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, 2001. |
| 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 25, 2001: 10,455,674
LSI INDUSTRIES INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2001
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........................................ 11
PART II. Other Information
ITEM 6. Exhibits and Reports on Form 8-K....................... 14
Signatures ....................................................... 15
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve substantial risks and uncertainties that could cause actual results to differ materially from those expected. These include, but are not limited to, the impact of competitive products, product demand and market acceptance risks, reliance on key customers, unexpected difficulties in integrating acquired businesses, and fluctuations in operating results or costs.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LSI INDUSTRIES INC.
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Three Months Ended
September 30
------------
2001 2000
---- ----
(in thousands, except per
share data)
Net sales $67,049 $53,609
Cost of products sold 47,965 38,210
------ ------
Gross profit 19,084 15,399
Selling and administrative expenses 12,784 10,881
------ ------
Operating income 6,300 4,518
Interest (income) (12) (395)
Interest expense 248 31
Other (income) expense -- (6)
------ ------
Income before income taxes 6,064 4,888
Income tax expense 2,362 1,907
------ ------
Net income $ 3,702 $ 2,981
======= =======
Earnings per common share
Basic $ .35 $ .29
======= =======
Diluted $ .35 $ .29
======= =======
Weighted average common shares
outstanding
Basic 10,450 10,292
======= =======
Diluted 10,655 10,435
======= =======
The accompanying Notes to Financial Statements are an integral part of these financial statements.
LSI INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share amounts) September 30, June 30,
2001 2001
------------ --------
ASSETS
------
Current Assets
Cash and cash equivalents 202 $ 340
Accounts receivable 50,421 51,609
Inventories 38,939 35,079
Other current assets 5,125 4,752
------ ------
Total current assets 94,687 91,780
Property, Plant and Equipment, net 42,147 42,241
Goodwill, net 41,239 41,572
Intangible Assets, net 6,045 6,166
Other Assets, net 1,275 --
------ ------
$185,393 $181,759
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable to bank 3,400 $ 552
Current maturities of long-term debt 352 352
Accounts payable 18,020 15,268
Accrued expenses 15,466 13,489
------- ------
Total current liabilities 37,238 29,661
Long-Term Debt 16,572 23,638
Deferred Income Taxes 1,297 1,267
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 10,457,592 and 10,438,469
shares, respectively 51,088 50,808
Retained earnings 79,198 76,385
------- ------
Total shareholders' equity 130,286 127,193
-------- --------
$185,393 $181,759
======== ========
The accompanying Notes to Financial Statements are an integral part of these financial statements.
LSI INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands) Three Months Ended
September 30
------------------
2001 2000
---- ----
Cash Flows from Operating Activities
Net income $ 3,702 $ 2,981
Non-cash items included in income
Depreciation and amortization 1,516 1,256
Deferred income taxes 30 30
Deferred compensation plan 40 68
(Gain) loss on disposition of fixed
assets -- (6)
Changes in
Accounts receivable 1,188 12
Inventories (3,860) (685)
Accounts payable and other 3,789 (1,715)
Net liabilities from discontinued
operations (708) (46)
------- -------
Net cash flows from operating
activities 5,697 1,895
------ ------
Cash Flows from Investing Activities
Purchase of property, plant and equipment (968) (2,128)
Proceeds from sale of fixed assets -- 6
------- -------
Net cash flows from investing activities (968) (2,122)
------- -------
Cash Flows from Financing Activities
Increase (decrease) of borrowings under line
of credit 2,848 --
Payment of long-term debt (7,066) (32)
Cash dividends paid (889) (1,338)
Exercise of stock options 352 270
Purchase of treasury shares (112) (178)
------- -------
Net cash flows from financing activities (4,867) (1,278)
------- -------
Increase (decrease) in cash and cash equivalents (138) (1,505)
Cash and cash equivalents at beginning of year 340 21,966
------- ------
Cash and cash equivalents at end of period $ 202 $ 20,461
======== ========
Supplemental Cash Flow Information
Interest paid$ 260 $ 49
Income taxes paid $ 172 $ 60
The accompanying Notes to Financial Statements are an integral part of these financial statements.
