-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LXv3xwUonjlM6wvS2kSiKbd6K6iNf1OdC6JmxDiHp4Uubicr4TOLm0g50dDD7Z88 hJM2adat21EVsbJhgi39vA== 0000950152-96-004478.txt : 19960906 0000950152-96-004478.hdr.sgml : 19960906 ACCESSION NUMBER: 0000950152-96-004478 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960905 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LSI INDUSTRIES INC CENTRAL INDEX KEY: 0000763532 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 310888951 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-13375 FILM NUMBER: 96626162 BUSINESS ADDRESS: STREET 1: 10000 ALLIANCE RD STREET 2: P O BOX 42728 CITY: CINCINNATI STATE: OH ZIP: 45242 BUSINESS PHONE: 5135796411 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-K405 1 LSI INDUSTRIES ANNUAL REPORT 1 SECURITIES AND EXCHANGE COMMISSION ---------------------------------- WASHINGTON, D.C. 20549 ---------------------- FORM 10-K --------- /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 1996. OR / / 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 Securities Registered Pursuant to Section 12(b) of the Act: None Securities Registered Pursuant to Section 12(g) of the Act: Common Shares (No par value) Indicate by check mark 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -- -- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Aggregate market value of the voting stock held by non-affiliates of the registrant at August 30, 1996 was approximately $131,622,000, based on a closing price of $16.75. At August 30, 1996, 8,996,791 shares of no par value Common Shares were issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE ----------------------------------- Portions of the Registrant's Proxy Statement filed with the Commission for its 1996 annual meeting are incorporated by reference in Part III, as specified. 2 LSI INDUSTRIES INC. 1996 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS
Begins on Page ---- PART I ITEM 1 - BUSINESS.......................................................... 1 ITEM 2 - PROPERTIES........................................................ 2 ITEM 3 - LEGAL PROCEEDINGS................................................. 2 ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................................... 3 PART II ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDERS' MATTERS............................. 3 ITEM 6 - SELECTED FINANCIAL DATA........................................... 3 ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................... 3 ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................... 3 ITEM 9 - DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...................................... 4 PART III ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................ 4 ITEM 11 - EXECUTIVE COMPENSATION............................................ 4 ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............................................ 4 ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................... 4 PART IV ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, REPORTS ON FORM 8-K.................................................. 4 SIGNATURES .................................................................. 6
i 3 PART I ITEM 1 - BUSINESS The Company's two business segments are Lighting and Graphics. Sales by continuing operations by segment are as follows (in thousands):
1996 1995 1994 ---- ---- ---- Lighting $ 93,208 $ 72,782 $56,159 Graphics 59,525 47,145 37,376 -------- -------- ------- Total $152,733 $119,927 $93,535 ======== ======== =======
The Lighting segment manufactures and sells outdoor, indoor, and landscape lighting fixtures to the retail petroleum, commercial and industrial markets. Additionally, this segment produces and markets menu boards to the restaurant and other markets. The Lighting segment includes the operations of LSI Lighting Systems Commercial and Petroleum Lighting divisions, Abolite Lighting division, Greenlee Lighting, the LSI Metal Fabrication division, and the LSI IMAGES division. The Graphics segment manufactures and sells screen printed materials and architectural graphic structures to the retail petroleum and other markets. The Graphics segment includes the operations of SGI Integrated Graphics Systems and the Insight Graphic Systems division. See Note 3 of Notes to Consolidated Financial Statements beginning on page S-13 of this Form 10-K for additional information on business segments. The Company believes that it is a low-cost producer for its types of products, and as such, is in a position to promote its product lines with substantial marketing and sales activities. The Company is not dependent on any one supplier for any of its component parts. The Company's sales are partially seasonal as installation of outdoor lighting and graphic systems in the northern states lessens during the harshest winter months. One customer, Chevron U.S.A. Inc. accounted for 12% of consolidated net sales in 1996, 14% in 1995, and 13% in 1994. The Company had a backlog of orders, believed by it to be firm, of $9.6 million and $13.8 million at June 30, 1996 and 1995, respectively. All orders are scheduled to ship within twelve months. The Company has approximately 900 full-time and 200 temporary employees. The Company has a comprehensive compensation and benefit program for employees, including competitive wages, a discretionary bonus plan, a profit-sharing plan and retirement plan, a 401(k) savings plan, a non-qualified deferred compensation plan (for certain employees), a stock option plan, and medical and dental insurance. -1- 4 The Company sells its products throughout the United States and Canada. LSI Industries encounters strong competition in all markets served by the Company's product lines. The Company has many competitors, some of which have greater financial and other resources. The Company considers product quality and performance, price, customer service, prompt delivery, and reputation to be important competitive factors. The Company has several product and process patents which it has obtained in the normal course of business. The Company does not believe that patent protection is critical to its business. ITEM 2 - PROPERTIES The Company has five facilities:
Description Size Location Status ----------- ---- -------- ------ 1) LSI Corporate 225,000 sq. ft., Cincinnati, OH Owned Headquarters, and including 38,000 lighting fixture sq. ft. of office and graphics space manufacturing 2) LSI pole manufac- 131,000 sq. ft. Cincinnati, OH Owned turing and dry powder-coat painting 3) LSI Metal Fabrication 96,000 sq. ft. Independence, KY Owned and LSI Images manu- including 5,000 facturing and dry sq. ft. of office powder-coat painting space 4) SGI headquarters, 251,000 sq. ft. Houston, TX Leased screen printing including 25,000 manufacturing, and sq. ft. of office architectural space and 67,000 graphics manufac- sq. ft. of outside turing warehouse space 5) Greenlee office 33,000 sq. ft. Dallas, TX Leased and manufacturing
The Company considers these facilities adequate for its current level of operations. ITEM 3 - LEGAL PROCEEDINGS None -2- 5 ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the year covered by this report. PART II ------- ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDERS' MATTERS "Common Share Information" appears on page S-18 of this Form 10-K. ITEM 6 - SELECTED FINANCIAL DATA "Selected Financial Data" appears on page S-19 of this Form 10-K. ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS "Management's Discussion and Analysis of Financial Condition and Results of Operations" appears on pages S-1 through S-3 of this Form 10-K. ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Begins Index to Financial Statements on Page ------- Financial Statements: Report of Independent Public Accountants S-4 Consolidated Income Statements for the years ended June 30, 1996, 1995 and 1994 S-6 Consolidated Balance Sheets at June 30, 1996 and 1995 S-7 Consolidated Statements of Cash Flows for the years ended June 30, 1996, 1995 and 1994 S-9 Consolidated Statements of Shareholders' Equity for the years ended June 30, 1996, 1995 and 1994 S-10 Notes to Consolidated Financial Statements S-11 Financial Statement Schedules: II - Valuation and Qualifying Accounts for the S-20 years ended June 30, 1996, 1995 and 1994
Schedules other than those listed above are omitted for the reason(s) that they are either not applicable or not required or because the information required is contained in the financial statements or notes thereto. -3- 6 ITEM 9 - DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None PART III -------- ITEMS 10, 11, 12 and 13 of Part III are incorporated by reference from the LSI Industries Inc. Proxy Statement for its Annual Meeting of Shareholders to be held November 14, 1996, as filed with the Commission pursuant to Regulation 14A. PART IV ------- ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) The following documents are filed as part of this report: (1) Financial Statements Appear as part of Item 8 of this Form 10-K. (2) Financial Statement Schedules Appear as part of Item 8 of this Form 10-K. (3) Exhibit list - listing of exhibits required to be filed with Form 10-K incorporated by reference to Exhibit(s) filed as part of: Proxy-89 = Proxy statement for 1989 Annual Shareholders' Meeting 10K-89 = Annual Report on Form 10-K for the fiscal year ended June 30, 1989 10K-95 = Annual Report on Form 10-K for the fiscal year ended June 30, 1995 S-8 (95-1) = Form S-8 Registration Statement No. 33-64721 for the LSI Industries Inc. 1995 Stock Option Plan S-8 (95-2) = Form S-8 Registration Statement No. 33-64723 for the LSI Industries Inc. 1995 Directors' Stock Option Plan S-3 (96) = Form S-3 Registration Statement No. 33-65043 or filed herewith where so noted. -4- 7 EXHIBIT INDEX -------------
Current Form 10-K Report/ Exhibit Exhibit No. Description of Exhibit Document Number - ----------- ---------------------- -------- ------ 3.1 Articles of Incorporation of LSI Industries Inc. S-3 (96) 3.1 3.2 Code of Regulations of LSI Industries Inc. S-3 (96) 3.2 4 Instruments Defining the Rights of * Security Holders Management Compensatory Agreements ---------------------------------- 10.1 LSI Industries Inc. Retirement Plan 10K-95 10.4 and Trust 10.2 1985 Stock Option Plan 10K-89 10.1 10.3 LSI Industries Inc. 1995 Stock Option Plan S-8 (95-1) 4.1 10.4 LSI Industries Inc. 1995 Directors' Stock Option Plan S-8 (95-2) 4.1 10.5 LSI Industries Inc. Nonqualified Deferred Filed herewith Compensation Plan, and Rabbi Trust Agreement 11 Statement Re Computation of Per Filed herewith Share Earnings 22 Subsidiaries of the Registrant Filed herewith 23 Consent of Independent Public Accountants (2) Filed herewith 24 Powers of Attorney (5) Filed herewith 27 Financial Data Schedule Filed herewith * The Company has no outstanding issue or indebtedness exceeding 10% of the Company's assets on a consolidated basis. A copy of the instruments defining the right of security holders will be furnished to the Commission upon request.
