CINCINNATI--(BUSINESS WIRE)--April 23, 2026--
LSI Industries Inc. (Nasdaq: LYTS, "LSI" or the "Company") a leading U.S. based manufacturer of commercial lighting and display solutions, today reported results for the fiscal 2026 third quarter ended March 31, 2026.
FISCAL 2026 THIRD QUARTER RESULTS
-- Completed the acquisition of Royston Group on March 24, 2026
-- Net Sales of $150.5 million, +14% y/y; net sales excluding Royston +9%
y/y
-- Net Income $2.1 million; Adjusted Net Income $9.6 million, +52% y/y
-- Diluted EPS of $0.06; Adjusted Diluted EPS of $0.28
-- EBITDA of $7.5 million; Adjusted EBITDA of $15.0 million, +34% y/y
-- Ratio of net debt to TTM proforma Adjusted EBITDA 2.7x
During the fiscal third quarter, LSI reported net sales of $150.5 million, an increase of 14% versus the prior-year period, including six days of contribution from the Royston Group ("Royston") acquisition. Excluding Royston-related contributions, fiscal third quarter revenue increased 9% versus the prior year, capitalizing on increased vertical market demand across both of LSI's Lighting and Display Solutions segments.
The Company reported net income of $2.1 million, or $0.06 per diluted share in the fiscal third quarter, while adjusted net income was $9.6 million, or $0.28 per diluted share. Reported net income for the fiscal third quarter includes approximately $6.5 million of non-recurring items, mainly related to the Royston acquisition.
During the quarter, LSI completed an underwritten public offering of common stock to support the financing of the Royston Group transaction. In connection with this offering and completion of the transaction, LSI issued approximately 5.5 million shares of common stock during the month of March 2026. As a result, weighted average diluted shares outstanding for the quarter reflect the partial-period impact of approximately 1.8 million shares related to this offering.
LSI reported fiscal third quarter adjusted EBITDA of $15.0 million, an increase of 34% versus the prior year driven by incremental volume, improved productivity, and price optimization. Adjusted EBITDA margin rate improved to 10.0% in the quarter, an increase of 150 basis points versus the prior year period.
A schedule detailing Royston's six-day financial contributions to LSI's fiscal third quarter results is provided below:
Fiscal Third Quarter 2026 usd in millions except EPS LSI Royston* Total LSI --------------------------- ------ -------- --------- Sales $143.9 $6.6 $150.5 Net Income $2.0 $.1 $2.1 Adj. Net Income $9.0 $.6 $9.6 EBITDA $7.1 $.4 $7.5 Adj. EBITDA $14.1 $.9 $15.0 Earnings per Share $0.06 $0.00 $0.06 Adj. Earnings per Share $0.27 $0.01 $0.28 * Royston results reflect the six day stub period
Total free cash flow, excluding non-recurring acquisition-related items, was $11.8 million in the quarter, maintaining a healthy earnings conversion to cash flow. At the conclusion of the Royston acquisition, LSI's ratio of net debt to pro forma trailing twelve month adjusted EBITDA was 2.7x. As of March 31, 2026, LSI had cash and availability on its credit facility of approximately $100 million. A reconciliation of GAAP to non-GAAP financial results is included in the appendix of this release.
The Company declared a regular cash dividend of $0.05 per share payable on May 12, 2026, to shareholders of record on May 4, 2026.
MANAGEMENT COMMENTARY
"The sustained high level of customer project activity in key vertical markets enabled LSI to deliver solid third quarter performance," stated James A. Clark, President and CEO of LSI. "With the recently completed acquisition of Royston, LSI has built a unique marketing offering that provides a one-stop shop solutions-based approach to support the new build and remodel programs of leading retail companies across North America. During the quarter, our customers directed increased investment toward branding solutions that enhance the consumer experience, a key differentiator across the retail environments they serve, contributing to another consecutive quarter of profitable growth for our business.
"Over the last five years, LSI has deployed more than $500 million through four strategic acquisitions, including Royston, positioning LSI as the leading scaled platform in branded solutions," continued Clark. "As outlined in our Fast Forward strategy, we've demonstrated a focused approach toward value creation through accretive complementary acquisitions, while generating organic growth, margin discipline, and profitability within our base business. The addition of Royston is expected to accelerate our growth across targeted vertical markets, expand our suite of solutions within higher margin product categories, and further establishes LSI as the partner of choice for leading retail brands.
"Our Display Solutions segment had an exceptional quarter, as sales increased 23% versus the prior year, and 14% excluding the Royston stub period impact. Segment adjusted operating income excluding Royston increased 64% versus prior year, with the gross margin rate improving by 230 basis points. We experienced strong project activity across our grocery and refueling/c-store markets during the quarter, as increasingly predictable demand patterns supported more balanced production levels, consistent scheduling, and increased factory productivity, all culminating in improved operating leverage.
"Positive momentum continued in the grocery vertical, as both refrigerated and non-refrigerated display case sales increased on a double-digit percentage basis, reflecting healthy activity across our customer base, the adoption of newly introduced products, and return to more normalized demand patterns. Order activity was strong for the quarter, increasing 25% over prior year levels, resulting a book-to bill ratio of 1.2," continued Clark.
"Within our refueling/c-store vertical, sales realized a high single digit growth rate, driven by ongoing site releases across large, multi-phase customer programs, including some spanning multiple years, combined with elevated levels of new and existing mid-sized engagements, " stated Clark. "Orders for the refueling/c-store vertical increased more than 20% in the third quarter, resulting in a book-to-bill ratio above 1.0, and higher backlog versus the year-ago period. Also in the quarter, LSI was awarded more than $5 million of program work by the largest c-store chain in North America. The program, which involves both store renovation and new build activity, will occur throughout the balance of calendar year 2026.
"Within the QSR vertical, performance was mixed during the third quarter, as many chains continue to invest for growth, while others have taken a more cautious approach toward site expansion and store remodel spend, over the short-term. We continue to align with many of the highest growth, multi-regional chains who recognize the economic value of an enhanced consumer experience, as demonstrated by a high level of concept and development work across key customers.
"Our Lighting segment delivered 2% sales growth in the third quarter, as less favorable weather conditions in the early part of the calendar year impacted outdoor lighting project activity," noted Clark. "While project quotation levels remain steady, our quote-to-order conversion period, which had compressed in the last several quarters, lengthened in the third quarter. Although third quarter segment orders increased on a sequential basis, orders were below prior year levels. Despite expectations for softer near-term demand in the Lighting segment, we continue to deliver above market growth, consistent with our stated focus. During the third quarter, we continued to apply strategic price actions in response to shifts in material input costs, resulting in a year-over-year 30 basis-point improvement in adjusted gross margin.
Clark concluded, "We're excited about both the short-term and long-term outlook for our company. Our strategic focus on sustained organic growth, proven track record of operational excellence, and disciplined, return driven approach to capital allocation, position LSI to become a value-compounder over the coming years. With the addition of Royston, we've expanded our capabilities, further established highly defensible, market leading positions in key vertical markets, and built a vertically integrated branding platform of scale, unequaled across North America. Looking ahead, our focus remains on delivering above-average market growth in both new and existing vertical markets, driving operating leverage through scale and productivity gains, and prioritizing capital allocation toward high return growth initiatives, and a balanced return on capital program, consistent with the priorities detailed in our Fast Forward strategy."
FISCAL 2026 THIRD 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 May 7, 2026:
Domestic Replay: 844-512-2921 International Replay: 412-317-6671 Conference ID: 13760033
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