Acuity Brands Inc. Reports Operating Results (10-Q)
Acuity Brands Inc. has a market cap of $1.78 billion; its shares were traded at around $40.97 with a P/E ratio of 19 and P/S ratio of 1. The dividend yield of Acuity Brands Inc. stocks is 1.3%. Acuity Brands Inc. had an annual average earning growth of 10.3% over the past 10 years.AYI is in the portfolios of John Keeley of Keeley Fund Management, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, Kenneth Fisher of Fisher Asset Management, LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations: outstanding common stock as authorized by the Board of Directors. Since October 2005, the Companys Board of Directors has authorized the repurchase of 10 million shares of the Companys outstanding common stock, of which approximately 9.5 million shares had been repurchased through August 2008. The Company currently expects to invest during fiscal 2010 approximately $25.0 primarily for new plant, equipment, tooling, and new and enhanced information technology capabilities, of which $15.9 was invested in the first nine months of fiscal 2010. In addition, the Company expects to contribute approximately $3.1 and $1.1 to its domestic and international defined benefit plans, respectively, during fiscal 2010.
Acuity Brands uses available cash and cash flow from operations, as well as proceeds from the exercise of stock options, to fund operations and capital expenditures, repurchase stock, fund acquisitions, and pay dividends. The Companys available cash position at May 31, 2010 was $194.5, an increase of $175.8 from August 31, 2009. In addition to $97.0 of cash generated from operating activities during the first nine months of fiscal 2010, net proceeds from refinancing activities completed in the second quarter of fiscal 2010, as more fully described below under the Capitalization section, contributed $108.6 to the increase in the year-to-date cash position, which was partially offset by capital expenditures and dividends to stockholders.
As noted above, the Company retired $175.7, or 87.9%, of the 2010 Notes through the execution of a cash tender offer for a purchase price of $1,050.91 per $1,000.00 (whole dollars) in December 2009. The loss on the transaction, including the premium paid, expenses, and the write-off of deferred issuance costs associated with the notes, was approximately $9.6. In addition, the Company later redeemed during the second quarter of fiscal 2010 the remaining $24.3 of the 2010 Notes outstanding for consideration of $25.1 plus accrued interest. The loss, including the premium paid and expenses, on the redemption was approximately $0.9.
During the first nine months of fiscal 2010, the Companys consolidated stockholders equity increased $44.7 to $716.9 at May 31, 2010 from $672.2 at August 31, 2009. The increase was due primarily to net income earned in the period, as well as amortization of stock-based compensation, and stock issuances resulting primarily from the exercise of stock options, partially offset by the payment of dividends and foreign currency translation adjustments. The Companys debt to total capitalization ratio (calculated by dividing total debt by the sum of total debt and total stockholders equity) was 33.0% and 25.6% at May 31, 2010 and August 31, 2009, respectively. The second quarter financing activities, which include the issuance of the $350.0 Notes and the early retirement of the $200.0 of 2010 Notes, increased the debt to total capitalization ratio. The ratio of debt, net of cash, to total capitalization, net of cash, was 18.1% at May 31, 2010 and 24.1% at August 31, 2009.
The Company paid cash dividends on common stock of $17.0 ($0.39 per share) during the first nine months of fiscal 2010 compared with $16.0 ($0.39 per share) during the first nine months of fiscal 2009. The Company currently plans to continue to pay quarterly dividends at a rate of $0.13 per share; however, each quarterly dividend must be approved by the Board of Directors, and the actual amount to be paid, if any, is subject to change.
Net sales were $407.6 for the three months ended May 31, 2010 compared with $396.6 reported in the prior-year period, an increase of $11.0, or 2.8%. For the three months ended May 31, 2010, the Company reported income from continuing operations of $21.3 compared with $22.3 for the three months ended May 31, 2009. For the three months ended May 31, 2010, the Company recorded $0.2 in after-tax special charge adjustments related to estimated costs to be incurred to simplify and streamline operations and consolidate certain manufacturing facilities, which had a minimal effect on earnings per share amounts for the period. Diluted earnings per share from continuing operations decreased 7.7% to $0.48 for the third quarter of fiscal 2010 as compared with $0.52 for the third quarter of fiscal 2009.
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