Kiniksa Pharmaceuticals Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
April 27, 2023

There are 3 speakers on the call.

Operator

Good day, and welcome to the LSI Industries' Fiscal Third Quarter 2023 Earnings Conference Call.

Speaker 1

Good morning, everyone, and thank you for joining. We issued a press release before the market opened this morning detailing our fiscal 3rd quarter results. In conjunction with this release, we also posted an conference call presentation in the Investor Relations portion of our corporate website at www.ellsicorp.com. Information contained in this presentation will be referenced throughout today's conference call, included are certain non GAAP measures for a complete transparency of our operating results. A complete reconciliation of 3rd quarter GAAP to non GAAP results contained in our press release and 10 Q.

Speaker 1

Please note that management's commentary and responses to questions on today's conference call may include forward looking statements about our business outlook. Such statements involve risks and opportunities and actual results may differ materially. I refer you to our Safe Harbor statement, which appears in this morning's press release as well as our most recent 10 ks and 10 Q. Today's call will begin with remarks summarizing our fiscal Q3 results. At the conclusion of these prepared remarks, we will open the line for questions.

Speaker 1

With that, I'll turn the call over to LSI President Chief Executive Officer, Jim Clark. Thank you, Jim, and good morning all. Thank you for joining us on today's call. As you've likely seen from our press release, we had another strong quarter in our Q3 fiscal 'twenty three. It's hard to believe that we are over just about 60 days from the end of our fiscal year and I could not be prouder of the efforts and progress of our employees, agents and partners as well as the continuing confidence of our customers choosing LSI to be the partner of choice.

Speaker 1

Sales for the quarter were up more than 7% year over year with net income up over 29%. We had a strong free cash flow performance and I'm happy to say our net debt is below $50,000,000 with a one time net leverage ratio. We are in a good spot going into the Q4 of the year. Jim Feliz will provide a deeper dive of the financials in a few minutes. Lighting provided another strong quarter of growth with sales increasing 17% and operating income increasing 31% in what is historically a weaker quarter for LSI against a very strong Q3 last year.

Speaker 1

As you may have noted last week, we published a press release providing an overview of a recent win with a large EV battery manufacturing plant being built in Kentucky. This is one of the largest manufacturing development projects in Kentucky's history It says a lot about the confidence of the customer in LSI that we were chosen to be the lighting provider for this project. It also says a lot about the culture's nature of our selling efforts and the capabilities of our company. As you all know, we have a manufacturing facility in Kentucky and I'm thrilled that we were able to support a project of this size and complexity with folks that live and work in Kentucky. Thank you to everyone to recognize the importance of this decision.

Speaker 1

Over the last few weeks, we've had a flurry of customer and agent activity in our facility for both lighting and display solutions. It's great to have the opportunity to sit down and talk with these folks that are making decisions that impact their company's performance. Just this week, we have more than 30 of our top automotive agents in house for training and discussions. I can honestly say that almost all of our conversations contain an acknowledgment and an appreciation for the values we hold dear, The culture of our company and the focus on meeting our commitments, our vertical market orientation and respect for our customers continues to pay dividend and I'm confident that it will never go out of style and hopefully never go unnoticed. Speaking of our Distributed Solutions Group, we continue to work on a large number of developing opportunities and projects, including ongoing activity in our digital and print menu boards along with a 4 60 site renovation project for a large oil company.

Speaker 1

Our mobile displays group offering both refrigerated and non refrigerated displays had a record breaking performance in the Q3, while building some real momentum in the C store refueling marketplace. Our ability to offer even more goods and services to our grocery and C store customers underlines the opportunities we see in front of us, and I'm thrilled with the progress we are making. New products and innovations continue to be a cornerstone of our performance over the last few years And I'm happy to say that the Company continues to demonstrate our commitment to ongoing investments in this area. Last quarter, we talked about a number of new product introductions in our Lighting segment, including the ReadyMound. This quarter, I'm happy to announce a very meaningful investment in the Display Solutions Group.

