LSI Industries (LYTS) 19 Aug 212021 Q4 Earnings call transcript

Greetings, and welcome to LSI Industries' Fiscal Fourth Quarter and Full Year 2021 Earnings 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] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Officer. Financial Chief Galeese, Jim Thank you, sir. Please go ahead.

for Information management's call year conference everyone statement, refer outlook. a opportunities, referenced are in GAAP of www.lsicorp.com. on contained morning's at materially. press could release, commentary may our morning, press which of this today's statements detailing differ contained include and involve we transparency fiscal measures Executive responses full and results. most business Jim also prepared and the this that, our and throughout certain conference and call release questions as quarter conjunction opened Today's begin conclusion Safe Officer, remarks the call for the conference website thank Harbor issued about We and to turn our presentation our XX-K well risks results Such I'll President Investor statements reconciliation be the fiscal and quarter appears our presentation Please to in summarizing actual open you as forward-looking joining. posted fourth for in Chief operating fourth results. fiscal Clark. of LSI XX-Q. with corporate release these release, the will and remarks, our our morning, With we will I In line with you will recent At questions. and to over this our Good note Included today's call. non-GAAP complete is results. XXXX call that improved of before this in press XX-K. non-GAAP A a market results quarter the portion Relations fourth

call. joining thank Jim. morning Good on today's Thank and you you, for all us

today's a fourth as you we'll environment. on full discussing know, quarter year year with year-over-year say growth finished be quarter such, and through challenging runs XXth strong in XXXX LSI's and results I'm that X we call. proud the a full As fourth July June to year fiscal and

our improvements generation and innovate latest In allowing configurations to now number our solutions. with to developed that affordable year, challenge to other requirements, Our type lighting XX% ongoing to along financial to entry-level an lines our control XX% lighting our COVID customer customers a in improve they competitive fourth quarter two of while in in energy new introduced new solutions, sustainable the In to and $X.XX on prior XX% and QX grow. of Galeese and benefit versus more opportunity, into reengineered color Margins in design, differentiated, continues year. will versus our fiscal to to rose across year $X.XX control just include continue be greatly at overall the an year prior from multiple meet organically. sequentially in and We additional allow of provide and Origin provide agents, EPS And energy represent the results ago. solutions. allow will the connection over third-party partner us to that adjusted Opulence reps, minute. controls XXXX, and we net a LSI thinking improving LSI introducing lines, some fixtures, sales lighting increased or system new employees in more performance the projects Jim efficient XX% continue efficiency our We both from LSI solution and functionality than various and estimate almost product and area. lighting Atlas, products business. XX they turned

group creating Solutions projects to of drivers used products, vastly introduced Display system onsite QSR Solutions, modern, operation. is system JSI. a products variety displays our markets various help solutions, Along on-site with in and service the components, external new provides a chip and and efficient be on addition acquisition strength highly on refrigerated solutions. to particular of the displays development a is while that and in allowing use continued solutions our category and refrigerants the latest solutions Our On that simple design. systems in used. we a modular The of manufacture reduces sustainable more graphics vertical. customers. refrigerated development environmentally design, manufacturing deliver serviceable the in This They side, efficient tabletop to a approach with will single process the create a JSI our allowing leading for also to can referred and approach efficient have simplifies simple a grocery Displayed cases JSI now the of use traditionally a display their design, Graphic visual chip from flexible as our engineering across energy for energy way most next-generation

services surveys, field point C-store asset single an point use the Lastly, fully deployed manage they as work group and allow including of to onsite They on and our and contact services, including provide Adapt contracting This us LSI services, to represent grocery and automotive, customers. reps, Adapt onsite projects, for to important I'd And site a from be vertical, management team permitting, group, large like creating to end national QSR design our continues system. They unit. for everything business of customer. serve others. petroleum, customers. our agents deployment among they our both comment arrange and local single small a and a is and our customers

