• LSI Industries Reports Fiscal First Quarter 2022 Results and Declares Quarterly Cash Dividend

    المصدر: Nasdaq GlobeNewswire / 03 نوفمبر 2021 07:23:36   America/Chicago

    CINCINNATI, Nov. 03, 2021 (GLOBE NEWSWIRE) -- LSI Industries Inc. (NASDAQ: LYTS, “LSI” or the “Company”) a leading U.S. based manufacturer of indoor/outdoor lighting and display solutions, today announced results for the first quarter of fiscal year 2022.

    First Quarter 2022 Results

    • Net sales of $106.4 million, growth of 52% versus prior year
    • Organic net sales increased 19% versus prior year
    • Net income of $3.1 million; Adjusted net income $3.5 million
    • EPS of $0.11 per diluted share; Adjusted EPS of $0.13
    • EBITDA of $7.0 million; Adjusted EBITDA of $7.6 million
    • Significant year-over-year increase in Comparable Quote/Order/Backlog levels

    LSI reported strong year-over-year increases in both net sales and profitability for the fiscal first quarter, driven by a combination of organic growth in both its Lighting and Display Solutions segments, coupled with the first full quarter of financial contribution from the JSI Store Fixtures acquisition (“JSI”) completed in May, 2021.

    The Company reported first quarter net sales of $106.4 million, an increase of 52% versus the prior year period. Net sales excluding the contributions from the JSI acquisition, increased 19% versus the fiscal first quarter of 2021. LSI reported net income of $3.1 million, an increase of 57% compared to the prior year period. Adjusted net income was $3.5 million, or $0.13 per diluted share, versus $2.1 million or $0.08 in the prior year period. Adjusted EBITDA increased 59% year-over-year to $7.6 million in the first quarter. A reconciliation of GAAP and non-GAAP financial results is included in this press release.

    LSI capitalized on strong demand conditions across its core Lighting and Display Solutions markets, while successfully managing the escalating challenges prevalent in the industrial operating environment. In response to lengthening supplier lead-times and intensified transit reliability issues, the Company invested in additional inventory in the first quarter, minimizing material availability risks. During a period of increased demand and rising backlog, LSI effectively leveraged its vertically integrated operations platform to meet customer order commitments throughout the first quarter.

    At the end of the first quarter, the Company’s total debt outstanding was $78 million, with a ratio of net debt to trailing twelve months Adjusted EBITDA of 2.5x. LSI had total cash and availability on its $100 million credit facility of $24 million at quarter end.

    The Company declared a regular cash dividend of $0.05 per share payable November 23, 2021 to shareholders of record on November 15, 2021.

    Management Commentary

    “During the first quarter, we continued to execute on our long-term strategic priorities, while successfully navigating what continues to be a challenging macro environment,” stated James A. Clark, President and Chief Executive Officer of LSI Industries. “Quarterly net sales exceeded $100 million for the first time in the history of the company, supported by a combination of strong organic growth and JSI-related contributions. Adjusted EBITDA increased nearly 60% versus the first quarter last year, while Adjusted EBITDA margin improved both on a sequential basis and year-over-year basis. The LSI team demonstrated a strong ability to execute effectively in changing, uncertain conditions, being quick to pivot as supply and freight disruptions occurred.

    “For most of last year, one of our commercial priorities involved development of an effective product pricing strategy during a period of rising input costs. However, in the first quarter, our focus shifted increasingly toward availability, specifically with respect to raw materials, key componentry, skilled labor, and freight. Normally we touch an order once in the quote to cash process, but for an increasing number of orders this has expanded to multiple touch points. This involves additional collaboration and communication with our suppliers, agency partners, and customers, to ensure delivery expectations are met.

    “With order and backlog rates continuing to increase, we’ve taken proactive measures to ensure we meet our customer commitments, including an investment in additional inventory. These measures proved to be critical in generating our strong first quarter organic sales growth. Overall market conditions remain encouraging, as project quote levels in both the Lighting and Display Solutions segments remain well above prior year. Order rates are solid despite a longer quote-to-order conversion period, and our backlog, particularly for key market verticals, is considerably above prior year.

    “The Lighting segment generated sales growth of 13% in the fiscal first quarter, with operating earnings improving 19% to $4.4 million. Project business increased 15% with sales improving in several key verticals including parking, automotive, and warehousing. The growth in warehousing is driven by new products launched in the second half of fiscal 2021, as our multiple price point product offering continues to gain market acceptance and quote/order levels continue to increase.

    “The Lighting gross margin rate finished above 30%, improving 100 bps sequentially from the fourth quarter of fiscal 2021 and consistent with the full-year fiscal 2021 rate. Material input and supply chain costs continued to increase in the quarter, but we were successful in adjusting selling prices and driving productivity to mitigate these cost increases. Our project backlog exiting the first quarter is considerably above prior year levels, with more than $5 million of new orders within the petroleum vertical awarded in late September. These orders were influenced heavily by product availability, together with the capability to fulfill these orders by the end of the fiscal second quarter.

