Form 8-K/A

8-K/A — LSI INDUSTRIES INC

Accession: 0001437749-26-019737

Filed: 2026-06-05

Period: 2026-03-24

CIK: 0000763532

SIC: 3640 (ELECTRIC LIGHTING & WIRING EQUIPMENT)

Item: Financial Statements and Exhibits

Documents

8-K/A — lyts20260521_8ka.htm (Primary)

EX-23.1 — EXHIBIT 23.1 (ex_972941.htm)

EX-99.1 — EXHIBIT 99.1 (ex_972876.htm)

EX-99.2 — EXHIBIT 99.2 (ex_972897.htm)

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8-K/A — FORM 8-K/A

8-K/A (Primary)

Filename: lyts20260521_8ka.htm · Sequence: 1

lyts20260521_8ka.htm

Form 8-K/A date of report 03-24-26

true

0000763532

2026-03-24

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

Amendment No. 1

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 24, 2026

LSI INDUSTRIES INC.

(Exact name of Registrant as Specified in its Charter)

Ohio

01-13375

31-0888951

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

10000 Alliance Road, Cincinnati, Ohio

45242

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code (513) 793-3200

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, no par value

LYTS

NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17CFR §240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Item9.01. Financial Statements and Exhibits.

On March 24, 2026, LSI Industries Inc., an Ohio corporation (“LSI”), filed a Form 8-K (the “Original Filing”) under Items 1.01, 2.01, 2.03, 7.01 and 9.01 to report LSI’s acquisition of SRR Holdings, Inc., a Delaware corporation, as described in the Original Filing. This Form 8-K/A is being filed to amend the Original Filing to provide the required financial statements and pro forma condensed combined financial information described below.

(a)

Financial Statements of Businesses or Funds Acquired. The audited financial statements of SRR Holdings, Inc. for the years ended December 31, 2025 and December 31, 2024, including the notes to such financial statements are incorporated herein by reference to Exhibit 99.1.

(b)

Pro Forma Financial Information. The pro forma condensed combined financial information of LSI Industries Inc. and SRR Holdings, Inc., including the pro forma condensed combined statement of operations for the fiscal year ended June 30, 2025 and the nine months ended March 31, 2026, including the introductory paragraph(s) and notes to such pro forma condensed combined financial information, are incorporated herein by reference to Exhibit 99.2.

(d)

Exhibits.

ExhibitNo.

Description

23.1

Consent of Grant Thornton LLP

99.1

SRR Holdings, Inc. audited financial statements (balance sheet as of December 31, 2025 and December 31, 2024, statements of operations for the fiscal years ended December 31, 2025 and December 31, 2024, statements of stockholders’ equity for the fiscal years ended December 31, 2025 and December 31, 2024, and statements of cash flows for the fiscal years ended December 31, 2025 and December 31, 2024)

99.2

LSI Industries Inc. pro forma condensed combined financial information (pro forma condensed combined statement of operations for the fiscal year ended June 30, 2025 and the nine months ended March 31, 2026)

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LSI INDUSTRIES INC.

BY:/s/ James E. Galeese

James E. Galeese

Executive Vice President, Chief Financial Officer

Dated: June 5, 2026

EX-23.1 — EXHIBIT 23.1

EX-23.1

Filename: ex_972941.htm · Sequence: 2

ex_972941.htm

Exhibit 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated May 6, 2026, with respect to the consolidated financial statements of SRR Holdings, Inc. and subsidiaries in the Current Report on Form 8-K/A of LSI Industries Inc., dated June 5, 2026. We consent to the incorporation by reference of said report in the Registration Statement of LSI Industries Inc. on Form S-3 (File No. 333-290202).

/s/ GRANT THORNTON LLP

Columbia, South Carolina

June 5, 2026

EX-99.1 — EXHIBIT 99.1

EX-99.1

Filename: ex_972876.htm · Sequence: 3

HTML Editor

Exhibit 99.1

Consolidated Financial Statements and Report of Independent Certified Public Accountants

SRR Holdings, Inc. and Subsidiaries

December 31, 2025 and 2024

Contents

Page

Report of Independent Certified Public Accountants

Consolidated financial statements

Consolidated balance sheets

Consolidated statements of operations and comprehensive income

Consolidated statements of shareholders’ equity

Consolidated statements of cash flows

Notes to consolidated financial statements

SRR Holdings, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 2025 and 2024

000's except share and per share data

2025

2024

ASSETS

CURRENT ASSETS

Cash and cash equivalents

5,802

1,516

Accounts receivable, net

34,517

34,448

Inventories

29,781

28,483

Prepaid expenses

3,701

2,417

Income taxes receivable

1,983

202

Total current assets

75,784

67,066

Property, plant and equipment, net

20,429

18,317

Right-of-use assets, finance leases, net

118

Right-of-use assets, operating leases, net

21,727

25,772

Investment in joint venture

1,373

1,787

Deferred tax assets

4,847

8,257

Intangible assets, net

58,725

66,743

Goodwill, net

11,685

Total assets

194,688

199,724

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

14,084

14,217

Accrued liabilities

10,636

14,553

Current portion of long-term debt

42,029

6,228

Current portion of finance lease liability

Current portion of operating lease liability

3,785

3,547

Total current liabilities

70,581

38,580

NONCURRENT LIABILITIES

Long-term debt, less current maturities

33,298

77,650

Finance leases, less current maturities

Operating lease liability, less current maturities

19,509

23,599

Total liabilities

123,452

139,893

Commitments and contingencies (Notes 7 and 9)

SHAREHOLDERS' EQUITY

Capital stock:

Common stock, $0.01 par value; 1,000,000 shares authorized, 576,750 issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

57,675

Accumulated other comprehensive loss

(40

)

(68

)

Retained earnings

13,595

2,218

Total shareholders’ equity

71,236

59,831

Total liabilities and shareholders’ equity

194,688

199,724

The accompanying notes are an integral part of these consolidated financial statements

SRR Holdings, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Years ended December 31, 2025 and 2024

000's

2025

2024

Net sales

265,023

271,328

Cost of goods sold

198,532

210,835

Gross profit

66,491

60,493

Selling, general and administrative expenses

43,454

42,818

Operating income

23,037

17,675

Other expense

Interest expense

(7,899

)

(9,502

)

Equity in earnings of joint venture

355

Gain (loss) on disposal of fixed assets

(718

)

Other expense, total

(7,816

)

(9,865

)

Earnings before income taxes

15,221

7,810

Income tax provision (benefit)

3,844

(5,010

)

NET INCOME

11,377

12,820

Foreign currency translation adjustment

)

TOTAL COMPREHENSIVE INCOME

11,405

12,812

The accompanying notes are an integral part of these consolidated financial statements

SRR Holdings, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Years ended December 31, 2025 and 2024

000's except share and per share data

Additional

Accumulated other

Retained earnings

Common Stock

Paid-in

comprehensive

(accumulated

Amount

Capital

loss

deficit)

Total

Balance, December 31, 2023

576,750

57,675

(60

)

(10,602

)

47,019

Net income

12,820

Foreign currency translation adjustment

)

Balance, December 31, 2024

576,750

57,675

(68

)

2,218

59,831

Net income

11,377

Foreign currency translation adjustment

Balance, December 31, 2025

576,750

57,675

(40

)

13,595

71,236

The accompanying notes are an integral part of these consolidated financial statements

SRR Holdings, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2025 and 2024

000's

2025

2024

Cash flows from operating activities:

Net income

11,377

12,820

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

2,949

3,032

Amortization of intangible assets

8,018

8,084

(Gain) loss on disposal of property, plant and equipment

(31

)

718

Change in allowance for doubtful accounts

(61

)

(73

)

Amortization of deferred debt issue costs

481

471

Amortization of operating ROU asset

4,093

3,802

Equity in earnings of joint venture

(52

)

(355

)

Deferred income taxes

3,410

(8,280

)

Changes in assets and liabilities:

Accounts receivable

)

(3,288

)

Income taxes receivable

(1,781

)

(44

)

Inventories

(1,298

)

114

Prepaid expenses

(1,284

)

1,409

Accounts payable

(133

)

415

Accrued liabilities, other current liabilities and other noncurrent liabilities

(7,772

)

(6,560

)

Net cash provided by operating activities

17,908

12,265

Cash flows from investing activities:

Purchases of property, plant and equipment

(5,068

)

(3,851

)

Proceeds from the sale of property, plant and equipment

294

Distributions from joint venture

239

Equity repayment/(investment) in joint venture

227

(414

)

Net cash used in investing activities

(4,564

)

(3,971

)

Cash flows from financing activities:

Payment of debt issuance costs

(22

)

Repayments on term loan

(9,032

)

(7,210

)

Repayment of finance leases

(54

)

(26

)

Borrowings on revolving line of credit

24,916

59,188

Repayments on revolving line of credit

(24,916

)

(59,188

)

Net cash used in financing activities

(9,086

)

(7,258

)

Effect of exchange rate changes on cash, cash equivalents

)

Net change in cash and cash equivalents

4,286

1,028

Cash and cash equivalents, beginning of period

1,516

488

Cash and cash equivalents, end of period

5,802

1,516

Supplemental disclosure - Cash paid for interest

7,435

9,182

Supplemental disclosure - Cash paid for income taxes

2,256

3,312

Supplemental disclosure - Capital asset purchases in accounts payable

The accompanying notes are an integral part of these consolidated financial statements

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

SRR Holdings, Inc. and Subsidiaries (collectively, the “Company”) is a Delaware corporation. Through their wholly owned primary operating subsidiaries, the Company’s operations consist of the following:

•

Royston, LLC (“Royston”) - designing, manufacturing, selling, and installing convenience and grocery store equipment, including check stands, sales and customer service centers, preparation counters, coffee/beverage islands, beverage tower systems, heated food merchandising systems, counters and countertops, shelving and kiosks; and laboratory furniture and fume hoods sold under the Hamilton brand name; and

•

SignResource, LLC (“SignResource”) - designing, manufacturing, selling, installing and servicing outdoor signage, in-store sign solutions and related design elements; and

•

Southern CaseArts (“SCA”) - designing, manufacturing and selling refrigerated and heated display cases, refrigerated island merchandisers, self-service cases, and combination cases.

A summary of the Company’s significant accounting policies follows.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Royston, SignResource and SCA. All intercompany transactions and balances have been eliminated in consolidation.

Revenue Recognition

The Company recognizes revenue using the five-step model prescribed by ASC 606, which requires us to: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, an entity satisfies a performance obligation.

A contract with a customer is identified when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

The Company accepts returns or claims for goods having quality defects or for other reasons such as disagreements or improper delivery. When revenue is recorded, estimates of returns are made and recorded as a reduction of revenue.

Recognition of Material Performance Obligations

Product sales - This performance obligation is satisfied at a point in time when the control of the product passes to the customer. This is generally at a point in time upon shipment for product sales.

Project management services - Since the customer simultaneously receives and consumes the benefits throughout the process, this performance obligation is satisfied over the period of time the service is performed for the customer. There have been no significant contract assets or liabilities recorded as of December 31, 2025 and 2024.

Disaggregation of revenues - Timing of revenue recognition for the years ended December 31, 2025 and 2024 is shown below:

2025

2024

Net sales transferred at a point in time

218,193

226,680

Net sales transferred over time

46,830

44,648

265,023

271,328

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

Fair Value of Financial Instruments

Because of their short maturities, the fair value of cash and cash equivalents, accounts receivable, accounts payable and other accrued liabilities are not materially different than their carrying amounts, as reported. The fair value of debt instruments is estimated to approximate carrying amounts since interest rates on these obligations adjust frequently and approximate the rates at which the Company could obtain similar financing at December 31, 2025 and 2024.

Cash and Cash Equivalents

For purposes of reporting the statements of cash flows, the Company considers all cash accounts and all highly liquid financial instruments purchased with an original maturity of three months or less to be cash and cash equivalents. Cash deposits are held in federally insured institutions. Uninsured domestic held deposits as of December 31, 2025 and 2024 were $5,359 and $1,156, respectively, and China uninsured deposits were $105 and $0, respectively.

Management performs periodic evaluations of the relative credit standing of the financial institution and believes the risk of loss to be remote.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are initially recognized at their sales price. Accounts receivable are considered past due or delinquent when payment is not received within the credit terms extended to the customer. An allowance for estimated credit losses on accounts receivable is provided based on analysis of historical losses and recoveries. Receivables are written off when deemed to be uncollectible. Accounts receivable are net of an allowance for doubtful accounts of $234 and $295 as of December 31, 2025 and 2024, respectively. The Company does not charge interest or late fees on past due accounts and generally does not require collateral.

While the relative significance of any particular customer varies from period to period, the loss of, or significant curtailments of, purchases of goods and services by one or more of the Company’s significant customers at any time would adversely affect revenues and cash flows. The following table summarizes customers generating significant revenues for the Company for the years ended December 31, 2025 and 2024, as well as those representing a significant portion of the accounts receivable balances as of December 31, 2025 and 2024:

2025

2024

Customer

Revenues

Accounts

Receivable

Revenues

Accounts

Receivable

Customer A

Customer B

Customer C

* This customer did not have revenues in excess of 10% of the Company's total revenues in 2025.

** This customer did not have accounts receivable in excess of 10% of the Company's total accounts receivable balance.

Inventories

Inventories are valued at the lower of cost or net realizable value. Cost is determined on the basis of weighted average and first-in, first-out (FIFO) methods. The Company assesses inventory on hand periodically for slow moving, obsolete, or damaged product. The carrying value of the slow moving, obsolete, and damaged products are reduced to their estimated net realizable value.

Deferred Debt Issue Costs

Deferred debt issue costs are being amortized over the term of the underlying debt agreements using the effective interest method. Amortization expense of $481 and $471 for the years ended December 31, 2025 and 2024, respectively, is recognized in interest expense. As of December 31, 2025 and 2024, gross deferred debt issue costs were $3,619 and $3,619, respectively, and accumulated amortization was $3,249 and $2,768, respectively.

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

Estimated amortization expense for deferred debt issue costs for the next three years is as follows:

Amount

2026

318

2027

370

Goodwill

Goodwill represents the excess of the cost of an acquired entity over the net amount assigned to assets acquired, including other identifiable intangible assets, and liabilities assumed in a business combination. Goodwill is not amortized; however, it is subject to review for impairment. No impairment was recognized for the years ended December 31, 2025 and 2024.

Long-Lived Assets

The Company reviews long-lived assets for impairment when events or changes in business conditions indicate that their full carrying value may not be recoverable. Intangible assets with definite lives, comprised primarily of trademarks, proprietary manufacturing processes, and customer relationships, are amortized over their estimated useful lives and evaluated for impairment consistent with other long-lived assets. Recoverability of long-lived assets is assessed by comparison of the carrying amount of the asset to the estimated future net cash flows expected to be generated by the asset. If estimated future net cash flows are less than the carrying amount of the asset, the asset is impaired, and an expense is recorded in an amount required to reduce the carrying amount of the asset to its fair value. There was no impairment recognized for the years ended December 31, 2025 and 2024.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Major additions and improvements are capitalized, while maintenance and repairs that do not improve the utility or extend the lives of the respective assets are expensed. The carrying amounts of assets that are sold or retired, and the related accumulated depreciation, are removed from the accounts in the year of disposal, and any resulting gain or loss is reflected in the statements of operations and comprehensive loss in other expenses.

Leases

Under ASC Topic 842, a lease is a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. The Company primarily leases manufacturing plants, typically with office space, and equipment under lease agreements. The Company determines if an arrangement is a lease at inception. The Company elected an accounting policy by class of underlying asset to combine lease and non-lease components.

For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. Leases expire at various dates from 2026 through 2035, with varying renewal and termination options. The length of lease terms include options to extend or terminate the lease when it is reasonably certain such option will be exercised. The Company has certain leases that contain lease and non-lease components and has elected the practical expedient to account for these components as a single lease component. The Company also made an accounting policy election to forego capitalization of leases with an initial term of 12 months or less.

Right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of lease payments over the lease term as of the commencement date. Because most of the Company’s leases do not provide an explicit or implicit rate of return, the incremental borrowing rate used is based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis. The incremental borrowing rate for a lease is the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar terms.

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

The Company monitors events or changes in circumstances that change the timing or amount of future lease payments which results in the remeasurement of a lease liability, with a corresponding adjustment to the ROU asset. ROU assets for operating and financing leases are periodically reviewed for impairment losses under ASC 360-10, Property, Plant, and Equipment, to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. There was no impairment recognized for the years ended December 31, 2025 and 2024.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes. Under this method, current income taxes are recognized for the estimated income taxes payable for the current period. Deferred income tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and on unutilized tax losses carried forward and measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recognized to the extent that the recoverability of deferred income tax assets is not considered more likely than not.

Management believes that there is appropriate support for the income tax positions taken and to be taken on income tax returns and that income tax receivables and accruals for tax liabilities are adequate for all open years based on an assessment of many factors, including past experience and interpretations of tax laws applied to the facts of each matter. Accordingly, a liability has not been recognized as a result of applying the applicable authoritative standards on accounting for uncertainty in income taxes as of December 31, 2025 and 2024.

Tax years 2022 through 2025 remain open to examination by the tax authorities under the statute of limitations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

The Company’s subsidiary in China prepares their financial statements using the Chinese Yuan as the functional currency. Accordingly, the Company’s consolidated foreign currency translation gains and losses are included in accumulated other comprehensive loss. The consolidated translation loss included in equity amounted to ($28) and $8 for the years ended December 31, 2025 and 2024, respectively. Deferred income taxes are not provided on currency translation adjustments as foreign earnings are considered to be permanently reinvested.

Investment in Joint Venture

The Company is part of a joint venture agreement with Tam-Mex, S.A. de C.V., a manufacturer located in Mexico City, Mexico, to market and distribute products in Mexico. The respective partners each own 50% of the corporate capital of the joint venture company, Royston Tammex S DE RL DE CV. The initial capital contribution to the joint venture by the Company was $31, which includes an initial capital contribution of $10, plus an additional $21 for 50% of the cost of start-up tooling. During 2024, the Company made an additional capital contribution of $414 of which $227 was repaid during 2025. The Company further received a dividend of $239 during 2025. The Company has recognized $52 and $355 in income from the joint venture for the years ended December 31, 2025 and 2024, respectively.

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

NOTE 2 - INVENTORIES

The components of inventories as of December 31, 2025 and 2024 are as follows:

2025

2024

Raw materials

19,412

17,223

Work-in-process

5,200

5,572

Finished goods

8,332

8,800

32,944

31,595

Less: Reserve for slow-moving, obsolete and damaged inventory

(3,163

)

(3,112

)

29,781

28,483

NOTE 3 - PROPERTY, PLANT AND EQUIPMENT, NET

Depreciation is computed for financial reporting purposes using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated using the straight-line method over the remaining life of the applicable lease when the life of the lease is less than the related useful life of the asset.

Property, plant and equipment as of December 31, 2025 and 2024, are as follows:

2025

2024

Useful Lives

Leasehold improvements

6,841

4,674

2 - 15 years

Machinery and equipment

31,170

28,402

2 - 19 years

Trucks and autos

367

401

3 - 5 years

Computer equipment and software

2,673

971

2 - 5 years

Furniture, fixtures and other

587

574

2 - 10 years

Construction in progress

195

2,155

41,833

37,177

Less - Accumulated depreciation

(21,404

)

(18,860

)

20,429

18,317

Depreciation expense was $2,949 and $3,032 for the years ended December 31, 2025 and 2024, respectively.

NOTE 4 - INTANGIBLE ASSETS

The components of intangible assets as of December 31, 2025 and 2024 are as follows:

2025

2024

Useful Lives

Trade names

43,510

15 years

Trade names

1,440

Indefinite

Proprietary manufacturing process

7,680

3 - 12 years

Customer relationships

67,480

3 - 15 years

120,110

Less - Accumulated amortization - Trade Names

(22,044

)

(19,143

)

Less - Accumulated amortization - Proprietary manufacturing process

(5,145

)

(4,537

)

Less - Accumulated amortization - Customer Relationships

(34,196

)

(29,687

)

58,725

66,743

Amortization expense was $8,018 and $8,084 for the years ended December 31, 2025 and 2024.

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

Estimated amortization expense, for the next five years and thereafter, as of December 31, 2025, is as follows:

Amount

2026

7,974

2027

7,974

2028

7,974

2029

7,974

2030

7,467

Thereafter

17,922

57,285

NOTE 5 - GOODWILL

The carrying values of goodwill are reviewed at least annually for possible impairment or whenever events or changes in circumstances indicate that goodwill may be impaired. The Company first assesses qualitative factors in order to determine if goodwill is impaired. If, through qualitative assessment, it is determined that it is more likely than not that the goodwill is not impaired, no further testing is required. If it is determined that it is more likely than not that the goodwill is impaired, or if the Company elects not to first assess qualitative factors, the Company’s impairment testing continues with the estimation of the fair value of the reporting unit using a combination of a market approach and an income (discounted cash flow) approach, at the reporting-unit level. The estimation of the fair value of the reporting unit requires significant management judgment with respect to revenue and expense growth rates, changes in working capital, and the selection and use of an appropriate discount rate. The estimates of the fair value of reporting units are based on the best information available as of the date of the assessment. The use of different assumptions could increase or decrease estimated future discounted operating cash flows and could increase or decrease an impairment charge. Company management uses its judgment in assessing whether assets may have become impaired between annual impairment tests. Indicators such as adverse business conditions, economic factors, and technological or competitive activities may signal that an asset has become impaired.

The Company identified its reporting units in conjunction with its annual goodwill impairment testing. The Company has a total of two reporting units that contain goodwill. The Company relies upon a number of factors, judgments, and estimates when conducting its impairment testing, including, but not limited to, the Company’s operating results, forecasts, anticipated future cash flows, and marketplace data. There are inherent uncertainties related to these factors and the judgments applied in the analysis of goodwill impairment.

The following presents information about the Company's goodwill on the dates or for the periods indicated:

SignResource,

LLC

Royston, LLC

Southern

CaseArts

Total

Balance as at December 31, 2023

Goodwill

26,049

11,183

502

37,734

Goodwill acquired

Accumulated impairment losses

(26,049

)

(26,049

)

Balance as at December 31, 2024

11,183

502

11,685

Balance as at December 31, 2024

Goodwill

26,049

11,183

502

37,734

Goodwill acquired

Accumulated impairment losses

(26,049

)

(26,049

)

Balance as at December 31, 2025

11,183

502

11,685

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

NOTE 6 - LONG-TERM DEBT

Please refer to Note 14 - Subsequent Events, regarding the current status of debt.

Credit Agreement

On March 9, 2018, the Company entered into a credit agreement (the “Credit Agreement”) with a third-party lending institution, which included a Term Loan and a Revolving Credit Facility. The Credit Agreement was amended on July 28, 2022 and again on July 27, 2023 as discussed in more detail below. The Credit Agreement is collateralized by a security interest in substantially all of the present and future assets of the Company.

Term Loan

The Company's initial Term Loan of $50,000 with maturity date of March 9, 2023, was revised on July 27, 2018 with an increase to $60,000 and the maturity date extended to July 27, 2023. On July 27, 2023, the Company refinanced its senior debt, extending the maturity date to July 27, 2026. The revised Term Loan’s principal amount was $60,000, repayable in quarterly installments, with a balloon payment of the remaining principal due at maturity.

The loan bears interest at a rate equal to the Base Rate or Adjusted Term Secured Overnight Financing Rate (SOFR) for such interest period, as stipulated in the executed Credit Agreement and selected by the Company, plus the applicable margin. SOFR is a reference rate that is used by parties in commercial contracts that is outside their direct control, established as an alternative to LIBOR. The applicable margin is based on the Company’s senior leverage ratio as defined by the Credit Agreement. The interest rate for the Term Loan as of December 31, 2025 and 2024 was 6.97% and 8.47%, respectively. Interest on the Term Loan determined using the SOFR Rate is paid monthly or quarterly dependent on the rate periodically selected by the Company.

Revolving Credit Facility

The Credit Agreement includes a revolving credit facility (“Revolver”), initially set at a borrowing limit of $15,000. This limit was raised to $25,000 following an amendment to the agreement on July 27, 2018 and to $30,000 following another amendment to the agreement on July 27, 2023. There were $0 outstanding borrowings as of December 31, 2025 and 2024, respectively. Total available for additional borrowings under the Revolver was $28,655 and $28,730 as of December 31, 2025 and 2024, respectively. The maturity date for the Revolver is July 27, 2026.

All Base Rate Advances of the Revolving Credit and Swing Line shall bear interest at a per annum interest rate equal to the Base Rate plus the Applicable Margin. All Term SOFR Advances of the Revolving Credit bear interest for each Interest Period at a per annum interest rate equal to Adjusted Term SOFR for such Interest Period plus the Applicable Margin and all Quoted Rate Advances of the Swing Line shall bear interest at a per annum interest rate equal to the Quoted Rate plus the Applicable Margin, if any. Interest accruing at the Base Rate shall be computed on the basis of a 360-day year and assessed for the actual number of days elapsed, and in such computation effect shall be given to any change in the interest rate resulting from a change in the Base Rate on the date of such change in the Base Rate. Interest on the Revolver is payable monthly.

Subordinated Note

The Company obtained a Subordinated Note worth $13,000 on March 9, 2018, with an initial maturity date of March 9, 2025. This note was modified on July 27, 2018, increasing the note’s value to $30,000 and extending the maturity date to July 27, 2024. A second amendment to the Subordinated Note was made on July 27, 2023, extending the maturity date further to July 27, 2027, without any other significant alterations to the note. The note accrues interest at an annual rate of 11% on the outstanding principal, payable quarterly in arrears. The balance of the Subordinated Note, including paid-in-kind interest, was $33,439 on December 31, 2025 and 2024.

The Company was in compliance with the debt covenants (as amended) for all reporting periods.

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

Derivatives and Hedging Activities

The Company is party to an interest rate swap agreement effective October 2023 to hedge the interest rate risk associated with the variable interest rates on a portion of its long-term debt. The notional amount is $15,375 and $17,500 at December 31, 2025 and 2024, respectively, and is reduced quarterly through July 2026 to $13,500. The fair value of the swap was not material at December 31, 2025 and 2024.

Letters of credit

As of December 31, 2025 and 2024, respectively, the outstanding letters of credit issued in terms of the credit agreement were $1,345 and $1,270. The beneficiaries are Hartford Fire Insurance Company, increasing from $830 to $905 and Great American Insurance Company $440.

The balances as of December 31, 2025 and 2024 were as follows:

2025

2024

Term loan

42,258

51,290

Subordinated note

33,439

Less - unamortized deferred financing costs related to the term loan

(370

)

(851

)

75,327

83,878

Less - current portion

(42,029

)

(6,228

)

33,298

77,650

Scheduled maturities of the term loan, subordinated note, and revolving facility as of December 31, 2025, are as follows:

Amount

2026

42,258

2027

33,439

75,697

NOTE 7 - LEASES

The following table presents the carrying value of leases and the classification within the consolidated balance sheet:

Classification

2025

2024

Operating lease liabilities

Current

3,785

3,547

Operating lease liabilities

Non-current

19,509

23,599

Right-of-use asset, operating leases

Non-current

21,727

25,772

Finance lease liabilities

Current

Finance lease liabilities

Non-current

Right-of-use asset, finance leases

Non-current

118

The following summarizes the lease costs included within the consolidated statements of operations and comprehensive income. Substantially all of the lease expenses are recorded in cost of goods sold, with an insignificant amount recorded in selling, general and administrative expenses, for the years ended December 31, 2025 and 2024, respectively.

2025

2024

Finance leases

Operating leases

5,643

5,766

Short-term leases

608

522

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

Future minimum payments under noncancelable operating leases, due in each of the next 5 years and thereafter as of December 31, 2025, are as follows:

Year Ending:

2026

5,331

2027

5,319

2028

4,292

2029

2,464

2030

2,068

Thereafter

10,083

Total minimum lease payments

29,557

Less: Imputed interest

(6,263

)

23,294

Future minimum payments under noncancelable finance leases, due in each of the next 5 years and thereafter as of December 31, 2025, are as follows:

Year Ending:

2026

2027

2028

Total minimum lease payments

121

Less: Imputed interest

(10

)

111

2025

2024

The following table presents additional information about lease obligations:

Weighted-average Operating lease term (years)

7.14

7.62

Weighted-average Operating lease discount rate

7.33

7.49

Weighted-average Finance lease term (years)

2.43

2.87

Weighted-average Finance Lease discount rate

7.73

8.08

2025

2024

The following table presents supplemental cash flow information:

Cash paid for amounts included in measurement of lease liabilities

Operating cash flows for operating leases

5,457

5,456

Cash flows for finance leases

Right-of-use assets obtained in exchange for lease obligations (non-cash)

Operating leases

6,916

Finance leases

NOTE 8 - EMPLOYEE BENEFIT PLANS

The Company has 401(k) retirement savings plans covering substantially all domestic full-time employees. These Plans were merged into one plan on August 1, 2023. The Company makes contributions to these plans based on employee contributions. Related expenses were $1,125 and $938 for the years ended December 31, 2025 and 2024, respectively.

