LSI Industries Inc. (NASDAQ: LYTS, or the “Company”) a
leading U.S. based manufacturer of indoor/outdoor lighting and
graphics solutions, today announced results for the fiscal fourth
quarter 2019.
Fourth Quarter 2019 Summary
- Sales of $81.5 million; EPS $0.03; EBITDA $2.2 million;
Adjusted EBITDA $3.3 million
- Order rate mid-single digits above last year; increased
backlog
- Free Cash Flow $4.8 million; Debt reduction of $4.3 million,
net leverage ratio 2.7x
- New Windsor, NY production transfer complete; cost savings
beginning fiscal Q2
- New Windsor, NY building sale/closing expected in September;
proceeds to be $12 million
Net sales were $81.5 million in the fiscal
fourth quarter 2019, a decrease of 2% compared to $83.4 million in
the fourth quarter 2018. Reported net income was $0.9
million, or $0.03 per diluted share, versus a loss of $(2.7
million), or $(0.10) per diluted share, in the fourth quarter
2018. Reported fiscal fourth quarter 2019 results include
pre-tax restructuring charges and a favorable tax adjustment that
resulted in a net favorable impact of $0.03 per share in the
period. The tax adjustment relates to the pending sale of the
New Windsor facility.
Adjusted EBITDA was $3.3 million in fiscal
fourth quarter 2019, versus $3.6 million in the same period of
2018. Free cash flow for the quarter was $4.8 million,
reflecting continued emphasis on balance sheet management.
Cash flow generated in the quarter served to reduce outstanding
debt by $4.3 million. Reconciliation of our GAAP and non-GAAP
financial results is included later in this release.
Earlier in August, 2019, the Company secured
final approval from the town of New Windsor, NY for the sale of its
manufacturing facility. The Company currently anticipates the
formal sale of the property to be completed on or before September
30, 2019 for approximately $12 million, consistent with prior
estimates.
The Company declared a regular cash dividend of
$0.05 per share payable September 12, 2019 to shareholders of
record on September 3, 2019.
Management Commentary
James A. Clark, President and Chief Executive Officer commented,
“Our fourth quarter reflects the initial impact of our
restructuring which began last year. Sales and Adjusted EBITDA
performance represents a stair-step improvement from the third
quarter, although slightly below prior year. Our sales
performance versus prior year was the best in five quarters;
completing the New Windsor production transfer improves capacity
utilization and generates an annual cost savings; and our new
product pipeline is developing, with several key launches scheduled
over the next several quarters. We generated strong free cash
flow in the fourth quarter that resulted in further debt reduction,
reflecting our ongoing commitment to disciplined balance sheet
management. We finished the fiscal year with total debt below
$40 million, and proceeds from the sale of the New Windsor facility
will provide liquidity to further reduce our debt from current
levels as well as invest in the business.
“Our sales team has embraced the focus on higher value,
performance-based market applications. They are aggressively
driving this plan in collaboration to end-users with our sales
agency partners. Our fourth quarter order book
increased on a mid-single digit basis when compared to prior year,
with bookings reflecting an improving mix, and price realization
resulting from the May price increase announcement. Our sales
organization remains a high priority, and we’re committed to
expanding and strengthening our selling
capabilities.
“Our shift toward higher-end applications is also driving a more
focused product development roadmap,” stated Clark. “We have
several key new products scheduled for release in the first half of
calendar 2020, and I’m inspired by the increased emphasis on
defining market requirements, and the efforts to reduce our speed
to market. This approach is also allowing us to objectively
evaluate and address certain applications and products that are not
performing to expectations. We’ve added several key resources
to the product management function which will accelerate our
product roadmap plans.
“In addition to developing a more focused sales and product
development strategy, we continue to drive activities in our
operations and supply chain to improve asset utilization and reduce
costs. The transfer of production operations from our New
Windsor facility to existing facilities in Ohio and Kentucky was
completed during the fiscal fourth quarter, and all new lines are
projected to be operating at pre-transfer levels by the end of
September 2019. In addition, several structural improvements
to our supply chain were implemented, generating lower inventory
levels and improved vendor lead-times.
