-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Tj54tIPdLdpNHWTjYht9wv18pz5m397T88Q9vLGqrTLzaTA4D5hD+D3bYHeN2nbV Zm5TLj1P45GkjO5xDgu7lA== 0000950152-95-000939.txt : 19950530 0000950152-95-000939.hdr.sgml : 19950530 ACCESSION NUMBER: 0000950152-95-000939 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950511 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LSI INDUSTRIES INC CENTRAL INDEX KEY: 0000763532 STANDARD INDUSTRIAL CLASSIFICATION: 3640 IRS NUMBER: 310888951 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13375 FILM NUMBER: 95536753 BUSINESS ADDRESS: STREET 1: 10000 ALLIANCE RD STREET 2: P O BOX 42728 CITY: CINCINNATI STATE: OH ZIP: 45242 BUSINESS PHONE: 5137933200 MAIL ADDRESS: STREET 1: 10000 ALLIANCE RD STREET 2: P O BOX 42728 CITY: CINCINNATI STATE: OH ZIP: 45242 FORMER COMPANY: FORMER CONFORMED NAME: LSI LIGHTING SYSTEMS INC DATE OF NAME CHANGE: 19891121 10-Q 1 LSI INDUSTRIES INC. 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995. / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________ TO ________________. Commission File No. 0-13375 LSI Industries Inc. State of Incorporation - Ohio IRS Employer I.D. No. 31-0888951 10000 Alliance Road Cincinnati, Ohio 45242 (513) 793-3200 Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- Common Shares, no par value. Shares Outstanding at April 30, 1995: 5,023,811. Page 1 of 14 INDEX TO EXHIBITS IS ON PAGE 14 2 LSI INDUSTRIES INC. FORM 10-Q FOR QUARTER ENDED MARCH 31, 1995 INDEX
Begins on Page ---- PART I. Financial Information ITEM 1. Financial Statements Consolidated Income Statements . . . . . . . . . . . . . . . 3 Consolidated Balance Sheets . . . . . . . . . . . . . . . . . 4 Consolidated Statements of Cash Flows . . . . . . . . . . . . 5 Notes to Financial Statements . . . . . . . . . . . . . . . . 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . 8 PART II. Other Information ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 11 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Exhibit Volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Index to Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Page 2 of 14 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LSI INDUSTRIES INC. CONSOLIDATED INCOME STATEMENTS (Unaudited)
Three Months Ended Nine Months Ended March 31 March 31 (In thousands, except per 1995 1994 1995 1994 share amounts) ---- ---- ---- ---- Net sales $26,920 $20,273 $88,604 $69,156 Cost of products sold 18,350 13,948 59,002 45,898 ------ ------ ------ ------ Gross profit 8,570 6,325 29,602 23,258 Selling and administrative expenses 7,279 5,475 21,872 17,906 ------ ------ ------ ------ Operating Income 1,291 850 7,730 5,352 Other expenses 135 138 333 304 ------ ------ ------ ------ Income before income taxes 1,156 712 7,397 5,048 Income tax expense 407 259 2,640 1,875 ------ ------ ------ ------ Net income $ 749 $ 453 $ 4,757 $ 3,173 ====== ====== ====== ====== Net income per common share $ .14 $ .09 $ .92 $ .62 ====== ====== ====== ====== Average shares outstanding 5,199 5,146 5,182 5,086
The accompanying Notes to Financial Statements are an integral part of these financial statements. Page 3 of 14 4 LSI INDUSTRIES INC. CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) March 31 June 30, 1995 1994 -------- -------- (Unaudited) ASSETS Current Assets: Cash $ 853 $ 1,614 Accounts receivable 15,263 14,376 Inventories 16,187 11,079 Other current assets 1,629 1,390 ------ ------ Total current assets 33,932 28,459 Property, plant and equipment, net 18,266 16,451 Goodwill 1,348 1,377 ------ ------ $53,546 $46,287 ====== ====== LIABILITIES & SHAREHOLDERS' EQUITY Current Liabilities: Current maturities of long-term debt $ 842 $ 265 Accounts payable 8,140 7,958 Accrued expenses 7,267 9,013 ------ ------ Total current liabilities 16,249 17,236 Long-Term Debt 7,454 3,335 Other Long-Term Liabilities 1,786 1,735 Shareholders' Equity: Preferred shares, without par value; -- -- Authorized 1,000,000 share, none issued Common shares, without par value; 7,734 7,539 Authorized 13,000,000 shares; Outstanding 5,012,561 and 4,977,967 shares, respectively Retained earnings 20,323 16,442 ------ ------ Total shareholders' equity 28,057 23,981 ------ ------ $53,546 $46,287 ====== ======
