Acuity Reports: Sales Drop, Income Up, EPS Up. Reaches Carbon Neutrality

ATLANTA, March 31, 2021 (GLOBE NEWSWIRE) — Acuity Brands, Inc. (NYSE: AYI) (the “Company”) a market-leading industrial technology company announced net sales of $776.6 million for the second quarter of fiscal 2021 ended February 28, 2021, a decrease of $47.6 million or 5.8 percent, as compared to the second quarter of fiscal 2020. Diluted earnings per share was $1.74, an increase of 20.8 percent over prior year and adjusted diluted earnings per share was $2.12 per share, an increase of 15.2 percent over prior year.

“I am very proud of our team for another quarter of solid performance. We continue to see signs of a modest recovery in the wider market, while our margin expansion reflects the hard work of our associates who continue to control costs in a more consistent and predictable way,” stated Neil Ashe, Chief Executive Officer of Acuity Brands. “Earlier this month, we advanced our sustainability journey and highlighted our ongoing commitment to the environment, our people, and our communities, with the announcement that we had achieved carbon neutrality in our operations.”

Gross profit of $336.7 million declined $7.2 million, or 2.1 percent, as compared to the prior year. Gross profit was 43.4 percent of net sales for the second quarter of fiscal 2021, an increase of approximately 170 basis points from 41.7 percent in the second quarter of fiscal 2020. The decline in gross profit was primarily due to the impact of lower sales volume, while the improvement in gross profit margin was the result of ongoing product and productivity improvements.

Operating profit of $91.0 million increased $9.6 million, or 11.8 percent as compared to prior year. Operating profit was 11.7 percent of net sales for the second quarter of fiscal 2021, an increase of 180 basis points from 9.9 percent for the second quarter of fiscal 2020. The improvement in operating profit margin was largely driven by the improvement in gross profit margin and ongoing cost management.

Adjusted operating profit of $108.9 million increased $7.2 million, or 7.1 percent, for the second quarter of fiscal 2021 as compared to the prior year. Adjusted operating profit was 14.0 percent of net sales for the second quarter of fiscal 2021, an increase of 170 basis points from 12.3 percent in the second quarter of fiscal 2020.

Net income of $62.9 million increased $5.7 million, or 10.0 percent, as compared to prior year. Diluted earnings per share of $1.74 increased $0.30, or 20.8 percent, for the second quarter of fiscal 2021, as compared to $1.44 for the second quarter of fiscal 2020.

Adjusted net income of $76.7 million increased $3.6 million, or 4.9 percent, as compared to the prior year. Adjusted diluted earnings per share of $2.12 increased $0.28, or 15.2 percent, as compared to $1.84 for the second quarter of fiscal 2020.

Channel Performance

Net sales of $592.7 million in the Independent Sales Network and of $73.9 million in the Direct Sales Network were approximately flat as compared to prior year.

Retail sales of $43.0 million declined $13.8 million as compared to the prior year. This was primarily due to a strong year-over-year pre-pandemic comparison combined with a current-quarter customer inventory rebalancing.

Sales in Corporate Accounts of $26.7 million declined $28.1 million as compared to prior year. This reflects a decrease in shipments to larger retailers as they continued to defer nonessential renovations.

Cash Flow and Capital Allocation

Net cash from operating activities of $212.6 million was approximately flat, declining $2.1 million, or 1.0 percent for the first half of fiscal 2021 as compared to the prior year. During the first half of 2021, the Company repurchased 3.2 million shares of common stock for a total of $338.3 million at an average price of $104 per share. The Company had approximately 4.4 million shares remaining under its most recent authorization at the end of the second fiscal quarter of 2021. Since May of 2020, the Company has reduced the outstanding share count by approximately 10 percent.

Carbon Neutrality Statement

On March 22, 2021, the Company announced to associates that it had achieved 100 percent carbon neutrality in operations through a combination of carbon reduction and offsetting measures. The Company will continue to update the market on ongoing efforts through the EarthLIGHT report, in periodic company press releases and through the sustainability section of the Company website.

Outlook

A further discussion relating to the ongoing impact of COVID-19 and the economic recovery will take place on our fiscal 2021 second-quarter conference call.

Conference Call

As previously announced, Acuity Brands will hold a conference call today, March 31, 2021, at 10:00 a.m. ET to discuss its fiscal 2021 second-quarter results. Interested parties may access the call via the Investor Relations section of the Company’s website at investors.acuitybrands.com to hear live or to hear a replay.

About Acuity Brands

Read the 10-Q here.

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