Acuity Brands, Inc. (NYSE:AYI) (“Company”) today announced record
fourth quarter and full-year results for net sales, net income, and
diluted earnings per share (“EPS”). Fiscal 2017 fourth
quarter net sales of $957.6 million increased $32.1 million, or 3.5
percent, compared with the year-ago period. Operating profit
for the fourth quarter of fiscal 2017 was $152.7 million, an
increase of $17.6 million, or 13 percent, over the year-ago
period. Net income for the fourth quarter of fiscal 2017 was
$90.5 million, an increase of 9 percent compared with the
prior-year period. Fiscal 2017 fourth quarter diluted EPS of
$2.15 increased 14 percent compared with $1.89 for the year-ago
period.
Adjusted diluted EPS for the fourth quarter of
fiscal 2017 increased over 15 percent to $2.55 compared with
adjusted diluted EPS of $2.21 for the year-ago period.
Adjusted operating profit for the fourth quarter of fiscal 2017
increased $19.8 million, or 13 percent, to $176.3 million compared
with the year-ago period and adjusted operating profit margin
increased 150 basis points over the prior-year period to a record
18.4 percent. Adjusted results for both periods exclude the
impact of amortization expense for acquired intangible assets,
share-based compensation expense, acquisition-related items
(including acquired profit in inventory and professional fees),
special charge for streamlining activities, and an impairment of an
intangible asset. 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, “We are pleased to
report record quarterly and full-year results while continuing to
make meaningful investments in areas with significant future growth
potential, including the recently introduced Atrius™ Internet of
Things (“IoT”) platform and software solutions. We achieved a
record adjusted operating profit margin of 18.4 percent, an
increase of 150 basis points over prior year. Our fourth
quarter net sales growth of nearly 4 percent reflected continued
solid performance as initial industry data suggests that the growth
rate of the Company’s key end markets in North America was flat to
slightly down, which was in line with prior quarter’s
expectations. We estimate that sales in our Tier 3 & 4
categories, which encompass our holistic, integrated solutions,
were up approximately 30 percent this past quarter and now
represent 15 percent of our total sales. We believe our
record fourth quarter and full-year results reflect our ability to
provide customers with truly differentiated value from our
industry-leading portfolio of innovative lighting and building
management solutions along with superior service.”
Fiscal 2017 Fourth Quarter
Results
The 3.5 percent year-over-year growth in fiscal
2017 fourth quarter net sales was primarily due to a 4.5 percent
increase in volume, partially offset by a 1 percent net unfavorable
change in product prices and mix of products sold (“price/mix”).
The change in price/mix was due primarily to lower pricing on
luminaires, largely as a result of lower LED component costs.
Sales volume was higher across most key product categories and
sales channels. Strong market adoption of LED-based products
continued during the fourth quarter of fiscal 2017 and represented
over two-thirds of the Company’s total net sales.
Fiscal 2017 fourth quarter gross profit margin of
42.5 percent declined 100 basis points compared with prior year’s
adjusted gross profit margin but was more than offset by a 250
basis points reduction in adjusted selling, distribution &
administrative (“SD&A”) expenses. As a result, fiscal
2017 fourth quarter adjusted operating profit margin increased 150
basis points over the prior-year period to a record 18.4
percent. Higher warranty expense and labor costs were
primarily responsible for the lower gross profit margin while the
decrease in adjusted SD&A expense was primarily due to a
decline in incentive compensation expense that was partially offset
by continued investment in additional headcount to support and
drive the Company’s tiered solutions strategy.
The Company recorded pre-tax special charges of
$9.6 million and $4.9 million during the fourth quarters of fiscal
2017 and 2016, respectively, for actions initiated to streamline
the organization, including the integration of recent
acquisitions. The fiscal 2017 fourth quarter special charge
consisted primarily of severance and employee-related benefit costs
for the elimination of certain operations and positions following a
realignment of the Company’s operating structure, including
positions within various SD&A departments.
Net miscellaneous expense of $2.2 million, or $0.03
diluted EPS, reported for the fourth quarter of fiscal 2017 was
comprised primarily of losses associated with changes in foreign
currency exchange rates. The Company reported net
miscellaneous income of $0.1 million in the prior-year fourth
quarter.
