Executive Summary

Strong Q4 finish: Revenue $155.1M (+20% y/y) and adjusted EPS $0.34 beat consensus materially; adjusted EBITDA margin rose 250 bps q/q to 11.0% on higher volume, price/cost alignment, and productivity gains . Q4 revenue/EPS/EBITDA all beat S&P Global consensus by wide margins (see Estimates table).*
Broad-based execution: Lighting grew 12% y/y; Display Solutions grew 29% y/y (10% organic) with strength in refueling/c‑store (+23%) and grocery (+31%), plus first full-quarter contribution from Canada’s Best .
Demand/backlog momentum: Orders +11% y/y, book-to-bill 1.0, and total backlog +13% y/y exiting FY25; Lighting backlog +20% y/y supports near-term visibility .
Outlook and risks: Management expects favorable cash generation and limited tariff impact (mostly domestic sourcing), with pricing/cost actions to offset lighting component tariffs in Q1 FY26 . Dividend maintained at $0.05 per share (payable Sep 10, 2025) .

What Went Well and What Went Wrong

What Went Well

Balanced segment growth and margin recovery: “both Lighting and Display Solutions realizing double-digit sales growth… fourth quarter adjusted EBITDA margin increased by 250 basis points versus the third quarter” .
Display strength and integration: Display Solutions +29% y/y; organic +10%; refueling/c‑store +23% and grocery +31%; Canada’s Best integration on plan; EMI achieved record sales and +200 bps adj. EBITDA margin improvement in year one .
Backlog and bookings: Orders +11% y/y; book-to-bill 1.0; backlog +13% y/y; Lighting backlog +20% y/y, indicating improving project flow and demand stabilization .

What Went Wrong

Lighting softness over the year: FY25 Lighting sales declined 5% y/y (despite Q4 rebound), reflecting earlier large-project softness; though operating margin improved with price/mix and cost management .
Tariff headwind near term: Minimal Q4 impact due to existing inventories, but Lighting will see higher input costs in Q1 FY26 as high-tariff inventory is consumed; management plans to offset via pricing and cost reductions .
Q3 margin/throughput volatility: Rapid demand shifts and scheduling changes in grocery temporarily pressured productivity and margins in Q3 before stabilizing by Q4 .

Financial Results

Quarterly trend (Q2–Q4 FY25)

Metric	Q2 2025	Q3 2025	Q4 2025
Net Sales ($M)	$147.734	$132.481	$155.066
Diluted EPS (Reported)	$0.18	$0.13	$0.26
Diluted EPS (Adjusted)	$0.26	$0.20	$0.34
Adjusted EBITDA ($M)	$13.296	$11.254	$17.087
Adjusted EBITDA Margin (%)	9.0%	8.5%	11.0%
Free Cash Flow ($M)	$8.825	$4.716	$8.549

Q4 YoY comparison

Metric	Q4 2024	Q4 2025
Net Sales ($M)	$129.007	$155.066
Diluted EPS (Reported)	$0.19	$0.26
Diluted EPS (Adjusted)	$0.28	$0.34
Adjusted EBITDA ($M)	$14.044	$17.087
Adjusted EBITDA Margin (%)	10.9%	11.0%

Estimates beat/miss (S&P Global consensus)*

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue Consensus* ($M)	$129.20	$129.72	$138.89
Revenue Actual ($M)	$147.73	$132.48	$155.07
Revenue Surprise ($M / %)	+$18.54 / +14.4%*	+$2.76 / +2.1%*	+$16.17 / +11.6%*
EPS Consensus* ($)	$0.167	$0.150	$0.183
EPS Actual (Adj.) ($)	$0.26	$0.20	$0.34
EPS Surprise ($ / %)	+$0.09 / +56%*	+$0.05 / +33%*	+$0.16 / +87%*
EBITDA Consensus* ($M)	$12.04	$11.79	$13.06
EBITDA Actual ($M)	$11.477 (EBITDA)	$9.297 (EBITDA)	$15.499 (EBITDA)

Note: “Actual EPS” reflects company-reported adjusted diluted EPS; EBITDA line compares company EBITDA (not adjusted EBITDA) to consensus EBITDA to preserve like-for-like comparison where possible. Values retrieved from S&P Global.*

Segment breakdown

Segment Sales ($M)	Q3 2025	Q4 2024	Q4 2025
Lighting	$58.967	$65.095	$72.743
Display Solutions (Total)	$73.514	$63.912	$82.323
- Comparable Display	$49.728	$45.838	$52.324
- EMI	$22.417	$18.074	$22.819
- Canada’s Best	$1.369	$—	$7.180
Total Net Sales	$132.481	$129.007	$155.066

KPIs and operating indicators

KPI	Q3 2025	Q4 2025
Orders Growth (y/y)	+6% (total orders)	+11%
Book-to-Bill	1.06 (total)	1.0 (total)
Backlog vs PY	+15% (total)	+13% (total)
Lighting Backlog vs PY	+18%	+20%
Refueling/c‑store Sales (y/y)	—	+23%
Grocery Sales (y/y)	—	+31%
Net Debt / TTM Adj. EBITDA	1.0x	0.82x
Dividend Declared	$0.05 (May 13)	$0.05 (Sep 10)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Share	Q4 FY25 payout	$0.05 (Q3 payout)	$0.05 (Q4 payout on Sep 10, 2025)	Maintained
Tariff Impact (qualitative)	Q1 FY26 and FY26	Minimal in Q4; preparing pricing/sourcing actions	Lighting to see higher costs in Q1 FY26; expect partial offsets via price/cost actions; Display minimal impact	Qualitative update
Cash Generation (qualitative)	FY26	—	Expect favorable cash generation to continue	New qualitative

No explicit quantitative revenue/margin guidance was issued in Q4 materials; management focused on backlog/booking strength, tariff mitigation, and continued cash generation .

