LSI Industries Inc. (NASDAQ:LYTS)
today:
- reported third quarter FY 2016 net sales of $70,740,000 an
increase of 3% as compared to $68,603,000 in the same period of the
prior fiscal year;
- reported third quarter FY 2016 net income of $522,000, or $0.02
per share, an increase of 33% as compared to $393,000, or $0.02 per
share, for the same period of the prior fiscal year;
- reported nine month FY 2016 net sales of $241,352,000, an
increase of 4% as compared to $231,784,000 in the prior fiscal
year;
- reported nine month FY 2016 net income of $8,054,000, or $0.32
per share, an increase of 130% as compared to net income of
$3,508,000, or $0.14 per share, for the prior fiscal year;
- declared a regular quarterly cash dividend of $0.05 per share
payable May 2, 2016 to shareholders of record May 10, 2016;
and
- announced the appointment of John K. Morgan, former Chairman,
CEO and President of Zep Inc., to the Board of
Directors.
Financial Highlights |
|
|
|
|
|
|
(In thousands, except per |
Three Months
Ended |
|
Nine Months
Ended |
share data; unaudited) |
March 31 |
|
March 31 |
|
2016 |
2015 |
% Change |
|
2016 |
|
|
2015 |
|
% Change |
|
|
|
|
|
|
|
Net Sales |
$ |
70,740 |
|
$ |
68,603 |
|
|
3 |
% |
$ |
241,352 |
|
$ |
231,784 |
|
|
4 |
% |
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
as reported |
$ |
732 |
|
$ |
582 |
|
|
26 |
% |
$ |
11,875 |
|
$ |
5,340 |
|
|
122 |
% |
Severance costs (income) |
|
178 |
|
|
(295 |
) |
|
n/m |
|
401 |
|
|
662 |
|
|
(39 |
)% |
Self-insured death benefit |
|
-- |
|
|
1,000 |
|
|
n/m |
|
-- |
|
|
1,000 |
|
|
n/m |
Loss on sale of assets, net |
|
-- |
|
|
-- |
|
|
n/m |
|
-- |
|
|
222 |
|
|
n/m |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
as adjusted (a) |
$ |
910 |
|
$ |
1,287 |
|
|
(29 |
)% |
$ |
12,276 |
|
$ |
7,224 |
|
|
70 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income as reported |
$ |
522 |
|
$ |
393 |
|
|
33 |
% |
$ |
8,054 |
|
$ |
3,508 |
|
|
130 |
% |
Net Income as adjusted |
$ |
639 |
|
$ |
842 |
|
|
(24 |
)% |
$ |
8,317 |
|
$ |
4,807 |
|
|
73 |
% |
|
|
|
|
|
|
|
Financial Highlights
(continued) |
|
|
|
|
|
|
(In thousands, except per |
Three Months
Ended |
|
Nine Months
Ended |
share data; unaudited) |
March 31 |
|
March 31 |
|
2016 |
|
2015 |
|
% Change |
|
2016 |
|
|
2015 |
|
% Change |
Earnings per share |
|
|
|
|
|
|
(diluted) as reported |
$ |
0.02 |
|
$ |
0.02 |
|
|
-- |
|
$ |
0.32 |
|
$ |
0.14 |
|
|
129 |
% |
Earnings per share |
|
|
|
|
|
|
(diluted) as adjusted |
$ |
0.02 |
|
$ |
0.03 |
|
|
(33 |
)% |
$ |
0.33 |
|
$ |
0.20 |
|
|
65 |
% |
|
|
|
|
|
|
|
|
|
|
|
3/31/16 |
6/30/15 |
|
|
|
Working Capital |
|
$ |
91,639 |
|
$ |
83,967 |
|
|
|
|
Total Assets |
|
$ |
190,262 |
|
$ |
182,379 |
|
|
|
|
Long-Term Debt |
|
$ |
nil |
|
$ |
nil |
|
|
|
|
Shareholders’
Equity |
|
$ |
154,454 |
|
$ |
142,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The Company incurred net pre-tax severance expense (income)
of $178,000 and $(295,000), and $401,000 and $662,000 in the third
quarter and nine month periods of fiscal 2016 and fiscal 2015,
respectively. The Company sold a manufacturing facility as
well as a subsidiary in the first quarter of fiscal 2015, both of
which netted to a pre-tax net loss of $222,000. Additionally,
the Company recorded a $1,000,000 self-insured death benefit
expense in the third quarter of fiscal 2015 related to the
Company’s former Chairman and Chief Executive Officer. Operating
income, net income, and earnings per share (diluted) before
severance costs, a self-insured death benefit, the sale of assets
and tax effect of the utilization of a long-term capital loss are
Non-GAAP financial measures (see page 4).
Management Comments and Outlook
Dennis W. Wells, Chief Executive Officer and President,
commented, "I am pleased that LSI was profitable in the third
quarter, our seasonally weakest period of the fiscal year.
However, it should have been much better. The substantial and
continuous progress we have made in improving operating margins was
blunted during the third quarter by the need to book an additional
$1.0 million of warranty expense. This issue is being
thoroughly investigated and resulted primarily from problems with
LED drivers. We no longer sell the problem drivers, and we
have targeted reducing our level of warranty claims as a high
priority objective.”
Steady progress continues to be made in reducing operating
expenses and improving efficiencies. Our company-wide,
lean-transformation programs and the benefits of the LSI Business
System are producing desired results with a long runway of
potential improvements ahead.”
Sales growth, though modest, resumed in the third quarter and
the outlook is very positive. LSI recently secured contract
extensions with three of our most important petroleum customers
that range from three-to-seven years. These contracts
represent over 25,000 petroleum sites across the United States as
LSI implements its Lighting + Graphics + Technology = Image
capabilities to provide world class service and image solutions to
our customers. We are active on multiple fronts to accelerate
sales and show potential customers the LSI difference.”
I am pleased to announce the appointment of John K. Morgan to
the Board of Directors of LSI Industries. Mr. Morgan served
as Chairman, President and CEO of Zep Inc. from October 2007 until
his retirement in June 2015. Prior to joining Zep, Mr. Morgan
held several positions at Acuity Brands from 2001 through 2007,
including Executive Vice President of Acuity Brands and President
and CEO of Acuity Specialty Products. Mr. Morgan has
extensive experience in the lighting industry, and I welcome his
contribution to our Board of Directors.”
As stated previously, but worth repeating, my mission and that
of the LSI management team is to achieve higher earnings, increase
cash dividends and develop shareholder value. Greater
efficiencies resulting in higher profit margins, combined with
increasing sales, produces very attractive operating
leverage. We know what we need to do and are focused on
implementing our plans to accomplish our goals.”
Fiscal 2016 will likely be LSI's most profitable year since
fiscal 2007. We are confident that fiscal 2017 will be even
better as we move forward to increase sales and improve profit
margins.”
Our final quarter of fiscal 2016 is shaping up to be strong and
I look forward to reporting significantly improved fourth quarter
and fiscal 2016 operating results to you."
Third Quarter Fiscal 2016 Results
Net sales in the third quarter of fiscal 2016 were $70,740,000,
an increase of 3% as compared to last year’s third quarter net
sales of $68,603,000. Lighting Segment net sales increased
1.0% to $49,331,000, Graphics Segment net sales increased 28.4% to
$17,162,000, and Technology Segment net sales (excluding
significant intersegment net sales) decreased 33.3% to
$4,247,000. After consideration of the Technology Segment’s
intersegment sales in support of LED products manufactured and sold
by the Lighting Segment, this segment’s net sales were level with
third quarter of the prior year. In the third quarters of
fiscal 2016 and fiscal 2015 the Company recorded a pre-tax
severance cost expense (income) of $178,000 and $(295,000),
respectively, and recorded a pre-tax self-insured death benefit of
$1,000,000 in the third quarter of fiscal 2015. The fiscal
2016 third quarter net income of $522,000, or $0.02 per share,
increased 33% over the fiscal 2015 third quarter net income of
$393,000 or $0.02 per share. Earnings per share represents
diluted earnings per share.
Nine Month Fiscal 2016 Results
Net sales in the first nine months of fiscal 2016 were
$241,352,000, an increase of 4% as compared to last year’s nine
month net sales of $231,784,000. Lighting Segment net sales
increased 2.2% to $168,007,000, Graphics Segment net sales
increased 20.7% to $59,949,000, Technology Segment net sales
(excluding significant intersegment net sales) decreased 24.3% to
$13,396,000 and All Other Category net sales decreased to zero as a
result of the sale early in fiscal 2015 of the only subsidiary
reported therein. After consideration of the Technology
Segment’s intersegment sales in support of LED products
manufactured and sold by the Lighting Segment, this segment’s net
sales increased 3.0% in the first nine months of fiscal 2016.
The Company recorded $401,000 and $662,000 of pre-tax severance
costs in the first nine months of fiscal 2016 and fiscal 2015,
respectively. Also in the first nine months of fiscal 2015
the Company recorded a $1,000,000 pre-tax self-insured death
benefit, a $343,000 pre-tax gain on the sale of a manufacturing
facility in the Graphics Segment, sold a subsidiary that had been
reported in the All Other Category for $1,928,000 and recorded a
pre-tax loss of $565,000 in Corporate Administrative expenses, and
recorded a $101,000 income tax benefit related to the utilization
of a portion of this long-term capital loss, all with no comparable
items in fiscal 2016. The nine month fiscal 2016 net income
of $8,054,000, or $0.32 per share, increased 130% from fiscal 2015
nine month net income of $3,508,000, or $0.14 per share.
Earnings per share represents diluted earnings per share.
Balance Sheet
The balance sheet at March 31, 2016 included current assets of
$125.1 million, current liabilities of $33.4 million and working
capital of $91.6 million, which includes cash of $33.8
million. The current ratio was 3.7 to 1. The Company
has shareholders’ equity of $154.5 million, no long-term debt, and
borrowing capacity on its commercial bank facility as of March 31,
2016 of $30.0 million. With continued strong cash flow, a
sound and conservatively capitalized balance sheet, and $30 million
in credit facilities, LSI Industries believes its financial
condition is sound and 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 third quarter of
fiscal 2016 payable May 10, 2016 to shareholders of record as of
May 2, 2016. The indicated annual cash dividend rate is $0.20
per share. The Board of Directors has adopted a policy regarding
dividends which indicates that dividends will be determined by the
Board of Directors in its discretion based upon its evaluation of
earnings, cash flow requirements, financial condition, debt levels,
stock repurchases, future business developments and opportunities,
and other factors deemed relevant.
Non-GAAP Financial Measures
This press release includes adjustments to GAAP net income and
earnings per share for the three and nine month periods ended March
31, 2016 and March 31, 2015. Adjusted net income and earnings
per share, which exclude the impact of severance costs, a
self-insured death benefit, the sale of a manufacturing facility,
the sale of a subsidiary, and the tax benefit of utilization of a
portion of the related long-term capital loss 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) |
Third Quarter |
|
|
Diluted |
|
Diluted |
|
FY
2016 |
EPS |
FY 2015 |
EPS |
Reconciliation of net income to |
|
|
|
|
adjusted net income: |
|
|
|
|
|
|
|
|
|
Net income and earnings |
|
|
|
|
per share as reported |
$ |
522 |
|
$ |
0.02 |
|
$ |
393 |
|
$ |
0.02 |
|
|
|
|
|
|
Adjustment for net severance
costs, |
|
|
|
|
inclusive of the income tax
effect |
|
117 |
|
-- |
|
(188 |
) |
|
(0.01 |
) |
|
|
|
|
|
Adjustment for self-insured death
benefit |
|
|
|
|
expense, inclusive of the income
tax effect |
|
-- |
|
|
-- |
|
|
637 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income and earnings
per share |
$ |
639 |
|
$ |
0.02 |
|
$ |
842 |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share data; unaudited)
|
Nine Month
