Core Insights - Acuity Brands, Inc. (AYI) reported mixed results for Q3 fiscal 2024, with earnings exceeding estimates while revenues fell short [1][2] - The company achieved a 17th consecutive quarter of earnings surpassing the Zacks Consensus Estimate, driven by a focus on margins and cash generation [1][2] Financial Performance - Adjusted earnings per share (EPS) were $4.15, beating the consensus estimate of $4.10 by 1.2% and increasing 10.7% from $3.75 a year ago [2] - Net sales totaled $968.1 million, missing the consensus mark of $995.4 million by 2.7% and declining 3% year-over-year due to lower volumes [2] Segment Performance - Acuity Brands Lighting and Lighting Controls (ABL) saw net sales decline 4.5% year-over-year to $898.5 million, below the estimate of $925.3 million [3] - The Independent Sales Network's sales decreased 7.1% to $637.1 million, while Direct Sales Network sales fell 6.6% to $97 million [3] - Retail sales dropped 4.8% to $45.7 million, but Corporate Accounts channel sales increased 36.3% to $60.5 million [3] - Adjusted operating profit for ABL rose 1.5% to $162.1 million, with an adjusted operating margin up 100 basis points to 18% [3] Intelligent Spaces Group - Intelligent Spaces Group (ISG) generated net sales of $75.7 million, a 15% increase year-over-year, with adjusted operating profit rising 35.2% to $17.3 million [4] - Adjusted operating margin for ISG improved by 340 basis points to 22.9% [4] Operating Highlights - Overall adjusted operating profit increased 2.6% to $167.1 million, with an adjusted operating margin of 17.3%, up 100 basis points [5] - Adjusted EBITDA rose 2.5% to $180 million, with an adjusted EBITDA margin expanding 100 basis points to 18.6% [5] Financial Position - As of the end of Q3, cash and cash equivalents stood at $699 million, up from $397.9 million at the end of fiscal 2023 [6] - Long-term debt slightly increased to $496 million from $495.6 million [6] - Cash provided by operating activities for the first nine months of fiscal 2024 totaled $445.1 million, down from $471.5 million in the prior-year period [6] - Free cash flow decreased 4.6% year-over-year to $404.1 million [6] - The company repurchased nearly 454,000 shares for $89 million during the first nine months of fiscal 2024 [6] Outlook - For fiscal 2024, AYI expects net sales in the range of $3.7 billion to $4 billion, compared to $3.95 billion reported in fiscal 2023 [7] - Adjusted EPS guidance was raised to a range of $14.75 to $15.50, up from a prior projection of $13 to $14.50 [7]

Financial Data and Key Metrics Changes - In Q3 2024, Acuity Brands generated net sales of $968 million, which was $32 million, or 3% below the prior year due to lower sales in the Lighting and Lighting Controls business [17] - Adjusted operating profit increased by $4 million year-over-year despite a $32 million decline in sales, with an adjusted operating profit margin of 17.3%, up 100 basis points from the previous year [18] - Adjusted diluted earnings per share rose to $4.15, an increase of $0.40, or 11% over the prior year [18] Business Line Data and Key Metrics Changes - In the Lighting and Lighting Controls business, net sales were $899 million, a decrease of 5%, but adjusted operating profit increased to $162 million with an adjusted operating profit margin of 18%, a 100 basis point improvement [18] - The Intelligent Spaces business reported net sales of $76 million, a 15% increase, with adjusted operating profit at $17 million and an adjusted operating profit margin of 22.9%, a 340 basis point improvement [19] Market Data and Key Metrics Changes - The order rate in the lighting business continued to grow year-over-year, with orders exceeding shipments, leading to a backlog that will be addressed in upcoming quarters [15][26] - The corporate accounts business showed strength due to a large retail relight project, while the C&I channel remained consistent across the country [30] Company Strategy and Development Direction - The company is focused on returning the Lighting and Lighting Controls business to growth while expanding margins and generating strong free cash flow [15][60] - Acuity Brands is entering new verticals such as refueling and horticulture, aiming to leverage its existing product portfolio to capture market opportunities [9][10] - The company continues to invest in technology and product vitality to enhance service levels and productivity, which are key drivers for margin improvement [39][57] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about future performance, highlighting the diversity of the portfolio as a strength [27] - The company is addressing production challenges that led to a backlog, with expectations to resolve these issues in the near term [53][54] - Management noted that while the market is not uniformly strong, the company is outperforming historical performance metrics [48] Other Important Information - Acuity Brands generated $445 million in cash flow from operating activities year-to-date and invested $41 million in capital expenditures [19][20] - The company increased its dividend per share by 15% and repurchased approximately 454,000 shares for about $89 million [20][43] Q&A Session Summary Question: Inquiry about gross margin performance and Design Select deployment - Management indicated that margin expansion is a multi-year process driven by product vitality and service level improvements, with Design Select pacing as expected [22][24] Question: Clarification on order rate growth and market trends - Management confirmed that order rates have been consistent, with backlog building due to unmet production targets, and expressed optimism about future growth [25][26] Question: Discussion on entering the refueling market - Management explained that the refueling vertical was previously overlooked but is now seen as an attractive opportunity due to limited competition and market size [34][35] Question: Inquiry about SG&A spending and leverage - Management acknowledged increased SG&A as part of operational investments, with expectations for leverage as the business returns to growth [37][39] Question: Discussion on cash deployment and M&A pipeline - Management highlighted a robust pipeline for small and medium-sized acquisitions, focusing on opportunities that align with strategic goals [42][45] Question: Clarification on production issues and revenue impact - Management clarified that production challenges were not alarming and stemmed from labor ramp-up issues, with expectations to resolve these in the upcoming quarters [53][54]

Fiscal 2024 Third Quarter Performance - Acuity Brands' net sales decreased by 3% to $968 million in Q3'24 compared to $1 billion in Q3'23 [9] - Adjusted diluted earnings per share increased by 11% to $4.15 in Q3'24 compared to $3.75 in Q3'23 [9] - Adjusted operating profit increased by 3% to $167 million in Q3'24 compared to $163 million in Q3'23 [9] - Year-to-date cash flow from operations decreased by 6% to $445 million [9] Segment Performance - ABL (Acuity Brands Lighting and Lighting Controls) net sales decreased [17] - ISG (Intelligent Spaces Group) net sales increased by 15% to $76 million in Q3'24 compared to $66 million in Q3'23 [15] - ISG adjusted operating profit increased by 35% to $17 million in Q3'24 compared to $13 million in Q3'23 [15] - ISG adjusted operating profit margin increased by 340 bps to 229% in Q3'24 compared to 195% in Q3'23 [15] Fiscal 2024 Outlook - The company projects net sales to be in the range of $37 billion to $40 billion [17] - Adjusted diluted EPS is expected to be in the range of $1475 to $1550 [17]

Core Insights - Acuity Brands reported $968.1 million in revenue for the quarter ended May 2024, reflecting a year-over-year decline of 3.2% and an EPS of $4.15, up from $3.75 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $995.41 million by 2.74%, while the EPS exceeded the consensus estimate of $4.10 by 1.22% [1] Revenue Performance - Revenues- Eliminations: Reported at -$6.10 million, better than the average estimate of -$7.32 million, representing a year-over-year change of -1.6% [2] - Revenues- Acuity Brands Lighting (ABL): Reported at $898.50 million, below the average estimate of $918.92 million, showing a year-over-year decline of 4.5% [2] - Revenues- Intelligent Spaces Group (ISG): Reported at $75.70 million, slightly below the estimated $76.42 million, but reflecting a year-over-year increase of 15.1% [2] Profit Metrics - Adjusted operating profit for Intelligent Spaces Group: Reported at $17.30 million, exceeding the average estimate of $14.25 million [2] - Adjusted operating profit for Acuity Brands Lighting: Reported at $162.10 million, slightly above the average estimate of $161.47 million [2] Stock Performance - Acuity Brands shares have returned -5.4% over the past month, contrasting with the Zacks S&P 500 composite's increase of +3.4% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Company Performance - Acuity Brands reported quarterly earnings of $4.15 per share, exceeding the Zacks Consensus Estimate of $4.10 per share, and up from $3.75 per share a year ago, representing an earnings surprise of 1.22% [1] - The company posted revenues of $968.1 million for the quarter ended May 2024, which was 2.74% below the Zacks Consensus Estimate and down from $1 billion in the same quarter last year [1] - Over the last four quarters, Acuity Brands has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [1] Stock Performance and Outlook - Acuity Brands shares have increased by approximately 17.1% since the beginning of the year, outperforming the S&P 500's gain of 14.9% [2] - The current consensus EPS estimate for the upcoming quarter is $4.26 on revenues of $1.04 billion, and for the current fiscal year, it is $15.43 on revenues of $3.88 billion [4] Industry Context - The Building Products - Lighting industry, to which Acuity Brands belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, indicating potential challenges ahead [5] - The performance of Acuity Brands may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [5]

[Acuity Brands Fiscal 2024 Third-Quarter Results](index=1&type=section&id=Acuity%20Brands%20Fiscal%202024%20Third-Quarter%20Results) The company reported a slight revenue decline in Q3 fiscal 2024 but demonstrated strong profitability and earnings growth [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported a slight revenue decline but achieved higher operating profit and significant growth in diluted earnings per share Q3 Fiscal 2024 Key Financial Metrics (YoY) | Metric | Q3 FY2024 | Q3 FY2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $968.1M | $1,000.3M | -3.2% | | Operating Profit | $145.3M | $143.3M | +1.4% | | Adjusted Operating Profit | $167.1M | $162.9M | +2.6% | | Diluted EPS | $3.62 | $3.28 | +10.4% | | Adjusted Diluted EPS | $4.15 | $3.75 | +10.7% | - The company successfully expanded its operating profit margin by **70 basis points** to **15.0%** and its adjusted operating profit margin by **100 basis points** to **17.3%** compared to the prior year[2](index=2&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) Performance was mixed, with the ABL segment's sales decline offset by margin improvement and strong growth from the ISG segment [Acuity Brands Lighting and Lighting Controls (ABL)](index=2&type=section&id=Acuity%20Brands%20Lighting%20and%20Lighting%20Controls%20(ABL)) The ABL segment saw a modest sales decrease but improved its operating profit margin through effective cost management ABL Segment Q3 FY2024 Performance (YoY) | Metric | Q3 FY2024 | Q3 FY2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $898.5M | $940.7M | -4.5% | | Operating Profit | $151.5M | $150.0M | +1.0% | | Operating Profit Margin | 16.9% | 15.9% | +100 bps | | Adjusted Operating Profit | $162.1M | $159.7M | +1.5% | [Intelligent Spaces Group (ISG)](index=2&type=section&id=Intelligent%20Spaces%20Group%20(ISG)) The ISG segment delivered robust double-digit sales growth and a significant expansion in operating profit margin ISG Segment Q3 FY2024 Performance (YoY) | Metric | Q3 FY2024 | Q3 FY2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $75.7M | $65.8M | +15.0% | | Operating Profit | $12.5M | $8.6M | +45.3% | | Operating Profit Margin | 16.5% | 13.1% | +340 bps | | Adjusted Operating Profit | $17.3M | $12.8M | +35.2% | [Cash Flow and Capital Allocation](index=2&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) The company generated strong operating cash flow and continued to return capital to shareholders through share repurchases - Net cash from operating activities for the first nine months of fiscal 2024 was **$445.1 million**, compared to $471.5 million in the same period of the prior year[6](index=6&type=chunk)[23](index=23&type=chunk) - Year-to-date, the company has repurchased approximately **454,000 shares** of common stock for about **$89 million**[6](index=6&type=chunk) [Disaggregated Net Sales](index=9&type=section&id=Disaggregated%20Net%20Sales) Sales performance varied by channel, with a decline in the Independent sales network partially offset by strong growth in Corporate accounts Q3 2024 Net Sales by Channel (YoY % Change) | Segment / Channel | Q3 2024 Sales | % Change | | :--- | :--- | :--- | | **ABL Total** | **$898.5M** | **-4.5%** | | Independent sales network | $637.1M | -7.1% | | Direct sales network | $97.0M | -6.6% | | Retail sales | $45.7M | -4.8% | | Corporate accounts | $60.5M | +36.3% | | **ISG Total** | **$75.7M** | **+15.0%** | | **Total Company** | **$968.1M** | **-3.2%** | [Financial Statements](index=6&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements reflect a stronger balance sheet and year-over-year net income growth [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The income statement shows stable gross profit despite lower net sales, leading to higher net income and diluted EPS for the quarter Q3 Fiscal 2024 Income Statement Highlights (in millions) | Line Item | Q3 FY2024 | Q3 FY2023 | | :--- | :--- | :--- | | Net Sales | $968.1 | $1,000.3 | | Gross Profit | $447.3 | $447.3 | | Operating Profit | $145.3 | $143.3 | | Net Income | $113.9 | $105.0 | - Diluted earnings per share for Q3 2024 increased to **$3.62** from $3.28 in Q3 2023[20](index=20&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet highlights a significant increase in cash and cash equivalents, strengthening the company's overall liquidity Balance Sheet Highlights (in millions) | Account | May 31, 2024 | August 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $699.0 | $397.9 | | Total current assets | $1,674.0 | $1,395.2 | | Total assets | $3,642.9 | $3,408.5 | | Total current liabilities | $605.3 | $595.4 | | Total liabilities | $1,388.2 | $1,393.1 | | Total stockholders' equity | $2,254.7 | $2,015.4 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated substantial cash from operations, funding investments and shareholder returns while increasing its cash balance Nine Months Ended May 31 Cash Flow Summary (in millions) | Cash Flow Activity | FY2024 | FY2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $445.1 | $471.5 | | Net cash used for investing activities | ($44.6) | ($76.4) | | Net cash used for financing activities | ($100.5) | ($258.7) | | **Net change in cash** | **$301.1** | **$136.1** | [Reconciliation of Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section details the adjustments made to bridge GAAP results to non-GAAP measures like adjusted operating profit - Management uses non-GAAP measures like adjusted operating profit and adjusted diluted EPS to provide a clearer view of core operational performance by excluding certain items[10](index=10&type=chunk)[11](index=11&type=chunk) Q3 2024 Reconciliation of Operating Profit (in millions) | Description | Amount | | :--- | :--- | | **Operating profit (GAAP)** | **$145.3** | | Add-back: Amortization of acquired intangible assets | $10.0 | | Add-back: Share-based payment expense | $11.8 | | **Adjusted operating profit (Non-GAAP)** | **$167.1** | [Company Information and Disclosures](index=2&type=section&id=Company%20Information%20and%20Disclosures) This section outlines the company's business structure, defines non-GAAP measures, and includes forward-looking statement disclaimers - Acuity Brands is an industrial technology company operating through two business segments: **Acuity Brands Lighting and Lighting Controls (ABL)** and the **Intelligent Spaces Group (ISG)**[8](index=8&type=chunk)[9](index=9&type=chunk) - The report includes non-GAAP financial measures to enhance understanding of the company's financial performance, excluding items like amortization and share-based payment expense[10](index=10&type=chunk) - The press release contains forward-looking statements that are subject to risks and uncertainties, and the company undertakes no obligation to update them[15](index=15&type=chunk)

[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) This section provides a comprehensive overview of the company's financial performance and condition, including detailed financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited Consolidated Financial Statements for Acuity Brands, Inc. as of May 31, 2024, including Balance Sheets, Statements of Comprehensive Income, and Statements of Cash Flows, along with 20 detailed notes providing context and explanation for the financial data [Consolidated Financial Statements (Tables)](index=3&type=section&id=Consolidated%20Financial%20Statements%20(Tables)) The core financial statements show a strong liquidity position with a significant increase in cash and cash equivalents, while net sales saw a slight decline, net income and earnings per share increased, driven by improved gross margins and lower operating expenses Consolidated Balance Sheet Highlights (in millions) | Account | May 31, 2024 (Unaudited) | August 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $699.0 | $397.9 | | Total current