Greetings, and welcome to LSI Industries' Fiscal Fourth Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce James Galeese, Chief Financial Officer. Thank you. You may begin. Good morning, everyone, and thank you for joining. We issued a press release before the market opened this morning, detailing our fiscal 2023 fourth quarter and full-year results. In conjunction with this release, we also posted a conference call presentation in the investor relations portion of our corporate website at www.lsicorp.com. Information contained in this presentation will be referenced throughout today's conference call. Included are certain non-GAAP measures for improved transparency of our operating results. A complete reconciliation of GAAP and non-GAAP results is contained in our press release and Form 10-K. Please note that management's commentary and responses to questions on today's conference call may include forward-looking statements about our business outlook. Such statements involve risks and opportunities, and actual results could differ materially. I refer you to our safe harbor statement, which appears in this morning's press release, as well as our most recent Form 10-K and 10-Q. Today's call will begin with remarks summarizing our fiscal fourth quarter and full-year results. At the conclusion of these prepared remarks, we will open the line for questions. With that, I'll turn the call over to LSI President and Chief Executive Officer, James Clark. Thank you, James. Good morning, all, and thank you for joining us today. As you've likely seen by now, we had a solid fourth quarter and a very strong close for the year. This year's performance, along with the strong performance over the last few years, is thanks to the work and effort of 1,600 or so team members at LSI. It's also thanks to the efforts and confidence of our agents, our partners, and the vast network and number of customers we serve. Our customers, agents, and partners trust LSI to be their partner of choice, to deliver high-quality solutions that help their business grow. I could not be prouder of the contributions of so many in helping us achieve a real milestone in the history and journey of LSI. Just about four years ago, we developed and published a goal of being a $500 million company with double-digit EBITDA performance in 2025. I'm happy to say that we have wholly met that goal as we finished the year just shy of $500 million and just over $52 million of EBITDA, we did that a full two years earlier than our plan. We finished this year in a very strong financial position as we generated over $46 million of free cash flow for the year and reduced our net debt to about $35 million. It's quite an accomplishment for a company that was struggling to hit $300 million in sales and $15 million of EBITDA just four years ago. As many of you know, we published an updated plan back in March, which we call our Fast Forward plan. It outlines our roadmap to get to $800 million in sales and nearly $100 million in EBITDA performance in 2028. The plan is an ambitious as our original plan to hit $500 million in sales, but this time we'll be doing it with the advantage of a seasoned team of folks on our management team, right through our sales team, manufacturing floor, and operations team. Much like our original plan, it calls for a balance of growth through organic activities and M&A. It continues to focus on our strategic initiative of zeroing in on high-potential vertical markets such as grocery, C-store, warehousing and manufacturing, automotive, and sports courts, among others. It allows us to deliver a variety of goods and services to those markets. Those goods and services are differentiated. They are designed and developed to serve those vertical markets in a way that commodity and catalog offerings cannot. They provide value to our customers that help them run their businesses. Over the past five years, we have regularly been introducing more than 20 new products each and every year. Last year, our spotlight product was the LSI REDiMount. The REDiMount allows our customers and our installers the opportunity to install our award-winning canopy lighting solutions more efficiently and with less time and cost to them. In addition, it allows for vastly simplified installation, service, and upgrade process. It creates a long-term relationship with our customers in which everyone benefits. This year, in 2024, we will continue that pace of development innovation with the introduction of more than 20 new products again, and with our flagship solution being a next-generation, environmentally friendly, refrigerated display solution that uses no ozone-depleting substances. This product will move away from man-made refrigerateds into an organic gas refrigerated that has a zero ozone-depleting footprint and virtually no global warming potential. We are in the process now of adding an additional manufacturing facility in Maine that will house this R290 solution, with the goal of taking orders in Q2 and delivering first-generation products in Q3 of 2024. Our digital menu board division continues to gain interest in orders from an ever-expanding base of customers. Three years back, we were fortunate to be awarded a $100 million project to install outdoor digital menu boards across the country for one of the world's largest quick-serve burger chains. We have wholly completed that project with a very satisfied customer. We've made a significant name for ourselves as a quality supplier and partner that can manage not only the design and manufacturing of this solution, but also the project management, installation, and post-sales support. With that, we have a