(b) Form 8-K: A report on Form 8-K was filed April 5, 1996 to report a change in the Company's certifying accountant from Price Waterhouse LLP to Arthur Andersen LLP effective March 29, 1996. -5- 8 SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) 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. September 4, 1996 BY: /s/ Robert J. Ready - --------------------------------- ----------------------------------- Date Robert J. Ready Chairman of the Board and President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title - --------- ----- /s/ Robert J. Ready Chairman of the Board and President - --------------------------------- (Principal Executive Officer) Robert J. Ready /s/ Ronald S. Stowell Chief Financial Officer and Treasurer - --------------------------------- (Principal Financial and Accounting Officer) Ronald S. Stowell *Michael J. Burke Director - --------------------------------- Michael J. Burke *Allen L. Davis Director - --------------------------------- Allen L. Davis *James P. Sferra Secretary; Executive Vice President - --------------------------------- - Manufacturing; and Director James P. Sferra *John N. Taylor, Jr. Director - --------------------------------- John N. Taylor, Jr. *Donald E. Whipple Director - --------------------------------- Donald E. Whipple
*The undersigned, by signing his name hereto, executed this Annual Report on Form 10-K on September 4, 1996, pursuant to Powers of Attorney executed by the above named Directors of the Registrant and filed with the Securities and Exchange Commission as Exhibit 25 hereto. September 4, 1996 By: /s/ Ronald S. Stowell - ------------------- ----------------------------- Date Attorney-in-Fact -6- 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SALES BY BUSINESS SEGMENT (In thousands)
1996 1995 1994 -------- -------- ------- LIGHTING $ 93,208 $ 72,782 $56,159 GRAPHICS 59,525 47,145 37,376 -------- -------- ------- $152,733 $119,927 $93,535 ======== ======== =======
RESULTS OF OPERATIONS 1996 COMPARED TO 1995 Net sales of $152,733,000 for 1996 increased 27% over 1995 net sales of $119,927,000 with Lighting segment sales increasing 28% and Graphics segment sales increasing 26%. The Company experienced sales growth in both the multi-site retail market and the commercial / industrial lighting market, and had significant growth in its largest market, the petroleum / convenience store market. One customer, Chevron U.S.A., accounted for 12% of net sales in 1996 and 14% of net sales in 1995. 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. The increase in net sales in 1996 was primarily the result of increased volume. While sales prices were increased, inflation did not have a significant impact on sales in 1996 as competitive pricing pressures held price increases to a minimum. Gross profit of $48,512,000, or 31.8% of net sales, increased over last year's gross profit of $39,771,000 or 33.2% of net sales. The increase in amount of gross profit is attributed primarily to the 27% increase in net sales. A sales mix shift in the Company's Graphics segment to somewhat lower gross margin programs (including an increased level of prototype image programs), lower utilization of manufacturing capacity in the Graphics segment, and an increase in lighting sales to the petroleum / convenience store market provided influences that reduced the gross profit percentage. Selling and administrative expenses increased to $35,101,000 from $29,509,000 primarily as a result of increased sales volume, and were reduced to 23% of net sales in 1996 as compared to 25% last year. Interest expense decreased in 1996 from $459,000 to $344,000, primarily as a result of the paydown of substantially all of the Company's outstanding debt in February 1996 with a portion of the net proceeds from the Company's public offering of common shares (see also LIQUIDITY AND CAPITAL RESOURCES). Other expense consists primarily of loss on disposition of fixed assets, of which there was a greater amount in 1995. The Company's effective tax rate increased to 36.4% from 36.0% last year as a result of the increased provision for state income taxes. Income from continuing operations of $8,270,000 or $.98 per share increased 34% over 1995 levels of $6,174,000 or $.79 per share as a result of increased net sales and gross profit, partially offset by increased selling and administrative expenses and an increased provision for income taxes. The weighted average common shares outstanding increased 8.4% in 1996 to 8,456,000 shares from 7,802,000 shares in 1995 primarily as a result of the effect of the 1.2 million common shares issued in the Company's public offering in February 1996. S-1 10 The Company recorded a $1.5 million or $.18 per share charge to Discontinued Operations in 1996 to increase the reserve for remaining liabilities associated with its discontinued European operations. As discussed in Note 9 to the financial statements, the Company had been involved in a dispute with the Internal Revenue Service (IRS) in which the IRS proposed audit adjustments to the Company's 1989 through 1992 federal income tax returns which could have resulted in a payment of income taxes by the Company of approximately $2.0 million, plus interest, which had been refunded to the Company with the filing of its 1992 income tax return. The IRS 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 settlement discussions with the IRS Appeals Division relating to the proposed audit assessment were concluded in December 1995. An agreement was reached that re-characterized a portion of the 1992 loss associated with discontinued European operations as a long term capital loss. The agreement resulted in payment of $1.7 million (composed of taxes and interest), and in the $1.5 million charge to discontinued operations. Net income of $6.8 million or $.80 per share compares to last year's net income of $6.2 million or $.79 per share. The change resulted from increased income from continuing operations, partially reduced by the charge to discontinued operations. Certain recently issued accounting pronouncements will affect the Company's future financial statements and/or disclosures. See Note 1 to these financial statements for additional discussion. 1995 COMPARED TO 1994 Net sales of $119,927,000 increased 28% over 1994 sales of $93,535,000. Lighting segment sales increased 30% with sales increases in all major markets served: the petroleum / convenience store market, the multi-site retail market, and the commercial / industrial lighting market. Graphics segment sales increased 26%, primarily as a result of strong sales into the petroleum / convenience store market. One customer, Chevron U.S.A., accounted for 14% of net sales in 1995 and 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. The increase in sales in 1995 was primarily the result of increased volume. While sales prices were increased, inflation did not have a significant impact on sales in 1995 as competitive pricing pressures held price increases to a minimum. Gross profit of $39,771,000, or 33.2% of net sales, increased over last year's gross profit of $31,105,000 or 33.3% of net sales. The increase in amount of gross profit is attributed primarily to the 28% increase in sales. Increased sales volume caused some manufacturing inefficiencies, increased employment levels and related training, and overtime and additional shifts in the first half of the year. The Company experienced cost increases in several raw materials and components from suppliers in the first half for which sales price increases were implemented in the second half of the year. Selling and administrative expenses of $29,509,000 increased from $23,965,000, but decreased as a percentage of net sales to 25% from 26%, primarily as a result of increased sales volume. Interest expense increased in 1995 from $199,000 to $459,000 as a result of increased average borrowings on the Company's revolving lines of credit and long-term debt facilities in addition to increased effective borrowing rates. Other expense consists primarily of losses on disposition of assets of $122,000 and $250,000 in 1995 and 1994, respectively. Income tax expense of S-2 11 $3,469,000 or 36% of income before taxes compares to tax expense of $2,461,000 or 37% last year. The increase in income tax expense is related primarily to the increased taxable income. Net income of $6,174,000 or $.79 per share increased from last year's net income of $4,190,000 or $.55 per share as a result of increased sales and gross profit, partially offset by increased selling and administrative expenses and an increased provision for taxes. See additional comments regarding earnings per share in LIQUIDITY AND CAPITAL RESOURCES. LIQUIDITY AND CAPITAL RESOURCES At June 30, 1996 the Company had working capital of $36,146,000, compared to $17,788,000 at June 30, 1995. The ratio of current assets to current liabilities increased to 2.66 to 1 from 1.74 to 1. The increased working capital is primarily attributed to increases in cash and cash equivalents, accounts receivable, inventories, and other current assets, and to reductions in accrued expenses and current maturities of long-term debt. The Company generated $19,581,000 in net proceeds from a public offering of 1.2 million common shares in February 1996. The Company used a portion of the net proceeds to repay all outstanding indebtedness under its revolving lines of credit and its term loan facility with its banks. The significant increase in cash and cash equivalents is directly related to this public offering. The Company generated $406,000 of cash from operating activities in 1996 as compared to $1,818,000 in 1995. The Company used more cash in fiscal 1996 primarily because of the payment of approximately $1.7 million associated with the settlement of the IRS audit related to the discontinued European operations. In 1996, the increased level of business resulted in increases in accounts receivable and inventories. As of June 30, 1996, the Company's days sales outstanding were approximately 59 days as compared to 62 days at year end last year. In addition to cash and cash equivalents (high grade, short-term investments), the Company's primary source of liquidity continues to be its lines of credit. The Company has two revolving lines of credit totaling $13 million, all of which is available as of August 21, 1996. The Company believes that the total of available lines of credit plus cash flows from operating activities is adequate for the Company's 1997 operational and capital expenditure needs. The Company is in compliance with all of its loan covenants. Capital expenditures of $3.4 million in 1996 compare to $5.1 million in 1995. Spending in fiscal year 1996 is primarily related to manufacturing equipment and process improvements. Capital expenditures of $4 million are planned for 1997. In August 1996, the Board of Directors declared regular quarterly and special year-end cash dividends of $.04 per share each to be paid September 17, 1996 to shareholders of record on September 10, 1996. During fiscal 1996, the Company paid cash dividends each quarter. 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. The Company believes that adequate financing for any such investments or acquisitions will be available through future borrowings due to the enhanced financial condition of the Company after the public offering or through the issuance of common or preferred shares in payment for acquired businesses. S-3 12 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ---------------------------------------- To the Board of Directors and Shareholders of LSI Industries Inc.: We have audited the accompanying consolidated balance sheet of LSI Industries Inc. (an Ohio corporation) and subsidiaries as of June 30, 1996, and the related consolidated statements of income, shareholders' equity and cash flows for the year then ended. These financial statements and the schedule referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of LSI Industries Inc. and subsidiaries as of June 30, 1996, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in the index to the financial statements is presented for purposes of complying with the Securities and Exchange Commissions rules and is not part of the basic financial statements. The information in this schedule as of and for the year ended June 30, 1996 has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in a material respects the financial data required to be set forth therein in relation to the basic statements taken as a whole. /s/ Arthur Andersen LLP Arthur Andersen LLP Cincinnati, Ohio August 14, 1996 S-4 13 REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- To the Board of Directors and Shareholders of LSI Industries Inc. In our opinion, the accompanying consolidated financial statements listed in the index appearing under ITEM 8 of this Form 10-K present fairly, in all material respects, the financial position of LSI Industries Inc. and its subsidiaries at June 30, 1995, and the results of their operations and their cash flows for each of the two years in the period ended June 30, 1995, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. /s/ Price Waterhouse LLP Price Waterhouse LLP Cincinnati, Ohio August 18, 1995 S-5 14 LSI INDUSTRIES INC. CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED JUNE 30, 1996, 1995, AND 1994 (In thousands, except per share)
1996 1995 1994 ---- ---- ---- Net sales $ 152,733 $119,927 $93,535 Cost of products sold 104,221 80,156 62,430 --------- -------- ------- Gross profit 48,512 39,771 31,105 Selling and administrative expenses 35,101 29,509 23,965 --------- -------- ------- Operating income 13,411 10,262 7,140 Interest expense 344 459 199 Other (income) expense 62 160 290 --------- -------- ------- Income from continuing operations before income taxes 13,005 9,643 6,651 Income tax expense 4,735 3,469 2,461 --------- -------- ------- Income from continuing operations 8,270 6,174 4,190 Discontinued operations (1,500) -- -- --------- -------- ------- Net income $ 6,770 $ 6,174 $ 4,190 ========= ======== ======= Net income (loss) per share Continuing operations $ .98 $ .79 $ .55 Discontinued operations (.18) -- -- --------- -------- ------- $ .80 $ .79 $ .55 ========= ======== ======= Average shares outstanding (see Note 6) 8,456 7,802 7,656 The accompanying notes are an integral part of these financial statements.
S-6 15 LSI INDUSTRIES INC. CONSOLIDATED BALANCE SHEETS JUNE 30, 1996 AND 1995 (in thousands)
1996 1995 ---- ---- ASSETS Current Assets Cash and cash equivalents $ 11,138 $ 2,124 Accounts receivable, less allowance for doubtful accounts of $358 and $242, respectively 24,825 19,273 Inventories 19,660 18,584 Refundable income taxes 345 438 Other current assets 1,901 1,397 -------- -------- Total current assets 57,869 41,816 Property, Plant and Equipment, at cost Land 2,741 2,512 Buildings 9,682 8,967 Machinery and equipment 19,082 16,900 -------- -------- 31,505 28,379 Less accumulated depreciation (11,178) (8,981) -------- -------- Net property, plant and equipment 20,327 19,398 Goodwill 1,300 1,339 -------- -------- $ 79,496 $ 62,553 ======== ======== The accompanying notes are an integral part of these financial statements.
S-7 16 LSI INDUSTRIES INC. CONSOLIDATED BALANCE SHEETS (CONTINUED) JUNE 30, 1996 AND 1995 (in thousands)
1996 1995 ---- ---- LIABILITIES & SHAREHOLDERS' EQUITY Current Liabilities Current maturities of long-term debt $ 180 $ 842 Accounts payable 10,855 10,641 Accrued expenses 10,688 12,545 ------- ------- Total current liabilities 21,723 24,028 Long-Term Debt 1,382 7,257 Other Long-Term Liabilities -- 380 Deferred Income Taxes 1,654 1,435 Shareholders' Equity Preferred shares, without par value; Authorized 1,000,000 shares, none issued -- -- Common shares, without par value; Authorized 30,000,000 shares; Outstanding 8,964,491 and 7,554,229 shares, respectively (see Note 6) 28,082 7,915 Retained earnings 26,655 21,538 ------- ------- Total shareholders' equity 54,737 29,453 ------- ------- $79,496 $62,553 ======= ======= The accompanying notes are an integral part of these financial statements.
