By Jack Keough
Acuity Brands, one of the largest lighting suppliers in the world, posted solid third quarter results last week, giving an indication that the lighting market is improving as the non-residential retrofit market grows and the residential market continues its rebound. Acuity posted net sales of $541.5 million for the quarter, an increase of $54 million or 11 percent compared with the same quarter a year ago.
And the company said its outlook seems even brighter, which is good news for other electrical manufacturers and distributors.
Vernon Nagel, chairman, CEO and president of Acuity Brands, noted that independent third-party forecasts and leading indicators suggest that the growth rate for the North American lighting market is very strong. “We look at those other indicators that, for us, have a historical basis, such as Architecture Billings Index, employment, absorption, and lending standards. All of those leading indicators for us right now are flashing green,” he said during a conference call with financial analysts.
Those forecasts, which also include renovation and retrofit activity, indicate that lighting activity will continue to be in the mid-single digits during the remainder of 2013 and also through 2014, he said. Nagel also noted, according to a press release as well as later in the conference call, that he is optimistic about the next 3 to five years for the markets that Acuity serves.
“It certainly is an improving market compared to just two years ago,” he said during the call, according to a transcript provided by www.seekingalpha.com
“While we still expect to see some volatility in demand among certain sales channels and geographies, our expectation for the near future is that overall demand in our end markets will continue to improve and be more consistent and broad-based,” he said.
Particularly significant was the growth of LED lighting solutions that more than doubled compared to a year ago. LED lighting now makes up approximately 20 percent of the company’s net sales.
Nagel said the company will will continue to fund the development of holistic lighting solutions for specific applications, such as schools, health care facilities, commercial office buildings and various outdoor applications, to fully leverage its portfolio of lighting fixtures, controls and components
In addition, the company said that the lighting and lighting-related industry will also experience solid growth due to energy and environmental concerns.
Nagel said Acuity’s third quarter financial numbers “reflects strong operating performance.”
Company officials said that during the quarter the company initiated streamlining actions including a decision to further consolidate its “manufacturing footprint “which will include the future closure of certain small production facilities.” They added that Acuity will also realign its responsibilities primarily within various selling, distribution and administrative departments.
After Acuity Brands released its earnings, its stock prices jumped as did the stock of several other electrical manufacturers.
Acuity also reported a pre-tax loss of $8.1 million resulting from fraud perpetrated at a freight payment and audit service firm formerly retained by the company. Acuity said it is aggressively taking steps to recover its losses through “multiple sources.”
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Jack Keough was the editor of Industrial Distribution magazine for more than 26 years. He often speaks at many industry events and seminars. He can be reached at john.keough@comcast.net or keoughbiz@gmail.com
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