Acuity Brands (AYI) 4 Oct 232023 Q4 Earnings call transcript

Good morning, and welcome to the Acuity Brands Fiscal 2023 Fourth Quarter and Full Year Earnings Call. After the speaker's 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. Charlotte, please go ahead.

Liz. you, Thank welcome Quarter and Acuity Fiscal Brands Good Full to Year Fourth and Earnings XXXX morning, the Call.

SEC and in management's As may control, a forward-looking and our our be known this subject which time. unknown today comments our available These those filings. assumptions management including beliefs beliefs at reminder, some of statements risks our of based and be our many information periodic beyond to currently detailed to are may and on uncertainties,

Please to that results certain available at on differ statements. earnings note our our company's our may Relations in fourth www.investors.acuitybrands.com. Investor we our of available with XXXX materially actual year and release, anticipated, quarter corresponding which undertake from are full website GAAP non-GAAP Reconciliations update is those financial metrics no measures obligation these and

our Ashe, me and our update Chairman, our President is and and fiscal and an and us performance an our Officer, our strategy year morning Financial performance through President full give Chief of With Executive provide who quarter walk on financial our who year well for Karen overview will as fourth Holcom, full this will Neil Officer, outlook year as Chief provide also XXXX. an full Vice highlights; Senior

an the There end of opportunity at be for Q&A will this call.

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

Acuity Brands. now webcasting are Ashe. call will you for conference I today's We in the interest live. to call your turn Neil over Thank

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

quarter Our performance fiscal execution. excellent fourth demonstrated

despite adjusted lighting operating generation diluted increased sales in higher the profit and margin a on cash in and adjusted focus to decline Our earnings per share business. margin led

strong successful concluded quarter year. a This financial delivered performance. We

our teams meaningful capital improve and to spaces driving both XXXX, Throughout effectively. our continue progress our made lighting forward. and allocated business fiscal we We businesses,

our our vitality, technology products improve improve and Controls to service Lighting both Acuity strategy Lighting differentiate to and drive services business, our to In use levels, Brands productivity. is and and our increase product

Design and Select. in go levels, By Made XXXX, product In lighting specifiers, and Select realigned vitality and service have allows ways Design our to product serve we now we Select, us Select We the introduction to high electrical market: Design improved Contractor to Order. distributors X of a combining defined portfolio better contractors. through which

allowed The improve in portfolio, price improvements realignment a our of while our strategically with environment, product us and continue chain manage has efforts, our ongoing costs. supply our vitality dynamic to ongoing together to the manage processes in productivity our

daylighting evaluation bit resulting quarter, of a evaluate in in portfolio. continuously resulted decision lighting architectural divestiture the numbers also of noise This of our our Winona actions. the the that from to There's year, We solutions. Sunoptics business exit custom series this a and

transformation our The efforts. result ongoing first the of is

resulting where work, organizational will our redefined changes is it have We that to lead done, in how and more efficiencies.

are impairment for primarily acquisitions. of related trade The names prior second charges to

products XXXX The collectibility to from between third for owed obligation supplier warranty and components a charge sold XXXX. of in we use and resulted the manufactured us

our teams a brand, roadway, that year, refreshed introduced lighting our our where to cover American for commercial have portfolio these product includes have AutoConnect, families. highlight and and like lighting applications. for which product This we value-driven infrastructure in connected new more XX% will of launched approximately Karen I'd detail. outdoor industrial is solution Electric each of many durable, luminaires

lighting energy for which than carbon and a the increase citywide longer-lasting lights, remotely is that of is Philadelphia us City network a coincide reduce emissions more this was into product anticipated Philadelphia rollout more by the targeted lighting success. selected Lighting has outdoor year, Streetlight municipal XX% announced positions more major continued the investments of XXX,XXX The of connect The approximately In our with controlled of and for X%. usage will street to it Project. by than lights reduce well LED Improvement project as expected American efficient, infrastructure replace expected supplier and August street to to Electric

technique for customers. to the Progress innovation backup solutions science including emergency warm from dim most products cylinders our Report, flame year's for recognized were value which team from fourth Our Aculux, and Illuminating our advancements the lighting bring the X showcases Gotham, in battery the significant technology XXXX and to In the our art selected lighting, Society our and for that of Engineering lighting continued be of quarter, Hydrel. our

the as of Best a the Marketing winner Our Electrical of XXXX announced Distributor marketing for the was Award Best by team also Magazine.

