What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-05-08 · 207 added, 414 removed, 538 unchanged (54% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Nine Months Ended

(In thousands, except per share data)

Three Months Ended

Cost of products and services sold

10 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended

Nine Months Ended

(In thousands)

Three Months Ended

Foreign currency translation adjustment

4 unchanged sentences

(In thousands, except shares)

September 30,

Current assets

1 unchanged sentence

Accounts receivable, less allowance for credit losses of $ 1,223 and $ 1,152 , respectively

Refundable income taxes

Refundable income tax

Other current assets

2 unchanged sentences

Machinery and equipment

Buildings under finance leases

Construction in progress

1 unchanged sentence

Net property, plant and equipment

Other intangible assets, net

Intangible assets, net

Operating lease right-of-use assets

4 unchanged sentences

(In thousands, except shares)

September 30,

LIABILITIES & SHAREHOLDERS' EQUITY

5 unchanged sentences

Long-term debt

Finance lease liabilities

Operating lease liabilities

8 unchanged sentences

Treasury shares, without par value

Deferred compensation plan

Key Executive Compensation

Retained earnings

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except per share data)

Common Shares

4 unchanged sentences

Shareholders'

(In thousands, except per share data)

Income (Loss)

Balance at June 30, 2024

Other comprehensive gain

Other comprehensive (loss)

Board stock compensation

8 unchanged sentences

Balance at September 30, 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 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

Treasury Shares

Key Executive

Comprehensive

Shareholders'

Balance at June 30, 2025

10 unchanged sentences

Balance at September 30, 2025

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 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

Nine Months Ended

Three Months Ended

(In thousands)

4 unchanged sentences

Deferred compensation plan

ESPP discount

Stock compensation expense

ESPP discount

Issuance of common shares as compensation

10 unchanged sentences

Cash Flows from Investing Activities

Proceeds from the sale of fixed assets

Acquisition of CBH (net of cash acquired)

Acquisition of EMI

Acquisition of business

Purchases of property, plant, and equipment

1 unchanged sentence

Cash Flows from Financing Activities

Payments of long-term debt

Borrowings of long-term debt

Payments on long-term debt

Borrowings on long-term debt

Cash dividends paid

Shares withheld for employees' taxes

Shares withheld on employees' taxes

Payments on financing lease obligations

Proceeds from stock option exercises

Net cash flows used in financing activities

Net cash flows provided by (used in) financing activities

Change related to Foreign Currency

8 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 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.

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 September 30, 2025, the results of its operations for the three-month periods ended September 30, 2025, and 2024, and its cash flows for the three-month periods ended September 30, 2025, and 2024.

These statements should be read in conjunction with the financial statements and footnotes included in the fiscal 2025 Annual Report on Form 10-K.

38 unchanged sentences

(In thousands)

March 31, 2025

March 31, 2024

September 30, 2025

Display Solutions

Timing of revenue recognition

1 unchanged sentence

Products and services transferred over time

Three Months Ended

March 31, 2025

March 31, 2024

Type of Product and Services

LED lighting, digital signage solutions, electronic circuit boards

Poles, other display solution elements

Poles and other display solutions elements

Project management, installation services, shipping and handling

Nine Months Ended

March 31, 2025

March 31, 2024

Three Months Ended

(In thousands)

September 30, 2024

Display Solutions

Timing of revenue recognition

1 unchanged sentence

Products and services transferred over time

Nine Months Ended

March 31, 2025

March 31, 2024

Type of Product and Services

LED lighting, digital signage solutions, electronic circuit boards

Poles, other display solution elements

Poles and other display solutions elements

Project management, installation services, shipping and handling

14 unchanged sentences

The Company will continue to evaluate the impact of this guidance on its consolidated financial statements.

In November 2023 , the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures.

This ASU expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The standard requires interim and annual disclosure of significant segment expenses that are regularly provided to the chief operating decision-maker ("CODM") and included within the reported measure of a segment’s profit or loss, requires interim disclosures about a reportable segment’s profit or loss and assets that are currently required annually, requires disclosure of the position and title of the CODM, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, and contains other disclosure requirements.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the effect of this new guidance on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023 - 09 , Income Taxes (Topic 740 ):

4 unchanged sentences

The Company is currently evaluating the effect of this new guidance on its consolidated financial statements and related disclosures.

NOTE 3 — ACQUISITION OF EMI INDUSTRIES, LLC

On April 18, 2024, the Company entered into and consummated the transactions contemplated by an asset purchase agreement with EMI Industries, LLC (EMI), a Florida-based metal and millwork manufacturer of standard and customized fixtures, displays and equipment for the convenience store, supermarket and restaurant industries, for $ 50.0 million, of which $ 0.1 million of the purchase price was retained pending a review of the acquired working capital.

In the first quarter of fiscal 2025, the company funded an additional $ 59,000 related to the final settlement of the acquired working capital.

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 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.

The Company accounted for this transaction as a business combination.

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 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:

(In thousands)

April 18, 2024 as

initially reported

April 18, 2024 as

Accounts Receivable

Property, Plant and Equipment

Operating Lease Right-Of-Use Assets

Intangible Assets

Accounts Payable

Accrued Expenses

Operating Lease Liabilities

Identifiable Assets

Net Purchase Consideration

The gross amount of accounts receivable acquired was $ 11.9 million.

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

The goodwill resulting from the acquisition is deductible for tax purposes.

The trade name and technology used an income (relief from royalty) approach, the non-compete used an income (with or without) approach, and the customer relationships used an income (excess earnings) approach.

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

(in thousands)

Estimated Fair

Estimated Useful

Indefinite life

Technology assets

Customer relationships

EMI’s post-acquisition results of operations for the period from April 18, 2024, through June 30, 2024, are included in the Company’s Consolidated Statements of Operations.

Since the acquisition date, net sales of EMI for the period from April 18, 2024, through June 30, 2024, were $ 18.1 million and operating income was $ 0.7 million.

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

Pro Forma Impact of the Acquisition of EMI (Unaudited)

The following table represents unaudited pro forma results of operations and gives effect to the acquisition of EMI as if the transaction had occurred on July 1, 2022.

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 EMI .

The unaudited pro forma financial information for the twelve months ended June 30, 2024, and June 30, 2023, is prepared using the acquisition method of accounting and has been adjusted to reflect 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 fiscal 2024 unaudited pro forma operating income of $ 36.3 million excludes acquisition-related expenses of $ 1.0 million.

Twelve Months Ended

(in thousands;

Operating Income

NOTE 3 — 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.

On March 11, 2025, the Company acquired 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 payments up to $ 7.0 million.

As of the acquisition date, total purchase consideration of $ 29.1 million includes the current fair value of the contingent consideration related to future earnout payments of $ 3.3 million.

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 $ 1.0 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 funded the initial purchase consideration totaling $ 25.9 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.

The Company has preliminarily allocated the purchase price of $ 29.1 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:

The Company has finalized the third-party valuations of certain assets including fixed assets and intangible assets.

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

(In thousands)

March 11, 2025 as

initially reported

(In thousands)

period adjustments

March 11, 2025

Cash and cash equivalents

6 unchanged sentences

Operating lease liabilities

Other long-term liabilities

Deferred tax liability

6 unchanged sentences

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

Estimated Fair

Estimated Useful Life

(in thousands)

Estimated Fair

Estimated Useful

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.

CBH’s post-acquisition results of operations for the period from July 1, 2025, through September 30, 2025, are included in the Company’s Consolidated Statements of Operations.

Since the acquisition date, net sales of CBH for the period from July 1, 2025, through September 30, 2025, were $ 8.9 million and operating income was $ 1.3 million.

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

3 unchanged sentences

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:

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

(1) directly attributable to the acquisition;

1 unchanged sentence

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

The unaudited pro-form operating income of $ 10.8 million excludes acquisition-related expenses of $ 0.1 million.

(in thousands;

Three Months Ended

September 30,

Operating Income

4 unchanged sentences

Corporate and Eliminations, which captures the Company’s corporate administrative activities, is also reported in the segment information.

The Company’s method for measuring profitability on a reportable segment basis and used by the CODM to assess performance is adjusted operating income and adjusted earnings before interest, tax, depreciation, amortization, along with other non-GAAP adjustments (adjusted EBITDA).

These measurements are used to monitor performance compared to prior periods and forecasted results.

The Lighting Segment includes non-residential outdoor and indoor lighting fixtures utilizing LED light sources that have been fabricated and assembled for the Company’s markets, primarily the refueling and convenience store markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports court and field market.

3 unchanged sentences

The Display Solutions Segment manufactures, sells and installs exterior and interior visual image and display elements, including printed graphics, structural graphics, digital signage, menu board systems, millwork display fixtures, refrigerated displays, food equipment, countertops, and other custom display elements.

