Acuity Brands Reports Record First Quarter Results
ATLANTA, Jan. 9, 2014 (GLOBE NEWSWIRE) — Acuity Brands, Inc. (NYSE:AYI) (“Company”) today announced record first quarter net sales, net income, and diluted earnings per share (“EPS”). Fiscal 2014 first quarter net sales of $574.7 million increased $93.6 million, or approximately 20 percent, compared with the year-ago period. Net income for the first quarter of fiscal 2014 was $44.5 million, an increase of $18.4 million, or 70 percent, compared with the prior-year period. Fiscal 2014 first quarter diluted EPS of $1.03 increased 69 percent compared with $0.61 for the year-ago period.
Vernon J. Nagel, Chairman, President, and Chief Executive Officer of Acuity Brands, commented, “We were extremely pleased with our record fiscal 2014 first quarter results as we continued to execute our strategies to extend our leadership position in North America. We believe our record first quarter results reflect our ability to provide customers truly differentiated value from our industry-leading portfolio of innovative lighting and control solutions along with superior service.”
The year-over-year growth in fiscal 2014 first quarter net sales was due primarily to an increase in volume, partially offset by an estimated 1 percentage point net unfavorable change in product prices and mix of products sold (“price/mix”). The increase in volume was broad-based across most product categories and key sales channels in North America. The impact on net sales from acquisitions and foreign currency was not significant. Sales of LED-based products more than doubled from the year-ago period and represented more than a quarter of the total of fiscal 2014 first quarter net sales.
Operating profit for the first quarter of fiscal 2014 was $77.4 million, an increase of $29.2 million, or 61 percent, over the year-ago period. Fiscal 2014 first quarter results include the benefit of an insurance recovery of $5 million, or $0.07 diluted EPS, associated with the prior-year reported loss resulting from fraud perpetrated at a freight payment and audit service firm formerly retained by the Company. Included in prior year’s first quarter results were a pre-tax special charge and temporary expenses associated with a previously announced production facility closure totaling $5.5 million, or $0.08 diluted EPS. Adjusted operating profit (excluding the impact of the insurance recovery) for the first quarter of fiscal 2014 increased $18.7 million, or 35 percent, to $72.4 million compared with the year-ago period adjusted operating profit (excluding pre-tax special charge and temporary expenses) of $53.7 million. Adjusted operating profit margin for the first quarter of fiscal 2014 increased 140 basis points to 12.6 percent compared with 11.2 percent for the prior-year period. Adjusted diluted EPS for the first quarter of fiscal 2014 increased 39 percent to $0.96 compared with prior-year’s adjusted diluted EPS of $0.69. Management believes that the adjusted financial measures enhance the reader’s overall understanding of the Company’s current financial performance and prospects for the future. A reconciliation of adjusted financial measures to the most directly comparable GAAP measure is provided in the tables at the end of this release.
During the first quarter of fiscal 2014, the Company completed the closures of two small production facilities which were part of the streamlining actions initiated in the prior year. The Company did not record any significant incremental expense during the first quarter for activities to close the facilities. Management estimates that during the first quarter of fiscal 2014 the Company realized approximately $3 million of pre-tax savings associated with the streamlining activities initiated in 2013 and currently expects to be at the total annualized savings run rate of $15 million by the end of the second fiscal quarter.
Cash and cash equivalents at the end of the first quarter of fiscal 2014 totaled $398.1 million, an increase of $39.0 million since the beginning of the fiscal year. Net cash provided by operating activities totaled $43.4 million for the first quarter of fiscal 2014 compared with net cash used for operating activities of $14.5 million for the year-ago period. The year-over-year improvement reflects higher net income and lower working capital requirements as compared with the prior-year period.
Outlook
Mr. Nagel commented, “Our outlook remains positive. Third-party forecasts and leading indicators continue to suggest that the growth rate for the North American lighting market, which includes renovation and retrofit activity, will continue to be in the mid-single digit range during 2014. While we still expect to see some volatility in demand among certain sales channels and geographies, our expectation for the future is that overall demand in our end markets will continue to improve and be more consistent and broad-based. The favorable trend in our December order rates seems to reflect this improvement. We believe opportunities continue to exist that will allow us to continue to outperform the markets we serve. These opportunities include benefits from growing renovation and tenant improvement projects, further expansion in underpenetrated geographies and channels, and growth from the introduction of new products and lighting solutions.”
Mr. Nagel concluded, “We believe the lighting and lighting-related industry will experience solid growth over the next decade, particularly as energy and environmental concerns come to the forefront, and we believe we are well positioned to fully participate in this exciting industry.”
Non-GAAP Financial Measures
This news release contains non-GAAP financial measures such as “adjusted gross profit margin”, “adjusted selling, distribution, and administrative expenses” (“adjusted SD&A expenses”), “adjusted operating profit”, “adjusted operating profit margin”, “adjusted net income”, and “adjusted diluted EPS”. These measures are provided to enhance the reader’s overall understanding of the Company’s current financial performance and prospects for the future. However, 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.
A reconciliation of each measure to the most directly comparable GAAP measure is available in this news release. In addition, the Current Report on Form 8-K furnished to the SEC concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.
Conference Call
As previously announced, the Company will host a conference call to discuss first quarter results today, January 9, 2014, 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 2013 net sales of over $2 billion, Acuity Brands employs approximately 6,500 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