LSI Industries Inc. (Nasdaq: LYTS, “LSI” or the “Company”) a
leading U.S. based manufacturer of commercial lighting and display
solutions, today reported financial results for the fiscal 2024
third quarter ended March 31, 2024.
FISCAL 2024 THIRD QUARTER
RESULTS
- Net Sales of $108.2 million
- Net Income of $5.4 million, or $0.18 per diluted share
- Adjusted Net Income of $6.2 million, or $0.21 per diluted
share
- EBITDA of $10.1 million; Adjusted EBITDA $11.2 million or
10.4%/sales
- Free Cash Flow of $11.2 million
- Gross Margin rate increased 140 bps y/y
- Net Debt $9.2 million; ratio of net debt to TTM Adjusted EBITDA
of 0.2x
LSI continued to execute on its commercial expansion and
operational excellence initiatives during the third quarter, as
outlined in the Company’s Fast Forward Strategy, culminating in
sustained, year-over-year growth in margin realization, net income,
and operating cash flow.
The Company reported third quarter net income of $5.4 million or
$0.18 per diluted share, versus $4.7 million or $0.16 per diluted
share in the prior-year period. Third quarter sales of $108.2
million declined from prior-year levels largely due to ongoing
lower demand in the grocery vertical market related to the delay in
the proposed merger of two large industry participants.
LSI reported Adjusted EBITDA of $11.2 million for the quarter,
and the adjusted EBITDA margin rate improved 80 basis points to
10.4%, reflecting LSI’s focus on a higher value, solutions-based
sales mix, continued price discipline, and moderating input costs.
On a trailing twelve-month basis through the end of the third
quarter 2024, LSI generated free cash flow of $43.3 million,
including $11.2 million in the third quarter alone. As of March 31,
2024, the ratio of net debt to trailing twelve-month Adjusted
EBITDA declined to 0.2x, versus 1.0x in the prior-year period.
On April 18, 2024, subsequent to the fiscal third quarter
reporting period, LSI announced the acquisition of privately held
EMI Industries (“EMI”) for an all-cash purchase price of $50
million. EMI is a leading manufacturer of standard and customized
fixtures, displays, and food equipment for the convenience store,
grocery, and restaurant industries. With the acquisition of EMI,
LSI continues to build a premier commercial lighting and display
solutions business in North America.
LSI funded the acquisition of EMI utilizing cash and
availability under its existing credit facility. LSI anticipates
that, pro-forma for the acquisition of EMI, its ratio of net debt
outstanding to trailing twelve month adjusted EBITDA at the end of
the fiscal third quarter was approximately 1.3x. LSI intends to
significantly reduce net leverage within the business during the
next 24 months, supported by anticipated growth in pro-forma free
cash flow from the combined businesses. EMI financial results will
be consolidated in LSI financial results beginning with the fiscal
2024 fourth quarter, reflecting a partial quarter impact.
The Company declared a regular cash dividend of $0.05 per share
payable on May 14, 2024, to shareholders of record on May 6,
2024.
MANAGEMENT COMMENTARY
“Over the last several years, LSI has developed a leading fully
integrated solutions-based platform within the commercial lighting
and display solutions market,” stated James A. Clark, President,
and Chief Executive Officer of LSI. “Our unique value proposition
continues to build momentum across our key vertical markets,
positioning LSI as a partner of choice for a growing, diverse base
of customers across North America. Our third quarter results
demonstrate further execution on this strategic focus, a
performance that culminated in year-over-year growth in margin
realization and profitability.”
“Having built a strong platform for organic growth, inorganic
growth is also an important focus for us, first with our
acquisition of JSI Store Fixtures in 2021, and now with our
acquisition of EMI Industries. As we continue to scale our
platform, we anticipate our business will become increasingly cash
generative, positioning us to pursue additional opportunities that
broaden our capabilities, enhance our sales mix, and expand our
customer touchpoints.”
“Our diverse end-market exposure and solid execution was key
during the third quarter, as certain verticals demonstrated robust
or stable demand strength, while the grocery vertical remains
unfavorably impacted by the proposed merger of two industry
participants, and longer than expected regulatory review. While
program refresh activity within grocery is below prior-year levels,
we believe the underlying fundamentals of the grocery vertical
remain compelling, given expectations for a multi-year refresh
cycle across the industry over the coming years.”
“Within our Lighting segment, demand conditions were steady
during the third quarter, as our book-to-bill ratio finished above
1.0, and backlog increased on a sequential basis. While our
quotation pipeline remains highly active, the order conversion
period continues to lengthen, specifically for larger projects.
Lighting segment adjusted operating income increased 11% during the
third quarter, driven by a 280-basis point improvement in the gross
margin rate. Multiple items contributed to our improved margin
realization, including favorable mix, stable pricing, moderating
material input costs, and plant productivity.”
“In the third quarter, we introduced an exciting new portfolio
of lighting products targeting higher-value applications, including
the Linear Area Light series of fixtures. The Linear Area Light
expands our growing portfolio of architectural grade products,
designed for a variety of outdoor pedestrian and parking
applications where performance and aesthetics are critical. These
include institutional applications such as schools and
universities, city-beautification uses, as well as a wide range of
general area lighting applications.”
“In our Display Solutions segment, recent program awards
generated strong growth in the refueling/c-store and QSR verticals,
partially offsetting delayed activity in the grocery vertical,”
continued Clark. “In the refueling/c-store segment our backlog of
released and unreleased program activity with multiple oil
companies, covering numerous brand banners, continues to grow. To
that end, the third quarter 2024 was our most active third quarter
in over 15 years, with work occurring on over 500 customer sites.
Site work content involved combinations of product, installation,
and complete turnkey solutions, including program management.
Building on our leading positions within North American markets, we
are winning additional business in international markets, with
ongoing customer projects in six Caribbean and Central American
countries. We expect refueling/c-store project site activity to
remain elevated throughout the fourth quarter and into fiscal
2025.”
“The addition of EMI is an excellent strategic fit for LSI,
expanding our product and service capabilities for display
solutions market applications, particularly in the c-store,
grocery, and restaurant verticals. As we bring together our
complementary products, services, and technologies, there are
significant cross-selling opportunities that will enable us to be a
single-source provider to more customers in more locations,” stated
Clark. "The business combination represents a major step forward in
our ability to serve a growing portfolio of national retail chains,
and capitalize on the ongoing, multi-year investment cycle
occurring in these markets.”
Clark concluded, “We’re proud of what our team has accomplished
the last several years, from advancing our positions in key
vertical markets and expanding our product offering and
capabilities, to increasing our value to customers and driving
profitable growth, all of which has translated to a stronger, more
competitive LSI. Looking ahead, we will continue to pursue leading
positions within growing, high-value vertical markets that expand
our capabilities and reach, generating profitable growth and
driving long-term value creation for our shareholders.”
FISCAL 2024 THIRD QUARTER 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:
Domestic Live: 877-407-4018 International Live:
201-689-8471
To listen to a replay of the teleconference, which subsequently
will be available through May 9, 2024:
Domestic Replay: 844-512-2921 International
Replay: 412-317-6671
Conference ID: 13745799
ABOUT LSI INDUSTRIES
Headquartered in Cincinnati, LSI Industries (NASDAQ: LYTS)
specializes in the creation of advanced lighting, graphics, and
display solutions. The Company’s American-made products, which
include lighting, print graphics, digital graphics, millwork, metal
and refrigerated products, and custom displays, are engineered to
elevate brands in competitive markets. With a workforce of
approximately 1,900 employees and 16 facilities throughout North
America, LSI is dedicated to providing top-quality solutions to its
clients. Additional information about LSI is available at
www.lsicorp.com.
FORWARD-LOOKING STATEMENTS
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.
Three Months EndedMarch 31 Nine Months EndedMarch 31
(Unaudited)
2024
2023
% Change
(In thousands, except per share data)
2024
2023
% Change
$
108,186
$
117,470
-8
%
Net sales
$
340,632
$
373,343
-9
%
7,660
7,732
-1
%
Operating income as reported
26,507
26,791
-1
%
1,021
968
5
%
Long-Term Performance Based Compensation
3,195
2,521
27
%
141
-
NM
Severance costs and Restructuring costs
529
46
NM
-
75
NM
Consulting expense: Commercial Growth Initiatives
19
864
NM
$
8,822
$
8,775
1
%
Operating income as adjusted
$
30,250
$
30,222
0
%
$
5,375
$
4,669
15
%
Net income as reported
$
19,309
$
17,347
11
%
$
6,243
$
5,497
14
%
Net income as adjusted
$
21,346
$
20,200
6
%
$
0.18
$
0.16
13
%
Earnings per share (diluted) as reported
$
0.64
$
0.60
8
%
$
0.21
$
0.19
12
%
Earnings per share (diluted) as adjusted
$
0.71
$
0.70
2
%
(amounts in thousands) March 31 June 30,
2024
2023
Working capital
$
77,224
$
73,314
Total assets
$
287,969
$
296,149
Long-term debt
$
12,782
$
31,629
Other long-term liabilities
$
10,489
$
10,380
Shareholders' equity
$
198,437
$
177,578
Three Months Ended March 31, 2024,
Results
Net sales for the three months ended March 31, 2024, were $108.2
million, down 8% from the three months ended March 31, 2023, net
sales of $117.5 million. Lighting Segment net sales of $64.9
million decreased 3% and Display Solutions Segment net sales of
$43.3 million decreased 15% from last year’s third quarter net
sales. Net income for the three months ended March 31, 2024, was
$5.4 million, or $0.18 per share, compared to $4.7 million or $0.16
per share for the three months ended March 31, 2023. Earnings per
share represents diluted earnings per share.
Nine Months Ended March 31, 2024,
Results
Net sales for the nine months ended March 31, 2024, were $340.6
million, down 9% from the nine months ended March 31, 2023, net
sales of $373.3 million. Lighting Segment net sales of $197.3
million decreased 2% and Display Solutions Segment net sales of
$143.3 million decreased 17% from last year’s net sales. Net income
for the nine months ended March 31, 2024, was $19.3 million, or
$0.64 per share, compared to $17.3 million or $0.60 per share for
the nine months ended March 31, 2023. Earnings per share represents
diluted earnings per share.
Balance Sheet
The balance sheet at March 31, 2024, included current assets of
$143.5 million, current liabilities of $66.3 million and working
capital of $77.2 million, which includes cash of $7.2 million. The
current ratio was 2.2 to 1. The balance sheet also included
shareholders’ equity of $198.4 million and long-term debt of $12.8
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 third quarter of
fiscal 2024, payable May 14, 2024, to shareholders of record as of
the close of business on May 6, 2024. 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 and nine
months ended March 31, 2024, and 2023. Operating income, net
income, and earnings per share, which exclude the impact of
long-term performance based compensation expense, commercial growth
initiative expense, and severance 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 before long-term
performance based compensation expense, commercial growth
initiative expense, and severance and restructuring expense
(Adjusted EBITDA), and Free Cash Flow. 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 Net Debt to Adjusted
EBITDA.