The accompanying Notes to Financial Statements are an integral part of these financial statements. Page 4 of 14 5 LSI INDUSTRIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands) Nine Months Ended March 31 -------------------------- 1995 1994 ---- ---- Cash Flows From Operating Activities: Net income of continuing operations $ 4,757 $ 3,173 Non-cash items included in income: Depreciation and amortization 1,461 1,246 Deferred income taxes 90 37 Loss on disposition of fixed assets -- 111 Changes in operating assets and liabilities: Accounts receivable (887) (1,401) Inventories (5,108) (1,040) Accounts payable and other (1,803) 4,231 Change in liability for discontinued operations (39) (188) ------- ------- Net cash flows from operating activities (1,529) 6,169 Cash Flows from Investing Activities: Purchase of property, plant and equipment (3,247) (3,700) ------- ------- Net cash flows from investing activities (3,247) (3,700) Cash Flows from Financing Activities: Increase (decrease) in lines of credit -- (1,312) Payment of long-term debt (253) (647) Increase in long-term debt 4,949 -- Cash dividends paid (876) (234) Exercise of stock options 195 282 ------- ------- Net cash flows from financing activities 4,015 (1,911) Increase (decrease) in cash (761) 558 Cash at beginning of year 1,614 159 ------- ------- Cash at end of period $ 853 $ 717 ======= =======
The accompanying Notes to Financial Statements are an integral part of these financial statements. Page 5 of 14 6 LSI INDUSTRIES INC. NOTES TO FINANCIAL STATEMENTS NOTE 1: INTERIM FINANCIAL STATEMENTS The interim financial statements are unaudited and are prepared in accordance with rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of Management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company's financial position as of March 31, 1995, and the results of its operations and its cash flows for the periods ended March 31, 1995 and 1994. These statements should be read in conjunction with the financial statements and footnotes included in the fiscal 1994 annual report. NOTE 2: NET INCOME PER COMMON SHARE The computation of net income per common share is based on the weighted average common shares outstanding for the period, including common share equivalents. Common share equivalents consist of dilutive stock options of which there were 181,328 and 185,812 shares, respectively, for the three month periods ended March 31, 1995 and 1994, and 178,608 and 148,981 shares, respectively, for the nine month periods ended March 31, 1995 and 1994. NOTE 3: INVENTORIES Inventories consist of the following (in thousands):
March 31, 1995 June 30, 1994 -------------- ------------- (unaudited) Raw Materials $ 7,953 $ 5,926 Work-in-Process and Finished Goods 8,234 5,153 ------ ------ $16,187 $11,079 ====== ======
NOTE 4: REVOLVING LINES OF CREDIT AND LONG-TERM DEBT The Company entered into two new revolving lines of credit in December 1994 in replacement of the previous $8,000,000 revolving line of credit. Both new lines of credit are unsecured, permit the Company to borrow at either the banks' Page 6 of 14 7 base lending rate or at a rate based upon a 1.00 percentage point increment over the LIBOR rate as periodically determined, and both lines expire in the fourth calendar quarter of 1995. The aggregate total of revolving lines of credit is $13,000,000, all of which is available at March 31, 1995. The Company's ten year, secured term loan was drawn up to $6,700,000 and interest only has been paid through December 31, 1994. Equal quarterly payments, plus interest, will be made beginning March 31, 1995. Interest on the term loan is charged based upon a 1.25 percentage point increment over the LIBOR rate as periodically determined, or at the bank's base lending rate, at the Company's option. In February 1995 the Company completed an Industrial Revenue Development Bond borrowing in the amount of $1,250,000 associated with the 1994 purchase and 1995 expansion of the facility in Northern Kentucky. The term of this IRB is 15 years with semi-annual interest payments and annual principal payments or retirement of bond principal