8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Act of 1934

Date of Report (Date of earliest event reported):                              January 24, 2008

LSI INDUSTRIES INC.

(Exact name of Registrant as specified in its Charter)

Ohio		0-13375	31-0888951
(State or Other Jurisdiction of Incorporation)		(Commission File Number)	(IRS Employer Identification No. )
	10000 Alliance Road, Cincinnati, Ohio		45242
	(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code                                                                                                           (513) 793-3200

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 - Results of Operations and Financial Condition.

On January 24, 2008, the Registrant issued a press release announcing its financial results for the fiscal quarter ended December 31, 2007. A copy of the press release is furnished as Exhibit 99 to this report and is incorporated herein by reference.

Item 9.01 - Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit No.	Description
99	Press Release dated January 24, 2008

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	LSI INDUSTRIES INC.
	/s/ Ronald S. Stowell
	Ronald S. Stowell
	Vice President, Chief Financial Officer   and Treasurer (Principal Accounting Officer)
January 24, 2007

EX-99

Exhibit 99

	CONTACT:	BOB READY OR
FOR IMMEDIATE RELEASE		RON STOWELL
DATE:  JANUARY 24, 2008		(513) 793-3200

LSI INDUSTRIES INC. REPORTS OPERATING RESULTS

FOR THE SECOND QUARTER AND FIRST HALF ENDED DECEMBER 31, 2007,

AND DECLARES CASH DIVIDEND

Cincinnati, OH; January 24, 2008 – LSI Industries Inc. (Nasdaq:LYTS)today:

· reported second quarter record net sales of $84,062,000, an increase of 3% over the same period of the prior fiscal year;

· reported second quarter net income of $4,823,000, a decrease of 4%, from the same period of the prior fiscal year;

· reported second quarter diluted earnings per share of $0.22, a decrease of 4% from the same period of the prior fiscal year;

· reported first half net sales of $174,063,000, an increase of 3% over the same period of the prior fiscal year;

· reported first half net income of $11,776,000, an increase of 12% over the same period of the prior fiscal year;

· reported first half diluted earnings per share of $0.53, an increase of 10% over the same period of the prior fiscal year; and

· declared a regular cash dividend of $0.15 per share (indicated annual rate of $0.60 per share), a 15% increase over the regular quarterly rate of the prior fiscal year.

Financial Highlights

(In thousands, except per

share data; unaudited)

	Three Months Ended December 31							Six Months Ended December 31
	2007		2006		% Change			2007		2006		% Change
Net Sales	$	84,062	$	81,640		3.0	%	$	174,063	$	168,307		3.4	%
Operating Income	$	7,709	$	8,283		(6.9	)%	$	18,435	$	17,052		8.1	%
Net Income	$	4,823	$	5,035		(4.2	)%	$	11,776	$	10,530		11.8	%
Earnings Per Share (diluted)	$	0.22	$	0.23		(4.3	)%	$	0.53	$	0.48		10.4	%

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LSI Industries Inc. Fiscal 2008 Second Quarter Results

January 24, 2008

	12/31/07		6/30/07
Working Capital	$	76,532	$	68,397
Total Assets	$	217,565	$	233,612
Long-Term Debt	$	--	$	--
Shareholders’ Equity	$	179,525	$	176,061

Second Quarter Fiscal 2008 Results

Net sales in the second quarter of fiscal 2008 were $84,062,000, an increase of 3% over last year’s second quarter net sales of $81,640,000.  Fiscal 2008 second quarter net income of $4,823,000 ($0.22 per share) decreased 4% from the $5,035,000 ($0.23 per share) reported last year in the same period.  Lighting Segment net sales decreased 0.3% to $48.8 million (sales to the Commercial / Industrial market increased 15%), and Graphics Segment net sales increased 7.8% to $35.3 million.  Earnings per share represent diluted earnings per share.

First Half Fiscal 2008 Results

Net sales in the first half of fiscal 2008 were $174,063,000, an increase of 3% over last year’s first half net sales of $168,307,000.  Fiscal 2008 first half net income of $11,776,000 ($0.53 per share) increased 12% from the $10,530,000 ($0.48 per share) reported last year in the same period.  Lighting Segment net sales decreased 4.6% to $96.7 million (sales to the Commercial / Industrial market increased 9%), and Graphics Segment net sales increased 15.5% to $77.4 million.  Earnings per share represent diluted earnings per share.

Company Comments

Robert J. Ready, President and Chief Executive Officer, commented, “For the first six months ended December 31, 2007, LSI Industries achieved increases in net sales and net income of 3.4% and 11.8%, respectively.  Diluted earnings per share increased 10.4% over the same period from fiscal 2007 to fiscal 2008.  These increases were driven by very strong year over year comparisons in our graphics business.  Although sales to the commercial/industrial market segment of our lighting business increased a healthy 9% during the first half, our specialty lighting niche business and LED-based lighting performed below expectations.  More specifically, we have experienced an environment of delayed rollouts with certain of our major national retailer customers.  As shareholders know, our commitment to the digital LED billboard market is a major initiative for LSI.  While we remain confident of our eventual success in gaining market share in this growing market, we now believe meaningful sales and profits will not begin until fiscal 2009.  We introduced our first LED white light product, the Crossover®, to our petroleum service station market during the second quarter.  This is truly an advanced “green” product and is a direct replacement for our large installed base of Scottsdale® lighting fixtures.  I have also instructed our new product development team to focus on designing and developing additional solid-state white LED lighting products for our specialty and commercial/industrial lighting markets.  Since acquiring SACO Technologies we have successfully developed the necessary commercial grade light engines and software needed to support our planned product offerings.

