LSI Industries Inc (LYTS, Financial), a leading U.S. based manufacturer of commercial lighting and display solutions, released its financial results for the fiscal 2024 first quarter on November 2, 2023. The company reported significant year-over-year growth in margin realization, operating income, and profitability, driven by disciplined price and cost management, and general stability across the company's diverse vertical markets.
Financial Highlights
LSI Industries Inc (LYTS, Financial) reported a net income of $8.0 million, or $0.27 per diluted share, on net sales of $123.4 million. This represents a 28% increase in net income from the previous year. Adjusted net income was $8.7 million, or $0.29 per diluted share, versus $7.1 million or $0.25 per diluted share last year. Net sales of $123.4 million was 3% below prior year.
The company reported Adjusted EBITDA of $15.1 million in the fiscal first quarter, an increase of 13% versus the prior-year period. Adjusted EBITDA margin rate improved 170 basis points year-over-year to 12.2% in the fiscal first quarter, driven by a higher-value sales mix, continued price discipline, and effective cost management.
The company generated free cash flow of $9.2 million and $45.4 million, respectively, for the three and twelve months ended September 30, 2023. The strong cash flow allowed the company to continue to reduce net debt. In the quarter net debt decreased to $25.1 million from $68.5 million last year, resulting in a reduction in the ratio of net debt to trailing twelve-month adjusted EBITDA to 0.5x.
Management Commentary
Our Company delivered solid first quarter results, driven by strong execution across all facets of our business," stated James A. Clark, President, and Chief Executive Officer of LSI. "Profitable growth remains a central pillar of our value creation strategy. Over the last year LSI has generated more than $45 million in free cash flow, including more than $9 million in the fiscal first quarter. We continue to strengthen our balance sheet in the reduction of our net leverage from 1.7x to 0.5x in the last twelve months."
Dividend Declaration
The company declared a regular cash dividend of $0.05 per share payable on November 21, 2023, to shareholders of record on November 13, 2023.
Financial Tables
The company's balance sheet as of September 30, 2023, included current assets of $154.2 million, current liabilities of $78.0 million, and working capital of $76.2 million. The balance sheet included shareholders’ equity of $186.5 million and long-term debt of $25.1 million.
Net sales for the three months ended September 30, 2023, of $123.4 million decreased 3% from the three months ended September 30, 2022, net sales of $127.1 million. Lighting Segment net sales of $67.6 million were flat from prior year while Display Solutions Segment net sales of $55.8 million decreased 6% from last year’s first quarter net sales of $59.5 million.
Net income for the three months ended September 30, 2023, was $8.0 million, or $0.27 per share, compared to $6.3 million or $0.22 per share for the three months ended September 30, 2022.
Explore the complete 8-K earnings release (here) from LSI Industries Inc for further details.
