Lsi Industries Inc. · NASDAQ:LYTS
Lsi Industries — Q1 FY2021 Earnings Presentation
23 slides from Lsi Industries's earnings presentation, Oct 29, 2020
Slide 1: First Quarter Fiscal 2021 Results Conference Call Presentation
FIRST QUARTER FISCAL 2021 RESULTS CONFERENCE CALL PRESENTATION OCTOBER 29, 2020
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements and Non-GAAP Financial Measures This presertation contains “Yorwarcooking statements"—that I, statements related to future events within the meaning of the Private Secures Ligation Reform Act of 1995. The Private Secures Ligation Reform Act of 1995 provides a sa
Slide 3: Key Messages
KEY MESSAGES First Quarter Fiscal 2021 Results ransformation Strong Consolidated Financial Results CContinuedstratagefocus on higher marginvertical ‘market applications, customer driven new product ‘Year-over-year growth inadjusted grossmarginrate, net evelopment, manutacturngexcellerceandaiscipined
Slide 4: Consolidated Financial Results
CONSOLIDATED FINANCIAL RESULTS & Higher-margin application focus and cost controls contributed to improved profitability ‘Total Net Sales ($M) Operating Income ($M) + covibdriventowerFa20 yan: we fecloges ovr pected ea T Flom sie 7 + improvedopeag income cientyeraseisoner om raat serstmenerene agund
Slide 5: Lighting Segment Update
LIGHTING SEGMENT UPDATE & Strong margin capture on lower sales; improved project backlog entering F2Q21 Lighting Segment Ssles($M) ight nt Gross Marsin| ‘+ Revenue increased sequentially Saas eer Project backlog. Soli Sse se si Se “Ho See DacklogenteringF202 ry rr sheeeredGicc Mage mAgutedGcaMargn L
Slide 6: Graphics Segment Update
GRAPHICS SEGMENT UPDATE & Strong rebound in graphics sales; major program commitments remain unchanged 1+ improvedvolumeandiower ‘operatingexpenses contributed Graphics Segment Sales ($M) Graphics Segment Gross Margin ($M) toy/ygrowthinsegment ‘peratingincomesnd Adjusted eaTDA sais ss = T 546 $47 |
Slide 7: Improved Working Capital Management
IMPROVED WORKING CAPITAL MANAGEMENT Aligning working capital with current demand environment “Total Working Capital ($M) ‘Total inventory ($M) ‘+ Non-cash workingcaptaldectned 25% y/y with ultipleworkng ‘eaptalcomponentscontributing “inventory declined BMV 1+ Maintaining inventory levels tor ertical
Slide 8: Growth in Free Cash Flow Generation
GROWTH IN FREE CASH FLOW GENERATION & Positive trend in both F1Q21 and TTM free cash flow generation ree Cash Flow = F1Q20 vs. F1Q21 (SM) Fee Cash Flow ~ TM F1Q20 vs, TTM F1Q21 ($M)..2 + Bxcudingassetsales F121 and ‘TIM freecash flow both Increased signtfeantlonay/y basis sie ‘support organicand ino
Slide 9: Disciplined Balance Sheet Management
DISCIPLINED BALANCE SHEET MANAGEMENT No long-term debt outstanding; ~$85 million of cash & availability on LOC [Net Debt Outstanding ($M) Net Debt /TTM Adjusted E81TDA $388 $311 million dolar change 1 tomnet cath postive i inves state | - 07x osx Long-Term Debt Free reais Fiqzo Faz F302 FAG FGA Faqs
Slide 10: The Path Forward
THE PATH FORWARD Targeting $500 million of revenue & double-digit EBITDA in Fiscal 2025 EXPAND CHANGE BUILD GROW Our Vertical Focu Ou Gstomer reegrrent Services Busines: Through Acquisition Provide Differentiated Value Transition to High-Value Shift from “Client Support” Focus on Bolt-On Acquisition
Slide 11: Expand Our Vertical Focus: Increase SOW and SAM
t EXPAND OUR VERTICAL FOCUS & 1 Increase SOW and SAM with current customers Vertical Markets EXPAND EXPAND: Share of Wallet Served Available Market Customer Base by Building Upon New Customers within a Vertical Current Relationships and Vertical } Knowledge ——
Slide 12: Expand Our Vertical Focus: Growth in New Verticals
