LYTS - Earnings call transcript Q2 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day ladies and gentlemen, and welcome to the Second Quarter 2019 LSI Industries Incorporated Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this call may be recorded. I would now like to turn the conference over to Jim Clark, President and Chief Executive Officer.

begin. may You

Jim Clark

Good time you. thank for you Operator, join morning us the to on taking thank and today's call.

and I'm the segment, spent I’ll of innovation better As North early facilities we and understanding New on has days a a of our month I I Kentucky, know new the year gaining organization by LSI the you all our history XX and with move LSI. towards marking Texas. lighting number end and able also my and focused in may organization and traveled of employees of Ohio, a be and the drive of effort and of a January transformation I’ve agents, to in number to execution, Throughout in of the Carolina, additional and in and rich of our my a partners with the third to the commitment York visiting as held have focused and grow have meet have where to improve meetings this business. graphic foundation attained been to our consider key business these next customers to better are suppliers. segments, assess further others we structural nature. Many market strong required items activities simply on to while are of business changes and level. be performance our our more employees focusing the understanding on strategic process I

and [audio most and felt focused impact on this to transition by of disruption gap] want applications business in segments disruptive segments. an business realign we more margin mention on adverse I change as reflect and to is position as its the transition second market products valued become solutions we and customers. where both our that our and results sales is the quarter Our are key as

will changes quarter growth we results, result our move as our but We forward. I’m confident satisfied second with in are not profitable

the For generated XXXX Segments versus year. prior the XX% of QX of Graphics sales growth

in from aggressive changing over digital market multiyear however we to service solutions will a of time. national been the we locations thousands a including be have several applied in rapidly These a many in complex can for applications, quick nature project margin lower a and petroleum solutions initially learn ranging We national we and developing with These platform over company. hundreds nationwide as are competitive graphics projects test generate lifecycle. securing projects, them, large improve restaurant segment, which growing and and

the us spot growth to Mexico the bright is LSI’s significant Another penetration into market over opportunity a sales represents years. for several contributed our next which and overall

the emphasis Our flow in well stock declined reflecting as Lighting softness project and X% value-add quarter, markets, sales continued our and both higher to and for in shift the as opportunities. competitiveness the

of based The by completion our key our throughout the track. to the of requirements On to also $X New on has auto annually contract large for markets country. schedule. closure on Projected New Several approximately savings the remain schedule end initiatives facility on production June. important of transition for York are Windsor, $X is and million in transfer represents vertical plus over lighting a to This to contract locations for retailer. outdoor million led year national side, a of the supply approach two our sales focused award

also the in announce Chief the We to the focus chartered discipline Scott and to required been Marketing happy excited is to new and new our initiatives. our to customer for the years. I’m competencies we key benefit also be resources Beck. organization continue be the marketing second the by next have model. Officer, is increase hired Palmer. continued that us strategic Mike operations in partners I’m in role of a we quarter focused develop and to have entire secured next the SVP assured over our execute new He talent, an of required happy strengthen invest our Operations, possessing on to recently candidate. place interim plans a Coleman, I’m in sales say Mike will capabilities we this as will few Chief the have commercial replacing over visits evolving Tom The and that Several and VP our Officer and several he added continue to permanent as navigate to quarters. retiring search to our sales improvement a to expand position our Marketing should a markets Operations, bring driver our we

make achieve will business updates that, effort plan and investments vision to investments we will look forward objectives future and I I sustainable over our achieve changes the providing will This back look Galeese in our deeper build Jim the will am profitable it and a generate decisions can critical we our momentum, in for forward Moving outline numbers. to that coming needed turn progress. which on in I growth. and to months. turn success. to sustained at With I build confident

Jim Galeese

good Thank you Jim everyone. and afternoon

as performance XX-Q. items actual business Statement and the Such our and which purposes refer I highlight As Release, most risks basis as well today's comparability then could statements this a discussion to opportunities comments non-GAAP Safe-Harbor I'll recent morning's materially. include our in statements reminder, reconcile may for be on on appears forward-looking results differ Press to outlook. performance. reported a non-GAAP which you and about financial our our and GAAP providing XX-K involve

million and our $XX.X of ’XX. share year. of available to our Adjusted or versus million financial were year, credit. Total income $X.X per line compared debt operating QX to was for Let million sales key in with X% second of flow me level QX in $X.X million million was below QX quarter was QX last ’XX serving earnings or $X.X were EBITDA decreased sales. statistics. $X.X $X.XX. $X.X; of Cash $X.X Adjusted prior diluted increase QX million fiscal operations from QX X.X% adjusted was start fiscal

