1 unchanged sentence
The purpose of this discussion and analysis is to enhance the understanding and evaluation of the results of operations, financial position, cash flows, indebtedness, and other key financial information of Acuity Brands, Inc.
−Removed: (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) and its subsidiaries as of May 31, 2024 and for the three and nine months ended May 31, 2024 and May 31, 2023.
+Added: (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) and its subsidiaries as of November 30, 2024 and for the three months ended November 30, 2024 and November 30, 2023.
The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included within this report.
2 unchanged sentences
We use technology to solve problems in spaces and light.
−Removed: 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.
+Added: 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.
4 unchanged sentences
Our ability to generate sufficient cash flows from operations or to access certain capital markets, including banks, is necessary to meet our capital allocation priorities, which are to invest in our current business for growth, to invest in mergers and acquisitions, to pay a dividend, and to make share repurchases.
−Removed: Sufficient cash flow generation is also critical to fund our operations in the short and long terms and to maintain compliance with covenants contained in our financing agreements.
+Added: Sufficient cash flow generation is also critical to fund our operations in the short and long term and to maintain compliance with covenants contained in our financing agreements.
Our significant contractual cash requirements primarily include principal and interest on our unsecured notes, accounts payable, accrued employee compensation, operating lease liabilities, and certain purchase obligations incurred in the ordinary course of business that are enforceable and legally binding.
Our obligations related to these items are described further within Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report filed on Form 10-K.
−Removed: We believe that we will be able to meet our liquidity needs over the next 12 months based on our cash on hand, current projections of cash flows from operations, and borrowing availability under financing arrangements.
+Added: Refer to Recent Developments for a discussion of changes to our contractual obligations after November 30, 2024.
+Added: We believe that we will be able to meet our liquidity needs over the next 12 months based on our cash on hand, current projections of cash flows from operations, borrowing availability under financing arrangements, and current access to capital markets.
Additionally, we believe that our cash flows from operations and sources of funding, including, but not limited to, future borrowings and borrowing capacity, will sufficiently support our long-term liquidity needs.
In the event of a sustained market deterioration, we may need additional capital, which would require us to evaluate available alternatives and take appropriate actions.
−Removed: Our cash position at May 31, 2024 was $699.0 million, an increase of $301.1 million from August 31, 2023.
+Added: Our cash position at November 30, 2024 was $935.6 million, an increase of $89.8 million from August 31, 2024.
Cash generated from operating activities and cash on hand were used during the current year to fund our capital allocation priorities as discussed below.
−Removed: We generated $445.1 million of cash flows from operating activities during the nine months ended May 31, 2024, compared to $471.5 million in the prior-year period, a decrease of $26.4 million.
−Removed: This decrease was due primarily to more favorable operating working capital reductions in fiscal 2023 as well as the timing of income tax payments in fiscal 2024, partially offset by higher pre-tax income in fiscal 2024.
+Added: We generated $132.2 million of cash flows from operating activities during the three months ended November 30, 2024, compared to $190.0 million in the prior-year period, a decrease of $57.8 million.
+Added: This decrease was due primarily to timing of payments to suppliers as well as lower cash collections from customers.
Financing Arrangements
−Removed: See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for discussion of the terms of our various financing arrangements, including the $500.0 million aggregate principal amount of 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”) as well as the terms of our $600.0 million five-year unsecured revolving credit facility (“Revolving Credit Facility”).
−Removed: At May 31, 2024, our outstanding debt balance was $496.0 million, which consisted solely of our Unsecured Notes, compared to our cash position of $699.0 million.
−Removed: We were in compliance with all covenants under our financing arrangements as of May 31, 2024.
−Removed: At May 31, 2024, we had additional borrowing capacity under the Revolving Credit Facility 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 facility.
−Removed: As of May 31, 2024, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $1.3 billion.
+Added: See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for discussion of the terms of our various financing arrangements, including the $500.0 million aggregate principal amount of 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”), the terms of our $600.0 million five-year unsecured revolving credit facility (“Revolving Credit Facility”), and the terms of our $600.0 million two-year unsecured term loan facility (“Term Loan Facility”).
+Added: At November 30, 2024, our outstanding debt balance was $496.3 million, which consisted solely of our Unsecured Notes, compared to our cash position of $935.6 million.
+Added: We were in compliance with all covenants under our financing arrangements as of November 30, 2024.
