Part I [Business](index=3&type=section&id=Item%201.%20Business) Acuity Brands is a leading provider of lighting and building management solutions and services in North America and select international markets, operating as a single reportable segment - Acuity Brands is a **leading provider** of lighting and building management solutions and services, operating as **one reportable segment** primarily serving the North American market[5](index=5&type=chunk) - The company estimates the North American lighting and building management solutions market it serves was **over $20 billion** in fiscal 2019, with renovation and retrofit activity representing a growing proportion of the total market[9](index=9&type=chunk)[10](index=10&type=chunk) - In fiscal 2019, approximately **98% of net sales originated in North America**, with **89% from the United States** Key customers include electrical distributors, retail home improvement centers, and national accounts[8](index=8&type=chunk) Fiscal 2019 Manufacturing & Sourcing by Region | Region | Manufactured | Purchased | Total | | :--- | :--- | :--- | :--- | | United States | 19% | 7% | 26% | | Mexico | 60% | —% | 60% | | China | —% | 11% | 11% | | Others | 3% | —% | 3% | | **Total** | **82%** | **18%** | **100%** | Research and Development Expenses (2017-2019) | Fiscal Year | R&D Expense (in millions) | | :--- | :--- | | 2019 | $74.7 | | 2018 | $63.9 | | 2017 | $52.0 | [Risk Factors](index=8&type=section&id=Item%201a.%20Risk%20Factors) The company faces significant risks related to its strategy, operations, legal/regulatory environment, and financial matters - Sales are **highly dependent** on the cyclical construction market and are subject to **aggressive pricing** from competitors, including Asian importers[37](index=37&type=chunk)[39](index=39&type=chunk) - Approximately **60% of finished products** are manufactured in Mexico, exposing the company to **potential disruptions** from civil unrest or trade disputes[51](index=51&type=chunk) - The company sources components and about **11% of finished goods** from China, which are subject to **import tariffs** Mitigation efforts include finding alternative suppliers, insourcing, and raising prices[66](index=66&type=chunk)[68](index=68&type=chunk) - **Significant operational risk** exists from **potential failures** or **security compromises** of IT systems, especially for customer-facing IoT and building management solutions, which could lead to **data loss**, **reputational damage**, and **fines** under evolving data privacy laws like GDPR and CCPA[52](index=52&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) - The company faces **financial risk** from the **planned transition** away from LIBOR after 2021, as its credit agreement is indexed to LIBOR, which could **increase interest expenses**[81](index=81&type=chunk) [Unresolved Staff Comments](index=15&type=section&id=Item%201b.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - **None**[84](index=84&type=chunk) [Properties](index=15&type=section&id=Item%202.%20Properties) As of August 31, 2019, the company operates from numerous facilities, primarily in North America, including 18 manufacturing facilities Facility Summary by Type (as of Aug 31, 2019) | Facility Type | Owned | Leased | | :--- | :--- | :--- | | Manufacturing facilities | 13 | 5 | | Warehouses | 1 | 3 | | Distribution centers | 2 | 7 | | Offices | 5 | 17 | Manufacturing Facilities by Location (as of Aug 31, 2019) | Location | Owned | Leased | Total | | :--- | :--- | :--- | :--- | | United States | 6 | 2 | 8 | | Mexico | 4 | 2 | 6 | | Europe | 2 | — | 2 | | Canada | 1 | 1 | 2 | | **Total** | **13** | **5** | **18** | [Legal Proceedings](index=15&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal claims, including patent infringement and a securities class action lawsuit - Lighting Science Group Corp (LSG) filed complaints alleging infringement of seven patents related to certain LED luminaires and is seeking to preclude importation and sale of accused products, along with unspecified monetary damages[89](index=89&type=chunk) - A consolidated securities class action lawsuit alleges false or misleading statements between October 2015 and April 2017 While a motion to dismiss was granted for 42 of 47 challenged statements, claims based on 5 statements are proceeding to discovery[90](index=90&type=chunk) [Mine Safety Disclosures](index=17&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[93](index=93&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=18&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Acuity Brands' common stock trades on the NYSE under "AYI", with a share repurchase program authorized in March 2018 - The Board authorized a repurchase of up to **six million shares** in March 2018 As of August 31, 2019, **4.55 million shares** may yet be purchased under this program[95](index=95&type=chunk) Share Repurchase Activity (Quarter Ended Aug 31, 2019) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | June 2019 | — | $— | | July 2019 | 250,000 | $131.58 | | August 2019 | — | $— | | **Total** | **250,000** | **$131.58** | - Over the five years ending August 31, 2019, a **$100 investment** in Acuity Brands stock would be worth **$103**, compared to **$142** for the S&P Midcap 400 Index and **$177** for the Dow Jones US Building Materials & Fixtures Index[99](index=99&type=chunk) [Selected Financial Data](index=20&type=section&id=Item%206.