“We are working hard to secure new business for our Graphics Segment as two out of the current three major programs have essentially been completed.  We continue to seek additional robust rollout programs that will positively influence our Graphics Segment sales volume and profitability.  However, as always, the timing is imperfect and volume is likely to fall off in the second half of fiscal 2008 before increasing again in fiscal 2009.

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LSI Industries Inc. Fiscal 2008 Second Quarter Results

January 24, 2008

“In summary, the balance of fiscal 2008 will not produce as favorable operating results as the same period of the prior fiscal year.  However, we are poised to achieve significant growth in fiscal 2009 and beyond.  We have the products, the technologies, the market position, and the balance sheet to look forward with confidence.”

Balance Sheet

The balance sheet at December 31, 2007 included current assets of $109.2 million, current liabilities of $32.7 million and working capital of $76.5 million.  The current ratio was 3.34 to 1.  The Company has shareholders’ equity of $179.5 million, no long-term debt, and has borrowing capacity on its commercial bank facilities as of December 31, 2007 of $57 million.  With continued strong cash flow, a sound and conservatively capitalized balance sheet, and $57 million in credit facilities, LSI Industries’ financial condition is sound and capable of supporting the Company’s planned growth, including acquisitions.

Cash Dividend Action

The Board of Directors declared a regular cash dividend of $0.15 per share payable February 12, 2008 to shareholders of record as of February 5, 2008.  This new indicated annual rate of $0.60 per share represents a 15% increase over the fiscal 2007 annual rate of $0.52 per share.  LSI Industries has paid regular cash dividends since 1989 and has increased its regular indicated cash dividend rate fifteen times during the period.

"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 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.  These risks and uncertainties include, but are not limited to, the impact of competitive products and services, product demand and market acceptance risks, reliance on key customers, financial difficulties experienced by customers, the adequacy of reserves and allowances for doubtful accounts, fluctuations in operating results or costs, unexpected difficulties in integrating acquired businesses, and the ability to retain key employees of acquired businesses.  The Company has no obligation to update any forward-looking statements to reflect subsequent events or circumstances.

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LSI Industries Inc. Fiscal 2008 Second Quarter Results

January 24, 2008

About the Company

LSI Industries is an Image Solutions company, dedicated to advancing solid-state LED technology and applications with lighting and graphics. We combine integrated technology, design, and manufacturing to supply high quality lighting fixtures and graphics elements for applications in the commercial, retail and specialty niche markets.  LSI’s Lighting Segment produces high performance, energy efficient lighting products, including solid-state LED light fixtures, dedicated to outdoor, architectural outdoor, indoor, architectural indoor and accent/downlight applications.  The Graphics Segment designs, produces, markets and manages a wide array of custom indoor and outdoor graphics programs including signage, menu board systems, decorative fixturing, LED displays and digital signage, and large format billboard and sports screens using solid-state LED technology.  In addition, we provide design support, engineering and project management for custom programs for today’s retail environment.  The Company’s technology operation located in Montreal, Canada designs, produces and supports high performance light engines and large format billboard, sports and entertainment video screens using solid-state LED technology.

LSI’s major markets are the commercial/industrial lighting, petroleum/convenience store, multi-site retail (including automobile dealerships, restaurants and national retail accounts), sports and entertainment markets.  LSI employs approximately 1800 people in fourteen facilities located in Ohio, California, New York, North Carolina, Kansas, Kentucky, Rhode Island, Tennessee, Texas and Montreal, Canada.  The Company’s common shares are traded on the NASDAQ Global Select Market under the symbol LYTS.

For further information, contact either Bob Ready, Chief Executive Officer and President, or Ron Stowell, Vice President, Chief Financial Officer, and Treasurer 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.

Page 4 of 5

LSI Industries Inc. Fiscal 2008 Second Quarter Results

January 24, 2008

Condensed Income Statements

(in thousands, except per share data; unaudited)	Three Months Ended December 31					Six Months Ended December 31
	2007			2006		2007			2006
Net sales	$	84,062		$	81,640	$	174,063		$	168,307
Cost of products sold		60,603			59,446		124,853			122,991
Gross profit		23,459			22,194		49,210			45,316
Selling and administrative expenses		15,750			13,911		30,775			28,264
Operating income		7,709			8,283		18,435			17,052
Interest (income) expense, net		(80	)		387		(212	)		658
Income before income taxes		7,789			7,896		18,647			16,394
Income tax expense		2,966			2,861		6,871			5,864
Net income	$	4,823		$	5,035	$	11,776		$	10,530
Earnings per common share
Basic	$	0.22		$	0.23	$	0.54		$	0.49
Diluted	$	0.22		$	0.23	$	0.53		$	0.48
Weighted average common shares outstanding
Basic		21,759			21,666		21,737			21,659
Diluted		22,063			21,938		22,036			21,909

Condensed Balance Sheets

(in thousands, unaudited)	December 31, 2007		June 30 2007
Current Assets	$	109,251	$	123,358
Property, Plant and Equipment, net		46,793		47,558
Other Assets		61,521		62,696
	$	217,565	$	233,612
Current Liabilities	$	32,719	$	54,961
Long-Term Debt		--		--
Other Long-Term Liabilities		5,321		2,590
Shareholders’ Equity		179,525		176,061
	$	217,565	$	233,612

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