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CINCINNATI - LSI Industries Inc. (NASDAQ:LYTS), a prominent manufacturer of commercial lighting and display solutions, disclosed its financial outcomes for the fiscal third quarter ending March 31, 2025. The company, which maintains a "GOOD" financial health rating according to InvestingPro, experienced a 22% year-over-year increase in net sales, reaching $132.5 million, with significant growth in its Display Solutions segment. The stock has delivered an impressive 103.37% return year-to-date, though current analysis suggests it may be trading above its Fair Value.
The fiscal third quarter saw net income at $3.9 million, or $0.13 per diluted share, while adjusted net income was reported at $6.3 million, or $0.20 per diluted share. LSI Industries also reported EBITDA of $9.3 million and an adjusted EBITDA of $11.3 million, representing 8.5% of net sales for the quarter. The company maintains a healthy gross profit margin of 30.65%, according to InvestingPro data, which offers 12 additional key metrics and insights for subscribers.
The company’s book-to-bill ratio stood at 1.06, with the backlog growing by 15% compared to the previous year. Contributing to the quarter’s performance was the acquisition of Canada’s Best Holdings, which was completed for a $24 million all-cash purchase price. This acquisition is expected to enhance LSI’s geographic reach and market focus, aligning with the company’s growth strategy.
LSI Industries generated free cash flow of $4.7 million during the quarter, attributed to continued profitability and efficient working capital management. The company maintains a strong balance sheet, with a net debt to trailing twelve-month adjusted EBITDA ratio of 1.0x. Additional financial strength indicators include a solid current ratio of 1.28 and an Altman Z-Score of 5.3, suggesting strong financial stability.
President and CEO James A. Clark commented on the company’s ability to manage variability in customer project schedules and demand levels effectively. He highlighted the strong performance in the Display Solutions segment, which saw a 70% increase in total sales, including 15% organic growth. Clark also noted the strategic importance of the Canada’s Best acquisition and the company’s preparedness for the impact of new tariffs announced on April 2, 2025.
LSI Industries declared a regular cash dividend of $0.05 per share, payable on May 13, 2025, to shareholders of record on May 5, 2025.
The company’s Lighting segment witnessed a 9% decrease in year-over-year sales but saw an improvement in operating margin. The backlog in this segment ended 18% higher than the previous year.
This report is based on a press release statement from LSI Industries Inc. and provides a snapshot of the company’s financial health and strategic moves in the market. For comprehensive analysis and real-time updates, investors can access detailed financial metrics, Fair Value calculations, and expert insights through InvestingPro.
In other recent news, LSI Industries Inc. has announced the acquisition of Canada’s Best Holdings, known as Canada’s Best Store Fixtures, for $31.0 million in an all-cash transaction. This acquisition includes a $7.0 million performance-based earnout and aims to expand LSI’s reach across North America’s core vertical markets. The purchase is expected to immediately benefit LSI’s margin rate and earnings per share. LSI funded the acquisition using available cash and its $100 million credit facility, anticipating a net debt to adjusted EBITDA ratio of 1.1x post-closing. This move aligns with LSI’s multi-year growth plan, "Fast Forward," and is the company’s third acquisition in the custom display solutions market in four years. The acquisition will enhance LSI’s Canadian market presence and is expected to synergize with its existing customer base. Canada’s Best Holdings will remain an independent brand within LSI’s display solutions segment, and its leadership team and 120 employees will join LSI. The company will host a conference call to discuss further details about the acquisition.
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