assets | $1,674.0 | $1,395.2 | | Total assets | $3,642.9 | $3,408.5 | | Total current liabilities | $605.3 | $595.4 | | Total liabilities | $1,388.2 | $1,393.1 | | Total stockholders' equity | $2,254.7 | $2,015.4 | Consolidated Statements of Comprehensive Income Highlights (in millions, except per share data) | Metric | Three Months Ended May 31, 2024 | Three Months Ended May 31, 2023 | Nine Months Ended May 31, 2024 | Nine Months Ended May 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $968.1 | $1,000.3 | $2,808.7 | $2,941.8 | | Gross profit | $452.2 | $447.3 | $1,293.0 | $1,270.5 | | Operating profit | $145.3 | $143.3 | $396.3 | $363.7 | | Net income | $113.9 | $105.0 | $303.7 | $263.1 | | Diluted earnings per share | $3.62 | $3.28 | $9.67 | $8.13 | Consolidated Statements of Cash Flows Highlights (in millions) | Metric | Nine Months Ended May 31, 2024 | Nine Months Ended May 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $445.1 | $471.5 | | Net cash used for investing activities | $(44.6) | $(76.4) | | Net cash used for financing activities | $(100.5) | $(258.7) | | Net change in cash and cash equivalents | $301.1 | $136.1 | [Notes to Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's business structure, recent corporate activities, and segment performance, with Acuity operating through two segments: Acuity Brands Lighting (ABL) and Intelligent Spaces Group (ISG), showing ABL sales decreased while ISG sales grew - The company operates through two business segments: Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG)[18](index=18&type=chunk) - On January 19, 2024, the company acquired certain assets related to Arize® horticulture lighting products, which were included in the ABL segment's results[28](index=28&type=chunk) - There were no divestitures in the first nine months of fiscal 2024, with the company selling its Sunoptics business in November 2022, recognizing a pre-tax loss of **$11.2 million** in fiscal 2023[32](index=32&type=chunk) Segment Net Sales (in millions) | Segment | Three Months Ended May 31, 2024 | Three Months Ended May 31, 2023 | Nine Months Ended May 31, 2024 | Nine Months Ended May 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | ABL | $898.5 | $940.7 | $2,618.4 | $2,778.6 | | ISG | $75.7 | $65.8 | $208.0 | $180.8 | Segment Operating Profit (in millions) | Segment | Three Months Ended May 31, 2024 | Three Months Ended May 31, 2023 | Nine Months Ended May 31, 2024 | Nine Months Ended May 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | ABL | $151.5 | $150.0 | $421.3 | $391.7 | | ISG | $12.5 | $8.6 | $26.9 | $22.7 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial health, highlighting a strong liquidity position with **$699.0 million** in cash and total liquidity of **$1.3 billion**, with improved gross margins leading to an **8.5%** increase in net income despite a **3.2%** decrease in Q3 net sales [Financial Condition, Capital Resources, and Liquidity](index=21&type=section&id=Financial%20Condition,%20Capital%20Resources,%20and%20Liquidity) The company's financial condition remains robust, with cash increasing by **$301.1 million** to **$699.0 million** since August 2023, driven by **$445.1 million** in operating cash flow, and total liquidity standing at **$1.3 billion** - Cash position increased by **$301.1 million** from August 31, 2023, to **$699.0 million** at May 31, 2024[111](index=111&type=chunk) - Generated **$445.1 million** in cash from operating activities during the first nine months of fiscal 2024[111](index=111&type=chunk) - Total liquidity as of May 31, 2024, was **$1.3 billion**, comprising cash on hand and **$596.2 million** of available borrowing capacity under the Revolving Credit Facility[113](index=113&type=chunk) - Repurchased **0.5 million** shares of common stock for **$88.3 million** and paid dividends of **$13.4 million** during the first nine months of fiscal 2024[123](index=123&type=chunk)[124](index=124&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) For Q3 2024, net sales decreased **3.2%** to **$968.1 million**, but gross profit margin expanded by **200 basis points** to **46.7%**, leading to a **1.4%** rise in operating profit and a **10.4%** increase in diluted EPS to **$3.62** Q3 FY2024 vs Q3 FY2023 Performance (in millions, except per share data) | Metric | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $968.1 | $1,000.3 | (3.2)% | | Gross Profit Margin | 46.7% | 44.7% | +200 bps | | Operating Profit | $145.3 | $143.3 | 1.4% | | Net Income | $113.9 | $105.0 | 8.5% | | Diluted EPS | $3.62 | $3.28 | 10.4% | Nine Months FY2024 vs FY2023 Performance (in millions, except per share data) | Metric | YTD 2024 | YTD 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,808.7 | $2,941.8 | (4.5)% | | Gross Profit Margin | 46.0% | 43.2% | +280 bps | | Operating Profit | $396.3 | $363.7 | 9.0% | | Net Income | $303.7 | $263.1 | 15.4% | | Diluted EPS | $9.67 | $8.13 | 18.9% | - In Q3 2024, ABL segment net sales decreased **4.5%** to **$898.5 million**, while ISG segment net sales increased **15.0%** to **$75.7 million**[136](index=136&type=chunk)[137](index=137&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company states that there have been no material changes to its exposure to market risks, which include fluctuations in interest rates, foreign exchange rates, and commodity prices, since the disclosures in its last Annual Report on Form 10-K - There have been no material changes to the company's exposure to market risks from those disclosed in the Form 10-K for the fiscal year ended August 31, 2023[155](index=155&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of May 31, 2024, with no material changes in internal control over financial reporting identified during the quarter - Based on an evaluation as of May 31, 2024, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures are effective[157](index=157&type=chunk) - No material changes to the company's internal control over financial reporting were identified during the most recently completed fiscal quarter[159](index=159&type=chunk) [Part II. OTHER INFORMATION](index=31&type=section&id=Part%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, other general information, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) This section references the 'Commitments and Contingencies' footnote for details on legal matters, noting a class action lawsuit related to 2020 and 2021 data security incidents was settled with court approval on May 21, 2024, with no material financial impact - A class action complaint filed regarding data security incidents in October 2020 and December 2021 has been settled[65](index=65&type=chunk)[66](index=66&type=chunk) - The court approved the settlement on May 21, 2024, with an effective date of June 25, 2024, and the impact of the settlement was not material to the company's financials[66](index=66&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K - There have been no material changes in the company's risk factors from those disclosed in the Form 10-K[162](index=162&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board of Directors authorized an additional **three million** shares for the company's stock repurchase program on January 25, 2024, with **79,523** shares repurchased during the third fiscal quarter at an average price of **$260.07** - On January 25, 2024, the Board authorized the repurchase of an additional **three million** shares of common stock[163](index=163&type=chunk) Share Repurchases for the Quarter Ended May 31, 2024 | Metric | Value | | :--- | :--- | | Total Shares Purchased | 79,523 | | Average Price Paid per Share | $260.07 | | Shares Remaining for Repurchase | 3,775,637 | [Item 5. Other Information](index=31&type=section&id=Item%205.%20Other%20Information) The company confirms that during the third quarter of fiscal 2024, no directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements - During Q3 2024, no directors or Section 16 officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements[165](index=165&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section provides a list of all exhibits filed with the Form 10-Q, including corporate governance documents and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act - The report includes a list of exhibits, such as CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)

Core Insights - Acuity Brands, Inc. reported net sales of $968.1 million for the third quarter of fiscal 2024, reflecting a 3.2% decline compared to the previous year [1][24] - The company achieved an operating profit of $145.3 million, a 1.4% increase year-over-year, with an adjusted operating profit of $167.1 million, up 2.6% [2][28] - Diluted earnings per share (EPS) rose to $3.62, marking a 10.4% increase from the prior year, while adjusted diluted EPS reached $4.15, up 10.7% [3][30] - Year-to-date cash flow from operations totaled $445.1 million, a decrease of $26.4 million compared to the previous year [6] Financial Performance - The company’s operating profit margin improved to 15.0%, an increase of 70 basis points from the prior year, while the adjusted operating profit margin rose to 17.3%, up 100 basis points [2][28] - Acuity Brands Lighting and Lighting Controls (ABL) segment generated net sales of $898.5 million, down 4.5% year-over-year, with an operating profit of $151.5 million, a 1.0% increase [4][32] - The Intelligent Spaces Group (ISG) reported net sales of $75.7 million, a 15.0% increase, with an operating profit of $12.5 million, up 45.3% [5][29] Cash Flow and Capital Allocation - The company generated $445.1 million in cash flow from operations for the first nine months of fiscal 2024, down from $471.5 million in the prior year [6][21] - Acuity Brands repurchased approximately 454,000 shares of common stock for about $89 million year-to-date [6][21] Segment Analysis - ABL's net sales decreased by $42.2 million, while ISG's net sales increased by $9.9 million compared to the prior year [4][5] - ABL's adjusted operating profit was $162.1 million, reflecting a 1.5% increase, while ISG's adjusted operating profit rose to $17.3 million, a 35.2% increase [4][5][28]

Core Insights - Acuity Brands, Inc. reported net sales of $968.1 million for the third quarter of fiscal 2024, reflecting a 3.2% decline compared to the previous year [1][24] - The company achieved an operating profit of $145.3 million, a 1.4% increase year-over-year, with an adjusted operating profit of $167.1 million, up 2.6% [2][28] - Diluted earnings per share (EPS) rose to $3.62, marking a 10.4% increase from the prior year, while adjusted diluted EPS reached $4.15, up 10.7% [3][30] - Year-to-date cash flow from operations totaled $445.1 million, a decrease of $26.4 million compared to the previous year [6] Financial Performance - The company’s net sales decreased by $32.2 million, or 3.2%, compared to the prior year [1][24] - Operating profit as a percentage of net sales was 15.0%, an increase of 70 basis points from the previous year [2] - Adjusted operating profit margin improved to 17.3%, up 100 basis points year-over-year [2][28] - The gross profit for the third quarter was $452.2 million, compared to $447.3 million in the prior year [19] Segment Performance - Acuity Brands Lighting and Lighting Controls (ABL) segment generated net sales of $898.5 million, a decrease of 4.5% year-over-year [4][24] - ABL's operating profit was $151.5 million, reflecting a 1.0% increase, with an operating profit margin of 16.9% [4][28] - The Intelligent Spaces Group (ISG) reported net sales of $75.7 million, a 15.0% increase compared to the prior year, with an operating profit margin of 16.5% [5][29] Cash Flow and Capital Allocation - The company generated $445.1 million in cash flow from operations for the first nine months of fiscal 2024, down from $471.5 million in the prior year [6][22] - Acuity Brands repurchased approximately 454,000 shares of common stock for about $89 million year-to-date [6][22] Company Overview - Acuity Brands, Inc. is a market-leading industrial technology company focused on innovative products and services in lighting and building management solutions [8][9] - The company operates through two main segments: ABL and ISG, aiming to enhance customer-focused efficiencies and increase market share [8]

Core Viewpoint - Acuity Brands, Inc. has declared a quarterly dividend of 15 cents per share, payable on August 1, 2024, to shareholders of record on July 18, 2024 [1] Company Overview - Acuity Brands, Inc. is a market-leading industrial technology company focused on solving problems in spaces, light, and more [2] - The company operates through two business segments: Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG) [2] - Acuity Brands designs, manufactures, and markets products and services that significantly impact people's lives [2] - The company emphasizes growth through innovative product development, including lighting, lighting controls, building management solutions, and location-aware applications [2] - Acuity Brands aims to increase market share and deliver superior returns by achieving customer-focused efficiencies and aggressively deploying capital to enter attractive new verticals [2] Operational Footprint - Acuity Brands is headquartered in Atlanta, Georgia, with operations across North America, Europe, and Asia [3] - The company is supported by a workforce of over 12,000 dedicated and talented associates [3]