The Unsecured Notes were issued by Acuity Brands Lighting, Inc., a wholly-owned subsidiary of Acuity Brands, Inc.
2 unchanged sentences
The following tables present summarized financial information for Acuity Brands, Inc., Acuity Brands Lighting, Inc., and ABL IP Holding LLC on a combined basis after the elimination of all intercompany balances and transactions between the combined group as well as any investments in non-guarantors as of the dates and during the period presented (in millions):
−Removed: Summarized Balance Sheet Information May 31, 2024 August 31, 2023
+Added: Summarized Balance Sheet Information November 30, 2024 August 31, 2024
Current assets $ 1,588.0 $ 1,517.6
3 unchanged sentences
Non-current liabilities 750.9 746.5
−Removed: Summarized Income Statement Information Nine Months Ended May 31, 2024
+Added: Summarized Income Statement Information Three Months Ended November 30, 2024
Net sales $ 789.4
1 unchanged sentence
Net income 111.6
+Added: On November 25, 2024, we entered into an amendment to our credit agreement (the “Credit Agreement”) that, among other things, provides for a delayed draw term under the Term Loan Facility of up to $600.0 million, which may be drawn in a single borrowing at any time through May 25, 2025, subject to certain conditions.
+Added: 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.
+Added: We were in compliance with all financial covenants under the Credit Agreement as of the periods presented.
+Added: 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.
+Added: As of November 30, 2024, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility and the Term Loan Facility totaled $2.1 billion.
Capital Allocation Priorities
1 unchanged sentence
Investments in Current Business for Growth
−Removed: We invested $41.0 million and $48.0 million in property, plant, and equipment during the nine months ended May 31, 2024 and May 31, 2023, respectively.
+Added: We invested $18.9 million and $14.6 million in property, plant, and equipment during the three months ended November 30, 2024 and November 30, 2023, respectively.
We invested primarily in new and enhanced information technology, equipment, tooling, and facility improvements in fiscal 2025 to date.
1 unchanged sentence
We seek opportunities to strategically expand and enhance our portfolio of solutions.
−Removed: Refer to the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements for more information.
−Removed: On January 19, 2024, we acquired certain assets related to Arize® horticulture lighting products from Current Lighting Solutions, LLC.
−Removed: 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.
−Removed: On May 15, 2023, using cash on hand, we acquired all of the equity interests of KE2 Therm Solutions, Inc.
−Removed: (“KE2 Therm”).
−Removed: KE2 Therm develops and provides intelligent refrigeration control solutions that deliver the precision of
−Removed: digital controls to promote safety, efficiency, and reliability, while delivering cost savings to the customer.
−Removed: This acquisition expanded ISG's technology and controls product portfolio and reached new customers.
−Removed: There were no divestitures during the first nine months of fiscal 2024.
−Removed: We sold our Sunoptics prismatic skylights business in the first fiscal quarter of 2023 and recognized a pre-tax loss of $11.2 million on the sale of this business.
−Removed: We paid dividends on our common stock of $13.4 million ($0.43 per share) and $12.7 million ($0.39 per share) during the nine months ended May 31, 2024 and May 31, 2023, respectively.
+Added: There were no acquisitions during the three months ended November 30, 2024 and November 30, 2023, respectively.
+Added: We paid dividends on our common stock of $4.5 million ($0.15 per share) and $4.1 million ($0.13 per share) during the three months ended November 30, 2024 and November 30, 2023, respectively.
All decisions regarding the declaration and payment of dividends are at the discretion of the Board of Directors (the “Board”) and are evaluated regularly in light of our financial condition, earnings, growth prospects, funding requirements, applicable law, and any other factors the Board deems relevant.
Share Repurchases
−Removed: During the first nine months of fiscal 2024 and 2023, we repurchased 0.5 million and 1.3 million shares of our outstanding common stock for $88.3 million and $218.8 million, respectively.
−Removed: Total cash outflows for share repurchases during the nine months ended May 31, 2024 and May 31, 2023 were $88.7 million and $216.2 million, respectively.
+Added: During the first three months of fiscal 2025 and 2024, we repurchased approximately 17,000 shares and 290,000 shares of our outstanding common stock for $5.4 million and $50.0 million, respectively.
+Added: Total cash outflows for share repurchases during the three months ended November 30, 2024 and November 30, 2023 were $6.7 million and $48.2 million, respectively.
