LSI Industries’ QQ3 2024 results demonstrate a resilient operating profile in a mixed demand environment. Revenue of $108.19 million declined 7.9% year over year and 0.75% quarter over quarter, reflecting ongoing headwinds in the grocery vertical tied to the industry merger process, while adjusted EBITDA margin expanded by ~80 basis points to 10.4% and adjusted gross margin improved by 160 basis points. Net income rose 15.1% year over year to $5.38 million, and EPS stood at $0.18, supported by favorable mix, stable pricing, and productive capacity. The quarter also showcased robust cash generation, with free cash flow of $11.15 million and operating cash flow of $12.43 million, enabling net debt reduction to roughly $9.18 million and a leverage ratio (adjusted EBITDA to net debt) of 0.2x.
Management continues to execute the Fast Forward Plan to reach $800 million in sales and 12.5% EBITDA by 2028, highlighted by the EMI Industries acquisition for $50 million. EMI adds five manufacturing locations and expands the company’s presence in grocery, C-store, and QSR verticals, creating a substantial cross-selling opportunity across a broadened customer base. While the grocery/Merger-related disruption remains a near-term drag, management expects continued growth in refueling C-store programs and broad-based lighting activity, with EMI expected to be accretive to EPS immediately and to realize meaningful synergies over the next 12–24 months. Investors should monitor EMI integration progress, the progress and outcome of the grocery merger divestiture plan (including potential new store opportunities and rebranding), supply chain dynamics, and the pace of recovery in large project quote-to-order cycles.