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, 2001, and the results of its operations and its cash flows for the periods ended September 30, 2001 and 2000. These statements should be read in conjunction with the financial statements and footnotes included in the fiscal 2001 annual report. |
NOTE 2: RECENT PRONOUNCEMENTS
| In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141 (SFAS No. 141), “Business Combinations,” and issued Statement of Financial Accounting Standards No. 142 (SFAS No. 142), “Goodwill and Other Intangible Assets.” SFAS No. 141 eliminates the pooling-of-interests method of accounting for business combinations and requires that all business combinations be accounted for as purchases. In addition, SFAS No. 141 establishes new rules concerning recognition of intangible assets arising in a purchase business combination and requires enhanced disclosure of information in the period in which a business combination is completed. SFAS No. 142 establishes new rules on accounting for goodwill whereby goodwill will no longer be amortized to expense, but rather will be subject to impairment review. SFAS No. 141 is effective for all business combinations initiated after June 30, 2001, and the Company has now adopted this accounting standard. The Company has the option of adopting SFAS No. 142 either July 1, 2001 or July 1, 2002. The Company is currently evaluating the impact to its financial statements, financial position, results of operations and cash flows related to the implementation of these two Statements, and has determined that SFAS No. 142 will be adopted on July 1, 2002. Information related to the Company’s goodwill and intangible assets is presented in Note 6.
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143 (SFAS No. 143), "Accounting for Asset Retirement Obligations," and in August 2001 issued Statement of Financial Accounting Standards No. 144 (SFAS No. 144), "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 143 establishes standards of accounting for asset retirement obligations (i.e., legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset, except for certain obligations of lessees) and the associated asset retirement costs. SFAS No. 144 replaces existing accounting pronouncements related to impairment or disposal of long-lived assets. Both SFAS No. 143 and No. 144 are effective beginning with the Company's fiscal 2003 year. The Company is currently evaluating the impact of these two statements, but does not expect any significant impact on its balance sheet or financial condition when they are implemented. |
NOTE 3: BUSINESS SEGMENT INFORMATION
| LSI operates in two business segments - the Image Segment and the Commercial / Industrial Lighting Segment. The Image Segment manufactures and sells exterior and interior visual image elements (lighting, graphics, and menu board systems) for the petroleum / convenience store market and for multi-site retail operations. The Image Segment includes the operations of LSI Petroleum Lighting, LSI Automotive, LSI Images, LSI Metal Fabrication, LSI SGI Integrated Graphic Systems, LSI Grady McCauley, LSI Retail Graphics and LSI Adapt (since the January 1, 2001 acquisition). The Commercial / Industrial Lighting Segment manufactures and sells primarily outdoor, indoor, and landscape lighting for the commercial / industrial and multi-site retail markets. The Commercial / Industrial Lighting Segment includes the operations of LSI Lighting Systems, LSI Courtsider Lighting, LSI Greenlee Lighting, LSI Marcole, LSI MidWest Lighting and LSI Lightron (since the November 21, 2000 acquisition). The Company’s most significant market is the petroleum / convenience store market with approximately 34% and 38% of net sales concentrated in this market in the three months ended September 30, 2001 and 2000, respectively. |
The following information is provided for the following periods:
Three Months Ended
September 30
------------
2001 2000
---- ----
(In thousands)
Net sales:
Image Segment $41,535 $34,492
Commercial / Industrial Lighting Segment 25,514 19,117
------- -------
$67,049 $53,609
======= =======
Operating income:
Image Segment $ 5,181 $ 3,461
Commercial / Industrial Lighting Segment 1,119 1,057
------- -------
$ 6,300 $ 4,518
======= =======
Capital expenditures:
Image Segment $ 553 $ 1,614
Commercial / Industrial Lighting Segment 415 514
------- -------
$ 968 $ 2,128
======= =======
Depreciation and amortization:
Image Segment $ 833 $ 814
Commercial / Industrial Lighting Segment 683 442
------- -------
$ 1,516 $ 1,256
======= =======
September 30 June 30
--------------- ----------------
2001 2000 2001 2000
---- ---- ---- ----
Identifiable assets:
Image Segment $107,509 $ 86,052 $105,072 $ 84,513
Commercial/Industrial
Lighting Segment 76,746 37,496 75,416 38,588
-------- -------- -------- --------
184,255 123,548 180,488 123,101
Corporate 1,138 22,959 1,271 23,682
-------- -------- -------- --------
$185,393 $146,507 $181,759 $146,783
======== ======== ======== ========
| 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: EARNINGS PER COMMON SHARE
| The following table presents the amounts used to compute earnings per common share and the effect of dilutive potential common shares on net income and weighted average shares outstanding (in thousands, except per share data): |
