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 its fiscal 2024
fourth quarter and full year ended June 30, 2024.
FISCAL 2024 FOURTH
QUARTER
- Net Sales $129.0 million, +4% to prior year
- Net Income $5.7 million, including $1.0 million of acquisition
related expense
- Adj. Net Income $7.3 million or $0.24 per diluted share
- EBITDA $11.9 million; Adjusted EBITDA $14.0 million or
10.9%/sales
- Free Cash Flow $10.3 million
- Completed acquisition of EMI Industries for $50 million
cash
FISCAL 2024 FULL YEAR
- Net Sales $469.6 million
- Net Income $25.0 million or $0.83 per diluted share
- Adjusted Net Income $28.6 million, $0.95 per diluted share
- EBITDA of $45.5 million; Adjusted EBITDA $51.4 million or
11.0%/sales, +60 bps y/t/y
- Free Cash Flow of $38.0 million
LSI demonstrated solid execution on its vertical market strategy
during the fiscal fourth quarter, with an emphasis on higher-value,
fully integrated solutions. The Company’s fourth quarter
performance reflects continuation of recent demand trends which
fluctuate by vertical market.
As previously disclosed, LSI acquired EMI Industries (“EMI”) on
April 18, 2024, serving to further enhance its one-stop, end-to-end
integrated display solutions offering within convenience store,
grocery, and restaurant industries. LSI believes the transaction,
which is immediately accretive to LSI’s adjusted earnings per
share, will provide significant commercial synergy potential
through the coming years, consistent with the value creation thesis
outlined within LSI’s Fast Forward Strategy.
LSI reported net sales of $129.0 million in the quarter,
including $18.1 million of partial-quarter contribution from EMI.
Excluding EMI, sales declined versus the prior-year period, due
largely to continued lower demand in the grocery vertical. Lower
grocery sales activity was due primarily to the proposed merger of
two large industry participants, which we have previously reported
and remains under regulatory review at this time.
Fourth quarter net income was $5.7 million, including $1.0
million of non-recurring EMI acquisition related expense. Adjusted
net income was $7.3 million in the fourth quarter, or $0.24 per
diluted share, while Adjusted EBITDA was $14.0 million or 10.9% of
net sales.
LSI generated $10.3 million of free cash flow in the fourth
quarter, driven by the continued high-level conversion of earnings
to cash and working capital efficiency.
For the twelve months ended June 30, 2024, LSI reported net
sales of $469.6 million, or $0.95 per adjusted diluted share. For
the full-year fiscal 2024, LSI delivered appreciable margin rate
expansion, reflecting a strong focus on quality of earnings.
Adjusted EBITDA of $51.4 million was comparable to prior year
despite lower sales, reflecting strong operational discipline and
cost controls, while the full year Adjusted EBITDA margin rate was
11.0% or 60 basis points above the prior-year period. A
reconciliation of GAAP and non-GAAP financial results is included
in this press release.
Full fiscal-year free cash flow was $38.0 million, enabling the
Company to reinvest throughout the year in both organic and
inorganic growth initiatives. LSI exits fiscal year 2024 with a
healthy balance sheet, with a net leverage ratio of 1.0x, including
the acquisition of EMI in April. As of June 30, 2024, the Company
had approximately $50 million of cash and availability under its
existing credit facility.
The Company declared a regular cash dividend of $0.05 per share
payable on September 3, 2024, to shareholders of record on August
26, 2024.
MANAGEMENT COMMENTARY
“The fiscal fourth quarter concludes a pivotal year for our
business, as we continued to expand our vertical market
capabilities, including the acquisition of EMI Industries,” stated
James A. Clark, President, and CEO of LSI. “Executing on our
multi-year value-creation strategy, we have continued to develop
leading positions across growing industry verticals, strengthened
relationships across key partners and channels, and further
improved our quality of earnings. LSI brings an unmatched portfolio
of integrated solutions to every customer opportunity.
“Sound execution underscores our fourth quarter performance, as
LSI achieved solid financial results while effectively managing an
environment of fluctuating demand levels,” continued Clark. “For
the full fiscal year, we achieved adjusted EBITDA of over $51
million, approximately equal to our record prior year level, and
expanded EBITDA margin by sixty basis points to 11.0%. We generated
free cash flow of over $38 million and exit the year with a strong
balance sheet including a net leverage ratio of 1.0x. Thanks to the
dedication and hard work of our team, we continue to demonstrate
structurally higher performance levels across our end markets.
“The underlying demand fundamentals for our key markets remain
healthy and we are positioned to achieve another year of profitable
growth in fiscal 2025. Growth is expected to resume within the
grocery vertical over the coming year, and our display solutions
backlog for the refueling/c-store market is strong entering fiscal
2025, reflecting multiple major customer program wins in the second
half of fiscal 2024. In addition, with our recent acquisition of
EMI, we are excited to offer our customers an even broader array of
complementary products and solutions, while cross-selling into both
new and existing relationships. Our ability to serve the full
project lifecycle, from concept, to installation, to ongoing
support, provides meaningful opportunity to capture value across
each phase of the project continuum, further strengthening our
customers’ trust and confidence in LSI, and earn an increased share
of business.
“Over the last year, we’ve continued to invest in innovation,
positioning us to introduce new, next generation applications
within our vertical markets, ” stated Clark. “We introduced more
than twenty-five new or enhanced products in fiscal 2024, covering
both the Lighting and Display Solutions segments, and have a steady
pipeline slated for launch in fiscal 2025, maintaining a product
vitality rate of over 30%. Activity in Display Solutions was
highlighted by the introduction of our new refrigerated display
case series of products utilizing the environmentally friendly R290
technology, which is free of ozone depleting properties. Initial
shipments began in the fourth quarter, and we are well positioned
to capitalize on resumption of demand in the grocery vertical,
where several large customers have publicly stated their intent to
fully convert to R290 technology.
“Additionally, we continued to strengthen our relationships with
our channel partners and end customers throughout fiscal 2024. Our
teams conducted a record number of lighting training sessions at
our Cincinnati headquarters and other locations last year,
including personnel from our external sales agency partners,
distributors, contractors, and end users. In May, we hosted all our
agency principals for a three-day conference, collaborating on
growth plans for fiscal 2025 and beyond. With over eighty
executives in attendance from over forty firms, we outlined product
roadmaps and new product launch schedules, and discussed sales
force requirements to be successful.
“Within the Lighting segment, we experienced generally stable
demand conditions across most of our vertical markets in the fourth
quarter,” stated Clark. “In fiscal 2024, sales were 4% below prior
year, with LSI outperforming the broader market, capturing share in
select vertical markets. Operating income for the year increased 5%
driven by the 200-basis point increase in gross margin. Recent
trends continue as project quotation levels remain steady; however,
the quote-to-order conversion period remains extended, particularly
for larger project activity. Construction schedule changes persist
due to non-lighting supply chain issues together with availability
of skilled labor. With lighting installation occurring in the
late-cycle phase of construction, we continue to incur high levels
of production schedule changes to our backlog, given changes in
project timing. Pricing for project quotations remains stable and
we expect that trend to continue in the first quarter of fiscal
2025.
“Fourth quarter Display Solutions sales increased 22% versus the
prior year period, including the partial quarter impact of the EMI
acquisition. Sales of print and digital graphics increased 9% in
the quarter driven by the multiple, large program orders received
in previous quarters. Momentum is expected to continue into fiscal
2025 and we enter the year with a strong backlog in the
refueling/c-store vertical. The service and installation portion of
our business realized stair-step growth in the quarter and will be
leveraged across multiple customer programs throughout fiscal 2025.
While fourth quarter Display Case sales to the grocery vertical
remained soft as expected, orders were above the prior year
quarter, resulting in the first year-over-year order increase in
five quarters.
Clark concluded: “LSI enters fiscal 2025 well positioned to
execute the next phase of our vertical market strategy. We remain
encouraged by the expectations of emerging, multi-year investment
cycles across our key vertical markets; the significant commercial
potential provided by our expanded products and solutions; our
strong relationships with both our channel partners and loyal
end-users; the high level of talent and engagement we see across
the organization; and optionality provided by our strong,
well-capitalized balance sheet. We are building a differentiated
model which we are confident will deliver sustained, profitable
growth over time, while creating long-term value for our
shareholders.”
FISCAL 2024 FOURTH 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 August 29, 2024:
Domestic Replay: 844-512-2921 International
Replay: 412-317-6671 Conference ID: 13747859
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, refrigerated
products, and custom displays, are engineered to elevate brands in
competitive markets. With a workforce of nearly 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 EndedJune 30 Twelve Months EndedJune 30
(Unaudited)
2024
2023
(In thousands, except per share data)
2024
2023
$
129,007
$
123,636
Net sales
$
469,638
$
496,979
95,173
87,773
Cost of products sold
335,962
360,003
-
-
Restructuring/Severance costs
508
31
33,834
35,863
Gross profit
133,168
136,945
23,830
25,606
Selling and administrative costs
96,618
99,018
11
20
Severance costs
32
35
-
-
Consulting expense: Commercial Growth Initiatives
-
864
982
-
Acquisition costs
1,001
-
9,011
10,237
Operating Income
35,517
37,028
121
(72
)
Other (income) expense
262
15
1,003
764
Interest expense, net
2,156
3,687
7,887
9,545
Income before taxes
33,099
33,326
2,219
1,130
Income tax
8,122
7,564
$
5,668
$
8,415
Net income
$
24,977
$
25,762
Weighted
Average Common Shares Outstanding
29,256
28,471
Basic
29,049
28,127
30,245
29,680
Diluted
30,068
29,316
Earnings Per Share
$
0.19
$
0.30
Basic
$
0.86
$
0.92
$
0.19
$
0.28
Diluted
$
0.83
$
0.88
`
(amounts in thousands) June 30, June
30,
2024
2023
Current assets
$
162,499
$
149,876
Property, plant and equipment, net
32,959
25,430
Other assets
153,342
120,844
Total assets
$
348,800
$
296,150
Current maturities of long-term debt
$
3,571
$
3,571
Other current liabilities
75,636
70,762
Long-term debt
50,658
31,629
Other long-term liabilities
14,580
12,610
Shareholders' equity
204,355
177,578
$
348,800
$
296,150
Three Months Ended June 30, 2024,
Results
Net sales for the three months ended June 30, 2024, were $129.0
million, up 4% from the three months ended June 30, 2023, reported
net sales of $123.6 million. Lighting Segment net sales of $65.1
million decreased 9% and Display Solutions Segment net sales of
$63.9 million increased 22% from last year’s fourth quarter net
sales. Net income for the three months ended June 30, 2024, was
$5.7 million, or $0.19 per share, compared to $8.4 million or $0.28
per share for the three months ended June 30, 2023. Earnings per
share represents diluted earnings per share.
Twelve Months Ended June 30, 2024,
Results
Net sales for the twelve months ended June 30, 2024, were $469.6
million, down 6% from the twelve months ended June 30, 2023,
reported net sales of $497.0 million. Lighting Segment net sales of
$262.4 million decreased 4% and Display Solutions Segment net sales
of $207.2 million decreased 7% from last year’s net sales. Net
income for the twelve months ended June 30, 2024, was $25.0
million, or $0.83 per share, compared to $25.8 million or $0.88 per
share for the twelve months ended June 30, 2023. Earnings per share
represents diluted earnings per share.
Balance Sheet
The balance sheet on June 30, 2024, included current assets of
$162.5 million, current liabilities of $79.2 million and working
capital of $83.3 million, which includes cash of $4.1 million. The
current ratio was 2.1 to 1. The balance sheet also included
shareholders’ equity of $204.4 million and long-term debt of $50.7
million. It is the Company’s priority to continuously generate
sufficient cash flow, coupled with our credit facility, to
adequately fund operations.