S-8 17 LSI INDUSTRIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended June 30, 1996, 1995 and 1994 (In thousands)
1996 1995 1994 ---- ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 6,770 $ 6,174 $ 4,190 Non-cash items included in income Depreciation and amortization 2,456 2,074 1,794 Deferred income taxes (129) 85 (234) Loss on disposition of fixed assets 23 122 250 Change in Accounts receivable (5,552) (4,897) (2,744) Inventories (1,076) (7,505) (3,481) Refundable income taxes 93 (438) 134 Accounts payable 214 2,683 2,087 Accrued expenses and other (2,069) 3,590 5,833 Change in liability for discontinued operations (324) (70) (245) -------- ------- ------- Net cash flows from operating activities 406 1,818 7,584 -------- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant, and equipment (3,392) (5,117) (4,609) Proceeds from sale of fixed assets 23 12 13 -------- ------- ------- Net cash flows from investing activities (3,369) (5,105) (4,596) -------- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Decrease in lines of credit -- -- (1,312) Payment of long-term debt (6,537) (451) (3,957) Increase in long-term debt -- 4,950 3,600 Cash dividends paid (1,653) (1,078) (234) Exercise of stock options 586 376 370 Proceeds from public offering of shares 19,581 -- -- -------- ------- ------- Net cash flows from financing activities 11,977 3,797 (1,533) -------- ------- ------- Increase in cash and cash equivalents 9,014 510 1,455 Cash and cash equivalents at beginning of year 2,124 1,614 159 -------- ------- ------- Cash and cash equivalents at end of year $ 11,138 $ 2,124 $ 1,614 ======== ======= ======= Supplemental cash flow information Interest paid $ 924 $ 438 $ 210 Income taxes paid $ 5,588 $ 5,831 $ 204 The accompanying notes are an integral part of these financial statements.
S-9 18 LSI INDUSTRIES INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For the years ended June 30, 1996, 1995, and 1994 (In thousands)
Common Shares ---------------- Number of Retained Shares Amount Earnings Total --------- ------ --------- ------ BALANCE AT JUNE 30, 1993 7,367 $ 7,169 $ 12,486 $ 19,655 Net income -- -- 4,190 4,190 Stock options exercised 100 370 -- 370 Dividend - $.03 per share -- -- (234) (234) ----- ------- -------- -------- BALANCE AT JUNE 30, 1994 7,467 7,539 16,442 23,981 Net income -- -- 6,174 6,174 Stock options exercised 87 376 -- 376 Dividends - $ .15 per share -- -- (1,078) (1,078) ----- ------- -------- -------- BALANCE AT JUNE 30, 1995 7,554 7,915 21,538 29,453 Net income -- -- 6,770 6,770 Public offering of shares 1,233 19,581 -- 19,581 Stock options exercised 177 586 -- 586 Dividend - $.21 per share -- -- (1,653) (1,653) ----- ------- -------- -------- BALANCE AT JUNE 30, 1996 8,964 $28,082 $ 26,655 $ 54,737 ===== ======= ======== ======== The accompanying notes are an integral part of these financial statements.
S-10 19 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONSOLIDATION: The consolidated financial statements include the accounts of LSI Industries Inc. and its subsidiaries, all of which are wholly owned. All significant intercompany transactions have been eliminated. RECLASSIFICATION: Certain reclassifications have been made to prior year amounts in order to be consistent with the presentation for the current year. USE OF ESTIMATES: The preparation of the financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. REVENUE RECOGNITION: Revenue is recognized when the customer accepts title and the resultant risks and rewards of ownership. Generally this occurs upon shipment of goods or shortly thereafter. Amounts received from customers prior to the recognition of revenue are accounted for as customer pre-payments under accrued expenses. CASH AND CASH EQUIVALENTS: The cash balance includes cash and cash equivalents which have original maturities of less than three months. INVENTORIES: Inventories are stated at the lower of cost or market. Cost is determined on the first-in, first-out basis. PROPERTY, PLANT AND EQUIPMENT AND RELATED DEPRECIATION: Property, plant and equipment are stated at cost. Major additions and betterments are capitalized while maintenance and repairs are expensed. For financial reporting purposes, depreciation is computed on the straight-line method over the estimated useful lives of the assets as follows: Buildings 31 - 39 years Machinery and equipment 3 - 10 years S-11 20 GOODWILL: The excess of cost over fair value of assets acquired ("goodwill") is amortized over a forty year period. As of June 30, 1996 and 1995, accumulated amortization of goodwill was $287,000 and $248,000, respectively. The Company periodically evaluates goodwill and other long-lived assets for permanent impairment based upon anticipated cash flows. To date no impairments have been recorded, nor are any anticipated. FINANCIAL INSTRUMENTS: The Company has financial instruments consisting primarily of cash and cash equivalents, revolving lines of credit, and long-term debt. The fair value of these financial instruments approximates carrying value because of their short-term maturity and variable, market-driven interest rates. The Company has no financial instruments with off balance sheet risk. EMPLOYEE BENEFIT PLANS: The Company has a defined contribution retirement plan and a discretionary profit sharing plan covering substantially all of its employees, and a non-qualified deferred compensation plan covering certain employees. The costs of employee benefit plans are charged to expense and funded annually. Total costs relating to continuing operations were $1,378,000 in 1996, $1,004,000 in 1995, and $942,000 in 1994. INCOME TAXES: Deferred income taxes are provided on items reported in income in different periods for financial reporting and tax purposes. 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 (dilutive stock options). Dilutive stock options amounted to 360,000 shares in 1996, 287,000 shares in 1995, and 236,000 shares in 1994. See also Note 6. RECENT PRONOUNCEMENTS: In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of," which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. This statement also addresses the accounting for long-lived assets that are expected to be disposed of in the future. The Company will adopt this standard in fiscal year 1997 and, based on current circumstances, does not believe the effect of adoption will be material. In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation." The Company S-12 21 intends to adopt this standard in fiscal year 1997 by making the required footnote disclosures only. Therefore, the adoption of this standard is not expected to have an effect on the Company's financial position or results of operations. NOTE 2 - DISCONTINUED OPERATIONS In 1992 the Company sold the assets and operations of its U.K. subsidiary, Duramark, to its management and reported a loss from Discontinued Operations. Consideration received included cash, assumption of liabilities by management, and rights to a percentage of future profits of the operation earned on or before May 31, 1996 (to which no value was assigned). The maximum amount receivable is not material, is subject to a time limit, and realizability is believed not to be certain. The remaining liabilities which were not assumed by the management buy-out group of the discontinued operations, net of related taxes, have been classified in the consolidated balance sheets as follows:
June 30 June 30 1996 1995 ---- ---- (In thousands) Accrued expenses $589 $429 Other long-term liabilities -- 380 ---- ---- Total $589 $809 ==== ====
NOTE 3 - BUSINESS SEGMENT INFORMATION LSI operates in two business segments - Lighting and Graphics. The Lighting segment manufactures and sells outdoor, indoor and landscape lighting fixtures as well as menu boards and light boxes to the petroleum / convenience store, multi-site retail and commercial/industrial markets. The Lighting segment includes the operations of LSI Lighting Systems, Abolite Lighting, Greenlee Lighting, LSI Images, and LSI Metal Fabrication. The Graphics segment manufactures and sells screen printed materials and architectural graphic structures for the petroleum / convenience store and multi-site retail markets. The Graphics segment includes the operations of SGI and Insight Graphics. The Company's most significant market is the petroleum / convenience store market with slightly over 50% of net sales of lighting and graphics concentrated in this market. The following information is provided for the following periods:
1996 1995 1994 ---- ---- ---- (In thousands) NET SALES: Lighting $ 93,208 $ 72,782 $56,159 Graphics 59,525 47,145 37,376 -------- -------- ------- $152,733 $119,927 $93,535 ======== ======== =======
S-13 22 OPERATING INCOME: Lighting $ 7,130 $ 4,937 $ 3,684 Graphics 6,281 5,325 3,456 ------- ------- ------- $13,411 $10,262 $ 7,140 ======= ======= ======= IDENTIFIABLE ASSETS: Lighting $43,138 $36,433 $29,912 Graphics 24,534 23,280 14,523 ------- ------- ------- 67,672 59,713 44,435 Corporate 11,824 2,840 1,852 ------- ------- ------- $79,496 $62,553 $46,287 ======= ======= ======= CAPITAL EXPENDITURES: Lighting $ 2,748 $ 3,814 $ 3,747 Graphics 644 1,303 862 ------- ------- ------- $ 3,392 $ 5,117 $ 4,609 ======= ======= ======= DEPRECIATION AND AMORTIZATION: Lighting $ 1,570 $ 1,404 $ 1,133 Graphics 886 670 661 ------- ------- ------- $ 2,456 $ 2,074 $ 1,794 ======= ======= =======
Operating income of the business segments includes sales less all operating expenses including allocations of corporate expense, but excluding interest expense. Sales between business segments are immaterial. Identifiable assets are those assets used by each segment in its operations, including allocations of shared assets. Corporate assets consist primarily of cash and cash equivalents, and refundable income taxes. NOTE 4 - BALANCE SHEET DATA The following information is provided as of June 30:
1996 1995 ---- ---- (In thousands) INVENTORIES: Raw materials $11,432 $ 9,821 Work-in-process and finished goods 8,228 8,763 ------- ------- $19,660 $18,584 ======= ======= ACCRUED EXPENSES: Compensation and benefits $ 4,600 $ 4,070 Customer prepayments $ 2,395 $ 5,648
S-14 23 NOTE 5 - REVOLVING LINES OF CREDIT AND LONG-TERM DEBT The Company has lines of credit with its banks in the aggregate amount of $13,000,000, all of which was available at June 30, 1996. These revolving lines of credit are unsecured and expire in fiscal year 1997. Interest on the revolving lines of credit is charged based upon a 1.0 percentage point increment over the LIBOR rate as periodically determined, or at the banks' base lending rate less 1.25 percentage points, at the Company's option. Under terms of these agreements, the Company has agreed to maintain minimum levels of profitability and net worth, and is subject to certain maximum levels of leverage. The Company has an Industrial Revenue Development Bond (IRB) borrowing in the amount of $1,195,000 associated with its facility in Northern Kentucky. The term of this IRB is 15 years with semi-annual interest payments and annual principal payments for retirement of bond principal in increasing amounts over the term of the bonds. The IRB interest rate, which is reestablished semi-annually, is currently 4.5%, plus a .9% letter of credit fee. The IRB is secured by the Company's Kentucky real estate, which has a net carrying value of $1.4 million. The Company has equipment loans outstanding totaling $367,000 with two governmental agencies in Kentucky. The loans are for terms of five years at a weighted average interest rate of 2.2% and are secured by the Company's Kentucky equipment which has a net carrying value of $1.4 million. The Company makes quarterly principal and interest payments of $32,000 through June 1999 and has committed to specified job growth in its Kentucky facility.
