Acuity Brands Reports Fiscal Year 2006 Second Quarter Results; Net Sales Increase 8.8%.ATLANTA Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. -- Acuity Brands Acuity Brands, Inc., through its subsidiaries, engages in the design, production, and distribution of lighting equipment and specialty products worldwide. The company was founded in 2001 and is based in Atlanta, Georgia. , Inc. (NYSE NYSE See: New York Stock Exchange : AYI AYI Academy of Young Investors ) announced today that net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter of fiscal 2006 increased $44.5 million, or 8.8%, to $549.6 million from $505.1 million reported in the prior year. Net income for the second quarter ended February February: see month. 28, 2006 was $14.5 million, or $0.32 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with a net loss of $8.4 million, or $0.20 loss per diluted share, reported in the year-ago period. Reported earnings per share of $0.32 for the current quarter included an additional pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern expense of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3.3 million, or $0.05 per diluted share, for certain share-based incentive plans, that were impacted by the 27% appreciation in the Company's stock price in the second quarter, and the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123(R), an accounting standard related to share-based payments. The year-ago period included a charge of $0.26 per share related to efforts to streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. the organization. Net sales for the first half of fiscal 2006 were $1,115.4 million compared with $1,030.3 million in 2005, an increase of 8.3%. Net income for the six months ended February 28, 2006 was $36.5 million, or $0.80 per diluted share, compared with $4.7 million, or $0.11 per diluted share in the year-ago period. Please see the Company's Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission today for more information on the results for the second quarter of fiscal 2006. You may access the 10-Q through the Company's website at www.acuitybrands.com. Vernon Vernon, city, Canada Vernon, city (1991 pop. 23,514), S British Columbia, Canada, near the north end of Okanagan Lake. The center of a fruit-growing and dairying area, it has packing and dehydrating plants. J. Nagel Nagel can refer to: People
Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. , and earnings per share, all of which exceeded our internal expectations and represented a dramatic turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. from the results reported one year ago. Our results reflect the benefits from our previously communicated programs to enhance customer service to the non-residential construction market, streamline operations, improve manufacturing and transactional efficiencies, and introduce new products and services. Our continued progress in these areas, as well as improvements in our financial performance, reflects the commitment to excellence and the effective execution of our plans by our 10,000 associates worldwide. "Our net sales growth in the quarter was very positive, particularly in our lighting business. This growth was due to continued increases in selling prices, greater market presence in certain key channels, new product introductions, improved service, and a slight benefit from improvement in the non-residential construction market. In our specialty chemical A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. business, net sales benefited from our ability to raise prices in a difficult economic environment, which helped offset rising raw material costs, and growth in unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. in certain key geographies. Overall unit volume in the specialty chemical business declined modestly in the quarter due to the impact of higher selling prices, soft economic conditions in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians , and reduced shipments in the retail channel due to contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction of inventory by certain retail customers. Fortunately, both business segments have been successful in closing the gap created last year when increases in material costs outpaced our ability to raise prices. "Further, we are also seeing early signs of a recovery from a prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. , multi-year decline in the non-residential construction market, including leading indicators Leading Indicator A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not always accurate. that suggest the potential for more robust demand. Our incoming Incoming is a 3-D shooter developed by Rage Software and published by Interplay. The PC version was released in late 1998, and the Dreamcast version, a launch title for the console, was released in 1998 in Japan and in 1999 in the rest of the world. order rates are improving on a year-over-year basis, particularly for new products. Therefore, we continue to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the prospects for industry-wide unit volume growth of lighting fixtures in the second half of our fiscal 2006 and beyond. We expect unit volume at our lighting business to track overall growth trends in the non-residential construction market. In addition, we expect the second half of our fiscal year to benefit from the traditional seasonal increase in demand as compared with the first half of fiscal 2006. Lastly, we