Earnings Call Themes & Trends

Topic	Q2 2025 (Jan)	Q3 2025 (Apr)	Q4 2025 (Aug)	Trend
Tariffs/macro	DOE R290 transition managed; backlog strong; Lighting sales down on tough comp	Prepped for additional tariffs; domestic sourcing mitigates exposure	Lighting tariff impact minimal in Q4; modest in Q1 FY26, expect offsets; Display minimal impact	Managed headwind; mitigation credible
Grocery vertical	Resurgence post merger termination; >50% growth in Q2	Scheduling volatility hurt Q3 margins; stabilizing into Q4	Q4 sales +31%; margins up >200 bps seq.; healthy backlog	Recovery stabilizing with backlog
Refueling/c‑store	>60% growth; multi-year programs	Stable orders; elevated backlog	Q4 sales +23%; largest program extends ~18 months of sites	Continued multi-year tailwind
Lighting project activity	Down y/y in Q2; backlog +6%	Quote-to-order improving; backlog +18%	Q4 sales +12%; backlog +20%; margin +250 bps y/y	Inflecting upward
Cross-selling & M&A	EMI ahead of expectations	Canada’s Best acquired; cross-sell building	Cross-selling in “double digit millions”; EMI +>200 bps margin y/y; Canada’s Best first full quarter	Building momentum
Cash/Capital allocation	Net debt/EBITDA 0.6x; FCF strong	Net debt/EBITDA 1.0x post deal; FCF positive	Net debt/EBITDA 0.8x; dividend maintained	Balance sheet optionality intact

Management Commentary

“LSI finished fiscal 2025 with a strong fourth quarter… both Lighting and Display Solutions realizing double-digit sales growth… fourth quarter adjusted EBITDA margin increased by 250 basis points versus the third quarter” — James A. Clark, CEO .
“Display Solutions… delivered 29% year-over-year growth… comparable sales +10%… Grocery sales increased 31%… Lighting… operating margin improved 250 basis points y/y, driven by volume and favorable price/mix” .
“We expect to partially offset higher [lighting tariff] costs with previously implemented price increases and other cost reduction efforts. We do not expect tariffs to have a significant impact on Lighting margins in the first quarter or the balance of fiscal 2026” .
“Adjusted EBITDA came in at $55 million or nearly 10% of sales… free cash flow remained robust… net debt leverage ratio of 0.8x” — CEO .
“Improved throughput and productivity, combined with increased volume… was responsible for the… 250 basis point improvement to adjusted EBITDA [margin]” — CFO .

Q&A Highlights

Refueling/c‑store program duration/size: Largest program has “thousands of site locations” with ~18 months of additional site releases; pipeline of potential new large programs remains active though not yet committed .
Grocery recovery: Market not “fully recovered,” but order and scheduling are now “stable” with healthy backlog and production outlook through calendar year-end .
EMI margins & trajectory: >200 bps margin improvement since acquisition; plan for another ~200 bps in FY26 as integration and cross-selling progress .
EBITDA margin sustainability: Management targets 11%+ as the “more normal” range, progressing toward ~12.5% by 2028 under Fast Forward plan; some variability expected due to portfolio actions .
Tariff exposure: Display minimally impacted; Lighting modestly more exposed (select electronics/castings) but below peers; pricing/cost actions expected to offset most impact .

Estimates Context

Q4 FY25 beat across the board vs S&P Global consensus: Revenue $155.07M vs $138.89M*; adjusted EPS $0.34 vs $0.183*; EBITDA $15.50M vs $13.06M* (company EBITDA vs consensus EBITDA). Prior two quarters also beat on revenue and EPS, with Q3 EBITDA below consensus amid temporary grocery scheduling volatility .*
Implications: Models likely move higher on FY26 revenue and margin trajectory given backlog strength, extended c‑store program, and Q4 margin recovery; tariff commentary should limit risk premia on gross margin outlook. Values retrieved from S&P Global.*

Key Takeaways for Investors

Broad-based beat with improving mix: Q4 revenue/EPS/EBITDA significantly above Street, with margin inflection to 11.0% and sequential improvement of 250 bps; segment growth is balanced and diversified .
Demand visibility: Orders +11% y/y, book-to-bill 1.0, and backlog +13% y/y provide a constructive setup into FY26; Lighting backlog +20% y/y underscores project re-acceleration .
Structural growth vectors: Multi-year refueling/c‑store programs, grocery recovery, and cross-selling “double digit millions” add medium-term revenue durability; acquisitions (EMI, Canada’s Best) expanding TAM and capabilities .
Tariff risk mitigated: Mostly domestic sourcing; lighting cost uptick in Q1 FY26 to be offset by pricing and cost actions; Display minimal impact .
Balance sheet and cash: Net debt/Adj. EBITDA 0.82x; FCF strong; dividend maintained—ample flexibility for organic and inorganic growth .
Trading lens: Near-term catalysts include sustained 11%+ adj. EBITDA margins, backlog conversion, and continued strength in c‑store/grocery; watch Q1 FY26 lighting margin for tariff pass-through execution .
Medium-term thesis: Execution on Fast Forward Plan, continued cross-selling, and further M&A integration support a path toward structurally higher margins and scaled vertical platform .

Footnote: All consensus values marked with an asterisk (*) are values retrieved from S&P Global.

LSI INDUSTRIES INC (LYTS)·Q4 2025 Earnings Summary