LSI Industries (LYTS) Delays 10-Q Filing, Plans to Amend Certain Prior Filings Related to Goodwill

May 19, 2009 8:21 AM EDT

LSI Industries Inc. (Nasdaq: LYTS) today announced that it will amend its Annual Report on Form 10-K for the fiscal year ended June 30, 2008 and Form10-Q for period ended December 31, 2008 to revise the amount of goodwill impairment expense reported. LSI expects to file its Form 10-Q for the period ended March 31, 2009 after the filing of such amendments. The net effect on the March 31, 2009 balance sheet is unchanged from that reported in the Company's press release of May 11, 2009.

Goodwill impairment expense in the amount of $27,149,000 and $12,669,000 in the quarters ended June 30, 2008 and December 31, 2008, respectively, was recorded in the financial statements of the Company. Based upon the Company's analysis as of this date, the Company overstated the goodwill impairment expense by approximately $393,000 in these two periods, on a cumulative basis. A summary of the expected impact on the Company's consolidated statements of operations and balance sheet from what was originally reported can be seen on the release.

Additionally, the Company and its independent registered public accounting firm expect to report in the amended Form 10-K for the year ended June 30, 2008 a material weakness in its internal controls over financial reporting related solely to its goodwill impairment testing method which aggregated related reporting units together for the test, rather than testing each individual reporting unit for impairment of goodwill. The existence of this material weakness as of June 30, 2008 requires amendment of the Form 10-K and two subsequently filed Form 10-Qs.

As indicated in the Company's press release dated May 11, 2009, the revisions to the Company's impairment charges do not affect cash, liquidity, the cash dividend policy, tangible net worth, or the borrowing capability of LSI Industries. Adjusting for the change to the goodwill impairment calculations, the Company's revised balance sheet at March 31, 2009 is expected to be substantially unchanged with current assets of $89.8 million, current liabilities of $17.1 million and working capital of $72.7 million, and the current ratio remains at 5.26 to 1. Goodwill is expected to be reported at $1.8 million, an increase of approximately $0.4 million, and shareholders' equity is expected to be revised upward to $131.5 million. The Company has no long-term debt, and has borrowing capacity on its commercial bank facilities as of March 31, 2009 of $47 million. With continued strong cash flow, a sound and conservatively capitalized balance sheet, and $47 million in credit facilities, LSI Industries believes its financial condition is sound and capable of supporting the Company's planned growth, including acquisitions.

Unrelated to the revision of goodwill impairment expense, in these amended filings of the 10-K and 10-Qs the Company expects to realign its business segment reporting to break out additional segments. The Company's business segment reporting currently consists of a Lighting Segment and a Graphics Segment. The realignment and increase in the number of reportable business segments, which should be determined within approximately ten days, will not result in any changes to the Company's balance sheet, statement of operations, earnings per share, cash flow statement or financial position in any period.

Related Categories

Corporate News

Stocks Mentioned

Related Entities

• Dividend

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?