Acuity Brands Reports Fiscal 2012 Fourth Quarter a Acuity Brands Reports Fiscal 2012 Fourth Quarter and Full Year Results
Fiscal 2012 Net Sales Rise 8% and Adjusted Diluted EPS Increases 24%
ATLANTA--(BUSINESS WIRE)--Oct. 2, 2012-- Acuity Brands, Inc. (NYSE: AYI) (“Company”) today announced fiscal 2012 fourth quarter net sales of $514.3 million, an increase of $18.1 million, or approximately 4 percent, compared with the year-ago period. Fiscal 2012 fourth quarter net income was $33.3 million compared with $34.2 million for the prior-year period. Diluted earnings per share (“EPS”) for the fourth quarter of fiscal 2012 were $0.78 compared with $0.79 reported for the prior-year period. Included in the results for the fourth quarter of fiscal 2012 were a pre-tax special charge and expenses associated with streamlining actions totaling $6.5 million, or $0.10 per diluted share as explained below. Excluding the special charge and related expenses, fiscal 2012 fourth quarter adjusted diluted EPS were $0.88, an increase of 11 percent compared with the year-ago period.
Fiscal 2012 fourth quarter results included $2.8 million of net miscellaneous expense, or $0.04 per diluted share, compared with $1.7 million of net miscellaneous income, or $0.03 per diluted share, in the prior-year period. Net miscellaneous income/expense consists primarily of gains and losses resulting from the impact of exchange rates changes on foreign currency exposures, particularly those associated with the Mexican Peso.
For the full year of fiscal 2012, the Company reported net sales of $1,933.7 million, an annual increase of approximately 8 percent. Adjusted diluted EPS for the full year of fiscal 2012 were $3.00, an increase of 24 percent over the prior year.
Vernon J. Nagel, Chairman, President and Chief Executive Officer of Acuity Brands, commented, “We were very pleased with our fiscal 2012 fourth quarter and full year results as we continued to execute our strategies to extend our leadership position in North America. Our profitability and cash flow for the quarter and full year were once again strong while we continued to fund areas with significant future growth potential, including the expansion of our industry-leading portfolio of lighting solutions.”
Fiscal 2012 Fourth Quarter Results
Over two-thirds of the approximate 4 percent year-over-year increase in fourth quarter net sales was due to higher volume with the balance due primarily to the net favorable change in product prices and the mix of products sold. The increase in volume was fairly broad-based across most product categories. The impact on net sales from acquisitions and foreign currency was not significant. Sales of LED-based products grew by more than two-and-a-half times over the prior-year period and represented approximately 12 percent of fiscal 2012 fourth quarter net sales.
In the fourth quarter of fiscal 2012, the Company recorded a pre-tax special charge related to streamlining activities of $2.1 million, or $0.03 per diluted share. The special charge was associated with the previously announced planned closing of the Cochran, Georgia production facility and consisted primarily of production transfer costs. In addition to the special charge, the Company incurred $3.2 million of higher costs, or $0.05 per diluted share, directly related to manufacturing inefficiencies associated with the closing of the facility as well as $1.2 million of non-cash expenses, or $0.02 per diluted share, related to the abandonment of certain otherwise usable inventory at the facility.
Fiscal 2012 fourth quarter gross profit margin increased 50 basis points to 40.9 percent compared with 40.4 percent for the prior-year period. Excluding the impact of the expenses directly associated with the closing of the Cochran facility, adjusted gross profit margin increased 140 basis points to 41.8 percent compared with the prior-year period.
Operating profit for the fourth quarter of fiscal 2012 was $61.2 million, or 11.9 percent of net sales, compared with $55.8 million, or 11.2 percent of net sales, for the prior-year period. Excluding expenses associated with the closing of the Cochran facility, adjusted operating profit for the fourth quarter of fiscal 2012 was $67.7 million, a 21 percent increase over the prior-year period. Adjusted operating profit margin for the fourth quarter of fiscal 2012 was 13.2 percent, which represents a 200 basis point improvement over the year-ago period.
The effective tax rate for the fourth quarter of fiscal 2012 was 34.4 percent compared with 31.7 percent for the prior-year period. The effective tax rate for the prior-year period was favorably impacted by various discrete items, including federal and state tax credits, which did not occur in the fourth quarter of the fiscal 2012.
Fiscal 2012 Full Year Results
Fiscal 2012 net sales were $1,933.7 million compared with $1,795.7 million for the prior-year period, an increase of approximately 8 percent. Operating profit for fiscal 2012 was $208.0 million compared with $188.7 million for the year-ago period. Net income for fiscal 2012 was $116.3 million compared with $105.5 million for fiscal 2011. Diluted EPS for fiscal 2012 and 2011 were $2.72 and $2.42, respectively. Excluding the impact of special charges and expenses associated with the closing of the Cochran facility, adjusted operating profit was $225.7 million, or 11.7 percent of net sales, which is a 120 basis point improvement over the prior year. Excluding the impact of special charges and expenses associated with the closing of the Cochran facility, fiscal 2012 adjusted diluted EPS were $3.00, a 24 percent increase over the prior year.
Fiscal 2012 full-year results included $1.7 million of net miscellaneous income, or $0.03 per diluted share, compared with $1.2 million of net miscellaneous expense, or $0.02 per diluted share, in the prior-year period.
Cash and cash equivalents totaled approximately $285 million at August 31, 2012. For the 2012 fiscal year, the Company generated over $172 million in net cash from operating activities. The Company’s debt to total capitalization ratio (calculated by dividing total debt by the sum of total debt and total stockholders’ equity) was 30 percent at August 31, 2012. The ratio of debt, net of cash, to total capitalization, net of cash, was 8 percent at August 31, 2012.
2012 Special Charges and Expenses Associated with Streamlining Activities
During fiscal 2012, the Company incurred a total of $17.7 million of pre-tax special charges for streamlining activities and for expenses associated with the closing of the Cochran production facility. The $17.7 million consisted of special charges related to streamlining activities totaling $13.3 million, $3.2 million of higher costs directly related to manufacturing inefficiencies associated with the closing of the Cochran facility, and $1.2 million of non-cash expenses related to the abandonment of certain otherwise usable inventory at the facility. The Company expects to record an additional pre-tax special charge of approximately $2 million associated with the closing of the Cochran facility along with related production inefficiencies of approximately $3 million, however, the amounts could vary depending on the timing of the transfer of production. The Company estimates that the total annualized pre-tax savings associated with all streamlining activities initiated in 2012, including the closure of the Cochran facility, to be approximately $14 million of which approximately $4 million was realized in fiscal 2012, including $2 million of benefits realized in the fourth quarter of fiscal 2012. The Company expects to be at the total annualized savings run rate from the streamlining activities by the end of the first quarter of fiscal 2013 following the completion of the transfer of production and closure of the facility.
Outlook
Mr. Nagel commented, “We remain very positive about the future prospects for our Company and our ability to outperform the markets we serve. We continue to position the Company to optimize short-term performance while investing in and deploying resources to capitalize on our long-term profitable growth opportunities. While we are optimistic about our future prospects and ability to outperform the markets we serve, we do see the possibility for continuing volatility in demand due to the weak pace of economic recovery in the United States and globally.
“The North American lighting market appears to have experienced a slowdown in the rate of growth over the past few months, reflecting both a tepid economic recovery in the U.S. and macro-level uncertainties in the U.S. and globally. Third-party forecasts for the U.S. non-residential construction market, a key market for the company, remain favorable though estimates for growth vary significantly. The current consensus estimate is that non-residential construction will grow modestly through our fiscal 2013 while the growth rate for the North American lighting market will be higher, suggesting growth in the mid-single digit range for fiscal 2013. We believe opportunities exist that will allow us to continue to outperform the markets we serve, including benefits from growing renovation and tenant improvement projects, further expansion in underpenetrated geographies and channels, and growth from the introduction of innovative products and lighting solutions.”
Mr. Nagel concluded, “We believe the lighting and lighting-related industry will experience solid growth over the next decade, particularly as energy and environmental concerns come to the forefront, and we believe we are well positioned to fully participate in this exciting industry.”
The independent registered public accountants’ audit opinion with respect to the Company’s fiscal year-end financial statements will not be issued until the Company completes its annual report on Form 10-K, including its evaluation of the effectiveness of internal controls over financial reporting. Accordingly, the financial results reported in this earnings release are preliminary pending completion of the audit.
https://www.acuitybrands.com/IR/InvestorInfo/NewsReleases.aspx
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