Acuity Brands, Inc. (NYSE:AYI) (“Company”) today announced that
fiscal 2017 second quarter net sales increased $26.9 million, or
3.5 percent, to $804.7 million from $777.8 million reported in the
prior-year period. Operating profit for the second quarter of
fiscal 2017 was $108.0 million, an increase of $1.3 million, or 1.2
percent, over the year-ago period. Net income for the second
quarter of fiscal 2017 was $67.3 million, an increase of $1.8
million, or 2.7 percent, compared with the prior-year period.
Fiscal 2017 second quarter diluted earnings per share (“EPS”) of
$1.53 increased $0.04, or 2.7 percent, compared with $1.49 for the
year-ago period.
Adjusted diluted EPS for the second quarter of
fiscal 2017 decreased 1.7 percent to $1.77 compared with adjusted
diluted EPS of $1.80 for the year-ago period. Adjusted
operating profit for the second quarter of fiscal 2017 decreased
$3.5 million, or 2.7 percent, to $123.9 million, or 15.4 percent of
net sales, compared with the year-ago period adjusted operating
profit of $127.4 million, or 16.4 percent of net sales.
Adjusted results exclude the impact of amortization expense for
acquired intangible assets, share-based payment expense,
acquisition-related items (including acquired profit in inventory
and professional fees), and special charges for streamlining
activities. Management believes these items impacted the
comparability of the Company's results and that adjusted financial
measures enhance the reader’s overall understanding of the
Company's current financial performance by making results
comparable between periods. A reconciliation of adjusted
financial measures to the most directly comparable U.S. 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, “Acuity Brands
continued to deliver sales growth while initial industry data
suggests that the North American lighting market declined modestly
during our fiscal second quarter, reflecting continued weakness in
smaller, short-cycle projects. Additionally, sales in certain
international markets, including Europe and Mexico, were down
year-over-year, reducing our overall net sales by approximately 1
percentage point compared with the year-ago period. Our
adjusted gross profit margin of 41.7 percent declined 180 basis
points compared with the prior year, primarily due to higher
manufacturing expenses resulting from increased wages and benefits,
inbound freight costs, and quality costs. Like last quarter,
we carried a higher manufacturing cost structure into the quarter
in anticipation of servicing a greater level of demand than
occurred. This higher cost structure negatively impacted both
gross profit dollars and margin. Adjusted selling,
distribution & administrative (“SD&A”) expenses declined 80
basis points year-over-year and represented 26.3 percent of net
sales in the second quarter of fiscal 2017 compared with prior
year’s 27.1 percent. Even though demand was subdued, we have
continued to invest in areas we believe have longer-term growth
potential. These areas include, among others, the expansion
of our lighting and building management solutions portfolios, as
well as our Internet of Things software platform that provides
customers with a smart infrastructure which enables endless
possibilities to enhance the utilization of their space through
better human interaction and greater asset and employee
productivity. Additionally, we continued to add associates to
support these intelligent Tier 3 and 4 solutions. The cost of
these investments was largely offset by lower variable
incentive compensation, which yielded a modest $1.0 million
year-over-year increase in adjusted SD&A expenses. Our
adjusted operating profit margin of 15.4 percent declined 100 basis
points compared with the prior year.”
Second Quarter Results
The 3.5 percent year-over-year growth in fiscal
2017 second quarter net sales was due primarily to a 4 percent
increase in volume and approximately 1 percent from acquired
revenues from acquisitions, partially offset by approximately 1
percent net unfavorable change in product prices and mix of
products sold (“price/mix”.) The impact from changes in
foreign currency exchange rates was less than one percentage
point. Sales volume was higher across most key product
categories and sales channels in the U.S. and Canada, while volumes
declined in both Europe and Mexico. The change in price/mix was due
primarily to lower pricing on luminaires, largely as a result of
lower LED component costs. Sales of LED-based products
increased approximately 20 percent from the year-ago period and
represented approximately two-thirds of fiscal 2017 second quarter
total net sales.
Year-to-Date Results
Net sales for the first six months of fiscal
2017 increased 9.3 percent to $1,655.9 million compared with
$1,514.4 million for the prior-year period. Fiscal 2017
first-half reported results included operating profit of $234.6
million, net income of $149.0 million, and diluted EPS of
$3.39.
Adjusted operating profit for the first half of
fiscal 2017 increased $13.8 million, or 5.4 percent, to $267.1
million, or 16.1 percent of net sales, compared with prior year’s
adjusted operating profit of $253.3 million, or 16.7 percent of net
sales. Adjusted net income for the first half of fiscal 2017
was $165.5 million compared with $156.6 million for the prior-year
period, an increase of 5.7 percent. Adjusted diluted EPS for
the first half of fiscal 2017 increased $0.18, or 5.0 percent, to
$3.76 compared with adjusted diluted EPS of $3.58 for the year-ago
period. Adjusted results exclude amortization expense for
acquired intangible assets, share-based payment expense,
acquisition-related items (including profit in inventory,
professional fees, and certain contract termination costs), special
charges for streamlining activities, manufacturing inefficiencies
related to the closing of a facility, and a gain on the sale of an
investment in an unconsolidated affiliate. The total impact
of these items on diluted EPS for the first six months of fiscal
2017 and 2016 was $0.37 and $0.52 respectively. A
reconciliation of adjusted financial measures to the most directly
comparable U.S. GAAP measure is provided in the tables at the end
of this release.
Net miscellaneous income for the six months
ended February 28, 2017, included a $7.2 million gain associated
with the sale of an investment in an unconsolidated affiliate which
occurred in the first quarter of the fiscal year.
Net cash provided by operating activities
totaled $71.6 million for the first half of fiscal 2017 compared
with $119.5 million for the year-ago period. Cash and cash
equivalents at the end of the second quarter of fiscal 2017 totaled
$463.2 million, an increase of $50.0 million since the beginning of
the fiscal year.
Outlook
Mr. Nagel commented, “Even though the growth
rate of lighting solutions in the North American market in the
first half of our fiscal 2017 was lower than anticipated, we
continue to see significant long-term growth opportunities.
Current quoting activity remains favorable and both short and
long-term fundamental drivers of the markets we serve remain
positive. Further, third-party forecasts suggest that the
softness in market demand that began in the third calendar quarter
of 2016 and continued through our second quarter may persist
through the remainder of our fiscal 2017. These forecasts
indicate that the North American lighting market should return to
growth in fiscal 2018. We expect to continue to outperform
the growth rates of the markets we serve by executing our
strategies focused on growth opportunities for new construction and
renovation projects, expansion into underpenetrated geographies and
channels, and growth from the continued introduction of new
lighting and building management solutions as part of our
integrated, tiered solutions strategy. Based on various
leading indicators and our focused investments in key strategic
areas, we remain bullish regarding the Company’s prospects for
continued future profitable growth.”
Mr. Nagel concluded, “We believe the lighting
and lighting-related industry as well as building management
systems 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
uniquely positioned to fully participate in this exciting
industry.”
Conference Call
As previously announced, the Company will host a
conference call to discuss second quarter results today, April 4,
2017, 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. (NYSE:AYI) is the North
American market leader and one of the world’s leading providers of
lighting and building management solutions. With fiscal year 2016
net sales of $3.3 billion, Acuity Brands currently employs
approximately 12,000 associates and is headquartered in Atlanta,
Georgia with operations throughout North America, and in Europe and
Asia. The Company’s products and solutions are sold under various
brands, including Lithonia Lighting®, Holophane®, Peerless®,
Gotham®, Mark Architectural Lighting™, Winona® Lighting, Juno®,
Indy™, Aculux®, Healthcare Lighting®, Hydrel®, American Electric
Lighting®, Carandini®, Antique Street Lamps™, Sunoptics®, Distech
Controls®, Acuity Controls™, nLight®, ROAM® and Sensor Switch®.
Visit us www.acuitybrands.com.
