The initial phase of this program will involve the conversion of over 1,100 individual retail stores. Energy savings were a key motivation for this conversion program. Work is already underway and revenues related to this new program will favorably affect fiscal year 2010. Revenues for this phase of the project are expected to be between $22 million and $23 million. Additional follow-on conversions for this customer’s stores not included in the initial phase are also possible later in fiscal years 2010 and 2011.
Robert J. Ready, president and chief executive officer, commented, These are two very positive developments for LSI Industries. Working together, our lighting and graphics business units were very effective in demonstrating to a major national customer the fundamental advantages and attractiveness of converting to solid-state LED lighting. Very clearly, the interest and momentum in LED-based lighting solutions is growing rapidly. Evidence of this interest in LEDs is everywhere, from trade shows to customer inquiries, to the popular press. LSI has taken the necessary steps to become a leader in providing advanced solid-state LED lighting products through its various Crossover(r) product lines which are designed to serve its core niche markets as well as the broad commercial and industrial lighting market. Naturally, we are very pleased to have been selected to provide our new energy saving products for the largest-to-date national rollout of solid-state LED lighting. I truly believe this is only the beginning of what will become a dominant trend as the many benefits of LED lighting drive the market.
So as to further establish and advance our leadership position in LED lighting, we made the decision to vertically integrate our capabilities in connection with designing, engineering, and producing the solid-state electronics that control and power LEDs. For the past two years, we and our Montreal-based engineers at LSI Saco Technologies have been working with the talented engineering and manufacturing people at ADL Technology. As part of the LSI family, ADL will allow us to stay on the leading edge of product development while at the same time providing opportunities to drive down manufacturing costs and control delivery of key components. ADL’s capabilities will also have applications in our other LED product lines such as digital scoreboards, and advertising ribbon boards and billboards. The owners of ADL will be joining the management team of LSI and we look forward to many benefits from this continuing relationship as we plan for the future and the resumption of growth in our markets and the general economy.
Ready went on to say, As I have stated in past conference calls, we have been actively developing an international presence for our LED product lines. I am pleased to say we now have our first UK based prototype installation in place and initial reports indicate the customer is extremely pleased with the results. . As more sites are converted to LSI’s LED lighting fixtures, we will be putting in place a very aggressive marketing and sales direction. We see the opportunity for solid-state LED lighting to serve both the domestic and international markets. This rather dramatically expands our potential for higher sales and profits as we address export sales. We continue to place high value on maintaining a sound and conservative balance sheet. This will also be true after the ADL acquisition, as a significant form of consideration is expected to be LSI’s common stock. Our balance sheet at March 31, 2009 included current assets of $89.8 million, current liabilities of $17.1 million and working capital of $72.7 million. The current ratio was 5.26 to 1. The Company has shareholders’ equity of $131.1 million, no long-term debt, and has borrowing capacity on its commercial bank facilities as of March 31, 2009 of $47 million.
LSI Industries is a US-based provider of corporate visual image solutions.
