Acuity Brands (AYI) 29 Jun 232023 Q3 Earnings call transcript

Good morning, and welcome to the Acuity Brands' Fiscal 2023 Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, the Company will conduct a question-and-answer session. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Charlotte McLaughlin, Vice President of Investor Relations. ahead. go please Charlotte,

Good third welcome quarter Liz. Brands' the fiscal XXXX earnings morning, you, to and Acuity Thank call.

our our assumptions our As comments a actual these GAAP no this periodic which financial and in website Relations beliefs results available that time. of on to are management materially many note XXXX of unknown today our those anticipated, detailed undertake currently beyond their and management's www.investors.acuitybrands.com. differ our measures known at non-GAAP may Please we from be in is our on These may to obligation third filings. reminder, SEC forward-looking control, statements our at some our those corresponding Company's available and information metrics of with certain risks statements. quarter including Investor subject may are uncertainties, available beliefs which and earnings based update to Reconciliations be and release

Neil Karen will our Financial President an our will Senior our With through opportunity who me an end quarter will Ashe, third us on President at financial fiscal and Chairman, quarter Vice Executive Q&A our our this walk and and call. highlights; Officer, strategy There third update the and Officer, provide who Holcom, is performance. Chief morning for Chief be of this

question follow-up if one to necessary. and participating, those one your limit For remarks please

interest in We are Brands. your webcasting today's Acuity for live. conference you call Thank

turn now will over Neil I call to Ashe. the

to Thank all you morning. this you, of Charlotte, and joining welcome us

operating and we fiscal quarter margin, profit both of year-over-year. third the adjusted XXXX, In sequentially expanded

sales. cash Therm decline flow EPS, acquisition diluted adjusted a we continued We from net repurchase and to shares. we completed despite operations, KEX our the grow strong generated of in to continue We and

product both products the We Brands Increased services. and are and and strategy differentiate and to Lighting Controls Acuity In and both businesses. our is meaningful business, clear. increased use Lighting technology vitality; service improve our making Lighting our Spaces levels, in progress our

we community quarter service. launched consists core configurable of developed products Design control brands of X,XXX needs solutions Aculux, them Design some lighting SensorSwitch. the elevate Design We making specification Select and easy by superior Select. for our meet to specification for Gotham, from families important dependable of choose including This it with and Select Lighting, our lighting service Lithonia that nLight to

categories. remainder of addition Select Through products to specification product ABL vitality dependable our most meet contractors, of community, challenging strategy. to now and and Select is is the XXX made available configurable products the and and are Lighting service, and with at control everyday existing levels products electrical order. important choices important clear and retailers an with X,XXX distributors. that and the Lighting combination lighting of the is continue Contractor distributors service Design organized industry in-stock differentiate into Design specifiers service Control Select three we key lighting ourselves the high lighting improved to standards. is

new We to products during continue introduce quarter. also the

module light family to the plazas optimal installers Each can create illumination individually allowing launched degrees be of inline the controlled, use exterior position for and rotate solutions. onsite can brand in Luminis luminaires arenas. flexibility improved luminaire XXX for Our and to

including of won The Apple, category in span this from distinction the team and awarded design. vitality Eureka and Sonos Dot proud for VR And products several prestigious headsets in of products a to products winners categories was and be recognition drug. from and The best innovators. IBM Luminis We're to is first included of our Other its efforts Tangram-Trace company important groundbreaking best responder of this to Dot Eureka. quarter, from Red product our our this Red our awards customers. Design

both was Atrius. at a our Now, Spaces to spaces This team Group. Distech quarter and our moving Intelligent big for

on Distech. First

strategic expand addressable Our we doing two-ways. which market in is priority to our are

geographic, continues progress, is which first successfully. to The

build in is control what space. we The increasing by second a

the the refrigeration, control addressable By During to the the restaurants of acquisition by in announced we schools. which commercial allows we to market commercial us space. entire quarter, portfolio the entering are controlling effectively verticals Therm like completion refrigeration of able Distech and more expand sell Distech's KEX retail,

