What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-08 compared with 2026-02-09 · 456 added, 373 removed, 800 unchanged (51% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Six Months Ended

(In thousands, except per share data)

Three Months Ended

Nine Months Ended

$ 150,525 $ 132,481 $ 454,776 $ 418,310

8 unchanged sentences

474 661 1,794 2,264

Other expense (income)

Other (income)/expense

244 ( 22 ) 671 300

12 unchanged sentences

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended

Six Months Ended

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Three Months Ended

Nine Months Ended

$ 2,091 $ 3,883 $ 15,703 $ 16,212

13 unchanged sentences

116,589 79,818

Refundable income taxes

Refundable income tax

Other current assets

12 unchanged sentences

208,444 64,548

Other intangible assets, net

Intangible assets, net

200,215 78,258

11 unchanged sentences

Current maturities of long-term debt

$ 58,000 $ 3,571

Accounts payable

4 unchanged sentences

188,278 97,349

Long-term debt

Long-term debt, less current maturities

203,006 44,986

13 unchanged sentences

( 11,283 ) ( 10,011 )

Deferred compensation plan

Key Executive Compensation

11,283 10,011

12 unchanged sentences

Key Executive

Accumulated Other

(In thousands, except per share data)

Comprehensive

6 unchanged sentences

- - - - - - ( 109 ) ( 109 )

Board stock compensation awards

Board stock compensation

8 113 - - - - - 113

20 unchanged sentences

- - - - - - ( 48 ) ( 48 )

Board stock compensation awards

Board stock compensation

7 112 - - - - - 112

17 unchanged sentences

29,891 $ 159,926 ( 1,022 ) $ ( 9,261 ) $ 9,261 $ 57,144 $ 45 $ 217,115

Common Shares

Treasury Shares

Key Executive

Accumulated Other

Comprehensive

Shareholders'

Income/(Loss)

Balance at June 30, 2025

- - - - - 3,883 - 3,883

- - - - - 7,264 7,264

Other comprehensive loss

Other comprehensive gain

- - - - - - 262 262

Board stock compensation awards

Board stock compensation

6 112 - - - - - 112

15 unchanged sentences

- - - - - ( 1,496 ) - ( 1,496 )

Balance at September 30, 2025

31,078 $ 168,754 ( 1,065 ) $ ( 10,352 ) $ 10,352 $ 632 $ 71,940 $ 241,326

Balance at March 31, 2025

29,988 $ 161,875 ( 1,037 ) $ ( 9,665 ) $ 9,665 $ 59,531 $ 307 $ 221,713

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

LSI INDUSTRIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Common Shares

Treasury Shares

Key Executive

(In thousands, except per share data)

Comprehensive

Shareholders'

Income (Loss)

Balance at June 30, 2025

Other comprehensive (loss)

- - - - - 243 - 243

Board stock compensation awards

6 135 - - - - - 135

Board stock compensation

ESPP stock awards

6 94 - - - - - 94

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

Shares issued for deferred compensation

24 492 - - - - - 492

Activity of treasury shares, net

- - ( 24 ) ( 493 ) - - - ( 493 )

Deferred stock compensation

- - - - 493 - - 493

Stock-based compensation expense

- 1,001 - - - - - 1,001

Stock options exercised, net

- - - - - - - -

Dividends — $0.20 per share

- - - - - - ( 1,555 ) ( 1,555 )

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 — $0.20 per share

Balance at December 31, 2025

31,114 $ 170,489 ( 1,089 ) $ ( 10,845 ) $ 10,845 $ 875 $ 76,733 $ 248,097

Other comprehensive (loss)

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

Shares used in the acquisition of a business

Stock-based compensation expense

Stock options exercised, net

Dividends — $0.20 per share

Balance at March 31, 2026

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)

Cash Flows from Operating Activities

$ 13,612 $ 12,329

Non-cash items included in net income

2 unchanged sentences

Deferred compensation plan

ESPP discount

Stock compensation expense

ESPP discount

Issuance of common shares as compensation

4 unchanged sentences

Accounts receivable

13,907 ( 2,661 )

( 1,518 ) 1,356

Refundable income taxes

Accounts payable

( 5,192 ) 130

Accrued expenses and other

( 4,868 ) ( 44 )

Customer prepayments

Net cash flows provided by operating activities

25,659 21,737

Cash Flows from Investing Activities

Acquisition of business

Proceeds from the sale of fixed assets

Acquisition of Royston (net of cash acquired and shares used in purchase)

Acquisition of CBH (net of cash acquired)

Acquisition of EMI

Purchases of property, plant, and equipment

( 2,651 ) ( 1,825 )

Net cash flows (used in) investing activities

( 2,389 ) ( 1,838 )

Cash Flows from Financing Activities

Payments of long-term debt

( 107,927 ) ( 96,265 )

Borrowings of long-term debt

87,308 80,222

Payments on long-term debt

Borrowings on long-term debt

Cash dividends paid

( 3,080 ) ( 2,973 )

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

( 20,366 ) ( 19,140 )

Net cash flows provided by (used in) financing activities

Change related to foreign currency

2 unchanged sentences

Cash and cash equivalents at end of period

$ 6,407 $ 4,712

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

4 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, 2025, the results of its operations for the three and six -month periods ended December 31, 2025, and 2024, and its cash flows for the six -month periods ended December 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 March 31, 2026, the results of its operations for the three and nine -month periods ended March 31, 2026, and 2025, and its cash flows for the nine -month periods ended March 31, 2026, and 2025.

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

19 unchanged sentences

The customized product types are as follows:

Customer specific metal and millwork branded products and branded print graphics

Customer Main Identification (MID) signage, print / digital graphics, and customer specific metal and millwork products

Electrical components based on customer specifications

Digital signage and related media content

The Company also offers installation services for its display solutions elements and select lighting products.

14 unchanged sentences

(In thousands)

December 31, 2025

December 31, 2024

Lighting Segment

Display Solutions Segment

Lighting Segment

Display Solutions Segment

March 31, 2026

March 31, 2025

Timing of revenue recognition

4 unchanged sentences

$ 60,038 $ 90,487 $ 58,967 $ 73,514

Three Months Ended

December 31, 2025

December 31, 2024

Lighting Segment

Display Solutions Segment

Lighting Segment

Display Solutions Segment

Type of Product and Services

LED lighting, digital signage solutions, electronic circuit boards

Lighting, poles, electronic components

$ 59,450 $ - $ 58,363 $ -

Poles, other display solution elements

Signage and display Products

- 76,134 - 58,459

2 unchanged sentences

$ 60,038 $ 90,487 $ 58,967 $ 73,514

Six Months Ended

December 31, 2025

December 31, 2024

Lighting Segment

Display Solutions Segment

Lighting Segment

Display Solutions Segment

Nine Months Ended

(In thousands)

March 31, 2026

March 31, 2025

Timing of revenue recognition

4 unchanged sentences

$ 195,764 $ 259,012 $ 175,614 $ 242,696

Six Months Ended

December 31, 2025

December 31, 2024

Lighting Segment

Display Solutions Segment

Lighting Segment

Display Solutions Segment

Type of Product and Services

LED lighting, digital signage solutions, electronic circuit boards

Lighting, poles, electronic components

$ 193,995 $ - $ 173,710 $ -

Poles, other display solution elements

Signage and display Products

- 216,302 - 192,634

11 unchanged sentences

New Accounting Pronouncements:

In October 2023, the FASB issued ASU 2023 - 06, Disclosure Improvements:

Codification Amendments in Response to SEC's Disclosure Update and Simplification Initiative.

This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standards Codification.

The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S- X or Regulation S-K becomes effective, with early adoption prohibited.

The Company will monitor the removal of various requirements from the current regulations in order to determine when to adopt the related amendments, but it does not anticipate that the adoption of the new guidance will have a material impact on the Company’s consolidated financial statements and related disclosures.