expect profitability and margins in the remainder of the fiscal year to benefit from favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. pricing actions implemented over the previous twelve months, though we remain cautious due to the potential for rising raw material and component costs. "Our financial performance in the first half of fiscal 2006 provides a very solid platform for sustained results for the remainder of 2006 and beyond. We remain confident that the Company will continue its progress towards the achievement of its longer-term financial goals of operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: expansion, earnings growth, and cash flow generation. As previously announced, we are pleased that the Company's Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to two million additional shares of the Company's outstanding common stock as we believe this represents an effective use of our cash flow to generate shareholder value." Conference Call As previously announced, the Company will host a conference call to discuss second quarter results today at 4:00 p.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., with fiscal year 2005 net sales of approximately $2.2 billion, is comprised of Acuity Brands Lighting and Acuity acuity /acu·i·ty/ (ah-ku´i-te) clarity or clearness, especially of vision. a·cu·i·ty n. Sharpness, clearness, and distinctness of perception or vision. Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Products. Acuity Brands Lighting is one of the world's leading providers of lighting fixtures and includes brands such as Lithonia Lighting(R), Holophane Holophane is a part of Acuity Brands. Holophane is one of the oldest manufacturers of lighting-related products in the world; founded in 1898. They are a US manufacturer (based in Newark, OH) of lighting fixtures for commercial, industrial, outdoor, and emergency (R), Peerless(R), Hydrel(R), American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Electric Lighting(R), and Gotham Gotham (gŏth`əm), name for New York City first used by Washington Irving and others in the Salmagundi Papers, with satirical reference to Gotham, England, where the wise men acted as fools in order to avoid paying for the king's upkeep. (R). Acuity Specialty Products is a leading provider of specialty chemicals and includes brands such as Zep(R), Zep Commercial(R), Enforcer(R), and Selig(TM). Headquartered in Atlanta, Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , Acuity Brands employs approximately 10,000 people and has operations throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia.Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Statements made herein that may be considered forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. include statements incorporating terms such as "expects," "believes," "intends," "anticipates" and similar terms that relate to future events, performance, or results of the Company, including, without limitation, statements made regarding early signs of a recovery from a decline in the non-residential construction market including leading indicators that suggest the potential for more robust demand, prospects for industry-wide unit volume growth of lighting fixtures in the second half of fiscal 2006 and beyond, unit shipments at the lighting company to track overall growth trends in the non-residential construction markets, benefits in the second half of the fiscal year from the traditional seasonal increase in demand as compared with the first half of fiscal 2006, benefits from favorable pricing actions implemented over the previous twelve months, the potential for rising raw material and component costs, progress towards the achievement of the Company's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. financial goals, and stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. as an effective use of cash flow to generate shareholder value. 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and other contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. ; and economic, political, governmental, and technological factors affecting the Company's operations, tax rate, markets, products, services, and prices, among others. Please see the other risk factors more fully described in the Company's SEC filings including the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 5, 2006.
ACUITY BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per-share data)
FEBRUARY 28, AUGUST 31,
2006 2005
------------- --------------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 69,812 $ 98,533
Accounts receivable, less reserve for
doubtful accounts of $6,697 at
February 28, 2006 and $6,999 at
August 31, 2005 324,399 345,770
Inventories 216,816 215,590
Deferred income taxes 23,399 24,873
Prepayments and other current assets 46,870 33,008
------------- --------------
Total Current Assets 681,296 717,774
------------- --------------
Property, Plant, and Equipment, at cost:
Land 12,355 12,303
Buildings and leasehold improvements 165,442 166,934
Machinery and equipment 387,429 382,729
------------- --------------
Total Property, Plant, and
Equipment 565,226 561,966
Less - Accumulated depreciation and
amortization 355,027 342,772
------------- --------------
Property, Plant, and Equipment,
net 210,199 219,194
------------- --------------
Other Assets:
Goodwill 344,895 344,836
Intangible assets 121,877 123,473
Deferred income taxes 4,249 4,249
Other long-term assets 24,038 32,689
------------- --------------
Total Other Assets 495,059 505,247
------------- --------------
Total Assets $ 1,386,554 $ 1,442,215
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 549 $ 567
Accounts payable 184,883 221,844
Accrued compensation 52,715 59,122
Other accrued liabilities 103,930 117,939
------------- --------------
Total Current Liabilities 342,077 399,472
------------- --------------
Long-Term Debt, less current maturities 371,464 371,736
------------- --------------
Deferred Income Taxes 4,650 4,707
------------- --------------
Self-Insurance Reserves, less current
portion 15,324 16,759
------------- --------------
Other Long-Term Liabilities 112,067 107,748
------------- --------------
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;
46,700,126 issued and 44,700,126
outstanding at February 28, 2006;
and 44,976,720 shares
issued and outstanding at
August 31, 2005 467 450
Paid-in capital 509,107 476,034
Retained earnings 135,440 112,447
Unearned compensation on restricted
stock -- (12,536)
Treasury stock, at cost, 2,000,000
shares at February 28, 2006 (70,297) --
Accumulated other comprehensive loss
items (33,745) (34,602)
------------- --------------
Total Stockholders' Equity 540,972 541,793
------------- --------------
Total Liabilities and
Stockholders' Equity $ 1,386,554 $ 1,442,215
============= ==============
ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per-share data)
THREE MONTHS ENDED SIX MONTHS ENDED
FEBRUARY 28 FEBRUARY 28
-------------------- -----------------------
2006 2005 2006 2005
--------- ---------- ----------- -----------
Net Sales $549,555 $ 505,121 $1,115,407 $1,030,323
Cost of Products Sold 334,300 315,073 674,929 626,624
--------- ---------- ----------- -----------
Gross Profit 215,255 190,048 440,478 403,699
Selling, Distribution,
and Administrative
Expenses 185,052 177,545 368,287 362,981
Special Charge -- 17,000 -- 17,000
--------- ---------- ----------- -----------
Operating Profit (Loss) 30,203 (4,497) 72,191 23,718
Other Expense (Income):
Interest expense, net 8,314 9,084 16,554 18,028
Gain on sale of
businesses -- -- -- (538)
Miscellaneous income,
net (146) (525) (62) (1,001)
--------- ---------- ----------- -----------
Total Other Expense 8,168 8,559 16,492 16,489
--------- ---------- ----------- -----------
Income (Loss) before
Provision for Income
Taxes 22,035 (13,056) 55,699 7,229
Provision (Benefit) for
Income Taxes 7,528 (4,619) 19,216 2,501
--------- ---------- ----------- -----------
Net Income (Loss) $ 14,507 $ (8,437) $ 36,483 $ 4,728
========= ========== =========== ===========
Earnings Per Share:
Basic Earnings (Loss)
per Share $ 0.33 $ (0.20) $ 0.82 $ 0.11
========= ========== =========== ===========
Basic Weighted
Average Number of
Shares Outstanding 44,419 42,926 44,331 42,683
========= ========== =========== ===========
Diluted Earnings
(Loss) per Share $ 0.32 $ (0.20) $ 0.80 $ 0.11
========= ========== =========== ===========
Diluted Weighted
Average Number of
Shares Outstanding 45,826 42,926 45,699 44,244
========= ========== =========== ===========
Dividends Declared per
Share $ 0.15 $ 0.15 $ 0.30 $ 0.30
========= ========== =========== ===========
ACUITY BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
SIX MONTHS ENDED
FEBRUARY 28
---------------------
2006 2005
---------- ----------
Cash Provided by (Used for) Operating
Activities:
Net income $ 36,483 $ 4,728
Adjustments to reconcile net income to net
cash provided by (used for) operating
activities:
Depreciation and amortization 20,187 20,585
Excess tax benefits from share-based
payments (10,224) --
Loss (gain) on the sale or disposal of
property, plant, and equipment 196 (191)
Gain on sale of businesses -- (538)
Other non-cash items 776 2,586
Change in assets and liabilities, net
of effect of acquisitions and
divestitures -
Accounts receivable 21,370 22,538
Inventories (1,385) 4,867
Deferred income taxes 1,417 12
Prepayments and other current
assets (3,636) (7,242)
Accounts payable (36,961) (37,410)
Other current liabilities (21,487) (13,484)
Other 9,200 10,377
---------- ----------
Net Cash Provided by Operating
Activities 15,936 6,828
---------- ----------
Cash Provided by (Used for) Investing
Activities:
Purchases of property, plant, and equipment (9,015) (18,800)
Proceeds from sale of property, plant, and
equipment 2,859 248
Sale of businesses 68 129
---------- ----------
Net Cash Used for Investing Activities (6,088) (18,423)
---------- ----------
Cash Provided by (Used for) Financing
Activities:
Repayments of notes payable, net -- (188)
Proceeds from revolving credit facility, net -- 300
Proceeds from short-term secured borrowings,
net -- 10,000
Repayments of long-term debt (322) (510)
Employee stock purchase plan issuances -- 817
Stock options exercised 34,951 9,531
Repurchases of common stock (69,815) --
Excess tax benefits from share-based
payments 10,224 --
Dividends paid (13,490) (13,015)
---------- ----------
Net Cash (Used for) Provided by
Financing Activities (38,452) 6,935
---------- ----------
Effect of Exchange Rate Changes on Cash (117) 39
---------- ----------
Net Change in Cash and Cash Equivalents (28,721) (4,621)
Cash and Cash Equivalents at Beginning of Period 98,533 14,135
---------- ----------
Cash and Cash Equivalents at End of Period $ 69,812 $ 9,514
========== ==========
Supplemental Cash Flow Information:
Income taxes paid during the period $ 27,758 $ 18,190
Interest paid during the period $ 17,004 $ 18,234
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