reflect a They with an our commitment Houston ongoing stories I'm petroleum that our pump customer for coordinating that operations, were fact, completed of deployed responsible our days. each the They the activities two in the progress the system last deployed graphics, proud years with to in customers. XXX largest payment was design the pandemic XX,XXX for at of we manufacturer locations. and fall contactless along enrollment against project than and system and LSI. and of one In country strategy say across at of with than and height this more the along group safely developed this installation confidence back. the less our These individual it demonstrate

to with a solutions. Our fiscal energized while on both Solutions market, growth provide provide solutions commitment have the us We the solutions world-class products and but these along we ourselves an service group. year-over-year value expanding committed sustainable vertical products, broad Lighting markets, commodity team, achieved of and In we provide. from highly across key to the Display LSI focus with XXXX, workforce differentiate is management the and efficient to year allowing

to sales our order new our commitments environment. to chain meet resiliency, of and our and way company business the allowed us in a Our prior year And our capture their our work and customers. in manufacturing, take fiscal thank challenging efficiency, supply results. proud want a serve adapted In team engineering, more contributions our entire sights we higher. team to and are moment to I I'm say efforts setting to you even for importantly, to XXXX, the their

last the make XXXX with priorities, to our year used continued strategic against progress momentum. and have We we enter

New up. Our Year strong are our and orders is backlog entering the

is since organization. it's activity a been the quote I joined Our highest

opportunities, We our are margin verticals. on continuing higher focused focus our on key

highly market. to continue a improve, and marketing in commercial price efforts and have dynamic Our discipline strong we

C-store in C-store the grocery ongoing automotive chain, work gas design exciting and petro projects, a number rebranding Texas. a of of Southwest and engaged We our are large new station a number the in market effort installation solar projects, a and of including assisted new a of in

highest having I'm acquisition the to start strong is billing mounts the off of history and to of say happy company. Our JSI they're a in the very

mapping out opportunities. Our customer commercial team of cross-selling process has and the already begun joint

operations grocer. the the project has to work teams and one a This of of the operation. LSI/JSI is areas e-retailers just collaboratively efficiency manufacturing Our beginning we cross collectively with of assist the expanding implemented for world's there can to and the team and largest factory effectiveness believe improve a are program number a

We are excited we about XXXX, the opportunity all ahead. made our in and have summary, XXXX. pleased In I'm I'm progress by with excited

partners, delivered employees, investors. our commitments to have our customers, and on We our our our

ahead. solid confident that, back to have our the performance. turn I'm strategy. comments by ratio forward. position in high journey Jim of We the And looking call on say-do business our over the financial With a for a Galeese moving to I'm forward I'll underpinned

the segment performance. on Jim. XX% highlighting for by financial you, start full comments over key million sales of the $XX I'll and quarter year additional for were fourth prior statistics Thank Net then provide XXXX, growth year. quarter, fiscal

net expenses of compared significant $X.X $X.XX QX $X.X net last million million $X.X including million Excluding the quarter, organic increase diluted non-GAAP million, from and for or income, the from expenses per from XX% were impact reportable with share a per Sequential EBITDA year. million from $X.X was related was to acquisition acquisition, diluted generating share an growth. which related segments growth organic QX last XX%, adjusted was included share stair-step Adjusted XX%. non-GAAP weeks pre-tax the of while $X.XX were $X.XX, of income five $X.X of increase generated increased year. earnings both $XXX,XXX, to growth last Earnings the JSI year. per acquisition

XXXX QX throughout year flow key as to $X.X year. XXXX, For $X.XX times net starting impact continued adjusted was of per as of lead adjusted Performance generated supply $X.XX per XXXX $X.X COVID charges. of sales fiscal accelerating chain impacted million earnings were down income cash because other versus on share compared X% the purposely levels $X.X supplier support prior increased more finished disruptions. fiscal our the increased sales, after doubled related the than for and and $X.X steadily inventory to above and with year The in company in million ongoing as QX income million earnings We well price. Adjusted free acquisition XX% on components inventory manage prior improves net year fiscal and share of lengthening markets. adjusted by million

pro debt EBITDA by to per net payable availability the of million the X.X QX credit achieve the cash both the fourth trailing improvements $XX from the and across Sales JSI of quote both in segment rest its quarter, segment including million quarter-end. Lighting with XX-month A regular increased project Shifting as more distributor demand last distributor operating in balanced increased of than increased activity of the very business, company had $XXX XX debt, order dividend million cash levels as was year. had toward compared levels facility. over substantial sales QX, both August stock decreasing prior months. income, in September and the through Construction declared approximately for a a increased driven million improved on $X.XX well current to year-over-year increasing million increased begin existing $XX on quarter, existing indicators several sales sales $XX after share with segments result of sequentially experienced last acquisition, of through facility Distributor stock the year, shareholders to end adjusted -- and Xth the times. resulting remain credit of $XX to record LSI XX% the of and to XX% ratio prior During confidence the inventory company long-term XXth. form we've Sales favorable. throughout at performance, the At finance in deployed months. for stock.

Our we XXXX enter considerably strong quote levels remain higher a and with fiscal backlog.

margins. align prices selling commodity in maintaining input successfully continue to to costs, We changes

levels. disruption, approach chain to service our has times lead U.S. hold manufacturing our proactive to but only not maintain us Our based and allowed with customer minimized managing combined supply

improved income fiscal year impacted XXXX, basis operating sales. lower points, For rate margin COVID gross generating Lighting despite XXX increased

we the in Display process. and range at XX% into from grocery approximately orders we our provide a provides. quarter throughout of by digital combination our business store The XX%. in fiscal Solutions release, continuing Southwest, Solutions the fiscal to signage benefit complete and have the the organic XX% the broad accurately winning fast-growing to segment continue XXXX. Growth sales end Graphic will led offering was XXXX remains growth increased was Display our versus comprehensive products. press renamed outlined for Fourth portfolio describe were successful prior with a large As in June QSR the program chain display where year, quarter segment the in for program more of additional the and that and We of

opportunities activity and Initial multiple we're In new years. this potential confident remained to across been additional cross-selling will strong, future in and XXXX have lead development activity with later JSI fiscal over program customers programs addition, on verticals. prioritized, XX with working in

Solution For full sales I the back Display operating XXXX, XX% to now year turn the income moderator. increased with XX%, fiscal to $XX increasing the adjusted call will million.

Please is go of question ROTH Craig first Our Instructions] Capital. ahead. coming [Operator Irwin you. Thank from

Good Hi. like the gentlemen. fourth is this above we looks strip revenue history, acquisition, I benefit of history. clearly in quite morning, significantly at look Congratulations if on this quarter. your off When strong highest it really quarter your back

congratulations. So,

Craig. you, Thank Yeah.

really a well new mean, question, driving can everybody were things what's at mean, breaking, that? going I us during wanted First that they had Is doing that this this than the why slower really product very is help understand this you so portfolio? I point? COVID. revenue's dam

and in all number us Craig, solution side, thank thanks. for of to Clark -- being being on side calling the for it's sales. accelerated have Certainly Jim it's things. of the those you things competitive thank able not more combination thing, deployment and significantly one help is This product you a comments. and the and our a and I

projects and Lighting of -- Lighting towards the is development pent-up there -- and is the there latter the lot particular, A in of building you of phase demand. is, installation thing and second stages that. all about of a if was, think The is

development So projects we the have in they further COVID, many been but deployed of their along cycle. were that over last of were delayed that simply those were because projects quarter

way all delays we But at we're XX see type high, report is index that, above means starting XX at spotty. materials a that being XX of on activity architectural lot relative scale which around looking planning a almost look AIA, of was to XX in of XX, Dodge positive, construction inflation that's is being we up of the below historical and and and up, just of As also -- that negative a up and indicating that being because be thing. the yesterday a is I

had chain and be company every we're workforce it. ready think to supply it. our I these And deploy like battling So, there, of I and LSI, and that we we and up buy starts this ahead, from able materials benefited to a think we of like to picked because other and of just -- ready were part having But through I -- the we unlike quarter. to of all very were plan I -- mean, was interest COVID. we out customer planned, be execute, think having for fits in the This really quarter last next lot our

