Acuity Brands, Inc. (NYSE:AYI) (“Company”) today announced fiscal
2018 first quarter net sales of $842.8 million, a decrease of $8.4
million, or 1 percent, compared with the year-ago period.
Operating profit for the first quarter of fiscal 2018 was
$118.6 million, a decrease of $8.0 million, or 6.3 percent, over
the year-ago period. Net income for the first quarter of
fiscal 2018 was $71.5 million, a decrease of 12.5 percent compared
with the prior-year period. Fiscal 2018 first quarter diluted
earnings per share (“EPS”) of $1.70 decreased 8.6 percent compared
with $1.86 for the year-ago period. Prior year’s first
quarter results included a $7.2 million gain, or $0.10 diluted EPS
impact, associated with the sale of an investment in an
unconsolidated affiliate.
Adjusted diluted EPS for the first quarter of
fiscal 2018 decreased 3 percent to $1.94 compared with adjusted
diluted EPS of $2.00 for the year-ago period. Adjusted
operating profit for the first quarter of fiscal 2018 decreased
$9.3 million, or 6.5 percent, to $133.9 million, or 15.9 percent of
net sales, compared with the year-ago period adjusted operating
profit of $143.2 million, or 16.8 percent of net sales.
Adjusted results exclude the impact of amortization expense for
acquired intangible assets, share-based payment expense, special
charges for streamlining activities, manufacturing inefficiencies
related to the closing of a facility, and a gain on the sale of an
investment in an unconsolidated affiliate. Management
believes these items impacted the comparability of the Company's
results and that adjusted financial measures enhance the reader’s
overall understanding of the Company's current financial
performance by making results comparable between periods. A
reconciliation of adjusted financial measures to the most directly
comparable U.S. GAAP measure is provided in the tables at the end
of this release.
Vernon J. Nagel, Chairman, President, and Chief
Executive Officer of Acuity Brands, commented, “Our fiscal 2018
first quarter net sales results were below our expectations, but
once again better than market level performance as initial industry
data suggests that the growth rate of the Company’s key end markets
in North America was down low-single digits, which was in line with
previous expectations. The year-over-year decline in our net
sales of one percent was due primarily to lower sales in the home
center/showroom channel and certain international sales channels,
including the U.K and Mexico. We believe the decline in the
home center/showroom channel was primarily due to changes in the
in-house branding strategies being deployed by certain customers
for select products in certain categories, while the decline in
sales in certain international markets was due to weaker demand
resulting from economic and or political headwinds. Excluding
these specific sales channels, net sales increased 2
percent.”
Mr. Nagel continued, “Our profitability measures
for the first quarter were solid but were impacted by continued
tepid market conditions and the decline in revenue in the
aforementioned sales channels. During the first quarter, we
continued to expand our industry leadership position in providing
IoT-enabled business solutions with our Atrius platform now
deployed across nearly 160 million square feet of indoor spaces,
leveraging more than 1.6 million networked sensors. We have
accelerated deployments and increased active pilots with several of
the largest U.S.-based and certain European-based retailers as well
as other key vertical applications, including certain
airports.”
The 1 percent year-over-year decline in fiscal
2018 first quarter net sales was primarily due to a 1 percent
decrease in sales volume and a 1 percent net unfavorable change in
product prices and mix of products sold (“price/mix”), partially
offset by a 1 percent favorable impact from changes in foreign
exchange rates. The change in price/mix was due primarily to
lower pricing on luminaires, reflecting the decline in certain LED
component costs as well as increased competition in more basic,
lesser-featured products. Sales of LED-based products during
the first quarter of fiscal 2018 and 2017 accounted for
approximately two-thirds of total net sales.
Gross profit for the first quarter of fiscal
2018 decreased $9.4 million, or 2.6 percent, to $350.2 million
compared with $359.6 million in the prior-year period. The
decline in gross profit was due primarily to lower sales,
unfavorable price/mix, and higher input costs for certain
commodity-related items, such as steel, which were partially offset
by lower costs for certain LED components and productivity
improvements. Fiscal 2018 first quarter adjusted gross profit
margin of 41.6 percent declined 80 basis points compared with prior
year’s adjusted gross profit margin. Selling, distribution,
and administrative (“SD&A”) expenses for the first quarter of
fiscal 2018 were $231.4 million compared with $231.8 million in the
prior-year period, reflecting lower commission expense largely
offset by higher salaried employee costs, amortization expense, and
share-based payment expense. Adjusted SD&A expenses for the
first quarter of fiscal 2018 were down modestly compared with the
prior-year period, but up 10 basis points to 25.7 percent of net
sales compared with the prior-year period.
