Acuity Brands Inc. Files 10-Q for Period Ending November 30, 2023

TL;DR

<b>Acuity Brands Inc. has filed its quarterly report (10-Q) for the period ending November 30, 2023, detailing financial information and business segments.</b>

AI Summary

ACUITY BRANDS INC (AYI) filed a Quarterly Report (10-Q) with the SEC on January 9, 2024. Acuity Brands Inc. filed a 10-Q report for the fiscal quarter ended November 30, 2023. The filing covers the period from September 1, 2023, to November 30, 2023. The company's fiscal year ends on August 31. The filing includes data for the periods ending November 30, 2023, and August 31, 2023. Key segments mentioned include Acuity Brands Lighting and Lighting Controls, and Intelligent Spaces Group.

Why It Matters

For investors and stakeholders tracking ACUITY BRANDS INC, this filing contains several important signals. This 10-Q filing provides investors with the latest financial performance and operational updates for Acuity Brands Inc. for the first quarter of fiscal year 2024. Understanding the segment performance and financial health disclosed in this report is crucial for assessing the company's current standing and future prospects in the lighting and building management sectors.

Risk Assessment

Risk Level: medium — ACUITY BRANDS INC shows moderate risk based on this filing. The filing is a standard 10-Q, which typically contains detailed financial information and risk factors. While it provides a snapshot of the company's performance, the inherent risks in the manufacturing and technology sectors, as well as market conditions, contribute to a medium risk assessment.

Analyst Insight

Review the detailed financial statements and segment performance in the 10-Q to understand revenue trends and profitability drivers for Acuity Brands Inc.

Revenue Breakdown

Key Numbers

• 2023-11-30 — Period End Date (Conformed period of report)
• 2024-01-09 — Filing Date (Filed as of date)
• 2023-09-01 — Quarter Start Date (Reporting period)
• 2022-11-30 — Prior Year Period End (Comparison period)

Key Players & Entities

• ACUITY BRANDS INC (company) — Filer name
• AYI (company) — Ticker symbol
• 2023-11-30 (date) — Conformed period of report
• 2024-01-09 (date) — Filed as of date
• 3640 (other) — Standard Industrial Classification for ELECTRIC LIGHTING & WIRING EQUIPMENT
• DE (other) — State of incorporation
• 0831 (other) — Fiscal year end
• 1170 PEACHTREE STREET NE SUITE 1200 ATLANTA GA 30309 (address) — Business address

Forward-Looking Statements

• The integration of KE2 Therm Solutions, Inc. will contribute positively to the revenue of the Intelligent Spaces Group segment. (Acuity Brands Inc.) — medium confidence, target: 2024-08-31

FAQ

Key Dates

• 2023-11-30: Quarterly Period End — Financial results for the period are reported.
• 2024-01-09: Filing Date — The 10-Q report was officially submitted to the SEC.

Key Financial Figures

• $0.01 — ange on which registered Common stock, $0.01 par value per share AYI New York Stock

Filing Documents

• ayi-20231130.htm (10-Q) — 919KB
• ayi-20231130xex31a.htm (EX-31.A) — 11KB
• ayi-20231130xex31b.htm (EX-31.B) — 10KB
• ayi-20231130xex32a.htm (EX-32.A) — 6KB
• ayi-20231130xex32b.htm (EX-32.B) — 6KB
• 0001144215-24-000005.txt (&nbsp;) — 6194KB
• ayi-20231130.xsd (EX-101.SCH) — 36KB
• ayi-20231130_cal.xml (EX-101.CAL) — 75KB
• ayi-20231130_def.xml (EX-101.DEF) — 149KB
• ayi-20231130_lab.xml (EX-101.LAB) — 563KB
• ayi-20231130_pre.xml (EX-101.PRE) — 365KB
• ayi-20231130_htm.xml (XML) — 1035KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets -- November 30, 2023 (Unaudited) and August 31, 2023 1 Consolidated Statements of Comprehensive Income (Unaudited) -- Three months ended November 30, 2023 and 2022 2 Consolidated Statements of Cash Flows (Unaudited) -- Three months ended November 30, 2023 and 2022 3

Notes to Consolidated Financial Statements (Unaudited)

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 6 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 12 Note 14 — Share-based Payments 13 Note 15 — Pension Plans 14 Note 16 — Special Charges 14 Note 17 — Other Expense 15 Note 18 — Earnings Per Share 15 Note 19 — Comprehensive Income 16 Note 20 — Segment Information 17 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 24 Item 4.

Controls and Procedures

Controls and Procedures 25

OTHER INFORMATION

Part II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 26 Item 1A.

Risk Factors

Risk Factors 26 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 26 Item 5. Other Information 26 Item 6. Exhibits 26 INDEX TO EXHIBITS 27

SIGNATURES

SIGNATURES 28 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ACUITY BRANDS, INC. CONSOLIDATED BALANCE SHEETS (In millions, except share data) November 30, 2023 August 31, 2023 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 513.3 $ 397.9 Accounts receivable, less reserve for doubtful accounts of $ 1.6 and $ 1.3 , respectively 517.1 555.3 Inventories 365.3 368.5 Prepayments and other current assets 78.4 73.5 Total current assets 1,474.1 1,395.2 Property, plant, and equipment, net 293.6 297.6 Operating lease right-of-use assets 79.1 84.1 Goodwill 1,097.5 1,097.9 Intangible assets, net 471.2 481.2 Deferred income taxes 0.7 3.0 Other long-term assets 47.7 49.5 Total assets $ 3,463.9 $ 3,408.5 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 311.8 $ 285.7 Current operating lease liabilities 19.3 19.7 Accrued compensation 71.5 103.3 Other current liabilities 198.0 186.7 Total current liabilities 600.6 595.4 Long-term debt 495.7 495.6 Long-term operating lease liabilities 70.0 75.5 Accrued pension liabilities 38.4 38.4 Deferred income taxes 56.5 59.0 Other long-term liabilities 138.6 129.2 Total liabilities 1,399.8 1,393.1 Commitments and contingencies (see Commitments and Contingencies footnote) 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; 54,536,606 and 54,411,186 issued, respectively 0.5 0.5 Paid-in capital 1,070.5 1,066.8 Retained earnings 3,601.9 3,505.4 Accumulated other comprehensive loss ( 114.1 ) ( 112.6 ) Treasury stock, at cost, of 23,652,280 and 23,362,196 shares, respectively ( 2,494.7 ) ( 2,444.7 ) Total stockholders' equity 2,064.1 2,015.4 Total liabilities and stockholders' equity $ 3,463.9 $ 3,408.5 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 1 Table of Contents ACUITY BRANDS, INC. CONSOLIDATED STATEMENTS OF COMPRE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

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-Light TM , Aculux TM , American Electric Lighting , Cyclone TM , Dark to Light , eldoLED , Eureka , Gotham , Healthcare Lighting , Holophane , Hydrel , Indy TM , IOTA , Juno , Lithonia Lighting , Luminaire LED TM , Luminis , Mark Architectural Lighting TM , nLight , OPTOTRONIC , Peerless , RELOC Wiring Solutions, and Sensor Switch . Principal customers of ABL include electrical distributors, retail home improvement centers, electric utilities, national accounts, original equipment manufacturer ("OEM") customers, digital retailers, lighting showrooms

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) These unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of November 30, 2023, our consolidated comprehensive income for the three months ended November 30, 2023 and 2022, and our consolidated cash flows for the three months ended November 30, 2023 and 2022. Certain information and footnote disclosures normally included in our annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. However, we believe that the disclosures included herein are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the three years in the period ended August 31, 2023 and notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on October 26, 2023 (File No. 001-16583) ("Form 10-K"). Our business exhibits some seasonality, with net sales being affected by weather and seasonal demand on construction and installation programs, particularly during the winter months, as well as the annual budget cycles of major customers. Historically, with certain exceptions, we have experienced our highest sales in the last two quarters of each fiscal year due to these factors. Note 2 — Significant Accounting Policies Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Reclassification

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) results of operations, or cash flows. Divestitures We sold our Sunoptics prismatic skylights business in November 2022. We transferred assets with a total carrying value of $ 15.1 million, which primarily consisted of intangibles with definite lives, inventories, and allocated goodwill from the ABL segment. During the first quarter of fiscal 2023, we recognized a pre-tax loss on the sale of $ 11.2 million within Miscellaneous expense, net on the Consolidated Statements of Comprehensive Income . Additionally, we recorded impairment charges for certain retained assets as well as associate severance and other costs related to the sale. These items are included within Special charges on the Consolidated Statements of Comprehensive Income . See the Special Charges footnote of the Notes to Consolidated Financial Statements for further details. Note 4 — New Accounting Pronouncements Accounting Standards Yet to Be Adopted Accounting Standards Update ( " ASU " ) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ( " ASU 2023-09 " ) In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, which expands income tax disclosure requirements to include additional information related to the rate reconciliation of our effective tax rates to statutory rates as well as additional disaggregation of taxes paid. The amendments in the ASU also remove disclosures related to certain unrecognized tax benefits and deferred taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, or our fiscal 2026. The amendments may be applied prospectively or retrospectively, and early adoption is permitted. We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures. ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ( " ASU 2023-07 " ) In November 2023, the FASB issue

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence. We may from time to time be required to remeasure the carrying value of certain assets and liabilities to fair value on a nonrecurring basis. Such adjustments typically arise if we determine that certain of our assets are impaired. Financial Instruments Recorded at Fair Value The following table summarizes balances and the fair value hierarchy level of our financial instruments recorded at fair value on a recurring basis as of the dates presented (in millions): November 30, 2023 August 31, 2023 Assets recorded at fair value: Cash and cash equivalents Level 1 $ 513.3 $ 397.9 Other financial instruments Level 2 0.5 0.4 Assets in fair value hierarchy 513.8 398.3 Other investments (1) 7.2 7.2 Total assets at fair value $ 521.0 $ 405.5 ____________________________________ (1) Includes strategic investments in privately-held entities over which we do not exercise significant influence or control and without readily determinable fair values. Amounts are recorded at cost less any impairment adjusted for observable price changes, if any. Disclosures of Fair Value of Financial Instruments Disclosures of fair value information about financial instruments, for which it is practicable to estimate that value, are required each reporting period in addition to any financial instruments carried at fair value on a recurring basis as prescribed by ASC Topic 825, Financial Instruments ("ASC 825"). In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Fair value for our outstanding debt obligations is estimated based on discounted future cash flows using rates currently availa

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 6 — Inventories Inventories include materials, direct labor, inbound freight, customs, duties, tariffs, and related manufacturing overhead. Inventories are stated on a first-in, first-out basis at the lower of cost and net realizable value and consist of the following as of the dates presented (in millions): November 30, 2023 August 31, 2023 Raw materials, supplies, and work in process (1) $ 233.5 $ 214.0 Finished goods 162.5 180.3 Inventories excluding reserves 396.0 394.3 Less: Reserves ( 30.7 ) ( 25.8 ) Total inventories $ 365.3 $ 368.5 _______________________________________ (1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, we do not believe the segregation of raw materials and work in process is meaningful information. We review inventory quantities on hand and record a provision for excess and obsolete inventory primarily based on estimated future demand and current market conditions. A significant change in customer demand and/or market conditions could render certain inventory obsolete and could have a material adverse impact on our operating results in the period the change occurs. Note 7 — Property, Plant, and Equipment Property, plant, and equipment consist of the following as of the dates presented (in millions): November 30, 2023 August 31, 2023 Land $ 22.9 $ 23.0 Buildings and leasehold improvements 212.4 210.9 Machinery and equipment 731.4 727.9 Total property, plant, and equipment, at cost 966.7 961.8 Less: Accumulated depreciation and amortization ( 673.1 ) ( 664.2 ) Property, plant, and equipment, net $ 293.6 $ 297.6 Note 8 — Goodwill and Intangible Assets Through multiple acquisitions, we acquired definite-lived intangible assets consisting primarily of customer relationships, patented technology, distribution networks, and trademarks and trade names associated with spe

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following table summarizes the changes in the carrying amount of goodwill by segment during the periods presented (in millions): ABL ISG Total Ba

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