Acuity Inc.

06/26/2025 | Press release | Distributed by Public on 06/26/2025 05:19

Quarterly Report for Quarter Ending May 31, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
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 Inc. (referred to herein as "we," "our," "us," the "Company," or similar references) and its subsidiaries as of May 31, 2025 and for the three and nine months ended May 31, 2025 and May 31, 2024. The following discussion should be read in conjunction with the Consolidated Financial Statementsand Notes to Consolidated Financial Statementsincluded within this report. Also, please refer to Acuity Inc.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2024, filed with the Securities and Exchange Commission (the "SEC") on October 28, 2024 ("Form 10-K").
Overview
Company
Effective March 26, 2025, we changed our corporate name from Acuity Brands, Inc. to Acuity Inc.
We are a market-leading industrial technology company. We use technology to solve problems in spaces, light, and more things to come. Through our two business segments, Acuity Brands Lighting ("ABL") and Acuity Intelligent Spaces ("AIS"), 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 an audio, video and control platform. We focus on customer outcomes and drive growth and productivity to increase market share and deliver superior returns. We look to aggressively deploy capital to grow the business and to enter attractive new verticals.
Our business exhibits some seasonality, with net sales being affected by weather and seasonal demand on construction and installation programs, particularly during the winter months, as well as the annual budget cycles of major customers. Historically, with certain exceptions, we have experienced our highest sales in the last two quarters of each fiscal year due to these factors.
Financial Condition, Capital Resources, and Liquidity
We have numerous sources of capital, including cash on hand and cash flows generated from operations, as well as various sources of financing. 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. 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 outstanding debt, 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. Refer to Financing Arrangements below for a discussion of significant changes to our contractual obligations for the first nine months of fiscal 2025.
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.
Cash
Our cash position at May 31, 2025 was $371.8 million, a decrease of $474.0 million from August 31, 2024. Cash generated from operating activities and cash on hand were used during the current year to partially fund the QSC, LLC ("QSC") acquisition and our other capital allocation priorities as discussed below.
We generated $398.9 million of cash flows from operating activities during the nine months ended May 31, 2025, compared to $445.1 million in the prior-year period, a decrease of $46.2 million. Cash flows from operations decreased as increased profitability on higher net sales was offset by payments for nonrecurring items as well as higher interest expense and the timing of collections from customers.
Financing Arrangements
See the Debt and Lines of Creditfootnote 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 $500.0 million unsecured term loan facility ("Term Loan Facility") due in two years.
At May 31, 2025, our outstanding debt balance was $1.0 billion, which consisted of our Unsecured Notes and borrowings on our Term Loan Facility, compared to our cash position of $371.8 million. We were in compliance with all covenants under our financing arrangements as of May 31, 2025.
The Unsecured Notes were issued by Acuity Brands Lighting, Inc., a wholly-owned subsidiary of Acuity Inc. The Unsecured Notes are fully and unconditionally guaranteed on a senior unsecured basis by Acuity Inc. and ABL IP Holding LLC, a wholly-owned subsidiary of Acuity Inc. The following tables present summarized financial information for Acuity 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):
Summarized Balance Sheet Information May 31, 2025 August 31, 2024
Current assets $ 1,034.2 $ 1,517.6
Amounts due from non-guarantor affiliates 329.3 338.0
Non-current assets 1,344.8 1,337.7
Current liabilities 581.9 553.2
Non-current liabilities 1,228.4 746.5
Summarized Income Statement Information Nine Months Ended May 31, 2025
Net sales $ 2,394.6
Gross profit 1,119.5
Net income 271.6
On November 25, 2024, we entered into an amendment to our credit agreement (the "Credit Agreement") that, among other things, provided for a delayed draw term under the Term Loan Facility of up to $600.0 million.
In January 2025, we drew the full $600.0 million on the Term Loan Facility to fund the QSC acquisition. In March 2025, we repaid $100.0 million of the outstanding obligation. We had $500.0 million in borrowings outstanding under the Term Loan Facility at May 31, 2025.
