What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-09-10 compared with 2020-09-11 · 67 added, 53 removed, 45 unchanged (73% of the section changed)

LSI Industries is a leading producer of high-performance, American-made lighting and graphics solutions.

The Company’s strength in outdoor lighting applications creates opportunities for it to introduce additional solutions to its customers.

LSI’s indoor and outdoor products and services, including its digital and print graphics capabilities, are valued by architects, engineers, distributors and contractors for their quality, reliability, and innovation.

LSI Industries Inc.

(LSI) is a leading producer of non-residential lighting and retail display solutions.

Non-residential lighting consists of high-performance, American-made lighting products.

The Company’s strength in outdoor lighting applications creates opportunities for it to introduce additional solutions to its customers.

Retail display solutions consist of graphics solutions, digital signage, and technically advanced food display equipment for strategic vertical markets.

LSI’s team of internal specialists also provide comprehensive project management services in support of large-scale rollouts.

Our business is organized as follows:

the Lighting Segment, which represented 67% of our fiscal 2020 net sales and the Graphics Segment, which represented 33% of our fiscal 2020 net sales.

the Lighting Segment, which represented 60% of our fiscal 2021 net sales and the Display Solutions Segment, which represented 40% of our fiscal 2021 net sales.

See Note 3 of Notes to Consolidated Financial Statements beginning on page 45 of this Form 10-K for additional information on business segments.

1 unchanged sentence

Lighting Segment

Graphics Segment

Display Solutions Segment

Total Net Sales

Lighting Segment

Our Lighting Segment manufactures, markets, and sells outdoor and indoor lighting solutions to the following markets including but not limited to:

petroleum/convenience markets, parking lot and garage markets, quick-service restaurant market, grocery and pharmacy store markets, the automotive market, and national retail accounts.

The Company reaches these customers through multiple channels including:

project job business sold through electrical distributors and shipped direct to the customer;

Our Lighting Segment manufactures, markets, and sells non-residential outdoor and indoor lighting solutions in the commercial and industrial markets, including the following vertical markets:

the petroleum/convenience markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports complex market.

We service these markets through multiple channels:

project job business sold through electrical distributors, agents, and shipped direct to the customer;

standard products sold to and stocked by distributors;

3 unchanged sentences

Our lighting fixtures, poles and brackets are produced in a variety of designs, styles, and finishes.

Important functional variations include types of mounting, such as pole, bracket and surface, and the nature of the light requirement, such as interior and exterior down-lighting, wall-wash lighting, canopy lighting, flood-lighting, emergency exit lighting, area lighting and security lighting.

Our engineering staff performs photometric analyses and wind load safety studies for our light fixtures.

In addition, our light fixtures are certified to UL, DLC, ROHS, and (for outdoor lighting) IDA standards.

Important functional variations include types of mounting, such as pole, bracket and surface, and the nature of the light requirement, such as but not limited to interior and exterior down-lighting, wall-wash lighting, canopy lighting, floodlighting, emergency exit lighting, area lighting and security lighting.

We also offer a variety of lighting controls including sensors, photocontrols, dimmers, motion detection and Bluetooth systems to support our lighting fixtures.

Our engineering professionals perform photometric analyses and wind load safety studies for our light fixtures.

In addition, our light fixtures are certified to UL, DLC, and (for outdoor lighting) IDA and IPC standards.

Our lighting products utilize LED light sources.

The major products and services offered within our lighting segment include exterior area lighting, interior lighting, canopy lighting, landscape lighting, lighting controls, light poles, lighting system design, and photometric layouts.

All of our products are designed for performance, reliability, ease of installation and service, as well as attractive appearance.

The Company also has a focus on designing lighting system solutions and implementing strategies related to energy savings in all markets served.

We offer our customers expertise in developing and utilizing high-performance solid-state LED solutions, which when combined with the Company’s lighting fixture expertise and control technology, has the potential to result in a broad spectrum of white light LED fixtures that offer equivalent or improved lighting performance with significant energy and maintenance savings as compared to conventional light sources.

Graphics Segment

Our Graphics Segment manufactures, sells and installs exterior and interior visual image elements such as traditional print graphics, interior branding, electrical and architectural signage, active digital signage along with the management of media content related to digital signage, and menu board systems that are either digital or print by design.

The major products and services offered within our Graphics Segment include the following:

signage and canopy graphics, pump dispenser graphics, building fascia graphics, decals, interior signage and marketing graphics, aisle markers, wall mural graphics, fleet graphics, menu boards, digital signage and media content management.

We also focus on designing lighting system solutions and implementing strategies related to energy savings in all markets served.

Display Solutions Segment

We acquired JSI Store Fixtures (JSI) in the fourth quarter of fiscal 2021 and consolidated it with our former Graphics Segment, which has been rebranded as our Display Solutions Segment, to more closely align our comprehensive product offering with the markets we serve.

The Display Solutions Segment manufactures, sells and installs exterior and interior visual image and display elements, including printed graphics, structural graphics, digital signage, menu board systems, display fixtures, refrigerated displays, and custom display elements.

The major products and services offered within our Display Solutions Segment include:

signage and canopy graphics, pump dispenser graphics, building fascia graphics, decals, interior signage and marketing graphics, aisle markers, wall mural graphics, and refrigerated and non-refrigerated merchandising displays.

We also provide a variety of project management services to complement our display elements such as installation management, site surveys, permitting, and content management which are offered to our customers to support our digital signage.

We also manage and execute the implementation of large rollout programs.

These programs provide graphics displays and visual image upgrades in several markets, including the petroleum/convenience store market, quick-service restaurant market, the grocery store and pharmacy markets, as well as customers with multi-site retail operations.

Our extensive lighting and graphics expertise, product offering, and visual image solution implementation capabilities represent significant competitive advantages.

We work with our customers and design firms to establish and implement cost effective corporate visual image programs to advance our customer’s brand.

Increasingly, we have become the primary supplier of exterior and interior graphics for our customers.

We also offer installation management services for those customers who require the installation of interior or exterior products (utilizing pre-qualified independent subcontractors throughout the United States).

These programs provide our customers a variety of display solutions and visual image upgrades in the same markets served in the lighting segment which include the petroleum/convenience markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports complex market.

We believe our expertise with the products and services we offer in the markets we serve represents a significant competitive advantage.

We work with our customers and design firms to establish and implement cost effective corporate visual image programs to advance our customer’s brand.

Increasingly, we have become the primary supplier of exterior and interior visual image and display elements for our customers.

Sales, Customers and Marketing

Our lighting products including lighting controls, are sold primarily throughout the United States, but also in Canada, Mexico, Australia, and Latin America (approximately 5% of consolidated net sales are outside the United States) using a combination of regional sales managers and independent sales representatives for the various markets we serve.

The products and services we offer are sold primarily throughout the United States, but also in Canada, Mexico, Australia, and Latin America (approximately 4% of consolidated net sales are outside the United States).

Our lighting product sales originate from two primary revenue streams.

1 unchanged sentence

The second revenue stream is from selling standard product to stocking distributors, who subsequently provide product to electrical contractors and end users for a variety of lighting applications.

Our graphics products, which in many instances are program-driven, are sold primarily through our own sales force.

Sales are developed through a wide variety of contacts such as, but not limited to, national retail marketers, branded product companies, franchises, and dealer operations.

In addition, sales are also achieved through recommendations from local architects, engineers, petroleum and electrical distributors and contractors.

Our display solution elements and related services, which in many instances are program-driven, are sold primarily through our own sales force.

Sales are developed through a wide variety of contacts such as, but not limited to, national retail marketers, branded product companies, and franchised and dealer operations.

In addition, sales are also achieved through recommendations from local architects, engineers, and electrical distributors and contractors.

The Company utilizes the latest technology to track sales leads and customer quotes with the goal to turn them into orders from our customers.

Our sales are partially seasonal as installation of outdoor lighting and graphic systems in the northern states decreases during the winter months.

The Company did not have any customers whose annual consolidated sales exceeded 10 percent of total net sales in fiscal 2020 or 2019.