Cash Dividend Actions
The Board of Directors declared a regular cash dividend of $0.05
per share for the fourth quarter of fiscal 2024, payable September
3, 2024, to shareholders of record as of the close of business on
August 26, 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 twelve
months ended June 30, 2024, and 2023. Operating income, net income,
and earnings per share, which exclude the impact of long-term
performance based compensation expense, commercial growth
opportunity expense, acquisition costs, and restructuring and
severance 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), Net Debt to 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 EndedJune 30 Twelve Months EndedJune 30
(Unaudited)
2024
2023
% Change (In thousands, except per share data)
2024
2023
% Change
$
129,007
$
123,636
4
%
Net sales
$
469,638
$
496,979
-6
%
9,011
10,237
-12
%
Operating income as reported
35,517
37,028
-4
%
1,185
1,477
-20
%
Long-Term Performance Based Compensation
4,380
3,998
10
%
982
-
NM
Acquisition costs
1,001
-
NM
10
20
-50
%
Restructuring/Severance costs
539
66
717
%
-
-
NM
Consulting expense: Commercial Growth Initiatives
-
864
NM
$
11,188
$
11,734
-5
%
Operating income as adjusted
$
41,437
$
41,956
-1
%
$
5,668
$
8,415
-33
%
Net income as reported
$
24,977
$
25,762
-3
%
$
7,278
$
8,797
-17
%
Net income as adjusted
$
28,625
$
28,997
-1
%
$
0.19
$
0.28
-33
%
Earnings per share (diluted) as reported
$
0.83
$
0.88
-6
%
$
0.24
$
0.30
-20
%
Earnings per share (diluted) as adjusted
$
0.95
$
0.99
-4
%
Three Months Ended Twelve Months Ended June
30 June 30
2024
2023
(In thousands, except per share data)
2024
2023
DilutedEPS DilutedEPS DilutedEPS
DilutedEPS Reconciliation of net income to adjusted net
income
$
5,668
$
0.19
$
8,415
$
0.28
Net income as reported
$
24,977
$
0.83
$
25,762
$
0.88
906
0.03
771
0.03
Long-Term Performance Based Compensation
3,272
0.11
2,879
0.10
722
0.02
-
-
Acquisition costs
735
0.02
-
-
6
-
13
-
Restructuring/Severance costs
396
0.01
51
-
-
-
-
-
Consulting expense: Commercial Growth Initiatives
-
-
707
0.02
(24
)
-
(402
)
(0.01
)
Tax rate difference between reported and adjustednet income
(755
)
(0.03
)
(402
)
(0.01
)
$
7,278
$
0.24
$
8,797
$
0.30
Net income adjusted
$
28,625
$
0.95
$
28,997
$
0.99
Three Months EndedJune 30 (Unaudited; In thousands)
Twelve Months EndedJune 30 Net Income to Adjusted
EBITDA
2024
2023
% Change
2024
2023
% Change
5,668
8,415
-33
%
Net income as reported
24,977
25,762
-3
%
2,219
1,130
Income Tax
8,122
7,564
1,003
764
Interest expense, net
2,156
3,687
121
(72
)
Other expense (income)
262
15
$
9,011
$
10,237
-12
%
Operating Income as reported
$
35,517
$
37,028
-4
%
2,856
2,369
Depreciation and amortization
9,999
9,664
$
11,867
$
12,606
-6
%
EBITDA
$
45,516
$
46,692
-3
%
1,185
1,477
Long-Term Performance Based Compensation
4,380
3,998
982
-
Acquisition costs
1,001
-
10
20
Restructuring/Severance costs
539
66
-
-
Consulting expense: Commercial Growth Initiatives
-
864
$
14,044
$
14,103
0
%
Adjusted EBITDA
$
51,436
$
51,620
0
%
10.9
%
11.4
%
Adjusted EBITDA as a Percentage of Sales
11.0
%
10.4
%
Three Months EndedJune 30 (Unaudited; In
thousands) Twelve Months EndedJune 30 Free Cash
Flow
2024
2023
% Change
2024
2023
% Change
$
11,096
$
17,040
-35
%
Cash flow from operations
$
43,393
$
49,588
-12
%
(762
)
(1,454
)
Capital expenditures
(5,388
)
(3,208
)
$
10,334
$
15,586
-34
%
Free cash flow
$
38,005
$
46,380
-18
%
Net Debt to Adjusted EBITDA Ratio June 30,
(amounts in thousands)
2024
2023
Current Maturity of Debt
$
3,571
$
3,571
Long-Term Debt
50,658
31,629
Total Debt
$
54,229
$
35,200
Less: Cash
(4,110
)
(1,828
)
Net Debt
$
50,119
$
33,372
Adjusted EBITDA - Trailing Twelve Months
$
51,436
$
51,620
Net Debt to Adjusted EBITDA Ratio
0.97
0.65
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240815596197/en/
INVESTOR & MEDIA CONTACT Noel Ryan, IRC
LYTS@vallumadvisors.com
LSI Industries (NASDAQ:LYTS)
過去 株価チャート
から 10 2024 まで 11 2024
LSI Industries (NASDAQ:LYTS)
過去 株価チャート
から 11 2023 まで 11 2024
