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LSI Industries’ Acquisition of Canada’s Best HoldingsMarch 11, 2025
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2 Disclaimer Execution of Fast Forward Strategy - Over the next five years, LSI intends to drive more than 60% growth in net sales, half of which is to come from strategic acquisitions, including EMI The bolt-on acquisition of EMI is a “strategic sequel” to the platform acquisition of JSI store fixturesin 2021 EMI will expand LSI’s product and service capabilities within the retail display equipment industry, with a strategic focus on serving national chains in the growing grocery, restaurant and convenience store markets This presentation contains forward-looking statements. Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “encourage,” “projects,” “plans,” “expects,” “can,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” or the negative versions of those words and similar expressions and by the context in which they are used. Such statements, whether expressed or implied, are based upon current expectations of the Company and speak only as of the date made. Actual results could differ materially from those contained in or implied by such forward-looking statements as a result of a variety of risks and uncertainties over which the Company may have no control. These risks and uncertainties include, but are not limited to, risks that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which LSI and CBH operate; uncertainties regarding the ability of LSI and CBH to promptly and effectively integrate their businesses; uncertainties regarding the reaction to the transaction of the companies’ respective customers, employees, and counterparties; and risks relating to the diversion of management time on transaction-related issues. For details on additional risks and uncertainties that may cause our actual results to be materially different than those expressed in our forward-looking statements, visit https://investors.lsicorp.com as well as our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q which contain risk factors. The Company does not undertake and hereby disclaims any duty to update any forward-looking statements to reflect subsequent events or circumstances.
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3 Transaction Overview Strategic Highlights Executive Summary The bolt-on acquisition of CBH is a “strategic sequel” to the April 2024 acquisition of EMI industries, further positioning LSI as a market-leading business of scale within retail display solutions Transaction funded by availability on existing credit facility Transaction is immediately accretive to LSI’s margin rate and earnings per share on a pre-synergy basisCBH to become part of LSI’s Display Solutions segmentPro-forma for the transaction, LSI expects net leverage of approximately 1.1x CBH accelerates LSI’s strategic expansion in the rapidly growing Canadian market, and further expands LSI’s vertical market presence in grocery, C-store/refueling; minimal customer overlap between LSI and CBH CBH local manufacturing and distribution footprint in Canada, allowing LSI to better support large customers with locations throughout North America, provides flexibility to better serve large, cross-border customers Demonstrates further execution of Fast Forward Strategy which includes expanding into new, growing markets and verticals. Strengthens LSI’s capabilities to capitalize on the secular growth opportunities projected for key vertical markets Leadership to remain with the combined organization LSI acquired Canada’s Best Holdings (“CBH”), on March 11, 2025, for $24 million cash (USD), with a $7 million performance-based earnout potential CBH is widely recognized as Canada’s Best Store Fixtures (CBSF)
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4 CBH Expands LSI’s Display Solutions Platform 3Facility Locations 132,000Total Square Footage 120Employees Nationwide CBH operates four Canada-based facilities that provide design, engineering, manufacturing, distribution operations Provides a one-stop, turnkey solutions for thousands of retail sites across Canada, including several ofLSI’s key vertical markets such as QSR, Grocery and Pharmacy Vaughan, Ontario (#1) 61,000 SQFTAcrylic fabrication, large format printing, distribution Vaughan, Ontario (#2) 47,502 SQFTWood fabrication and finishing, metal fabrication Edmonton, Alberta11,700 SQFTShowroom and distribution center Tottenham, Ontario12,000 SQFTDistributionCenter Financial Institutions RetailPharmacy Specialty Retail QSR / Restaurant Grocery 10,000+Retail sites served 200+ millionRetail square footage served 2003Year Founded Fashion & Apparel C-store CBH is an Ontario-based, vertically integrated designer, manufacturer, distributor, and installer of custom store fixtures and display solutions