small but growing revenue, recurring revenue associated with this ongoing remote content management and services. We continue to differentiate ourselves as a company, as a full solutions provider. With an oversized award like this project, there has to be a lot of work done to fill the gap once things are complete. I'm happy to say our sales and design team have done an outstanding job of doing just that. By infilling ongoing activities of that $100 million order with a variety of customers, from burgers to chicken, Chinese food to tacos. We're very excited to continue to expand this solution, and we think in the long run, digital displays will find a place in other areas of our vertical marketing strategy. Our lighting division continues to innovate and expand its products and services offering. LSI has always been known for its industry-leading outdoor lighting and advanced control solutions, but it's also always had a very robust indoor product lighting offering. Our ability to deliver these solutions to the vertical markets we serve, has continued to pay dividends for LSI, our customers, and our investors. We believe LSI has a lot of runway left. We have a team of folks that are ready to continue our growth in lighting, digital and print displays, refrigerated solutions, and our expanding base of project management and service solutions. We have a well-thought-out strategy and a plan to grow that is adaptable to changing market conditions and competitive forces. We feel confident in our ability to manage and seek out continued productivity and cost opportunities, while managing price, margin, and cash flow. With that, I'll turn the call over to James Galeese, who will provide additional details on our fourth quarter and full-year performance. Thank you, Jim. A solid fourth quarter capped a successful year for LSI. In summary, fourth quarter operating income increased 43% year-over-year on sales of $124 million. The business generated $14 million adjusted EBITDA in Q4, 33% above last year, and continued to realize margin expansion with adjusted EBITDA margin of 11.4%, 310 basis points above last year. Fourth quarter reported earnings per share were $0.28, with adjusted EPS at $0.30. This compares to $0.18 and $0.21, respectively, for the prior year quarter. Improved profitability, combined with a lower fourth quarter effective tax rate, drove the increase. The lower tax rate contributed $0.04 to reported EPS and $0.03 to adjusted EPS. For the full fiscal year, sales increased to $497 million, representing 9% year-over-year growth. Adjusted net income increased 61% to $29 million. Adjusted earnings per share increased 55% to $0.99 per share. This represents the company's highest full-year EPS in over 20 years. full-year adjusted EBITDA increased to $52 million, with the adjusted EBITDA margin rate expanding 270 basis points to 10.4%, and all quarters showing considerable improvement over prior year. Our significantly improved earnings and working capital efficiency generated full-year free cash flow of $46 million. Cash generation was positive throughout the year, culminating with fourth quarter cash flow of approximately $16 million. Strong cash flow was applied to reduce the level of outstanding debt. We reduced debt by over 50% in the last 12 months to $35 million, lowering our ratio of net debt to trailing twelve-month adjusted EBITDA to 0.7x. Lower debt was a capital allocation priority in fiscal 2023 and provides the balance sheet flexibility to pursue both organic and inorganic growth initiatives, as outlined in our updated five-year strategic plan. A regular cash dividend of $0.05 per share was declared payable September 5th, for shareholders of record on August 28th. Now, a few comments on segment performance. Lighting growth continued in Q4, with sales increasing 5%, representing the 9th consecutive quarter of growth compared to the prior year period. Growth reflects ongoing healthy activity in our key vertical markets, particularly parking applications, warehousing, and automotive. For fiscal year 2023, lighting sales increased 17%, with double-digit growth achieved in both indoor and outdoor applications. Our assessment is that we are taking share and outperforming the market, a combination of our expanding position in key markets and the overall vitality of these priority verticals.... The lighting gross margin rate improved to 33% in the fourth quarter. The full-year margin rate improved to 32%, 190 basis points above last year. We enter fiscal 2024 with a project quotation level steady at a high level. Q4 bookings were favorable, with a book-to-bill ratio above 1. We are seeing some slowing in large projects. Small and medium project activity remains healthy. We continue to experience lengthening quote to order conversion periods. These are holding steady. These are committed projects. Because of financing and budgetary purposes, final specs and product requirements are constantly being modified, delaying order release. Pricing remains steady. Material input costs vary by commodity. Overall, input costs remain aligned with pricing. As expected, fourth quarter display solution sales declined versus the prior year, as the prior year quarter was a peak period for our large digital menu board order. full-year display solution sales increased 1%, but sales increased 13% when excluding the digital menu board order, reflecting the ongoing strength and investment in the grocery, refueling C-store, and QSR market verticals. full-year display Operating Income increased 43% and realized significant margin rate expansion, with the Gross Margin rate improving 470 basis points and Operating Income improving to 11.6% of sales. The mix of higher value applications, along with improved program pricing, drove the rate expansion. We enter fiscal 2024 with very active customer inquiry levels for branding and imaging initiatives, particularly in the refueling C-store and grocery space. In addition, we are experiencing very high interest in our new refrigerated display case product, scheduled for launch in Q3 of fiscal 2024. We will begin taking orders late in fiscal Q2 for shipment beginning in fiscal Q3. In summary, it was a solid quarter and fiscal year for LSI. We enter fiscal 2024 well positioned to build on this success. The market is steady at a healthy level and will support our commercial and efforts with continued strong operational execution and effective margin management. I will now return the call back to the moderator. Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you'd like to ask your question, you may press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Aaron Spychalla with Craig-Hallum. Please proceed with your question. Yeah, good morning, Jim and Jim. Thanks for taking the questions. you know, first for me, you know, I saw in the deck, you kind of talked about the second half of FY 2024 being stronger than the first half. Can you just talk about some of the factors that go into that? just more broadly on the markets that you're in, seem to be a little more insulated from, from the macro and, you know, have had good CapEx trends. Can you just talk a little bit about, you know, paybacks or return on investment or just other factors that, that customers are looking at, when evaluating lighting and display versus other projects? Good morning, Aaron. Thanks, thanks for the question, and thanks for getting on the call. Yeah, I mean, I, we know we're not shielded from anything anymore or less than anybody else, but as we've talked before, kind of in this forum and others, you know, when we selected our strategies really based around vertical markets, and we wanna be, you know, more to fewer as opposed to something to everyone. Within those vertical markets we picked, we look for how we can add value to the, our customers' businesses and help them improve their overall function as a business. Then, also, you know, how they would respond to any kind of reci- you know, kind of, external macro pressures and things like that. The markets that we've picked are generally aligned with that. They're not immune, but they're more resistant, if you will. You know, as you look at across our vertical markets like grocery or, or C-store or, you know, interestingly enough, automotive has just been on fire. We just thought that these are markets that will kind of move through the cycles of this in a, in a longer term, and but the customers will still invest and keep to their plans. That's proven out to, to be pretty solid strategy over the last, you know, five years or so. In terms of strength in the second half, you know, for us, I just mentioned it a few minutes ago, you know, we're gonna be introducing some newer products. You know, probably at the top of mind this year is the introduction of our R290 refrigerated solution. You know, it's a zero ozone, zero, you know, global warming contributor, and it, it's, you know, it's a product we think is gonna have a lot of demand, and we have a lot of opportunity with it. We see that as, you know, as being a real growth driver in the second half. Then lastly, I would say to that, you're aware of the seasonality we have, you know, where these numbers right now. Q4 participation, we'll have the Q1 participation, you know, the winter months are, from a seasonality perspective, are usually a little bit lighter on us. It's got nothing to do with demand or interest or lost deals or anything. It's just the reality of doing exterior installations and such, you know, during winter months. Aaron, Jim Galeese here. The only thing I would add to that, Jim covered it very thoroughly, is, you know, we mentioned about the lengthening quote to order conversion, you know, rate. You know, that started sometime in, you know, in Q3 and is, is continuing, you know, so that, that'll affect us from out the door more in the first half. That'll be the norm and stabilized and hopefully condensed a little bit, you know, by the second half of, you know, the second half of the year. That'd be more in a normal operating environment. Right. Right, that makes sense. Just second on margins, you know, great, great job, obviously, to, to date. You talked about, you know, some of the runway that's left there. Can you just provide a little bit more detail on, you know, some of the key levers, and, and just how margins might, you know, progress as, as we think about FY 2024? Well, you, you know that we're pretty good about planning and, you know, I think our Fast Forward planning up on the web is a good indication of how we like to set our goals and objectives. We have a number of things we feel we can still do operationally from a procurement standpoint, from a manufacturing standpoint. A lot of those things are gated by the ongoing kind of variations. You know, we've. Input commodity pricing, some things are moving down, some things are moving up. Labor is still a bit unsteady. I mean, we've been doing very good with it, and, and we feel very good, but it's still just a bit unsteady, and it's not really within our company as much as externally. Some of the programs that we want to initiate, implement, and continue to refine and implement are. It's the timing's just not right, because, you know, you're, you're trying to do things while it's raining outside. It's just better to, you know, for some of those things to wait when things become more stable, but we have the plans to implement that. When I say that we have more runway, we have the plans to do those things, and I think you can see from our margin performance and stuff, we're incrementally implementing those. If the environment was a little bit more stable, and again, I'm not just talking about internal, I'm talking about external partners and things like that, installation teams, permitting issues, things like that. We think there's another couple of turns of the wheel we can implement that just allow us to become more efficient, and they'll be reflected in margin. Aaron, one of the things we're, you know, very encouraged about our margin expansion, it has been, it's been very balanced, not driven by one particular element. You know, volume, certainly over the last year, has been a, been a contributor. You know, higher quality, you know, application, so higher quality mix, certainly playing into that. Our ability to, you, to really. We spend a lot of time on this, getting pricing right, you know, by, by program, representing, you know, the value of the solutions we're providing and the customer recognizing that, you know, so we spend a lot of time on, on pricing. Then, you know, we, we always keeping a sharp eye on, on costs, our material input costs, our design savings, you know, et cetera. All those serve to, contributing to the, you know, the margin expansion we've driven now over the last couple of years. Right. Right, thanks for that. Then just maybe last, you know, really nice free cash flow generation and, and continuing to pay down the debt, over the last year and a half. You know, can you just maybe give an update on, on kind of capital allocation priorities? Saw the mention of, of organic and, and inorganic, but just maybe some more color there. Yeah, I don't think you're gonna see any material changes in, you know, our capital models that we've used in the past. You know, I think you have to give some way for inflation and, you know, the general, you know, from a total dollar standpoint, just the, the inflated cost of things that are gonna be with us, you know, for some time. Beyond that, there, you know, we don't see any radical changes to our past performance. Our priority items, you know, we see in the short, intermediate term remaining the same, correct? Okay. Then anything, you know, I mean, on anything new on, on the M&A outlook as we kind of, you know, think about that opportunity with, with kind of the balance sheet much improved? Yeah, I mean, you know, it, it's always a, a tricky subject to talk about. You know, I'll just, you know, I'll say what I've said in the past: We always have our oars in the water looking for opportunities. We think that, we think the environment's a bit better right now. I mean, I know there's a, a lot of thoughts on this, but we think the environment's a bit better right now. You know, I think there, there's a lot of owners faced with, you know, or smaller businesses are faced with ongoing struggles or stabilization of their business and, and how much they want to continue to put in. You know, I think that the, the change in cost of capital and such has, you know, slowed down some of these stratospheric multiples, and I, I like the tone of the conversations a lot better today than I did a year ago, and our activity level is strong. As you know, you know, you've been following us for a while, you know, we're very disciplined. We're disciplined buyers, and the value has got to be there, you know, not just from a financial perspective, but how it fits into our strategy, and then how it fits into our culture. Right. Right, and appreciate that. That's, that's it for me. Thanks for taking the questions. I'll turn it over. Okay, thanks, Aaron. Our next question comes from the line of George Gianarikas with Canaccord Genuity. Please proceed with your question. Hi, good morning, and thanks for taking my question, and thanks for coming to our conference last week. Yeah. Good morning, George, and thank you. It was great to see you, and it was a great conference, too. We certainly had a full dance card through the whole thing, and I, you know, I appreciate the invite. That's great to hear. So maybe to start, just a couple questions on the macroeconomic environment. You expressed some consternation last quarter about some just small signs you were seeing in the marketplace that maybe things weren't exactly going swimmingly. What has changed about the character of, of the issue that you've seen, that you expressed, some issues about last quarter and, and also addressed this quarter as well? Are there. You expressed some issues with close rates, but is there a different, is the character of the customer that you're seeing issues with changing, or is it sort of the same that you saw last quarter? Yeah, it first of all, it's. I'll just sum it up in one word, which is timing. It's not, it's not interest, it's not quote activity, it's not project activity. All of those things remain on, you know, on the same pace that we've had, you know, for the, you know, last couple years, if you will. In general, by the way, that activity rate has increased kind of quarter-over-quarter. What we're seeing is a lengthening in the, the process, if you will, the initial request for a quote, the sit-down and discussion, and then, if you will, the, the, the final decision, that lengthening between the, the final quote and agreement on the project and the actual execution of the project, has been lengthening. It's stable right now, but at an extended kind of arm, if you will. We just noted. I just brought