of The transcritical for has to This demand digital timing warming COX while safety, efficiency the and provide the industry is customer. reliability, need growing solutions, delivering responds refrigerant global cost significant which as to for to to technologies. the refrigeration led ultra-low require potential precision savings the controls

a minutes Atrius. few I on now spend to want

to Atrius ability Vegas. been the Atrius connects Earlier our edge applications largest in XXXX This that launched spaces. has a conference difference we the build that this applications environment layer foundational in is at month At IBcon a for of develop space. to the layer Atrius data our commercial use facilities is companies. showcased estate Our of to a that the strategy a IBcon build that supports Conference the data a to products we data Las smart to building that with and real cloud and powerful built automate portfolio make DataLab,

creates This building a that captures it historic building are of system and updates then of the scenarios, the a and digital digital environment organizes from DataLab harmonizes it important users different. building in is for current and data is From twin, scenarios. there, accessibility management other model usefulness built twin. Atrius the analyze data because cloud. and top get Applications service to allowing on live every

will and reports team be our facilities each the carbon of spaces. an benchmark tool foundation Atrius resolve. is reduction Atrius allowing been were automation Atrius science-based of live captures, the by and have Energy of energy achieve out usage on within built to rolling Atrius against Atrius facilities their data our this facilitates Atrius collection, and and applications built to emissions Sustainability and categorizes partners that Insights. in that usage specific Building ensure goals on and Energy sustainability Later are built Sustainability teams their Atrius carbon target. Our their and measurement energy the of spaces. year, Atrius built management through

XXXX. Now, looking remainder to the of fiscal

both with macro-environment. Entering we of being expected lead-time quarter, third impacted believe the by played out we that these sales continuation a and as trends. Our be our fourth normalization will there quarter

our integration into each KEX are and and strategic closer shipment alignment order rates not on While In and material improvements we returning we're to seasonality. costs. Therm. going returned we're the ABL, with rates focus productivity sequential of continued In have of other, to the successful Atrius managing growth our normal focus on and yet pricing, Distech ISG, continued to going

and margin, prioritize to continue cash allocating will effectively. We managing generating capital flow strong

to quarter third update you on will our the turn over Karen, call I'll who performance. Now

and call. to you, everyone Thank Neil, morning good on the

despite delivered decline third We in diluted the XXXX, In sales. of earnings per from and share we net operations. margin grew improvement quarter flow and operating profit adjusted adjusted generated cash year-over-year a strong sequential

AYI, X% of ABL which in as was billion, sales of in than result net a total generated net prior business. sales $X the For lower year our we the decline

was As with of the trends result the lead-time volumes, consistent normalization of Neil and wider lower described, this macro-environment. the impact

delivering made focus clear cash is on flow. margin on operating As and our call, last our we

operating the both operating improvement driven profit on of XXX margin. basis flat adjusted improvement of profit points During adjusted gross sales. the the were expanded approximately increase We lower year, quarter, basis an which points by operating in and over XXX sequentially, was prior margin profit profit to XX.X%, an and

diluted our quarter, over earnings the year. X% $X.XX share $X.XX the During per or of adjusted prior increased

by This channel. largely segment to prior driven sales continued compared offset X% ABL Moving retail by independent year network the this the was and sales net the partially our in performance was quarter, million in sales. review. infrastructure sales and the declines in direct OEM with performance $XXX projects were of lower strong network our decrease in

prior were basis point and adjusted year sequentially price improvement we particularly profit inbound operating lower adjusted operating both and and steel improves, XXX delivered input profit sales over a on margin and improvement a XXX freight. material as cost profit basis and of flat point held ABL's operating XX% net the

well continued another Spaces to XX% was to segment million, Distech the million and Sales good million as business growth. $XX profit Spaces was grow. of both for invest we in were operating with operating perform and continued The profit as Atrius an adjusted longer-term $XX increase to $X quarter. continued