Speaker 1

With continued growth in this segment and opportunities in the future, We are expanding our footprint with our refrigerated displays group, adding more than 65,000 square feet of manufacturing, research and development space. More importantly, raising the capacity and capability to provide next generation refrigerated solutions with the addition of an R290 based product. R290 is an environmentally friendly, non toxic, propane based gas refrigerant. It is free of ozone depleting properties and is currently one of the most climate friendly solutions available and we're excited to be able to offer this option to our customers. I don't mention this topic on these calls, I'd like to point out that LSI is making a real impact on the environment.

Speaker 1

From energy savings that are provided by our LED solutions, the reduction in light pollution and the use of ozone friendly products to the way we run our factories, We're proud to be doing our part meaningfully and positively impacting the environment. Going into Q4, our quote activity and prospects across all sectors remain strong. We're still facing some headwinds, but we believe that many opportunities lie in front of us and continue to work to improve both our top line and bottom line. With that, I'll turn the call over to Jim Gleece for a look at our financials. Thank you, Jim.

Speaker 1

Q3 was an active quarter from several perspectives. We delivered a solid quarter of financial performance, demonstrated durable sustained operational execution and we continue to make progress on key growth initiatives. I'll briefly comment on all three. Let me start with summary financials. Sales for the quarter were 7% above last year, building on the record setting fiscal Q3 last year.

Speaker 1

Adjusted operating income, net income and EBITDA all increased, with adjusted operating income increasing 47%, while adjusted EBITDA of $11,200,000 improved 32%. Trade expansion was achieved in all margin categories with adjusted operating income and adjusted EBITDA improving 210 and 190 basis points, respectively. Volume, coupled with improved program pricing favorable program mix, all attributed to the rate expansion. Adjusted diluted earnings per share were 0 point 19 dollars versus $0.15 last year, increasing our year to date earnings per share to $0.70 60 2 percent above prior year EPS of $0.43 Free cash flow generation was strong for the quarter, dollars 11,700,000 increasing our fiscal year to date cash flow to $31,000,000 Increased earnings and a reduction in working capital which was responsible for the significant year over year improvement. Inventory decreased for the 2nd consecutive quarter, while successfully supporting 7% sales growth, reflecting ongoing stabilization and reliability in the supply chain.

Speaker 1

Our strong free cash flow reduced net debt to $48,000,000 at the end of the quarter, net debt increasing $35,000,000 over the last 12 months. As a result, the ratio of net debt to trailing 12 month adjusted EBITDA declined to an even one times. Lower debt levels provide the financial stability and optionality for the business moving forward. As part of our capital allocation, the company declared a regular cash dividend of $0.05 per share payable on May 16th to shareholders of record on May 8. Now some brief comments on segment performance.

Speaker 1

Lighting had an excellent quarter with sales increasing 17% and operating income improving 31%. We continue to make progress in the market, increasing sales in all major verticals. I referenced growth initiatives in my opening comment and we have multiple in Lighting. Lighting has historically had a strong position in outdoor applications. But as part of our overall critical market strategy and objective of increasing our customer share of wallet, we have been strengthening our capabilities for indoor applications.

Speaker 1

As a result, the growth rate for indoor applications is measurably above our total growth rate, enhancing our overall position with customers. Flotation activity for Vieng remains healthy levels equal to the high fiscal Q3 levels last year. As we've mentioned previously, We are experiencing a lengthening quote to order conversion period, which has increased the backlog of outstanding quotes. While we expect activity to remain healthy, the length in quote to order conversion could cause timing fluctuations moving forward. For the Display Solutions segment, earnings increased measurably on slightly lower sales.

Speaker 1

Total Q3 sales were down 4%, driven by the forecast decrease on digital signage shipments as the large QSR program peaked in the second half of fiscal 'twenty two. This will also impact additional signage sales in Q4 as we transition to the indoor phase of the program as well as early phase activity in other programs. Order and inquiry demand remained steady in other verticals and products, including mobile display cases to the grocery vertical and static or print graphics for the petroleum C store environment. Operating income for Display Solutions increased 23% on slightly lower sales, driven by a 430 basis point improvement in gross margin, reflecting strong improved program management pricing and favorable program mix. We continue to aggressively pursue growth initiatives in the Display Solutions segment as well.