it up in the sense that from a timing perspective, things that we saw that might have closed in, you know, that we were planning on closing, you know, June 20th, are now closing, you know, July 18th. Things that we thought traditionally were gonna close on, you know, or through our systems, indicated a close on May 12th, you know, didn't happen until June 26th. We're not losing any projects. We're just seeing that once we get to that point where we're like, "Okay, we're ready to move forward," we've noticed just in some of our customer base, that time between, "Okay, we're done. Let me get you the purchase order," has just lengthened a bit. I think there's lots of factors for it. I think there's lots of reasons for it. Most of them are external. You know, they could be in new construction. There, there are things like, you know, final funding releases and things like that. As you know, all the banks have tightened up, and when you're in a project like that, it's just taking a couple more checks and signatures, you know, for developers or such to get, you know, to keep the timing going. When we're talking about remodels and things like that, we're, you know, we're looking at, labor issues, either external, subcontractors or even in some cases, internally, just the number of people to get all the, the paperwork and the processes done. You know, I just think it's fair. We've always been very transparent, and we just wanted to kind of mention it. I do not want to overplay it. You know, George, the, you know, the secular trends in some of our key verticals remain, you know, very sound. If you look at refueling, C-store, grocery, you know, QSR, the level of inquiry we continue to receive with respect to branding, refresh, strengthening image, remains extremely, you know, healthy. That's driven by two things. They're continuing to look for more, you know, energy-efficient solutions with consideration of environmental factors. That's where our R-290 plays into, you know, but also the customer experience, you know, as things are, their competitive environment and so forth. These are, are, are sectors that have been performing very well. They've done very well financially, and so they continue to invest. We see some of these secular trends in some- in our key verticals remaining, remaining pretty healthy. As Jim's points, then it just comes down to timing. Right. So no cancellations, just, you know, timing issues, so to speak? Yep. Like we said, that, that kind of popped up in the spring, and it, and it hasn't lengthened any more, but it's at an extended level right now. Because we track this stuff, right? We, we look and, you know, it's not perfect science or anything, but we have an expectation from initial inquiry to project development, to final spec, to order, you know, to actual order, and then obviously through manufacturing and delivery. We've just seen. You know, To be honest, too, I, I want to be candid here. It's not just an extension, it's kind of a little bit of an accordion. It's extended. We're in an extended phase, and then, you know, things can compress on us so. Right. How's the permitting environment? You expressed some issues with that, I think maybe last quarter or quarter before that. You know, are you getting permits on time? Yeah, I think that that is wholly stabilized. You know, it's still at a very extended permitting time in Mexico. You know, that's just, that just may be the new norm for, you know, years or months, you know, it's just, now it's just the new norm down there. Domestically, the States and Canada, that has stabilized. You know, it, it's, yeah, it's less of an issue right now. You gave some kind of qualitative guidance around fiscal 2024 that you've discussed with the previous question. I'm curious as to whether you can help us bridge 2023 to 2028. Do you think 2024 will be a growth year? I think we're, you know, we're one month into the year right now, so it's, I don't know, you know, it's, we have some limited visibility, but it'd be premature for me to kind of, you know, guess on 2024 or forecast on 2024. I will say that I expect that, you know, I can tell you in lighting, I think that, you know, the signs remain positive within that limited, you know, window that we have, let's say, you know, a two-month window or such. I think that, more, a timing related in the display side, and that has to do with, construction schedules and that lengthening, timing we talked about from quote to actual order. I don't see any concern about our ability to continue to grow. I do see that, you know, timing-related issues could be off, you know, 30, 60 days. What I worry about in the public market side is that, you know, something that pushes one quarter that will pick up in the next quarter is overreacted at any given time. That's, you know, that's one of the reasons why we kind of mention it, but I don't see anything that's gonna take us too far off track of where we're going. Yeah. Thank you. We feel confident we'll continue to outperform the market. All right? To Jim's point, wherever the market may end up being, we also feel solid about maintaining the quality of our earnings as well. That's a great segue to my, to my last question. You know, with regard to the M&A environment, how much does earnings accretion matter to you when you look at targets? Well, I will tell you that, I mean, I think we have a demonstrated management team with the ability to kind of work with something that is dilutive and create value. You know, we would also certainly like to, you know, kind of focus on things that are accretive right from the beginning. I think that it would be anything that we would