LONG-TERM DEBT: 1996 1995 ---- ---- (In thousands) Industrial Revenue Development Bond at 5.4% $1,195 $1,250 Equipment loans (average rate of 2.2%) 367 484 Term loan -- 6,365 ------ ------ 1,562 8,099 Less current maturities 180 842 ------ ------ $1,382 $7,257 ====== ======
Future maturities of long-term debt at June 30, 1996 are as follows (in thousands): 1997 1998 1999 2000 2001 2002 and after ---- ---- ---- ---- ---- -------------- $180 $187 $190 $ 70 $ 75 $860
NOTE 6 - SHAREHOLDERS' EQUITY The Company generated $19.6 million in net proceeds from a public offering of 1,232,894 common shares in February 1996. The Company used a portion of the net proceeds to repay all outstanding indebtedness under its revolving lines of credit and its term loan facility with its banks. The Company has stock option plans which cover all of its full-time employees and has a plan covering all non-employee directors. The options granted pursuant to these plans are granted at S-15 24 fair market value at date of grant and generally become exercisable 25% per year (cumulative) beginning one year after the date of grant at the fair market value of the Common Shares at the date of grant. The number of shares reserved for issuance is 785,100, of which 166,400 shares were available for future grant as of June 30, 1996. The plans allow for the grant of both incentive stock options and non-qualified stock options. Shares Average (In thousands) Price -------------- ------- OPTIONS OUTSTANDING AT JUNE 30, 1993 513 $ 3.13 Options granted 182 4.58 Options terminated (34) 3.37 Options exercised (107) 3.28 ---- OPTIONS OUTSTANDING AT JUNE 30, 1994 554 3.56 Options granted 42 9.71 Options terminated (12) 3.37 Options exercised (92) 3.37 ---- OPTIONS OUTSTANDING AT JUNE 30, 1995 492 4.13 Options granted 342 13.14 Options terminated (22) 12.10 Options exercised (193) 3.43 ---- OPTIONS OUTSTANDING AT JUNE 30, 1996 619 $ 9.04 ====
At June 30, 1996, there were 184,000 options exercisable at an average price of $4.99 per share. On August 21, 1996, the Board of Directors declared a regular quarterly dividend of $.04 per share and a special $.04 per share cash dividend to be paid September 17, 1996 to shareholders of record on September 10, 1996. Annual cash dividend payments made during fiscal years 1996, 1995 and 1994 were $.21, $.15, and $.03 per share, respectively. NOTE 7 - SALES TO MAJOR CUSTOMERS The Company made sales in both the Lighting and Graphics segments to a major customer which exceeded 10% of consolidated net sales. Sales to Chevron U.S.A. represented 12% of consolidated net sales in 1996, 14% in 1995, and 13% in 1994. NOTE 8 - LEASES The Company leases certain of its facilities and equipment under operating lease arrangements. Rental expense was $656,000 in 1996, $835,000 in 1995, and $846,000 in 1994. Minimum annual rental commitments under non-cancelable operating leases are: $600,000 in 1997; $505,000 in 1998; and $345,000 in 1999. S-16 25 NOTE 9 - INCOME TAXES The following information is provided for the years ended June 30:
1996 1995 1994 ---- ---- ---- (In thousands) PROVISION (BENEFIT) FOR INCOME TAXES: Current federal $ 4,290 $ 3,179 $ 2,582 Current state and local 574 205 113 Deferred (129) 85 (234) -------- -------- -------- $ 4,735 $ 3,469 $ 2,461 ======== ======== ======== RECONCILIATION TO FEDERAL STATUTORY RATE: Federal statutory tax rate 34.2% 34.0% 34.0% State and local taxes 2.9 1.4 1.1 Goodwill and other (.7) .6 1.9 -------- -------- -------- Effective tax rate 36.4% 36.0% 37.0% ======== ======== ========
The components of deferred income tax assets and liabilities at June 30, 1996 and 1995 are as follows:
1996 1995 ------- ------- (In thousands) CURRENT ASSETS (LIABILITIES): Reserves against current assets $ 385 $ 269 Prepaid expenses (164) (106) Accrued expenses 663 373 ------- ------- Deferred income tax asset included in Other Current Assets on the Consolidated Balance Sheets $ 884 $ 536 ======= ======= NONCURRENT LIABILITIES: Depreciation $ 1,654 $ 1,435 ------- ------- Deferred income tax liabilities as reported on the Consolidated Balance Sheets $ 1,654 $ 1,435 ======= =======
The Company discontinued its European operations in 1992 and reported a $4.3 million loss, net of a $3.2 million income tax benefit. The Internal Revenue Service (IRS) completed its audit of the Company's 1989 through 1992 federal income tax returns and proposed audit adjustments which would have resulted in a return of approximately $2 million of income taxes (plus interest) to the IRS which had been refunded to the Company with the filing of its 1992 income tax return. The IRS 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. S-17 26 The Company's settlement discussions with the IRS Appeals Division relating to the proposed audit assessment were concluded in December 1995. An agreement was reached that re-characterized a portion of the 1992 loss associated with discontinued European operations as a long term capital loss. The agreement resulted in payment of $1.7 million (composed of taxes and interest), and in a charge to discontinued operations of $1.5 million to increase the Company's reserve for remaining liabilities associated with the discontinued operations. NOTE 10 - SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
Quarter Ended ------------------------------------------------------ Fiscal Sept. 30 Dec. 31 March 31 June 30 Year -------- ------- -------- ------- ---- 1996 Net sales $ 35,882 $ 45,561 $ 33,495 $ 37,795 $ 152,733 Gross profit 11,942 13,824 10,001 12,745 48,512 Income from continuing operations 2,194 2,693 948 2,435 8,270 Net income 2,194 1,193 948 2,435 6,770 Earnings per share Income from continuing operations $ .28 $ .34 $ .11 $ .26 $ .98(a) Net income $ .28 $ .15 $ .11 $ .26 $ .80 Range of share prices High $ 15.50 $ 19.63 $ 18.25 $ 19.75 $ 19.75 Low $ 12.17 $ 14.25 $ 13.50 $ 16.75 $ 12.17 1995 Net sales $ 29,320 $ 32,364 $ 26,920 $ 31,323 $ 119,927 Gross profit 9,858 11,174 8,570 10,169 39,771 Net income 1,849 2,159 749 1,417 6,174 Earnings per share $ .24 $ .28 $ .10 $ .18 $ .79(a) Range of share prices High $ 8.33 $ 8.00 $ 9.67 $ 12.92 $ 12.92 Low $ 6.67 $ 6.67 $ 7.33 $ 9.33 $ 6.67 (a) The total of the earnings per share for each of the four quarters does not equal the total earnings per share for the full year because the calculations are based on the average shares outstanding during each of the individual periods.
At August 6, 1996, there were 517 shareholders of record. The Company believes this represents approximately 2,800 beneficial shareholders. S-18 27 LSI INDUSTRIES INC. SELECTED FINANCIAL DATA (In thousands except per share) The following data has been selected from the Consolidated Financial Statements of the Company for the periods and dates indicated: INCOME STATEMENT DATA:
1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- Net sales $152,733 $119,927 $93,535 $ 72,563 $ 69,182 Cost of products sold 104,221 80,156 62,430 49,789 47,389 Operating expenses 35,101 29,509 23,965 20,156 19,351 Restructuring charges -- -- -- -- 2,136 -------- -------- ------- -------- -------- Operating income 13,411 10,262 7,140 2,618 306 Interest expense 344 459 199 503 580 Other (income) expense 62 160 290 (481) 539 -------- -------- ------- -------- -------- Income (loss) from continuing operations before income taxes 13,005 9,643 6,651 2,596 (813) Income taxes 4,735 3,469 2,461 927 (282) -------- -------- ------- -------- -------- Income (loss) from continuing operations $ 8,270 $ 6,174 $ 4,190 $ 1,669 $ (531) ======== ======== ======= ======== ======== Net income (loss) $ 6,770 $ 6,174 $ 4,190 $ 1,669 $ (4,793) ======== ======== ======= ======== ======== Per share data Income (loss) from continuing operations $ .98 $ .79 $ .55 $ .23 $ (.07) Net income (loss) $ .80 $ .79 $ .55 $ .23 $ (.65) Cash dividends $ .21 $ .15 $ .03 $ .03 $ .03 Average number of shares outstanding (a) 8,456 7,802 7,656 7,385 7,367 BALANCE SHEET DATA: (At June 30) 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- Working capital $ 36,146 $ 17,788 $11,223 $ 10,268 $ 12,241 Total assets 79,496 62,553 46,287 38,051 41,231 Long-term debt, including current maturities 1,562 8,099 3,600 3,957 8,454 Shareholders' equity 54,737 29,453 23,981 19,655 18,220 (a) Average shares outstanding represents common shares outstanding plus the dilutive impact of common share equivalents (stock options).
S-19 28 LSI INDUSTRIES INC. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED JUNE 30, 1996, 1995 AND 1994 (IN THOUSANDS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E -------- -------- -------- -------- -------- Additions Balance Charged to Balance Beginning Costs and (A) End of Description of Period Expenses Deductions Period - ----------- --------- -------- ---------- ------ ALLOWANCE FOR DOUBTFUL ACCOUNTS: Year Ended June 30, 1996 $242 $328 $(212) $358 Year Ended June 30, 1995 $265 $103 $(126) $242 Year Ended June 30, 1994 $540 $316 $(591) $265 INVENTORY OBSOLESCENCE RESERVES: Year Ended June 30, 1996 $453 $892 $(651) $694 Year Ended June 30, 1995 $306 $302 $(155) $453 Year Ended June 30, 1994 $356 $162 $(212) $306 (A) For allowance for doubtful accounts, deductions are uncollectible accounts charged off, less recoveries.
S-20 29 LSI INDUSTRIES INC. Form 10-K June 30, 1996 INDEX TO EXHIBITS Exhibit Number Description of Exhibit - ------ ---------------------- 10.5 LSI Industries Inc. Nonqualified Deferred Compensation Plan, and Rabbi Trust Agreement 11 Statement Re Computation of Earnings Per Share 22 Subsidiaries of the Registrant 23 Consent of Independent Public Accountants (2) 24 Powers of Attorney (5) 27 Financial Data Schedule EX-10.5 2 EXHIBIT 10.5 1 EXHIBIT 10.5 LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN --------------------------------------- PREAMBLE -------- LSI Industries Inc. and each Employer hereby adopt the Plan effective as of September 15, 1996. This Plan is an unfunded deferred compensation arrangement for a select group of management or highly compensated employees who are rendering service to an Employer. ARTICLE I - DEFINITIONS ----------------------- 1.1 "BENEFICIARY" shall mean the person or persons entitled to receive the distributions, if any, payable under the Plan upon or after a Participant's death, to such person or persons as such Participant's Beneficiary. Each Participant may designate a Beneficiary by filing the proper form with the Committee. A Participant may designate one or more contingent Beneficiaries to receive any distributions after the death of a prior Beneficiary. A designation shall be effective upon said filing, provided that it is so filed during such Participant's lifetime, and may be changed from time to time by the Participant. 1.2 "COMMITTEE" shall mean the Compensation Committee of the Board of Directors of LSI Industries Inc. which is responsible for the administration of this Plan in accordance with the provisions of the Plan as set forth in this document. 1.3 "COMPENSATION" shall mean the total amount of earnings (including bonuses) paid by an Employer to an Executive or which would otherwise be paid but for a deferral election hereunder or a salary reduction election under any Section 401(k) or 125 plan. 1.4 "DEFERRED COMPENSATION ACCOUNT" shall mean the account to be established by an Employer as a book reserve to reflect the amounts deferred by a Participant, the amounts credited by the Employer, and the earnings adjustment under Article VI. A Participant's Deferred Compensation Account shall be reduced by distributions under Articles VII and VIII. 1.5 "EFFECTIVE DATE" shall mean September 15, 1996. 1.6 "EMPLOYER" shall mean LSI Industries Inc., any affiliate of LSI Industries Inc. (whether or not incorporated) which has adopted the Plan with the consent of LSI Industries Inc., or any successor or assignee of any of them. 2 - 2 - 1.7 "EXECUTIVE" shall mean any employee designated by the Committee (in conjunction with senior management of LSI Industries Inc.) as a member of the select group of management or highly compensated employees eligible for participation in this Plan. 1.8 "PARTICIPANT" shall mean any Executive who has a right to a benefit under the Plan and a person who was such at the time of his death or termination of service and who retains, or whose Beneficiary retains, a benefit under the Plan which has not been distributed. 1.9 "PLAN" shall mean the LSI Industries Inc. Nonqualified Deferred Compensation Plan as described in this instrument, effective September 15, 1996, and, as may be amended thereafter. 1.10 "PLAN YEAR" shall mean the 12-consecutive month period beginning on July 1. ARTICLE II - PARTICIPANT'S ELECTION TO DEFER -------------------------------------------- 2.1 Each Executive may elect to have up to 100% of his Compensation (in whole percentages) for a Plan Year deferred and credited with earnings in accordance with the terms and conditions of the Plan. The Committee may allow separate elections with respect to regular earnings and bonuses. 2.2 An Executive desiring to exercise an election under Paragraph 2.1 shall notify the Committee of his deferral election. Such notice must be in writing, on a form provided by the Committee, and delivered to the Committee by such date as the Committee shall specify, but in all events before the first day of the Plan Year to which such election is to apply. Notwithstanding the foregoing, for the Plan Year beginning July 1, 1996 only, an Executive may provide such notice to the Committee after July 1, 1996 to be effective only with respect to Compensation paid in such Plan Year, but after the date such written notice is provided to the Committee; provided that such written notice is delivered to the Committee by September 1, 1996. 2.3 A deferral election shall be effective with respect to the entire Plan Year to which it relates and may not be modified or terminated for that Plan Year. Notwithstanding the foregoing, the election for the Plan Year beginning July 1, 1996 only, shall be effective with respect to Compensation paid between September 15, 1996 and June 30, 1997. 2.4 The Compensation otherwise payable to the Executive during the Plan Year shall be reduced pursuant to the Executive's election under this Article II. Such amounts shall be credited to the Executive's Deferred Compensation Account. 3 - 3 - ARTICLE III - EMPLOYER MAKE-UP ALLOCATIONS ------------------------------------------ 3.1 If, by reason of an election under Article II, a Participant receives a smaller allocation of Employer contributions and/or forfeitures under the LSI Industries Inc. Retirement Plan for a plan year of that plan than he would have received had no such election been made, then there shall be credited to the Participant's Deferred Compensation Account an amount equal to the amount which bears the same relationship to the amounts deferred under Article II and credited to the Participant's Deferred Compensation Account during the Plan Year as the Participant's allocations (of Employer contributions and/or forfeitures) under the LSI Industries Inc. Retirement Plan bear to the Participant's compensation taken into account under that plan. Such amount shall be credited to the Participant's Deferred Compensation Account at such time as the Committee shall determine. 3.2 (a) If, by reason of the application of the compensation limitation imposed by Section 401(a)(17) of the Internal Revenue Code of 1986 (or any corresponding successor provision), including any provision in the LSI Industries Inc. Retirement Plan providing such limitation, a Participant receives a smaller allocation of Employer contributions and/or forfeitures under the LSI Industries Inc. Retirement Plan for any plan year of that plan than he would have received had no such limitation been in effect, then there shall be credited to his Deferred Compensation Account the amount determined under (b) below. Such amount shall be credited to the Participant's Deferred Compensation Account at such time as the Committee shall determine. The Board of Directors of LSI Industries Inc. may, in its sole discretion, determine that each Employer shall make an allocation of this type with respect to the LSI Industries Inc. Retirement Plan plan year ended June 30, 1996, to be credited to the respective Employer's Participant's Deferred Compensation Accounts at such time as the Committee shall determine. (b) The amount hereunder shall be equal to the amount which is the same percentage of the Participant's compensation (as defined in the LSI Industries Inc. Retirement Plan) in excess of the compensation limitation referred to in (a) above as the percentage allocated under the LSI Industries Inc. Retirement Plan on compensation in excess of the Social Security taxable wage base (but not in excess of the limitation referred to in (a) above). ARTICLE IV - LSI INCENTIVE ALLOCATIONS -------------------------------------- 4.1 Subject to Paragraph 4.2, each Participant shall be eligible for an Employer incentive allocation for a Plan Year, to be determined in accordance with Paragraph 4.3, if he satisfies each of the following requirements: (a) The Participant must have elected to have part or all of his Compensation deferrals for the Plan Year of the LSI incentive allocation, the immediately preceding Plan Year 4 - 4 - and/or the second preceding Plan Year credited with earnings (or losses) under the LSI Common Shares investment option. (b) As of the date specified by the Committee (or its delegate) in the Plan Year (or the prior Plan Year) of the LSI incentive allocation, after giving effect to any investment election changes, at least 50% of the value of the Participant's Deferred Compensation Account attributable to Compensation deferrals (for all Plan Years) must be subject to the LSI Common Shares investment option; and (c) The Participant must be employed by an Employer at the time the Committee determines that the Performance Goal (defined below) was satisfied for the Plan Year. 4.2 (a) The Employer shall make an incentive allocation determined under Paragraph 4.3 below only if the Performance Goal (defined below) is met for the Plan Year as determined in the sole discretion of the Committee. (b) "Performance Goal" shall mean a Return on Average Shareholders' Equity (as determined in the sole discretion of the Committee) of at least 18%. The Committee shall have the right to adjust the Performance Goal from time to time on account of equity changes or other extraordinary matters. 4.3 If the Performance Goal (defined above) is met for a Plan Year, those Participants eligible for an Employer incentive allocation under Paragraph 4.1 above shall receive such an allocation determined by the Committee as follows: (a) The Committee shall determine the number of LSI Common Shares deemed to have been acquired during the Plan Year and each of the two immediately preceding Plan Years with the Compensation deferrals for such years elected by the Participant to be credited with earnings (or losses) under the LSI Common Shares investment option. In making that determination, the Committee shall consider only Compensation deferrals for a Plan Year up to 40% of the Participant's Compensation. (b) The Committee shall determine the percentages applicable to each eligible Participant for the current Plan Year and for each of the two preceding Plan Years from the following: 5 - 5 -
RETURN ON AVERAGE SHAREHOLDERS' EQUITY At least 18% but less At least 20% but less than 20% than 22% 22% or more Corporate Officers 20% 25% 30% and Top Executives All Other Employees 10% 12.5% 15%
The Participant's status (as a "corporate officer" or "top executive") as determined by the Committee at the end of the Plan Year in which he makes his Compensation deferrals will determine the level of Employer allocations under this Paragraph attributable to such Compensation deferrals for that Plan Year. (c) The applicable percentages determined for a Participant for the Plan Year and the two immediately preceding Plan Years shall be applied against the number of LSI Common Shares determined for the respective Plan Years (under (a) above). The resulting number shall be rounded to the nearest whole share. (d) The Committee shall determine the value of the number of LSI Common Shares (determined under (c) above) as of such date as it deems appropriate. That amount shall be credited to the Participant's Deferred Compensation Account at such time as the Committee shall determine. ARTICLE V - PARTICIPANT'S INTEREST ---------------------------------- No Participant or his designated Beneficiary shall acquire any property interest in his Deferred Compensation Account or any other assets of the Employer, their rights being limited to receiving from the Employer a deferred payment as set forth in this Plan, and these rights are conditioned upon continued compliance with the terms and conditions of this Plan. To the extent that any Participant or Beneficiary acquires a right to receive benefits under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Employer. ARTICLE VI - CREDITING OF EARNINGS ---------------------------------- 6.1 GENERAL. There shall be credited to the Deferred Compensation Account of each Participant an additional amount of earnings (or losses) determined under this Article VI. 6 - 6 - 6.2 ELECTIONS FOR COMPENSATION DEFERRALS. Each Participant shall elect (in whole percentages) to have earnings (or losses) credited to so much of his Deferred Compensation Account as is attributable to his Compensation deferrals under Article II under one (or a combination) of the following investment elections: (a) LSI Common Shares (b) Fountain Square U.S. Treasury Obligations Fund (c) Fountain Square Quality Bond Fund (d) Fountain Square International Equity Fund Such an election must be in writing, on a form provided by the Committee, and delivered to the Committee prior to the beginning of the period to which it relates. Notwithstanding the foregoing, for the first quarter of the 1996 Plan Year only, a Participant may provide such notice to the Committee no later than the date he provides his first deferral election under Article II. Subject to Paragraph 6.3, an investment election shall be effective for the entire Plan Year quarter to which it relates and may not be modified or terminated for that Plan Year quarter. In the event that an investment election form is not received by the Committee by the date specified for elections for a particular Plan Year quarter for a Participant, the last investment election received by the Committee from the Participant shall remain in effect for that Plan Year quarter. 6.3 COMMITMENT TO LSI COMMON SHARES INVESTMENT OPTION. If a Participant elects to have some or all of his Compensation deferrals for a Plan Year credited with earnings (or losses) under the LSI Common Shares investment option, that election with respect to such Compensation deferrals (and any earnings allocable to such Compensation deferrals) may not be changed until the end of the second full Plan Year following the Plan Year of the deferral. After that period, the previously restricted Compensation deferrals (and earnings attributable thereto) may be invested in any of the investment funds designated under Paragraph 6.2 (including LSI Common Shares) without such a time restriction. Notwithstanding Paragraph 6.2, an election changing the amounts to be credited with earnings (or losses) under the LSI Common Shares investment option may be made only once in a Plan Year at the time designated by the Committee or its delegate. 6.4 EMPLOYER ALLOCATIONS. Employer allocations under Articles III and IV shall be credited with earnings (or losses) under the LSI Common Shares investment option. The Participant shall have no right to change the investment option with respect to such Employer allocations. 7 - 7 - 6.5 DETERMINATION OF RATE OF RETURN. The Committee shall determine the rate of return throughout each Plan Year quarter or other period for the investments or investment funds designated under Paragraph 6.2. 