We were in compliance with all financial covenants under the Credit Agreement as of the periods presented. At May 31, 2025, we had additional borrowing capacity under the Credit Agreement of $595.8 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 $4.2 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance premiums. As of May 31, 2025, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $967.6 million.
Capital Allocation Priorities
Our capital allocation priorities are to invest in our current business for growth, to invest in mergers and acquisitions, to pay a dividend, and to make share repurchases.
Investments in Current Business for Growth
We invested $43.6 million and $41.0 million in property, plant, and equipment during the nine months ended May 31, 2025 and May 31, 2024, respectively. We invested primarily in new and enhanced information technology, equipment, tooling, and facility improvements in fiscal 2025 to date.
Strategic Acquisitions, Investments, and Divestitures
We seek opportunities to strategically expand and enhance our portfolio of solutions.
QSC
On January 1, 2025, we acquired all of the equity interests of QSC, a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $1.2 billion. This acquisition is intended to expand AIS into a cloud-manageable audio, video, and control platform that includes controls, sensors, and software with broad applications across multiple end-markets including education, commercial, hospitality, government, healthcare, and transportation. We funded the transaction using cash on hand and proceeds from our Term Loan Facility. The operating results, assets, liabilities, and cash flows of QSC have been included in our consolidated financial statements since the date of acquisition.
M3 Innovation
On May 1, 2025, we acquired certain assets of M3 Innovation, a sports lighting startup that uses innovative technology to lower the overall cost of the installation and operation of sports lighting solutions. 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.
Please refer to theAcquisitionsfootnote of the Notes to Consolidated Financial Statementsfor more information.
Dividends
We paid dividends on our common stock of $15.3 million ($0.49 per share) and $13.4 million ($0.43 per share) during the nine months ended May 31, 2025 and May 31, 2024, 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
During the first nine months of fiscal 2025 and 2024, we repurchased approximately 0.3 million shares and 0.5 million shares of our outstanding common stock for $90.0 million and $88.3 million, respectively. Total cash outflows for share repurchases during the nine months ended May 31, 2025 and May 31, 2024 were $91.3 million and $88.7 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. As of May 31, 2025, 3.4 million shares remained available within the program to repurchase.
Recent Developments
In recent months, the U.S. government has imposed, and is considering imposing, additional tariffs and trade restrictions on certain goods produced outside of the United States, including steel and aluminum. In response to these actions, certain jurisdictions, including China, Mexico, Canada, and the European Union, have imposed, or are considering imposing, tariffs and restrictions on certain goods produced in the United States. The situation concerning the imposition of additional tariffs and trade restrictions by the U.S. and other jurisdictions and the status of certain trade agreements, including the United States, Mexico, Canada Free Trade Agreement, continues to evolve, and we cannot be certain of the outcome which could adversely impact demand for our products, costs, inflation, customers, suppliers, and the U.S. economy. Although we have taken actions to mitigate the impacts of tariffs and trade restrictions, including pricing actions and efforts to diversify our supply chain, competitive pricing or market pressures may not allow us to pass on the additional cost of these tariffs and may adversely affect our profit margins, results of operations, and/or cash flows.
Recent increased geopolitical instability has created additional uncertainty in the marketplace. While we do not have significant operations in directly affected areas, we are unable to predict the impact of geopolitical factors on the global economy or on our financial condition, results of operations, and cash flows as of the date of these financial statements.
