LSI Industries Inc. (Nasdaq:LYTS)
today:
- reported third quarter net sales of $62,937,000, a decrease of
3% as compared to $64,628,000 in the same period of the prior
fiscal year;
- reported a third quarter net loss of $(377,000) or $(0.02) per
share as compared to net income of $2,115,000 or $0.09 per share
for the same period of the prior fiscal year;
- reported nine month net sales of $197,206,000, a decrease of
10% as compared to $219,284,000 in the same period of the prior
fiscal year;
- reported nine month net income of $1,719,000 or $0.07 per share
as compared to net income of $9,331,000 or $0.38 per share for the
same period of the prior fiscal year; and
- declared a regular quarterly cash dividend of $0.06 per share
payable May 15, 2012 to shareholders of record May 8, 2012.
Financial Highlights |
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(In thousands, except per |
Three Months Ended |
Nine Months Ended |
share data; unaudited) |
March 31 |
March 31 |
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2012 |
2011 |
% Change |
2012 |
2011 |
% Change |
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Net Sales |
$62,937 |
$64,628 |
(3)% |
$197,206 |
$219,284 |
(10)% |
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Operating Income |
$94 |
$2,483 |
(96)% |
$3,491 |
$13,754 |
(75)% |
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Net Income (Loss) |
($377) |
$2,115 |
(118)% |
$1,719 |
$9,331 |
(82)% |
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Earnings (Loss) Per |
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Share (diluted) |
($0.02) |
$0.09 |
(122)% |
$0.07 |
$0.38 |
(82)% |
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3/31/12 |
6/30/11 |
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Working Capital |
$82,146 |
$84,524 |
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Total Assets |
$173,302 |
$176,021 |
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Long-Term Debt |
$ -- |
$1,064 |
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Shareholders' Equity |
$149,174 |
$151,218 |
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Third Quarter Fiscal 2012 Results
Net sales in the third quarter of fiscal 2012 were $62,937,000,
a decrease of 3% as compared to last year's third quarter net sales
of $64,628,000. Lighting Segment net sales decreased 0.1% to
$46,714,000 with sales to national accounts and niche markets
increasing 10%, sales to the Commercial / Industrial lighting
market decreasing 14%, sales related to LED video screens
increasing significantly, and lighting sales to the international
markets increasing 33%. In the other reportable business
segments, Graphics Segment net sales decreased 15% to $8,940,000,
Electronic Components Segment net sales decreased 26% to $4,609,000
and net sales of the All Other Category increased 129% to
$2,674,000. The fiscal 2012 third quarter net loss of
$(377,000), or $(0.02) per share, compares to fiscal 2011 second
quarter net income of $2,115,000 or $0.09 per share. In the
third quarter of fiscal 2012, the Company recorded pre-tax expense
of $584,000 related to acquisition deal costs and related expenses
but had no corresponding expense in the third quarter of fiscal
2011. Earnings per share represents diluted earnings per
share.
Nine Month Fiscal 2012 Results
Net sales in the first nine months of fiscal 2012 were
$197,206,000, a decrease of 10% as compared to net sales in the
first nine months of fiscal 2011 of $219,284,000. Lighting
Segment net sales increased 5% to $149,411,000 with sales to
national accounts and niche markets increasing 8%, sales to the
Commercial / Industrial lighting market decreasing 2%, sales
related to LED video screens increasing 54%, and lighting sales to
the international markets increasing 21%. In the other
reportable business segments, Graphics Segment net sales decreased
48% to $29,519,000, Electronic Components Segment net sales
decreased 18% to $13,228,000 and net sales of the All Other
Category increased 22% to $5,048,000. A 7-Eleven program to
install LED lighting and signage throughout its retail store system
accounted for $38.6 million of net sales in the first nine months
of fiscal 2011. This program was completed in the second
quarter of fiscal 2011. Net sales to 7-Eleven in the first
nine months of fiscal 2012 were significantly less than the prior
year, down by $24.1 million in the Graphics Segment and down by
$9.6 million in the Lighting Segment. The fiscal 2012 nine
month net income of $1,719,000, or $0.07 per share, compares to
fiscal 2011 nine month net income of $9,331,000 or $0.38 per
share. In the first nine months of fiscal 2012, the Company
recorded a pre-tax non-cash goodwill impairment expense of
$(258,000), as well as pre-tax expense of $584,000 related to
acquisition deal costs and related expenses, but had no
corresponding expenses in the first nine months of fiscal
2011. Earnings per share represents diluted earnings per
share.
