What changed in this filing

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Item 1. Business

2022-09-09 compared with 2021-09-10 · 40 added, 48 removed, 64 unchanged (58% of the section changed)

1 unchanged sentence

(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.

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

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

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

Our business is organized as follows:

the Lighting Segment, which represented 51% of our fiscal 2022 net sales and the Display Solutions Segment, which represented 49% of our fiscal 2022 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.

See Note 3 of Notes to Consolidated Financial Statements beginning on page 48 of this Form 10-K for additional information on business segments.

Net sales by segment are as follows (in thousands):

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Lighting Segment

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.

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

refueling and convenience store, parking lot and garage, quick-service restaurant, retail, grocery and pharmacy, automotive dealership, sports court and field, and warehouse.

We service these markets through multiple channels:

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

project business sold through electrical distributors and agents and shipped directly to the customer;

standard products sold to and stocked by distributors;

and direct to end-use customers.

Our products are designed and manufactured to provide maximum value and meet the high-quality, competitively priced product requirements of the markets we serve.

Focusing on key market applications allows us to deliver unique product solutions which in turn provides value to our customers.

Our products are designed and manufactured to provide maximum customer value and meet the high-quality, competitively priced product requirements of the markets we serve.

Focusing on key vertical applications allows us to deliver unique product solutions, which in turn provide differentiated value to our customers.

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 but not limited to interior and exterior down-lighting, wall-wash lighting, canopy lighting, floodlighting, emergency exit lighting, area lighting and security lighting.

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, flood lighting, 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.

In addition, our light fixtures are certified to Universal Labs (UL), DesignLights Consortium (DLC), International Dark-Sky Association (IDA, for outdoor lighting) and Institute for Printed Circuits (IPC) standards, to name a few.

Our lighting products utilize high efficient LED light sources.

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

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

In addition, 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.

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, store 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 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 also manage and execute the implementation of large rollout programs with our professional services group.

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 following markets:

refueling and convenience store, quick-service restaurant, retail, grocery and pharmacy, and automotive dealerships.

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.

We work with our customers and design firms to establish and implement cost-effective corporate visual image programs to advance our customer’s brands and deliver value to their customers.

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

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The first revenue stream is from project-based business, quoting and receiving orders as a preferred vendor for product sales to multiple end-users, including customer-owned as well as franchised and licensed dealer operations.

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.

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

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.

In addition, sales are also achieved through recommendations from local architects, engineers, 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 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.

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Manufacturing and Distribution

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.

These changes allowed us to leverage our existing footprint in Ohio, Kentucky, North Carolina, and Texas while strengthening our commitment to U.S.

based manufacturing along with a diverse and redundant supply chain.

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

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

states and one province in Ontario, Canada.

The Company added four manufacturing facilities resulting from the acquisition of JSI Store Fixtures (May 2021), 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.

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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.

Our lighting and display solutions 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 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.

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.

As a result of challenges encountered in the supply chain, we have increased our safety stock in certain components in order to mitigate potential disruption to our operations resulting from an anticipated shortage of certain 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.

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We had a backlog of orders, which we believe to be firm, of $112.4 million and $89.7 million at June 30, 2022, and 2021, respectively.

Fiscal 2021 includes the backlog of JSI.

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

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

Environmental Regulations

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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.

We recognize that in order to drive innovation, growth, and operational excellence, we must identify, attract, retain, and motivate top talent.

Our approach is to develop talent from within and supplement with external hires. We are committed to building a diverse, inclusive, and engaged workforce.

Our management teams and all of our employees are expected to exhibit the principles of fairness, honesty, and integrity in the actions we undertake.

Our employees must adhere to a code of conduct that sets standards for appropriate behavior and includes required annual training on preventing, identifying, reporting, and stopping any type of unlawful discrimination or unethical actions.

We have 1,380 full-time employees and 149 agency employees as of June 30, 2022.

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.

Information Concerning LSI Industries Inc.

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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.

The information found on our website is not part of, or incorporated by reference into, this or any other report we file with, or furnish to, the SEC.

In addition to these channels, we use social media to communicate to the public.

It is possible that the information we post on social media could be deemed to be material to investors.

We encourage investors, the media, and others interested in LSI to review the information we post on the social media channels listed on our Investor Relations website.

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