LSI Industries Reports Fiscal 2026 First Quarter Results and Declares Quarterly Cash Dividend
FISCAL 2026 FIRST QUARTER RESULTS
-
Net Sales of
$157.3 million 14% y/y; organic growth7% y/y -
Net Income
$7.3 million $9.7 million 22% y/y -
Diluted EPS of
$0.23 $0.31 -
EBITDA of
$14.2 million $15.6 million 17% y/y -
Adjusted EBITDA margin rate of
10.0% - Ratio of net debt to TTM Adjusted EBITDA of .8x
LSI delivered significant year-over-year growth in net sales during the fiscal 2026 first quarter, driven by broad-based demand across its Lighting and Display Solutions segments. A combination of increased project activity across several vertical markets, improved price realization, and disciplined cost management resulted in higher operating income, net income, adjusted EBITDA, and margin realization when compared to the prior year period.
The Company reported fiscal first quarter net sales of
LSI reported adjusted EBITDA of
Working Capital increased in the first quarter as expected, driven by our sales growth and support of our supply chain and production capabilities. While the timing of these investments impacted free cash generation in the first quarter, LSI expects to a return to positive cash flow during the fiscal second quarter. LSI maintains a strong balance sheet, exiting the quarter with a ratio of net debt to trailing twelve-month adjusted EBITDA of .8x.
The Company declared a regular cash dividend of
MANAGEMENT COMMENTARY
“Strong execution and favorable demand conditions supported a successful start to our fiscal year 2026, highlighted by a combination of solid organic sales growth, improved margin realization, and the impact of Canada’s Best Holdings, which we acquired in March 2025,” stated James A. Clark, President and CEO of LSI. “Project activity increased across both our Lighting and Display Solutions businesses in the first quarter, resulting in double-digit year-over-year sales growth in each segment. We believe our strategic focus on high-value verticals, with compelling long-term growth potential enables LSI to outperform broader market indices and drive sustained growth.
“In recent years, we have built an expanded sourcing capability, positioning LSI to effectively navigate a fluid trade policy environment, that is impacting tariff levels, raw material costs, and inventory availability,” continued Clark. “We also work diligently on margin management, ensuring project price quotations are aligned with current cost information. This discipline, together with increased customer project activity, culminated in improved operating leverage during the first quarter, with adjusted net income increasing
“Within our Display Solutions segment, first quarter sales increased by
“Development activity for proposed programs within the refueling/c-store vertical remains high, as LSI engineering teams have been fully deployed to collaborate with customers on new concepts and build specifications. Given the high level of front-end engineering activity with these customers, which range in size from global oil companies to growing independent retail brands, we remain confident on the intermediate-to-longer-term outlook for this vertical, as these programs, once approved, have the potential to extend over multi-year periods.
Within the grocery vertical, we generated double-digit sales growth in the first quarter, as demand conditions continue to normalize. First quarter sales were balanced between refrigerated and non-refrigerated displays, reflecting our growing penetration into non-refrigerated products. During the first quarter, LSI was awarded a multi-million-dollar program for a large national grocer. Importantly, LSI was awarded this program based on our superior quality and performance standards, factors which outweighed LSI not being the low-cost bidder on the engagement.
Activity in the grocery vertical is much improved from the levels experienced in fiscal 2024 and early 2025, although the pipeline of new project launch activity has increasingly focused on near-term investments in store builds and renovations. Currently, we expect fiscal 2026 second quarter grocery project volumes to be below the record setting prior year, given the surge in activity we experienced after termination of the proposed merger of two national grocery chains, as well as the EPA mandated calendar year-end phase-out of the R448 refrigerant technology. On balance, we expect LSI will deliver year-over-year sales growth in the grocery vertical for fiscal 2026, building on elevated prior-year comparisons.
“Our Lighting segment had a strong first quarter performance highlighted by
“We continue to convert lighting accounts to LSI, displacing our competitors. These share gains are the result of investments we’ve made in the features and functionality of our products, which are designed for specific vertical market applications and outperform the competition. Further, our ability to provide on-time, on-budget solutions during a period of broader market supply chain disruption is a competitive advantage, made possible by our focused engineering capabilities and domestic manufacturing footprint.
“Investment in Innovation is core to the LSI culture, a way of doing business that has led us to redefine best-in-class functionality and performance, while reducing the total cost of ownership for our customers. Our product development pipeline across both segments, which includes new products, product revisions, and proposals, all remained at high levels entering fiscal 2026, and we continue to release a steady stream of new solutions to our growing base of customers.
“Effective in the first quarter, we amended and extended our existing credit facility, further ensuring LSI has ample liquidity to support the strategic growth of the business, as outlined in our 2028 Fast Forward Plan. The amended facility increases our availability from
Clark concluded, “Following a record fiscal 2025, our team is off to another strong start entering fiscal 2026. Looking ahead, we will work to drive sustained, profitable sales growth within our targeted vertical markets through a combination of share gains, price discipline, and cost controls, while remaining an opportunistic acquiror of high-quality, complementary assets that accelerate our value creation roadmap. We believe the secular growth outlook for our end markets remains healthy, positioning us to not only meet, but potentially exceed our fiscal 2028 financial targets.”
FISCAL 2026 FIRST QUARTER CONFERENCE CALL
A conference call will be held today at 11:00 A.M. ET to review the Company’s financial results and conduct a question-and-answer session.
A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of LSI Industries’ website at www.lsicorp.com. Individuals can also participate by teleconference dial-in. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register, download and install any necessary audio software.
Details of the conference call are as follows:
Domestic Live: |
877-407-4018 |
|
International Live: |
201-689-8471 |
To listen to a replay of the teleconference, which subsequently will be available through November 20, 2025:
Domestic Replay: |
844-512-2921 |
|
International Replay: |
412-317-6671 |
|
Conference ID: |
13756516 |
ABOUT LSI INDUSTRIES
Headquartered in
FORWARD-LOOKING STATEMENTS
For details on the uncertainties that may cause our actual results to be materially different than those expressed in our forward-looking statements, visit https://investors.lsicorp.com as well as our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q which contain risk factors.
| Three Months Ended September 30 |
||||||||
| (Unaudited) | ||||||||
| (In thousands, except per share data) |
|
2025 |
|
|
2024 |
|
||
| Net sales | $ |
157,249 |
|
$ |
138,095 |
|
||
| Cost of products sold |
|
117,039 |
|
|
104,343 |
|
||
| Expense on step-up basis of acquired lease |
|
68 |
|
|
67 |
|
||
| Severance costs and restructuring costs |
|
(135 |
) |
|
38 |
|
||
| Gross profit |
|
40,277 |
|
|
33,647 |
|
||
| Long-term performance based compensation |
|
1,282 |
|
|
1,184 |
|
||
| Severance costs and restructuring costs |
|
64 |
|
|
22 |
|
||
| Amortization expense of acquired intangible assets |
|
1,554 |
|
|
1,408 |
|
||
| Acquisition costs |
|
220 |
|
|
48 |
|
||
| Selling and administrative costs |
|
26,185 |
|
|
21,854 |
|
||
| Operating income |
|
10,972 |
|
|
9,131 |
|
||
| Other (income) expense |
|
530 |
|
|
(61 |
) |
||
| Interest expense, net |
|
747 |
|
|
875 |
|
||
| Income before taxes |
|
9,695 |
|
|
8,317 |
|
||
| Income tax |
|
2,431 |
|
|
1,635 |
|
||
| Net income | $ |
7,264 |
|
$ |
6,682 |
|
||
| Weighted Average Common Shares Outstanding | ||||||||
| Basic |
|
30,449 |
|
|
29,593 |
|
||
| Diluted |
|
31,381 |
|
|
30,530 |
|
||
| Earnings Per Share | ||||||||
| Basic | $ |
0.24 |
|
$ |
0.23 |
|
||
| Diluted | $ |
0.23 |
|
$ |
0.22 |
|
||
| (amounts in thousands) | ||||||
| September 30, | June 30, | |||||
|
2025 |
|
2025 |
|||
| Current assets | $ |
207,739 |
$ |
194,166 |
||
| Property, plant and equipment, net |
|
30,487 |
|
31,154 |
||
| Other assets |
|
166,647 |
|
171,042 |
||
| Total assets | $ |
404,873 |
$ |
396,362 |
||
| Current maturities of long-term debt | $ |
3,571 |
$ |
3,571 |
||
| Other current liabilities |
|
91,409 |
|
93,778 |
||
| Long-term debt |
|
47,105 |
|
44,986 |
||
| Other long-term liabilities |
|
21,462 |
|
23,305 |
||
| Shareholders' equity |
|
241,326 |
|
230,722 |
||
$ |
404,873 |
$ |
396,362 |
|||
Three Months Ended September 30, 2025, Results
Net sales for the three months ended September 30, 2025, of
Balance Sheet
The balance sheet at September 30, 2025, included current assets of
Cash Dividend Actions
The Board of Directors declared a regular quarterly cash dividend of
Non-GAAP Financial Measures
This press release includes adjustments to GAAP operating income, net income, and earnings per share for the three and twelve months ended June 30, 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 measures, the revenue of the acquired companies is reflected in the measures, and the acquired assets contribute to revenue generation. We exclude these items because we believe they are not representative of the ongoing results of the operations of the business. Also included in this press release are 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
| Three Months Ended September 30 |
|||||||||||
| (Unaudited) | |||||||||||
| (In thousands, except per share data) |
|
2025 |
|
|
|
2024 |
|
|
% Change |
||
| Net sales | $ |
157,249 |
|
$ |
138,095 |
|
14 |
% |
|||
| Operating income as reported |
|
10,972 |
|
|
9,131 |
|
20 |
% |
|||
| Long-term performance based compensation |
|
1,282 |
|
|
1,184 |
|
|||||
| Amortization expense of acquired intangible assets |
|
1,554 |
|
|
1,408 |
|
|||||
| Acquisition costs |
|
220 |
|
|
48 |
|
|||||
| Lease expense on the step-up basis of acquired leases |
|
68 |
|
|
67 |
|
|||||
| Severance costs and restructuring costs |
|
(71 |
) |
|
60 |
|
|||||
| Operating income as adjusted | $ |
14,025 |
|
$ |
11,898 |
|
18 |
% |
|||
|
8.9 |
% |
|
8.6 |
% |
||||||
| Net income as reported | $ |
7,264 |
|
$ |
6,682 |
|
9 |
% |
|||
| Net income as adjusted | $ |
9,731 |
|
$ |
7,981 |
|
22 |
% |
|||
| Earnings per share (diluted) as reported | $ |
0.23 |
|
$ |
0.22 |
|
5 |
% |
|||
| Earnings per share (diluted) as adjusted | $ |
0.31 |
|
$ |
0.26 |
|
19 |
% |
|||
| Three Months Ended | |||||||||||||
| September 30 | |||||||||||||
| (In thousands, except per share data) |
|
2025 |
|
|
2024 |
|
|||||||
| Diluted EPS | Diluted EPS | ||||||||||||
| Reconciliation of net income to adjusted net income | |||||||||||||
| Net income as reported | $ |
7,264 |
|
$ |
0.23 |
$ |
6,682 |
|
$ |
0.22 |
|
||
| Long-term performance based compensation | $ |
954 |
|
|
0.03 |
|
881 |
|
|
0.03 |
|
||
| Amortization expense of acquired intangible assets | $ |
1,117 |
|
|
0.04 |
|
1,042 |
|
|
0.03 |
|
||
| Acquisition costs | $ |
165 |
|
|
- |
|
36 |
|
|
- |
|
||
| Lease expense on the step-up basis of acquired leases | $ |
51 |
|
|
- |
|
50 |
|
|
- |
|
||
| Severance costs and restructuring costs | $ |
(53 |
) |
|
- |
|
45 |
|
|
- |
|
||
| Foreign currency transaction loss on intercompany loan | $ |
326 |
|
|
0.01 |
|
- |
|
|
- |
|
||
| Tax rate difference between reported and adjusted net income |
$ |
(93 |
) |
|
- |
|
(755 |
) |
|
(0.02 |
) |
||
| Net income adjusted | $ |
9,731 |
|
$ |
0.31 |
$ |
7,981 |
|
$ |
0.26 |
|
||
The foreign currency transaction loss on intercompany loan relates to an intercompany loan established as a result of the acquisition Canada’s Best Holdings as a method to repatriate cash generated in
| (Unaudited; In thousands) | Three Months Ended September 30 |
||||||||||
| Net Income to Adjusted EBITDA | |||||||||||
|
2025 |
|
|
|
2024 |
|
|
% Change |
|||
| Net Income as reported | $ |
7,264 |
|
$ |
6,682 |
|
|||||
| Income tax |
|
2,431 |
|
|
1,635 |
|
|||||
| Interest expense, net |
|
747 |
|
|
875 |
|
|||||
| Other expense (income) |
|
530 |
|
|
(61 |
) |
|||||
| Operating income as reported | $ |
10,972 |
|
$ |
9,131 |
|
20 |
% |
|||
| Depreciation and amortization |
|
3,200 |
|
|
2,940 |
|
|||||
| EBITDA | $ |
14,172 |
|
$ |
12,071 |
|
17 |
% |
|||
| Long-term performance based compensation |
|
1,282 |
|
|
1,184 |
|
|||||
| Acquisition costs |
|
220 |
|
|
48 |
|
|||||
| Lease expense on the step-up basis of acquired leases |
|
68 |
|
|
67 |
|
|||||
| Severance costs and restructuring costs |
|
(71 |
) |
|
60 |
|
|||||
| Adjusted EBITDA | $ |
15,671 |
|
$ |
13,430 |
|
17 |
% |
|||
| Adjusted EBITDA as a percentage of sales |
|
10.0 |
% |
|
9.7 |
% |
|||||
| (Unaudited; In thousands) | Three Months Ended September 30 |
||||||||||
| Free Cash Flow | |||||||||||
|
2025 |
|
|
|
2024 |
|
|
% Change |
|||
| Cash flow from operations | $ |
675 |
|
$ |
11,846 |
|
-94 |
% |
|||
| Capital expenditures |
|
(967 |
) |
|
(759 |
) |
|||||
| Free cash flow | $ |
(292 |
) |
$ |
11,087 |
|
-103 |
% |
|||
| Net Debt to Adjusted EBITDA Ratio | September 30, | |||||||
| (amounts in thousands) |
|
2025 |
|
|
2024 |
|
||
| Current maturity of long-term debt | $ |
3,571 |
|
$ |
3,571 |
|
||
| Long-term debt |
|
47,105 |
|
|
44,118 |
|
||
| Total debt | $ |
50,676 |
|
$ |
47,689 |
|
||
| Less: cash |
|
(7,143 |
) |
|
(6,969 |
) |
||
| Net debt | $ |
43,533 |
|
$ |
40,720 |
|
||
| Adjusted EBITDA - trailing twelve months | $ |
57,308 |
|
$ |
50,321 |
|
||
| Net debt to adjusted EBITDA ratio |
|
0.8 |
|
|
0.8 |
|
||
| Organic compared to Inorganic Sales | Q1 2026 | Q1 2025 | % Variance | ||||||||
| Lighting Segment | $ |
69,053 |
$ |
58,437 |
18 |
% |
|||||
| Display Solutions Segment | |||||||||||
| - Comparable Display Solutions Sales |
|
79,277 |
|
79,658 |
- |
|
|||||
| - |
|
8,919 |
|
- |
|||||||
| Total Display Solutions Sales | $ |
88,196 |
$ |
79,658 |
11 |
% |
|||||
| Total net sales | $ |
157,249 |
$ |
138,095 |
14 |
% |
|||||
| Less: | |||||||||||
|
8,919 |
|
- |
- |
|
||||||
| Total organic net sales | $ |
148,330 |
$ |
138,095 |
7 |
% |
|||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20251106550011/en/
INVESTOR & MEDIA CONTACT
Noel Ryan or Bill Seymour
720.778.2415
LYTS@vallumadvisors.com
Source: LSI Industries Inc.
