Acuity Brands Reports Record First Quarter Results.

Diluted EPS Increases 60% on More Than 8% Growth in Net Sales

ATLANTA -- Acuity Brands, Inc. (NYSE:AYI) announced today record first quarter results for net sales, net income, and earnings per diluted share. Net sales for the first quarter of fiscal 2007 rose $48.6 million, or 8.6%, to $614.5 million from $565.9 million reported in the prior year. Net income increased 52.7% to $33.6 million for the quarter ended November 30, 2006 from $22.0 million reported in the year-ago period. Diluted earnings per share for the first quarter of fiscal 2007 increased 60.4% to $0.77 per diluted share, compared with $0.48 per diluted share in the prior year's first quarter.

Please see the Company's Form 10-Q filed with the Securities and Exchange Commission today for more information on the results for the first quarter of fiscal 2007. The Form 10-Q is available through the Company's website at www.acuitybrands.com.

Both business segments posted higher revenues compared with the year ago period. Net sales at Acuity Brands Lighting (ABL) advanced by 10.2% due primarily to more favorable pricing, a better mix of product sold, the impact of new product introductions, and greater customer demand in the non-residential construction market. Net sales at Acuity Specialty Products (ASP) grew by 3.2% due primarily to company-wide pricing initiatives and higher unit volume in the Industrial and Institutional (I&I) market, partially offset by lower volume in the retail channel.

Consolidated operating profit margin expanded 240 basis points in the first quarter to 9.8% compared with 7.4% in the year-ago period. The margin improvement reflected benefits from efforts to improve selling prices, on-going initiatives to enhance productivity in both businesses, and additional profit contribution from increased volume and a better mix of product sold in the lighting business. These benefits were partially offset by lower unit sales volume in ASP's retail channel, higher costs in certain areas, including raw materials and component parts, compensation expense, and continued investments to improve productivity and customer service companywide.

Vernon J. Nagel, Chairman, President, and Chief Executive Officer of Acuity Brands, said, "We are very pleased to report record first quarter results. Our strong first quarter results reflect the benefits from programs implemented to create greater value for our customers, to invest in our associates to be more customer-focused and productive, and to more effectively deploy our assets to generate greater returns for our stakeholders. We anticipate that the second quarter will once again be challenging due primarily to normal seasonal factors including inconsistent customer demand and inventory rebalancing by certain customers as well as continued cost pressures. In addition, we remain somewhat cautious about near term shipments at ABL due primarily to the decline in non-residential construction awards reported during the third quarter of calendar 2006, given the normal lag time between awards and shipments. However, based on the recent rebound in non-residential construction awards and other predictive indicators such as the Architecture Billings Index, we expect demand for lighting fixtures to resume its recovery during the course of the second half of the fiscal year, particularly in sectors where we participate to a significant degree.

"For the full year, we expect that ABL will continue to contribute a disproportionately higher share to the overall results of Acuity Brands due primarily to the success of strategies to drive profitable growth including new product introductions, enhancements to the mix of products sold, and productivity improvements as well as continued positive demand in key sectors of the non-residential construction market, the Company's largest served market. Our consolidated results will be somewhat tempered by the performance of ASP, as management expects that ASP's full year operating profit will approximate that earned in the year-ago period due primarily to market challenges caused by rising costs, weak demand in certain key markets and geographies, and the expense of investments made to drive future profitable growth. While the results at ASP in the first quarter were less than anticipated, we believe that actions taken to enhance profitability, including programs to improve pricing, productivity and to expand unit volume will favorably impact the second half of 2007.

"Lastly, we believe that our consolidated first quarter results support our performance expectations for 2007. Therefore, we remain optimistic that for the full fiscal year 2007, and particularly in the second half, the Company will make significant progress towards the achievement of its longer-term financial goals including operating margin expansion, earnings growth, and cash flow generation."

Conference Call and Board News

As previously announced, the Company will host a conference call to discuss first 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.

The Company will hold its Annual Meeting of Stockholders at 1:00 p.m. ET on Thursday, January 11, 2007, in the Ballroom of the Four Seasons Hotel, 75 Fourteenth Street NE, Atlanta, Georgia. The quarterly meeting of the Company's Board of Directors will also take place that day.

Acuity Brands, Inc., with fiscal year 2006 net sales of approximately $2.4 billion, is comprised of Acuity Brands Lighting and Acuity Specialty Products. Acuity Brands Lighting is one of the world's leading providers of lighting fixtures and includes brands such as Lithonia Lighting[R], Holophane[R], Peerless[R], Hydrel[R], American Electric Lighting[R], Gotham[R], Carandini[R], SpecLight[R], MetalOptics[R] and Antique Street Lamps[TM]. 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, Acuity Brands employs approximately 10,200 people and has operations throughout North America and in Europe and Asia.

Forward Looking Information

This release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that may be considered forward-looking 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, anticipated challenges in the second quarter due to normal seasonal factors as well as continued cost pressures, statements regarding the impact of non-residential contract award activity on near-term shipments at ABL, expectations that demand for lighting fixtures will resume its recovery during the course of the second half of the fiscal year and particularly in sectors where the Company participates to a significant degree, expectations that ABL will continue to contribute a disproportionately higher share to the overall results of Acuity Brands due primarily to the success of strategies to drive profitable growth as well as continued positive demand in key sectors of the non-residential construction market, the anticipated tempering of full year consolidated results due to the performance of ASP, the expectation that market challenges caused by rising costs, weak demand in certain key markets and geographies, and the expense of investments made to drive future profitable growth will lead to ASP's full year operating profit approximating that earned in the year-ago period, the belief that certain actions taken to enhance profitability will have a favorable impact on ASP's results in the second half of 2007, the belief that consolidated first quarter results support performance expectations for full year fiscal 2007, the expectation that the Company will make significant progress towards the achievement of its longer-term financial goals. 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; the outcome of pending environmental investigations; 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 January 4, 2007.

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