Acuity Brands, Inc. (NYSE:AYI) ("Company") today announced record
first quarter net sales, net income, and diluted earnings per share
("EPS"). Fiscal 2015 first quarter net sales of $647.4 million
increased $72.7 million, or 13 percent, compared with the year-ago
period. Net income for the first quarter of fiscal 2015 was $51.1
million, an increase of 15 percent compared with the prior-year
period. Fiscal 2015 first quarter diluted EPS of $1.17 increased 14
percent compared with $1.03 for the year-ago period.
Fiscal 2015 first quarter adjusted net income of $57.4 million
increased $16.0 million, or 39 percent, compared with adjusted net
income of $41.4 million for the prior-year period. Adjusted diluted
EPS for the first quarter of fiscal 2015 increased 38 percent to
$1.32 compared with adjusted diluted EPS of $0.96 for the year-ago
period. Adjusted results for the first quarter of fiscal 2015
exclude a $10.0 million pre-tax special charge, or $0.15 diluted
EPS, related to streamlining activities. Adjusted results for the
prior-year fiscal first quarter exclude the benefit of a $5.0
million pre-tax insurance recovery, or $0.07 diluted EPS,
associated with a fiscal 2013 loss resulting from fraud perpetrated
at a freight payment and audit service firm formerly retained by
the Company. Management believes these items impacted the
comparability of the Company's results and that the adjusted
financial measures enhance the reader's overall understanding of
the Company's current financial performance. A reconciliation of
adjusted financial measures to the most directly comparable 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, "We were extremely pleased
with our record fiscal 2015 first quarter results. Gross profit
margin of 42.2 percent increased 90 basis points over prior year's
first quarter, while adjusted operating profit margin of 14.9
percent increased 230 basis points over last year's first quarter
adjusted operating profit margin. Our variable contribution margin,
i.e., the incremental adjusted operating profit as a percentage of
the increase in net sales, was over 33 percent. We believe our
record first quarter results reflect our ability to provide
customers truly differentiated value from our industry-leading
portfolio of innovative lighting and control solutions along with
superior service."
The year-over-year growth in fiscal 2015 first quarter net sales
was due primarily to an increase in volume of more than 14 percent,
partially offset by an estimated 1 percentage point net unfavorable
change in product prices and mix of products sold ("price/mix")
and, to a lesser degree, an unfavorable impact from changes in
foreign currency exchange rates. The increase in volume was
broad-based across most product categories and key sales channels.
Sales of LED-based products increased more than 70 percent from the
year-ago period and represented approximately 42 percent of fiscal
2015 first quarter net sales.
Operating profit for the first quarter of fiscal 2015 was $86.7
million, an increase of $9.3 million, or 12 percent, over the
year-ago period. Adjusted operating profit (excluding the impact of
the special charge) for the first quarter of fiscal 2015 increased
$24.3 million, or 34 percent, to $96.7 million compared with the
year-ago period adjusted operating profit (excluding the impact of
the insurance recovery) of $72.4 million. Adjusted operating profit
margin for the first quarter of fiscal 2015 increased 230 basis
points to 14.9 percent compared with 12.6 percent adjusted
operating profit margin for the prior-year period.
During the first quarter of fiscal 2015, the Company recorded a
pre-tax special charge of $10 million associated with actions to
streamline the organization by realigning certain responsibilities,
primarily within various selling, distribution, and administrative
departments, as well as for the consolidation of certain production
activities. The special charge consisted primarily of severance and
employee-related costs. Management expects to incur production
transfer expenses and additional costs associated with these
streamlining actions totaling approximately $1.0 million during the
next two fiscal quarters. Management expects to achieve
net cost savings in fiscal 2015 in excess of the pre-tax
charges.
Cash and cash equivalents at the end of the first quarter of
fiscal 2015 totaled $583.0 million, an increase of $30.5 million
since the beginning of the fiscal year. Net cash provided by
operating activities totaled $46.7 million for the first quarter of
fiscal 2015 compared with $43.4 million for the year-ago
period.