Three Months Ended
September 30
------------
2001 2000
---- ----
BASIC EARNINGS PER SHARE
Net income $ 3,702 $ 2,981
======= =======
Weighted average shares
outstanding during the period,
net of treasury shares 10,450 10,292
======= =======
Basic earnings per share $ .35 $ .29
======= =======
DILUTED EARNINGS PER SHARE
Net income $ 3,702 $ 2,981
======= =======
Weighted average shares
outstanding during the period,
net of treasury shares 10,450 10,292
Effect of dilutive securities (A):
Impact of common shares to be
issued under stock option plans,
a deferred compensation plan
and contingently issuable shares 205 143
------- -------
Weighted average shares
outstanding (B) 10,655 10,435
======= =======
Diluted earnings per share $ .35 $ .29
======= =======
| (A) | Calculated using the “Treasury Stock” method as if dilutive securities were exercised and the funds were used to purchase Common Shares at the average market price during the period. |
| (B) | Options to purchase 815 common shares and 52,683 common shares during the three month periods ended September 30, 2001 and 2000, respectively, were not included in the computation of diluted earnings per share because the exercise price was greater than the average market value of the common shares. |
NOTE 5: INVENTORIES
Inventories consist of the following (in thousands):
September 30, 2001 June 30, 2001
------------------ -------------
Raw Materials $16,132 $16,485
Work-in-Process and
Finished Goods 22,807 18,594
------- -------
$38,939 $35,079
======= =======
NOTE 6: GOODWILL AND INTANGIBLE ASSETS
| The following tables present information about the Company's Goodwill and Intangible Assets on the dates or for the periods indicated |
(in thousands) As of September 30, 2001 As of June 30, 2001
--------------------------- ----------------------------
Carrying Accumulated Carrying Accumulated
Amount Amortization Net Amount Amortization Net
------ ------------ --- -------- ------------ ---
Goodwill 44,421 3,182 41,239 44,421 2,849 41,572
====== ===== ====== ====== ===== ======
Intangible Assets 6,450 405 6,045 6,450 284 6,166
====== ===== ====== ====== ===== ======
Amortization Expense
--------------------
Intangible
Goodwill Assets Total
-------- ---------- -----
Three months ended:
September 30, 2001 $333 $121 $454
==== ==== ====
September 30, 2000 $172 $ -- $172
==== ==== ====
NOTE 7: REVOLVING LINES OF CREDIT AND LONG-TERM DEBT
| The Company has an unsecured $50 million revolving line of credit with its bank group. As of September 30, 2001 the available portion of this line of credit was $31.6 million. A portion of this credit facility is a $20 million line of credit that expires in the third quarter of fiscal 2002. The remainder of the credit facility is a $30 million three year committed line of credit that expires in fiscal 2004 and that has an annual renewal for the third year of commitment in the third quarter of fiscal 2002. Interest on the revolving lines of credit is charged based upon an increment over the LIBOR rate as periodically determined, an increment over the Federal Funds Rate as periodically determined, or at the bank's base lending rate, at the Company's option. The increment over the LIBOR borrowing rate, as periodically determined, fluctuates between 50 and 75 basis points depending upon the ratio of indebtedness to earnings before interest, taxes, depreciation and amortization (EBITDA). The increment over the Federal Funds borrowing rate, as periodically determined, fluctuates between 150 and 200 basis points, and the commitment fee on the unused balance of the $30 million committed portion of the line of credit fluctuates between 15 and 25 basis points based upon the same leverage ratio. At September 30, 2001 the average interest rate on borrowings under this revolving line of credit was 4.1%. Under terms of these agreements, the Company has agreed to a negative pledge of assets, to maintain minimum levels of profitability and net worth, and is subject to certain maximum levels of leverage. |
Long-term debt: (In thousands) September 30 June 30,
2001 2001
---- ----
Revolving Line of Credit (3 year committed line) $18,400 $22,552
Industrial Revenue Development Bond at 4.5% 860 860
Equipment loans (average rate of 5.9%) 1,064 1,130
------ ------
20,324 24,542
Less notes payable to bank 3,400 552
------ ------
Total long-term debt 16,924 23,990
Less current maturities of long-term debt 352 352
------ ------
Long-term debt $16,572 $23,638
======= =======
NOTE 8: DISCONTINUED OPERATIONS LIABILITY
| A summary of the activity in the reserve for discontinued operations during the first quarter of fiscal 2002 is as follows:
(In thousands)
6/30/01 1,091
less payments made (1,088)
9/30/01 $ 3
|
| The Company’s reserve for discontinued operations, net of related taxes, is included in accrued expenses in the amounts of $3,000 and $711,000 as of September 30, 2001 and June 30, 2001, respectively. |
NOTE 9: CASH DIVIDENDS
| The Company paid cash dividends of $889,000 and $1,338,000 in the three month periods ended September 30, 2001 and 2000, respectively. In October 2001, the Company’s Board of Directors declared a $0.09 per share regular quarterly cash dividend (approximately $941,000) payable on November 13, 2001 to shareholders of record November 6, 2001. |
