Acuity Brands, Inc. (NYSE:AYI) Q1 2020 Earnings Conference Call - Final Transcript
Jan 09, 2020 • 10:00 am ET
Good morning, and welcome to Acuity Brands Fiscal 2020 First Quarter Financial Conference Call. [Operator Instructions].
Now I would like to introduce, Mr. Pete Shannin, Vice President, Investor Relations and Corporate Development. Sir, you may begin.
Good morning. With me today to discuss our fiscal 2020 first quarter results are Vern Nagel, our Chairman and Chief Executive Officer; and Karen Holcom, our Senior Vice President and Chief Financial Officer. We are webcasting today's conference call at acuitybrands.com.
During this call, we will also discuss certain non-GAAP financial measures. Reconciliations to comparable GAAP financial measures can be found in our first quarter press release. I would like to remind everyone that during the call, we may make projections or forward-looking statements regarding future events or future financial performance of the Company. Such statements involve risk and uncertainties such that actual results may differ materially. Further, forward-looking statements speak only as to the date that they are made, and we undertake no obligation to update publicly any of these statements in light of new information and future events.
Please refer to our most recent 10-K and 10-Q SEC filings and today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections on forward-looking statements.
Now let me turn this call over to Vern Nagel.
Vernon J. Nagel
Thank you, Pete. Good morning, everyone. We have a great deal to discuss this morning, including our CEO succession plan, which -- I will address later in the call. But first, Karen and I, would like to make a few comments regarding the quarter, and then after we will answer your questions.
As you will recall from our last earnings call, we expected our net sales to be down this quarter compared with the year-ago period, primarily due to the significant pull forward of orders last year, as customers placed orders in advance of two announced price increases, and to a lesser degree, the impact of our efforts to improve the margin profile of our product portfolio.
While the precise impact of this pull forward in the year-ago period was impossible to determine, we felt it was probable our net sales would decline this quarter by mid to upper single-digits from last year. This decline played out pretty much as we expected. However, we believe the decline in our net sales this quarter was also exacerbated by additional weakness in the overall demand, primarily due to continued concerns over global trade and the economic issues.
Nonetheless, our results for the first quarter were solid despite these issues as witnessed by our enhanced gross profit margin profile and strong cash flow from operations.
In addition, we took several actions in the quarter to better align the resources of our Company to current demand and to further invest in our key strategies to drive profitable growth in the future. Some of these actions resulted in a special charge this quarter, which we will further discuss later in the call.