Fiscal 2026 fourth quarter and full year
Filed Aug 20, 2026LSI Industries reports fiscal 2026 fourth-quarter net sales growth of 51% to $234.6 million, supported by 8% organic growth and the first full-quarter contribution from Royston.
Fourth-quarter revenue, organic growth, adjusted earnings, adjusted EBITDA, and free cash flow increased, while GAAP net income and diluted EPS declined amid acquisition-related expenses. Display Solutions delivered substantial growth and margin improvement, whereas Lighting sales declined year over year and leverage increased following the Royston acquisition.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, fourth quarterGAAP | $234.6 million | – | +51% |
| Organic net sales growth, fourth quarternon-GAAP | 8% | – | +8% |
| Net sales, fiscal yearGAAP | $689.4 million | – | +20% |
| Cost of products sold, fourth quarterGAAP | $177,206 thousand | – | – |
| Cost of products sold, fiscal yearGAAP | $516,032 thousand | – | – |
| Gross profit, fourth quarterGAAP | $57,415 thousand | – | – |
| Gross profit, fiscal yearGAAP | $173,365 thousand | – | – |
| Selling and administrative costs, fourth quarterGAAP | $42,925 thousand | – | – |
| Selling and administrative costs, fiscal yearGAAP | $134,962 thousand | – | – |
| Operating income, fourth quarterGAAP | $14.5 million | – | +21% |
| Operating income, fiscal yearGAAP | $38.4 million | – | +7% |
| Adjusted operating income, fourth quarternon-GAAP | $22.7 million | – | +50% |
| Adjusted operating income, fiscal yearnon-GAAP | $61.8 million | – | +28% |
| Net income, fourth quarterGAAP | $6.9 million | – | -16% |
| Net income, fiscal yearGAAP | $22.6 million | – | -7% |
| Adjusted net income, fourth quarternon-GAAP | $14.4 million | – | +37% |
| Adjusted net income, fiscal yearnon-GAAP | $42.2 million | – | +28% |
| Diluted EPS, fourth quarterGAAP | $0.18 per diluted share | – | -31% |
| Adjusted diluted EPS, fourth quarternon-GAAP | $0.38 per diluted share | – | +13% |
| Diluted EPS, fiscal yearGAAP | $0.67 per diluted share | – | -15% |
| Adjusted diluted EPS, fiscal yearnon-GAAP | $1.25 per diluted share | – | +17% |
| EBITDA, fourth quarternon-GAAP | $21.2 million | – | +37% |
| Adjusted EBITDA, fourth quarternon-GAAP | $25.7 million | – | +50% |
| Adjusted EBITDA as a percentage of sales, fourth quarternon-GAAP | 10.9% | +90 basis points | – |
| EBITDA, fiscal yearnon-GAAP | $55.0 million | – | +14% |
| Adjusted EBITDA, fiscal yearnon-GAAP | $69.7 million | – | +27% |
| Adjusted EBITDA as a percentage of sales, fiscal yearnon-GAAP | 10.1% | – | +50 basis points |
| Cash flow from operations, fourth quarterGAAP | $11.6 million | – | +22% |
| Cash flow from operations, fiscal yearGAAP | $44.1 million | – | +16% |
| Capital expenditures, fourth quarterother | $(1.9) million | – | – |
| Capital expenditures, fiscal yearother | $(5.1) million | – | – |
| Free cash flow, fourth quarternon-GAAP | $9.7 million | – | +13% |
| Free cash flow, fiscal yearnon-GAAP | $39.0 million | – | +13% |
| Net debt to adjusted EBITDA rationon-GAAP | 2.71 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Lighting Segment, fourth quarterA soft quarter in automotive and quick-service restaurant verticals, where project activity can be uneven throughout the fiscal year. | $70.5 million | +17% versus the fiscal third quarter | -3% |
| Display Solutions Segment, fourth quarterComparable Display Solutions sales increased 18%, Royston contributed $66.9 million, and grocery and refueling/c-store demand strengthened. | $164.2 million | – | doubled from last year's fourth quarter net sales |
| Lighting Segment, fiscal yearGrowth was driven by increased penetration of national accounts and improved demand for outdoor area lighting. | $266.2 million | – | +7% |
| Display Solutions Segment, fiscal yearFiscal 2026 sales included the partial-year impact from the Royston acquisition. | $423.2 million | – | +30% |
Capital returns
- The Board declared a regular cash dividend of $0.05 per share for the fourth quarter of fiscal 2026.
- The dividend is payable September 8, 2026, to shareholders of record as of the close of business on August 31, 2026.
- The indicated annual cash dividend rate is $0.20 per share.
What drove it
- Fourth-quarter sales growth reflected sustained growth in key vertical markets and the first full-quarter contribution from Royston, acquired on March 24, 2026.
- Excluding acquisition-related contributions, fourth-quarter net sales increased 8% year over year.
- Adjusted EBITDA margin improved 90 basis points sequentially, driven by operational discipline and favorable margin contribution from Royston.
- Display Solutions comparable sales grew 18%, supported by strengthening grocery and refueling/c-store demand.
- Refrigerated and non-refrigerated display cases sales increased 21% year over year in grocery.
- Refueling/c-store fourth-quarter sales increased 16% year over year, with double-digit growth in outdoor print graphics and EMI store interior products.
- The Company received a multi-year award from a large oil company to renovate approximately 2,500 sites, representing a new customer win.
- Lighting fourth-quarter orders were 5% above last year and book-to-bill was above 1.0.
Concerns
- Fourth-quarter GAAP net income declined to $6.9 million from $8.2 million and GAAP diluted EPS declined to $0.18 from $0.26.
- The fourth quarter included $3.0 million of acquisition-related expenses.
- Royston fourth-quarter sales declined modestly year over year as LSI narrows its focus toward a higher-value product and project mix.
- Lighting segment sales declined 3% year over year due to softness in automotive and quick-service restaurant verticals.
- Net debt to adjusted EBITDA increased to 2.71 from 0.82 as of June 30, 2026.
- Management expects project timing to remain non-linear as customers navigate site scheduling, permitting, and procurement requirements.
What to watch
- The ramp of several of Royston's largest c-store customers' multi-year renovation and new-construction cycles beginning in fiscal 2027.
- Conversion and timing of the approximately $30 million refueling/c-store program award, which is excluded from reported fourth-quarter order rates.
- Display Solutions order rates and book-to-bill of approximately 1.0x on strong sales.
- The planned calendar-year fourth-quarter launch of initial sizes of the Velocity Flood light fixture line.
- Progress integrating Royston through a unified customer-facing value proposition and go-to-market model.
- Lighting demand in automotive and quick-service restaurant verticals.
Balance sheet and cash flow
- Cash was $14.3 million as of June 30, 2026.
- Current assets were $295.9 million, current liabilities were $149.9 million, and working capital was $146.0 million as of June 30, 2026.
- The current ratio was 2.0 to 1 as of June 30, 2026.
- Shareholders' equity was $360.7 million and long-term debt was $245.9 million as of June 30, 2026.
- Total debt was $255.9 million, net debt was $241.7 million, and adjusted EBITDA trailing twelve months was $89.0 million as of June 30, 2026.
- The Company had approximately $95 million of availability under its $350 million senior secured credit facility as of June 30, 2026.
Analysis
LSI ended fiscal 2026 with fourth-quarter net sales of $234.6 million, up 51% year over year, including 8% organic growth. The first full-quarter contribution from Royston was central to reported growth, contributing $66.9 million of fourth-quarter sales. Fiscal-year net sales increased 20% to a record $689.4 million, with the Company citing volume growth, strategic price actions, productivity initiatives, and the partial-year impact of Royston.
Display Solutions was the principal growth engine. Fourth-quarter segment sales doubled to $164.2 million, with comparable Display Solutions sales up 18%. Grocery refrigerated and non-refrigerated display cases sales rose 21%, while refueling/c-store sales rose 16%; outdoor print graphics and EMI store interior products both produced double-digit growth. The segment's adjusted EBITDA margin reached 12.4%, its highest level in nearly three years and 180 basis points above the year-ago period. A multi-year award to renovate approximately 2,500 sites and a separate approximately $30 million refueling/c-store program award add to the disclosed project pipeline, although the latter is not included in fourth-quarter order rates.
Profitability showed a clear difference between GAAP and adjusted results. Fourth-quarter GAAP net income fell to $6.9 million and diluted EPS fell to $0.18, while adjusted net income rose 37% to $14.4 million and adjusted diluted EPS rose 13% to $0.38. Acquisition costs were $3.0 million in the quarter. Adjusted EBITDA increased 50% to $25.7 million, and its margin was 10.9%, with management attributing the 90-basis-point sequential margin improvement to operational discipline and Royston's favorable margin contribution. For the full year, adjusted EBITDA rose 27% to $69.7 million and adjusted EBITDA margin increased to 10.1% from 9.6%.
Lighting produced mixed signals. Fourth-quarter sales of $70.5 million were up 17% sequentially but down 3% year over year amid softness in automotive and quick-service restaurant project activity. For the full year, Lighting sales increased 7% to $266.2 million, aided by national-account penetration and outdoor area-lighting demand. Fourth-quarter orders were 5% above the prior year and book-to-bill was above 1.0, while management also cited market acceptance for V-LOCITY outdoor area lighting and plans to launch initial Velocity Flood fixture sizes in the calendar-year fourth quarter.
Cash generation remained positive, with fourth-quarter free cash flow of $9.7 million and fiscal-year free cash flow of $39.0 million. The Company declared a $0.05-per-share quarterly cash dividend. The Royston transaction materially changed the balance-sheet profile: net debt was $241.7 million and net debt to adjusted EBITDA was 2.71 as of June 30, 2026, compared with 0.82 a year earlier. LSI reported approximately $95 million of availability under its $350 million senior secured credit facility. No quantitative fiscal 2027 financial guidance was provided; management instead described elevated Display Solutions activity and strong order rates, while noting that project timing will not be linear.
Management, verbatim
Fiscal 2026 was a transformational year for LSI, one in which we delivered record sales and profitability within our core business, while completing our largest acquisition to-date, with the purchase of Royston Group.
James A. Clark, President and CEO of LSI
Within Display Solutions, project activity remains elevated and order rates remain strong, with a book-to-bill of approximately 1.0x on strong sales.
James A. Clark, President and CEO of LSI
For our Lighting segment, fourth quarter sales increased 17% versus the fiscal third quarter but declined 3% when compared to the fiscal fourth quarter 2025, the result of a soft quarter for the automotive and QSR verticals, where project activity can be uneven throughout the fiscal year.
James A. Clark, President and CEO of LSI
Not in the filing
stated, not guessed- Quantitative forward revenue guidance
- Quantitative forward gross-margin guidance
- Quantitative forward operating-expense guidance
- Quantitative forward tax-rate guidance
- Prior-quarter revenue, income, EPS, cash flow, and balance-sheet figures other than the stated sequential changes
- GAAP gross margin
- Segment operating income or segment adjusted EBITDA amounts for Lighting and Display Solutions
- Share repurchases or repurchase authorization
- Management's quantitative outlook for fiscal 2027
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.