“We are committed to disciplined balance sheet management, as
evidenced by our continued focus on debt reduction. Looking
ahead, our capital allocation priorities include debt reduction,
investment in high-impact initiatives that support our ongoing
business transformation and continued payment of our quarterly cash
dividend.
“While fiscal year 2019 was a period of significant change and
disruption for our business, we are motivated by evidence of
multiple progress points that validate the actions we have taken
thus far,” concluded Clark. “Entering fiscal year 2020,
significant work remains ahead of us, however, we are encouraged
that momentum has begun to build, supported by a team committed to
achieving consistent, balanced results across our key market
verticals and product segments.”
CONFERENCE
CALL
A conference call will be held today at 11:00 A.M. ET to review
the Company’s financial results, discuss recent events 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.lsi-industries.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 in
order to register, download, and install any necessary audio
software.
Details of the conference call are as
follows:
Call
Dial-In: |
(844)
400-1698 |
Conference ID: |
1091289 |
To listen to a replay of the teleconference via
webcast, please visit the Investor Relations section of LSI
Industries’ website at www.lsi-industries.com.
ABOUT LSI
INDUSTRIES
LSI Industries Inc. is a U.S.-based manufacturer of lighting,
graphics and technology solutions for both indoor and outdoor
applications. We are a leading solutions provider to the
primary end-markets we serve, including petroleum, automotive,
quick serve restaurants, grocery, banking, retail, renovation,
parking and warehousing. Our products are marketed throughout
North America through a network of independent sales
representatives and distributors, as well as through national
accounts. We partner with our 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 seven
facilities throughout the United States.
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 http://www.lsi-industries.com/fls 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
Financial Highlights |
|
Three Months Ended June 30 |
|
|
|
Twelve Months Ended June 30 |
|
(Unaudited) |
|
|
2019 |
|
|
|
2018 |
|
|
% Change |
|
(In thousands, except per share data) |
|
|
2019 |
|
|
|
2018 |
|
|
% Change |
$ |
81,522 |
|
|
$ |
83,409 |
|
|
-2% |
|
Net Sales |
|
$ |
328,852 |
|
|
$ |
342,023 |
|
|
-4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(280 |
) |
|
|
(2,128 |
) |
|
n/m |
|
Operating (Loss) as reported |
|
|
(19,890 |
) |
|
|
(21,652 |
) |
|
n/m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-- |
|
|
|
-- |
|
|
|
|
Goodwill impairment |
|
|
20,165 |
|
|
|
28,000 |
|
|
|
|
1,082 |
|
|
|
-- |
|
|
|
|
Restructuring and plant closure
costs |
|
|
3,073 |
|
|
|
-- |
|
|
|
|
26 |
|
|
|
37 |
|
|
|
|
Severance costs |
|
|
560 |
|
|
|
128 |
|
|
|
|
-- |
|
|
|
3,136 |
|
|
|
|
Transition and re-alignment
costs |
|
|
120 |
|
|
|
3,136 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
828 |
|
|
$ |
1,045 |
|
|
-21% |
|
Operating Income as adjusted |
|
$ |
4,028 |
|
|
$ |
9,612 |
|
|
-58% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
862 |
|
|
$ |
(2,664 |
) |
|
n/m |
|
Net Income (Loss) as reported |
|
$ |
(16,339 |
) |
|
$ |
(19,541 |
) |
|
n/m |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
77 |
|
|
$ |
487 |
|
|
-84% |
|
Net Income as adjusted |
|
$ |
985 |
|
|
$ |
5,714 |
|
|
-83% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.03 |
|
|
$ |
(0.10 |
) |
|
n/m |
|
Income (Loss) per share (diluted) as reported |
|
$ |
(0.63 |
) |
|
$ |
(0.76 |
) |
|
n/m |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.00 |
|
|
$ |
0.02 |
|
|
-100% |
|
Earnings per share (diluted) as adjusted |
|
$ |
0.04 |
|
|
$ |
0.22 |
|
|
82% |
|
|
(amounts in thousands) |
|
|
6/30/19 |
|
6/30/18 |
Working Capital |
|
$ |
71,105 |
|
$ |
67,882 |
Total Assets |
|
$ |
201,100 |
|
$ |
229,517 |
Long-Term Debt |
|
$ |
39,541 |
|
$ |
45,360 |
Shareholders' Equity |
|
$ |
119,937 |
|
$ |
139,251 |
Fourth Quarter Fiscal 2019 Results
Net sales in the fourth quarter of fiscal 2019 were $81,522,000,
down 2% from last year’s fourth quarter net sales of
$83,409,000. Lighting Segment net sales of $57,243,000
decreased 7% while Graphics Segment net sales of $24,279,000
increased 11% from last year’s fourth quarter net sales. The
Company recorded pre-tax restructuring and plant closure costs of
$1,082,000 related to the closure of its New Windsor, New York
facility in the Lighting Segment and $26,000 of severance costs.