We expect to repurchase shares on an opportunistic basis subject to various factors including stock price, Company performance, market conditions, and other possible uses of cash.
On January 25, 2024, the Board approved an increase of three million shares to the maximum number of shares that may yet be repurchased under the share repurchase program.
−Removed: As of May 31, 2024, 3.8 million shares remained available within the program to repurchase.
+Added: As of November 30, 2024, 3.8 million shares remained available within the program to repurchase.
+Added: Recent Developments
+Added: On January 1, 2025, Acuity Brands Technology Services, Inc., a wholly owned subsidiary of Acuity Brands, Inc.
+Added: 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.
+Added: 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.
Results of Operations
−Removed: Third Quarter of Fiscal 2024 Compared with Third Quarter of Fiscal 2023
−Removed: The following table sets forth information comparing the components of net income for the three months ended May 31, 2024 and May 31, 2023 (in millions except per share data):
+Added: First Quarter of Fiscal 2025 Compared with First Quarter of Fiscal 2024
+Added: The following table sets forth information comparing the components of net income for the three months ended November 30, 2024 and November 30, 2023 (in millions except per-share data):
Three Months Ended
−Removed: May 31, 2024 May 31, 2023 Increase (Decrease) Percent Change
+Added: November 30, 2024 November 30, 2023 Increase (Decrease) Percent Change
Net sales $ 951.6 $ 934.7 $ 16.9 1.8 %
7 unchanged sentences
Interest (income) expense, net (4.0) 0.9 (4.9) (544.4) %
−Removed: Miscellaneous (income) expense, net (0.5) 0.7 (1.2) NM
+Added: Miscellaneous expense, net 2.5 1.1 1.4 NM
Total other (income) expense (1.5) 2.0 (3.5) (175.0) %
6 unchanged sentences
NM - not meaningful
−Removed: Net sales for the third quarter of fiscal 2024 decreased $32.2 million, or 3.2%, to $968.1 million, compared with $1.0 billion in the prior-year period due to a decline in sales within our ABL segment, partially offset by higher sales within our ISG segment.
−Removed: Acquisitions did not have a meaningful impact on consolidated net sales for the third quarter of fiscal 2024.
−Removed: Gross profit for the third quarter of fiscal 2024 increased $4.9 million, or 1.1%, to $452.2 million, compared with $447.3 million in the prior-year period, and gross profit margin increased 200 basis points to 46.7% from 44.7% compared with the prior-year period.
−Removed: Our gross profit increased compared with the prior period due primarily to favorable material costs, which outpaced the impact of lower net sales and higher production costs.
+Added: Net sales for the first quarter of fiscal 2025 increased $16.9 million, or 1.8%, to $951.6 million, compared with $934.7 million in the prior-year period due to increases in sales in both our Acuity Brands Lighting and Acuity Intelligent Spaces segments.
+Added: Gross profit for the first quarter of fiscal 2025 increased $20.9 million, or 4.9%, to $449.3 million, compared with $428.4 million in the prior-year period, and gross profit margin increased 140 basis points to 47.2% from 45.8% compared with the prior-year period.
+Added: Our gross profit increased compared with the prior period due primarily to the fall through of higher net sales and lower materials cost.
+Added: This increase was partially offset by increased labor and overhead costs.
Operating Profit
−Removed: Selling, distribution, and administrative expenses (“SD&A”) expenses for the third quarter of fiscal 2024 were $306.9 million, compared with $304.0 million in the prior-year period, an increase of $2.9 million, or 1.0%.
−Removed: The increase in SD&A expenses was due primarily to higher employee-related costs, partially offset by lower commissions and freight costs associated with the decline in net sales.
−Removed: Operating profit for the third quarter of fiscal 2024 was $145.3 million (15.0% of net sales), compared with $143.3 million (14.3% of net sales) for the prior-year period, an increase of $2.0 million, or 1.4%.
+Added: Selling, distribution, and administrative expenses (“SD&A”) expenses for the first quarter of fiscal 2025 were $316.0 million, compared with $295.5 million in the prior-year period, an increase of $20.5 million, or 6.9%.
+Added: The increase in SD&A expenses was due primarily to higher employee-related costs, sales-related costs, such as commissions, and sales and marketing costs.
+Added: Additionally, we incurred acquisition-related costs of $4.6 million during the first quarter of 2025.
