LYTS - Earnings call transcript Q4 2020

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Operator

Greetings. Welcome to the LSI Industries Fourth Quarter and Full-Year Fiscal 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the to turn CFO, host now Galeese. Jim will conference your over and I

begin. may You

Jim Galeese

this conjunction everyone. commentary portion morning, market fourth our results. in opportunities also morning, the a call conference corporate most opened detailing release, presentation begin In I statements posted summarizing quarter to statement, call a fourth Chief Investor Good fiscal these XX-Q. our will XX-K risks and Jim remarks, could we in issued as our this results questions our like We presentation harbor remarks today's conclusion conference that, Clark. Relations and Executive throughout today's the at website press will turn refer with line press as to the With of this you we fiscal well President and results. of morning's may statements be with Such and prepared remind to questions. will recent LSI I'll release before Today's the quarter include www.lsi-industries.com. to Information outlook. about open release our contained you referenced materially. and Officer, differ that call call conference our safe At involve for management's I on in would appears actual responses this over forward-looking call. the which business

Jim Clark

to join the on third In COVID-XX Good all, our initial for call. morning, the and today's Jim. business. of you, time last you our impacts Thank from we earnings thank our results quarter discussed call, taking

our but worked look to number mission we could employees current Creating and the operational ways to decision business ways from was operational a essential safe our start, but not early throughout protection was add of for made in remain only environment deemed value we remain LSI an As customers. work on to we hard at which actively also challenge. finding the the one,

with but our support, an allowed to and supply also to interruption, minimal our chain and other including previous work on customers COVID-related footprint and pivot not some distance U.S. graphics, services. social only created continue it specific to our us Our manufacturing products provide diversifying and opportunity serve

our opportunities elimination margin, to us the fiscal in our from allowed ago, debt generation, cash say, and of and you to year continued is fourth earnings, shift the currently flow on the debt-free. year a started strong nearly costs, QX year, XX have $XX to exit over LSI recently and LSI Note, XXXX I'm increased mission One the million particular and our business last the months. released has COVID-XX, we growth current actions from team future gross in and away pharma. efforts We profitably higher of low-value serve, entire quarter lower that value challenge financials vertical our parking, solutions. to commoditized, expansion it seen created likely in markets of from with many quick-serve, in of through the we grocery retail, As petroleum, the including products of throughout operating our happy automotive,

had focus in partners, and lighting our and in our discipline away and business to where gross for improvement low-value from for our This year. on Company the XXX-bp of many overall courage quarter shareholders. to customers and improvement XXX a the including bring team, Our effort the value higher we resulted margin a basis-point and much markets walk a fourth

financial will prior on or provide X% the in result was exceptional above quarter $X.X further our declined sales the the Jim year, COVID-XX, in a adjusted million of year. as Although prior in income comment graphics, year. $X.X XX% for million and in fourth up operating our versus lighting performance quarter Galeese

participation the and pace year my to Company comments team. of our XXXX. progress entire I'm encouraged the shifting by of fiscal and Now, our

our COVID-XX headwinds has to the from our reality slow While progress, employees efforts been of professionalism our down outstanding. and new in adapting the environment and current related may the

our of our differentiation On and development sales Atlas, over current next earn XXXX. solutions team, a those the our plans, usage, the lighting seven improvement manufacturing, marketing level in vertical products, alignment commodity more the provide add level we and an and and and year products. XX products in about. focus of these to plan will product year. platform separating value we from across When will side our controls of XXXX, solutions, along introduced different right ourselves markets including team, The plan new our markets our win the comfort on talk add the XX products a on entire we'll we feel low-quality and of work line, additional and in markets visual improved I our engineering, for energy we introduce frequently commoditized build QX, and to compete not we our markets differentiation marketing, output business, we continued product coupled from to Building with higher will further our These for with we in. new understanding an introduced the new and three vertical with products. an in completed reflect by Under integration than in out entry new we complete growth the the

the and we've side ongoing the future experienced business, proposed On surprisingly disruption minimal of our projects. graphics to