Speaker 1

To highlight, In March, we announced the lease of additional manufacturing space, providing additional capacity to support the ongoing market demand for Refrigerating Display cases and as Jim mentioned support the planned introduction of new products. In addition, cross selling initiatives continued, including several pilot projects for display cases into the C store vertical. In summary, Q3 was a successful quarter for LSI with improved financial performance and continued progress on our growth initiatives. Given the current environment of broader economic uncertainties, We continue to be diligent, maintaining a strong focus on operational execution, including margin and cash flow management.

Operator

Comes from Aaron Petchlin with Craig Hallum. Please go ahead.

Speaker 1

Good morning, Jim and Jim. Thanks for taking the questions. 1st on QSR, maybe you touched

Speaker 2

a little bit on it, thank you,

Speaker 1

Jim, at the end. But just maybe an update on the large digital menu award.

Speaker 2

It sounds like we're kind of wrapping that up, at least in the

Speaker 1

Good to see translating to a new pilot award for a new customer. Maybe just can

Speaker 2

you share a little more details on potential size, Anything on rollout or timing there?

Speaker 1

Yes. Good morning, Aaron. Jim Park here. Thanks for the question. I mean, the QSR, particularly on digital menu board continues to do well.

Speaker 1

We have rolled up substantially off of the big program. I think our peak It was probably Q2, Q3 of last year, and we've been working that down as that project became wholly complete. We have picked up other elements with that particular customer specifically doing what started off as a $20,000,000 indoor order now moving to a $30,000,000 indoor order. It's just timing in coordination on their side right now. So, we don't anticipate that taking off until Q1 of next year.

Speaker 1

But Subsequent to that, we've been infilling it for quite some time with other customers and we do have another couple of larger projects that we've been looking at that We're very hopeful. But I would say that what you're not going to see is So, a big drop off. You're just going to see the beginning projects was large, but then we had time to develop all of these Small or medium sized projects. And there are still large projects sitting out there. If you think about what happened to them during an inflationary period, anybody that had menu board was really at a disadvantage to move their pricing.

Speaker 1

And it's really created a sense of Awareness, I won't say urgency, but awareness and with some sense of speed counts. So, we're happy with the activity that's going on there. And all the activity you see moving forward has really just been infill as that project has kind of substantially completed. And then maybe second, just as you see the margin expansion, especially incremental margins,

Speaker 2

given the supply chain challenges. Can you just maybe give

Speaker 1

us an update there? You kind of mentioned some stabilization, but

Speaker 2

what are you seeing in the market? Is permitting still kind of the biggest Which point?

Speaker 1

And then just how you think

Speaker 2

that margins maybe turned over the near term?

Speaker 1

Yes. So depending on the projects Reviewing any type of retrofit or anything like that permitting is the number one issue we're running into. Sometimes we're delayed by progress of maybe another contractor or something like that. Advanced construction has just a litany of things that are putting pressure on it. Permittings, 1, Switchgear, I'm sure you guys hear all the time.

Speaker 1

From what we understand, and we stay close to a lot of the electrical guys, Switch gears, still massive demand, massive back orders and just time seeking to fill. But from a margin standpoint, it was primarily mix. A very favorable mix and good pricing discipline has Allowed us to maintain those margins. All right. And then maybe last for me.

Speaker 1

Just Anything on fiscal 'twenty three targets you kind of provided back in March, maybe an early read on the Q4. I know you have a Nice comp year over year there as well. And then

Speaker 2

just thinking about that even the kind of talk on conversion cycles.

Speaker 1

You're saying I'm just trying to make sure I understood that right, fiscal 'twenty four targets or fiscal 'twenty three targets?

Speaker 2

No, just kind of I

Speaker 1

think 1st March when you gave kind of the fast forward, there was some FY 'twenty three. So just kind of any early read

Speaker 2

on what the Q1 might look like?

