LSI Industries Inc. reported its financial results for the three months ended September 30, 2024, showing a net sales increase of 12% to $138.1 million, compared to $123.4 million in the same period of 2023. This growth was primarily driven by a significant 43% increase in the Display Solutions segment, which generated $79.7 million in sales, bolstered by contributions from the recently acquired EMI Industries, LLC. In contrast, the Lighting segment experienced a 14% decline in sales, totaling $58.4 million, attributed to reduced large project activity and a slowdown in non-residential construction.

Despite the revenue growth, LSI Industries faced a decrease in profitability. Gross profit for the quarter fell to $33.6 million from $36.6 million year-over-year, leading to a gross profit margin decline from 29.6% to 24.3%. Operating income also decreased by 17% to $9.1 million, down from $11.0 million in the prior year. The decline in operating income was largely due to lower sales in the Lighting segment, although the Display Solutions segment's operating income rose to $7.7 million from $7.2 million.

Net income for the quarter was $6.7 million, a decrease from $8.0 million in the same period last year, resulting in diluted earnings per share of $0.22, down from $0.27. The company reported comprehensive income of $6.6 million, compared to $8.0 million in the previous year.

LSI Industries' cash and cash equivalents increased to $6.97 million as of September 30, 2024, up from $4.11 million at the end of June 2024. The company also reported a working capital increase to $86.8 million, with a current ratio of 2.1:1. Net accounts receivable rose to $80.7 million, and days sales outstanding improved to 54 days from 58 days.

Strategically, LSI Industries completed the acquisition of EMI Industries on April 18, 2024, for $50 million, which is expected to expand its market presence in the grocery, quick-service restaurant, and convenience store sectors. The acquisition included $1 million in related costs and was funded through cash reserves and a $75 million revolving line of credit.

Overall, while LSI Industries achieved revenue growth, it faced challenges in profitability, particularly within its Lighting segment, and is actively pursuing strategic initiatives to enhance its market position.