Lsi Industries Inc. · NASDAQ:LYTS
Lsi Industries — ROTH Conference 2022
35 slides from Lsi Industries's conference presentation, Mar 14, 2022
Slide 1: Investor Presentation March 2022
NASDAQ: LYTS INVESTOR PRESENTATION MARCH 2022 a DEssERTS4 ROTH, 22
Slide 2: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward-Looking Statements ‘This presentation contains “forward-looking statements”—that is statements telated to future events within the meaning of the Private Securities Litigation Reform Act of 95 The Private Securities Lttgation Reform Act of 1995 provides a safe harbor for forward-l
Slide 3: Introduction: LSI is Positioned for Profitable Growth
INTRODUCTION & LSI is Positioned for Profitable Growth LsI 1976 Cincinnati, OH Lyts 1,400 u Numb Year Founded Headquarters NASDAQ Employees of Locations + Integrated Lighting/Display Solutions Company with Adjacent Growth Opportunities in Services Businesses + Strong Foundation With Entrenched Posit
Slide 4: LSI Financial Projection FY 2022 vs 2021
LSI FINANCIAL PROJECTION FY 2022 vs 2021 & American-Made Lighting and Display Solutions + FY22 Sales Growth Projected at 30+%, SAM “S425 Sim Display with Organic Growth Display Solutions of 15+% Solutions 40% Adj. Operating $18M - $21M + Earningsand Marcin 53%-49% $13M / 4.1% Expansion Driven by 50%
Slide 5: Why LSI Wins in Our Focus Markets
WHY LSI WINS IN OUR FOCUS MARKETS How We Differentiate Generalists + Conglomerates + Standard /High Volume + "Telephone Book’ Portfolio + Convert Focused Specialist to Standard Volume + Little Unique Differentiation + Pricing is Main Decision Factor + Built on Scale /Low-Cost Provider HUG Pe Vertica
Slide 6: Vertical Market Focus
VERTICAL MARKET FOCUS VSI Customize Solutions Serving High-Value Applications Vertical Markets Automotive Petroteun sr Retail & Grocery Parking ‘Sports Complex Warehous Li tbe Market Driven. Portfolio cnn Solutions Display Solutions Te == = Senso ey) 3 cen ean ao Sere : * Wat cur ‘ Netentetecion | B
Slide 7: Vertical Market Focus: Paths to Market
VERTICAL MARKET FOCUS Paths to Market VSI Vertical Markets moi a SportsComplex Warehouse Of» A tame Projects Stock and Flow Direct Quote/Bid Process Local Distributor Stock Availabilty C-Suite, Specifications, architects, Other Lighting Solutions play Solutions 2022 siiNoUSTAIES 7
Slide 8: Strong Customer Engagement
STRONG CUSTOMER ENGAGEMENT VSI Target Verticals with End-User Specific Lighting & Display Solutions Our Solutions S$@o @ GG csormens =D Enhance the Value Proposition Hae ete Gna te VY one - wovs oe. GY naetin ger 4s Customers Contracts eal ae CED Aygnans krog Range from we 100's to 1,000's FedEx rs
Slide 9: Consolidated Financial Results - 1st Half
CONSOLIDATED FINANCIAL RESULTS - 1st HALF 22 vs 21 & Year-Over-Year Improvement Across All Key Financial Metrics as Recovery Accelerates ‘Total Net Sales ($M) Operating Income ($M) + Sales Growth of 49% in the: ses. et Hal. 19% Organic sis + crown piven by || at Repertee Cperating income Sciot Verte
Slide 10: Financial Trends
FINANCIAL TRENDS & Improvement Across All Key Financial Metrics ‘Total Net Sales ($M) Non-GAAP Adjusted Operating Income ($M) + Sales Growth Continues 05-405 — Driven by Secular Recovery in Construction Markets, sos soso Share Gains in Key Market suo Verticals, nd 381 Acquistion 70 ~ yn |__| eheeey
Slide 11: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Balanced Approach for Driving Shareholder Value ll 2 Organic and Inorganic Growth Reduce Net Leverage + Organic - Invest in New Product * Allocate Free Cash Flow Development / Innovation, Sales Generation Toward Reduction in / Marketing Capabilities, Net Leverage Over t
Slide 12: Investments Impacting Cash Flow in Short-Term
INVESTMENTS IMPACTING CASH FLOW IN SHORT-TERM & Cash Flow from Earnings Applied to Manage Supply Chain Challenges Free Cash Flow - FY21 Actual (A), FY20 (A), FY22 Forecast (F) ($M) Projected FY22 Ad) EBITDA ‘of $28M to $3IM Offset by Increased Working Capital S08 $258 + Increased Working Capital Dri
Slide 13: The Path Forward: Bridging to 2025
THE PATH FORWARD Bridging to 2025
Slide 14: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE Deep Commitment to ESG Environmental Factors LSI takes its commitment to the environment very seriously. As demand for electricity continues to increase, our customers and their communities look. tous to provide product solutions that help reduce energy consumption
Slide 15: The Path Forward
THE PATH FORWARD Targeting $500 Million of Revenue & Double-Digit EBITDA in Fiscal 2025 & EXPAND CHANGE ir Vertical Focus Customer Engagement Provide Differentiated Transition to High- Shift from “Client Focus on Bolt-On Value through Direct Value Channel Support” Model to a Acquisitions that Engage
Slide 16: Expand Our Vertical Focus
t EXPAND OUR VERTICAL FOCUS VSI + Increase SOW and SAM with Current Customers Vertical Markets at, SportsComplex Warehouse + +e EXPAND EXPAND Market Increase Addressable Market, Expand Partnership Model to New Customers within a
Slide 17: Petroleum
PETROLEUM Solutions and Lighting UNDE: LEDFD Ae =ayp= ‘COLUMN WRAP. 30 FORMED METAL DISPENSER GRAPHICS th (GRAPHICS VALENCE GRAPHICS, [BRANDED OVERLAYS REGULATORY DECALS 2002 SINDUSTRIES =
Slide 18: Grocery & C-Store
GROCERY C: iD Lead with Display Solutions ‘DIMENSIONAL 7 SIGNAGE & GRAPHICS TASK & DECORATIVE LIGHTING. a FRESH REFRIGERATION : IRES DIMENSIONAL SIGNAGE GRAPH 1" ae a 2022 SHINDUSTRIES 8
Slide 19: Automotive
AUTOMOTIVE d with Outdoor Lighting < = = aS oe Sy eee : OUTDOOR VEHICLE DELIVERY FIXTURE: ARCHITECTURAL TROFEERLIGHTING
Slide 20: Quick Serve Restaurants (QSR)
QUICK SERVE RESTAURANTS (QSR) Lead with Digital Menu Boards and Lighting DANETHRU LoHTIN ‘AREA LIGHTS / | mS WALL MOUNTED &
Slide 21: Change Our Customer Engagement
CHANGE OUR CUSTOMER ENGAGEMENT & Migrating Closer Toward the Customer Grow Direct ‘Customer Relationships Build Knowledge Base Around ‘Customer Requirements 4) Leverage Design & Go-Forward End-User Focus ‘There is Value in Having Both Agency and Direct Relationships + As we Move Higher on the Value
Slide 22: Build a Services Business
Provide a Differentiated ‘Customer Value Proposition Margin Shift to Higher Professional Services Profile Unique Advantage Over Industry Competitors Market Opportunity to Expanded Customer Base to Non-Traditional Segments Service Business Scalable via Partnerships BUILD A SERVICES BUSINESS & Address
Slide 23: Grow Through Acquisition
GROW THROUGH ACQUISITION Focused on Complementary and Adjacent Spaces Criteria + Geography + Adjacent Space 3 ei Stronger + Vertical Enhancement TARGETS + Vertical Expansion Balance Sheet + Complementary to Core and Enhanced f * Strong Vertical Position + Market Insulation + Expanded Capabilities Li
Slide 24: 3SI Transaction Overview
JSI TRANSACTION OVERVIEW Building our Presence Within Growing, Complementary Vertical Markets Transaction Hig! n Update: Exceeding Expectations Acquisi + Transaction closed on May 21, 2021 + FY22 sales and EBITDA exceeding acquisition case targets. FY22 sales forecast $90m, FY20 pro forma $70m, Doub
Slide 25: JSI Store Fixtures
JSI STORE FIXTURES ISI is a Leading Provider of Retail Display Solutions to Grocery & C-Store Verticals Established Market Leader Milo, Maine corporate + Soyearsof industry experience + 4 Faciities throughout North America + 255,000+ SF of manufacturing space + 300+ non-union employees $2.2 Billion
Slide 26: Established, Multi-Channel Product Portfolio
ESTABLISHED, MULTI-CHANNEL PRODUCT PORTFOLIO JSI's Innovative Products Maintain Freshness, Promote Food Safety, Drive Traffic Diversified Based of Large, Long-Tenured National Customer Accounts eee aaa a irae aa ee Average customer tenure is 15 years: GbR Sei gaulinricemies eran ten Pramas Gat oan o
Slide 27: Vertical Synergies
VERTICAL SYNERGIES & Leverage Positions for Growth Customer Js! LsI Js! LsI Base Customer + Continuity + Single Point of Contact + Prepared Foods + Project Rollouts Benefit + Aesthetics + Inctease Supplier Scale + Solar + Expanded Partnership Share of + Leverage Relationship for Account Penetration
Slide 28: Projected Financials
PROJECTED FINANCIALS & $500M Sales and Double-Digit EBITDA in 2025 Projected Sales ($M) Projected Adj. EBITDA ($M) Sales Growth a Combination 800 fof Organic and Inorganic 8.0% Initiatives 50, $36 $305 49%, EBITDA Increase Driven by 5 Continued improvementto (Gross Margin Rates fo | | Existing Busin
Slide 29: Investment Summary
INVESTMENT SUMMARY & American-Made Company Positioned for Profitable Growth GROW Through Integrated Lighting / Display Solutions Company with Adjacent Growth Opportunities in Services Businesses Strong Foundation With Entrenched Position in Target Vertical Market Applications; Selectively Expanding;
Slide 30: Appendix
APPENDIX
Slide 31: Statement on Non-GAAP Financial Measures
STATEMENT ON NON-GAAP FINANCIAL MEASURES ‘This presentation includes adjustments to CAAP operating income, net income and earnings per share for the six months ended December 31, 2021 and 2020, and twelve months ended June 30, 2021 and 2020. Operating income, net income and eatnings per share, which
Slide 32: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION AstHalf IstHalf Full Year Full Year Sl Industries Fy20z2 __FY2021__FY2021_—_~FY2020 Net Sales [a] 217,540 146,393 «315,612 305,558 Operating Income 8866 4,888 13,076 ‘Acquisition costs 340 - - Restructuring and plant closure costs (gains) (7,038) ‘Severance costs 346 Stock co
Slide 33: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION AstHalf 1st Half Full Year FullYear Istindusres Fro _Fyz0n__y2021—_Fy2000 Net cash flows provided by (used in) operating activities (16,543) 13,417 28,009 29,710 Proceeds rom sale of assets 20150 Purchases of property, pant, and equipment (as) (a0) (2233) (2.739) Free Cash Fl
Slide 34: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION & Full Year Full Year Fy2021 £2020 ited EPS ited OS Netincome $5868 S$ 02 $9sm $ 036 ‘tock compensation expense 4274005 66 003,497.05, a7 0 Acquisition costs 29 001 - 2161 0.08 Severance costs = = C= es 22 oot Restructuring and plant dosure costs (gains) : : 2 ay + (55557) (0
Slide 35: For additional questions, please contact
For additional questions, please contact 720.778.2415 Thank you, LSI Investor Relations