Outlook
Mr. Nagel commented, "We remain very bullish about our prospects
for continued future profitable growth. Third-party forecasts
as well as key leading indicators suggest that the growth rate for
the North American lighting market, which includes renovation and
retrofit activity, will be in the mid-to-upper single digit range
for fiscal 2015 with expectations that overall demand in our end
markets will continue to experience solid growth over the next
several years. Our order rates through the month of December
reflect this favorable trend. Further, we expect to continue
to outperform the growth rates of the markets we serve due to
benefits from growing renovation and tenant improvement projects,
further expansion in underpenetrated geographies and channels, and
growth from the introduction of new products and lighting
solutions. Additionally, we expect to continue to pursue
growth opportunities enabled by newer technologies which require
additional resources, including talent with specific skill sets, to
drive innovation and accelerate commercialization of these evolving
digital lighting solutions."
Mr. Nagel concluded, "We believe the lighting and
lighting-related industry will 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 well positioned to fully participate in this
exciting industry."
Non-GAAP Financial Measures
This news release contains non-GAAP financial measures such as
"adjusted selling, distribution, and administrative expenses"
("adjusted SD&A expenses"), "adjusted operating profit",
"adjusted operating profit margin", "adjusted net income", and
"adjusted diluted EPS". These measures are provided to enhance
the reader's overall understanding of the Company's current
financial performance and prospects for the future. However, 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.
A reconciliation of each measure to the most directly comparable
GAAP measure is available in this news release. In addition, the
Current Report on Form 8-K furnished to the SEC concurrent with the
issuance of this press release includes a more detailed description
of each of these non-GAAP financial measures, together with a
discussion of the usefulness and purpose of such measures.
Conference Call
As previously announced, the Company will host a conference call
to discuss first quarter results today, January 9, 2014, 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. is a North American market leader and one of
the world's leading providers of lighting solutions for both indoor
and outdoor applications. With fiscal year 2014 net sales of $2.4
billion, Acuity Brands employs approximately 7,000 associates and
is headquartered in Atlanta, Georgia with operations throughout
North America, and in Europe and Asia. The Company's lighting
solutions are sold under various brands, including Lithonia
Lighting®, Holophane®, Peerless®, Gotham®, Mark Architectural
Lighting™, Winona® Lighting, Healthcare Lighting®, Hydrel®,
American Electric Lighting®, Carandini®, Antique Street Lamps™,
Sunoptics®, RELOC® Wiring Solutions, Acculamp®, eldoLED® and
Acuity Controls.
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," "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: prospects for future profitable growth; third-party
forecasts of a mid-to-upper single digit growth rate for the North
American lighting market for fiscal 2015 and expections that demand
in the Company's end markets will continue to experience solid
growth over the next several years; expectation that opportunities
exist that will allow the Company to outperform the growth rates of
the markets it serves; expectation of solid growth over the next
decade for the lighting and lighting-related industry and the
Company's position to fully participate; additional costs of
approximately $1.0 million associated with streamlining activities
to be incurred during the next two fiscal quarters; and achievement
of cost savings in fiscal 2015 in excess of pre-tax special charges
and plans to reinvest a portion of the savings over the next twelve
months. 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,
2014. 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 and per-share data) |
|
November 30,
2014 |
August 31, 2014 |
|
(Unaudited) |
|
ASSETS |
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 583.0 |
$ 552.5 |
Accounts receivable, less reserve for
doubtful accounts of $1.6 and $1.9 as of November 30, 2014 and
August 31, 2014, respectively |
371.8 |
373.4 |
Inventories |
214.2 |
212.0 |
Deferred income taxes |
20.8 |
21.5 |
Prepayments and other current assets |
35.7 |
27.3 |
Total Current Assets |
1,225.5 |
1,186.7 |
Property, Plant, and Equipment, at cost: |
|
|
Land |
7.3 |
7.8 |
Buildings and leasehold
improvements |
115.8 |
116.0 |
Machinery and equipment |
390.4 |
375.8 |
Total Property, Plant, and
Equipment |
513.5 |
499.6 |
Less - Accumulated depreciation and
amortization |
352.8 |
347.1 |
Property, Plant, and Equipment,
net |
160.7 |
152.5 |
Other Assets: |
|
|
Goodwill |
567.9 |
569.4 |
Intangible assets, net |
227.6 |
231.6 |
Deferred income taxes |
3.4 |
3.0 |
Other long-term assets |
21.0 |
24.9 |
Total Other Assets |
819.9 |
828.9 |
Total Assets |
$ 2,206.1 |
$ 2,168.1 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 277.5 |
$ 287.4 |
Accrued compensation |
41.1 |
54.8 |
Accrued pension liabilities,
current |
1.2 |
1.2 |
Other accrued liabilities |
133.8 |
127.1 |
Total Current Liabilities |
453.6 |
470.5 |
Long-Term Debt |
353.6 |
353.6 |
Accrued Pension Liabilities, less current
portion |
62.1 |
65.1 |
Deferred Income Taxes |
58.4 |
58.4 |
Self-Insurance Reserves, less current
portion |
7.2 |
6.8 |
Other Long-Term Liabilities |
60.5 |
50.2 |
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; 52,824,677 issued and 43,105,422
outstanding at November 30, 2014; and 52,581,917 issued and
42,862,662 outstanding at August 31, 2014 |
0.5 |
0.5 |
Paid-in capital |
770.5 |
761.5 |
Retained earnings |
939.1 |
893.6 |
Accumulated other comprehensive loss |
(79.2) |
(71.9) |
Treasury stock, at cost, 9,719,255 shares
at November 30, 2014 and August 31, 2014 |
(420.2) |
(420.2) |
Total Stockholders' Equity |
1,210.7 |
1,163.5 |
Total Liabilities and Stockholders'
Equity |
$ 2,206.1 |
$ 2,168.1 |
|
|
|
ACUITY BRANDS,
INC. |
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME (Unaudited) |
(In millions, except
per-share data) |
|
|
|
|
Three Months
Ended November 30, |
|
2014 |
2013 |
Net Sales |
$ 647.4 |
$ 574.7 |
Cost of Products Sold |
374.4 |
337.6 |
Gross Profit |
273.0 |
237.1 |
Selling, Distribution, and Administrative
Expenses |
176.3 |
159.7 |
Special Charge |
10.0 |
-- |
Operating Profit |
86.7 |
77.4 |
Other Expense (Income): |
|
|
Interest Expense, net |
7.9 |
8.0 |
Miscellaneous (Income) Expense,
net |
(0.9) |
0.6 |
Total Other Expense |
7.0 |
8.6 |
Income before Provision for Income
Taxes |
79.7 |
68.8 |
Provision for Income Taxes |
28.6 |
24.3 |
Net Income |
$ 51.1 |
$ 44.5 |
|
|
|
Earnings Per Share: |
|
|
Basic Earnings per Share |
$ 1.18 |
$ 1.03 |
Basic Weighted Average Number of Shares
Outstanding |
43.0 |
42.6 |
Diluted Earnings per Share |
$ 1.17 |
$ 1.03 |
Diluted Weighted Average Number of Shares
Outstanding |
43.3 |
42.9 |
Dividends Declared per Share |
$ 0.13 |
$ 0.13 |
|
|
|
Comprehensive Income: |
|
|
Net Income |
$ 51.1 |
$ 44.5 |
Other Comprehensive Income/(Expense)
Items: |
|
|
Foreign currency translation
adjustments |
(7.2) |
2.3 |
Defined benefit plans, net |
(0.1) |
0.6 |
Other Comprehensive Income/(Expense) Items,
net of tax |
(7.3) |
2.9 |
Comprehensive Income |
$ 43.8 |
$ 47.4 |
|
|
|
ACUITY BRANDS,
INC. |
CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited) |
(In
millions) |
|
Three
Months Ended November 30, |
|
2014 |
2013 |
Cash Provided by/(Used for) Operating
Activities: |
|
|
Net income |
$ 51.1 |
$ 44.5 |
Adjustments to reconcile net income to
net cash provided by (used for) operating activities: |
|
|
Depreciation and amortization |
11.3 |
10.6 |
Share-based compensation expense |
4.1 |
4.5 |
Excess tax benefits from share-based
payments |
(9.2) |
(5.2) |
Deferred income taxes |
0.4 |
0.8 |
Change in assets and liabilities, net of
effect of acquisitions, divestitures and effect of exchange rate
changes: |
|
|
Accounts receivable |
(0.7) |
(14.0) |
Inventories |
(2.9) |
(5.0) |
Prepayments and other current
assets |
(8.8) |
(4.7) |
Accounts payable |
(8.8) |
(5.4) |
Other current liabilities |
6.7 |
19.8 |
Other |
3.5 |
(2.5) |
Net Cash Provided by Operating
Activities |
46.7 |
43.4 |
Cash Provided by/(Used for) Investing
Activities: |
|
|
Purchases of property, plant, and
equipment |
(18.5) |
(8.5) |
Proceeds from sale of property, plant,
and equipment |
-- |
0.9 |
Net Cash Used for Investing
Activities |
(18.5) |
(7.6) |
Cash Provided by/(Used for) Financing
Activities: |
|
|
Proceeds from stock option exercises and
other |
4.9 |
2.6 |
Excess tax benefits from share-based
payments |
9.2 |
5.2 |
Dividends paid |
(5.6) |
(5.6) |
Other financing activities |
(3.2) |
-- |
Net Cash Provided by Financing
Activities |
5.3 |
2.2 |
Effect of Exchange Rate Changes on
Cash |
(3.0) |
1.0 |
Net Change in Cash and Cash
Equivalents |
30.5 |
39.0 |
Cash and Cash Equivalents at Beginning of
Period |
552.5 |
359.1 |
Cash and Cash Equivalents at End of
Period |
$ 583.0 |
$ 398.1 |
|
|
|
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 NOVEMBER 30, |
|
2014 |
2013 |
|
|
% of Sales |
|
% of Sales |
Net Sales |
$ 647.4 |
|
$ 574.7 |
|
|
|
|
|
|
Selling, Distribution, and Administrative
Expenses (GAAP) |
$ 176.3 |
27.2% |
$ 159.7 |
27.8% |
Add-Back: Fraud-Related Recovery |
-- |
|
5.0 |
|
Adjusted Selling, Distribution, and
Administrative Expenses (Non-GAAP) |
$ 176.3 |
27.2% |
$ 164.7 |
28.7% |
|
|
|
|
|
Operating Profit (GAAP) |
$ 86.7 |
13.4% |
$ 77.4 |
13.5% |
Less: Fraud-Related Recovery |
-- |
|
(5.0) |
|
Add-Back: Special Charge |
10.0 |
|
-- |
|
Adjusted Operating Profit (Non-GAAP) |
$ 96.7 |
14.9% |
$ 72.4 |
12.6% |
|
|
|
|
|
Net Income (GAAP) |
$ 51.1 |
|
$ 44.5 |
|
Less: Fraud-Related Recovery, net of tax |
-- |
|
(3.1) |
|
Add-Back: Special Charge, net of tax |
6.3 |
|
-- |
|
Adjusted Net Income (Non-GAAP) |
$ 57.4 |
|
$ 41.4 |
|
|
|
|
|
|
Diluted Earnings Per Share (GAAP) |
$ 1.17 |
|
$ 1.03 |
|
Less: Fraud-Related Recovery, net of tax |
-- |
|
(0.07) |
|
Add-Back: Special Charge, net of tax |
0.15 |
|
-- |
|
Adjusted Diluted Earnings Per
Share (Non-GAAP) |
$ 1.32 |
|
$ 0.96 |
|
|
|
|
|
|
CONTACT: Dan Smith, 404-853-1423
dan.smith@acuitybrands.com
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