Acuity Brands Reports Fiscal 2021 Third-Quarter Results
July 01, 2021 at 07:00 AM EDT
ATLANTA, July 01, 2021 (GLOBE NEWSWIRE) -- Acuity Brands, Inc. (NYSE: AYI) (the "Company") a market-leading industrial technology company announced net sales of $899.7 million for the third quarter of fiscal 2021 ended May 31, 2021, an increase of $123.5 million or 15.9 percent, as compared to the third quarter of fiscal 2020. Diluted earnings per share was $2.37, an increase of 55.9 percent over prior year, and adjusted diluted earnings per share was $2.77 per share, an increase of 42.8 percent over prior year.
"I am proud of our team for returning the business to growth during the quarter, while also expanding our gross profit margin. The breakout of our newly formed business segments shows that both segments contributed to that improvement,” stated Neil Ashe, Chief Executive Officer of Acuity Brands. "We continue to allocate capital effectively with the acquisition of ams OSRAM's North American Digital Systems business which will contribute to innovation and long-term growth."
Gross profit of $386.6 million increased $59.0 million, or 18.0 percent, as compared to the prior year. Gross profit was 43.0 percent of net sales for the third quarter of fiscal 2021, an increase of 80 basis points from 42.2 percent in the third quarter of fiscal 2020. The improvement in gross profit and gross profit margin was primarily a result of the increase in sales volumes as well as product and productivity improvements, which were partially offset by higher input costs.
Operating profit of $118.1 million increased $35.1 million, or 42.3 percent as compared to prior year. Operating profit was 13.1 percent of net sales for the third quarter of fiscal 2021, an increase of 240 basis points from 10.7 percent for the third quarter of fiscal 2020. The improvement in operating profit margin was largely a result of the increase in gross profit margin, in addition to the leveraging of the fixed costs base.
Adjusted operating profit of $136.8 million increased $31.9 million, or 30.4 percent, for the third quarter of fiscal 2021 as compared to the prior year. Adjusted operating profit was 15.2 percent of net sales for the third quarter of fiscal 2021, an increase of 170 basis points from 13.5 percent in the third quarter of fiscal 2020.
Net income of $85.7 million increased $25.3 million, or 41.9 percent, as compared to prior year. Diluted earnings per share of $2.37 increased $0.85, or 55.9 percent, for the third quarter of fiscal 2021, as compared to $1.52 for the third quarter of fiscal 2020.
Adjusted net income of $100.4 million increased $23.2 million, or 30.1 percent, as compared to the prior year. Adjusted diluted earnings per share of $2.77 increased $0.83, or 42.8 percent, as compared to $1.94 for the third quarter of fiscal 2020.
Acuity Brands Lighting and Lighting Controls "ABL"
ABL generated net sales of $850 million for the third quarter of fiscal 2021, an increase of $108.4 million or 14.6 percent, as compared to the third quarter of fiscal 2020.
Operating profit was $126.5 million for the third quarter of fiscal 2021, an increase of $27.9 million or 28.3 percent, as compared to the third quarter of fiscal 2020. Adjusted operating profit was $135.5 million for the fiscal third quarter of 2021 an increase of $27.4 million or 25.3 percent, as compared to the third quarter of fiscal 2020.
Intelligent Spaces Group "ISG"
ISG generated net sales of $55.4 million for the third quarter of fiscal 2021, an increase of $17.7 million or 46.9 percent as compared to the third quarter of fiscal 2020.
Operating profit was $7.2 million for the third quarter of fiscal 2021, an increase of $7.4 million as compared to the third quarter of fiscal 2020. Adjusted operating profit was $11.1 million for the fiscal third quarter of 2021 an increase of $6.1 million or 122.0 percent, as compared to the third quarter of fiscal 2020.
Cash Flow and Capital Allocation
Net cash from operating activities of $316.2 million decreased $62.1 million, or 16.4 percent for the first nine months of fiscal 2021 as compared to the same period in the prior year driven primarily by an increase in net working capital to support the higher level of sales. During the first nine months of 2021, the Company repurchased 3.3 million shares of common stock for a total of $340.9 million at an average price of $104 per share. The Company had approximately 4.4 million shares remaining under its most recent share purchase authorization at the end of the third fiscal quarter of 2021. Since May of 2020, the Company has reduced the outstanding share count by approximately 10 percent.
