LSI Industries Inc. (NASDAQ:LYTS)
today:
- announced that it expects fiscal 2017 net sales will be between
$330 million and $331 million; and diluted earnings per share will
be between $0.11 and $0.12 on a U.S. GAAP basis. This
compares to prior fiscal year net sales of $322.2 million and
diluted earnings per share of $0.37;
- announced that it expects fourth quarter net sales will be
between $82 million and $83 million; and diluted earnings per share
will be between $0.02 and $0.03 on a U.S. GAAP basis. This
compares to net sales of $80.8 million and diluted earnings per
share of $0.06 in the fourth quarter last year;
- announced that the Company expects to report fiscal fourth
quarter and full year 2017 operating results before the market
opens on August 17, 2017; and
- commences search for new leadership in the Lighting Segment as
Shawn M. Toney, President of the Lighting Segment, announces his
resignation.
Dennis W. Wells, Chief Executive Officer and President,
commented, “Our fourth quarter and full year fiscal 2017 results
did not meet our expectations. Market conditions for the
fourth quarter in both lighting and graphics did not develop as
projected, continuing the softness of the last several
quarters. Capital investment by our customers on small and
medium projects, which represents a large portion of our business,
has been slow to materialize. This combined with continued
inflationary pressures, particularly in key commodities, negatively
impacted margin performance.
“More specifically, several market segments in which LSI has a
strong position were down measurably. These include the
petroleum and retail segments, which impact both our lighting and
graphics business. Investment in the petroleum industry has
been affected by ongoing weak conditions in the oil market, as well
as uncertain supply/demand indicators for gasoline. The
market over-capacity situation around certain retail sub-segments
is well publicized.
“We have previously identified these trends and have been
investing in products and capabilities to accelerate growth in
other market segments. We are excited about the progress we
are making here, as evidenced by the fourth quarter growth
generated in non-retail commercial and industrial markets, and
certain new product and technology initiatives such as our SOAR™
Digital Signage program. Digital signage is growing rapidly,
and our SOAR solution is well positioned to capitalize on this
growth. Our focus on renovation opportunities also generated
sizeable growth in the fourth quarter and throughout fiscal
2017. The Atlas acquisition represents an important component
of our plan, and the integration continues to progress very
well.
“Our growth acceleration plans are supported by the significant
improvements being made through our LSI Business System.
Manufacturing productivity has improved significantly in fiscal
2017 with the closure of three facilities, increasing capacity
utilization. Substantial investments that we have made in
equipment will generate additional productivity in fiscal 2018,
continuing to improve our cost position and service
capabilities. We have initiated targeted sourcing and design
initiatives to mitigate the commodity cost increases. Selling
price increases on select product categories have been implemented
and have begun to partially offset the impact of commodity cost
increases. Lastly, we completed a 6% salaried workforce
reduction during the quarter in response to market
conditions. This reduction will not impact our ability to
respond to increasing demand as market growth resumes.
“We remain cautiously optimistic that our markets will stabilize
and the pace of growth will improve throughout fiscal 2018,
especially as we move into the latter half of the fiscal
year. Overall economic indicators, while mixed, support
growth in construction activity in both new and renovation/retrofit
markets.
“Our plans are to accelerate efforts to expand our served
available market, and realize the growth potential of this
business. We will continue to maintain our strong position in
our core served markets. These are major segments, and market
conditions here will improve. Concurrently, we will continue
to aggressively invest in key application markets where LSI
products and solutions represent value to the end-user.
“Lastly, on behalf of the entire LSI team, I would like to thank
Shawn Toney for the many contributions that he has made to LSI’s
Lighting Segment during his eight years with the Company.
Particularly during the past few years Shawn has made significant
contributions toward LSI’s progress in the Lighting Segment,
including successfully leading the implementation of lean
initiatives and systems enhancements; guiding new product
development; and ramping up our sales and marketing
campaigns. Shawn has agreed to stay with LSI through
mid-September to facilitate a seamless transition. We wish
Shawn well in his new endeavors and thank him for his years of
service to LSI.”
Mr. Toney commented, “My decision to resign is personal. I
have enjoyed working at LSI for the past eight years and will miss
my daily interactions with customers and fellow employees. I
have experienced a lot of change at LSI during my tenure, and
believe that the current management team has well-positioned the
Company to take advantage of the dynamic shifts taking place in the
lighting industry. I am confident, as I make this decision,
that I am leaving the Company and our customers in good
hands.”
Mr. Wells went on to comment, “A search for new leadership is
underway, and we have already begun to receive interest from a
number of qualified candidates.”
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995
This document contains certain forward-looking statements that
are subject to numerous assumptions, risks or
uncertainties. The Private Securities Litigation Reform
Act of 1995 provides a safe harbor for forward-looking
statements. Forward-looking statements may be identified
by words such as “estimates,” “anticipates,” “projects,” “plans,”
“expects,” “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. Such
statements, whether expressed or implied, are based upon current
expectations of the Company and speak only as of the date
made. Actual results could differ materially from those
contained in or implied by such forward-looking statements as a
result of a variety of risks and uncertainties over which the
Company may have no control. These risks and
uncertainties include, but are not limited to, the impact of
competitive products and services, product demand and market
acceptance risks, potential costs associated with litigation and
regulatory compliance, reliance on key customers, financial
difficulties experienced by customers, the cyclical and seasonal
nature of our business, the adequacy of reserves and allowances for
doubtful accounts, fluctuations in operating results or costs
whether as a result of uncertainties inherent in tax and accounting
matters or otherwise, failure of an acquisition or acquired company
to achieve its plans or objectives generally, unexpected
difficulties in integrating acquired businesses, the ability to
retain key employees of acquired businesses, unfavorable economic
and market conditions, the results of asset impairment assessments,
the ability to maintain an effective system of internal control
over financial reporting, the ability to remediate any material
weaknesses in internal control over financial reporting and any
other risk factors that are identified herein. You are
cautioned to not place undue reliance on these forward-looking
statements. In addition to the factors described in this
paragraph, the risk factors identified in our Form 10-K and other
filings the Company may make with the SEC constitute risks and
uncertainties that may affect the financial performance of the
Company and are incorporated herein by reference. The
Company does not undertake and hereby disclaims any duty to update
any forward-looking statements to reflect subsequent events or
circumstances.
About the Company
We are a customer-centric company that positions itself as a
value-added, trusted partner in developing superior image solutions
through our world-class lighting, graphics, and technology
capabilities. Our core strategy of "Lighting + Graphics +
Technology = Complete Image Solutions" differentiates us from our
competitors.
We are committed to advancing solid-state LED technology to make
affordable, high performance, energy-efficient lighting and custom
graphic products that bring value to our customers. We have a
vast offering of innovative solutions for virtually any lighting or
graphics application. In addition, we provide sophisticated
lighting and energy management control solutions to help customers
manage their energy performance. Further, we provide a full
range of design support, engineering, installation and project
management services to our customers.
We are a vertically integrated U.S.-based manufacturer
concentrating on serving customers in North America and Latin
America. Our major markets include commercial / industrial
lighting, petroleum / convenience store and multi-site retail
(including automobile dealerships, restaurants and national retail
accounts). Headquartered in Cincinnati, Ohio, LSI has
facilities in Ohio, California, Kentucky, New York, North Carolina
and Texas. The Company’s common shares are traded on the
NASDAQ Global Select Market under the symbol LYTS.
For further information, contact Dennis Wells,
Chief Executive Officer and President, at (513) 793-3200.
Additional note:
Today’s news release, along with past releases from LSI
Industries, is available on the Company’s internet site at
www.lsi-industries.com or by email or fax, by calling the Investor
Relations Department at (513) 793-3200.
CONTACT: DENNIS WELLS
(513) 793-3200
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