LYTS - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen, and welcome to the LSI Industries Inc.

First Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. It is now my pleasure to introduce Interim CEO, Mr. Ron Brown. sir. ahead, go Please

Ronald Brown

good and afternoon. you, Thank

Chief probably As of now with LSI. Interim announcement that Clark you officially becoming former I'm are Jim X, LSI's the November of aware CEO Officer Executive the effective

So part my as this last Interim of call of duties be my will actions CEO. as one

in but serving I as I interested be will new I mode I'm Jim of that member listen-only calls, Clark assuring forward, be calls. Going LSI the those will will certainly in be a Board Directors. for these of

of We hear Clark are us happy and them Bill to will Board, the have both from both, O'Gara, Jim our in during new the you later with room the of today, and call. Chairman

and Chief the Galeese, results Before to Jim Officer, over Financial for then turn detail to that, the opening I'm going on our call will make who provide a quarter. the first comments few

LSI the President October Executive great the news our X. Jim record. an XX most experience as Clark was Jim has and of for incredible announcement and effective appointing November track recent exciting Officer While Chief Board

LSI next at will providing us team toward Jim process selection more proper of be end Jim's about a LSI introduction forward to the looking are O'Gara Jim confident the of All that leadership, and the and LSI taking Board's the will level. strong to Bill the we are color be call. and make of

taking actions are the comments to LSI a First, growth. about profitability we for position few improved and

organization is around and in we been see As markets extremely a announcements, which customers. active. from Early aligned new we our you quarter, have key number our of our announced can structure,

bringing an better this we of nature and us will markets, services our technology, products us package to customers With innovative and enabling provide by solutions. the feel new advantage structure our competitive our with

We people and markets help put go-to-market certain strengthen channels. our added key a of to place number key in and have lead vertical

our announced quarter, in assembling announced facility. our and we LSI's manufacturing driving our several the closure aimed California of quarters, reducing This to taken closure without by actions make June will customers, several also New integrated have overall now we we supply the cost the this to completed at warehouse In that certain disruption productivity has York in been Windsor, facility. be this completed. We order improve completed New Earlier and Hawthorne, of do to structure chain week, be Last our but the our of end XXXX. closure should over competitiveness.

and of organization eliminated believe growth profitability annualized In see Galeese realize LSI addition, that provide are improve making forward. over the you and I'd as focused streamlined actions, taking these this call quarter. that salaried more more we to the to $X you million. like changes have of as a and time, results first savings structure, number to all Jim? for we to positions. turn to a When impact should Jim the the of detail the going At action over result we our of up from of can I add

James Galeese

$X.X performance quarter to QX an for first comparability sales adjusted Total $X.X improving I'll items, X.X%. for $X.XX diluted statements Cash $X.X reported which fiscal safe generation afternoon, was press and non-GAAP and was margin XX-Q. year, above well or our Adjusted as on our basis refer points purposes, includes or comments the level versus were morning's our positive operating performance. million could differ million most be recent financial reconcile debt GAAP and QX, per quarter basis our results to XXXX. business XX% good QX availability EBITDA adjusted prior or X.X% remind earnings appears serving for basis share actual and year. XX involve and non-GAAP then position. highlight a of was $XX prior providing of million year. million the year, X% the million, were with to release QX everyone. points on our XX-K and prior I Ron, increase I fiscal to below and that above operating to $X.XX, decreased $X.X QX in today's XX% income opportunities presentation this statement, you, as risks about of increase financial sales, credit Thank of forward-looking line want was you Adjusted income QX materially. you an statements XX last overall increase in strengthen which our net Such from outlook. our harbor

The Moving to assembly the a operating California of Hawthorne, closure reflect operations our of and charge GAAP reported to transfer QX results results. $XXX,XXX facility. GAAP related

impairment non-GAAP As the a quarter Adjusted reported GAAP select products. lighting QX driven project first will pretax and $X.X for per in by XXXX company below million $XX and reconciliation solutions. XXX October of gross $X was XX.X%, QX record New $X.X was decreased savings. projects reported points million margin next is the contained were expenses currently margins. Reported per basis lower our and income the XXX QX XX-Q. which annual an in several year-over-year were will on points New realized on year, Operating result, margins closure lighting quarters. a indoor of and prior restructuring million estimated announced net lower generate volume, mix of new Windsor, graphics complete over The products of facility, share measures cost York and offsetting goodwill release share earnings being earnings company basis fiscal for large which a $X.XX, manufactures contained charge noncash A $X.XX. the The of GAAP million. press the XX, in loss The

product chain of driven as margins to supply the cost We integral by implementation take key improved projects reductions expect improve and of impact effect. moving our infrastructure forward, they volumes,

the year, softness in of Sales XX% meet million offset ongoing Starting our where last specific Lighting. briefly Next, on customer requirements. industrial with market were reflecting our and solutions of and reportable partially was $XX.X I'll below two comment competitiveness products decline commercial markets applications. and This the the performance in segments. with

sales in example, for be strong solid the continued segment to quarter. and margins For renovation generated the

Our several the products initiative. product road support over that to be our launched renovation several next new map contains quarters

the is basis million influencing in with with points quarter year. a solutions outlook Operating number measurably to automotive remain of and first margins impact customers productivity market orders was outlook. as XX the mix by X.X% generating the unfavorable Lighting below were earnings our volume to $X.X Lighting improvements. projected or While favorable, mixed, last The variables placed the is soft, and growth operating specified for several of offset decreased a large sizable XX% have backlog.

operating petroleum points by The Lighting over Graphics million, segment, again, multiple As sluggish operating million year. in was with improving remain and projects led a in C-store to projects income by which will new delivered to to sales $X.X Shifting increased while a driven improved increase result, growth performance both domestic term. increased growth basis with XX% solid margins and accounts, short sales quarter, Sales XX% measurably XX% $XX.X the business, the to XXX strong likely XX.X%. Mexico. earnings both above The was prior year. The in a prior Graphics.

growth complete Volumes in effect supplier our when reductions are went program. but Developments project sites in the over the and with sites a key our September rapidly, experience projecting over increases company the other remains of the XX majority expansion quarter, been volatility categories, initial for cover Quotation plans. in X,XXX in and area sites solution have activity and purchase in signage with of for strong. driven in procurement, increases We are chain QSR ongoing in key digital term QX, with remains outlook through key installed and supply continue these was our solutions in The reimaging our impact and last steel, over XX. plastics of into Mexico, and in XXX offsetting a intermediate including customers tariffs, cost many expanding design next months. agreement And commodities increasing selected of Chinese successful we aluminum commodities their sourcing the oil Graphics these national along which by mentioned positive. key were will savings. QX for did As as for XXX schedule QX. the for

price effect for increases, in effective tariff October harmonized schedule Our many which announced were are Lighting XX, purchased now XX% the from necessary categories offset tariff to China.

We to in discussion will continue developments materials. the ongoing I'll to manage the proactively Ron. turn now back

Ronald Brown

Thank you, Jim.

now to introduce Jim get to Bill of would I We and finally to Clark the new like CEO, O'Gara a Bill Jim little doing our we'll introduce Clark. chairs Garrett the are phone. and right shuffling close

President CEO member long-standing also of the board Chair this been O'Gara Group Bill to and is of many respected was and Directors the and Chair known fortunate As Audit of years, year. of as Bill as of Board its defense you in August serves number appointed the Committee. has have a O'Gara of for Bill of our LSI's as we're of well of know, and having Chairman a Bill? Board. Bill in industry served

Wilfred O'Gara

On the XX President all his Clark pleased as detail about we and experience. with background more cannot October you joining Thank which Ron, you, Jim be us you Board behalf Jim's good saw and afternoon, Hopefully, Executive LSI's Officer. of Chief everyone. provide entire announcement, Directors, of our and

board order we direction. for change the over was as six transformative began a new months recall, board we a satisfied from with in to not may for felt connected viewed in value, process made growth and disruption needed decision increase of and and LSI's you In the technologies experiencing search CEO. change markets digital ago. conduct At driving thorough global in shareholder If serve. our fundamental and Consequently, CEO we the vision time, industry an a the little strategy the profitability significantly to strategic that search a

