Good day, and welcome to the LSI Industries Fiscal Third Quarter 2023 Results Conference Call [Operator Instructions]. I would now like to turn the conference over to Jim Galeese, Chief Financial Officer..

Good morning, everyone, and thank you for joining. We issued a press release before the market opened this morning, detailing our fiscal third quarter results. In conjunction with this release, we also posted a conference call presentation in the Investor Relations portion of our corporate Web site at www.lsicorp.com.

Information contained in this presentation will be referenced throughout today's conference call. Included are certain non-GAAP measures for improved transparency of our operating results. A complete reconciliation of third quarter GAAP and non-GAAP results is contained in our press release and 10-Q.

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 could 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-K and 10-Q. Today's call will begin with remarks summarizing our fiscal third quarter results. At the conclusion of these prepared remarks, we will open the line for questions.

With that, I'll turn the call over to LSI's President and 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 '23.

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.

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 million with a 1x net leverage ratio.

We are in a good spot going into the fourth quarter of the year, and Jim Galeese 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 and against a very strong third quarter last year.

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, and 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 focused 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 that recognize the importance of this decision.

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 is 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 Display Solutions group, we continue to work a large number of developing opportunities and projects, including ongoing activity in our digital and print menu boards along with a 450 site renovation project for a large oil company.

Our mobile displays group, offering both refrigerated and non-refrigerated displays had a record-breaking performance in the third quarter, 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.

I'm happy to say that the company continues to demonstrate our commitment to ongoing investments in this area. Last quarter, I spoke about a number of new product introductions in our lighting segment, including the REDi-Mount. This quarter, I'm happy to announce a very meaningful investment in the Display Solutions group.

With continued growth in this segment and opportunities in the future, we're expanding our footprint in our refrigerated displays group, adding more than 65,000 square feet of manufacturing, research and development space.

More importantly, for adding the capacity and capability to provide next-generation refrigerated solutions with the addition of an R-290 based product. R-290 is an environmentally friendly non-toxic propane-based gas refrigerant.

It is free of ozone-depleting properties, 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 often on these calls, but I'd like to point out that LSI is making a real impact on the environment.

From energy savings that are provided by our LED solutions, to 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 we're continuing to work to improve both our top line and bottom line. With that, I'll turn the call over to Jim Galeese for our look at our financials..

Thank you, Jim. Fiscal Q3 was an active quarter from several perspectives. We delivered a solid quarter of financial performance, demonstrated durable, sustained operational execution, and we continued to make progress on key growth initiatives. I'll briefly comment on all 3. Let me start with summary financials.

Sales for the quarter was 7% above last year, building on the record-setting fiscal third quarter last year. Adjusted operating income, net income and EBITDA all increased, with adjusted operating income increasing 47%, while adjusted EBITDA of $11.2 million improved 32%.

Rate 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 and favorable program mix all contributed to the rate extension.

Adjusted diluted earnings per share were $0.19 versus $0.15 last year, increasing our year-to-date earnings per share to $0.70, 62% above prior year EPS of $0.43. Free cash flow generation was strong for the quarter, $11.7 million, increasing our fiscal year-to-date cash flow to $31 million.

Increased earnings and a reduction in working capital, was responsible for the significant year-over-year improvement. Inventory decreased for the second consecutive quarter while successfully supporting 7% sales growth, reflecting ongoing stabilization and reliability in the supply chain.

Our strong free cash flow reduced net debt to $48 million at the end of the quarter, with net debt decreasing $35 million over the last 12 months. As a result, the ratio of net debt to trailing 12-month adjusted EBITDA declined to an even 1x. 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 16 to shareholders of record on May 8. Now some brief comments on segment performance. 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 vertical market strategy and objective of increasing our customer share of wallet, we have been strengthening our capabilities for indoor applications. As a result, our growth rate for indoor applications is measurably above our total growth rate, enhancing our overall position with customers.

Quotation activity for lighting remains healthy, with quote 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.

Total Q3 sales were down 4%, driven by the forecast decrease in digital signage shipments as the large QSR program peaked in the second half of fiscal '22. This will also impact digital signage sales in Q4 as we transition into the indoor phase of the program as well as early-phase activity in other programs.

Order and inquiry demand remains 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.

To highlight, in March, we announced the lease of additional manufacturing space, providing additional capacity to support the ongoing market demand for refrigerated display cases and as Jim mentioned, support the planned introduction of new products.

