LSI Reports Strong 1Q

CINCINNATI, Oct. 22, 2015 (GLOBE NEWSWIRE) -- LSI Industries Inc. (LYTS) today

  • reported first quarter net sales of $85,925,000, an increase of 10% as compared to $78,466,000 in the same period of the prior fiscal year;
  • reported first quarter net income of $3,750,000, or $0.15 per share, an increase of 146% as compared to $1,527,000 or $0.06 per share for the same period of the prior fiscal year; and
  • declared the new higher regular quarterly cash dividend of $0.04 per share payable November 10, 2015 to shareholders of record November 2, 2015.

Financial Highlights

(In thousands, except per share data; unaudited)

Three Months Ended

 

September 30

 

 

2015

 

 

2014

 

% Change 

 

 

 

 

Net Sales

$

85,925

 

$

78,466

 

 

10

%

 

 

 

 

Operating Income as reported 

$

5,763

 

$

2,534

 

 

127

%

(Loss) on sale of assets, net 

-- 

 

222

 

n/m

Operating Income as adjusted (a)

$

5,763

 

$

2,756

 

 

109

%

 

 

 

 

Net Income as reported

$

3,750

 

$

1,527

 

 

146

%

Net Income as adjusted

$

3,750

 

$

1,767

 

 

112

%

 

 

 

 

Earnings per share as reported

$

0.15

 

$

0.06

 

 

150

%

Earnings per share as adjusted 

$

0.15

 

$

0.07

 

 

114

%

 

 

 

 

 

                                                                       

9/30/2015

6/30/2015

Working Capital

$

  89,429

 

$

  83,967

 

Total Assets

$

  188,408

 

$

  182,379

 

Long-Term Debt

 $ nil

 $ nil

Shareholders’ Equity

$

  149,084

 

$

  142,952

 

(a) 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. Operating income, net income, and earnings per share (diluted) before the sale of assets and tax effect of the utilization of a long-term capital loss are Non-GAAP financial measures (see pages 3 and 4).

Management Comments and Outlook

Dennis W. Wells, Chief Executive Officer and President, commented, "I view the first quarter of fiscal 2016 just ended as the first period of LSI Industries' continuous improvement phase.  As such, I am pleased to report solid sales growth and substantial increases in the gross and operating profits of the business.  And we have truly just begun.  Each day we are realizing the benefits of the LSI Business System in terms of sharper sales initiatives, greater operating efficiencies, the pursuit of new opportunities, and improved management team harmony and effectiveness.  Our customer-centric philosophy is front and center as we work to provide best-in-class service and innovative new products.

"Once again, from a strategic standpoint, our high-priority focus is to demonstrate to customers how LSI can be their value-added, trusted partner in developing superior image solutions through our world-class lighting, graphics, and technology capabilities.  Image is fundamental to our growth strategy.

"I look forward to reporting a number of exciting developments to you during the second quarter.  Solid and measurable continuous improvement is LSI Industries' theme for fiscal 2016 and beyond.

“Our Annual Shareholders’ Meeting will be held on Thursday, November 19, 2015 at 10:00 a.m. at the Company’s headquarters located at 10000 Alliance Road, Cincinnati, Ohio.  You are cordially invited to attend.”

First Quarter Fiscal 2016 Results

Net sales in the first quarter of fiscal 2016 were $85,925,000, an increase of 10% as compared to last year’s first quarter net sales of $78,466,000.  Lighting Segment net sales increased 6.0% to $59,075,000; Graphics Segment net sales increased 35.8% to $21,753,000; Technology Segment net sales decreased 23.7% to $5,097,000 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.  In the first quarter of fiscal 2015 the Company recorded a $343,000 pre-tax gain on the sale of a manufacturing facility in the Graphics Segment, sold a subsidiary 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 the first quarter of fiscal 2016.  The fiscal 2016 first quarter net income of $3,750,000, or $0.15 per share, increased 146% as compared to fiscal 2015 first quarter net income of $1,527,000, or $0.06 per share.  Earnings per share represents diluted earnings per share.

Balance Sheet

The balance sheet at September 30, 2015 included current assets of $126.6 million, current liabilities of $37.2 million and working capital of $89.4 million, which includes cash of $28.4 million.  The current ratio was 3.4 to 1.  The Company has shareholders’ equity of $149.1 million, no long-term debt, and borrowing capacity on its commercial bank facility as of September 30, 2015 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 $0.04 per share in connection with the first quarter of fiscal 2016 payable November 10, 2015 to shareholders of record as of November 2, 2015.  This represents a 33% increase over the fourth quarter fiscal 2015 dividend declaration of $0.03 per share.  The fiscal 2016 indicated annual cash dividend rate is $0.16 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 month period ended September 30, 2014.  Adjusted net income and earnings per share, which exclude the impact of 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)

First 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

$

3,750

 

$

0.15

 

$

1,527

 

$

0.06

 

 

 

 

 

 

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

$

3,750

 

$

0.15

 

$

1,767

 

$

0.07