LSI Industries Reports Fiscal Second Quarter 2022 Results and Declares Quarterly Cash Dividend
LSI Industries reported a remarkable fiscal Q2 2022, achieving a 45% increase in total net sales to $111.1 million year-over-year, with organic sales up 19%. Net income rose by 41% to $3.1 million, or $0.11 per diluted share. Adjusted net income also surged 67% to $4.2 million, representing $0.15 per diluted share. The company’s robust performance is attributed to the recovery in non-residential construction and the JSI Store Fixtures acquisition. A regular cash dividend of $0.05 per share is set for February 15, 2022.
- Total net sales up 45% y/y to $111.1 million.
- Organic net sales increased by 19%.
- Net income rose 41% to $3.1 million.
- Adjusted net income increased 67% to $4.2 million.
- Adjusted EBITDA grew 65% to $8.4 million.
- Lighting and Display Solutions segments showed significant sales growth.
- Ongoing supply chain challenges present risks.
- Inflation continues to impact input costs.
CINCINNATI, Jan. 27, 2022 (GLOBE NEWSWIRE) -- LSI Industries Inc. (NASDAQ: LYTS, “LSI” or the “Company”) a leading U.S. based manufacturer of indoor/outdoor lighting and display solutions, today announced results for the second quarter of fiscal year 2022.
FISCAL SECOND QUARTER 2022
- Total net sales +
45% y/y to$111.1 million , organic net sales +19% y/y - Lighting sales +
27% y/y; Display Solution sales +72% y/y - Net Income +
41% y/y to$3.1 million , or$0.11 per diluted share - Adjusted net income +
67% y/y to$4.2 million , or$0.15 per diluted share - Adjusted EBITDA +
65% y/y to$8.4 million
LSI generated significant year-over-year growth in sales and profitability in the fiscal second quarter, driven by a continued recovery in non-residential construction activity, systemic gains in targeted vertical markets, together with contributions from the JSI Store Fixtures acquisition (“JSI”) completed in May 2021.
The Company reported net sales of
The Company reported adjusted net income of
The Company declared a regular cash dividend of
MANAGEMENT COMMENTARY
“Our solid fiscal second quarter performance reflects the accelerating momentum building in our business,” stated James A. Clark, President and Chief Executive Officer of LSI Industries.
“Entering the third quarter, demand conditions have improved, contributing to organic growth across both our Lighting and Display Solutions businesses,” continued Clark. “Sales exceeded
“In view of heightened supply chain disruptions evidenced throughout the pandemic, we’ve taken preemptive actions to ensure uninterrupted product availability for both new and existing customers,” continued Clark. “These actions have positioned us to win new business, most notably capitalizing on short lead-time opportunities. To that end, LSI was recently awarded a large order from a leading international petroleum retailer whose construction plan required immediate access to componentry and domestic manufacturing capabilities. LSI was uniquely suited to fulfill this time-sensitive customer order, further positioning us as a proven, reliable partner, while demonstrating the value we place on building customer trust and confidence in our company.
“Our vertical market strategy emphasizes close collaboration with our customers, an approach that often positions us to participate in new, emerging growth opportunities integral to their future business development. For example, during the second quarter, we initiated a turnkey solar installation for a petroleum fueling station. The site included solar panels mounted on the fuel canopy and car wash that will materially reduce the location’s energy consumption, carbon footprint and operating expenses. The turnkey solar installation supports the continued development of LSI’s service business model, exhibiting full lifecycle project capabilities that span from concept to installation.
“The Lighting segment delivered a solid quarter, generating sales growth of
“Sales for the Display Solutions segment increased
“Quotation and order activity remains favorable for Display Solutions, most notably in the grocery market vertical. In the quarter, JSI was awarded a
“Proposal activity for potential programs in the petroleum graphics and digital QSR market verticals are in development. Our current large QSR digital signage program is creating opportunities with additional banners under the customer flagship brand, with both committed business and potential programs.
“Targeted, discretionary investments in componentry and select finished inventories to support critical sales growth initiatives resulted in a
Mr. Clark concluded, “We are incrementally more positive on the outlook for the second half of fiscal 2022 than we were at the end of the fiscal first quarter. Market indicators remain favorable, while current quote, order and backlog levels are measurably above last year. While the operating environment remains challenging, our supply chain capabilities have proven an important point of differentiation for our business, positioning us to achieve further margin expansion as price escalations offset rising input costs.”