performance. our activities generated We over nine from improvements same period the fiscal to XXXX, of for by XXXX, in months $XXX million cash-flow operating the an of in $XXX largely million cash flow driven first moving Now, of capital. working increase

of have inventory the days accounts We end both improved year. the to compared of and receivable

million $XXX down continued XXXX. As repurchase levels $XX and on by XX the calls, February prior Year-to-date, X.X over shares. capital we've from and brought from expenditures inventory million of the invested inventory days inventory second peak in XXXX, approximately sequentially $XX million quarter also down bring we've million to allocated by in fiscal we discussed we've to

expanded for remain as the allocation in our platform businesses R&D growth our the CapEx. purchase KEX invested capital was with current Our XXXX We've the We've Therm business. share, value an and per of billion through organic through our Lighting flow. repurchases evidenced in our in by shareholder of funded at Optronics we've of created cash priorities Spaces our business approximately approximately acquisitions a We've same. by quarter $X.X of and permanent $XXX fourth share maintained average dividends which since fiscal price and

now our billion. year-over-year. performance our expectations and being results the $X and cash year-to-date flow delivered quarter, strong Based net billion we despite quarter, margin be to expect full summarize sales between year down we for To and sales fourth for the on $X.X

earnings not changed. full-year expectations share per diluted adjusted Our have for

flow. meeting customers Our focus margin continues and cash to be needs our and of the on delivering

over Thank you you take for to your joining now to us will pass operator I today. questions.

Tim first [Operator question Our Instructions] with Wojs comes Baird. from

rates project the to normalizing. how out appreciate and there are direct then to kind the Maybe curious market. kind and around or of of stock order rates shipment of if that channel I flow and it's was kind was the any what side, start out segmentation, some way of seeing accounts? and of color more the just those your I of break business on on kind maybe by kind whether or you're

morning, Tim. Good Yes.

back me kind let start from So, of front. to

on - corporate are order There's the probably at those. be our So the of down that's first big on corporate reasons going of on and volatile side, the on side where continued second, are and accounts account obviously destocking the driver on timing The rates then renovations those there's market. those the customers lots and going are to and low. OEM those down side, some OEM for relatively

you project stable C&I to that's business, the sales point. our direct our network kind where relatively Then, and get order is this rate as of at

So, consistent. and direct is our sales also

a are here level where consistent. they're they relatively finding So

continued And then finally, strong we've retail. performance in had

a and looking quarter right you this what seen in I back it can of So, from together, continuation when out think boil of see it's all us. trends to we've front the we

in your not be really yet. remarks revenue mentioned I you Okay. you seasonality or expectation that And is, prepared that is seasonality? I to kind normal of to guess there like mean, thought quite might of back normal you're kind any back when

Yes. to that you this. ready and to sort at that Tim, We're I windshield the not of same metrics as through yet kind looking mean, we're way call our we understand. are try

haven't period like proxy one, we don't looks perfect because that is. for a where a this gone So, have that through we

quarter take So a one we're, it at this time. point going to at

sense. Okay, a one just this of is last And question. maybe makes picture bigger then, and more a

this it And Just MTO talk before? products. way, a a mean, just Select, Design and with cats that about benefit on of does under and which if sales more have maybe margins to Contractor with sales you easier a of is of you because how - you, the what's impact the more or dogs, I could eliminates that order lot guess kind like is different the you're segmentation some aligning just bucketing of I that of topline it versus products, Select for

Yes.

levels. the - is think powerful of of a number the clarity I the So delineation on delineation

for of we've Select. First, had success Contractor a lot

very wants that So compete an important building stocking line product distribution be through very to and us SKU have channel. that's the the XXX of - electrical electrical built retail product and allows effectively retail vitality, and enter product high whoever and ability for to have levels provides and and market the be resale to a industry, with service high distribution it partner us very to

So that's been a us. real success for

configurable among product good basically products community. about Design this what them choices - then Select to do choose specification And the allows is the make for families. is

this So process. that in the next is step

will as this that them of revenue, more is line aren't a expectations well for create our our new it efficiency are So as that but - lot creates us. a expectations for

And then order. isolate finally, to we can made

we order. such, made So accordingly. -- And can we to it service to treat when it order, we is can we price isolate then accordingly, can it can and made as which we

ultimately the those that's predictable, is we're So and more the of and to repeatable control import trying business buckets, lighting scalable. light make that creating different

Okay.