These products are used in visual image programs in several markets including the refueling and convenience store markets, parking lot and garage markets, quick-service and casual restaurant market, retail and grocery store, and other retail markets.

These products are used in visual image programs in several markets including the refueling and convenience store markets, quick-service and casual restaurant market, retail and grocery store, and other retail markets.

The Company accesses its customers primarily through a direct sale model utilizing its own sales force.

Sales through distribution represents a small portion of Display Solutions sales.

Sales through distribution represent a small portion of Display Solutions sales.

The Display Solutions Segment also provides a variety of project management services to complement our display elements, such as installation management, site surveys, permitting, and content management which are offered to our customers to support our digital signage.

2 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 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:

There were no customers or customer programs representing a concentration of 10% or more of the Company’s consolidated net sales in the three months ended September 30, 2025, or 2024.

There was no concentration of accounts receivable at September 30, 2025, or 2024.

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of September 30, 2025, and September 30, 2024:

(In thousands)

Three Months Ended

Nine Months Ended

September 30, 2025

Operating income

Long-term performance based compensation

Severance costs and restructuring costs

Amortization expense of acquired intangible assets

Acquisition costs

Expense on step-up basis of acquired assets

Adjusted operating income

Depreciation Expense

Adjusted EBITDA

(In thousands)

Lighting Segment

Display Solutions Segment

Operating Income (Loss):

Lighting Segment

Display Solutions Segment

Corporate and Eliminations

Three Months Ended

September 30, 2024

Operating income

Long-term performance based compensation

Severance costs and restructuring costs

Amortization expense of acquired intangible assets

Acquisition costs

Expense on step-up basis of acquired assets

Adjusted operating income

Depreciation Expense

Adjusted EBITDA

(In thousands)

Three Months Ended

Capital Expenditures:

6 unchanged sentences

Corporate and Eliminations

Total Assets:

September 30, 2025

June 30, 2025

Identifiable Assets:

Lighting Segment

2 unchanged sentences

The segment net sales reported above represent sales to external customers.

Segment operating income, which is used in management’s evaluation of segment performance, represents net sales less all operating expenses.

Identifiable assets are those assets used by each segment in its operations.

The Company records a 10% mark-up on intersegment revenues.

Any inter-segment profit in inventory is eliminated in consolidation.

Any intersegment profit in inventory is eliminated in consolidation.

Intersegment revenues were eliminated in consolidation as follows:

1 unchanged sentence

Three Months Ended

Nine Months Ended

(In thousands)

3 unchanged sentences

The following table presents the amounts used to compute basic and diluted earnings per common share, as well as the effect of dilutive potential common shares on weighted average shares outstanding:

(in thousands, except per share data)

Three Months Ended

Nine Months Ended

BASIC EARNINGS PER SHARE

3 unchanged sentences

Weighted average shares outstanding

Basic earnings per common share

Basic income per share

DILUTED EARNINGS PER SHARE

3 unchanged sentences

Weighted average shares outstanding

Diluted earnings per common share

Diluted income per share

Anti-dilutive securities (b)

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 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.

Anti-dilutive securities were excluded from the computation of diluted net income per share for the three months ended September 30, 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 6 – INVENTORIES, NET

1 unchanged sentence

(In thousands)

September 30, 2025

June 30, 2025

Raw materials

5 unchanged sentences

(In thousands)

September 30, 2025

June 30, 2025

Accrued Expenses:

2 unchanged sentences

Accrued warranty

Operating lease liabilities

Accrued sales commissions

Accrued freight

Finance lease liabilities

Operating lease liabilities

Other accrued expenses

18 unchanged sentences

(In thousands)

Balance as of March 31, 2025

Lighting Segment

Balance as of September 30, 2025

Measurement period adjustments

Foreign currency translation

Accumulated impairment losses

Goodwill, net as of March 31, 2025

Goodwill, net as of September 30, 2025

Balance as of June 30, 2025

Goodwill acquired, net of adjustments

Foreign currency translation

Accumulated impairment losses

1 unchanged sentence

The gross carrying amount and accumulated amortization by each major intangible asset class is as follows:

Other Intangible Assets

March 31, 2025

(In thousands)

September 30, 2025

Gross Carrying

Amortized Intangible Assets

Customer relationships

LED technology firmware, software

LED technology, software

Total Amortized Intangible Assets

3 unchanged sentences

Total Other Intangible Assets

Other Intangible Assets

June 30, 2024

(In thousands)

June 30, 2025

Gross Carrying

Amortized Intangible Assets

Customer relationships

LED technology firmware, software

LED technology, software

Total Amortized Intangible Assets

4 unchanged sentences

Three Months Ended

Nine Months Ended

(In thousands)

3 unchanged sentences

NOTE 9 – DEBT

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

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

September 30,

(In thousands)

3 unchanged sentences

Total amounts due after one year, net

In September 2021, the Company amended its existing $ 100 million secured line of credit, to a $ 25 million term loan and $ 75 million remaining as a secured revolving line of credit.

Both facilities expire in the first quarter of fiscal 2027.

The principal of the term loan is repaid annually in the amount of $ 3.6 million over a five -year period with a balloon payment of the remaining balance due last month.

Interest on both the revolving line of credit and the term loan is charged based upon an increment over the Secured Overnight Financing Rate (SOFR) or a base rate, at the Company’s option.

The base rate is calculated as the highest of (a) the Prime rate, (b) the sum of the Overnight Funding Rate plus 50 basis points and (c) the sum of the Daily SOFR Rate plus 100 basis points.

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 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.

In September 2025, the Company amended its existing $ 100 million credit facility which consisted of a $ 25 million term loan and a $ 75 million revolving credit line to a $ 125 million revolving credit line.

The $ 125 million credit facility will expire in the first quarter of fiscal 2031.

Interest on the revolving line of credit is charged based upon an increment over the Secured Overnight Financing Rate ( SOFR ).

The increment over the SOFR borrowing rate fluctuates between 100 and 225 basis points 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 September 30, 2025, the Company’s borrowing rate against its revolving line of credit was 5.5 %.

The increment over the SOFR borrowing rate will be 100 basis points for the second quarter of fiscal 2026.

The fee on the unused balance of the $ 125 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 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.

Under the terms of the credit agreement, the Company is required to comply with a financial covenant that limits the ratio of indebtedness to EBITDA.

The Company is also required to maintain an interest coverage ratio equal to or above the minimum set forth in the agreement.

Under the amended credit facility, there was $ 73 million available for borrowing under the $ 125 million line of credit.

The Company is in compliance with all of its loan covenants as of September 30, 2025.

NOTE 10 - CASH DIVIDENDS

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.

The Company paid cash dividends of $ 1.5 million for the three months ended September 30, 2025, and September 30, 2024, respectively.

Dividends on restricted stock units in the amount of $ 0.2 million and $ 0.1 million were accrued as of both September 30, 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 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.

In November 2025, the Board of Directors declared a regular quarterly cash dividend of $ 0.05 per share payable November 25, 2025, to shareholders of record as of November 17, 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 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.

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 1,047,885 as of September 30, 2025.

In the three months ended September 30, 2025, the Company granted 121,440 PSUs and 80,958 RSUs, both with a weighted average market value of $ 19.30 .

Stock compensation expense was $ 1.1 million for both the three months ended September 30, 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 2026, employees purchased 4,000 shares.

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

At September 30, 2025, 221,000 shares remained available for purchase under the ESPP.

NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION

Nine Months Ended

(in thousands)

Three Months Ended

Cash Payments:

8 unchanged sentences

In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, results of operations, cash flows or liquidity.

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

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

The Company recorded a $ 3.4 million contingent liability related to the future earnout payments as part of the acquisition of Canada’s Best Holding (CBH).

(Refer to Footnote 3.) The $3.3 million, and $ 3.4 million represents the value of the earnout converted from its functional currency to USD as of September 30, 2025, and June 30, 2025, respectively.

NOTE 14 - LEASES

4 unchanged sentences

The lease agreements do not contain any material residual guarantees or material variable lease payments.

The number of operating leases increased in fiscal 2024 as a result of the acquisition of EMI;

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 March 31, 2025, and 2024.

The rent expense for these leases was immaterial for September 30, 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.

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Three Months Ended

Nine Months Ended

(In thousands)

6 unchanged sentences

Total lease cost

Three Months Ended

Supplemental Cash Flow Information

Nine Months Ended

(in thousands)

Cash flows from operating leases

Fixed payments - operating cash flows

Fixed payments - operating lease cash flows

Liability reduction - operating cash flows

3 unchanged sentences

Operating Leases:

September 30, 2025

June 30, 2025

Total operating right-of-use assets

Accrued expenses (Current liabilities)

Accrued Expenses

Long-term operating lease liability

2 unchanged sentences

Weighted Average Discount Rate

Finance Leases:

Buildings under finance leases

Equipment under finance leases

Accumulated depreciation

Total finance lease assets, net

Accrued expenses (Current liabilities)

Long-term finance lease liability

Total finance lease liabilities

Weighted Average remaining Lease Term (in years)

Weighted Average Discount Rate

In fiscal 2025, the Company terminated its finance lease in Akron, Ohio as of June 30, 2025.

In conjunction with the termination of the finance lease, the Company entered into a new lease to expand its production capabilities in its Houston, Texas location.

The new lease is effective October 1, 2025, and expires September 30, 2035.

Maturities of Lease Liability:

Finance Lease

Operating Lease

Total lease payments

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Three Months Ended

Nine Months Ended

Reconciliation of effective tax rate:

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Uncertain tax positions

Deferred income tax adjustment

Share-based compensation

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Three Months Ended

Nine Months Ended

(In thousands)

1 unchanged sentence

Display Solutions Segment

Operating Income by Business Segment

Total Net Sales

Operating Income (Loss) by Business Segment

Three Months Ended

Nine Months Ended

(In thousands)

2 unchanged sentences

Corporate and Eliminations

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 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 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 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 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.

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.

Total Operating Income

Net sales of $157.2 million for the three months ended September 30, 2025, increased 14% as compared to net sales of $138.1 million for the three months ended September 30, 2024.

Lighting segment net sales of $69.1 million increased 18% compared to prior year quarter net sales of $58.4 million.

Strong Lighting t net sales were driven by the introduction of several new products and the Company’s ability to convert multiple competitor accounts to LSI.

Net sales in the Display Solutions segment of $88.2 million increased 11% compared to the same quarter last year sales of $79.7 million.

The increase in net sales in the Display Solutions segment is the result of continued steady demand in the refueling/c-store and grocery markets and from the acquisition of Canada’s Best Holdings which contributed $8.9 million of the quarter-over-quarter sales growth.

Operating income of $11.0 million for the three months ended September 30, 2025, represents a 20% increase from operating income of $9.1 million in the three months ended September 30, 2024.

Adjusted operating income, a Non-GAAP measure, was $14.1 million in the three months ended September 30, 2025, represents an 18% increase compared to $11.9 million in the three months ended September 30, 2024.

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

GAAP measures.

The increase in operating income is the result of an increase in net sales in both segments coupled with improved price realization and disciplined cost management.

Non-GAAP Financial Measures

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.

This report includes adjustments to GAAP operating income, net income, and earnings per share for the three months ended September 30, 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.

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We believe these non-GAAP measures will provide increased transparency to our core operating performance of the business.

Also included in this report are non-GAAP financial measures, including Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA and Adjusted EBITDA), Net Debt to Adjusted EBITDA, Free Cash Flow, and organic sales growth.

We believe that these are useful as supplemental measures in assessing the operating performance of our business.

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Amortization expense of acquired intangible assets

Lease expense on the step-up basis of acquired leases

Restructuring/severance costs

Acquisition costs

Adjusted operating income

Reconciliation of net income to adjusted net income

Three Months Ended

(In thousands, except per share data)

Net income as reported

Long-term performance based compensation

Amortization expense of acquired intangible assets

Lease expense on the step-up basis of acquired leases

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 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):

Nine Months Ended

Reconciliation of operating income to adjusted operating income:

(In thousands)

Operating income as reported

Acquisition costs

Long-term performance based compensation

Amortization expense of acquired intangible assets

Lease expense on the step-up basis of acquired leases

Restructuring/severance costs

Consulting expense:

commercial growth opportunities

Adjusted operating income

Reconciliation of net income to adjusted net income

Nine Months Ended

Three Months Ended

(In thousands, except per share data)

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Lease expense on the step-up basis of acquired leases

Consulting expense:

commercial growth opportunities

Foreign Currency transaction loss on intercompany loan

Tax rate difference between reported and adjusted net income

Net income adjusted

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.

Reconciliation of Net Income to Adjusted EBITDA

Three Months Ended

Nine Months Ended

Reconciliation of net income to EBITDA and adjusted EBITDA

(In thousands)

1 unchanged sentence

Interest expense, net

Other (Income) Expense

Other expense (income)

Operating income as reported

Depreciation and amortization

Acquisition costs

Long-term performance based compensation

1 unchanged sentence

Lease expense on the step-up basis of acquired leases

Consulting expense:

commercial growth opportunities

Acquisition costs

Adjusted EBITDA

Three Months Ended

Reconciliation of cash flow from operations to free cash flow

(In thousands)

Cash flow from operations

Capital expenditures

Free cash flow

Net debt to adjusted EBITDA

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Long-Term Debt

Cash and cash equivalents

Debt as reported

Cash and cash equivalents as reported

Adjusted EBITDA - Trailing 12 Months

Net debt to adjusted EBITDA

Three Months Ended

Nine Months Ended

Organic compared to Inorganic Sales

Lighting Segment

Display Solutions Segment

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

Display Solutions Segment

Three Months Ended

(In thousands)

Operating Income

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 $7.9 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

Three Months Ended

(In thousands)

Operating Income

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 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 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

Three Months Ended

(In thousands)

Gross Profit (Loss)

Operating (Loss)

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

Operating expenses of $5.4 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.

Also contributing to the quarter-over-quarter change was an increase in employee benefit costs.

Consolidated Results

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

THREE MONTHS ENDED SEPTEMBER 30, 2025, COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2024

Display Solutions Segment

Nine Months Ended

(In thousands)

Operating Income

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

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.

Display Solutions Segment net sales of $88.2 million in the three months ended September 30, 2025, increased 11% from net sales of $79.7 million in the same period in fiscal 2025.

The increase in net sales in the Display Solutions segment is the result of favorable demand in the refueling/c-store and grocery markets and from the acquisition of Canada’s Best Holdings which contributed $8.9 million of the quarter-over-quarter sales growth.

Gross profit of $17.1 million in the three months ended September 30, 2025, increased 14% from the same period of fiscal 2025.

Gross profit as a percentage of net sales in the three months ended September 30, 2025, increased to 19.4% from 18.9% in the same period of fiscal 2025 impacted by favorable product and vertical market mix.

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

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.

Operating expenses of $8.5 million in the three months ended September 30, 2025, increased 16% from the same period of fiscal 2025, primarily driven by the acquisition of CBH and by continued investment in commercial initiatives to drive growth.

Display Solutions Segment operating income of $8.6 million in the three months ended September 30, 2025, increased 12% from the same period of fiscal 2025.

The increase in operating income was driven by the increase in net sales and an improvement in gross profit margin.

Lighting Segment

Nine Months Ended

(In thousands)

Operating Income

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 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.

Lighting Segment net sales of $69.1 million in the three months ended September 30, 2025, increased 18% compared to net sales of $58.4 million in the same period in fiscal 2025.

Strong Lighting net sales were driven by the introduction of several new products and the Company’s ability to convert multiple competitor accounts to LSI.

Gross profit of $23.2 million in the three months ended September 30, 2025, increased 25% from the same period of fiscal 2025 while gross profit as a percentage of sales improved from 31.9% in the first quarter of fiscal 2025 to 33.6% in the first quarter of fiscal 2026.

The improved gross margin reflects increased volume, but also the ability to successfully align selling prices with changes in material input costs.

Operating expenses of $14.6 million in the three months ended September 30, 2025, increased 14% from the same period of fiscal 2025, driven mostly by agent commission expense resulting from higher sales.

Lighting Segment operating income of $8.5 million for the three months ended September 30, 2025, increased 48% from operating income of $5.8 million in the same period of fiscal 2025 primarily driven by increased net sales and an improvement in gross profit margin.

Corporate and Eliminations

Nine Months Ended

(In thousands)

Operating (Loss)

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

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.

Also contributing to the year-over-year change was an increase in employee benefit costs.

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

Operating expenses of $6.2 million in the three months ended September 30, 2025, increased from operating expenses of 4.3 in the three months ended September 30, 2024.

The increase was primarily the result of the investment in commercial initiatives to support the growth of the Company, including the cost associated with acquisitions, and performance related compensation programs.

Consolidated Results

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%.

The Company reported $0.7 million and $0.8 million of net interest expense in the three months ended September 30, 2025, and September 30, 2024, respectively.

The decrease in interest expense is the result of positive cash flow to pay down the of funds borrowed to acquire EMI Industries, LLC in the fourth quarter of fiscal 2024 and Canada’s Best Holdings in the third quarter of fiscal 2025, and by lower borrowing costs.

The Company also recorded other expense/(income) of $0.5 million and ($0.1) million in the three months ended September 30, 2025, and September 30, 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 $2.4 million of income tax expense in the three months ended September 30, 2025, represents a consolidated effective tax rate of 25.1%.

The $1.6 million of income tax expense in the three months ended September 30, 2024, represents a consolidated effective tax rate of 19.7%.

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 $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.

The Company reported net income of $7.3 million in the three months ended September 30, 2025, compared to net income of $6.7 million in the three months ended September 30, 2024.

Non-GAAP adjusted net income was $9.7 million for the three months ended September 30, 2025, compared to adjusted net income of $8.0 million for the three months ended September 30, 2024 (Refer to the Non-GAAP tables above).

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

Diluted adjusted earnings per share of $0.23 was reported in the three months ended September 30, 2025, compared to $0.22 diluted adjusted earnings per share in the same period of fiscal 2025.

The weighted average common shares outstanding for purposes of computing diluted earnings per share in the three months ended September 30, 2025, were 31,381,000 shares compared to 30,530,000 shares in the same period last year.

Liquidity and Capital Resources

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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 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.

At September 30, 2025, the Company had working capital of $112.4 million compared to $96.8 million at June 30, 2025.

The ratio of current assets to current liabilities was 2.2 to 1 as of September 30, 2025, and 2.0 to 1 as of June 30, 2025.

The increase in working capital from June 30, 2025, to September 30, 2025, is primarily driven by a $10.4 million increase in net accounts receivable and a $3.7 million increase in cash.

Net accounts receivable was $114.8 million and $104.3 million at September 30, 2025, and June 30, 2025, respectively.

DSO increased to 65 days at September 30, 2025, from 57 days at June 30, 2025.

The increase in net accounts receivable and the corresponding increase in DSO is directly related to strong sales in the last month of the quarter, and an inadvertent delay in project billing for a large customer.

Net inventories of $78.9 million at September 30, 2025, decreased $0.9 million from $79.8 million at June 30, 2025.

Lighting Segment net inventory increased $3.0 million to support the growth in backlog, whereas net inventory in the Display Solutions Segment decreased $3.9 million as a result of several shipments supporting several customer rollout programs.

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

The Company has a $25 million term loan and $75 million remaining in a secured revolving line of credit.

Both facilities expire in the first quarter of fiscal 2027.

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

In September 2025, the Company amended its existing $100 million credit facility which consisted of a $25 million term loan and a $75 million revolving credit line to a $125 million revolving credit line.

The $125 million credit facility will expire in the first quarter of fiscal 2031.

As of September 30, 2025, $73 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 2026.

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 $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 $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.

The Company generated $0.7 million of cash from operating activities in the three months ended September 30, 2025, compared to $11.8 million of cash generated from operating activities in the same period in fiscal 2025.

While cash flow from earnings was positive in the first quarter of fiscal 2026, the growth in net accounts receivable partially offset the cash flow generated from earnings.

The Company continues to proactively manage its working capital while generating positive cash flow from earnings.

The Company consumed $0.7 million and $0.8 million of cash related to investing activities in the three months ended September 30, 2025, and September 30, 2025, respectively, most of which related to investments in equipment and tooling to support sales growth.

The Company generated cash of $3.9 million in the three months ended September 30, 2025, compared to a consumption of cash of $8.1 million in the three months ended September 30, 2024, related to financing activities.

The decline in cash flow from operations from the first quarter of fiscal 2025 to the first quarter of fiscal 2026 contributed to the period-over-period comparison of cash flow from financing activities whereby the Company borrowed from its credit facility to fund the operating cashflow shortfall in the current quarter.

Contributing favorably to cash flow from financing activities was the generation of cash related to the proceeds from the exercise of stock options of $3.0 million in the first quarter of fiscal 2026 compared to $0.2 million of proceeds from the exercise of stock option in the prior period.

The Company has on its balance sheet financial instruments consisting primarily of cash and cash equivalents, revolving lines of credit, and long-term debt.

3 unchanged sentences

Cash Dividends

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.

In November 2025, the Board of Directors declared a regular quarterly cash dividend of $0.05 per share payable November 25, 2025, to shareholders of record as of November 17, 2025.

The indicated annual cash dividend rate for fiscal 2026 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