LSI Industries Reports Fiscal 2025 First Quarter Results and Declares Quarterly Cash Dividend
FISCAL 2025 FIRST QUARTER RESULTS
-
Net Sales of$138.1 million , +12% y/y -
Net Income of
$6.7 million , or$0.22 per diluted share -
Adjusted Net Income of
$8.0 million , or$0.26 per diluted share -
EBITDA of
$12.1 million ; Adjusted EBITDA$13.4 million -
Free Cash Flow of
$11.1 million - Ratio of net debt to TTM Adjusted EBITDA of 0.8x
- Display Solutions Backlog strong; Grocery vertical orders increased 90% y/y
LSI demonstrated strong commercial and operational execution during the fiscal 2025 first quarter, a performance highlighted by consistent profitability, solid free cash flow generation, disciplined balance sheet management, and successful integration of
The Company reported first quarter sales of
LSI reported net income of
LSI’s acquisition activity has increased in recent years, and inorganic growth is part of our long-term growth strategy, as outlined in our Fast Forward plan. Management believes in providing increased transparency to our core operating results, therefore beginning with the fiscal first quarter 2025, LSI will include amortization expense related to acquired intangible assets as an add-back to its non-GAAP reconciliation. A complete reconciliation of GAAP and non-GAAP results, together with a comparison of current and prior year calculations, is included in this release.
The Company generated free cash flow of
The Company declared a regular cash dividend of
MANAGEMENT COMMENTARY
“During a period of fluctuating demand levels within our vertical markets, LSI continues to build leading positions across our key markets during the first quarter, though a combination of new business wins, together with the recent, successful integration of
“We continued to execute on large, multi-year customer programs within our refueling/c-store vertical during the quarter, while order rates within our grocery vertical increased materially versus the prior-year period,” continued Clark. “Overall order rates increased versus prior year, resulting in a 12% increase in backlog entering the second quarter.
“The durability of our operating model was on display during the first quarter, as our diverse end-markets, long-term customer base, deep solutions portfolio, and unique value proposition supported a solid financial performance, highlighted by sustained profitability and free cash flow generation.
“Within our Display Solutions segment, we continued to execute on an elevated backlog of refueling/c-store program wins awarded in fiscal 2024, which partially offset slower scheduled project activity within the grocery vertical,” continued Clark. “Importantly, order rates within our grocery vertical increased 90% in the first quarter and remain strong early into the second quarter, as both deferred maintenance and planned investments begin to rebound. Our grocery vertical book-to-bill was 1.3x in the first quarter, driven by the adoption of the new R290 refrigerant solution and increased demand for non-refrigerated display case products. As grocery vertical demand resumes, with our new products and increased production capacity, LSI is positioned to support the requirements of our customer base.
“EMI delivered a near record performance in its first full quarter as an LSI company, driven by improved customer activity within the
“We forecast positive activity to continue for Display Solutions in the fiscal second quarter with comparable sales expected to increase year-over-year, and backlog continuing to improve,” stated Clark. “Our second half fiscal 2025 is developing favorably, as much of the recent order activity is scheduled to commence after the holiday season, when store renovation activity is limited.
“Within our Lighting segment, net sales declined year-over year due to lower levels of large project activity,” continued Clark. “While smaller project activity remains healthy, supported by a stable quote-to-order conversion period, we’ve seen a lengthening in the conversion period for large projects, particularly within the warehouse vertical, where construction starts have slowed. Conversely, we’ve continued to experience demand growth in select verticals, including refueling and sport court applications. We anticipate that our Lighting Segment performance will improve in the second quarter, when compared to the year-ago period, and larger known projects, many of which are on hold pending final approval, are released to move forward in the first half of calendar year 2025. Selling prices and material input costs remain stable across all verticals and applications.
“Our Lighting go-to-market model is led by our strong portfolio of outdoor solutions,” stated Clark. “Our area lighting offering is considered one of the best in the industry, led by our Mirada series of products. In the first quarter we formally launched an innovative family of area lights to complement our Mirada range, representing our largest lighting product launch in seven years. The V-LOCITY™ series fixtures offer a sleek, streamlined aesthetic design, and many distinct features providing numerous benefits to end users. Highlighting the benefits is the modular and configurable optical distribution options, customizable to specific applications. Ease and speed of installation is also a major differentiator, providing a unique, simplified solution to the challenging installation process. The interchangeable mounting system along with a lighter weight fixture is expected to generate a 45% reduction in installation time, representing a significant savings to the contractor and end-user.
Clark concluded, “We have built a stronger, more capable business during the last several years, a durable platform equipped to deliver profitable growth, consistent with the financial targets outlined in our Fast Forward plan. We see significant opportunities for both organic and inorganic growth over the coming years as we capitalize on the favorable, long-term secular tailwinds evident across our key vertical markets. We remain committed to a balanced, disciplined approach to capital allocation, maximizing the balance of economic returns, ongoing investment, and shareholder value.”
FISCAL 2024 FIRST 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.
Domestic Live: |
|
844-826-3035 |
International Live: |
|
412-317-5195 |
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: |
|
10193820 |
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
|
||||||||
(Unaudited) | ||||||||
(In thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
Net sales |
$ |
138,095 |
|
$ |
123,441 |
|
||
Cost of products sold |
|
104,343 |
|
|
86,505 |
|
||
Expense on step-up basis of acquired lease |
|
67 |
|
|
- |
|
||
Severance costs and restructuring costs |
|
38 |
|
|
347 |
|
||
Gross profit |
|
33,647 |
|
|
36,589 |
|
||
Severance costs and restructuring costs |
|
22 |
|
|
6 |
|
||
Amortization expense of acquired intangible assets |
|
1,408 |
|
|
- |
|
||
Acquisition costs |
|
48 |
|
|
- |
|
||
Consulting expense: commercial growth initiatives |
|
- |
|
|
19 |
|
||
Selling and administrative costs |
|
23,038 |
|
|
25,536 |
|
||
Operating income |
|
9,131 |
|
|
11,028 |
|
||
Other (income) expense |
|
(61 |
) |
|
96 |
|
||
Interest expense, net |
|
875 |
|
|
566 |
|
||
Income before taxes |
|
8,317 |
|
|
10,366 |
|
||
Income tax |
|
1,635 |
|
|
2,338 |
|
||
Net income |
$ |
6,682 |
|
$ |
8,028 |
|
||
Weighted Average Common Shares Outstanding | ||||||||
Basic |
|
29,593 |
|
|
28,757 |
|
||
Diluted |
|
30,530 |
|
|
29,955 |
|
||
Earnings Per Share | ||||||||
Basic |
$ |
0.23 |
|
$ |
0.28 |
|
||
Diluted |
$ |
0.22 |
|
$ |
0.27 |
|
||
(amounts in thousands) |
||||||||
|
|
|
||||||
|
2024 |
|
|
|
2024 |
|
||
Current assets |
$ |
166,890 |
|
$ |
162,499 |
|
||
Property, plant and equipment, net |
|
32,221 |
|
|
32,959 |
|
||
Other assets |
|
150,391 |
|
|
153,342 |
|
||
Total assets |
$ |
349,502 |
|
$ |
348,800 |
|
||
Current maturities of long-term debt |
$ |
3,571 |
|
$ |
3,571 |
|
||
Other current liabilities |
|
76,497 |
|
|
75,636 |
|
||
Long-term debt |
|
44,118 |
|
|
50,658 |
|
||
Other long-term liabilities |
|
14,133 |
|
|
14,580 |
|
||
Shareholders' equity |
|
211,183 |
|
|
204,355 |
|
||
$ |
349,502 |
|
$ |
348,800 |
|
|||
Three Months Ended
Net sales for the three 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 months ended
Three Months Ended
|
|||||||||||
(Unaudited) | |||||||||||
(In thousands, except per share data) |
|
2024 |
|
|
|
2023 |
|
|
% Change |
||
Net sales |
$ |
138,095 |
|
$ |
123,441 |
|
12 |
% |
|||
Operating income as reported |
|
9,131 |
|
|
11,028 |
|
-17 |
% |
|||
Long-term performance based compensation |
|
1,184 |
|
|
1,325 |
|
|||||
Amortization expense of acquired intangible assets |
