Acuity Brands Reports Fiscal 2011 Third Quarter Results

ATLANTA, Jun 29, 2011 (BUSINESS WIRE) -- Acuity Brands, Inc. (NYSE: AYI) ("Company") announced fiscal 2011 third quarter net sales of $458.3 million, an increase of over 12 percent compared with the year-ago period. Operating profit for the third quarter of fiscal 2011 was $50.2 million, or 11.0 percent of net sales, compared with the prior year period's $39.2 million, or 9.6 percent of net sales. Fiscal 2011 third quarter net income was $27.1 million compared with $21.3 million for the prior-year period, an increase of 27 percent. Diluted earnings per share (EPS) from continuing operations for the third quarter of fiscal 2011 were $0.62 compared with $0.48 for the prior year, an increase of 29 percent.

Excluding the impact from acquisitions, fiscal 2011 third quarter net sales rose 9 percent year-over-year. Higher unit volumes contributed approximately 5 percent to the increase in net sales reflecting growth of both luminaires and controls across multiple sales channels, primarily for smaller-size commercial projects and renovation. In addition, favorable price/mix contributed approximately 3 percent to the year-over-year increase in net sales with the remainder due to favorable foreign currency translation on international sales.

In the prior year third quarter, the Company recorded a $0.3 million pre-tax adjustment to reduce its previously recorded special charge for streamlining activities reflecting lower than originally planned employee severance and benefit costs. Adjusted operating profit for the third quarter of fiscal 2010 was $38.9 million, or 9.5 percent of net sales.

Mr. Nagel, Chairman, President, and Chief Executive Officer of Acuity Brands, commented, "We are pleased with our fiscal 2011 third quarter results as we continue to execute extremely well in a demanding and competitive environment. We believe our strategies to drive profitable growth are progressing well as we continue to gain market share. Higher sales volumes, favorable price/mix, and productivity improvements all contributed to the year-over-year 130 basis points improvement in gross profit margin and 150 basis points improvement in adjusted operating profit margin."

Mr. Nagel continued, "During the third quarter, we also enhanced our expertise and offering of high-quality, energy-efficient lighting solutions with the acquisition of Healthcare Lighting and its specialized product portfolio for the large and growing healthcare industry. Healthcare Lighting'sproduct portfolio includes specialized ambient and task lighting products for today's modern healthcare facilities, including patient and examination rooms, surgical suites and medical procedure rooms, as well as lighting products for specialized medical functions."

Year-to-Date Results

Net sales for the first nine months of fiscal 2011 were $1,299.5 million compared with $1,182.7 million for the prior-year period, an increase of approximately 10 percent. Operating profit for the first nine months of fiscal 2011 was $132.9 million, or 10.2 percent of net sales, compared with $109.7 million, or 9.3 percent of net sales, for the year-ago period. Income from continuing operations for the first nine months of fiscal 2011 was $71.3 million compared with $51.8 million for the prior-year period. Diluted EPS from continuing operations for the first nine months of fiscal 2011 were $1.63 compared with $1.17 per share for the prior-year period.

In the prior fiscal year, the Company incurred special charges for streamlining activities and recorded a loss associated with the early retirement of debt. Excluding the special charges and loss associated with the early retirement of debt, adjusted operating profit for the first nine months of fiscal 2010 was $114.9 million, or 9.7 percent of net sales, while adjusted income from continuing operations was $62.0 million and adjusted diluted EPS from continuing operations were $1.41.

Outlook

Mr. Nagel commented, "We remain very positive about the future prospects for our company and our ability to outperform the markets we serve. We continue to position the Company to optimize short-term performance while investing in and deploying resources to further our long-term profitable growth opportunities.

"We expect the economic environment for the remainder of our fiscal 2011 to remain challenging. Independent third-party forecasts continue to indicate declines for non-residential construction activity for the balance of 2011, although the North American non-residential lighting market, which includes renovation and relight, is expected to continue to rise modestly for the balance of our fiscal 2011. While we are optimistic about our future prospects and ability to outperform the markets we serve, we do see the potential for continuing volatility in demand as well as increases in material and component costs. We will continue to be as vigilant as possible in our pricing strategies to protect our margins."

Mr. Nagel concluded, "We believe the lighting and lighting-related industry will experience strong 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."