    “Sales for the Display Solutions segment sales increased 124% to $55.1 million, reflecting a full quarter impact of the JSI acquisition. Organic growth, excluding the JSI acquisition, was also strong, increasing 29%. Adjusted operating income was $3.8 million for the first quarter, versus $1.9 million in the prior year quarter.

    “JSI had a strong quarter, with total sales of $23.3 million, driven by both refrigeration and non-refrigeration products for both new and existing customers. JSI project quotation activity remains robust, reflecting the ongoing investment in merchandising solutions by national and regional chains in the grocery vertical. Revenue in our digital signage business increased 145%, year-over-year, led by the ongoing program with a large national QSR chain. The outdoor menu board portion of the program is approximately halfway complete and will continue through the first quarter of fiscal year 2023. First quarter activity in the petroleum vertical was slowed by site scheduling delays resulting from construction product shortages, all unrelated to LSI. The programs will be released in subsequent months during fiscal 2022.

    “In summary, we continued to build momentum during the first quarter, advancing our market vertical driven strategy, while continuing to deliver consistent growth and profitability. While we expect the operating environment to remain challenged over the near-term, we will continue to be proactive, leveraging our diverse supply chain, maintaining strong cost discipline, and allocating resources toward higher-value vertical markets that position us to achieve both sales growth and margin expansion moving forward.

    CONFERENCE CALL

    A conference call will be held today at 11:00 A.M. ET to review the Company’s financial results 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.lsicorp.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 to register, download and install any necessary audio software.

    Details of the conference call are as follows:

    Call Dial-In:1-877-407-4018
    Conference ID:13723643
      
    Call Replay:1-844-512-2921
    Replay Passcode:13723643

    A replay of the conference call will be available between November 3, 2021 and November 17, 2021. To listen to a replay of the teleconference via webcast, please visit the Investor Relations section of LSI Industries’ website at www.lsicorp.com.

    ABOUT LSI INDUSTRIES

    Headquartered in Greater Cincinnati, LSI is a publicly held company with shares listed on the NASDAQ Stock Market under the symbol LYTS. The Company manufactures non-residential lighting and display solutions. Non-residential lighting consists of high-performance, American-made lighting solutions. The Company’s strength in outdoor lighting applications creates opportunities to introduce additional solutions to its valued customers. Display solutions consist of graphics solutions, digital signage, and technically advanced food display equipment for strategic vertical markets. LSI’s team of internal specialists also provide comprehensive project management services in support of large-scale product rollouts. The Company employs about 1,400 people at 11 manufacturing plants in the U.S. and Canada. Additional information about LSI is available at www.lsicorp.com.

    FORWARD-LOOKING STATEMENTS

    This press release contains 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 https://investors.lsicorp.com 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, IRC
    720.778.2415
    LYTS@vallumadvisors.com

     
    Financial Highlights
     
      Three Months Ended
    September 30
    (Unaudited) 
    (In thousands, except per share data)  2021   2020  % Change
    Net sales $ 106,397  $ 70,006  52%
           
    Operating income as reported  4,444   2,202  102%
           
    Stock compensation expense  556   505   
    Restructuring costs  -   3   
           
    Operating income as adjusted $ 5,000  $ 2,710  85%
           
    Net income as reported $ 3,133  $ 1,990  57%
           
    Net income as adjusted $ 3,540  $ 2,075  71%
           
    Earnings per share (diluted) as reported $ 0.11  $ 0.07  57%
           
    Earnings per share (diluted) as adjusted $ 0.13  $ 0.08  63%
           

     

      (amounts in thousands)
      September 30, June 30,
       2021  2021
    Working capital $ 67,110 $ 54,113
    Total assets $ 299,588 $ 286,821
    Long-term debt $ 74,700 $ 68,178
    Other long-term liabilities $ 15,713 $ 16,578
    Shareholders' equity $ 135,373 $ 131,170
         

    Three Months Ended September 30, 2021 Results

    Net sales for the three months ended September 30, 2021 were $106.4 million, up 52% from the three months ended September 30, 2020 net sales of $70.0 million. Lighting Segment net sales of $51.3 million increased 13% and Display Solutions Segment net sales of $55.1 million increased 124% from last year’s first quarter net sales. Net income for the three months ended September 30, 2021 was $3.1 million, or $0.11 per share, compared to $2.0 million or $0.07 per share for the three months ended September 30, 2020. Earnings per share represents diluted earnings per share.