pharma Canton- part, quick-serve around not completed location. and we as we has the petroleum, and and the our But even significantly move an customer COVID Akron graphics new leverage and Our work to the location hotspots beyond. to had for XXXX productivity, has we our had deployment installation and have of most as plans schedules it this improvement immediate business into occasionally our on in as environments. in changed been facility We've retail This emerged. look commitments move QX, In further usual. grocery,

and plan. the on can things the focused but We've we adjustments continuing and environment, we charge outlook times, opportunities still feel made in our and are the to remains to we reflect strategic are our uncertain build the company. grow control these as of though Although well-thought-out of and unprecedented creating execution

you who regularly transforming our back say-do last execution. a comments high financials. think of in better the believe our company, Galeese LSI still months our calls, With past days commitment for lie performing I We to and ratio reflects into and I'll spent quarter us. those I XX to follow it of Jim Company our on our ahead our For turn best that, over the

Jim Galeese

Earnings statistics, were in $X.XX million prior morning Thank compared EBITDA was $X.X quarter was the net last of diluted versus $X.X you, good income fiscal to the year. million, of $XXX,XXX per everyone. fourth share To $X.X $X.XX million Jim, in key and financial quarter year. fiscal net fourth versus summarize XXXX. income

same resulting result of compared a declined the on $XXX,XXX impact activity, Full in million balance flow a is Company $X.X flow to share press million. million, of in generated Non-GAAP QX of results of non-GAAP earnings The and in non-GAAP and end compares fiscal release at prior year. cash million basis, As of was year. last sales million On XX%. to complete $X.XX quarter pandemic cash per $XX.X net income XXXX. compared free was K. $X.X income fourth XX- construction debt year. the EBITDA zero the at million GAAP adjusted million, the free versus earnings period of QX, was of $XX.X year end our a of diluted and prior were eliminating fiscal This $X.X all per in contained Adjusted the in XXXX. to $X.X cash $XX.X net share fourth A reconciliation debt net quarter

adjusting required implemented spending COVID-driven Company from multiple quarter sales, costs of included lower support both the an With all contributing interim actions This the and our the fourth basis, to reducing ongoing onset to expense. discretionary and of major operating an COVID, categories reduce in to results. headcount

in We other products continued invest initiatives. to and new commercial

million, year. $XX year and million fiscal XXXX, prior to $X the EBITDA was net for Adjusted was per versus earnings income million at $X.XX, completed fiscal the adjusted $X.XX finished $XXX $X.X Adjusted for million. XXXX. sales fiscal share were in For XXXX, compared

per $X.XX at record August declared share shareholders Xth for was Our payable dividend XXst. regular September cash on of of

declined operating XXX an the fixed margin The to Moving reflects our expenses of margin to quarter the in XXXX. XX.X% quality for manufacturing and launched and the increased to operating lower income reportable reduce X% Fourth $X.X several to and the transition fiscal costs, of improved to products The mix improving actions This lighting Sales gross higher pandemic. trend costs. rate continues million the adjusted influenced by points $XX reflecting million. XX%. increased cost new reduced recent two basis quarters number rate decreased segments. sales to last also operating quarter, of

expect year, earlier programs. fiscal fiscal of to changes actions. restructuring graphics the as with pandemic installation income backlog construction with million not last expenses exceeded margin current large, We customer that organizational $X.X X.X, any solid in XXXX has However, occurred million, versus the graphics is Shifting our recent was a an Sales book-to-bill flat $X.X as the year, do Graphics graphics to gradually activity Operating well last adjusted cost that to commitments. a rate The the recovering. X% declined as schedules. declined the indication gross mix recent and program reflecting year. multi-year quarter reflecting generate strong operating of $XXX,XXX exit delayed activity segment.

extended to However, schedules pandemic-related in to be the near-term, we installation do disruptions. anticipate project may due

project was relocation with move base. our I'll completed the the seamless our customer moderator. call Canton, the Lastly, Ohio to now back North to return

Operator

H.C. conducting time, question question. this Dayal with is a with question-and-answer Our Wainwright. from will Instructions] [Operator be Please proceed Amit at first your And we session.

