LSI INDUSTRIES INC (LYTS)

CIK: 0000763532. SIC: 3640 Electric Lighting & Wiring Equipment. Latest 10-K as of: 2025-09-11.

SIC breadcrumb: Manufacturing > Electronic And Other Electrical Equipment And Components, Except Computer Equipment > SIC 3640 Electric Lighting & Wiring Equipment

SEC company page: https://www.sec.gov/edgar/browse/?CIK=763532. Latest filing source: 0001437749-25-028862.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-09-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000763532.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000763532.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001437749-26-015958.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note About Forward-Looking Statements

This report includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report, including this section. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “focus,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. We describe risks and uncertainties that could cause actual results and events to differ materially in in our Annual Report on Form 10-K in the following sections: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Quantitative and Qualitative Disclosures about Market Risk,” and “Risk Factors.” All of those risks and uncertainties are incorporated herein by reference. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations and financial condition of LSI Industries Inc. MD&A is provided as a supplement to, and should be read in conjunction with, our Annual Report on Form 10-K for the year ended June 30, 2025, and our financial statements and the accompanying Notes to Financial Statements (Part I, Item 1 of this Form 10-Q).

Our condensed consolidated financial statements, accompanying notes and the “Safe Harbor” Statement, each as appearing earlier in this report, should be referred to in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Summary of Consolidated Results

Net Sales by Business Segment

Three Months Ended

Nine Months Ended

March 31,

March 31,

(In thousands)

2026

2025

2026

2025

Lighting Segment

$

60,038

$

58,967

$

195,764

$

175,614

Display Solutions Segment

90,487

73,514

259,012

242,696

Total Net Sales

$

150,525

$

132,481

$

454,776

$

418,310

Operating Income (Loss) by Business Segment

Three Months Ended

Nine Months Ended

March 31,

March 31,

(In thousands)

2026

2025

2026

2025

Lighting Segment

$

6,938

$

7,154

$

23,034

$

18,885

Display Solutions Segment

7,895

4,510

22,562

20,344

Corporate and Eliminations

(10,757

)

(5,429

)

(21,683

)

(15,404

)

Total Operating Income

$

4,076

$

6,235

$

23,913

$

23,825

Net sales of $150.5 million for the three months ended March 31, 2026, increased 14% as compared to net sales of $132.5 million for the three months ended March 31, 2025. The increase in net sales reflects growth in both of the Company’s segments with a 23% sales growth in the Display Solutions segment and a 2% sales growth in the Lighting segment. The 23% growth in the Display Solutions Segment was primarily driven by strong demand levels across a broad base of customers in both the grocery and refueling/c-store verticals. Third quarter net sales in the Display Solutions segment also reflects Royston net sales of $6.6 million for the 6-day stub period. Royston was acquired on March 24, 2026. Lighting Segment sales improved 2% compared to the same period last year despite a lengthening project quote to order conversion period.

Net sales of $454.8 million for the nine months ended March 31, 2026, increased 9% as compared to net sales of $418.3 million for the nine months ended March 31, 2025. The increase in net sales reflects growth in both of the Company’s segments with a 7% sales growth in the Display Solutions segment and a 12% sales growth in the Lighting segment. As stated in the overview of the third quarter, the demand levels across a broad base of customers in both the grocery and refueling/c-store verticals contributed to the year-over-year growth in the Display Solutions segment. Net sales in the period for the Display Solutions segment also reflects Royston net sales of $6.6 million for the 6-day stub period. Royston was acquired on March 24, 2026. Growth in the Lighting Segment continued for the third straight quarter with period-over-period sales growth contributing to the year-to-date growth in net sales of 12%.  

Page 26

Table of Contents

Operating income of $4.1 million for the three months ended March 31, 2026, represents a 35% decrease in operating income from $6.2 million in the three months ended March 31, 2025. Operating income for the three months ended March 31, 2026, was impacted by $6.5 million of acquisition-related costs. Adjusted operating income, a Non-GAAP measure, was $13.4 million in the three months ended March 31, 2026, representing a 39% increase compared to adjusted operating income of $9.7 million in the three months ended March 31, 2025. Refer to “Non-GAAP Financial Measures” below for a reconciliation of Non-GAAP financial measures to U.S. GAAP measures. The quarter-over-quarter sales growth of 14% coupled with improved margins resulting from improved productivity and price optimization resulted in leveraged adjusted operating income growth.   

Operating income of $23.9 million for the nine months ended March 31, 2026, represents a slight increase from operating income of $23.8 million in the nine months ended March 31, 2025. Operating income for the three months ended March 31, 2026, was impacted by $6.9 million of acquisition-related costs. Adjusted operating income, a Non-GAAP financial measure, was $39.1 million in the nine months ended March 31, 2026, compared to adjusted operating income of $33.2 million in the nine months ended March 31, 2025. Refer to “Non-GAAP Financial Measures” below for a reconciliation of Non-GAAP financial measures to U.S. GAAP measures. The year-over-year sales growth of 9% coupled with improved margins resulting from improved productivity and price optimization resulted in the growth in operating income.   

Non-GAAP Financial Measures

This report includes adjustments to GAAP operating income, net income, and earnings per share for the three months and nine months ended March 31, 2026, and 2025.  Operating income, net income, and earnings per share, which exclude the impact of long-term performance-based compensation expense, the amortization expense of acquired intangible assets, commercial growth opportunity expense, acquisition costs, the lease expense on the step-up basis of acquired leases, and restructuring and severance costs, are non-GAAP financial measures. We further note that while the amortization expense of acquired intangible assets is excluded from the non-GAAP financial measures, the revenue of the acquired companies is included in the measures, and the acquired assets contribute to the generation of revenue. We believe these non-GAAP measures will provide increased transparency to our core operating performance of the business. Also included in this report are non-GAAP financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA and Adjusted EBITDA), Net Debt to Adjusted EBITDA, and Free Cash Flow.  We believe that these are useful as supplemental measures in assessing the operating performance of our business.  These measures are used by our management, including our chief operating decision maker, to evaluate business results, and are frequently referenced by those who follow the Company.  These non-GAAP measures may be different from non-GAAP measures used by other companies.  In addition, the non-GAAP measures are not based on any comprehensive set of accounting rules or principles.  Non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP.  Therefore, these measures should be used only to evaluate our results in conjunction with corresponding GAAP measures.

Three Months Ended

Reconciliation of operating income to adjusted operating income:

March 31,

2026

2025

(In thousands)

Operating income as reported

$

4,076

$

6,235

Long-term performance based compensation

715

1,116

Amortization expense of acquired intangible assets

1,732

1,465

Restructuring/severance costs

25

-

Acquisition costs

6,519

774

Lease expense on the step-up basis of acquired leases

317

67

Adjusted operating income

$

13,384

$

9,657

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Table of Contents

Reconciliation of net income to adjusted net income

Three Months Ended

March 31,

(In thousands, except per share data)

2026

2025

Diluted EPS

Diluted EPS

Net income as reported

$

2,091

$

0.06

$

3,883

$

0.13

Long-term performance based compensation

597

(1)

0.02

879

(7)

0.02

Amortization expense of acquired intangible assets

1,377

(2)

0.05

1,128

(8)

0.04

Restructuring/severance costs

19

(3)

-

-

-

Acquisition costs

4,898

(4)

0.15

577

(9)

0.02

Lease expense on the step-up basis of acquired leases

241

(5)

0.01

52

(10)

-

Foreign Currency transaction loss on intercompany loan

(147

)(6)

(0.01

)

-

-

Tax rate difference between reported and adjusted net income

523

0.01

(188

)

(0.01

)

Net income adjusted

$

9,599

$

0.29

$

6,331

$

0.20

The following represents the income tax effects of the adjustments in the tables above, which were calculated using the estimated combined U.S., Canada and Mexico effective income tax rates for the periods indicated (in thousands):

(1) $118

(2) $355

(3) $6

(4) $1,621

(5) $76

(6) ($49)

(7) $237

(8) $337

(9) $197

(10) $15

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Table of Contents

Nine Months Ended

Reconciliation of operating income to adjusted operating income:

March 31,

2026

2025

(In thousands)

Operating income as reported

$

23,913

$

23,825

Long-term performance based compensation

2,999

3,969

Amortization expense of acquired intangible assets

4,844

4,281

Restructuring/severance costs

(46

)

60

Consulting expense: commercial growth opportunities

-

81

Acquisition costs

6,939

822

Lease expense on the step-up basis of acquired leases

453

203

Adjusted operating income

$

39,102

$

33,241

Reconciliation of net income to adjusted net income

Nine Months Ended

March 31,

(In thousands, except per share data)