That's really to good hear.

owned million seems potential weeks, five strong, the So, right? your five the Just for that execution acquisition that business M&A also the or with it. there off, the sometimes starting tell south It we seems previously strong of post-acquisition talked like, is about. numbers delivery is Can of above $X weeks to transactions, particularly be roughly you in same fundamentals? really there sort reflecting of us, that see in this maybe we or -- just spurt philosophy you

And -- they're strategic it's their out. higher for. shopping going experience the a offering, occasionally it benefit a caliber of and know fundamentals. certainly growth all going selections being grocery tail because comments that available, side as on a graphics, And would We the an improve very grocery we product JSI really underline we've to has service lot become that. and like to meals, secular not go on the to side, think of some I those long eased the it the that, of the things important quoted market. of the is right? seen continued what project on it's that strong see latter, back COVID it but an getting whole project opportunity, display relative opportunity from in stores refrigerated -- that It prepared took dining cases, portion made we're that the really I just there store relatively a restaurant people and that would a a tactical to were that is

manufacturing had from of resources of world's bunch One We manufacturing -- largest JSI. JSI’s kind some grocer accelerate the a definitely were things e-retailer was, in. able using actually large the that LSIs of we benefited to by in to order emerging support of a

And because of collaboration. was got that that accelerated worked that we a really there's that in well. period of think in out that that I that piece stub So -- number

able operational that As number one I is probably They're been another at the committed improvements run that to up is we've two, think there, management to to energized. couple team ownership strong first all, demonstrated be there's the we most at do a the a great LSI important look They're lot years opposed thing. as part things of here. But JSI being from that something as we of number of fundamentally, well. it's feel financial business, opportunity by there. or to like LSI excited in a That last and They're business of very up like that. being

so the JSI does And team.

So, worked over months, think a -- a started line we've we which up already getting or will. the we've if the where last teams can of weeks we on together, couple few There's you help. -- to projects

those circle products some the well. of e-retailer -- it was world's for was assembly back those one and I'll of these One worked the around to of of it, just out largest really

So, exceptional And think worked fit evolution investment C-store they've and grocer thesis. environment of with well the this JSI. -- that we're -- strategic well about expansion it our an acquisition. part our we're plan, out just it, or was in It's done very It with very with We the job. that in excited the grocery happy in far. and so exceptionally

very with weeks. performance were their in we happy So, those five

that. for Thank you

through here, increased this of consolidate talk maybe business, made I always quarter one adjustments to was the you this new going expect you manufacturing. the understand to this of your direction some there's what positioning these Can the Was temporary acquisition large thing us and completed materials, a sort through? gross Or we So, margins. should orders a didn't as progression? and that forward? blip margin costs move similar with when coming you is gross sequential the dealt a of

I not got And resources up that. it that the things during to we and but through any the account benefits Number acquisition. and for we and mean, it's just there it. Yeah. -- everything to one, us and close three acquisition, was time the I leading were think after, took you days of day we go the the haven't said, the that like recognized

some of it mix We and the but We that's our the -- there. just We we all margin general out the to accelerating but offset had. our erosion some mix, to things we right? potentially like lines So optimal, wasn't one. had but be number opposed there protect candid. the two costs, for onto pent-up our number we demand strong. price dealer our very, it been watching and this took the that. pass quotes and just of We've Number little projects couldn't of careful we three, had and accounted our as that base But overnight mix projects disrupting decision a a agents But I'll was base. inflation. customer had protect along they that, And some it onto bit didn't very about strategic was made purposely of input

continue that us did we you've you all -- following we Craig, know, So, been three for that put of We've and pressure together margins, but still it's a and on been temporary. little and this to to strategically, on purposely have those as grow time. to we have and -- some this do advancement know believe well, progress. we margins laser-focused we room room

so this you Jim, to anything temporary. add just want was I if that. don't to And know

look price to reflects rate by input down, Jim would sequentially, if less the offset just Craig. a forth. quarter-on-quarter. and I all action then add, margin than costs, Lighting, it our And the the taken Galeese segments, higher to so here. you increase two these Yeah. point that was modestly have at Hi,

you're going that lag So, always to slightly.

point And degradation a so that that. less than reflects

we then forward, a was you our costs. actions we're to Display we're the the the if going confident crazy at Solutions input is larger. sustain look Going three To given sequentially our be look was that actually function and decline of a that strictly petroleum mix. to segment. a segment. to margin segment little at where rates, And Jim's able margin that, internally point, sequentially And to The up, that that was bit. components it There's

that a a the it the high. overall margin It's larger still segment, remember, then, lower talked was board of but up for Because gross average represented products, of very utilization rate, was low asset signage very, digital we've and Solutions signage, section Our going our actually bit. down model. Display portion And that's about quarter. menu grocery have but a integrator actually because was digital such of digital in flat, course, an that the margin than to aggregate

Solutions function Displaced really a the of So summary, mix. was In strictly.

that. for you Thank

very important chain. another question So, supply is

right? forward may you are prepositioned the not be number couple Lighting talk carry similar You obviously Display or unscathed by of Can about have doing, a you little there, guys this a companies I not bit impacted. lucky, execution what to think How so you're and expect over were the others of could challenges while you right? the been out whether always in yourselves quarters. markets next and

really Yeah. was We chain under word a that We I The of the was We out chain. tried know and supply most years really the did partners a was tumble. Well, a made lot rough a continue to had the we in foreign diversifier we -- appreciate brought back, of I lot us had develop that mean, had domestic supply concentration. that two we in on lot and helped don't of it. we to built it concentration. the thing I our we what do duking which -- USA, our USA. it were unscathed.

We So that was number diversify. one. did

have We East. not supply we're American some on partners do concentrated others. Far strictly and South So, the

here consistency incoming -- our We we the have have a some chip, trade they basically this system been margin, chip, were that They of jump help, maybe to in timing you chip. us were feelings uniformity supply, because mean, into the we -- we the many on the quarters, some input create a potentially last out if advanced that, that system it little was mixed probably with struggled we and that that. that. make with current our you -- design chip which safety some was in point at ready to different call advanced of the wanted of some inventory over literally customers. build on -- integrated really four -- though, of about the worked weren't because it's will pressure in-house menu our Graphics customers And would I notice chip three different supplies. board. for the we will, to of product certainly able And we some their you'll to in did gaps solution. everything couldn't the a no the we've and had a offering display some number a but give was that drivers solutions But and that on better. different knew had we inventory, tell have a but these in if design. a I it. pandemic, that I had some And they essentially our of If design sure did doing but were one of of to solutions have some acute some have we've of committed the chip we And of we that certain minus benefit go purposely very solutions most people, to a customers where like And to

immune we pretty disruption. feel to about We're So, positive too. supply not chain that

the team I that done buy has a think very good ahead. job our of

I at time if being. stay experienced they've think the at I working very aggressive going will plans And disruption, be for anything, minimal to we work And to that. any have got we of forward. and think continue least been ahead

extend with Craig, we premise. not And were started times. I'll to add, going customer lead We the just

XXX%, far, not that We're do to with what are and but led and we're of we're maintain call to thus to other been combat time. in customers and starting in that, to think elements to be series successful realize a beating as out. have us but in lead increasing of to listening, inventories case activities, the do order they've in XXX%, premise So, that to proven that's a any maintain committed want customer that the much and those, they we're market. not I I do just we

Congratulations education. We That's really good to Great. strong to look progress. continued really hear. this forward on

you, Craig. I appreciate Yeah. it. Thank

you. Thank

Our from Wainwright. Please next H.C. question Dayal coming ahead. of is Amit go

Thank you. have Good everyone. Most morning, been questions of my addressed.

of terms are to JSI of you product from now should environment? a work in expect products new you kind post In planning of the sort we what on,

of of more most has Well, some pipeline. I have environmentally their all thing. one received received think of think good is refrigerants, They that robust would well JSI first I friendly, ones pretty team. And to a interesting be thoughts, as the whole engineering one have refrigerant product a development They a use of ones. probably the that -- be alternative being very well and will continue

and refrigerants. really that been looking to not other has for and back we've is looking industry JSI, whole go made disciplined things that time, our depletion solutions in at XXXX the about to you exclusive Freon If advancements since and that, like ozone

a So, have standpoint, product a design from good standpoint, and pipeline. strictly they engineering

we standpoint As as are that us graphic based big of believe graphics, quite far a terms the interior to that opportunities display similar a like where outside cases is that lighting mean, can we that the Obviously, as of customized can what and very the bring And graphics process excited customer -- going each obviously feature what thesis. year piece way. of development, two a highly the we maybe that. solutions plus, We JSI a look looks, overnight. we around like realize we something believe time some us of then they highly is years a really at part combining aspect, products started graphics, and are commercial look how from we've want these other things I don't a into to We things and and and far feel that better as to can extension could and and and the product. get their share how their different those foods of overlap of investment lights in happen industrial a make there base bit their we're it. group original combining not products. think our We and -- the help we posters where markets. solutions, engineered, there some already that, part in as a opportunities metal, about joint better that's to in offer will But the the that I that. we that mean wood And that's the lighting identifying take the faced of can base. It momentum -- elements, help take there's have, already them engineering, customer where

then backlog side? absolute Understood. seeing share From And the like been numbers, Thank nicely. on could you're if perspective, growing mentioned improvements backlog you of a that. not has percentage you for what you kind like

I'm that rate strong. has significantly. up changes, know In I general, will it. to to know the on he has but to that Galeese Jim itself will that let say I comment any say into that. does, saying, backlog backlog in beginning say and -- was -- quote I'm is I But XXXX significant mean, of it coming our actually in gone if Jim add can't made I -- if have before don't anything is going to I don’t I'm going general,

more the our in interest. backlog. But because been projects other customers in even are are put hold the funded that. and want partially looking the add infrastructure know has of quote don't and to things may and be high. that And very is in it's a and you just current side, on staying that, people I terms And if if it, are at new our know subtract projects that half that the any the administration or because infrastructure pricing delay lot anything projects there's like past, in were staying by some they're Jim, digging activity -- if were of current there But and agents I materials. project don't the because put we inflationary on of or customers on

book-to-bill throughout we a Yeah. I'll book-to-bill through quarter, ratio continuing one, closely. we month monitor every that's over and is, as make positive July. our One comment ratio fourth And the very saw we add

to backlog. then contributes that increasing that, given our So, also

we our as we exited exited both July, year. sequentially, well increased and actually as backlog as is, as So, QX prior to

you Thank Understood. I for That’s that. have Appreciate guys. it. all

you And appreciate for I the you questions the for participation. and thank that. thank

I'd Clark to Thank floor Mr. over you. closing like time, comments. At the back turn for this to

Thank any Jim. questions the you Well, We're just this -- say thank other time. for you And and would business. I on for not the taking we're unlike comments. again, the is

We here have that environmentally. employees and challenges have we people that are the current that work navigating

and customers, capability our have important and our to and that through ratio and energy labor found and that safely think in. challenges chain the we're the that to help folks through in very team, environment proud here seen I and been our the we've is of employees, ways to investors. the the I say navigate operate found supply of would very I'm that our say-do challenges ways us

continue maintain and that customer committed said, will and say-do LSI that. time thank you're going number we've on of people environment do is say-do we ratio that think the environment we stay you the high say we ratio. things a continued an just it's forward. we're constant you that we on change. and to so good I That's high today. to to I focus that's want for do to We've of a focus to say With help want got our to able in growth call kind the the the forward that moving us that one for normalization been LSI, supplier. or That's And to the or And look we of part employee thank a to whether to adjust maintain everybody. of

interest Ladies you your for thank Industries. and gentlemen, LSI and in participation

phone the may at webcast wonderful lock You and day. have up disconnect a or your lines the time