• LSI Industries Reports Fourth Quarter and Full-Year Fiscal 2021 Results and Declares Quarterly Cash Dividend

    Source: Nasdaq GlobeNewswire / 19 Aug 2021 06:30:00   America/New_York

    CINCINNATI, Aug. 19, 2021 (GLOBE NEWSWIRE) -- LSI Industries Inc. (NASDAQ: LYTS, or the “Company”), a leading U.S. based manufacturer of commercial lighting and display solutions, today announced results for the fourth quarter and full-year fiscal 2021.

    FOURTH QUARTER 2021 SUMMARY

    • Net Sales increased 53% versus Prior Year, organic sales increased 39%
    • Completed acquisition of JSI Store Fixtures on May 21, 2021
    • Net Income of $0.2 million; Adjusted Net Income of $3.3 million
    • Diluted EPS of $0.01, including $0.08 of acquisition related expense
    • Adjusted EPS $0.12 versus $0.07 prior year

    FISCAL YEAR 2021 SUMMARY

    • Net Sales increased 3% from prior year to $316 million
    • Net Income of $5.9 million; Adjusted Net Income of $9.8 million
    • Diluted EPS of $0.21; Adjusted EPS of $0.36 versus $0.15 prior year
    • EBITDA of $16.1 million; Adjusted EBITDA of $21.1 million
    • Free Cash Flow $25.8 million

    LSI generated significant year-over-year growth in net sales and profitability during the fiscal fourth quarter, capitalizing on both improved demand across both its lighting and display markets while continuing to expand its presence within higher growth, higher-margin verticals. Fourth quarter and fiscal 2021 results include approximately five weeks of financial contributions from the JSI Store Fixtures (“JSI”) acquisition completed on May 21, 2021.

    The Company reported net income of $0.2 million, or $0.01 per diluted share in the fourth quarter 2021, versus net income of $1.5 million, or $0.06 per diluted share, in the prior year period. Fourth quarter 2021 results include $2.9 million or $0.08 per share of JSI acquisition related expenses.

    LSI reported adjusted net income of $3.3 million, or $0.12 per diluted share, compared to $1.8 million or $0.07 per diluted share in the prior period. A reconciliation of GAAP and non-GAAP financial results is included in this press release.

    For the twelve months ended June 30, 2021, LSI reported net income of $5.9 million, or $0.21 per diluted share versus net income of $9.6 million or $0.36 per share in the prior year. Prior year results include an $8.5 million pre-tax gain on sale of facilities. On an adjusted basis, the Company reported net income of $9.8 million, or $0.36 per diluted share in fiscal 2021, versus $4.1 million, or $0.15 per share in fiscal 2020. LSI generated Adjusted EBITDA of $21.1 million in fiscal 2021, versus $15.6 million in the prior year.

    As of June 30, 2021, the Company had $68 million in long-term debt, including borrowings related to the purchase of JSI, resulting in a ratio of net debt to pro forma trailing twelve month Adjusted EBITDA of 2.5x. At the end of the fourth quarter, LSI had $32 million available under its $100 million credit facility due fiscal 2026.

    The Company declared a regular cash dividend of $0.05 per share payable on September 7, 2021, to shareholders of record on August 30, 2021.

    MANAGEMENT COMMENTARY

    James A. Clark, President and Chief Executive Officer commented, “We have continued to expand our presence within growing, high-value lighting and display markets, while positioning the business to capitalize on early indications of a broader sector recovery. Our collective focus on launching new products, customer engagement, technological innovation and operational discipline contributed to strong year-over year growth in adjusted EBITDA and profitability during both the fourth quarter and full-year fiscal 2021, creating significant momentum as we look ahead to fiscal 2022.

    “The LSI team delivered 39% year-over-year organic sales growth in the fourth quarter, and 22% sequential growth from the third quarter, a tribute to the diligent execution efforts of our more than 1,100 employees. We successfully navigated various supply chain disruptions during the quarter, while continuing to leverage our North American design and manufacturing capabilities to service our diverse customer base.

    “In May, we completed the acquisition of JSI, a transaction that serves to materially increase our total addressable market opportunity within the growing grocery and convenience store verticals, while driving meaningful revenue synergies across our combined product portfolio. This business combination creates a leading integrated provider of lighting and display solutions to the North American grocery, convenience, and specialty store channels, one uniquely positioned to capitalize on a multi-year period of growth and investment in these markets," continued Clark.

    “Both the LSI and JSI teams have demonstrated professionalism and leadership throughout the business combination, resulting in a seamless integration process. We are exceptionally pleased with the high-caliber of our new colleagues, their customer-centric culture, and their commitment to product innovation, all of which aligns with how we do business. In the short period since closing on the transaction, our integration team has identified incremental revenue synergies, together with immediate cost savings not previously identified.  

    “We have renamed the 'Graphics' segment to 'Display Solutions' to reflect the comprehensive offering the business combination provides. Beginning with these fourth quarter results, we will publish under the 'Lighting' and 'Display Solutions' segments,” noted Clark.

    “Fiscal fourth quarter sales for our Display Solutions segment increased 93% versus prior year, reflecting organic growth of 54% with five weeks of JSI sales contributing the balance. Organic growth was led by our digital signage offering, which continues to benefit from our large QSR program that remains in-process. The program was approximately 40% complete at the end of June. Separately, we have continued to increase our book of business with a fast-growing grocery chain in the Southwest, where we are providing a broad range of display products. On balance, development activity on potential new programs across multiple verticals and customers remains robust. Display Solutions generated strong results in the period, with operating income of $3.7 million, or 70% above the prior-year period.

    “The Lighting segment generated sales growth of 30% in the fiscal fourth quarter, with significant increases in both project business and sales through distributor stock. Distributor stock sales increased more than 50% on a year-on-year basis, driven by increased current demand, and confidence by distributors to increase stock levels which were significantly reduced during the pandemic. Project quotation activity also remains very strong, particularly with respect to our recently expanded High Bay product range, as well as the recently introduced Opulence™ architectural area lighting family of products, which will complement our current Mirada™ commercial line. Operating income for the Lighting segment increased significantly versus the prior year period, driven by increased sales volume and gross margin rate expansion.

    “We are well positioned entering fiscal 2022,” noted Clark. “The cross-selling opportunities between LSI and JSI are significant, creating a pathway for multi-year growth. These acquisition-related synergies, together with organic investments in sales, marketing, and new products, positions us to create substantial value for our customers, employees and investors,” concluded Clark.

    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: 877-407-4018
    Conference ID: 13721147
       
    Call Replay: 844-512-2921
    Replay Passcode: 13721147

    A replay of the conference call will be available between August 19, 2021 and September 2, 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 traded over the NASDAQ Stock Exchange under the symbol LYTS. The company manufactures non-residential lighting and retail display solutions. Non-residential lighting consists of high-performance, American-made lighting solutions. The Company’s strength in outdoor lighting applications creates opportunities for it to introduce additional solutions to its valued customers. Retail 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

    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. 

    Financial Highlights

     Three Months Ended
    June 30
       Twelve Months Ended
    June 30
      (Unaudited) 
      2021   2020 % Change (In thousands, except per share data)  2021   2020  % Change
     $ 97,015  $ 63,470 53% Net Sales $ 315,612  $ 305,558  3%
                  
      1,046   1,846 -43% Operating Income as reported  8,030   13,076  -39%
                  
      2,938   -   Acquisition costs  2,938   -   
      660   105   Stock compensation expense  1,977   599   
      20   273   Severance costs  41   346   
      (17)  329   Restructuring and plant closure costs (gains)  (14)  (7,038)  
                  
     $ 4,647  $ 2,553 82% Operating Income as adjusted $ 12,972  $ 6,983  86%
                  
     $ 198  $ 1,513 -87% Net Income as reported $ 5,868  $ 9,592  -39%
                  
     $ 3,315  $ 1,825 82% Net Income as adjusted $ 9,763  $ 4,089  139%
                  
     $ 0.01  $ 0.06 -83% Earnings per share (diluted) as reported $ 0.21  $ 0.36  -42%
                  
     $ 0.12  $ 0.07 71% Earnings per share (diluted) as adjusted $ 0.36  $ 0.15  140%


         
         
      (amounts in thousands)
      June 30, June 30,
       2021  2020
    Working Capital $ 54,113 $ 51,209
    Total Assets $ 286,821 $ 172,263
    Long-Term Debt $ 68,178 $ -
    Other Long-Term Liabilities $ 16,578 $ 11,914
    Shareholders' Equity $ 131,170 $ 125,700
         

    Three Months Ended June 30, 2021 Results

    Net sales for the three months ended June 30, 2021 were $97.0 million, up 53% from the three months ended June 30, 2020 net sales of $63.5 million. Lighting Segment net sales of $52.7 million increased 30% and Display Solutions Segment net sales of $44.3 million increased 93% from last year’s fourth quarter net sales. Net income for the three months ended June 30, 2021 was $0.2 million, or $0.01 per share, compared to $1.5 million or $0.06 per share for the three months ended June 30, 2020. Earnings per share represents diluted earnings per share.

    Twelve Months Ended June 30, 2021 Results

    Net sales for the twelve months ended June 30, 2021 were $315.6 million, up 3% from the twelve months ended June 30, 2020 net sales of $305.6 million. Lighting Segment net sales of $189.0 million decreased 8% and Display Solutions Segment net sales of $126.6 million increased 27% from last year’s net sales. Net income for the twelve months ended June 30, 2021 was $5.9 million, or $0.21 per share, compared to $9.6 million or $0.36 per share for the twelve months ended June 30, 2020. Earnings per share represents diluted earnings per share.

    Balance Sheet
            
    The balance sheet at June 30, 2021 included current assets of $125.0 million, current liabilities of $70.9 million and working capital of $54.1 million, which includes cash of $2.3 million. The current ratio was 1.8 to 1. The balance sheet also included shareholders’ equity of $131.2 million and long-term debt of $68.2 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 2021, payable September 7, 2021 to shareholders of record as of the close of business on August 30, 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 and twelve months ended June 30, 2021 and 2020. Operating income, net income and earnings per share, which exclude the impact of acquisition costs, stock compensation expense, severance costs and restructuring and plant closure costs (gains), 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 Sales Growth. 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 Sales Growth.

    Three Months Ended   Twelve Months Ended
    June 30   June 30
     2021    2020   (In thousands, except per share data)  2021    2020  
     Diluted
    EPS
      Diluted
    EPS
        Diluted
    EPS
      Diluted
    EPS
        Reconciliation of net income to adjusted net income    
    $ 198 $ 0.01 $ 1,513 $ 0.06  Net Income as reported $ 5,868 $ 0.21 $ 9,592 $ 0.36 
                 
     2,161  0.08  -  -  Acquisition costs  2,161  0.08  -  - 
                 
     485  0.02  74  -  Stock compensation expense  1,497  0.05  447  0.02 
                 
     15  -  192  0.01  Severance costs  32  -  252  0.01 
                 
     (13) -  231  0.01  Restructuring and plant closure costs (gains)  (11) -  (5,557) (0.21)
                 
     468  0.02  (185) (0.01) Tax impact due to the change in the estimated annual tax rate used for GAAP reporting purposes  216  0.01  (645) (0.02)
                 
    $ 3,315 $ 0.12 $ 1,825 $ 0.07  Net Income adjusted $ 9,763 $ 0.36 $ 4,089 $ 0.15 
    NOTE: All adjustments are net of tax except for the adjustment of the tax impact from the change in the estimated annual tax rate
                 


     Three Months Ended
    June 30
     (Unaudited; In thousands) Twelve Months Ended
    June 30
     
      EBITDA and Adjusted EBITDA  
      2021   2020  % Change   2021   2020  % Change 
     $ 1,046  $ 1,846  -43% Operating Income as reported $ 8,030  $ 13,076  -39% 
                   
      2,171   2,023    Depreciation and Amortization  8,114   8,654    
     $ 3,217  $ 3,869  -17% EBITDA $ 16,144  $ 21,730  -26% 
                   
      2,938   -    Acquisition costs  2,938   -    
      660   105    Stock compensation expense  1,977   599    
      20   273    Severance costs  41   346    
      (17)  329    Restructuring and plant closure costs (gains)  (14)  (7,038)   
     $ 6,818  $ 4,576  49% Adjusted EBITDA $ 21,086  $ 15,637  35% 
                   
                   
                   
     Three Months Ended
    June 30
     (Unaudited; In thousands) Twelve Months Ended
    June 30
     
      Free Cash Flow  
      2021   2020  % Change   2021   2020  % Change 
     $ 3,375  $ 12,613  -73% Cash Flow From Operations $ 28,009  $ 29,710  -6% 
                   
      -   118    Proceeds from Sale of Fixed Assets  -   20,150    
                   
      (716)  (1,201)   Capital Expenditures  (2,233)  (2,739)   
     $ 2,659  $ 11,530  -77% Free Cash Flow $ 25,776  $ 47,121  -45% 
                   


    Reconciliation of net sales to organic net sales            
      Q4 2020 Q4 2021 % Variance
     Q3 2021 Q4 2021 % Variance 
                 
    Lighting Segment $40,559 $52,729 30.0% $45,740 $52,729 15.3%
    Display Solutions Segment $22,911 $44,286 93.3% $26,464 $44,286 67.3%
    Total Net Sales $63,470 $97,015 52.9% $72,204 $97,015 34.4%
    Less:            
    JSI  -  9,084    -  9,084  
    Total Organic Net Sales $63,470 $87,931 38.5% $72,204 $87,931 21.8%
                 
                 
      Q4 2020 Q4 2021 % Variance
          
                 
    Display Solutions Segment $22,911 $44,286 93.3%      
    Less:            
    JSI  -  9,084        
    Total Display Solutions Segment Organic Net Sales $22,911 $35,202 53.6%      
                 



    Condensed Consolidated Statement of Operations

    Three Months Ended
    June 30
      Twelve Months Ended
    June 30
    (Unaudited) 
     2021   2020  (In thousands, except per share data)  2021   2020 
    $ 97,015  $ 63,470  Net Sales $ 315,612  $ 305,558 
             
     74,118   47,386  Cost of Products Sold  236,637   230,944 
     10   93  Severance Costs  15   104 
     (17)  222  Restructuring (Gains) Costs  (14)  980 
             
     22,904   15,769  Gross Profit  78,974   73,530 
             
     21,848   13,738  Selling and Administrative Costs  70,918   68,783 
     10   180  Severance Costs  26   242 
     -   5  Restructuring Costs (Gains)  -   (8,571)
             
     1,046   1,846  Operating Income  8,030   13,076 
             
     44   (120) Other Expense (Income)  (153)  513 
     96   78  Interest Expense, net  267   870 
             
     906   1,888  Income Before Taxes  7,916   11,693 
             
     708   375  Income Tax  2,048   2,101 
             
    $ 198  $ 1,513  Net Income $ 5,868  $ 9,592 
             
        Weighted Average Common Shares Outstanding    
     26,846   26,355  Basic   26,692   26,274 
     27,719   26,649  Diluted  27,440   26,473 
             
        Earnings Per Share    
    $ 0.01  $ 0.06  Basic  $ 0.22  $ 0.37 
    $ 0.01  $ 0.06  Diluted $ 0.21  $ 0.36 
             

    Condensed Balance Sheet

         
         
      (amounts in thousands)
      June 30, June 30,
      2021 2020
    Current Assets $ 125,008 $ 85,858
    Property, Plant and Equipment, net  30,552  26,535
    Other Assets  131,261  59,870
    Total Assets $ 286,821 $ 172,263
         
    Current Liabilities $ 70,895 $ 34,649
    Long-Term Debt  68,178  -
    Other Long-Term Liabilities  16,578  11,914
    Shareholders' Equity  131,170  125,700
      $ 286,821 $ 172,263
         

    INVESTOR & MEDIA CONTACT
    
    Noel Ryan, IRC
    720.778.2415
    LYTS@vallumadvisors.com

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