Fiscal 2017 Full-Year Results
Net sales for fiscal 2017 increased $213.8 million,
or 6.5 percent, to $3,505.1 million. Results for fiscal 2017
include operating profit of $518.8 million, net income of $321.7
million, and diluted EPS of $7.43.
Adjusted operating profit for fiscal 2017 increased
$36.5 million, or 7 percent, to $591.7 million compared with prior
year’s adjusted operating profit of $555.2 million. Adjusted
operating profit margin for both fiscal 2017 and 2016 was 16.9
percent. Fiscal 2017 adjusted net income increased $22.2
million, or 7 percent, to $365.9 million compared with $343.7
million for the prior-year period. Adjusted diluted EPS for
fiscal 2017 increased $0.61, or 8 percent, to $8.45 compared with
adjusted diluted EPS of $7.84 for the year-ago period.
Adjusted results exclude amortization expense for acquired
intangible assets, share-based compensation expense,
acquisition-related items (including acquired profit in inventory,
professional fees, and certain contract termination costs), special
charge for streamlining activities, and an impairment of an
intangible asset. Additionally, fiscal 2017 adjusted results
exclude a gain associated with the sale of an investment in an
unconsolidated affiliate. The total impact of these items on
diluted EPS for fiscal 2017 and 2016 was $1.02 and $1.21,
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 cash provided by operating activities totaled
$316.2 million for the full year compared with $345.7 million for
the year-ago period, representing a year-over-year decrease of 9
percent. Cash and cash equivalents at the end of the fourth
quarter of fiscal 2017 totaled $311.1 million, a decrease of $102.1
million since the beginning of the fiscal year. During fiscal
2017, the Company completed the buyback of 2 million shares of
Acuity Brands common stock under its previously authorized stock
repurchase program at a total cost of $357.9 million.
Outlook
Mr. Nagel commented, “We remain bullish regarding
the Company’s prospects for continued future profitable
growth. While various leading indicators continue to
generally reflect favorable conditions for our end markets, we are
cautious regarding a meaningful rebound in our end-markets over the
next few quarters as a result of various factors, including labor
shortages in the construction industry and uncertainty related to
both infrastructure spending as well as federal tax and trade
policies. We expect to see some volatility in demand among
certain sales channels and geographies, including possible
short-term volatility due to the recent hurricanes that hit
Florida, Texas, and Puerto Rico. At this time, we expect the growth
rate for lighting and building management solutions in the North
American market, which includes renovation and retrofit activity
and comprises over 97 percent of the Company’s revenues, will be up
low single-digits for fiscal 2018, reflecting an expected rebound
in the second half of the year. 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.”
Management estimates a fiscal 2018 annual tax rate
of approximately 35.5 percent before any discrete items, assuming
the tax rates in the Company’s taxing jurisdictions remain
generally consistent throughout the year. Additionally,
management expects fiscal 2018 capital expenditures will
approximate 2 percent of net sales.
Mr. Nagel concluded, “We believe the lighting and
lighting-related industry as well as building management solutions
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.”
The independent registered public accounting firm’s
audit report with respect to the Company’s fiscal year-end
financial statements will not be issued until the Company completes
its annual report on Form 10-K, including its evaluation of the
effectiveness of internal controls over financial reporting.
Accordingly, the financial results reported in this earnings
release are preliminary pending completion of the audit.
Conference Call
As previously announced, the Company will host a
conference call to discuss fourth quarter results today, October 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 2017
net sales of $3.5 billion, Acuity Brands currently employs over
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®, Sensor Switch® and Atrius™.
Visit us www.acuitybrands.com.
Non-GAAP Financial Measures
This news release includes the following non-GAAP
financial measures: "adjusted gross profit," “adjusted gross profit
margin,” “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. Previously, 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 that we execute on an ongoing basis and integrate
acquisitions, manufacturing inefficiencies directly related to the
closure of a facility, and a 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.
Adjustments related to acquisitions include
acquired profit in inventory, professional fees, and certain
contract termination costs. While these costs are not
operational in nature and are not expected to continue for any
singular transaction on an ongoing basis, similar types of costs,
expenses and charges have occurred in prior periods and may recur
in the future as the Company continues to integrate prior
acquisitions and pursues any future acquisitions.
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
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, 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, share-based payment expense, and special
charges. The most directly comparable GAAP measures for
adjusted other expense is “other expense,” 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 a 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," “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: volatility in future demand among certain sales channels
and geographies, including possible short-term volatility due to
recent hurricanes; low single-digit growth rate for lighting and
building management solutions in the North American market for
fiscal 2018, reflecting an expected rebound in the second half of
the year; capital expenditures in fiscal 2018 approximating 2
percent of net sales; fiscal 2018 annual tax rate of 35.5 percent
before any discrete items; 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. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In millions) |
|
August 31, |
2017 |
|
|
(Preliminary) |
|
|
2016 |
|
|
|
|
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and
cash equivalents |
$ |
311.1 |
|
$ |
413.2 |
Accounts
receivable, less reserve for doubtful accounts of $1.9 and $1.7,
respectively |
|
573.3 |
|
|
572.8 |
Inventories |
|
328.6 |
|
|
295.2 |
Prepayments and other current assets |
|
32.6 |
|
|
41.7 |
|
|
|
|
Total
Current Assets |
|
1,245.6 |
|
|
1,322.9 |
|
|
|
|
Property, Plant, and
Equipment, net |
|
287.7 |
|
|
267.8 |
|
|
|
|
Other Long-Term
Assets |
|
1,366.3 |
|
|
1,357.3 |
|
|
|
|
Total
Assets |
$ |
2,899.6 |
|
$ |
2,948.0 |
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current
Liabilities: |
|
|
|
Accounts
payable |
$ |
395.1 |
|
$ |
401.0 |
Current
maturities of long-term debt |
|
0.4 |
|
|
0.2 |
Other
accrued liabilities |
|
205.4 |
|
|
271.3 |
|
|
|
|
Total
Current Liabilities |
|
600.9 |
|
|
672.5 |
|
|
|
|
Long-Term Debt, less
current portion |
|
356.5 |
|
|
355.0 |
Other Long-Term
Liabilities |
|
276.6 |
|
|
260.7 |
Total Stockholders’
Equity |
|
1,665.6 |
|
|
1,659.8 |
|
|
|
|
Total
Liabilities and Stockholders’ Equity |
$ |
2,899.6 |
|
$ |
2,948.0 |
|
|
|
|
ACUITY BRANDS, INC. |
CONSOLIDATED STATEMENTS OF
INCOME |
(In millions, except per-share
data) |
|
|
|
|
|
|
|
|
|
Three Months |
|
Year |
|
Ended August 31, |
|
Ended August 31, |
2017 |
|
|
|
2017 |
|
|
|
(Preliminary) |
|
|
2016 |
|
|
(Preliminary) |
|
|
2016 |
|
|
(Unaudited) |
|
|
|
|
Net
Sales |
$ |
957.6 |
|
$ |
925.5 |
|
|
$ |
3,505.1 |
|
|
$ |
3,291.3 |
|
Cost of
Products Sold |
|
550.7 |
|
|
523.4 |
|
|
|
2,023.9 |
|
|
|
1,855.1 |
|
|
|
|
|
|
|
|
|
Gross
Profit |
|
406.9 |
|
|
402.1 |
|
|
|
1,481.2 |
|
|
|
1,436.2 |
|
|
|
|
|
|
|
|
|
Selling,
Distribution, and Administrative Expenses |
|
244.6 |
|
|
262.1 |
|
|
|
951.1 |
|
|
|
946.0 |
|
Special
Charge |
|
9.6 |
|
|
4.9 |
|
|
|
11.3 |
|
|
|
15.0 |
|
|
|
|
|
|
|
|
|
Operating
Profit |
|
152.7 |
|
|
135.1 |
|
|
|
518.8 |
|
|
|
475.2 |
|
|
|
|
|
|
|
|
|
Other
Expense (Income): |
|
|
|
|
|
|
|
Interest
expense, net |
|
8.2 |
|
|
8.0 |
|
|
|
32.5 |
|
|
|
32.2 |
|
Miscellaneous expense (income), net |
|
2.2 |
|
|
(0.1 |
) |
|
|
(6.3 |
) |
|
|
(1.6 |
) |
Total
Other Expense |
|
10.4 |
|
|
7.9 |
|
|
|
26.2 |
|
|
|
30.6 |
|
Income
before Provision for Income Taxes |
|
142.3 |
|
|
127.2 |
|
|
|
492.6 |
|
|
|
444.6 |
|
Provision
for Income Taxes |
|
51.8 |
|
|
44.3 |
|
|
|
170.9 |
|
|
|
153.8 |
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
90.5 |
|
$ |
82.9 |
|
|
$ |
321.7 |
|
|
$ |
290.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Earnings per Share |
$ |
2.16 |
|
$ |
1.90 |
|
|
$ |
7.46 |
|
|
$ |
6.67 |
|
|
|
|
|
|
|
|
|
Basic
Weighted Average Number of Shares Outstanding |
|
41.9 |
|
|
43.7 |
|
|
|
43.1 |
|
|
|
43.5 |
|
|
|
|
|
|
|
|
|
Diluted
Earnings per Share |
$ |
2.15 |
|
$ |
1.89 |
|
|
$ |
7.43 |
|
|
$ |
6.63 |
|
|
|
|
|
|
|
|
|
Diluted
Weighted Average Number of Shares Outstanding |
|
42.0 |
|
|
43.9 |
|
|
|
43.3 |
|
|
|
43.8 |
|
|
|
|
|
|
|
|
|
Dividends
Declared per Share |
$ |
0.13 |
|
$ |
0.13 |
|
|
$ |
0.52 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
ACUITY BRANDS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In millions) |
|
|
Year Ended August 31, |
|
2017 (Preliminary) |
|
2016 |
|
|
Cash flows from
operating activities: |
|
|
|
Net
income |
$ |
321.7 |
|
|
$ |
290.8 |
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by (used
for) operating activities: |
|
|
|
Depreciation and amortization |
|
74.6 |
|
|
|
62.6 |
|
Share-based compensation expense |
|
32.0 |
|
|
|
27.7 |
|
Excess
tax benefits from share-based payments |
|
(5.2 |
) |
|
|
(25.6 |
) |
Loss
(gain) on the sale or disposal of property, plant, and
equipment |
|
0.3 |
|
|
|
(0.9 |
) |
Asset
impairment |
|
- |
|
|
|
5.1 |
|
Deferred
income taxes |
|
(7.7 |
) |
|
|
(8.2 |
) |
Gain on
sale of investment in unconsolidated affiliate |
|
(7.2 |
) |
|
|
- |
|
Net
change in assets and liabilities, net of effect of acquisitions,
divestitures and effect of exchange rate changes |
|
(92.3 |
) |
|
|
(5.8 |
) |
|
|
|
|
Net cash
provided by operating activities |
|
316.2 |
|
|
|
345.7 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchases
of property, plant, and equipment |
|
(67.3 |
) |
|
|
(83.7 |
) |
Proceeds
from sale of property, plant, and equipment |
|
5.5 |
|
|
|
2.2 |
|
Investments and acquisitions of businesses, net of cash
acquired |
|
- |
|
|
|
(623.2 |
) |
Proceeds
from sale of investment in unconsolidated affiliate |
|
13.2 |
|
|
|
- |
|
Other
investing activities |
|
(0.2 |
) |
|
|
- |
|
|
|
|
|
Net cash
used for investing activities |
|
(48.8 |
) |
|
|
(704.7 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Issuance
of long-term debt |
|
1.0 |
|
|
|
2.5 |
|
Repurchases of common stock |
|
(357.9 |
) |
|
|
- |
|
Proceeds
from stock option exercises and other |
|
3.0 |
|
|
|
14.2 |
|
Excess
tax benefits from share-based payments |
|
5.2 |
|
|
|
25.6 |
|
Dividends
paid |
|
(22.7 |
) |
|
|
(22.9 |
) |
|
|
|
|
Net cash
(used for) provided by financing activities |
|
(371.4 |
) |
|
|
19.4 |
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
1.9 |
|
|
|
(4.0 |
) |
|
|
|
|
Net change in cash and
cash equivalents |
|
(102.1 |
) |
|
|
(343.6 |
) |
Cash and cash
equivalents at beginning of period |
|