Results of Operations
Third Quarter of Fiscal 2025 Compared with Third Quarter of Fiscal 2024
The following table sets forth information comparing the components of net income for the three months ended May 31, 2025 and May 31, 2024 (in millions except per-share data):
Three Months Ended
May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change
Net sales $ 1,178.6 $ 968.1 $ 210.5 21.7 %
Cost of products sold(1)
608.4 515.9 92.5 17.9 %
Gross profit 570.2 452.2 118.0 26.1 %
Percent of net sales 48.4 % 46.7 % 170 bps
Selling, distribution, and administrative expenses(2)
400.7 306.9 93.8 30.6 %
Special charges 29.7 - 29.7 NM
Operating profit 139.8 145.3 (5.5) (3.8) %
Percent of net sales 11.9 % 15.0 % (310) bps
Other expense:
Interest expense (income), net 12.1 (1.8) 13.9 NM
Miscellaneous expense (income), net 2.3 (0.5) 2.8 NM
Total other expense (income) 14.4 (2.3) 16.7 NM
Income before income taxes 125.4 147.6 (22.2) (15.0) %
Percent of net sales 10.6 % 15.2 % (460) bps
Income tax expense 27.0 33.7 (6.7) (19.9) %
Effective tax rate 21.5 % 22.8 %
Net income $ 98.4 $ 113.9 $ (15.5) (13.6) %
Diluted earnings per share $ 3.12 $ 3.62 $ (0.50) (13.8) %
NM - not meaningful
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(1) Fiscal 2025 includes $19.2 million in preliminary acquisition date fair value adjustments to inventory for the QSC acquisition.
(2)Fiscal 2025 includes $2.5 million in acquisition-related costs and $11.6 million in preliminary amortization of intangible assets for the QSC acquisition.
Net Sales
Net sales for the third quarter of fiscal 2025 increased $210.5 million, or 21.7%, to $1.2 billion, compared with $968.1 million in the prior-year period due primarily to an increase in sales in our Acuity Intelligent Spaces segment driven by the acquisition of QSC, which contributed $172.8 million in sales, as well as higher sales of Atrius and Distech products. Additionally, net sales increased in our Acuity Brands Lighting segment due primarily to higher net sales within the independent sales network, partially offset by lower net sales within the corporate accounts channel.
Gross Profit
Gross profit for the third quarter of fiscal 2025 increased $118.0 million, or 26.1%, to $570.2 million, compared with $452.2 million in the prior-year period, and gross profit margin increased 170 basis points to 48.4%, compared with 46.7% in prior-year period. Our gross profit increased compared with the prior period due primarily to the fall through of higher net sales, including contributions from the QSC acquisition, as well as favorable materials cost. These increases were partially offset by increased production costs, acquisition date fair value adjustments to QSC's inventory, higher costs for Asian-sourced finished goods (including freight, duties, and tariffs), and additional non-Asian tariff costs.
Operating Profit
Selling, distribution, and administrative expenses ("SD&A") expenses for the third quarter of fiscal 2025 were $400.7 million, compared with $306.9 million in the prior-year period, an increase of $93.8 million, or 30.6%. The increase in SD&A expenses was due primarily to higher employee-related costs, including amounts from the QSC acquisition, higher selling costs associated with higher sales, higher amortization, and acquisition-related costs. Acquisition-related costs were recorded within unallocated corporate amounts.
We recorded special charges totaling $29.7 million during the third quarter of fiscal 2025, which consisted primarily of impairments of long-lived assets as well as employee severance costs related to productivity initiatives.
Operating profit for the third quarter of fiscal 2025 was $139.8 million (11.9% of net sales), compared with $145.3 million (15.0% of net sales) for the prior-year period, a decrease of $5.5 million, or 3.8%. The decrease in operating profit was due to the recognition of special charges in the current period and higher SD&A expenses, partially offset by higher gross profit.
Interest Expense (Income), net
We reported net interest expense of $12.1 million and net interest income of $1.8 million for the third quarter of fiscal 2025 and 2024, respectively. The increase in net interest expense was due primarily to interest incurred on our outstanding Term Loan Facility and lower interest-bearing cash and cash equivalent balances held during the period as a result of our purchase of QSC.
Miscellaneous Expense (Income), net
Miscellaneous expense (income), 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. We reported net miscellaneous expense of $2.3 million and net miscellaneous income of $0.5 million for the third quarter of fiscal 2025 and 2024, respectively.