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: | 1-877-407-4018 |
| Conference ID: | 13726268 |
| Call Replay: | 1-844-512-2921 |
| Replay Passcode: | 13726268 |
A replay of the conference call will be available between January 27, 2022 and February 10, 2022. 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 with shares listed on the NASDAQ Stock Market under the symbol LYTS. The Company manufactures non-residential lighting and display solutions. Non-residential lighting consists of high-performance, American-made lighting solutions. The Company’s strength in outdoor lighting applications creates opportunities to introduce additional solutions to its valued customers. 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
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
| Financial Highlights | ||||||||||||||||||
| Three Months Ended December 31 | Six Months Ended December 31 | |||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| 2021 | 2020 | % Change | (In thousands, except per share data) | 2021 | 2020 | % Change | ||||||||||||
| $ | 111,143 | $ | 76,387 | 45% | Net sales | $ | 217,540 | $ | 146,393 | 49% | ||||||||
| 4,422 | 2,686 | 65% | Operating income as reported | 8,866 | 4,888 | 81% | ||||||||||||
| 1,130 | 397 | 185% | Stock compensation expense | 1,686 | 902 | 87% | ||||||||||||
| 340 | - | NM | Acquisition costs | 340 | - | NM | ||||||||||||
| - | 21 | -100% | Severance costs | - | 21 | -100% | ||||||||||||
| - | - | NM | Restructuring costs | - | 3 | -100% | ||||||||||||
| $ | 5,892 | $ | 3,104 | 90% | Operating income as adjusted | $ | 10,892 | $ | 5,814 | 87% | ||||||||
| $ | 3,105 | $ | 2,208 | 41% | Net income as reported | $ | 6,238 | $ | 4,198 | 49% | ||||||||
| $ | 4,241 | $ | 2,543 | 67% | Net income as adjusted | $ | 7,781 | $ | 4,618 | 68% | ||||||||
| $ | 0.11 | $ | 0.08 | 38% | Earnings per share (diluted) as reported | $ | 0.22 | $ | 0.15 | 47% | ||||||||
| $ | 0.15 | $ | 0.09 | 67% | Earnings per share (diluted) as adjusted | $ | 0.28 | $ | 0.17 | 65% | ||||||||
| (amounts in thousands) | |||||||
| December 31, | June 30, | ||||||
| 2021 | 2021 | ||||||
| Working capital | $ | 78,852 | $ | 54,113 | |||
| Total assets | $ | 303,469 | $ | 286,821 | |||
| Long-term debt | $ | 83,030 | $ | 68,178 | |||
| Other long-term liabilities | $ | 13,762 | $ | 16,578 | |||
| Shareholders' equity | $ | 138,886 | $ | 131,170 | |||
Three Months Ended December 31, 2021 Results
Net sales for the three months ended December 31, 2021 were
Six Months Ended December 31, 2021 Results
Net sales for the six months ended December 31, 2021 were
Balance Sheet
The balance sheet at December 31, 2021 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, 2021 and 2020. Operating income, net income and earnings per share, which exclude the impact of stock compensation expense, acquisition costs, severance costs 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 Adjusted EBITDA), Free Cash Flow and Organic Net Sales. 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 Net Sales.
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| December 31 | December 31 | |||||||||||||||||||||
| 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 | ||||||||||||||||||||||
| $ | 3,105 | $ | 0.11 | $ | 2,208 | $ | 0.08 | Net income as reported | $ | 6,238 | $ | 0.22 | $ | 4,198 | $ | 0.15 | ||||||
| 867 | 0.03 | 318 | 0.01 | Stock compensation expense | 1,274 | 0.05 | 698 | 0.03 | ||||||||||||||
| 269 | 0.01 | - | - | Acquisition costs | 269 | 0.01 | - | - | ||||||||||||||
| - | - | 17 | - | Severance costs | - | 17 | - | |||||||||||||||
| - | - | - | - | Restructuring costs | - | 2 | - | |||||||||||||||
| - | - | - | - | Tax impact due to the change in the estimated annual tax rate used for GAAP reporting purposes | - | - | (297 | ) | (0.01 | ) | ||||||||||||
| $ | 4,241 | $ | 0.15 | $ | 2,543 | $ | 0.09 | Net income adjusted | $ | 7,781 | $ | 0.28 | $ | 4,618 | $ | 0.17 | ||||||
| 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 | ||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||||||
| $ | 4,422 | $ | 2,686 | 65 | % | Operating Income as reported | $ | 8,866 | $ | 4,888 | 81 | % | ||||||||||