Speaker 1

I mean, I think it's going to remain fairly strong. We're anticipating staying right in the range that we expect We certainly have our eye on fully completing that hitting that $500,000,000 mark, It's just a lot of market conditions continuing to win on every front and we anticipate A solid Q4, but I wouldn't want to give any specific guidance right now, but I think it's safe to say we'll be

Operator

Our next question comes from Amit with H. C. Wainwright. Please go ahead.

Speaker 2

Thank you. Good morning, everyone. I appreciate you

Speaker 1

taking my questions. And then congrats on another really solid quarter.

Speaker 2

Jim, to begin with, maybe on the operating margin and cash flow side, is there room for leverage to continue coming through as you go revenues or are you at a point now where you need to add some more resources?

Speaker 1

Hi, Amit. Tim Gillece here. No, there's certainly his room. We're successful in continuing to meet Our growth objectives that provides the leverage to continue to see margin rate expansion, but as well as invest in some of The key resources in order to make that happen. So it's not an either or.

Speaker 1

If we're continuing to grow the business that provides the leverage for margin expansion and also providing the opportunity to continue to achieve reinvestments. And you see some of those investments we're making on I mentioned in the beginning of the call, our step into next generation refrigerants on our refrigerated line with R290. Last quarter, we talked extensively about the introduction of our ReadyMount product. We continue to be committed to investing in new products and in new markets. And so I think there is still, from Jim Gleece's point, still a lot of opportunity for

Speaker 2

us. Understood. The Q2 orders in Brazil and any sort of pipeline build out, is there an impact on The interested environment on how customers are thinking about placing orders or just

Speaker 1

No. I mean, we're not I certainly don't want to be The guy that says there's no impact, but I'm going to tell you that if we're not seeing it from a day to day business standpoint, meaning incoming orders and inquiries certainly not being affected by the interest rate environment. I do think that there are still a number of external things are going on that are affecting a continuing pace like we are and most of them are external to us, Labor resources, permitting, switchgear, we've heard and in fact, we've heard it from our people and then we saw an article in the Wall Street Journal may be a bit slower. So talking about large project demand, it's all still there, but a lot of the Ultra large contractors and stuff are being very selective actually turning projects down mostly because of the constraint around personnel and And equipment in product, we're certainly not being exposed to that, but in terms of our ability to deliver, but they are being So, it's only in the sense that some of those projects are slowing, not slowing in terms of demand, but just moving along slower than we would have anticipated.

Speaker 2

Thank you.

Speaker 1

Understood. And just

Speaker 2

one last one for me.

Speaker 1

On the lighting side, how is the

Speaker 2

customer base changing In terms of maybe a year or 2 ago, is it more sort of industrial customers

Speaker 1

with this onshoring trend that

Speaker 2

is going on, especially in for manufacturing type of development. Are we seeing more of those types of customers come through versus what you might have described previously. Just to get a sense of what direction

Speaker 1

the writing business is heading towards? Yes. I think we're seeing growth across the board in general. What we are seeing I wish I could say that all of our customers appreciate the domestic manufacturing and that they all turn a blind eye to And that they all turn a blind eye to import product. Unfortunately, they don't.

Speaker 1

I was Extremely happy that this RGV win, they consider that an important element. And I really like the fact that we have a factory in Kentucky. We here in Ohio, we're very close to that facility and we have people that are making these products Live and work in the state and live and work in joining states that will be contributing to this project. A big project and we're very proud to be associated with it. And I know that our folks will be driving by and pointing it out for a long time.

Speaker 1

I wish there was more of that that went on. There was more recognition of U. S. Built and U. S.

Speaker 1

Company and that type of thing. But where it is strong, it's strong. And where it's That type of thing. But where it is strong, it's strong and where it's not, it's we're still able to compete. We make a good product.

Speaker 1

We're proud of it. We're managing price really well. We're managing our margin really well. Product quality is strong. And so, we have a lot Selling reasons for folks to buy from us.

Speaker 1

And it would be nice, though, if the made in America was a stronger lever.

Speaker 2

Understood. Have you named the EV manufacturer Imerich business?

Speaker 1

I did not. We did not. But I would just say it's one of the big three.