Income Taxes and Net Income
Our effective income tax rate was 21.5% and 22.8% for the third quarter of fiscal 2025 and 2024, respectively. This decline was due primarily to an increase in favorable discrete items recognized in the quarter.
Net income for the third quarter of fiscal 2025 decreased $15.5 million, or 13.6%, to $98.4 million, from $113.9 million reported for the prior-year period. This decrease was due primarily to the recognition of nonrecurring special charges, higher SD&A expenses, and higher net interest expense, partially offset by higher gross profit and lower income tax expense. Diluted earnings per share for the third quarter of fiscal 2025 decreased $0.50, or 13.8%, to $3.12 compared with diluted earnings per share of $3.62 for the prior-year period. This decrease reflects lower net income as well as higher outstanding diluted shares.
Segment Results
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 May 31, 2025 and May 31, 2024 (in millions):
Three Months Ended
May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change
Acuity Brands Lighting:
Net sales $ 923.2 $ 898.5 $ 24.7 2.7 %
Operating profit 134.0 151.5 (17.5) (11.6) %
Operating profit margin 14.5 % 16.9 % (240) bps
Acuity Intelligent Spaces:
Net sales $ 264.1 $ 75.7 $ 188.4 248.9 %
Operating profit 27.4 12.5 14.9 119.2 %
Operating profit margin 10.4 % 16.5 % (610) bps
Acuity Brands Lighting net sales for the third quarter of fiscal 2025 increased $24.7 million, or 2.7%, to $923.2 million, compared with $898.5 million in the prior-year period. This increase was due
primarily to higher net sales within the independent sales network, partially offset by a decline in the corporate accounts channel. The decline in our corporate accounts channel was due primarily to the timing of renovation activities for a large retail customer.
Operating profit for Acuity Brands Lighting was $134.0 million (14.5% of Acuity Brands Lighting net sales) for the third quarter of fiscal 2025, compared with $151.5 million (16.9% of Acuity Brands Lighting net sales) in the prior-year period, a decrease of $17.5 million. The decrease in operating profit was due primarily to the recognition of special charges. Additionally, the fall through of higher net sales and favorable materials cost was partially offset by higher production costs, higher costs for Asian-sourced finished goods (including freight, duties, and tariffs), and additional non-Asian tariff costs.
Acuity Intelligent Spaces net sales for the third quarter of fiscal 2025 increased $188.4 million, or 248.9%, to $264.1 million, compared with $75.7 million in the prior-year period. The increase in sales within the Acuity Intelligent Spaces segment is attributed primarily to the acquisition of QSC, which contributed $172.8 million in sales. Additionally, sales of Atrius and Distech products increased during the current quarter.
Operating profit for Acuity Intelligent Spaces was $27.4 million for the third quarter of fiscal 2025, compared with $12.5 million in the prior-year period, an increase of $14.9 million. This increase was due primarily to contributions from higher net sales, partially offset by additional costs related to the acquisition of QSC, including preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory and preliminary amortization of intangible assets.
First Nine Months of Fiscal 2025 Compared with First Nine Months of Fiscal 2024
The following table sets forth information comparing the components of net income for the nine months ended May 31, 2025 and May 31, 2024 (in millions except per share data):
Nine Months Ended
May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change
Net sales $ 3,136.5 $ 2,808.7 $ 327.8 11.7 %
Cost of products sold(1)
1,649.0 1,515.7 133.3 8.8 %
Gross profit 1,487.5 1,293.0 194.5 15.0 %
Percent of net sales 47.4 % 46.0 % 140 bps
Selling, distribution, and administrative expenses(2)
1,074.5 896.7 177.8 19.8 %
Special charges 29.7 - 29.7 NM
Operating profit 383.3 396.3 (13.0) (3.3) %
Percent of net sales 12.2 % 14.1 % (190) bps
Other expense:
Interest expense (income), net 15.0 (1.0) 16.0 NM
Miscellaneous expense, net 5.8 1.2 4.6 NM
Total other expense 20.8 0.2 20.6 NM
Income before income taxes 362.5 396.1 (33.6) (8.5) %
Percent of net sales 11.6 % 14.1 % (250) bps
Income tax expense 79.9 92.4 (12.5) (13.5) %
Effective tax rate 22.0 % 23.3 %
Net income $ 282.6 $ 303.7 $ (21.1) (6.9) %
Diluted earnings per share $ 8.92 $ 9.67 $ (0.75) (7.8) %
NM - not meaningful
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(1) Fiscal 2025 includes $29.6 million in preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory related to the acquisition of QSC.