The Company markets its products and service capabilities to end users in multiple channels through a broad spectrum of marketing and promotional methods, including direct customer contact, trade shows, on-site training, print advertising in industry publications, product brochures and other literature, as well as the internet and social media.

We have made investments in our marketing support team to continue to build awareness of LSI’s product and service capabilities.

Our sales are partially seasonal as installation of our non-residential outdoor lighting and visual display solutions in the northern states decreases during the winter months.

The Company had one customer program with annual consolidated sales exceeding 10 percent of total net sales in fiscal 2021.

The Company markets its products and service capabilities to end users in multiple channels through a broad spectrum of marketing and promotional methods, including direct customer contact, trade shows, on-site and virtual training, print advertising in industry publications, product brochures and other literature, as well as the internet and social media.

We have made investments in our marketing support team to continue to build awareness of LSI’s product and service capabilities.

Our marketing approach and means of distribution vary by product line and by market.

Manufacturing and Distribution

We currently operate out of seven manufacturing facilities in four U.S.

In the first quarter of fiscal 2020, the Company sold its New Windsor, New York facility, and moved production from this location to our Cincinnati, Ohio and Independence, Kentucky locations.

In the third quarter, the Company sold its North Canton, Ohio facility.

We currently operate out of eleven manufacturing facilities in six U.S.

states and one in Ontario, Canada.

In the first quarter of fiscal 2020, the Company sold its New Windsor, New York facility, and moved its production from this location to our Cincinnati, Ohio and Independence, Kentucky locations.

In the third quarter of fiscal 2020, the Company sold its North Canton, Ohio facility.

In conjunction with the sale of the North Canton facility, we moved to a smaller manufacturing facility in Akron, Ohio.

1 unchanged sentence

based manufacturing along with a diverse and redundant supply chain.

We design, engineer and manufacture most of our lighting and graphics products through the utilization of lean manufacturing principles.

The Company added four manufacturing facilities resulting from the acquisition of JSI which included manufacturing facilities located in Maine, Utah, and Canada.

We design, engineer and manufacture most of our lighting and visual display products through the utilization of lean manufacturing principles.

Our investment in our production facilities is focused primarily on improving capabilities, product quality, and manufacturing efficiency as well as environmental, health, and safety compliance.

The majority of products we sell are engineered, designed and assembled by the Company, while a small portion of the products we sell are purchased from select qualified vendors .Our lighting and graphics products are delivered directly from our manufacturing facilities to our customers utilizing third-party common carriers.

The principal raw materials and purchased components used in the manufacturing of our products are steel, aluminum, aluminum castings, fabrications, LEDs, power supplies, powder paint, steel tubing, wire harnesses, acrylic, silicon and glass lenses, inks, various graphics substrates such as Aluminum Composite Material (ACM), Expanded PVC sheet (EPVC), vinyl film, styrene, foamboards, and digital screens.

The majority of products we sell are engineered, designed, and assembled by the Company, while a small portion of the products and components we sell are purchased from select qualified vendors.

Our lighting and visual display products are delivered directly from our manufacturing facilities to our customers utilizing third-party common carriers.

The principal raw materials and purchased components used in the manufacturing of our products are steel, aluminum, aluminum castings, fabrications, LEDs, power supplies, sensors, powder paint, steel tubing, wire harnesses, acrylic, silicon and glass lenses, inks, various graphics substrates such as Aluminum Composite Material (ACM), Expanded PVC sheet (EPVC), vinyl film, styrene, foamboards, wood and wood laminates, condensing units, and digital screens.

We source these materials and components from a variety of suppliers.

Although an interruption of these supplies and components could disrupt our operations, we believe generally that alternative sources of supply exist and could be readily arranged.

We are not dependent on any one supplier for critical component parts.

Although an interruption of these supplies and components could disrupt our operations, we believe generally that alternative sources of supply exist and could be readily arranged prior to the COVID-19 pandemic.

As a result of the pandemic, we have increased our safety stock in certain components in order to mitigate a potential disruption to our operations resulting from an anticipated shortage of these same components. We are not dependent on any one supplier for critical component parts.

