LSI Industries Inc. Reports Operating Results for the First Quarter Ended September...

[Erik Sine]

LSI Industries Inc. Reports Operating Results for the First Quarter Ended September...

Thomson Reuters

Thu Oct 22, 2009 7:45am EDT

LSI Industries Inc. Reports Operating Results for the First Quarter Ended

September 30, 2009, and Declares Regular Quarterly Cash Dividend

CINCINNATI, Oct. 22, 2009 (GLOBE NEWSWIRE) -- LSI Industries Inc. (Nasdaq:LYTS)

today:

* reported first quarter net sales of $67,676,000, a decrease of

11% as compared to the same period of the prior fiscal year;

* reported first quarter net income of $1,637,000 or $0.07 per

share, as compared to net income of $2,687,000 or $0.12 per share

for the same period of the prior fiscal year; and

* declared a regular quarterly cash dividend of $0.05 per share

payable November 10, 2009 to shareholders of record November 3,

2009;

Financial Highlights

(In thousands, except per Three Months Ended

share data; unaudited) September 30

-----------------------------

2009 2008 % Change

---- ---- --------

Net Sales $67,676 $75,838 (10.8)%

Operating Income $ 2,497 $ 4,216 (40.8)%

Net Income $ 1,637 $ 2,687 (39.1)%

Earnings Per Share (diluted) $ 0.07 $ 0.12 (41.7)%

9/30/09 6/30/09

------- -------

Working Capital $ 74,731 $ 72,500

Total Assets $ 171,957 $ 153,118

Long-Term Debt $ 1,122 $ --

Shareholders' Equity $ 145,659 $ 130,473

First Quarter Fiscal 2010 Results

Net sales in the first quarter of fiscal 2010 were $67,676,000, a decrease of

11% over last year's first quarter net sales of $75,838,000. Lighting Segment

net sales decreased 20% to $39,641,000 (sales to the Commercial / Industrial

lighting market decreased 29%), Graphics Segment net sales increased 5% to

$22,097,000, Technology Segment net sales decreased 62% to $1,061,000,

Electronic Components Segment net sales (a new segment comprised of the results

of recently acquired LSI ADL Technology) were $3,238,000 and net sales of the

All Other Category decreased 27% to $1,639,000. The fiscal 2010 first quarter

net income of $1,637,000 or $0.07 per share, compares to a fiscal 2009 first

quarter net income of $2,687,000, or $0.12 per share. First quarter fiscal 2010

includes the following significant non-recurring pre-tax expenses: acquisition

deal costs of $513,000; acquisition-related fair value inventory adjustment of

$526,000 related to purchase accounting requirements of LSI ADL Technology's

finished goods and work-in-process inventory. Earnings per share represents

diluted earnings per share.

Reportable Business Segments -- New Segment Added

As a result of the acquisition of LSI ADL Technology in July 2009, the Company

has added a reportable business segment named the Electronic Components Segment

in which to report the results of this new subsidiary. Therefore, results will

now be reported in four Business Segments and one All Other Category. The

following operations are included in the Lighting Segment: LSI Ohio Operations,

LSI Metal Fabrication, LSI MidWest Lighting, LSI Lightron and LSI Greenlee

Lighting. The following operations are included in the Graphics Segment: Grady

McCauley, LSI Retail Graphics and LSI Integrated Graphics. The Technology

Segment includes LSI Saco Technologies. The following operations are included in

the All Other Category: LSI Marcole, LSI Images, LSI Adapt and Corporate

Administration expenses.

Company Comments

Robert J. Ready, President and Chief Executive Officer, commented, "General

economic weakness continued to affect our specialty niche markets and Commercial

/ Industrial lighting business during the first quarter of fiscal 2010. Our

rollout for the largest LED lighting project in the industry to date for a major

national convenience store customer is going well, is already being expanded in

scope, and likely will have its greatest earnings impact during the second

quarter of this fiscal year. We are continuing to enhance our solid-state

lighting product offering with new technology developments protected by

additional patents. We are also investing in additional LED manufacturing

capacity to meet the demands of steadily improving LED lighting sales volume

coming from both our core markets as well as new market opportunities. We

believe the quick service restaurant industry is showing early indications of

new activity in remodeling and upgrading. We also believe the convenience store

and petroleum markets are striving to grow their food and drink share of the

market and this should ultimately bode well for LSI Industries."

The first quarter of 2010 produced the Company's second largest quarterly

billings to date in the LED video board markets. The cost-cutting and efficiency

actions we have been taking during this recessionary period generated profitable

operations on substantially lower sales. Specifically, first quarter net income

of $1,637,000 ($0.07 per diluted share) was realized on an 11% decrease in net

sales. Acquisition deal expenses and purchase accounting requirements in

connection with the acquisition of AdL Technology impacted pretax earnings in

the aggregate amount of approximately $1.0 million. Without these

acquisition-related costs, we would have reported net income of approximately

$2.3 million or $0.10 per share. Our cash flow continues to be positive and our

balance sheet remains strong as we weather this storm and watch for additional

signs of improving business conditions. Our position as a leader in solid-sate

LED lighting and graphics products is well established and we have the

production capability and other resources to take advantage of opportunities as

markets improve. We invite all of our shareholders to attend our Annual

Shareholder's Meeting on November 19th at the Company's offices. We will be

showcasing our new technology center as well as sharing why we feel so positive

about the future of LSI's business."

Balance Sheet

The balance sheet at September 30, 2009 included current assets of $96.9

million, current liabilities of $22.1 million and working capital of $74.7

million. The current ratio was 4.38 to 1. The Company has shareholders' equity

of $145.7 million, $1.1 million of long-term debt, and has borrowing capacity on

its commercial bank facilities as of September 30, 2009 of $45 million. With

continued strong cash flow, a sound and conservatively capitalized balance

sheet, and $45 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 $0.05 per

share payable November 10, 2009 to shareholders of record as of November 3,

2009. The indicated annual cash dividend rate for fiscal 2010 is $0.20 per

share. LSI Industries has paid regular cash dividends since 1989. 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.

Non-GAAP Financial Measures

This press release includes adjustments to the GAAP net income for the three

month period ended September 30, 2009. Adjusted net income and earnings per

share, which excludes the impact of the LSI ADL Technology acquisition deal

costs and acquisition-related fair value inventory adjustment is a non-GAAP

financial measure. 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 measure to net income for the period indicated,

excluding the acquisition related costs.

(in thousands, except

per share); unaudited First Quarter Fiscal 2010

-------------------------

Dollars Diluted EPS

------- -----------

Reconciliation of net income to

adjusted net income:

Net income as reported $1,637 $0.07

Adjustment for the acquisition

deal costs and acquisition-related

fair value inventory adjustment,

inclusive of the income tax effect 634 0.03

------

Adjusted net income and earnings

per share $2,271 $0.10

======

"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 "guidance,"

"forecasts," "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 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. These risks and uncertainties include, but

are not limited to, the impact of competitive products and services, product

demand and market acceptance risks, reliance on key customers, financial

difficulties experienced by customers, potential costs associated with

litigation and regulatory compliance, the adequacy of reserves and allowances

for doubtful accounts, fluctuations in operating results or costs, unexpected

difficulties in integrating acquired businesses, the cyclical and seasonal

nature of our business, the ability to retain key employees of acquired

businesses and any other factors that may be identified in our reports filed

with the Securities and Exchange Commission, including our Form 10-K. The

Company has no obligation to update any forward-looking statements to reflect

subsequent events or circumstances.

About the Company

LSI Industries is an Image Solutions company, dedicated to advancing solid-state

LED technology in lighting and graphics applications. We combine integrated

technology, design, and manufacturing to supply high quality, environmentally

friendly lighting fixtures and graphics elements for commercial, retail and

specialty niche market applications. LSI is a U.S. manufacturer with marketing /

sales efforts throughout the world with concentration currently on North

American, South American, Asian, Australian, New Zealand and European markets.

Building upon its success with the Crossover® LED canopy fixture, LSI is

committed to producing affordable, high performance, energy efficient lighting

products, including solid-state LED light fixtures, for indoor and outdoor use.

The Company also designs, produces, markets and manages a wide array of custom

indoor and outdoor graphics programs including signage, menu board systems,

decorative fixturing, LED displays and digital signage, and large format

billboard and sports screens using solid-state LED technology. In addition, we

provide design support, engineering, installation and project management for

custom rollout programs for today's retail environment. The Company's technology

R&D operation located in Montreal, Canada designs, produces and supports high

performance light engines and large format billboard, sports and entertainment

video screens using solid-state LED technology.

LSI's major markets are the commercial / industrial lighting, petroleum /

convenience store, multi-site retail (including automobile dealerships,

restaurants and national retail accounts), sports and entertainment markets. LSI

employs approximately 1,400 people in facilities located in Ohio, New York,

North Carolina, Kansas, Kentucky, Rhode Island, Tennessee, Texas and Montreal,

Canada. The Company's common shares are traded on the NASDAQ Global Select

Market under the symbol LYTS.

For further information, contact either Bob Ready, Chief Executive Officer and

President, or Ron Stowell, Vice President, Chief Financial Officer, and

Treasurer at (513) 793-3200.

The LSI Industries Inc. logo is available at

http://www.globenewswire.com/newsroom/prs/?pkgid=3646

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. More information on LSI's quarterly earnings,

including additional financial analysis and an earnings overview presentation,

will also be available at this site after the Investor Call to be held at 3:00

p.m. Eastern Time today.

Condensed Statements of Operations

----------------------------------

Three Months Ended

(in thousands, except per September 30

share data; unaudited) -------------------

2009 2008

------- -------

Net sales $67,676 $75,838

Cost of products & services sold 51,079 57,659

------- -------

Gross profit 16,597 18,179

Selling and administrative expenses 14,100 13,963

------- -------

Operating income 2,497 4,216

Interest expense, net 34 5

------- -------

Income before income taxes 2,463 4,211

Income tax expense 826 1,524

------- -------

Net income $ 1,637 $ 2,687

======= =======

Income per common share

Basic $ 0.07 $ 0.12

======= =======

Diluted $ 0.07 $ 0.12

======= =======

Weighted average common shares outstanding

Basic 23,683 21,796

======= =======

Diluted 23,688 21,805

======= =======

Condensed Balance Sheets

------------------------

(in thousands, unaudited) September 30, June 30,

2009 2009

------------ ------------

Current Assets $ 96,872 $ 92,117

Property, Plant and Equipment, net 44,939 42,043

Other Assets 30,146 18,958

--------- ---------

$ 171,957 $ 153,118

========= =========

Current Liabilities $ 22,141 $ 19,617

Long-Term Debt 1,122 --

Other Long-Term Liabilities 3,035 3,028

Shareholders' Equity 145,659 130,473

--------- ---------

$ 171,957 $ 153,118

========= =========

-0-

CONTACT: LSI Industries Inc.

Bob Ready

Ron Stowell

(513) 793-3200

[manuellynch]

Axiom is proud to be supplier to LSI and we are honored to be largely involved in the Chevron conversion. Great company to work with.

[FUDueschel]

Axiom is proud to be supplier to LSI and we are honored to be largely involved in the Chevron conversion. Great company to work with.

Manuel,

Do you know who is running the Chevron project? Is it a CBRE type company handling this?

Thanks,