LSI Industries Reports Fiscal Second Quarter 2021 Results and Declares Quarterly Cash Dividend
LSI Industries announced its fiscal Q2 2021 results, showing a net income of $2.2 million, a 27% increase from the previous year. Adjusted net income rose 47% to $2.5 million, with EPS at $0.08 compared to $0.07 last year. EBITDA reached $4.7 million, up 20% year-over-year, while free cash flow stood at $5.3 million. The company, which has no long-term debt, remains optimistic about future growth, particularly in its Graphics segment, despite ongoing pandemic-related challenges.
- Net income increased 27% to $2.2 million.
- Adjusted net income rose 47% to $2.5 million.
- EBITDA of $4.7 million, up 20% year-over-year.
- Free cash flow of $5.3 million, with total cash at $13.6 million.
- No long-term debt, with $75 million available on credit facility.
- Graphics segment sales grew 8% year-over-year.
- Lighting segment sales were flat compared to the first quarter.
- Project quotation rates improved but conversion periods have lengthened.
CINCINNATI, Jan. 21, 2021 (GLOBE NEWSWIRE) -- LSI Industries Inc. (NASDAQ: LYTS, or the “Company”) a leading U.S. based manufacturer of indoor/outdoor lighting and graphics solutions, today announced results for the second quarter fiscal 2021.
Second Quarter 2021 Highlights
- Net Income of
$2.2 million ,27% above prior year - Adjusted Net Income of
$2.5 million ,47% above prior year - EPS of
$0.08 versus$0.07 prior year - EBITDA of
$4.7 million ; Adjusted EBITDA of$5.1 million - Free cash flow of
$5.3 million , no long-term debt - Continued investments in commercial initiatives
LSI delivered improved year-over-year growth in profitability during the fiscal second quarter, supported by a higher margin sales mix across both its Graphics and Lighting segments that more than offset adverse market conditions related to the COVID-19 pandemic.
The Company reported net income of
The Company generated free cash flow of
The Company declared a regular cash dividend of
Management Commentary
James A. Clark, President and Chief Executive Officer commented, “Our improved second quarter profitability was a testament to the versatility of the LSI team, as together we successfully managed through a resurgence of pandemic related market and supply chain disruptions. Despite these challenges, we generated sequential sales growth compared to the first quarter, while our gross margin rate, operating income, net income and earnings per share all improved versus the prior year period.
Our Graphics segment generated sales growth of
Lighting segment sales for the second quarter were flat with the first quarter, despite being adversely impacted by pandemic related factors during the period. We’ve experienced project quotation rates above prior year levels for the last several months, but the quote-to-order conversion period has lengthened, a reflection of the challenges evident in developing construction plans and installation schedules during the pandemic. Lighting segment gross margin exceeded
While current market conditions remain impacted by the pandemic, we continue to invest in multiple commercial initiatives intended to drive profitable growth moving forward. These initiatives include the introduction of new products, the addition of key sales resources, expanding our entry into new and existing market verticals and purposeful marketing and communications programs.
For example, the pace of new product launch activity in Lighting continues to accelerate, as five new products were launched in the second quarter alone, along with several cost-down design programs and various feature and function enhancements. Most notable is the next generation Vertex™ Canopy product, which provides industry-leading lighting optic capabilities, further strengthening our leading position in this product category.
Looking forward, we expect to release a record number of new products in the second half of fiscal 2021. We have a well-positioned, extremely competitive and successful outdoor product portfolio that we intend to further expand, including the launch of the Witness wall-pack fixture. This innovative solution integrates the lighting benefits of an exterior wall pack fixture with security camera recording capabilities, providing a low-cost security solution for certain market applications. In addition, we will introduce our Opulence™ architectural area lighting family of products, which will complement our current Mirada™ commercial line, providing a comprehensive outdoor area lighting solution for all major vertical markets.
For indoor applications, our new product vitality rate will increase substantially as we launch a succession of new products that provide additional price points, improved aesthetics, multiple technology enablement options and simplified ease of contractor installation.
Despite current market headwinds, we are investing in additional sales resources, intending to expand our sales team by approximately
Respecting pandemic safety protocols in effect across the country, we have expanded our digital communications capabilities to effectively engage with our partners and customers. We are leveraging various tools to conduct virtual meetings and training programs, as well as numerous daily consultation and solution building sessions. In addition, we have launched various marketing programs designed to promote solution capabilities in key vertical markets. We are a leading provider of high-performance lighting solutions for sports and recreation facilities, and we recently announced that LSI is now the official lighting partner of USA Pickleball. Population trends and an increasing focus on personal health and wellness are contributing to growth in Pickleball and all sport court activities.
While pandemic-related market disruptions may persist in the near-term, we will continue to position the business for execution on our growth plans while investing in the people, products and opportunities that will enable us to capitalize on a future market recovery,” 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 in order 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: | 13714672 |
| Call Replay: | 844-512-2921 |
| Replay Passcode: | 13714672 |
A replay of the conference call will be available between January 21, 2021 and February 4, 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 Blue Ash, Ohio (Greater Cincinnati), LSI Industries is a leading producer 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. LSI’s indoor and outdoor products and services, including its digital and print graphics capabilities, are valued by architects, engineers, distributors and contractors for their quality, reliability and innovation. The Company’s products are used extensively in automotive dealerships, petroleum stations, quick service restaurants, grocery stores and pharmacies, retail establishments, sports complexes, parking lots and garages, and commercial and industrial buildings. LSI has approximately 1,100 employees at seven manufacturing plants in the United States, including its corporate headquarters. Additional information about LSI is available at www.lsicorp.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “encourage,” “projects,” “plans,” “expects,” “can,” “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. 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.
INVESTOR CONTACT
Noel Ryan, IRC
720.778.2415
LYTS@vallumadvisors.com
MEDIA CONTACT
Mike Wallner
Senior Manager, Communications
513.372.3417
mike.wallner@lsi-industries.com
Financial Highlights
| Three Months Ended December 31 | Six Months Ended December 31 | |||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| 2020 | 2019 | % Change | (In thousands, except per share data) | 2020 | 2019 | % Change | ||||||||||||||||||
| $ | 76,387 | $ | 82,377 | -7 | % | Net Sales | $ | 146,393 | $ | 171,078 | -14 | % | ||||||||||||
| 2,686 | 1,760 | n/m | Operating Income as reported | 4,888 | 8,599 | -43 | % | |||||||||||||||||
| 397 | 199 | Stock compensation expense | 902 | 597 | ||||||||||||||||||||
| 21 | 54 | Severance costs | 21 | 54 | ||||||||||||||||||||
| - | 276 | Restructuring and plant closure costs (gains) | 3 | (4,312 | ) | |||||||||||||||||||
| $ | 3,104 | $ | 2,289 | 36 | % | Operating Income as adjusted | $ | 5,814 | $ | 4,938 | 18 | % | ||||||||||||
| $ | 2,208 | $ | 1,743 | 27 | % | Net Income as reported | $ | 4,198 | $ | 6,218 | -32 | % | ||||||||||||
| $ | 2,543 | $ | 1,735 | 47 | % | Net Income as adjusted | $ | 4,618 | $ | 3,339 | 38 | % | ||||||||||||
| $ | 0.08 | $ | 0.07 | 15 | % | Earnings per share (diluted) as reported | $ | 0.15 | $ | 0.24 | -36 | % | ||||||||||||
| $ | 0.09 | $ | 0.07 | 33 | % | Earnings per share (diluted) as adjusted | $ | 0.17 | $ | 0.13 | 31 | % | ||||||||||||
| (amounts in thousands) | ||||||
| December 31, | June 30, | |||||
| 2020 | 2020 | |||||
| Working Capital | $ | 58,181 | $ | 51,209 | ||
| Total Assets | $ | 181,281 | $ | 172,263 | ||
| Long-Term Debt | $ | - | $ | - | ||
| Other Long-Term Liabilities | $ | 10,772 | $ | 11,914 | ||
| Shareholders' Equity | $ | 129,273 | $ | 125,700 | ||
Three Months Ended December 31, 2020 Results
Net sales for the three months ended December 31, 2020 were
Six Months Ended December 31, 2020 Results
Net sales for the six months ended December 31, 2020 were
Balance Sheet
The balance sheet at December 31, 2020 included current assets of
Cash Dividend Actions
The Board of Directors declared a regular quarterly cash dividend of
Non-GAAP Financial Measures
This press release includes adjustments to GAAP operating income, net income and earnings per share for the three and six months ended December 31, 2020 and 2019. Operating income, net income and earnings per share, which exclude the impact of 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 our business. Also included in this press release are non-GAAP financial measures including Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA and 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 and Free Cash Flow.
