LSI Industries Reports Fiscal 2024 Third Quarter Results and Declares Quarterly Cash Dividend
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
LSI reported Adjusted EBITDA of
On
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
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
“Having built a strong platform for organic growth, inorganic growth is also an important focus for us, first with our acquisition of
“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
“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
“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
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
Domestic Replay: 844-512-2921
International Replay: 412-317-6671
Conference ID: 13745799
ABOUT
Headquartered in
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 Ended |
Nine Months Ended |
|||||||||||||||||
(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) | ||||||
|
|
|||||
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
Net sales for the three months ended
Nine Months Ended
Net sales for the nine months ended
Balance Sheet
The balance sheet at
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 nine months ended
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
|
|
|||||||||||||||||||||
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 adjusted net 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 Ended |
(Unaudited; In thousands) |
Nine Months Ended |
||||||||||||||||||||
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 Ended |
(Unaudited; In thousands) |
Nine Months Ended |
||||||||||||||||||||
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 |
|
|
||||||
(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 Ended |
Nine Months Ended |
||||||||||||
(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) | ||||||
|
|
|||||
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
720.778.2415
LYTS@vallumadvisors.com
Source: