Vernon J. Nagel, Chairman, President and Chief Executive Officer of Acuity Brands, commented, “We are pleased with our fiscal 2011 fourth quarter results. We continue to execute well in a challenging environment. In addition to our top-line growth, our profitability and cash flow were similarly strong even while we continued to invest heavily in a number of areas, including new products and lighting solutions, as well as key strategic acquisitions. We continue to focus on extending our leadership position in North America while diversifying our product portfolio and expanding our channels to market, making us much less reliant on new construction. Furthermore, as we continue to diversify and expand our addressable market, we see significant growth potential over the next five years and beyond.”
Fiscal 2011 fourth quarter gross profit margin declined 110 basis points to 40.4 percent compared with 41.5 percent for the prior-year period. The year-over-year decrease was due primarily to the impact of higher input costs and unfavorable changes in the mix of products sold. The Company was able to recover all but approximately $2 million of these higher input costs through price increases, however, the gross profit margin percentage was negatively impacted. The Company implemented an additional price increase in September 2011 on those products most affected by higher input costs. In the fourth quarter of fiscal 2011, sales of the Company’s LED products quadrupled compared with the prior-year period and the Company launched a new line of retrofit lighting fixtures through the home center channel that entailed upfront stocking and display costs. While the LED products contributed profit dollars similar to or above the traditional portfolio mix, the gross profit percentage from the products was lower due to both their higher sales price and component costs. The profit margin on most LED products is currently dilutive to the Company’s overall profit margin and is expected to remain so in the near future. The Company anticipates that LED fixtures will become accretive to its overall profit margins as the expected decline of LED component costs outpaces the expected decrease in the selling prices of LED fixtures. This is due largely to higher value-added benefits and functionality of these fixtures, including improved energy efficiency and quality lighting from embedded controls.