What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-01-08 compared with 2024-06-27 · 143 added, 223 removed, 413 unchanged (47% of the section changed)

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(In millions, except per-share data)

May 31, 2024 August 31, 2023

November 30, 2024 August 31, 2024

Current assets:

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(In millions, except per-share data)

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Three Months Ended

November 30, 2024 November 30, 2023

Net sales $ 951.6 $ 934.7

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Selling, distribution, and administrative expenses 316.0 295.5

Special charges — — — 6.9

Operating profit 133.3 132.9

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Interest (income) expense, net ( 4.0 ) 0.9

Miscellaneous (income) expense, net ( 0.5 ) 0.7 1.2 6.1

Miscellaneous expense, net 2.5 1.1

Total other (income) expense ( 1.5 ) 2.0

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Defined benefit plans, net of tax 0.5 0.6

Other comprehensive income items, net of tax 0.8 6.3 0.7 5.8

Other comprehensive loss items, net of tax ( 16.8 ) ( 1.5 )

Comprehensive income $ 89.9 $ 99.1

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(In millions)

Nine Months Ended

May 31, 2024 May 31, 2023

Three Months Ended

November 30, 2024 November 30, 2023

Cash flows from operating activities:

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Share-based payment expense 12.1 11.1

Loss on disposal of property, plant, and equipment 0.3 —

Asset impairment — 4.3

Loss on sale of a business — 11.2

Changes in operating assets and liabilities, net of acquisitions and divestitures:

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Purchases of property, plant, and equipment ( 18.9 ) ( 14.6 )

Acquisition of businesses, net of cash acquired — ( 35.4 )

Other investing activities 0.5 0.1

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Cash flows from financing activities:

Repayments on credit facility, net of borrowings — ( 18.0 )

Repurchases of common stock ( 6.7 ) ( 48.2 )

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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.

Our ABL strategy is to increase product vitality, elevate service levels, use technology to improve and differentiate both our products and how we operate the business, 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.

Through our two business segments, Acuity Brands Lighting and Acuity Intelligent Spaces, 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 solutions, and location-aware applications.

Acuity Brands Lighting Segment

Our Acuity Brands Lighting strategy is to increase product vitality, elevate service levels, use technology to improve and differentiate both our products and how we operate the business, and drive productivity.

Acuity Brands Lighting'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 ® , 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 ® , QUICKTRONIC ® , 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, and energy service companies.

ABL's customers are located in North America and select international markets that serve new construction, renovation and retrofit, and maintenance and repair applications.

ABL's lighting and lighting controls solutions are sold primarily through a network of independent sales agencies that cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, directly to large corporate accounts, and directly to OEM customers.

Products are delivered directly from our manufacturing facilities or through a network of distribution centers, regional warehouses, and commercial warehouses using both common carriers and an internally-managed truck fleet.

We market ABL's product portfolio and service capabilities to customers and/or end users in multiple channels through a broad spectrum of marketing and promotional methods, including direct customer contact, trade shows, on-site training, print and digital advertising in industry publications, product brochures, and other literature, as well as through digital marketing and social media.

ABL operates training and education facilities in several locations throughout North America and Europe designed to enhance the lighting knowledge of customers and industry professionals.

Our mission in our ISG business is to make spaces smarter, safer, and greener through our strategy of connecting the edge to the cloud.

ISG offers building management solutions and building management software.

ISG's building management solutions include products for controlling heating, ventilation, air conditioning (“HVAC”), lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems.

ISG's intelligent building software enhances the occupant experience, improves building system management, and automates labor intensive tasks while delivering operational energy efficiency and cost reductions.

Through a connected and converged building system architecture, ISG's software delivers different applications, allows clients to upgrade over time with natural refresh cycles, and deploys new capabilities.

Customers of ISG primarily include system integrators as well as retail stores, airports, and enterprise campuses throughout North America and select international locations.

ISG products and solutions are marketed under multiple brand names, including but not limited, to Atrius ® , Distech Controls ® , and KE2 Therm Solutions ® .

Acuity Brands Lighting'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 ® , IOTA ® , Juno ® , Lithonia Lighting ® , Luminaire LED TM , Luminis ® , Mark Architectural Lighting TM , nLight ® , OPTOTRONIC ® , Peerless ® , RELOC ® Wiring Solutions, and SensorSwitch TM .

Principal customers of Acuity Brands Lighting include electrical distributors, retail home improvement centers, electric utilities, corporate accounts, original equipment manufacturer (“OEM”) customers, digital retailers, lighting showrooms, and energy service companies.

Customers of Acuity Brands Lighting are located in North America and select international markets that serve new construction, renovation and retrofit, and maintenance and repair applications.