Non-GAAP Financial Measures
This news release includes the following
non-GAAP financial measures: "adjusted gross profit," “adjusted
selling, distribution, and administrative expenses” (“adjusted
SD&A expenses”), “adjusted operating profit,” “adjusted
operating profit margin,” “adjusted other expense,” “adjusted net
income,” and “adjusted diluted EPS.” These non-GAAP financial
measures are provided to enhance the reader's overall understanding
of the Company's current financial performance and prospects for
the future. During fiscal 2016, the Company acquired four
businesses which impacted the comparability of many of its GAAP
financial measures. Specifically, management believes that
these non-GAAP measures provide useful information to investors by
excluding or adjusting items for amortization of acquired
intangible assets, acquisition-related items, share-based payment
expense which is used as a method to improve retention and align
the interests of key leaders of acquired businesses with those of
the Company’s shareholders, special charges associated with efforts
to streamline the organization and integrate acquisitions,
manufacturing inefficiencies directly related to the closure of a
facility, and gain associated with the sale of an investment in an
unconsolidated affiliate. Management typically adjusts for
these items for internal reviews of performance and uses the above
non-GAAP measures for baseline comparative operational analysis,
decision making and other activities. Management believes
these non-GAAP measures provide greater comparability and enhanced
visibility into the Company’s results of operations as well as
comparability with many of its peers, especially those companies
focused more on technology and software.
Non-GAAP financial measures included in this
news release should be considered in addition to, and not as a
substitute for or superior to, results prepared in accordance with
GAAP. The most directly comparable GAAP measure for adjusted gross
profit is gross profit, which includes the impact of
acquisition-related items and manufacturing inefficiencies directly
related to the closure of a facility. The most directly comparable
GAAP measure for adjusted SD&A expenses is “SD&A expenses”
which includes acquisition-related items, amortization of acquired
intangible assets, special charges, and share-based payment
expense. The most directly comparable GAAP measures for adjusted
operating profit and adjusted operating profit margin are
“operating profit” and “operating profit margin,” respectively,
which include the impact of acquisition-related items,
manufacturing inefficiencies directly related to the closure of a
facility, amortization of acquired intangible assets, and
share-based payment expense. The most directly comparable
GAAP measures for adjusted other expense (income) is “other expense
(income),” which includes the impact of a gain on sale of
investment in an unconsolidated affiliate. The most directly
comparable GAAP measures for adjusted net income and adjusted
diluted EPS are “net income” and “diluted EPS,” respectively, which
include the impact of acquisition-related items, manufacturing
inefficiencies directly related to the closure of a facility,
amortization of acquired intangible assets, share-based payment
expense, special charges, and gain on sale of investment in an
unconsolidated affiliate. A reconciliation of each measure to
the most directly comparable GAAP measure is available in this news
release. 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.
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," “could,” “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: third-party forecasts indicating
that the North American lighting market may remain essentially flat
for the second half of fiscal 2017 and should return to growth
in fiscal 2018; prospects for continued future profitable growth
and expectations for the Company to continue to outperform the
growth rates of the markets it serves and execute strategies
related to growth opportunities; and overall demand in the
Company’s end markets to continue to experience solid growth over
the next decade as well as the Company’s position to fully
participate. 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,
2016. 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 data) |
|
February 28, 2017 |
|
August 31, 2016 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and
cash equivalents |
$ |
463.2 |
|
|
$ |
413.2 |
|
Accounts
receivable, less reserve for doubtful accounts of $1.6 and $1.7,
respectively |
|
500.9 |
|
|
|
572.8 |
|
Inventories |
|
353.7 |
|
|
|
295.2 |
|
Prepayments and other current assets |
|
46.1 |
|
|
|
41.7 |
|
Total
Current Assets |
|
1,363.9 |
|
|
|
1,322.9 |
|
Property, Plant, and
Equipment, at cost: |
|
|
|
Land |
|
22.0 |
|
|
|
23.1 |
|
Buildings
and leasehold improvements |
|
180.5 |
|
|
|
174.4 |
|
Machinery
and equipment |
|
458.9 |
|
|
|
448.2 |
|
Total
Property, Plant, and Equipment |
|
661.4 |
|
|
|
645.7 |
|
Less -
Accumulated depreciation and amortization |
|
(383.6 |
) |
|
|
(377.9 |
) |
Property,
Plant, and Equipment, net |
|
277.8 |
|
|
|
267.8 |
|
Goodwill |
|
893.3 |
|
|
|
947.8 |
|
Intangible assets, net |
|
446.4 |
|
|
|
381.4 |
|
Deferred
income taxes |
|
4.7 |
|
|
|
5.1 |
|
Other
long-term assets |
|
13.0 |
|
|
|
23.0 |
|
Total
Assets |
$ |
2,999.1 |
|
|
$ |
2,948.0 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current
Liabilities: |
|
|
|
Accounts
payable |
$ |
365.5 |
|
|
$ |
401.0 |
|
Current
maturities of long-term debt |
|
0.3 |
|
|
|
0.2 |
|
Accrued
compensation |
|
25.0 |
|
|
|
95.2 |
|
Other
accrued liabilities |
|
156.0 |
|
|
|
176.1 |
|
Total
Current Liabilities |
|
546.8 |
|
|
|
672.5 |
|
Long-Term Debt |
|
355.8 |
|
|
|
355.0 |
|
Accrued Pension
Liabilities, less current portion |
|
116.4 |
|
|
|
119.9 |
|
Deferred Income
Taxes |
|
102.5 |
|
|
|
74.6 |
|
Self-Insurance
Reserves, less current portion |
|
8.2 |
|
|
|
7.2 |
|
Other Long-Term
Liabilities |
|
64.6 |
|
|
|
59.0 |
|
Total
Liabilities |
|
1,194.3 |
|
|
|
1,288.2 |
|
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; 53,512,076
and 53,415,687 issued, respectively |
|
0.5 |
|
|
|
0.5 |
|
Paid-in
capital |
|
868.4 |
|
|
|
856.4 |
|
Retained
earnings |
|
1,498.4 |
|
|
|
1,360.9 |
|
Accumulated other comprehensive loss |
|
(143.9 |
) |
|
|
(139.4 |
) |
Treasury
stock, at cost - 9,679,752 and 9,679,457 shares,
respectively |
|
(418.6 |
) |
|
|
(418.6 |
) |
Total
Stockholders’ Equity |
|
1,804.8 |
|
|
|
1,659.8 |
|
Total
Liabilities and Stockholders’ Equity |
$ |
2,999.1 |
|
|
$ |
2,948.0 |
|
|
|
|
|
ACUITY BRANDS, INC. |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (Unaudited) |
(In millions, except per-share
data) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
February 28, 2017 |
|
February 29, 2016 |
|
February 28, 2017 |
|
February 29, 2016 |
Net Sales |
$ |
804.7 |
|
$ |
777.8 |
|
|
$ |
1,655.9 |
|
|
$ |
1,514.4 |
|
Cost of Products
Sold |
|
468.9 |
|
|
440.9 |
|
|
|
960.5 |
|
|
|
858.1 |
|
Gross Profit |
|
335.8 |
|
|
336.9 |
|
|
|
695.4 |
|
|
|
656.3 |
|
Selling, Distribution,
and Administrative Expenses |
|
227.8 |
|
|
230.1 |
|
|
|
459.6 |
|
|
|
436.7 |
|
Special Charge |
|
- |
|
|
0.1 |
|
|
|
1.2 |
|
|
|
0.5 |
|
Operating Profit |
|
108.0 |
|
|
106.7 |
|
|
|
234.6 |
|
|
|
219.1 |
|
Other Expense
(Income): |
|
|
|
|
|
|
|
Interest
Expense, net |
|
8.0 |
|
|
8.2 |
|
|
|
16.2 |
|
|
|
16.1 |
|
Miscellaneous Expense (Income), net |
|
0.6 |
|
|
(1.1 |
) |
|
|
(7.3 |
) |
|
|
(1.8 |
) |
Total
Other Expense |
|
8.6 |
|
|
7.1 |
|
|
|
8.9 |
|
|
|
14.3 |
|
Income before Provision
for Income Taxes |
|
99.4 |
|
|
99.6 |
|
|
|
225.7 |
|
|
|
204.8 |
|
Provision for Income
Taxes |
|
32.1 |
|
|
34.1 |
|
|
|
76.7 |
|
|
|
70.9 |
|
Net Income |
$ |
67.3 |
|
$ |
65.5 |
|
|
$ |
149.0 |
|
|
$ |
133.9 |
|
|
|
|
|
|
|
|
|
Earnings Per
Share: |
|
|
|
|
|
|
|
Basic
Earnings per Share |
$ |
1.54 |
|
$ |
1.50 |
|
|
$ |
3.40 |
|
|
$ |
3.08 |
|
Basic
Weighted Average Number of Shares Outstanding |
|
43.8 |
|
|
43.5 |
|
|
|
43.8 |
|
|
|
43.4 |
|
Diluted
Earnings per Share |
$ |
1.53 |
|
$ |
1.49 |
|
|
$ |
3.39 |
|
|
$ |
3.06 |
|
Diluted
Weighted Average Number of Shares Outstanding |
|
44.0 |
|
|
43.8 |
|
|
|
44.0 |
|
|
|
43.7 |
|
Dividends Declared per
Share |
$ |
0.13 |
|
$ |
0.13 |
|
|
$ |
0.26 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
Comprehensive
Income: |
|
|
|
|
|
|
|
Net Income |
$ |
67.3 |
|
$ |
65.5 |
|
|
$ |
149.0 |
|
|
$ |
133.9 |
|
Other Comprehensive
Income (Loss) Items: |
|
|
|
|
|
|
|
Foreign
currency translation adjustments |
|
3.3 |
|
|
(9.2 |
) |
|
|
(8.6 |
) |
|
|
(13.4 |
) |
Defined
benefit pension plans, net of tax |
|
2.1 |
|
|
1.3 |
|
|
|
4.1 |
|
|
|
2.7 |
|
Other Comprehensive
Income (Loss), net of tax |
|
5.4 |
|
|
(7.9 |
) |
|
|
(4.5 |
) |
|
|
(10.7 |
) |
Comprehensive
Income |
$ |
72.7 |
|
$ |
57.6 |
|
|
$ |
144.5 |
|
|
$ |
123.2 |
|
|
|
|
|
|
|
|
|
ACUITY BRANDS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) |
(In millions) |
|
Six Months Ended |
|
February 28, 2017 |
|
February 29, 2016 |
Cash Flows from
Operating Activities: |
|
|
|
Net
income |
$ |
149.0 |
|
|
$ |
133.9 |
|
Adjustments to reconcile net income to net cash provided by (used
for) operating activities: |
|
|
|
Depreciation and amortization |
|
36.5 |
|
|
|
30.7 |
|
Share-based payment expense |
|
16.0 |
|
|
|
13.0 |
|
Excess
tax benefits from share-based payments |
|
(6.2 |
) |
|
|
(14.3 |
) |
Loss
(gain) on sale or disposal of property, plant, and equipment |
|
0.1 |
|
|
|
(1.1 |
) |
Gain on
sale of investment in unconsolidated affiliate |
|
(7.2 |
) |
|
|
- |
|
Deferred
income taxes |
|
(2.7 |
) |
|
|
(0.3 |
) |
Change in
assets and liabilities, net of effect of acquisitions, divestitures
and effect of exchange rate changes: |
|
|
|
Accounts
receivable |
|
69.7 |
|
|
|
18.3 |
|
Inventories |
|
(59.5 |
) |
|
|
(3.5 |
) |
Prepayments and other current assets |
|
(8.9 |
) |
|
|
(11.4 |
) |
Accounts
payable |
|
(32.2 |
) |
|
|
(16.2 |
) |
Other
current liabilities |
|
(83.6 |
) |
|
|
(29.2 |
) |
Other |
|
0.6 |
|
|
|
(0.4 |
) |
Net Cash
Provided by Operating Activities |
|
71.6 |
|
|
|
119.5 |
|
Cash Flows fom
Investing Activities: |
|
|
|
Purchases
of property, plant, and equipment |
|
(35.8 |
) |
|
|
(43.8 |
) |
Proceeds
from sale of property, plant, and equipment |
|
5.4 |
|
|
|
2.2 |
|
Acquisition of businesses, net of cash acquired |
|
- |
|
|
|
(613.7 |
) |
Proceeds
from sale of investment in unconsolidated affiliate |
|
13.2 |
|
|
|
- |
|
Other
investing activities |
|
(0.2 |
) |
|
|
- |
|
Net Cash
Used for Investing Activities |
|
(17.4 |
) |
|
|
(655.3 |
) |
Cash Flows from
Financing Activities: |
|
|
|
Issuance
of long-term debt |
|
0.9 |
|
|
|
1.1 |
|
Repurchases of common stock |
|
(0.4 |
) |
|
|
- |
|
Proceeds
from stock option exercises and other |
|
2.3 |
|
|
|
6.2 |
|
Excess
tax benefits from share-based payments |
|
6.2 |
|
|
|
14.3 |
|
Dividends
paid |
|
(11.5 |
) |
|
|
(11.4 |
) |
Net Cash
(Used for) Provided by Financing Activities |
|
(2.5 |
) |
|
|
10.2 |
|
Effect of Exchange Rate
Changes on Cash and Cash Equivalents |
|
(1.7 |
) |
|
|
(6.9 |
) |
Net Change in Cash and
Cash Equivalents |
|
50.0 |
|
|
|
(532.5 |
) |
Cash and Cash
Equivalents at Beginning of Period |
|
413.2 |
|
|
|
756.8 |
|
Cash and Cash
Equivalents at End of Period |
$ |
463.2 |
|
|
$ |
224.3 |
|
|
|
|
|
ACUITY BRANDS, INC. |
|
Reconciliation of Non-U.S. GAAP
Measures |
|
|
|
The tables
below reconcile certain GAAP financial measures to the
corresponding non-GAAP measures: |
|
|
|
(In millions, except
Diluted Earnings per Share) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
February 28, 2017 |
|
February 29, 2016 |
|
Increase (Decrease) |
|
Percent Change |
|
Net Sales |
$ |
804.7 |
|
|
$ |
777.8 |
|
|
$ |
26.9 |
|
|
3.5 |
% |
|
|
|
|
|
|
|
|
|
|
Gross Profit
(GAAP) |
$ |
335.8 |
|
|
$ |
336.9 |
|
|
|
|
|
|
Add-back:
Acquisition-related items(1) |
|
- |
|
|
|
1.4 |
|
|
|
|
|
|
Adjusted Gross Profit
(Non-GAAP) |
$ |
335.8 |
|
|
$ |
338.3 |
|
|
$ |
(2.5 |
) |
|
(0.7 |
)% |
|
Percent
of Sales |
|
41.7 |
% |
|
|
43.5 |
% |
|
|
(180 |
) |
bps |
|
|
|
|
|
|
|
|
|
|
Selling, Distribution,
and Administrative (SD&A) Expenses (GAAP) |
$ |
227.8 |
|
|
$ |
230.1 |
|
|
|
|
|
|
Less:
Amortization of acquired intangible assets |
|
(7.8 |
) |
|
|
(6.0 |
) |
|
|
|
|
|
Less:
Share-based payment expense |
|
(8.1 |
) |
|
|
(6.6 |
) |
|
|
|
|
|
Less:
Acquisition-related items(1) |
|
- |
|
|
|
(6.6 |
) |
|
|
|
|
|
Adjusted
SD&A Expenses (Non-GAAP) |
$ |
211.9 |
|
|
$ |
210.9 |
|
|
$ |
1.0 |
|
|
0.5 |
% |
|
Percent
of Sales |
|
26.3 |
% |
|
|
27.1 |
% |
|
|
(80 |
) |
bps |
|
|
|
|
|
|
|
|
|
|
Operating Profit
(GAAP) |
$ |
108.0 |
|
|
$ |
106.7 |
|
|
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
7.8 |
|
|
|
6.0 |
|
|
|
|
|
|
Add-back:Share-based payment expense |
|
8.1 |
|
|
|
6.6 |
|
|
|
|
|
|
Add-back:
Acquisition-related items(1) |
|
- |
|
|
|
8.0 |
|
|
|
|
|
|
Add-back:
Special charge |
|
- |
|
|
|
0.1 |
|
|
|
|
|
|
Adjusted
Operating Profit (Non-GAAP) |
$ |
123.9 |
|
|
$ |
127.4 |
|
|
$ |
(3.5 |
) |
|
(2.7 |
)% |
|
Percent
of Sales |
|
15.4 |
% |
|
|
16.4 |
% |
|
|
(100 |
) |
bps |
|
|
|
|
|
|
|
|
|
|
Net Income (GAAP) |
$ |
67.3 |
|
|
$ |
65.5 |
|
|
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
7.8 |
|
|
|
6.0 |
|
|
|
|
|
|
Add-back:Share-based payment expense |
|
8.1 |
|
|
|
6.6 |
|
|
|
|
|
|
Add-back:
Acquisition-related items(1) |
|
- |
|
|
|
8.0 |
|
|
|
|
|
|
Add-back:
Special charge |
|
- |
|
|
|
0.1 |
|
|
|
|
|
|
Total
pre-tax adjustments to Net Income |
|
15.9 |
|
|
|
20.7 |
|
|
|
|
|
|
Income
tax effect |
|
(5.5 |
) |
|
|
(7.1 |
) |
|
|
|
|
|
Adjusted Net Income
(Non-GAAP) |
$ |
77.7 |
|
|
$ |
79.1 |
|
|
$ |
(1.4 |
) |
|
(1.8 |
)% |
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Share (GAAP) |
$ |
1.53 |
|
|
$ |
1.49 |
|
|
|
|
|
|
Adjusted Diluted
Earnings per Share (Non-GAAP) |
$ |
1.77 |
|
|
$ |
1.80 |
|
|
$ |
(0.03 |
) |
|
(1.7 |
)% |
|
|
|
|
|
|
|
|
|
|
(1)
Acquisition-related items include acquired profit in inventory,
professional fees, and certain contract termination costs. |
|
|
|
|
|
|
|
|
|
|
(In millions, except
Diluted Earnings per Share) |
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
February 28, 2017 |
|
February 29, 2016 |
|
Increase (Decrease) |
|
Percent Change |
|
Net Sales |
$ |
1,655.9 |
|
|
$ |
1,514.4 |
|
|
$ |
141.5 |
|
|
9.3 |
% |
|
|
|
|
|
|
|
|
|
|
Gross Profit
(GAAP) |
$ |
695.4 |
|
|
$ |
656.3 |
|
|
|
|
|
|
Add-back:
Acquisition-related items(1) |
|
- |
|
|
|
2.0 |
|
|
|
|
|
|
Add-back:
Manufacturing Inefficiencies(2) |
|
1.6 |
|
|
|
- |
|
|
|
|
|
|
Adjusted Gross Profit
(Non-GAAP) |
$ |
697.0 |
|
|
$ |
658.3 |
|
|
$ |
38.7 |
|
|
5.9 |
% |
|
Percent
of Sales |
|
42.1 |
% |
|
|
43.5 |
% |
|
|
(140 |
) |
bps |
|
|
|
|
|
|
|
|
|
|
Selling, Distribution,
and Administrative (SD&A) Expenses (GAAP) |
$ |
459.6 |
|
|
$ |
436.7 |
|
|
|
|
|
|
Less:
Amortization of acquired intangible assets |
|
(13.7 |
) |
|
|
(11.0 |
) |
|
|
|
|
|
Less:
Share-based payment expense |
|
(16.0 |
) |
|
|
(13.0 |
) |
|
|
|
|
|
Less:
Acquisition-related items(1) |
|
- |
|
|
|
(7.7 |
) |
|
|
|
|
|
Adjusted
SD&A Expenses (Non-GAAP) |
$ |
429.9 |
|
|
$ |
405.0 |
|
|
$ |
24.9 |
|
|
6.1 |
% |
|
Percent
of Sales |
|
26.0 |
% |
|
|
26.7 |
% |
|
|
(70 |
) |
bps |
|
|
|
|
|
|
|
|
|
|
Operating
Profit (GAAP) |
$ |
234.6 |
|
|
$ |
219.1 |
|
|
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
13.7 |
|
|
|
11.0 |
|
|
|
|
|
|
Add-back:Share-based payment expense |
|
16.0 |
|
|
|
13.0 |
|
|
|
|
|
|
Add-back:
Acquisition-related items(1) |
|
- |
|
|
|
9.7 |
|
|
|
|
|
|
Add-back:
Manufacturing Inefficiencies(2) |
|
1.6 |
|
|
|
- |
|
|
|
|
|
|
Add-back:
Special charge |
|
1.2 |
|
|
|
0.5 |
|
|
|
|
|
|
Adjusted
Operating Profit (Non-GAAP) |
$ |
267.1 |
|
|
$ |
253.3 |
|
|
$ |
13.8 |
|
|
5.4 |
% |
|
Percent
of Sales |
|
16.1 |
% |
|
|
16.7 |
% |
|
|
(60 |
) |
bps |
|
|
|
|
|
|
|
|
|
|
Other
expense (GAAP) |
$ |
8.9 |
|
|
$ |
14.3 |
|
|
|
|
|
|
Add-back: Gain on sale
of investment in unconsolidated affiliate |
|
7.2 |
|
|
|
- |
|
|
|
|
|
|
Adjusted other expense
(Non-GAAP) |
$ |
16.1 |
|
|
$ |
14.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (GAAP) |
$ |
149.0 |
|
|
$ |
133.9 |
|
|
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
13.7 |
|
|
|
11.0 |
|
|
|
|
|
|
Add-back:Share-based payment expense |
|
16.0 |
|
|
|
13.0 |
|
|
|
|
|
|
Add-back:
Acquisition-related items(1) |
|
- |
|
|
|
9.7 |
|
|
|
|
|
|
Add-back:
Manufacturing Inefficiencies(2) |
|
1.6 |
|
|
|
- |
|
|
|
|
|
|
Add-back:
Special charge |
|
1.2 |
|
|
|
0.5 |
|
|
|
|
|
|
Less:
Gain on sale of investment in unconsolidated affiliate |
|
(7.2 |
) |
|
|
- |
|
|
|
|
|
|
Total
pre-tax adjustments to Net Income |
|
25.3 |
|
|
|
34.2 |
|
|
|
|
|
|
Income
tax effect |
|
(8.8 |
) |
|
|
(11.5 |
) |
|
|
|
|
|
Adjusted Net Income
(Non-GAAP) |
$ |
165.5 |
|
|
$ |
156.6 |
|
|
$ |
8.9 |
|
|
5.7 |
% |
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Share (GAAP) |
$ |
3.39 |
|
|
$ |
3.06 |
|
|
|
|
|
|
Adjusted Diluted
Earnings per Share (Non-GAAP) |
$ |
3.76 |
|
|
$ |
3.58 |
|
|
$ |
0.18 |
|
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
|
(1)
Acquisition-related items include acquired profit in inventory,
professional fees, and certain contract termination costs. |
|
(2)
Incremental costs incurred due to manufacturing inefficiencies
directly related to the closure of a facility. |
|
|
|
|
|
|
|
|
|
|
Contact:
Dan Smith, 404-853-1423
dan.smith@acuitybrands.com
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