Core Insights - LSI Industries' shares increased by over 14% following the announcement of its fiscal 2026 second-quarter results [1] Sales Performance - LSI's net sales for the quarter ended December 31 were $147 million, reflecting a decline of less than 1% year over year, attributed to the normalization of event-driven grocery sales [3] - The lighting business was a significant growth driver, with sales increasing by 15% [3] Profitability and Cash Flow - Adjusted net income rose slightly to $8.4 million, or $0.26 per share, surpassing Wall Street's expectations of $0.22 per share [4] - The company generated $23.3 million in free cash flow, which was used to pay down debt and strengthen the balance sheet [5] - Management plans to utilize strong cash generation for organic growth investments and potential acquisitions [5] Future Outlook - The company anticipates continued year-over-year revenue growth in the lighting segment and a resumption of growth in the display solutions segment as it enters the second half of fiscal 2026 [5]

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Core Insights - The company reported solid second-quarter results for fiscal 2026, with revenue flat year over year at $147 million, while profitability and free cash flow improved [5][16]. - The Display Solutions segment saw a slight revenue decline year over year but improved order trends and backlog, particularly in the refueling, convenience store, and casual dining sectors [1][3][21]. - The Lighting segment achieved a 15% year-over-year sales growth, marking the third consecutive quarter of double-digit growth, driven by new product introductions and strong project shipments [2][17]. Display Solutions - The Display Solutions segment experienced a year-over-year revenue decline due to strong prior-year comparisons, but orders improved sequentially and were up year over year, indicating a healthier backlog [1][3]. - The company is expanding its presence beyond quick-serve restaurants into casual dining and premium food services, with project values per site ranging from $250,000 to $1 million [6][19]. - The grocery vertical has returned to normalized demand levels after a previous surge, with Q2 orders increasing double digits year over year, resulting in a strong book-to-bill ratio of 1.2 [20][19]. Lighting - The Lighting segment reported a 15% year-over-year sales growth, following an 18% growth in the first quarter, with adjusted operating income increasing by 29% [2][17]. - The growth in Lighting is attributed to the addition of aluminum poles to the product line, increased large project shipments, and a successful national account strategy [2][17]. - Orders in the Lighting segment were up approximately 10% year over year, contributing to a book-to-bill ratio above one, indicating continued confidence in future performance [2][17]. Financial Performance - Adjusted EBITDA increased year over year to $13.4 million, with free cash flow strong at $23 million, allowing the company to reduce total debt by $22.7 million during the quarter [12][13][16]. - The company ended the quarter with a net leverage ratio of 0.4, providing significant capital allocation flexibility for future investments and acquisitions [13][16]. - The company expects to maintain above-market growth, supported by improving order trends and backlog across key vertical markets [14][55]. Strategic Initiatives - The company is focused on integrating its teams and breaking down silos to enhance cross-selling opportunities and improve operational efficiency [9][10]. - There is a commitment to talent management and empowering employees to foster a unified organizational culture [8][11]. - The company is optimistic about the potential in the casual dining and premium food services sectors, with larger project sizes and cross-selling opportunities expected to drive growth [38][62]. Market Outlook - The company anticipates continued elevated activity levels into fiscal and calendar year 2027, driven by strong customer engagement and planning discussions [7][22]. - The competitive environment in the convenience store and grocery markets is seen as favorable, with new entrants and existing players investing in customer experience and branding [56][59]. - The company is exploring M&A opportunities, with a focus on cultural fit and operational synergies, while remaining selective in its acquisition strategy [59][60].

LSI Industries (NasdaqGS:LYTS) Q2 2026 Earnings call January 22, 2026 11:00 AM ET Company ParticipantsJim Galeese - CFOJim Clark - President and CEOConference Call ParticipantsSameer Joshi - AnalystGeorge Gianarikas - AnalystAlex Riegel - AnalystAaron Spychala - AnalystChristopher Glynn - AnalystOperatorGreetings and welcome to the LSI Industries Fiscal 2026 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal ...

LSI Industries (NasdaqGS:LYTS) Q2 2026 Earnings call January 22, 2026 11:00 AM ET Company ParticipantsJim Galeese - CFOJim Clark - President and CEOConference Call ParticipantsSameer Joshi - AnalystGeorge Gianarikas - AnalystAlex Rygiel - AnalystAaron Spychala - AnalystChristopher Glynn - AnalystOperatorGreetings and welcome to the LSI Industries Fiscal 2026 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal ...

Financial Data and Key Metrics Changes - Revenue for Q2 2026 was $147 million, essentially flat year over year, while profitability and free cash flow improved [5][15] - Adjusted EBITDA increased year over year to $13.4 million, with a strong free cash flow of $23 million, reducing the net leverage ratio to 0.4 [13][15] - Adjusted earnings per share were $0.26 for the quarter, with adjusted net income and adjusted EBITDA modestly above the prior year [15] Business Line Data and Key Metrics Changes - The Lighting segment achieved a sales growth of 15% year over year, marking the third consecutive quarter of double-digit growth [6][16] - Display Solutions experienced a slight revenue decline year over year due to prior year comparisons, but orders improved sequentially and were up year over year, resulting in a strong backlog [7][18] - In the grocery vertical, Q2 sales reflected a return to normal seasonal demand, with grocery orders increasing double digits year over year and a book-to-bill ratio of 1.2 [17] Market Data and Key Metrics Changes - International market activity, particularly in Mexico and the islands, showed improvement after several softer periods, with expectations for elevated activity into fiscal and calendar year 2027 [10] - The competitive environment in the convenience store sector is accelerating, with new entrants driving growth and investment in customer experience [26][64] Company Strategy and Development Direction - The company is focused on integrating JSI and EMI under the LSI umbrella, emphasizing talent management and operational consolidation to unlock cross-selling opportunities [11][32] - The strategy includes enhancing visibility into sales activities and strengthening alignment between sales, operations, and execution [12] - The company aims to grow above market through a differentiated solutions-based approach, leveraging its capabilities in custom fabrication and integrated design [14][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the secular growth outlook across key vertical markets, supported by improving order trends and backlog [14] - The company remains focused on building long-term value through disciplined growth and operational excellence, with expectations for continued progress in the second half of Fiscal 2026 [14][80] Other Important Information - The company utilized strong cash flow to reduce total debt by $22.7 million during the quarter, supporting its fast-forward strategy [13] - The integration of Canada's Best is progressing well, with ongoing discussions in the retail banking sector in the U.S. [51] Q&A Session Summary Question: Can you help frame the opportunity in refueling and C-store? - Management indicated steady growth with multiple mid-sized projects expected to contribute positively through 2026 and into 2027 [22][24] Question: What are the market drivers in Mexico? - Management noted that the market is normalizing, with expectations for growth as companies return to original plans [25][29] Question: Can you discuss the integration of EMI and its impact on margins? - Management reported over 200 basis points of margin improvement and expects continued progress towards achieving better margins [33] Question: What is the outlook for premium food services? - Management highlighted growth opportunities in casual dining and premium food services, with larger project sizes compared to QSR [38][72] Question: How does the competitive environment support above-market growth? - Management emphasized the dynamics in the convenience store and grocery markets, which align well with the company's offerings [64]

Financial Performance - Q2FY26 sales were $147 million, successfully offsetting the non-recurring demand surge in Q2FY25[13, 19] - Adjusted EBITDA margin for Q2FY26 was 91%, a slight increase of 10 bps compared to the previous year[13, 18, 23] - The company generated $233 million in free cash flow in Q2FY26, resulting in a net debt to trailing twelve-month adjusted EBITDA ratio of 04x[14] - Adjusted net income increased by 6% year-over-year[18] Segment Performance - The Lighting Segment experienced 15% organic revenue growth year-over-year, driven by market share gains and increased large project activity[14, 26] - Lighting Segment adjusted gross margin rate improved by 190 bps[14, 26] - Display Solutions Segment sales were $803 million, impacted by elevated prior-year levels, but order activity improved, supporting increased demand in the second half of fiscal 2026[15, 36, 38] Outlook and Strategy - The company anticipates year-over-year growth in Q3FY26, with Lighting segment orders up 10% above prior-year levels[15] - Grocery vertical orders in the Display Solutions segment increased 20% above the prior year, supporting improved segment backlog[15] - The company maintains over $103 million in cash and available liquidity under its credit facility[54, 55]

分组1 - LSI reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.17 per share, and showing an increase from $0.18 per share a year ago, resulting in an earnings surprise of +17.65% [1] - The company achieved revenues of $147 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 5.27%, although this represents a slight decrease from year-ago revenues of $147.73 million [2] - LSI has outperformed the S&P 500, with shares increasing by about 11.2% since the beginning of the year compared to the S&P 500's gain of 0.4% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $136.21 million, while for the current fiscal year, the estimate is $0.95 on revenues of $601.45 million [7] - The Building Products - Lighting industry, to which LSI belongs, is currently ranked in the top 40% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - LSI reported net sales of $147.0 million for the second quarter of fiscal 2026, consistent with the prior year period [3]. - The company achieved a net income of $6.3 million, or $0.20 per diluted share, with adjusted net income of $8.4 million, or $0.26 per adjusted diluted share [4]. - Adjusted EBITDA for the second quarter was $13.4 million, representing 9.1% of net sales, an increase from the prior-year period [4]. - Operating income as reported for the second quarter was $8,865, reflecting a 5% increase from $8,459 in the prior year [34]. - Adjusted EBITDA for the six months ended December 31, 2025, was $29,033, representing a 9% increase from $26,726 in 2024 [36]. - Net income as reported for the three months ended December 31, 2025, was $6,348, a 12% increase from $5,647 in 2024 [34]. - Earnings per share (diluted) as reported for the second quarter was $0.20, an 8% increase from $0.18 in the prior year [34]. Cash Flow and Debt Management - Free cash flow generated in the second quarter was $23.3 million, contributing to a reduction in total debt by $22.7 million [5]. - Free cash flow for the three months ended December 31, 2025, was $23,300, a significant increase of 164% compared to $8,825 in the same period of 2024 [36]. - The ratio of net debt to trailing twelve-month adjusted EBITDA improved to 0.4x as of December 31, 2025 [5]. - The net debt to adjusted EBITDA ratio improved to 0.4 as of December 31, 2025, down from 0.6 in 2024 [36]. Segment Performance - The Lighting segment experienced a 15% increase in sales, while the Display Solutions segment saw a 10% decrease compared to the prior year [27]. - Orders in the Lighting segment were 10% above the prior year, resulting in a book-to-bill ratio above 1.0x [16]. - Organic sales in the Lighting Segment for Q2 2026 were $66,673, a 15% increase from $58,210 in Q2 2025 [37]. - The company anticipates continued year-over-year revenue growth in both the Lighting and Display Solutions segments entering the second half of fiscal 2026 [16]. Dividend and Balance Sheet - The company declared a quarterly cash dividend of $0.05 per share, payable on February 10, 2026 [31]. - LSI's balance sheet showed current assets of $187.3 million and long-term debt of $27.9 million as of December 31, 2025 [29]. - Total net sales for the six months ended December 31, 2025, were $304,251, a 6% increase from $285,829 in the same period of 2024 [34]. - Total organic net sales for the six months ended December 31, 2025, were $289,004, a 1% increase from $285,829 in 2024 [37].