in increasing amounts over the term of the bonds. The IRB interest rate will be re-established semi-annually and is currently 6.15%, including the letter of credit fee. NOTE 5: CASH DIVIDENDS The Company paid annual dividends of $234,000 in September 1993 and $476,000 in September 1994 and quarterly dividends of $200,000 in both November 1994 and February 1995. In May 1995, the Company's Board of Directors declared a $.04 per share dividend payable on May 22, 1995 to shareholders of record as of May 15, 1995. NOTE 6: SALES TO MAJOR CUSTOMERS The Company made sales in both the Lighting and Graphics segments to a major customer, Chevron U.S.A., representing 19% and 11%, respectively, of consolidated net sales in the three month periods ended March 31, 1995 and 1994, and 16% and 13%, respectively, for the nine month periods ended March 31, 1995 and 1994. NOTE 7: INCOME TAXES The Internal Revenue Service (IRS) has completed its audit of the Company's 1989 through 1992 federal income tax returns. In October 1994, the Company received a 30-day letter from the IRS for proposed return of approximately $2 million of income taxes which had been refunded to the Company with the filing of its 1992 income tax return. The IRS has questioned the tax treatment of the loss associated with the discontinued operations, specifically as to whether it should receive ordinary loss or capital loss treatment. The Company plans to vigorously protest this assessment and has filed a protest letter with the IRS Page 7 of 14 8 stating that the Company believes that its filing position has merit. The Company does not expect that the ultimate outcome of any final assessment would be material to its financial position. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NET SALES BY BUSINESS SEGMENT
Three Months Ended Nine Months Ended (In thousands; unaudited) March 31 March 31 ------------------ ----------------- 1995 1994 1995 1994 ---- ---- ---- ---- Lighting $16,299 $12,401 $52,405 $40,943 Graphics 10,621 7,872 36,199 28,213 ------ ------ ------ ------ $26,920 $20,273 $88,604 $69,156 ====== ====== ====== ======
THREE MONTHS ENDED MARCH 31, 1995 COMPARED WITH THREE MONTHS ENDED MARCH 31, 1994 Net sales of $26,920,000 increased 33% over third quarter sales last year of $20,273,000. Lighting segment sales increased 31% and Graphics segment sales increased 32%, as a result of strong sales into the three major markets served by the Company: the petroleum/convenience store, multi-site retail, and commercial/industrial lighting. One customer, Chevron U.S.A., accounted for 19% of net sales in the third quarter of fiscal 1995 and 11% of net sales in 1994. The Company believes that it continues to maintain a good business relationship with this major customer; however, the level of total sales is never assured in the future. Gross profit of $8,570,000, or 31.8% of net sales, increased over last year's third quarter gross profit of $6,325,000 or 31.2% of net sales. The increase in amount of gross profit is attributed primarily to the 33% increase in sales. Additionally, sales price increases to pass on materials cost increases were effective in most business units for the entire third quarter. Selling and administrative expenses increased to $7,279,000 primarily as a result of increased sales volume, and remained at 27% of net sales. Other expenses were substantially level at $135,000. Interest expense was up primarily as a result of increased average borrowings on the Company's revolving lines of credit and term loan facilities in addition to increased effective borrowing rates. The third quarter of fiscal 1994 also included a loss on disposition of fixed assets; there was no corresponding charge against income in 1995. Net income of $749,000 or $.14 per share increased from last year's net income of $453,000 or $.09 per share as a result of increased sales and gross profit, partially offset by increased provision for taxes. Page 8 of 14 9 NINE MONTHS ENDED MARCH 31, 1995 COMPARED WITH NINE MONTHS ENDED MARCH 31, 1994 Net sales of $88,604,000 increased 28% over nine month sales last year of $69,156,000. Both Lighting segment and Graphics segment sales increased 