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

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

11 unchanged sentences

The Company accounted for this transaction as a business combination.

The Company has preliminarily allocated the purchase price of $ 28.8 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 has allocated the purchase price of $ 28.8 million, which includes 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 was subject to the final determination of the purchase price, which was finalized in fiscal 2026, which includes revisions resulting from the finalization of pre-acquisition tax filing.

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:

March 11, 2025

(In thousands)

March 11, 2025 as

initially reported

as initially reported

period adjustments

March 11, 2025 as

Cash and cash equivalents

30 unchanged sentences

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

(in thousands)

Estimated Fair

Estimated Useful

Technology assets

(in thousands)

Non-compete agreements

Customer relationships

CBH’s post-acquisition results of operations for the period from July 1, 2025, through December 31, 2025, are included in the Company’s Condensed Consolidated Statements of Operations.

Since the acquisition date, net sales of CBH for the period from July 1, 2025, through December 31, 2025, were $ 15.2 million and operating income was $ 1.7 million, and net sales of CBH for the period from October 1, 2025, through December 31, 2025, were $ 6.3 million and operating income was $ 0.4 million.

CBH’s post-acquisition results of operations for the period from July 1, 2025, through March 31, 2026, are included in the Company’s Condensed Consolidated Statements of Operations.

Since the acquisition date, net sales of CBH for the period from July 1, 2025, through March 31, 2026, were $ 22.8 million and operating income was $ 2.8 million, and net sales of CBH for the period from January 1, 2026, through March 31, 2026, were $ 7.5 million and operating income was $ 1.1 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 three and six months ended December 31, 2024, is prepared using the acquisition method of accounting and has been adjusted to reflect the pro forma events that are:

The unaudited pro forma financial information for the three and nine months ended March 31, 2025, 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-form operating income for the three months ended December 31, 2024 of $ 10.3 million excludes acquisition-related expenses of $ 0.1 million.

The unaudited pro-form operating income for the six months ended December 31, 2024 of $ 23.4 million excludes acquisition-related expenses of $ 0.2 million.

The unaudited pro forma operating income for the three months ended March 31, 2025 of $ 6.2 million excludes acquisition-related expenses of $ 0.1 million.

The unaudited pro forma operating income for the nine months ended March 31, 2025 of $ 23.9 million excludes acquisition-related expenses of $ 0.3 million.

Three Months Ended

Nine Months Ended

(in thousands;

unaudited) Three Months

Ended December

$ 137,313 $ 432,807

2 unchanged sentences

$ 6,245 $ 23,853

NOTE 4 — ACQUISITION OF ROYSTON GROUP

On February 20, 2026 the Company entered into an agreement and a plan of merger to acquire SRR Holdings, Inc.

(Royston) which was completed on March 24, 2026.

Royston is a leading U.S.-based designer and manufacturer of cabinetry and store fixtures, refrigerated and heated cases, and signage for multiple end markets.

Royston’s customer base spans across large, attractive end-markets of convenience, grocery and gas stations and other retail.

Royston was acquired for $ 325.0 million;

320.0 million in cash and $ 5.0 million in the Company’s common stock, subject to a working capital adjustment.

The Company prefunded $ 13.2 million as an estimate of the cash and working capital acquired which brings the total purchase consideration to $ 338.2 million.

The amount prefunded for cash and working capital will be adjusted in the fourth quarter of 2026 fiscal year to reflect the actual amounts acquired.

The Company incurred acquisition-related costs totaling $ 6.5 million which are included in the selling and administrative expense line of the consolidated statements of operations.

The Company funded the initial purchase consideration totaling $ 338.2 million with a combination of cash on hand, the $ 150 million revolving line of credit, the $ 200 million five -year term loan, and the $ 98.1 million of net proceeds from the Company’s February 26, 2026 public common stock offering.

The Company accounted for this transaction as a business combination.

The Company has preliminarily allocated the purchase price of $ 338.2 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 2027, as well as potential revision resulting from the finalization of pre-acquisition tax filings and net working capital adjustments.

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 24, 2026, is as follows:

March 24, 2026

(In thousands)

as initially reported

period adjustments

Cash and cash equivalents

$ 1,353 $ - $ 1,353

Accounts receivable

36,990 - 36,990

32,400 - 32,400

Property, plant and equipment

28,500 - 28,500

Prepaids expenses and other current assets

8,135 - 8,135

Income tax provision refund

1,792 - 1,792

Operating lease right-of-use assets

22,538 - 22,538

1,291 - 1,291

Intangible assets

127,000 - 127,000

Accounts payable

( 16,861 ) - ( 16,861 )

Accrued expenses

( 18,558 ) - ( 18,558 )

Operating lease liabilities

( 19,638 ) - ( 19,638 )

Deferred tax liability

( 10,919 ) - ( 10,919 )

Identifiable Assets

194,023 - 194,023

144,176 - 144,176

Net Purchase Consideration

$ 338,199 $ - $ 338,199

The gross amount of accounts receivable is $ 37.2 million.

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

The intangible assets include amounts recognized for the fair value of the trade name, technology assets, 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

(in thousands)

$ 23,600 Indefinite

Technology assets

Non-compete agreements

Customer relationships

Royston’s post-acquisition results of operations for the period from March 24, 2026, through March 31, 2026, are included in the Company’s Condensed Consolidated Statements of Operations.

Since the acquisition date, net sales of Royston for the period from March 24, 2025, through March 31, 2026, were $ 6.6 million and operating income was $ 0.8 million.

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

Pro Forma Impact of the Acquisition of Royston (Unaudited)

The following table represents unaudited pro forma results of operations and gives effect to the acquisition of Royston as if the transaction had occurred on July 1, 2024.

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 Royston .

The unaudited pro forma financial information for the three and nine months ended March 31, 2026, 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 unaudited pro forma operating income for the three months ended March 31, 2026 of ($ 9.4 ) million excludes acquisition-related expenses of $ 21.4 million.

The unaudited pro forma operating income for the nine months ended March 31, 2026 of $ 8.0 million excludes acquisition-related expenses of $ 21.8 million.

Three Months Ended

Nine Months Ended

(in thousands;

$ 205,929 $ 637,547

$ 48,003 $ 156,022

Operating Income

$ ( 9,414 ) $ 8,051

NOTE 5 - SEGMENT REPORTING INFORMATION

1 unchanged sentence

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s Chief Executive Officer or “CODM”) in making decisions on how to allocate resources and assess performance.

The Company’s two operating segments are Lighting and Display Solutions, with one executive team under the organizational structure reporting directly to the CODM with responsibilities for managing each segment.

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).

The Company’s two operating segments are Lighting and Display Solutions, with one executive leadership team reporting directly to the CODM with responsibilities for managing the performance across the segments.

The Company’s methods for measuring profitability under GAAP on a reportable segment basis and used by the CODM to assess performance is adjusted net income.

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

The CODM does not look at disaggregated expenses at the segment level.

The CODM does review expenses on a consolidated basis which is consistent with the categories of expense reported on the consolidated statements of operations.

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.

2 unchanged sentences

The Lighting Segment also includes the design, engineering and manufacturing of electronic circuit boards, assemblies and sub-assemblies which are sold directly to customers.

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.

The Display Solutions Segment manufactures, sells and installs exterior and interior visual image and display elements, including printed graphics, structural graphics, digital signage, non-digital signage, menu board systems, millwork and metal display fixtures, refrigerated displays, heated 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, quick-service and casual restaurant market, retail and grocery store, and other retail markets.

2 unchanged sentences

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.

The Company’s corporate administration activities are reported in the Corporate and Eliminations line item.