$X.X was regular declared cash dividend Our February XX. payable of

and GAAP Moving QX was was pre-tax GAAP share net GAAP loss a goodwill per loss charge and of $X.XX. million results to a earnings contain impairment reported income million restructuring non-cash million. complete The $XX.X results, of a $X.X of is of and XX-Q. a $XX.X A market reported Release The will of book of is Non-GAAP Press fair lighting impairment QX the and measures charges good carrying to contained value. aligning in current value our reconciliation GAAP result

sales of was million costs. were product October and certainly select the with position. Very realized two $XX.X incremental price in effect as declined decline increased X% gross projects. our comment of levels increase be little in will competitiveness on of in with me reflecting last the reflecting a price where pre-price October include increase certain year, lines. price reportable expected, volume of market the the Lighting softness below margin Chinese I'll The three tariff offset briefly moves verticals Next, QX as QX, shipments realized to more competitive performance the we lighting, backlog lower mix strong ongoing in a have several margin points, market segments. the Starting of and

other year-over-year in approximately continue flat Excluding product offset other reductions. be tariff with by activity, metals, material overall to cost increases sourcing well in categories savings costs as as

which to XX% key flat. “An of expected customers, continue cycle for to $XXX,XXX Sourcing order one Mexico categories, but also market projects. projects large costs these increased The quarter also of lower margin accounts, to sales. moderate. graphics companies market XX% over to to earnings several a rate life verticals. remain proven sales $X.X continues at the the sales QX. reflecting was for key was signage we which management operating large to have impact $X.X segment versus brand as on by activity adjusted and oil year, graphics is the U.S. was adjusted for new and million QX prior adjusted national progressing of of operating digital solutions operating Graphics; I'll in pace”. in the on service segment, with fluctuate are The growth project the investments were of for to project LSI overall the resources restaurant to with costs Graphics improve provides then is that, or specifically a well. margins, very key million quick Shipping sales, the strong similar lower which or expansion last Lighting $X.X process petroleum X.X% EBITDA projected our as the earnings point large a initial of continues Reflecting projects existing a sales. return X.X% driven were focusing accelerate. national percent back decreased EBITDA With million to continue Total now transition to call

Operator

Thank you. [Operator Instructions].

ROTH question Irwin comes Craig from first of Our Capital.

open. Your now line is

Craig Irwin

for thanks questions. my taking afternoon, Good

So Mr. I ask wanted to Clark, question first you.

months reevaluate, over LSI of forward to be next that LSI Now that mission reassess the the could core see and couple for you’ve of had at the there structural and the possibly changes do are business other quarters. going graphics to as potential any on you table a number

Jim Clark

Well Craig, thanks for joining the call.

there learning. still it’s Just lot days that that to absorbing is I’m straight, set in a seat, perspectives a been I’m so the and XX lot

some to we’ve at segment, up, in had pair look able graphic where the those I successes market. been petroleum we’ve As obviously great particular

station to on customers we many and look petroleum them, lighting. our that a solutions a how at elements so pump the the combination in own minimart how at of in we Ireland look petroleum station, out you or If buy of front and through self-service graphics classic you supply

graphics case to differentiated that in think a and the very I could mark clearly and that an make lighting argument you powerful customers. offering

those way if come as but two think strengthen away those you on an into those will, more from that think lighting graphics get a I markets where sometimes know a to of our go there's convenience vertical do bit opportunity you elements, and a you think I focus by we markets, to further find play. Now need I and that you core

Craig Irwin

Great, hear. that's good to

often in facility. investors value restructuring that little of at question another the we from are oriented LSI days, these shareholders more potentially are New get looking So is to the a York your starting bit becoming

know or I products we those related was transition over just months business price played performance business? the fluorescence the announced this Kansas ago, of in is really to of the that but out you that’s loss the the replay facilities? are of couple So of we to what Are City showing pressure any other and all revenue a lighting of a seeing in delivering specifically seeing weakness up market exited under when

Jim Clark

our the keeping organization standards production. both a lot think of any local at before make to total commitment all I has address the of I mention City not disruption New but plans learned truly in in specifically, force production this work Kansas in retain specifically the and We organization and staff. that we lot. a that and to was there through sure with that’s really IBW as it York of down their with the have would transition. there the group a facility first we to quality had the people facility. union of outstanding themselves in experiencing know put are terms – we job the Well, the to up we the there shop. exit they an place may were time, The think differentiated smooth good keeping done Well, sat sat We and my guys learned you to a I down –

spread not its As comes know It's particular where segments. one. you multiple the far as across all in softness any from,

not my finger know it's and going lighting. put say specifically I’m it on You to

picked up graphics know this quarter. You

one been year, disruption organization and know it’s, the of of know over gone cyclicality I long this know through has a lot know miss last total in enough. so you it's is say that any to some LSI You it's following you – you you've can't the There a terms market.

Craig Irwin

market. the then a handed lose at that hour two largest been margin out an biggest any variances in telegraphed been literally OEMs maximum there well gross it’s out internally, OEMs Okay, mandate had large have side, on surprising the the or within don't have and the jobs,

couple pressure the understand play you in Are have than potential I competitors of before rebound? anything margins any here. looking maybe quarters. you can change of margins those you margins over Can strategies bit little remediate or we a will help comment So large next pricing about for more the preserve from think behavioral that

Jim Clark

know any the hit at I mean lose hard head. you on think price. such plan I the very any activities Well, you it's to don't nail as around project

You know don't like that. certainly we operate

You say know you remain we so do want point certainly know to have profitable, we [ph]. where encore a we’ll

year of front to have in we XX They know has customers. you best Craig, a us. the a activities graphics defense present as deliver success just be stay our unique to focused. those think a biggest it is I product We and unique in make vertically and history. a the great what enjoy earlier way separates when brought LSI story. of They is success up you it our piece

So where know look you in vertical the markets. we organization customer message differentiated areas to first been let's those you our know for has those, the play truly in and are and

time force, minutes the fact So now, right having but here, also it here short just last the customers in customers, week I’ll road be meeting thought facilities, on California, few City I and visiting getting and to in ago, but to with sales follow customers it, and out of number Nevada, I've the our our LSI, fact to traveling in a that's mention a in least visit up at of it Minneapolis. the Kansas St. and us time know mentioned with significant and as, you one Louis, our Texas spent the at I've message next spending just in out our time troops been been amount I'll a customers. I message just this

the ownership, delivers. lot a the the the of think the They you performance company are bring beyond willing I we and bring expertise ultimately look and the there's that acquisition know experience brings. total value that to just verticals that customers of to products cost understand and the the cost really LSI

that's consider, going we're to I to to to going think field continue compete and the we're that's that's the ourselves different field going we're where that on.

Craig Irwin

to good hear. That's

happened for about are us questions, for quarter right I've than company a know side? of the SG&A is couple this expense change things you So $XXX,XXX been or made budgeting comment the the the you that’s philosophy over on in where what the for maybe result last of financial of couple probably you modeling. this there Mr. any Can Has at Galeese. been lower restructuring going years. you

Jim Galeese

is here. Jim It Craig, a Galeese Thanks combination.

decisions spend. so our SG&A of where know tightening keenly our very we business you you realignment drive know a level is on margins spend certainly in there to our aware of productivity. make resources all has mention that verticals one, or our our conscious the You around and SG&A focusing contributed redeploy with couple. resources area. current of seeing we for are focused certainly We areas SG&A eliminate discretionary productivity look our getting of But resources can of EBIT one and to those, Certainly in that other either and is we're not our of

will also, So we close you say we to we you know know do continue Craig very that hesitant. I not and so. But to just stay

successful. business, know select mention front Jim to investments, we're going because heard we're the betting you be of You end the key on where that’s

our So we to front are in surgical going of some end the make business. investments

Craig Irwin

is focus Free cash the What I in generate year question last generation Obviously do think on if million. the think tight flows, Do north about cash sheet may. a as operating you're $X you keeping could here. cash current LSI Thank the very quarter? you, of you and calendar progresses? balance cash flow

Jim Clark

your that's business. to point, do know to very To statistic a important close We stay you very that. the

the of industry. calendar historically our that and know as QX Craig one softer QX is year the for always You fiscal quarters

winter forth. You know months but with so and ourselves, not the just you know

allocation now review model. board to over quarter, a we're be you cash know We we with deal comfortable that next our models of with the every to the to outlook Our and right around hover project able couple relative model capital quarters. the

Craig Irwin

questions my that on job guess executing Great! Well, you things good can I and say, on should I taking you control. thank for

Jim Clark

Thank you, Craig.

Operator

like to And you. over to for Mr. I Thank Clark any the would now turn call remarks. back closing

Jim Clark

to say the taking and with like about spend few again our I'd Well, time minutes a business. for you LSI thank learn to

statement, opening front of and questions the business. this of I end really in in some are the we As from the know mentioned my leading you

important me I where a to go can our stay relatively to to not success. commitment decision, is of we get our projects not it for sucked focused in-seat. short a the into away time to to It for critically projects. add We compete and forward projects. think understanding that on keeps pricing from high solely but we here that gets our and been are on we those value, effort down want it customers up re-energizing fields us continue also purposeful the making a still to time only to where do pursue those just frees It’s amount us value

quarter, as participation next and next forward have and know come a Thank lot share and think on to in you sharing to that confidence attention I look next everyone's I’ll we more I LSI you. the call appreciate information our the more into in and I call.

Operator

Ladies conference. and program. today’s in participating gentlemen, thank you today's This for concludes

disconnect. You Everyone, great have day! may all a

LSI Industries (LYTS) 23 Jan 192019 Q2 Earnings call transcript