"While the Graphics business improved slightly in FY2010, slow new construction and limited capital expenditures by our customers for remodels continues to limit the near term opportunities. We have adjusted our operating costs to reflect the current volume levels and remain prepared to adjust quickly should new roll out programs develop.
"With a slowly improving outlook combined with a strong cash flow and solid balance sheet, we have elected to continue the current indicated annual cash dividend rate of $0.20 per share for fiscal 2011. We believe that the cash dividends paid by LSI Industries are important to our shareholders and the current rate is comfortable for LSI. It would be our intention to once again increase the cash dividend rate once actual market conditions and operating results improve. LSI has paid regular cash dividends since 1989.
"We will be covering fiscal 2010 in a more detailed manner in our Annual Report to Shareholders. However, I would like to briefly mention the following:
- Applying the non-GAAP financial measures that management uses to evaluate business results, adjusted net income and earnings per share for fiscal 2010 were $2,785,000 and $0.12 per share, respectively.
- At June 30, 2010, our cash balance was $17,417,000, our current ratio 3.85 to 1, and shareholders' equity was $144.2 million with long-term debt of only $1.1 million. We have unused credit facilities of $35 million. We plan to maintain our strong unlevered balance sheet which supports our planned growth, capital expenditures, cash dividends, and possible future acquisitions.
- Our acquisition of AdL Technology about one year ago has proven to be very rewarding. This business contributes to our solid-state LED capabilities and has been fully integrated into LSI.
- Our iZone Technology Center has been a hit with customers. iZone has become an education center and an idea generator, a place where LSI can showcase its state-of-the-art, energy-saving lighting and graphics products.
- We made solid progress reorganizing and upgrading our lighting sales management and independent sales rep agencies.
- We initiated efforts to enter new geographic markets with our LED products, including Europe and the Middle East.
- We were rewarded by receiving the largest domestic order on record, including significant follow-on additional business, for the energy efficient re-lighting program of a large national convenience store customer utilizing our solid-state LED lighting.
- We made substantial investments to upgrade our metal fabrication capabilities to current computer-controlled technologies and to increase our digital printing capacity.
- We continued to protect and enhance our solid-state LED position with new technology and developments protected by additional patents.
- Our Graphics business is encouraged by the growth in our active digital signage business throughout fiscal 2010, and continues to see evidence that the activity level in the Quick Serve Restaurant and Convenience Store market segments indicate strong potential for fiscal 2011.
"As we look to fiscal 2011 and beyond, LSI Industries is well-positioned to capitalize on improvements in the economy and our niche and general markets both in lighting and graphics. I look forward to reporting future progress and developments as the fiscal year progresses."