Three Months Ended Nine Months Ended March 31
March 31
2024
2023
(In thousands, except per share data)
2024
2023
Diluted EPS Diluted EPS Diluted EPS Diluted
EPS Reconciliation of net income to adjusted net income
$
5,375
$
0.18
$
4,669
$
0.16
Net income as reported
$
19,309
$
0.64
$
17,347
$
0.60
767
0.03
769
0.03
Long-Term Performance Based Compensation
2,366
0.08
2,107
0.08
-
-
59
-
Consulting expense: Commercial Growth Initiatives
13
-
708
0.02
101
-
-
-
Severance costs and Restructuring costs
390
0.01
38
-
-
-
-
-
Tax rate difference between reported and adjustednet income
(732
)
(0.02
)
-
-
$
6,243
$
0.21
$
5,497
$
0.19
Net income adjusted
$
21,346
$
0.71
$
20,200
$
0.70
Three Months EndedMarch 31 (Unaudited; In thousands)
Nine Months EndedMarch 31 Net Income to Adjusted
EBITDA
2024
2023
% Change
2024
2023
% Change
5,375
4,669
15
%
Net income as reported
19,309
17,347
11
%
2,076
2,257
Income Tax
5,903
6,434
134
877
Interest expense, net
1,153
2,924
75
(71
)
Other expense (income)
142
86
$
7,660
$
7,732
-1
%
Operating Income as reported
$
26,507
$
26,791
-1
%
2,415
2,455
Depreciation and amortization
7,143
7,295
$
10,075
$
10,187
-1
%
EBITDA
$
33,650
$
34,086
-1
%
1,021
968
Long-Term Performance Based Compensation
3,195
2,521
141
-
Severance costs and Restructuring costs
529
46
-
75
Consulting expense: Commercial Growth Initiatives
19
864
$
11,237
$
11,230
0
%
Adjusted EBITDA
$
37,393
$
37,517
0
%
10.4
%
9.6
%
Adjusted EBITDA as a percentage of Sales
11.0
%
10.0
%
Three Months EndedMarch 31 (Unaudited; In
thousands) Nine Months EndedMarch 31 Free Cash
Flow
2024
2023
% Change
2024
2023
% Change
$
12,429
$
12,486
NM
Cash flow from operations
$
32,297
$
32,548
NM
(1,277
)
(759
)
68
%
Capital expenditures
(4,626
)
(1,754
)
164
%
$
11,152
$
11,727
NM
Free cash flow
$
27,671
$
30,794
NM
Net Debt to Adjusted EBITDA Ratio March 31 March
31 (amounts in thousands)
2024
2023
Current Maturity of Debt
$
3,571
$
3,571
Long-Term Debt
12,782
46,002
Total Debt
$
16,353
$
49,573
Less: Cash
(7,175
)
(1,350
)
Net Debt
$
9,178
$
48,223
Adjusted EBITDA - Trailing Twelve Months
$
51,496
$
48,117
Net Debt to Adjusted EBITDA Ratio
0.2
1.0
Three Months EndedMarch 31 Nine Months EndedMarch 31
(Unaudited)
2024
2023
(In thousands, except per share data)
2024
2023
$
108,186
$
117,470
Net sales
$
340,632
$
373,343
76,846
85,266
Cost of products sold
240,789
272,230
130
Severance costs and Restructuring costs
508
31
31,210
32,204
Gross profit
99,335
101,082
23,538
24,397
Selling and administrative costs
72,788
73,412
12
-
Severance costs and Restructuring costs
21
15
-
75
Consulting expense: Commercial Growth Initiatives
19
864
7,660
7,732
Operating Income
26,507
26,791
75
(71
)
Other expense (income)
142
86
134
877
Interest expense, net
1,153
2,924
7,451
6,926
Income before taxes
25,212
23,781
2,076
2,257
Income tax
5,903
6,434
$
5,375
$
4,669
Net income
$
19,309
$
17,347
Weighted Average Common Shares
Outstanding
29,163
28,306
Basic
28,981
28,012
30,122
29,611
Diluted
30,005
29,055
Earnings Per Share
$
0.18
$
0.16
Basic
$
0.67
$
0.62
$
0.18
$
0.16
Diluted
$
0.64
$
0.60
(amounts in thousands) March 31 June 30
2024
2023
Current assets
$
143,485
$
149,876
Property, plant and equipment, net
26,105
25,431
Other assets
118,379
120,842
Total assets
$
287,969
$
296,149
Current maturities of long-term debt
$
3,571
$
3,571
Other current liabilities
62,690
72,991
Long-term debt
12,782
31,629
Other long-term liabilities
10,489
10,380
Shareholders' equity
198,437
177,578
$
287,969
$
296,149
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425017423/en/
INVESTOR & MEDIA CONTACT Noel Ryan, IRC 720.778.2415
LYTS@vallumadvisors.com
Grafico Azioni LSI Industries (NASDAQ:LYTS)
Storico
Da Mar 2025 a Mar 2025
Grafico Azioni LSI Industries (NASDAQ:LYTS)
Storico
Da Mar 2024 a Mar 2025
