Financial Data and Key Metrics Changes - The company reported record net sales of $933 million for Q1 2019, an increase of 11% compared to the same period last year [7] - Diluted earnings per share grew 17% to $1.98, marking a first-quarter record [6] - Adjusted operating profit for Q1 2019 was $134.1 million, a slight decrease of 1% from $135.5 million in the prior year [8][16] - Adjusted diluted earnings per share reached a record $2.32, up 20% from $1.94 in the year-ago period [20] Business Line Data and Key Metrics Changes - Solutions sold through the independent sales network, which constitutes approximately 70% of total net sales, grew 10% compared to the previous year [11] - The company experienced solid growth in net sales across most channels and geographies, particularly driven by demand for Atrius-based luminaires and lighting control solutions [10][15] - The adjusted gross profit margin for Q1 was 39.5%, a decrease of about 200 basis points compared to the prior year [16] Market Data and Key Metrics Changes - The overall growth rate in the lighting market in North America was up low-single digits, while the company's net sales growth rate of approximately 11% significantly outperformed this [14] - The company noted that the construction market is expected to grow in the low to mid-single-digit range, with the lighting industry lagging behind due to product substitutions to lower-priced alternatives [32] Company Strategy and Development Direction - The company is focused on expanding its customer base and introducing new products to drive growth, with a particular emphasis on innovative lighting and building management solutions [10][21] - The company continues to expand its Contractor Select portfolio to compete profitably in the market for lower-priced products [22][36] - Strategic actions taken include price increases and productivity improvements to address inflationary cost pressures [6][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth despite current market challenges, citing strong sales growth and cash flow [31] - The company anticipates that labor shortages and tariff-related cost increases may dampen growth rates in the near term [32][33] - Management believes that announced price increases will eventually offset rising input costs [33] Other Important Information - The company generated $132 million in net cash flow from operating activities during Q1, with a cash position of $215 million at the end of the quarter [28] - The effective tax rate for Q1 2019 was 25.2%, significantly lower than 35.5% in the prior year due to the Tax Cuts and Jobs Act [27] Q&A Session Summary Question: Trends in Contractor Select profitability - Management noted that the Contractor Select portfolio has seen improved margins and growth since its relaunch, aimed at value-oriented products [34][36] Question: Impact of product sourcing on gross contribution margin - Management acknowledged that while sourcing from Asia may reduce leverage opportunities, the margin profile remains favorable for the Contractor Select portfolio [37][39] Question: Product substitution dynamics - Management indicated that product substitution occurs both at the initial bid stage and later in the construction process, influenced by budget constraints [43][51] Question: State of the non-residential cycle - Management highlighted that while small to medium projects remain favorable, larger projects are constrained by labor availability [75] Question: Residential business growth - Management reported a 10% increase in retail channel sales, which includes residential applications, indicating stability in that segment [78]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________________ Form 10-Q _____________________________________________ (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2018. OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number 001-16583. _____ ...