LSI INDUSTRIES INC Segments Disclosure

NOTE 4 — BUSINESS SEGMENT INFORMATION

 

The accounting guidance on Segment Reporting establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s Chief Executive Officer or “CODM”) in making decisions on how to allocate resources and assess performance. The Company’s two operating segments are Lighting and Display Solutions, with one executive team under the organizational structure reporting directly to the CODM with responsibilities for managing each segment. Corporate and Eliminations, which captures the Company’s corporate administrative activities, is also reported in the segment information.

 

The Company’s method for measuring profitability on a reportable segment basis and used by the CODM to assess performance is adjusted operating income and adjusted earnings before interest, tax, depreciation, amortization, along with other non-GAAP adjustments (adjusted EBITDA). These measurements are used to monitor performance compared to prior periods and forecasted results.

 

The Lighting Segment includes non-residential outdoor and indoor lighting fixtures utilizing LED light sources that have been fabricated and assembled for the Company’s markets, primarily the refueling and convenience store markets, parking lot and garage markets, quick-service restaurant market, retail and grocery store markets, the automotive market, the warehouse market, and the sports court and field market. The Company also services lighting product customers through the commercial and industrial project, stock and flow, and renovation channels. In addition to the manufacture and sale of lighting fixtures, the Company offers a variety of lighting controls to complement its lighting fixtures which include sensors, photocontrols, dimmers, motion detection and Bluetooth systems. The Lighting Segment also includes the design, engineering and manufacturing of electronic circuit boards, assemblies and sub-assemblies which are sold directly to customers.

 

The Display Solutions Segment manufactures, sells and installs exterior and interior visual image and display elements, including printed graphics, structural graphics, digital signage, menu board systems, millwork display fixtures, refrigerated displays, food equipment, countertops, and other custom display elements. These products are used in visual image programs in several markets including the refueling and convenience store markets, quick-service and casual restaurant market, retail and grocery store, and other retail markets. The Company accesses its customers primarily through a direct sale model utilizing its own sales force. Sales through distribution represent a small portion of Display Solutions sales. The Display Solutions Segment also provides a variety of project management services to complement our display elements, such as installation management, site surveys, permitting, and content management which are offered to our customers to support our digital signage.

 

The Company’s corporate administration activities are reported in the Corporate and Eliminations line item. These activities primarily include intercompany profit in inventory eliminations, expense related to certain corporate officers and support staff, the Company’s internal audit staff, expense related to the Company’s Board of Directors, equity compensation expense for various equity awards granted to corporate administration employees, certain consulting expenses, investor relations activities, and a portion of the Company’s legal, auditing, and professional fee expenses. Corporate identifiable assets primarily consist of cash, invested cash (if any), refundable income taxes (if any), and deferred income taxes. 

 

There were no customers or customer programs representing a concentration of 10% or more of the Company’s net sales in the fiscal year ended June 30, 2025, or 2024. There was no concentration of accounts receivable at June 30, 2025, or 2024.

 

Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of June 30, 2025, and June 30, 2024:

 

(In thousands)		Twelve Months Ended
		June 30, 2025
										Corporate
		Lighting				Display				& Elims				Total
Net sales		$	248,357			$	325,020			$	-			$	573,377
Operating income			30,253				26,353				(20,837	)			35,769
Long-term performance based compensation			338				1,068				3,533				4,939
Severance costs and restructuring costs			83				195				22				300
Amortization expense of acquired intangible assets			2,412				3,457				-				5,869
Acquisition costs			-				-				1,047				1,047
Expense on step-up basis of acquired assets			-				356				-				356
Consulting expense: commercial growth initiatives			-				-				81				81
															-
Adjusted operating income			33,086				31,429				(16,154	)			48,361
Depreciation Expense			2,639				3,715				352				6,706
Adjusted EBITDA		$	35,725			$	35,144			$	(15,802	)		$	55,067

 

(In thousands)		Twelve Months Ended
		June 30, 2024
										Corporate
		Lighting				Display				& Elims				Total
Net sales		$	262,413			$	207,225			$	-			$	469,638
Operating income			33,327				19,969				(17,779	)			35,517
Long-term performance based compensation			176				994				3,210				4,380
Severance costs and restructuring costs			26				513				-				539
Amortization expense of acquired intangible assets			2,413				2,545				-				4,958
Acquisition costs			-				-				1,001				1,001
															-
Adjusted operating income			35,942				24,021				(13,568	)			46,395
Depreciation Expense			2,753				1,934				354				5,041
Adjusted EBITDA		$	38,695			$	25,955			$	(13,214	)		$	51,436

 

 

		Twelve Months Ended
(In thousands)		June 30
		2025				2024
Capital Expenditures:
Lighting Segment		$	1,883			$	3,555
Display Solutions Segment			1,499				1,386
Corporate and Eliminations			83				447
		$	3,465			$	5,388
Depreciation and Amortization:
Lighting Segment		$	5,060			$	5,167
Display Solutions Segment			7,190				4,480
Corporate and Eliminations			325				352
		$	12,575			$	9,999

 

		June 30, 2025				June 30, 2024
Identifiable Assets:
Lighting Segment		$	132,960			$	130,695
Display Solutions Segment			253,299				208,248
Corporate and Eliminations			10,103				9,857
		$	396,362			$	348,800

 

The segment net sales reported above represent sales to external customers. Identifiable assets are those assets used by each segment in its operations.

 

The Company does have sales and assets in other geographic locations outside of the United States which are immaterial to the consolidated sales and assets.

 

The Company records a 10% mark-up on most intersegment revenues. Any intersegment profit in inventory is eliminated in consolidation. Intersegment revenues were eliminated in consolidation as follows:

 

Inter-segment sales		Twelve Months Ended
(In thousands)		June 30
		2025				2024
Lighting Segment inter-segment net sales		$	19,976			$	22,852
Display Solutions Segment inter-segment net sales		$	893			$	797