6.6 INVESTMENT ADJUSTMENT. For each Plan Year quarter or other period, the Participant's Deferred Compensation Account shall be increased or decreased as if it had earned the rate of return corresponding to the amount determined by the Committee under Paragraph 6.5. Such increase or decrease shall be based on the varying balances in each of the investment elections comprising the Deferred Compensation Account throughout the Plan Year quarter or other period and shall be credited at such time as the Committee in its sole discretion shall determine. ARTICLE VII - PLAN BENEFITS --------------------------- 7.1 (a) A Participant's rights to that portion of his Deferred Compensation Account attributable to his Compensation deferrals under Article II (as adjusted for earnings and losses) shall be nonforfeitable at all times. (b) A Participant shall have a vested interest in that portion of his Deferred Compensation Account attributable to Employer allocations under Article III (as adjusted for earnings and losses) determined in accordance with the following schedule: YEARS OF VESTED SERVICE PERCENTAGE ----------------------- ---------- Less than two 0 Two but less than three 20 Three but less than four 40 Four but less than five 60 Five but less than six 80 Six or more 100 For purposes of this Paragraph, "Years of Vested Service" shall be determined in accordance with the provisions of the LSI Industries Inc. Retirement Plan. (c) A Participant's rights to that portion of his Deferred Compensation Account attributable to Employer allocations under Article IV based on Compensation deferrals for a Plan Year (as adjusted for earnings and losses) shall become nonforfeitable at the end of the second full Plan Year following the year of the Compensation deferrals to which such Employer allocations are attributable, if the Participant has been continuously employed by an Employer through that date. This applies to all Employer allocations based on such Compensation deferrals whether the allocations are for the Plan Year of the Compensation deferrals or the first or second succeeding Plan Years. 8 - 8 - (d) Notwithstanding Paragraphs 7.1(b) and (c) above, Employer allocations under Articles III and IV (as adjusted for earnings and losses) shall become fully vested upon the Participant's retirement after age 62 and completion of at least three (3) years of service, disability or death. (e) Notwithstanding any provision to the contrary, Employer allocations under Articles III and IV(as adjusted for earnings and losses) shall be forfeited if the Participant commits any dishonest act or violates any noncompete or nonsolicitation agreement (as the Committee in its sole discretion shall determine). 7.2 (a) At the time an Executive makes his first deferral election under Article II or investment election under Article VI, he shall also elect to have the amounts represented by his Deferred Compensation Account paid in one of the following two forms commencing as soon as administratively feasible upon termination of his service with all Employers: (1) single lump sum payment, or (2) approximately equal monthly installments to last not less than 12 months nor more than 120 months. If installment payments are in effect, the Participant's Deferred Compensation Account shall continue to be credited with earnings (or losses) under Article VI until payment of the final installment and the Participant may continue to make such elections thereunder as are available to other Participants. (b) A Participant may change the election referred to in (a) above. Payment shall be made in accordance with any such changed election only if the Participant terminates service with all Employers at least one year following the date of the election. Otherwise, the payment shall be made in accordance with the election (if any) in effect immediately prior to the changed election. (c) If a Participant has no election concerning the form of benefit payment under this Paragraph 7.2 in effect at the time he terminates service with all Employers, payment shall be made in a single lump sum payment. (d) Elections shall be made in writing, on a form provided by the Committee, and shall be made in accordance with the rules established by the Committee. 7.3 DISTRIBUTION OF LSI COMMON SHARES. To the extent that a Participant's Deferred Compensation Account is being credited with earnings (or losses) under Article VI based on the LSI Common Shares investment option, such Participant shall receive benefit payments in the form of whole shares of such LSI Common Shares. Any fractional shares and all other benefit payments shall be paid in cash. Any expenses 9 - 9 - attributable to a payment in shares may be deducted from the Participant's Deferred Compensation Account. ARTICLE VIII - DEATH -------------------- Upon the death of a Participant prior to commencement of payment under Article VII, the amounts represented by the Participant's Deferred Compensation Account, increased by any amounts due to be credited but not yet credited under Articles II, III or IV shall be payable to the Participant's Beneficiary as soon as administratively feasible in a single lump sum distribution. If the Participant has already commenced receiving the amounts represented by the Participant's Deferred Compensation Account in the installment payment form, the installment payments shall continue to be paid to the Participant's Beneficiary. To the extent that a Participant's Deferred Compensation Account is being credited with earnings (or losses) under Article VI based on the LSI Common Shares investment option, the Beneficiary shall receive any benefit payments in the form of whole shares of such LSI Common Shares. Otherwise, benefit payments shall be paid in cash. ARTICLE IX - NON-ASSIGNABLE/NON-ATTACHMENT ------------------------------------------ Except as required by law, no right of the Participant or designated Beneficiary to receive payments under this Plan shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law and any attempt, voluntary or involuntary, to effect any such action shall be null and void and of no effect. An Employer may not assign its obligations hereunder. ARTICLE X - CONSTRUCTION ------------------------ This Plan shall be construed under the laws of the State of Ohio. Article headings are for convenience only and shall not be considered as part of the terms and provisions of the Plan. The Committee shall have full power and authority to interpret, construe and administer this Plan. ARTICLE XI - AMENDMENT OR TERMINATION OF PLAN --------------------------------------------- The Plan may be terminated at any time or amended in whole or in part from time to time by LSI Industries Inc. provided that no such termination or amendment may directly or indirectly reduce a Participant's Deferred Compensation Account (other than through a complete distribution thereof to the Participant (or his Beneficiary in the event of his 10 - 10 - death)); and any such amendment shall be binding on each Employer, Participant and designated Beneficiary. ARTICLE XII - MISCELLANEOUS --------------------------- 12.1 Neither this Plan, nor any action of LSI Industries Inc., an Employer or the Committee, nor any election to defer Compensation hereunder shall be held or construed to confer on any person any legal right to be continued as an employee of LSI Industries Inc. or any Employer. 12.2 LSI Industries Inc. and the Participant's Employer shall have the right to deduct from all payments and amounts credited hereunder any taxes required by law to be withheld with respect to any benefits under this Plan. IN WITNESS WHEREOF, LSI Industries Inc. and each Employer, with the consent of LSI Industries Inc., have caused this Plan to be executed this 3rd day of September, 1996. LSI INDUSTRIES INC. By: /s/ Ronald S. Stowell ____________________________________ Chief Financial Officer & Treasurer SGI INTEGRATED GRAPHIC SYSTEMS L.P. By: /s/ Ronald S. Stowell ____________________________________ Treasurer GREENLEE LIGHTING L.P. By: /s/ Ronald S. Stowell ____________________________________ Treasurer 11 EXPLANATION OF FORMS FOR USE BY EMPLOYEES ELIGIBLE UNDER THE LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN --------------------------------------- DEFERRAL ELECTION FORM is for an employee to elect: (a) to defer part or all of a bonus under the LSI Industries Inc. Nonqualified Deferred Compensation Plan; and (b) to defer regular earnings under the LSI Industries Inc. Nonqualified Deferred Compensation Plan. BENEFICIARY DESIGNATION FORM. Note that spousal consent is not needed. INVESTMENT ELECTION FORM. This form can be used for initial elections and future changes under the LSI Industries Inc. Nonqualified Deferred Compensation Plan. FORM OF PAYMENT ELECTION (NEW PARTICIPANTS). This form is for use by a participant to elect how he wants his LSI Industries Inc. Nonqualified Deferred Compensation Plan benefit paid. For a new participant, the form will be effective immediately if it is completed and dated prior to the commencement of deferrals under the LSI Industries Inc. Nonqualified Deferred Compensation Plan. Otherwise, the form will be given effect only after the passage of one year after the date of election. FORM OF PAYMENT ELECTION (ELECTION CHANGE). To avoid or minimize the constructive receipt issue being argued by the IRS, any change in the form of payment election may not be honored unless the employee remains employed by LSI Industries Inc. or any Employer for at least one year after the change. 12 LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN FORM OF PAYMENT ELECTION ------------------------ (NEW PARTICIPANTS) In accordance with the provisions of the LSI Industries Inc. Nonqualified Deferred Compensation Plan, I hereby elect to receive payments from my account (which become due upon my termination of employment) in the following form: (Choose one) / / Single lump sum payment as soon as administratively feasible after my termination of employment; or / / Approximately equal monthly installments commencing as soon as administratively feasible after my termination of employment to last ____ months (not less than 12 months nor more than 120 months). I understand that this election will be honored immediately if made at or before the time i make my first deferral election or investment election under the LSI Industries Inc. Nonqualified Deferred Compensation Plan. Otherwise, this election will be honored only if I continue in LSI Industries Inc. (or any Employer's) employment for at least one year from this date. Note: Amounts invested under the LSI Common Shares investment option will be paid in LSI Common Shares. Other payments are in cash. - ------------------------------------------------ --------------------- Employee Signature Date 13 LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN BENEFICIARY DESIGNATION FORM ----------------------------
============================================================================================= MY PRIMARY BENEFICIARY(IES) UNDER THE PLAN IS (ARE): - --------------------------------------------------------------------------------------------- Name % Relationship to me Address - ----------------------- ---- ------------------- --------------------------------- - ----------------------- ---- ------------------- --------------------------------- =============================================================================================
============================================================================================= MY CONTINGENT BENEFICIARY(IES) (IN THE EVENT ALL MY PRIMARY BENEFICIARIES DIE BEFORE ME OR BEFORE RECEIVING ALL THE PAYMENTS TO WHICH THEY WOULD BE ENTITLED) IS (ARE): - --------------------------------------------------------------------------------------------- Name % Relationship to me Address - ----------------------- ---- ------------------- --------------------------------- - ----------------------- ---- ------------------- --------------------------------- =============================================================================================
14 ================================================================================ Any distribution shall be divided equally among these Primary Beneficiaries living at the time of such distribution or, if there are no such Primary Beneficiaries, equally among those Contingent Beneficiaries living at the time of such distribution, unless otherwise correctly indicated. This form supersedes any previous beneficiary designation made by the undersigned. Date: ________________________ WITNESS: _____________________________________ _________________________________ Witness's Signature Participant's Signature _____________________________________ _________________________________ Witness's Name (Printed) Participant's Name (Printed) A beneficiary designation may be changed at any time by filing a new form. No beneficiary designation form is effective unless and until it is received by the plan administrator during the Participant's lifetime. ================================================================================ LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN INVESTMENT ELECTION FORM ------------------------ NAME: _______________________________________________ SS #: ___________________ ADDRESS: ______________________________________________________________________ ================================================================================ PART 1: INVESTMENT ELECTIONS FOR FUTURE COMPENSATION DEFERRALS - -------------------------------------------------------------------------------- I hereby elect to have all future Compensation deferrals credited to my account under the LSI Industries Inc. Nonqualified Deferred Compensation Plan credited with earnings (or losses) under the following investment elections: (Note: You may choose any combination. Investment allocations must be in increments of 10%. Combined total must equal 100%.) Restricted LSI Common Shares ______%(1) Fountain Square U.S. Treasury Obligations Fund ______% Fountain Square Quality Bond Fund ______% Fountain Square International Equity Fund ______% (1)Compensation deferrals invested in the LSI Common Shares investment option must remain so invested for the current year and the two succeeding years. ================================================================================
15 ================================================================================ PART 2: INVESTMENT ELECTIONS FOR CURRENT BALANCE ATTRIBUTABLE TO COMPENSATION DEFERRALS NOT OTHERWISE INVESTED IN RESTRICTED LSI COMMON SHARES - -------------------------------------------------------------------------------- I hereby elect to have my current account balance attributable to Compensation deferrals not otherwise invested in Restricted LSI Common Shares credited with earnings (or losses) under the following investment elections: (Note: You may choose any combination. Investment allocations must be in increments of 10%. Combined total must equal 100%.) Unrestricted LSI Common Shares ________%(2) Fountain Square U.S. Treasury Obligations Fund ________% Fountain Square Quality Bond Fund ________% Fountain Square International Equity Fund ________% (2)This percentage may change only once in a Plan Year at the time designated by the Compensation Committee. ================================================================================
