ATLANTA, Jan. 9, 2015 (GLOBE NEWSWIRE) — Acuity Brands, Inc. (AYI) (“Company”) today announced record first quarter net sales, net income, and diluted earnings per share (“EPS”). Fiscal 2015 first quarter net sales of $647.4 million increased $72.7 million, or 13 percent, compared with the year-ago period. Net income for the first quarter of fiscal 2015 was $51.1 million, an increase of 15 percent compared with the prior-year period. Fiscal 2015 first quarter diluted EPS of $1.17 increased 14 percent compared with $1.03 for the year-ago period.
Fiscal 2015 first quarter adjusted net income of $57.4 million increased $16.0 million, or 39 percent, compared with adjusted net income of $41.4 million for the prior-year period. Adjusted diluted EPS for the first quarter of fiscal 2015 increased 38 percent to $1.32 compared with adjusted diluted EPS of $0.96 for the year-ago period. Adjusted results for the first quarter of fiscal 2015 exclude a $10.0 million pre-tax special charge, or $0.15 diluted EPS, related to streamlining activities. Adjusted results for the prior-year fiscal first quarter exclude the benefit of a $5.0 million pre-tax insurance recovery, or $0.07 diluted EPS, associated with a fiscal 2013 loss resulting from fraud perpetrated at a freight payment and audit service firm formerly retained by the Company. Management believes these items impacted the comparability of the Company’s results and that the adjusted financial measures enhance the reader’s overall understanding of the Company’s current financial performance. A reconciliation of adjusted financial measures to the most directly comparable GAAP measure is provided in the tables at the end of this release.
Vernon J. Nagel, Chairman, President, and Chief Executive Officer of Acuity Brands, commented, “We were extremely pleased with our record fiscal 2015 first quarter results. Gross profit margin of 42.2 percent increased 90 basis points over prior year’s first quarter, while adjusted operating profit margin of 14.9 percent increased 230 basis points over last year’s first quarter adjusted operating profit margin. Our variable contribution margin, i.e., the incremental adjusted operating profit as a percentage of the increase in net sales, was over 33 percent. We believe our record first quarter results reflect our ability to provide customers truly differentiated value from our industry-leading portfolio of innovative lighting and control solutions along with superior service.”
The year-over-year growth in fiscal 2015 first quarter net sales was due primarily to an increase in volume of more than 14 percent, partially offset by an estimated 1 percentage point net unfavorable change in product prices and mix of products sold (“price/mix”) and, to a lesser degree, an unfavorable impact from changes in foreign currency exchange rates. The increase in volume was broad-based across most product categories and key sales channels. Sales of LED-based products increased more than 70 percent from the year-ago period and represented approximately 42 percent of fiscal 2015 first quarter net sales.
Operating profit for the first quarter of fiscal 2015 was $86.7 million, an increase of $9.3 million, or 12 percent, over the year-ago period. Adjusted operating profit (excluding the impact of the special charge) for the first quarter of fiscal 2015 increased $24.3 million, or 34 percent, to $96.7 million compared with the year-ago period adjusted operating profit (excluding the impact of the insurance recovery) of $72.4 million. Adjusted operating profit margin for the first quarter of fiscal 2015 increased 230 basis points to 14.9 percent compared with 12.6 percent adjusted operating profit margin for the prior-year period.
During the first quarter of fiscal 2015, the Company recorded a pre-tax special charge of $10 million associated with actions to streamline the organization by realigning certain responsibilities, primarily within various selling, distribution, and administrative departments, as well as for the consolidation of certain production activities. The special charge consisted primarily of severance and employee-related costs. Management expects to incur production transfer expenses and additional costs associated with these streamlining actions totaling approximately $1.0 million during the next two fiscal quarters. Management expects to achieve net cost savings in fiscal 2015 in excess of the pre-tax charges.
Cash and cash equivalents at the end of the first quarter of fiscal 2015 totaled $583.0 million, an increase of $30.5 million since the beginning of the fiscal year. Net cash provided by operating activities totaled $46.7 million for the first quarter of fiscal 2015 compared with $43.4 million for the year-ago period.
Outlook
Mr. Nagel commented, “We remain very bullish about our prospects for continued future profitable growth. Third-party forecasts as well as key leading indicators suggest that the growth rate for the North American lighting market, which includes renovation and retrofit activity, will be in the mid-to-upper single digit range for fiscal 2015 with expectations that overall demand in our end markets will continue to experience solid growth over the next several years. Our order rates through the month of December reflect this favorable trend. Further, we expect to continue to outperform the growth rates of the markets we serve due to benefits from growing renovation and tenant improvement projects, further expansion in underpenetrated geographies and channels, and growth from the introduction of new products and lighting solutions. Additionally, we expect to continue to pursue growth opportunities enabled by newer technologies which require additional resources, including talent with specific skill sets, to drive innovation and accelerate commercialization of these evolving digital lighting solutions.”
Mr. Nagel concluded, “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 along with emerging opportunities for digital lighting to play a key role in the Internet of Things. We believe we are well positioned to fully participate in this exciting industry.”
Non-GAAP Financial Measures
This news release contains non-GAAP financial measures such as “adjusted selling, distribution, and administrative expenses” (“adjusted SD&A expenses”), “adjusted operating profit”, “adjusted operating profit margin”, “adjusted net income”, and “adjusted diluted EPS”. These measures are provided to enhance the reader’s overall understanding of the Company’s current financial performance and prospects for the future. However, the Company’s non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures used by other companies, have limitations as an analytical tool and should not be considered in isolation or as a substitute for GAAP financial measures.
A reconciliation of each measure to the most directly comparable GAAP measure is available in this news release. In addition, the Current Report on Form 8-K furnished to the SEC concurrent with the issuance of this press release includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.