Okay. luck good. Good Appreciate guys. Thanks Very next the on commentary. year.

Jim. Thanks

from with is Our Joe next Fargo. Wells comes O'Dea open. question line Joe, your now

Hi, questions. start to my morning. taking margin quarter. during for on front. good the strong gross Really Wanted Thanks the margins

if of looks you margin back sort It like bit on of the around year, incoming dynamic. if years, pressure you're on might there? sustainability And just the gross you we seeing target should think XX% be that? we of sort were could how you the And do a I a any about XX%. seeing be unpack price maybe of side, a couple about talking go north price so of you this then of what think cost little

it I'll on. Neil question Joe, this over pass thanks for to I'll start and add then to the morning.

talked the ABL, improvements material costs. call, we at managing strategic really pricing, on productivity So we're as continued on and about focused

these So continue thing discipline I see that we've is in be strong at in the add ISG, and our having so you margin to And that's as us year, areas third that continued that's all would growth focus. and gross well. demonstrated resulting the in going is quarter, to we're helping other which this the

Yes. build would little that I Karen. bit, on And a only

I I when an think we improvement have well that, we it XX%. targeting made the say from think to you were Joe, summarized where were we

things up then. Karen there. we've would out since clearly, I on improved So two just business the pointed And pick that

where participate Select on is effective. portfolio, wants can which projects Contractor anyone on that enter very those can through pricing. that's First, market in the we to we the pricing, with so strategic compete channels, around based to which we choose want And

significantly we're we're more how So strategic pricing. about

combination to of the I'd And work continued cost growth doing and Second that done is combination material growth and level and finally, that our savings. a improvements and we're the efforts our load. nice ISG a is supply the product have teams of we're in job chain that vitality accretive of on really working margin hard, accretive. then productivity our accretive, emphasize returns That's

then a and And year to you both related just question next. this outlook, Thank

maintaining outlook, like that year, this $X.XX earnings think I it's the sounds but range.

think outlook? in are what that the you'd you you Neil, likely of a about that And as watch few to 'XX over talk few months, the months most of thinking so in anything important any would next band? for of be a within guide terms narrowing what's most a And about of to then just items that sort you how sort inform

Yes.

the in for at year. meet you for our that weren't still the I'll and of through we in So said let important EPS - the We as going to we've But felt of lower guidance first beginning to then is we our are specifics sales me identify We update net to guidance we end contextualize annual and not plan to the that question. your provide guidance it consistently, answer gave that the the year. the range year. adjusted dig of

be of proud we're transparent, to that. And

been to deliver our that delivering cetera. increase the has done this a lower this dollar on profit we're results to maintain really margins, So to margin hard sales, have teams year et -- work

we So really that. good about feel

As right forward said, 'XX, to at a we're we take this look I for one now. to time quarter going as

'XX. too we're on far ourselves So of get predicting going to ahead not

rest that going and of similar like year in of change. ISG now, planning for growth trends the the ability the that forward. feels are indications could confident general having going grow And to that to we're then ABL it's we're to be Our initiatives some continue this we're business our calendar that

we've Spaces in we're margin, not and Group. we're sales continue Whether in We're free priority, as we've to it, is Intelligent the deliver of or continue to grow demonstrated environment, have to ton layer So we this to a flow, which and through said growth, doing. trying that we're going delivered we've to our tear trying cash margin. to

you. Thank

with Merkel Ryan from Blair. comes question next Our William

everyone. Hi, Good the again. on orders morning, pick to I up thanks. wanted

Can little unpack digits, just What bit like decelerating clear, tighter are sort little tracking you mentioned so Is times some of it distributor rate are a sounds Just destocking? are those that factors credit? the we're and it and down the macro. it the a Is lead more? orders here? impacting bit order you of mid-single

any take Karen, at Yes. in explanation. that I a the I will shot fill gaps and, leave that in

So first, just to reiterate the bigger picture here.

to lot times a looking basically back of had last a of So pulled year, which combination a we price increase orders. lead environment, forward longer and

swelled quarter, a to we've be and normal. working been through this back this through had through we starting And So to year. that it's backlog about backlog

basically that means we any in will which what's period, ship So ordered.

of long normal ship So in and quarter, what's ordered we will. over quarter bit arc a before. little the from quarter a obviously, we generally that But the time, will in

we're more to of kind there. levels So to get normalized starting

side, On the OEM, which in the absent numbers of first consistent, are those relatively and the I positive the the volatility question. discussed corporate accounts

So we on good that's where are that feel kind we front. of about -

forward the as taking to I - don't at and why pretend next look looking crystal quarter will impacted quarters have the So of data macroeconomic this then as same is the don't you kind time we're that, we be you by And a a off saying this ball. think are, one and of we're trends. normal at we're one,

or get. holding data All our or all cash free to environment. deliver continue flow there So we and continue our indications to either in we're to and share and we'll business is taking focus piece margin that try of layer from that are of get this sources going - every we're in can

was tighter that guys credit seeing projects. any it. when releases. question little the that was and was gets a And another short I helpful. bit to then as And that? better? had maybe project you of switchgear visibility hearing releases of That's delaying I Got Are on

Yes.

So then I'll take and switchgear projects.

switchgear. we compressed lead on have times, - not First understand the for it, switchgears. have as not yet

they kind range, XX-week So just in to so in context, not of put days, that the were range. weeks

many So they bottleneck the have the of already on funded been projects.

happen. normal times Those projects So to their will on order expectation a lighting the more projects that for are all those they that those now our will lead - normal, switchgear continue that's thing. will And our basically schedule. is

should that over out a play So while.

new our environment. terms that's from projects, the really macro - In perspective, of that's

I So think rates, their projects. higher relook is with to going at everyone

It's - in we projects those changed, sales of that And of is of normal. it clear is doesn't are market margins, being delivering it our but layering the on they're queue, make so anecdotally, are why modified, quarter-by-quarter not of number fair kind But what we have abnormal. flow. which have a it taking projects is again network independent exactly which going that we're focused things, to sorts cash in reevaluated, and we're size the kind be, frankly

Got helpful. Very it. you. Thank

next line Chris Our the comes Snyder from question UBS. with of

Hello.

Chris. Hi

a had I that. little phone trouble. about Sorry

just margins? would quarters, why destocking So volume last expansion, Acuity. focus the the very Thank there increased is on that on right volume couple headwinds. interested But in margin the Neil, we've points there's you. in how one basis about but of to company's And be significant you focus is declines. for also I and response gross the I XXX a And think trade-off know seen about hearing impact steep margins negative pretty

Yes.

how and we create clear grow So balance with net value. our we're sales, sheet the into as address on I'll don't perspective, cash grow And - company We we profits we our very the happily fast. turn that. from

predictable, volume, to and we control repeatable our look lighting, the around scalable. with as cetera, strategically price, objective lighting be business So is out et

delivering on we're that. And

that volume this you're the of more call, of had Karen current right, over kind the and year. price indicated environment, in course than other on we has have So this

we've about of So all is factors before. results that's kind talked - are of a of and And that seeing. we delivering the combination the that

or We process. all in taking from the maintaining indications sources also external our we're have that either share

to the in this to ability company said, - scalable company as to, So repeatable I we're and this the business. steer trying to be or predictable, more guide

grow we So the create sales, won't as fast. will That we we'll grow turn the do into net sheet right how profits these value. cash choices. balance and are We'll think is we

that was And market And things or challenge return environments. when environment. do that normalized we're fell it a up. marketing we're when of we some demonstrating pandemic try of - succeeding to can now I in different when they the shot succeeded market and through as We believe the off. number We we succeeded

appreciate margin taking up ABL the on the And follow down I on which and share. impressive construction I I markets is that see the I X%. you confidence company and gives share? that. think share investors to gains, comment taking very guess XX% what Because is up gross obviously wanted side around raising non-res considering

the you. from obviously, -- structural we think there. you share should big impact shifts, or a versus the in destock within we do lag think potential How maybe are how - nature? how that So which the do about more Thank guys about