Amit Dayal

want managing morning, positive first with just to Good everyone. this you. on say such results. period Thank I congratulations through

you year, ‘XX? in in product in we there for that us to guys even new should of is terms think come potentially you you growth what reasonable, sort outlook place of or for growth like give anticipate the Could you little fiscal next type are color looks some XX%, on do interesting could higher? it including launches. of drivers X% In

Jim Clark

Yes. still we're market what and us joining based honest. I rate for question anticipate ready down the to mean, prepared the think flux, our you to we're pivot, when it's for scenarios call Amit, of multiple year. to be thank the paper forecast the -- how really I in a we are such on completely I reacts. thank difficult on have be and today, put state growth comments. we've the and for very for you Things to

know, and do and is small things you being small The one disruption like way play not our at even graphics lighting construction in factors that business thing. whole coronavirus in -- particular to ability being element our so and installations there is, our and in not business one affects that. As many it

like that. mostly I don't say to anything, continue have on had come prepared to And fiscal month or honest you have anything. visibility will year, a hotspots to we're the done -- just some verticals Although had now, new I and comments, how new could canceled we how installations we're our growth I we a know tell things say I underline projects truth. and in flare-ups that and can't that any how, we getting have, and the mentioned haven't of sales But, we're of quickly, depending push-out, say going given only and difficulty my right in. I I I’ll pivot that because number that into after.

we we'll things combination whether think -- the us us end. that's going And the we know to up more going And are put flat travel are two those ultimately or bring year. so, down, as continue the to to through of I as or to

Amit Dayal

Yes.

have, So, know don’t Jim, one new the verticals, those. you if I mentioned I question,

three initial color be what kind verticals. what applying of and are resources said on those make us inroads give You of Could will in areas? you those you to sort verticals

Jim Clark

Yes.

over a spoken remain M&A we couple we're as before in so, better Despite and other we things right sure committed also built bigger make And and to that areas. But, of sales a calls and in activity and we investments. general, making the to. acquisitions investments I’ve make So, we wanted openly in spoken couple I've company. a last pretty or half ready the year coronavirus and built to got we environment we're that about the the last company,

doing to we're we going of talk so, now want of we -- it's to the we're frank, those momentum much we those list, together current what the markets in don't we're those greater now. about investments validating in three. in and we're markets But ready make to right the than how fit create in environment be process verticals that completely that the And drive Because specifically to in. is are growth. I put process a right validating the can

certainly those that's now, point, I they'll or are, all at really don't pivot, the don't they on but build that's something to verticals So, what the -- in will this we I quick-serve want retailer, mix. say But, top thing. lately, particularly auto, we've been that of being successes had very the type strong if verticals, and of do pharma petro, well has in one grocery that

Amit Dayal

then, lower These sort year, And next where quarter, remain to just it. operating one we going of Got one costs look for in are these quarterly to the How should basis? see, this place the quarters? in me. in to next come out last for this is going a fiscal on few

Jim Clark

Yes.

now, going of I everybody's let's as to we opportunities. I minute are kind very said might in just even north, that where thinking right are, or be going south, be maintain think, additional flip some me But we go structurally, while we there that let could deliberate and investments a making ago, some around.

south, going everybody's north. go let's While

going -- can thing. maintain going ways of looking are structural we making now. continue and to costs of investments that to we right to So, for type be We're those some

So, you flux some that. might in see

Amit Dayal

it, That's questions Thank offline. have all Got Yes. my you it. other Okay. so guys. take I'll much. got I

Jim Clark

for Thank the on time be taking Amit. to Thank call. you. Alright, you the

Operator

Please And Craig proceed question our Irwin your Capital. question. is next from ROTH with with

Unidentified Analyst

Good you Hey. deleveraging in rest the the some the have upcoming outlook on taking progress some assuming question is It guys the programs, segment. there. Craig. the to on early I along pertains environment especially in you guys progress My -- graphics just some Andrew especially be great there like looks first and projects, any in want opens This and [ph] year, expansion the on quarter stage the you for able segment? sheet, to balance made up the margin to morning. you on margin as might execute these and can commentary

Jim Clark

saying, spot think that Andrew, thanks But, underlining is the sure that's We goes I going that every call the you're some for see of and joining think, uncertainty opportunity it last as through opportunity. project on. the environment. given months Obviously the without I right through normal on we're now, world, efficiency the call, the we there. and maturity the early do see the we've -- thing. over on I'm we closer stage, of curve, we learning and that an and A in a process When certainly gone curve. that currently get projects number go of type working to few we're

to Obviously, And able improved offset continue see so, are starting and margins bring that we do that we anticipate that's new we we'll to be to in. that. projects exercise with

a kind we've do move gained with been the That and But, a there's number So, a other on. cycle going efficiencies projects of on. coupled Canton-Akron continuing in we some see opportunity. we of working definitely some

Unidentified Analyst

might over things out and been to too been not but day-to-day some to now? that have it just going uncertain you. provide Thank there guys congrats book-to-bill progress Great. QX, pushed are able to in still second And out execute here, in pretty back be QX and question Have many you on is able may comments, X.

Jim Clark

some that were We've picked candid. up QX absolutely QX. pushed projects from But, I'll No. in be

some that to have QX. in pushing QX We are

it's and So, of one and kind one away. hand takes gives

the I'll but or have Particularly, systems underline digital that petroleum, we and underlined our my quite graphics been Jim I front So, fallout. not just haven't menu on to quick-serve any And this active, significant our and good we seen haven't in active. print, isolated seen those and news, mentioned is retail, comments is as very our the very, disruption in any cancellations.

Operator

Partners. question. is question with Capital Fearon proceed Please with Rick your from next Our Accretive

Rick Fearon

congratulations during a And on times. challenging great morning, Good quarter guys.

by was on the of some segment improvement, the graphics, it -- talk margin gross time? type little and you guys targets purely as it's lighting to in sounds have you're or how particularly relates at then if to a project I And function taking if more wondering bit gross function that's if of about of the margin which a that ramping. a like projects wanted Just are

Jim Clark

share our efficiencies margin contribute with And Rick, I here. to for ways willing definitely we’re lighting to targets. operating don't we're We're side improvement. Good stage if then the for joining And it think continuing and I improvement. morning, do working product work want usually broadly are others, for And thanks to and to we can the margin to Early left them. additional there's know or projects, find our what added in we tend service offerings even room -- always I through call. have looking services, and those -- improve value give. offerings, either us

established fronts, on customers, of I kind to think that. our have all move to even with room incrementally we continue

Rick Fearon

to incredibly new have a though you and what you've businesses been that mean, identified impressive. great would teams first interesting improvement. growth probably impressive. it'll your the particularly not to and inherited hear And the stock is the verticals be really existing flow is you've I hear. with that margin and what far no But, done done factor will about doubt That's choice thus into business that again, for you future opportunities

expense the last through And this the in outlined kind On front, fruit other is low side, this already a hanging it improvements point? good of operating are on at we that quarter equally quarter's SG&A kind it’s impressive. reductions, showing just for And of results. SG&A you some are just at or state

Jim Clark

earlier, -- and decision making start in team, there. But, that to mentioning see So, we're purposeful I take some do we a doing opportunity continuing I as I as see do a was think investments. some now right

and continue we start to I So, the want you may -- some also same time mentioned get at into expansion out that. may may the new we lumpiness But, I see in verticals. not It to that improvement these investments. incremental some stuff. making the turn it may --