Balance Sheet
The balance sheet at March 31, 2012 included current assets of
$103.4 million, current liabilities of $21.2 million and working
capital of $82.1 million, including cash of $18.6 million. The
current ratio was 4.9 to 1. The Company has shareholders'
equity of $149.2 million, no long-term debt, and has borrowing
capacity on its commercial bank facilities as of March 31, 2012 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 $0.06 per share payable May 15, 2012 to shareholders of
record as of May 8, 2012. The indicated annual cash dividend
rate for fiscal 2012 is $0.24 per share. 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.
Company Comments
Robert J. Ready, Chief Executive Officer, commented, "By far the
biggest news since our second quarter press release is the
completion of the acquisition of Virticus Corporation, based near
Portland, Oregon. The Virticus acquisition gives LSI
Industries the very important capabilities of providing
state-of-the-art control of lighting through an automated network
control system and software for the management of indoor and
outdoor fixtures and lighting systems. LSI can now offer its
customers complete solid-state solutions to their lighting
needs. We believe this will become an important driver of
future sales in our lighting market and will also have applications
to our graphics business. The third quarter operating results
were generally lackluster, as overall Lighting Segment sales
declined 0.1% and the Graphics Segment declined 15%. Program
business that did not repeat this period combined with traditional
third quarter softness added pressure to our results for the
quarter. However, growing order activity in both the Lighting
and Graphics Segments signal an improving outlook for the remainder
of the fiscal year. Positive highlights during the
quarter included lighting sales to national accounts and niche
markets increasing 10%, significantly higher sales of LED video
screens, and higher lighting sales to international
markets. Taken as a whole, the third quarter was breakeven at
the diluted earnings per share level, before the one-time costs
associated with the Virticus acquisition.
"We are quite encouraged by what we see developing over the next
several quarters. Importantly, we believe that our graphics
business is coming out of its sales decline caused by the
completion of certain large programs. The graphics business is
expected to show significant improvement in sales and once again
contribute to profits. Lighting is well-positioned with the
right products and sales programs to move forward. Of course,
we expect Virticus to contribute to sales both directly (their
products and services) and indirectly (drive sales of other LSI
Industries' products). Lighting sales to the international
markets, up 33% during the third quarter, also hold promise and are
expected to grow. As I see it, LSI Industries is entering a
period where its major business segments are likely to align for
stronger growth in revenues, and because of favorable operating
leverage, produce even greater growth in operating
profits. Our balance sheet is a source of pride. At March
31st, shareholders' equity was $149 million, there was no long-term
debt, cash was over $18 million, and working capital was $82
million. In addition, LSI Industries has unused commercial
bank credit facilities totaling $35 million. We are
comfortable with cash flow to support our expected business growth,
and fund future cash dividends. I look forward to reporting
our progress during the next several quarters."
Business Segment Information
The Company acquired Virticus Corporation during the third
quarter of fiscal 2012. Operating results of LSI Virticus Inc.
subsequent to the March 19, 2012 acquisition date are included in
the Electronic Components Segment.
Non-GAAP Financial Measures
This press release includes adjustments to the GAAP net income
for the three and nine month periods ended March 31,
2012. Adjusted net income and earnings per share, which
excludes the impact of the LSI Virticus acquisition deal costs and
related expenses are non-GAAP financial measures. We believe
that it is useful as a supplemental measure 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 non-recurring
items because they are not representative of the ongoing results of
operations of our business. Below is a reconciliation of this
non-GAAP measurement to the net income reported for the period
indicated.