2026

2025

Diluted EPS

Diluted EPS

Net income as reported

$

15,703

$

0.48

$

16,212

$

0.53

Long-term performance based compensation

2,264

(1)

0.07

3,039

(7)

0.09

Amortization expense of acquired intangible assets

3,653

(2)

0.12

3,260

(8)

0.11

Restructuring/severance costs

(35

(3)

-

45

(9)

-

Acquisition costs

5,205

(4)

0.16

627

(10)

0.02

Lease expense on the step-up basis of acquired leases

340

(5)

0.01

155

(11)

0.01

Consulting expense: commercial growth opportunities

-

-

62

(12)

-

Foreign Currency transaction loss on intercompany loan

207

(6)

0.01

-

-

Tax rate difference between reported and adjusted net income

430

0.01

(1,093

(0.03

)

Net income adjusted

$

27,767

$

0.86

$

22,307

$

0.73

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Table of Contents

The following represents the income tax effects of the adjustments in the tables above, which were calculated using the estimated combined U.S., Canada and Mexico effective income tax rates for the periods indicated (in thousands):

(1) $735

(2) $1,191

(3) $113

(4) ($11)

(5) $1,734

(6) $52

(7) $930

(8) $1,021

(9) $15

(10) $195

(11) $48

(12) $19

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high. Filing date: 2025-09-11. Report date: 2025-06-30.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of the Company’s operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of our operations for the year ended June 30, 2025, compared to the year ended June 30, 2024. For a discussion of the year ended June 30, 2024, compared to the year ended June 30, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended June 30, 2024. 

Overview

LSI Industries Inc. (LSI) is a leading producer of non-residential lighting and retail display solutions. Non-residential lighting consists of American-made fixtures and services for both indoor and outdoor applications satisfying the specific performance requirements of our customers. Retail display solutions consist of multiple custom products and services which enhance our customer’s brand image and improve the customer shopping experience. We offer customers in target vertical markets a package solution set of both lighting and display solutions, providing value for the customer by working with one partner to manage their regional and national location programs, versus multiple suppliers.

Summary of Consolidated Results

Net Sales by Business Segment

(In thousands)

2025

2024

Lighting Segment

$

248,357

$

262,413

Display Solutions Segment

325,020

207,225

Total Net Sales

$

573,377

$

469,638

Operating Income (Loss) by Business Segment

(In thousands)

2025

2024

Lighting Segment

$

30,253

$

33,327

Display Solutions Segment

26,353

19,969

Corporate and Eliminations

(20,837

)

(17,779

)

Total Operating Income

$

35,769

$

35,517

Fiscal 2025 net sales of $573.4 million increased 22% compared to fiscal 2024 net sales of $470.0 million. The increase in net sales was attributed to a $117.8 million or 57% increase in net sales of the Display Solutions Segment, partially offset by a $14.1 or 5% decline in net sales of the Lighting Segment. The Display Solutions Segment generated organic growth of 17% driven by increased sales across all product categories and vertical markets supported mostly by the grocery and refueling/ C-Store verticals. The Company’s acquisition of EMI and CBH contributed an additional $85.3 million of the year-over-year sales growth of the Display Solutions Segment. The decline in sales in the Lighting Segment is attributed to the comparison of year-over-year sales of large lighting projects. In fiscal 2024, the Company had several large lighting projects that did not repeat in fiscal 2025. While there was a year-over-year decline in large lighting projects, small project activity continued to increase over the prior year period while large lighting projects order activity increased in the fourth quarter of fiscal 2025.

Fiscal 2025 operating income of $35.8 million represents a 1% increase from fiscal 2024 operating income of $35.5 million. Fiscal 2025 adjusted operating income, a Non-GAAP financial measure, was $48.4 million compared to adjusted fiscal 2024 operating income of $46.4 million. While sales increased 22% compared to the same period last year, Non-GAAP operating income rose 4%. The increase in sales was partially offset by the dilutive impact of acquisitions and by customer mix. Refer to “Non-GAAP Financial Measures” below for a reconciliation of Non-GAAP financial measures to U.S. GAAP measures

23

This report includes adjustments to GAAP operating income, net income, and earnings per share for the fiscal years 2025 and 2024. Operating income, net income, and earnings per share, which exclude the impact of long-term performance-based compensation expense, the amortization expense of acquired intangible assets, commercial growth opportunity expense, acquisition costs, the lease expense on the step-up basis of acquired leases, and restructuring and severance costs, are non-GAAP financial measures. We further note that while the amortization expense of acquired intangible assets is excluded from the non-GAAP financial measures, the revenue of the acquired companies is included in the measures, and the acquired assets contribute to the generation of revenue. We believe these non-GAAP measures will provide increased transparency to our core operating performance of the business. This report includes additional non-GAAP financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA and Adjusted EBITDA), Net Debt to Adjusted EBITDA, Free Cash Flow, and organic sales growth.  We believe that these are useful as supplemental measures in assessing the operating performance of our business.  These measures are used by our management, including our chief operating decision maker, to evaluate business results, and are frequently referenced by those who follow the Company.  These non-GAAP measures may be different from non-GAAP measures used by other companies.  In addition, the non-GAAP measures are not based on any comprehensive set of accounting rules or principles.  Non-GAAP measures have limitations, in that they do not reflect all amounts associated with our results as determined in accordance with U.S. GAAP.  Therefore, these measures should be used only to evaluate our results in conjunction with corresponding GAAP measures.  Below is a reconciliation of these non-GAAP measures to net income and earnings per share reported for the periods indicated along with the calculation of EBITDA, Adjusted EBITDA, Free Cash Flow, Net Debt to Adjusted EBITDA, and organic sales growth.

Non-GAAP Financial Measures

Reconciliation of net income to adjusted net income:

(In thousands, except per share data)

2025

2024

Diluted

EPS

Diluted

EPS

Net income as reported

$

24,383

$

0.79

$

24,977

$

0.83

Long-term performance based compensation

3,951

(1)

0.13

3,272

(7)

0.11

Consulting expense: commercial growth opportunities

62

(2)

-

-

-

Acquisition costs

838

(3)

0.03

735

(8)

0.02

Lease expense on the step-up basis of acquired leases

285

(4)

0.01

-

-

Restructuring/severance costs

240

(5)

0.01

396

(9)

0.01

Amortization expense of acquired intangible assets

4,745

(6)

0.16

3,671

(10)

0.13

Foreign currency transaction gain on intercompany loan

(489

)

(0.02

)

-

-

Tax rate difference between reported and adjusted net income

(1,132

)

(0.04

)

(757

)

(0.03

)

Net income adjusted

$

32,883

$

1.07

$

32,294

$

1.07

Effective in the first quarter of fiscal 2025, LSI includes the amortization expense related to acquired intangible assets as an add-back to its non-GAAP reconciliation. Prior quarter non-GAAP reconciliations have been adjusted accordingly.

The following represents the income tax effects of the adjustments in the tables above, which were calculated using the estimated combined U.S., Canada and Mexico effective income tax rates for the periods indicated:

(1) $988

(2) $19

(3) $209

(4) $71

(5) $60

(6) $1,124

(7) $1,108

(8) $266

(9) $143

(10) $1,287

24

The reconciliation of reported earnings per share to adjusted earnings per share may not produce identical amounts due to rounding differences.

Reconciliation of operating income to adjusted operating income:

2025

2024

(In thousands)

Operating income as reported

$

35,769

$

35,517

Long-term performance based compensation

4,939

4,380

Consulting expense: commercial growth opportunities

81

-

Acquisition costs

1,047

1,001

Lease expense on the step-up basis of acquired leases

356

-

Restructuring/severance costs

300

539

Amortization expense of acquired intangible assets

5,869

4,958

Adjusted operating income

$

48,361

$

46,395

Reconciliation of net income to EBITDA to adjusted EBITDA:

2025

2024

(In thousands)

Net income - reported

$

24,383

$

24,977

Income tax

8,655

8,122

Interest expense, net

3,129

2,156

Other expense (income)

(398

)

262

Operating income as reported

$

35,769

$

35,517

Depreciation and amortization

12,575

9,999

EBITDA

$

48,344

$

45,516

Acquisition costs

1,047

1,001

Long-term performance based compensation

4,939

4,380

Restructuring/severance costs

300

539

Lease expense on the step-up basis of acquired leases

356

-

Consulting expense: commercial growth opportunities

81

-

Adjusted EBITDA

$

55,067

$

51,436

Reconciliation of cash flow from operations to free cash flow:

2025

2024

(In thousands)

Cash flow from operations

$

38,118

$

43,393

Capital expenditures

(3,465

)

(5,388

)

Free cash flow

$

34,653

$

38,005

25

Net debt to adjusted EBITDA:

June 30,

June 30,

(In thousands)

2025

2024

Debt as reported

$

48,557

$

54,229

Less:

Cash and cash equivalents as reported

3,457

4,110

Net debt

$

45,100

$

50,119

Adjusted EBITDA

$

55,067

$

51,436

Net debt to adjusted EBITDA

0.82

0.97

Twelve Months Ended

Organic compared to inorganic Sales

FY 2025

FY 2024

% Variance

Lighting Segment

$

248,357

$

262,413

-5

%

Display Solutions Segment

- Comparable Display Solutions Sales

221,641

189,152

17

%

- EMI

94,830

18,073

- Canada's Best

8,549

-

Total Diplay Solutions Sales

325,020

207,225

57

%

Total net sales

573,377

469,638

22

%

Less:

EMI

`

94,830

18,073

Canada's Best

8,549

-

Total organic net sales

$

469,998

$

451,565

4

%

Results of Operations

2025 Compared to 2024 

Display Solutions Segment

(In thousands)

2025

2024

Net Sales

$

325,020

$

207,225

Gross Profit

$

57,476

$

44,195

Operating Income

$

26,353

$

19,969

Display Solutions net sales of $325.0 million increased 57% from same period in fiscal 2024. This segment generated organic growth of 17% driven by increased sales across all major product categories and vertical markets supported mostly by the grocery and refueling/ C-Store verticals. The Company’s acquisitions of EMI and CBH also contributed $85.3 million of the year-over-year sales growth of the Display Solutions Segment.

Gross profit of $57.5 million in fiscal 2025 increased 30% from the same period of fiscal 2024. Gross profit as a percentage of net sales decreased to 18% from 21% in the same period of fiscal 2024 as a result of the dilutive impact of acquisitions and by customer mix.

Operating expenses of $31.1 million in fiscal 2025 increased 29% from the same period of fiscal 2024, primarily driven by the acquisitions of EMI and CBH and by continued investment in commercial initiatives to drive growth.

Fiscal 2025 operating income of $26.4 million in fiscal 2025 increased 32% from the same period of fiscal 2024. The increase in operating income of 6.4 million was driven by the net effect of an increase in net sales partially offset by the dilutive impact of acquisitions and by customer mix.

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Lighting Segment

(In thousands)

2025

2024

Net Sales

$

248,357

$

262,413

Gross Profit

$

84,390

$

89,026

Operating Income

$

30,253

$

33,327

Lighting Segment net sales of $248.4 million in fiscal 2025 decreased 5% compared to net sales of $262.4 million in the same period in fiscal 2024. In fiscal 2024, the Company had several large lighting projects that did not repeat in fiscal 2025. While there was a year-over-year decline in large lighting projects, small project activity continued to increase over the prior year period while large lighting projects order activity increased in the fourth quarter of fiscal 2025.

Gross profit of $84.4 million in fiscal 2025 decreased 5% from the same period of fiscal 2024. The decline in gross profit is attributed to the decline in sales. Despite a decline in gross profit due to a decline in sales, gross profit as a percentage of sales improved marginally. Maintaining a comparable gross margin rate on lower sales was the result of an increase in a higher mix of value applications, and effective cost management.

Operating expenses of $54.1 million in fiscal 2025 decreased 3% from the same period of fiscal 2024, driven mostly by lower commission expense from lower sales, and effective cost management.

Fiscal 2025 Lighting Segment operating income of $30.3 million decreased 9% from operating income of $33.3 million in the same period of fiscal 2024 primarily driven by decreased net sales partially offset by an increase in a higher mix of value applications, stable pricing, and effective cost management.

Corporate and Eliminations

(In thousands)

2025

2024

Gross (Loss)/Profit

$

4

$

(53

)

Operating (Loss)

$

(20,837

)

$

(17,779

)

The gross (loss) relates to the intercompany profit in inventory elimination.

Operating expenses of $20.8 million in fiscal 2025 increased 17% from the same period of fiscal 2024. The increase in expense is the result of an increase in investment in commercial initiatives to support the growth of the Company, including the cost associated with acquisitions, and performance related compensation programs.

Consolidated Results

The Company reported $3.1 million and $2.2 million of net interest expense in fiscal 2025 and 2024, respectively. The increase in interest expense is the result of the funds borrowed to acquire EMI in the fourth quarter of fiscal 2024 along with the funds borrowed to acquire CBH in the third quarter of fiscal 2025, partially offset by decreased borrowing costs. The Company also recorded other (income)/expense of ($0.4) million and $0.3 million in fiscal 2025 and 2024, respectively, both of which is related to net foreign exchange currency transaction gains and losses through the Company’s Mexican and Canadian subsidiaries.

The $8.7 million of income tax expense in fiscal 2025 represents a consolidated effective tax rate of 26.2%. The $8.1 million of income tax expense in fiscal 2024 represents a consolidated effective tax rate of 24.5%. The increase in the effective tax rate from fiscal 2024 to fiscal 2025 is primarily driven by an increase in state, local and foreign income taxes across the multiple tax jurisdictions where LSI has a physical presence partially offset by the favorable tax treatment of the Company’s long-term performance-based compensation.

The Company reported net income of $24.4 million in fiscal 2025, compared to net income of $25.0 million in fiscal 2024. Non-GAAP adjusted net income was $32.9 million for fiscal 2025, compared to adjusted net income of $32.3 million for fiscal 2024 (Refer to the Non-GAAP tables above). The increase in Non-GAAP adjusted net income is primarily the net result of an increase in net sales partially offset by unfavorable product mix. Diluted adjusted earnings per share of $1.07 was reported in fiscal 2025, compared to the same diluted adjusted earnings per share of $1.07 in the same period of fiscal 2024. The weighted average common shares outstanding for purposes of computing diluted earnings per share in fiscal 2025, were 30,832,000 shares compared to 30,068,000 shares in the same period last year.

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Liquidity and Capital Resources

The Company considers our level of cash on hand, borrowing capacity, current ratio and working capital levels to be our most important measures of short-term liquidity. For long-term liquidity indicators, we believe our ratio of long-term debt to equity and our historical levels of net cash flows from operating activities to be the most important measures.

Working capital was $96.8 million at June 30, 2025, compared to $83.3 million at June 30, 2024. The ratio of current assets to current liabilities was 2.0 to 1 as of June 30, 2025, compared to a ratio of 2.1 to 1 as of June 30, 2024. The acquisition of Canada’s Best Holding (CBH) in the third quarter of fiscal 2025 accounted for $9.7 million of the increase in net working capital. When the impact of the acquisition of CBH is removed from the year-over-year comparison, net working capital increased $5.4 million. The net increase in net working capital excluding CBH was mostly due to a $18.8 million increase in net accounts receivable, an increase of $4.0 million in net inventory, partially offset by a $13.6 million increase in accounts payable and accrued expenses and a 3.2 million reduction in refundable income taxes.

Net accounts receivable were $104.3 million and $78.6 million at June 30, 2025, and June 30, 2024, respectively with CBH accounting for $6.9 million of net accounts receivable as of June 30, 2025. Net accounts receivable increased $18.8 million excluding CBH’s net accounts receivable, primarily the result of a period-over period increase in sales. Days Sales Outstanding (DSO) was 57 days and 58 days as of June 30, 2025, and June 30, 2024, respectively. We believe that our receivables are ultimately collectible or recoverable, net of certain reserves, and that aggregate allowances for credit losses are adequate. 

Net inventories were $79.8 million and $70.9 million at June 30, 2025, and June 30, 2024, respectively, with CBH accounting for $5.0 million of the $79.8 million total net inventory at June 30, 2025. Net inventory increased $3.9 million excluding CBH’s net inventory. The increase of $3.9 million is the result of a $1.7 million increase in Lighting Segment inventory and a $2.2 million increase in Display Solutions Segment inventory. Inventory levels increased in both reportable segments to support the growth in sales.

Cash generated from operations and borrowing capacity under our credit facility is our primary source of liquidity. Our credit facility consists of a $25 million term loan and $75 million secured revolving line of credit. Both facilities expire in the first quarter of fiscal 2027. As of June 30, 2025, $35.7 million of the revolving line of credit was available. As of June 30, 2025, we are in compliance with all of our loan covenants. We believe that our $100 million credit facility plus cash flows from operating activities are adequate for operational and capital expenditure needs for the next 12 months.

The Company generated $38.1 million of cash from operating activities in fiscal 2025 compared to a generation of cash of $43.4 million in fiscal 2024. The Company continues to effectively manage its working capital while generating cash flow from earnings, resulting in strong cash flow from operations.

The Company consumed $28.0 million of cash from investing activities in fiscal 2025 compared to a consumption of cash of $55.3 million in fiscal 2024. The Company acquired Canada’s Best Holdings for $24.6 million in the third quarter of fiscal 2025 and acquired EMI Industries, LLC in the fourth quarter of fiscal 2024 for $49.9 million which contributed significantly to the consumption of cash in both reporting periods. The Company also invested $3.5 million and $5.4 million of cash related to purchases of equipment and tooling in fiscal 2025 and 2024, respectively, to support sales growth initiatives.

The Company had a net consumption of cash of $11.4 million in fiscal 2025 compared to a net generation of cash of $14.3 million in fiscal 2024 related to financing activities. While the cash generated from operating activities continues to pay down its debt, the Company borrowed funds from its line of credit to acquire EMI and CBH, which impacted net debt activity over the course of the two fiscal years.

The Company has on its balance sheet financial instruments consisting primarily of cash and cash equivalents, revolving lines of credit, and long-term debt. The fair value of these financial instruments approximates carrying value because of their short-term maturity and/or variable, market-driven interest rates.

Off-Balance Sheet Arrangements

We have no financial instruments with off-balance sheet risk.

Cash Dividends

In August 2025, the Board of Directors declared a regular quarterly cash dividend of $0.05 per share payable September 10, 2025, to shareholders of record as of September 2, 2025. The indicated annual cash dividend rate for fiscal 2025 was $0.20 per share. The Board of Directors has adopted a policy regarding dividends which indicates that dividends will be determined by the Board of Directors at its discretion based upon its evaluation of earnings, cash flow requirements, financial conditions, debt levels, stock repurchases, future business developments and opportunities, and other factors deemed relevant.

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Critical Accounting Policies and Use of Estimates

We have adopted various accounting policies to prepare the consolidated financial statements in accordance with U.S. GAAP. Our significant accounting policies are described in Note 1. "Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements. Some of those significant accounting policies require us to make difficult, subjective, or complex judgments or estimates. An accounting estimate is considered to be critical if it meets both of the following criteria: (i) the estimate requires assumptions about matters that are highly uncertain at the time the accounting estimate is made, and (ii) different estimates reasonably could have been used, or changes in the estimate that are reasonably likely to occur may have a material impact on our financial condition or results of operations. The significant accounting policy that management believes is critical to the understanding and evaluating our reported financial results is the warranty reserve. For further information see Note 1. “Summary of Significant Accounting Policies " of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. 

Warranty Reserves:

The Company offers a limited warranty that its products are free from defects in workmanship and materials.  The specific terms and conditions vary somewhat by product line, but generally cover defective products returned within one to five years, with some exceptions where the terms extend to 10 years, from the date of shipment. The Company records warranty liabilities to cover the estimated future costs for repair or replacement of defective returned products as well as products that need to be repaired or replaced in the field after installation. The Company calculates its liability for warranty claims by applying estimates based upon historical claims as a percentage of sales to cover unknown claims, as well as estimating the total amount to be incurred for known warranty issues. Warranty reserves are subject to large reserve adjustments when actual warranty costs differ significantly from cost estimates due to unforeseen claim activity which exceeds historical claim activity such as product failures across several customers or over a wide geographic area. The Company also periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amount as necessary, which can also cause large reserve adjustments. These adjustments may be required in the future, which could adversely affect our gross profit and results of operations. The same methodology was used for calculating warranty reserves in fiscal 2024 and fiscal 2025 which resulted in an increase in the reserves in fiscal 2025.

Business Combination:

From time to time, the Company enters into business combinations. Business acquisitions are accounted for using the acquisition method of accounting, which allocates the fair value of the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. In the fair value evaluation of intangible assets acquired, there are significant estimates and assumptions, including forecasts of future cash flows, revenues; and earnings before interest, taxes, depreciation and amortization; as well as the selection of the royalty rates and discount rates. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The acquisition method of accounting also requires us to refine these estimates over a measurement period not to exceed one year to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to adjust provisional amounts that we have recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could have a material impact on our financial condition and results of operations.

Additionally, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and assumptions periodically and record any adjustments to preliminary estimates to goodwill, provided we are within the measurement period. If outside of the measurement period, any subsequent adjustments are recorded to the consolidated statement of operations.

29