LSI Industries (LYTS) Q2 2026 earnings summary

Executive summary

• Q2 FY26 net sales were $147 million, flat year-over-year, with Lighting segment up 15% and Display Solutions down 10%; profitability and free cash flow improved, supported by margin expansion and strong project execution.

• Adjusted EBITDA was $13.4 million (9.1% margin), and free cash flow reached $23.3 million, enabling a $22.7 million debt reduction and a net leverage ratio of 0.4.

• Net income for Q2 was $6.3 million ($0.20 EPS); adjusted net income was $8.4 million ($0.26 EPS).

• Integration of recent acquisitions, including Canada's Best, is progressing, with a focus on operational efficiency, sales synergies, and cross-selling.

• A quarterly dividend of $0.05 per share was declared, with an annualized rate of $0.20.

Financial highlights

• Q2 sales were $147 million, with adjusted operating margin at 7.9% and adjusted EBITDA margin at 9.1%.

• Adjusted net income increased 6% year-over-year; adjusted EPS was $0.26.

• Gross profit for Q2 was $37.4 million, with Lighting gross margin at 34.6%.

• Free cash flow for Q2 was $23.3 million; net debt to adjusted EBITDA was 0.4x.

• Cash and available liquidity exceeded $100 million under a $125 million credit facility.

Outlook and guidance

• Management expects continued momentum in Lighting, with orders up 10% year-over-year and a book-to-bill ratio above 1.0; Display Solutions is stabilizing, with improved backlog and order rates.

• Anticipates above-market growth for the year, driven by differentiated solutions and strong vertical market activity.

• Grocery vertical sales and international activity, especially in Mexico, are expected to grow in the second half and into FY27.