================================================================================ PART 3: Authorization - -------------------------------------------------------------------------------- The investment elections will continue in effect until future changes are made in writing as provided by the Plan. This document is not valid unless properly signed and dated. _________________________________________________ ______________________ Employee Signature Date ================================================================================ Note: Employer contributions are not subject to this election. They will remain invested pursuant to the LSI Common Shares investment option. 16 LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN DEFERRAL ELECTION FORM ---------------------- Name:_____________________________Social Security Number:_______________________ Address:________________________________________________________________________ City:_______________________________State:_______________________Zip:___________ Date of Birth:______________________________Date of Hire:_______________________ ================================================================================ PART 1: BONUS DEFERRAL - -------------------------------------------------------------------------------- Any bonus I might earn for the Plan Year July 1, 1996 through June 30, 1997 shall be paid or deferred as follows: (whole percentages only) $________________ shall be paid in cash _________________% of any remaining bonus shall be deferred under the terms of the LSI Industries Inc. Nonqualified Deferred Compensation Plan (and the remaining amount (if any) shall be paid in cash)
================================================================================ ================================================================================ PART 2: REGULAR EARNINGS DEFERRAL - -------------------------------------------------------------------------------- I hereby elect to defer the following percentage of my regular earnings otherwise payable to me from September 15, 1996 through June 30, 1997 (but after the date of this election) under the terms of the LSI Industries Inc. Nonqualified Deferred Compensation Plan: _________________% (whole percentage only) ================================================================================ ================================================================================ PART 3: AUTHORIZATION - -------------------------------------------------------------------------------- I understand that these elections are irrevocable and will remain in effect throughout the period ending June 30, 1997. _________________________________________________ ______________________ Employee Signature Date ================================================================================ 17 LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN FORM OF PAYMENT ELECTION ------------------------ (ELECTION CHANGE) In accordance with the provisions of the LSI Industries Inc. Nonqualified Deferred Compensation Plan, I hereby elect to receive payments from my account (which become due upon my termination of employment) in the following form: (Choose one) / / Single lump sum payment as soon as administratively feasible after my termination of employment; or / / Approximately equal monthly installments commencing as soon as administratively feasible after my termination of employment to last months (not less than 12 months nor more than 120 months). I understand that this election will become effective one year from this date and that my previous election (if any) will remain in effect until that time. Note: Amounts invested under the LSI Common Shares investment option will be paid in LSI Common Shares. Other payments are in cash. _________________________________________________ ______________________ Employee Signature Date 18 RABBI TRUST AGREEMENT UNDER THE LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN 19 RABBI TRUST AGREEMENT UNDER THE LSI INDUSTRIES INC. NONQUALIFIED DEFERRED COMPENSATION PLAN --------------------------------------- This Agreement made this 3rd day of September, 1996, by and between LSI INDUSTRIES INC., GREENLEE LIGHTING L.P. AND SGI INTEGRATED GRAPHIC SYSTEMS L.P. (collectively, the "Company") and THE FIFTH THIRD BANK ("Trustee"): WHEREAS, Company has adopted the LSI Industries Inc. Nonqualified Deferred Compensation Plan ("Plan"); WHEREAS, Company has incurred or expects to incur liability under the terms of such Plan with respect to the individuals participating in such Plan; WHEREAS, Company wishes to establish a trust (hereinafter called "Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of Company's creditors in the event of Company's Insolvency, as herein defined, until paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan; WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974; WHEREAS, it is the intention of the Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan; NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows: Section 1. Establishment of Trust. ----------------------- (a) Company hereby deposits with Trustee in trust $10.00, which shall become the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement. (b) The Trust hereby established shall be irrevocable. (c) The Trust is intended to be a grantor trust, of which Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. 20 (d) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of Company and shall be used exclusively for the uses and purposes of Plan participants and general creditors as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against Company. Any assets held by the Trust will be subject to the claims of Company's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein. (e) Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Subject to (f) below, neither Trustee nor any Plan participant or beneficiary shall have any right to compel such additional deposits. (f) Upon a Change of Control, Company shall, as soon as possible, but in no event longer than 30 days following the Change of Control, as defined herein, make an irrevocable contribution to the Trust in an amount that is sufficient to pay each Plan participant or beneficiary the benefits to which Plan participants or their beneficiaries would be entitled pursuant to the terms of the Plan as of the date on which the Change of Control occurred. Section 2. Payments to Plan Participants and Their Beneficiaries. ------------------------------------------------------ (a) Company shall deliver to Trustee a schedule (the "Payment Schedule") that indicates the amounts payable in respect of each Plan participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. Except as otherwise provided herein, Trustee shall make payments to the Plan participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by Company. (b) The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan shall be determined by Company or such party as it shall designate under the Plan, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan. (c) Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan. Company shall notify Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any - 2 - 21 earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, Company shall make the balance of each such payment as it falls due. Trustee shall notify Company where principal and earnings are not sufficient. Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary -------------------------------------------------------------- When Company Is Insolvent. -------------------------- (a) Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the Company is Insolvent. Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay its debts as they become due, or (ii) Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code. (b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of Company under federal and state law as set forth below. (1) The Board of Directors and the Chief Financial Officer of Company shall have the duty to inform Trustee in writing of Company's Insolvency. If a person claiming to be a creditor of Company alleges in writing to Trustee that Company has been Insolvent, Trustee shall determine whether Company is Insolvent and, pending such determination, Trustee shall discontinue payment of benefits to Plan participants or their beneficiaries. (2) Unless Trustee has actual knowledge of Company's Insolvency, or has received notice from Company or a person claiming to be a creditor alleging that Company is Insolvent, Trustee shall have no duty to inquire whether Company is Insolvent. Trustee may in all events rely on such evidence concerning Company's solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning Company's solvency. (3) If at any time Trustee has determined that Company is Insolvent, Trustee shall discontinue payments to Plan participants, their beneficiaries and shall hold the assets of the Trust for the benefit of Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Plan participants or their beneficiaries to pursue their rights as general creditors of Company with respect to benefits due under the Plan or otherwise. (4) Trustee shall resume payment of benefits to Plan participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after Trustee has determined that Company is not Insolvent (or is no longer Insolvent). - 3 - 22 (c) Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by Company in lieu of the payments provided for hereunder during any such period of discontinuance. (d) Any notice, report, demand or waiver required or permitted hereunder shall be in writing and shall be given personally or by prepaid registered or certified mail, return receipt requested, addressed as follows: If to the Company: Mailing Address-- LSI Industries Inc. 10000 Alliance Road, P.O. Box 42728 Cincinnati, Ohio 45242 If to the Trustee: The Fifth Third Bank Trust Department 38 Fountain Square Plaza Cincinnati, Ohio 45263 Section 4. Payments to Company. -------------------- Except as provided in Section 3 hereof, Company shall have no right or power to direct Trustee to return to Company or to divert to others any of the Trust assets before all payment of benefits have been made to Plan participants and their beneficiaries pursuant to the terms of the Plan. Section 5. Investment Authority. --------------------- (a) Trustee may invest in securities (including stock or rights to acquire stock) or obligations issued by LSI Industries Inc. All rights associated with assets of the Trust shall be exercised by Trustee or the person designated by Trustee, and shall in no event be exercisable by or rest with Plan participants, except that voting rights with respect to Trust assets will be exercised by Company. (b) Subject to the direction of the Company, the Trustee is authorized and empowered, in addition to powers granted under any applicable statutes, regulations or rules which, to the extent of their granting of powers applicable to trusts of a similar nature to the Trust, are incorporated herein by reference: (1) to purchase and subscribe for any securities or other property and to retain such securities or other property in trust; - 4 - 23 (2) to sell at public or private sale, for cash, or upon credit, or otherwise dispose of any property, real or personal, and no person dealing with the Trustee shall be bound to see to the application or to inquire into the validity, expediency or propriety of any such sale or other disposition; (3) to exercise any conversion privilege, subscription right or other option pertaining to or in connection with securities or other property held by it; (4) to exercise itself, or by general or limited power of attorney, any right, including the right to vote, incident to any securities or other property held by it; (5) to join in, dissent from or oppose the reorganization, recapitalization, consolidation, sale or merger of corporations or properties of which it may hold stocks, bonds or other securities or in which it may be interested, to pay any expenses, assessments or subscriptions in connection therewith, and to accept and to hold any other securities issued in connection therewith; (6) to manage, administer, operate, repair, improve, mortgage, or lease for any number of years, or to otherwise deal with any real property or interest therein; to renew or extend or to participate in the renewal or extension of any mortgage, and to agree to the reduction in the interest on any mortgage or other modification or change in the terms of any mortgage or guarantee thereof in any manner and upon such terms as may be deemed advisable; to waive any defaults whether in the performance of any covenant or condition of any mortgage or in the performance of any guarantee or to enforce any such default in such a manner as may be deemed advisable, including the exercise and enforcement of any and all rights of foreclosure; (7) to register any investment held in its own name or in the name of a nominee or to hold any investment in bearer form; (8) to employ suitable agents, accountants and counsel and to pay their reasonable expenses and compensation; (9) to hold any part or all of the assets uninvested; (10) to invest in savings accounts, certificates of deposit and other deposits which bear a reasonable rate of interest, with any financial institution or quasi-financial institution, either domestic or foreign, including any such financial institution operated or maintained by the Trustee (or an affiliate) in its corporate capacity; (11) to form corporations and partnerships and to create trusts to hold title to any securities or other property, all upon such terms and conditions as it may deem advisable; - 5 - 24 (12) to invest in open-end and closed-end investment companies (including those for which the Trustee serves as investment advisor), investment trusts, and in any partnership, limited or unlimited, joint venture or other form of joint enterprise created for any lawful purpose; (13) to adjust, settle, contest, compromise and arbitrate any claims, debts, or damages due or owing to or from the assets, and to sue, commence or defend any legal proceedings in reference thereto; (14) to borrow money upon such terms and conditions as may be deemed advisable to carry out the purposes of the Trust and to pledge securities or other property in repayment of any such loan; provided, however, that loans or advances may be made by the Trustee by way of overdrafts or otherwise on a temporary basis on which no interest is payable; (15) to enter into any type of contract with any insurance company or companies, either for the purpose of investment or otherwise, and, to the extent the Plan so provides, to purchase any life insurance policy or annuity contract; (16) to buy, sell, and deal in options as writer of call options against securities, stocks, convertible preferred stocks, convertible bonds and warrants, which are owned by the Trust, to repurchase written call options in a closing transaction, to deliver the securities for cash if the option is exercised, to buy put options for securities, stock, convertible preferred stock, convertible bonds and warrants, which are owned by the Trust, to resell put options in a closing transaction, and to deliver the securities for cash if the option is exercised; (17) to invest in any collective or common trust fund operated and maintained by the Trustee, including, but not limited to, demand notes, short-term notes and cash equivalent funds; (18) to make, execute and deliver as Trustee any and all deeds, leases, mortgages, advances, contracts, waivers, releases or other instruments in writing necessary or proper in the employment of any of the foregoing powers; and (19) to exercise, generally, any of the powers which an individual owner might exercise in connection with property either real, personal or mixed and to do all other acts that the Trustee may deem necessary or proper to carry out any of the powers set forth in this Section 5 or otherwise in the best interests of the Trust. (c) Company shall have the right at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity. - 6 - 25 Section 6. Disposition of Income. ---------------------- During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested. Section 7. Accounting by Trustee. ---------------------- Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between Company and Trustee. Within 60 days following the close of each Plan year and within 30 days after the removal or resignation of Trustee, Trustee shall deliver to Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and shown all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. Section 8. Responsibility of Trustee. -------------------------- (a) Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by Company which is contemplated by, and in conformity with, the terms of the Plan or this Trust and is given in writing by Company. In the event of a dispute between Company and a party, Trustee may apply to a court of competent jurisdiction to resolve the dispute. (b) If Trustee undertakes or defends any litigation or claims arising in connection with this Trust, Company agrees to indemnify Trustee against Trustee's reasonable costs, expenses and liabilities (including, without limitation, reasonable attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. If Company does not pay such reasonable costs, expenses and liabilities in a reasonably timely manner, Trustee may obtain reasonable payment from the Trust. (c) Trustee may consult with legal counsel (who may also be counsel for Company generally) with respect to any of its duties or obligations hereunder. (d) Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder. - 7 - 26 (e) Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy. (f) Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code. Section 9. Compensation and Expenses of Trustee. ------------------------------------- Company shall pay all administrative and Trustee's fees and reasonable expenses. If not so paid, the fees and expenses shall be paid from the Trust. Section 10. Resignation and Removal of Trustee. ----------------------------------- (a) Trustee may resign at any time by written notice to LSI Industries Inc., which shall be effective 60 days after receipt of such notice unless LSI Industries Inc. and Trustee agree otherwise. (b) Trustee may be removed by LSI Industries Inc. on 60 days notice or upon shorter notice accepted by Trustee. (c) Upon a Change of Control, as defined herein, Trustee may not be removed by LSI Industries Inc. for 2 years. (d) If Trustee resigns within 2 years of a Change of Control, as defined herein, Trustee shall select a successor Trustee in accordance with the provisions of Section 11(b) hereof prior to the effective date of Trustee's resignation or removal. (e) Upon resignation or removal of Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within 60 days after receipt of notice of resignation, removal or transfer, unless LSI Industries Inc. extends the time limit. (f) If Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 10 hereof, by the effective date of resignation or removal under - 8 - 27 paragraphs (a) or (b) of this section. If no such appointment has been made, Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. Section 11. Appointment of Successor. ------------------------- (a) If Trustee resigns or is removed in accordance with Section 10(a) or (b) hereof, LSI Industries Inc. may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by Company or the successor Trustee to evidence the transfer. (b) The successor Trustee need not examine the records and acts of any prior Trustee and may retain or dispose of existing Trust assets, subject to Section 7 and 8 hereof. The successor Trustee shall not be responsible for and Company shall indemnify and defend successor Trustee from any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor Trustee. Section 12. Amendment and Termination. -------------------------- (a) This Trust Agreement may be amended by a written instrument executed by Trustee and LSI Industries Inc. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable. (b) The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust any assets remaining in the Trust shall be returned to Company. Section 13. Miscellaneous. -------------- (a) Any provisions of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. (b) Benefits payable to Plan participants and their beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. - 9 - 28 (c) This Trust Agreement shall be governed by and construed in accordance with the laws of the State of Ohio. (d) For purposes of this Trust, Change of Control shall mean the purchase or other acquisition by any person, entity or group of persons, within the meaning of section 13(d) or 14(d) of the Securities Exchange Act of 1934 ("Act"), or any comparable successor provisions, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 30 percent or more of either the outstanding shares of common stock or the combined voting power of Company's then outstanding voting securities entitled to vote generally, or the approval by the stockholders of Company of a reorganization, merger or consolidation, in each case, with respect to which persons who were stockholders of Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50 percent of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated Company's then outstanding securities, or a liquidation or dissolution of Company or of the sale of all or substantially all of Company's assets. Section 14. Effective Date. --------------- The effective date of this Trust Agreement shall be September 15, 1996. COMPANY: TRUSTEE: - -------- -------- LSI INDUSTRIES INC. THE FIFTH THIRD BANK By: /s/ Ronald S. Stowell By: /s/ John S. Rybka ----------------------------------- -------------------------------- Title: Chief Financial Officer & Its: Vice President -------------------------------- ------------------------------ Treasurer -------------------------------- GREENLEE LIGHTING L.P. By: /s/ Ronald S. Stowell ----------------------------------- Title: Treasurer -------------------------------- SGI INTEGRATED GRAPHIC SYSTEMS L.P. By: /s/ Ronald S. Stowell ----------------------------------- Title: Treasurer -------------------------------- - 10 - EX-11 3 EXHIBIT 11 1 EXHIBIT 11 STATEMENT RE COMPUTATION OF EARNINGS PER SHARE ---------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE)
1996 1995 1994 ------- ------ ------ NET INCOME - ---------- Income from Continuing Operations $ 8,270 $6,174 $4,190 Discontinued Operations (1,500) -- -- ------- ------ ------ Net Income $ 6,770 $6,174 $4,190 ======= ====== ====== AVERAGE SHARES OUTSTANDING - -------------------------- Weighted average shares outstanding during the period, net of treasury shares 8,096 7,515 7,420 Common Share Equivalents: Common Shares to be issued under Stock Option Plan (a) 360 287 236 ------- ------ ------ 8,456 7,802 7,656 ======= ====== ====== NET INCOME PER SHARE - -------------------- Continuing Operations $ .98 $ .79 $ .55 Discontinued Operations (.18) -- -- ------- ------ ------ Net Income per share $ .80 $ .79 $ .55 ======= ====== ====== Notes (a): 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.
EX-22 4 EXHIBIT 22 1 EXHIBIT 22 SUBSIDIARIES OF THE REGISTRANT ------------------------------
Percent Business and Owned by State of Subsidiary Location Registrant Incorporation - ---------- -------- ---------- ------------- SGI Integrated Graphic Limited Partner 100% Delaware Systems Inc. Wilmington, Delaware SGI Delaware Systems Inc. General Partner 100% Delaware Wilmington, Delaware SGI Integrated Graphic Screen printed materials, 100% Delaware Systems L.P. and illuminated and non- (Partnership) illuminated architectural graphics Houston, Texas Greenlee Lighting Inc. Limited Partner 100% Delaware Wilmington, Delaware Greenlee Incorporated General Partner 100% Delaware Wilmington, Delaware Greenlee Lighting L.P. Landscape Lighting 100% Delaware Dallas, Texas (Partnership)
EX-23 5 EXHIBIT 23 1 EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statement File No.'s 33-3490, 33-19326, 33-0840, 33-64721 and 33-64723. /s/ Arthur Andersen LLP Arthur Andersen LLP Cincinnati, Ohio September 4, 1996 2 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectuses constituting part of the Registration Statement on Form S-8 (No. 33-3490, No. 33-19326 and No. 33-0840) of LSI Industries Inc. of our report dated August 18, 1995, which appears on page S-5 of this Form 10-K. /s/ Price Waterhouse LLP PRICE WATERHOUSE LLP Cincinnati, Ohio August 30, 1996 EX-24 6 EXHIBIT 24 1 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or director of LSI Industries Inc., an Ohio corporation, which is about to file an annual report on Form 10-K for the fiscal year ended June 30, 1996, under provisions of the Securities Exchange Act of 1934, with the Securities and Exchange Commission, Washington, D.C., hereby constitutes and appoints Robert J. Ready or Ronald S. Stowell his true and lawful attorney-in-fact and agent, and each of them with full power to act without the other, his true and lawful attorney-in-fact and agent, for him and in his name, place and stead, in any and all capacities, to sign such Form 10-K and any and all amendments thereof, with power where appropriate to affix the corporate seal of said corporation thereto and to attest to said seal, and to file such Form 10-K and each such amendment, with all exhibits thereto, and any and all other documents, in connection therewith, with the Securities and Exchange Commission, hereby grants unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person and hereby ratifies and confirms all that said attorney-in-fact and agent, or either of them may lawfully do or cause to be done by virtue thereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 21st day of August, 1996. /s/ Michael J. Burke --------------------------- Michael J. Burke 2 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or director of LSI Industries Inc., an Ohio corporation, which is about to file an annual report on Form 10-K for the fiscal year ended June 30, 1996, under provisions of the Securities Exchange Act of 1934, with the Securities and Exchange Commission, Washington, D.C., hereby constitutes and appoints Robert J. Ready or Ronald S. Stowell his true and lawful attorney-in-fact and agent, and each of them with full power to act without the other, his true and lawful attorney-in-fact and agent, for him and in his name, place and stead, in any and all capacities, to sign such Form 10-K and any and all amendments thereof, with power where appropriate to affix the corporate seal of said corporation thereto and to attest to said seal, and to file such Form 10-K and each such amendment, with all exhibits thereto, and any and all other documents, in connection therewith, with the Securities and Exchange Commission, hereby grants unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person and hereby ratifies and confirms all that said attorney-in-fact and agent, or either of them may lawfully do or cause to be done by virtue thereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 21st day of August, 1996. /s/ Allen L. Davis --------------------------- Allen L. Davis 3 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or director of LSI Industries Inc., an Ohio corporation, which is about to file an annual report on Form 10-K for the fiscal year ended June 30, 1996 under provisions of the Securities Exchange Act of 1934, with the Securities and Exchange Commission, Washington, D.C., hereby constitutes and appoints Robert J. Ready or Ronald S. Stowell his true and lawful attorney-in-fact and agent, and each of them with full power to act without the other, his true and lawful attorney-in-fact and agent, for him and in his name, place and stead, in any and all capacities, to sign such Form 10-K and any and all amendments thereof, with power where appropriate to affix the corporate seal of said corporation thereto and to attest to said seal, and to file such Form 10-K and each such amendment, with all exhibits thereto, and any and all other documents, in connection therewith, with the Securities and Exchange Commission, hereby grants unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person and hereby ratifies and confirms all that said attorney-in-fact and agent, or either of them may lawfully do or cause to be done by virtue thereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 21st day of August, 1996. /s/ James P. Sferra --------------------------- James P. Sferra 4 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or director of LSI Industries Inc., an Ohio corporation, which is about to file an annual report on Form 10-K for the fiscal year ended June 30, 1996, under provisions of the Securities Exchange Act of 1934, with the Securities and Exchange Commission, Washington, D.C., hereby constitutes and appoints Robert J. Ready or Ronald S. Stowell his true and lawful attorney-in-fact and agent, and each of them with full power to act without the other, his true and lawful attorney-in-fact and agent, for him and in his name, place and stead, in any and all capacities, to sign such Form 10-K and any and all amendments thereof, with power where appropriate to affix the corporate seal of said corporation thereto and to attest to said seal, and to file such Form 10-K and each such amendment, with all exhibits thereto, and any and all other documents, in connection therewith, with the Securities and Exchange Commission, hereby grants unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person and hereby ratifies and confirms all that said attorney-in-fact and agent, or either of them may lawfully do or cause to be done by virtue thereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 21st day of August, 1996. /s/ John N. Taylor, Jr. --------------------------- John N. Taylor, Jr. 5 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and/or director of LSI Industries Inc., an Ohio corporation, which is about to file an annual report on Form 10-K for the fiscal year ended June 30, 1996, under provisions of the Securities Exchange Act of 1934, with the Securities and Exchange Commission, Washington, D.C., hereby constitutes and appoints Robert J. Ready or Ronald S. Stowell his true and lawful attorney-in-fact and agent, and each of them with full power to act without the other, his true and lawful attorney-in-fact and agent, for him and in his name, place and stead, in any and all capacities, to sign such Form 10-K and any and all amendments thereof, with power where appropriate to affix the corporate seal of said corporation thereto and to attest to said seal, and to file such Form 10-K and each such amendment, with all exhibits thereto, and any and all other documents, in connection therewith, with the Securities and Exchange Commission, hereby grants unto said attorney-in-fact and agent, and each of them, full power and authority to do and perform any and all acts and things requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person and hereby ratifies and confirms all that said attorney-in-fact and agent, or either of them may lawfully do or cause to be done by virtue thereof. IN WITNESS WHEREOF, the undersigned has hereunto set his hand on this 21st day of August, 1996. /s/ Donald E. Whipple --------------------------- Donald E. Whipple EX-27 7 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. YEAR JUN-30-1996 JUL-01-1995 JUN-30-1996 11,138 0 25,183 (358) 19,660 57,869 31,505 (11,178) 79,496 21,723 1,382 28,082 0 0 26,655 79,496 152,733 152,733 104,221 34,773 62 328 344 13,005 4,735 8,270 (1,500) 0 0 6,770 .80 .80
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