Acuity Brands Lighting's lighting and lighting controls solutions are sold primarily through a network of independent sales agencies that cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, directly to large corporate accounts, and directly to OEM customers.

Products are delivered primarily through a network of distribution centers as well as directly from our manufacturing facilities using both common carriers and an internally-managed truck fleet.

Acuity Intelligent Spaces Segment

Our mission in Acuity Intelligent Spaces is to make spaces smarter, safer, and greener through our strategy of connecting the edge with the cloud using disruptive technologies that leverage data interoperability.

Acuity Intelligent Spaces offers building management solutions and building management software.

Our building management solutions include products for controlling heating, ventilation, and air conditioning (“HVAC”), lighting, shades, refrigeration, and building access that deliver end-to-end optimization of those building systems.

Our intelligent building management software enhances the occupant experience, improves building system management, and automates labor intensive tasks while delivering operational energy efficiency and cost reductions.

Through a connected and converged building system architecture, our software delivers different applications, allows clients to upgrade over time with natural refresh cycles, and deploys new capabilities.

Customers of Acuity Intelligent Spaces primarily include system integrators as well as retail stores, airports, and enterprise campuses throughout North America and select international locations.

Acuity Intelligent Spaces products and solutions are marketed under multiple brand names, including but not limited to, Atrius ® and Distech Controls ® .

Basis of Presentation

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and its wholly-owned subsidiaries.

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, 2024, our consolidated comprehensive income for the three months ended November 30, 2024 and November 30, 2023, and our consolidated cash flows for the three months ended November 30, 2024 and November 30, 2023.

Certain information and footnote disclosures normally included in our annual financial statements prepared in

ACUITY BRANDS, INC.

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 May 31, 2024, our consolidated comprehensive income for the three and nine months ended May 31, 2024 and May 31, 2023, and our consolidated cash flows for the nine months ended May 31, 2024 and May 31, 2023.

Certain information and footnote disclosures normally included in our annual financial statements prepared in accordance with U.S.

accordance with U.S.

GAAP have been condensed or omitted.

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No material reclassifications occurred during the current period.

Note 3 — Acquisitions and Divestitures

On January 19, 2024, we acquired certain assets related to Arize® horticulture lighting products from Current Lighting Solutions, LLC.

The assets have been included in ABL's financial results since the date of acquisition and did not have a material impact to our consolidated financial condition, results of operations, or cash flows.

On May 15, 2023, using cash on hand, we acquired all of the equity interests of KE2 Therm Solutions, Inc.

(“KE2 Therm”).

KE2 Therm develops and provides intelligent refrigeration control solutions that deliver the precision of digital controls to promote safety, efficiency, and reliability, while delivering cost savings to the customer.

This acquisition expanded ISG's technology and controls product portfolio and reached new customers .

We accounted for the acquisition of KE2 Therm in accordance with Accounting Standards Codification (“ASC”) Topic 805 , Business Combinations (“ASC 805”).

We finalized the acquisition accounting for the KE2 Therm acquisition during the third quarter of fiscal 2024.

There were no material measurement period adjustments during fiscal 2024.

Acquired assets and liabilities were recorded at their estimated acquisition-date fair values.

Acquisition-related costs were expensed as incurred and were not material to our financial statements.

The aggregate purchase price of this acquisition reflects goodwill within the ISG segment of $ 15.0 million, which is not deductible for tax purposes.

The goodwill is comprised of expected benefits related to expanding ISG's technology and controls product portfolio as well as the trained workforce acquired with these businesses and expected synergies from combining KE2 Therm with our current businesses.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

We additionally recorded gross intangible assets of $ 18.0 million, which reflect estimates for definite-lived intangibles with an estimated weighted average useful life of approximately 15 years.

The operating results of KE2 Therm have been included in our financial statements since the date of acquisition and are not material to our consolidated financial condition, results of operations, or cash flows.

There were no divestitures during the first nine months of fiscal 2024.

The following discussion relates to fiscal year 2023 activities.

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 this sale of $ 11.2 million within Miscellaneous (income) 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 this 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 3 — New Accounting Pronouncements

Accounting Standards Yet to Be Adopted

Accounting Standards Update ( “ ASU ” ) 2023-09, Income Taxes (Topic 740):

Accounting Standards Update ( “ ASU ” ) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220):

Disaggregation of Income Statement Expenses ( “ ASU 2024-03 ” )

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, which requires public entities to disaggregate specific types of expenses, including disclosures for purchases of inventory, employee compensation, depreciation, and intangible asset amortization, as well as selling expenses.

Annual disclosures are required for fiscal years beginning after December 15, 2026, or our fiscal 2028.

Interim disclosures are required for periods within fiscal years beginning after December 15, 2027, or our fiscal 2029.

Prospective application is required, and retrospective application is permitted.

Early adoption is permitted.

We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures.

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.

In December 2023, the 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.

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Annual disclosures are required for fiscal years beginning after December 15, 2023 or our fiscal

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Interim disclosures are required for periods within fiscal years beginning after December 15, 2024, or our fiscal 2026.

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All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 4 — Fair Value Measurements

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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):

May 31, 2024 August 31, 2023

Assets recorded at fair value:

Cash and cash equivalents Level 1 $ 699.0 $ 397.9

Other financial instruments Level 2 0.7 0.4

November 30, 2024 August 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Cash and cash equivalents $ 935.6 $ — $ — $ 935.6 $ 845.8 $ — $ — $ 845.8

Other financial instruments — — — — — — — —

Assets in fair value hierarchy 935.6 — — 935.6 845.8 — — 845.8

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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.

Those techniques are significantly affected by the assumptions used, such as 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 available for debt of similar terms and maturity (Level 2).

Our senior unsecured public notes are carried at the outstanding balance, net of unamortized bond discount and deferred costs, as of the end of the reporting period.

The estimated fair value of our senior unsecured public notes was $ 416.0 million and $ 401.4 million as of May 31, 2024 and August 31, 2023, respectively.

We had no short-term borrowings outstanding under our revolving credit facility as of May 31, 2024 and August 31, 2023.

The estimated fair value of our senior unsecured public notes was $ 432.5 million and $ 429.7 million as of November 30, 2024 and August 31, 2024, respectively.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

We had no short-term borrowings outstanding under our revolving credit facility as of November 30, 2024 and August 31, 2024.

Such borrowings, if any, are variable-rate instruments that reset on a frequent short-term basis;

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Accordingly, the aggregate fair value amounts presented do not represent the underlying value to us.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instruments.

In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instruments.

In evaluating our management of liquidity and other risks, the fair values of all assets and liabilities should be taken into consideration, not only those presented above.

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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):

May 31, 2024 August 31, 2023

November 30, 2024 August 31, 2024

Raw materials, supplies, and work in process (1)

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Property, plant, and equipment consist of the following as of the dates presented (in millions):

May 31, 2024 August 31, 2023

November 30, 2024 August 31, 2024

Land $ 22.0 $ 22.3

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Indefinite-lived intangible assets consist of trade names that are expected to generate cash flows indefinitely.

We recorded amortization expense for definite-lived intangible assets of $ 10.0 million and $ 9.2 million during the three months ended May 31, 2024 and 2023, respectively, and $ 29.9 million and $ 32.1 million during the nine months ended May 31, 2024 and 2023, respectively.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

We recorded amortization expense for definite-lived intangible assets of $ 8.7 million and $ 9.9 million during the three months ended November 30, 2024 and 2023, respectively.

The following table summarizes the changes in the carrying amount of goodwill by segment during the periods presented (in millions):

ABL ISG Total

Acuity Brands Lighting Acuity Intelligent Spaces Total

Balance at August 31, 2024 $ 1,015.1 $ 83.6 $ 1,098.7

Foreign currency translation adjustments ( 4.9 ) ( 2.0 ) ( 6.9 )

Balance at May 31, 2024 $ 1,013.7 $ 83.0 $ 1,096.7

ABL ISG Total

Balance at November 30, 2024 $ 1,010.2 $ 81.6 $ 1,091.8

Acuity Brands Lighting Acuity Intelligent Spaces Total

Balance at August 31, 2023 $ 1,014.4 $ 83.5 $ 1,097.9

Provisional amounts from acquired businesses — 15.2 15.2

Derecognitions for divestitures ( 0.7 ) — ( 0.7 )

Foreign currency translation adjustments ( 0.2 ) ( 0.2 ) ( 0.4 )

Balance at May 31, 2023 $ 1,013.3 $ 83.4 $ 1,096.7

Balance at November 30, 2023 $ 1,014.2 $ 83.3 $ 1,097.5

Further discussion of goodwill and intangible assets is included within the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

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Other current liabilities consist of the following as of the dates presented (in millions):

May 31, 2024 August 31, 2023

November 30, 2024 August 31, 2024

Customer incentive programs (1)

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Freight costs 17.7 18.1

Warranty and recall costs (2)

Product warranty costs (2)

Tax-related items (3)

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On June 30, 2022, we entered into a credit agreement (the “Credit Agreement”) with a syndicate of banks that provides us with a $ 600.0 million five-year unsecured revolving credit facility (the “Revolving Credit Facility”) with the ability to request an additional $ 400.0 million of borrowing capacity.