These activities primarily include intercompany profit in inventory eliminations, expense related to certain corporate officers and support staff, the Company’s internal audit staff, expense related to the Company’s Board of Directors, equity compensation expense for various equity awards granted to corporate administration employees, certain consulting expenses, investor relations activities, and a portion of the Company’s legal, auditing, and professional fee expenses.

The Company’s corporate administration activities are reported in the Unallocated corporate expenses net of tax line item.

These activities primarily include expense related to certain corporate officers and support staff, the Company’s internal audit staff, expense related to the Company’s Board of Directors, equity compensation expense for various equity awards granted to corporate administration employees, certain consulting expenses, investor relations activities, and a portion of the Company’s legal, auditing, and professional fee expenses.

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, 2025, or 2024.

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

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of December 31, 2025, and December 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 and nine months ended March 31, 2026, or 2025.

There was no concentration of accounts receivable at March 31, 2026, or 2025.

There is no concentration of revenues or assets outside of United States.

Summarized financial information for the Company’s operating segments is provided for the indicated periods and as of March 31, 2026, and March 31, 2025:

(In thousands)

Three Months Ended

December 31, 2025

$ 66,673 $ 80,329 $ - $ 147,002

Operating income

7,547 6,076 ( 4,758 ) 8,865

Long-term performance based compensation

81 259 662 1,002

Severance costs and restructuring costs

Nine Months Ended

March 31, 2026

$ 62,860 $ 90,630 $ 153,490 $ 205,080 $ 259,698 $ 464,778

Amortization expense of acquired intangible assets

Inter-segment sales

( 2,822 ) ( 143 ) ( 2,965 ) ( 9,316 ) ( 686 ) ( 10,002 )

Acquisition costs

Expense on step-up basis of acquired assets

Adjusted operating income

60,038 90,487 150,525 195,764 259,012 454,776

Depreciation Expense

Other segment items *

( 53,637 ) ( 82,922 ) ( 136,559 ) ( 175,802 ) ( 238,388 ) ( 414,190 )

Adjusted EBITDA

Adjusted net income

6,401 7,565 13,966 19,962 20,624 40,586

(In thousands)

Six Months Ended

December 31, 2025

Unallocated corporate expenses

( 3,893 ) ( 11,025 )

Operating income

Interest expense

( 474 ) ( 1,794 )

1 unchanged sentence

( 597 ) ( 2,264 )

Severance costs and restructuring costs

17 ( 88 ) - ( 71 )

Amortization expense of acquired intangible assets

Amortization expense on acquired intangible assets

( 1,377 ) ( 3,653 )

Restructuring / severance costs

Acquisition costs

Expense on step-up basis of acquired assets

Adjusted operating income

( 4,898 ) ( 5,205 )

Depreciation Expense

Lease expense on the step-up basis of acquired leases

( 241 ) ( 340 )

Adjusted EBITDA

Foreign currency transaction loss on intercompany loan

Tax rate difference between reported and adjusted net income

( 523 ) ( 430 )

$ 2,091 $ 15,703

* Costs of products and services sold, selling and administrative expenses, other income and expense, and income tax expense

(In thousands)

Three Months Ended

December 31, 2024

$ 58,210 $ 89,524 $ - $ 147,734

Operating income

5,971 8,125 ( 5,637 ) 8,459

Long-term performance based compensation

Nine Months Ended

March 31, 2025

$ 62,302 $ 73,796 $ 136,098 $ 190,984 $ 243,284 $ 434,268

Consulting expense:

commercial growth initiatives

Amortization expense of acquired intangible assets

Inter-segment sales

( 3,334 ) ( 283 ) ( 3,617 ) ( 15,371 ) ( 587 ) ( 15,958 )

Expense on step-up basis of acquired assets

Adjusted operating income

58,968 73,513 132,481 175,613 242,697 418,310

Depreciation Expense

Other segment items *

( 53,196 ) ( 67,466 ) ( 120,662 ) ( 159,677 ) ( 224,475 ) ( 384,152 )

Adjusted EBITDA

Adjusted net income

5,772 6,047 11,819 15,936 18,222 34,158

Six Months Ended

December 31, 2024

(In thousands)

Unallocated corporate expenses

( 4,827 ) ( 9,587 )

Operating income

Interest expense

( 661 ) ( 2,264 )

1 unchanged sentence

( 879 ) ( 3,039 )

Consulting expense:

commercial growth initiatives

Severance costs and restructuring costs

Amortization expense of acquired intangible assets

Amortization expense on acquired intangible assets

( 1,128 ) ( 3,260 )

Restructuring / severance costs

Acquisition costs

Expense on step-up basis of acquired assets

Adjusted operating income

( 577 ) ( 627 )

Depreciation Expense

Lease expense on the step-up basis of acquired leases

( 52 ) ( 155 )

Adjusted EBITDA

Consulting expense:

commercial growth initiatives

Tax rate difference between reported and adjusted net income

$ 3,883 $ 16,212

Three Months Ended

Six Months Ended

* Costs of products and services sold, selling and administrative expenses, other income and expense, and income tax expense

(In thousands)

Three Months Ended

Nine Months Ended

Capital Expenditures:

3 unchanged sentences

251 358 2,062 934

Corporate and Eliminations

$ 741 $ 604 $ 3,290 $ 2,401

Total segment capital expenditures

$ 741 $ 604 $ 3,290 $ 2,401

Other unallocated capital expenditures

( 34 ) 86 68 114

Consolidated capital expenditures

$ 707 $ 690 $ 3,358 $ 2,515

Income Tax Expense:

Lighting Segment

$ 1,201 $ 2,063 $ 5,147 $ 5,103

Display Solutions Segment

2,245 992 5,700 5,298

$ 3,446 $ 3,055 $ 10,847 $ 10,401

Total segment income tax expense

$ 3,446 $ 3,055 $ 10,847 $ 10,401

Other unallocated income tax (credit)

( 2,179 ) ( 1,342 ) ( 5,102 ) ( 5,352 )

Consolidated income tax expense

$ 1,267 $ 1,713 $ 5,745 $ 5,049

Depreciation and Amortization:

3 unchanged sentences

2,012 1,693 5,703 4,984

Corporate and Eliminations

$ 3,291 $ 2,977 $ 9,519 $ 8,762

Total segment depreciation and amortization

$ 3,291 $ 2,977 $ 9,519 $ 8,762

December 31, 2025

Other unallocated depreciation and amortization

101 84 301 258

Consolidated depreciation and amortization

$ 3,392 $ 3,061 $ 9,820 $ 9,020

March 31, 2026

June 30, 2025

Total Assets:

Identifiable Assets:

Lighting Segment

2 unchanged sentences

664,562 253,299

Corporate and Eliminations

$ 795,179 $ 386,259

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

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

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

Any intersegment profit in inventory is eliminated in consolidation.

Intersegment revenues were eliminated in consolidation as follows:

Inter-segment sales

Three Months Ended

Six Months Ended

(In thousands)

Lighting Segment inter-segment net sales

Total Segment assets

$ 795,179 $ 386,259

Display Solutions Segment inter-segment net sales

Deferred tax assets

Other unallocated assets

Consolidated assets

$ 800,549 $ 396,362

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

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

NOTE 6 - EARNINGS PER COMMON SHARE

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

Six Months Ended

Nine Months Ended

BASIC EARNINGS PER SHARE

7 unchanged sentences

33,018 30,003 31,531 29,841

Basic earnings per common share

Basic income per share

$ 0.06 $ 0.13 $ 0.50 $ 0.54

8 unchanged sentences

33,855 30,966 32,387 30,790

Diluted earnings per common share

Diluted income per share

$ 0.06 $ 0.13 $ 0.48 $ 0.53

1 unchanged sentence

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, 2025, and December 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 and nine months ended March 31, 2026, and March 31, 2025, 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

1 unchanged sentence

(In thousands)

March 31, 2026

June 30, 2025

Raw materials

8 unchanged sentences

(In thousands)

March 31, 2026

June 30, 2025

Accrued Expenses:

4 unchanged sentences

Accrued warranty

Operating lease liabilities

Accrued sales commissions

Accrued freight

Operating lease liabilities

Accrued rebate

Accrued sales and use tax

Other accrued expenses

12 unchanged sentences

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

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 Company has a total of six reporting units that contain goodwill.

One reporting unit is within the Lighting Segment and five 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.

1 unchanged sentence

There are inherent uncertainties related to these factors and judgments in applying them to the analysis of goodwill impairment.

As of March 1, 2026 , the Company performed its annual goodwill impairment test on the five reporting units that contain goodwill as of that date.

The goodwill impairment test of the reporting unit in the Lighting Segment passed with a business enterprise value of $ 34.0 million or 13 % above the carrying value of the reporting unit including goodwill.

The goodwill impairment test of one reporting unit with goodwill in the Display Solutions Segment passed with an estimated business enterprise value of $ 27.3 million or significantly above the carrying value of the reporting unit including goodwill.

The goodwill impairment test of the second reporting unit with goodwill in the Display Solutions Segment passed with an estimated business enterprise value of $ 114.9 million or 41 % above the carrying value of the reporting unit including goodwill.

The goodwill impairment test of the third reporting unit with goodwill in the Display Solutions Segment passed with an estimated business enterprise value of $ 65.7 million or 47 % above the carrying value of the reporting unit including goodwill.

The goodwill impairment test of the fourth reporting unit with goodwill in the Display Solutions Segment passed with an estimated business enterprise value of $ 26.6 million or 132 % above the carrying value of the reporting unit including goodwill.

The fifth reporting unit with goodwill in the Display Solutions Segment was acquired on March 24, 2026 which will be included in the annual goodwill impairment analysis as of March 1, 2027.

The following table presents information about the Company's goodwill on the dates or for the periods indicated:

(In thousands)

Balance as of December 31, 2025

Balance as of March 31, 2026

$ 70,971 $ 82,865 $ 153,836

Goodwill acquired, net of adjustements

Goodwill acquired, net of adjustments

- 143,914 143,914

3 unchanged sentences

( 61,763 ) ( 27,525 ) ( 89,288 )

Goodwill, net as of December 31, 2025

Goodwill, net as of March 31, 2026

$ 9,208 $ 199,236 $ 208,444

1 unchanged sentence

$ 70,971 $ 75,714 $ 146,685

Goodwill acquired, net of adjustements

Goodwill acquired, net of adjustments

- 6,769 6,769

5 unchanged sentences

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

Other Intangible Assets

December 31, 2025

(In thousands)

March 31, 2026

Amortized Intangible Assets

1 unchanged sentence

$ 162,609 $ 28,541 $ 134,068

LED technology firmware, software

LED technology, software

41,926 19,973 21,953

3,685 1,563 2,122

1,886 396 1,490

Total Amortized Intangible Assets

7 unchanged sentences

$ 250,956 $ 50,741 $ 200,215

Other Intangible Assets

June 30, 2025

(In thousands)

June 30, 2025

Amortized Intangible Assets

1 unchanged sentence

$ 78,485 $ 25,251 $ 53,234

LED technology firmware, software

LED technology, software

24,126 18,694 5,432

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

4 unchanged sentences

NOTE 10 - DEBT

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

The Company’s long-term debt as of March 31, 2026, and June 30, 2025, consisted of the following:

(In thousands)

2 unchanged sentences

Term loan, net of debt issuance costs of $ 8 and $ 14 , respectively

Total debt $ 27,939 $ 48,557

61,006 11,601

$ 261,006 $ 48,557

amounts due within one year

1 unchanged sentence

$ 203,006 $ 44,986

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 December 31, 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 third 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 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 $ 104.6 available for borrowing under the $ 125 million line of credit.

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

In March of 2026, the Company entered into a $ 350 million senior secured credit facility consisting of a $ 200 million five -year term loan and a $ 150 million revolving credit facility.

The Company is required to make quarterly amortization payments of $ 2.5 million against the term loan, with the balance of the term loan due at maturity on March 24, 2031.

The revolving credit facility is also scheduled to expire on March 24, 2031.

Interest on the term loan and any loans made under the revolving credit facility is based on the Secured Overnight Financing Rate (“SOFR”) or a customary base rate (which may include Daily Simple SOFR or the Prime Rate), to be determined by reference to customary market benchmarks, in each case plus an applicable margin that is anticipated to vary based on the Company’s consolidated total net leverage ratio, which is calculated to be consolidated funded debt minus unrestricted cash and cash equivalents against earnings before interest, taxes, depreciation, and amortization (“EBITDA”), as defined in the line of credit agreement.

As of March 31, 2026, the interest rate applicable to the term loan was 5.5 % and the Company’s borrowing rate against its revolving line of credit was 6.2 %.

The increment over the SOFR borrowing rate is 250 basis points for the third quarter of fiscal year 2026.

In addition to interest on outstanding amounts, the Company also pays a commitment fee on the unused balance of the revolving credit facility, fluctuates between 17.5 and 27.5 basis points based on the Company’s consolidated total net leverage ratio.

Under the terms of the credit agreement, the Company is required to comply with a financial covenant that limits the ratio of indebtedness and unrestricted cash to EBITDA measured on a quarterly basis, with a maximum net leverage ratio of 4.00 to 1.00 at closing, which then steps down to 3.75 to 1.00 in the fiscal quarter ending December 31, 2026 and further to 3.50 to 1.00 in the fiscal quarter ending September 30, 2027.

The Company is also required to maintain an interest coverage ratio, measured on a quarterly basis, equal to or above the minimum set forth in the agreement, which as of closing was 1.15 to 1.00.

As of March 31, 2026, there was $ 88.9 million available for borrowing under the revolving credit facility for general business purposes.

The Company is in compliance with all of its loan covenants as of March 31, 2026.

NOTE 11 - CASH DIVIDENDS

The Company paid cash dividends of $ 3.1 million and $ 3.0 million for the six months ended December 31, 2025, and December 31, 2024, respectively.

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

The Company paid cash dividends of $ 4.6 million and $ 4.5 million for the nine months ended March 31, 2026, and March 31, 2025, respectively.

Dividends on restricted stock units in the amount of $ 0.2 million and $ 0.2 million were accrued as of both March 31, 2026, and 2025, respectively.

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

In January 2026, the Board of Directors declared a regular quarterly cash dividend of $ 0.05 per share payable February 10, 2026 , to shareholders of record as February 2, 2026 .

In April 2026 , the Board of Directors declared a regular quarterly cash dividend of $ 0.05 per share payable May 12, 2026 , to shareholders of record as May 4, 2026 .

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 1,012,769 as of December 31, 2025.

In the six months ended December 31, 2025, the Company granted 121,440 PSUs and 85,958 RSUs, both with a weighted average market value of $ 19.54 .

Stock compensation expense was $ 1.0 million and $ 1.1 million for the three months ended December 31, 2025, and 2024, respectively, and $ 2.1 million and $ 2.2 million in the six months ended December 31, 2025, and 2024, 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 1,016,256 as of March 31, 2026.

In the nine months ended March 31, 2026, the Company granted 121,440 PSUs and 85,958 RSUs, both with a weighted average market value of $ 19.54 .

Stock compensation expense was $ 0.9 million and $ 1.0 million for the three months ended March 31, 2026, and 2025, respectively, and $ 3.0 million and $ 3.2 million in the nine months ended March 31, 2026, and 2025, 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 14,000 shares.

At December 31, 2025, 216,000 shares remained available for purchase under the ESPP.

At March 31, 2026, 211,000 shares remained available for purchase under the ESPP.

NOTE 13 - SUPPLEMENTAL CASH FLOW INFORMATION

Six Months Ended

(in thousands)

Nine Months Ended

Cash Payments:

3 unchanged sentences

Issuance of common shares as compensation

Issuance of common shares in the acquisition of a business

Issuance of common shares to fund deferred compensation plan

$ 1,373 $ 1,441

Issuance of common shares to fund ESPP plan

5 unchanged sentences

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 $ 3.4 million represents the value of the earnout converted from its functional currency to USD as of December 31, 2025, and June 30, 2025.

(Refer to Note 3.

) The decrease to $ 3.3 million from $ 3.4 million represents the value of the earnout converted from its functional currency to USD as of March 31, 2026, and June 30, 2025, respectively.

NOTE 15 - LEASES

The Company leases certain manufacturing facilities along with a small office space, several forklifts, several small tooling items, and various items of office equipment.

All but two of the Company’s leases are operating leases.

Leases have a remaining term of one to seven years some of which have an option to renew.

The Company’s leases are operating leases and have a remaining term of one to nine years, some of which have an option to renew.

The Company does not assume renewals in determining the lease term unless the renewals are deemed reasonably certain.

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

The number of operating leases increased in fiscal 2026 as a result of the acquisition of Royston;

most of Royston’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, 2025, and 2024.

The rent expense for these leases was immaterial for March 31, 2026, and 2025.

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)

8 unchanged sentences

$ 3,623 $ 1,761 $ 10,475 $ 5,126

Nine Months Ended

Supplemental Cash Flow Information:

Six Months Ended

(in thousands)

Cash flows from operating leases

Fixed payments - operating cash flows

Fixed payments - operating lease cash flows

$ 10,195 $ 5,055

2 unchanged sentences

Assets obtained in exchange for operating lease obligations

$ 19,733 $ 6,577

Cash flows from finance leases

2 unchanged sentences

Operating Leases:

March 31, 2026

June 30, 2025

Total operating right-of-use assets

$ 51,633 $ 17,187

Accrued expenses (Current liabilities)

$ 7,650 $ 6,037

Accrued Expenses

Long-term operating lease liability

6 unchanged sentences

Maturities of Lease Liability:

Operating Lease Liabilities

Operating Subleases

Net Lease Commitments

$ 12,157 $ - $ 12,157

16 unchanged sentences

Significant judgment is required in determining the effective tax rate and in evaluating tax positions.

For the three months ended March 31, 2026 the anticipated rate is significantly greater than the statutory tax rate because of certain non-deductible transaction costs related to the Royston acquisition included in the projected effective tax rate.

Three Months Ended

Six Months Ended

Nine Months Ended

Reconciliation of effective tax rate:

8 unchanged sentences

37.7 % 30.6 % 26.8 % 23.8 %

NOTE 16 – SUBSEQUENT EVENTS

A limited liability company owned and controlled by LSI's Chief Executive Officer, James A.

NOTE 17 – RELATED PARTY

A limited liability company owned (the “LLC”) and controlled by LSI's Chief Executive Officer, James A.

Clark, owns an aircraft that is dry leased to an unrelated third party.

Pursuant to a separate arrangement, the third -party dry leases the aircraft to LSI for NEO business travel.

Payments made by LSI depends on actual usage.

For the period from July 2025 through January 2026, the LLC received aggregate payments of $ 102,000 in connection with this arrangement.

Pursuant to a separate arrangement, the third -party dry leases the aircraft to LSI for qualifying business travel by certain of the Company’s executive officers.

Payments made by LSI depend on actual usage.

For the period from July 2025 through March 2026, the LLC received aggregate payments of $ 177,000 in connection with this arrangement.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

13 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

1 unchanged sentence

Display Solutions Segment

Total Net Sales

Operating Income (Loss) by Business Segment

Three Months Ended

Six Months Ended

Nine Months Ended

(In thousands)

2 unchanged sentences

Corporate and Eliminations

Net sales of $147.0 million for the three months ended December 31, 2025, decreased less than 1% as compared to net sales of $147.7 million for the three months ended December 31, 2024.

Lighting Segment net sales of $66.7 million increased 15% and Display Solutions Segment net sales of $80.3 million decreased 10% from last year’s second quarter net sales.

The 15% second quarter sales growth of Lighting Segment sales follows 18% growth in the first quarter, with several factors contributing to the improving momentum, including the increased number of large project shipments, which doubled from the second quarter last year.

Within the Display Solutions segment, we continue to maintain a high level of project execution across large, multi-year customer programs in the refueling/c-store and QSR verticals.

In addition, our grocery vertical continues to stabilize, with demand patterns returning to seasonal levels after two years of significant disruption.

Net sales of $304.3 million for the six months ended December 31, 2025, increased 6% as compared to net sales of $285.8 million for the six months ended December 31, 2024.

Lighting Segment net sales of $135.7 million increased 16% and Display Solutions Segment net sales of $168.5 million decreased less than 1 percent from last year’s net sales As stated in the overview of second quarter sales, the momentum in the Lighting Segment from the first quarter carried over to the second quarter with strong lighting net sales driven by the increased number of large project shipments and by the introduction of several new products and the Company’s ability to convert multiple competitor accounts to LSI.

Within the Display Solutions segment we continue to experience a steady demand in the refueling/c-store and grocery markets as customers continue to recognize the value of our broad service capabilities.

Operating income of $8.9 million for the three months ended December 31, 2025, represents a 5% increase in operating income from $8.5 million in the three months ended December 31, 2024.

Adjusted operating income, a Non-GAAP measure, was $11.7 million in the three months ended December 31, 2025, compared to $11.7 million in the three months ended December 31, 2024.

Total Operating Income

Net sales of $150.5 million for the three months ended March 31, 2026, increased 14% as compared to net sales of $132.5 million for the three months ended March 31, 2025.

The increase in net sales reflects growth in both of the Company’s segments with a 23% sales growth in the Display Solutions segment and a 2% sales growth in the Lighting segment.

The 23% growth in the Display Solutions Segment was primarily driven by strong demand levels across a broad base of customers in both the grocery and refueling/c-store verticals.

Third quarter net sales in the Display Solutions segment also reflects Royston net sales of $6.6 million for the 6-day stub period.

Royston was acquired on March 24, 2026.

Lighting Segment sales improved 2% compared to the same period last year despite a lengthening project quote to order conversion period.

Net sales of $454.8 million for the nine months ended March 31, 2026, increased 9% as compared to net sales of $418.3 million for the nine months ended March 31, 2025.

The increase in net sales reflects growth in both of the Company’s segments with a 7% sales growth in the Display Solutions segment and a 12% sales growth in the Lighting segment.

As stated in the overview of the third quarter, the demand levels across a broad base of customers in both the grocery and refueling/c-store verticals contributed to the year-over-year growth in the Display Solutions segment.

Net sales in the period for the Display Solutions segment also reflects Royston net sales of $6.6 million for the 6-day stub period.

Royston was acquired on March 24, 2026.

Growth in the Lighting Segment continued for the third straight quarter with period-over-period sales growth contributing to the year-to-date growth in net sales of 12%.

Operating income of $4.1 million for the three months ended March 31, 2026, represents a 35% decrease in operating income from $6.2 million in the three months ended March 31, 2025.

Operating income for the three months ended March 31, 2026, was impacted by $6.5 million of acquisition-related costs.

Adjusted operating income, a Non-GAAP measure, was $13.4 million in the three months ended March 31, 2026, representing a 39% increase compared to adjusted operating income of $9.7 million in the three months ended March 31, 2025.

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

GAAP measures.

While net sales were relatively flat compared to the same time in the prior year, operating income improved.

Margin management remains a priority for us, with a strong focus on project pricing, productivity, and cost discipline.

Operating income of $19.8 million for the six months ended December 31, 2025, represents a 13% increase from operating income of $17.6 million in the six months ended December 31, 2024.

Adjusted operating income, a Non-GAAP financial measure, was $25.7 million in the six months ended December 31, 2025, compared to adjusted operating income of $23.6 million in the six months ended December 31, 2024.

The increase in net sales coupled with focused margin management contributed to the period over period improvement in operating income.

The quarter-over-quarter sales growth of 14% coupled with improved margins resulting from improved productivity and price optimization resulted in leveraged adjusted operating income growth.

Operating income of $23.9 million for the nine months ended March 31, 2026, represents a slight increase from operating income of $23.8 million in the nine months ended March 31, 2025.

Operating income for the three months ended March 31, 2026, was impacted by $6.9 million of acquisition-related costs.

Adjusted operating income, a Non-GAAP financial measure, was $39.1 million in the nine months ended March 31, 2026, compared to adjusted operating income of $33.2 million in the nine months ended March 31, 2025.

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

GAAP measures.

The year-over-year sales growth of 9% coupled with improved margins resulting from improved productivity and price optimization resulted in the growth in operating income.

Non-GAAP Financial Measures

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

This report includes adjustments to GAAP operating income, net income, and earnings per share for the three months and nine months ended March 31, 2026, and 2025.

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.

8 unchanged sentences

Therefore, these measures should be used only to evaluate our results in conjunction with corresponding GAAP measures.

Below is a reconciliation of these non-GAAP measures to net income and earnings per share reported for the periods indicated along with the calculation of EBITDA, Adjusted EBITDA, Free Cash Flow, Net Debt to Adjusted EBITDA, and organic sales growth.

Three Months Ended

4 unchanged sentences

Amortization expense of acquired intangible assets

Lease expense on the step-up basis of acquired leases

Restructuring/severance costs

Acquisition costs

Consulting expense:

commercial growth opportunities

Lease expense on the step-up basis of acquired leases

Adjusted operating income

5 unchanged sentences

Amortization expense of acquired intangible assets

Lease expense on the step-up basis of acquired leases

Restructuring/severance costs

Acquisition costs

Consulting expense:

commercial growth opportunities

Lease expense on the step-up basis of acquired leases

Foreign Currency transaction loss on intercompany loan

2 unchanged sentences

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:

1 unchanged sentence

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

1 unchanged sentence

commercial growth opportunities

Acquisition costs

Lease expense on the step-up basis of acquired leases

Adjusted operating income

Reconciliation of net income to adjusted net income

Six Months Ended

Nine Months Ended

(In thousands, except per share data)

11 unchanged sentences

Reconciliation of Net Income to Adjusted EBITDA

Three Months Ended

Six 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

Restructuring/severance costs

Lease expense on the step-up basis of acquired leases

Consulting expense:

commercial growth opportunities

Acquisition costs

Restructuring/severance costs

Lease expense on the step-up basis of acquired leases

Adjusted EBITDA

Reconciliation of cash flow from operations to free cash flow

Three Months Ended

Six Months Ended

Nine Months Ended

Reconciliation of cash flow from operations to free cash flow

(In thousands)

6 unchanged sentences

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

Six 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 DECEMBER 31, 2025, COMPARED TO THREE MONTHS ENDED DECEMBER 31, 2024

THREE MONTHS ENDED MARCH 31, 2026, COMPARED TO THREE MONTHS ENDED MARCH 31, 2025

Display Solutions Segment

2 unchanged sentences

Operating Income

Display Solutions net sales of $80.3 million decreased from same period in fiscal 2024.

Within the Display Solutions segment, we continue to maintain a high level of project execution across large, multi-year customer programs in the refueling/c-store and QSR verticals.

In addition, our grocery vertical continues to stabilize, with demand patterns returning to seasonal levels after two years of significant disruption.

Gross profit of $14.4 million in the three months ended December 31, 2025, decreased from the same period of fiscal 2025 driven by lower sales.

Gross profit as a percentage of net sales remained at 18% despite lower sales as we continue to maintain favorable program pricing and prudent cost management.

Operating expenses of $8.3 million in the three months ended December 31, 2025, increased 8% from the same period of fiscal 2025, primarily driven by the acquisition of Canada’s Best Holdings and by continued investment in commercial initiatives to drive growth.

Display Solutions Segment operating income of $6.1 million in the three months ended December 31, 2025, decreased from the same period of fiscal 2025.

The decrease in operating income driven by the net effect of a decrease in net sales partially offset by the gross margin impact of product mix and by favorable program pricing and prudent cost management.

Display Solutions net sales of $90.5 million increased 23% from same period in fiscal 2025.

The 23% growth in the Display Solutions Segment was primarily driven by strong demand levels across a broad base of customers in both the grocery and refueling/c-store verticals.

Third quarter net sales in the Display Solutions segment also reflects Royston net sales of $6.6 million for the 6-day stub period.

Royston was acquired on March 24, 2026.

Gross profit of $17.3 million in the three months ended March 31, 2026, increased 39% from the same period of fiscal 2025.

Gross profit as a percentage of net sales improved 220 basis points from the same period as last year.

The strong demand in grocery and refueling/c-store verticals coupled with increased productivity and price optimization contributed to the quarter-over-quarter leveraged growth in gross margin.

Operating expenses of $9.4 million in the three months ended March 31, 2026, increased 19% from the same period of fiscal 2025, primarily driven by the acquisition costs and related operating costs related to the Royston acquisition, and by continued investment in commercial initiatives to drive growth.

Display Solutions Segment operating income of $7.9 million in the three months ended March 31, 2026, increased 75% from the same period of fiscal 2025.

The increase in operating income, driven by the net effect of an increase in net sales, improved gross margin as a percentage of sales, partially offset by an increase in operating expenses.

Lighting Segment

2 unchanged sentences

Operating Income

Lighting Segment net sales of $66.7 million in the three months ended December 31, 2025, increased 15% compared to net sales of $58.2 million in the same period in fiscal 2025.

The 15% second quarter sales growth follows 18% growth in the first quarter, with several factors contributing to our improving momentum, including the increased number of large project shipments, which doubled from the second quarter last year.

Gross profit of $23.0 million in the three months ended December 31, 2025, increased 21% from the same period of fiscal 2025.

Gross profit as a percentage of sales improved from 32.7% to 34.6%.

The increase in net sales coupled with focused margin management contributed to the period over period improvement in gross profit.

Operating expenses of $15.5 million in the three months ended December 31, 2025, increased from the same period of fiscal 2025, driven mostly by higher agent commission expense from higher net sales.

Lighting Segment operating income of $7.5 million for the three months ended December 31, 2025, increased 26% from operating income of $6.0 million in the same period of fiscal 2025 primarily driven by improved sales and focused margin management.

Lighting Segment net sales of $60.0 million in the three months ended March 31, 2026, increased 2% compared to net sales of $59.0 million in the same period in fiscal 2025.

Lighting Segment sales improved 2% compared to the same period last year despite less favorable weather conditions in the early part of the quarter.

Gross profit of $20.9 million in the three months ended March 31, 2026, increased 3% from the same period of fiscal 2025.

Gross profit as a percentage of sales improved 30 basis points as a result of pricing actions taken in response to shifts in material input costs.

Operating expenses of $14.0 million in the three months ended March 31, 2026, increased 6% from the same period of fiscal 2025, driven mostly by higher commission expense from improved sales along with a continued investment in sales initiatives to generate sales growth.

Lighting Segment operating income of $7.0 million for the three months ended March 31, 2026, decreased 3% from operating income of $7.2 million in the same period of fiscal 2025 primarily driven by the net effect of an increase in net sales, a 30-basis point improvement in gross margin, offset by an increase in operating expenses.

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 $4.8 million in the three months ended December 31, 2025, decreased 16% from the same period of fiscal 2025.

The decrease in expense is primarily the result of effective cost management of the Company’s corporate operating expenses.

Operating expenses of $10.8 million in the three months ended March 31, 2026, increased from $5.4 million from the same period of fiscal 2025.

The increase in expense is primarily the result of acquisition-related costs for Royston and CBH of $5.3 million.

Consolidated Results

The Company reported $0.6 million and $0.7 million of net interest expense in the three months ended December 31, 2025, and December 31, 2024, respectively.

The decrease in interest expense is driven by profitability and by sustained working capital management as the Company lowered its outstanding debt.

The Company also recorded other income of ($0.1) million compared to other expense of $0.4 in the three months ended December 31, 2025, and December 31, 2024, respectively, of which is related to net foreign exchange currency transaction gains and losses through the Company’s Mexican and Canadian subsidiaries.

The $2.0 million of income tax expense in the three months ended December 31, 2025, represents a consolidated effective tax rate of 24.4%.

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 Company reported $0.5 million and $0.7 million of net interest expense in the three months ended March 31, 2026, and March 31, 2025, respectively.

The decrease in interest expense is the result of a reduction of quarter-over-quarter average outstanding debt driven by profitability and by sustained working capital management.

The overall reduction in interest expense was partially offset by the company incurred additional debt on March 24, 2026 to acquire Royston.

The Company also recorded other expense of $0.2 million compared to other income of ($0.1) million in the three months ended March 31, 2026, and March 31, 2025, respectively, which is related to net foreign exchange currency transaction gains and losses through the Company’s Mexican and Canadian subsidiaries.

The $1.3 million of income tax expense in the three months ended March 31, 2026, represents a consolidated effective tax rate of 37.7%.

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 effective tax rate for the three months ended March 31, 2026, was impacted by the unfavorable tax treatment related to acquisition-related costs.

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 $6.3 million in the three months ended December 31, 2025, compared to net income of $5.6 million in the three months ended December 31, 2024.

Non-GAAP adjusted net income was $8.4 million for the three months ended December 31, 2025, compared to adjusted net income of $8.0 million for the three months ended December 31, 2024 (Refer to the Non-GAAP tables above).

The increase in Non-GAAP adjusted net income is primarily the result of a strong focus on project pricing, productivity, and cost disciplines, on relatively flat sales.

Diluted adjusted earnings per share of $0.20 were reported in the three months ended December 31, 2025, compared to $0.18 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 December 31, 2025, were 32,004,000 shares compared to 30,876,000 shares in the same period last year.

SIX MONTHS ENDED DECEMBER 31, 2025, COMPARED TO SIX MONTHS ENDED DECEMBER 31, 2024

The Company reported net income of $2.1 million in the three months ended March 31, 2026, compared to net income of $3.9 million in the three months ended March 31, 2025.

Non-GAAP adjusted net income was $9.6 million for the three months ended March 31, 2026, compared to adjusted net income of $6.3 million for the three months ended March 31, 2025 (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, improved gross margin rate resulting from improved productivity and price optimization, partially offset by an increase in operating expense mostly resulting from an increase in sales.

Diluted adjusted earnings per share of $0.28 was reported in the three months ended March 31, 2026, compared to $0.20 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 March 31, 2026, were 33,855,000 shares compared to 30,966,000 shares in the same period last year.

NINE MONTHS ENDED MARCH 31, 2026, COMPARED TO NINE MONTHS ENDED MARCH 31, 2025

Display Solutions Segment

Six Months Ended

Nine Months Ended

(In thousands)

Operating Income

Display Solutions Segment net sales of $168.5 million decreased less than 1 percent from last year’s net sales.

We continue to experience a continued steady demand in the refueling/c-store and grocery markets as customers continue to recognize the value of our broad service capabilities.

In addition, our grocery vertical continues to stabilize, with demand patterns returning to seasonal levels after two years of significant disruption.

Gross profit of $31.5 million in the six months ended December 31, 2025, increased 2% from the same period of fiscal 2025 despite slightly lower sales.

Gross profit as a percentage of net sales in the six months ended December 31, 2025, increased slightly to 18.7% from 18.2% in the same period of fiscal 2025 impacted by favorable program pricing and prudent cost management.

Operating expenses of $16.8 million in the six months ended December 31, 2025, increased 12% from the same period of fiscal 2025, primarily driven by the acquisition of Canada’s Best Holdings and by continued investment in commercial initiatives to drive growth.

Operating income of $14.7 million in the six months ended December 31, 2025, decreased from the same period of fiscal 2025.

The decrease in operating income was driven by the net effect of an increase in gross offset by an increase in operating expenses.

Display Solutions net sales of $259.0 million increased 7% from same period in fiscal 2025.

Net sales within the Display Solution segment have returned to its normal seasonal sales levels, driven in part by the third quarter growth resulting from strong demand levels across a broad base of customers in both the grocery and refueling/c-store verticals.

Year-to-date net sales in the Display Solutions segment also reflects Royston net sales of $6.6 million for the 6-day stub period.

Royston was acquired on March 24, 2026.

Gross profit of $48.8 million in the nine months ended March 31, 2026, increased 13% from the same period of fiscal 2025.

Gross profit as a percentage of net sales in the nine months ended March 31, 2026, increased 100 basis points.

The strong demand in grocery and refueling/c-store verticals coupled with increased productivity and price optimization contributed to the year-over-year leveraged growth in gross margin.

Operating expenses of $26.2 million in the nine months ended March 31, 2026, increased 14% from the same period of fiscal 2025, primarily driven by the acquisition costs and related operating costs related to the Royston acquisition, and by continued investment in commercial initiatives to drive growth.

Operating income of $22.6 million in the nine months ended March 31, 2026, increased 11% from the same period of fiscal 2025.

The increase in operating income driven by the net effect of an increase in net sales, improved gross margin as a percentage of sales, partially offset by an increase in operating expenses.

Lighting Segment

Six Months Ended

Nine Months Ended

(In thousands)

Operating Income

Lighting Segment net sales of $135.7 million in the six months ended December 31, 2025, increased 16% compared to net sales of $116.7 million in the same period in fiscal 2025.

Also contributing to the period over period growth of sales was the introduction of several new products and the Company’s ability to convert multiple competitor accounts to LSI.

Gross profit of $46.2 million in the three months ended December 31, 2025, increased 23% from the same period of fiscal 2025.

Gross profit as a percentage of sales improved from 32.3% to 34.1%.

The increase in net sales coupled with focused margin management contributed to the period over period improvement in gross profit.

Operating expenses of $30.1 million in the six months ended December 31, 2025, increased 16% from the same period of fiscal 2025, driven mostly by higher agent commission expense.

Lighting Segment operating income of $16.1 million for the six months ended December 31, 2025, increased 37% from operating income of $11.7 million in the same period of fiscal 2025.

primarily driven by improved sales and focused margin management.

Lighting Segment net sales of $195.8 million in the nine months ended March 31, 2026, increased 12% compared to net sales of $175.6 million in the same period in fiscal 2025.

The increase in net sales is the result of the Company’s investment in commercial initiatives to drive growth which continues to deliver above market net sales growth despite overall market headwinds.

Gross profit of $67.1 million in the nine months ended March 31, 2026, increased 16% from the same period of fiscal 2025.

Gross profit as a percentage of sales improved 120 basis points as a result of pricing actions taken in response to shifts in material input costs.

Operating expenses of $44.1 million in the nine months ended March 31, 2026, increased 16% from the same period of fiscal 2025, driven mostly by higher commission expense from higher sales along with a continued investment in sales initiatives to generate sales growth.

Lighting Segment operating income of $23.0 million for the nine months ended March 31, 2026, increased 22% from operating income of $18.9 million in the same period of fiscal 2025.

The increase in operating income is primarily driven by the net effect of an increase in net sales, a 120-basis point improvement in gross margin, partially offset by an increase in operating expenses.

Corporate and Eliminations

Six Months Ended

Nine Months Ended

(In thousands)

1 unchanged sentence

Operating (Loss)

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

Operating expenses of $10.9 million in the six months ended December 31, 2025, increased 10% from the same period of fiscal 2025.

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

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

Operating expenses of $21.7 million in the nine months ended March 31, 2026, increased from $15.4 from the same period of fiscal 2025.

The increase in expense is primarily the result of acquisition-related costs of $5.9 million and also by a small increase in an investment in commercial initiatives to support the growth of the Company.

Consolidated Results

The Company reported $1.3 million and $1.6 million of net interest expense in the six months ended December 31, 2025, and December 31, 2024, respectively.

The decrease in interest expense is driven by profitability and by sustained working capital management as the Company lowered its outstanding debt.

The Company also recorded other expense of $0.4 million and $0.3 million in the six months ended December 31, 2025, and December 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 $4.5 million of income tax expense in the six months ended December 31, 2025, represents a consolidated effective tax rate of 24.8%.

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 Company reported $1.8 million and $2.3 million of net interest expense in the nine months ended March 31, 2026, and March 31, 2025, respectively.

The decrease in interest expense is the result of a reduction of year-over-year average outstanding debt driven by profitability and by sustained working capital management.

The overall reduction in interest expense was partially offset by the company incurred additional debt on March 24, 2026 to acquire Royston.

The Company also recorded other expense of $0.7 million and $0.3 million in the nine months ended March 31, 2026, and March 31, 2025, respectively, both of which are related to net foreign exchange currency transaction gains and losses through the Company’s Mexican and Canadian subsidiaries.

The $5.7 million of income tax expense in the nine months ended March 31, 2026, represents a consolidated effective tax rate of 26.8%.

The $5.0 million of income tax expense in the nine months ended March 31, 2025, represents a consolidated effective tax rate of 23.7%.

The effective tax rate for the three months ended March 31, 2026, was impacted by the unfavorable tax treatment related to acquisition-related costs.

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 $13.6 million in the six months ended December 31, 2025, compared to net income of $12.3 million in the six months ended December 31, 2024.

Non-GAAP adjusted net income was $18.2 million for the six months ended December 31, 2025, compared to adjusted net income of $16.0 million for the six months ended December 31, 2024 (Refer to the Non-GAAP tables above).

The increase in Non-GAAP adjusted net income is primarily the result of improved sales and a strong focus on project pricing, productivity, and cost disciplines.

Diluted adjusted earnings per share of $0.57 was reported in the six months ended December 31, 2025, compared to $0.52 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 six months ended December 31, 2025, were 31,685,000 shares compared to 30,709,000 shares in the same period last year.

The Company reported net income of $15.7 million in the nine months ended March 31, 2026, compared to net income of $16.2 million in the nine months ended March 31, 2025.

Non-GAAP adjusted net income was $27.8 million for the nine months ended March 31, 2026, compared to adjusted net income of $22.3 million for the nine months ended March 31, 2025 (Refer to the Non-GAAP tables above).

Diluted adjusted earnings per share of $0.86 was reported in the nine months ended March 31, 2026, compared to $0.72 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 nine months ended March 31, 2026, were 32,387,000 shares compared to 30,790,000 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, 2025, the Company had working capital of $100.1 million compared to $96.8 million at June 30, 2025.

The ratio of current assets to current liabilities was 2.2 to 1 for December 31, 2025, and 2.0 for June 30, 2025.

The increase in working capital from June 30, 2025, to December 31, 2025, was primarily driven a decrease in accounts payable and accrued expenses and an increase in net inventory, partially offset by a $13.7 million decrease in net accounts receivable.

Net accounts receivable was $90.6 million and $104.3 million at December 31, 2025, and June 30, 2025, respectively.

DSO decreased to 59 days at December 31, 2025, from 66 days at June 30, 2025.

Net inventories of $82.0 million at December 31, 2025, increased $2.2 million from $79.8 million at June 30, 2025.

Lighting Segment net inventory increased $3.6 million to support the growth in Lighting Segment sales whereas net inventory in the Display Solutions Segment decreased $1.4 million.

At March 31, 2026, the Company had working capital of $90.9 million compared to $96.8 million at June 30, 2025.

The ratio of current assets to current liabilities was 1.5 to 1 as of March 31, 2026, and 2.0 as of June 30, 2025.

The acquisition of Royston in the third quarter of fiscal 2026 accounted for an additional $47.7 million of net working capital and also added $58 million in short-term debt.

When the impact of the acquisition of Royston is removed from the year-over-year comparison, net working capital increased $4.4 million to $101.2 million.

The net increase in working capital excluding Royston is the result of a $6.2 million decrease in net accounts receivable more than offset by a $4.3 million increase in inventory, a $2.3 million increase in other current assets and a $2.9 million decrease in current liabilities.

Net accounts receivable was $135.8 million and $104.3 million at March 31, 2026, and June 30, 2025, respectively.

The acquisition of Royston accounted for $37.6 million of the year-over-year change.

DSO increased to 63 days at March 31, 2026, excluding the impact of Royston, from 57 days at June 30, 2025.

Net inventories of $116.6 million at March 31, 2026, increased $36.8 million from $79.8 million at June 30, 2025.

The acquisition of Royston accounted for $32.5 million of the increase in net inventory.

When the impact of the Royston acquisition is removed from the period-over-period change in net inventory, net inventory increased $4.3 million.

The increase in the Lighting Segment net inventory accounted for all of the increase in total net inventory.

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

The Company has a $125 million a secured revolving line of credit.

The revolving line of credit expires in the first quarter of fiscal 2031.

As of December 31, 2025, $104.6 million of the credit line was available.

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

The Company has a $200 million term loan and a $150 million revolving line of credit.

Both credit facilities commenced in the third quarter of fiscal 2026 to accommodate the acquisition of Royston.

Both credit facilities expire in the third quarter of fiscal 2031.

As of March 31, 2026, $89 million of the credit line was available.

The Company is in compliance with all of its loan covenants as of March 31, 2026.

The $350 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 $25.7 million of cash from operating activities in the six months ended December 31, 2025, compared to $21.7 million of cash generated from operating activities in the same period in fiscal 2025.

The Company generated $32.6 million of cash from operating activities in the nine months ended March 31, 2026, compared to $28.6 million of cash generated from operating activities in the same period in fiscal 2025.

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 $2.6 million and $1.8 million of cash related to investing activities in the six months ended December 31, 2025, and December 31, 2024, respectively.

The Company invested $3.2 million and $2.5 million of cash related to purchases of property, plant and equipment in the nine months ended March 31, 2026, and March 31, 2025, respectively.

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

The Company had a net use of cash of $20.4 million and $19.1 million related to financing activities in the six months ended December 31, 2025, and December 31, 2024, respectively.

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.

In the third quarter of FY 2026 the Company acquired Royston for $336.8 million net of cash received.

The Company had a net source of cash of $309.3 million and a net use of cash of $3.2 million related to financing activities in the nine months ended March 31, 2026, and March 31, 2025, respectively.

The acquisition of Royston accounted for $238.7 million of the source of cash through the debt refinancing from the Company’s credit facility.

In addition, the Company raised $98.1 million of net proceeds from the sale of common stock in a public equity offering in February of 2026.

Both the debt financing along with the public equity offering served as the source of funds to acquire Royston.

Not including the cost to acquire Royston, 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 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 January 2026, the Board of Directors declared a regular quarterly cash dividend of $0.05 per share payable February 10, 2026, to shareholders of record as of February 2, 2026.

In April 2026, the Board of Directors declared a regular quarterly cash dividend of $0.05 per share payable May 12, 2026, to shareholders of record as of May 4, 2026.

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