LED-based lighting solutions is growing rapidly

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.

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.