LSI Industries Reports Slight Decline in Net Sales, Strong Growth in Lighting Segment

LSI Industries Inc. reported a slight decline in net sales for the second quarter of fiscal 2026, with revenues totaling $147.0 million, down from $147.7 million in the same period last year. The Lighting Segment experienced a 15% increase in sales, reaching $66.7 million, while the Display Solutions Segment saw a 10% decrease, generating $80.3 million. For the six months ending December 31, 2025, total net sales increased by 6% to $304.3 million, driven by a 16% rise in the Lighting Segment, which benefited from a surge in large project shipments and new product introductions.

Operating income for the second quarter rose to $8.9 million, a 5% increase from $8.5 million in the prior year. The six-month operating income also improved by 13% to $19.8 million, compared to $17.6 million in the same period last year. The company attributed these gains to effective margin management and cost discipline, despite relatively flat sales figures. Adjusted operating income remained stable at $11.7 million for the second quarter, reflecting the company's focus on maintaining profitability amid fluctuating sales.

In terms of strategic developments, LSI Industries completed the acquisition of Canada’s Best Holdings (CBH) in March 2025 for $25.9 million, with potential earnout payments of up to $7.0 million. This acquisition is expected to enhance the company's capabilities in retail fixtures and custom store design solutions. The integration of CBH has begun to contribute to the Display Solutions Segment, with net sales of $15.2 million and operating income of $1.7 million reported since the acquisition.

Operationally, LSI Industries reported a decrease in accounts receivable, which fell to $90.6 million from $104.3 million, while inventories increased to $82.0 million. The company maintained a strong liquidity position with a current ratio of 2.2 to 1 and $104.6 million available under its $125 million revolving credit line. The company generated $25.7 million in cash from operating activities during the first half of fiscal 2026, up from $21.7 million in the same period last year, indicating effective working capital management.

Looking ahead, LSI Industries remains optimistic about its growth trajectory, particularly in the Lighting Segment, which has shown consistent sales momentum. The company plans to continue leveraging its recent acquisitions and product innovations to drive future growth. The board of directors has declared a quarterly cash dividend of $0.05 per share, reflecting the company's commitment to returning value to shareholders while maintaining a focus on operational efficiency and strategic investments.