Speaker 2

Okay. That's all I answered. Thank you so much for taking my questions offline.

Operator

Our next question comes from George Stavantos with Canaccord. Please go ahead.

Speaker 1

So I guess,

Speaker 2

you mentioned Some of the timing issues, some of the delays from that you're seeing in the marketplace, but you still expect to see

Speaker 1

a good close to the year and to the year to

Speaker 2

your $500,000,000 target. So I just

Speaker 1

if you could help us understand how to quantify this impact. Are you just kind

Speaker 2

of giving us color on the marketplace as opposed to any sort of articulating any Any sort of financial impact to the firm as we close out the year?

Speaker 1

Yes. I mean, I think that would be accurate. We're just giving observations of what's going on outside, Packer is outside of our control. We I think that over the last few years, we've kind of bucked the trend about macro Things happening in the macro market, if you will, versus things that are happening to us. From an internal standpoint, the observation that I think Tim was trying to underline is quote activity.

Speaker 1

Quarter after quarter after quarter, and How many inquiries there are and what that activity is as to an early indicator of how much we'll get in orders. It doesn't it's not steady enough to be an absolute predictor or anything like that. It is an interesting statistic to look at. I think what we've taken on lately, and when I say lately, I mean 3 to 5, maybe even 6 months, is we're seeing initial inquiry to the taking up and finalization of the quarter. The activities remain high, but the time between That first inquiry and the time between the second and the close inquiry is lengthening.

Speaker 1

And most of the time, it's lengthening, not because there's Not because interest rates went up and not because there's a lack of projects, but because Projects are just getting extended and they're either ongoing things with supply chains Other suppliers or labor issues or projects being put in the queue and just the contractors not being able to get to them. And we're just making mention that we noticed that. Now, because George, as you know, lighting is late cycle already in a construction project. So it's so dependent on other forms of completion.

Speaker 2

So it sounds like you're saying that the supply chain situation that we've heard from others Improving, you're saying it's getting worse. By the way, you're not the only one to mention switchgear. I mean, we had a committee last night that specifically mentioned switchgear as The issue of building out a facility in North Carolina, which is interesting.

Speaker 1

Yes. If you're in the electrical Product industry, meaning, we're dependent on copper wire and switchgear and switches and Everything leading right up to our picture to energize it and power it, switchgear is definitely a Pain point going on right now. I mean, it has been since April of 'twenty, a month after we went into lockdown, and it just hasn't it has not recovered yet. Interesting. What is your permitting set?

Speaker 2

You mentioned permits over the last couple of quarters. I'm curious as to whether there's any improvement In receiving permits and edgy freeing up on the part of municipalities and towns and issuing them, any color there would be much appreciated.

Speaker 1

I think it's I think if we're through the worst part and it's just going to this is the new normal. The reality of the situation is, is they built quite a backlog of projects. Some towns, states, cities are great and some are just awful. But I think that we've taken the brunt of the pain and the situation is beginning to improve. But I would still say that It will be an ongoing issue for at least another year, maybe 2 years.

Speaker 1

I mean, simply put, many of the cities And townships have 1 or 2 guys and they have a normal backlog of 10 projects and now they have 100 And they're not they don't have the budget or they're not hiring the people or whatever for whatever reason, they're not doing anything to Work down that backlog and I think it's just going to take a while for it to completely stabilize.

Speaker 2

Got it. And maybe switching gears, pun intended for a second. You talked about your fast forward strategy outlined both volume and growth, changing on additional M and A. You've now got your leverage down to about 1 times. Should we expect that More closure in terms of targets?

Speaker 2

Are you waiting for the economic environment to clear before you Appreciate any acquisitions, any update there would be much appreciated.

Speaker 1

Yes. Well, acquisition development is an ongoing process. Yes, we have never stopped. We keep that funnel filled. We have always said and I've always said that We would if the right opportunity presented itself regardless of where we were, we would certainly consider it may Cause additional pause or we may need the deal to be structured differently or be at a different level as our debt is a little bit higher, but us getting down below 1.0 isn't necessarily the only gate that we need.

Speaker 1

I'm not overly worried about economic conditions. We're very aware of them. We will be very strategic and very thoughtful and calculative about Is it the right time? Is it the right opportunity? But the bottom line is the acquisition is going to be a part of Our go forward plan is, it actually is a smaller part.

Speaker 1

Organic growth is the bigger side of it. And we are just going to look for the right opportunity. And if it materializes in the next 3 months, we'd certainly I think we're in a better to be able to capitalize on it. And if it takes 13 months, we'll take that time. We're disciplined investors.

Speaker 2

And how should we think about the financial metrics for the LendSure which we view this acquisition? Do they all have to be accretive to earnings Any other profitability metrics?

Speaker 1

I think that they all ultimately have to be accretive to earnings. But If we saw something that may be slightly dilutive initially, but we think can create Great return for our shareholders and the people in the Company and propel us forward. We are certainly A structured deal to take on a challenge like that, we would certainly consider it. But, we're always trying to look out for the best interest of our shareholders In balance, that's short term, long term component of it.

Speaker 2

Maybe last question. Since you participating in several verticals across the economy. I'm curious if you could give any color. You talked about length of the quarter to quarter Cycle, are there any particular verticals that you're seeing that more pronounced than others?

Speaker 1

Well, I would say right now, I mean, just specifically, 2 parts to that. I'll say right now, automotive is moving at an incredible speed. And they've come back with a vengeance and they're really there's a lot of inquiry and they're really willing to invest. Warehouse has slowed a bit. I mean, I think that it's just a more cautious approach.

Speaker 1

But what's taken right over underneath that is large manufacturing investments in kind of U. S. Manufacturing, if you will, the EZ Power Plant is a good example of it. There's a number of large headline grabbing projects going on. But there's also a lot that are not Grabbing headlines that are going on and so we're seeing those large projects.

Speaker 1

There's a lot of activity around that. Now that It's probably the one that's most sensitive to lengthening cycle because they're working it, they're moving forward, but then all of a The concrete guys need the next few 2 months to get their projects done Or the basic rough in for electrical is taking a bit longer because Switch boxes or cables not available or whatever it is. So, those are the ones that we see It's more acute that we see the complexity adding to the lengthening because it requires so many more components and pieces. The smaller projects, It seems as though some of the folks are able to hustle to find alternative sources. But when you're trying to find 50 feet of I Beam is a lot easier than when you're trying to find 5,000 feet of I Beam.

Speaker 1

So it might be some of that.

Operator

Our next question comes from Rick Yrum with Excluded Capital Partners. Please go ahead.

Speaker 2

Good morning, Jim and Jim and congrats on another terrific quarter. I was interested in the new product Development, the question 90 refrigerant is really exciting. It's one of those things that kind of I know last year, one of the big kind of new products with the MEDIMAT. Are you still running that roughly coming product annual sort of new product development on annual cycle and other things that we can kind of We expect to be introduced this year that will be those types of drivers. I mean, it seems like certainly the 2 90 can be one of those.

Speaker 2

And I

Speaker 1

was wondering if the pipeline helps. Yes. Rick, good to hear you. Thank you for calling the question. So, first of all, we were just going over, I was just talking with the marketing department, product development and engineering a couple of weeks ago.

Speaker 1

And I was saying about how important it is, is that we keep that rhythm up and we keep the investment going. And this, I love the fact that we get to say 20 plus products. And the reality is they were starting to add them up and show them to me and they were there every year They've been in excess of 'twenty. And I think that case will continue for quite some time. I mean, I have the benefit of looking at Our future development plans and we're already scheduled out now starting to talk about 2025.

Speaker 1

So I think that pace will keep up. There's 2 avenues we have in new products, completely new product, R290 and ReadyMount would be something like that. And then Products that were going through additional enhancements or crossed out initiatives or things like that, that maybe a new category of product or something. I'd ask you to say that we basically for the most part have 20 brand new organic products on the roadmap, 20 plus, again going out for at least 18 to 24 months. And I don't mention this a lot, but We are an outdoor oriented company and we really want to see outdoor visa kind of the lead.