(in thousands, except per share data;
unaudited) |
Third Quarter |
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Diluted |
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Diluted |
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FY 2012 |
EPS |
FY 2011 |
EPS |
Reconciliation of net income (loss)
to |
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adjusted net income (loss): |
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Net income (loss) as reported |
($377) |
($0.02) |
$2,115 |
$0.09 |
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Adjustment for the acquisition deal |
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costs and related expenses, |
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inclusive of the income tax effect |
376 |
0.02 |
-- |
-- |
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Adjusted net income (loss) and |
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earnings (loss) per share |
($1) |
$0.00 |
$2,115 |
$0.09 |
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(in thousands, except per share data;
unaudited) |
Nine Month |
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Diluted |
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Diluted |
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FY 2012 |
EPS |
FY 2011 |
EPS |
Reconciliation of net income to |
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adjusted net income: |
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Net income as reported |
$1,719 |
$0.07 |
$9,331 |
$0.38 |
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Adjustment for the acquisition deal |
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costs and related expenses, |
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inclusive of the income tax effect |
376 |
0.02 |
-- |
-- |
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Adjusted net income and |
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earnings per share |
$2,095 |
$0.09 |
$9,331 |
$0.38 |
"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, unexpected
difficulties in integrating acquired businesses, the ability to
retain key employees of acquired businesses, unfavorable economic
and market conditions, and the results of asset impairment
assessments. 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
Leadership. Strength. Innovation. Those are the
key values behind the smart vision upon which LSI Industries Inc.
was founded when established in 1976. Today LSI demonstrates
this in our dedication to advancing technology throughout all
aspects of our business. We are a vertically integrated
manufacturer who combines integrated technology, design and
manufacturing to produce the most efficient, high quality products
possible. Everything we build is done right here in one of our
US plants.
We are committed to advancing solid-state 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. Further, we can provide design support,
engineering, installation and project management for custom
graphics rollout programs for today's retail environment.
LSI is a U.S. manufacturer with marketing / sales efforts
throughout the world with concentration currently on North America,
Latin America, Australia, New Zealand, Asia, Europe and the Middle
East. Our major markets include the commercial / industrial
lighting, petroleum / convenience store, multi-site retail
(including automobile dealerships, restaurants and national retail
accounts), sports and entertainment markets. Headquartered in
Cincinnati, Ohio, LSI has facilities in Ohio, New York, North
Carolina, Kansas, Kentucky, Oregon, 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
For further information, contact either Bob
Ready, Chief Executive Officer, or Ron Stowell, Vice President,
Chief Financial Officer, and Treasurer 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 Income
Statements |
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Three Months Ended |
Nine Months Ended |
(in thousands, except per |
March 31 |
March 31 |
share data; unaudited) |
2012 |
2011 |
2012 |
2011 |
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Net sales |
$62,937 |
$64,628 |
$197,206 |
$219,284 |
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Cost of products and services sold |
49,621 |
48,304 |
153,500 |
163,691 |
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Gross profit |
13,316 |
16,324 |
43,706 |
55,593 |
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Selling and administrative expenses |
13,222 |
13,841 |
40,215 |
41,839 |
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Operating income |
94 |
2,483 |
3,491 |
13,754 |
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Interest expense, net |
31 |
11 |
108 |
71 |
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Income before income taxes |
63 |
2,472 |
3,383 |
13,683 |
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Income tax expense |
440 |
357 |
1,664 |
4,352 |
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Net income (loss) |
($377) |
$2,115 |
$1,719 |
$9,331 |
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Income (loss) per common
share |
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Basic |
($0.02) |
$0.09 |
$0.07 |
$0.38 |
Diluted |
($0.02) |
$0.09 |
$0.07 |
$0.38 |
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Weighted average common shares
outstanding |
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Basic |
24,300 |
24,291 |
24,297 |
24,286 |
Diluted |
24,360 |
24,363 |
24,352 |
24,331 |
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Condensed Consolidated Balance
Sheets |
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(in thousands, unaudited) |
March 31, |
June 30, |
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2012 |
2011 |
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Current Assets |
$103,381 |
$106,100 |
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Property, Plant and Equipment, net |
42,907 |
44,284 |
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Other Assets |
27,014 |
25,637 |
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$173,302 |
$176,021 |
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Current Liabilities |
$21,235 |
$21,576 |
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Long-Term Debt |
-- |
1,064 |
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Other Long-Term Liabilities |
2,893 |
2,163 |
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Shareholders' Equity |
149,174 |
151,218 |
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$173,302 |
$176,021 |
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CONTACT: BOB READY OR
RON STOWELL
(513) 793-3200
LSI Industries (NASDAQ:LYTS)
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