LSI Industries Inc. (NASDAQ:LYTS)
today
announced:
First Quarter Summary
- Sales increased 4% compared to Q1 of the prior year
- Adjusted Operating Income increased 41%, with adjusted
operating margin improving 90 basis points
- Adjusted Net Income increased 7% versus Q1 prior year (see
reconciliation in Non-GAAP items below)
- Adjusted EPS $0.07 compared to $0.06 in Q1 prior year.
GAAP reported EPS was a loss of $(0.61) versus $0.03 prior year Q1,
reflecting a $28 million goodwill impairment charge
Net sales in the first quarter of fiscal 2018 were $87,466,000,
an increase of 4% compared to the $84,159,000 reported in the first
quarter of the prior year. Adjusted net income was $1,734,000
in the first quarter versus $1,621,000 in Q1 FY 2017.
Adjusted EPS of $0.07 is $0.01 above first quarter of the prior
year. The Company reported a pre-tax, non-cash goodwill
impairment charge of $28 million to the Lighting Segment in Q1,
2018. As a result, GAAP net income was a loss of
$(15,629,000). GAAP EPS after the goodwill impairment was a
loss of $(0.61) versus $0.03 in the first quarter of FY 2017.
See reconciliation in Non-GAAP Measures below. The Company
declared a regular cash dividend of $0.05 per share payable
November 14, 2017 to shareholders of record on November 6,
2017.
Management Comments and Outlook
Dennis W. Wells, Chief Executive Officer and President,
commented, “Our improved Q1 performance reflects the focus and
priorities driven by the LSI team members. We’ve been alert
in recognizing the continuing overall soft market conditions, and
agile in executing decisions which benefit the business both now
and more importantly on a go-forward basis. Commercially, we
continue to intentionally shift away from low margin, conventional
technology sales opportunities, instead focusing almost exclusively
on LED and other technology solutions. The soft market and
reduction in low margin sales was responsible for a 9% decline in
organic sales. In lighting for example, the shift from
conventional technology aligns with the previously announced
closure of our Kansas City lighting facility, generating lower
costs, increased margins, and improved asset utilization. Our LED
sales in Q1 increased 23% versus Q1 prior year and now represent
85% of our lighting product sales.
“Our focus and investment in key growth initiatives
continue. Market interest in Smart Lighting is expanding,
with the Airlink™ wireless control solution adoption rate
continuing to increase. We are also excited about the
SmartVision® platform officially launched at the NACS/PEI show last
week. Our core portfolio of LED products will be strengthened
with a significant number of new product launches scheduled over
the next several quarters. This includes a new range of
under-canopy fixtures, maintaining our industry leading position in
this segment.
“The Atlas acquisition delivered sales and EBITDA above Q1 prior
year on a comparable pro forma basis. The
distribution side of the lighting business is also impacted by the
soft market; as a result, while above prior year, Q1 somewhat
lagged internal expectations. Significant integration
activities continue across multiple areas of the business, most
notably in the product and sales channel areas. Since the
acquisition, we have added 223 new distributor branch locations, of
which 38 are new distributor partners. Channel expansion
activity will continue to be a major emphasis and a platform for
future growth.
“I want to highlight the Graphics Segment as this business
delivered a solid quarter, with sales above prior year and
measurably improved earnings. The SOAR digital signage initiative
again generated sales growth over 100% for the quarter. We
are adding sales resources to the SOAR business and project strong
growth rates to continue. The Graphics business continues to
realize growth outside of the petroleum and convenience store
segments. Our quotes backlog is very strong, and working to convert
quotes to orders is a key priority.
“From an operations and infrastructure view, we continue to
generate substantial cost savings and many process improvement
initiatives are in-progress under our LSI business system
framework. Key purchased commodities costs remain stubbornly
high, and in some cases continue to increase. In response,
selling price realization continues to increase, although still
lagging the commodity increases. New sourcing and design
initiatives are also contributing to mitigate these cost
increases. Driven by plant closure activity, lean
manufacturing efforts, and strategic outsourcing, our productivity
continues to increase. Our comparable Q1 direct labor and
overhead spending was 22% below last year, and sales per employee
increased 12%. On a comparable basis, our total square
footage has decreased 17% since June, 2014. All these
improvements contributed to our improved operating
margin.
“Let me address the lighting segment goodwill impairment.
Several quarters of lower sales and earnings in the Lighting
Segment caused a sustained drop in our stock price. With this
drop in stock price, management reviewed the goodwill asset on the
balance sheet, which upon completion, resulted in a reduction to
the value of the asset. This non-cash adjustment represents a more
current valuation, and we are confident the Lighting Segment will
return to previous growth and profitability levels.
