Acuity Brands, Inc. (ACY, Financial), the leading U.S. provider of lighting solutions, continued to post sensational results, with sales increasing 26% (up 14% on an organic basis) and profits increasing 53%. Acuity continues to benefit from the secular demand for more energy efficient lighting and the rapid adoption of LED lighting, which now accounts for 55% of its sales. Acuity is gaining share and making strategic acquisitions (Juno, Distec), which have increased the breadth of their product offerings, opened up new avenues of growth and been financially accretive. The company’s efforts to sell innovative, high margin integrated solutions, their “Tier 3 and Tier 4” offerings, are picking up steam, growing 40% this last quarter and now comprise 10% of revenues.
From Baron Funds' Small Cap Fund second quarter 2016 shareholder letter.