|
1,408 |
|
|
1,190 |
|
|||||
Acquisition costs |
|
48 |
|
|
- |
|
|||||
Lease expense on the step-up basis of acquired leases |
|
67 |
|
|
- |
|
|||||
Consulting expense: commercial growth initiatives |
|
- |
|
|
19 |
|
|||||
Severance costs and restructuring costs |
|
60 |
|
|
353 |
|
|||||
Operating income as adjusted |
$ |
11,898 |
|
$ |
13,915 |
|
-14 |
% |
|||
Net income as reported |
$ |
6,682 |
|
$ |
8,028 |
|
-17 |
% |
|||
Net income as adjusted |
$ |
7,981 |
|
$ |
9,610 |
|
-17 |
% |
|||
Earnings per share (diluted) as reported |
$ |
0.22 |
|
$ |
0.27 |
|
-19 |
% |
|||
Earnings per share (diluted) as adjusted |
$ |
0.26 |
|
$ |
0.32 |
|
-19 |
% |
|||
Three Months Ended |
||||||||||||||
|
||||||||||||||
(In thousands, except per share data) |
|
2024 |
|
|
|
|
2023 |
|
|
|||||
|
Diluted EPS |
|
|
Diluted EPS |
||||||||||
Reconciliation of net income to adjusted net income |
|
|
|
|||||||||||
Net income as reported |
$ |
6,682 |
|
$ |
0.22 |
|
$ |
8,028 |
|
$ |
0.27 |
|
||
Long-term performance based compensation |
|
881 |
|
|
0.03 |
|
|
974 |
|
|
0.03 |
|
||
Amortization expense of acquired intangible assets |
|
1,042 |
|
|
0.03 |
|
|
870 |
|
|
0.03 |
|
||
Acquisition costs |
|
36 |
|
|
- |
|
|
- |
|
|
- |
|
||
Lease expense on the step-up basis of acquired leases |
|
50 |
|
|
- |
|
|
- |
|
|
- |
|
||
Consulting expense: commercial growth initiatives |
|
- |
|
|
- |
|
|
13 |
|
|
- |
|
||
Severance costs and restructuring costs |
|
45 |
|
|
- |
|
|
256 |
|
|
0.01 |
|
||
Tax rate difference between reported and adjusted net income |
|
(755 |
) |
|
(0.02 |
) |
|
(531 |
) |
|
(0.02 |
) |
||
Net income adjusted |
$ |
7,981 |
|
$ |
0.26 |
|
$ |
9,610 |
|
$ |
0.32 |
|
||
(Unaudited; In thousands) |
Three Months Ended
|
||||||||||
Net Income to Adjusted EBITDA | |||||||||||
|
2024 |
|
|
|
2023 |
|
|
% Change |
|||
Net Income as reported |
$ |
6,682 |
|
$ |
8,028 |
|
|||||
Income tax |
|
1,635 |
|
|
2,338 |
|
|||||
Interest expense, net |
|
875 |
|
|
566 |
|
|||||
Other expense (income) |
|
(61 |
) |
|
96 |
|
|||||
Operating income as reported |
$ |
9,131 |
|
$ |
11,028 |
|
-17 |
% |
|||
Depreciation and amortization |
|
2,940 |
|
|
2,371 |
|
|||||
EBITDA |
$ |
12,071 |
|
$ |
13,399 |
|
-10 |
% |
|||
Long-term performance based compensation |
|
1,184 |
|
|
1,325 |
|
|||||
Acquisition costs |
|
48 |
|
|
- |
|
|||||
Lease expense on the step-up basis of acquired leases |
|
67 |
|
|
- |
|
|||||
Consulting expense: commercial growth initiatives |
|
- |
|
|
19 |
|
|||||
Severance costs and restructuring costs |
|
60 |
|
|
353 |
|
|||||
Adjusted EBITDA |
$ |
13,430 |
|
$ |
15,096 |
|
-11 |
% |
|||
Adjusted EBITDA as a percentage of sales |
|
9.7 |
% |
|
12.2 |
% |
|||||
(Unaudited; In thousands) |
Three Months Ended
|
||||||||||
Free Cash Flow | |||||||||||
|
2024 |
|
|
|
2023 |
|
|
% Change |
|||
Cash flow from operations |
$ |
11,846 |
|
$ |
10,592 |
|
12 |
% |
|||
Capital expenditures |
|
(759 |
) |
|
(1,393 |
) |
|||||
Free cash flow |
$ |
11,087 |
|
$ |
9,199 |
|
21 |
% |
|||
Net Debt to Adjusted EBITDA Ratio |
|
|||||||
(amounts in thousands) |
|
2024 |
|
|
|
2023 |
|
|
Current maturity of long-term debt |
$ |
3,571 |
|
$ |
3,571 |
|
||
Long-term debt |
|
44,118 |
|
|
25,098 |
|
||
Total debt |
$ |
47,689 |
|
$ |
28,669 |
|
||
Less: cash |
|
(6,969 |
) |
|
(3,533 |
) |
||
Net debt |
$ |
40,720 |
|
$ |
25,136 |
|
||
Adjusted EBITDA - trailing twelve months |
$ |
49,770 |
|
$ |
53,408 |
|
||
Net debt to adjusted EBITDA ratio |
|
0.8 |
|
|
0.5 |
|
||
Reconciliation of net income to adjusted net income - five quarter view | |||||||||||||||
FY 2024 | |||||||||||||||
|
Diluted EPS |
|
|
Diluted EPS |
|||||||||||
Q1 2024 |
|
Q2 2024 |
|||||||||||||
Net Income Reported |
$ |
8,028 |
|
$ |
0.27 |
|
$ |
5,906 |
|
$ |
0.20 |
|
|||
Consulting expense: commercial growth initiatives |
|
13 |
|
|
- |
|
|
- |
|
|
- |
|
|||
Amortization expense of acquired intangible assets |
|
870 |
|
|
0.03 |
|
|
885 |
|
|
0.03 |
|
|||
Severance costs/Restructuring costs |
|
256 |
|
|
0.01 |
|
|
34 |
|
|
- |
|
|||
Long-term performance based compensation |
|
974 |
|
|
0.03 |
|
|
625 |
|
|
0.02 |
|
|||
Tax rate difference between reported and adjusted net income |
|
(531 |
) |
|
(0.02 |
) |
|
(201 |
) |
|
(0.01 |
) |
|||
Net Income Adjusted |
$ |
9,610 |
|
$ |
0.32 |
|
$ |
7,249 |
|
$ |
0.24 |
|
|||
Adjusted Net Income % |
|
7.8 |
% |
|
6.7 |
% |
|||||||||
FY 2024 |
|||||||||||||||
|
|
|
|
|
|||||||||||
|
Diluted EPS |
|
|
Diluted EPS |
|||||||||||
Q3 2024 |
|
Q4 2024 |
|||||||||||||
Net Income Reported |
$ |
5,375 |
|
$ |
0.18 |
|
$ |
5,668 |
|
$ |
0.19 |
|
|||
Acquisition costs |
|
- |
|
|
- |
|
|
722 |
|
|
0.02 |
|
|||
Amortization expense of acquired intangible assets |
|
888 |
|
|
0.03 |
|
|
1,028 |
|
|
0.04 |
|
|||
Severance costs/Restructuring costs |
|
101 |
|
|
- |
|
|
5 |
|
|
- |
|
|||
Long-term performance based compensation |
|
767 |
|
|
0.03 |
|
|
906 |
|
|
0.03 |
|
|||
Tax rate difference between reported and adjusted net income |
|
- |
|
|
(25 |
) |
|
- |
|
||||||
Net Income Adjusted |
$ |
7,131 |
|
$ |
0.24 |
|
$ |
8,304 |
|
$ |
0.28 |
|
|||
Adjusted Net Income % |
|
6.6 |
% |
|
6.4 |
% |
|||||||||
FY 2025 |
|||||||||||||||
|
|
||||||||||||||
|
Diluted EPS |
||||||||||||||
Q1 2025 |
|||||||||||||||
Net Income Reported |
$ |
6,682 |
|
$ |
0.22 |
|
|||||||||
Acquisition costs |
$ |
36 |
|
$ |
- |
|
|||||||||
Amortization expense of acquired intangible assets |
|
1,042 |
|
|
0.03 |
|
|||||||||
Lease expense on the step-up basis of acquired leases |
|
50 |
|
|
- |
|
|||||||||
Severance costs/Restructuring costs |
|
45 |
|
|
- |
|
|||||||||
Long-term performance based compensation |
|
881 |
|
|
0.03 |
|
|||||||||
Tax rate difference between reported and adjusted net income |
|
(755 |
) |
|
(0.02 |
) |
|||||||||
Net Income Adjusted |
$ |
7,981 |
|
$ |
0.26 |
|
|||||||||
Adjusted Net Income % |
|
5.8 |
% |
||||||||||||
Effective in the first quarter of fiscal 2025, LSI will include the amortization expense related to acquired intangible assets as an add-back to its non-GAAP reconciliation. Prior quarter non-GAAP reconciliations have been adjusted accordingly.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107886924/en/
INVESTOR & MEDIA CONTACT
720.778.2415
LYTS@vallumadvisors.com
Source: