Acuity Brands, Inc. (NYSE: AYI) (the “Company”) today announced
record fourth quarter and full-year results for net sales, net
income, and diluted earnings per share (“EPS”). Fiscal 2018 fourth
quarter net sales of $1.06 billion increased approximately $104
million, or 11 percent, compared with the year-ago period.
Operating profit for the fourth quarter of fiscal 2018 was $142
million compared with $153 million in the year-ago period.
Net income for the fourth quarter of fiscal 2018 was $108 million,
an increase of approximately 20 percent compared with the
prior-year period. Fiscal 2018 fourth quarter diluted EPS of
$2.70 increased approximately 26 percent compared with the year-ago
period.
Adjusted diluted EPS for the fourth quarter of
fiscal 2018 increased 5 percent to $2.68 compared with the year-ago
period. Adjusted operating profit for the fourth quarter of
fiscal 2018 was $154 million compared with $176 million in the
year-ago period, and adjusted operating profit margin decreased 390
basis points over the prior-year period to 14.5 percent.
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), special charge/credit for planned
streamlining activities, gain associated with the sale of the
Company’s Spanish lighting business, and an income tax net benefit
for discrete items associated with the Tax Cuts and Jobs Act of
2017 (“TCJA”). 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, “Our fourth quarter
performance was solid, particularly against the backdrop of a
challenging lighting market where larger commercial projects
remained soft and input costs rose significantly. Net sales
growth of 11 percent was robust and was driven primarily by volume
growth in our Contractor Select portfolio, Atrius-enabled
luminaires, and Holophane solutions. Overall, we experienced solid
growth in net sales in most channels and geographies. This was the
first time in our history that we generated quarterly net sales in
excess of $1 billion.”
Mr. Nagel continued, “The most significant
factors impacting our fourth quarter operating profit and margin
were changes in price/mix as well higher input costs for various
items such as electronic components, freight, wages, and certain
commodity-related items, such as steel. Many of these input
costs experienced dramatic increases in price in the fourth quarter
due to several economic factors, including previously announced and
enacted tariffs and wage inflation due to the tight labor
market. We estimate the inflationary impact of these items
reduced our fourth quarter gross profit by more than $20 million
and lowered our adjusted gross profit margin by 200 basis
points. Recently announced product price increases are
expected to recover these higher costs, however, we do typically
experience a delay between incurring higher costs and realizing the
benefits of an increase in sales prices.”
Fiscal 2018 Fourth Quarter
Results
The 11 percent year-over-year growth in fiscal
2018 fourth quarter net sales was primarily due to a 13 percent
increase in volume as well as a 1 percent increase from
acquisitions, partially offset by a 3 percent net unfavorable
change in product prices and mix of products sold ("price/mix").
The net unfavorable price/mix was primarily due to lower pricing on
certain luminaires as a result of increased competition in portions
of the market for more basic, lesser-featured products, and to a
lesser degree, changes in product mix reflecting the substitution
of certain products with less costly form factors resulting in
lower price points.
Gross profit for the fourth quarter of fiscal
2018 increased $5 million, or 1.3 percent, to $412 million compared
with $407 million in the prior-year period due to higher sales
volumes and productivity improvements, largely offset by
unfavorable price/mix, and higher material, component, and freight
costs. Fiscal 2018 fourth quarter gross profit margin of 38.9
percent declined 360 basis points compared with prior year’s gross
profit margin, while adjusted gross profit margin of 39.0 percent
declined 350 basis points compared with the year-ago period.
Selling, distribution, and administrative (“SD&A”) expenses for
the fourth quarter of fiscal 2018 totaled $275 million, an increase
of over $30 million, or approximately 12 percent, compared with the
prior-year period, due primarily to increased freight and
commission expense to support the greater sales volume, higher
employee related costs, and increased expenses for marketing and
outside services.
The Company reversed a previously recorded
special charge of $5 million during the fourth quarter of fiscal
2018 as certain planned streamlining activities were no longer
expected to occur, primarily due to the Company's sale of its
Spanish lighting business during the quarter. The Company
recorded a special charge of approximately $10 million during the
prior-year fourth quarter, which included planned streamlining
activities associated with the Spanish business.
