LSI Industries recently reported a sharp increase in fiscal fourth-quarter revenue as the acquisition of Royston Group combined with strong organic growth in its Display Solutions business, although acquisition-related expenses contributed to a decline in reported GAAP net income.
Fourth-quarter net sales reached $234.6 million, up 51% from $155.1 million in the prior-year period. Excluding acquisition-related contributions, companywide organic sales increased 8%.
The standout was Display Solutions, where sales increased 99% to $164.2 million from $82.3 million.
Royston contributed $66.9 million of quarterly Display Solutions sales, while comparable Display Solutions revenue excluding Royston increased 18% to $97.3 million.
The organic growth was supported by demand across the grocery and refueling/convenience-store verticals. Grocery display-case sales increased 21% year-over-year, while LSI also continued expanding project activity in the refueling and convenience-store market.
Display Solutions’ adjusted EBITDA margin reached 12.4%, its highest level in nearly three years and 180 basis points above the prior-year period. The segment entered fiscal 2027 with a book-to-bill ratio of approximately 1.0 times, excluding a recently awarded $30 million refueling and convenience-store program.
Lighting was softer, with quarterly segment sales declining 3% to $70.5 million.
Despite the much larger revenue base, GAAP net income declined approximately 16% to $6.9 million from $8.2 million. The latest quarter included $3 million of acquisition-related expenses associated with LSI’s recent expansion. Adjusted net income, which removes certain items, was substantially higher at $14.4 million.
The difference between GAAP and adjusted results illustrates the near-term cost of integrating acquisitions, particularly Royston, even as those transactions materially increase LSI’s revenue and broaden its addressable markets.
For the full fiscal year, LSI generated record net sales of $689.4 million, up 20%. Display Solutions revenue increased 30% for the year to $423.2 million, while Lighting revenue increased 7% to $266.2 million.
KEY QUOTE:
“Within our Display Solutions segment, net sales doubled from the previous year period, including 18% organic growth.”
James A. Clark, President and CEO of LSI Industries