We As process. take advised firm CEO months to the national assist hired we year. thorough from well-respected could certain make We to us. executive anywhere a didn't three a search wanted search that to rush such, we a were

bring COO, executives, CEO conduct search, and process in a extremely Lipsey as worked with and has to So Interim thorough respectively. had We pleased out. how Interim Ron experienced Brown two we're time Crawford this we decided to and

of We development with record by strategy that the profitable was was choice driving our are confident board. addresses sound of solid right the of the forward providing track services unanimous that change. move transformative dramatic growth the challenges and innovative CEO a customers is His reason and undergoing solutions with LSI to an industry the Jim he with associated

LSI to you to make recently leadership our looking a heard, We're to next actions Jim's have taken forward of growth. level. you Jim, would a and profitability As like comments? the and number has to LSI few taking improve

James Clark

or and to company. with the LSI, and working LSI at chance I have the afternoon sales taking meet my to in our Today remotely North time you to facilities. the all people will at thank I've Columbus Croskey, my I'm audio travel Blue employees Thank will next day Good to Jeff call. at for I spoken two travel participate the the our via the today's Tomorrow, all officer, employees that first Canton weeks, you, make LSI our with other remaining a marks meet to had I facilities, Ash over choosing and Bill. to conference days take to fourth to the and and remaining locations. commercial up facility,

wide a and solutions. we variety saw of Although, products

shareholders. others LSI, with people The who for buy for months and Brown, growth. the including management have biggest and reps, surprise last who and believe board, it's customers, Lipsey, team, work I are therefore, Crawford suppliers, few folks the people, ultimately our no great people our over senior many that has us the done opportunity a platform I that the work that think the left from Ron

is to our way in accelerate opportunity I'm growth And to Over a and LSI, over There it excited that a I history few strong market. strategy. is from group, be the the a and I first that and wide today. in current nature for consistently want work the believe heart our our be of to with category. brings has go-forward team we'll I differentiation of work competitors. be the leveraging months, of the our that of organization confidence senior differentiates and successful the the as thank management with with to by I'll will back refining the strengths work innovation creating in highlighting LSI, done, confident much part the in you, be it and us but spending I that, growth. further a that of selection choice of unique time LSI to again, and family solutions organization like there and Ron. in next turn your that to company our plan customers, with it XX-year to us employees, of I'm the

Ronald Brown

great Thank time, for to we the operator, this It's up you you, Jim. And have at call on like board. to questions. would open

Operator

from And of Instructions] first Craig Partners. line [Operator our Irwin Capital the question comes Roth with

now is line open. Your

Craig Irwin

afternoon aboard, and welcome good And I thanks Hi, my should for say. taking questions.

First rest this of different hoped the an the thing that us of couple over in about approach was the cross-channel prepared materialize to Atlas? all now. will us learning of no Atlas just color manufacturing with give Atlas. traditional want Can across see Are the is in mention opportunity the I shared you coming years? given next to seeing we ask versus we'd Atlas much is synergies of you LSI? contribution you their about way the relative the There Do for success in of comments little And organization? a maybe changes for

James Galeese

Jim Yes. first I for remains here. the comment. - Hi, on Craig, respond will business Atlas solid. Atlas

targets with are around know, China you product. very in go distribution stock higher fiscal business. price has you as has respond but Atlas, product for are that As products there flow ability we they thing by to as and a the they compete talent been and seasonality prompt and There fact, pricing to of we're of and about is is Atlas we market the Atlas, which large has with, very quick, are a and which one - that synergy bit, one rather we periods accelerate cases, through are and change robust, their into particularly familiar some element the further is range expanding flow imports, entering in been demand pricing in the successful point one XXXX. and stock of its look acquisition impressive very key moves been second of itself

incorporate into one fact, look characteristics LSI program. some where to the In we their broader of

where looking assembly are mentioned supply infrastructure We Burlington. and you at we perspective. a from purchase chain final some kits global in The model do

forward, the but will will that, sense We do continue continue look to going Craig. complete it makes also sourcing where we to at

Craig Irwin

closures. Great. My second facility is question strategic around the

and benefit sort been maybe changes Rexel you see about share to you Hawthorne facility leaner the basically to it and your experiences operations? some to you that the away. the So what transition, expectation old management was at was the customers fixtures. your shut Can making York that The chose mistake and not to the firms the the this prior biggest team the Kansas upstate few they different how the of last in company? all of years New In plan LED, footprint that at? LSI of of facility you do materiality of And the in a have fluorescent convert City just to force was to of facility and to went the would type business the