“Our financial position remains strong. Our debt position
at the end of Q1 was down 21% from the date of the Atlas
transaction in February. We are continuing to maintain our
dividend at a $0.20 annual rate.
“On a reporting note, the Technology Segment results have been
consolidated and are now included in the Lighting Segment for all
periods reported. The decision is consistent with the current
management model, as the majority of products and components
produced by this segment already feed into our lighting
products. Following the combination, the Company’s reportable
segments consist of a Lighting Segment and a Graphics Segment.
“As we enter Q2, our focus will continue to be: targeting
higher margin sales growth opportunities; improving our operating
margins; and maintaining a cost efficient manufacturing and supply
chain infrastructure ready to capitalize on any change in market
level requirements. We’re very pleased to have our new
Lighting Segment president on board, Ron Newbold, and look forward
to his leadership as we aggressively pursue opportunities in the
lighting market.”
Financial Highlights |
|
(In thousands, except
per |
Three Months Ended |
share data;
unaudited) |
September 30 |
|
2017 |
|
|
2016 |
|
% Change |
|
|
|
|
|
|
|
Net Sales |
$ |
87,466 |
|
|
$ |
84,159 |
|
4% |
|
|
|
|
|
|
|
Operating Income
(Loss) |
|
|
|
|
|
|
as
reported |
$ |
(24,814 |
) |
|
$ |
1,066 |
|
n/m |
Goodwill
impairment |
28,000 |
|
|
-- |
|
n/m |
Restructuring costs and |
|
|
|
|
|
|
plant
closure costs |
-- |
|
|
1,056 |
|
n/m |
Severance
Costs |
-- |
|
|
145 |
|
n/m |
Operating Income |
|
|
|
|
|
|
as
adjusted (a) |
$ |
3,186 |
|
|
$ |
2,267 |
|
41% |
|
|
|
|
|
|
|
Net Income (Loss) as
reported |
$ |
(15,629 |
) |
|
$ |
829 |
|
n/m |
Net Income as
adjusted |
$ |
1,734 |
|
|
$ |
1,621 |
|
7% |
|
|
|
|
|
|
|
Earnings (loss) per
share |
|
|
|
|
|
|
(diluted)
as reported |
$ |
(0.61 |
) |
|
$ |
0.03 |
|
n/m |
Earnings per share |
|
|
|
|
|
|
(diluted)
as adjusted |
$ |
0.07 |
|
|
$ |
0.06 |
|
17% |
|
|
9/30/17 |
|
|
6/30/17 |
Working Capital |
$ |
67,628 |
|
$ |
61,704 |
Total Assets |
$ |
239,189 |
|
$ |
256,680 |
Long-Term Debt |
$ |
51,862 |
|
$ |
49,698 |
Shareholders’
Equity |
$ |
144,394 |
|
$ |
160,078 |
(a) The Company recorded pre-tax goodwill impairment of
$28,000,000 in the first quarter of fiscal 2018. The Company
recorded pre-tax restructuring costs and plant closure costs
totaling $1,056,000, and incurred net pre-tax other severance
expense of $145,000 in the first quarter of fiscal 2017.
Operating income, net income, and earnings per share (diluted)
before the goodwill impairment, restructuring costs, plant closure
costs and severance expense are Non-GAAP financial measures (see
page 4).
First Quarter Fiscal 2018 Results
Net sales in the first quarter of fiscal 2018 were $87,466,000,
up 4% from last year’s first quarter net sales of
$84,159,000. Lighting Segment net sales of $68,428,000
increased 4.8% and Graphics Segment net sales of $19,038,000
increased 0.8% from last year’s first quarter net sales. The
former Technology Segment net sales and operating results are now
included in the Lighting Segment and prior year segment results
have been revised accordingly. The Company recorded a pre-tax
goodwill impairment in the Lighting Segment of $28,000,000 in the
first quarter of fiscal 2018. In the first quarter of fiscal
2017 the Company recorded pre-tax restructuring and plant closure
costs of $1,056,000 ($903,000 was expensed in Cost of Products Sold
and $153,000 was expensed in Selling and Administrative expenses)
related to the Company’s exit from the manufacturing of fluorescent
lighting fixtures. Additionally, the Company recorded other
severance costs of $145,000 in the first quarter of fiscal
2017. The fiscal 2018 first quarter net loss of
$(15,629,000), or $(0.61) per share, compared to the fiscal 2017
first quarter net income of $829,000 or $0.03 per share.
Earnings per share represents diluted earnings per share.
Balance Sheet
The balance sheet at September 30, 2017 included current assets
of $109.0 million, current liabilities of $41.3 million and working
capital of $67.6 million, which includes cash of $2.1
million. The current ratio was 2.6 to 1. The Company
has shareholders’ equity of $144.4 million and $51.9 million of
long-term debt on its balance sheet as of September 30, 2017.
With continued strong cash flow, a sound balance sheet, and $48.1
million available in its credit facility, LSI Industries believes
its financial condition is sound and is 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 $0.05 per share in connection with the first quarter of
fiscal 2018 payable November 14, 2017 to shareholders of record as
of the close of business on November 6, 2017. 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 net income and
earnings per share for the three months ended September 30, 2017
and 2016. Adjusted net income and earnings per share, which
exclude the impact of a goodwill impairment, restructuring and
plant closure costs, and other severance costs, 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 2018 |
|
|
EPS |
|
|
FY 2017 |
|
EPS |
Reconciliation of net
income to adjusted net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) and earnings (loss) per share as reported |
$ |
(15,629 |
) |
|
$ |
(0.61 |
) |
|
$ |
829 |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
Adjustment for goodwill impairment, inclusive of the income tax
effect |
17,361 |
|
|
0.67 |
|
|
-- |
|
-- |
|
|
|
|
|
|
|
|
|
|
Adjustment for restructuring and plant closure costs, inclusive of
the income tax effect |
-- |
|
|
-- |
|
|
695 |
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Adjustment for other severance costs, inclusive of the income tax
effect |
-- |
|
|
-- |
|
|
97 |
|
-- |
|
|
|
|
|
|
|
|
|
|
Adjusted
net income and earnings per share |
$ |
1,734 |
|
|
$ |
0.07 |
|
|
$ |
1,621 |
|
$ |
0.06 |
"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, failure of an acquisition or acquired company
to achieve its plans or objectives generally, unexpected
difficulties in integrating acquired businesses, the ability to
retain key employees, unfavorable economic and market conditions,
the results of asset impairment assessments, the ability to
maintain an effective system of internal control over financial
reporting, the ability to remediate any material weaknesses in
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, California, Kentucky, New York, North Carolina
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 Jim Galeese,
Executive Vice President and Chief Financial Officer 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 |
September 30 |
|
share data;
unaudited) |
2017 |
|
2016 |
|
|
|
|
|
|
|
Net sales |
$ |
87,466 |
|
|
$ |
84,159 |
|
|
|
|
|
|
|
Cost of products and
services sold |
63,763 |
|
|
62,821 |
|
Restructuring costs –
cost of sales |
-- |
|
|
503 |
|
|
|
|
|
|
|
Gross
profit |
23,703 |
|
|
20,835 |
|
|
|
|
|
|
|
Selling and
administrative expenses |
20,517 |
|
|
19,616 |
|
|
|
|
|
|
|
Goodwill
Impairment 28,000 |
-- |
|
|
|
|
|
|
|
|
|
|
Restructuring costs –
SG&A expense |
-- |
|
|
153 |
|
|
|
|
|
|
|
Operating
income (loss) |
(24,814 |
) |
|
1,066 |
|
|
|
|
|
|
|
Interest expense
(income), net |
403 |
|
|
(14 |
) |
|
|
|
|
|
|
Income
(loss) before income taxes |
(25,217 |
) |
|
1,080 |
|
|
|
|
|
|
|
Income tax (benefit)
expense |
(9,558 |
) |
|
251 |
|
Net
income (loss) |
$ |
(15,629 |
) |
|
$ |
829 |
|
Income (loss) per
common share |
|
|
|
|
|
Basic |
$ |
(0.61 |
) |
|
$ |
0.03 |
|
Diluted |
$ |
(0.61 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
Weighted average common
shares outstanding |
|
|
|
|
|
Basic |
25,787 |
|
|
25,275 |
|
Diluted |
25,787 |
|
|
25,912 |
|
Condensed Consolidated Balance Sheets |
(in thousands,
unaudited) |
September 30, |
|
June 30, |
|
2017 |
|
2017 |
Current
Assets |
$ |
108,974 |
|
$ |
107,129 |
Property,
Plant and Equipment, net |
45,982 |
|
47,354 |
Other
Assets |
84,233 |
|
102,197 |
|
$ |
239,189 |
|
$ |
256,680 |
|
|
|
|
Current
Liabilities |
$ |
41,346 |
|
$ |
45,425 |
Long-Term
Debt |
51,862 |
|
49,698 |
Other
Long-Term Liabilities |
1,587 |
|
1,479 |
Shareholders’ Equity |
144,394 |
|
160,078 |
|
$ |
239,189 |
|
$ |
256,680 |
CONTACT: DENNIS WELLS or JIM GALEESE (513)
793-3200
LSI Industries (NASDAQ:LYTS)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
LSI Industries (NASDAQ:LYTS)
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