Lsi Industries Inc. · NASDAQ:LYTS
Lsi Industries — Investor Presentation (March 2023)
35 slides from Lsi Industries's investor presentation, Mar 9, 2023
Slide 1: Investor Presentation March 2023
‘ee INVESTOR , PRESENTATION ! MARCH 2023
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements ‘This presentation contains foarcooking statements'—that ig statements related to future events within the meaning of the Private Secures tigation Reform Act of 1995. The Private secures Lngation Refotm Sct of Ss provider a sate RarSo or frward olng statements i
Slide 3: Company Overview & Recent Performance
COMPANY OVERVIEW & RECENT PERFORMANCE
Slide 4: Company Overview
COMPANY OVERVIEW Leading Integrated Lighting and Display Solutions Company Our Transformation + Leading vertically integrated commercial indoor/outdoor lighting ‘and display solutions company ~ strong foundation with entrenched position in growing vertical markets + Commenced successful business tra
Slide 5: Uniquely Positioned in Target Markets
UNIQUELY POSITIONED IN TARGET MARKETS & Our Integrated Solution Includes Design, Production and Installation ‘Our Competition -— Market Generalists | Our Approach - Area and Sector Specialization Vs) H + Conglomerates + Standard/High Volume + “Telephone Book" Portfolio + Convert Focused Specialist t
Slide 6: Target Market Verticals and Integrated Solutions Portfolio
WsRuleANt MARKET URES Sports Complex Warehouse teeat Market Driven Portfolio Using Sluions DisplaySolutions [services | | a ] + Printed Graphies + Creative Services + Structural Graphics + Site Surveys ‘Area + Sensors + Facades and Cladding + Permitting i * Canopy 0 Pbeieeniie + Digital Signage + Co
Slide 7: Strong Customer Engagement
STRONG CUSTOMER ENGAGEMENT & Target Verticals with End-User Specific Lighting & Display Solutions Strong Value Proposition We Serve Leading Global Brands + We provide integrated lighting and display solutions to a growing (xia) bp Ceestonsseuesconeme — EB) DM GG scores wy GomdD) base of ong tenuredc
Slide 8: Sustained Multi-Year Growth
SUSTAINED MULTI-YEAR GROWTH & Strong Track Record of Operational and Financial Execution Total Net Sales Total Adjusted Operating Income ~ Focused growin au fae simeitn eas impoved = ad disciplined capital Lectin BS aoe |_| || |_| evestedip Serco fe ne ee Seermtoretitves dinate ,, Total Adjusted EBI
Slide 9: FY23 Q2: Key Messages
FY23 Q2: KEY MESSAGES Fiscal Second Quarter 2023 Results Strong F2Q23 performance led by continued y/y Sales volume growth, disciplined pricing, and improved mix Reported y/y growth in sales, operating income, net income, adjusted EBITDA and free cash flow Balanced growth across Lighting and Display
Slide 10: FY23 Q2: Consolidated Financial Results
FY23 Q2: CONSOLIDATED FINANCIAL RESULTS & Strong Y/Y Growth in Commercial Volumes, Continued Price Discipline, Improved Sales Mix Total Net Sales (2) Operating Income (ss) Project wins in both - existing vertical markets sm sae 0 and underserved ks markets with profitable ee growth potential | | rag
Slide 11: FY23 Q2: Working Capital Management
FY23 Q2: WORKING CAPITAL MANAGEMENT & Working Capital Decline Driven by Targeted Sequential Reduction in Inventory Levels Total Working Capital (3) Reduced total working Reduced total inventory ror $843 $949 by 9% sequentially Po ———— ae | || stabilization supports = = targeted inventory = incu ee M
Slide 12: FY23 Q2: Capital Allocation Priorities
FY23 Q2: CAPITAL ALLOCATION PRIORITIES & Prioritizing Capital Deployment Toward Debt Reduction, Return of Capital, Growth Initiatives Free Cash Flow (:02) During last 12 months, free cash flow jeneration in excess of $50 million, sia yy improvement in F2Q23 free cash flow During last 12 months, Redu
Slide 13: Fast Forward: Our Five-Year Roadmap to FY28
FAST FORWARD Out Five-Year Roadmap to FY28
Slide 14: Measuring Our Progress [FY20-FY23]
MEASURING OUR PROGRESS [FY20-FY23] & We Introduced a Comprehensive Business Transformation Plan in 2020 Sep Gunna In 2020, LSI launched The Path Forward, a value-creation framework : designed to accelerate revenue growth, margin realization, and profitability Provide Differentiated Transition to Hig
Slide 15: Measuring Our Progress [FY20-FY23]
MEASURING OUR PROGRESS [FY20-FY23] & Established a High “Say-Do”, Delivered Continuous Improvement on Strategic Plan The Path Forward delivered on its initial targets ahead of plan, driven by organizational improvements across operations, manufacturing and sales/marketing v v Implemented vertical ma
Slide 16: Measuring Our Progress [FY20-FY23]
MEASURING OUR PROGRESS [FY20-FY23] Consistent Outperformance Vs. Revenue, Margin and Profitability Targets Revenue Growth ($M) Adjusted EBITDA Margin ($M) $490-$500 mad 500 sss sc Mp a $306 _ 51% 2020" MBA Organic 2022 20236 Focused Operational Excellence Stable Margin Expansi Targeted Commercial Ex
Slide 17: Introducing Our Fast Forward Initiative
INTRODUCING OUR FAST FORWARD INITIATIVE The Five-Year Roadmap to FY28 ys) Current Focus Forward Focus ide and Inside the Building » Accelerating —* croungvweisoow mnausy awege Markets strategically Aligned Around Clean Energy Megatrends ely Demanding Experience of our Cu Adjacent Opt $ Incremental &
Slide 18: Fast Forward Expand End-Market Focus
FAST FORWARD EXPAND END-MARKET FOCUS & Incremental Growth Drivers: Leveraging Integrated Solutions in Higher Value Markets Current Focus Forward Focus Adjacent Opportunities Tied to Our Vertical Market Strategy Leverage Trendsin Energy, Infrastructure and Evolving Consumer Habits Identify and Grow N
Slide 19: Fast Forward Financial Targets [FY23-FY28]
FAST FORWARD FINANCIAL TARGETS [FY23-FY28] Introducing our New, Five-Year Financial Targets Revenue Growth ($M) Adjusted EBITDA / Margin ($M) $160 ‘$800 - soo = env a = a Focused Operational Excellence Long-Term Value Creation Stable Margin Expansion ving Profitable Growth ¥ High-single-digit organi
Slide 20: Fast Forward Strategic Priorities
FAST FORWARD STRATEGIC PRIORITIES Building Upon a Foundation of Commercial Growth and Operational Execution Enterprise Growth Partner of Choice Bui Driving Shareh ¥ Deeper Penetration in Existing Verticals v New Adjacent Solutions for Existing and New Verticals. Market Driven New Product /Solutions
Slide 21: Vertical Applications
VERTICAL APPLICATIONS
Slide 22: Refueling & Convenience Store
REFUELING & CONVENIENCE STORE Le th D 1 Li DIGITAL MENUS Gi = COLUMN WRAP SO FORMEDMETAL DISPENSERGRAPHICS) =——— GRAPHICS VALENCECRAPHICS QRANDEDOVERLAYS = REGULATORY DECALS 2025S IN 5
Slide 23: Grocery
GROCERY Lead with Disp DIMENSIONAL «SIGNAGE & GRAPHICS TASK & DECORATIVE LIGHTING FRESH REFRIGERATION FIXTURES DIMENSIONAL. SIGNAGES GRAPHICS 23
Slide 24: Automotive
AUTOMOTIVE WALL MOUNTED & og XTURES “ OUTDOOR VEHICLE F-DELIVERY FIXTURES ARCHITECTURAL TROFFERLICHTING GRAPHIC 6 DIGITAL SIGNAGE SOLUTIONS.
Slide 25: Quick Serve Restaurants (QSR)
QUICK SERVE RESTAURANTS (QSR) Lead with Digital Menu Boards and Lighting PSOAIVETHRU LIGHT) [ AREA LIGHTS/ POLES WALL MOUNTED & FACADE FIXTURES INDOOR) Leite LIGHTING
Slide 26: Investment Conclusion
@ INVESTMENT CONCLUSION
Slide 27: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE B, 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 consumpti
Slide 28: Investment Summary
INVESTMENT SUMMARY Building Upon a Foundation of Commercial Growth and Operational Execution Enterprise Growth | Partnerof Choice | Business Excellence || Capital Allocation (pand Our Vert Build ¥ Deeper Penetration in ¥ EducateandEmpowerour Provide ExcellentCustomer _¥_Investin Organic Sales Existi
Slide 29: Appendix
APPENDIX
Slide 30: Statement on Non-GAAP Financial Measures
STATEMENT ON NON-GAAP FINANCIAL MEASURES ‘This presentation includes adjustments to GAAP operating income, net income and earnings per share for the periods presented, Operating income, net income and earnings per share, which exclude the impact of acquisition costs, stock compensation expense, seve
Slide 31: Non-GAAP Reconciliation: Op Income
NON-GAAP RECONCILIATION: OP INCOME & LSI Industries Q22022 22023 _-FY2019 _FY2020 _FY2021__~FY 2022 Net Sales [a] 111,143 128,804 328,852 305,558 315,612 455,120 Operating Income 4,422 9,038, (19,890) 13,076 8,030 21,201 ‘Acquisition Costs 340 : : - 2,938 473 Consulting Expense: Commercial Growth In
Slide 32: Non-GAAP Reconciliation: EBITDA
NON-GAAP RECONCILIATION: EBITDA & LsI Industries Q22022 022023 FY2019 FY2020 _FY2021_—FY 2022 Net Sales [a] 111,143 128,804 © «328,852 305,558 315,612 455,120 Operating Income 4,422 9,038, (19,890) 13,076 8,030 21,201 Depreciation and Amortization 2,538 2,419 10,221 86548114 10,118 EBITDA 6,960 11,4
Slide 33: Non-GAAP Reconciliation: Net Income-FY
NON-GAAP RECONCILIATION: NET INCOME-FY USI Industries [Net income as Reported ‘Stock Compensation Expense ‘Acquisition Costs Severance Costs / Restructuring Costs ‘Tax impact from the Anticipated Sale of the New Windsor Assets, Goodwill Impairment ‘Tax impact Due tothe Change in the Estimated Annual
Slide 34: Non-GAAP Reconciliation: Net Income-Qtr
NON-GAAP RECONCILIATION: NET INCOME-QTR & 62025151 INDUSTRIES Uslindustries Net Income as Reported ‘Stock Compensation Expense ‘Acquisition Costs Severance Costs / Restructuring Costs Consulting Expense: Commercial Growth Initiatives Net Income Adjusted ‘Three Months Ended December 31 ee, ee. Net Di
Slide 35: LSI Investor Relations
° r LSI Investor Relations