(2)Fiscal 2025 includes $21.2 million in acquisition-related costs and $19.4 million in preliminary amortization of intangible assets related to the acquisition of QSC.
Net Sales
Net sales for the nine months ended May 31, 2025 increased $327.8 million, or 11.7%, to $3.14 billion compared with $2.81 billion in the prior-year due to increases in sales in both our Acuity Intelligent Spaces and Acuity Brands Lighting segments. The increase in our Acuity Intelligent Spaces segment was driven by the acquisition of QSC, which contributed $267.9 million in sales, as well higher net sales of our Atrius and Distech products. Additionally, net sales increased in our Acuity Brands Lighting segment due primarily to higher net sales within the independent sales and direct sales networks, partially offset by lower net sales within the corporate accounts and retail channels.
Gross Profit
Gross profit for the nine months ended May 31, 2025 increased $194.5 million, or 15.0%, to $1.49 billion compared with $1.29 billion in the prior-year period. Gross profit margin increased 140 basis points to 47.4% for the nine months ended May 31, 2025 compared with 46.0% in the prior-year period. Our gross profit increased compared with the prior period due primarily to the fall through of higher net sales, including contributions from the QSC acquisition, as well as favorable materials cost. These increases were partially offset by increased production costs, acquisition date fair value adjustments to QSC's inventory, higher costs for Asian-sourced finished goods (including freight, duties, and tariffs), and additional non-Asian tariff costs.
Operating Profit
SD&A expenses for the nine months ended May 31, 2025 were $1.07 billion compared with $896.7 million in the prior-year period, an increase of $177.8 million, or 19.8%. The increase in SD&A expenses was due primarily to higher employee-related costs, including amounts from the QSC acquisition, higher selling costs associated with higher sales, higher amortization, and acquisition-related costs. Acquisition-related costs were recorded within unallocated corporate amounts.
We recorded special charges totaling $29.7 million during the nine months ended May 31, 2025, which consisted primarily of impairments of long-lived assets as well as employee severance costs related to productivity initiatives.
Operating profit for the nine months ended May 31, 2025 was $383.3 million (12.2% of net sales) compared with $396.3 million (14.1% of net sales) for the prior-year period, a decrease of $13.0 million, or 3.3%. The decrease in operating profit was due to the recognition of special charges in the current period and higher SD&A expenses, partially offset by higher gross profit.
Interest Expense (Income), net
We reported net interest expense of $15.0 million and net interest income of $1.0 million for the nine months ended May 31, 2025 and May 31, 2024, respectively. The increase in net interest expense was due primarily to interest incurred on our outstanding Term Loan Facility and lower interest-bearing cash and cash equivalent balances as a result of our purchase of QSC.
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.
We reported net miscellaneous expense of $5.8 million for the nine months ended May 31, 2025 and $1.2 million for the nine months ended May 31, 2024. This year-over-year change is due primarily to a non-cash loss in the first quarter of fiscal 2025 on an investment in a privately-held entity over which we do not exercise significant influence or control.
Income Taxes and Net Income
Our effective income tax rate was 22.0% and 23.3% for the nine months ended May 31, 2025 and May 31, 2024, respectively. This decline was due primarily to an increase in favorable discrete items recognized during the period. We recognized excess tax benefits of $4.8 million and $1.8 million related to share-based payment awards during the nine months ended May 31, 2025 and May 31, 2024, respectively.
