LSI Industries (LYTS) investor relations material

Executive summary

• Q2 FY2026 net sales were $147.0 million, flat year-over-year, with strong 15% growth in Lighting offsetting a decline in Display Solutions; profitability and free cash flow improved, reflecting solid execution against tough prior-year comparisons.

• Adjusted EBITDA rose to $13.4 million (9.1% of sales), and free cash flow reached $23.3 million, supporting a $22.7 million reduction in total debt and ending with a net leverage ratio of 0.4.

• Integration of recent acquisitions (EMI, JSI, Canada's Best) is progressing, with a focus on culture, operational efficiency, and cross-selling opportunities.

• A quarterly cash dividend of $0.05 per share was declared, payable February 10, 2026.

Financial highlights

• Adjusted net income was $8.4 million ($0.26 adjusted diluted EPS), modestly above prior year; adjusted EBITDA margin improved to 9.1%.

• Lighting segment adjusted gross margin improved by 190 basis points year-over-year to 34.6%; display solutions gross margin improved by 30 basis points despite lower volume.

• Cash and availability under the amended financing facility is approximately $100 million.

• Six-month net sales increased 6% year-over-year to $304.3 million; net income for the period was $13.6 million ($0.43 diluted EPS).

Outlook and guidance

• Expect continued above-market growth for the year, supported by strong order trends, healthy backlog, and secular growth in key verticals.

• Lighting segment momentum expected to continue into the second half of FY2026, with book-to-bill above one and improved backlog; orders exited Q2FY26 10% above prior-year levels.

• Display Solutions segment saw a 20% year-over-year increase in Grocery vertical orders, supporting improved backlog.

• Q3 is historically the toughest quarter, but management expects to outperform the prior year.