November 11, 2025
Dialight Edges Forward, Even as Sales Slip
After years of volatility, half-year results show rising profits despite a 4.3% revenue dip
Dialight’s latest half-year numbers don’t read like a celebration. The industrial LED lighting manufacturer, beset by executive turnover, significant losses and costly litigation in recent years, continues to wrestle with soft demand and delayed customer orders. But beneath the flat top line, there are signs of a company regaining operational balance; even confidence.
Revenue for the six months to September fell 4.3% to $86.4 million, a decline largely driven by deferred lighting projects, they say. Yet profitability improved sharply. Underlying operating profit rose sixfold to $5.5 million, while gross margins expanded to 35.3%, up from 33%. Operating cash flow more than doubled to $13.9 million, helped by stricter cost discipline and tighter inventory control. Net debt dropped to $10.2 million from $17.8 million in March.
Above: Full-year sales history for Dialight. First half 2026 revenues are reported at $86.4 M.
It’s the continuation of a slow, pragmatic rebuild — one that CEO Steve Blair calls the “Transformation Plan,” now entering its final phase. The company has pared back complexity, trimmed nearly 100 jobs, consolidated its manufacturing footprint, and overhauled procurement. Those cuts have not come without pain, but they have delivered tangible results: annualized savings of more than $3 million and a 23% reduction in inventory to $35.8 million.
Manufacturing and Markets
A key shift this year was the transfer of several lighting product lines from Mexico to Malaysia, reducing tariffs and shortening lead times to Asian markets. For now, Dialight’s core North American shipments remain largely tariff-free under the USMCA trade pact — a crucial advantage for a business that earns about 70% of its revenue in that region. But management remains wary. “We continue to operate against a backdrop of tariff uncertainty,” Blair noted, adding that contingency plans are in place should that change.
The company’s two divisions tell the same story in miniature: the larger Lighting business saw sales fall 9%, while Signals & Components grew 10%. The latter’s revival follows a strategic review and fresh investment in opto-electronic products, which serve data centers and industrial equipment. It’s a modest but telling reversal for a segment long considered secondary.
Debt Down, Discipline Up
For investors who have followed Dialight’s difficult decade — one marked by multiple profit warnings, accounting restatements, and a bruising legal fight with former partner Sanmina — the difference today is less about growth than control. The Sanmina dispute, which reached a $12 million settlement earlier this year, will finally be cleared from Dialight's books by December, when the remaining $5.7 million payment is made.
There’s still no dividend, a void stretching back to 2015. But the board now hints that capital returns could resume once the transformation program concludes next March. The pension schemes are stable, the revolving credit facility has been extended to 2027, and cash generation has turned positive.
Another Kind of Progress
Investors have noticed. The shares — correctly quoted at £2.62 — have climbed more than 150% this year, despite one lighting trade publication’s habit of inaccurately reporting the share price in the hundreds of pounds, day after day, year after year.
Dialight’s rebound remains rooted in execution, not exuberance. The markets it serves — oil and gas, heavy industry, hazardous environments — are cyclical and slow-moving. Its challenge now is to reignite sales without losing the hard-won efficiency of the past two years.
For a business defined in recent years by crisis management, the real story may be the absence of crisis itself. Dialight isn’t celebrating; it’s working. And for now, that’s progress enough.