In addition, cross-selling initiatives continue, 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. I will now return the call back to the moderator for the question-and-answer session..

[Operator Instructions] The first question comes from Aaron Spychalla with Craig-Hallum..

Jim and Jim, first, on QSR, maybe you touched a little bit on it there, Jim, at the end, but just maybe an update on the large digital menu award. Sounds like we're kind of [wrapping] that up, at least on the outdoor portion.

But good to see -- translating to a new pilot award for a new customer? Maybe just -- can you share a little more details on potential size, anything on rollout or timing there?.

Yes, I mean the QSR, particularly on digital menu board, continues to do well. We have rolled off -- substantially off of the big program. I think our peak 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, we're doing what started off as a $20 million indoor order now moving to a $30 million indoor order. It's just timing and coordination on their side right now. So we don't anticipate that taking off until Q1 of next year.

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 a big drop off.

You're just going to see -- the beginning project was large, but then we had time to develop all of these smaller, 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 a static menu board, a print menu board was really at a disadvantage to move their pricing. 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. All the activity you see moving forward has really just been infill as that project has substantially completed..

Then second, just great to see the margin expansion, especially incremental margins given the supply chain challenges. Can you just maybe give us an update there? You mentioned some stabilization.

But what are you seeing in the market? Is permitting still the biggest push point, and then just how you're thinking margins can trend over the near term?.

Yes, so depending on the projects we're doing, any type of retrofit or anything like that, permitting is the number 1 issue we're running into. Sometimes we're delayed by progress of maybe another contractor or something like that. But new construction has just a litany of things that are putting pressure on it. Permitting is one.

Switchgear, I'm sure you guys hear all the time. From what we understand, and we stay pretty close to a lot of the electrical guys, switchgears -- still massive demand and massive back orders and just time taking to fill. But from a margin standpoint, it was primarily mix.

We had very favorable mix and good pricing discipline has allowed us to maintain those margins..

And then last for me. Just anything on fiscal '23 targets? You provided back in March an early read on the fourth quarter. I know you have a nice comp year-over-year there as well. Then just thinking about that, given the thoughts on the quote-to-conversion cycles....

You're saying -- I just want to make sure I understood that right, fiscal '24 targets or fiscal '23 targets?.

No, just '23. I think back in March when you gave the fast forward, there was some FY '23. So just any early read on what the fourth quarter might look like..

I mean, I think it's going to remain fairly strong. We're anticipating staying right in the range that we expected to land in. We certainly have our eye on fully completing that -- getting that $0.5 billion 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 pretty darn close to our goals..

Our next question comes from Amit Dayal with HCI Wainwright..

Congrats on another really solid quarter.

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

No, there certainly is 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.

We're continue to grow the business that provides the leverage for margin expansion and also providing the opportunity to continue key reinvestments..

You see some of those investments we're making -- I mentioned in the beginning of the call, our step into next-generation refrigerants on our refrigerated line with the R-290. Last quarter, we talked extensively about the introduction of our REDi-Mount product. We continue to be committed to investing in new products and in new markets.

So I think there is still, to Jim Galeese's point, still a lot of opportunity for us..

The quote-to-order conversion and any pipeline build out, is there impact from the interest rate environment on how customers are thinking about placing orders, or just taking deliveries, et cetera, at this point?.

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 are certainly not being affected by the interest rate environment.

I do think that there are still a number of external things that 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 -- in fact, we've heard it from our people, and then we just saw an article in the Wall Street Journal maybe a week ago or so talking about large project demand, that 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 constraint around personnel and equipment and product.

But we're certainly not being exposed to that, in terms of our ability to deliver. But we are being exposed 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..

Just one last one for me. On the lighting side, how is the customer base changing compared to maybe a year or two ago? Is it more industrial customers with this onshoring trend that is going on, especially in Texas, Oklahama, Kentucky, et cetera, for manufacturing type of development.

Are we seeing more of those types of customers come through versus what you might have [Indiscernible] previously? Just to get a sense of what direction the lighting business is heading towards..

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 import product. Unfortunately, they don't. I was extremely happy that this large EV win, they consider that an important element.

I really like the fact that we have a factory in Kentucky. Being here in Ohio, we're very close to that facility, and we have people that are making these products that live and work in the state and live and work in adjoining states that will be contributing for this project.

It's 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. I wish it was more of that that went on, that there was more recognition of 'U.S. built' and 'U.S. company' and 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. We're proud of it. We're managing price really well. We're managing our margin really well. Product quality is strong. So we have a lot of compelling reasons for folks to buy from us.

