LSI Industries Inc. (NASDAQ:LYTS)
today announced that it will permanently close its
LSI MidWest Lighting Inc. manufacturing facility in Kansas City,
Kansas as well as consolidate its LSI Controls facility in
Beaverton, Oregon into other LSI facilities.
Scheduled Plant Closing
LSI announced to its employees today the decision
reached this week that it will permanently close the operations of
LSI MidWest Lighting Inc. in Kansas City. The decision is
based upon the changes in lighting technology and other market
forces reducing the demand for the lighting products currently
produced at LSI’s Kansas City location. The lighting market
continues to shift away from fluorescent and other older
technologies, and is rapidly moving to LED lighting solutions,
which are manufactured at other LSI facilities. LSI Lighting
Solutions will continue to meet customer demand for products
containing both fluorescent and high intensity discharge light
sources as long as those technologies are commercially viable. The
Company anticipates that the closing will occur not later than
December 31, 2016.
The Company will record estimated restructuring
costs totaling, in the aggregate, between $1,100,000 and $1,300,000
over the first, second and third fiscal quarters.
Restructuring costs primarily include employee-related costs
(severance) and the probable impairment of manufacturing equipment,
and also include plant shut down expenses, expenses related to
preparation of the facility for sale, legal expenses, and other
related costs. There also will be an additional inventory
write-down expense of between $300,000 and $500,000 recorded in the
first quarter of fiscal 2017. The Company owns the facility
in Kansas City and expects to realize a gain when the facility is
sold. The Company expects the closure of this facility will
result in annual net operating profit improvement and cost savings
of approximately $1,400,000, before consideration of the
restructuring and inventory write-down expenses.
Consolidation of
Facility
The Company has also taken recent action to
consolidate its small LSI Controls facility in Beaverton, Oregon
into other LSI facilities by about September 30, 2016. The
light assembly of products in the Beaverton facility was moved to
the Company’s Columbus, Ohio facility, and the administrative and
engineering functions were moved to an LSI facility in Cincinnati,
Ohio. A restructuring charge of approximately $368,000 will
be recorded in the first quarter of fiscal 2017, with the majority
of this primarily representing the costs related to the remaining
period of the facility’s lease and severance costs for employees
who formerly worked in the Beaverton facility. The
consolidation of this facility and net reduction of employment is
expected to result in annual cost savings of approximately
$450,000.
Summary Comments
Dennis Wells, Chief Executive Officer and President, stated “The
actions we are taking to close one facility and consolidate
another, while difficult decisions, are the result of the rapid
evolution of lighting to LED technology in the case of Kansas City,
and of the need to more efficiently manage the business in the case
of Beaverton. As we have said before, we are committed to the
lean transformation of our operations and facilities, to a culture
of continuous and long-term cost reduction, and to continue the
improvement in profitability that we have achieved in the past two
years.”
"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, 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 Dennis Wells,
Chief Executive Officer and President 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.
CONTACT: DENNIS WELLS
(513) 793-3200
LSI Industries (NASDAQ:LYTS)
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