Period |
|
|
Diluted |
|
Diluted |
|
FY 2016 |
EPS |
FY 2015 |
EPS |
Reconciliation of net income to adjusted net
income: |
|
|
|
|
|
|
|
|
|
Net income and earnings per share
as reported |
$ |
8,054 |
|
$ |
0.32 |
|
$ |
3,508 |
|
$ |
0.14 |
|
|
|
|
|
|
Adjustment for severance
costs, |
|
|
|
|
inclusive of the income tax
effect |
|
263 |
|
|
0.01 |
|
|
422 |
|
|
0.02 |
|
|
|
|
|
|
Adjustment for self-insured death
benefit |
|
|
|
|
expense, inclusive of the income
tax effect |
|
-- |
|
|
-- |
|
|
637 |
|
|
0.03 |
|
|
|
|
|
|
Adjustment for the gain on the |
|
|
|
|
sale of a manufacturing
facility, |
|
|
|
|
inclusive of the income tax
effect |
|
-- |
|
|
-- |
|
|
(224 |
) |
|
(0.01 |
) |
|
|
|
|
|
Adjustment for the loss on sale of
a subsidiary |
|
-- |
|
|
-- |
|
|
565 |
|
|
0.02 |
|
|
|
|
|
|
Income tax effect of utilization of
a |
|
|
|
|
long-term capital loss |
|
-- |
|
|
-- |
|
|
(101 |
) |
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income and earnings
per share |
$ |
8,317 |
|
$ |
0.33 |
|
$ |
4,807 |
|
$ |
0.20 |
|
"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,
the results of asset impairment assessments, the Company’s ability
to maintain an effective system of internal control over financial
reporting, our ability to remediate any material weaknesses in our
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, Kansas, Kentucky, New York, North
Carolina, Oregon, Rhode Island 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 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 Statements of Operations |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
(in thousands, except per |
March 31 |
|
March 31 |
share data; unaudited) |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
Net sales |
$ |
70,740 |
|
$ |
|
68,603 |
|
|
$ |
241,352 |
|
$ |
|
231,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products and services sold |
|
54,191 |
|
|
|
52,298 |
|
|
|
177,528 |
|
|
|
176,316 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
16,549 |
|
|
|
16,305 |
|
|
|
63,824 |
|
|
|
55,468 |
|
|
|
|
|
|
|
Selling and administrative expense |
|
15,817 |
|
|
|
15,723 |
|
|
|
51,949 |
|
|
|
50,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
732 |
|
|
|
582 |
|
|
|
11,875 |
|
|
|
5,340 |
|
|
|
|
|
|
|
Interest (income) expense, net |
|
(19 |
) |
|
|
3 |
|
|
|
(27 |
) |
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
751 |
|
|
|
579 |
|
|
|
11,902 |
|
|
|
5,323 |
|
|
|
|
|
|
|
Income tax expense |
|
229 |
|
|
|
186 |
|
|
|
3,848 |
|
|
|
1,815 |
|
|
|
|
|
|
|
Net income |
$ |
522 |
|
$ |
393 |
|
|
$ |
8,054 |
|
$ |
3,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share |
|
|
|
|
|
Basic |
$ |
0.02 |
|
$ |
0.02 |
|
|
$ |
0.32 |
|
$ |
0.14 |
|
Diluted |
$ |
0.02 |
|
$ |
0.02 |
|
|
$ |
0.32 |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
Basic |
|
25,080 |
|
|
24,528 |
|
|
|
24,918 |
|
|
24,470 |
|
Diluted |
|
25,700 |
|
|
24,643 |
|
|
|
25,494 |
|
|
24,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance
Sheets |
|
|
|
|
|
(in thousands, unaudited) |
|
March
31, |
|
June
30, |
|
|
|
2016 |
|
2015 |
|
Current Assets |
|
$ |
|
125,082 |
|
|
$ |
120,814 |
|
|
Property, Plant and Equipment,
net |
|
|
|
47,248 |
|
|
|
43,188 |
|
|
Other Assets |
|
|
|
17,932 |
|
|
|
18,377 |
|
|
|
|
$ |
|
190,262 |
|
|
$ |
182,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
$ |
|
33,443 |
|
|
$ |
36,847 |
|
|
Long-Term Debt |
|
|
|
-- |
|
|
|
-- |
|
|
Other Long-Term Liabilities |
|
|
|
2,365 |
|
|
|
2,580 |
|
|
Shareholders’ Equity |
|
|
154,454 |
|
|
|
142,952 |
|
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|
$ |
190,262 |
|
|
$ |
182,379 |
|
|
|
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|
|
|
|
|
|
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|
|
|
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CONTACT: DENNIS WELLS or
RON STOWELL
(513) 793-3200
LSI Industries (NASDAQ:LYTS)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
LSI Industries (NASDAQ:LYTS)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024