-----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, Ciq7u9/caYHysz2TaTA6FbC6QkJ7QoTb5buu/vmfIrlyqL9IaGqWK/vTP/vzdxou 0iOXfj8Ru+y90z6KkayORg== 0000950152-96-005794.txt : 19961111 0000950152-96-005794.hdr.sgml : 19961111 ACCESSION NUMBER: 0000950152-96-005794 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961108 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-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13375 FILM NUMBER: 96657124 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-Q 1 LSI INDUSTRIES 1 FORM 10-Q --------- SECURITIES AND EXCHANGE COMMISSION ---------------------------------- WASHINGTON, D.C. 20549 ---------------------- /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996. /_/ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________ TO ________________. Commission File No. 0-13375 LSI Industries Inc. State of Incorporation - Ohio IRS Employer I.D. No. 31-0888951 10000 Alliance Road Cincinnati, Ohio 45242 (513) 793-3200 Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. YES /X/ NO / / Common Shares, no par value. Shares Outstanding at October 30, 1996: 9,026,546 2 LSI INDUSTRIES INC. FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 INDEX
Begins on Page --------- PART I. Financial Information ITEM 1. Financial Statements Consolidated Income Statements................... 3 Consolidated Balance Sheets...................... 4 Consolidated Statements of Cash Flows............ 5 Notes to Financial Statements.................... 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................. 7 PART II. Other Information ITEM 6. Exhibits and Reports on Form 8-K................. 9 Signatures ................................................. 10
Page 2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS LSI INDUSTRIES INC. CONSOLIDATED INCOME STATEMENTS (Unaudited)
Three Months Ended September 30 ------------------ (In thousands, except per 1996 1995 share amounts) ---- ---- Net sales $36,885 $35,882 Cost of products sold 24,745 23,940 ------- ------- Gross profit 12,140 11,942 Selling and administrative expenses 8,805 8,312 ------- ------- Operating income 3,335 3,630 Interest (income) expense, net (97) 143 Other expense 14 5 ------- ------- Income before income taxes 3,418 3,482 Income tax expense 1,282 1,288 -------- -------- Net income $ 2,136 $ 2,194 ======= ======= Net income per common share $ .23 $ .28 ======= ======= Average shares outstanding 9,240 7,961 ======= =======
The accompanying Notes to Financial Statements are an integral part of these financial statements. Page 3 4 LSI INDUSTRIES INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands) September 30, June 30, 1996 1996 ------------- -------- ASSETS - ------ Current Assets Cash and cash equivalents $12,448 $11,138 Accounts receivable 26,438 24,825 Inventories 17,899 19,660 Other current assets 1,788 2,246 ------- ------- Total current assets 58,573 57,869 Property, plant and equipment, net 20,231 20,327 Goodwill 1,290 1,300 ------- ------- $80,094 $79,496 ======= ======= LIABILITIES & SHAREHOLDERS' EQUITY - ---------------------------------- Current Liabilities Notes payable to bank $ 344 $ -- Current maturities of long-term debt 180 180 Accounts payable 9,932 10,855 Accrued expenses 10,342 10,688 ------- ------- Total current liabilities 20,798 21,723 Long-Term Debt 1,353 1,382 Other Long-Term Liabilities 1,684 1,654 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 9,023,861 and 8,964,491 shares, respectively 28,190 28,082 Retained earnings 28,069 26,655 ------- ------- Total shareholders' equity 56,259 54,737 ------- ------- $80,094 $79,496 ======= =======
The accompanying Notes to Financial Statements are an integral part of these financial statements. Page 4 5 LSI INDUSTRIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands) Three Months Ended September 30 ------------------ 1996 1995 ---- ---- Cash Flows from Operating Activities Net income $ 2,136 $ 2,194 Non-cash items included in income Depreciation and amortization 710 567 Deferred income taxes 30 20 (Gain) loss on disposition of fixed assets 4 (4) Changes in operating assets and liabilities Accounts receivable (1,613) (2,388) Inventories 1,761 (691) Accounts payable and other (811) (217) Change in liability for discontinued operations -- (52) ------- ------- Net cash flows from operating activities 2,217 (571) ------- ------- Cash Flows from Investing Activities Purchase of property, plant and equipment (608) (960) Proceeds from sale of fixed assets -- 4 ------- ------- Net cash flows from investing activities (608) (956) ------- ------- Cash Flows from Financing Activities Increase in notes payable to bank 344 1,500 Payment of long-term debt (29) (196) Cash dividends paid (722) (684) Exercise of stock options 108 125 ------- ------- Net cash flows from financing activities (299) 745 ------- -------- Increase (decrease) in cash and cash equivalents 1,310 (782) Cash and cash equivalents at beginning of year 11,138 2,124 ------- -------- Cash and cash equivalents at end of period $12,448 $ 1,342 ======= ======== Supplemental Cash Flow Information Interest paid $ 39 $ 166 Income taxes paid $ 27 $ 74
