CINCINNATI, Aug. 17, 2017 (GLOBE NEWSWIRE) — LSI Industries Inc. (LYTS) today:
- reported FY 2017 net sales of $331,392,000, an increase of 3% over $322,196,000 in the prior fiscal year. Excluding the acquisition of Atlas Lighting Products, organic sales declined 3% year-over-year;
- reported FY 2017 net income of $3,000,000, or $0.12 per share, a decrease of 68% as compared to net income of $9,482,000, or $0.37 per share, for the prior fiscal year. On a Non-GAAP basis, net income was $4,974,000 or $0.19 per share, a decrease of 49% or $0.19 per share, compared to the prior year Non-GAAP results. Non-GAAP results exclude adjustments related to the impairment of an intangible asset, restructuring and plant closure costs, acquisition deal costs, fair market inventory write-up, and severance costs (see Non-GAAP Financial Measures);
- reported fourth quarter FY 2017 net sales of $83,419,000 an increase of 3% as compared to $80,844,000 in the same period of the prior fiscal year. Excluding the acquisition of Atlas Lighting, organic sales declined 11% in the fourth quarter year-over-year;
- reported fourth quarter FY 2017 net income of $696,000, or $0.03 per share, a decrease of 51% as compared to $1,428,000, or $0.06 per share, for the same period of the prior fiscal year. On a Non-GAAP basis, net income was $519,000 or $0.02 per share, a decrease of 65% or $0.04 per share compared to the prior year fourth quarter Non-GAAP results. Non-GAAP results exclude adjustments related to acquisition deal costs, restructuring and plant closure costs, and severance costs (see Non-GAAP Financial Measures); and
- declared a regular quarterly cash dividend of $0.05 per share payable September 6, 2017 to shareholders of record August 28, 2017.
| Financial Highlights | |||||||||||||||||||
| (In thousands, except per | Three Months Ended | Year Ended | |||||||||||||||||
| share data; unaudited) | June 30 | June 30 | |||||||||||||||||
| 2017 | 2016 | % Change | 2017 | 2016 | % Change | ||||||||||||||
| Net Sales | $ | 83,419 | $ | 80,844 | 3 | % | $ | 331,392 | $ | 322,196 | $ | 3 | % | ||||||
| Operating Income | |||||||||||||||||||
| as reported | $ | 499 | $ | 2,081 | (76 | )% | $ | 3,609 | $ | 13,956 | $ | (74 | )% | ||||||
| Impairment of intangible | |||||||||||||||||||
| asset | — | — | n/m | 479 | — | n/m | |||||||||||||
| Acquisition deal costs | 128 | — | n/m | 1,608 | — | n/m | |||||||||||||
| Fair market value inventory | |||||||||||||||||||
| write-up | — | — | n/m | 155 | — | n/m | |||||||||||||
| Restructuring and plant | |||||||||||||||||||
| closure costs | 101 | — | n/m | 897 | — | n/m | |||||||||||||
| Severance costs | 284 | 68 | 318 | % | 506 | 469 | 8 | % | |||||||||||
| Operating Income | |||||||||||||||||||
| as adjusted (a) | $ | 1,012 | $ | 2,149 | (53 | )% | $ | 7,254 | $ | 14,425 | (50 | )% | |||||||
| Net Income as reported | $ | 696 | $ | 1,428 | (51 | )% | $ | 3,000 | $ | 9,482 | (68 | )% | |||||||
| Net Income as adjusted | $ | 519 | $ | 1,483 | (65 | )% | $ | 4,974 | $ | 9,800 | (49 | )% | |||||||
| Earnings per share | |||||||||||||||||||
| (diluted) as reported | $ | 0.03 | $ | 0.06 | (50 | )% | $ | 0.12 | $ | 0.37 | (68 | )% | |||||||
| Earnings per share | |||||||||||||||||||
| (diluted) as adjusted | $ | 0.02 | $ | 0.06 | (67 | )% | $ | 0.19 | $ | 0.38 | (50 | )% | |||||||
| 6/30/17 | 6/30/16 | ||||||||||||||||||
| Working Capital | $ | 61,704 | $ | 88,510 | |||||||||||||||
| Total Assets | $ | 256,680 | $ | 195,560 | |||||||||||||||
| Long-Term Debt | $ | 49,698 | $ | nil | |||||||||||||||
| Shareholders’ Equity | $ | 160,078 | $ | 155,520 | |||||||||||||||
| (a) | The Company recorded a $479,000 pre-tax impairment of an intangible asset in fiscal 2017. The Company also recorded pre-tax acquisition deal costs of $128,000 and $1,608,000 in the fourth quarter and twelve month periods of fiscal 2017, respectively. The Company recorded a $155,000 fair market value inventory write-up associated with the acquisition of Atlas Lighting in the fiscal 2017. The Company also recorded pre-tax restructuring costs and plant closure costs totaling $101,000 and $897,000 in the fourth quarter and twelve month periods of fiscal 2017, respectively. Restructuring costs in fiscal 2017 include a $1,361,000 gain on the sale of one of the facilities that had been closed. Additionally, the Company incurred pre-tax severance costs of $284,000 and $68,000 in the fourth quarter of fiscal 2017 and 2016, respectively, and incurred pre-tax severance costs of $506,000 and $469,000 in fiscal 2017 and fiscal 2016, respectively. |
Management Comments and Outlook
Dennis W. Wells, Chief Executive Officer and President, commented, “In spite of difficult market conditions and inflationary pressures, fiscal 2017 represented a year of significant progress for LSI. We continued to invest in our LED Lighting portfolio and Digital Signage with positive results. Our lean efforts are providing meaningful savings, although masked by a soft market and heavy inflation. We completed the highly-strategic acquisition of Atlas, broadening our abilities into the stock and flow portion of the market.
“Notable softness in several market segments where LSI has a strong market position, specifically petroleum and retail, was responsible for the organic decline. This served to mask the growth generated in other target segments and products. Our LED Lighting products grew by 20% and LED now comprises 78% of total lighting sales. We introduced several new LED lighting products during the year, many of which include controls-enhanced solutions. Our recently introduced Mirada family of LED Fixtures has been received positively. These fixtures are ideal for parking lot, strip mall, auto dealership, and general site illumination purposes.
“On our Smart Lighting advancement, our Lighting Controls sales grew by 50%, led by AirLink™ in partnership with Lutron using factory installed components. We continue to be encouraged by the feedback we are receiving from the beta installation of our SmartVision® platform, and we will be commercializing this system at the NACS/PEI show in October.
“We completed the acquisition of Atlas Lighting Products during February 2017. This highly strategic acquisition has broadened our abilities into the stock and flow portion of the market. In addition to expanding the product portfolio for both LSI and Atlas, we are now in the early stages of increasing our Asian sourcing utilizing Atlas’ existing relationships, a move that will produce company-wide cost synergies. Integration efforts have been very successful to date, and the continued positive input that we are receiving from customers, agents and distributors is encouraging. LSI’s results in fiscal 2017 included just over four months of contribution from the Atlas business. I look forward to reporting a full year of contribution from Atlas during fiscal 2018.
“Our targeted internal investments are also generating sales growth in important, fast growing segments. I am proud to report that sales at our SOAR™ Digital Signage program doubled during fiscal 2017. Over the past few years we have moved this program through the incubation stage into what is now a profitable, cutting edge product line for LSI. Dynamic digital signage is a rapidly growing sector in the graphics market, and our SOAR solution is well-positioned in this space. We offer a complete digital signage package for the customer, including installation, monitoring, content creation and refresh capabilities. We expect this program to continue to gain momentum during fiscal 2018.
“We continued to improve efficiencies through the use of our LSI Business System. Three facilities were closed during the first half of fiscal 2017. We expect to see a full year of benefit resulting from these closures during fiscal 2018, including reduced fixed costs and payroll expenses. Investments in new equipment during the year are also improving productivity meaningfully. We have also begun to see positive results from new sourcing and design initiatives aimed at lowering costs. These continued efforts to lean the business, combined with price increases that were initiated in fiscal 2017, will contribute to offsetting cost increases in materials and labor going forward.
“During fiscal 2017 we began to revitalize our marketing and sales efforts, including focusing on previously underserved markets, such as hospitality and assisted living facilities. We are encouraged by the reception we are receiving as we work with prospective customers in these markets, and look forward to reporting on this initiative as we progress through fiscal 2018. These efforts are supported by a full slate of new products scheduled for launch throughout fiscal 2018.