Shares of LSI Industries (LYTS) Rally on LED Crossover(r) Contract, Purchase of Solid-State LED Engineering Business

June 30, 2009 2:45 PM EDT

Shares of LSI Industries (Nasdaq: LYTS) are rallying this afternoon following a press release which was issued last night. LSI announced:

• that it has been selected by a major petroleum/convenience store retailer to upgrade and re-image its canopy lighting, site lights, and security lighting on a nationwide basis utilizing LSI's recently introduced solid-state LED Crossover(r) lighting fixtures. In addition, LSI's graphics division will retrofit exterior fascia graphics lighting using LED technology for the convenience stores as well as have responsibility for project management and installation activities. The initial phase of this program will involve the conversion of over 1,100 individual retail stores. LSI believes this program represents the largest single national conversion of conventional-to-LED based lighting ever undertaken. Energy savings were a major 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.
  
• LSI has reached an agreement in principle to acquire a Columbus, Ohio based business, ADL Technology and related companies, that design, engineer, and manufacture custom designed circuit boards, assemblies, and sub-assemblies used in various applications including the control of solid-state LED lighting. Subject to completion of due diligence and finalization of a definitive purchase agreement, this acquisition is expected to close during the next 30 days. The purchase price is expected to be approximately $13 million, a significant portion of which is expected to be shares of LSI's common stock, plus the assumption of approximately $4 million of long-term debt. ADL has a history of profitable operations and the acquisition is expected to be accretive before giving effect to one-time transaction costs and non-cash amortization expenses.

Shares of LSI are currently up nearly 15% to $5.53 today.

Related Categories

Corporate News
Mergers and Acquisitions
Momentum Movers

Stocks Mentioned

Add Your Comment

Name

Subject

Body

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