Completion of OSRAM Acquisition
One June 4, 2021, the Company announced that it has signed a definitive agreement to purchase ams OSRAM’s North American Digital Systems (“DS”) business. This acquisition is intended to enable the Company to enhance our LED driver and controls technology portfolio and accelerate our innovation, expand our access to market through a more fulsome OEM product offering, and give us more control over our supply chain. The transaction is expected to close by end of day on July 1, 2021.
Pledge to 100 Million Metric Tons of carbon reduction by 2030
At a sales conference during the third-quarter 2021, the Company committed to a goal of 100 million metric tons of carbon reduction by 2030 through the sales of LED luminaires, controls, and building management systems, replacing older technologies in existing buildings and new construction.
On July 1, 2021, the Company issued the 2020 Acuity Brands EarthLIGHT Handprint Report: Lighting the Way Toward Net-Zero on its website. The report evaluates the net environmental impact of its products at the point of use, incorporating both the environmental costs of using its products and the environmental benefits of removing older, less-efficient technology.
Further discussion relating to the economic recovery and long-term financial framework will take place during the virtual Investor Day today at 09:00am ET, July 1, 2021.
Investor Day 2021
As previously announced, Acuity Brands will hold a virtual Investor Day today, July 1, 2021, at 09:00 a.m. ET where it will discuss, amongst other topics its fiscal 2021 third-quarter results. Interested parties may access the webcast via the Investor Relations section of the Company's website at investors.acuitybrands.com to view live or to view a replay.
About Acuity Brands
Acuity Brands, Inc. (NYSE: AYI) is a market-leading industrial technology company. Through its two business segments, Acuity Brands Lighting and Lighting Controls (ABL) and the Intelligent Spaces Group (ISG) the Company designs, manufactures, and brings to market products and services that make the world more brilliant, productive, and connected. Acuity Brands achieves growth through the development of innovative new products and services, including building management systems, lighting, lighting controls, and location-aware applications.
Acuity Brands achieves customer-focused efficiencies that allow the Company to increase market share and deliver superior returns. The Company looks to aggressively deploy capital to grow the business and to enter attractive new verticals.
Acuity Brands is based in Atlanta, Georgia, with operations across North America, Europe, and Asia. The Company is powered by approximately 12,000 dedicated and talented associates. Visit us at www.acuitybrands.com.
Non-GAAP Financial Measures
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 acquisition-related items. The most directly comparable GAAP measures for adjusted SD&A expenses and adjusted SD&A expenses as a percent of net sales are “SD&A expenses” and “SD&A expenses as a percent of net sales,” respectively, 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 for total company and by segment are “operating profit” and “operating profit margin,” respectively, for total company and by segment, which include the impact of acquisition-related items, amortization of acquired intangible assets, share-based payment expense, and special charges. The most directly comparable GAAP measure for adjusted other expense is “other expense,” which includes an impairment of investment. 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, amortization of acquired intangible assets, share-based payment expense, an impairment of investment, and special charges. The most directly comparable GAAP measure for FCF is “net cash provided by operating activities.” 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. Our presentation of such measures, which may include adjustments to exclude unusual or non-recurring items, should not be construed as an inference that our future results will be unaffected by other unusual or non-recurring items.
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on management’s beliefs and assumptions and information currently available to management. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements are statements other than those of historical fact and may include statements relating to goals, plans, market conditions and projections regarding Acuity Brands' strategy, and specifically include statements made in this press release regarding: commitment to innovation and long-term growth, ongoing customer inventory rebalancing, strategically important for our growth strategy, accelerate the innovation and development of our product portfolio, Commitment to 100 million metric tons of Carbon Reduction. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. A number of important factors could cause actual events to differ materially from those contained in or implied by the forward-looking statements, including those factors discussed in our annual report on Form 10-K for the fiscal year ended August 31, 2020, filed on October 23, 2020 and those described from time to time in our other filings with the U.S. Securities and Exchange Commission (the “SEC”), which can be found at the SEC’s website www.sec.gov. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of events, or otherwise.
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The following table shows net sales by channel for the periods presented:
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The tables below reconcile certain GAAP financial measures to the corresponding non-GAAP measures for total company as well as our reportable operating segments: