LSI Industries Inc. (NASDAQ: LYTS)
today announced:
First Quarter Operating Results:
- Sales of $85.0 million, 3% below Q1 of the prior year
- GAAP Reported operating income of $2.9 million
- Adjusted operating income of $3.5 million, 11% above last
year
- GAAP reported EPS of $0.07 versus $(0.61) in Q1 2018
- Adjusted EPS of $0.08 compared to $0.07 in Q1 prior year
- Declares regular quarterly dividend of $0.05
Net sales in the first quarter of fiscal 2019 were $84,957,000,
or 3% below the $87,466,000 reported in the same period of the
prior year. Reported net income was $1,749,000 compared to a
net loss of $(15,629,000) in the first quarter of fiscal
2018. Reported EPS of $0.07 was above the reported EPS loss
of $(0.61) for the first quarter of the prior year (first quarter
fiscal 2018 contained a pretax, non-cash goodwill impairment charge
of $28 million). The Company recorded a first quarter fiscal
2019 charge of $590,000 related to the closure of the Hawthorne,
California facility, which was announced earlier in the
quarter. This charge impacts GAAP reported results and is
excluded from adjusted results. Adjusted operating income in
the first quarter of fiscal 2019 was $3,524,000 compared to
$3,186,000 for the first quarter last year. First quarter
operating income includes a one-time favorable impact due to a
benefit program change net of other adjustments. Adjusted EPS
of $0.08 increased $0.01 versus $0.07 for the first quarter prior
year. The Company declared a regular cash dividend of $0.05
per share payable November 27, 2018 to shareholders of record on
November 16, 2018.
Cash generation was positive for the quarter even as investment
in working capital increased as planned. The debt level at
the end of the first quarter decreased $5.7 million versus the same
period last year, further strengthening our solid financial
position. Inventory and accounts receivable were responsible
for the working capital increase, as investment was required to
support several key growth initiatives.
Management Comments and Outlook
Ron Brown, former Interim Chief Executive Officer and elected
member of the Board of Directors, commented, “The first quarter was
extremely active as we took aggressive actions on a number of our
key priorities. First, we announced a new organizational
structure aligned around our key markets and customers. This
is enabling the Company to better package our technology, products
and services, providing our customers with innovative solutions in
order to accelerate growth. Second, we executed on several
actions aimed at driving productivity and savings in our integral
supply chain, as well as our overall cost structure. We
announced the closure of the Hawthorne, California assembly and
warehouse facility, which was completed in October. More
recently, we announced the closure of the New Windsor, New York
manufacturing facility, which will occur over the next several
quarters. In addition, through fiscal year-to-date, we’ve
also made a number of key new talent additions, while eliminating a
number of salaried roles through productivity and process
improvement. The combined impacts of these actions are
estimated to generate annual savings of over $6 million.
Mr. Brown continued, “Of course, the most exciting news was our
October 17th announcement of the appointment of James (Jim) Clark
as President and Chief Executive Officer effective November
1st. Jim’s track record of driving transformative growth by
providing customers with innovative solutions and services makes
him the right leader for LSI. His experience in leading and
capitalizing on changing market environments driven by technology
and increasing end-user expectations will be extremely valuable to
LSI moving forward. We all look forward to Jim’s leadership
as the LSI team takes this Company to the next
level.”
Jim Galeese, LSI’s Chief Financial Officer commented, “Our first
quarter results reflect the changes we are driving to improve the
growth and profitability of the business. The Graphics
segment generated sales growth of 24% with operating income
increasing 62%. Conversely, Lighting segment sales decreased
10%, with the shortfall realized in project business. Lighting
operating earnings declined 12%.
Mr. Galeese continued, “The 24% increase in Graphics segment
sales was driven by significant growth in the Petroleum and Quick
Service Restaurant (QSR) customer markets. Petroleum growth
was generated in each of our top three accounts, including activity
in the opportunity developing in Mexico. As discussed last
quarter, domestic oil companies are rapidly expanding into the
Mexico market, and our proven solutions and strong partnerships are
generating significant levels of incremental orders and sales in
this regional market. QSR growth was fueled by our supply
agreement with a national chain for their complete re-imaging
program which is expected to be completed over the next eighteen
months. This customer is implementing our SOAR digital
technology solution at the majority of its sites. Approximately 100
individual site locations were completed in the first quarter, with
the schedule projecting over 300 sites to be completed in the
second quarter. Quotation activity for our digital signage
solution offerings remains strong, with several major customer
quotes in-progress. The intermediate term outlook for the
Graphics segment remains positive.
“The decline in Lighting segment sales reflects ongoing
competitiveness and softness in commercial and industrial market
applications. This was partially offset in markets where our
products and solutions meet specific customer requirements.
For example, sales in the renovation segment continue to be strong,
and generated solid margins for the quarter. Our product
roadmap contains several new products to be launched over the next
several quarters that will support our renovation initiative.
Despite a soft first quarter, the outlook for Automotive is
favorable. Several large automotive customers have specified
our solution and have placed orders, generating an improved
backlog. Similar new product and solution investment plans
are in place for warehouse, parking, and other target market
applications. Lighting growth is expected to remain sluggish
in the short-term as we increase our emphasis on opportunities
requiring customer specific solutions and reduce priority on price
driven type projects.
“The adjusted gross margin rate for the quarter was 140 basis
points below prior year, impacted primarily by lower Lighting
volumes, mix of large Graphics projects, which typically command a
lower margin, and initial margins on the custom digital solution
for the large QSR program. We expect QSR margins to improve
as volumes continue to accelerate, and several cost reductions are
implemented. Operating expenses decreased 190 basis points
year-over-year, serving to offset the lower margins.
“We continue to manage developments in the procurement area,
including the ongoing volatility in key commodities, and the
initial impact of Chinese tariffs, which went into effect September
13th. In the first quarter, we were successful in offsetting
the majority of increases in steel, aluminum and plastics through
cost reductions in other purchase categories along with design
productivity. Our recently announced selling price increases
are aimed at offsetting the 10% tariff now in effect for many HTS
(harmonized tariff schedule) categories purchased from
China.”
Mr. Brown concluded, “We have implemented numerous
organizational changes which will allow us to more effectively
exploit opportunities for growth in our target markets and customer
segments. While there is still more to be done, many programs are
now in place to further develop the products and solutions required
to better satisfy customer requirements in these areas. Our
integral supply chain is being aligned to support this market
strategy, as is our overall cost structure. All these actions
are positioning LSI to successfully achieve sustainable profitable
growth moving forward.”
Financial Highlights
(In thousands, except pershare data; unaudited) |
|
Three Months EndedSeptember
30 |
|
|
|
2018 |
|
|
2017 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
84,957 |
|
|
$ |
87,466 |
|
|
|
(3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss) as reported |
|
$ |
2,934 |
|
|
$ |
(24,814 |
) |
|
|
n/m |
|
Goodwill impairment |
|
|
-- |
|
|
|
28,000 |
|
|
|
n/m |
|
Restructuring costs and plant closure costs |
|
|
590 |
|
|
|
-- |
|
|
|
n/m |
|
Operating Income as adjusted |
|
$ |
3,524 |
|
|
$ |
3,186 |
|
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) as reported |
|
$ |
1,749 |
|
|
$ |
(15,629 |
) |
|
|
n/m |
|
Net Income as adjusted |
|
$ |
2,203 |
|
|
$ |
1,734 |
|
|
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share (diluted) as reported |
|
$ |
0.07 |
|
|
$ |
(0.61 |
) |
|
|
n/m |
|
Earnings per share (diluted) as adjusted |
|
$ |
0.08 |
|
|
$ |
0.07 |
|
|
|
14 |
% |
|
|
9/30/18 |
|
|
6/30/18 |
|
Working Capital |
|
$ |
72,622 |
|
|
$ |
67,882 |
|
Total Assets |
|
$ |
235,544 |
|
|
$ |
229,517 |
|
Long-Term Debt |
|
$ |
46,152 |
|
|
$ |
45,360 |
|
Shareholders’
Equity |
|
$ |
141,063 |
|
|
$ |
139,251 |
|
First Quarter Fiscal 2019 Results
Net sales in the first quarter of fiscal 2019 were $84,597,000,
down 2.9% from last year’s first quarter net sales of
$87,466,000. Lighting Segment net sales of $61,432,000
decreased 10.2% while Graphics Segment net sales of $23,525,000
increased 23.6% from last year’s first quarter net sales. The
Company recorded pre-tax restructuring and plant closure costs of
$590,000 related to the closure of its Hawthorne, California
warehouse and light assembly facility in the Lighting Segment. In
the first quarter of fiscal 2018, the Company recorded a pre-tax
goodwill impairment also in the Lighting Segment of $28,000,000.
The fiscal 2019 first quarter net income of $1,749,000, or $ 0.07
per share, compared to the fiscal 2018 first quarter net loss of
$(15,629,000) or $(0.61) per share. Earnings per share
represents diluted earnings per share.
Balance Sheet
The balance sheet at September 30, 2018 included current assets
of $118.3 million, current liabilities of $45.7 million and working
capital of $72.6 million, which includes cash of $4.2
million. The current ratio was 2.6 to 1. The Company
has shareholders’ equity of $141.1 million and $46.2 million of
long-term debt on its balance sheet as of September 30, 2018.
With continued strong cash flow, a sound balance sheet, and $53.8
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 2019 payable November 27, 2018 to shareholders of record as
of the close of business on November 16, 2018. 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, 2018
and 2017. Adjusted net income and earnings per share, which
exclude the impact of a goodwill impairment and restructuring, and
plant closure 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 |
|
|
|
FY 2019 |
|
|
DilutedEPS |
|
|
FY 2018 |
|
|
DilutedEPS |
|
Reconciliation of net income to adjusted net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) and earnings (loss) per share as reported |
|
$ |
1,749 |
|
|
$ |
0.07 |
|
|
$ |
(15,629 |
) |
|
$ |
(0.61 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for goodwill impairment, inclusive of the income tax
effect |
|
|
-- |
|
|
|
|
|
|
|
17,363 |
|
|
|
0.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for restructuring and plant closure costs, inclusive of
the income tax effect |
|
|
454 |
|
|
|
0.01 |
|
|
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
net income and earnings per share |
|
$ |
2,203 |
|
|
$ |
0.08 |
|
|
$ |
1,734 |
|
|
$ |
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, tax law changes, 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 impact of tariffs and trade wars, 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
LSI Industries Inc. is a U.S.-based designer, manufacturer and
marketer of lighting, graphics and technology solutions for both
indoor and outdoor applications. The Company is a leader in
the primary markets it serves including petroleum, automotive,
quick serve restaurants, grocery, banking, retail, renovation,
parking and warehousing. Products are marketed throughout
North America by a network of independent sales representatives and
distributors, as well as through national accounts. LSI
partners with its customers to provide a full range of design
support, engineering, installation and project management
services. Headquartered in Blue Ash, Ohio, LSI currently
employs over 1,200 employees and operates eight facilities
throughout the U.S. The Company’s common shares are traded on
the NASDAQ Global Select Market under the symbol LYTS.
Additional information can be found on the Investor Relations page
at www.lsi-industries.com.
For further information, contact Jim Galeese,
Executive Vice President and Chief Financial Officer at (513)
793-3200.
Conference Call
As previously disclosed, Ron Brown, former Interim Chief
Executive Officer, and Jim Galeese, Executive Vice President and
Chief Financial Officer, will host a conference call this afternoon
at 2:00 p.m. ET to discuss first quarter results along with other
material information. The call will contain forward looking
statements and other material information.
Access to the live Webcast will be available via the Investor
Relations page of the Company’s website:
http://www.lsi-industries.com
A replay of the Webcast will be posted to the Investor Relations
page of the Company’s website shortly after the completion of the
conference call, where it will be archived for three months.
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
(in thousands, except per |
|
Three Months EndedSeptember 30 |
|
share data;
unaudited) |
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
84,957 |
|
|
$ |
87,466 |
|
|
|
|
|
|
|
|
|
|
Cost of products and
services sold |
|
|
63,541 |
|
|
|
63,763 |
|
Restructuring costs –
cost of sales |
|
|
155 |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
21,261 |
|
|
|
23,703 |
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses |
|
|
18,327 |
|
|
|
20,517 |
|
|
|
|
|
|
|
|
|
|
Goodwill
Impairment |
|
|
-- |
|
|
|
28,000 |
|
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
|
|
2,934 |
|
|
|
(24,814 |
) |
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
|
518 |
|
|
|
403 |
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
|
2,416 |
|
|
|
(25,217 |
) |
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense |
|
|
667 |
|
|
|
(9,558 |
) |
Net
income (loss) |
|
$ |
1,749 |
|
|
$ |
(15,629 |
) |
|
|
|
|
|
|
|
|
|
Income (loss) per
common share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
(0.61 |
) |
Diluted |
|
$ |
0.07 |
|
|
$ |
(0.61 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
26,032 |
|
|
|
25,791 |
|
Diluted |
|
|
26,365 |
|
|
|
25,791 |
|
Condensed Consolidated Balance Sheets
(in thousands, unaudited) |
|
September 30, |
|
|
June 30, |
|
|
|
2018 |
|
|
2018 |
|
Current
Assets |
|
$ |
118,345 |
|
|
$ |
110,081 |
|
Property,
Plant and Equipment, net |
|
|
42,523 |
|
|
|
43,703 |
|
Other
Assets |
|
|
74,676 |
|
|
|
75,733 |
|
|
|
$ |
235,544 |
|
|
$ |
229,517 |
|
|
|
|
|
|
|
|
|
|
Current
Liabilities |
|
$ |
45,723 |
|
|
$ |
42,199 |
|
Long-Term
Debt |
|
|
46,152 |
|
|
|
45,360 |
|
Other
Long-Term Liabilities |
|
|
2,606 |
|
|
|
2,707 |
|
Shareholders’ Equity |
|
|
141,063 |
|
|
|
139,251 |
|
|
|
$ |
235,544 |
|
|
$ |
229,517 |
|
LSI Industries (NASDAQ:LYTS)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
LSI Industries (NASDAQ:LYTS)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024