    Balance Sheet

    The balance sheet at September 30, 2021 included current assets of $140.9 million, current liabilities of $73.8 million and working capital of $67.1 million, which includes cash of $2.6 million. The current ratio was 1.9 to 1. The balance sheet also included shareholders’ equity of $135.4 million and long-term debt of $74.7 million. 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 first quarter of fiscal 2022, payable November 23, 2021 to shareholders of record as of the close of business on November 15, 2021. 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 months ended September 30, 2021 and 2020. Operating income, net income and earnings per share, which exclude the impact of stock compensation expense and restructuring costs, are non-GAAP financial measures. We exclude these items because we believe they are not representative of the ongoing results of operations of the business. Also included in this press release are non-GAAP financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA and Adjusted EBITDA), Free Cash Flow and Organic Net Sales. 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. These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, the non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP. Therefore, these measures should be used only to evaluate our results in conjunction with corresponding GAAP measures. Below is a reconciliation of these non-GAAP measures to net income and earnings per share reported for the periods indicated along with the calculation of EBITDA, Adjusted EBITDA, Free Cash Flow and Organic Net Sales.

      Three Months Ended
      September 30
    (In thousands, except per share data) 2021  2020 
       Diluted
    EPS    		  Diluted
    EPS
    Reconciliation of net income to adjusted net income    
    Net income as reported $ 3,133$ 0.11 $ 1,990 $ 0.07 
           
    Stock compensation expense  407 0.02  380  0.01 
           
    Restructuring costs  - -  2  - 
           
    Tax impact due to the change in the estimated annual tax rate used for GAAP reporting purposes  - -  (297) (0.01)
           
    Net income adjusted $ 3,540$ 0.13 $ 2,075 $ 0.08 
    NOTE: All adjustments are net of tax except for the adjustment of the tax impact from the change in the estimated annual tax rate
           

     

     (Unaudited; In thousands) Three Months Ended
    September 30
     EBITDA and Adjusted EBITDA 
       2021   2020  % Change
     Operating Income as reported $ 4,444  $ 2,202  102%
            
     Depreciation and amortization  2,563   2,033   
     EBITDA $ 7,007  $ 4,235  65%
            
     Stock compensation expense  556   505   
     Restructuring costs  -   3   
     Adjusted EBITDA $ 7,563  $ 4,743  59%
            
            
     (Unaudited; In thousands) Three Months Ended
    September 30
     Free Cash Flow 
       2021   2020  % Change
     Cash flow from operations $ (7,889) $ 7,639  NM
            
     Capital expenditures  (297)  (405)  
     Free cash flow $ (8,186) $ 7,234  NM


    (Unaudited; In thousands) Three Months Ended
    September 30
    Reconciliation of net sales to organic net sales 
      2021  2020 % Change
    Lighting Segment $51,260 $45,405 12.9%
    Display Solutions Segment $55,137 $24,601 124.1%
    Total Net Sales $106,397 $70,006 52.0%
    Less:      
    JSI  23,347  -  
    Total Organic Net Sales $83,050 $70,006 18.6%
           
           
      Three Months Ended
    September 30
      
       2021  2020 % Change
    Display Solutions Segment $55,137 $24,601 124.1%
    Less:      
    JSI  23,347  -  
    Total Display Solutions Segment Organic Net Sales $31,790 $24,601 29.2%
           
           

    Condensed Consolidated Statement of Operations

      Three Months Ended
    September 30
    (Unaudited)       
    (In thousands, except per share data) 2021 2020
    Net sales $ 106,397 $ 70,006 
         
    Cost of products sold  81,887  51,731 
    Restructuring costs  -  3 
         
    Gross profit  24,510  18,272 
         
    Selling and administrative costs  20,066  16,070 
         
    Operating Income  4,444  2,202 
         
    Other (income) expense  79  (105)
    Interest expense, net  234  57 
         
    Income before taxes  4,131  2,250 
         
    Income tax  998  260 
         
    Net income $ 3,133 $ 1,990 
         
    Weighted Average Common Shares Outstanding    
    Basic   26,996  26,520 
    Diluted  27,743  26,968 
         
    Earnings Per Share    
    Basic  $ 0.12 $ 0.08 
    Diluted $ 0.11 $ 0.07 
         

    Condensed Balance Sheet

          
      (amounts in thousands) 
      September 30, June 30, 
       2021  2021 
    Current assets $ 140,912 $ 125,008 
    Property, plant and equipment, net  29,456  30,552 
    Other assets  129,220  131,261 
    Total assets $ 299,588 $ 286,821 
          
    Current maturities of long-term debt $ 3,571 $ - 
    Other current liabilities  70,231  70,895 
    Long-term debt  74,700  68,178 
    Other long-term liabilities  15,713  16,578 
    Shareholders' equity  135,373  131,170 
      $ 299,588 $ 286,821 
          

      


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