LSI Industries Inc.

Greetings and welcome to the LSI Industries Fiscal Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, please press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Jim Galeese, Chief Financial Officer. Thank you, sir. Please go ahead.

Good morning, everyone, and thank you for joining. We issued a press release before the market opened this morning detailing our fiscal fourth quarter and full fiscal year 2021 results. In conjunction with this release, we also posted a conference call presentation in the investor relations portion of our corporate website. at www.lsicorp.com. Information contained in this presentation will be referenced throughout today's conference call. Included are certain non-GAAP measures for improved transparency of our operating results. A complete reconciliation of fourth quarter GAAP and non-GAAP results is contained in our press release in 10-K. Please note that management's commentary and responses to questions on today's conference call may include forward-looking statements about our business outlook. Such statements involve risks and opportunities, and actual results could differ materially. I refer you to our Safe Harbor Statement, which appears in this morning's press release, as well as our most recent 10-K and 10-Q. Today's call will begin with remarks summarizing our fiscal fourth quarter results At the conclusion of these prepared remarks, we will open the line for questions. With that, I'll turn the call over to LSI President and Chief Executive Officer, Jim Clark.

Thank you, Jim. Good morning, all, and thank you for joining us on today's call. As you know, LSI's fiscal year runs July 1 through June 30, and as such, we'll be discussing fourth quarter and full year 2020 results on today's call. I'm proud to say that we finished the year with a strong fourth quarter and full year over year growth in a challenging environment. Our fourth quarter net sales increased 53% versus prior year, 22% sequentially from Q3, and 39% organically. Margins continue to improve and adjusted EPS rose to 12 cents versus 7 cents in the prior year. Jim Galeese will provide additional color on financial results in a minute. In fiscal year 21, we turned the COVID challenge into an opportunity, introducing more than 40 new or re-engineered products across the business. We introduced two new lighting lines, Opulence and LSI and Origin at Atlas. Both product lines represent new thinking in performance and design, and they allow our reps, agents, and employees to be more competitive and differentiated, while allowing our customers to benefit from the latest generation of are sustainable and energy efficient lighting solutions. In connection to our ongoing improvements in lighting fixtures, LSI continues to innovate in our lighting controls area. LSI developed an affordable entry-level control solution just over a year ago, and along with other third-party partner solutions, they allow us to provide multiple configurations to meet various customer requirements greatly improving the overall functionality and energy efficiency of our solutions. We estimate that almost 40% of our projects now include some type of system control, and that number will continue to grow. On the graphics side, now referred to as displayed solutions, our continued engineering developments introduced a new category of QSR visual display solutions, allowing for a single system on a chip approach that can be used across most of our projects in addition to our external graphics drivers products we have traditionally used. This system-on-a-chip approach vastly simplifies the manufacturing process and reduces onsite serviceable components while creating a more modern, flexible, and energy-efficient design. Along with the displayed solutions group is our latest acquisition, JSI. JSI provides display solutions in various markets with a particular strength in the grocery vertical. They design, manufacture, and deliver a variety of products from simple tabletop displays and cases to refrigerated solutions. The refrigerated solutions use a highly efficient modular design allowing a simple onsite service and energy efficient operation. JSI is also leading the way in the development and use of next generation refrigerants that will help to create environmentally sustainable systems for our customers. Lastly, I'd like to comment on our ADAPT business unit. ADAPT is our field services group, and they represent the deployment management team for our local and national customers. They service both large and small projects, including our petroleum, C-Store Vertical, Automotive, Grocery, and QSR customers, among others. This group continues to be an important asset to LSI, our reps, agents, and end-use customers. And they allow us to provide a single point of contact for a fully deployed system. They manage and arrange on-site services, including everything from site surveys, design work, permitting, and on-site contracting services, creating a single point of customer. In fact, it's with this group along with our Houston operations that deployed a contactless payment system last fall for one of our largest petroleum customers. They were responsible for coordinating the manufacture and design of the system graphics along with the installation and enrollment of each individual pump at more than 11,800 locations. I'm proud to say that this project was completed safely at the height of the pandemic and deployed across the country in less than 100 days. These stories and activities reflect the customer confidence in LSI. They demonstrate our commitment and our progress against an ongoing strategy that we developed two years back. Our commitment is to provide world-class service with highly efficient, sustainable products and solutions. We provide these solutions to the broad market, but we have a focus on key vertical markets, allowing us to differentiate ourselves from commodity products while expanding the value of the solutions we provide. In fiscal year 2021, the LSI management team, along with an energized and committed workforce, achieved year-over-year growth across both lighting and display solutions group. Our prior work in manufacturing efficiency, supply chain resiliency, engineering, and sales allowed us to meet our order commitments and capture new business in a challenging environment. I'm proud of the way our team and our company adapted to serve our customers and I want to take a moment to say thank you to the entire team for their efforts and more importantly, their contributions to our results. In fiscal year 2022, we are setting our sights even higher. We have used the last year to make continued progress against our strategic priorities and we enter 2022 with momentum. Our backlog entering the new year is strong and our orders are up. Our quote activity is the highest it's been since I joined the organization. We are continuing our focus on higher margin opportunities, focused on our key verticals. Our commercial and marketing efforts continue to improve, and we have strong price discipline in a highly dynamic market. We are engaged in a number of new exciting projects, including a rebounding effort of a large Southwest grocery chain, a number of automotive projects, our ongoing work in the Petro Sea Store market, and the new design and installation of a solar-assisted gas station and C-store in Texas. Our acquisition of JSI is off to a very strong start, and I'm happy to say they're having the highest billing months in the history of the company. Our commercial team has already begun the process of mapping out cross-selling and joint customer opportunities. Our operations team has implemented a cross-factory LSI-JSI manufacturing program to assist with a project for one of the world's largest e-retailers in expanding grocer. This is just the beginning and collectively the teams believe there are a number of areas we can work collaboratively to improve the effectiveness and efficiency of the operation. We are all excited by the opportunity ahead. In summary, I'm pleased with our progress we have made in 2021 and I'm excited about 2022. We have delivered on our commitments to our employees, our partners, our customers, and our investors. We have a high say-do ratio underpinned by a solid strategy. I'm confident in the position of our business moving forward, and I'm looking forward to the journey ahead. With that, I'll turn the call back over to Jim Galeese for comments on our financial performance.