So, as the is various with there's we get and markets. an we associated decisions in test make and get support expense material we involved the that we get and there

the simplest terms, investments I in So, want make to here. some

put But, could latitude our out pressure feels any past that. work great, the some we're equalize I to it so sure look to for things would a the the that pennies, But, the to make opportunities pressure team investments. while and see to still do If So, speak. on for Company leave little smaller dollar opportunities. we potential opportunities want chasing nobody

opportunity see I investments. So, for make I reductions, to but continuing SG&A do some definitely do want also

two we'll other. balance how So, see each those

Rick Fearon

some rather I'm understood. expense. be Yes, capitalized will of those totally sure, And investments operating expense than

So there'll that no a lag, be with investments. -- doubt those

margin when are done and both of If into to you I or have business, guess a be reasonable target -- you -- kind EBITDA some when to those diversifying the the has verticals, of of the and higher steady you of that going mind, function is identified margin into existing or assumption also before you’ve get be do verticals? that you state, new a moved to in sort

Jim Clark

talk lower EBITDA higher although it standpoint, ground, in some initial line may of from business ultimately that Anything one to be often a we growth the that maintaining quality have of about the cost margin associated So, and would the the us trade now off quality right margin. definitely for vertical that it, on things we get pursuit is develop our that with business. with off

been list very mindful approaches I that. our our initial of So, have think and that initial

on to we'll that make incremental continue that. is expectation improvements my So,

Rick Fearon

great. That’s

really the So, tackling and about this is and team blocking Jim, I know still. the is you for

team strategic if side. of just something the Is to a hard prepared results lay Investor that in get to given you've initiatives to are possibly sort and in know but environment, great Relations already webcast? out there? -- getting or some hosting out? or roll out your expand call you the the like I on there to to speaking and you're that when opportunity person, this feel I on are do even webcast a it's so, themselves. thought advise wondering for know was I any And But

Jim Clark

as to number and certainly things there's this would have advance be to candid, know folks We probably that that. virtual you a and of Yes. conferences of meetings the something that. firms most their been like like stuff call, I'd and like standard trying been do through on

I We And advanced just -- that ones it. in supportive normally are type can't talked some have, do. we've fact, we been we the meetings. virtual doing recently about say I've in and that participating

headwinds point. feel here. about advanced that momentum can’t I handicapped out not But have quarter Rick, that. to certainly mean, haven’t things, we're and of fourth COVID this if things will our results we financial feel get and able like a it some all hear I we little other bit. the We with building we're it talk and our frustrating the talk And you, and about get much, you tell think the and is to at party year slightly out of we Even that speak these I message. this I a internally, and

been talking but internally, we So, have about I are -- hasn't advanced those we it that much. will say

Rick Fearon

the Yes, thanks questions, thanks all behalf hard Thanks taking for of of great -- on congrats first again on for the understood. work all, my stakeholders. Well, and results. for

Jim Clark

you taking the call. time Thank you. to for be on Thank the

Rick Fearon

Talk soon. to you

Operator

We back session. the to Clark the I'll for the remarks. Jim And over call of reached closing end turn have now question-and-answer

Jim Clark

a on want challenges the the in do were the the think of uncertainty call team, of to minutes that investors getting I do ultimate I that the of and absolutely a When entire could very LSI. and I to with just opportunity to results point call, Rick's do and this best of there I broadly the latter had. short done. minutes about opportunities you the faced that few -- very way lot just then that with although despite part are and got to we've a our few preliminary again more interaction. the the Much growing each Company to it's slate we speaking headwinds, the put these forward want and XXXX happy we've already so progress And made. we we and beyond. able that we thank look us to call. been and the that our the we we'll And to to wanted and very I a are make sure and will taking am internally forward progress I everyone just you QX, of in to in the we've progress committed Stay us. for far. as of that Even were on will outside this excited we've ago, confidence we're again the make think want we we've you our the as think we But, be, made and proud Take with I the employees next targets, ahead results the QX for and I of where efforts and to our thank measured on can. of the think I look we wish soon care. time the share even fell just to spending Company, be about against of acknowledge safe

Operator

you for And lines participation. disconnect conference. your time. today's you concludes this This your Thank may at

LSI Industries (LYTS) 20 Aug 202020 Q4 Earnings call transcript