+Added: Operating profit for the first quarter of fiscal 2025 was $133.3 million (14.0% of net sales), compared with $132.9 million (14.2% of net sales) for the prior-year period, an increase of $0.4 million, or 0.3%.
The increase in operating profit was due primarily to the increase in gross profit, partially offset by higher operating expenses.
Interest (Income) Expense, net
−Removed: We reported net interest income of $1.8 million and net interest expense of $3.9 million for the third quarter of fiscal 2024 and 2023, respectively.
−Removed: Our fiscal 2024 net interest income reflects higher interest bearing cash and cash equivalent balances, higher investing rates on those balances, and lower average short-term borrowings outstanding compared to the prior year.
−Removed: Miscellaneous (Income) Expense, net
−Removed: Miscellaneous (income) expense, net consists of non-service components of net periodic pension cost, gains and losses associated with foreign currency-related transactions, and non-operating gains and losses.
−Removed: We reported net miscellaneous income of $0.5 million and net miscellaneous expense of $0.7 million for the third quarter of fiscal 2024 and 2023, respectively.
−Removed: This year-over-year change is due primarily to the impact of foreign currency-related items compared to the prior year.
−Removed: Income Taxes and Net Income
−Removed: Our effective income tax rate was 22.8% and 24.3% for the third quarter of fiscal 2024 and 2023, respectively.
−Removed: This decrease was due primarily to higher discrete items for research and development tax credits as well as excess tax benefits on stock compensation in the third quarter of fiscal 2024.
−Removed: We recognized excess tax benefits of $0.2 million related to share-based payment awards for the third quarter of fiscal 2024.
−Removed: We recognized no excess tax benefits related to share-based payment awards for the third quarter of fiscal 2023.
−Removed: Net income for the third quarter of fiscal 2024 increased $8.9 million, or 8.5%, to $113.9 million, from $105.0 million reported for the prior-year period.
−Removed: Diluted earnings per share for the third quarter of fiscal 2024 increased $0.34, or 10.4%, to $3.62 compared with diluted earnings per share of $3.28 for the prior-year period.
−Removed: This increase reflects higher net income as well as lower outstanding diluted shares.
−Removed: Segment Results
−Removed: The following table sets forth information comparing the operating results of our segments, ABL and ISG, for the three months ended May 31, 2024 and May 31, 2023 (in millions):
−Removed: Three Months Ended
−Removed: May 31, 2024 May 31, 2023 Increase (Decrease) Percent Change
−Removed: Net sales $ 898.5 $ 940.7 $ (42.2) (4.5) %
−Removed: Operating profit 151.5 150.0 1.5 1.0 %
−Removed: Operating profit margin 16.9 % 15.9 % 100 bps
−Removed: Net sales $ 75.7 $ 65.8 $ 9.9 15.0 %
−Removed: Operating profit 12.5 8.6 3.9 45.3 %
−Removed: Operating profit margin 16.5 % 13.1 % 340 bps
−Removed: ABL net sales for the third quarter of fiscal 2024 decreased $42.2 million, or 4.5%, to $898.5 million, compared with $940.7 million in the prior-year period.
−Removed: Sales within the ABL segment decreased due to lower net sales across all channels, except for corporate accounts.
−Removed: Net sales in the third quarter of 2023 benefited from working through an elevated backlog.
−Removed: Operating profit for ABL was $151.5 million (16.9% of ABL net sales) for the third quarter of fiscal 2024, compared with $150.0 million (15.9% of ABL net sales) in the prior-year period, an increase of $1.5 million.
−Removed: The increase in operating profit was due to improved profitability on lower sales as well as lower sales-related costs, such as commissions and freight to customers.
−Removed: ISG net sales for the third quarter of fiscal 2024 increased $9.9 million, or 15.0%, to $75.7 million, compared with $65.8 million in the prior-year period.
−Removed: The increase in sales within the ISG segment is attributed to higher sales of Distech products as well as the acquisition of KE2 Therm.
−Removed: ISG operating profit was $12.5 million for the third quarter of fiscal 2024, compared with $8.6 million in the prior-year period, an increase of $3.9 million.
−Removed: This increase was due primarily to contributions from higher net sales, partially offset by higher employee-related costs.