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| December 31 | December 31 | |||||||||||||||||||||||||
| 2020 | 2019 | (In thousands, except per share data) | 2020 | 2019 | ||||||||||||||||||||||
| Diluted EPS | Diluted EPS | Diluted EPS | Diluted EPS | |||||||||||||||||||||||
| Reconciliation of net income to adjusted net income | ||||||||||||||||||||||||||
| $ | 2,208 | $ | 0.08 | $ | 1,743 | $ | 0.07 | Net Income as reported | $ | 4,198 | $ | 0.15 | $ | 6,218 | $ | 0.24 | ||||||||||
| 318 | 0.01 | 161 | 0.01 | Stock compensation expense | 698 | 0.03 | 460 | 0.02 | ||||||||||||||||||
| 17 | - | 44 | - | Severance costs | 17 | - | 44 | - | ||||||||||||||||||
| - | - | 223 | 0.01 | Restructuring and plant closure costs (gains) | 2 | - | (3,223 | ) | (0.12 | ) | ||||||||||||||||
| - | - | (436 | ) | (0.02 | ) | Tax impact due to the change in the estimated annual tax rate used for GAAP reporting purposes | (297 | ) | (0.01 | ) | (160 | ) | (0.01 | ) | ||||||||||||
| $ | 2,543 | $ | 0.09 | $ | 1,735 | $ | 0.07 | Net Income adjusted | $ | 4,618 | $ | 0.17 | $ | 3,339 | $ | 0.13 | ||||||||||
| 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 December 31 | (Unaudited; In thousands) | Six Months Ended December 31 | |||||||||||||||||||||
| EBITDA and Adjusted EBITDA | |||||||||||||||||||||||
| 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||
| $ | 2,686 | $ | 1,760 | 53 | % | Operating Income as reported | $ | 4,888 | $ | 8,599 | -43 | % | |||||||||||
| 1,990 | 2,152 | Depreciation and Amortization | 4,023 | 4,551 | |||||||||||||||||||
| $ | 4,676 | $ | 3,912 | 20 | % | EBITDA | $ | 8,911 | $ | 13,150 | -32 | % | |||||||||||
| 397 | 199 | Stock compensation expense | 902 | 597 | |||||||||||||||||||
| 21 | 54 | Severance costs | 21 | 54 | |||||||||||||||||||
| - | 276 | Restructuring and plant closure costs (gains) | 3 | (4,312 | ) | ||||||||||||||||||
| $ | 5,094 | $ | 4,441 | 15 | % | Adjusted EBITDA | $ | 9,837 | $ | 9,489 | 4 | % | |||||||||||
| Three Months Ended December 31 | (Unaudited; In thousands) | Six Months Ended December 31 | |||||||||||||||||||||
| Free Cash Flow | |||||||||||||||||||||||
| 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||
| $ | 5,778 | $ | 14,544 | -60 | % | Cash Flow From Operations | $ | 13,417 | $ | 20,903 | -36 | % | |||||||||||
| - | Proceeds from Sale of Fixed Assets | - | 12,332 | ||||||||||||||||||||
| (475 | ) | (764 | ) | Capital Expenditures | (880 | ) | (1,119 | ) | |||||||||||||||
| $ | 5,303 | $ | 13,780 | -62 | % | Free Cash Flow | $ | 12,537 | $ | 32,116 | -61 | % | |||||||||||
Condensed Consolidated Statement of Operations
| Three Months Ended December 31 | Six Months Ended December 31 | ||||||||||||||||
| (Unaudited) | |||||||||||||||||
| 2020 | 2019 | (In thousands, except per share data) | 2020 | 2019 | |||||||||||||
| $ | 76,387 | $ | 82,377 | Net Sales | $ | 146,393 | $ | 171,078 | |||||||||
| 56,676 | 62,136 | Cost of Products Sold | 108,407 | 128,724 | |||||||||||||
| 5 | - | Severance Costs | 5 | - | |||||||||||||
| - | 277 | Restructuring Costs | 3 | 535 | |||||||||||||
| 19,706 | 19,964 | Gross Profit | 37,978 | 41,819 | |||||||||||||
| 17,004 | 18,151 | Selling and Administrative Costs | 33,074 | 38,013 | |||||||||||||
| 16 | 54 | Severance Costs | 16 | 54 | |||||||||||||
| - | (1 | ) | Restructuring Costs (Gains) | - | (4,847 | ) | |||||||||||
| 2,686 | 1,760 | Operating Income | 4,888 | 8,599 | |||||||||||||
| (135 | ) | (91 | ) | Other (Income) Expense | (240 | ) | (9 | ) | |||||||||
| 62 | 233 | Interest Expense, net | 119 | 664 | |||||||||||||
| 2,759 | 1,618 | Income Before Taxes | 5,009 | 7,944 | |||||||||||||
| 551 | (125 | ) | Income Tax | 811 | 1,726 | ||||||||||||
| $ | 2,208 | $ | 1,743 | Net Income | $ | 4,198 | $ | 6,218 | |||||||||
| Weighted Average Common Shares Outstanding | |||||||||||||||||
| 26,639 | 26,280 | Basic | 26,580 | 26,257 | |||||||||||||
| 27,360 | 26,534 | Diluted | 27,161 | 26,364 | |||||||||||||
| Earnings Per Share | |||||||||||||||||
| $ | 0.08 | $ | 0.07 | Basic | $ | 0.16 | $ | 0.24 | |||||||||
| $ | 0.08 | $ | 0.07 | Diluted | $ | 0.15 | $ | 0.24 | |||||||||
Condensed Balance Sheet
| (amounts in thousands) | |||||||
| December 31, | June 30, | ||||||
| 2020 | 2020 | ||||||
| Current Assets | $ | 99,417 | $ | 85,858 | |||
| Property, Plant and Equipment, net | 24,756 | 26,535 | |||||
| Other Assets | 57,108 | 59,870 | |||||
| Total Assets | $ | 181,281 | $ | 172,263 | |||
| Current Liabilities | $ | 41,236 | $ | 34,649 | |||
| Long-Term Debt | - | - | |||||
| Other Long-Term Liabilities | 10,772 | 11,914 | |||||
| Shareholders' Equity | 129,273 | 125,700 | |||||
| $ | 181,281 | $ | 172,263 | ||||
FAQ
What were LSI Industries' earnings for Q2 2021?
What is the adjusted net income for LSI Industries in Q2 2021?
What factors contributed to LSI Industries' profitability in Q2 2021?
How did free cash flow change in Q2 2021 for LSI Industries?
What products did LSI Industries launch in Q2 2021?
