ATLANTA — Acuity Brands, Inc. announced net sales of $899.7 million for the third quarter of fiscal 2021 ended May 31, 2021, an increase of $123.5 million or 15.9 percent, as compared to the third quarter of fiscal 2020. Diluted earnings per share was $2.37, an increase of 55.9 percent over prior year, and adjusted diluted earnings per share was $2.77 per share, an increase of 42.8 percent over prior year.
“I am proud of our team for returning the business to growth during the quarter, while also expanding our gross profit margin. The breakout of our newly formed business segments shows that both segments contributed to that improvement,” stated Neil Ashe, Chief Executive Officer of Acuity Brands. “We continue to allocate capital effectively with the acquisition of ams OSRAM’s North American Digital Systems business which will contribute to innovation and long-term growth.”
Gross profit of $386.6 million increased $59.0 million, or 18.0 percent, as compared to the prior year. Gross profit was 43.0 percent of net sales for the third quarter of fiscal 2021, an increase of 80 basis points from 42.2 percent in the third quarter of fiscal 2020. The improvement in gross profit and gross profit margin was primarily a result of the increase in sales volumes as well as product and productivity improvements, which were partially offset by higher input costs.
Operating profit of $118.1 million increased $35.1 million, or 42.3 percent as compared to prior year. Operating profit was 13.1 percent of net sales for the third quarter of fiscal 2021, an increase of 240 basis points from 10.7 percent for the third quarter of fiscal 2020. The improvement in operating profit margin was largely a result of the increase in gross profit margin, in addition to the leveraging of the fixed costs base.
Adjusted operating profit of $136.8 million increased $31.9 million, or 30.4 percent, for the third quarter of fiscal 2021 as compared to the prior year. Adjusted operating profit was 15.2 percent of net sales for the third quarter of fiscal 2021, an increase of 170 basis points from 13.5 percent in the third quarter of fiscal 2020.
Net income of $85.7 million increased $25.3 million, or 41.9 percent, as compared to prior year. Diluted earnings per share of $2.37 increased $0.85, or 55.9 percent, for the third quarter of fiscal 2021, as compared to $1.52 for the third quarter of fiscal 2020.
Adjusted net income of $100.4 million increased $23.2 million, or 30.1 percent, as compared to the prior year. Adjusted diluted earnings per share of $2.77 increased $0.83, or 42.8 percent, as compared to $1.94 for the third quarter of fiscal 2020.
Segment Performance
Acuity Brands Lighting and Lighting Controls “ABL”
ABL generated net sales of $850 million for the third quarter of fiscal 2021, an increase of $108.4 million or 14.6 percent, as compared to the third quarter of fiscal 2020.
- Net sales of $628.0 million in the Independent Sales Network and of $96.7 million in the Direct Sales Network increased 14.3 percent and 39.3 percent, respectively, as compared to prior year.
- Sales in the Corporate Accounts channel of $44.0 million increased 12.5 percent over prior year as retailers began to address previously deferred nonessential renovations.
- Retail sales of $36.1 million declined 25.9 percent. This was primarily due to an ongoing customer inventory rebalancing.
Operating profit was $126.5 million for the third quarter of fiscal 2021, an increase of $27.9 million or 28.3 percent, as compared to the third quarter of fiscal 2020. Adjusted operating profit was $135.5 million for the fiscal third quarter of 2021 an increase of $27.4 million or 25.3 percent, as compared to the third quarter of fiscal 2020.
Intelligent Spaces Group “ISG”
ISG generated net sales of $55.4 million for the third quarter of fiscal 2021, an increase of $17.7 million or 46.9 percent as compared to the third quarter of fiscal 2020.
Operating profit was $7.2 million for the third quarter of fiscal 2021, an increase of $7.4 million as compared to the third quarter of fiscal 2020. Adjusted operating profit was $11.1 million for the fiscal third quarter of 2021 an increase of $6.1 million or 122.0 percent, as compared to the third quarter of fiscal 2020.
Cash Flow and Capital Allocation
Net cash from operating activities of $316.2 million decreased $62.1 million, or 16.4 percent for the first nine months of fiscal 2021 as compared to the same period in the prior year driven primarily by an increase in net working capital to support the higher level of sales. During the first nine months of 2021, the Company repurchased 3.3 million shares of common stock for a total of $340.9 million at an average price of $104 per share. The Company had approximately 4.4 million shares remaining under its most recent share purchase authorization at the end of the third fiscal quarter of 2021. Since May of 2020, the Company has reduced the outstanding share count by approximately 10 percent.
Completion of OSRAM Acquisition
One June 4, 2021, the Company announced that it has signed a definitive agreement to purchase ams OSRAM’s North American Digital Systems (“DS”) business. This acquisition is intended to enable the Company to enhance our LED driver and controls technology portfolio and accelerate our innovation, expand our access to market through a more fulsome OEM product offering, and give us more control over our supply chain. The transaction is expected to close by end of day on July 1, 2021.
Pledge to 100 Million Metric Tons of carbon reduction by 2030
At a sales conference during the third-quarter 2021, the Company committed to a goal of 100 million metric tons of carbon reduction by 2030 through the sales of LED luminaires, controls, and building management systems, replacing older technologies in existing buildings and new construction.
On July 1, 2021, the Company issued the 2020 Acuity Brands EarthLIGHT Handprint Report: Lighting the Way Toward Net-Zero on its website. The report evaluates the net environmental impact of its products at the point of use, incorporating both the environmental costs of using its products and the environmental benefits of removing older, less-efficient technology.
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