%20Selected%20Financial%20Data) The five-year financial data shows net sales peaking at $3.68 billion in 2018, with consistent growth in total assets and stockholders' equity Selected Consolidated Financial Data (2015-2019) | (In millions, except per-share data) | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $3,672.7 | $3,680.1 | $3,505.1 | $3,291.3 | $2,706.7 | | Net income | $330.4 | $349.6 | $321.7 | $290.8 | $222.1 | | Diluted earnings per share | $8.29 | $8.52 | $7.43 | $6.63 | $5.09 | | Total assets | $3,172.4 | $2,988.8 | $2,899.6 | $2,948.0 | $2,407.0 | | Total debt | $356.6 | $356.8 | $356.9 | $355.2 | $352.4 | | Stockholders' equity | $1,918.9 | $1,716.8 | $1,665.6 | $1,659.8 | $1,360.0 | | Cash dividends declared per common share | $0.52 | $0.52 | $0.52 | $0.52 | $0.52 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=21&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, liquidity, and strategic outlook, noting flat sales in fiscal 2019 and a cautious outlook for fiscal 2020 [Overview](index=21&type=section&id=MD%26A_Overview) This section outlines Acuity Brands' business as a leading provider of lighting and building management solutions, including IoT-enabled systems - The company's strategy focuses on extending its leadership in North America by delivering superior lighting and building management solutions, including expanding its software and IoT offerings[111](index=111&type=chunk) - Recent acquisitions include The Luminaires Group (TLG) and WhiteOptics in fiscal 2019, and IOTA Engineering and Lucid Design Group in fiscal 2018, to enhance the company's portfolio of luminaires, optical components, emergency lighting, and data analytics platforms[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=MD%26A_Liquidity_and_Capital_Resources) The company's primary liquidity sources are operating cash flow, cash on hand, and borrowings, with significant increase in operating cash flow in fiscal 2019 - Net cash from operating activities **increased by $143.2 million to $494.7 million** in fiscal 2019, primarily due to a **$57.0 million decrease in operating working capital**[120](index=120&type=chunk) - The company intends to refinance its **$350.0 million senior unsecured notes**, due December 2019, using its Term Loan Facility, which is expected to have a **lower interest rate**[125](index=125&type=chunk)[126](index=126&type=chunk)[167](index=167&type=chunk) Contractual Obligations as of August 31, 2019 (in millions) | Obligation | Total | Less than 1 Year | 1 to 3 Years | 4 to 5 Years | After 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | Debt | $356.7 | $350.3 | $4.8 | $0.7 | $0.9 | | Interest obligations | $95.2 | $23.6 | $25.2 | $20.9 | $25.5 | | Operating leases | $68.7 | $16.7 | $23.4 | $11.8 | $16.8 | | Purchase obligations | $357.2 | $347.2 | $10.0 | $— | $— | | Other liabilities | $44.9 | $1.8 | $3.2 | $1.5 | $38.4 | | **Total** | **$922.7** | **$739.6** | **$66.6** | **$34.9** | **$81.6** | [Results of Operations](index=25&type=section&id=MD%26A_Results_of_Operations) This section provides a detailed comparison of financial results for fiscal years 2019 vs 2018 and 2018 vs 2017, highlighting sales, margins, and tax rates Fiscal 2019 vs. 2018 Performance | (In millions, except per share) | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $3,672.7 | $3,680.1 | (0.2)% | | Gross profit | $1,479.7 | $1,485.4 | (0.4)% | | Operating profit | $462.9 | $460.8 | 0.5% | | Net income | $330.4 | $349.6 | (5.5)% | | Diluted EPS | $8.29 | $8.52 | (2.7)% | | Adjusted Diluted EPS | $9.57 | $8.84 | 8.3% | - The fiscal 2019 sales decline was driven by a **1% drop in volume**, attributed to non-repeating initial stocking at a retail customer, product portfolio pruning, and softer market conditions This was offset by **favorable price/mix** from price increases and channel mix changes[136](index=136&type=chunk) Fiscal 2018 vs. 2017 Performance | (In millions, except per share) | 2018 | 2017 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $3,680.1 | $3,505.1 | 5.0% | | Gross profit | $1,485.4 | $1,481.1 | 0.3% | | Operating profit | $460.8 | $527.5 | (12.6)% | | Net income | $349.6 | $321.7 | 8.7% | | Diluted EPS | $8.52 | $7.43 | 14.7% | - The fiscal 2018 sales increase was due to a **~7% rise in sales volume**, partially offset by an unfavorable price/mix of **~3%** The volume growth was driven by Atrius-based luminaires and higher shipments in the home center channel[149](index=149&type=chunk) - The effective tax rate for fiscal 2018 was **17.9%**, significantly lower than **34.7%** in 2017, primarily due to the enactment of the Tax Cuts and Jobs Act (TCJA)[157](index=157&type=chunk) [Outlook](index=33&type=section&id=MD%26A_Outlook) Management expresses caution for fiscal 2020, anticipating sluggish market demand due to global trade issues and tariffs - Management is **cautious** about fiscal 2020 market conditions due to **global trade issues** and **tariffs**, expecting **sluggish demand** for lighting products[160](index=160&type=chunk) - Fiscal 2020 first quarter net sales are projected to be down in the **mid-to-high single-digit percentage range** compared to Q1 2019, primarily due to a **prior-year pull-forward of orders** ahead of price increases[162](index=162&type=chunk) - The estimated annual tax rate for fiscal 2020 is approximately **23%** before discrete items, and capital expenditures are expected to be around **1.7% of net sales**[161](index=161&type=chunk) [Critical Accounting Estimates](index=34&type=section&id=MD%26A_Critical_Accounting_Estimates) The company identifies several critical accounting estimates that require significant management judgment, including revenue recognition and impairment testing - Key **critical accounting estimates** include revenue recognition, inventory valuation, goodwill and intangible asset impairment, self-insurance reserves, retirement benefits, share-based payments, and product warranty/recall costs[170](index=170&type=chunk)[171](index=171&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually in Q4 The fiscal 2019 qualitative assessment for goodwill (**$967.3M**) and quantitative test for indefinite-lived trade names (**$141.3M**) resulted in **no impairment charges**[175](index=175&type=chunk)[177](index=177&type=chunk)[178](index=178&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%207a.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates, foreign exchange rates, and commodity prices - A hypothetical **10% decline** in the Canadian dollar versus the U.S. dollar would negatively impact operating profit by **~$12 million**, while a **10% appreciation** would favorably impact it by **~$15 million**[197](index=197&type=chunk) - A hypothetical **10% decrease** in the Mexican peso versus the U.S. dollar would favorably impact operating profit by **~$13 million**, while a **10% increase** would negatively impact it by **~$16 million**[197](index=197&type=chunk) - In fiscal 2019, the company purchased approximately **90,000 tons of steel and aluminum**, exposing it to **commodity price volatility**[199](index=199&type=chunk) [Financial Statements and Supplementary Data](index=39&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's consolidated financial statements for the fiscal year ended August 31, 2019, and the independent auditor's reports [Management's Report on Internal Control over Financial Reporting](index=40&type=section&id=Management%27s%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) Management asserts its responsibility for establishing and maintaining adequate internal control over financial reporting, concluding it was effective as of August 31, 2019 - Management concluded that the Company's internal control over financial reporting was **effective** as of August 31, 2019, based on the criteria set forth by COSO in the Internal Control-Integrated Framework (2013)[203](index=203&type=chunk) [Report of Independent Registered Public Accounting Firm](index=41&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Ernst & Young LLP issued an unqualified opinion on the financial statements and internal controls, identifying indefinite-lived trade names valuation as a critical audit matter - The auditor, Ernst & Young LLP, issued an **unqualified opinion** on the consolidated financial statements and the company's internal control over financial reporting as of August 31, 2019[207](index=207&type=chunk)[217](index=217&type=chunk) - The audit identified the valuation of the company's **$141.3 million** in indefinite-lived trade names as a **critical audit matter** due to the **complex and subjective judgments** required for assumptions like future net sales, discount rates, and royalty rates[211](index=211&type=chunk)[213](index=213&type=chunk) [Consolidated Financial Statements](index=44&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position and performance, including the Balance Sheet, Statements of Comprehensive Income, and Cash Flows Consolidated Balance Sheet Highlights (as of Aug 31, in millions) | | 2019 | 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $461.0 | $129.1 | | Total current assets | $1,441.8 | $1,211.1 | | Goodwill | $967.3 | $970.6 | | Total assets | $3,172.4 | $2,988.8 | | Total current liabilities | $596.1 | $682.7 | | Long-term debt | $347.5 | $356.4 | | Total liabilities | $1,253.5 | $1,272.0 | | Total stockholders' equity | $1,918.9 | $1,716.8 | Consolidated Statement of Comprehensive Income (Year Ended Aug 31, in millions) | | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net sales | $3,672.7 | $3,680.1 | $3,505.1 | | Gross profit | $1,479.7 | $1,485.4 | $1,481.1 | | Operating profit | $462.9 | $460.8 | $527.5 | | Net income | $330.4 | $349.6 | $321.7 | | Diluted EPS | $8.29 | $8.52 | $7.43 | [Notes to Consolidated Financial Statements](index=48&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed disclosures supporting the main financial statements, covering accounting policies, acquisitions, debt, and income taxes - The company adopted ASC 606 (Revenue from Contracts with Customers) on September 1, 2018, using the modified retrospective method, resulting in a **$13.0 million cumulative reduction to retained earnings**[281](index=281&type=chunk) - Total debt outstanding was **$356.6 million** at August 31, 2019, primarily consisting of **$350.0 million in senior unsecured notes** due December 2019, which the company intends to **refinance**[345](index=345&type=chunk)[346](index=346&type=chunk) - The company recorded **pre-tax special charges of $1.8 million** in fiscal 2019 for **streamlining initiatives**, compared to **$5.6 million** in 2018 and **$11.3 million** in 2017[393](index=393&type=chunk)[395](index=395&type=chunk) - The **total tax benefit** related to the enactment of the TCJA was **$36.8 million**, including a **$32.5 million benefit** from **re-measuring deferred taxes** and a **$4.3 million benefit** for the **one-time transition tax**[403](index=403&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=96&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - **None**[430](index=430&type=chunk) [Controls and Procedures](index=96&type=section&id=Item%209a.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of August 31, 2019 - Based on an evaluation as of August 31, 2019, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures are **effective at a reasonable assurance level**[432](index=432&type=chunk) [Other Information](index=97&type=section&id=Item%209b.%20Other%20Information) There is no other information to report for this item - **None**[435](index=435&type=chunk) Part III [Directors, Executive Officers, and Corporate Governance](index=98&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) Information regarding the company's directors, executive officers, and corporate governance policies is incorporated by reference from the 2020 proxy statement - Information required by this item is incorporated by reference from the company's proxy statement for the 2020 Annual Meeting of Stockholders[437](index=437&type=chunk)[438](index=438&type=chunk)[439](index=439&type=chunk) [Executive Compensation](index=98&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the company's proxy statement for its 2020 Annual Meeting of Stockholders - Information required by this item is incorporated by reference from the company's proxy statement for the 2020 Annual Meeting of Stockholders[440](index=440&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=98&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership by certain beneficial owners and management, and equity compensation plans, is incorporated by reference from the 2020 proxy statement - Information required by this item is incorporated by reference from the company's proxy statement for the 2020 Annual Meeting of Stockholders[441](index=441&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=98&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related party transactions, and director independence is incorporated by reference from the company's proxy statement for its 2020 Annual Meeting of Stockholders - Information required by this item is incorporated by reference from the company's proxy statement for the 2020 Annual Meeting of Stockholders[442](index=442&type=chunk) [Principal Accountant Fees and Services](index=98&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services, including audit committee pre-approval policies, is incorporated by reference from the 2020 proxy statement - Information required by this item is incorporated by reference from the company's proxy statement for the 2020 Annual Meeting of Stockholders[443](index=443&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=99&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Form 10-K report, including financial statements, schedules, and a comprehensive index of exhibits - This section lists all financial statements, schedules, and exhibits filed with the report, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act[445](index=445&type=chunk)[484](index=484&type=chunk) [Form 10-K Summary](index=108&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a summary for this item - **None**[485](index=485&type=chunk)

Acuity Brands, Inc. (NYSE:AYI) Q4 2019 Earnings Conference Call October 2, 2019 10:00 AM ET Company Participants Dan Smith - Senior Vice President, Treasurer, Secretary Vern Nagel - Chairman, President and Chief Executive Officer Karen Holcom - Senior Vice President and Chief Financial Officer Conference Call Participants Christopher Glynn - Oppenheimer Deepa Raghavan - Wells Fargo Securities Brian Lee - Goldman Sachs Joseph Osha - JMP Securities John Walsh - Credit Suisse Timothy Wojs - Robert W. Baird & ...

Acuity Brands, Inc. (NYSE:AYI) Q3 2019 Earnings Conference Call July 2, 2019 10:00 AM ET Company Participants Dan Smith - Senior Vice President, Treasurer, Secretary Vern Nagel - Chairman, President, & Chief Executive Officer Ricky Reece - Executive Vice President & Chief Financial Officer Conference Call Participants Timothy Wojs - Robert W. Baird & Co. John Walsh - Credit Suisse Jeffrey Osborne - Cowen & Company Jeffrey Sprague - Vertical Research Partners Ryan Merkel - William Blair Operator Good morning ...

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 May 31, 2019. 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. __________ ...

Financial Data and Key Metrics Changes - Net sales for the second quarter reached a record $854 million, an increase of almost 3% compared to the year-ago period [8] - Adjusted operating profit for the second quarter was $112.4 million, up 7% from $105.3 million in the prior year [8][14] - Adjusted diluted earnings per share (EPS) was a record $1.99, reflecting a 5% increase from the previous year [8][16] - Adjusted gross profit margin decreased by 100 basis points to 39.2% compared to the year-ago period [14] Business Line Data and Key Metrics Changes - Net sales through the independent sales network benefited from price increases and growth from the building management team at Distech, while C&I sales volume declined due to order pull-forward [11] - Corporate accounts channel net sales increased by 10% year-over-year, driven by the expansion of Atrius-enabled luminaires [11] - C&I market net sales were up almost 5% for the first half of 2019 compared to the previous year, indicating a recovery from the pull-forward effect [12] Market Data and Key Metrics Changes - The overall growth rate of the lighting industry in North America was reported to be low-single digits, with the company outpacing this growth [10] - The company noted that prolonged weak demand for larger non-residential lighting projects and product substitution to lower-priced alternatives continued to impact sales [12][32] Company Strategy and Development Direction - The company is focused on diversifying its product offerings and enhancing customer solutions, particularly through its Atrius IoT platform and building management solutions [17][36] - The company aims to maintain its investment-grade rating while exploring M&A opportunities and share buybacks as part of its capital allocation strategy [39][42] - The company is reviewing its product portfolio to eliminate underperforming items, which is expected to improve margins and return on invested capital [35][72] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth despite current market challenges, citing strong cash flow and sales growth [28] - The company anticipates that labor shortages and global trade issues may continue to impact growth rates in the construction and lighting markets [30][31] - Management expects to continue outperforming the overall market growth rate, particularly in North America, while facing challenges from product substitutions and pricing dynamics [33][34] Other Important Information - The company generated $188 million in net cash flow from operating activities in the first half of fiscal 2019, an increase from $178 million in the prior year [24] - The company repurchased 400,000 shares for $49 million during the first six months of fiscal 2019, with 4.8 million shares remaining under the current repurchase authorization [26][27] Q&A Session Summary Question: Thoughts on deploying net buybacks and leveraging the balance sheet - Management indicated that cash will be used for capital expenditures, shareholder returns, and acquisitions, with a preference for M&A opportunities [39][40] Question: Impact of retail channel mix on growth - Management sees opportunities for diversification and growth in the retail channel, despite the complexities of different customer service requirements [46][48] Question: Price capture and realization timeline - Management believes there may be another quarter of noise around price capture, but is optimistic about future price realization [54][55] Question: Recent lighting industry M&A activity - Management remains bullish on the lighting industry, stating that it continues to grow and that Acuity is well-positioned compared to smaller competitors [68][69]

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 February 28, 2019. 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. _____ ...

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. _____ ...