Fiscal Third Quarter 2025 Results Conference Call April 24, 2025 DISCLAIMER This presentation contains "forward-looking statements"—that is, statements related to future events within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Forward-looking statements often address our expected future business, financial performance, financial condition and results of operations, often cont ...

Financial Data and Key Metrics Changes - The company achieved net sales of $132.5 million for Q3 2025, representing a 22% year-over-year growth [8][15] - Adjusted EBITDA for the quarter was $11.3 million, with adjusted earnings per share of $0.20 [15] - Cash flow generated in the third quarter was $4.7 million, increasing the trailing twelve months cash flow to approximately $35 million [16] Business Line Data and Key Metrics Changes - The Display Solutions segment saw a 70% increase in sales year-over-year, with 15% organic growth [8][17] - Lighting sales lagged year-over-year but experienced a 110 basis point improvement in operating margins [9][19] - The Lighting segment's backlog increased by 18% compared to the previous year, indicating a strong rebound in large project order activity [10][19] Market Data and Key Metrics Changes - The Refueling C store vertical experienced a 60% increase in sales year-over-year, driven by ongoing customer graphics programs [17] - Sales of refrigerated and non-refrigerated display case products to the grocery vertical grew by 20% despite order fulfillment challenges [17] Company Strategy and Development Direction - The company is focused on onshoring and reshoring manufacturing, currently standing at 70% domestic sourcing and 30% foreign sourcing [11] - The acquisition of Canada's Best Store Fixtures is part of the strategy to enhance capabilities and market presence [7][16] - The company aims to leverage its unique integrated solutions approach to differentiate itself from competitors [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in regaining margins as customer demand stabilizes and operational efficiencies improve [7][10] - The company anticipates continued favorable order rates, although performance may remain choppy due to the lengthening quote-to-order conversion cycle [19][20] - Management remains optimistic about the market outlook, citing a strong backlog and recovery in lighting orders [46][67] Other Important Information - The company is actively pursuing both incremental and transformational M&A opportunities to enhance growth [55][56] - The product development team continues to release over 30 new products annually, indicating a strong commitment to innovation [58][60] Q&A Session Summary Question: Can you provide more details on fluctuating demand levels and customer schedules? - Management noted that fluctuating demand is primarily around grocery, with improvements in stability observed since early April [24][25] Question: What is the margin impact from production inefficiencies? - Management estimated a margin impact of 200 to 250 basis points due to scheduling disruptions, primarily in the grocery vertical [29][31] Question: How is the company managing the tariff environment? - Management indicated that they have established alternative sourcing and are monitoring pricing impacts due to tariffs, ensuring costs are captured appropriately [33][35] Question: Are there opportunities for cross-selling between display and lighting segments? - Management confirmed that there are significant cross-selling opportunities between display solutions and lighting customers, particularly in vertical markets [40][41] Question: What is the company's acquisition strategy moving forward? - Management stated that they remain active in M&A, focusing on both incremental and transformational opportunities to enhance business capabilities [54][56]

分组1 - LSI reported quarterly earnings of $0.13 per share, matching the Zacks Consensus Estimate, but down from $0.18 per share a year ago [1] - The company posted revenues of $132.48 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.40% and up from $108.19 million year-over-year [2] - LSI shares have declined approximately 18.6% since the beginning of the year, compared to an 8.6% decline in the S&P 500 [3] 分组2 - The earnings outlook for LSI is mixed, with the current consensus EPS estimate at $0.18 on revenues of $138.6 million for the upcoming quarter and $0.70 on revenues of $556.39 million for the current fiscal year [7] - The Building Products - Lighting industry, to which LSI belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - LSI reported fiscal Q3 2025 sales of $132.5 million, a 22% increase year-over-year from $108.2 million[4]. - Net income for Q3 2025 was $3.9 million, or $0.13 per diluted share, compared to $5.4 million, or $0.18 per diluted share in Q3 2024[5][27]. - Adjusted EBITDA for the quarter was $11.3 million, representing 8.5% of net sales[5]. - Free cash flow generated in Q3 2025 was $4.7 million, supported by ongoing profitability and working capital efficiency[6]. - Operating income as reported for the three months ended March 31, 2025, was $6.2 million, a decrease of 19% from $7.7 million in 2024[34]. - Net income as reported for the three months ended March 31, 2025, was $3.9 million, down 28% from $5.4 million in 2024[34]. - The diluted earnings per share (EPS) as reported for the three months ended March 31, 2025, was $0.13, a decrease of 28% from $0.18 in 2024[34]. - Adjusted operating income for the three months ended March 31, 2025, was $9.7 million, a decrease of 4% from $10.0 million in 2024[34]. - Adjusted net income for Q3 2025 was $6,331,000, representing 4.8% of total sales[40]. Segment Performance - Display Solutions segment sales increased by 70% year-over-year, contributing significantly to overall sales growth[11]. - Lighting segment net sales decreased by 9% to $59.0 million, while operating margin improved by 110 basis points to 13.3%[13][27]. - The Lighting Segment reported sales of $58,967,000, down 9% from $64,881,000 in Q3 2024[38]. - Comparable Display Solutions sales increased by 15% to $49,728,000 in Q3 2025 from $43,305,000 in Q3 2024[38]. - Total organic net sales remained flat at $108,695,000 in Q3 2025 compared to $108,186,000 in Q3 2024[38]. Cash Flow and Capital Management - Free cash flow for Q3 2025 was $4,716,000, a significant decrease from $11,152,000 in Q3 2024[37]. - Capital expenditures for Q3 2025 were $(690,000), a 46% decrease from $(1,277,000) in Q3 2024[37]. Acquisitions and Market Position - The company completed the acquisition of Canada's Best Holdings for $24 million, enhancing its market presence in Canada[6][12]. - The book-to-bill ratio was 1.06, with a backlog increase of 15% year-over-year, indicating strong future demand[7][10]. Assets and Liabilities - LSI's total assets increased to $380.9 million, up from $348.8 million in the previous quarter[26]. - Current assets as of March 31, 2025, were $185.5 million, with current liabilities of $89.2 million, resulting in working capital of $96.3 million[29]. - Long-term debt as of March 31, 2025, was $51.8 million, while shareholders' equity stood at $221.7 million[29]. Dividends - The company declared a quarterly cash dividend of $0.05 per share, payable on May 13, 2025[8]. - The Board of Directors declared a quarterly cash dividend of $0.05 per share, with an indicated annual cash dividend rate of $0.20 per share[31]. Non-GAAP Measures - Free cash flow and organic sales growth are included as non-GAAP financial measures to assess operating performance[32]. - The company plans to include amortization expense related to acquired intangible assets as an add-back to its non-GAAP reconciliation starting in fiscal 2025[35]. Debt and Financial Ratios - The net debt to adjusted EBITDA ratio rose to 1.0 in Q3 2025 from 0.2 in Q3 2024[37].

Financial Performance - Net sales for the three months ended December 31, 2024, were $147.734 million, a 35.5% increase from $109.005 million in the same period of 2023[10] - Gross profit for the six months ended December 31, 2024, was $68.508 million, slightly up from $68.125 million in 2023, indicating a stable gross margin[10] - Operating income for the three months ended December 31, 2024, was $8.459 million, compared to $7.819 million in 2023, reflecting an 8.2% increase[10] - Net income for the six months ended December 31, 2024, was $12.329 million, down from $13.934 million in 2023, representing a decrease of 11.5%[10] - Basic earnings per share for the three months ended December 31, 2024, was $0.19, a decrease from $0.20 in the same period of 2023[10] - For the three months ended December 31, 2024, total revenue was $58.2 million, a decrease of 34.9% compared to $89.5 million for the same period in 2023[36] - For the six months ended December 31, 2024, total revenue was $116.6 million, down 30.9% from $169.2 million for the same period in 2023[36] Assets and Liabilities - Total current assets as of December 31, 2024, were $163.405 million, slightly up from $162.499 million as of June 30, 2024[16] - Total liabilities as of December 31, 2024, were $127.430 million, down from $129.438 million as of June 30, 2024[19] - The company’s total assets as of December 31, 2024, were $344.545 million, a decrease from $348.800 million as of June 30, 2024[19] - The company’s long-term debt decreased to $34,615,000 as of December 31, 2024, from $50,658,000 in June 2024[19] - The Company reported a total debt of $38,186,000 as of December 31, 2024, down from $54,229,000 as of June 30, 2024[63] Shareholders' Equity - Shareholders' equity increased to $217.115 million as of December 31, 2024, compared to $204.355 million as of June 30, 2024, indicating a growth of 6.2%[19] - The balance of shareholders' equity at December 31, 2024, was $217,115,000, reflecting an increase from $204,355,000 at June 30, 2024, which is an increase of approximately 6.2%[23] Cash Flow and Dividends - Cash flows provided by operating activities increased to $21,737,000 for the six months ended December 31, 2024, compared to $19,868,000 in 2023, representing an increase of about 9.0%[26] - Total cash and cash equivalents at the end of the period increased to $4,712,000 from $2,660,000, marking a significant increase of approximately 77.0%[26] - Cash dividends paid increased to $2,973,000 in 2024 from $2,826,000 in 2023, representing an increase of approximately 5.2%[26] - Cash dividends paid for the six months ended December 31, 2024, were $3,000,000, compared to $2,800,000 for the same period in 2023[65] Acquisition and Goodwill - The company acquired EMI for $59,000 during the period, indicating ongoing market expansion efforts[26] - The company acquired EMI Industries, LLC for $50.0 million, funded by cash on hand and a $75 million revolving line of credit, expected to expand market reach in grocery and restaurant sectors[42] - The acquisition of EMI resulted in a preliminary allocation of $49.9 million to identifiable assets and liabilities, with $12.4 million recorded as goodwill[43] - Goodwill from the acquisition of EMI is $15.67 million, with significant components including customer relationships valued at $7.49 million and tradename at $4.88 million[44] - The gross amount of accounts receivable acquired from EMI was $11.9 million[43] - The company incurred acquisition-related costs of $1.0 million included in selling and administrative expenses[42] Segment Performance - The Lighting Segment reported net sales of $58.21 million for the three months ended December 31, 2024, down from $64.80 million in 2023, a decline of approximately 10.5%[54] - The Display Solutions Segment saw a significant increase in net sales to $89.52 million for the three months ended December 31, 2024, compared to $44.21 million in 2023, representing an increase of about 102.5%[54] - EMI generated net sales of $18.1 million and operating income of $0.7 million for the period from April 18, 2024, to June 30, 2024[44] Expenses and Costs - The company reported depreciation and amortization expenses of $5,958,000 for the six months ended December 31, 2024, up from $4,728,000 in 2023, indicating an increase of about 26.0%[26] - Stock compensation expense for the six months ended December 31, 2024, was $2,188,000, compared to $2,034,000 in 2023, reflecting an increase of approximately 7.6%[26] - The Company expects to record annual amortization expenses of $5,739,000 in 2025, decreasing to $4,497,000 after 2029[62] - The Company recorded interest payments of $1,460,000 for the six months ended December 31, 2024, compared to $1,006,000 in 2023[69] Tax and Compliance - The effective tax rate for the three months ended December 31, 2024, was 23.2%, up from 20.1% in 2023[78] - The Company is in compliance with all loan covenants as of December 31, 2024[64] Inventory and Accrued Expenses - Total inventories as of December 31, 2024, were $69.43 million, slightly down from $70.91 million as of June 30, 2024[57] - Total accrued expenses as of December 31, 2024, were $42.66 million, a decrease from $43.44 million as of June 30, 2024[58]

Fiscal Second Quarter 2025 Results Conference Call January 23, 2025 DISCLAIMER This presentation contains "forward-looking statements"—that is, statements related to future events within the meaning of the Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Forward-looking statements often address our expected future business, financial performance, financial condition and results of operations, often c ...

Financial Data and Key Metrics Changes - Net sales for Q2 were above $147 million, with adjusted EBITDA exceeding $13 million and free cash flow of almost $9 million, resulting in a trailing twelve months (TTM) net debt ratio of 0.6 times leverage [9][25]. - Total sales increased by 36% year-over-year, with comparable organic sales rising by 14% [24][25]. - Adjusted earnings per share for Q2 were $0.26 compared to $0.24 in the previous year, and adjusted EBITDA was $13.3 million, which is 20% higher than the prior year quarter [25][26]. Business Line Data and Key Metrics Changes - The Display Solutions segment saw total sales double, with organic growth of 50%, driven by demand resurgence in grocery and continued implementations in the refueling vertical [24][30]. - Sales in the grocery vertical increased over 60%, influenced by the release of previously held programs and the phase-out of R448 technology [30]. - The Lighting segment experienced sales below the prior year due to fluctuations in demand across project sizes, although small project activity remained strong [31][32]. Market Data and Key Metrics Changes - The company reported strong project activity in the refueling/c-store vertical, contributing to approximately 1,000 refueling/c-store sites serviced in Q2, marking the highest quarter in many years [28]. - The resurgence in the grocery vertical was significant, with many projects that had been on hold now moving forward due to increased clarity in the market [12][30]. - The company noted that its Latin America business has started to pick up momentum post-COVID, indicating a recovery in that market [109]. Company Strategy and Development Direction - The company is committed to its Fast Forward plan, focusing on profitable growth and operational efficiency while integrating the acquired EMI business [22][113]. - There is a strong emphasis on new product development, with plans to launch around 40 new products this year, including the next-generation outdoor lighting product, V-LOCITY [20][66]. - The company aims to maintain a vertical market orientation, enhancing its capabilities to offer more goods and services to targeted markets [21]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued order activity, particularly in the Display Solutions and grocery segments, although they acknowledged some uncertainty regarding the sustainability of the surge in demand [40][41]. - There are expectations for improved operational efficiency and margins as the company continues to ramp up production and integrate EMI [47][48]. - Management highlighted the importance of maintaining strong relationships with customers and adapting to changes in the market, including potential impacts from tariffs [52][56]. Other Important Information - The company has reduced its net debt to $33 million, significantly lowering its leverage ratio from 1.3 to 0.6 times since the acquisition of EMI [26]. - The company is actively engaged in larger projects, including data centers and chip manufacturing facilities, although these projects are progressing more slowly than anticipated [17][32]. - Management noted that they have contingency plans in place to address potential supply chain disruptions and have proactively moved some sourcing to mitigate risks [59][60]. Q&A Session Summary Question: Expectations for strength in the second half and seasonality - Management indicated that they expect elevated order rates to continue, particularly in the Display Solutions and grocery segments, although not at the same rate as Q2 [40][41]. Question: Trajectory of gross margins and EBITDA margins - Management acknowledged inefficiencies in Q2 due to rapid ramp-up but anticipates improvements in margins moving forward as operational efficiencies are regained [47][48]. Question: Impact of proposed tariffs - Management believes their domestic focus will mitigate the impact of tariffs, as they have shifted from 20% domestic sourcing to 70% [52][56]. Question: Surge in order activity across verticals - The majority of the surge was related to the grocery market, but there was also significant activity in the petroleum c-store space and QSR projects [94][96]. Question: Delivery delays and managing customer expectations - Management confirmed that they have not experienced delays in product delivery and have maintained efficiency in capacity utilization [100][101]. Question: Changes in permitting and supply chain issues - Permitting has normalized, and the company has effectively managed its supply chain to minimize disruptions [105][106].

Company Performance - LSI reported quarterly earnings of $0.18 per share, missing the Zacks Consensus Estimate of $0.20 per share, and down from $0.20 per share a year ago, representing an earnings surprise of -10% [1] - The company posted revenues of $147.73 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 14.99%, compared to year-ago revenues of $109.01 million [2] - Over the last four quarters, LSI has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Outlook - LSI shares have added about 1.9% since the beginning of the year, underperforming the S&P 500's gain of 3.5% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for stock performance [4] - The current consensus EPS estimate for the coming quarter is $0.21 on revenues of $132.16 million, and for the current fiscal year, it is $0.86 on revenues of $537.54 million [7] Industry Context - The Building Products - Lighting industry, to which LSI belongs, is currently in the top 12% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact LSI's stock performance [5][6]

Financial Performance - LSI reported net sales of $147.7 million in Q2 2025, a 36% increase year-over-year, with organic net sales growing by 14%[4] - Net income for the second quarter was $5.6 million, or $0.18 per diluted share, while adjusted net income was $8.0 million, or $0.26 per diluted share[5] - Adjusted EBITDA reached $13.3 million, representing 9.0% of net sales, an increase of over 20% compared to the previous year[5] - Free cash flow generated in the second quarter was $8.8 million, with a trailing twelve-month free cash flow of nearly $41.4 million[6] - The company reported a net income of $5,647,000 for the three months ended December 31, 2024, a decrease of 4% from $5,906,000 in the same period of 2023[34] - Earnings per share (diluted) as reported for the three months ended December 31, 2024, was $0.18, down 7% from $0.20 in the same period of 2023[34] - FY 2024 Q1 reported net income was $8,028 million with an EPS of $0.27, while Q2 reported net income was $5,906 million with an EPS of $0.20[37] - FY 2024 Q3 reported net income was $5,375 million with an EPS of $0.18, and Q4 reported net income was $5,668 million with an EPS of $0.19[37] - FY 2025 Q1 reported net income was $6,682 million with an EPS of $0.22, while Q2 reported net income was $5,647 million with an EPS of $0.18[37] Cash Flow and Debt Management - Free cash flow for the three months ended December 31, 2024, was $8,825,000, a 21% increase from $7,320,000 in the same period of 2023[35] - The ratio of net debt to trailing twelve-month adjusted EBITDA improved to 0.6x, down from 1.3x at the time of the EMI acquisition[6] - The net debt to adjusted EBITDA ratio improved to 0.6 as of December 31, 2024, down from 1.0 in June 2024[35] Segment Performance - Display Solutions segment achieved organic sales growth of 50% in Q2, with sales to refueling/c-store customers increasing by over 60% year-over-year[11] - The grocery vertical saw sales growth exceeding 50% due to increased demand for refrigerated and non-refrigerated display cases[12] - The company experienced a 50% increase in comparable Display Solutions sales, rising from $44,209,000 to $66,133,000[35] - Lighting segment sales decreased by 10% year-over-year, attributed to a challenging comparison with the previous year’s large projects[16] Product Development and Innovation - LSI plans to launch over 40 new products in fiscal 2025, continuing its focus on innovation and meeting customer requirements[18] Dividends - The company declared a quarterly cash dividend of $0.05 per share, payable on February 11, 2025[8] - The Board of Directors declared a quarterly cash dividend of $0.05 per share, with an annual cash dividend rate of $0.20 per share[31] Adjusted Income and Expenses - Adjusted net income for FY 2024 Q1 was $9,610 million, representing an adjusted net income percentage of 7.8%, and Q2 adjusted net income was $7,249 million with a percentage of 6.7%[37] - Adjusted net income for FY 2024 Q3 was $7,131 million, with an adjusted net income percentage of 6.6%, and Q4 adjusted net income was $8,304 million with a percentage of 6.4%[37] - Adjusted net income for FY 2025 Q1 was $7,981 million, representing an adjusted net income percentage of 5.8%, and Q2 adjusted net income was $7,996 million with a percentage of 5.4%[37] Amortization and Compensation - Amortization expense of acquired intangible assets for FY 2024 Q1 was $870 million, and for Q2 it was $885 million[37] - Long-term performance-based compensation for FY 2024 Q1 was $974 million, and for Q2 it was $625 million[37] - Severance costs for FY 2024 Q1 were $256 million, while Q2 saw a reduction to $34 million[37] - The tax rate difference between reported and adjusted net income for FY 2024 Q1 was $(531) million, and for Q2 it was $(201) million[37]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting the use of a specific screening strategy to identify stocks with strong fundamentals and positive price momentum [1][2]. Group 1: Stock Screening Strategy - The "Recent Price Strength" screen is designed to identify stocks with sufficient fundamental strength to maintain their recent uptrend, focusing on those trading in the upper portion of their 52-week high-low range, indicating bullishness [3]. - LYTS (LSI) is highlighted as a strong candidate for trend investing, having increased by 30.5% over the past 12 weeks, reflecting investor confidence in its potential upside [4]. - A recent price increase of 21.2% over the past four weeks for LYTS suggests that the upward trend is still intact, with the stock currently trading at 85.9% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - LYTS holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, which are critical for near-term price movements [6]. - The stock also has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. - The article suggests that the price trend for LYTS is unlikely to reverse soon, and encourages consideration of other stocks that meet the screening criteria for potential investment [8].