The fiscal 2019 fourth quarter net income of $862,000, or $0.03 per
share, compares to fiscal 2018 fourth quarter net loss of
$(2,664,000) or $(0.10) per share. Earnings per share
represents diluted earnings per share.
Fiscal 2019 Results
Net sales in fiscal 2019 were $328,852,000, down 4% from fiscal
2018 net sales of $342,023,000. Lighting Segment net sales of
$235,114,000 decreased 10% while Graphics Segment net sales of
$93,738,000 increased 15% from fiscal 2018 net sales. The Company
recorded pre-tax restructuring and plant closure costs of
$3,073,000 related to the closure of its New Windsor, New York and
Hawthorne, California facilities in the Lighting Segment and
recorded a pre-tax goodwill impairment also in the Lighting Segment
of $20,165,000. The Company also recorded $560,000 of severance
costs and recorded an additional $120,000 of transition and
re-alignment costs. The fiscal 2019 net loss of $(16,339,000), or
$(0.63) per share, compares to the fiscal 2018 net loss of
$(19,541,000) or $(0.76) per share. Earnings per share
represents diluted earnings per share.Balance
Sheet
The balance sheet at June 30, 2019 included current assets of
$111.0 million, current liabilities of $39.9 million and working
capital of $71.1 million, which includes cash of $1.0 million along
with an asset held for sale of $7.5 million. When the asset
held for sale is removed from working capital, the current ratio
was 2.59 to 1 which presents a more representative comparison to
previous periods. The balance sheet also included shareholders’
equity of $119.9 million and $39.5 million of 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 fourth quarter
of fiscal 2019 payable September 12, 2019 to shareholders of record
as of the close of business on September 3, 2019. 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 twelve
months ended June 30, 2019 and 2018. Operating income, net
income and earnings per share, which exclude the impact of goodwill
impairment, severance costs, the tax impact from the reduction of
deferred tax assets, the tax impact from the anticipated sales of
the New Windsor, New York Assets, transition and re-alignment
costs, and restructuring, and plant closure costs, are non-GAAP
financial measures. We exclude these non-recurring items
because they are not representative of the ongoing results of
operations of our 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. Below is a reconciliation of these non-GAAP
financial measures to the net income and earnings per share
reported for the periods indicated along with the calculation of
EBIDTA, Adjusted EBITDA and Free Cash Flow.
FOURTH QUARTER |
|
|
|
YEAR-TO-DATE |
|
2019 |
|
|
|
|
2018 |
|
|
|
(In thousands, except per share data) |
|
|
2019 |
|
|
|
|
2018 |
|
|
|
Diluted EPS |
|
|
Diluted
EPS |
|
|
|
|
Diluted EPS |
|
|
Diluted EPS |
|
|
|
|
Reconciliation of net income to adjusted net
income |
|
|
|
|
$ |
862 |
|
$ |
0.03 |
|
|
$ |
(2,664 |
) |
$ |
(0.10 |
) |
|
Net Income (Loss) as reported |
|
$ |
(16,339 |
) |
$ |
(0.63 |
) |
|
$ |
(19,541 |
) |
$ |
(0.76 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36 |
) |
|
-- |
|
|
|
-- |
|
|
-- |
|
|
Goodwill impairment |
|
|
15,325 |
|
|
0.59 |
|
|
|
17,361 |
|
|
0.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,025 |
|
|
0.04 |
|
|
|
-- |
|
|
-- |
|
|
Restructuring and plant closure costs |
|
|
2,410 |
|
|
0.09 |
|
|
|
-- |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54 |
|
|
-- |
|
|
|
27 |
|
|
-- |
|
|
Severance costs |
|
|
426 |
|
|
0.02 |
|
|
|
92 |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
-- |
|
|
|
2,261 |
|
$ |
0.09 |
|
|
Transition and re-alignment
costs |
|
|
91 |
|
|
-- |
|
|
|
2,261 |
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact from the anticipated sale of New Windsor
Assets |
|
|
|
|
|
|
|
(1,825 |
) |
|
(0.07 |
) |
|
|
-- |
|
|
-- |
|
|
|
|
(928 |
) |
|
(0.04 |
) |
|
|
-- |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Impact from the reduction of the Deferred Tax
Assets |
|
|
|
|
|
|
|
-- |
|
|
-- |
|
|
|
863 |
|
|
0.03 |
|
|
|
|
-- |
|
|
-- |
|
|
|
5,541 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
77 |
|
$ |
0.00 |
|
|
$ |
487 |
|
$ |
0.02 |
|
|
Net Income adjusted |
|
$ |
985 |
|
$ |
0.04 |
|
|
$ |
5,714 |
|
$ |
0.22 |
|
|
|
|
NOTE: All adjustments are net of tax except for the
adjustment of the deferred tax assets and the Tax impact from the
anticipated sale of the New Windsor Assets |
|
|
|
|
|
|
|
Three Months Ended June 30 |
|
(Unaudited; In thousands) |
|
Twelve Months Ended June 30 |
|
|
|
EBITDA |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
% Change |
|
|
|
2019 |
|
|
|
2018 |
|
|
% Change |
|
|
$ |
(280 |
) |
|
$ |
(2,128 |
) |
|
-87% |
|
Operating Income as reported |
|
$ |
(19,890 |
) |
|
$ |
(21,652 |
) |
|
-8% |
|
|
|
|
|
|
|
2,434 |
|
|
|
2,582 |
|
|
|
|
Depreciation and Amortization |
|
|
10,221 |
|
|
|
10,222 |
|
|
|
|
|
$ |
2,154 |
|
|
$ |
454 |
|
|
n/m |
|
EBITDA |
|
$ |
(9,669 |
) |
|
$ |
(11,430 |
) |
|
-15.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30 |
|
(Unaudited; In thousands) |
|
Twelve Months Ended June 30 |
|
|
|
Adjusted EBITDA |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
% Change |
|
|
|
2019 |
|
|
|
2018 |
|
|
% Change |
|
|
$ |
828 |
|
|
$ |
1,045 |
|
|
-21% |
|
Operating Income as adjusted |
|
$ |
4,028 |
|
|
$ |
9,612 |
|
|
-58% |
|
|
|
|
|
|
|
2,434 |
|
|
|
2,582 |
|
|
|
|
Depreciation and Amortization |
|
|
10,221 |
|
|
|
10,222 |
|
|
|
|
|
$ |
3,262 |
|
|
$ |
3,627 |
|
|
-10.1% |
|
Adjusted EBITDA |
|
$ |
14,249 |
|
|
$ |
19,834 |
|
|
-28.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30 |
|
(Unaudited; In thousands) |
|