The Company reported net miscellaneous income of
$0.4 million and $7.9 million for the three months ended November
30, 2017 and 2016, respectively. Net miscellaneous income for
the first quarter of the prior year included a $7.2 million gain
associated with the sale of an investment in an unconsolidated
affiliate.
Net cash provided by operating activities
totaled $139.8 million for the first quarter of fiscal 2018
compared with $55.8 million for the year-ago period. Cash and
cash equivalents at the end of the first quarter of fiscal 2018
totaled $428.6 million, an increase of $117.5 million since the
beginning of the fiscal year.
Outlook
Mr. Nagel commented, “We remain positive
regarding the Company’s prospects for future profitable growth
despite recent market softness, which has impacted our short-term
performance. While various leading indicators continue to
generally reflect favorable conditions for our end markets, we are
cautious regarding a meaningful rebound in our end markets over the
next quarter or so as a result of various factors, including labor
shortages in the construction industry and uncertainty related to
both infrastructure spending as well as federal regulatory and
trade policies. However, we believe the recent passage of the
U.S. Tax Cuts and Jobs Act may have a favorable impact on future
demand for many end markets we serve as positive business sentiment
may lead to further investments in facilities and infrastructure in
the U.S. At this time, we continue to expect the growth rate
for lighting and building management solutions in the North
American market, which includes renovation and retrofit activity
and comprises approximately 97 percent of the Company’s revenues,
will be up low single-digits for fiscal 2018, reflecting an
expected rebound in the second half of the year. We expect the
pricing environment to continue to be challenging in certain
portions of the market, particularly for more basic,
lesser-featured products sold through certain sales channels. We do
not foresee a meaningful rebound in demand in the near term in
certain international markets that we serve. In addition, we expect
certain headwinds in the home center/showroom channel to continue
in the near term, giving way to growth in the second half of
calendar 2018 as we bring new solutions to key customers and expand
our access to market in this important sales channel. We
expect to continue to outperform the growth rates of the markets we
serve by executing our strategies focused on growth opportunities
for new construction and renovation projects, expansion into
underpenetrated geographies and channels, and growth from the
continued introduction of new lighting and building management
solutions as part of our integrated, tiered solutions
strategy.”
Management expects the Tax Cuts and Jobs Act
(“Act”) that was passed on December 22, 2017, to favorably impact
the Company’s net income, diluted EPS, and cash flows in future
periods, due primarily to the reduction in the federal corporate
tax rate from 35 percent to 21 percent effective for periods
beginning January 1, 2018. Additionally, positive business
sentiment and other favorable aspects of the new tax law could
incentivize additional investments in facilities and infrastructure
in the U.S. that may increase future demand in the end-markets that
the Company serves. Management currently estimates that the
Company’s blended consolidated effective income tax rate (“tax
rate”) for full-year fiscal 2018 will approximate 26 to 28 percent
before discrete items, compared with nearly 35 percent for the
prior year. Management also anticipates that the tax rate for the
second quarter of fiscal 2018 will be significantly lower than the
estimated full-year blended tax rate to cumulatively adjust for the
35.5 percent tax rate recorded for the first quarter of fiscal
2018. Additionally, management currently estimates the second
quarter tax expense to be reduced by approximately $30 million for
discrete items, primarily due to a non-cash income tax benefit from
the remeasurement of the Company’s net U.S. deferred tax
liabilities, partially offset by an unfavorable impact related to
the taxation of the Company's accumulated unremitted foreign
earnings. Management currently estimates that the fiscal 2019 tax
rate will approximate 23 to 25 percent before discrete items.
The aforementioned tax-related estimates may differ from actual
results, possibly materially, due to changes in interpretations of
the Act and assumptions made by the Company, as well as guidance
that may be issued and actions the Company may take as a result of
the Act.
Mr. Nagel concluded, “We believe the lighting
and lighting-related industry as well as building automation
systems have the potential to experience solid growth over the next
decade, particularly as energy and environmental concerns come to
the forefront along with emerging opportunities for digital
lighting to play a key role in the Internet of Things. We
believe we are uniquely positioned to fully participate in this
exciting industry.”
Conference Call
As previously announced, the Company will host a
conference call to discuss first quarter results today, January 9,
2018, at 10:00 a.m. ET. Interested parties may listen to this
call live today or hear a replay at the Company's Web site:
www.acuitybrands.com.
About Acuity Brands
Acuity Brands, Inc. (NYSE:AYI) is the North
American market leader and one of the world’s leading providers of
lighting and building management solutions. With fiscal year 2017
net sales of $3.5 billion, Acuity Brands currently employs over
12,000 associates and is headquartered in Atlanta, Georgia with
operations throughout North America, and in Europe and Asia. The
Company’s products and solutions are sold under various brands,
including Lithonia Lighting®, Holophane®, Peerless®, Gotham®, Mark
Architectural Lighting™, Winona® Lighting, Juno®, Indy™, Aculux®,
Healthcare Lighting®, Hydrel®, American Electric Lighting®,
Carandini®, Antique Street Lamps™, Sunoptics®, Distech Controls®,
nLight®, ROAM®, Sensor Switch® and Atrius™. Visit us
at www.acuitybrands.com.
Non-GAAP Financial Measures
This news release includes the following
non-GAAP financial measures: "adjusted gross profit," “adjusted
gross profit margin,” “adjusted SD&A expenses,” “adjusted
operating profit,” “adjusted operating profit margin,” “adjusted
other expense,” “adjusted net income,” and “adjusted diluted EPS.”
These non-GAAP financial measures are provided to enhance the
reader's overall understanding of the Company's current financial
performance and prospects for the future. Previously, during fiscal
2016, the Company acquired four businesses, which impacted the
comparability of many of its GAAP financial measures.
Specifically, management believes that these non-GAAP measures
provide useful information to investors by excluding or adjusting
items for amortization of acquired intangible assets, share-based
payment expense, which is used as a method to improve retention and
align the interests of key leaders of acquired businesses with
those of the Company’s shareholders, special charges associated
with efforts to streamline the organization that we execute on an
ongoing basis and to integrate acquisitions, manufacturing
inefficiencies directly related to the closure of a facility, and a
gain associated with the sale of an investment in an unconsolidated
affiliate. Management typically adjusts for these items for
internal reviews of performance and uses the above non-GAAP
measures for baseline comparative operational analysis, decision
making, and other activities. Management believes these
non-GAAP measures provide greater comparability and enhanced
visibility into the Company’s results of operations as well as
comparability with many of its peers, especially those companies
focused more on technology and software.
Non-GAAP financial measures included in this
news release should be considered in addition to, and not as a
substitute for or superior to, results prepared in accordance with
GAAP. The most directly comparable GAAP measures for adjusted gross
profit and adjusted gross profit margin are “gross profit” and
“gross profit margin,” respectively, which include the impact of
manufacturing inefficiencies directly related to the closure of a
facility. The most directly comparable GAAP measure for adjusted
SD&A expenses is “SD&A expenses,” which includes
amortization of acquired intangible assets and share-based payment
expense. The most directly comparable GAAP measures for adjusted
operating profit and adjusted operating profit margin are
“operating profit” and “operating profit margin,” respectively,
which include the impact of acquisition-related items,
manufacturing inefficiencies directly related to the closure of a
facility, amortization of acquired intangible assets, share-based
payment expense, and special charges. The most directly
comparable GAAP measures for adjusted other expense is “other
expense,” which includes the impact of a gain on sale of investment
in an unconsolidated affiliate. The most directly comparable
GAAP measures for adjusted net income and adjusted diluted EPS are
“net income” and “diluted EPS,” respectively, which include the
impact of manufacturing inefficiencies directly related to the
closure of a facility, amortization of acquired intangible assets,
share-based payment expense, special charges, and a gain on sale of
investment in an unconsolidated affiliate. A reconciliation
of each measure to the most directly comparable GAAP measure is
available in this news release. The Company’s non-GAAP
financial measures may not be comparable to similarly titled
non-GAAP financial measures used by other companies, have
limitations as an analytical tool, and should not be considered in
isolation or as a substitute for GAAP financial measures.
Forward Looking Information
This release contains forward-looking
statements, within the meaning of the Private Securities Litigation
Reform Act of 1995. Statements that may be considered
forward-looking include statements incorporating terms such as
"expects," "believes," "intends," “estimates”, “forecasts,”
"anticipates," “could,” “may,” “should”, “suggests,” “remain,” and
similar terms that relate to future events, performance, or results
of the Company and specifically include statements made in this
press release regarding: management’s expectation for a low
single-digit growth rate for lighting and building management
solutions in the North American market for fiscal 2018, reflecting
an expected rebound in the second half of the
year; management’s expectation that the
pricing environment will continue to be challenging in certain
portions of the market, particularly for more basic,
lesser-featured products sold through certain sales channels;
management’s expectation of no meaningful rebound in demand in the
near term in certain international markets that the Company serves;
management’s expectation for certain headwinds to continue in the
home center/showroom channel in the near term, giving way to growth
in the second half of calendar 2018 as the Company brings new
solutions to key customers and expands access to market in this
channel; management’s expectation for overall demand of the
Company’s end markets to have the potential to experience solid
growth over the next decade as well as the Company’s position to
fully participate; management’s expectation for future profitable
growth and expectations for the Company to continue to outperform
the growth rates of the markets it serves and execute strategies
related to growth opportunities; management’s belief that the
passage of the Act may favorably impact demand for many of the
Company’s end markets and expectations of a favorable impact on the
Company’s net income, diluted earnings, and cash flows in future
periods due primarily to a reduction in the Company’s expected
consolidated effective income tax rate as well as an approximate
$30 million non-cash income tax benefit largely due from the
remeasurement of the Company’s net U.S. deferred tax
liabilities. Forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from the historical experience of Acuity Brands
and management's present expectations or projections. These risks
and uncertainties include, but are not limited to, customer and
supplier relationships and prices; competition; ability to realize
anticipated benefits from initiatives taken and timing of benefits;
market demand; litigation and other contingent liabilities; and
economic, political, governmental, and technological factors
affecting the Company. Please see the other risk factors more
fully described in the Company’s SEC filings including risks
discussed in Part I, “Item 1a. Risk Factors” in the Company’s
Annual Report on Form 10-K for the year ended August 31,
2017. The discussion of those risks is specifically
incorporated herein by reference. Management believes these
forward-looking statements are reasonable; however, undue reliance
should not be placed on any forward-looking statements, which are
based on current expectations. Further, forward-looking
statements speak only as of the date they are made, and management
undertakes no obligation to update publicly any of them in light of
new information or future events.
|
ACUITY BRANDS, INC. |
CONSOLIDATED BALANCE SHEETS |
(In millions, except share data) |
|
|
November 30, 2017 |
|
August 31, 2017 |
(Unaudited) |
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
Cash and
cash equivalents |
$ |
428.6 |
|
|
$ |
311.1 |
|
Accounts
receivable, less reserve for doubtful accounts of $2.0 and $1.9,
respectively |
|
514.3 |
|
|
|
573.3 |
|
Inventories |
|
339.6 |
|
|
|
328.6 |
|
Prepayments and other current assets |
|
41.3 |
|
|
|
32.6 |
|
Total
current assets |
|
1,323.8 |
|
|
|
1,245.6 |
|
Property,
plant, and equipment, at cost: |
|
|
|
Land |
|
22.3 |
|
|
|
22.5 |
|
Buildings
and leasehold improvements |
|
181.4 |
|
|
|
180.7 |
|
Machinery
and equipment |
|
492.9 |
|
|
|
484.6 |
|
Total
property, plant, and equipment |
|
696.6 |
|
|
|
687.8 |
|
Less -
Accumulated depreciation and amortization |
|
(410.5 |
) |
|
|
(400.1 |
) |
Property,
plant, and equipment, net |
|
286.1 |
|
|
|
287.7 |
|
Goodwill |
|
896.5 |
|
|
|
900.9 |
|
Intangible assets, net |
|
439.9 |
|
|
|
448.8 |
|
Deferred
income taxes |
|
3.3 |
|
|
|
3.4 |
|
Other
long-term assets |
|
11.8 |
|
|
|
13.2 |
|
Total
assets |
$ |
2,961.4 |
|
|
$ |
2,899.6 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
364.6 |
|
|
$ |
395.1 |
|
Current
maturities of long-term debt |
|
0.4 |
|
|
|
0.4 |
|
Accrued
compensation |
|
31.2 |
|
|
|
41.8 |
|
Other
accrued liabilities |
|
198.7 |
|
|
|
163.6 |
|
Total
current liabilities |
|
594.9 |
|
|
|
600.9 |
|
Long-term
debt |
|
356.5 |
|
|
|
356.5 |
|
Accrued
pension liabilities |
|
95.9 |
|
|
|
96.9 |
|
Deferred
income taxes |
|
108.3 |
|
|
|
108.2 |
|
Self-insurance reserves |
|
8.6 |
|
|
|
7.9 |
|
Other
long-term liabilities |
|
71.1 |
|
|
|
63.6 |
|
Total
liabilities |
|
1,235.3 |
|
|
|
1,234.0 |
|
Stockholders’
equity: |
|
|
|
Preferred
stock, $0.01 par value; 50,000,000 shares authorized; none
issued |
|
- |
|
|
|
- |
|
Common
stock, $0.01 par value; 500,000,000 shares authorized; 53,621,355
and 53,549,840 issued, respectively |
|
0.5 |
|
|
|
0.5 |
|
Paid-in
capital |
|
884.3 |
|
|
|
881.0 |
|
Retained
earnings |
|
1,725.9 |
|
|
|
1,659.9 |
|
Accumulated other comprehensive loss |
|
(108.6 |
) |
|
|
(99.7 |
) |
Treasury
stock, at cost - 11,676,689 and 11,678,002 shares,
respectively |
|
(776.0 |
) |
|
|
(776.1 |
) |
Total
stockholders’ equity |
|
1,726.1 |
|
|
|
1,665.6 |
|
Total
liabilities and stockholders’ equity |
$ |
2,961.4 |
|
|
$ |
2,899.6 |
|
|
|
|
|
|
|
|
|
|
ACUITY BRANDS, INC. |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited) |
(In millions, except per-share
data) |
|
|
|
|
|
Three Months Ended |
|
November 30, 2017 |
|
November 30, 2016 |
Net sales |
$ |
842.8 |
|
|
$ |
851.2 |
|
Cost of products
sold |
|
492.6 |
|
|
|
491.6 |
|
Gross profit |
|
350.2 |
|
|
|
359.6 |
|
Selling, distribution,
and administrative expenses |
|
231.4 |
|
|
|
231.8 |
|
Special charge |
|
0.2 |
|
|
|
1.2 |
|
Operating profit |
|
118.6 |
|
|
|
126.6 |
|
Other expense
(income): |
|
|
|
Interest
expense, net |
|
8.1 |
|
|
|
8.2 |
|
Miscellaneous income, net |
|
(0.4 |
) |
|
|
(7.9 |
) |
Total
other expense |
|
7.7 |
|
|
|
0.3 |
|
Income before provision
for income taxes |
|
110.9 |
|
|
|
126.3 |
|
Provision for income
taxes |
|
39.4 |
|
|
|
44.6 |
|
Net income |
$ |
71.5 |
|
|
$ |
81.7 |
|
|
|
|
|
Earnings per
share: |
|
|
|
Basic
earnings per share |
$ |
1.71 |
|
|
$ |
1.87 |
|
Basic
weighted average number of shares outstanding |
|
41.9 |
|
|
|
43.8 |
|
Diluted
earnings per sShare |
$ |
1.70 |
|
|
$ |
1.86 |
|
Diluted
weighted average number of shares outstanding |
|
42.1 |
|
|
|
44.0 |
|
Dividends declared per
share |
$ |
0.13 |
|
|
$ |
0.13 |
|
|
|
|
|
Comprehensive
income: |
|
|
|
Net income |
$ |
71.5 |
|
|
$ |
81.7 |
|
Other comprehensive
income (loss) items: |
|
|
|
Foreign
currency translation adjustments |
|
(10.5 |
) |
|
|
(11.9 |
) |
Defined
benefit pension plans, net of tax |
|
1.6 |
|
|
|
2.0 |
|
Other comprehensive
income (loss), net of tax |
|
(8.9 |
) |
|
|
(9.9 |
) |
Comprehensive
income |
$ |
62.6 |
|
|
$ |
71.8 |
|
|
|
|
|
|
|
|
|
|
ACUITY BRANDS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) |
(In millions) |
|
Three
Months Ended |
|
|
November 30, 2017 |
|
November 30, 2016 |
Cash Flows from
operating activities: |
|
|
|
Net
income |
$ |
71.5 |
|
|
$ |
81.7 |
|
Adjustments to reconcile net income to net cash provided by (used
for) operating activities: |
|
|
|
Depreciation and amortization |
|
19.0 |
|
|
|
17.2 |
|
Share-based payment expense |
|
8.5 |
|
|
|
7.9 |
|
Loss on
sale or disposal of property, plant, and equipment |
|
0.1 |
|
|
|
0.1 |
|
Gain on
sale of investment in unconsolidated affiliate |
|
- |
|
|
|
(7.2 |
) |
Deferred
income taxes |
|
(0.1 |
) |
|
|
- |
|
Change in
assets and liabilities, net of effect of acquisitions, divestitures
and effect of exchange rate changes: |
|
|
|
Accounts
receivable |
|
57.6 |
|
|
|
47.6 |
|
Inventories |
|
(11.1 |
) |
|
|
(40.3 |
) |
Prepayments and other current assets |
|
(9.3 |
) |
|
|
(10.7 |
) |
Accounts
payable |
|
(32.5 |
) |
|
|
(7.2 |
) |
Other
current liabilities |
|
25.5 |
|
|
|
(45.7 |
) |
Other |
|
10.6 |
|
|
|
12.4 |
|
Net cash
provided by operating activities |
|
139.8 |
|
|
|
55.8 |
|
Cash flows from
investing activities: |
|
|
|
Purchases
of property, plant, and equipment |
|
(10.3 |
) |
|
|
(19.5 |
) |
Proceeds
from sale of property, plant, and equipment |
|
- |
|
|
|
5.4 |
|
Proceeds
from sale of investment in unconsolidated affiliate |
|
- |
|
|
|
13.0 |
|
Net cash
used for investing activities |
|
(10.3 |
) |
|
|
(1.1 |
) |
Cash flows from
financing activities: |
|
|
|
Issuance
of long-term debt |
|
- |
|
|
|
0.9 |
|
Repayments of long-term debt |
|
(0.1 |
) |
|
|
- |
|
Repurchases of common stock |
|
- |
|
|
|
(0.4 |
) |
Proceeds
from stock option exercises and other |
|
0.8 |
|
|
|
2.1 |
|
Payments
for employee taxes on net settlement of equity awards |
|
(6.0 |
) |
|
|
(11.3 |
) |
Dividends
paid |
|
(5.5 |
) |
|
|
(5.8 |
) |
Net cash
used for financing activities |
|
(10.8 |
) |
|
|
(14.5 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
(1.2 |
) |
|
|
(2.2 |
) |
Net change in cash and
cash equivalents |
|
117.5 |
|
|
|
38.0 |
|
Cash and cash
equivalents at beginning of period |
|
311.1 |
|
|
|
413.2 |
|
Cash and cash
equivalents at end of period |
$ |
428.6 |
|
|
$ |
451.2 |
|
|
|
|
|
Certain
prior-period amounts have been reclassified to conform to the
current year presentation. |
|
|
|
|
|
|
ACUITY BRANDS,
INC.Reconciliation of Non-U.S. GAAP
Measures |
|
The table below reconciles certain GAAP financial measures to
the corresponding non-GAAP measures: |
|
(In millions, except
per share data) |
|
|
|
|
|
|
Three Months Ended |
|
Increase (Decrease) |
|
Percent Change |
|
November 30, 2017 |
|
November 30, 2016 |
|
|
Net sales |
$ |
842.8 |
|
|
$ |
851.2 |
|
|
$ |
(8.4 |
) |
|
(1.0 |
)% |
|
|
|
|
|
|
|
|
Gross profit
(GAAP) |
$ |
350.2 |
|
|
$ |
359.6 |
|
|
|
|
|
Add-back:
Manufacturing inefficiencies(1) |
|
- |
|
|
|
1.6 |
|
|
|
|
|
Adjusted Gross profit
(Non-GAAP) |
$ |
350.2 |
|
|
$ |
361.2 |
|
|
$ |
(11.0 |
) |
|
(3.0 |
)% |
Percent
of net sales |
|
41.6 |
% |
|
|
42.4 |
% |
|
|
(80 |
) |
bps |
|
|
|
|
|
|
|
|
Selling, distribution,
and administrative (SD&A) expenses (GAAP) |
$ |
231.4 |
|
|
$ |
231.8 |
|
|
|
|
|
Less:
Amortization of acquired intangible assets |
|
(6.6 |
) |
|
|
(5.9 |
) |
|
|
|
|
Less:
Share-based payment expense |
|
(8.5 |
) |
|
|
(7.9 |
) |
|
|
|
|
Adjusted
SD&A expenses (Non-GAAP) |
$ |
216.3 |
|
|
$ |
218.0 |
|
|
$ |
(1.7 |
) |
|
(0.8 |
)% |
Percent
of Sales |
|
25.7 |
% |
|
|
25.6 |
% |
|
|
10 |
|
bps |
|
|
|
|
|
|
|
|
Operating profit
(GAAP) |
$ |
118.6 |
|
|
$ |
126.6 |
|
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
6.6 |
|
|
|
5.9 |
|
|
|
|
|
Add-back:Share-based payment expense |
|
8.5 |
|
|
|
7.9 |
|
|
|
|
|
Add-back:
Manufacturing inefficiencies(1) |
|
- |
|
|
|
1.6 |
|
|
|
|
|
Add-back:
Special charge |
|
0.2 |
|
|
|
1.2 |
|
|
|
|
|
Adjusted
operating profit (Non-GAAP) |
$ |
133.9 |
|
|
$ |
143.2 |
|
|
$ |
(9.3 |
) |
|
(6.5 |
)% |
Percent
of Sales |
|
15.9 |
% |
|
|
16.8 |
% |
|
|
(90 |
) |
bps |
|
|
|
|
|
|
|
|
Other expense
(GAAP) |
$ |
7.7 |
|
|
$ |
0.3 |
|
|
|
|
|
Add-back: Gain on sale
of investment in unconsolidated affiliate |
|
- |
|
|
|
7.2 |
|
|
|
|
|
Adjusted other
expense(Non-GAAP) |
$ |
7.7 |
|
|
$ |
7.5 |
|
|
$ |
0.2 |
|
|
2.7 |
% |
|
|
|
|
|
|
|
|
Net income (GAAP) |
$ |
71.5 |
|
|
$ |
81.7 |
|
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
6.6 |
|
|
|
5.9 |
|
|
|
|
|
Add-back:Share-based payment expense |
|
8.5 |
|
|
|
7.9 |
|
|
|
|
|
Add-back:
Manufacturing inefficiencies(1) |
|
- |
|
|
|
1.6 |
|
|
|
|
|
Add-back:
Special charge |
|
0.2 |
|
|
|
1.2 |
|
|
|
|
|
Less:
Gain on sale of investment in unconsolidated affiliate |
|
- |
|
|
|
(7.2 |
) |
|
|
|
|
Total
pre-tax adjustments to Net Income |
|
15.3 |
|
|
|
9.4 |
|
|
|
|
|
Income
tax effect |
|
(5.3 |
) |
|
|
(3.3 |
) |
|
|
|
|
Adjusted net income
(Non-GAAP) |
$ |
81.5 |
|
|
$ |
87.8 |
|
|
$ |
(6.3 |
) |
|
(7.2 |
)% |
|
|
|
|
|
|
|
|
Diluted Earnings per
Share (GAAP) |
$ |
1.70 |
|
|
$ |
1.86 |
|
|
|
|
|
Adjusted Diluted
Earnings per Share (Non-GAAP) |
$ |
1.94 |
|
|
$ |
2.00 |
|
|
$ |
(0.06 |
) |
|
(3.0 |
)% |
|
|
|
|
|
|
|
|
(1)
Incremental costs incurred due to manufacturing inefficiencies
directly related to the closure of a facility. |
|
Contact: Dan Smith,
404-853-1423dan.smith@acuitybrands.com
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