−Removed: First Nine Months of Fiscal 2024 Compared with First Nine Months of Fiscal 2023
−Removed: The following table sets forth information comparing the components of net income for the nine months ended May 31, 2024 and May 31, 2023 (in millions except per share data):
−Removed: Nine Months Ended
−Removed: May 31, 2024 May 31, 2023 Increase (Decrease) Percent Change
−Removed: Net sales $ 2,808.7 $ 2,941.8 $ (133.1) (4.5) %
−Removed: Cost of products sold 1,515.7 1,671.3 (155.6) (9.3) %
−Removed: Gross profit 1,293.0 1,270.5 22.5 1.8 %
−Removed: Percent of net sales 46.0 % 43.2 % 280 bps
−Removed: Selling, distribution, and administrative expenses 896.7 899.9 (3.2) (0.4) %
−Removed: Special charges — 6.9 (6.9) NM
−Removed: Operating profit 396.3 363.7 32.6 9.0 %
−Removed: Percent of net sales 14.1 % 12.4 % 170 bps
−Removed: Other expense:
−Removed: Interest (income) expense, net (1.0) 16.2 (17.2) (106.2) %
−Removed: Miscellaneous expense, net 1.2 6.1 (4.9) NM
−Removed: Total other expense 0.2 22.3 (22.1) (99.1) %
−Removed: Income before income taxes 396.1 341.4 54.7 16.0 %
−Removed: Percent of net sales 14.1 % 11.6 % 250 bps
−Removed: Income tax expense 92.4 78.3 14.1 18.0 %
−Removed: Effective tax rate 23.3 % 22.9 %
−Removed: Net income $ 303.7 $ 263.1 $ 40.6 15.4 %
−Removed: Diluted earnings per share $ 9.67 $ 8.13 $ 1.54 18.9 %
−Removed: NM - not meaningful
−Removed: Net sales for the nine months ended May 31, 2024 decreased $133.1 million, or 4.5%, to $2.81 billion compared with $2.94 billion in the prior-year period due to a decline in sales within our ABL segment, partially offset by higher sales within our ISG segment.
−Removed: Acquisitions and divestitures did not have meaningful impacts on consolidated net sales for the first nine months of fiscal 2024.
−Removed: Gross profit for the nine months ended May 31, 2024 increased $22.5 million, or 1.8%, to $1.29 billion compared with $1.27 billion million in the prior-year period.
−Removed: Gross profit margin increased 280 basis points to 46.0% for the nine months ended May 31, 2024 compared with 43.2% in the prior-year period.
−Removed: Our gross profit increased compared with the prior period due primarily to favorable material and import costs, which outpaced the impact of lower net sales and higher production costs.
−Removed: Operating Profit
−Removed: SD&A expenses for the nine months ended May 31, 2024 were $896.7 million compared with $899.9 million in the prior-year period, a decrease of $3.2 million, or 0.4%.
−Removed: The decrease in SD&A expenses was due primarily to lower commissions and freight costs associated with the decline in net sales as well as lower amortization expense, partially offset by increased employee-related costs.
−Removed: Amortization expense of definite-lived intangibles decreased in fiscal 2024 as we recorded $4.0 million of accelerated amortization in fiscal 2023 for intangibles associated with certain brands that were discontinued.
−Removed: We recognized special charges of $6.9 million during the first nine months of fiscal 2023.
−Removed: Please refer to the Special Charges footnote of the Notes to Consolidated Financial Statements for further details.
−Removed: Operating profit for the first nine months of fiscal 2024 was $396.3 million (14.1% of net sales) compared with $363.7 million (12.4% of net sales) for the prior-year period, an increase of $32.6 million, or 9.0%.
−Removed: The increase in operating profit was due primarily to higher gross profit, lower SD&A expenses, and nonrecurring special charges in the first quarter of fiscal 2023.
−Removed: Interest (Income) Expense, net
−Removed: We reported net interest income of $1.0 million and net interest expense of $16.2 million for the nine months ended May 31, 2024 and May 31, 2023, respectively.
−Removed: The decrease in net interest expense was due to higher interest bearing cash and cash equivalent balances, higher investing rates on those balances, and lower average short-term borrowings outstanding compared to the prior year.
+Added: We reported net interest income of $4.0 million and net interest expense of $0.9 million for the first quarter of fiscal 2025 and 2024, respectively.
+Added: Our fiscal 2025 net interest income reflects higher interest-bearing cash and cash equivalent balances and higher investing rates on those balances.