28% primarily as a result of strong sales into the petroleum/convenience store and multi-site retail markets. Sales to the commercial/industrial lighting market were also increased. One customer, Chevron U.S.A., accounted for 16% of net sales in the first nine months of fiscal 1995 as compared to 13% of net sales in 1994. The Company believes that it continues to maintain a good business relationship with this major customer; however, the level of total sales is never assured in the future. Sales to the petroleum/convenience store market have increased to 48% of total sales in the first nine months of fiscal 1995, up from 45% last year. Contributing to this increase are sales of lighting fixture upgrade kits as well as increased sales to Chevron. Gross profit of $29,602,000, or 33.4% of net sales, increased over last year's nine month gross profit of $23,258,000 or 33.6% of net sales. The increase in amount of gross profit is attributed primarily to the 28% increase in sales. The reduction in the gross profit percentage relates to two issues that effected the first two quarters of fiscal 1995: sales volume and pricing. Increased sales volume caused some manufacturing inefficiencies, increased employment levels and related training, overtime and additional shifts, and increased freight costs to satisfy customers' delivery requirements. Production throughput in the Company's new metal fabrication facility was lower than planned, therefore resulting in unabsorbed manufacturing overhead. The Company has addressed each of these areas with corrective programs and believes that the third quarter was not significantly impacted by these issues. The Company experienced cost increases in several raw materials and components from suppliers in the first half. Sales price increases for most product lines have been implemented where appropriate to pass along these cost increases. Selling and administrative expenses decreased from 26% to 25% of net sales, but increased to $21,872,000 primarily as a result of increased sales volume. Other expenses increased to $333,000 from $304,000. Interest expense was up primarily as a result of increased average borrowings on the Company's revolving lines of credit and term loan facilities in addition to increased effective borrowing rates. Fiscal 1994 also included a loss on disposition of fixed assets; there was no corresponding charge against income in 1995. Net income of $4,757,000 or $.92 per share increased from last year's nine month net income of $3,173,000 or $.62 per share as a result of increased sales and gross profit, partially offset by increased selling, administrative, and interest expense, and increased provision for taxes. Page 9 of 14 10 LIQUIDITY AND CAPITAL RESOURCES At March 31, 1995 the Company had working capital of $17,683,000, compared to $11,223,000 at June 30, 1994, and the ratio of current assets to current liabilities increased to 2.09 to 1 from 1.65 to 1. The increased working capital is primarily attributed to increases in accounts receivable, inventories, and other current assets, and a reduction in accrued expenses related to income tax and compensation payments, partially offset by increases in accounts payable related to increased sales and production volumes, increased current maturities of long-term debt, and to decreased cash. The Company used $1.5 million in cash for operating activities in the first nine months of fiscal year 1995. The debt to equity ratio of .30 to 1 at March 31, 1995 increased from .15 to 1 as of June 30, 1994. Capital expenditures of $3,247,000 in the first nine months of fiscal year 1995 compares to $3,700,000 in the comparable period last year. Spending in fiscal year 1995 is primarily related to office expansion, and manufacturing equipment and process improvements and is expected to total approximately $4 million for the full year. The Company paid an annual dividend of $.10 per share or $476,000 and a 5% stock dividend in September 1994. Additionally, $.04 per share or $200,000 quarterly cash dividends were paid in November 1994 and February 1995. The Company entered into two new revolving lines of credit in December 1994 in replacement of the previous $8,000,000 revolving line of credit. Both new lines of credit are unsecured, permit the Company to borrow at either the banks' base lending rate or at a rate based upon a 1.00 percentage point increment (improved from the previous 1.25 percentage point increment) over the LIBOR rate as periodically determined and both lines expire in the fourth calendar quarter of 1995. The aggregate total of revolving lines of credit is $13,000,000, all of which is available at March 31, 1995. A final draw of $1.2 million was made in December 1994 on the Company's ten year term loan. Equal quarterly payments of $167,500, plus interest, began in March 1995. In February 1995 the Company completed an Industrial Revenue Development Bond borrowing in the amount of $1,250,000 associated with the 1994 purchase and 1995 expansion of the facility in Northern Kentucky. The term of this IRB is 15 years with semi-annual interest payments and annual principal payments or retirement of bond principal in increasing amounts over the term of the bonds. The IRB interest rate will be re-established semi-annually and is currently 6.15%, including the letter of credit fee. The Company is in compliance with all of its loan covenants. The Company believes that the total available line of credit plus cash flows from operating activities are adequate for the Company's operational and capital expenditure needs. The Company continues to seek opportunities to invest in new products and markets and in acquisitions which fit its strategic growth plans in the lighting and graphics markets. Page 10 of 14 11 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits 11 Statement Re Computation of Earnings per share (b) Form 8-K No reports on Form 8-K have been filed during the quarter for which this Report is filed. [All other items required in Part II have been omitted because they are not applicable or are not required.] 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, thereunto duly authorized. LSI Industries Inc. BY: /s/ Robert J. Ready -------------------------------------- Robert J. Ready President and Chief Executive Officer (Principal Executive Officer) BY: /s/ Ronald S. Stowell -------------------------------------- Ronald S. Stowell Chief Financial Officer and Treasurer (Principal Accounting Officer) May 10, 1995 Page 11 of 14 12 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 LSI INDUSTRIES INC. Commission File No. 0-13375 EXHIBIT VOLUME Form 10-Q March 31, 1995 Page 12 of 14 13 LSI INDUSTRIES INC. Form 10-Q March 31, 1995 INDEX TO EXHIBITS
Begins on Exhibit Page Number Description of Exhibit Number - - - - ------ ---------------------- ------ 11 Statement Re Computation of Earnings per Share 14
Page 13 of 14 EX-11 2 EXHIBIT 11 1 EXHIBIT 11 LSI INDUSTRIES INC. STATEMENT RE COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE)
Three Months Ended Nine Months Ended March 31 March 31 ------------------ ----------------- 1994 1993 1995 1994 NET INCOME $ 749 $ 453 $ 4,757 $ 3,173 ====== ====== ====== ====== AVERAGE SHARES OUTSTANDING (a) Weighted average shares outstanding during the period, net of treasury shares 5,018 4,960 5,004 4,937 Common Share Equivalents: Common Shares to be issued under Stock Option Plan (b) 181 186 178 149 ------ ------ ------ ------ Average Shares Outstanding 5,199 5,146 5,182 5,086 ====== ====== ====== ====== NET INCOME PER SHARE $ .14 $ .09 $ .92 $ .62 ====== ====== ====== ======
Notes (a): Weighted average shares outstanding and Common Share Equivalents reflect the 5% stock dividend paid in September 1994. (b): Calculated using the "Treasury Stock" method as if options were exercised and the funds were used to purchase Common Shares at the average market price during the period. Page 14 of 14 EX-27 3 EXXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM 10-Q FILED FOR THE PERIOD ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000763532 LSI INDUSTRIES INC. 9-MOS JUN-30-1994 JUL-01-1995 MAR-31-1995 853 0 15,537 (274) 16,187 33,932 28,248 (9,982) 53,546 16,249 0 7,734 0 0 20,323 53,546 88,604 88,604 59,002 59,002 21,901 0 304 7,397 2,640 4,757 0 0 0 4,757 .92 .92
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