Speaker 1

But our indoor product line, which has always been very has really taken on legs of its own over the last couple of years. And we have spent a lot of that development time on that and It has been paying off in stage for us. Our share when we start to look at our mix between indoor and outdoor, We still always favor the outdoor mix, but I'll tell you, it's getting a lot closer to fifty-fifty than I would have ever imagined. And You're seeing the growth in the outdoor, but you're seeing maybe 2x growth on the indoor. And so it's great because What you're seeing is us being able to provide just that much more of a solution, which has always been The foundation of our growth strategy, either more vertical markets or deeper into the vertical markets we're in.

Speaker 1

And when indoor continues to improve, one of the things is that we're getting more of indoor on those projects we're on. So that just goes to underlying hitting that greater share of wallet.

Speaker 2

That's great color, Jim. That's Actually, really excited to ensure that helps to invest in the seasonality as well. And I was curious when it comes to margins on the indoor products, I'm guessing when you're rolling out something like the R290, you see a nice bump up in the margin there. Are you As I've asked why does the business close and maybe starts picking up with a more aggressive pace, is that an increase in margin? Is it sort of

Speaker 1

It's too early to tell on the R290 side. It will be mostly at the end of this calendar year before we're delivering R290 solutions Additive product is a compelling reason to move to it, offset by the learning curve that goes along with manufacturing, which is And the start up that goes with it. On the indoor versus outdoor, We're very disciplined around what we're going to do for lighting. And if we can't keep those margin levels comparative, we're not interested in doing something that's Alluded to our overall position in Lighting. So, the answer to your question is the indoor product is very Competitive with our outdoor product in terms of margin and performance.

Speaker 2

That makes sense. And I'm sure once you're in working on a larger project to which you're offering additional services or products that just help us with margin enhancement just so you don't have to Chris, in there, specific to those projects, we're already there. So the last question I've got you on this is The deleveraging of the company is the nothing short is impressive and we have sort of one times size parameters and anything specific to those areas that you'd like to strengthen that

Speaker 1

I would say that we're optimistic. We will look and consider everything and most things that we feel would contribute to our ability to grow, but in a way that is Financially responsible and stable. I'm glad you mentioned culture. I know that we've talked about it before and I'm Glad you mentioned it because I underlined it. So much of this has to start with the cultural fit.

Speaker 1

If we're around in their square or we're triangle and they're an octagon, I don't know if we want to go through all of that work to try to mesh them together. There's just there's opportunity where we can find something that creates momentum, JSI being a good example of what can be done when you're measuring The tangible with the intangible. As far as how far out over our skis we would get, I mean, I think that anybody that's followed us for any length of time knows we're I'll just use the word again, we're disciplined. We want this to be we're building a great company here. We're building a bigger company.

Speaker 1

We want this to be palatable for our employees, for our shareholders and for our customers and what we don't want to do is do something that risks that. So Everything is on the table, but it would we would it would have to be the right opportunity. And I would just say To you as an investor, you can be confident that we would put every opportunity through the wringer that will also require to meet a certain threshold for it to be

Speaker 2

And just wanted to say thank you to you to the team

Speaker 1

Thank you, operator. I would just say again, thank you for taking the time to listen and learn a little bit more about LSI. Everybody that takes the time to get on the phone And listen to what we're doing just becomes that much more informed and that much more has a greater understanding of what we're doing here. I think that we're going to have a good fiscal 2023. And it's hard for me to believe, as I mentioned in the beginning comments, We're wholly 2 months, 60 some odd days away from the end of our fiscal year.

Speaker 1

You can be assured that we're doing our best To hit the next objective, hit the next goal for us and we're already moved on to our path forward plan for 2028. And we're excited to hit that next level of growth and achievement and do it in a way that keeps our employees, Our customers and our shareholders all happy. So with that, I'll just say good afternoon and thank you again for the time. Take care.

Operator

The conference is now completed. Thank you for attending today's presentation.

Powered by Quartr
Earnings Conference Call
Kiniksa Pharmaceuticals Q3 2023
00:00 / 00:00