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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: Q3 Earnings Surge Fueled by Acquisition and Strong Margins

LSI Industries delivered a robust fiscal 2026 third‑quarter performance, with net sales climbing 14% to $150.5 million, or 9% on a Royston‑free basis. Adjusted earnings per share rose to $0.28 (vs. $0.21 last year) and $0.27 excluding Royston, marking a $0.07 YoY lift. Adjusted EBITDA reached $15 million, representing 10% of sales and a 130‑basis‑point margin improvement. These results place the company at a P/E of 29.19 and an EV/EBITDA of 16.79, underscoring the market’s pricing of its growth trajectory. “We’re executing on our vertical‑market strategy and driving margin quality,” said CEO Jim Clark, underscoring the firm’s disciplined focus on execution and integration.

Publication Date: Apr -27

📋 Highlights
  • Total Sales Growth:: Fiscal Q3 2026 sales rose 14% to $150.5M, with 9% growth excluding the Royston acquisition.
  • Adjusted Earnings Improvement:: Adjusted EPS increased $0.07 to $0.28 YoY, with EBITDA at $15M (10% of sales) and a 130 bps margin expansion.
  • Segment Performance:: Display Solutions sales and operating income surged 14% and 64%, respectively, outpacing Lighting’s 2% growth.
  • Strategic Acquisitions:: Royston acquisition adds $500M+ in total acquisitions over five years, enhancing cross-selling and vertical market presence.

Revenue Growth

Sales increased 14% year over year, driven largely by the newly acquired Royston Group, which added $20 million in incremental revenue. Even after stripping Royston, the core business still grew 9%, reflecting a resilient demand base across the Display Solutions and Lighting segments.

Margin Expansion

Adjusted EBITDA margin climbed to 10% of sales, up 130 basis points from the same quarter last year. The company attributes this lift to disciplined cost management and the synergies realized from its $500 million acquisition pipeline, including Royston. The margin improvement is expected to persist into Q4 and beyond as integration matures.

Segment Highlights

The Display Solutions unit led the charge, with sales up 14% and adjusted operating income surging 64%, reflecting strong demand for high‑performance displays. Lighting sales were modestly up 2%, buoyed by national accounts, while non‑national accounts remained softer. The company is not breaking out national vs. non‑national sales but expects continued growth in its high‑priority investment areas.

Acquisition Impact

Royston’s acquisition expands LSI’s capabilities and deepens its footprint across vertical markets. The firm is proactively engaging Royston’s key customers, receiving positive feedback and addressing concerns about operational changes. The integration strategy is deliberate, preserving Royston’s culture while leveraging AI to accelerate cross‑selling and operational efficiencies. This approach aims to avoid dilution of core efforts while unlocking long‑term value.

Future Outlook

LSI projects low‑ to mid‑single‑digit net sales growth in Q4, supported by a solid pipeline and an emphasis on vertical‑market execution. The company’s high cash‑conversion ratio and a 5.49% free‑cash‑flow yield position it well to fund future acquisitions and return capital to shareholders. With a 4.61% ROIC and 8.9% ROE, LSI remains poised to capitalize on its expanded platform and maintain its competitive edge in the one‑stop solution category.

3. NewsRoom

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Diamond Hill Small Cap Strategy Q1 2026 Portfolio Review

May -04

Source: seekingalpha.com

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LSI Industries Inc. (LYTS) Q3 2026 Earnings Call Transcript

Apr -23

Source: seekingalpha.com

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LSI (LYTS) Misses Q3 Earnings Estimates

Apr -23

Source: zacks.com

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LSI Industries Reports Fiscal 2026 Third Quarter Results and Declares Quarterly Cash Dividend

Apr -23

Source: businesswire.com

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LSI Industries Completes Acquisition of Royston Group

Mar -24

Source: businesswire.com

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LSI Industries Inc. (NASDAQ:LYTS) Given Consensus Rating of “Hold” by Analysts

Mar -07

Source: defenseworld.net

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LSI Industries (NASDAQ:LYTS) Sees Unusually-High Trading Volume – Here’s Why

Mar -01

Source: defenseworld.net

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LSI Industries Prices Public Offering of Common Stock

Feb -27

Source: businesswire.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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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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A-Score: 4.4/10

Value: 4.4

Growth: 5.8

Quality: 6.9

Yield: 0.0

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Value: 9.5

Growth: 2.9

Quality: 2.5

Yield: 0.0

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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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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

24.41$

Current Price

24.41$

Potential

-0.00%

Expected Cash-Flows