What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2025-02-07 · 248 added, 173 removed, 704 unchanged (37% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands, except per share data)

3 unchanged sentences

Interest expense

Other expense (income)

Other (income) expense

Income before income taxes

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

53 unchanged sentences

Key Executive

Accumulated Other

Comprehensive

1 unchanged sentence

(In thousands, except per share data)

Income/(Loss)

Balance at June 30, 2023

Other comprehensive loss

Board stock compensation awards

Other comprehensive gain

Board stock compensation

ESPP stock Awards

7 unchanged sentences

Balance at September 30, 2023

Other comprehensive loss

Board stock compensation awards

Other comprehensive gain

Board stock compensation

ESPP stock Awards

7 unchanged sentences

Balance at December 31, 2023

Other comprehensive gain

Board stock compensation awards

ESPP stock Awards

Restricted stock units issued, net of shares withheld for tax withholdings

Shares issued for deferred compensation

Activity of treasury shares, net

Deferred stock compensation

Stock-based compensation expense

Stock options exercised, net

Dividends — $ 0.05 per share

Balance at March 31, 2024

Common Shares

3 unchanged sentences

Shareholders'

Income/(Loss)

Balance at June 30, 2024

Other comprehensive loss

Board stock compensation awards

Board stock compensation

ESPP stock awards

7 unchanged sentences

Balance at September 30, 2024

Other comprehensive loss

Board stock compensation awards

Other comprehensive gain

Board stock compensation

ESPP stock awards

7 unchanged sentences

Balance at December 31, 2024

Other comprehensive gain

Board stock compensation

ESPP stock awards

Restricted stock units issued, net of shares withheld for tax withholdings

Shares issued for deferred compensation

Activity of treasury shares, net

Deferred stock compensation

Stock-based compensation expense

Stock options exercised, net

Dividends — $ 0.05 per share

Balance at March 31, 2025

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(In thousands)

7 unchanged sentences

Issuance of common shares as compensation

(Gain) loss on disposition of fixed assets

Loss on disposition of fixed assets

Allowance for credit losses

8 unchanged sentences

Cash Flows from Investing Activities

Acquisition of EMI

Proceeds from the sale of fixed assets

Acquisition of CBH (net of cash acquired)

Acquisition of EMI

Purchases of property, plant and equipment

18 unchanged sentences

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of December 31, 2024, the results of its operations for the three and six-month periods ended December 31, 2024, and 2023, and its cash flows for the six-month periods ended December 31, 2024, and 2023.

In the opinion of management, the interim financial statements include all normal adjustments and disclosures necessary to present fairly the Company’s financial position as of March 31, 2025, the results of its operations for the three and nine-month periods ended March 31, 2025, and 2024, and its cash flows for the nine-month periods ended March 31, 2025, and 2024.

These statements should be read in conjunction with the financial statements and footnotes included in the fiscal 2024 Annual Report on Form 10-K.

19 unchanged sentences

The customized product types are as follows:

Customer specific branded print graphics

Customer specific metal and millwork branded products and branded print graphics

Electrical components based on customer specifications

16 unchanged sentences

(In thousands)

December 31, 2024

December 31, 2023

March 31, 2025

March 31, 2024

Timing of revenue recognition

2 unchanged sentences

Three Months Ended

December 31, 2024

December 31, 2023

March 31, 2025

March 31, 2024

Type of Product and Services

2 unchanged sentences

Project management, installation services, shipping and handling

Six Months Ended

December 31, 2024

December 31, 2023

Nine Months Ended

March 31, 2025

March 31, 2024

Timing of revenue recognition

1 unchanged sentence

Products and services transferred over time

Six Months Ended

December 31, 2024

December 31, 2023

Nine Months Ended

March 31, 2025

March 31, 2024

Type of Product and Services

33 unchanged sentences

The Company incurred acquisition-related costs totaling $ 1.0 million which are included in the selling and administrative expense line of the consolidated statements of operations.

The acquisition of EMI is expected to increase the Company’s total addressable markets within the grocery, quick service restaurant and convenience store verticals.

The acquisition of EMI will further expand LSI’s vertical market presence within Grocery, C-Store, and QSR/Restaurant, while providing a compelling entry point into other diverse markets.

The Company funded the acquisition totaling $ 49.9 million with a combination of cash on hand and from the $ 75 million revolving line of credit.

1 unchanged sentence

The Company has allocated the purchase price of approximately $ 49.9 million which includes an estimate of customary post-closing purchase price adjustments to the assets acquired and liabilities assumed at estimated fair values, and the excess of the purchase price over the aggregate fair values is recorded as goodwill.

This preliminary allocation is subject to the final determination of the purchase price which will be finalized in fiscal 2025, as well as the potential revision resulting from the finalization of pre-acquisition tax filings.

This allocation of the final determination of the purchase price was finalized in fiscal 2025, as well as the potential revision resulting from the finalization of pre-acquisition tax filings.

The preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed as of April 18, 2024, is as follows:

38 unchanged sentences

Operating Income

NOTE 4 — ACQUISITION OF CANADA ’ S BEST HOLDINGS

On March 11, 2025, the Company executed and closed on an asset purchase agreement with Canada’s Best Holdings (CBH), an Ontario Canada-based leading provider of retail fixtures and custom store design solutions for grocery, quick service restaurant, c-store, banking, and specialty retail environments, for $ 25.9 million, subject to a working capital adjustment and future potential earnout payment up to $ 7.0 M as of the acquisition date for a total purchase consideration of $ 27.4 M.

The future earnout payments include revenue and EBITDA goals for the fiscal years ending June 30,2026 and June 30, 2027.

The Company incurred acquisition-related costs totaling $ 0.8 million which are included in the selling and administrative expense line of the consolidated statements of operations.

The Company funded the acquisition totaling $ 27.4 million with a combination of cash on hand and from the $ 75 million revolving line of credit.

The Company accounted for this transaction as a business combination.

The Company has preliminarily allocated the purchase price of approximately $ 27.4 million which includes an estimate of customary post-closing purchase price adjustments to the assets acquired and liabilities assumed at estimated fair values, and the excess of the purchase price over the aggregate fair values is recorded as goodwill.

This preliminary allocation is subject to the final determination of the purchase price which will be finalized in fiscal 2026, as well as potential revision resulting from the finalization of pre-acquisition tax filings and earnout payment calculations.

The Company is in the process of finalizing third party valuations of certain assets including fixed assets and intangible assets.

The preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed as of March 11, 2025, is as follows:

March 11, 2025 as

initially reported

(In thousands)

Cash and cash equivalents

Accounts receivable

Property, plant and equipment

Operating lease right-of-use assets

Intangible assets

Accounts payable

Accrued expenses

Operating lease liabilities

Deferred tax liability

Identifiable assets

Net purchase consideration

The gross amount of accounts receivable is $ 4.3 million.

Goodwill recorded from the acquisition of CBH is attributable to the impact of the positive cash flow from CBH in addition to expected synergies from the business combination.

The intangible assets include amounts recognized for the fair value of the trade name, non-compete agreements and customer relationships.

The fair value of the intangible assets was determined based upon the income (discounted cash flow) approach.

The following table presents the details of the intangible assets acquired at the date of acquisition:

Estimated Fair

Estimated Useful Life

(in thousands)

Non-compete agreements

Customer relationships

The preliminary fair market value write-up of the property, plant, and equipment totaled $ 0.6 million.

The Company expects more transaction costs to follow in the fourth quarter.

CBH’s post-acquisition results of operations for the period from March 11, 2025, through March 31, 2025, are included in the Company’s Consolidated Statements of Operations.

Since the acquisition date, net sales of CBH for the period from March 11, 2025, through March 31, 2025, were $ 1.4 million and operating income was $ 0.3 million.

The operating results of CBH are included in the Display Solutions Segment.

Pro Forma Impact of the Acquisition of CBH (Unaudited)

The following table represents unaudited pro forma results of operations and gives effect to the acquisition of CBH as if the transaction had occurred on July 1, 2023.

The unaudited pro forma results of operations have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or the results that may occur in the future.

Furthermore, the unaudited pro forma financial information does not reflect the impact of any synergies or operating efficiencies resulting from the acquisition of CBH .

The unaudited pro forma financial information for the twelve months ended June 30, 2024 is prepared using the acquisition method of accounting and has been adjusted to effect to the pro forma events that are:

(1) directly attributable to the acquisition;

(2) factually supportable;

and (3) expected to have a continuing impact on the combined results.

The unaudited pro forma operating income of $ 41.3 million excludes acquisition-related expenses of $ 0.8 million.

Twelve Month Ended

(in thousands;

Operating Income

NOTE 5 - SEGMENT REPORTING INFORMATION

15 unchanged sentences

Corporate identifiable assets primarily consist of cash, invested cash (if any), refundable income taxes (if any), and deferred income taxes.

There were no customers or customer programs representing a concentration of 10% or more of the Company’s consolidated net sales in the three and six months ended December 31, 2024, or 2023.

There was no concentration of accounts receivable at December 31, 2024, or 2023.

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of December 31, 2024, and December 31, 2023:

There were no customers or customer programs representing a concentration of 10% or more of the Company’s consolidated net sales in the three and nine months ended March 31, 2025, or 2024.

There was no concentration of accounts receivable at March 31, 2025, or 2024.

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of March 31, 2025, and March 31, 2024:

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

13 unchanged sentences

Corporate and Eliminations

June 30, 2024

Total Assets:

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

BASIC EARNINGS PER SHARE

12 unchanged sentences

Calculated using the “Treasury Stock” method as if dilutive securities were exercised and the funds were used to purchase common shares at the average market price during the period.

Anti-dilutive securities were excluded from the computation of diluted net income per share for the three and six months ended December 31, 2024, and December 31, 2023, because the exercise price was greater than the average fair market price of the common shares or because the assumed proceeds from the award’s exercise or vesting was greater than the average fair market price of the common shares.

Anti-dilutive securities were excluded from the computation of diluted net income per share for the three and nine months ended March 31, 2025, and March 31, 2024, because the exercise price was greater than the average fair market price of the common shares or because the assumed proceeds from the award’s exercise or vesting was greater than the average fair market price of the common shares.

NOTE 7 – INVENTORIES, NET

29 unchanged sentences

The Company identified its reporting units in conjunction with its annual goodwill impairment testing.

The Company has a total of four reporting units that contain goodwill.

One reporting unit is within the Lighting Segment and three reporting units are within the Display Solutions Segment.

The Company has a total of five reporting units that contain goodwill.

One reporting unit is within the Lighting Segment and four reporting units are within the Display Solutions Segment.

The tradename intangible assets have an indefinite life and are also tested separately on an annual basis.

3 unchanged sentences

(In thousands)

Balance as of December 31, 2024

Balance as of March 31, 2025

Accumulated impairment losses

Goodwill, net as of December 31, 2024

Goodwill, net as of March 31, 2025

Balance as of June 30, 2024

3 unchanged sentences

Other Intangible Assets

December 31, 2024

March 31, 2025

(In thousands)

19 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

3 unchanged sentences

NOTE 10 - DEBT

The Company’s long-term debt as of December 31, 2024, and June 30, 2024, consisted of the following:

The Company’s long-term debt as of March 31, 2025, and June 30, 2024, consisted of the following:

(In thousands)

9 unchanged sentences

The increment over the SOFR borrowing rate fluctuates between 100 and 225 basis points, and the increment over the Base Rate fluctuates between 0 and 125 basis points, both of which depend upon the ratio of indebtedness to earnings before interest, taxes, depreciation, and amortization (“EBITDA”), as defined in the line of credit agreement.

As of December 31, 2024, the Company’s borrowing rate against its revolving line of credit was 5.7 %.

The increment over the SOFR borrowing rate will be 100 basis points for the third quarter of fiscal 2025.

As of March 31, 2025, the Company’s borrowing rate against its revolving line of credit was 5.4 %.

The increment over the SOFR borrowing rate will be 100 basis points for the fourth quarter of fiscal 2025.

The fee on the unused balance of the $ 75 million committed line of credit fluctuates between 15 and 25 basis points.

Under the terms of this line of credit, the Company is required to comply with financial covenants that limit the ratio of indebtedness to EBITDA and require a minimum fixed charge ratio.

As of December 31, 2024, there was $ 50.2 million available for borrowing under the $ 75 million line of credit.

The Company is in compliance with all of its loan covenants as of December 31, 2024.

As of March 31, 2025, there was $ 32.1 million available for borrowing under the $ 75 million line of credit.

The Company is in compliance with all of its loan covenants as of March 31, 2025.

NOTE 11 - CASH DIVIDENDS

The Company paid cash dividends of $ 3.0 million and $ 2.8 million for the six months ended December 31, 2024, and December 31, 2023, respectively.

Dividends on restricted stock units in the amount of $ 0.2 million and $ 0.1 million were accrued as of both December 31, 2024, and 2023, respectively.

The Company paid cash dividends of $ 4.5 million and $ 4.3 million for the nine months ended March 31, 2025, and March 31, 2024, respectively.

Dividends on restricted stock units in the amount of $ 0.2 million were accrued as of both March 31, 2025, and 2024, respectively.

These dividends will be paid upon the vesting of the restricted stock units when shares are issued to the award recipients.

In January 2025, the Board of Directors declared a regular quarterly cash dividend of $ 0.05 per share payable February 11, 2025 , to shareholders of record as February 3, 2025 .

In April 2025, the Board of Directors declared a regular quarterly cash dividend of $ 0.05 per share payable May 13, 2025, to shareholders of record as May 5, 2025.

The indicated annual cash dividend rate is $ 0.20 per share.

4 unchanged sentences

The 2019 Omnibus Plan allows for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units (‘RSUs”), performance stock units ("PSUs") and other awards.

Except for Restricted Stock Unit ("RSU") grants which are time-based, participants in the Company's Long-Term Equity Compensation Plans are awarded the opportunity to acquire shares over a three-year performance measurement period tied to specific company performance metrics.

The number of shares that remain reserved for issuance under the 2019 Omnibus Plan is 1,403,708 as of December 31, 2024.

In the first quarter of fiscal 2025, the Company granted 160,826 PSUs and 107,217 RSUs, both with a weighted average market value of $ 14.92 .

Stock compensation expense was $ 1.1 million and $ 0.8 million for the three months ended December 31, 2024, and 2023, respectively, and $ 2.2 million and $ 2.0 million in the six months ended December 31, 2024, and 2023, respectively.

Except for RSU grants which are time-based, participants in the Company's Long-Term Equity Compensation Plans are awarded the opportunity to acquire shares over a three-year performance measurement period tied to specific company performance metrics.

The number of shares that remain reserved for issuance under the 2019 Omnibus Plan is 1,374,537 as of March 31, 2025.

In the first nine months of fiscal 2025, the Company granted 160,826 PSUs and 107,217 RSUs, both with a weighted average market value of $ 14.92 .

Stock compensation expense was $ 1.0 million and $ 0.9 million for the three months ended March 31, 2025, and 2024, respectively, and $ 3.2 million and $ 2.9 million in the nine months ended March 31, 2025, and 2024, respectively.

In November of 2021, our board of directors approved the LSI Employee Stock Purchase Plan (“ESPP”).

3 unchanged sentences

During fiscal year 2025, employees purchased 12,000 shares.

At December 31, 2024, 234,000 shares remained available for purchase under the ESPP.

At March 31, 2025, 230,000 shares remained available for purchase under the ESPP.

NOTE 13 - SUPPLEMENTAL CASH FLOW INFORMATION

Six Months Ended

Nine Months Ended

(In thousands)

10 unchanged sentences

The Company may occasionally issue a standby letter of credit in favor of third parties.

As of December 31, 2024, there were no such standby letters of credit issued.

As of March 31, 2025, there were no standby letters of credit issued.

NOTE 15 - LEASES

6 unchanged sentences

most of EMI’s operating leases are building leases.

The number of operating leases increased in fiscal 2025 as a result of the acquisition of CBH;

most of CBH’s operating leases are building leases.

The Company has periodically entered into short-term operating leases with an initial term of twelve months or less.

The Company elected not to record these leases on the balance sheet.

The rent expense for these leases was immaterial for December 31, 2024, and 2023.

The rent expense for these leases was immaterial for March 31, 2025, and 2024.

The Company has certain leases that contain lease and non-lease components and has elected to utilize the practical expedient to account for these components together as a single lease component.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

7 unchanged sentences

Supplemental Cash Flow Information:

Six Months Ended

Nine Months Ended

(In thousands)

34 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Reconciliation of effective tax rate:

1 unchanged sentence

Uncertain tax positions

Deferred Income Tax Adjustment

Share-based compensation

15 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

1 unchanged sentence

Display Solutions Segment

Operating Income (Loss) by Business Segment

Operating Income by Business Segment

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

2 unchanged sentences

Corporate and Eliminations

Net sales of $147.7 million for the three months ended December 31, 2024, increased 36% as compared to net sales of $109.0 million for the three months ended December 31, 2023.

Net sales of $132.5 million for the three months ended March 31, 2025, increased 22% as compared to net sales of $108.2 million for the three months ended March 31, 2024.

The increase in net sales was attributed to a $30.2 million or 70% increase in net sales of the Display Solutions Segment, partially offset by a $5.9 million or 9% decline in net sales of the Lighting Segment.

The Display Solutions Segment generated organic growth of 50% driven by increased sales across all product categories and vertical markets supported mostly by the grocery, refueling/ C-Store, and QSR verticals.

The Company’s recent acquisition of EMI contributed an additional $23.4 million of the quarter-over-quarter sales growth of the Display Solutions Segment.

The Display Solutions Segment generated organic growth of 15% driven by increased sales across all product categories and vertical markets supported mostly by the grocery and refueling/ C-Store verticals.

The Company’s acquisitions of EMI and CBH (acquired March 11, 2025) contributed an additional $23.8 million of the quarter-over-quarter sales growth of the Display Solutions Segment.

The decline in sales in the Lighting Segment is attributed to the comparison of quarter-over-quarter sales of large lighting projects.

In fiscal 2024, the Company had several large lighting projects, including a new EV plant complex that did not repeat in fiscal 2025.

While there was a decline in large lighting projects, small project activity increased over the prior year period.

Net sales of $285.8 million for the six months ended December 31, 2024, increased 23% as compared to net sales of $232.4 million for the six months ended December 31, 2023.

In fiscal 2024, the Company had several large lighting projects that did not repeat in fiscal 2025.

While there was a decline in large lighting projects, small project activity continued to increase over the prior year period.

Net sales of $418.3 million for the nine months ended March 31, 2024, increased 23% as compared to net sales of $340.6 million for the nine months ended March 31, 2024.

The increase in net sales was attributed to a $99.4 million or 69% increase in net sales of the Display Solutions Segment, partially offset by a $21.7 or 11% decline in net sales of the Lighting Segment.

The Display Solutions Segment generated organic growth of 20% driven by increased sales across all product categories and vertical markets supported mostly by the grocery, refueling/ c-Store, and QSR verticals.

The Company’s recent acquisition of EMI contributed an additional $49.6 million of the year-over-year sales growth of the Display Solutions Segment.

The Display Solutions Segment generated organic growth of 18% driven by increased sales across all product categories and vertical markets supported mostly by the grocery and refueling/ C-Store verticals.

The Company’s acquisition of EMI and CBH contributed an additional $73.4 million of the year-over-year sales growth of the Display Solutions Segment.

The decline in sales in the Lighting Segment is attributed to the comparison of year-over-year sales of large lighting projects.

In fiscal 2024, the Company had several large lighting projects, including a new EV plant complex that did not repeat in fiscal 2025.

While there was a decline in large lighting projects, small project activity increased over the prior year period.

Operating income of $8.5 million for the three months ended December 31, 2024, represents an 8% increase in operating income of $7.8 million in the three months ended December 31, 2023.

Adjusted operating income, a Non-GAAP measure, was $11.7 million in the three months ended December 31, 2024, compared to $9.9 million in the three months ended December 31, 2023.

In fiscal 2024, the Company had several large lighting projects that did not repeat in fiscal 2025.

While there was a decline in large lighting projects, small project activity continued to increase over the prior year period.

Operating income of $6.2 million for the three months ended March 31, 2025, represents a 19% decrease in operating income of $7.7 million in the three months ended March 31, 2024.

Adjusted operating income, a Non-GAAP measure, was $9.7 million in the three months ended March 31, 2025, compared to $10.0 million in the three months ended March 31, 2024.

The increase in net sales was offset by a change in product mix.

Refer to “Non-GAAP Financial Measures” below for a reconciliation of Non-GAAP financial measures to U.S.

GAAP measures.

The increase in net sales contributed to the increase in operating profit which was partially offset by a change in product mix between the Lighting Segment and Display Solutions Segment product lines.

Operating income of $17.6 million for the six months ended December 31, 2024, represents a 7% decrease from operating income of $18.8 million in the six months ended December 31, 2023.

Adjusted operating income, a Non-GAAP financial measure, was $23.6 million in the six months ended December 31, 2024, compared to adjusted operating income of $23.8 million in the six months ended December 31, 2023.

The increase in net sales was offset by a change in product mix between the Lighting Segment and Display Solutions Segment product lines.

Operating income of $23.8 million for the nine months ended March 31, 2025, represents a 10% decrease from operating income of $26.5 million in the nine months ended March 31, 2024.

Adjusted operating income, a Non-GAAP financial measure, was $33.2 million in the nine months ended March 31, 2025, compared to adjusted operating income of $33.8 million in the nine months ended March 31, 2024.

The increase in net sales was offset by a change in product mix.

Refer to “Non-GAAP Financial Measures” below for a reconciliation of Non-GAAP financial measures to U.S.

1 unchanged sentence

Non-GAAP Financial Measures

This report includes adjustments to GAAP operating income, net income, and earnings per share for the three months and six ended December 31, 2024, and 2023.

This report includes adjustments to GAAP operating income, net income, and earnings per share for the three months and nine ended March 31, 2025, and 2024.

Operating income, net income, and earnings per share, which exclude the impact of long-term performance based compensation expense, the amortization expense of acquired intangible assets, commercial growth opportunity expense, acquisition costs, the lease expense on the step-up basis of acquired leases, and restructuring and severance costs, are non-GAAP financial measures.

17 unchanged sentences

Restructuring/severance costs

Consulting expense:

commercial growth opportunities

Acquisition costs

Adjusted operating income

5 unchanged sentences

Amortization expense of acquired intangible assets

Restructuring/severance costs

Lease expense on the step-up basis of acquired leases

Consulting expense:

commercial growth opportunities

Restructuring/severance costs

Acquisition Costs

Tax rate difference between reported and adjusted net income

Net income adjusted

Effective in the first quarter of fiscal 2025, LSI will include the amortization expense related to acquired intangible assets as an add-back to its non-GAAP reconciliation.

Effective in the first quarter of fiscal 2025, LSI includes the amortization expense related to acquired intangible assets as an add-back to its non-GAAP reconciliation.

Prior quarter non-GAAP reconciliations have been adjusted accordingly.

The following represents the income tax effects of the adjustments in the tables above, which were calculated using the estimated combined U.S., Canada and Mexico effective income tax rates for the periods indicated (in thousands):

Six Months Ended

Nine Months Ended

Reconciliation of operating income to adjusted operating income:

10 unchanged sentences

Reconciliation of net income to adjusted net income

Six Months Ended

Nine Months Ended

(In thousands, except per share data)

9 unchanged sentences

Net income adjusted

Effective in the first quarter of fiscal 2025, LSI will include the amortization expense related to acquired intangible assets as an add-back to its non-GAAP reconciliation.

Effective in the first quarter of fiscal 2025, LSI includes the amortization expense related to acquired intangible assets as an add-back to its non-GAAP reconciliation.

Prior quarter non-GAAP reconciliations have been adjusted accordingly.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

11 unchanged sentences

Adjusted EBITDA

Reconciliation of cash flow from operations to free cash flow

Three Months Ended

Six Months Ended

(In thousands)

Cash Flow from Operations

Capital expenditures

Free Cash Flow

Net Debt to Adjusted EBITDA

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Organic compared to Inorganic Sales

2 unchanged sentences

- Comparable Display Solutions Sales

Total Display Solutions Sales

- Canada's Best

Total Diplay Solutions Sales

Total net sales

Canada's Best

Total organic net sales

Results of Operations

THREE MONTHS ENDED DECEMBER 31, 2024, COMPARED TO THREE MONTHS ENDED DECEMBER 31, 2023

THREE MONTHS ENDED MARCH 31, 2025, COMPARED TO THREE MONTHS ENDED MARCH 31, 2024

Display Solutions Segment

2 unchanged sentences

Operating Income

Display Solutions net sales of $89.5 million increased 103% from same period in fiscal 2024.

This segment generated organic growth of 50% driven by increased sales across all major product categories and vertical markets supported mostly by the grocery, refueling/ c-Store, and QSR verticals.

The Company’s recent acquisition of EMI also contributed $23.4 million of the quarter-over-quarter sales growth of the Display Solutions Segment.

Gross profit of $15.8 million in the three months ended December 31, 2024 increased 79% from the same period of fiscal 2024.

Gross profit as a percentage of net sales in the three months ended December 31, 2024 decreased to 18% from 20% in the same period of fiscal 2024 impacted by product and vertical market mix.

Display Solutions net sales of $73.5 million increased 70% from the same period in fiscal 2024.

This segment generated organic growth of 15% driven by increased sales across all major product categories and vertical markets supported mostly by the grocery and refueling/ C-Store verticals.

The Company’s acquisition of EMI and CBH (acquired March 11, 2025) also contributed $23.8 million of the quarter-over-quarter sales growth of the Display Solutions Segment.

Gross profit of $12.5 million in the three months ended March 31, 2025, increased 29% from the same period of fiscal 2024.

Gross profit as a percentage of net sales in the three months ended March 31, 2025, decreased to 17% from 22% in the same period of fiscal 2024 impacted by product and vertical market mix.

The rapid increase in demand combined with a high level of scheduling changes also had what is expected to be a transitory impact on margins.

The Company continues to maintain favorable program pricing and prudent cost management.

Operating expenses of $7.7 million in the three months ended December 31, 2024 increased 39% from the same period of fiscal 2024, primarily driven by the acquisition of EMI and by continued investment in commercial initiatives to drive growth.

Display Solutions Segment operating income of $8.1 million in the three months ended December 31, 2024 increased 146% from the same period of fiscal 2024.

The increase in operating income of $4.8 million was driven by the net effect of an increase in net sales partially offset by the gross margin impact of product mix.

Operating expenses of $7.9 million in the three months ended March 31, 2025, increased 43% from the same period of fiscal 2024, primarily driven by the acquisitions of EMI and CBH and also by continued investment in commercial initiatives to drive growth.

Display Solutions Segment operating income of $4.5 million in the three months ended March 31, 2025, increased 11% from the same period of fiscal 2024.

The increase in operating income of $0.4 million was driven by the net effect of an increase in net sales partially offset by the gross margin impact of product and vertical mix.

Lighting Segment

2 unchanged sentences

Operating Income

Lighting Segment net sales of $58.2 million in the three months ended December 31, 2024, decreased 10% compared to net sales of $64.8 million in the same period in fiscal 2024.

Lighting Segment net sales of $59.0 million in the three months ended March 31, 2025, decreased 9% compared to net sales of $64.9 million in the same period in fiscal 2024.

The decline in sales is attributed to the comparison of quarter-over-quarter sales of large lighting projects.

In fiscal 2024, the Company had several large lighting projects, including a new EV plant complex that did not repeat in fiscal 2025.

While there was a decline in large lighting projects, small project activity increased over the prior year period.

Gross profit of $19.0 million in the three months ended December 31, 2024 decreased 16% from the same period of fiscal 2024.

In fiscal 2024, the Company had several large lighting projects that did not repeat in fiscal 2025.

While there was a decline in large lighting projects, small project activity continued to increase over the prior year period.

Gross profit of $20.4 million in the three months ended March 31, 2025, decreased 6% from the same period of fiscal 2024.

The decline in gross profit is attributed to the decline in sales.

While overall demand levels were lower in the fiscal second quarter, selling prices and material input costs remain stable.

Operating expenses of $13.1 million in the three months ended December 31, 2024 decreased 6% from the same period of fiscal 2024, driven mostly by lower commission expense from lower sales, and effective cost management.

Lighting Segment operating income of $6.0 million for the three months ended December 31, 2024 decreased 33% from operating income of $8.9 million in the same period of fiscal 2024 primarily driven by decreased net sales.

While overall demand levels were lower in the fiscal third quarter, gross profit as a percentage of sales improved from 33% to 35%.

The improvement in gross margin was driven by an increase in a higher mix of value applications, stable pricing, and affective cost management.

Operating expenses of $13.2 million in the three months ended March 31, 2025, decreased 7% from the same period of fiscal 2024, driven mostly by lower commission expense from lower sales, and effective cost management.

Lighting Segment operating income of $7.2 million for the three months ended March 31, 2025, decreased 2% from operating income of $7.3 million in the same period of fiscal 2024 primarily driven by decreased net sales partially offset by an improvement in operating margins.

Corporate and Eliminations

1 unchanged sentence

(In thousands)

Gross Profit (Loss)

Operating (Loss)

The gross profit relates to the change in the intercompany profit in inventory elimination.

Operating expenses of $5.6 million in the three months ended December 31, 2024, increased 30% from the same period of fiscal 2024.

Operating expenses of $5.4 million in the three months ended March 31, 2025, increased 48% from the same period of fiscal 2024.

The increase in expense is primarily the result of continued investment in commercial initiatives to support the growth of the Company.

1 unchanged sentence

Consolidated Results

The Company reported $0.7 million and $0.5 million of net interest expense in the three months ended December 31, 2024, and December 31, 2023, respectively.

The increase in interest expense is the result of the funds borrowed to acquire EMI in the fourth quarter of fiscal 2024 partially offset by decreased borrowing costs.

The Company also recorded other income of $0.4 million of other (income) in the three months ended December 31, 2024, of which is related to net foreign exchange currency transaction gains and losses through the Company’s Mexican and Canadian subsidiaries.

The $1.7 million of income tax expense in the three months ended December 31, 2024 represents a consolidated effective tax rate of 23.2%.

The $1.5 million of income tax expense in the three months ended December 31, 2023 represents a consolidated effective tax rate of 20.1%.

Impacting the effective tax rate of both reported periods was the favorable tax treatment of the Company’s long-term performance based compensation.

The Company reported net income of $5.6 million in the three months ended December 31, 2024 compared to net income of $5.9 million in the three months ended December 31, 2023.

Non-GAAP adjusted net income was $8.0 million for the three months ended December 31, 2024, compared to adjusted net income of $7.3 million for the three months ended December 31, 2023 (Refer to the Non-GAAP tables above).

The increase in Non-GAAP adjusted net income is primarily the net result of an increase in net sales partially offset by the profit margin impact of product mix.

Diluted adjusted earnings per share of $0.18 was reported in the three months ended December 31, 2024 compared to $0.20 diluted adjusted earnings per share in the same period of fiscal 2024.

The weighted average common shares outstanding for purposes of computing diluted earnings per share in the three months ended December 31, 2024 were 30,876,000 shares compared to 30,043,000 shares in the same period last year.

SIX MONTHS ENDED DECEMBER 31, 2024, COMPARED TO SIX MONTHS ENDED DECEMBER 31, 2023

The Company reported $0.6 million and $0.1 million of net interest expense in the three months ended March 31, 2025, and March 31, 2024, respectively.

The increase in interest expense is the result of the funds borrowed to acquire EMI in the fourth quarter of fiscal 2024 along with the funds borrowed in the third quarter of fiscal 2025 to acquire CBH partially offset by decreased borrowing costs.

The $1.7 million of income tax expense in the three months ended March 31, 2025, represents a consolidated effective tax rate of 30.6%.

The $2.1 million of income tax expense in the three months ended March 31, 2024, represents a consolidated effective tax rate of 27.8%.

Impacting the effective tax rate of both reported periods is the increase in pre-tax profits in foreign countries where the tax rates of these countries is higher than the US statutory tax rates.

The Company reported net income of $3.9 million in the three months ended March 31, 2025, compared to net income of $5.4 million in the three months ended March 31, 2024.

Non-GAAP adjusted net income was $6.3 million for the three months ended March 31, 2025, compared to adjusted net income of $7.1 million for the three months ended March 31, 2024 (Refer to the Non-GAAP tables above).

The decrease in Non-GAAP adjusted net income is primarily the net result of an increase in net sales offset by unfavorable product mix and operating efficiencies.

Diluted adjusted earnings per share of $0.13 was reported in the three months ended March 31, 2025, compared to $0.18 diluted adjusted earnings per share in the same period of fiscal 2024.

The weighted average common shares outstanding for purposes of computing diluted earnings per share in the three months ended March 31, 2025 were 30,966,000 shares compared to 30,122,000 shares in the same period last year.

NINE MONTHS ENDED MARCH 31, 2025, COMPARED TO NINE MONTHS ENDED MARCH 31, 2024

Display Solutions Segment

Six Months Ended

Nine Months Ended

(In thousands)

1 unchanged sentence

Display Solutions net sales of $242.7 million increased 69% from same period in fiscal 2024.

This segment generated organic growth of 20% driven by increased sales across all major product categories and vertical markets supported mostly by the grocery, refueling/ c-Store, and QSR verticals.

The Company’s recent acquisition of EMI also contributed $49.6 million of the year-over-year sales growth of the Display Solutions Segment.

Gross profit of $30.9 million in the six months ended December 31, 2024 increased 39% from the same period of fiscal 2024.

Gross profit as a percentage of net sales in the six months ended December 31, 2024 decreased to 18% from 22% in the same period of fiscal 2024 impacted by product and vertical market mix.

This segment generated organic growth of 18% driven by increased sales across all major product categories and vertical markets supported mostly by the grocery and refueling/ C-Store verticals.

The Company’s acquisitions of EMI and CBH also contributed $73.4 million of the year-over-year sales growth of the Display Solutions Segment.

Gross profit of $43.3 million in the nine months ended March 31, 2025, increased 36% from the same period of fiscal 2024.

Gross profit as a percentage of net sales in the nine months ended March 31, 2025, decreased to 18% from 22% in the same period of fiscal 2024 impacted by product and vertical market mix.

The rapid increase in demand over the past two quarters combined with a high level of scheduling changes also had a transitory impact on margins.

The Company continues to maintain favorable program pricing and prudent cost management.

Operating expenses of $15.0 million in the six months ended December 31, 2024 increased 29% from the same period of fiscal 2024, primarily driven by the acquisition of EMI and by continued investment in commercial initiatives to drive growth.

Operating income of $15.8 million in the six months ended December 31, 2024 increased 51% from the same period of fiscal 2024.

Operating expenses of $23.0 million in the nine months ended March 31, 2025 increased 33% from the same period of fiscal 2024, primarily driven by the acquisitions of EMI and CBH and by continued investment in commercial initiatives to drive growth.

Operating income of $20.3 million in the nine months ended March 31, 20254 increased 40% from the same period of fiscal 2024.

The increase in operating income of 5.8 million was driven by the net effect of an increase in net sales partially offset by the gross margin impact of product mix.

Lighting Segment

Six Months Ended

Nine Months Ended

(In thousands)

Operating Income

Lighting Segment net sales of $116.6 million in the six months ended December 31, 2024, decreased 12% compared to net sales of $132.4 million in the same period in fiscal 2024.

The decline in sales in the Lighting Segment is attributed to the comparison of year-over-year sales of large lighting projects.

In fiscal 2024, the Company had several large lighting projects, including a new EV plant complex that did not repeat in fiscal 2025.

Contributing to the decline in large projects was the lengthening of the conversions cycle for these large projects.

While there was a decline in large lighting projects, small project activity increased over the prior year period.

Gross profit of $37.7 million in the three months ended December 31, 2024 decreased 18% from the same period of fiscal 2024.

Lighting Segment net sales of $175.6 million in the nine months ended March 31, 2025, decreased 11% compared to net sales of $197.3 million in the same period in fiscal 2024.

The decline in sales is attributed to the comparison of year-over-year sales of large lighting projects.

In fiscal 2024, the Company had several large lighting projects that did not repeat in fiscal 2025.

While there was a decline in large lighting projects, small project activity continues to increase over the prior year period.

Gross profit of $58.0 million in the nine months ended March 31, 2025, decreased 14% from the same period of fiscal 2024.

The decline in gross profit is attributed to the decline in sales.

While overall demand levels were lower in the first half of fiscal 2025, selling prices and material input costs remain stable.

Operating expenses of $25.9 million in the six months ended December 31, 2024 decreased 9% from the same period of fiscal 2024, driven mostly by lower commission expense from lower sales, and effective cost management.

Lighting Segment operating income of $11.7 million for the six months ended December 31, 2024 decreased 33% from operating income of $17.6 million in the same period of fiscal 2024 primarily driven by decreased net sales.

While overall demand levels were lower in the first nine months, gross profit as a percentage of sales only decreased by 1% compared to the 34% from the margin rate reported in first nine months of fiscal 2024.

Maintaining a comparable gross margin rate on lower sales was the result of an increase in a higher mix of value applications, stable pricing, and affective cost management.

Operating expenses of $39.2 million in the nine months ended March 31, 2025, decreased 8% from the same period of fiscal 2024, driven mostly by lower commission expense from lower sales, and effective cost management.

Lighting Segment operating income of $18.9 million for the nine months ended March 31, 2025, decreased 24% from operating income of $24.9 million in the same period of fiscal 2024 primarily driven by decreased net sales partially offset by an increase in a higher mix of value applications, stable pricing, and effective cost management.

Corporate and Eliminations

Six Months Ended

Nine Months Ended

(In thousands)

Gross Profit (Loss)

Operating (Loss)

The gross profit (loss) relates to the change in the intercompany profit in inventory elimination.

Operating expenses of $10.0 million in the six months ended December 31, 2024, increased 7% from the same period of fiscal 2024.

Operating expenses of $15.4 million in the nine months ended March 31, 2025, increased 19% from the same period of fiscal 2024.

The increase in expense is the result of an increase in investment in commercial initiatives to support the growth of the Company.

1 unchanged sentence

Consolidated Results

The Company reported $1.6 million and $1.0 million of net interest expense in the six months ended December 31, 2024, and December 31, 2023, respectively.

The increase in interest expense is the result of the funds borrowed to acquire EMI in the fourth quarter of fiscal 2024 partially offset by decreased borrowing costs.

The Company also recorded other income of $0.3 million and $0.1 million in the six months ended December 31, 2024, and December 31, 2023, respectively, both of which is related to net foreign exchange currency transaction gains and losses through the Company’s Mexican and Canadian subsidiaries.

The $3.3 million of income tax expense in the six months ended December 31, 2024 represents a consolidated effective tax rate of 21.3%.

The $3.8 million of income tax expense in the six months ended December 31, 2023 represents a consolidated effective tax rate of 21.5%.

The Company reported $2.3 million and $1.2 million of net interest expense in the nine months ended March 31, 2025, and March 31, 2024, respectively.

The increase in interest expense is the result of the funds borrowed to acquire EMI in the fourth quarter of fiscal 2024 along with the funds borrowed to acquire CBH in the third quarter of fiscal 2025, partially offset by decreased borrowing costs.

The Company also recorded other expense of $0.3 million and $0.1 million in the nine months ended March 31, 2025, and March 31, 2024, respectively, both of which is related to net foreign exchange currency transaction gains and losses through the Company’s Mexican and Canadian subsidiaries.

The $5.1 million of income tax expense in the nine months ended March 31, 2025 represents a consolidated effective tax rate of 23.7%.

The $5.9 million of income tax expense in the nine months ended March 31, 2024 represents a consolidated effective tax rate of 23.4%.

Impacting the effective tax rate of both reported periods was the favorable tax treatment of the Company’s long-term performance based compensation.

The Company reported net income of $12.3 million in the six months ended December 31, 2024 compared to net income of $13.9 million in the six months ended December 31, 2023.

Non-GAAP adjusted net income was $16.0 million for the six months ended December 31, 2024, compared to adjusted net income of $16.9 million for the six months ended December 31, 2023 (Refer to the Non-GAAP tables above).

The decrease in Non-GAAP adjusted net income is primarily the net result of an increase in net sales offset by the profit margin impact of product mix.

Diluted adjusted earnings per share of $0.40 was reported in the six months ended December 31, 2024 compared to $0.47 diluted adjusted earnings per share in the same period of fiscal 2024.

The weighted average common shares outstanding for purposes of computing diluted earnings per share in the six months ended December 31, 2024 were 30,876,000 shares compared to 29,949,000 shares in the same period last year.

The Company reported net income of $16.2 million in the nine months ended March 31, 2025, compared to net income of $19.3 million in the nine months ended March 31, 2024.

Non-GAAP adjusted net income was $22.3 million for the nine months ended March 31, 2025, compared to adjusted net income of $24.0 million for the nine months ended March 31, 2024 (Refer to the Non-GAAP tables above).

The decrease in Non-GAAP adjusted net income is primarily the net result of an increase in net sales offset by unfavorable product mix and operating efficiencies.

Diluted adjusted earnings per share of $0.53 was reported in the nine months ended March 31, 2025, compared to $0.64 diluted adjusted earnings per share in the same period of fiscal 2024.

The weighted average common shares outstanding for purposes of computing diluted earnings per share in the nine months ended March 31, 2025, were 30,790,000 shares compared to 30,005,000 shares in the same period last year.

Liquidity and Capital Resources

1 unchanged sentence

For long-term liquidity indicators, the Company believes its ratio of long-term debt to equity and our historical levels of net cash flows from operating activities to be the most important measures.

At December 31, 2024, the Company had working capital of $84.9 million compared to $83.3 million at June 30, 2024.

The ratio of current assets to current liabilities was 2.1 to 1 for both December 31, 2024, and June 30, 2024.

The increase in working capital from June 30, 2024, to December 31, 2024, was primarily driven by a $2.6 million increase in net accounts receivable partially offset by a $1.5 million decrease in net inventory.

Net accounts receivable was $81.2 million and $78.6 million at December 31, 2024, and June 30, 2024, respectively.

DSO decreased to 52 days at December 31, 2024, from 58 days at June 30, 2024.

Net inventories of $69.4 million at December 31, 2024, decreased $1.5 million from $70.9 million at June 30, 2024.

Lighting Segment net inventory decreased $1.7 million whereas net inventory in the Display Solutions Segment increased $0.2 million to support the growth in backlog resulting from an increase program activity.

At March 31, 2025, the Company had working capital of $96.3 million compared to $83.3 million at June 30, 2024.

The ratio of current assets to current liabilities was 2.1 to 1 for both March 31, 2025, and June 30, 2024.

The acquisition of CBH in the third quarter of fiscal 2025 accounted for $8.3 million of the increase in net working capital.

When the impact of the acquisition of CBH is removed from the year-over-year comparison, net working capital increased $4.8 million.

Most of the increase is attributed to a $14.9 million increase in accounts receivable partially offset by a $9.0 increase in accounts payable and accrued expenses.

Net accounts receivable was $98.0 million and $78.6 million at March 31, 202, and June 30, 2024, respectively.

The acquisition of CBH accounted for $4.5 million of the increase.

DSO increased to 59 days at March 31, 2025, from 58 days at June 30, 2024.

Net inventories of $74.5 million at March 31, 2025, increased $3.5 million from $70.9 million at June 30, 2024.

Lighting Segment net inventory decreased $1.9 million whereas net inventory in the Display Solutions Segment increased $5.4 million.

The acquisition of CBH accounted for $4.3 million of the increase in net inventory.

The growth in Display Solutions inventory excluding the impact of CBH inventory was to support the growth in backlog resulting from an increase in program activity.

Cash generated from operations and borrowing capacity under the Company’s line of credit is its primary source of liquidity.

1 unchanged sentence

Both facilities expire in the first quarter of fiscal 2027.

As of December 31, 2024, $50.2 million of the credit line was available.

As of March 31, 2025, $32.2 million of the credit line was available.

The Company is in compliance with all of its loan covenants.

The $100 million credit facility plus cash flows from operating activities are adequate for operational and capital expenditure needs for the remainder of fiscal 2025.

The Company generated $21.7 million of cash from operating activities in the six months ended December 31, 2024, compared to $19.9 million of cash generated from operating activities in the same period in fiscal 2024.

The Company generated $27.1 million of cash from operating activities in the nine months ended March 31, 2025, compared to $32.3 million of cash generated from operating activities in the same period in fiscal 2024.

The Company continues to effectively manage its working capital while generating increasing cash flow from earnings in both fiscal years, resulting in strong cash flow from operations.

The Company invested $1.8 million and $3.3 million of cash related to investing activities in the six months ended December 31, 2024, and December 31, 2023, respectively.

The Company invested $2.5 million and $4.6 million of cash related to purchases of property, plant and equipment in the nine months ended March 31, 2025, and March 31, 2024, respectively.

In the third quarter of FY 2025 the Company acquired CBH for $22.8 million net of cash received.

The Company continues to invest in equipment and tooling to support sales growth.

The Company had a net use of cash of $19.1 million and $15.7 million related to financing activities in the six months ended December 31, 2024, and December 31, 2023, respectively.

The Company had a net use of cash of $3.2 million and $22.4 million related to financing activities in the nine months ended March 31, 2025, and March 31, 2024, respectively.

The decrease in net cash used year-over-year was the result of the debt funding required to acquire CBH in the third quarter of fiscal 2025.

The Company continues to generate positive cash flow from its operations in order to pay down its debt and fund its dividend payments to shareholders.

4 unchanged sentences

Cash Dividends

In January 2025, the Board of Directors declared a regular quarterly cash dividend of $0.05 per share payable February 11, 2025, to shareholders of record as of February 3, 2025.

In April 2025, the Board of Directors declared a regular quarterly cash dividend of $0.05 per share payable May 13, 2025, to shareholders of record as of May 5, 2025.

The indicated annual cash dividend rate for fiscal 2025 is $0.20 per share.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements