ATLANTA--(BUSINESS WIRE)--Jul. 2, 2009--
Acuity Brands, Inc. (NYSE: AYI) today announced results for the third
quarter of fiscal 2009, including net sales of $396.6 million, a decline
of 23 percent compared with $512.4 million for the year-ago period.
Recent acquisitions represented approximately two percent of net sales
in the third quarter of fiscal 2009. As a result of the stronger dollar,
the translation impact on international sales reduced fiscal 2009 third
quarter net sales by approximately two percentage points as compared
with the prior year period. Operating profit for the third quarter of
fiscal 2009 was $41.5 million, or 10.5 percent of net sales, compared
with $71.7 million, or 14.0 percent of net sales, for the year-ago
period. Income from continuing operations for the third quarter of
fiscal 2009 was $22.3 million compared with $41.7 million for the same
period a year ago. Diluted earnings per share (EPS) from continuing
operations for the third quarter of fiscal 2009 were $0.54 compared with
$1.01 for the prior year period.
Mr. Nagel, Chairman, President, and Chief Executive Officer of Acuity
Brands, commented, “Net sales for the third quarter of 2009 continued to
be impacted by the significant decline in construction activity,
particularly in key markets such as commercial and office buildings. New
construction continues to be impacted by lower economic activity and
tight credit markets for real estate lending. We were able to partially
mitigate the impact of lower sales, including realizing benefits from
our continuous improvement initiatives and on-going streamlining efforts
while continuing to invest in innovative and energy-efficient products.
During the third quarter, we realized savings of approximately $10
million from streamlining actions taken in the first half of fiscal
2009. Additionally, results for the third quarter of fiscal 2009 were
impacted by higher raw material and component costs, which we estimate
were approximately $8 million higher than the prior year period. During
the third quarter, we completed the acquisition of Sensor Switch, Inc.
(“Sensor Switch”), an industry-leading developer and manufacturer of
lighting controls and energy management systems. We believe the addition
of Sensor Switch, along with our recent acquisition of Lighting Control
& Design, allows us to expand our capabilities in offering a full array
of intelligent lighting products and lighting control solutions in a
time when energy management control is critical.”
Diluted earnings per share from continuing operations for the nine
months ended May 31, 2009 were $1.36, a decline of 47 percent compared
with $2.55 for the prior year period. Income from continuing operations
for the first nine months of fiscal 2009 was $56.1 million, a decrease
of 47 percent versus the year-ago period, while net sales declined 18
percent to $1,234.8 million. Results for the first nine months of fiscal
2009 and fiscal 2008 include special charges of $26.6 million, or $0.41
per diluted share, and $14.6 million, or $0.21 per diluted share,
respectively. The special charges relate to on-going actions to
streamline and simplify the Company’s organizational structure and
operations. For the nine months ended May 31, 2009, the Company
estimates that it realized savings of approximately $26 million from
these actions of which an estimated $17 million relates to actions taken
during fiscal 2009. For the fourth quarter of fiscal 2009, the Company
expects to realize an estimated $11 million of savings from streamlining
actions taken during fiscal 2009. Management expects to realize more
than $50 million of annualized cost savings from the streamlining
actions taken in fiscal 2009, including the consolidation of previously
announced manufacturing operations that are scheduled to be
substantially complete by the end of the fiscal year.
The results for both periods exclude those of the specialty chemicals
business, which was spun off to the shareholders of Acuity Brands on
October 31, 2007 as Zep Inc. The historical results of the specialty
chemicals business are reported in discontinued operations. The Company
reported a diluted loss per share from discontinued operations of $0.01
in both the third quarter of fiscal 2009 and fiscal 2008. The losses in
both periods represent income tax adjustments associated with previous
earnings generated by the specialty chemicals business. The Company
reported a diluted loss per share from discontinued operations of $0.01
for the first nine months of both fiscal 2009 and fiscal 2008.
Including the results of discontinued operations, the Company reported
diluted EPS of $0.53 for the third quarter of fiscal 2009, or $22.0
million of net income, compared with diluted EPS of $1.00 for the third
quarter of fiscal 2008, or $41.1 million of net income. Including the
results of discontinued operations, the Company reported diluted EPS of
$1.35 for the first nine months of fiscal 2009, or $55.8 million of net
income, compared with diluted EPS of $2.54 for the first nine months of
fiscal 2008, or $106.4 million of net income.
Cash and cash equivalents at the end of the third fiscal quarter totaled
$28.3 million, a decrease of $268.8 million from the $297.1 million at
the beginning of the fiscal year. The decrease in cash was due primarily
to the retirement of the $160 million public notes that matured in
February 2009 and $162 million utilized for acquisitions and other
strategic investments. Total debt outstanding at May 31, 2009 was $294.8
million which included $60.8 million of borrowings under the Company’s
revolving credit facility and a $30 million three-year unsecured note
issued to the seller of Sensor Switch as partial consideration for the
acquisition of the business.
Outlook
Mr. Nagel commented, “Looking ahead, we continue to foresee a very
difficult economic environment, particularly for non-residential
construction activity, a primary market for us. Key indicators continue
to signal declines for both residential and non-residential construction
activity for the balance of 2009 and into 2010. Our backlog at the end
of the third quarter was down 21 percent on a year-over-year comparable
basis.
“We expect our profitability in the fourth quarter of fiscal 2009 to
reflect additional benefits from previously announced streamlining
actions and lower material costs as compared to the first nine months of
the fiscal year. Also, we expect pricing to continue to become more
competitive in certain channels and geographies. We forecast cash flows
to remain positive through the remainder of fiscal 2009 due to
forecasted earnings and lower operating working capital driven by
inventory reductions following the completion of the consolidation of
certain manufacturing facilities. While the recent acquisitions of
Lighting Control & Design and Sensor Switch are important strategic
additions with great longer-term potential, we do not expect them to
materially impact our results for the remainder of fiscal 2009.”
Mr. Nagel continued, “Although near-term results will continue to be
negatively impacted by current economic conditions, we remain very
positive about the long-term future performance of our company and our
ability to outperform the market. We continue to position the Company to
optimize short-term performance while investing in and deploying
resources to further our profitable growth opportunities for the
long-term. With our recent acquisitions, we are creating a lighting
controls and energy management platform with extensive capabilities
affording us the opportunity to be an industry leader in this rapidly
growing market.
“We believe the execution of our longer-term strategies to focus on
productivity improvement, accelerate investments in innovative and
energy-efficient products, expand market presence in key sectors such as
the renovation and relight market, and enhance services to our customers
will provide growth opportunities which will enable us to outperform the
market. Looking beyond the current environment, 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 now well positioned to fully
participate in this exciting industry.”
Mr. Nagel concluded, “These are extraordinarily challenging times.
However, our past and future actions to create value for our customers,
invest in our associates to be even more customer-focused and
productive, and more effectively deploy assets to generate greater
returns for our shareholders should enhance the Company’s opportunity to
prosper over the long-term.”
Please see the Company's Form 10-Q filed with the Securities and
Exchange Commission today for more information on the results for the
third quarter of fiscal 2009. You may access the 10-Q through the
Company’s website at www.acuitybrands.com.
Conference Call
As previously announced, the Company will host a conference call to
discuss third quarter results today 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.
Acuity Brands, Inc. owns and operates Acuity Brands Lighting, Inc. and
Acuity Brands Technology Services, Inc. With fiscal year 2008 net sales
of approximately $2.0 billion, Acuity Brands Lighting and Acuity Brands
Technology Services combined are one of the world's leading providers of
lighting fixtures and related products and services and include brands
such as Lithonia Lighting®, Holophane®, Peerless®,
Mark Architectural Lighting™, Hydrel®, American Electric
Lighting®, Gotham®, Carandini®,
MetalOptics®, Antique Street Lamps™, RELOC®,
Lighting Control & Design™, Sensor Switch®, Synergy®
Lighting Controls, SAERIS™, and ROAM®. Headquartered in
Atlanta, Georgia, Acuity Brands employs approximately 6,000 associates
and has operations throughout North America and in Europe and Asia.
Forward-Looking Statements
This release contains forward-looking statements, within the meaning of
the federal securities laws. Statements that may be considered
forward-looking include statements incorporating terms such as
"expects," "believes," "intends," "anticipates," “may,” and similar
terms that relate to future events, performance, or results of the
Company and specifically include statements regarding: (a) the Company’s
ability to execute and realize benefits from initiatives related to
streamlining its operations; (b) projected year over year revenue
declines; (c) factors expected to impact profitability in the fourth
quarter of fiscal 2009; (d) cash flow expectations for the remainder of
fiscal 2009; (e) the impact of the recent acquisitions of Lighting
Control & Design and Sensor Switch; (f) pricing expectations in certain
channels and geographies; and (g) longer-term industry and Company
growth expectations and the Company’s ability to execute strategies that
enable it to outperform the market. 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. A variety
of other risks and uncertainties are discussed in the Company’s filings
with the SEC, including the 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, 2008. 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 thousands, except share and per-share data)
|
|
|
|
|
|
|
|
May 31,
2009
|
|
August 31,
2008
|
|
|
(unaudited )
|
|
|
|
ASSETS
|
|
|
|
|
Current Assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
28,290
|
|
|
$
|
297,096
|
|
|
Accounts receivable, less reserve for doubtful accounts of $1,844 at
May 31, 2009 and $1,640 at August 31, 2008
|
|
221,477
|
|
|
|
268,971
|
|
|
Inventories
|
|
158,129
|
|
|
|
145,725
|
|
|
Deferred income taxes
|
|
21,971
|
|
|
|
18,251
|
|
|
Prepayments and other current assets
|
|
25,914
|
|
|
|
26,104
|
|
|
|
|
|
|
|
Total Current Assets
|
|
455,781
|
|
|
|
756,147
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant, and Equipment, at cost:
|
|
|
|
|
Land
|
|
7,342
|
|
|
|
9,501
|
|
|
Buildings and leasehold improvements
|
|
112,073
|
|
|
|
126,450
|
|
|
Machinery and equipment
|
|
343,595
|
|
|
|
334,641
|
|
|
|
|
|
|
|
Total Property, Plant, and Equipment
|
|
463,010
|
|
|
|
470,592
|
|
|
Less - Accumulated depreciation and amortization
|
|
318,039
|
|
|
|
309,086
|
|
|
|
|
|
|
|
Property, Plant, and Equipment, net
|
|
144,971
|
|
|
|
161,506
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
Goodwill
|
|
548,105
|
|
|
|
342,306
|
|
|
Intangible assets
|
|
148,684
|
|
|
|
129,319
|
|
|
Deferred income taxes
|
|
2,281
|
|
|
|
2,226
|
|
|
Other long-term assets
|
|
21,302
|
|
|
|
17,187
|
|
|
|
|
|
|
|
Total Other Assets
|
|
720,372
|
|
|
|
491,038
|
|
|
|
|
|
|
|
Total Assets
|
$
|
1,321,124
|
|
|
$
|
1,408,691
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
Current maturities of long-term debt
|
$
|
9,510
|
|
|
$
|
159,983
|
|
|
Revolving credit facility borrowings
|
|
60,800
|
|
|
|
—
|
|
|
Accounts payable
|
|
157,174
|
|
|
|
205,776
|
|
|
Accrued compensation
|
|
37,775
|
|
|
|
67,463
|
|
|
Other accrued liabilities
|
|
68,007
|
|
|
|
89,344
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
333,266
|
|
|
|
522,566
|
|
|
Long-Term Debt
|
|
224,461
|
|
|
|
203,953
|
|
|
|
|
|
|
|
Accrued Pension Liabilities, less current portion
|
|
27,114
|
|
|
|
26,686
|
|
|
|
|
|
|
|
Deferred Income Taxes
|
|
22,912
|
|
|
|
23,983
|
|
|
|
|
|
|
|
Self-Insurance Reserves, less current portion
|
|
9,085
|
|
|
|
8,853
|
|
|
|
|
|
|
|
Other Long-Term Liabilities
|
|
45,736
|
|
|
|
47,104
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
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;
49,823,799 issued and 42,336,099 outstanding at May 31, 2009; and
49,689,408 issued and 40,201,708 outstanding at August 31, 2008
|
|
498
|
|
|
|
497
|
|
|
Paid-in capital
|
|
643,823
|
|
|
|
626,435
|
|
|
Retained earnings
|
|
380,109
|
|
|
|
366,904
|
|
|
Accumulated other comprehensive loss
|
|
(40,706
|
)
|
|
|
(22,819
|
)
|
|
Treasury stock, at cost, 7,487,700 shares at May 31, 2009 and
9,487,700 at August 31, 2008
|
|
(325,174
|
)
|
|
|
(395,471
|
)
|
|
|
|
|
|
|
Total Stockholders’ Equity
|
|
658,550
|
|
|
|
575,546
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity
|
$
|
1,321,124
|
|
|
$
|
1,408,691
|
|
|
ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per-share data)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
May 31,
2009
|
|
May 31,
2008
|
|
May 31,
2009
|
|
May 31,
2008
|
|
Net Sales
|
$
|
396,628
|
|
|
$
|
512,438
|
|
|
$
|
1,234,792
|
|
|
$
|
1,503,887
|
|
|
Cost of Products Sold
|
|
243,023
|
|
|
|
304,246
|
|
|
|
765,067
|
|
|
|
900,470
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
153,605
|
|
|
|
208,192
|
|
|
|
469,725
|
|
|
|
603,417
|
|
|
Selling, Distribution, and Administrative Expenses
|
|
112,116
|
|
|
|
136,488
|
|
|
|
339,257
|
|
|
|
401,440
|
|
|
Special Charge
|
|
6
|
|
|
|
—
|
|
|
|
26,635
|
|
|
|
14,638
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
|
|
41,483
|
|
|
|
71,704
|
|
|
|
103,833
|
|
|
|
187,339
|
|
|
|
|
|
|
|
|
|
|
|
Other Expense (Income):
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
6,372
|
|
|
|
7,174
|
|
|
|
21,882
|
|
|
|
21,274
|
|
|
Miscellaneous expense (income), net
|
|
2,020
|
|
|
|
1,592
|
|
|
|
(2,188
|
)
|
|
|
1,476
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Expense
|
|
8,392
|
|
|
|
8,766
|
|
|
|
19,694
|
|
|
|
22,750
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations before Provision for Income Taxes
|
|
33,091
|
|
|
|
62,938
|
|
|
|
84,139
|
|
|
|
164,589
|
|
|
Provision for Income Taxes
|
|
10,765
|
|
|
|
21,280
|
|
|
|
28,030
|
|
|
|
57,862
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
22,326
|
|
|
|
41,658
|
|
|
|
56,109
|
|
|
|
106,727
|
|
|
Loss from Discontinued Operations
|
|
(299
|
)
|
|
|
(525
|
)
|
|
|
(299
|
)
|
|
|
(377
|
)
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
22,027
|
|
|
$
|
41,133
|
|
|
$
|
55,810
|
|
|
$
|
106,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share:
|
|
|
|
|
|
|
|
|
Basic Earnings per Share from Continuing Operations
|
$
|
0.55
|
|
|
$
|
1.04
|
|
|
$
|
1.39
|
|
|
$
|
2.61
|
|
|
Basic Loss per Share from Discontinued Operations
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings per Share
|
$
|
0.54
|
|
|
$
|
1.03
|
|
|
$
|
1.38
|
|
|
$
|
2.60
|
|
|
|
|
|
|
|
|
|
|
|
Basic Weighted Average Number of Shares Outstanding
|
|
40,934
|
|
|
|
40,190
|
|
|
|
40,358
|
|
|
|
40,865
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share from Continuing Operations
|
$
|
0.54
|
|
|
$
|
1.01
|
|
|
$
|
1.36
|
|
|
$
|
2.55
|
|
|
Diluted Loss per Share from Discontinued Operations
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share
|
$
|
0.53
|
|
|
$
|
1.00
|
|
|
$
|
1.35
|
|
|
$
|
2.54
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Weighted Average Number of Shares Outstanding
|
|
41,718
|
|
|
|
41,247
|
|
|
|
41,122
|
|
|
|
41,825
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared per Share
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
$
|
0.39
|
|
|
$
|
0.41
|
|
|
ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
May 31,
2009
|
|
May 31,
2008
|
|
Cash Provided by (Used for) Operating Activities:
|
|
|
|
|
Net income
|
$
|
55,810
|
|
|
$
|
106,350
|
|
|
Add: Loss from Discontinued Operations
|
|
299
|
|
|
|
377
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
56,109
|
|
|
|
106,727
|
|
|
Adjustments to reconcile net income to net cash provided by (used
for) operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
26,126
|
|
|
|
24,808
|
|
|
Excess tax benefits from share-based payments
|
|
(555
|
)
|
|
|
(4,696
|
)
|
|
Loss (Gain) on the sale or disposal of property, plant, and equipment
|
|
9
|
|
|
|
(22
|
)
|
|
Impairments of property, plant, and equipment
|
|
1,558
|
|
|
|
—
|
|
|
Deferred income taxes
|
|
(4,521
|
)
|
|
|
3,563
|
|
|
Other non-cash items
|
|
6,852
|
|
|
|
3,281
|
|
|
Change in assets and liabilities, net of effect of acquisitions,
divestitures and foreign currency:
|
|
|
|
|
Accounts receivable
|
|
48,939
|
|
|
|
6,819
|
|
|
Inventories
|
|
(7,591
|
)
|
|
|
(3,758
|
)
|
|
Prepayments and other current assets
|
|
5,901
|
|
|
|
7,644
|
|
|
Accounts payable
|
|
(49,522
|
)
|
|
|
(21,719
|
)
|
|
Other current liabilities
|
|
(60,952
|
)
|
|
|
(20,161
|
)
|
|
Other
|
|
5,079
|
|
|
|
8,106
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities
|
|
27,432
|
|
|
|
110,592
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by (Used for) Investing Activities:
|
|
|
|
|
Purchases of property, plant, and equipment
|
|
(15,078
|
)
|
|
|
(21,407
|
)
|
|
Proceeds from sale of property, plant, and equipment
|
|
141
|
|
|
|
133
|
|
|
Acquisitions
|
|
(162,414
|
)
|
|
|
(3,500
|
)
|
|
|
|
|
|
|
Net Cash Used for Investing Activities
|
|
(177,351
|
)
|
|
|
(24,774
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided by (Used for) Financing Activities:
|
|
|
|
|
Revolving credit facility borrowings, net
|
|
60,800
|
|
|
|
—
|
|
|
Repayments of long-term debt
|
|
(160,000
|
)
|
|
|
(6
|
)
|
|
Employee stock purchase plan issuances
|
|
261
|
|
|
|
410
|
|
|
Stock options exercised
|
|
2,555
|
|
|
|
3,434
|
|
|
Repurchases of common stock
|
|
—
|
|
|
|
(136,139
|
)
|
|
Excess tax benefits from share-based payments
|
|
555
|
|
|
|
4,696
|
|
|
Dividend received from Zep Inc.
|
|
—
|
|
|
|
58,379
|
|
|
Dividends paid
|
|
(16,001
|
)
|
|
|
(17,132
|
)
|
|
|
|
|
|
|
Net Cash Used for Financing Activities
|
|
(111,830
|
)
|
|
|
(86,358
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Discontinued Operations:
|
|
|
|
|
Net Cash (Used for) Provided by Operating Activities
|
|
(299
|
)
|
|
|
274
|
|
|
Net Cash Used for Investing Activities
|
|
—
|
|
|
|
(410
|
)
|
|
Net Cash Provided by Financing Activities
|
|
—
|
|
|
|
970
|
|
|
|
|
|
|
|
Net Cash (Used for) Provided by Discontinued Operations
|
|
(299
|
)
|
|
|
834
|
|
|
|
|
|
|
|
Effect of Exchange Rate Changes on Cash
|
|
(6,758
|
)
|
|
|
2,346
|
|
|
|
|
|
|
|
Net Change in Cash and Cash Equivalents
|
|
(268,806
|
)
|
|
|
2,640
|
|
|
Cash and Cash Equivalents at Beginning of Period
|
|
297,096
|
|
|
|
213,674
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at End of Period
|
$
|
28,290
|
|
|
$
|
216,314
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
Income taxes paid during the period
|
$
|
32,025
|
|
|
$
|
64,174
|
|
|
Interest paid during the period
|
$
|
26,660
|
|
|
$
|
28,115
|
|
Source: Acuity Brands, Inc.
Acuity Brands, Inc.
Dan Smith, 404-853-1423
|
