Acuity Brands, Inc. (NYSE: AYI) (“Company”) today announced results
for the second quarter ended on February 29, 2020. Second
quarter net sales were $824 million, a decrease of 3.5% compared
with the year-ago period. Gross profit margin of 41.7% increased
260 basis points from the prior-year period. Operating profit
margin of 9.9% declined 130 basis points and adjusted operating
profit margin of 12.3% declined 90 basis points from the prior-year
period. Diluted earnings per share (EPS) of $1.44 declined
13.8% and adjusted diluted EPS of $1.84 declined 7.5% from the
prior-year period. For the six months ended February 29,
2020, cash flow from operations increased $26 million, or 14.0%,
from the prior-year period to $215 million.
Neil Ashe, President and Chief Executive Officer
of Acuity Brands, commented, “Results for the second quarter were a
combination of continuing trends with some signs of
improvement. We are embarking on the next generation of
Acuity Brands while at the same time we are dealing with the shocks
caused by the COVID-19 pandemic. We are focused on the health
and well-being of our associates while aggressively managing the
risks and opportunities that the COVID-19 shocks present to the
Company. We enter this period with a strong balance sheet and
a strong team.”
Fiscal 2020 Second Quarter
Results
Fiscal 2020 second quarter net sales of $824
million decreased 3.5% compared with the prior-year period due
primarily to a 7% decrease in volume, partially offset by a
contribution from acquisitions of approximately 3%, and a 1% net
favorable change in price and mix of products sold
(“price/mix”). Management estimates that price/mix was
impacted by a favorable shift in sales channel mix, partially
offset by an unfavorable mix of products sold.
Gross profit for the second quarter of fiscal
2020 increased $10 million to $344 million compared with $334
million in the prior-year period due primarily to the contribution
from acquisitions, lower costs for certain inputs, and favorable
price/mix. These increases were partially offset by lower
sales volume and increased tariffs. Fiscal 2020 second
quarter gross profit margin of 41.7% increased 260 basis points
compared with the prior-year period’s gross profit margin.
Selling, distribution, and administrative
(“SD&A”) expenses for the second quarter of fiscal 2020 totaled
$261 million, an increase of $23 million, or approximately 9.8%,
compared with the prior-year period. The increase in SD&A
expense in the second quarter was due primarily to the addition of
costs from acquired businesses, increased commissions, higher
professional fees, and higher variable incentive
compensation. Adjusted SD&A expenses for the second
quarter of fiscal 2020 totaled $242 million, an increase of $20
million, or 8.9% compared with the prior-year period.
Operating profit for the second quarter of
fiscal 2020 was $81 million, or 9.9% of net sales, compared with
$96 million, or 11.2% of net sales, for the prior-year
period. The decrease in operating profit was due to higher
SD&A expenses and increased special charges, partially offset
by higher gross profit. Adjusted operating profit for the
second quarter of fiscal 2020 was $102 million, or 12.3% of net
sales, compared with $112 million, or 13.2% of net sales, for the
prior-year period.
Year-to-Date Results
Net sales for the first six months of fiscal
2020 were $1.66 billion compared with $1.79 billion reported for
the prior-year period, a decrease of $128 million, or 7.2%.
Operating profit for the first six months of fiscal 2020 was $165
million compared with $212 million for the prior-year period, a
decrease of $47 million, or 22.3%. Operating profit margin
for the first six months of fiscal 2020 decreased 200 basis points
to 9.9% of net sales compared with 11.9% of net sales in the
year-ago period. Net income for the first six months of
fiscal 2020 was $114 million, a decrease of $32 million, or 21.7%,
compared with $146 million for the prior-year period. For the first
six months of fiscal 2020, diluted EPS decreased 21.3% to $2.88
compared with $3.66 reported in the year-ago period.
Adjusted operating profit decreased by $26
million, or 10.5%, to $221 million for the first six months of
fiscal 2020 compared with $247 million for the prior-year
period. Adjusted operating profit margin for the first six
months of fiscal 2020 decreased 50 basis points to 13.3% of net
sales compared with 13.8% of net sales in the year-ago
period. Adjusted net income for the first six months of
fiscal 2020 was $157 million compared with $172 million in the
prior-year period, a decrease of $15 million, or 8.4%.
Adjusted diluted earnings per share for the six months ended
February 29, 2020 decreased $0.34, or 7.9%, to $3.97 compared
with $4.31 for the prior-year period.
Cash Flows
Net cash provided by operating activities
totaled $215 million during the first half of fiscal 2020 compared
with $188 million in the prior-year period, an increase of $26
million, or 14.0%. Cash and cash equivalents at the end of
the second quarter of fiscal 2020 totaled $381 million.
Outlook
Mr. Ashe commented, “On January 31, I became CEO
of Acuity Brands, and I am pleased with the strong foundation that
is in place. We have an industry leading lighting and
controls business and an emerging technology opportunity. We
have a strong company in a period of great change. We are
aggressively adapting the business to current market dynamics and
to respond to the impacts of the COVID-19 pandemic. Due to demand
and other uncertainties, the near-term economic impact of COVID-19
cannot be reliably quantified at this time, and the impacts on our
full year fiscal 2020 results and beyond are therefore
uncertain.”
Conference Call
As previously announced, the Company will host a
conference call to discuss second quarter results today, April 2,
2020, 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 a
market-leading industrial technology company. We develop,
manufacture and bring to market products and services that make the
world more brilliant, productive, and connected including building
management systems, controls, lighting and location-aware
applications. Acuity Brands achieves growth through the development
of innovative new products and services.
Through the Acuity Business System, the Company
achieves customer-focused efficiencies that allow the Company to
increase market share and deliver superior returns. We look
to aggressively deploy capital to grow our current businesses and
to enter attractive new verticals.
Acuity Brands is based in Atlanta, Georgia with
operations across North America and in Europe and Asia. The Company
is powered by over 12,000 dedicated and talented associates. Visit
us at www.acuitybrands.com.
Non-GAAP Financial Measures
This news release includes the following
non-Generally Accepted Accounting Principles (GAAP) financial
measures: “adjusted gross profit,” “adjusted gross profit margin,”
“adjusted SD&A expenses,” “adjusted SD&A expenses as a
percent of net sales,” “adjusted operating profit,” “adjusted
operating profit margin,” “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.
Specifically, management believes that these non-GAAP measures
provide useful information to investors by excluding or adjusting
items for manufacturing inefficiencies, acquisition-related items,
amortization of acquired intangible assets, share-based payment
expense, and special charges associated with continued efforts to
streamline the organization to integrate acquisitions.
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 measures for adjusted
gross profit and adjusted gross profit margin are “gross profit”
and “gross profit margin,” respectively, which include the impact
of manufacturing inefficiencies and acquisition-related items. The
most directly comparable GAAP measure for adjusted SD&A
expenses and adjusted SD&A expenses as a percent of net sales
is “SD&A expenses” and “SD&A expenses as a percent of net
sales,” which include amortization of acquired intangible assets,
share-based payment expense, and acquisition-related items. 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 manufacturing inefficiencies, acquisition-related items,
amortization of acquired intangible assets, share-based payment
expense, and special charges. 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 manufacturing inefficiencies, acquisition-related items,
amortization of acquired intangible assets, share-based payment
expense, and special charges. 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: statements on the near-term economic
impact of COVID-19 that cannot be reliably quantified at this time,
and the uncertain impacts on our full year fiscal 2020 results and
beyond; and our belief that management can adapt the business to
current market dynamics and to respond to the impacts of the
COVID-19 pandemic. Forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from the historical experience of the Company and
management's present expectations or projections. The risks
and uncertainties that could cause actual results to differ
materially from those expressed in our forward-looking statements
are 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, 2019 and
Part II, “Item 1a. Risk Factors” in the Company’s Form 10-Q for the
quarterly period ended February 29, 2020 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 considering new
information or future events.
ACUITY BRANDS,
INC.CONSOLIDATED BALANCE SHEETS(In
millions, except share data)
|
February 29, 2020 |
|
August 31, 2019 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
380.6 |
|
|
$ |
461.0 |
|
Accounts receivable, less reserve for doubtful accounts of $1.4 and
$1.0, respectively |
506.7 |
|
|
561.0 |
|
Inventories |
348.6 |
|
|
340.8 |
|
Prepayments and other current assets |
71.9 |
|
|
79.0 |
|
Total current assets |
1,307.8 |
|
|
1,441.8 |
|
Property, plant, and equipment,
net |
279.3 |
|
|
277.3 |
|
Operating lease right-of-use
assets |
59.4 |
|
|
— |
|
Goodwill |
1,089.6 |
|
|
967.3 |
|
Intangible assets, net |
628.8 |
|
|
466.0 |
|
Deferred income taxes |
2.1 |
|
|
2.3 |
|
Other long-term assets |
29.7 |
|
|
17.7 |
|
Total assets |
$ |
3,396.7 |
|
|
$ |
3,172.4 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
333.5 |
|
|
$ |
338.8 |
|
Current maturities of debt |
15.4 |
|
|
9.1 |
|
Current operating lease liabilities |
16.6 |
|
|
— |
|
Accrued compensation |
55.6 |
|
|
73.2 |
|
Other accrued liabilities |
151.1 |
|
|
175.0 |
|
Total current liabilities |
572.2 |
|
|
596.1 |
|
Long-term debt |
390.8 |
|
|
347.5 |
|
Long-term operating lease
liabilities |
48.1 |
|
|
— |
|
Accrued pension liabilities |
96.9 |
|
|
99.7 |
|
Deferred income taxes |
117.8 |
|
|
92.7 |
|
Self-insurance reserves |
7.0 |
|
|
6.8 |
|
Other long-term liabilities |
118.8 |
|
|
110.7 |
|
Total liabilities |
1,351.6 |
|
|
1,253.5 |
|
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; 53,859,675 and 53,778,155 issued, respectively |
0.5 |
|
|
0.5 |
|
Paid-in capital |
950.6 |
|
|
930.0 |
|
Retained earnings |
2,399.6 |
|
|
2,295.8 |
|
Accumulated other comprehensive loss |
(149.6 |
) |
|
(151.4 |
) |
Treasury stock, at cost — 14,325,197 and 14,325,197 shares,
respectively |
(1,156.0 |
) |
|
(1,156.0 |
) |
Total stockholders’ equity |
2,045.1 |
|
|
1,918.9 |
|
Total liabilities and stockholders’ equity |
$ |
3,396.7 |
|
|
$ |
3,172.4 |
|
ACUITY BRANDS,
INC.CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (Unaudited)(In millions, except per-share data)
|
Three Months Ended |
|
Six Months Ended |
|
February 29,2020 |
|
February 28,2019 |
|
February 29, 2020 |
|
February 28, 2019 |
Net sales |
$ |
824.2 |
|
|
$ |
854.4 |
|
|
$ |
1,658.9 |
|
|
$ |
1,787.0 |
|
Cost of products sold |
480.3 |
|
|
520.5 |
|
|
959.2 |
|
|
1,085.6 |
|
Gross profit |
343.9 |
|
|
333.9 |
|
|
699.7 |
|
|
701.4 |
|
Selling, distribution, and
administrative expenses |
260.9 |
|
|
237.6 |
|
|
526.2 |
|
|
487.7 |
|
Special charges |
1.6 |
|
|
0.4 |
|
|
8.5 |
|
|
1.4 |
|
Operating profit |
81.4 |
|
|
95.9 |
|
|
165.0 |
|
|
212.3 |
|
Other expense: |
|
|
|
|
|
|
|
Interest expense, net |
5.7 |
|
|
8.6 |
|
|
14.0 |
|
|
17.3 |
|
Miscellaneous expense, net |
1.0 |
|
|
1.1 |
|
|
2.4 |
|
|
2.4 |
|
Total other expense |
6.7 |
|
|
9.7 |
|
|
16.4 |
|
|
19.7 |
|
Income before income taxes |
74.7 |
|
|
86.2 |
|
|
148.6 |
|
|
192.6 |
|
Income tax expense |
17.5 |
|
|
19.9 |
|
|
34.4 |
|
|
46.7 |
|
Net income |
$ |
57.2 |
|
|
$ |
66.3 |
|
|
$ |
114.2 |
|
|
$ |
145.9 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
Basic earnings per share |
$ |
1.45 |
|
|
$ |
1.68 |
|
|
$ |
2.89 |
|
|
$ |
3.67 |
|
Basic weighted average number of shares outstanding |
39.5 |
|
|
39.5 |
|
|
39.5 |
|
|
39.7 |
|
Diluted earnings per share |
$ |
1.44 |
|
|
$ |
1.67 |
|
|
$ |
2.88 |
|
|
$ |
3.66 |
|
Diluted weighted average number of shares outstanding |
39.7 |
|
|
39.6 |
|
|
39.7 |
|
|
39.8 |
|
Dividends declared per share |
$ |
0.13 |
|
|
$ |
0.13 |
|
|
$ |
0.26 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
Comprehensive income: |
|
|
|
|
|
|
|
Net income |
$ |
57.2 |
|
|
$ |
66.3 |
|
|
$ |
114.2 |
|
|
$ |
145.9 |
|
Other comprehensive income
(loss) items: |
|
|
|
|
|
|
|
Foreign currency translation adjustments |
(3.7 |
) |
|
4.9 |
|
|
(1.8 |
) |
|
(3.9 |
) |
Defined benefit plans, net of tax |
1.7 |
|
|
1.4 |
|
|
3.6 |
|
|
4.0 |
|
Other comprehensive (loss) income items, net of tax |
(2.0 |
) |
|
6.3 |
|
|
1.8 |
|
|
0.1 |
|
Comprehensive income |
$ |
55.2 |
|
|
$ |
72.6 |
|
|
$ |
116.0 |
|
|
$ |
146.0 |
|
ACUITY BRANDS,
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)(In millions)
|
Six Months Ended |
|
February 29, 2020 |
|
February 28, 2019 |
Cash flows from operating
activities: |
|
|
|
Net income |
$ |
114.2 |
|
|
$ |
145.9 |
|
Adjustments to reconcile net income to net cash flows from
operating activities: |
|
|
|
Depreciation and amortization |
49.8 |
|
|
43.3 |
|
Share-based payment expense |
24.7 |
|
|
15.3 |
|
Loss on sale or disposal of property, plant, and equipment |
0.1 |
|
|
0.4 |
|
Deferred income taxes |
(0.1 |
) |
|
0.4 |
|
Change in assets and liabilities, net of effect of acquisitions,
divestitures, and exchange rate changes: |
|
|
|
Accounts receivable |
66.9 |
|
|
139.6 |
|
Inventories |
8.3 |
|
|
(1.3 |
) |
Prepayments and other current assets |
(4.0 |
) |
|
(21.8 |
) |
Accounts payable |
(12.3 |
) |
|
(102.6 |
) |
Other current liabilities |
(46.1 |
) |
|
(38.9 |
) |
Other |
13.2 |
|
|
8.0 |
|
Net cash provided by operating activities |
214.7 |
|
|
188.3 |
|
Cash flows from investing
activities: |
|
|
|
Purchases of property, plant, and equipment |
(24.9 |
) |
|
(24.9 |
) |