NOTE 10: SHAREHOLDERS' EQUITY
| | The Company has a non-qualified Deferred Compensation Plan with all Plan investments in common shares of the Company. A total of 78,466 and 74,261 common shares were held in the Plan as of September 30, 2001 and June 30, 2001, respectively, and, accordingly, have been recorded as treasury shares. |
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
------------
2001 2000
---- ----
Image Segment $41,535 $34,492
Commercial / Industrial
Lighting Segment 25,514 19,117
$67,049 $53,609
Results of OperationsTHREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS
ENDED SEPTEMBER 30, 2000 Net sales of $67,049,000 in the first quarter of fiscal 2002 increased 25% from fiscal 2001 first quarter net sales of $53,609,000. Results of the Commercial / Industrial Lighting Segment in the first quarter of fiscal 2002 include the operations of LSI Lightron (acquired November 2000), and results of the Image Segment include the operations of LSI Adapt (acquired January 2001). Commercial / Industrial Lighting Segment net sales increased 33% and Image Segment net sales increased 20% in the first quarter of fiscal 2002 as compared to the prior year. The increase in Commercial / Industrial Lighting Segment is attributed to the November 2000 acquisition of LSI Lightron (over 20% of net sales of this Segment). Excluding the acquisition of LSI Lightron, net sales in this segment increased approximately 4%. The increase in Image Segment net sales is primarily attributed to three factors. First is the inclusion of the results of LSI Adapt, acquired in January 2001 and representing approximately 5% of Image Segment net sales. Second is the volume gain in menu board systems resulting from the beginning of a roll out program with a quick service restaurant customer. Third is an increase in graphics business related to roll out image conversion programs for two customers in the petroleum / convenience store market. Net sales of the Image Segment to the petroleum / convenience store market represented 34% and 38% of total net sales in the first quarters of fiscal 2002 and fiscal 2001, respectively. Sales to this market increased 11% in the first quarter of fiscal 2002 as compared to the same period last year. While sales prices in some markets that the Company serves were increased, inflation did not have a significant impact on sales in the first quarter of fiscal 2002 as competitive pricing pressures held price increases to a minimum.
Gross profit of $19,084,000 in the first quarter of fiscal 2002 increased 24% from last year's gross profit of $15,399,000, and decreased as a percentage of net sales to 28.5% in fiscal year 2002 as compared to 28.7% in the prior year. The increase in amount of gross profit is due primarily to the 25% increase in net sales. Selling and administrative expenses increased 17% to $12,784,000 from $10,881,000. The increase was caused primarily by the additions of LSI Lightron and LSI Adapt, and by the increase in net sales. As a percentage of net sales, selling and administrative expenses were at 19.1% in the first quarter of fiscal 2002 as compared to 20.3% in the prior year. The Company continued the task of converting its business operating software and systems company-wide. Total implementation costs expensed were $134,000 ($0.01 per share, diluted) in the first quarter of fiscal 2002 as compared to $180,000 ($0.01 per share, diluted) in the same period of fiscal 2001. Expenditures are expected to continue through fiscal 2003.
The Company reported net interest expense of $236,000 in the first quarter of fiscal 2002 as compared to net interest income of $364,000 in the same period of fiscal 2001. The change between years is primarily reflective of the Company being in a net borrowing position since November 2000 and in a net cash investment position prior to that date. The Company's effective tax rate of 39.0% was consistent for the first quarter of both years, and was up slightly from the fiscal year 2001 38.8% effective tax rate.
Net income of $3,702,000 ($0.35 per share) in the first quarter of fiscal 2002 increased 24% from last year's first quarter net income of $2,981,000 ($0.29 per share). The increase is primarily the result of increased gross profit from increased sales, partially offset by increased operating expenses, net interest expense and income taxes. Diluted earnings per share of $0.35 in the first quarter of fiscal 2002 increased 21% from $0.29 per share reported in the same period last year. The weighted average common shares outstanding for purposes of computing diluted earnings per share increased 2% in fiscal 2002 to 10,655,000 shares from 10,435,000 shares in 2001 as a result of common shares issued both for the exercise of stock options and for an acquisition during fiscal 2001.
Liquidity and Capital Resources The Company considers its level of cash on hand, its current ratio and working capital levels to be its most important measures of short-term liquidity. For long-term liquidity indicators, the Company believes its ratio of long-term debt to equity and its historical levels of net cash flows from operating activities to be the most important measures.
At September 30, 2001 the Company had working capital of $57.4 million, compared to $62.1 million at June 30, 2001. The ratio of current assets to current liabilities decreased to 2.54 to 1 from 3.09 to 1. The decreased working capital is primarily attributed to decreased cash and cash equivalents, decreased accounts receivables, and increased accounts payable, notes payable to bank and accrued expenses, partially offset by increased inventories and other current assets.
The Company generated $5.7 million of cash from operating activities in the first quarter of fiscal 2002 as compared to $1.9 million in the same period of fiscal 2001. The increase in net cash flows from operating activities in fiscal 2002 is primarily the net result of increased net income, a reduction in accounts receivable, increased accounts payable and accrued expenses, and increased amortization expense, partially offset by increased inventories and increased payments of liabilities from discontinued operations. As of September 30, 2001, the Company's days sales outstanding were at approximately 70 days, decreased from 73 days at June 30, 2001. Collection cycles from a few large customers in the Image Segment, as well as several other customers, have been very slow due to a combination of factors, including customer cash availability and economic conditions. However, the Company believes that these receivables are ultimately collectible and that aggregate bad debt allowances are adequate.
In addition to cash generated from operations, the Company's primary source of liquidity continues to be its line of credit. The Company has an unsecured $50 million revolving line of credit with its bank group. As of October 14, 2001 there was approximately $32 million available on this line of credit. This line of credit is composed of a $30 million three year committed credit facility expiring in fiscal 2004 and a $20 million credit facility with an annual renewal in the third quarter of fiscal 2002. The Company believes that the total of available lines of credit plus cash flows from operating activities is adequate for the Company's fiscal 2002 operational and capital expenditure needs. The Company is in compliance with all of its loan covenants. Capital expenditures of $1.0 million in the first quarter of fiscal 2002 compare to $2.1 million in the same period of fiscal 2001. Capital expenditures totaling approximately $12 million are planned for fiscal 2002, exclusive of business acquisitions.
On October 22, 2001 the Board of Directors declared a regular quarterly cash dividend of $0.09 per share (approximately $941,000), to be paid November 13, 2001 to shareholders of record on November 6, 2001. During the first quarter of fiscal 2002, the Company paid cash dividends in the amount of $0.9 million, as compared to $1.3 million in the same period of fiscal 2001.
The Company used $4.9 million in financing activities in the first quarter of fiscal 2002 as compared to $1.3 million in the same period of fiscal 2001. The change is the net result of the Company's net $4.2 million pay down on its revolving line of credit, partially offset by the difference related to the amount of dividend payments between years.
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141 (SFAS No. 141), "Business Combinations," and issued Statement of Financial Accounting Standards No. 142 (SFAS No. 142), "Goodwill and Other Intangible Assets." SFAS No. 141 eliminates the pooling-of-interests method of accounting for business combinations and requires that all business combinations be accounted for as purchases. In addition, SFAS No. 141 establishes new rules concerning recognition of intangible assets arising in a purchase business combination and requires enhanced disclosure of information in the period in which a business combination is completed. SFAS No. 142 establishes new rules on accounting for goodwill whereby goodwill will no longer be amortized to expense, but rather will be subject to impairment review. SFAS No. 141 is effective for all business combinations initiated after June 30, 2001, and the Company has the option of adopting SFAS No. 142 either July 1, 2001 or July 1, 2002. Net income will increase when the amortization of goodwill to expense is stopped. The Company is currently evaluating the impact to its financial statements, financial position, results of operations and cash flows related to the implementation of these two Statements. SFAS No. 142 will be adopted effective July 1, 2002, the beginning of fiscal 2003.
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143 (SFAS No. 143), "Accounting for Asset Retirement Obligations," and in August 2001 issued Statement of Financial Accounting Standards No. 144 (SFAS No. 144), "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 143 establishes standards of accounting for asset retirement obligations (i.e., legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or the normal operation of a long-lived asset, except for certain obligations of lessees) and the associated asset retirement costs. SFAS No. 144 replaces existing accounting pronouncements related to impairment or disposal of long-lived assets. Both SFAS No. 143 and No. 144 are effective beginning with the Company's fiscal 2003 year. The Company is currently evaluating the impact of these two statements, but does not expect any significant impact on its balance sheet or financial condition when they are implemented.
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 or through the issuance of common or preferred shares in payment for acquired businesses.
PART II. OTHER INFORMATIONITEM 6. EXHIBITS AND REPORTS ON FORM 8-Kb) | Reports on Form 8-K
None |
[All other items required in Part II have been omitted because they are not applicable or are not required.]
SIGNATURESPursuant 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
Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer) |
October 26, 2001