Miscellaneous Expense, net
Miscellaneous expense, net consists of non-service components of net periodic pension cost, gains and losses associated with foreign currency-related transactions, and non-operating gains and losses.
−Removed: We reported net miscellaneous expense of $1.2 million for the nine months ended May 31, 2024 and $6.1 million for the nine months ended May 31, 2023.
−Removed: This year-over-year decrease was due primarily to the recognition of an $11.2 million loss on the sale of our Sunoptics prismatic skylights business in fiscal 2023, partially offset by the impact of foreign currency-related items compared to the prior year.
+Added: We reported net miscellaneous expense of $2.5 million and $1.1 million for the first quarter of fiscal 2025 and 2024, respectively.
+Added: This year-over-year change is due primarily to a non-cash loss on an investment in a privately-held entity which we do not exercise significant influence or control.
Income Taxes and Net Income
−Removed: Our effective income tax rate was 23.3% and 22.9% for the nine months ended May 31, 2024 and May 31, 2023, respectively.
−Removed: This increase was due primarily to the recognition of higher favorable discrete items in the prior year.
−Removed: We recognized excess tax benefits of $1.8 million and $1.7 million related to share-based payment awards during the nine months ended May 31, 2024 and May 31, 2023, respectively.
−Removed: Net income for the first nine months of fiscal 2024 increased $40.6 million, or 15.4%, to $303.7 million from $263.1 million reported for the prior-year period.
−Removed: Diluted earnings per share for the nine months ended May 31, 2024 increased $1.54 to $9.67 compared with diluted earnings per share of $8.13 for the prior-year period.
−Removed: This increase reflects higher net income as well as lower outstanding diluted shares.
+Added: Our effective income tax rate was 20.8% and 23.1% for the first quarter of fiscal 2025 and 2024, respectively.
+Added: This decrease was due primarily to higher excess tax benefits on stock compensation in the first quarter of fiscal 2025.
+Added: We recognized excess tax benefits of $4.3 million related to share-based payment awards for the first quarter of fiscal 2025 compared to $1.5 million for the first quarter of fiscal 2024.
+Added: Net income for the first quarter of fiscal 2025 increased $6.1 million, or 6.1%, to $106.7 million, from $100.6 million reported for the prior-year period.
+Added: Diluted earnings per share for the first quarter of fiscal 2025 increased $0.14, or 4.4%, to $3.35 compared with diluted earnings per share of $3.21 for the prior-year period.
+Added: This increase reflects higher net income.
Segment Results
−Removed: The following table sets forth information comparing the operating results of our segments, ABL and ISG, for the nine months ended May 31, 2024 and May 31, 2023 (in millions):
−Removed: Nine Months Ended
−Removed: May 31, 2024 May 31, 2023 Increase (Decrease) Percent Change
+Added: The following table sets forth information comparing the operating results of our segments, Acuity Brands Lighting and Acuity Intelligent Spaces, for the three months ended November 30, 2024 and November 30, 2023 (in millions):
+Added: Three Months Ended
+Added: November 30, 2024 November 30, 2023 Increase (Decrease) Percent Change
+Added: Acuity Brands Lighting:
Net sales $ 886.0 $ 876.4 $ 9.6 1.1 %
1 unchanged sentence
Operating profit margin 16.2 % 16.4 % (20) bps
+Added: Acuity Intelligent Spaces:
Net sales $ 73.5 $ 64.2 $ 9.3 14.5 %
1 unchanged sentence
Operating profit margin 14.7 % 8.3 % 640 bps
−Removed: ABL net sales for the nine months ended May 31, 2024 decreased 5.8% compared with the prior-year period due to lower net sales across all channels.
−Removed: Net sales in fiscal 2023 benefited from working through an elevated backlog.
−Removed: Operating profit for ABL was $421.3 million (16.1% of ABL net sales) for the nine months ended May 31, 2024 compared to $391.7 million (14.1% of ABL net sales) in the prior-year period, an increase of $29.6 million.
−Removed: The increase in operating profit was due primarily to improved profitability on lower sales as well as lower sales-related costs, such as commissions and freight to customers.
−Removed: During the first nine months of fiscal 2023, we recorded within ABL $6.9 million of special charges and $4.0 million of accelerated amortization expense for intangibles associated with certain brands that were discontinued.