Yes, sure.

this correlation -- lot just a done, but long And like-for-like is summarize a like level of lighting a a the industry of are That a we've same so soliloquy, kind basket me data this the of that are quarter soliloquy have PhD is requires a to. X.X. correlations that of let -- and macro point the And gotten we not with to of there that external benefit kind a the kind work we've it, can of could correlation. be a squares kind specific a between of number

great in not we're So predictability good, the on range the that. of

takes It of those. multiples

we that ahead both of performing are is good macroeconomic has general the generally, as research the second for our good. the and shown cycle, that not The for

So that through working now. we're

So a would the - there you is described it to answer is surprise question the those is not that direct to us way diverge it. numbers your

difference the construction nominal is there highlight and real would the data. between in I that thing Second

question, to consistent performance with also, last that our well. the as is So

that surprised a isn't. predict of - by data there's market between results, would tied the those you to were algebraic relationship So kind there but more that there I described. external we're a and not numbers our It's wish basket,

you. Thank Really helpful. Neil. color, that all Appreciate

Sachs. Our Brian from of line Goldman Lee comes question with next the

for Hi, questions. taking the everyone. morning. Thanks Good

Brian. Hi

kind beat maybe want issue, I a sort - to moment? elaborate and to quantification, I the missed just they but time horse, this, reference terms of you trajectory the might are, give Just have at dead quantitative where be, hate And here? destocking where but lead maybe in could a it of some of bit a with would them issue us the from be that helpful. you of frame purely is of the sort a more

Yes. covered on some last quarter Brian, we this detail in the call.

summarize of which I'll So they're the in end of were at now, range. the days that fiscal and is last kind now in it year, range our and times lead XXs XXs the

we've times days. XX basically, So lead about reduced by

year. resulted So we've of of that year in been of backlog a fiscal end this the buildup last working kind through that towards

And bit pulled been correspondingly, order have as been an obviously, forward. a -- and projects have drought little of needs

why big a period. balance of over of So view basically basically picture we kind starting ordered and come why what's we're and we've identified ship XX-day to that's also and that the that - back into that

that I we only to is several Yes, resulted would increases some Brian, if described in that and as that recall, that in forward add pull price year, thing had lead you addition the the Neil last time. of well,

tailwind. and guys talking you gone enough. stuff generally Fair You for are I you Is a product of to, clarification. low for price decent as And year, then I second Okay. price up, kind new And have being has vitality, price. Select Karen, appreciate around know meaningful that all. plus Historically, well. from just of relation a away I Design had the more thanks of question where you was amount alluded some to been, in I it as terms single-digit Yes. the of minus of guess But type you've specifics I in number then think, on that that, or bringing introduced normal? had, a price. kind back to a we toward and maybe last

So you. you impact introducing Thank to as on maybe and well? high-level products as lot can the of mix these any sense a you're as price new just provide

to go our just talked Yes. Brian, posture pricing I about back on strategic earlier. would we that

about We years. that to have this over right products place right which discipline combination really a Contractor at past able lighting focused XXX we're of it the right talked our product, of the couple on really portfolio, Select the with the price. is with compete everyday We

the So the compete that we us of to weren't ability while gives to that market a able compete part in a ago certain in.

approach on able look is if the strategic side we pick our And more our want we're business, the projects project about and there pricing that then of the overall. be to you that disciplined just

really today. that that's So pricing what's we're driving seeing the

All rest offline. Thank right. I'll Fair take enough. the you.

Our Sprague Jeffrey question line of with comes Research. the Instructions] [Operator from next Vertical

Good you. Thank everyone. morning,

Jeff. Hi

general. morning. ground want back good in kind Hi, what renovation A the of in into you're further lot a little just covered. bit I to markets of go seeing

this is kind function obviously the kind You that? But think corporate Or of mostly of be on kind rural kind of a squeezing any other interesting. marginal markets color within address seeing level. account You out of would anything projects? you could rates of add there there

We would what had Sure, by are vertical you Jeff. in the Industrial. At ABL, expect see. really decreases sales to declines

care that were seeing taking a declines in place. impact we're of recall, year, wider you logistics lot and commercial we health projects due also, then And the and the to warehouse If macro of environment. last had office

nothing really, kind -- So nothing of the on vertical surprising front.

And Jeff, for change good. renovation say us that on front, I is would the

if what about the et happens So commercial - space in we've the cetera. a of questions lending or of valuations, kind environment, the broader the office around gotten lot commercial

sold about Journal in then recently. $XXX that on building had everybody I million saw I XXXX Wall Street was million - $XX think for would so Market article a Street and just the San Francisco And the use valuation in

reality that with reset they need that to while different what the and the of capital will move experience will it's they customize So new trade, it tenants unpleasant at building be rates, space will to for side the in now is want. that

and need lighting lighting controls. going so And they're to

kind that's for anecdotally future. of So renovation foreseeable us so how will next that's the - play out over

visibility kind and Yes. on from that, Could on that No could or right, though, think. three address on as two price the great be also a process work more side. home bit a little everything of guess just year just you would And I I resettles.

of were would couple see lagging in of starting you've where You base. pretty do explicit you capital leverage gross seed in of right? growth make the overtly pressure that And flow? And share managing But sense algorithm to times, name and see anywhere? margin, the in or sort to an it, said margins emerging algorithm, in the it sheet about to competitive emerge of a do kind cash you environment brewing that kind of just fact, the protecting balance

Jeff, fundamentally we Contractor part a vitality. the about posture changed Yes, product on Select that the have reason our we of is lot talk

have able and now it a a to a margin consistent allows us we on product comers, So basis deliver price marketplace. compete that's relatively at is the with in competitive all portfolio a to that

the product to very is the position. think value but the -- a price is other Select that's strategy in a competitive what us necessarily to So have lowest to Costco competitive. Contractor really industry. as I Kirkland Select about to priced That's distribution is be electrical highest out interesting the like and there, - is be Contractor it around doesn't In words, it allowed very

price on on with and had this tested the we've really And - results price. we good volume drive we've and so And whether that.

which we it's that. will negatively don't a our going on I us impact And which bit - value to would one there, think go if algorithm. to which we manage can we question about chase little So unnecessarily way your think share ultimate creation long to a choose, us allows

productivity of are with from we we've We're the the and improvements position in very competitive. So marketplace perspective demonstrated. a competitive because our comfortable vitality

lighting the would we make period as scalable a repeatable lighting and and really can - value as of business time, we we of for a so for control predictable longer to and lot And want to now want deliver which us.

And portfolio. this I then Intelligent question and the want the to don't of without Group Spaces also importance answer highlighting our

continue to finding business Atrius, saw to put continue that we make to So find work quarter, - better. can as grow you capital Distech, continue this we ways to where are to grow we we we

with scalable ISG. lighting predictable, business company creation we're the then more obvious going at different business is algorithm, an value So The and whole technology the looks and growing hopefully repeatable forward.

it. Thanks that. answer. Very Appreciate for Great. complete

Thanks Jeff.

Thank in I'd like call you. for Ashe turn back Neil no I'm to time. questions showing any the remarks. And the at closing queue this to further

joining Thank underlying capital and had appreciate you effectively, and you, and engagement questions. solid delivered all margin improve Liz. the our allocated decline today. to flow quarter. us despite businesses. continue to I'd We We We the of a like sales. for thank cash We we in a

we So again interest Acuity for next look to you Brands, quarter. your in forward and seeing thank you

for today's concludes Thank participating. This call. conference you

You disconnect. may now