LSI Industries Inc.

and welcome to LSI Industries' fiscal first quarter 2024 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 Gillies, Chief Financial Officer. Thank you, Mr. Gillies. 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 24 first quarter results. In addition to this release, we also posted a conference call presentation in the investor relations section of our corporate website. 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 GAAP and non-GAAP results is contained in our press release and 10Q. Please note that management's commentary and responses to today's 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 first 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 today. As you have likely noted from our press release, we had solid results in our first quarter of fiscal year 2024. We continue to improve business operations in nearly every category, and the commitment of our team and their ability to execute continues to be demonstrated each day. adjusted net income for the quarter was up 23% adjusted EBITDA came in at 12.2% we had an EPS of 29 cents which was up 4 cents from last year and free cash flow is better than 9 million for the quarter bringing our net depth to 25 million while sales remain steady as you may recall from my last call I spoke about our fast-forward plan at LSI this plan is outlines our business goals and objectives extending out the fiscal year 2028 and it is regularly shared with our entire management team in company personnel it is also posted on our website under our investor relations section the plan has some ambitious goals in top line sales margin performance profitability and the markets that we intend to serve with any goal or acquired skill you plan and practice your craft to advance to the point where you are proficient in the execution and confident in your ability to repeat and control the motions and activities that advance you towards your goal. In some cases, progress is swift, and in others, it will require repeated effort and fine-tuning in order to advance. I'm sure that all of you have experienced a journey like this before. Anyone that has tried to develop a new skill a habit or advance towards some goal, understands it's the speed in which you progress can vary, and external factors are always at play. Along those lines, I wanted to remind everyone that our goal is to be an $800 million company with 12.5% adjusted EBITDA performance or better in 2028. The reason I point this out, this quarter we achieved 12.2%, in adjusted EBITDA for the quarter. This accomplishment helps demonstrate to the team at LSI that this level of performance is well within our reach. And if we continue to focus in practice, we can sustain that level of performance and reach even further in the future. Now with that said, I want to remind you all that much like our path to 10% EBITDA, there will be ups and downs in our journey to 12.5% or better. Some quarters will be better than others, but we will learn from each. I do not expect that we will regularly perform at this elevated 12-plus percent level just quite yet, but I do know that we can get there, and I think this quarter shows it. As I look out short-term, we know that Q2 and Q3 are typically seasonally affected, and lower utilization puts pressure on our margins. Last year, we had the best Q2 performance in the company's history. In fact, it was our single best quarter ever. And as I mentioned in the past, we do not expect that every Q2 will be like that. In fact, I expect that we will have some settling and realignment this year. As I mentioned over the last four or five quarters, our quote activity remains at very high level, but our quote to conversion time has been extended. and it continues to be less predictable than it has in the past. Permitting issues have stabilized, but they're still unpredictable. Supply from other trades, particularly electrical switchgear, remains unsteady, and this slows project time. Our automotive vertical, which interestingly enough has had a very strong demand for the last few years, is a bit less predictable right now, which I'm sure is connected to the Big Three's labor negotiations. Our grocery segment has a lot of potential and program interest, but is also a bit constrained right now due to a probable merger and divestitures and a seasonal pause that occurs as the holidays approach. As I look forward to the next few quarters, we have some challenges, but we also have some exciting and meaningful opportunities in front of us. We have a number of new products, new commercial efforts, a number of focused marketing programs, and continued progress in our operational efforts. Last week, we were awarded the second phase of lighting in our ongoing involvement in the new EV power plant battery manufacturing facility in Kentucky. This award was even larger than the first award, and it goes to underline customer confidence in our product quality and our ability to deliver. In addition, we also noted last week that we have been awarded a large 7,000 site multi-year brand refresh program for a major oil retailer. This is all good news and it speaks well for continued opportunities in front of us. From an operational perspective, just yesterday, I was in our new Bangor, Maine facility. This is a location that will be responsible for the production of our new zero-ozone depleting R290 refrigerated solution. I'm happy to say that things are progressing well, and as we stand right now, we will begin production in this facility and delivery in Q3. Customer interest in this product is high, and our team is excited to have this offering in our article solution. I also had the chance to visit our Milo main bill work facility. We've been putting time into reforming this factory, and I had the opportunity to see the results of our ongoing changes to our manufacturing process, which helps us to optimize production and reduce waste improved margins, all while adding additional capacity and capability. Two weeks ago, I was in our Burlington, North Carolina facility. This location is responsible for our stock and flow lighting business, Atlas Lighting. We're in the middle of what we call lighting season within this business. Typically, this is the time of year we see an increase in maintenance and repair of outdoor lighting in preparation for shorter days and longer nights as winter sets in across the U.S. This is an area where Atlas tends to shine. There's a lot of potential opportunity here, and I'm very confident in this team's ability to deliver, and I'm looking forward to seeing the results of this coming quarter. Lastly, I wanted to make note that we have recently completed a number of changes to our print graphics division, Akron, Ohio. Whereas over the summer, we consolidated print operations into our Houston, Texas plant, which we expect will yield a number of costs and operational efficiencies along with increased capabilities. Our ADAPT project management group and our digital menu board program management team remains in Akron. All in all, we expect a strong year in 2024, but we are aware of a number of external factors that could affect timing and progress. Our automotive vertical, our grocery vertical, and our work in warehousing could all be affected over the next few quarters as mergers, labor talks progress, and the holiday seasons affect project time. We do not see any of these disruptions as structural risks, and we are confident that any impact would be limited to timing only. Our team is committed and innovative, and we expect to continue our journey to 800 million in 2028. I want to thank you all again for turning into the call. And with that, I will turn the call back over to Jim Gilles for a deeper look at our financials.