LSI Industries Inc.

Greetings and welcome to the LSI Industries Fiscal Second Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jim Gilles, Chief Financial Officer. Thank you, Jim. You may begin.

Good morning, everyone, and thank you for joining. We issued a press release before the market opened this morning detailing our fiscal second quarter 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 gap measures for improved transparency of our operating results. A complete reconciliation of second quarter gap and non gap results is contained in our press release in 10 Q. 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 10K and 10Q. Today's call will begin with remarks summarizing our fiscal second 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, and good morning all. Thank you for joining us on today's call. As you've likely seen from our press release, we had another strong quarter in our Q2 fiscal 23. In fact, this is our seventh consecutive quarter of double-digit organic growth. It's quite an accomplishment given the ongoing headwinds of the general economy, ongoing supply chain challenges, and disruptions in the construction market. My hats off to the entire team at LSI, along with our agents and partners. Sales for the quarter were up more than 16% year over year, net income up over 107%. We had strong free cash flow performance, and I'm happy to say our net debt sits around $60 million, which is a 1.3 times net leverage ratio. We're in a good spot going into the second half of the year, and Jim Glees will provide a deeper dive of the financials in a few minutes. Our strategy around vertical markets continues to pay dividends and is reflected in our growth. While no market is recession proof, we do believe that a good swath of our various vertical markets has provided us with some hedge against the current headwinds and have proven to be recession resistant, creating growth opportunities that outpace the performance of the general economy. Our refueling market continues to perform well. Although recovery in Mexico continues to lag our expectations, we have developed opportunities in other locations that are offsetting our delayed projects in Mexico. In the second quarter, we substantially completed approximately 200 site rebranding projects in Puerto Rico for a major oil retailer. This represents our first major project in Puerto Rico and demonstrates the strength of our systems and processes which allowed us to substantially complete this major project in a new market without a blip. We will continue to look for those types of opportunities and expand accordingly. As many of you have seen, we issued a press release a few weeks back regarding a solar installation we completed for an oil retailer in Austin, Texas mid-year last year. A few months of the system running and operating, we were able to provide some interesting numbers in regards to energy savings and the payback period related to the initial investment. We see the canopy at most petroleum retail locations as an untapped opportunity, and this project is a good example of how we can turn this unused space into a real profit center for both us and our customers, let alone the environmental impact of the clean energy production. I want to caution everyone that this is simply a first step but it does go a long way into underlining the opportunities and possibilities of expanding products and services we can offer in our various vertical markets. Our grocery store vertical continues to deliver above expectations. In this last quarter, we were awarded another major project by one of the nation's largest retail grocery store chains to provide approximately 1,200 to 1,500 units of refrigerated and non-refrigerated display solutions which we will substantially complete and deliver by the end of this fiscal year. We continue to provide various print and lighting solutions to a wide group of our grocery customers, and we're experimenting with some other goods and services we can offer to this market. I hope to have some interesting news to share with you regarding these efforts next quarter. Our automotive market continues to show a number of growing opportunities and engagement of our team in a number of new projects. This week, our automotive sales team will be attending the National Association of Automotive Dealers, NADA, trade show, and continue to advance our position in this market. Despite several external factors affecting new and used car sales, this market continues to show good, solid activity. Lastly, our sports court market has been moving along nicely with a number of larger wins recently. As we've spoken before, Our company does have some seasonality built into our normal sales cycle. With our focus on outdoor lighting solutions, it means that a good section of our sales are exposed to the realities of winter, cold weather, and construction activities that slow during winter months. Q2 and Q3 normally represent our slower months, and although I do not expect us to outsmart winter, we have been very fortunate with a record-setting third quarter last year and a very robust Q2 this year. You can be assured we'll be looking for every opportunity to keep that momentum going. Next week, we will be hosting our annual national sales meeting in Cincinnati. For these meetings, we bring all our sales, marketing, product development, and engineering resources together for a very full agenda. As we've done in the past, we will have a combination of workshops, sales training, product training for our sales and marketing folks. This is a big investment that has historically paid big dividends, and we're excited to make this investment and move forward with this meeting. Immediately following our national sales meeting, we will be hosting our third annual partner and agent virtual sales and tech meeting, sharing lessons learned from our national sales meeting along with new product introductions and best practices learned over the last year. Going into Q3, our quote activity across all sectors remains strong. We are still facing some significant headwinds, but we believe many more opportunities ahead of us, and we're working to improve both our top line and our bottom line. With that, I'll turn the call over to Jim Gilles for a deeper look at our financials.