The Company reported net miscellaneous income of
$4 million for the fourth quarter of fiscal 2018, which reflected a
$5 million gain associated with the sale of the Spanish lighting
business. The gain was primarily due to the recognition of
favorable accumulated foreign currency translation adjustments
previously recorded in other comprehensive income.
Fiscal 2018 Full-Year
Results
Net sales for fiscal 2018 increased $175
million, or 5 percent, to $3.68 billion. Results for fiscal
2018 include operating profit of $455 million, net income of $350
million, and diluted EPS of $8.52.
Adjusted operating profit for fiscal 2018
decreased $64 million, or 11 percent, to $528 million compared with
prior year’s adjusted operating profit of $592 million.
Fiscal 2018 adjusted net income decreased $3 million, or 1 percent,
to $363 million compared with $366 million for the prior-year
period. Adjusted diluted EPS for fiscal 2018 increased $0.39,
or 5 percent, to $8.84 compared with adjusted diluted EPS of $8.45
for the year-ago period. Adjusted results exclude
amortization expense for acquired intangible assets, share-based
payment expense, acquisition-related items (including acquired
profit in inventory and professional fees), special charge/credit
for planned streamlining activities, manufacturing inefficiencies
and excess inventory adjustments related to the closure of a
facility, gain associated with the sale of the Company’s Spanish
lighting business, gain associated with the sale of an investment
in an unconsolidated affiliate, and an income tax net benefit for
discrete items associated with the TCJA. The total impact of
these items on diluted EPS for fiscal 2018 and 2017 was $0.32 and
$1.02, 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.
Cash and cash equivalents at the end of the
fourth quarter of fiscal 2018 totaled $129 million, a decrease of
$182 million since the beginning of the fiscal year. Net cash
provided by operating activities totaled $353 million for the full
year compared with $337 million for the year-ago period,
representing a year-over-year increase of 5 percent. During
fiscal 2018, the Company spent $163 million to acquire two
businesses, Lucid Design Group and IOTA Engineering, and $298
million to repurchase two million shares of Acuity Brands
common stock under its authorized stock repurchase programs.
Outlook
Mr. Nagel commented, "We remain cautiously
optimistic for fiscal 2019. Third-party forecasts and leading
indicators suggest that the North American lighting market, the
Company's primary market, is projected to be up low-single digits
in fiscal 2019. Our focus in fiscal 2019 is to garner additional
top-line growth driven primarily by outperforming the growth rates
of the markets we serve through execution of our previously
announced growth strategies, continue to improve the mix of
products and solutions sold as we execute our tiered solutions
strategy, and leverage our fixed cost infrastructure to achieve
targeted incremental margins to improve our overall
profitability."
Mr. Nagel continued, "We have taken a number of
actions during the past several months that we believe will offset
much of the recent inflationary cost pressures, including announced
price increases as well as other measures to reduce costs and
improve productivity. We believe that our actions will begin to
offset these cost pressures midway through our first quarter of
fiscal 2019. Various components used in the Company's products as
well as certain purchased finished products are impacted by the
recently imposed tariffs on various China imported goods and may be
further impacted by proposed future tariffs. Management continues
to identify and implement actions to mitigate the financial impact
of the tariffs, including the recently announced price
increases."
Management estimates a fiscal 2019 annual tax
rate of approximately 25 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 2019 capital expenditures will
approximate 1.5 percent of net sales.
Mr. Nagel concluded, “We continue to believe the
lighting and lighting-related industry as well as building
management systems have the potential to experience solid growth
over the next decade, particularly as owners and users of lighting
equipment and buildings see the potential to transform those
investments into strategic assets by deploying our distinctive
solutions. 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 files 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 3,
2018, 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 2018
net sales of $3.7 billion, Acuity Brands currently employs
approximately 13,000 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®, Antique Street Lamps™, Sunoptics®, Distech Controls®,
nLight®, ROAM®, Sensor Switch®, Power Sentry®, IOTA®, and Atrius™.
Visit us at 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. Specifically,
management believes that these non-GAAP measures provide useful
information to investors by excluding or adjusting items for
amortization of acquired intangible assets, 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, acquisition-related items, special
charges associated with efforts to streamline the organization that
we execute on an ongoing basis and to integrate acquisitions,
manufacturing inefficiencies and excess inventory adjustments
directly related to the closure of a facility, gain associated with
the sale of the Company’s Spanish lighting business, gain
associated with the sale of an investment in an unconsolidated
affiliate, and income tax net benefit for discrete items associated
with the TCJA. 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 excess inventory adjustments
directly related to the closure of a facility, as well as
acquisition-related items. The most directly comparable GAAP
measure for adjusted SD&A expenses is “SD&A expenses,”
which includes 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 acquisition-related items, manufacturing inefficiencies
and excess inventory adjustments 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 associated with the
sale of the Company’s Spanish lighting business and a gain on the
sale of an 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 and excess inventory
adjustments directly related to the closure of a facility,
amortization of acquired intangible assets, share-based payment
expense, special charges, gain associated with the sale of the
Company’s Spanish lighting business, gain on sale of investment in
an unconsolidated affiliate, and income tax net benefit for
discrete items associated with the TCJA. 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: projected low single-digit growth rate for the
North American lighting market for fiscal 2019; capital
expenditures in fiscal 2019 approximating 1.5 percent of net sales;
fiscal 2019 annual tax rate of 25 percent before any discrete
items; expectations that recently announced product price increases
as well as other measures to reduce costs and improve productivity
will offset the recent inflationary cost pressures and begin to
offset the cost pressures midway through the first quarter of
fiscal 2019; management’s ability to identify and implement actions
to mitigate the financial impact of tariffs; the Company’s focus in
fiscal 2019 to garner additional top-line growth by outperforming
the growth rate of its markets, improving the mix of products and
solutions, and leveraging the fixed cost infrastructure; prospects
for continued future profitable growth; and potential for overall
demand in the Company’s end markets 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, 2017. 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, |
2018 |
|
|
(Preliminary) |
|
2017 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
Current
Assets: |
|
|
|
Cash and
cash equivalents |
$ |
129.1 |
|
$ |
311.1 |
Accounts
receivable, less reserve for doubtful accounts of $1.3 and $1.9,
respectively |
|
637.9 |
|
|
573.3 |
Inventories |
|
411.8 |
|
|
328.6 |
Prepayments and other current assets |
|
32.3 |
|
|
32.6 |
|
|
|
|
Total Current Assets |
|
1,211.1 |
|
|
1,245.6 |
|
|
|
|
Property,
Plant, and Equipment, net |
|
286.7 |
|
|
287.7 |
|
|
|
|
Other
Long-Term Assets |
|
1,491.0 |
|
|
1,366.3 |
|
|
|
|
Total Assets |
$ |
2,988.8 |
|
$ |
2,899.6 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
Liabilities: |
|
|
|
Accounts
payable |
$ |
451.1 |
|
$ |
395.1 |
Current
maturities of long-term debt |
|
0.4 |
|
|
0.4 |
Other
accrued liabilities |
|
231.2 |
|
|
205.4 |
|
|
|
|
Total Current Liabilities |
|
682.7 |
|
|
600.9 |
|
|
|
|
Long-Term
Debt, less current portion |
|
356.4 |
|
|
356.5 |
Other
Long-Term Liabilities |
|
232.9 |
|
|
276.6 |
Total
Stockholders’ Equity |
|
1,716.8 |
|
|
1,665.6 |
|
|
|
|
Total Liabilities and Stockholders’
Equity |
$ |
2,988.8 |
|
$ |
2,899.6 |
|
|
|
|
|
|
|
|
|
|
|
|
ACUITY BRANDS, INC. |
CONSOLIDATED STATEMENTS OF
INCOME |
(In millions, except per-share
data) |
|
|
|
|
|
|
|
|
|
Three Months |
|
Year |
|
Ended August 31, |
|
Ended August 31, |
|
2018 |
|
|
|
|
|
2018 |
|
|
|
|
(Preliminary) |
|
2017 |
|
(Preliminary) |
|
|
2017 |
|
|
(Unaudited) |
|
|
|
|
Net
Sales |
$ |
1,061.2 |
|
|
$ |
957.6 |
|
$ |
3,680.1 |
|
|
$ |
3,505.1 |
|
Cost of
Products Sold |
|
648.9 |
|
|
|
550.7 |
|
|
2,193.3 |
|
|
|
2,023.9 |
|
|
|
|
|
|
|
|
|
Gross
Profit |
|
412.3 |
|
|
|
406.9 |
|
|
1,486.8 |
|
|
|
1,481.2 |
|
|
|
|
|
|
|
|
|
Selling,
Distribution, and Administrative Expenses |
|
275.3 |
|
|
|
244.6 |
|
|
1,026.6 |
|
|
|
951.1 |
|
Special
Charge |
|
(5.1 |
) |
|
|
9.6 |
|
|
5.6 |
|
|
|
11.3 |
|
|
|
|
|
|
|
|
|
Operating
Profit |
|
142.1 |
|
|
|
152.7 |
|
|
454.6 |
|
|
|
518.8 |
|
|
|
|
|
|
|
|
|
Other
Expense (Income): |
|
|
|
|
|
|
|
Interest
expense, net |
|
9.0 |
|
|
|
8.2 |
|
|
33.5 |
|
|
|
32.5 |
|
Miscellaneous (income) expense, net |
|
(4.0 |
) |
|
|
2.2 |
|
|
(4.8 |
) |
|
|
(6.3 |
) |
Total
Other Expense |
|
5.0 |
|
|
|
10.4 |
|
|
28.7 |
|
|
|
26.2 |
|
Income
before Income Taxes |
|
137.1 |
|
|
|
142.3 |
|
|
425.9 |
|
|
|
492.6 |
|
Income
Taxes |
|
28.9 |
|
|
|
51.8 |
|
|
76.3 |
|
|
|
170.9 |
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
108.2 |
|
|
$ |
90.5 |
|
$ |
349.6 |
|
|
$ |
321.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
Per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
Earnings per Share |
$ |
2.71 |
|
|
$ |
2.16 |
|
$ |
8.54 |
|
|
$ |
7.46 |
|
|
|
|
|
|
|
|
|
Basic
Weighted Average Number of Shares Outstanding |
|
40.0 |
|
|
|
41.9 |
|
|
40.9 |
|
|
|
43.1 |
|
|
|
|
|
|
|
|
|
Diluted
Earnings per Share |
$ |
2.70 |
|
|
$ |
2.15 |
|
$ |
8.52 |
|
|
$ |
7.43 |
|
|
|
|
|
|
|
|
|
Diluted
Weighted Average Number of Shares Outstanding |
|
40.1 |
|
|
|
42.0 |
|
|
41.0 |
|
|
|
43.3 |
|
|
|
|
|
|
|
|
|
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, |
|
2018(Preliminary) |
|
|
|
2017 |
|
Cash
flows from operating activities: |
|
|
|
Net
income |
$ |
349.6 |
|
|
$ |
321.7 |
