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Acuity Brands Reports Fiscal 2012 Second Quarter Results

Non-GAAP Financial Measures

Acuity Brands’ management included in the above news release the terms “adjusted operating profit”, “adjusted operating profit margin”, “adjusted net income”, and “adjusted diluted EPS” which are non-GAAP financial measures provided to enhance the user's overall understanding of the Company's current financial performance and prospects for the future. Specifically, management believes that adjusted operating profit, adjusted operating profit margin, adjusted net income, and adjusted diluted EPS provide useful information to investors by excluding or adjusting items related to special charges associated with efforts to streamline the organization, which affected fiscal 2012 second quarter operating profit, net income and diluted EPS. Management believes the special charges impacted the comparability of the Company's results and that these items are not reflective of fixed costs that the Company will incur over the long term. However, we have incurred similar charges in prior fiscal years and continually evaluate streamlining measures which could result in additional charges in future periods. These non-GAAP financial measures 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 measure for adjusted operating profit and adjusted operating profit margin are “operating profit” and “operating profit margin”, respectively, which include the impact of the special charges. The most directly comparable GAAP measures for adjusted net income and adjusted diluted EPS are “net income” and “diluted EPS,” respectively; both GAAP measures include the impact of the special charges. The non-GAAP financial measures included in this news release have been reconciled to the nearest GAAP measure.

Conference Call

As previously announced, the Company will host a conference call to discuss second quarter results today, April 4, 2012, 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. is a North American market leader and one of the world’s leading providers of lighting solutions for both indoor and outdoor applications. With fiscal year 2011 net sales of $1.8 billion, Acuity Brands employs approximately 6,000 associates and is headquartered in Atlanta, Georgia with operations throughout North America, and in Europe and Asia. The company’s lighting solutions are sold under various brands, including Lithonia Lighting®, Holophane®, Peerless®, Gotham®, Mark Architectural Lighting™, Winona® Lighting, Healthcare Lighting®, Hydrel®, American Electric Lighting®, Carandini®, Antique Street Lamps™, Tersen®, Sunoptics®, Sensor Switch®, Lighting Control & Design™, Synergy® Lighting Controls, Pathway Connectivity™, Dark to Light®, ROAM®, RELOC® Wiring Solutions, and acculamp®.

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”, “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: (a) projected annualized pre-tax savings associated with the facility closure and workforce reductions; (b) expectation of solid growth for the lighting and lighting-related industry and the Company's position to fully participate; (c) existence of opportunities that will allow the Company to outperform the markets it serves; and (d) low-to-mid single digit growth for the North American lighting market for the remainder fiscal 2012 and the potential for continuing volatility in customer demand and commodity costs. 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 the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 4, 2012 and 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, 2011. 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.
CONSOLIDATED BALANCE SHEETS
(In millions, except share and per-share data)
 
   

February 29, 2012

   

August 31, 2011

(Unaudited)  
ASSETS
Current Assets:
Cash and cash equivalents $ 180.6 $ 170.2
Accounts receivable, less reserve for doubtful accounts of $2.0 at February 29, 2012 and $1.8 at August 31, 2011 257.6 262.6
Inventories 159.0 165.9
Deferred income taxes 15.4 16.0
Prepayments and other current assets   30.1     15.8  
Total Current Assets   642.7     630.5  
Property, Plant, and Equipment, at cost:
Land 7.3 8.4
Buildings and leasehold improvements 113.5 121.2
Machinery and equipment   357.8     355.3  
Total Property, Plant, and Equipment 478.6 484.9
Less - Accumulated depreciation and amortization   345.2     341.7  
Property, Plant, and Equipment, net   133.4     143.2  
Other Assets:
Goodwill 557.3 559.2
Intangible assets 234.5 234.2
Deferred income taxes 2.1 2.0
Other long-term assets   27.9     28.3  
Total Other Assets   821.8     823.7  
Total Assets $ 1,597.9   $ 1,597.4  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable $ 189.4 $ 203.8
Accrued compensation 32.6 45.0
Accrued pension liabilities, current 1.2 1.2
Other accrued liabilities   69.0     81.4  
Total Current Liabilities   292.2     331.4  
Long-Term Debt 353.4 353.4
Accrued Pension Liabilities, less current portion 57.1 60.5
Deferred Income Taxes 37.7 36.4
Self-Insurance Reserves, less current portion 7.6 7.3
Other Long-Term Liabilities 54.7 51.4
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; 51,434,881 issued and 41,715,626 outstanding at February 29, 2012; and 50,956,137 issued and 41,488,882 outstanding at August 31, 2011 0.5 0.5
Paid-in capital 694.3 680.3
Retained earnings 579.5 541.0
Accumulated other comprehensive loss items (59.0 ) (53.8 )
Treasury stock, at cost, 9,719,255 shares at February 29, 2012 and 9,467,255 shares at August 31, 2011   (420.1 )   (411.0 )
Total Stockholders’ Equity   795.2     757.0  
Total Liabilities and Stockholders’ Equity $ 1,597.9   $ 1,597.4  
 
ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In millions, except per-share data)
               
Three Months Ended Six Months Ended

February 29, 2012

 

February 28, 2011

 

February 29, 2012

 

February 28, 2011

Net Sales $ 457.7 $ 416.1 $ 932.0 $ 841.2
Cost of Products Sold   275.8   252.3   556.4     501.2
Gross Profit 181.9 163.8 375.6 340.0
Selling, Distribution, and Administrative Expenses 136.3 126.6 276.8 257.3
Special Charge   6.6   -   9.3     -
Operating Profit 39.0 37.2 89.5 82.7
Other Expense (Income):
Interest Expense, net 7.7 7.5 15.4 15.0

Miscellaneous Expense (Income), net

  1.1   0.7   (1.8 )   2.0
Total Other Expense   8.8   8.2   13.6     17.0
Income before Provision for Income Taxes 30.2 29.0 75.9 65.7
Provision for Income Taxes   10.7   9.1   26.4     21.4
Net Income $ 19.5 $ 19.9 $ 49.5   $ 44.3
 
Earnings Per Share:        
Basic Earnings per Share $ 0.46 $ 0.46 $ 1.17   $ 1.03
Basic Weighted Average Number of Shares Outstanding   41.4   42.3   41.3     42.2
Diluted Earnings per Share $ 0.46 $ 0.45 $ 1.16   $ 1.01
Diluted Weighted Average Number of Shares Outstanding   41.9   43.0   41.8     42.9
Dividends Declared per Share $ 0.13 $ 0.13 $ 0.26   $ 0.26
 
ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Millions)
 
    Six Months Ended
February 29, 2012         February 28, 2011
Cash Provided by (Used for) Operating Activities:  
Net income $ 49.5   $ 44.3  
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization 19.5 19.2
Share-based compensation expense, net 3.6 3.0
Excess tax benefits from share-based payments (4.1 ) (3.5 )
Loss on the sale or disposal of property, plant, and equipment 0.1 0.1
Asset impairments 0.1 -
Deferred income taxes (1.9 ) (0.9 )
Other non-cash items 0.1 (1.0 )
Change in assets and liabilities, net of effect of acquisitions, divestitures and effect of exchange rate changes:
Accounts receivable 4.1 21.9
Inventories 6.6 (14.4 )
Prepayments and other current assets (8.2 ) (5.7 )
Accounts payable (13.9 ) (22.6 )
Other current liabilities (20.5 ) (16.7 )
Other   2.6     5.0  
Net Cash Provided by Operating Activities   37.6     28.7  
Cash Provided by (Used for) Investing Activities:
Purchases of property, plant, and equipment (9.4 ) (11.8 )
Acquisitions of business and intangible assets, net of cash acquired   (3.8 )   (80.5 )
Net Cash Used for Investing Activities   (13.2 )   (92.3 )
Cash Provided by (Used for) Financing Activities:
Repurchases of common stock (9.2 ) (2.9 )
Proceeds from stock option exercises and other 6.4 5.3
Excess tax benefits from share-based payments 4.1 3.5
Dividends paid   (11.0 )   (11.2 )
Net Cash Used for Financing Activities   (9.7 )   (5.3 )
Effect of Exchange Rate Changes on Cash   (4.3 )   3.4  
Net Change in Cash and Cash Equivalents 10.4 (65.5 )
Cash and Cash Equivalents at Beginning of Period   170.2     191.0  
Cash and Cash Equivalents at End of Period $ 180.6   $ 125.5  
 

ACUITY BRANDS, INC.

Reconciliation of Non-U.S. GAAP Measures

The table below reconciles certain U.S. Generally Accepted Accounting Principles (“GAAP”) financial measures to the corresponding non-GAAP measures, which exclude special charges associated with actions to accelerate the streamlining of the organization, including reductions in the workforce and the closure of a production facility. These non-GAAP financial measures, including adjusted operating profit, adjusted operating profit margin, adjusted net income, and adjusted diluted earnings per share, are provided to enhance the user’s overall understanding of the Company’s current financial performance. Specifically, the Company believes these non-U.S. GAAP measures provide greater comparability and enhanced visibility into results excluding the impact of the special charges. These non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, results prepared in accordance with GAAP.

(In millions, except per-share data)     THREE MONTHS ENDED
February 29, 2012         February 28, 2011
        % of Sales         % of Sales
Net Sales $ 457.7 $ 416.1
 
Operating Profit (GAAP) $ 39.0 8.5 % $ 37.2 8.9 %
Add-Back: Special Charge   6.6 1.5 %   - -  
Adjusted Operating Profit (Non-GAAP) $ 45.6 10.0 % $ 37.2 8.9 %
 
Net Income (GAAP) $ 19.5 $ 19.9

Add-Back: Special Charge, net of tax

  4.5   -
Adjusted Net Income (Non-GAAP) $ 24.0 $ 19.9
 
Diluted Earnings Per Share (GAAP) $ 0.46 $ 0.45

Add-Back: Special Charge, net of tax

  0.11   -
Adjusted Diluted Earnings Per Share (Non-GAAP) $ 0.57 $ 0.45
 
 
(In millions, except per-share data) SIX MONTHS ENDED
February 29, 2012 February 28, 2011
% of Sales % of Sales
Net Sales $ 932.0 $ 841.2
 
Operating Profit (GAAP) $ 89.5 9.6 % $ 82.7 9.8 %
Add-Back: Special Charge   9.3 1.0 %   - -  
Adjusted Operating Profit (Non-GAAP) $ 98.8 10.6 % $ 82.7 9.8 %
 
Net Income (GAAP) $ 49.5 $ 44.3

Add-Back: Special Charge, net of tax

  6.3   -
Adjusted Net Income (Non-GAAP) $ 55.8 $ 44.3
 
Diluted Earnings Per Share (GAAP) $ 1.16 $ 1.01

Add-Back: Special Charge, net of tax

  0.15   -
Adjusted Diluted Earnings Per Share (Non-GAAP) $ 1.31 $ 1.01




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