do that we, we would consider that might be initially dilutive, you can be assured we have a plan that will make it accretive at some point and not take too long. If we did something accretive, we wanna make sure we're not paying too much of a premium that washes away that accretion. What I would tell you is, we're disciplined investors, we're choosy. I just mentioned it with Aaron's question, you know, we don't look just at the financial metrics, we look at how it fits into our strategy. There's no sense having orphans to our strategy. Lastly, or maybe not lastly, but just as importantly, we look at culture. We don't wanna kind of take a square peg, no matter what its performance is, and try to force it into our, you know, our round hole, if you will. You know, all of those factors, you know, help make our decisions, but I would just underline with saying we're disciplined, and but I am encouraged by the environment right now. I think there's, there's more in front of us, maybe based on our results, maybe based on the general market, or maybe based on, you know, a combination of all of those things. Thanks. Appreciate it. Yeah. George, thank you for, thank you for the questions. Our next question comes from the line of Sameer Joshi with H.C. Wainwright. Please proceed with your question. Hey, guys, good morning. Thanks for taking my questions. Just a couple on the orders. The EV battery manufacturing facility order, have you disclosed the scope in dollar terms of that opportunity going forward? We haven't. You know, what I would like to say is, it's, you know, it's a single digit. It, it doesn't represent any, you know, double-digit improvement in our quarter or anything. We're excited about it, and we wanted to share that news, these type of projects, we roll in and roll out of on a constant basis. You know, I think that, you know, I know that there's been a number of questions over the, you know, last year or so, like projects like our large digital menu board order. You know, it's a $100 million project that hits you all at once. Well, you know, while we were executing against, you know, the delivery of that project, we were also executing around backfilling that. You know, so when you have a big spike like that, like a big order like that, our attention, outside of delivering on that, immediately turns to: Okay, how do we maintain this elevated level? The, the EV project, that EV project doesn't rise to that same level. It was, you know, it was a project we wanted to make note of, not only because of the composition of the project, but because it's within what we consider our Ohio region. You know, we like this whole concept of Ohio for Ohio, buying locally. That buying locally, by the way, also extends to Texas and extends to, you know, Utah and the West Coast. Wherever we have a facility, we're trying to make sure we're visible in the community, and we want to participate in a way that allows our employees to see their work in a local facility, but also for those customers to see the pride of the people that are in that area. You know, that's why we highlighted it. We were excited about it. It's a sizable project, and to be completely frank, we're, you know, working on phase two of that right now. Maybe there be something else we have, but it doesn't rise to the level where it created any big anomaly in the quarter or anything. It's just another one of those larger projects we get. Understood. Thanks for that. On the display side, there is the capacity expansion that is being planned or already underway. Is there any significant CapEx involved in that, or is it just a few couple million dollars? Yeah, it, it's $2 million, it's kind of within our plan, you know, ±$1 million or so. Nothing, again, I think the 1st-- one of the 1st questions we got was around our capital plan, it, it remains consistent with our prior years, you know, adjusted for inflationary, you know, inflationary costs and things like that. Yeah, it's already included, and it's not significant. We have been... In, In, in our prior years, we've been staging up for this, there has been incremental investments we've made that we're now just consolidating into 1 facility, new facility. Understood. Then just, you mentioned a few things, in terms of, delay, lead time, delays. How does that impact your OpEx and working capital requirements? Another way to ask the question is, do you see any impact on operating profits because of these delays? No. They don't rise to the level where they, you know, disrupt, you know, a quarter significantly. You know, there could be, you know, mid-single digit adjustments on a quarter-by-quarter basis. If I think if you took any two quarters together, they would normalize. Okay. So we should expect operating leverage year-over-year. In other words, operating expense as a% of revenue will be should be expected to be lower in the. Yeah, well, that is one of the levers we pull, right? Yeah. That, yeah, I mean, I think there's still a lot of, there's still a lot of those efficiencies, and there's still a lot of the timing things that we can do, you know, to create that opportunity, and that's just our ongoing job to execute against them. I think, you know, this year, if you look at 2024 on a whole, you can see that kind of incremental steps up. You know, sometimes we're taking two steps forward and a half step back, you know, and sometimes we're taking, you know, a half step forward. If you look at it on an aggregated basis, you can see that continual improvement. You know, Sameer, I'll just add that, you know, there are some variable costs in operating expense, so they do flex. You know, if, if, if there is a bit of softness somewhere, things like, you know, agency commissions, you know, go down because you don't, you don't pay it. We'll be able to, we'll be able to manage, you know, our OpEx, you know, in line with our operating margin expectations. Understood. The distribution of, or, or rather, contribution from the lighting versus display, I think this quarter, you had around 57.7% of revenues from lighting. Is that trend, is that proportion expected in the next few quarters? If so, does it imply a better gross margin going forward? No, I, I think that, you know, I'm not making any blanket statements here, but in general, lighting has more of a sensitivity to, the seasonality we talked about than display solutions does. I think that you'll always see it kind of hovering in this, you know, 50/50, 40/60 range. It's not gonna go outside of those, those markers. If you think about it in terms of a football field, we're gonna play between the 40s all the time, you know, lighting and display solutions. And gross margin implications? In what regards you mean the rate? Because I think your lighting segment, gross margins are 33% plus, and display is, are, are lower. Yeah, much, much different business profile. The, you know, I think that in order to get an apples-to-apples comparison, you look at the top-line revenue, and you look at the bottom line. Yeah, operating margin. Yeah, the operating margin. The stuff that happens in the middle is really a reflection of the two- the differences between the two business. One being more capital intensive than the other. One has a higher gross margin rate than the other, but the, the other may have a lower OpEx, Samir, as you know, right? Right. Yeah. They wash out. Yeah. As you know, at the bottom operating margin, they're, they're pretty close. Yeah. Yeah. We have discussed this in the past. Thanks for that. Yeah. You know, just to, just to further that just one other comment, I don't think you're ever gonna see the gross margins kind of. Never equal up. It's not, it's just not- Different businesses. They're fundamentally different businesses, and they're just a different structure. I think it's really important to look at that, you know, top line and op income. You know, that's, that's your, that's your true measure. Understood. Then just last one, how big is this refrigerated display for the R290? How big is that opportunity that you're looking at right now? Well, I mean, I, I think it still fits within the whole refrigerated, portable refrigerated display market. It's just that we think that, you know, it is, it, it's a, a leading edge, if you will, technology, and, you know, it could create a, a lot of opportunity for us to take additional share. The market's bigger than, than we, you know, by a magnitude, bigger than we serve. The mobile refrigerated display market continues to grow. To grow, right. You know, our thing is always about, we have to earn every project we take, and once we get that, you know, we get a tremendous amount of customer loyalty, and we, we do, you know, we hold it in very high regard to make sure we hold on to that. The stickiness we have with our customers is demonstrated, you know, through our continued performance and our customer list. We have to go out, the market is much bigger than us right now, and we need to go out and fight for every new opportunity there is. Once we get those opportunities, we do, do a pretty good job of holding on to them. I, I, you know, nobody's gonna be the, the opportunity is not gonna be beating down our door. We still need to go out and earn every, every dollar. Agreed. Thanks for that color, and thanks for taking the questions. Good luck. All right. Thank you, Samir. Thanks. Our next question comes from the line of Richard Fearon with Accretive Capital Partners. Please distribute your question. Good morning, Jim and Jim, and congrats on another fantastic quarter. Nice, nice job backfilling on the menu board business. Just a, you know, a couple of questions regarding M&A have already come up, and my only question is a little more specific about the acquisition philosophy, Jim. Mostly regarding your sort of buy versus build considerations, you know, maybe specific to, you know, some product extensions like security or, you know, as you get into the new refrigerateds right now. I mean, this is the success you had with REDiMount, the, you know, the opportunity that R290 seems to represent. It's, it's just exciting what you're doing internally, and good acquisitions are hard to find. It'd be interesting to hear what you're seeing on the M&A side versus, you know, how much growth you think you guys will accomplish organically? Well, good morning, Rick, and thanks for joining the call, and thanks for the comments. You know, first of all, if, if you look at the Fast Forward plan and you look at our prior plan, you know, our 2025 plan, you know, both of those have a component of organic growth and M&A. You know, between 2019 and the end of this 2023, you know, we led with organic growth, and M&A was a piece of that. In our 2028 Fast Forward plan, we still have organic growth as the majority contributor, with M&A as a minority contributor. They're close, you know, for sake of discussion and, and alignment in the business, we want to... You know, the, the real discipline and the real execution comes around organic growth, and we wanna make sure that we're balanced in that. In terms of the make versus buy and that type of thing, it varies by market, right? In the security, we, we definitely want to be in the security business. I don't see us making security equipment. There's plenty of, you know, very