"New product development, particularly solid-state LED lighting, is a top priority at LSI Industries. LSI has established itself as a leader in designing, engineering, and manufacturing advanced energy-efficient lighting and graphics products. Expect to see new products introduced throughout fiscal 2011 and beyond.
"On the international front, LSI has now obtained all required European product certifications. We believe Europe and the Middle East are markets that have good potential for LSI's solid-state products and we hope to report progress in securing sales later this fiscal year.
"Market conditions for our lighting and graphics capabilities are clearly improving. We expect to see increasing interest in our energy-efficient lighting products, specifically our LED products, and in our world class graphics capabilities as we seek additional sales volume.
"In conclusion, our prior actions to adjust to recessionary influences and prepare for improving economic conditions are now benefiting our operating results. We have always believed the longer term was very bright for LSI Industries, and now the near and intermediate term horizon has improved substantially. LSI's financial condition and cash flow are strong. Our current indicated annual cash dividend rate is comfortable, and, as indicated in our letter to shareholders in the fiscal 2010 Annual Report, the Board of Directors may give consideration to increasing the cash dividend rate as market conditions and operating results improve. I look forward to reporting third and fourth quarter operating results to you."Balance Sheet The balance sheet at December 31, 2010 included current assets of $103.8 million, current liabilities of $23.8 million and working capital of $80.1 million. The current ratio was 4.37 to 1. The Company has shareholders' equity of $149.7 million, $1.1 million of long-term debt, and has borrowing capacity on its commercial bank facilities as of December 31, 2010 of $35 million. With continued strong cash flow, a sound and conservatively capitalized balance sheet, and $35 million in credit facilities, LSI Industries believes its financial condition is sound and capable of supporting the Company's planned growth, including acquisitions.