Acuity Brands, Inc. (NYSE:AYI) Q3 2019 Earnings Conference Call Transcript

Jul 02, 2019 • 10:00 am ET


Acuity Brands, Inc. (NYSE:AYI) Q3 2019 Earnings Conference Call Transcript


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Vernon J. Nagel

not repeat this year. The potential of this top line decline notwithstanding, we believe our adjusted operating profit margins will exceed those reported in the year ago period as well as continue to improve on a sequential basis. I'd like to reemphasize those points because it will be particularly important as one thinks about their models going forward and I believe it's a favorable outcome.

Additionally, as I noted last quarter, we initiated a review this year of a portion of our product portfolio and services offered primarily through the retail channel with the objective of eliminating those items and activities that do not meet our financial objectives. These efforts have and will continue to impact our top line growth rate, however, we expect that the actions taken in this effort will be accretive to our margins as a percentage of net sales and return on invested capital.

As we have noted before, our gross profit margin is influenced by several factors, including sales volume, innovation, components and commodity cost, market pricing dynamics and changes in product and sales channel mix. Additionally, we are always striving to improve our profitability through our continuous improvement efforts. Lastly, the execution of our integrated tiered solutions strategy, including the expansion of our Tier 3 and 4 holistic lighting, building management and our Atrius IoT platform and software solutions and our opportunities to participate in interconnected world is an integral part of our overall long-term profitable growth strategy to meaningfully expand our addressable market by adding broad-based holistic solutions that will allow our customers to transform their connected, intelligent buildings and campuses from cost centers to strategic assets.

As I've said before, we believe the lighting and lighting-related industry as well as the building management systems market have the potential to experience solid growth over the next decade because of continued opportunities for new construction and as importantly, the conversion of the installed base, which is enormous in size to more efficient and effective solutions. As the market leader in lighting solutions and a technology leader in building automation, along with our Atrius platform, we believe we are well positioned to fully participate and lead these exciting and growing industries.

Thank you, and with that, we will now entertain any questions that you have.