We had no short-term borrowings outstanding under the Revolving Credit Facility at May 31, 2024 and August 31, 2023.

We had no short-term borrowings outstanding under the Revolving Credit Facility at November 30, 2024 and August 31, 2024.

On November 25, 2024, we entered into an amendment to the Credit Agreement that, among other things, provides for a delayed draw term loan facility of up to $ 600.0 million (the “Term Loan Facility”), which may be drawn in a single borrowing at any time through May 25, 2025, subject to certain conditions.

The Credit Agreement permits the proceeds of the Term Loan Facility to be used for general corporate purposes, including working capital, permitted acquisitions, and repurchases of capital stock.

The Term Loan Facility will mature on June 30, 2027, which is the maturity date of the revolving loans and commitments under the existing Credit Agreement.

Borrowings under the Term Loan Facility bear interest at an adjusted term Secured Overnight Financing Rate (“SOFR”), adjusted daily simple SOFR rate, or base rate, at the Company’s option, plus an applicable margin.

The applicable margin is based on, at our option, the Company’s leverage ratio or ratings level, each as defined in the Credit Agreement, and ranges from 0.875 % to 1.375 % (for SOFR-based loans) and from 0.0 % to 0.375 % (for base rate loans).

Undrawn commitments under the Term Loan Facility will accrue a commitment fee from and after February 24, 2025 at a per annum rate ranging from 0.075 % to 0.175 %, depending on, at our option, the Company’s leverage ratio or ratings level, each as defined in the Credit Agreement.

The covenants and events of default that apply to the revolving loans and commitments under the Credit Agreement also apply to the Term Loan Facility, and borrowings under the Term Loan Facility are guaranteed by the Company and the subsidiaries of the Company that guarantee the revolving loans and commitments.

We had no borrowings outstanding under the Term Loan Facility at November 30, 2024.

We were in compliance with all financial covenants under the Credit Agreement as of the periods presented.

At May 31, 2024, we had additional borrowing capacity under the Credit Agreement of $ 596.2 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less outstanding letters of credit of $ 3.8 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance premiums.

At November 30, 2024, we had additional borrowing capacity under the Credit Agreement of $ 1.2 billion under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility and the Term Loan Facility less outstanding letters of credit of $ 3.5 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance premiums.

None of our existing debt instruments include provisions that would require an acceleration of repayments based solely on changes in our credit ratings.

Borrowings and repayments on our Revolving Credit Facility with terms of three months or less are reported on a net basis on our Consolidated Statements of Cash Flows .

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 10 — Commitments and Contingencies

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We establish estimated liabilities when the associated costs related to uncertainties or guarantees become probable and can be reasonably estimated.

For the period ended May 31, 2024, no material changes have occurred in our estimated liabilities for self-insurance, litigation, environmental matters, guarantees and indemnities, or relevant events and circumstances, from those disclosed in the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K other than the items discussed below.

Product Warranty and Recall Costs

For the period ended November 30, 2024, no material changes have occurred in our estimated liabilities for self-insurance, litigation, environmental matters, guarantees, and indemnities, or relevant events and circumstances, from those disclosed in the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

Product Warranty Costs

Our products generally have a standard warranty term of five years that assure our products comply with agreed upon specifications.

We record an accrual for the estimated amount of future warranty costs in accordance with ASC Topic 450, Contingencies (“ASC 450”) when the related revenue is recognized.

Estimated future warranty and recall costs are primarily based on historical experience of identified warranty and recall claims.

Estimated costs related to product warranty and recall costs outside of our historical experience, which could include significant product recalls or formal campaigns soliciting repair or return of a product, are accrued when they are deemed to be probable and can be reasonably estimated.

We record an accrual for the estimated amount of future warranty costs in accordance with ASC Topic 450, Contingencies (“ASC 450”) when the related revenue is recognized and when costs are deemed to be probable and can be reasonably estimated.

Liabilities related to product warranty costs are subject to uncertainty because they require estimates of future costs.

Estimated future warranty costs are primarily based on historical experience, including the number and costs of identified warranty claims as well as the period of time between the shipment of products and our settlement of related claims.

Any estimated or actual loss recoveries that offset our costs and payments are reflected as assets and included within Other current assets or Other long-term assets based on the timing of receipt of recovery.

Recoveries are recorded net of allowances for credit losses.

There can be no assurance that future warranty or recall costs will not exceed historical amounts, new technology products may not generate unexpected costs, and/or loss recoveries will not be fully collectible.

If actual future warranty or recall costs exceed historical amounts or recoveries are no longer collectible, adjustments to our

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

accruals and/or receivables may be warranted, which could have a material adverse impact on our results of operations and cash flows.

Estimated liabilities for product warranty and recall costs are included in Other current liabilities or Other long-term liabilities on the Consolidated Balance Sheets based upon when we expect to settle the incurred warranty.

The following table summarizes changes in the estimated liabilities for product warranty and recall costs during the periods presented (in millions):

Nine Months Ended

May 31, 2024 May 31, 2023

Although we assume that historical experience will continue to be the best indicator of future warranty costs, we cannot assure that future warranty costs will not exceed historical amounts, and/or loss recoveries will not be fully collectible.

If actual future warranty costs exceed recorded amounts, or recoveries are no longer collectible, adjustments to our accruals and/or receivables may be warranted, which could have a material adverse impact on our results of operations and cash flows.

Estimated liabilities for product warranty costs are included in Other accrued liabilities or Other long-term liabilities on the Consolidated Balance Sheets based upon when we expect to settle the incurred warranty.

The following table summarizes changes in the estimated liabilities for product warranty costs during the periods presented (in millions):

Three Months Ended

November 30, 2024 November 30, 2023

Beginning balance $ 37.5 $ 31.6

Warranty and recall costs 35.8 36.1

Product warranty costs (1)

Payments and other deductions (1)

( 9.3 ) ( 11.3 )

Ending balance $ 34.5 $ 32.7

Data Security Incidents

On December 14, 2022, a former associate filed a putative class action complaint against the Company in the United States District Court for the Northern District of Georgia on behalf of all persons whose personal information was compromised as a result of data security incidents we experienced in October 2020 and/or December 2021.

On January 25, 2023, a second putative class action complaint was filed in the same venue by two other former associates.

Both complaints contained similar allegations and claimed that the Company failed to exercise reasonable caution in securing and safeguarding associate information.

On that basis, the complaints asserted claims for negligence, breach of contract, breach of implied contract, unjust enrichment, breach of fiduciary duty, invasion of privacy, and breach of confidence.

The plaintiffs sought class certification, monetary damages, certain injunctive relief regarding our data-security measures, additional credit-monitoring services, other equitable relief (including disgorgement), attorneys’ fees, costs, and pre- and post-judgment interest.

On December 1, 2023, the parties reached a proposed settlement and release of all claims in the class action and executed a Settlement Agreement and Release.

The State Court of Fulton County, Georgia approved the settlement on May 21, 2024 with an effective date of June 25, 2024.

The impact of the settlement was not material.

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(1) Amounts exclude any estimated or actual loss recoveries.

We are subject to various other legal claims arising in the normal course of business, including patent infringement, employment matters, and product liability claims.

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Balance, November 30, 2024 31.0 $ 0.5 $ 1,120.5 $ 4,012.0 $ ( 131.7 ) $ ( 2,537.9 ) $ 2,463.4

Net income — — — 89.2 — — 89.2

Other comprehensive income — — — — 1.4 — 1.4

Share-based payment amortization, issuances, and cancellations

_______________________________________

Employee stock purchase plan issuances — — 0.3 — — — 0.3

Cash dividends of $ 0.15 per share paid on common stock

— — — ( 4.7 ) — — ( 4.7 )

Stock options exercised — — 5.1 — — — 5.1

Repurchases of common stock ( 0.1 ) — — — — ( 17.6 ) ( 17.6 )

Balance, February 29, 2024 30.8 0.5 1,087.7 3,686.4 ( 112.7 ) ( 2,512.3 ) 2,149.6

Net income — — — 113.9 — — 113.9

Other comprehensive income — — — — 0.8 — 0.8

Share-based payment amortization, issuances, and cancellations — — 10.7 — — — 10.7

Employee stock purchase plan issuances — — 0.4 — — — 0.4

Cash dividends of $ 0.15 per share paid on common stock

— — — ( 4.6 ) — — ( 4.6 )

Stock options exercised — — 4.6 — — — 4.6

Repurchases of common stock ( 0.1 ) — — — — ( 20.7 ) ( 20.7 )

Balance, May 31, 2024 30.7 $ 0.5 $ 1,103.4 $ 3,795.7 $ ( 111.9 ) $ ( 2,533.0 ) $ 2,254.7

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(1) Share activity and balances above are calculated using rounded numbers.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

* Represents shares of less than 0.1 million.