−Removed: ISG net sales for the nine months ended May 31, 2024 increased 15.0% compared with the prior-year period primarily driven by the acquisition of KE2 Therm as well as higher demand, price increases, and favorable product mix for Distech products.
−Removed: ISG operating profit was $26.9 million for the nine months ended May 31, 2024 compared with $22.7 million in the prior-year period, an increase of $4.2 million.
−Removed: This increase was due primarily to contributions from higher sales, partially offset by increased employee-related costs and professional fees.
+Added: Acuity Brands Lighting net sales for the first quarter of fiscal 2025 increased $9.6 million, or 1.1%, to $886.0 million, compared with $876.4 million in the prior-year period.
+Added: Sales within the Acuity Brands Lighting segment increased due to higher net sales within our independent sales network and direct sales network, partially offset by declines in the retail and corporate accounts channels.
+Added: Operating profit for Acuity Brands Lighting was $143.3 million (16.2% of Acuity Brands Lighting net sales) for the first quarter of fiscal 2025, compared with $143.8 million (16.4% of Acuity Brands Lighting net sales) in the prior-year period, a decrease of $0.5 million.
+Added: The decrease in operating profit was due to higher labor and overhead costs, and employee-related costs, partially offset by the fall through of higher net sales and lower materials cost.
+Added: Acuity Intelligent Spaces net sales for the first quarter of fiscal 2025 increased $9.3 million, or 14.5%, to $73.5 million, compared with $64.2 million in the prior-year period.
+Added: The increase in sales within the Acuity Intelligent Spaces segment is attributed to higher sales of Distech products.
+Added: Acuity Intelligent Spaces operating profit was $10.8 million for the first quarter of fiscal 2025, compared with $5.3 million in the prior-year period, an increase of $5.5 million.
+Added: This increase was due primarily to contributions from higher net sales and lower professional and consulting fees, partially offset by higher employee-related costs.
Critical Accounting Estimates
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goodwill and indefinite-lived intangible assets;
−Removed: share-based payment expense;
−Removed: and product warranty and recall costs.
+Added: and product warranty costs.
We base our estimates and judgments on our substantial historical experience and other relevant factors, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
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This filing contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”).
−Removed: Forward-looking statements include, among other things, statements that describe or relate to the Company’s plans, initiatives, projections, vision, goals, targets, commitments, expectations, objectives, prospects, strategies, or financial outlook, and the assumptions underlying or relating thereto.
+Added: Forward-looking statements include, but are not limited to, statements that describe or relate to the Company’s plans, initiatives, projections, vision, goals, targets, commitments, expectations, objectives, prospects, strategies, or financial outlook, and the assumptions underlying or relating thereto.
In some cases, we may use words such as “expect,” “believe,” “intend,” “anticipate,” “estimate,” “forecast,” “indicate,” “project,” “predict,” “plan,” “may,” “will,” “could,” “should,” “would,” “potential,” and words of similar meaning, as well as other words or expressions referencing future events, conditions, or circumstances, to identify forward-looking statements.
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Forward-looking statements are not guarantees of future performance.
−Removed: Our forward-looking statements are based on our current beliefs, expectations, and assumptions, which may not prove to be accurate, and are subject to known and unknown risks and uncertainties, many of which are outside of our control.
−Removed: These risks and uncertainties could cause actual events or results to differ materially from our historical experience and management’s present expectations or projections.
+Added: Our forward-looking statements are based on our current beliefs, expectations, and assumptions, which may not prove to be accurate, and are subject to known and unknown risks and uncertainties, assumptions, and other important factors, many of which are outside of our control and any of which could cause our actual results to differ materially from those expressed or implied by the forward-looking statements.
These risks and uncertainties are discussed in our filings with the U.S.
−Removed: Securities and Exchange Commission, including our most recent annual report on Form 10-K (including, but not limited to, Part I, Item 1a.
−Removed: Risk Factors ), quarterly reports on Form 10-Q, and current reports on Form 8-K.
+Added: Securities and Exchange Commission, including our most recent annual report on Form 10-K (including, but not limited to, the sections titled “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations”), quarterly reports on Form 10-Q, and current reports on Form 8-K.
Any forward-looking statement speaks only as of the date on which it is made.
+Added: This quarterly report is not comprehensive, and for that reason, should be read in conjunction with such filings.
You are cautioned not to place undue reliance on any forward-looking statements.
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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.