well-organized, well-run equipment manufacturers in the security side. We're not interested in acquiring a security equipment manufacturer, but we are interested in being able to deliver value in that market, maybe through our metal fabrication and some of our capabilities. Access to market. Access to market is another one. Then, you know, really, we talk about it a lot, but our ADAPT group, which is our project management group, just allows us to offer more goods and services to our customer base, which increases our value to that customer. When we look at something like security, we see it as an extension in the goods and services we offer, but we don't necessarily have to make it as much as we have to own. Integration. the design, the integration, and the, the installation and delivery of it. Now, when you go somewhere else, you know, we'll talk about. You know, I'm just gonna use this as an example. It's not anything that we actively are engaged with or anything, and it does, it doesn't necessarily reflect anything we're going, but I'll just use it as an example. You know, let's say we were getting into checkout counters or something like that. That would probably be closer to a, a make equation because, you know, in that, in that segment, we already do a lot of the things that are required for making checkout counters. We already have a lot of the technology and the capabilities, and we source similar materials and things like that. That might be more of a, hey, look at this acquisition can get us a start, but we can add a lot of value because of our already strong internal capabilities. That's kind of how we look at it, make versus buy, and it, and it changes depending on what that M&A target might be. That's great color, Jim, thanks. It, it, you know, just kind of raised a question in my mind. When you talk about, you know, other extensions like checkout counters, you know, I think of security as kind of, there's sort of two benefits, right, with, you know, getting into that business is, you know, you, you've certainly your background, your experience, but, you know, you're selling a, you know, presumably a little bit of a higher margin product, but then you have the recurring revenue stream, which with it, you correct me if I'm wrong, but might be sort of that recurring communication with customers, you know, leading to, you know, other opportunities down the road. Is there a recurring revenue component to checkout counters, or is that? does that sort of fall into the sort of like refrigerated category where you, you know, you, you'd be obviously able to do some service and stuff like that, but, not really a consistent revenue stream? Yeah, I mean, I think that, you just did a, you, a great, kind of connection there. I think that checkout counters, belt-driven or, or fixed, fall more in kind of the refrigerated, non-refrigerated display type of market, right? There might be some service to it, but there's really not any recurring revenue. However, you look at the security market, you know, and our initial view on that is a strong lean towards surveillance. When you look at intrusion and hold up and things like that, there is a well-established recurring revenue model associated with that. It's not. Listen, there's no way we're gonna go from zero to meaningful contribution in the security market, you know, in the next six months or something. On a longer term basis, recurring revenue is something that we wanna, we wanna continue to put a focus on, not only, you know, for the business and the income stream and the convenience of the customer, but from a commercial standpoint, it tends to create stickiness and a kind of a closer proximity to the customer. You're in contact with them more often. You're, you're seeing things that are happening within their business, and you're able to act as a good partner and many times offer a solution or, you know, assistance. So we are very focused on, you know, expanding our recurring revenue model. The digital menu boards are a good example of it. It's a, you know, it's a good start. You know, we, we continue to look for ways that we can make that happen. No matter what happens there, it's not gonna be something that happens overnight, and it's not gonna be, you know, a, a, you know, a triple-digit contributor to revenue or income, you know, quickly. It's gonna be pick and shovel work, but we're in the process of doing it, and we wanna make sure that it all fits within our vertical market strategy. Oh, that makes sense. Thanks for the additional color and depth. Thanks for all the great work. Good luck this quarter. Yeah, thank you. There are no further questions in the queue. I'd like to hand the call back to management for closing comments. Yeah, I, I just wanna say thank you again for all those that take the time to, to get on the call or follow us after. You know, our story has consistently been about execution, and, you know, what I always refer to as a high say-do ratio. Our plan, our Fast Forward plan, that extends out to 2028, is published on our website. It's there and available for investors, but it's also there and available for our suppliers, our employees, our partners, and our customers. I, and I think it's just a, a document that tells you, you know, that shows you the roadmap and, and what we're planning to do. It, it just remains consistent and connected with our philosophy around execution and a high say-do ratio. With that, I would just say thank you for the continued following of LSI investment and, and consideration, and we'll look forward to talking to you on the next quarter. Take care. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.