Key Points LSI's profits are improving as it stabilizes its revenue base. Robust cash flow is bolstering LSI's balance sheet and funding its expansion plans. 10 stocks we like better than Lsi Industries › Shares of LSI Industries (NASDAQ: LYTS) popped on Thursday after the commercial lighting and display manufacturer announced its fiscal 2026 second-quarter results. By the close of trading, LSI's stock price was up more than 14%. Image source: Getty Images. Stabilizing sales LSI's net sales dec ...

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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].