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

NOTE 9 - LITIGATION

The Company is involved in various legal proceedings encountered in the normal course of business. In the opinion of management, the resolution of these matters will not have a material adverse effect on the Company’s financial position.

NOTE 10 - INSURANCE RESERVES

The Company has insurance policies for medical and workers’ compensation benefits that contain significant deductibles. The cost of general medical and workers’ compensation claims, up to the deductibles, is accrued annually based on actual claims reported plus estimated amounts for claims not reported. These estimates are based on historical information, along with certain assumptions about future events, and are subject to change as additional information becomes available. As of December 31, 2025 and 2024, the Company accrued $1,640 and $1,875, respectively, for general medical and workers’ compensation claims within accrued liabilities in the consolidated balance sheets.

NOTE 11 - INCOME TAXES

The major components of income tax provision are as follows:

2025

2024

Current income tax provision:

Federal

2,869

State

415

401

Deferred income tax (benefit) provision:

Federal

3,082

(7,201

)

State

328

(1,079

)

3,844

(5,010

)

Reconcilition of effective tax rate:

Income tax provision at statutory rate

21.0

Increase (decrease) in income tax provision due to:

State and local taxes, net

4.3

-10.0

Permanent differences

-0.1

0.8

Change in valuation allowance

0.0

-76.1

Other

0.0

0.2

Total provision for income tax

25.2

-64.1

Total income tax (payable) receivable:

Federal

1,720

(209

)

State

263

411

1,983

202

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

Deferred income tax assets and liabilities result from differences between the carrying amount and the tax bases of the following:

2025

2024

Deferred tax assets:

Inventories

1,041

901

Interest carryforward

3,060

3,740

Accrued expenses

619

265

Net operating losses

1,231

118

Intangibles

2,828

3,541

Lease liabilities

5,632

6,591

Capitalized research expenses

197

2,930

Other deferred tax assets

145

188

14,753

18,274

Deferred tax liabilities:

Property and equipment

(3,862

)

(3,064

)

Right-of-use asset

(5,255

)

(6,257

)

Other deferred tax liabilities

(789

)

(696

)

(9,906

)

(10,017

)

Net deferred tax assets

4,847

8,257

The Company recognizes the amount of taxes payable or refundable for the current year and recognizes deferred tax liabilities and assets for the expected future tax consequences of events and transactions that have been recognized in the Company’s financial statements or tax returns.

The Company's effective tax rate differs from the federal statutory rate primarily due to state income taxes.

The Company files tax returns in each jurisdiction where they are registered to do business. In the United States and many of the state jurisdictions, and in the foreign country where the Company files tax returns, a statute of limitations period exists. After a statute period expires, the tax authorities may no longer assess additional income tax for the expired period. In addition, the Company is no longer eligible to file claims for refund for any tax that it may have overpaid. Federal pre-tax NOL carryforwards at December 31, 2025 and December 31, 2024 were approximately $5.6 million and $0 for federal, respectively, and carryforward indefinitely. State pre-tax NOL carryforwards at December 31, 2025 and December 31, 2024 were approximately $1.1 million and $2.2 million and will begin expiring at various amounts and dates beginning in 2041.

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. In assessing the recoverability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the period in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based on the cumulative historical income over the past three years and projected future income, management believes it is more likely than not that the Company will be able to realize the benefits of certain deferred income tax assets as of December 31, 2025.

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law and includes significant changes to U.S. federal income tax law, including the permanent extension of certain provisions originally enacted under the Tax Cuts and Jobs Act, the restoration or expansion of favorable tax treatment for certain business deductions, and modifications to the limitation on the deductibility of business interest expense. The Company evaluated the provisions of OBBBA applicable to its operations, including, among other items, changes related to the limitation on business interest expense, accelerated depreciation for qualified property, and the timing of deductions for domestic research and experimentation expenditures. Based on the Company’s evaluation, the enactment of the OBBBA did not have a material impact on the Company’s net income tax provision for the year ended December 31, 2025.

NOTE 12 - STOCK OPTION PLAN

The Company has a stock-based incentive plan for directors and key employees, which is administered by the Company’s Board of Directors. Stock options vest upon a sale of the Company or upon an initial public offering of the Company in which the holders of shares of common stock of the Company achieve a minimum internal rate of return as determined by the Board of Directors and set forth in the stock option agreement of each holder. As of December 31, 2025 and 2024, no options have vested, and no related compensation expense has been recorded.

Stock options terminate 10 years after the effective date of grant. Outstanding stock options as of December 31, 2025 are as follows:

Number of

Options

Weighted-

Average Exercise

Price

Remaining

Contractual Term

Balance at December 31, 2023

43,526

Options granted

3,000

100

8.7 years

Options forfeited/reduced

(2,000

)

100

Balance at December 31, 2024

44,526

Options granted

Options forfeited/reduced

Balance at December 31, 2025

44,526

Vested and unvested expected to vest at December 31, 2025

Exercisable at December 31, 2025

NOTE 13 - RELATED-PARTY TRANSACTIONS

As of December 31, 2025 and 2024, the Company was party to a management agreement with its majority shareholder. Under the agreement, the majority shareholder performs certain services for the Company including, but not limited to, consultation on corporate strategy, budgeting of future corporate investments, acquisition and divestiture strategies, and debt and equity financings. Management fees expensed and paid during the years ended December 31, 2025 and 2024, were $769 and $753, respectively. Management fees payable were $350 at December 31, 2025 and 2024, respectively. The Company also receives management fees for similar services provided to a joint venture, Royston Tammex S DE RL DE CV. Management fees received during the years ended December 31, 2025 and 2024, were $255 and $641, respectively.

SRR Holdings, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

000's except share and per share data

NOTE 14 - SUBSEQUENT EVENTS

On March 24, 2026, subsequent to the balance sheet date, LSI Industries Inc. acquired the Company in a transaction accounted for as a business combination under ASC 805, Business Combinations.

In connection with the closing of the merger, all outstanding indebtedness of the Company was repaid in full in accordance with the terms of the Merger Agreement.

In accordance with ASC 855‑10‑25, the merger represents a nonrecognized subsequent event, as the conditions giving rise to the transaction did not exist as of the balance sheet date. Accordingly, the accompanying financial statements have not been adjusted to reflect the effects of the merger or the related extinguishment of debt.

The Company has evaluated subsequent events through May 6, 2026, the date these financial statements were available to be issued.

EX-99.2 — EXHIBIT 99.2

EX-99.2

Filename: ex_972897.htm · Sequence: 4

ex_972897.htm

Exhibit 99.2

UNAUDITED PROFORMA FINANCIAL INFORMATION

On February 20, 2026, LSI Industries Inc. (“LSI” or the “Company”) entered into an agreement and a plan of merger to acquire SRR Holdings, Inc. (Royston) which was completed on March 24, 2026. Royston was acquired for $325.0 million; 320.0 million in cash and $5.0 million in the Company’s common stock, subject to a working capital adjustment. The Company prefunded $13.2 million as an estimate of the cash and working capital acquired which brings the total purchase consideration to $338.2 million. The Company incurred acquisition-related costs totaling $6.5 million which are included in the selling and administrative expense line of the consolidated statements of operations. The Company funded the initial purchase consideration totaling $338.2 million with a combination of cash on hand, the $150 million revolving line of credit, the $200 million five-year term loan, and the $98.1 million of net proceeds from the Company’s February 26, 2026, public common stock offering.

The following unaudited proforma financial information has been prepared in accordance with Article 11 of Regulation S-X and gives effect to the acquisition by LSI using the acquisition method of accounting with the assumptions and adjustments described in the accompanying notes to the unaudited pro forma financial information.

The Unaudited Pro Forma Condensed Combined Statement of Operations are presented to give effect to the merger as if it occurred on July 1, 2024. The proforma financial information should be read in conjunction with the following:

●

LSI’s historical consolidated financial statements that were included in its Quarterly Report on Form 10-Q for the period ended March 31, 2026, and Annual Report on Form 10-K for the year ended June 30, 2025.

●

Royston’s historical financial statements are included in this Current Report on Form 8-K. The historical statements of Royston have been adjusted to conform to the Company’s financial statement presentation.

The unaudited condensed combined pro forma statements of operations are presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have actually been reported had the acquisition occurred on July 1, 2024, nor is it necessarily indicative of the future results of the operations. The unaudited proforma condensed combined statements of operations include adjustments to reflect the allocation of the purchase price to acquired assets and assumed liabilities of Royston and related financing for this transactions.

The unaudited proforma condensed combined financial information is based on the assumptions and proforma adjustments that are described in the accompanying notes. The proforma adjustments are preliminary, subject to further revision as additional information becomes available and additional analyses are performed. Adjustments have been made solely for the purpose of providing unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial information does not give effect to the potential impact of current financial conditions, regulatory matters, operating efficiencies or other savings or expenses that may be associated with the integration of the two companies. The unaudited pro forma condensed combined financial information is not necessarily indicative of the results of operations in the future periods or the result that actually would have been realized had LSI and Royston been a combined organization during the specified periods. The actual results reported in periods following the Merger may differ significantly from those reflected in the unaudited condensed combined pro forma financial information presented herein for a number of reasons, including, but not limited to, differences in the assumptions used to prepare this unaudited pro forma condensed combined financial information.

LSI Industries Inc.

Unaudited Proforma Condensed Combined Statement of Operations

Nine Months Ended March 31, 2026

(Unaudited)

(amounts in thousands except per share data)

Historical

Pro Forma

LSI

Royston

Adjustments

Total

Sales

454,776

198,479

653,255

Cost of goods sold

338,826

149,125

840

488,791

Gross profit (loss)

115,950

49,354

(840

)

164,464

Selling and administrative costs

92,037

32,036

(1,044

)

D, B

123,029

Operating income

23,913

17,318

204

41,435

Interest expense

1,794

5,806

4,125

11,725

Other (income)/expense

671

(110

)

(567

)

Income (loss) before taxes

21,448

11,622

(3,354

)

29,716

Income tax expense

5,745

2,969

(704

)

8,010

Net income (loss)

15,703

8,653

(2,650

)

21,706

Earnings per share

Basic

0.50

0.59

Diluted

0.48

0.57

Weighted average common shares outstanding

Basic

31,531

5,517

37,048

Diluted

32,387

5,517

37,904

LSI Industries Inc.

Unaudited Proforma Condensed Combined Statement of Operations

Twelve Months Ended June 30, 2025

(Unaudited)

(amounts in thousands except per share data)

Historical

Pro Forma

LSI

Royston

Adjustments

Total

Sales

573,377

269,476

842,853

Cost of goods sold

431,597

205,958

1,120

638,675

Gross profit (loss)

141,780

63,518

(1,120

)

204,178

Selling and administrative costs

106,011

43,902

5,869

D, B

155,782

Operating income (loss)

35,769

19,616

(6,989

)

48,396

Interest expense

3,129

9,057

3,420

15,606

Other (income)/expense

(398

)

427

(756

)

(727

)

Income (loss) before taxes

33,038

10,132

(9,653

)

33,517

Income tax expense (benefit)

8,655

(4,658

)

(2,027

)

1,970

Net income (loss)

24,383

14,790

(7,626

)

31,547

Earnings per share

Basic

0.82

0.89

Diluted

0.79

0.87

Weighted average common shares outstanding

Basic

29,903

5,517

35,420

Diluted

30,832

5,517

36,349

NOTE 1 – RECONILIATION OF SSR HOLDING, INC. STATEMENT OF OPERATIONS

To reconcile the consolidated statements of operations for Royston filed in the Form 8-K report for the year ended December 31, 2024, and the nine months ended September 30, 2025, the following tables provide the quarterly financial information supporting the combined statement operations used in the proforma.

LSI Industries Inc.

Unaudited Proforma Condensed Combined Statement of Operations

Royston Twelve Months Ended March 31, 2025

X + Y - Z

(Unaudited)

12 Mos 12.31.24

3 Mos 3.31.25

3 Mos 3.31.24

12 Mos 3.31.25

(amounts in thousands except per share data

Historical

Royston

Sales

271,328

66,544

(68,396

)

269,476

Cost of Goods Sold

210,835

49,407

(54,284

)

205,958

Gross Profit

60,493

17,137

(14,112

)

63,518

Selling and Administrative Costs

42,818

11,418

(10,334

)

43,902

Operating Income

17,675

5,719

(3,778

)

19,616

Interest Expense

9,502

2,093

(2,538

)

9,057

Other (Income)/Expense

363

427

Income Before Taxes

7,810

3,599

(1,277

)

10,132

Income Tax Expense

(5,010

)

875

(523

)

(4,658

)

Net Income

12,820

2,724

(754

)

14,790

LSI Industries Inc.

Unaudited Proforma Condensed Combined Statement of Operations

Royston Nine Months Ended December 31, 2025

X - Y

(Unaudited)

12 Mos 12.31.25

3 Mos 3.31.25

9 Mos 12.31.25

(amounts in thousands except per share data

Historical

Royston

Sales

265,023

(66,544

)

198,479

Cost of Goods Sold

198,532

(49,407

)

149,125

Gross Profit

66,491

(17,137

)

49,354

Selling and Administrative Costs

43,454

(11,418

)

32,036

Operating Income

23,037

(5,719

)

17,318

Interest Expense

7,899

(2,093

)

5,806

Other (Income)/Expense

(83

)

(27

)

(110

)

Income Before Taxes

15,221

(3,599

)

11,622

Income Tax Expense

3,844

(875

)

2,969

Net Income

11,377

(2,724

)

8,653

Basis of Presentation

The unaudited pro forma condensed combined financial statements are based upon the historical consolidated financial statements of LSI Industries Inc. (LSI or Company) which were included in its Quarterly Report on Form 10-Q for the nine months ended March 31, 2026, and Annual Report on Form 10-K for the year ended June 30, 2025, and Royston financial statements for the comparable periods are included in this Current Report on Form 8K. The unaudited pro forma condensed combined statements of operations for the nine months ended March 31, 2026, and the year end June 30, 2025, combine the historical statements of operations of LSI and Royston, adjusted to reflect the pro forma effect as if the acquisition of Royston occurred on July 1, 2024 (the first day of the LSI’s 2025 fiscal year).

The unaudited proforma condensed combined financial information is based on management’s current best estimate of the assumptions and adjustments that are described in the accompanying notes. Accordingly, the pro forma adjustments are preliminary, subject to further revision as additional information becomes available and is analyzed and has been made solely for the purpose of providing unaudited pro forma condensed combined financial information. Differences between these preliminary accounting conclusions and estimates and the final accounting conclusions and amounts may occur as a result and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial information and the combined company’s future results of operations.

Pro Forma Adjustments

A – Estimated Purchase consideration for the acquisition of Royston Group (Royston) for $325 million which includes $320 million of cash and $5 million equity with the difference coming from the Company’s credit facility and through a private sale of equity. The Company raised $98.1 million net of discount with the remaining $240 million though the Company’s credit facility. Assume an average stock price of $18.50 per share through the private equity offering (totaling 5,290,000 shares) and $22.07 per share for the $5 million in shares (totaling 226,552 shares) which are part of the purchase consideration. The value of these shares was determined at the close of business on 2/19/2026.

B – Added acquisition transaction costs of $7.0 million for 12 months ended June 30, 2025. Removed $1.1 million of acquisition related transactions costs for the 9 months ended March 31, 2026, that were included in Royston’s historical results. LSI’s reported results for the 9 months ended March 31, 2026, includes acquisition costs of $7.0 million.

C – The increase in depreciation expense related to the fair value estimate of Royston’s fixed assets. Refer to the estimated fair values below. Over a 9-month period, depreciation expense will increase $840K and over a 12-month period depreciation expense will increase $1,120K.

Machinery and equipment - 10 year life

23,357

Furniture and fixture - 7 year life

642

Leasehold improvements - 7 year life

5,889

Vehicles- 5 year life

828

Computer - 5 year life

1,883

CIP- Undefined life

450

Total

33,049

D – To eliminate the intangible asset amortization expense recorded prior to acquisition and to record the amortization expense of Royston’s revalued intangible assets. Intangible assets will consist of the Royston Trade Name (indefinite life), Technology assets (7-year life), and a Customer Relation asset (20-year life). Amortization expense will be $6,707K over a 9-month period and $8,943K over a 12-month period.

Tradename - Indefinite life

23,780

Technology Asset - 7 year life

12,160

Customer Relationship - 20 year life

144,120

Total

180,060

E – To remove private equity distribution fees from historical Royston totaling $567K for a 9-month period and $756K for a 12-month period that will not carryover to LSI.

F – To record the elimination of historical Royston interest expense of $12.2 million annually and $7.6 million over 9 months, and also record interest expense on borrowed funds to purchase Royston totaling $240 million plus existing revolver balance of $28M multiplied by the annual borrowing rate of 6.0% which equates to $15.6 million annually and $11.7 million over 9 months.

G – To apply a 21% statutory tax rate to the net effect of all proforma adjustments.

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Document And Entity Information

Mar. 24, 2026

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Mar. 24, 2026

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