LSI Industries Inc. · NASDAQ:LYTS
LSI Industries — Investor Presentation (September 2022)
33 slides from LSI Industries's investor presentation, September 2022
Slide 1: Investor Presentation
NASDAQ: LYTS INVESTOR PRESENTATION SEPTEMBER 2022
Slide 2: Disclaimer
DISCLAIMER This presentation contains “forward-looking statements”—that is, statements related to future events within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In t
Slide 3: Company Overview
COMPANY OVERVIEW • Leading vertically integrated commercial indoor/outdoor lighting and display solutions company – strong foundation with entrenched position in growing vertical markets Serving Our Marketplace from • Commenced successful business transformation in 2018 under new 11 Manufacturing le
Slide 4: Vertical Market Focus
VERTICAL MARKET FOCUS Vertical Markets Automotive Refueling & C-Store QSR Retail & Grocery Parking Sports Complex Warehouse Market Driven Portfolio Lighting Solutions Display Solutions Services Indoor Outdoor Controls • Printed Graphics • Creative Services • Structural Graphics • Site Surveys • High
Slide 5: Uniquely Positioned in Target Markets
UNIQUELY POSITIONED IN TARGET MARKETS • Conglomerates • Vertical / Application Solutions Driven • Standard / High Volume • End-User Driven Specifications • “Telephone Book” Portfolio • Competency with Modification and Customization • Convert Focused Specialist to Standard Volume • Strong Engineering
Slide 6: Strong Customer Engagement
STRONG CUSTOMER ENGAGEMENT • We provide integrated lighting and display solutions to a growing base of long-tenured customer brands • Our marketing, technical and program management expertise provide customers with a one-stop solution that is unique in the markets we serve • Our customer contracts r
Slide 7: Sustained Multi-Year Growth
SUSTAINED MULTI-YEAR GROWTH LSI Fiscal Year (FY) Begins July 1st, Through June 30th • Focused growth in +11.4% +70.8% higher margin 3-Year CAGR 3-Year CAGR targeted verticals, improved $455.1 Adj. Operating Income ($MM) Adj. Operating Margi n (%) operational $3 0.0 5.5% 56 . % execution and $328.9 $
Slide 8: Sustained Multi-Year Growth
SUSTAINED MULTI-YEAR GROWTH LSI Fiscal Year (FY) Begins July 1st, Through June 30th • Within Display +33.3% (0.2)% Solutions segment, 3-Year CAGR 3-Year CAGR new customer wins within QSR, grocery $221.7 $235.1 $233.4 and c-store vertical $206.2 $189.0 driving revenue $126.6 growth $99.4 $93.7 • With
Slide 9: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES 1 2 3 Organic and Inorganic Reduce Net Leverage Return of Capital Growth • Organic – Invest in New Product • Allocate Free Cash Flow • Committed to Supporting a Development / Innovation, Sales Generation Toward Reduction in Regular Quarterly Cash / Marketing Capabilitie
Slide 10: The Path Forward
THE PATH FORWARD Bridging to 2025
Slide 11: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE Environmental Factors Social Factors Governance Factors LSI takes its commitment to the As America strives to become more A key component of our approach to environment very seriously. As demand energy-efficient, our products allow ESG is our Code of Business Ethic
Slide 12: The Path Forward
THE PATH FORWARD EXPAND CHANGE BUILD GROW Our Vertical Focus Our Customer Engagement Services Business Through Acquisition Provide Differentiated Transition to High- Shift from “Client Focus on Bolt-On Value through Direct Value Channel Support” Model to a Acquisitions that Engagement of Both Engage
Slide 13: Expand Our Vertical Focus
EXPAND OUR VERTICAL FOCUS EXPAND EXPAND EXPAND Share of Wallet Served Available Market Increase Addressable Market Focused Growth Within Expand Partnership Model Expand to New Attractive our Customer Base by to New Customers within a Verticals that Align with Building Upon Current Vertical LSI Value
Slide 14: Refueling & Convenience Store
REFUELING & CONVENIENCE STORE CANOPY FASCIA LED ACM FASCIA PRINTED 3D CANOPY LOGOS UNDER CANOPY ILLUMINATION GRAPHICS LED ILLUMINATION LED FIXTURES INDOOR LIGHTING DIMENSIONAL SIGNAGE & GRAPHICS DIGITAL MENUS GRAB-N-GO REFRIGERATION FIXTURES INDOOR GRAPHICS / FIXTURES AREA, SOFFIT, & WALL MOUNTED LI
Slide 15: Grocery
GROCERY DIMENSIONAL AREA LIGHTING & POLES SIGNAGE & GRAPHICS PEDESTRIAN & WALL MOUNTED LIGHTING TASK & DECORATIVE LIGHTING PARKING LOT INDOOR LIGHTING FRESH REFRIGERATION DIMENSIONAL FIXTURES SIGNAGE & GRAPHICS INDOOR DISPLAY FIXTURES INDOOR GRAPHICS / LIGHTING ©2022 LSI INDUSTRIES 15
Slide 16: Automotive
AUTOMOTIVE HIGH BAY LIGHTING WALL MOUNTED & TASK LIGHTING FAÇADE FIXTURES OUTDOOR VEHICLE DELIVERY FIXTURES SERVICE BAY ARCHITECTURAL & TROFFER LIGHTING GRAPHIC & AREA LIGHTS / POLES DIGITAL SIGNAGE SOLUTIONS OUTDOOR SHOWROOM ©2022 LSI INDUSTRIES 16
Slide 17: Quick Serve Restaurants (QSR)
QUICK SERVE RESTAURANTS (QSR) DRIVE THRU LIGHTING AREA LIGHTS / POLES DIGITAL SIGNAGE WALL MOUNTED & DIGITAL FAÇADE FIXTURES MENU SERVICE DRIVE THRU / MENU BOARDS DIGITAL SIGNAGE & MENU SERVICE INDOOR LIGHTING DIMENSIONAL SIGNAGE & GRAPHICS OUTDOOR LIGHTING INDOOR LIGHTING / MENUS ©2022 LSI INDUSTRI
Slide 18: Change Our Customer Engagement
CHANGE OUR CUSTOMER ENGAGEMENT Engage Beyond Go-Forward End-User Focus The Agent • There is Value in Having Both Agency and Direct Relationships Grow Direct • As we Move Higher on the Value Chain with More Customer Specialized Products, Access to the Customer is Relationships Increasingly Critical •
Slide 19: Build a Services Business
BUILD A SERVICES BUSINESS SCALABLE • Provide a Differentiated Customer Value SERVICE MODEL Proposition • Margin Shift to Higher FUTURE EXPANSION Professional Services • Turnkey Installations Profile • Maintenance Contracts SERVICE BUSINESS • ESCO Services • Unique Advantage Over • End-to-End Integra
Slide 20: Grow Through Acquisition
GROW THROUGH ACQUISITION Criteria • Vertical Enhancement • Geography TARGETS • Vertical Expansion • Adjacent Space Stronger Balance Sheet • Strong Vertical Position • Complementary to Core and Enhanced • Market Insulation • Expanded Capabilities Liquidity ATTRIBUTES • Focused Specialist • Broadens S
Slide 21: JSI Store Fixtures
JSI STORE FIXTURES Established Market Leader Rapidly Growing, High-Margin Manufacturer of Merchandising Solutions • Milo, Maine corporate headquarters Multi-channel growth opportunity in $2.2 billion market that is • 30 years of industry experience Attractive Market 1 expected to see continued growt
Slide 22: Established, Multi-Channel Product Portfolio
ESTABLISHED, MULTI-CHANNEL PRODUCT PORTFOLIO Diversified Based of Large, Long-Tenured National Customer Accounts • JSI serves 13 of the top 20 pure-play NA grocers • Average customer tenure is 15 years • Organic growth in refrigeration is innovation-driven • Pharmacy, QSR and foodservice represent a
Slide 23: Investment Thesis
INVESTMENT THESIS 1 Strong Growth Across Key Metrics. F4Q22 sales +31% y/y and +16% sequentially (from F3Q22); Adjusted Operating Income +75% y/y to $8.1 million; Adjusted EBITDA +56% y/y to $10.6 million; Adjusted Net Income +81% y/y to $6.0 million 2 Market Conditions Remain Favorable. Continue to
Slide 24: Projected Financials
PROJECTED FINANCIALS LSI Fiscal Year (FY) Begins July 1st, Through June 30th • Given strong FY22 results, LSI remains on track to meet or exceed FY25 guidance of $500 million in sales, $50 10.0% $500 million of Adjusted $60 10.0% $450 EBITDA and 10% EBITDA 8.0% $50 $50 margins 8.0% $305 $40 $36 4.9%
Slide 25: Appendix
APPENDIX
Slide 26: Statement on Non-GAAP Financial Measures
STATEMENT ON NON-GAAP FINANCIAL MEASURES This presentation includes adjustments to GAAP operating income, net income and earnings per share for the twelve months ended June 30, 2022 and 2021. Operating income, net income and earnings per share, which exclude the impact of stock compensation expense,
Slide 27: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES LSI Fiscal Year (FY) Begins July 1st, Through June 30th Free Cash Flow ($MM) • Generated free cash flow of $8.0 $8.0 million in Q4FY22, versus $2.7 million in the PY $3.3 period ($8.2) ($9.1) • Positive cash flow in second half of fiscal 2022, following ~$20 million inv
Slide 28: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION LSI Industries Q3 2021 Q2 2022 Q3 2022 Q4 2022 Lighting Segment Q3 2021 Q2 2022 Q3 2022 Q4 2022 Net Sales [a] 72,204 111,143 110,111 127,470 Net Sales [a] 45,740 57,276 57,126 67,786 Operating Income 2,096 4,422 5,161 7,175 Operating Income 3,797 4,623 4,959 7,022 Acquisition
Slide 29: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION ©2022 LSI INDUSTRIES 29
Slide 30: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION ©2022 LSI INDUSTRIES 30
Slide 31: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION Full Year Full Year LSI Industries Q4 2021 Q4 2022 FY 22 FY 21 Lighting Segment Q4 2021 Q4 2022 FY 22 FY 21 Operating Income - Reported 1,046 7,175 21,201 8,030 Operating Income - Reported 3,809 7,022 20,942 13,328 Severance costs and Restructuring 9 8 11 26 Severance costs a
Slide 32: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION Three Months Ended Twelve Months Ended June 30 June 30 2022 2021 (In thousands, except per share data) 2022 2021 Diluted Diluted Diluted Diluted EPS EPS Reconciliation of net income to adjusted net income EPS EPS $ 5,176 $ 0.18 $ 198 $ 0.01 Net income as reported $ 15,032 $ 0
Slide 33: For Additional Questions, Please Contact
For Additional Questions, Please Contact 720.778.2415 Thank You, LSI Investor Relations
LSI Industries — Investor Presentation (September 2022) on 6ix