Common Stock Outstanding

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Balance, November 30, 2023 30.9 $ 0.5 $ 1,070.5 $ 3,601.9 $ ( 114.1 ) $ ( 2,494.7 ) $ 2,064.1

Net income — — — 83.2 — — 83.2

Other comprehensive loss — — — — ( 0.1 ) — ( 0.1 )

Share-based payment amortization, issuances, and cancellations — — 10.9 — — — 10.9

Employee stock purchase plan issuances — — 0.3 — — — 0.3

Cash dividends of $ 0.13 per share paid on common stock

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Stock options exercised — — 0.5 — — — 0.5

Repurchases of common stock ( 0.2 ) — — — — ( 46.5 ) ( 46.5 )

Balance, February 28, 2023 32.0 0.5 1,047.1 3,325.8 ( 126.3 ) ( 2,299.5 ) 1,947.6

Net income — — — 105.0 — — 105.0

Other comprehensive income — — — — 6.3 — 6.3

Share-based payment amortization, issuances, and cancellations — — 9.4 — — — 9.4

Employee stock purchase plan issuances — — 0.4 — — — 0.4

Cash dividends of $ 0.13 per share paid on common stock

— — — ( 4.2 ) — — ( 4.2 )

Repurchases of common stock ( 0.6 ) — — — — ( 94.7 ) ( 94.7 )

Balance, May 31, 2023 31.4 $ 0.5 $ 1,056.9 $ 3,426.6 $ ( 120.0 ) $ ( 2,394.2 ) $ 1,969.8

_______________________________________

(1) Share activity and balances above are calculated using rounded numbers.

Note 13 — Revenue Recognition

Note 12 — Revenue

We recognize revenue when we transfer control of goods and services to our customers.

11 unchanged sentences

The amount of transaction price from contracts with customers allocated to our contract liabilities consists of the following as of the dates presented (in millions):

May 31, 2024 August 31, 2023

November 30, 2024 August 31, 2024

Current deferred revenues $ 17.0 $ 17.4

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These services are expected to be performed within one year.

Revenue recognized from beginning balances of contract liabilities during the nine months ended May 31, 2024 totaled $ 12.3 million.

Revenue recognized from beginning balances of contract liabilities during the three months ended November 30, 2024 totaled $ 5.4 million.

Non-current deferred revenues primarily consist of long-term service-type warranties, which are typically recognized ratably as revenue between five and ten years from the date of sale, and are included within Other long-term liabilities on the Consolidated Balance Sheets.

Unsatisfied performance obligations that do not represent contract liabilities are expected to be satisfied within one year from May 31, 2024 and consist primarily of orders for physical goods that have not yet been shipped.

Unsatisfied performance obligations that do not represent contract liabilities are expected to be satisfied within one year from November 30, 2024 and consist primarily of orders for physical goods that have not yet been shipped.

Disaggregated Revenues

Our ABL segment's lighting and lighting controls are sold primarily through independent sales agents who cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, directly to large corporate accounts, and through other distribution methods, including directly to OEM customers.

ISG sells predominantly to system integrators.

Our Acuity Brands Lighting segment's products are sold primarily through independent sales agents who cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, directly to large corporate accounts, and through other distribution methods, including directly to OEM customers.

Acuity Intelligent Spaces sells predominantly to system integrators.

The following table shows revenue from contracts with customers by sales channel and reconciles to our segment information for the periods presented (in millions):

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Three Months Ended

November 30, 2024 November 30, 2023

Acuity Brands Lighting:

Independent sales network $ 643.9 $ 625.2

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OEM and other 57.3 56.7

Total ABL 898.5 940.7 2,618.4 2,778.6

ISG 75.7 65.8 208.0 180.8

Total Acuity Brands Lighting 886.0 876.4

Acuity Intelligent Spaces 73.5 64.2

Eliminations ( 7.9 ) ( 5.9 )

2 unchanged sentences

We account for share-based payments through the measurement and recognition of compensation expense for share-based payment awards made to employees and directors over the related requisite service period, including restricted stock, performance stock units, and stock options (all part of our equity incentive plan), as well as stock units representing certain deferrals into our director deferred compensation plan or our supplemental deferred savings plan.

The following table presents share-based payment expense for the periods presented (in millions):

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Share-based payment expense $ 11.8 $ 10.4 $ 34.9 $ 32.4

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table presents share-based payment expense for the periods presented (in millions):

Three Months Ended

November 30, 2024 November 30, 2023

Share-based payment expense $ 12.1 $ 11.1

Further details regarding our share-based payments are included within the Share-based Payments footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

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Net periodic pension cost included the following components before tax for the periods presented (in millions):

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Three Months Ended

November 30, 2024 November 30, 2023

Service cost $ 1.4 $ 1.1

1 unchanged sentence

Expected return on plan assets ( 2.1 ) ( 2.2 )

Amortization of prior service cost — 0.7 — 2.0

Recognized actuarial loss 0.7 0.8

1 unchanged sentence

Further details regarding our pension plans are included within the Pension and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

Note 16 — Special Charges

We recognized no special charges during the first nine months of fiscal 2024.