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by (used
for)operating activities: |
|
|
|
Depreciation and amortization |
|
80.3 |
|
|
|
74.6 |
|
Share-based payment expense |
|
32.3 |
|
|
|
32.0 |
|
Loss on sale or disposal of property, plant, and
equipment |
|
0.6 |
|
|
|
0.3 |
|
Deferred income taxes |
|
(38.2 |
) |
|
|
(7.7 |
) |
Gain on sale of investment in unconsolidated
affiliate |
|
- |
|
|
|
(7.2 |
) |
Gain on sale of business |
|
(5.4 |
) |
|
|
- |
|
Net change in assets and liabilities, net of effect of
acquisitions, divestitures and effect of
exchange rate changes |
|
(66.0 |
) |
|
|
(77.1 |
) |
|
|
|
|
Net cash provided by operating activities |
|
353.2 |
|
|
|
336.6 |
|
|
|
|
|
Cash
flows from investing activities: |
|
|
|
Purchases
of property, plant, and equipment |
|
(43.6 |
) |
|
|
(67.3 |
) |
Proceeds
from sale of property, plant, and equipment |
|
- |
|
|
|
5.5 |
|
Acquisition of businesses, net of cash acquired |
|
(163.2 |
) |
|
|
- |
|
Proceeds
from sale of business assets |
|
1.1 |
|
|
|
- |
|
Proceeds
from sale of investment in unconsolidated affiliate Proceeds from
sale of investment in unconsolidated affiliate |
|
- |
|
|
|
13.2 |
|
Other
investing activities |
|
- |
|
|
|
(0.2 |
) |
|
|
|
|
Net cash used for investing activities |
|
(205.7 |
) |
|
|
(48.8 |
) |
|
|
|
|
Cash
flows from financing activities: |
|
|
|
Borrowings on credit facility |
|
395.4 |
|
|
|
- |
|
Repayments of borrowings on credit facility |
|
(395.4 |
) |
|
|
- |
|
(Repayments) issuances of long-term debt |
|
(0.4 |
) |
|
|
1.0 |
|
Repurchases of common stock |
|
(298.4 |
) |
|
|
(357.9 |
) |
Proceeds
from stock option exercises and other |
|
1.7 |
|
|
|
3.0 |
|
Payments
for employee taxes on net settlement of equity awards |
|
(8.2 |
) |
|
|
(15.2 |
) |
Dividends
paid |
|
(21.4 |
) |
|
|
(22.7 |
) |
|
|
|
|
Net cash provided by financing activities |
|
(326.7 |
) |
|
|
(391.8 |
) |
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
(2.8 |
) |
|
|
1.9 |
|
|
|
|
|
Net
change in cash and cash equivalents |
|
(182.0 |
) |
|
|
(102.1 |
) |
Cash and
cash equivalents at beginning of period |
|
311.1 |
|
|
|
413.2 |
|
|
|
|
|
Cash and
cash equivalents at end of period |
$ |
129.1 |
|
|
$ |
311.1 |
|
|
|
|
|
Certain prior-period amounts have been reclassified to conform
to the current year presentation. |
|
|
|
|
|
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
earnings per share data) |
Three Months Ended August 31, |
|
Increase(Decrease) |
PercentChange |
|
|
2018 |
|
|
|
2017 |
|
|
Net sales |
$ |
1,061.2 |
|
|
$ |
957.6 |
|
|
$ |
103.6 |
|
10.8 |
% |
|
|
|
|
|
|
|
Gross profit
(GAAP) |
$ |
412.3 |
|
|
$ |
406.9 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
1.2 |
|
|
|
- |
|
|
|
|
Adjusted gross profit
(Non-GAAP) |
$ |
413.5 |
|
|
$ |
406.9 |
|
|
$ |
6.6 |
|
1.6 |
% |
Percent of net sales |
|
39.0 |
% |
|
|
42.5 |
% |
|
|
(350 |
) |
bps |
|
|
|
|
|
|
|
Selling, distribution,
and administrative expenses (GAAP) |
$ |
275.3 |
|
|
$ |
244.6 |
|
|
|
|
Less:
Amortization of acquired intangible assets |
|
(8.0 |
) |
|
|
(6.1 |
) |
|
|
|
Less:
Share-based payment expense |
|
(7.9 |
) |
|
|
(7.9 |
) |
|
|
|
Less:
Acquisition-related items (1) |
|
(0.3 |
) |
|
|
- |
|
|
|
|
Adjusted selling,
distribution, and administrative expenses (Non-GAAP) |
$ |
259.1 |
|
|
$ |
230.6 |
|
|
$ |
28.5 |
|
12.4 |
% |
Percent of net sales |
|
24.4 |
% |
|
|
24.1 |
% |
|
|
30 |
|
bps |
|
|
|
|
|
|
|
Operating profit
(GAAP) |
$ |
142.1 |
|
|
$ |
152.7 |
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
8.0 |
|
|
|
6.1 |
|
|
|
|
Add-back:
Share-based payment expense |
|
7.9 |
|
|
|
7.9 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
1.5 |
|
|
|
- |
|
|
|
|
Add-back
(Less): Special charge/(credit) |
|
(5.1 |
) |
|
|
9.6 |
|
|
|
|
Adjusted operating
profit (Non-GAAP) |
$ |
154.4 |
|
|
$ |
176.3 |
|
|
$ |
(21.9 |
) |
(12.4 |
%) |
Percent of net sales |
|
14.5 |
% |
|
|
18.4 |
% |
|
|
(390 |
) |
bps |
|
|
|
|
|
|
|
Other expense (income)
(GAAP) |
$ |
5.0 |
|
|
$ |
10.4 |
|
|
|
|
Add-back:
Gain on sale of business |
|
5.4 |
|
|
|
- |
|
|
|
|
Adjusted other expense
(income) (Non-GAAP) |
$ |
10.4 |
|
|
$ |
10.4 |
|
|
$ |
- |
|
- |
% |
|
|
|
|
|
|
|
Net income (GAAP) |
$ |
108.2 |
|
|
$ |
90.5 |
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
8.0 |
|
|
|
6.1 |
|
|
|
|
Add-back:
Share-based compensation expense |
|
7.9 |
|
|
|
7.9 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
1.5 |
|
|
|
- |
|
|
|
|
Add-back
(Less): Special charge/(credit) |
|
(5.1 |
) |
|
|
9.6 |
|
|
|
|
Less:
Gain on sale of business |
|
(5.4 |
) |
|
|
- |
|
|
|
|
Total pre-tax
adjustments to net income |
|
6.9 |
|
|
|
23.6 |
|
|
|
|
Income tax effect |
|
(4.3 |
) |
|
|
(6.8 |
) |
|
|
|
Less: Discrete income
tax benefits of TCJA (2) |
|
(3.4 |
) |
|
|
- |
|
|
|
|
Adjusted net income
(Non-GAAP) |
$ |
107.4 |
|
|
$ |
107.3 |
|
|
$ |
0.1 |
|
0.1 |
% |
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP) |
$ |
2.70 |
|
|
$ |
2.15 |
|
|
|
|
Adjusted diluted
earnings per share (Non-GAAP) |
$ |
2.68 |
|
|
$ |
2.55 |
|
|
$ |
0.13 |
|
5.0 |
% |
|
|
|
|
|
|
|
(1)
Acquisition-related items include acquired profit in inventory and
professional fees. |
(2)
Discrete income tax net benefit of the Tax Cuts and Jobs Act of
2017 includes provisional estimates recognized within Income tax
expense on the Consolidated Statements of Comprehensive
Income. |
|
|
|
|
|
|
|
(In millions, except
earnings per share data) |
Year Ended August 31, |
|
Increase(Decrease) |
PercentChange |
|
|
2018 |
|
|
|
2017 |
|
|
Net sales |
$ |
3,680.1 |
|
|
$ |
3,505.1 |
|
|
$ |
175.0 |
|
5.0 |
% |
|
|
|
|
|
|
|
Gross profit
(GAAP) |
$ |
1,486.8 |
|
|
$ |
1,481.2 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
1.7 |
|
|
|
- |
|
|
|
|
Add-back:
Manufacturing inefficiencies (2) |
|
- |
|
|
|
1.6 |
|
|
|
|
Add-back:
Excess Inventory (3) |
|
3.1 |
|
|
|
- |
|
|
|
|
Adjusted gross profit
(Non-GAAP) |
$ |
1,491.6 |
|
|
$ |
1,482.8 |
|
|
$ |
8.8 |
|
0.6 |
% |
Percent
of net sales |
|
40.5 |
% |
|
|
42.3 |
% |
|
|
(180 |
) |
bps |
|
|
|
|
|
|
|
Selling, distribution,
and administrative expenses (GAAP) |
$ |
1,026.6 |
|
|
$ |
951.1 |
|
|
|
|
Less:
Amortization of acquired intangible assets |
|
(28.5 |
) |
|
|
(28.0 |
) |
|
|
|
Less:
Share-based payment expense |
|
(32.3 |
) |
|
|
(32.0 |
) |
|
|
|
Less:
Acquisition-related items (1) |
|
(2.1 |
) |
|
|
- |
|
|
|
|
Adjusted selling,
distribution, and administrative expenses (Non-GAAP) |
$ |
963.7 |
|
|
$ |
891.1 |
|
|
$ |
72.6 |
|
8.1 |
% |
Percent
of net sales |
|
26.2 |
% |
|
|
25.4 |
% |
|
|
80 |
|
bps |
|
|
|
|
|
|
|
Operating profit
(GAAP) |
$ |
454.6 |
|
|
$ |
518.8 |
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
28.5 |
|
|
|
28.0 |
|
|
|
|
Add-back:
Share-based payment expense |
|
32.3 |
|
|
|
32.0 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
3.8 |
|
|
|
- |
|
|
|
|
Add-back:
Manufacturing inefficiencies (2) |
|
- |
|
|
|
1.6 |
|
|
|
|
Add-back:
Excess Inventory (3) |
|
3.1 |
|
|
|
- |
|
|
|
|
Add-back:
Special charge |
|
5.6 |
|
|
|
11.3 |
|
|
|
|
Adjusted operating
profit (Non-GAAP) |
$ |
527.9 |
|
|
$ |
591.7 |
|
|
$ |
(63.8 |
) |
(10.8 |
%) |
Percent
of net sales |
|
14.3 |
% |
|
|
16.9 |
% |
|
|
(260 |
) |
bps |
|
|
|
|
|
|
|
Other expense
(GAAP) |
$ |
28.7 |
|
|
$ |
26.2 |
|
|
|
|
Add-back:
Gain on sale of investment in unconsolidated affiliate |
|
- |
|
|
|
7.2 |
|
|
|
|
Add-back:
Gain on sale of business |
|
5.4 |
|
|
|
- |
|
|
|
|
Adjusted other expense
(Non-GAAP) |
$ |
34.1 |
|
|
$ |
33.4 |
|
|
$ |
0.7 |
|
2.1 |
% |
|
|
|
|
|
|
|
Net income (GAAP) |
$ |
349.6 |
|
|
$ |
321.7 |
|
|
|
|
Add-back:
Amortization of acquired intangible assets |
|
28.5 |
|
|
|
28.0 |
|
|
|
|
Add-back:
Share-based compensation expense |
|
32.3 |
|
|
|
32.0 |
|
|
|
|
Add-back:
Acquisition-related items (1) |
|
3.8 |
|
|
|
- |
|
|
|
|
Add-back:
Manufacturing inefficiencies (2) |
|
- |
|
|
|
1.6 |
|
|
|
|
Add-back:
Excess Inventory (3) |
|
3.1 |
|
|
|
- |
|
|
|
|
Add-back:
Special charge |
|
5.6 |
|
|
|
11.3 |
|
|
|
|
Less:
Gain on sale of investment in unconsolidated affiliate |
|
- |
|
|
|
(7.2 |
) |
|
|
|
Less:
Gain on sale of business |
|
(5.4 |
) |
|
|
- |
|
|
|
|
Total pre-tax
adjustments to net income |
|
67.9 |
|
|
|
65.7 |
|
|
|
|
Income tax effect |
|
(20.0 |
) |
|
|
(21.5 |
) |
|
|
|
Less:
Discrete income tax benefits of the TCJA (4) |
|
(34.6 |
) |
|
|
- |
|
|
|
|
Adjusted net income
(Non-GAAP) |
$ |
362.9 |
|
|
$ |
365.9 |
|
|
$ |
(3.0 |
) |
(0.8 |
%) |
|
|
|
|
|
|
|
Diluted earnings per
share (GAAP) |
$ |
8.52 |
|
|
$ |
7.43 |
|
|
|
|
Adjusted diluted
earnings per share (Non-GAAP) |
$ |
8.84 |
|
|
$ |
8.45 |
|
|
$ |
0.39 |
|
4.6 |
% |
|
|
|
|
|
|
|
(1)
Acquisition-related items include acquired profit in inventory and
professional fees. |
(2)
Incremental costs incurred due to manufacturing inefficiencies
directly related to the closure of a facility. |
(3) Excess
inventory related to the closure of a facility. |
(4)
Discrete income tax net benefit of the Tax Cuts and Jobs Act of
2017 includes provisional estimates recognized within Income tax
expense on the Consolidated Statements of Comprehensive
Income. |
|
Contact:Dan Smith,
404-853-1423dan.smith@acuitybrands.com
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