Twelve Months Ended June 30 |
|
|
|
Free Cash Flow |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
% Change |
|
|
|
2019 |
|
|
|
2018 |
|
|
% Change |
|
|
$ |
5,106 |
|
|
$ |
3,611 |
|
|
41% |
|
Cash Flow From Operations |
|
$ |
11,491 |
|
|
$ |
11,500 |
|
|
n/m |
|
|
|
|
|
|
|
(270 |
) |
|
|
(1,228 |
) |
|
|
|
Capital Expenditures |
|
|
(2,618 |
) |
|
|
(3,406 |
) |
|
|
|
|
$ |
4,836 |
|
|
$ |
2,383 |
|
|
102.9% |
|
Free Cash Flow |
|
$ |
8,873 |
|
|
$ |
8,094 |
|
|
9.6% |
|
Condensed Consolidated Statements of
Operations
Three Months Ended June 30 |
|
Twelve Months Ended June 30 |
(Unaudited) |
|
2019 |
|
|
|
2018 |
|
|
(In thousands, except per share data) |
|
2019 |
|
|
|
2018 |
|
$ |
81,522 |
|
|
$ |
83,409 |
|
|
Net Sales |
$ |
328,852 |
|
|
$ |
342,023 |
|
|
|
|
|
|
|
|
|
|
63,414 |
|
|
|
63,103 |
|
|
Cost of Products Sold |
|
253,621 |
|
|
|
252,789 |
|
|
-- |
|
|
|
-- |
|
|
Severance Costs |
|
77 |
|
|
|
-- |
|
|
649 |
|
|
|
-- |
|
|
Restructuring Costs |
|
1,441 |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
17,459 |
|
|
|
20,306 |
|
|
Gross Profit |
|
73,713 |
|
|
|
89,234 |
|
|
|
|
|
|
|
|
|
|
17,480 |
|
|
|
19,298 |
|
|
Selling and Administrative Costs |
|
72,470 |
|
|
|
79,750 |
|
|
-- |
|
|
|
-- |
|
|
Goodwill Impairment |
|
20,165 |
|
|
|
28,000 |
|
|
26 |
|
|
|
-- |
|
|
Severance Costs |
|
483 |
|
|
|
-- |
|
|
233 |
|
|
|
-- |
|
|
Restructuring Costs |
|
365 |
|
|
|
-- |
|
|
-- |
|
|
|
3,136 |
|
|
Transition and re-alignment
costs |
|
120 |
|
|
|
3,136 |
|
|
|
|
|
|
|
|
|
|
(280 |
) |
|
|
(2,128 |
) |
|
Operating
(Loss) |
|
(19,890 |
) |
|
|
(21,652 |
) |
|
|
|
|
|
|
|
|
|
(45 |
) |
|
|
-- |
|
|
Other (Income) Expense |
|
138 |
|
|
|
-- |
|
|
528 |
|
|
|
460 |
|
|
Interest
Expense |
|
2,240 |
|
|
|
1,680 |
|
|
|
|
|
|
|
|
|
|
(763 |
) |
|
|
(2,588 |
) |
|
(Loss) Before
Taxes |
|
(22,268 |
) |
|
|
(23,332 |
) |
|
|
|
|
|
|
|
|
|
(1,625 |
) |
|
|
76 |
|
|
Income (Benefit)
Tax |
|
(5,929 |
) |
|
|
(3,791 |
) |
|
|
|
|
|
|
|
|
$ |
862 |
|
|
$ |
(2,664 |
) |
|
Net Income (Loss) |
$ |
(16,339 |
) |
|
$ |
(19,541 |
) |
|
|
|
|
Weighted Average Common Shares Outstanding |
|
|
|
|
26,187 |
|
|
|
25,959 |
|
|
Basic |
|
26,109 |
|
|
|
25,866 |
|
|
26,219 |
|
|
|
25,959 |
|
|
Diluted |
|
26,109 |
|
|
|
25,866 |
|
|
|
|
|
|
|
|
Income (Loss) Per Share |
|
$ |
0.03 |
|
|
$ |
(0.10 |
) |
|
Basic |
$ |
(0.63 |
) |
|
$ |
(0.76 |
) |
$ |
0.03 |
|
|
$ |
(0.10 |
) |
|
Diluted |
$ |
(0.63 |
) |
|
$ |
(0.76 |
) |
|
|
(amounts in thousands) |
|
|
6/30/19 |
|
6/30/18 |
Current Assets (Less Assets Held for Sale) |
|
$ |
103,468 |
|
$ |
110,081 |
Assets Held for Sale |
|
|
7,512 |
|
|
-- |
Property, Plant and Equipment, net |
|
|
31,976 |
|
|
43,703 |
Other Assets |
|
|
58,144 |
|
|
75,733 |
Total Assets |
|
$ |
201,100 |
|
$ |
229,517 |
|
Current
Liabilities |
|
$ |
39,875 |
|
$ |
42,199 |
Long-Term
Debt |
|
|
39,541 |
|
|
45,360 |
Other Long-Term Liabilities |
|
|
1,747 |
|
|
2,707 |
Shareholders' Equity |
|
|
119,937 |
|
|
139,251 |
|
|
$ |
201,100 |
|
$ |
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