It would be nice, though, if the 'Made in America' was a stronger lever..

Have you named the EV manufacturer? I may have missed this..

I did not, we did not. But I would just say it's one of the big 3..

Next question comes from George Gianarikas with Canaccord..

So first, you mentioned timing issues and some of the delays from -- that you're seeing in the marketplace, but you still expect to see a good close to the year and hitting your $0.5 billion target. So I just -- if you could help us understand how to quantify this impact.

Are you just kind of giving us color on the marketplace as opposed to articulating any financial impact to the firm as we close out the year?.

Yes, I think that would be accurate. We're just giving observations of what's going on outside -- factors outside of our control. I think that over the last few years, we've kind of bucked the trend about 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 Jim was trying to underline is quote activity quarter after quarter after quarter, and I'm talking eight, nine, 10 quarters, we've been seeing an increase in quote activity.

We try to draw a parallel between 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, but it's an interesting statistic to look at.

The thing that we picked up on lately, and when I say lately, I mean three to five, maybe even six months, is we're seeing initial inquiry to the tightening up and finalization of the quarter, the activities remained high, but the time between the first inquiry and the time between the second and the close inquiry is lengthening.

Most of the time, it's lengthening not because there's lack of demand and not because interest rates run up and not because there's a lack of projects, but because projects are just getting extended and there are either ongoing things with supply chains of other suppliers or labor issues or projects being put in the queue and just the contractors not being able to get to them.

We're just making mention that we noticed that, because George, as you know, lighting is late cycle, right, in a construction project. So it's so dependent on other forms of completion..

So it sounds like you're saying that the supply chain situation that you've heard from others is improving, you're saying it's getting worse. By the way, you're not the only one who mentioned switchgear. We had a company last night that specifically mentioned switchgear as an issue in building out a facility in North Carolina, which is interesting..

If you're in the electrical products industry, meaning, we're dependent on copper wire and switchgear and switches and everything leading right up to our fixture to energize it and power it. Switchgear is definitely a pain point going on right now.

I mean, it has been since basically April of '20, the month after we went into lockdown, and it just hasn't -- it has not recovered yet..

What about the permitting side? You've mentioned permits over the last couple of quarters. I'm just curious as to whether there's any improvement in receiving permits and any freeing up on the part of municipalities and towns in issuing them. Any comment would be much appreciated..

I think that we're through the worst part, and it's just going to -- this is the new normal. The reality of the situation 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 two years.

Simply put, many of the cities and townships have one or two 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 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..

Maybe switching gears, pun intended, for a second. You talked about your fast forward strategy, outlining both quantity of growth hinging on additional M&A. You've now got your leverage down to about 1 times.

Should we expect more closure in terms of targets? Are you waiting for the economic environment to clear before you initiate on any acquisitions? Any update there would be much appreciated..

Yes, well, acquisition development is an ongoing process. We have never stopped. We keep that funnel filled. We have always said or 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. 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 this the right opportunity? But the bottom line is acquisition is going to be a part of our go-forward plan. It actually is a smaller part. Organic growth is the bigger side of it.

We're 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 spot to be able to capitalize on it. If it takes 13 months, we'll take that time. We're disciplined investors..

How should we think about the financial metrics or the lens through which you view these acquisitions? Do they all have to be accretive to earnings, to any other profitability metric?.

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 a great return for our shareholders and the people in the company and propel us forward. We are certainly structured to be able to take on a challenge like that, and we would certainly consider it.

But we're always trying to look out for the best interest of our shareholders and balance that short-term, long-term component of it..

Last question, since you participate in several verticals across the economy, can you share any color -- when you talk about lengthening quote-to-order cycle, are there any particular verticals that you're seeing that more pronounced than others?.

Well, I would say right now, just specifically, I'll add two 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. Warehouses slowed a bit. I mean, I think that it's just a more cautious approach.

But what's taken right over underneath that is large manufacturing investments and U.S. manufacturing, if you will -- the EV 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.

So we're seeing those large projects, there's a lot of activity around that.

Now that is probably the one that's most sensitive to lengthening cycle because they're working -- they're moving forward, but then all of a sudden, the concrete guys need an extra two months to get to their project or the basic rough-in for electrical is taking a bit longer because switch boxes or cable is 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. So it might be some of that..

Our next question comes from Rick Fearon with Accretive Capital Partners..

Jim and Jim, congrats on another terrific quarter. I was interested in the new product development, the R-290 refrigerant is -- it sounds really exciting. One of those things that kind of fit in nicely with an industry trend towards environmental consciousness and all that. I know last year, one of the big new products was the REDi-Mount.

Are you still running at roughly 20 product annual -- new products development annual cycle and are there other things that we can expect to be introduced this year, that will be those types of drivers. It seems like certainly R-290 can be one of those and just wondering how the pipeline looks..

Well, first of all, we were just going over -- I was just talking about the marketing department, product development and engineering a couple of weeks ago, and I was saying about how important it is, is that we keep that rhythm up and we keep the investment going.

And that 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 there were -- every year, they've been in excess of 20. I think that, that pace will continue for quite some time.

I have the benefit of looking at our future development plans, and we're already scheduled out now starting to talk about 2025. So I think that pace will keep up. There's 2 avenues we have in new products. Completely new product -- R-290, and REDi-Mount would be something like that.

Then products that we're -- going through additional enhancements or cost-out initiatives or things like that, there may be a new category of product or something. I'm happy to say that we basically, for the most part, have 20 brand-new organic products on the road map -- 20-plus again, going up for at least 18 to 24 months.

I don't mention this a lot, but we are an outdoor oriented company, and we really want to see outdoor be the lead. But our indoor product line, which has always been very strong, has really taken on legs of its own over the last couple of years. We have spent a lot of that development time on that, and it has been paying off in spades 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 50-50 than I would have ever imagined. You're seeing the growth in the outdoor, but you're seeing maybe 2 times growth on the indoor.

So it's great because what you're seeing is us be 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. 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 getting that greater share of wallet..

That's actually really exciting to ensure to help smooth out some of the seasonality as well. I was curious when it comes to margins on the indoor products.

I'm guessing when you're rolling out something like the R-290, do you see a nice bump up in some of the margin there? Are you -- as that side of the business grows and maybe starts picking up at a more rapid pace, is that an improvement margin? Is it sort of indoor and outdoor both expanding similar type margins these days, or is there some change to be expected along both lines?.

Yes, it's too early to tell on the R-290 side, it will be mostly at the end of this calendar year before we're delivering R-290 solutions with enough color to tell you, but certainly, our intentions are to give our customers a very competitive product with a compelling reason to move to it, offset by the learning curve that goes along with manufacturing with this type of technology and the investment and the startup that goes with it.

On the indoor versus outdoor, we're very disciplined around what we're going to do for lighting. If we can't keep those margin levels comparative, we're not interested in doing something that's dilutive to our overall position in lighting.

So the answer to your question is the indoor product is very competitive with our outdoor products in terms of margin and performance..

Then for once you're working on the larger projects, if you think you're offering additional services or products, that in and of itself is a bit of a margin [Indiscernible], and you don't have to get crews in there specific to those projects that are already there.

So the last question I've got for you, I mean this is -- the deleveraging of the company has been nothing short of impressive and to be at 1x adjusted EBITDA level of debt and continuing cash flows from this as the company does.

I'm sure that M&A funnel has been active, and just general overview of size parameters and anything specific you carry that you'd like to strengthen that [Indiscernible] going into new vertical or existing verticals.

I'm sure you're being opportunistic and a big part of it's value and then I know 90% of it's culture with you Jim, and that's what gives us all a lot of confidence.

But are there any sort of general parameters in terms of size or specific industry that you might be most interested in?.

I would say that we're opportunistic. We will look and consider everything or 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 underline that so much of this has to start with the cultural fit. If we're a round in their square or we're a triangle and they're an octagon, I don't know if we want to go through all 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 SKUs 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.

We want this to be palatable for our employees, for our shareholders and for our customers. What we don't want to do is do something that risks that. So everything is on the table, but it would have to be the right opportunity.

I would just say to you as an investor, you can be confident that we would put every opportunity through the wringer, but we'll also require it to meet a certain threshold for it to be -- for us to advance forward with it..

…a wonderful success and that gives us all the confidence we need. Just wanted to say thank you to you, to the team for all the hard work and for being great custodians of our capital. We appreciate it..

This concludes our question-and-answer session. I would like to turn the conference back over to Jim Clark for any closing remarks..

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, that we're only 2 months, 60 some odd days away from the end of our fiscal year.

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 fast forward plan for 2028. We're excited to hit that next level of growth and achievement and do it in a way that makes 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..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect..