CINCINNATI, Ohio, Nov. 06, 2019 (GLOBE NEWSWIRE) — LSI Industries Inc. (NASDAQ: LYTS, or the “Company”) a leading U.S. based manufacturer of indoor/outdoor lighting and graphics solutions, today announced results for the fiscal first quarter 2020.
First Quarter 2020 Summary
- Sales of $88.7 million, 4% growth versus prior year
- EPS of $0.17; Adjusted EPS of $0.04
- Net Income of $4.5 million, Adjusted Net income $1.0 million
- EBITDA of $9.2 million; Adjusted EBITDA of $4.7 million
- Free Cash Flow of $18.3 million; Net Debt reduced by $20.4 million versus prior year
- Net Debt to Adjusted EBITDA ratio improves to 1.7x
Net sales increased 4% to $88.7 million in the fiscal first quarter 2020, versus $85.0 million in the first quarter 2019. Reported net income was $4.5 million, or $0.17 per diluted share, versus income of $1.7 million or $0.07 per diluted share, in the first quarter 2019. Reported fiscal first quarter 2020 results include a $4.8 million pre-tax gain on sale resulting from the divestiture of the New Windsor, NY facility in September 2019. Fiscal first quarter results also include restructuring charges of $0.2 million.
EBITDA was $9.2 million for the quarter compared to $5.6 million in the prior year quarter. Non-GAAP adjusted EBITDA was $4.7 million in fiscal first quarter 2020, versus $6.2 million in the fiscal quarter 2019. The prior year period included a $1.2 million non-reoccurring favorable adjustment related to a change in the Company’s employee benefits policy.
The Company generated free cash flow of $18.3 million in the fiscal first quarter 2020, including $12.3 million in net proceeds resulting from the sale of the New Windsor facility. Excluding the impact of net proceeds from the facility sale, total free cash flow was $6.0 million in the fiscal first quarter 2020, compared to $1.5 million in the fiscal first quarter 2019.
During the twelve months ended September 30, 2019, LSI reduced total net debt outstanding by 49% to $21.6 million, consistent with the Company’s ongoing focus on disciplined capital management. At the end of the fiscal first quarter 2020, the Company’s net debt to Adjusted EBITDA ratio was 1.7x. The schedule reconciling GAAP and non-GAAP financial results is included later in this release.
The Company declared a regular cash dividend of $0.05 per share payable November 26, 2019 to shareholders of record on November 18, 2019.
James A. Clark, President and Chief Executive Officer commented, “We reported year-over-year growth in sales, net income and free cash flow during the first quarter, a performance driven by our focus on all facets of the business and improved execution throughout the organization. Continued growth in cash flow from operations, together with proceeds from the recently completed sale of the New Windsor facility, contributed to a significant reduction in net leverage during the first quarter, as planned. We have realized significant improvements throughout all aspects of our commercial, operational, and financial operations during the past year, creating a solid foundation to advance the business as we move forward.
“We achieved balanced sales growth during the first quarter, supported by solid performances within both the Lighting and Graphics segments. In our Lighting segment, sales increased 3% compared to prior year, and our gross margin rate improved 140 bps, driven primarily by improved price and mix. In what remains an inconsistent market environment, we achieved these results by focusing strongly on those market verticals where our proven solutions provide customers’ exceptional value, including retail parking, automotive, petroleum and convenience store applications. During the first quarter, we continued to expand our lighting sales team and launched several new products in both the project and stock and flow channels which provide improved performance characteristics for our customers and a cost savings to LSI.”
“The Graphics segment continued to generate solid growth, increasing 8% versus the first quarter 2019. Our core petroleum market vertical continued to grow with both new and existing customers. We have four major customer programs currently active, and our program management teams are busy with development work on four potential customer projects. This upfront investment and customer collaboration is critical to becoming the preferred supplier for projects involving hundreds to several thousand customer locations. In addition, we recently completed our 500th installation in Mexico, a testament to the long-term customer relationships we have developed as a trusted, proven partner in the petroleum market.
“The first quarter also saw improvements in our manufacturing and supply chain capabilities. We completed the production transition from the New Windsor, NY facility closure, realizing initial cost savings from improved capacity and asset utilization, contributing to the lighting gross margin rate expansion. We anticipate operating at the annualized cost savings target of $4 million by the end of the fiscal second quarter. Improvements to production floor layouts and scheduling processes at several manufacturing locations has reduced cycle times and contributed to improved inventory levels. Capital investment is planned to increase modestly in fiscal 2020, with targeted programs focused on planned new products and factory cost reductions, as well as service and quality enhancements.
“Our first quarter results prove that with the right focus, planning, and execution, we can profitably grow our business,” concluded Clark. “Looking forward, current market activity in Lighting remains volatile and conditions are projected to remain the same throughout the fiscal second quarter. During a period of industry transition, LSI remains a proven, stable source for innovative, high-performance lighting and graphics solutions, including expert support and service.”