413.2 |
|
|
|
756.8 |
|
|
|
|
|
Cash and cash
equivalents at end of period |
$ |
311.1 |
|
|
$ |
413.2 |
|
|
|
|
|
ACUITY BRANDS, INC. |
|
Reconciliation of Non-U.S. GAAP
Measures |
|
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|
The tables below reconcile certain GAAP financial measures to
the corresponding non-GAAP measures: |
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|
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|
(In millions, except
earnings per share data) |
Three Months Ended August 31, |
|
Increase (Decrease) |
Percent Change |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
Net sales |
$ |
957.6 |
|
|
$ |
925.5 |
|
|
$ |
32.1 |
|
3.5 |
% |
|
|
|
|
|
|
|
|
|
Gross profit |
$ |
406.9 |
|
|
$ |
402.1 |
|
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
- |
|
|
|
0.2 |
|
|
|
|
|
Adjusted gross
profit |
$ |
406.9 |
|
|
$ |
402.3 |
|
|
$ |
4.6 |
|
1.1 |
% |
|
Percent of net
sales |
|
42.5 |
% |
|
|
43.5 |
% |
|
|
(100 |
) |
bps |
|
|
|
|
|
|
|
|
|
Selling, distribution,
and administrative expenses |
$ |
244.6 |
|
|
$ |
262.1 |
|
|
|
|
|
Less:
Amortization of acquired intangible assets |
|
(6.1 |
) |
|
|
(3.1 |
) |
|
|
|
|
Less:
Share-based payment expense |
|
(7.9 |
) |
|
|
(7.9 |
) |
|
|
|
|
Less:
Acquisition-related items (1) |
|
- |
|
|
|
(0.2 |
) |
|
|
|
|
Less:
Impairment of intangible asset |
|
- |
|
|
|
(5.1 |
) |
|
|
|
|
Adjusted selling,
distribution, and administrative expenses |
$ |
230.6 |
|
|
$ |
245.8 |
|
|
$ |
(15.2 |
) |
(6.2 |
%) |
|
Percent of net
sales |
|
24.1 |
% |
|
|
26.6 |
% |
|
|
(250 |
) |
bps |
|
|
|
|
|
|
|
|
|
Operating profit |
$ |
152.7 |
|
|
$ |
135.1 |
|
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
6.1 |
|
|
|
3.1 |
|
|
|
|
|
Add-back:
Share-based payment expense |
|
7.9 |
|
|
|
7.9 |
|
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
- |
|
|
|
0.4 |
|
|
|
|
|
Add-back:
Impairment of intangible asset |
|
- |
|
|
|
5.1 |
|
|
|
|
|
Add-back:
Special charge |
|
9.6 |
|
|
|
4.9 |
|
|
|
|
|
Adjusted operating
profit |
$ |
176.3 |
|
|
$ |
156.5 |
|
|
$ |
19.8 |
|
12.7 |
% |
|
Percent of net
sales |
|
18.4 |
% |
|
|
16.9 |
% |
|
|
150 |
|
bps |
|
|
|
|
|
|
|
|
|
Net income |
$ |
90.5 |
|
|
$ |
82.9 |
|
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
6.1 |
|
|
|
3.1 |
|
|
|
|
|
Add-back:
Share-based compensation expense |
|
7.9 |
|
|
|
7.9 |
|
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
- |
|
|
|
0.4 |
|
|
|
|
|
Add-back:
Impairment of intangible asset |
|
- |
|
|
|
5.1 |
|
|
|
|
|
Add-back:
Special charge |
|
9.6 |
|
|
|
4.9 |
|
|
|
|
|
Total pre-tax
adjustments to net income |
$ |
23.6 |
|
|
$ |
21.4 |
|
|
|
|
|
Income tax effect |
|
(6.8 |
) |
|
|
(7.4 |
) |
|
|
|
|
Adjusted net
income |
$ |
107.3 |
|
|
$ |
96.9 |
|
|
$ |
10.4 |
|
10.7 |
% |
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
2.15 |
|
|
$ |
1.89 |
|
|
|
|
|
Adjusted diluted
earnings per share |
$ |
2.55 |
|
|
$ |
2.21 |
|
|
$ |
0.34 |
|
15.4 |
% |
|
|
|
|
|
|
|
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|
(1) Acquisition-related items include acquired profit in
inventory and professional fees. |
|
(In millions, except
earnings per share data) |