Jt, EXPAND OUR VERTICAL FOCUS & ¥ Growth in new verticals Verticals EXPAI Increase Addressable Market + Niche, Non-Commoditized Market + Supports Margin Expansion High Barriers to Entry + Low Price Sensitivity Stable, Growing End-Markets * Leverages Our Unique Value Proposition Customer-Driven Uniqu
Slide 13: Change Our Customer Engagement
CHANGE OUR CUSTOMER ENGAGEMENT & Migrating closer toward the customer Go-Forward Ent r Focus * There is Value in Having Both Agency and Direct Relationships + Aswe Move Higher on the Value Chain with More Specialized Products, Access to the Customeris Increasingly Critical Grow Direct Customer Relat
Slide 14: Build a Services Business
mmm = BUILD A SERVICES BUSINESS MMM Addresses customer pain point + Provide a Differentiated Customer Value Proposition SCALABLE SERVICE MODEL + Margin Shift to Higher Professional Services Profile FUTURE EXPANSION + Turkey installations + Unique Advantage Over + Maintenance Contracts Industry Compe
Slide 15: Grow Through Acquisition
GROW THROUGH ACQUISITION Focused on complementary and adjacent spaces + Vertical Enhancement + Geography TARGETS * Vertical Expansion + Adjacent space + Strong Vertical Position + Complementary to Core + Market insulation + Expanded Capabilities ATTRIBUTES + Focused Speci + Broadens Services + Organ
Slide 16: Investment Summary
INVESTMENT SUMMARY & American-Made Company Positioned for Profitable Growth EXPAND Our Vertical Focu CHANGE Customer Engagement BUILD Services Business GROW Through ‘ere si moustRes Integrated Lighting / Graphics Solutions Company with Adjacent Growth Opportunities in Services Businesses ‘Strong Fou
Slide 17: Appendix
@ APPENDIX
Slide 18: Statement on Non-GAAP Financial Measures
STATEMENT On Non-GAAP FINANCIAL MEASURES ‘This presentation indudes adjustments to GAAP operating inceme,netinceme an earnings per share forthe three menth ended September 30, 2020.nd 2019. Operating income, net income and eamings per share, which exdude the impact of restructuring and plant dosure
Slide 19: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION 12020 91 2020 an2021 luted Es Net income $ 4am $047 $ 4819'S 006 S$ 1990S Restructuring and plant closure coss (guns) Gate) (0.13) zl oo 2 Severance costs = : a2 oor : ‘Stock compensation expense 29 oot % 200 Taxlimeact de tothe change inthe estimated annual a ‘ate ued or GAA
Slide 20: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION tstinguseies 912020 _at2021 Net Soles [a] ‘8700 70006 Gross Margin 2195518272 Restructuring ad lant dsure cos (ins) 258 3 Aajusted Grose Margin) 2241318275 ‘Adjusted Goss Martin % (b1/[s] 79% 261" Lighting Segment Net ales (a) Gross Margin Restructuring and plant csure costs
Slide 21: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION Astindosies ‘ax2020 042020, Operating income Crd Resting nd lant closure coats ge) sss) 29, ehtingSerment et Sues[a) ‘peztraieome estuctuingard pre clsure cost (i) Severance cone Stock compensaon expense [Adsted Operating come Deprecistionand amorestion ‘Adjusted EBITDA) ‘Adu
Slide 22: Non-GAAP Reconciliation
Non-GAAP RECONCILIATION Istinduseres 1912020 22020 32020 42020 a1 2021, Debe vim 1047 7819 ‘ah asm ast aan Net Debt Outstanding EK Istingusoies 1012020 _q22020 032000 _42020__ai 2021, Net cash ows (sedin provided by operating actives 6359 145 «BAO «RSI 7839 Purchases of propery plant, and equipment
Slide 23: Thank you, LSI Investor Relations
4 For access to our full investor presentation, please visit our investor relations website at https://investors.|sicorp.com or contact our investor relationsteam at 720.778.2415 Thankyou, LSI Investor Relations