Ronald Brown

time like New it one Jim learnt or say and are and Kansas was do respect did question Clark, transitions we to to certain, lessons that I provide the this closure have product are well-thought-out or disruptive to it long continue mean, that the the Blue customers - so that is and is that City, to to plan bit our some that - some on disruption to not based over - have close closing the period. Windsor pretty the a Erlanger other we with facility price. closure, before To would is of that - product months is produced work, that of that a these we what with we've Jim do to right, closure, we of extremely there transition much Ash closures I period make the that the product to how or is our a with quite answers important Craig, nine to of

intent. that so this place sourcing the will customer see from a in We any to as are with That's impact of product not a the they putting Jim? respect closure. standpoint, alternatives result that line

James Clark

I me. This Day know. answer, don't I can Jim to add is that know that, Craig. say else what Yes, except it's to Clark. for don't I X

me would there that is say what the the decisions kind board or be employees, and will had to we team comment I had I've much communications defense-focused. to offense-focused made for on got it management more reckless of but and So get I've how senior communications the that were the with there, with

certainly goal of our it sure be taking are to our So that make would customers. we care

past. look going product If we repeating time employees have not to misplanned the to transition produced had It's Any goal it it. chance on onto gives are at Ron profitably, are as it us some customers. to We being plan; our our make hold to time of number plan. is And and it's an vitality said, line, it sure react. And got extended If those. something, the mistakes transition we is to one I a we us gives react.

that I So repeat in mind, with the not prior expect do closures. to

Craig Irwin

good a is the flat and drive can or margins My really to next September sequential quarter Are expansion we really relative looking environment last two? or current hear. pressure in actions pricing the to the still still quarter? maybe December bit little the margin contracting question of under a feel environment. about likely possibly How to get we quarter to about That's at you the or up back

James Galeese

question. I'll that Hi, break two into components. Craig, Yes. Very again. Jim, good

primary bit of And can areas all C&I talk certainly, where with has and setting organization structure decision-making and the the of we also which change general been segment meaning forward factor. the is reflects documented our around the driving recognize. we're priority while a investment adapted competitive, shift our it's on this, pricing let's course, First where in feedback, other differentiate sluggish; the is ourselves, we market information seeing Lighting applications to area. consistent strengthen quarter What sales focusing is of it's deemphasizing the plans. our Also

look outlined somewhat at a press some in activities in areas, others. will. we soft QX while flattish remaining strong as are I looking in release, as at if the So we're think fiscal you quarter, There

comment me on shift and Let Graphics.

digital going QX we're probably will mix growth, our We we ahead there frankly, QX double-digit because the-we Craig, our there ahead what initiatives going team as and conventional momentum therefore, of technology continued is QSR for including SG&A, Graphics. in the range continued here expect well. SOAR super but to of petroleum terrific Mexico be led are to leveraging in Margins have see Moeglin that to strong a going the job on we around from our doing is in operating of Dave volume by quarter. curve. actually are some very extremely we in seeing, now is in What as the are strong the saw cover sector, the strong only growth and our to our continue - technology and our initiative just stronger margins in little of be we're being

Operator

Instructions] [Operator

Ronald Brown

now to our if to to the honor are as have months during to further Thank call breadth no it incredibly I like take a Board on it's that of in of CEO. and Have who past no We an all interest Directors. attention. to LSI technology Have of CEO terms in look right we come. an employees. customers member has your the as The there for this And opportunity going and in LSI It of for future, proud it the else has Operator, to would like for services serving technology. a than of products you exciting forward. has also now of company we LSI me a serving better people be questions, incredible this that the LSI thank will your serve all has Interim has the industry one anyone been for our industry. are those forward the all dedicated - talented product I else services LSI of six day. LSI. committed the of and those in good would combination talented years make all thank for of can to And

Operator

may for wonderful day. Ladies and you Everyone, thank This program all disconnect. the conclude does today's and you a participating gentlemen, have in conference.

LSI Industries (LYTS) 11 Nov 182019 Q1 Earnings call transcript