ayi-20240229

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

Form 10-Q

_____________________________________________


(Mark One)
☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2024.


OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .

Commission file number 001-16583.

_____________________________________________

ACUITY BRANDS, INC.

(Exact name of registrant as specified in its charter)

_____________________________________________


Delaware						58-2632672
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1170 Peachtree Street, N.E., Suite 1200, Atlanta, Georgia 30309

(Address of principal executive offices)

(404) 853-1400

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $0.01 par value per share

AYI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock — $0.01 par value — 30,797,872 shares as of March 28, 2024.

ACUITY BRANDS, INC.

Table of Contents


		Page No.
Part I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets -- February 29, 2024 (Unaudited) and August 31, 2023	1
	Consolidated Statements of Comprehensive Income (Unaudited) -- Three months and six months ended February 29, 2024 and February 28, 2023	2
	Consolidated Statements of Cash Flows (Unaudited) -- Six months ended February 29, 2024 and February 28, 2023	3
	Notes to Consolidated Financial Statements (Unaudited)	4
	Note 1 — Description of Business and Basis of Presentation	4
	Note 2 — Significant Accounting Policies	5
	Note 3 — Acquisitions and Divestitures	5
	Note 4 — New Accounting Pronouncements	6
	Note 5 — Fair Value Measurements	7
	Note 6 — Inventories	8
	Note 7 — Property, Plant, and Equipment	8
	Note 8 — Goodwill and Intangible Assets	8
	Note 9 — Other Current Liabilities	9
	Note 10 — Debt and Lines of Credit	10
	Note 11 — Commitments and Contingencies	10
	Note 12 — Changes in Stockholders' Equity	12
	Note 13 — Revenue Recognition	13
	Note 14 — Share-based Payments	14
	Note 15 — Pension Plans	14
	Note 16 — Special Charges	15
	Note 17 — Other Expense	15
	Note 18 — Earnings Per Share	16
	Note 19 — Comprehensive Income	16
	Note 20 — Segment Information	17

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	27

Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 5.	Other Information	28
Item 6.	Exhibits	28

INDEX TO EXHIBITS		29

SIGNATURES		30

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

ACUITY BRANDS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions, except per-share data)


	February 29, 2024		August 31, 2023
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	578.9	$	397.9
Accounts receivable, less reserve for doubtful accounts of $1.2 and $1.3, respectively	494.9		555.3
Inventories	375.8		368.5
Prepayments and other current assets	97.2		73.5
Total current assets	1,546.8		1,395.2
Property, plant, and equipment, net	296.0		297.6
Operating lease right-of-use assets	76.2		84.1
Goodwill	1,097.1		1,097.9
Intangible assets, net	462.9		481.2
Deferred income taxes	0.8		3.0
Other long-term assets	46.0		49.5
Total assets	$	3,525.8	$	3,408.5
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	322.4	$	285.7

Current operating lease liabilities	19.6		19.7
Accrued compensation	83.9		103.3
Other current liabilities	172.0		186.7
Total current liabilities	597.9		595.4
Long-term debt	495.9		495.6
Long-term operating lease liabilities	67.5		75.5
Accrued pension liabilities	38.7		38.4
Deferred income taxes	42.3		59.0
Other long-term liabilities	133.9		129.2
Total liabilities	1,376.2		1,393.1
Commitments and contingencies (see Commitments and Contingencies footnote)
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 50.0 shares authorized; none issued	—		—
Common stock, $0.01 par value per share; 500.0 shares authorized; 54.6 and 54.4 shares issued, respectively	0.5		0.5
Paid-in capital	1,087.7		1,066.8
Retained earnings	3,686.4		3,505.4
Accumulated other comprehensive loss	(112.7)		(112.6)
Treasury stock, at cost, of 23.7 and 23.4 shares, respectively	(2,512.3)		(2,444.7)
Total stockholders’ equity	2,149.6		2,015.4
Total liabilities and stockholders’ equity	$	3,525.8	$	3,408.5

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

ACUITY BRANDS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In millions, except per-share data)


	Three Months Ended				Six Months Ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Net sales	$	905.9	$	943.6	$	1,840.6	$	1,941.5
Cost of products sold	493.5		536.9		999.8		1,118.3
Gross profit	412.4		406.7		840.8		823.2
Selling, distribution, and administrative expenses	294.3		295.2		589.8		595.9
Special charges	—		—		—		6.9
Operating profit	118.1		111.5		251.0		220.4
Other expense:
Interest (income) expense, net	(0.1)		5.7		0.8		12.3
Miscellaneous expense (income), net	0.6		(3.7)		1.7		5.4
Total other expense	0.5		2.0		2.5		17.7
Income before income taxes	117.6		109.5		248.5		202.7
Income tax expense	28.4		26.3		58.7		44.6
Net income	$	89.2	$	83.2	$	189.8	$	158.1

Earnings per share(1):
Basic earnings per share	$	2.89	$	2.60	$	6.13	$	4.91
Basic weighted average number of shares outstanding	30.864		32.048		30.940		32.178
Diluted earnings per share	$	2.84	$	2.57	$	6.05	$	4.86
Diluted weighted average number of shares outstanding	31.399		32.386		31.388		32.545
Dividends declared per share	$	0.15	$	0.13	$	0.28	$	0.26

Comprehensive income:
Net income	$	89.2	$	83.2	$	189.8	$	158.1
Other comprehensive income (loss) items:
Foreign currency translation adjustments	0.7		(1.1)		(1.4)		(2.6)
Defined benefit plans, net of tax	0.7		1.0		1.3		2.1
Other comprehensive income (loss) items, net of tax	1.4		(0.1)		(0.1)		(0.5)
Comprehensive income	$	90.6	$	83.1	$	189.7	$	157.6

______________________________

(1) Earnings per share is calculated using unrounded numbers. Amounts in the table may not recalculate exactly due to rounding.

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

ACUITY BRANDS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In millions)


	Six Months Ended
	February 29, 2024		February 28, 2023
Cash flows from operating activities:
Net income	$	189.8	$	158.1
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	45.6		48.5
Share-based payment expense	23.1		22.0
Loss on disposal of property, plant, and equipment	0.3		—
Asset impairment	—		4.3
Loss on sale of a business	—		11.2



Changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable	60.1		142.6
Inventories	(4.7)		44.5
Prepayments and other current assets	(23.0)		(1.7)
Accounts payable	39.2		(69.1)
Other operating activities	(37.8)		(54.0)
Net cash provided by operating activities	292.6		306.4
Cash flows from investing activities:
Purchases of property, plant, and equipment	(29.0)		(35.6)



Other investing activities	(3.7)		6.4
Net cash used for investing activities	(32.7)		(29.2)
Cash flows from financing activities:
Repayments on credit facility, net of borrowings	—		(18.0)


Repurchases of common stock	(67.8)		(121.7)
Proceeds from stock option exercises and other	7.0		1.7
Payments of taxes withheld on net settlement of equity awards	(9.4)		(12.9)
Dividends paid	(8.8)		(8.5)

Net cash used for financing activities	(79.0)		(159.4)
Effect of exchange rate changes on cash and cash equivalents	0.1		(2.0)
Net change in cash and cash equivalents	181.0		115.8
Cash and cash equivalents at beginning of period	397.9		223.2
Cash and cash equivalents at end of period	$	578.9	$	339.0
Supplemental cash flow information:
Income taxes paid during the period	$	75.9	$	52.1
Interest paid during the period	$	18.4	$	21.9

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

Table of Contents

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1 — Description of Business and Basis of Presentation

Acuity Brands, Inc. (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) is a market-leading industrial technology company. We use technology to solve problems in spaces and light. Through our two business segments, Acuity Brands Lighting and Lighting Controls (“ABL”) and the Intelligent Spaces Group (“ISG”), we design, manufacture, and bring to market products and services that make a valuable difference in people's lives. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management systems, and location-aware applications.

ABL Segment

Our ABL strategy is to increase product vitality, improve service levels, use technology to improve and differentiate both our products and our services, and drive productivity. ABL's portfolio of lighting solutions includes commercial, architectural, and specialty lighting in addition to lighting controls and components that can be combined to create integrated lighting controls systems. We offer devices such as luminaires that predominantly utilize light emitting diode (“LED”) technology designed to optimize energy efficiency and comfort for various indoor and outdoor applications. ABL's portfolio of products includes but is not limited to the following brands: A-LightTM, AculuxTM, American Electric Lighting®, Cyclone

SEC Form 10-Q filed by Acuity Brands Inc.