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5 Retail Design & Project Management Build strategy, design & prototyping, materials sourcing and fabrication, construction, site launch CBH Provides an Integrated, One-Stop Solution Full-Lifecycle Custom Retail Build Solutions Custom Wood Fabrication Custom millwork built with the highest-quality materials for both design and function Metal, Acrylics, Plastics & Glass Fabrication High-quality custom metal, acrylic, plastic and glass retail displays and fixtures SolutionsSourcing Source merchandising accessories, such as shelves and other display requirements, providing a comprehensive customer solution set Installation & Merchandising Manage installation by partnering with an extensive network of installers and merchandisers to meet customer site schedules
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6 CBH Supports Leading Regional & Global Brands Grocery & Bulk Food Pharmacy CBH expands LSI’s presence with regional, national and international brands with operations in Canada Only 20% of CBH’s customer base are also customers of LSI – minimal customer overlap CBH positions LSI to expand within core grocery, QSR and c-store/refueling markets, while providing additional entry points into other complementary vertical markets QSR / Restaurant / C-Store Fashion and Apparel Specialty Retail Financial Institutions
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7 FacilitiesEmployees Annual Revenue (USD)(1) Annual Adj. EBITDA (USD)(1) CBH Acquisition Supports our Fast Forward Strategy (1)Reflects LSI TTM performance through F2Q25 and EMI performance for the full-year calendar 2024(2)CBH data reflects trailing two-year fiscal average through fiscal year 2024 16 3 19 1,9001202,020 $548.0 million $24.2 million(2) $572.2 million $53.7 million$4.0 million(2) $57.7 million
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8 CBH Acquisition Rationale Acquisition further positions LSI as a market-leading business of scale within the retail display solutions market. CBH represents LSI’s next step in providing high-value solutions to customers in key vertical markets, partnering to attain their branding and consumer experience objectives. Accelerates LSI’s strategic expansion within the rapidly growing Canadian market. CBH will become LSI’s largest business by revenue in Canada, one whose well-established, long-term customer relationships are expected to provide significant revenue synergies in the market. Low customer overlap with LSI, providing for attractive commercial synergies. The business combination also expands LSI’s capability to attract new customers in existing markets. In fiscal 2024, approximately 80% of CBH’s revenue was with customers not currently served by LSI. Transaction is immediately accretive to LSI’s margin rate and adjusted earnings per share. In fiscal year 2024, CBH generated an adjusted EBITDA margin above LSI’s trailing twelve-month average. Highly skilled workforce of more than 120+ employees and experienced leadership team. LSI intends to retain the experienced leadership team at CBH, mirroring the JSI and EMI integration playbooks. Enhances capability to provide custom solutions. The addition of CBH to the LSI portfolio provides localized manufacturing, distribution and logistics operations, providing flexibility to fulfill custom solutions for both individual customers and large customers with locations across the United States and Canada. Accelerates LSI’s strategic execution under the Fast Forward Plan Advancing our vertical market strategy outlined in Fast Forward Plan Further establishes LSI within both core and emerging vertical markets Creates recognized presence in the growing Canadian market Low customer overlap creates commercial synergies
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9 FAST FORWARD Value Creation Strategy *LSI Fiscal Year (FY) July 1st, Through June 30th Revenue Growth ($M)Adjusted EBITDA ($M) / Margin (%) $497$143$160$800 2023M&AOrganic Growth2028 $52 $10010.4%12.5% 0%2%4%6%8%10%12%14% $0$20$4 0$60$8 0$100$120 FY23FY282023M&A2028 Our FY28 Fast Forward Plan targets prioritize a combination of organic / inorganic commercial growth, operational excellence, and disciplined capital allocation We continue to execute on our Fast Forward Plan of:•Growing our “customer share of wallet” by providing additional goods and services to customers in existing verticals •Expanding into new vertical and geographic markets, offering new, differentiated high-value value solutions as recognized by the customer Organic Growth
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For Additional Questions, Please Contact 720.778.2415Thank You,LSI Investor Relations