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1. Company Snapshot

1.a. Company Description

LSI Industries Inc.manufactures and sells non-residential lighting and retail display solutions in the United States, Canada, Mexico, Australia, and Latin America.It operates in two segments, Lighting and Display Solutions.


The Lighting segment manufactures, markets, and sells non-residential outdoor and indoor lighting solutions.It also offers lighting control products, including sensors, photocontrols, dimmers, motion detection, and Bluetooth systems to support lighting fixtures; and designs, engineers, and manufactures electronic circuit boards, assemblies, and sub-assemblies.The Display Solutions segment manufactures, sells, and installs exterior and interior visual image and display elements, including printed and structural graphics, digital signage, menu board systems, display fixtures, refrigerated displays, and custom display elements.


Its products comprise signage and canopy graphics, pump dispenser graphics, building fascia graphics, decals, interior signage and marketing graphics, aisle markers, wall mural graphics, and refrigerated and non-refrigerated merchandising displays.This segment also implements, installs, and provides program management services, such as installation management, site surveys, permitting, and content management; and manages and executes the implementation of large rollout programs.It serves petroleum/convenience, parking lot and garage, quick-service restaurant, retail and grocery store, automotive, warehouse, and sports complex markets.


The company was founded in 1976 and is headquartered in Cincinnati, Ohio.

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1.b. Last Insights on LYTS

LSI Industries Inc.'s recent performance was driven by strong Q4 2025 earnings, announced on August 21, 2025. The company's CEO, James A. Clark, participated in the earnings conference call, discussing recent events and financial results. A notable increase in commercial lighting and display solutions sales likely contributed to the positive momentum. The company's decision to host a conference call to review its financial results and conduct a Q&A session also underscores its transparency and commitment to stakeholders.

1.c. Company Highlights

2. LSI Industries' Q2 FY2026 Earnings: A Strong Performance

LSI Industries reported fiscal 2026 second-quarter results, with revenue flat year-over-year at $147 million, while profitability and free cash flow improved. Adjusted earnings per share were $0.26 for the quarter, with actual EPS coming in at $0.2003, beating estimates of $0.17. The company's adjusted EBITDA increased to $13.4 million, and free cash flow was strong at $23 million, used to reduce total debt by $22.7 million. The Lighting segment delivered a strong quarter with 15% year-over-year sales growth and meaningful margin expansion.

Publication Date: Jan -23

📋 Highlights
  • Flat Revenue with Profitability Gains:: Q2 revenue held steady at $147 million YoY, while adjusted EBITDA rose to $13.4 million and free cash flow reached $23 million.
  • Lighting Segment Growth:: Delivered 15% YoY sales growth, driven by aluminum poles, large projects, and national account strategy, with significant margin expansion.
  • Debt Reduction and Balance Sheet Strength:: $22.7 million in debt reduction, net leverage ratio of 0.4, and $100 million in cash and availability.
  • EMI Integration Success:: Achieved over 200 bps margin improvement post-acquisition, targeting 10.5%+ margins within a year.
  • Expansion into Food Services:: Strategic focus on premium food services (casual dining, campus meal plans) and cross-selling opportunities in refrigeration/display solutions.

Segment Performance

The Display Solutions revenue declined slightly year-over-year due to prior-year comparisons, but orders improved sequentially and were up year-over-year. The company has seen a normalization of uncertainties around Mexico, allowing them to focus on their plans. They are still behind on their plans but are working to catch up, driven by their partnership with oil companies. The deregulation of the external retail environment in Mexico has been a positive for LSI.

Margin Expansion and Cash Flow

The integration of EMI has led to over 200 bps of margin improvement, with a goal to reach 10.5% and better within a year. The company has a strong balance sheet, with a net leverage ratio of 0.4 and approximately $100 million in cash and availability. Free cash flow yield is at 3.22%, indicating a decent return for investors.

Growth Outlook and Valuation

LSI Industries expects above-market growth for the year, driven by their focus on markets with disruption and long-term growth potential. Analysts estimate next year's revenue growth at 7.5%. With a P/E Ratio of 28.36 and an EV/EBITDA of 15.6, the company's valuation appears to be reasonable, considering its growth prospects. The company's ROIC is at 8.55%, indicating a decent return on invested capital.

M&A Strategy and Opportunities

The company is focused on cultural fit, with a leverage ratio target of below three, and ideally below two. They have a strong balance sheet and cash flow generation, with a goal to continue to make strategic acquisitions. LSI Industries has made several successful acquisitions, including EMI, Canada's Best, and JSI, and is looking to enter the banking vertical in the US.

3. NewsRoom

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Why LSI Industries Stock Surged Today

Jan -22

Source: fool.com

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LSI Industries Inc. (LYTS) Q2 2026 Earnings Call Transcript

Jan -22

Source: seekingalpha.com

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LSI (LYTS) Q2 Earnings and Revenues Top Estimates

Jan -22

Source: zacks.com

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SG Americas Securities LLC Takes Position in LSI Industries Inc. $LYTS

Jan -20

Source: defenseworld.net

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LSI Industries Inc. (NASDAQ:LYTS) Given Average Recommendation of “Moderate Buy” by Brokerages

Nov -27

Source: defenseworld.net

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Campbell & CO Investment Adviser LLC Makes New Investment in LSI Industries Inc. $LYTS

Nov -18

Source: defenseworld.net

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LSI Industries Inc. (LYTS) Q1 2026 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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LSI (LYTS) Beats Q1 Earnings and Revenue Estimates

Nov -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.00%)

6. Segments

Lighting

Expected Growth: 6%

LSI Industries Inc.'s lighting segment growth is driven by increasing adoption of energy-efficient LED lighting, rising demand from e-commerce and retail customers, and growing need for smart lighting solutions in industrial and commercial spaces. Additionally, the company's strategic acquisitions and investments in technology have enhanced its product offerings and expanded its customer base, contributing to the 6% growth rate.

Display Solutions

Expected Growth: 6%

LSI Industries Inc.'s Display Solutions segment growth is driven by increasing demand for energy-efficient lighting and graphics, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on innovative product offerings, such as LED lighting and digital signage, is contributing to its growth.

7. Detailed Products

Lighting Products

LSI Industries Inc. offers a wide range of lighting products, including LED lighting, high-bay lighting, and outdoor lighting solutions for various industries such as commercial, industrial, and retail.

Graphics and Display Solutions

LSI Industries Inc. provides graphics and display solutions, including signage, digital signage, and display fixtures for retail, petroleum, and convenience store markets.

Digital Signage Solutions

LSI Industries Inc. offers digital signage solutions, including digital displays, media players, and content management software for various industries such as retail, hospitality, and healthcare.

Image Processing Solutions

LSI Industries Inc. provides image processing solutions, including image processing software and hardware for various industries such as retail, healthcare, and government.

Smart City and IoT Solutions

LSI Industries Inc. offers smart city and IoT solutions, including smart lighting, smart traffic management, and smart energy management solutions for municipalities and cities.

8. LSI Industries Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for LSI Industries Inc. is medium due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for LSI Industries Inc. is high due to the concentration of customers in the industry and their ability to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers for LSI Industries Inc. is low due to the availability of multiple suppliers in the market and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for LSI Industries Inc. is medium due to the moderate barriers to entry in the industry and the availability of resources.

Intensity Of Rivalry

The intensity of rivalry for LSI Industries Inc. is high due to the high level of competition in the industry and the need to differentiate products and services.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 16.54%
Debt Cost 8.04%
Equity Weight 83.46%
Equity Cost 8.04%
WACC 8.04%
Leverage 19.82%

11. Quality Control: LSI Industries Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Bel Fuse

A-Score: 5.0/10

Value: 4.8

Growth: 7.0

Quality: 6.4

Yield: 0.0

Momentum: 8.0

Volatility: 3.7

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LSI Industries

A-Score: 4.5/10

Value: 4.7

Growth: 6.3

Quality: 5.9

Yield: 3.0

Momentum: 2.0

Volatility: 5.3

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CTS

A-Score: 4.4/10

Value: 4.4

Growth: 5.8

Quality: 6.9

Yield: 0.0

Momentum: 2.5

Volatility: 6.7

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Value: 9.5

Growth: 2.9

Quality: 2.5

Yield: 0.0

Momentum: 7.5

Volatility: 3.3

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A-Score: 3.9/10

Value: 3.5

Growth: 4.0

Quality: 4.7

Yield: 0.0

Momentum: 7.5

Volatility: 3.7

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Vishay Precision Group

A-Score: 3.7/10

Value: 2.6

Growth: 2.9

Quality: 4.3

Yield: 0.0

Momentum: 9.0

Volatility: 3.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.19$

Current Price

22.19$

Potential

-0.00%

Expected Cash-Flows