| 2,538 | 1,990 | Depreciation and amortization | 5,101 | 4,023 | ||||||||||||||||||
| $ | 6,960 | $ | 4,676 | 49 | % | EBITDA | $ | 13,967 | $ | 8,911 | 57 | % | ||||||||||
| 1,130 | 397 | Stock compensation expense | 1,686 | 902 | ||||||||||||||||||
| 340 | - | Acquisition costs | 340 | - | ||||||||||||||||||
| - | 21 | Severance costs | - | 21 | ||||||||||||||||||
| - | - | Restructuring costs | - | 3 | ||||||||||||||||||
| $ | 8,430 | $ | 5,094 | 65 | % | Adjusted EBITDA | $ | 15,993 | $ | 9,837 | 63 | % | ||||||||||
| Three Months Ended December 31 | (Unaudited; In thousands) | Six Months Ended December 31 | ||||||||||||||||||||
| Free Cash Flow | ||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||||||
| $ | (8,654 | ) | $ | 5,778 | n/m | Cash flow from operations | $ | (16,543 | ) | $ | 13,417 | NM | ||||||||||
| (448 | ) | (475 | ) | Capital expenditures | (745 | ) | (880 | ) | ||||||||||||||
| $ | (9,102 | ) | $ | 5,303 | n/m | Free cash flow | $ | (17,288 | ) | $ | 12,537 | NM | ||||||||||
| Three Months Ended December 31 | (Unaudited; In thousands) | Six Months Ended December 31 | ||||||||||||||||
| Reconciliation of net sales to organic net sales | ||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||
| $ | 57,276 | $ | 45,126 | 26.9 | % | Lighting Segment | $ | 108,536 | $ | 90,531 | 19.9 | % | ||||||
| $ | 53,867 | $ | 31,261 | 72.3 | % | Display Solutions Segment | $ | 109,004 | $ | 55,862 | 95.1 | % | ||||||
| $ | 111,143 | $ | 76,387 | 45.5 | % | Total Net Sales | $ | 217,540 | $ | 146,393 | 48.6 | % | ||||||
| 20,560 | - | JSI | 43,907 | - | ||||||||||||||
| $ | 90,583 | $ | 76,387 | 18.6 | % | Total organic net sales | $ | 173,633 | $ | 146,393 | 18.6 | % | ||||||
| Three Months Ended December 31 | Six Months Ended December 31 | |||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||
| $ | 53,867 | $ | 31,261 | 72.3 | % | Display Solutions Segment | $ | 109,004 | $ | 55,862 | 95.1 | % | ||||||
| 20,560 | - | JSI | 43,907 | - | ||||||||||||||
| $ | 33,307 | $ | 31,261 | 6.5 | % | Total Display Solutions Segment organic net sales | $ | 65,097 | $ | 55,862 | 16.5 | % | ||||||
Condensed Consolidated Statement of Operations
| Three Months Ended December 31 | Six Months Ended December 31 | |||||||||||||
| (Unaudited) | ||||||||||||||
| 2021 | 2020 | (In thousands, except per share data) | 2021 | 2020 | ||||||||||
| $ | 111,143 | $ | 76,387 | Net sales | $ | 217,540 | $ | 146,393 | ||||||
| 85,695 | 56,676 | Cost of products sold | 167,582 | 108,407 | ||||||||||
| - | 5 | Severance costs | - | 5 | ||||||||||
| - | - | Restructuring costs | - | 3 | ||||||||||
| 25,448 | 19,706 | Gross profit | 49,958 | 37,978 | ||||||||||
| 21,026 | 17,004 | Selling and administrative costs | 41,092 | 33,074 | ||||||||||
| - | 16 | Severance costs | - | 16 | ||||||||||
| 4,422 | 2,686 | Operating Income | 8,866 | 4,888 | ||||||||||
| 9 | (135 | ) | Other expense (income) | 88 | (240 | ) | ||||||||
| 529 | $ | 62 | Interest expense, net | 763 | 119 | |||||||||
| 3,884 | 2,759 | Income before taxes | 8,015 | 5,009 | ||||||||||
| 779 | 551 | Income tax | 1,777 | 811 | ||||||||||
| $ | 3,105 | $ | 2,208 | Net income | $ | 6,238 | $ | 4,198 | ||||||
| Weighted Average Common Shares Outstanding | ||||||||||||||
| 27,292 | 26,639 | Basic | 27,144 | 26,580 | ||||||||||
| 28,067 | 27,360 | Diluted | 27,895 | 27,161 | ||||||||||
| Earnings Per Share | ||||||||||||||
| $ | 0.11 | $ | 0.08 | Basic | $ | 0.23 | $ | 0.16 | ||||||
| $ | 0.11 | $ | 0.08 | Diluted | $ | 0.22 | $ | 0.15 | ||||||
Condensed Balance Sheet
| (amounts in thousands) | |||||||
| December 31, | June 30, | ||||||
| 2021 | 2021 | ||||||
| Current assets | $ | 146,643 | $ | 125,008 | |||
| Property, plant and equipment, net | 28,614 | 30,552 | |||||
| Other assets | 128,212 | 131,261 | |||||
| Total assets | $ | 303,469 | $ | 286,821 | |||
| Current maturities of long-term debt | $ | 3,571 | $ | - | |||
| Other current liabilities | 64,220 | 70,895 | |||||
| Long-term debt | 83,030 | 68,178 | |||||
| Other long-term liabilities | 13,762 | 16,578 | |||||
| Shareholders' equity | 138,886 | 131,170 | |||||
| $ | 303,469 | $ | 286,821 | ||||
FAQ
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