We strive to reduce price volatility in our purchases of raw materials and components through annual contracts with strategic suppliers.

Our Lighting operations generally carry a certain level of sub-assemblies and finished goods inventory to meet quick delivery requirements.

The Company’s operations dealing with LED products generally carry LED and LED component inventory due to longer lead times.

Most lighting products are made to order and shipped shortly after they are manufactured.

Our Graphics operations manufacture custom graphics products for customers who require us to stock certain amounts of finished goods in exchange for their commitment to that inventory.

Our digital signage business requires us to carry an inventory of digital screens to meet the demands of a large roll-out program.

In some Graphics programs, customers also give us a cash advance for the inventory that we stock for them.

Our display solutions operations manufacture custom products for customers who require us to stock certain amounts of finished goods in exchange for their commitment to that inventory. An example is our digital signage business where customers require us to carry an inventory of digital screens to meet the demands of a large rollout program.

Research and Development :

3 unchanged sentences

We experience competition in both segments and in all markets we serve based on numerous factors, including price, brand name recognition, product quality, product design, prompt delivery, energy efficiency, customer relationships, reputation, and service capabilities.

Although we have many competitors, some of which have greater financial and other resources, we do not compete with the same companies across both segments and all markets.

In addition, there have been a growing number of new competitors in the lighting segment, most notably those companies selling lower cost Asian imports.

Although we have many competitors, both nationally and internationally, some of which have greater financial and other resources, we do not compete with the same companies across both segments and all markets.

Working Capital

For a discussion of our working capital, see “Liquidity and Capital Resources” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations."

For a discussion of our working capital, see “Liquidity and Capital Resources”

in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations."

Backlog Orders

We had a backlog of orders, which we believe to be firm, of $26.2 million and $30.7 million at June 30, 2020 and 2019, respectively.

We had a backlog of orders, which we believe to be firm, of $62.1 million and $26.2 million at June 30, 2021 and 2020, respectively.

Fiscal 2021 includes the backlog of JSI.

All orders are expected to be shippable or installed within twelve months.

3 unchanged sentences

Failure to comply with such provisions could result in fines and other liabilities to the government or third parties.

We have 1,072 full-time employees and 29 agency employees as of June 30, 2020.

We offer a comprehensive compensation and benefits program to our employees, including competitive wages, medical and dental insurance and a 401(k) retirement savings plan.

The Company offers a nonqualified deferred compensation plan, an equity-based incentive plan and an incentive plan that is based upon the achievement of the Company’s business plan goals, for certain employees.

Human Capital

The Company works to attract and retain the best of the best.

We have 1,335 full-time employees as of June 30, 2021.

We have a long tenured workforce and are an employer of choice for many of the best employees in our industry.

From the executive office to the shop floor, we believe that every LSI team member plays an important role in the Company’s success.

As a responsible employer, we offer attractive and rewarding career opportunities to people from every background and education level.

In addition to providing competitive pay and benefits, including multiple health care options, life insurance and more, we work hard to foster a work environment that encourages innovation, teamwork, and safety every day.

We take a structured and scientific approach to safety in order to help ensure that all of our employees end their shifts as safely as they started them.

We also promote active and healthy lifestyles within the company, as well as within the communities in which we operate.

As part of that vision, we provide free onsite wellness examinations to all of our employees.

We strongly believe that LSI’s success depends on employees understanding how their work contributes to the Company’s overall strategy.

To this end, we utilize a variety of channels to facilitate open and direct communication, including open forums or town hall meetings with the CEO along with regular ongoing update communications.

Information Concerning LSI Industries Inc.

We file reports with the Securities and Exchange Commission (“SEC”) on Forms 10-K, 10-Q and 8-K.

The SEC maintains an internet website that contains reports, proxy and information statements and other information regarding us.

The address of that site is http://www.sec.gov .

Our internet address is http://www.lsi corp .com .

Our internet address is http://www.lsicorp.com .

We make available free of charge through our internet website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practical after we electronically file them with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business