LSI(US:LYTS)2022-09-09 21:06Financial Performance - Fiscal 2022 net sales reached $455.1 million, an increase of $139.5 million or 44.2% compared to fiscal 2021 net sales of $315.6 million[116]. - The Lighting Segment generated net sales of $233.4 million, up $44.4 million or 23.5% from fiscal 2021, driven by strong demand and new product introductions[126]. - The Display Solutions Segment saw net sales of $221.7 million, an increase of $95.1 million or 75.1% from fiscal 2021, attributed to the acquisition of JSI and growth in key markets[130]. - Operating income for fiscal 2022 was $21.2 million, a $13.2 million increase from $8.0 million in fiscal 2021, with adjusted operating income rising to $25.0 million, up 93% from $13.0 million[118]. - Net income rose to $15.0 million in fiscal 2022 from $5.9 million in fiscal 2021, with diluted earnings per share increasing to $0.54 from $0.21[137]. - Gross profit for the year ended June 30, 2022, was $109.21 million, representing a gross margin of 24.0%, up from $78.97 million in 2021[179]. Order Backlog and Future Revenue - The company reported a backlog of orders totaling $112.4 million as of June 30, 2022, compared to $89.7 million in the previous year, with all orders expected to be shipped or installed within twelve months[31]. - The Company had a backlog of orders of approximately $112.4 million as of June 30, 2022, compared to $89.7 million as of June 30, 2021, indicating a significant increase in expected future revenues[64]. Research and Development - Research and development costs for new product development totaled $3.6 million in fiscal 2022, slightly down from $3.7 million in fiscal 2021, indicating ongoing investment in innovation[29]. - The company’s ability to develop new products is critical for maintaining competitive position, with risks associated with technological obsolescence and market acceptance[50]. Manufacturing and Operations - The company operates eleven manufacturing facilities across six U.S. states and one in Ontario, Canada, having added four facilities from the acquisition of JSI Store Fixtures in May 2021[25]. - The company utilizes lean manufacturing principles to enhance product quality and manufacturing efficiency, while also managing supply chain risks by increasing safety stock for certain components[26][27]. - The company focuses on energy-efficient LED lighting solutions, with all products designed for performance, reliability, and ease of installation[20]. Competitive Environment - The company faces competitive pressures in both segments, with risks including economic downturns, labor shortages, and potential disruptions in supply chains impacting operating margins[30][40]. - The company faces competitive pressures that could affect selling prices and operating results, with some competitors having greater financial resources[47]. - A significant concentration of net sales is in the refueling and convenience store and grocery markets, making the company vulnerable to changes in these sectors[48]. Financial Position and Debt - Long-term debt increased to $79.6 million in fiscal 2022 from $68.2 million in fiscal 2021, resulting in net debt of $77.1 million[125]. - The Company has a $75 million revolving line of credit and a $25 million term loan, both subject to interest rate fluctuations[85]. - The company expects to generate cash from operations to pay down debt or invest in short-term investments[85]. Inventory and Accounts Receivable - Net accounts receivable grew to $77.8 million in fiscal 2022 from $57.7 million in fiscal 2021, reflecting increased sales[140]. - Net inventories increased by $15.5 million to $74.4 million in fiscal 2022, driven by a $12.0 million increase in the Lighting Segment[141]. - The company recorded an allowance for credit losses of $499,000 as of June 30, 2022, up from $256,000 in 2021, indicating a rise of 94.5%[201]. Employee and Compensation - The company has 1,380 full-time employees and 149 agency employees, offering a comprehensive compensation and benefits program[34]. - Stock compensation expense rose to $3,288,000 in 2022 from $1,977,000 in 2021, an increase of 66.4%, indicating higher compensation costs associated with stock awards[187]. Legal and Regulatory Risks - The Company may incur substantial costs related to legal proceedings and compliance with environmental regulations, which could adversely affect operating profits[66]. - The company is committed to investing in cybersecurity measures to protect its information systems from potential attacks and disruptions[56]. Shareholder Returns - The Company authorized a new share repurchase program allowing for the repurchase of up to $15 million of its common stock[81]. - A quarterly cash dividend of $0.05 per share was declared in August 2022, indicating an annual cash dividend rate of $0.20 per share for fiscal 2022[148].