LSI Industries Inc. (LYTS)
F4Q09 Earnings Call
August 20, 2009; 3:00 pm ET
Bob Ready - Chairman & Chief Executive Officer
Ron Stowell - Chief Financial Officer
Scott Ready - President of the Lighting Group
David McCauley - President of the Graphic Solutions Plus
Fred Jalbout - President of Technologies at Saco in Montreal.
Steve Brucker - Chief Information Officer
Glenn Wortman - Sidoti & Co.
Josh Baribeau - Canaccord Adams
Jim Ricchiuti - Needham & Co.
Jim Stone - PSK Advisors
Previous Statements by LYTS
» LSI Industries Inc., F2Q09 (Qtr End 12/31/08) Earnings Call Transcript
» LSI Industries Inc. F1Q09 (Qtr End 9/30/2008) Earnings Call Transcript
» LSI Industries, Inc. F4Q08 (Qtr End 06/30/08) Earnings Call Transcript
Now without further delay, I’ll turn your call over to Mr. Steve Brucker.
Good afternoon everyone and welcome. Today’s presentation is being supported with visual materials that you can access by visiting the LSI website at www.lsi-industries.com and clicking on the Investor Relations button. There it will take you to the in the slide presentation and will be able to follow along with us during the meeting here today.
If you’re not within convenient access of the internet at right this time, you can you dial in later and a replay of this presentation will be available this evening and now it’s my pleasure to introduce Mr. Bob Ready, the Chief Executive and Chairman for LSI Industries.
Thanks, Steve. Good afternoon everybody. As normal, what we’re going to do is kind of highlight a few things during the quarter. I have with me Ron Stowell, our Chief Financial Officer, Scott Ready, President of the Lighting Group, David McCauley, President of the Graphics Group and Fred Jalbout, President of Technology at Saco in Montreal.
I guess the only way to start off this conference call is thank god the year is over. It’s fiscal 2009 was probably the toughest year in my 48 year history and it has been a challenge to say the least.
However, with that said, I’m extremely pleased with the way our company has been able to operate through these difficult times, keeping our balance sheet as strong as it is, some of the important things that are beginning to happen as you probably aware the fact with our press release, just a few weeks ago, with the major rollout program that we are actually involved with right now from one of our major convenience food store customers.
We’re in the process of not only building product but installing that product in over 1100 sites throughout the North American market. That project will be completed by the end of December and we hope from the success of that project, not only will that customer see the benefits of the tremendous energy savings that are going to be incurred by taking off the old traditional lighting and replacing it with LED technology, that there will be more opportunity.
We also hope but in the competitive level, the competitors of our customer, as well as the sites are starting to be relit and may stimulate more opportunity with that same market. One of the things that we really achieved in the fourth quarter was the acquisition of AdL. Smaller company up in Columbus area, not too far from headquarters here, probably no more than an hour and half drive.
AdL is a company that we have been working with for a couple of years. It was a company that we sourced out in the process of developing some of our solid state drivers and circuit boards that are certainly present in our LED fixtures. That acquisition we feel is going to be extremely instrumental with specifically in the lighting side, but equally as important and as time goes on we will be implementing a manufacturing process at AdL to help in the development and the building of our modules for our video board displays.
It will take a couple of months, a few months to get those folks up to that direction, but that’s our intent and one of the main reasons why we made the investment. Fred is going to touch a little bit today in reference to our direction on the international market. We are very active now in pursuing a much broader process from an international level, certainly starting with the LED technology, but with Fred’s expertise we hope to expand that opportunity with some of our video displays as well.
David will touch base with you today, a little bit on a few items as it relates to the graphics business. Things are still pretty tough, obviously understanding that the graphics business, as you all know is more project driven. The retail segment of our economy has held pretty tight, but be that as it may, we’re out developing other areas of opportunity. We have an ongoing program with Stop & Shop and certainly CVS, but there are other things that Dave will touch on as well.
I think now, what I’d like to do is turn it over to Ron. He’s going to highlight a few things and then we’ll turn it right over to Q-and-A. Ron, if you would please.
Good afternoon, everybody. I will start off with the Safe Harbor statement, which I presented in the materials, but I think the main thing here is that we do not have any material nonpublic information to disclose today at today’s discussions. You’ve heard us talk about our areas of focus over the last several quarters and I’m just following up on those areas of focus.
First of all was spending. Spending in the SG&A, operating expense area, and as we look at that excluding the goodwill impairment that we’ve recorded, loss contingencies, the last year and the sales commissions what’s clearly vary on sales, so trying to get a bead on our spending. In the second half of fiscal ‘09 SG&A was down 17% and in the full year we were down 13% from fiscal 2008.
Manufacturing overhead spending, somewhat similar, actually my percentages are incorrect here. They were about 10% down for the full year, rather than the 13% that’s indicated here. The other area, next area of focus was our accounts receivable and our DSO, we’re very pleased to present in at 51 days as of June 30, ‘09 and just six months ago prior we were at 63 days. So in spite of the recessionary pressures, our customers are having a cash flow issues. We are still achieving one of the better DSOs that we’ve had in a long, long time.