Acuity Brands, Inc. (NYSE:AYI) Q3 2022 Earnings Conference Call June 30, 2022 8:00 AM ET Company Participants Charlotte McLaughlin - Vice President, Investor Relations Neil Ashe - Chairman, President and CEO Karen Holcom - Senior Vice President and CFO Conference Call Participants Christopher Snyder - UBS John Walsh - Credit Suisse Christopher Glynn - Oppenheimer Ryan Merkel - William Blair Josh Chan - Robert W. Baird & Co. Jeffrey Osborne - Cowen & Company Miguel De Jesus - Goldman Sachs Operator Good morn ...

Financial Performance - Net sales for the three months ended May 31, 2022, increased by $160.9 million, or 17.9%, to $1.06 billion compared to $899.7 million in the prior-year period[138]. - Gross profit for the same period was $445.1 million, representing a 15.1% increase from $386.6 million in the prior year[138]. - Net income for the three months ended May 31, 2022, was $105.7 million, a 23.3% increase from $85.7 million in the prior year[138]. - For the first nine months of fiscal 2022, net sales increased by $427.5 million, or 17.3%, to $2.90 billion compared to $2.47 billion in the prior-year period[153]. - Gross profit for the first nine months of fiscal 2022 increased by $154.5 million, or 14.6%, to $1.21 billion, with a gross profit margin decrease of 100 basis points to 41.8%[154]. - Operating profit for the first nine months of fiscal 2022 was $360.1 million, an increase of $65.3 million, or 22.2%, compared to $294.8 million in the prior-year period[156]. - Net income for the first nine months of fiscal 2022 increased by $60.4 million, or 29.0%, to $268.6 million, with diluted earnings per share rising by $2.00 to $7.66[160]. Cash Flow and Investments - Cash generated from operating activities during the nine months ended May 31, 2022, was $165.7 million, a decrease of $150.5 million compared to $316.2 million in the prior-year period[122]. - The cash position at May 31, 2022, was $318.2 million, a decrease of $173.1 million from August 31, 2021[121]. - The company invested $38.0 million in property, plant, and equipment during the nine months ended May 31, 2022, compared to $30.6 million in the prior year[128]. - The company expects to invest approximately 1.5% of net sales on capital expenditures during fiscal 2022[128]. - The company repurchased 2.3 million shares of common stock for $405.1 million during the first nine months of fiscal 2022[132]. Segment Performance - ABL segment net sales for Q3 fiscal 2022 increased by $158.4 million, or 18.6%, to $1.01 billion, driven by price increases and higher volumes[148]. - ISG segment net sales for Q3 fiscal 2022 increased by $2.9 million, or 5.2%, to $58.3 million, primarily due to strong demand and price increases[150]. - ABL net sales for the nine months ended May 31, 2022, increased by 17.7% to $2,755.1 million compared to $2,340.4 million in the prior-year period[162]. - ISG net sales for the nine months ended May 31, 2022, increased by 10.9% to $154.7 million compared to $139.5 million in the prior-year period[163]. - Acquisitions contributed approximately 3% to ABL's sales increase compared to the prior year, reflected in the other sales channel[162]. - Sales in the independent and direct network channels increased due to recent price increases and higher volumes, while retail channel sales were relatively flat[162]. Profitability Metrics - Operating profit for Q3 fiscal 2022 was $142.7 million, an increase of $24.6 million, or 20.8%, compared to $118.1 million in the prior-year period[141]. - The increase in ABL's operating profit was primarily due to higher sales, partially offset by increased material, labor, and freight costs[163]. - Operating profit for ABL was $394.2 million, representing a margin of 14.3%, an increase of $67.3 million from $326.9 million (14.0% margin) in the prior-year period[163]. - ISG operating profit was $12.4 million, up from $7.9 million in the prior-year period, reflecting an increase of $4.5 million[163]. Tax and Market Risks - The effective income tax rate for the first nine months of fiscal 2022 was 22.2%, a decrease from 23.1% in the prior-year period[159]. - The company is exposed to market risks from fluctuations in interest rates, foreign exchange rates, and commodity prices, with no material changes reported[168]. Forward-Looking Statements - Forward-looking statements indicate expectations regarding financial performance, market demand, and potential impacts from economic conditions and global events[166]. - Management continues to evaluate critical accounting estimates, including revenue recognition and inventory valuation, which could impact reported financial results[164].