Proceeds from sale of property, plant, and equipment |
0.2 |
|
|
— |
|
Acquisition of businesses, net of cash acquired |
(302.9 |
) |
|
— |
|
Other investing activities |
(1.9 |
) |
|
2.9 |
|
Net cash used for investing activities |
(329.5 |
) |
|
(22.0 |
) |
Cash flows from financing
activities: |
|
|
|
Borrowings on credit facility |
400.0 |
|
|
86.5 |
|
Repayments of borrowings on credit facility |
— |
|
|
(86.5 |
) |
Repayments of long-term debt |
(350.5 |
) |
|
(0.2 |
) |
Repurchases of common stock |
— |
|
|
(48.7 |
) |
Proceeds from stock option exercises and other |
0.5 |
|
|
0.3 |
|
Payments of taxes withheld on net settlement of equity awards |
(4.7 |
) |
|
(4.3 |
) |
Dividends paid |
(10.4 |
) |
|
(10.5 |
) |
Net cash provided by (used for) financing activities |
34.9 |
|
|
(63.4 |
) |
Effect of exchange rate changes
on cash and cash equivalents |
(0.5 |
) |
|
— |
|
Net change in cash and cash
equivalents |
(80.4 |
) |
|
102.9 |
|
Cash and cash equivalents at
beginning of period |
461.0 |
|
|
129.1 |
|
Cash and cash equivalents at end
of period |
$ |
380.6 |
|
|
$ |
232.0 |
|
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 per share
data) |
Three Months Ended |
|
|
|
|
|
|
February 29, 2020 |
|
|
|
February 28, 2019 |
|
|
|
Increase (Decrease) |
Percent Change |
Net sales |
$ |
824.2 |
|
|
|
|
$ |
854.4 |
|
|
|
|
$ |
(30.2 |
) |
(3.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP) |
$ |
343.9 |
|
|
|
|
$ |
333.9 |
|
|
|
|
$ |
10.0 |
|
3.0 |
% |
Percent of net sales |
|
|
41.7 |
% |
|
|
|
39.1 |
% |
|
260 |
|
bps |
Add-back: Manufacturing inefficiencies (1) |
— |
|
|
|
|
0.9 |
|
|
|
|
|
|
Add-back: Acquisition-related items (2) |
0.1 |
|
|
|
|
— |
|
|
|
|
|
|
Adjusted gross profit
(Non-GAAP) |
$ |
344.0 |
|
|
|
|
$ |
334.8 |
|
|
|
|
$ |
9.2 |
|
2.7 |
% |
Percent of net sales |
|
|
41.7 |
% |
|
|
|
39.2 |
% |
|
250 |
|
bps |
|
|
|
|
|
|
|
|
|
|
|
Selling, distribution, and
administrative (SD&A) expenses (GAAP) |
$ |
260.9 |
|
|
|
|
$ |
237.6 |
|
|
|
|
$ |
23.3 |
|
9.8 |
% |
Percent of net sales |
|
|
31.7 |
% |
|
|
|
27.8 |
% |
|
390 |
|
bps |
Less: Amortization of acquired intangible assets |
(10.4 |
) |
|
|
|
(7.7 |
) |
|
|
|
|
|
Less: Share-based payment expense |
(8.0 |
) |
|
|
|
(7.5 |
) |
|
|
|
|
|
Less: Acquisition-related items (2) |
(0.2 |
) |
|
|
|
— |
|
|
|
|
|
|
Adjusted SD&A expenses
(Non-GAAP) |
$ |
242.3 |
|
|
|
|
$ |
222.4 |
|
|
|
|
$ |
19.9 |
|
8.9 |
% |
Percent of net sales |
|
|
29.4 |
% |
|
|
|
26.0 |
% |
|
340 |
|
bps |
|
|
|
|
|
|
|
|
|
|
|
Operating profit (GAAP) |
$ |
81.4 |
|
|
|
|
$ |
95.9 |
|
|
|
|
$ |
(14.5 |
) |
(15.1 |
)% |
Percent of net sales |
|
|
9.9 |
% |
|
|
|
11.2 |
% |
|
(130 |
) |
bps |
Add-back: Amortization of acquired intangible assets |
10.4 |
|
|
|
|
7.7 |
|
|
|
|
|
|
Add-back: Share-based payment expense |
8.0 |
|
|
|
|
7.5 |
|
|
|
|
|
|
Add-back: Manufacturing inefficiencies (1) |
— |
|
|
|
|
0.9 |
|
|
|
|
|
|
Add-back: Acquisition-related items (2) |
0.3 |
|
|
|
|
— |
|
|
|
|
|
|
Add-back: Special charges |
1.6 |
|
|
|
|
0.4 |
|
|
|
|
|
|
Adjusted operating profit
(Non-GAAP) |
$ |
101.7 |
|
|
|
|
$ |
112.4 |
|
|
|
|
$ |
(10.7 |
) |
(9.5 |
)% |
Percent of net sales |
|
|
12.3 |
% |
|
|
|
13.2 |
% |
|
(90 |
) |
bps |
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
$ |
57.2 |
|
|
|
|
$ |
66.3 |
|
|
|
|
$ |
(9.1 |
) |
(13.7 |
)% |
Add-back: Amortization of acquired intangible assets |
10.4 |
|
|
|
|
7.7 |
|
|
|
|
|
|
Add-back: Share-based payment expense |
8.0 |
|
|
|
|
7.5 |
|
|
|
|
|
|
Add-back: Manufacturing inefficiencies (1) |
— |
|
|
|
|
0.9 |
|
|
|
|
|
|
Add-back: Acquisition-related items (2) |
0.3 |
|
|
|
|
— |
|
|
|
|
|
|
Add-back: Special charges |
1.6 |
|
|
|
|
0.4 |
|
|
|
|
|
|
Total pre-tax adjustments to net income |
20.3 |
|
|
|
|
16.5 |
|
|
|
|
|
|
Income tax effects |
(4.4 |
) |
|
|
|
(3.8 |
) |
|
|
|
|
|
Adjusted net income
(Non-GAAP) |
$ |
73.1 |
|
|
|
|
$ |
79.0 |
|
|
|
|
$ |
(5.9 |
) |
(7.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
(GAAP) |
$ |
1.44 |
|
|
|
|
$ |
1.67 |
|
|
|
|
$ |
(0.23 |
) |
(13.8 |
)% |
Adjusted diluted earnings per
share (Non-GAAP) |
$ |
1.84 |
|
|
|
|
$ |
1.99 |
|
|
|
|
$ |
(0.15 |
) |
(7.5 |
)% |
______________________________(1) Incremental costs incurred due
to manufacturing inefficiencies directly related to the closure of
a facility.(2) Acquisition-related items include profit in
inventory and professional fees.
(In millions, except per share
data) |
Six Months Ended |
|
|
|
|
|
|
February 29, 2020 |
|
|
|
February 28, 2019 |
|
|
|
Increase (Decrease) |
Percent Change |
Net sales |
$ |
1,658.9 |
|
|
|
|
$ |
1,787.0 |
|
|
|
|
$ |
(128.1 |
) |
(7.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Gross profit (GAAP) |
$ |
699.7 |
|
|
|
|
$ |
701.4 |
|
|
|
|
$ |
(1.7 |
) |
(0.2 |
)% |
Percent of net sales |
|
|
42.2 |
% |
|
|
|
39.3 |
% |
|
290 |
|
bps |
Add-back: Manufacturing inefficiencies (1) |
— |
|
|
|
|
0.9 |
|
|
|
|
|
|
Add-back: Acquisition-related items (2) |
1.2 |
|
|
|
|
1.2 |
|
|
|
|
|
|
Adjusted gross profit
(Non-GAAP) |
$ |
700.9 |
|
|
|
|
$ |
703.5 |
|
|
|
|
$ |
(2.6 |
) |
(0.4 |
)% |
Percent of net sales |
|
|
42.3 |
% |
|
|
|
39.4 |
% |
|
290 |
|
bps |
|
|
|
|
|
|
|
|
|
|
|
Selling, distribution, and
administrative (SD&A) expenses (GAAP) |
$ |
526.2 |
|
|
|
|
$ |
487.7 |
|
|
|
|
$ |
38.5 |
|
7.9 |
% |
Percent of net sales |
|
|
31.7 |
% |
|
|
|
27.3 |
% |
|
440 |
|
bps |
Less: Amortization of acquired intangible assets |
(20.0 |
) |
|
|
|
(15.4 |
) |
|
|
|
|
|
Less: Share-based payment expense |
(24.7 |
) |
|
|
|
(15.3 |
) |
|
|
|
|
|
Less: Acquisition-related items (2) |
(1.3 |
) |
|
|
|
— |
|
|
|
|
|
|
Adjusted SD&A expenses
(Non-GAAP) |
$ |
480.2 |
|
|
|
|
$ |
457.0 |
|
|
|
|
$ |
23.2 |
|
5.1 |
% |
Percent of net sales |
|
|
28.9 |
% |
|
|
|
25.6 |
% |
|
330 |
|
bps |
|
|
|
|
|
|
|
|
|
|
|
Operating profit (GAAP) |
$ |
165.0 |
|
|
|
|
$ |
212.3 |
|
|
|
|
$ |
(47.3 |
) |
(22.3 |
)% |
Percent of net sales |
|
|
9.9 |
% |
|
|
|
11.9 |
% |
|
(200 |
) |
bps |
Add-back: Amortization of acquired intangible assets |
20.0 |
|
|
|
|
15.4 |
|
|
|
|
|
|
Add-back: Share-based payment expense |
24.7 |
|
|
|
|
15.3 |
|
|
|
|
|
|
Add-back: Manufacturing inefficiencies (1) |
— |
|
|
|
|
0.9 |
|
|
|
|
|
|
Add-back: Acquisition-related items (2) |
2.5 |
|
|
|
|
1.2 |
|
|
|
|
|
|
Add-back: Special charges |
8.5 |
|
|
|
|
1.4 |
|
|
|
|
|
|
Adjusted operating profit
(Non-GAAP) |
$ |
220.7 |
|
|
|
|
$ |
246.5 |
|
|
|
|
$ |
(25.8 |
) |
(10.5 |
)% |
Percent of net sales |
|
|
13.3 |
% |
|
|
|
13.8 |
% |
|
(50 |
) |
bps |
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP) |
$ |
114.2 |
|
|
|
|
$ |
145.9 |
|
|
|
|
$ |
(31.7 |
) |
(21.7 |
)% |
Add-back: Amortization of acquired intangible assets |
20.0 |
|
|
|
|
15.4 |
|
|
|
|
|
|
Add-back: Share-based payment expense |
24.7 |
|
|
|
|
15.3 |
|
|
|
|
|
|
Add-back: Manufacturing inefficiencies (1) |
— |
|
|
|
|
0.9 |
|
|
|
|
|
|
Add-back: Acquisition-related items (2) |
2.5 |
|
|
|
|
1.2 |
|
|
|
|
|
|
Add-back: Special charges |
8.5 |
|
|
|
|
1.4 |
|
|
|
|
|
|
Total pre-tax adjustments to net income |
55.7 |
|
|
|
|
34.2 |
|
|
|
|
|
|
Income tax effect |
(12.6 |
) |
|
|
|
(8.3 |
) |
|
|
|
|
|
Adjusted net income
(Non-GAAP) |
$ |
157.3 |
|
|
|
|
$ |
171.8 |
|
|
|
|
$ |
(14.5 |
) |
(8.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
(GAAP) |
$ |
2.88 |
|
|
|
|
$ |
3.66 |
|
|
|
|
$ |
(0.78 |
) |
(21.3 |
)% |
Adjusted diluted earnings per
share (Non-GAAP) |
$ |
3.97 |
|
|
|
|
$ |
4.31 |
|
|
|
|
$ |
(0.34 |
) |
(7.9 |
)% |
______________________________(1) Incremental costs incurred due
to manufacturing inefficiencies directly related to the closure of
a facility.(2) Acquisition-related items include profit in
inventory and professional fees.
Company ContactPete ShanninAcuity Brands, Inc.(770) 860-2873
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