During the first quarter of fiscal 2023, we recognized $ 6.9 million within Special charges on the Consolidated Statements of Comprehensive Income primarily for impairments of operating lease right-of-use assets for $ 4.3 million associated with our previously owned Sunoptics prismatic skylights business that were not transferred in connection with the sale.

We additionally recognized associate severance and other costs totaling $ 2.6 million primarily in connection with the Sunoptics divestiture.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 15 — Other (Income) Expense

The following table summarizes the components of other (income) expense, net for the periods presented (in millions):

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

The following table summarizes the components of O ther (income) expense , net for the periods presented (in millions):

Three Months Ended

November 30, 2024 November 30, 2023

Interest (income) expense, net:

2 unchanged sentences

Interest (income) expense, net ( 4.0 ) 0.9

Miscellaneous (income) expense, net:

Miscellaneous expense, net:

Non-service components of net periodic pension cost 1.0 1.1

Foreign currency transaction (gains) losses ( 1.4 ) — ( 0.6 ) ( 6.5 )

Loss on sale of business — — — 11.2

Foreign currency transaction losses 0.1 0.6

Other items 1.4 ( 0.6 )

Miscellaneous (income) expense, net ( 0.5 ) 0.7 1.2 6.1

Miscellaneous expense, net 2.5 1.1

Other (income) expense, net $ ( 1.5 ) $ 2.0

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 16 — Earnings Per Share

Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding.

Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised, all unvested share-based payment awards were vested, and other distributions related to deferred stock agreements were incurred.

Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised, unvested share-based payment awards were vested, and other distributions related to deferred stock agreements were incurred.

Common stock equivalents are calculated using the treasury stock method.

1 unchanged sentence

The following table calculates basic earnings per common share and diluted earnings per common share for the periods presented (in millions, except per share data):

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Three Months Ended

November 30, 2024 November 30, 2023

Net income $ 106.7 $ 100.6

9 unchanged sentences

Amounts in the table may not recalculate exactly due to rounding.

Stock options, performance stock awards, and restricted stock awards that were excluded from the diluted earnings per share calculation as the effect of inclusion would have been antidilutive were immaterial for three and nine months ended May 31, 2024 and May 31, 2023.

Further discussion of our share-based payment awards is included within the Common Stock and Related Matters and Share-based Payments footnotes of the Notes to Consolidated Financial Statements within our Form 10-K.

1 unchanged sentence

Comprehensive income represents a measure of all changes in equity that result from recognized transactions and other economic events other than transactions with owners in their capacity as owners.

Comprehensive income includes our net income as well as other comprehensive income (loss) items, which are comprised of foreign currency translation and pension adjustments.

Comprehensive income includes our net income as well as other comprehensive (loss) income items, which are comprised of foreign currency translation and pension adjustments.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table presents the changes in each component of accumulated other comprehensive (loss) income net of tax during the periods presented (in millions):

The following table presents the changes in each component of accumulated other comprehensive loss net of tax during the periods presented (in millions):

Foreign Currency Items Defined Benefit Pension Plans Accumulated Other Comprehensive Loss Items

3 unchanged sentences

Net current period other comprehensive (loss) income ( 17.3 ) 0.5 ( 16.8 )

Balance at May 31, 2024 $ ( 66.1 ) $ ( 45.8 ) $ ( 111.9 )

Balance at November 30, 2024 $ ( 88.2 ) $ ( 43.5 ) $ ( 131.7 )

Foreign Currency Items Defined Benefit Pension Plans Accumulated Other Comprehensive Loss Items

2 unchanged sentences

Amounts reclassified from accumulated other comprehensive loss (1)

Net current period other comprehensive income 2.6 3.2 5.8

Balance at May 31, 2023 $ ( 70.9 ) $ ( 49.1 ) $ ( 120.0 )

Net current period other comprehensive (loss) income ( 2.1 ) 0.6 ( 1.5 )

Balance at November 30, 2023 $ ( 67.1 ) $ ( 47.0 ) $ ( 114.1 )

_______________________________________

3 unchanged sentences

Three Months Ended

May 31, 2024 May 31, 2023

Before Tax Amount Tax (Expense) Benefit Net of Tax Amount Before Tax Amount Tax (Expense) Benefit Net of Tax Amount

Foreign currency translation adjustments $ 0.3 $ — $ 0.3 $ 5.2 $ — $ 5.2

Defined benefit pension plans:

Amortization of defined benefit pension items:

Prior service cost

— — — 0.7 ( 0.2 ) 0.5

Actuarial losses 0.8 ( 0.3 ) 0.5 0.8 ( 0.2 ) 0.6

Total defined benefit pension plans, net 0.8 ( 0.3 ) 0.5 1.5 ( 0.4 ) 1.1

Other comprehensive income (loss) $ 1.1 $ ( 0.3 ) $ 0.8 $ 6.7 $ ( 0.4 ) $ 6.3

Nine Months Ended

May 31, 2024 May 31, 2023

November 30, 2024 November 30, 2023

Before Tax Amount Tax (Expense) Benefit Net of Tax Amount Before Tax Amount Tax (Expense) Benefit Net of Tax Amount

Foreign currency translation adjustments $ ( 17.3 ) $ — $ ( 17.3 ) $ ( 2.1 ) $ — $ ( 2.1 )

Defined benefit pension plans:

Amortization of defined benefit pension items:

Prior service cost — — — 2.0 ( 0.5 ) 1.5

Actuarial losses 2.4 ( 0.6 ) 1.8 2.3 ( 0.6 ) 1.7

Total defined benefit pension plans, net 2.4 ( 0.6 ) 1.8 4.3 ( 1.1 ) 3.2

Other comprehensive income (loss) $ 1.3 $ ( 0.6 ) $ 0.7 $ 6.9 $ ( 1.1 ) $ 5.8

Actuarial losses on defined benefit pension plans 0.7 ( 0.2 ) 0.5 0.8 ( 0.2 ) 0.6

Other comprehensive loss $ ( 16.6 ) $ ( 0.2 ) $ ( 16.8 ) $ ( 1.3 ) $ ( 0.2 ) $ ( 1.5 )

Note 18 — Segment Information

We report our financial results of operations in two reportable segments, ABL and ISG, consistent with how our chief operating decision maker currently evaluates operating results, assesses performance, and allocates resources within the Company.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

We report our financial results of operations in two reportable segments, Acuity Brands Lighting and Acuity Intelligent Spaces, consistent with how our chief operating decision maker currently evaluates operating results, assesses performance, and allocates resources within the Company.

The accounting policies of our reportable segments are the same as those described in the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.

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Additionally, net interest expense, net miscellaneous expense, and income tax expense are not allocated to segments.

We recorded no special charges during the three and nine months ended May 31, 2024.

We recorded no special charges during the three months ended May 31, 2023.

Special charges during the nine months ended May 31, 2023 of $ 6.9 million pertained to the ABL segment.

ACUITY BRANDS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

The following table presents financial information by operating segment for the periods presented (in millions):

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

ABL $ 898.5 $ 940.7 $ 2,618.4 $ 2,778.6

ISG 75.7 65.8 208.0 180.8

Three Months Ended

November 30, 2024 November 30, 2023

Acuity Brands Lighting $ 886.0 $ 876.4

Acuity Intelligent Spaces 73.5 64.2

Eliminations (1)

2 unchanged sentences

Operating profit:

ABL $ 151.5 $ 150.0 $ 421.3 $ 391.7

ISG 12.5 8.6 26.9 22.7

Acuity Brands Lighting $ 143.3 $ 143.8

Acuity Intelligent Spaces 10.8 5.3

Unallocated corporate amounts ( 20.8 ) ( 16.2 )

4 unchanged sentences

The following table reconciles operating profit by segment to income before income taxes for the periods presented (in millions):

Three Months Ended Nine Months Ended

May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023

Operating profit - ABL $ 151.5 $ 150.0 $ 421.3 $ 391.7

Operating profit - ISG 12.5 8.6 26.9 22.7

Three Months Ended

November 30, 2024 November 30, 2023

Operating profit - Acuity Brands Lighting $ 143.3 $ 143.8

Operating profit - Acuity Intelligent Spaces 10.8 5.3

Unallocated corporate amounts ( 20.8 ) ( 16.2 )

1 unchanged sentence

Interest (income) expense, net ( 4.0 ) 0.9

Miscellaneous (income) expense, net ( 0.5 ) 0.7 1.2 6.1

Miscellaneous expense, net 2.5 1.1

Income before income taxes $ 134.8 $ 130.9

Note 19 — Subsequent Event

On January 1, 2025, Acuity Brands Technology Services, Inc., a wholly-owned subsidiary of Acuity Brands, Inc.

acquired all of the equity interests of QSC, LLC (“QSC”), a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $ 1.215 billion.

We funded the transaction using cash on hand and proceeds from our Term Loan Facility, under which we incurred an aggregate $ 600.0 million in indebtedness effective as of January 2, 2025 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements