 |
$(14,411) |
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|
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Net Income (Loss) |
$727 |
$(257) |
|
$1,424 |
$(13,414) |
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|
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|
|
|
Earnings (Loss) Per Share
(diluted) |
$0.03 |
$(0.01) |
|
$0.06 |
$(0.62) |
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6/30/10 |
6/30/09 |
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Working Capital |
$73,568 |
$72,500 |
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|
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Total Assets |
$173,845 |
$153,118 |
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|
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Long-Term Debt |
$1,099 |
$ -- |
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Shareholders' Equity |
$144,218 |
$130,473 |
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Fourth Quarter Fiscal 2010 Results
Net sales in the fourth quarter of fiscal 2010 were $63,886,000,
an increase of 27.3% over last year's fourth quarter net sales of
$50,185,000. Lighting Segment net sales increased 18.6% to
$40,318,000 (sales to the Commercial / Industrial lighting market
increased 6%), Graphics Segment net sales increased 11.5% to
$16,074,000, Technology Segment net sales increased significantly
to $1,927,000, the Electronic Components Segment net sales were
$4,455,000 with no net sales in the prior year, and net sales of
the All Other Category decreased 32.2% to $1,112,000. The
fiscal 2010 fourth quarter net income of $727,000, or $0.03 per
share, compares to a fiscal 2009 fourth quarter net loss of
$(257,000), or $(0.01) per share. The Company recorded a
pre-tax non-cash intangible asset impairment expense of $(153,000)
in the fourth quarter of fiscal 2010 in its Lighting ($16,000) and
Technology ($137,000) Segments, as compared to a pre-tax non-cash
goodwill impairment expense of $(260,000) in its All Other Category
in the fourth quarter of fiscal 2009. Earnings or loss per
share represents diluted earnings or loss per share.
Fiscal 2010 Results
Net sales in fiscal 2010 were $254,402,000, an increase of 8.8%
over last year's net sales of $233,799,000. Lighting Segment
net sales decreased (0.9)% to $159,105,000 (sales to the Commercial
/ Industrial lighting market decreased 18.9%), Graphics Segment net
sales increased 12.6% to $68,395,000, Technology Segment net sales
decreased 1.6% to $4,505,000, the Electronic Components Segment net
sales were $16,116,000 with no net sales in the prior
year, and net sales of the All Other Category decreased 21.3%
to $6,281,000. The fiscal 2010 net income of $1,424,000, or
$0.06 per share, compares to a fiscal 2009 net loss of
$(13,414,000), or $(0.62) per share. The Company recorded a
pre-tax non-cash intangible asset impairment expense of $(153,000)
[represents $0.01 per share inclusive of the income tax effect] in
its Lighting ($16,000) and Technology Segments ($137,000), as
compared to a pre-tax non-cash goodwill impairment expense of
$(14,467,000) [represents $(0.62) per share inclusive of the income
tax effect] in its Lighting ($11,185,000) and Graphics ($716,000)
Segments, and in its All Other Category ($2,566,000) in fiscal
2009. Earnings or loss per share represents diluted earnings
or loss per share.
Company Comments
Robert J. Ready, President and Chief Executive Officer,
commented, "Although operating results for fiscal 2010 improved
over the prior fiscal year, the markets for our products continued
to be depressed as a result of the general economic
recession. Our fourth quarter results showed a 27% increase in
net sales. Last time this year, fourth quarter sales had
fallen 24% from the same period of fiscal 2008. Although the
U.S. economy has begun to grow again, construction spending in the
non-residential market continues to be depressed. This market
normally lags improvement in the general economy and, in this
instance, has also been adversely affected by a tight lending
environment.
"There do appear to be early signs of an improving
market. During the fourth quarter our Lighting Segment net
sales increased nearly 19%, and sales to the large commercial /
industrial lighting market increased by 6%. By comparison,
during the fourth quarter of 2009, our Lighting Segment net sales
decreased 29% and sales to the commercial / industrial lighting
market segment decreased 33%. We believe we are either gaining
or holding market share and our solid-state lighting initiative
continues to show strong interest and growth. What is needed
is the resumption of spending and growth in our end user
markets. Until then, we continue to work on improving
efficiencies, reducing costs, developing new products (primarily
solid-state LED), carefully managing our working capital, and
maintaining financial strength. When growth resumes we will be
ready.
"While the Graphics business improved slightly in FY2010,
slow new construction and limited capital expenditures by our
customers for remodels continues to limit the near term
opportunities. We have adjusted our operating costs to
reflect the current volume levels and remain prepared to adjust
quickly should new roll out programs develop.
"With a slowly improving outlook combined with a strong cash
flow and solid balance sheet, we have elected to continue the
current indicated annual cash dividend rate of $0.20 per share for
fiscal 2011. We believe that the cash dividends paid by LSI
Industries are important to our shareholders and the current rate
is comfortable for LSI. It would be our intention to once
again increase the cash dividend rate once actual market conditions
and operating results improve. LSI has paid regular cash
dividends since 1989.
"We will be covering fiscal 2010 in a more detailed manner in
our Annual Report to Shareholders. However, I would like to
briefly mention the following:
- Applying the non-GAAP financial measures that management uses
to evaluate business results, adjusted net income and earnings per
share for fiscal 2010 were $2,785,000 and $0.12 per share,
respectively.
- At June 30, 2010, our cash balance was $17,417,000, our current
ratio 3.85 to 1, and shareholders' equity was $144.2 million with
long-term debt of only $1.1 million. We have unused credit
facilities of $35 million. We plan to maintain our strong
unlevered balance sheet which supports our planned growth, capital
expenditures, cash dividends, and possible future acquisitions.
- Our acquisition of AdL Technology about one year ago has proven
to be very rewarding. This business contributes to our
solid-state LED capabilities and has been fully integrated into
LSI.
- Our iZone Technology Center has been a hit with
customers. iZone has become an education center and an idea
generator, a place where LSI can showcase its state-of-the-art,
energy-saving lighting and graphics products.
- We made solid progress reorganizing and upgrading our lighting
sales management and independent sales rep agencies.
- We initiated efforts to enter new geographic markets with our
LED products, including Europe and the Middle East.
- We were rewarded by receiving the largest domestic order on
record, including significant follow-on additional business, for
the energy efficient re-lighting program of a large national
convenience store customer utilizing our solid-state LED lighting.
- We made substantial investments to upgrade our metal
fabrication capabilities to current computer-controlled
technologies and to increase our digital printing capacity.
- We continued to protect and enhance our solid-state LED
position with new technology and developments protected by
additional patents.
- Our Graphics business is encouraged by the growth in our active
digital signage business throughout fiscal 2010, and continues to
see evidence that the activity level in the Quick Serve Restaurant
and Convenience Store market segments indicate strong potential for
fiscal 2011.
"As we look to fiscal 2011 and beyond, LSI Industries is
well-positioned to capitalize on improvements in the economy and
our niche and general markets both in lighting and graphics. I
look forward to reporting future progress and developments as the
fiscal year progresses."
Balance Sheet
The balance sheet at June 30, 2010 included current assets of
$99.4 million, current liabilities of $25.8 million and working
capital of $73.6 million. The current ratio was 3.85 to
1. The Company has shareholders' equity of $144.2 million,
$1.1 million of long-term debt, and has borrowing capacity on its
commercial bank facilities as of June 30, 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 September 7, 2010 to
shareholders of record as of August 31, 2010 and set the indicated
annual cash dividend rate of $0.20 per share for fiscal
2011. 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
(loss) for the three and twelve month periods ended June 30, 2010
and 2009. Adjusted net income (loss) and earnings (loss) per
share, which excludes the impact of the impairment of goodwill and
intangible assets as well as a contingency settlement on a menu
board patent litigation, a loss on the sale of LSI Marcole, and
costs associated with the acquisition of LSI ADL Technology is a
non-GAAP financial measure. We believe that this adjusted
supplemental measure is useful in assessing the operating
performance of our business. This measure is used by our
management, including our chief operating decision maker, to
evaluate business results. We exclude these costs in our
evaluation because they are not representative of the ongoing
results of operations of our business. Below is a
reconciliation of this non-GAAP measure to net income (loss) for
the periods indicated.
|
Fiscal 2010 |
Fiscal 2009 |
|
Dollars |
Diluted EPS |
Dollars |
Diluted EPS |
|
(in thousands) |
|
(in thousands) |
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Reconciliation of net income
(loss) to adjusted net income: |
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Net income (loss) |
$1,424 |
$0.06 |
$(13,414) |
$(0.62) |
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Adjustment for the non-cash goodwill and
intangible asset impairment charge, inclusive of the income tax
effect |
148 |
0.01 |
13,583 |
0.62 |
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|
Adjustment for the loss on sale of LSI
Marcole inclusive of the income tax effect |
422 |
0.02 |
-- |
-- |
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Adjustment for the acquisition deal costs
and acquisition-related fair value inventory adjustment,
inclusive of the income tax effect |
791 |
0.03 |
-- |
-- |
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Adjustment for the loss contingency
related to the menu board patent litigation, inclusive of the
income tax effect |
-- |
-- |
125 |
0.01 |
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|
Adjusted net income and earnings per
share |
$2,785 |
$0.12 |
$294 |
$0.01 |
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Fourth Quarter Fiscal
2010 |
Fourth Quarter Fiscal
2009 |
|
Dollars |
Diluted EPS |
Dollars |
Diluted EPS |
|
(in thousands) |
|
(in thousands) |
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Reconciliation of net income
(loss) to adjusted net income (loss): |
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Net income (loss) |
$727 |
$0.03 |
$(257) |
$(0.01) |
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Adjustment for the non-cash goodwill and
intangible asset impairment charge, inclusive of the income tax
effect |
148 |
0.01 |
200 |
0.01 |
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Adjusted net income (loss) and
earnings (loss) per share |
$875 |
$0.04 |
$(57) |
$(0.00) |
"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 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, reliance on key
customers, financial difficulties experienced by customers, the
economic strength and competitive nature of the geographic markets
that the Company serves, interruption of supplies from the
Company's key suppliers, 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 Form 10-K. You are cautioned to not
place undue reliance on these forward-looking statements. 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
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
1,400 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
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 today.
Condensed Statements of
Operations |
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Three Months Ended |
Fiscal Year Ended |
(in thousands, except per |
June 30 |
June 30 |
share data; unaudited) |
2010 |
2009 |
2010 |
2009 |
|
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|
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|
Net sales |
$63,886 |
$50,185 |
$254,402 |
$233,799 |
|
|
|
|
|
Cost of products sold |
49,923 |
38,568 |
198,030 |
181,972 |
Loss on sale of subsidiary |
-- |
-- |
639 |
-- |
Total cost of products sold |
49,923 |
38,568 |
198,669 |
181,972 |
|
|
|
|
|
Gross profit |
13,963 |
11,617 |
55,733 |
51,827 |
|
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|
Selling and administrative
expenses |
13,517 |
12,182 |
53,671 |
51,571 |
|
|
|
|
|
Loss contingency |
-- |
-- |
-- |
200 |
|
|
|
|
|
Goodwill or intangible asset
impairment |
153 |
260 |
153 |
14,467 |
|
|
|
|
|
Operating income (loss) |
293 |
(825) |
1,909 |
(14,411) |
|
|
|
|
|
Interest (income), net |
26 |
(6) |
125 |
(8) |
|
|
|
|
|
Income (Loss) before income
taxes |
267 |
(819) |
1,784 |
(14,403) |
|
|
|
|
|
Income tax (benefit) expense |
(460) |
(562) |
360 |
(989) |
|
|
|
|
|
Net income (loss) |
$727 |
$(257) |
$1,424 |
$(13,414) |
|
|
|
|
|
Income (Loss) per common share |
|
|
|
|
Basic |
$0.03 |
$(0.01) |
$0.06 |
$(0.62) |
Diluted |
$0.03 |
$(0.01) |
$0.06 |
$(0.62) |
|
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|
Weighted average common shares
outstanding |
|
|
|
|
Basic |
24,279 |
21,802 |
24,128 |
21,800 |
Diluted |
24,284 |
21,802 |
24,134 |
21,800 |
|
|
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|
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|
Condensed Balance
Sheets |
|
|
|
|
(in thousands, unaudited) |
June 30, |
June 30, |
|
|
|
2010 |
2009 |
|
|
Current Assets |
$99,411 |
$92,117 |
|
|
Property, Plant and Equipment,
net |
44,911 |
42,043 |
|
|
Other Assets |
29,523 |
18,958 |
|
|
|
$173,845 |
$153,118 |
|
|
|
|
|
|
|
Current Liabilities |
$25,843 |
$19,617 |
|
|
Long-Term Debt |
1,099 |
-- |
|
|
Other Long-Term Liabilities |
2,685 |
3,028 |
|
|
Shareholders' Equity |
144,218 |
130,473 |
|
|
|
$173,845 |
$153,118 |
|
|
CONTACT: LSI Industries Inc.
Bob Ready, Chief Executive Officer and President
Ron Stowell, Vice President, Chief Financial Officer,
and Treasurer
(513) 793-3200
LSI Industries (NASDAQ:LYTS)
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