Year Ended August 31, |
|
Increase (Decrease) |
Percent Change |
|
|
2017 |
|
|
|
2016 |
|
|
Net sales |
$ |
3,505.1 |
|
|
$ |
3,291.3 |
|
|
$ |
213.8 |
|
6.5 |
% |
|
|
|
|
|
|
|
Gross profit |
$ |
1,481.2 |
|
|
$ |
1,436.2 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
- |
|
|
|
2.8 |
|
|
|
|
Add-back:
Manufacturing inefficiencies (2) |
|
1.6 |
|
|
|
- |
|
|
|
|
Adjusted gross
profit |
$ |
1,482.8 |
|
|
$ |
1,439.0 |
|
|
$ |
43.8 |
|
3.0 |
% |
Percent of net
sales |
|
42.3 |
% |
|
|
43.7 |
% |
|
|
(140 |
) |
bps |
|
|
|
|
|
|
|
Selling, distribution,
and administrative expenses |
$ |
951.1 |
|
|
$ |
946.0 |
|
|
|
|
Less:
Amortization of acquired intangible assets |
|
(28.0 |
) |
|
|
(21.4 |
) |
|
|
|
Less:
Share-based payment expense |
|
(32.0 |
) |
|
|
(27.7 |
) |
|
|
|
Less:
Acquisition-related items (1) |
|
- |
|
|
|
(8.0 |
) |
|
|
|
Less:
Impairment of intangible asset |
|
- |
|
|
|
(5.1 |
) |
|
|
|
Adjusted selling,
distribution, and administrative expenses |
$ |
891.1 |
|
|
$ |
883.8 |
|
|
$ |
7.3 |
|
0.8 |
% |
Percent of net
sales |
|
25.4 |
% |
|
|
26.9 |
% |
|
|
(150 |
) |
bps |
|
|
|
|
|
|
|
Operating profit |
$ |
518.8 |
|
|
$ |
475.2 |
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
28.0 |
|
|
|
21.4 |
|
|
|
|
Add-back:
Share-based payment expense |
|
32.0 |
|
|
|
27.7 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
- |
|
|
|
10.8 |
|
|
|
|
Add-back:
Impairment of intangible asset |
|
- |
|
|
|
5.1 |
|
|
|
|
Add-back:
Manufacturing inefficiencies (2) |
|
1.6 |
|
|
|
- |
|
|
|
|
Add-back:
Special charge |
|
11.3 |
|
|
|
15.0 |
|
|
|
|
Adjusted operating
profit |
$ |
591.7 |
|
|
$ |
555.2 |
|
|
$ |
36.5 |
|
6.6 |
% |
Percent of net
sales |
|
16.9 |
% |
|
|
16.9 |
% |
|
|
- |
|
bps |
|
|
|
|
|
|
|
Other expense |
$ |
26.2 |
|
|
$ |
30.6 |
|
|
|
|
Add-back:
Gain on sale of investment in unconsolidated affiliate |
|
7.2 |
|
|
|
- |
|
|
|
|
Adjusted other
expense |
$ |
33.4 |
|
|
$ |
30.6 |
|
|
$ |
2.8 |
|
9.2 |
% |
|
|
|
|
|
|
|
Net income |
$ |
321.7 |
|
|
$ |
290.8 |
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
28.0 |
|
|
|
21.4 |
|
|
|
|
Add-back:
Share-based compensation expense |
|
32.0 |
|
|
|
27.7 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
- |
|
|
|
10.8 |
|
|
|
|
Add-back:
Impairment of intangible asset |
|
- |
|
|
|
5.1 |
|
|
|
|
Add-back:
Manufacturing inefficiencies (2) |
|
1.6 |
|
|
|
- |
|
|
|
|
Add-back:
Special charge |
|
11.3 |
|
|
|
15.0 |
|
|
|
|
Add-back:
Gain on sale of investment in unconsolidated affiliate |
|
(7.2 |
) |
|
|
- |
|
|
|
|
Total pre-tax
adjustments to net income |
$ |
65.7 |
|
|
$ |
80.0 |
|
|
|
|
Income tax effect |
|
(21.5 |
) |
|
|
(27.1 |
) |
|
|
|
Adjusted net
income |
$ |
365.9 |
|
|
$ |
343.7 |
|
|
$ |
22.2 |
|
6.5 |
% |
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
7.43 |
|
|
$ |
6.63 |
|
|
|
|
Adjusted diluted
earnings per share |
$ |
8.45 |
|
|
$ |
7.84 |
|
|
$ |
0.61 |
|
7.8 |
% |
|
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|
|
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|
(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,
404-853-1423dan.smith@acuitybrands.com
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