Net income for the first nine months of fiscal 2025 decreased $21.1 million, or 6.9%, to $282.6 million from $303.7 million reported for the prior-year period. This decrease was due primarily to the recognition of nonrecurring special charges, higher SD&A expenses, and higher net interest expense, partially offset by
higher gross profit and lower income tax expense. Diluted earnings per share for the nine months ended May 31, 2025 decreased $0.75 to $8.92 compared with diluted earnings per share of $9.67 for the prior-year period. This decrease reflects lower net income as well as higher outstanding diluted shares.
Segment Results
The following table sets forth information comparing the operating results of our segments, Acuity Brands Lighting and Acuity Intelligent Spaces, for the nine months ended May 31, 2025 and May 31, 2024 (in millions):
Nine Months Ended
May 31, 2025 May 31, 2024 Increase (Decrease) Percent Change
Acuity Brands Lighting:
Net sales $ 2,649.8 $ 2,618.4 $ 31.4 1.2 %
Operating profit 407.6 421.3 (13.7) (3.3) %
Operating profit margin 15.4 % 16.1 % (70) bps
Acuity Intelligent Spaces:
Net sales $ 509.1 $ 208.0 $ 301.1 144.8 %
Operating profit 48.1 26.9 21.2 78.8 %
Operating profit margin 9.4 % 12.9 % (350) bps
Acuity Brands Lighting net sales for the nine months ended May 31, 2025 increased 1.2% compared with the prior-year period due primarily to higher net sales in our independent and direct sales networks, partially offset by a decline in corporate accounts due primarily to the timing of renovation activities for a large retail customer and a decline in the retail sales channel.
Operating profit for Acuity Brands Lighting was $407.6 million (15.4% of ABL net sales) for the nine months ended May 31, 2025 compared to $421.3 million (16.1% of ABL net sales) in the prior-year period, a decrease of $13.7 million. The decrease in operating profit was due primarily to the recognition of special charges. Additionally, the fall through of higher net sales and favorable materials cost was partially offset by higher production costs, higher costs for Asian-sourced finished goods (including freight, duties, and tariffs), and additional non-Asian tariff costs.
Acuity Intelligent Spaces net sales for the nine months ended May 31, 2025 increased 144.8% compared with the prior-year period. The increase in sales is attributed primarily to the acquisition of QSC, which contributed $267.9 million in sales, as well as higher net sales of Atrius and Distech products.
Acuity Intelligent Spaces operating profit was $48.1 million for the nine months ended May 31, 2025 compared with $26.9 million in the prior-year period, an increase of $21.2 million. This increase was due primarily to contributions from higher net sales, partially offset by additional costs related to the acquisition of QSC, including preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory and preliminary amortization of intangible assets.
Critical Accounting Estimates
Management's Discussion and Analysis of Financial Condition and Results of Operationsaddresses the financial condition and results of operations as reflected in our Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). As discussed in the Description of Business and Basis of Presentationfootnote of the Notes to Consolidated Financial Statements, the preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expense during the reporting period. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition; inventory valuation; goodwill and indefinite-lived intangible assets; 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. Actual results could differ from those estimates. We discuss the development of critical accounting estimates with the Audit Committee of the Board of Directors on a recurring basis.
There have been no material changes in our critical accounting estimates during the current period. For a detailed discussion of other significant accounting policies that may involve a higher degree of judgment, refer to our Form 10-K.
Cautionary Statement Regarding Forward-Looking Statements and Information
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"). 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. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Act. Forward-looking statements are not guarantees of future performance. 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. 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. 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. Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this quarterly report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events, or otherwise.
Acuity Inc. published this content on June 26, 2025, and is solely responsible for the information contained herein. Distributed via SEC EDGAR on June 26, 2025 at 11:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]