Acuity Brands, Inc. (NYSE:AYI) Q2 2022 Earnings Conference Call April 5, 2022 8:00 AM ET Company Participants Charlotte McLaughlin - Vice President, Investor Relations Neil Ashe - Chairman, President and CEO Karen Holcom - Senior Vice President and CFO Conference Call Participants Christopher Glynn - Oppenheimer Ryan Merkel - William Blair Christopher Snyder - UBS Josh Chan - Baird Jeffrey Osborne - Cowen & Company Miguel De Jesus - Goldman Sachs Operator Good morning, and welcome to the Acuity Brands Secon ...

Acuity Brands, Inc. (NYSE:AYI) Q1 2022 Earnings Conference Call January 7, 2021 8:00 AM ET Company Participants Charlotte McLaughlin - Vice President, Investor Relations Neil Ashe - Chairman, President and CEO Karen Holcom - Senior Vice President and CFO Conference Call Participants John Walsh - Credit Suisse Ryan Merkel - William Blair Jeffrey Sprague - Vertical Research Christopher Glynn - Oppenheimer Miguel De Jesus - Goldman Sachs Christopher Snyder - UBS Joseph O'Dea - Wells Fargo Jeffrey Osborne - Cow ...

Part I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Acuity Brands, Inc.'s unaudited consolidated financial statements and notes for periods ended November 30, 2021 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of November 30, 2021, total assets were $3.61 billion, a slight increase from $3.58 billion at August 31, 2021, driven by higher cash and inventories, partially offset by a decrease in accounts receivable Consolidated Balance Sheet Highlights (in millions) | Account | Nov 30, 2021 (Unaudited) | Aug 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $1,599.9 | $1,544.3 | | Cash and cash equivalents | $504.0 | $491.3 | | Inventories | $439.7 | $398.7 | | **Total Assets** | **$3,605.6** | **$3,575.1** | | **Total Current Liabilities** | $695.2 | $692.2 | | Long-term debt | $494.5 | $494.3 | | **Total Liabilities** | **$1,532.7** | **$1,530.6** | | **Total Stockholders' Equity** | **$2,072.9** | **$2,044.5** | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) For the three months ended November 30, 2021, net sales increased by 16.9% to $926.1 million, net income rose by 47.0% to $87.6 million, and diluted earnings per share increased by 56.7% to $2.46 Consolidated Statements of Comprehensive Income (in millions, except per share data) | Metric | Three Months Ended Nov 30, 2021 | Three Months Ended Nov 30, 2020 | | :--- | :--- | :--- | | Net sales | $926.1 | $792.0 | | Gross profit | $385.8 | $332.4 | | Operating profit | $115.1 | $85.7 | | **Net income** | **$87.6** | **$59.6** | | **Diluted earnings per share** | **$2.46** | **$1.57** | | Dividends declared per share | $0.13 | $0.13 | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for the three months ended November 30, 2021, was $83.7 million, a decrease from the prior year, primarily due to increased working capital, with cash and cash equivalents ending at $504.0 million Consolidated Statements of Cash Flows Highlights (in millions) | Cash Flow Activity | Three Months Ended Nov 30, 2021 | Three Months Ended Nov 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $83.7 | $123.9 | | Net cash used for investing activities | $(9.0) | $(14.1) | | Net cash used for financing activities | $(59.1) | $(164.1) | | **Net change in cash and cash equivalents** | **$12.7** | **$(53.7)** | | **Cash and cash equivalents at end of period** | **$504.0** | **$507.0** | [Notes to Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial data, including segment information, acquisitions, debt structure, and a litigation settlement - The company operates through two business segments: Acuity Brands Lighting and Lighting Controls (ABL), which accounted for **~95% of revenue**, and the Intelligent Spaces Group (ISG), which accounted for **~5%**[18](index=18&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - There were no acquisitions in fiscal 2022. In fiscal 2021, the company acquired ams OSRAM's North American Digital Systems business and Rockpile Ventures[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - The company has **$500.0 million** in **2.150%** senior unsecured notes due 2030 and a **$400.0 million** unsecured revolving credit facility, which was undrawn as of November 30, 2021[56](index=56&type=chunk)[57](index=57&type=chunk) - A shareholder class action lawsuit was settled for **$15.8 million**, which is expected to be fully funded by Directors and Officers liability insurance, resulting in no significant net loss or cash outflow for the company[71](index=71&type=chunk) Disaggregated Revenue by Sales Channel (in millions) | Sales Channel | Three Months Ended Nov 30, 2021 | Three Months Ended Nov 30, 2020 | | :--- | :--- | :--- | | **ABL Total** | **$883.6** | **$753.6** | | Independent sales network | $636.8 | $559.5 | | Direct sales network | $90.0 | $80.1 | | Retail sales | $46.9 | $56.0 | | **ISG Total** | **$46.4** | **$40.8** | | **Total Net Sales** | **$926.1** | **$792.0** | Segment Operating Profit (in millions) | Segment | Three Months Ended Nov 30, 2021 | Three Months Ended Nov 30, 2020 | | :--- | :--- | :--- | | ABL Operating Profit | $128.1 | $98.4 | | ISG Operating Profit (Loss) | $2.0 | $(0.1) | | Unallocated corporate amounts | $(15.0) | $(12.6) | | **Total Operating Profit** | **$115.1** | **$85.7** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for the first quarter of fiscal 2022, highlighting increased net sales and operating profit, strong liquidity, and capital allocation priorities Q1 FY2022 vs Q1 FY2021 Performance (in millions, except per share data) | Metric | Q1 FY2022 | Q1 FY2021 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $926.1 | $792.0 | 16.9% | | Gross profit | $385.8 | $332.4 | 16.1% | | Operating profit | $115.1 | $85.7 | 34.3% | | Net income | $87.6 | $59.6 | 47.0% | | Diluted EPS | $2.46 | $1.57 | 56.7% | - Net sales growth of **16.9%** was attributed to strong go-to-market activities, customer service focus, recovery in end markets, and price increases. Acquired companies contributed **less than 4%** to the sales increase[129](index=129&type=chunk) - Gross profit margin decreased slightly by **30 basis points** to **41.7%**, as price increases and productivity improvements were largely able to offset escalating material, conversion, and freight costs[130](index=130&type=chunk) - Operating profit margin improved by **160 basis points** to **12.4%** due to better leveraging of operating costs, despite higher SD&A expenses related to increased sales and acquisitions[131](index=131&type=chunk)[132](index=132&type=chunk) - The effective tax rate decreased to **19.6%** from **24.7%** YoY, primarily due to favorable discrete items related to excess tax benefits on share-based payments[134](index=134&type=chunk) - The company maintained a strong liquidity position with **$504.0 million** in cash and **$395.9 million** of additional borrowing capacity under its revolving credit facility[112](index=112&type=chunk)[115](index=115&type=chunk) - During the quarter, the company repurchased **0.3 million shares** for **$52.8 million** and paid dividends of **$4.7 million**[122](index=122&type=chunk)[123](index=123&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes to its exposure to market risks, including interest rates, foreign exchange rates, and commodity prices, since its last Form 10-K filing - There have been no material changes to the company's exposure to market risks (interest rates, foreign exchange, commodity prices) since the last Form 10-K filing[143](index=143&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of November 30, 2021, with no material changes to internal control over financial reporting during the quarter - The principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of November 30, 2021[145](index=145&type=chunk) - The assessment of internal control over financial reporting excluded the fiscal 2021 acquisitions of Rockpile Ventures and OSRAM DS, which collectively represented **less than 4%** of consolidated assets, equity, sales, and pre-tax income[146](index=146&type=chunk) Part II. OTHER INFORMATION [Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference information on legal proceedings from the 'Commitments and Contingencies' footnote in Part I, noting any new reportable developments - Information regarding legal proceedings is detailed in the 'Commitments and Contingencies' footnote of the Notes to Consolidated Financial Statements, which is incorporated by reference into this item[150](index=150&type=chunk) [Risk Factors](index=28&type=section&id=Item%201a.%20Risk%20Factors) The company reports no material changes in its risk factors from those disclosed in its Annual Report on Form 10-K - There have been no material changes in risk factors from those disclosed in the company's Form 10-K[151](index=151&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter ended November 30, 2021, the company repurchased 300,426 shares of common stock at an average price of $175.75 per share, with 3.5 million shares remaining available for repurchase Share Repurchase Activity (Quarter Ended Nov 30, 2021) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Sep 2021 | 248,779 | $174.51 | | Oct 2021 | 51,647 | $181.73 | | Nov 2021 | 0 | $0.00 | | **Total** | **300,426** | **$175.75** | - As of November 30, 2021, **3.5 million shares** were still available for repurchase under the authorized program[153](index=153&type=chunk) [Other Information](index=28&type=section&id=Item%205.%20Other%20Information) On January 6, 2022, the Board of Directors declared a quarterly dividend of $0.13 per share, payable on February 1, 2022 - A quarterly dividend of **$0.13 per share** was declared on January 6, 2022[155](index=155&type=chunk) [Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and various corporate governance and compensation plan documents - The report includes a list of filed exhibits, such as CEO/CFO certifications (Exhibits 31, 32) and compensation plan documents (Exhibit 10)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)