The accompanying Notes to Financial Statements are an integral part of these financial statements. Page 5 6 LSI INDUSTRIES INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1: INTERIM FINANCIAL STATEMENTS The interim financial statements are unaudited and are prepared in accordance with rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of Management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company's financial position as of September 30, 1996, and the results of its operations and its cash flows for the periods ended September 30, 1996 and 1995. These statements should be read in conjunction with the financial statements and footnotes included in the fiscal 1996 annual report. NOTE 2: NET INCOME PER COMMON SHARE The computation of net income per common share is based on the weighted average common shares outstanding for the period, including common share equivalents. Common share equivalents include the dilutive effect of stock options of 245,000 and 379,000 shares, respectively, for the three month periods ended September 30, 1996 and 1995. NOTE 3: INVENTORIES Inventories consist of the following (in thousands):
September 30, 1996 June 30, 1996 ------------------ -------------- Raw Materials $ 9,727 $11,432 Work-in-Process and Finished Goods 8,172 8,228 ------- ------- $17,899 $19,660 ======= =======
NOTE 4: CASH DIVIDENDS The Company paid cash dividends of $722,000 and $684,000 in the three month periods ended September 30, 1996 and 1995, respectively. In October 1996, the Company's Board of Directors declared a $.05 per share regular quarterly cash dividend ($451,000) payable on November 19, 1996 to shareholders of record November 12, 1996. Page 6 7 NOTE 5: SALES TO MAJOR CUSTOMERS The Company's sales in both the Image and Commercial / Industrial Lighting segments (see discussion in Management's Discussion and Analysis of Financial Condition and Results of Operations) to a major customer, Chevron U.S.A., represented 11% of consolidated net sales in the three month periods ended September 30, 1996 and 1995, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NET SALES BY BUSINESS SEGMENT (In thousands, unaudited)
Three Months Ended September 30 ------------------- 1996 1995 ---- ---- Image Segment $24,933 $24,212 Commercial / Industrial Lighting Segment 11,952 11,670 ------- ------- $36,885 $35,882 ======= =======
RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THREE MONTHS ENDED SEPTEMBER 30, 1995 Net sales of $36.9 million increased 3% over first quarter net sales last year of $35.9 million. The Company has changed its disclosure of business segments in order to more closely align the business segments with the market focus which the Company uses to manage its business. In prior years, the business segments included the Lighting segment and the Graphics segment. Beginning in fiscal year 1997, segment reporting will be on the basis of the Image segment and the Commercial / Industrial Lighting segment. Prior year data will be restated accordingly when presented with current data. The Image segment represents markets and customers to whom the Company has the opportunity to sell both lighting and graphics; for example, the petroleum / convenience store, automotive, and quick service restaurant markets. The Commercial / Industrial Lighting segment represents markets and customers to whom the Company would sell only lighting systems and fixtures with those customers and markets having no requirement for graphics; for example, shopping center lighting, industrial lighting, and landscape lighting. Fiscal year 1997 first quarter Image segment sales increased 3.0% and Commercial / Industrial Lighting segment sales increased 2.4% over the first quarter of fiscal year 1996. The Company experienced good sales growth in the multi-site retail market with net sales up over 30%. Sales to the Petroleum / Convenience Store market, representing about 47% of the Company's total sales, decreased 4% from the first quarter of fiscal 1996 as the decreased graphics sales (structural graphics and printed graphics) more than offset increased petroleum Page 7 8 lighting sales. Sales of graphics products in the first quarter of fiscal 1997 were below last year as two of the Company's major oil company customers delayed roll-out implementation of image conversion programs for which the Company has orders and/or contracts. This trend of lower graphics products sales has continued through the filing date of this Form 10-Q. The Company has one customer, Chevron U.S.A., who accounted for 11% of net sales (reported in the Image segment) in the first quarter of both 1997 and 1996. 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 the first quarter of fiscal 1997 was primarily the result of increased volume. While sales prices were increased, inflation did not have a significant impact on sales in 1997 as competitive pricing pressures held price increases to a minimum. Gross profit of $12.1 million, or 32.9% of net sales, increased over last year's gross profit of $11.9 million or 33.3% of net sales. The increase in amount of gross profit is attributed primarily to the 3% increase in net sales. A lower utilization of manufacturing capacity in the Company's graphics operations, and lower graphics sales more than offset improved margins and efficiencies in the Company's lighting operations. Selling and administrative expenses increased to $8.8 million primarily as a result of increased sales volume and increased marketing expenses, and were increased to 24% of net sales in the first quarter of fiscal 1997 from 23% last year. The Company reported net interest income of $97,000 in the first quarter of fiscal 1997 as compared to net interest expense of $143,000. The change from the prior year is related to the Company's use of the net proceeds from the February 1996 Public Offering of Common Shares. Substantially all of the Company's outstanding debt in February 1996 was paid down with a portion of the net proceeds, and the remainder was invested in high-quality short term cash investments. The Company's effective tax rate increased to 37.5% from 37.0% last year as a result of the increased provision for state income taxes. Net income of $2.1 million or $.23 per share compares to last year's first quarter net income of $2.2 million or $.28 per share. The change resulted from increased gross profit from increased sales, the reporting of net interest income rather than net interest expense, a lower income tax provision, and increased marketing and selling expenses. The weighted average common shares outstanding increased in the first quarter of 1997 to 9,240,000 shares from 7,961,000 shares in 1996 primarily as a result of the 1.2 million common shares issued during the third quarter of fiscal 1996 in the Company's Public Offering. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1996 the Company had working capital of $37.8 million, compared to $36.1 million at June 30, 1996. The ratio of current assets to current liabilities increased to 2.82 to 1 from 2.66 to 1. The increased working capital is primarily attributed to increases in accounts receivable, and cash and cash equivalents, partially offset by reductions in inventories and accounts payable. Page 8 9 The Company generated $2.2 million of cash from operating activities in the first quarter of 1997 as compared to a use of cash of $.6 million in the first quarter of 1996. The Company generated more cash in the first three months of fiscal 1997 primarily due to inventory reductions in the Company's lighting operations and due to less of an increase in accounts receivable than in last year's first quarter. As of June 30, 1996, the Company's days sales outstanding were at approximately 67 days as compared to 59 days at June 30, 1996. 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 October 30, 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 $.6 million in the first quarter of fiscal 1997 compare to $1.0 million in the first quarter of 1996. Spending in fiscal year 1997 is primarily related to manufacturing equipment and process improvements. Capital expenditures of $4 million are planned for 1997. In October 1996, the Board of Directors declared a regular quarterly cash dividend of $.05 per share ($451,000) to be paid November 19, 1996 to shareholders of record on November 12, 1996. 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. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits 11 Statement Re Computation of Earnings Per Share 27 Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K have been filed during the quarter for which this Report is filed. [All other items required in Part II have been omitted because they are not applicable or are not required.] Page 9 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LSI Industries Inc. BY: /s/ Robert J. Ready _____________________________________ Robert J. Ready President and Chief Executive Officer (Principal Executive Officer) BY: /s/ Ronald S. Stowell _____________________________________ Ronald S. Stowell Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) November 5, 1996 Page 10 EX-11 2 EXHIBIT 11 1 EXHIBIT 11 LSI INDUSTRIES INC. STATEMENT RE COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE)
Three Months Ended September 30 --------------------- 1996 1995 ---- ----- NET INCOME $2,136 $2,194 - ---------- ====== ====== AVERAGE SHARES OUTSTANDING - -------------------------- Weighted average shares outstanding during the period 8,995 7,582 Common Share Equivalents: Common Shares to be issued under Stock Option Plan 245 379 ------ ------ Average Shares Outstanding 9,240 7,961 ====== ====== NET INCOME PER SHARE $ .23 $ .28 - -------------------- ====== ======
Note: Calculated using the "Treasury Stock" method as if options were exercised and the funds were used to purchase Common Shares at the average market price during the period. Page 11 EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000763532 LSI INDUSTRIES, INC. 3-MOS JUN-30-1997 JUL-01-1996 SEP-30-1996 12,448 0 26,845 (407) 17,899 58,573 32,102 (11,871) 80,094 20,798 1,353 0 0 28,190 28,069 80,094 36,885 36,885 24,745 8,805 14 0 (97) 3,418 1,282 2,136 0 0 0 2,136 .23 .23
-----END PRIVACY-ENHANCED MESSAGE-----