we Now moving smarter, business strategy to great connecting spaces cloud. by is The safer greener and to our another to Spaces make edge had year. where for the spaces, Intelligent the

has the the best in control Distech devices and the market, will be edge on applications. cloud Atrius best

is expand our ways. for in priority to Distech strategic Our addressable market X

in The is increasing a is built and second space. control first geographic, what we the

by our progressing to forward a U.K. integration a out successful rounded XXXX of we KEX market them we strategy well, acquisition The through commercial added and portfolio. Therm establishing awarded the controls a Design continue XXXX, refrigeration in KEX this to In which and Dealer drive year of Award. the with being presence Therm, is

is that to and between in goals. our Data a ensure devices launched point the achieve Lab specific we year, help to the cloud. energy space this Atrius a our automate sustainability built Atrius the partners Data and and environment Lab, their and Distech ability foundational applications edge Earlier the the intersection of

was honors the and progress their as integral have we practice part I'm Leadership Sustainability overall a or an have of The in who During team with as pleased a the quarter, made sustainability made winner Sustainability business teams in mission. XXXX Atrius Award organizations program the program. XXXX. named people, Awards

up the technology. advantage company megatrends: of and long-term of of We and have X positioned growth change by maximizing the of impacts the ourselves impacts important our successfully taking for at intersection sustainability technology, of most setting minimizing the climate

lighting business productivity. more scalable the the the made and and we continue repeatable vitality, business improving focusing business America. product the use on lead throughout of predictable, to levels, controls and technology driving And ABL in by Our have largest service North lighting as company

spaces Our technology to attractive grow the the that spaces. business to cloud business edge connects as for an built continued

a digital advantage today for technology significant analog controls time. that are of And difference Atrius cloud to over already become and as can new we in mechanical expand continue that making has the a Distech the our customers. introduced applications

works better, We changed how system. faster the smarter, a have company operating for

strategic processes, of results. our operating Better, rhythms organization tools deliver unique manage change and people is is to of spans the solving. drive problem allows us smarter, strategy faster working from ways and It that to to and combination to alignment, to

values, these are culture shared help values strategic our goals. how values of we decisions the other and on create and company's achieving at each core our Our based make our a and purpose and to to our treat impact greater how for we customers. better, We operate with to more our economic and of of faster and quickly improve changing It and values efficiently combination respond our company. environments. smarter, allows accountability responsibility we distribution the how businesses continue effectively throughout us The is serve

through of responsibility value everyone framework creation model, accountability. compounds our and in rewards The total our through that organization our alignment

contribute Our strategy. our to associates how overall they understand

ask balance grow sheet sales, If them you and stop we we turn fast. net how we profits they will grow as our those and cash, we answer in company the create value, into people don't

we that have to This are demonstrate continued capital effective we allocators. year,

current acquisition R&D and in our businesses capital through about of since invested the maintained Sunoptics share with We permanent our have we've growth through dividend, expenditures. for $X.X value shareholder KEX Therm. fiscal repurchases and of XX% the shares of portfolio We've enhanced exit quarter We've and of fourth in amounts then approximately created to outstanding. the which billion the of the a beginning XXXX, our

In lighting drive our remain margin business, we the fiscal strategic cash same. turn we and our to will our As to flow. priorities XXXX, continue

the conditions calendar roughly potential expect for lighting calendar the for improvement this year, the We year. of same some in market the remainder in next with

We will built make control a delivering in our Intelligence continue Spaces and by by applications planes in difference ways: spaces. group that X adding grow Geographically, to

businesses with in acquire those improve the better, faster priorities. and in continue We development system to consistent our we will that the and will our continue capital operating to our of we order current allocate smarter, future,

Now Karen, provide call over XXXX. more details about I'll update performance will XXXX our on who and you to turn the

throughout improved flow our we you, Thank everyone the We well profit on executed business, a call. operating to from In XXXX. million. challenging lighting $X good fiscal morning generated and adjusted of million Neil, cash $XXX the in and by environment sales year-over-year operations

our and improve capital to continue We effectively. allocated businesses

of business billion, the business. quarter in year offset we fourth sales $X X% approximately or This quarter. was result growth of the the in in For by our net partially prior lower total sales $XXX continued decline the which of in the than as million in ISG a generated ABL was AYI, net XX%

We year-over-year improvement. margin continue deliver to

to price year-over-year adjusted approximately the operating lower continue The profit an we we adjusted margin on costs. sales, strategically profit from largely down During while our in margin points as and by driven increase expanded increase XX the XX.X%, year. basis the prior quarter, improvement significant was our of gross was profit operating to manage

During by our earnings million ABL, by were prior or year. with of performance across prior XX% channel. X% slightly sales driven the share declines net retail diluted channels, the In over of $X.XX per quarter, in in strong most compared quarter, $XXX our the offset adjusted our the of decrease a $X.XX year, increased continued

million particularly $XXX lower net costs year price profit improved, ABL's And over a adjusted point inbound margin prior X% and the profit we to delivered improvement sales. operating on freight. XX.X%, adjusted basis XXX strategically operating managed decreased and we input steel of as

beginning during quarter also the related we at that's of primarily the call, charges to took mentioned Neil As ABL. several the

pretax in $XX.X amounted these share. together, to $X.XX Taken nonrecurring diluted or earnings per charges in million

efforts result and as in work. ongoing a The of we we of our first million realigned is severance how $X transformation charge a includes

and The charge noncash acquisitions. to names $XX.X trade for second prior a for small certain investment is million a related impairment

transitioned indefinite lives names value. their we addition, definite to several reflect to trade accurately of from more those In

on The is third from a between The supplier outdoor a recovery receivable and pretax manufactured have noncash charge for owes lighting we collectibility. related a and to obligation XXXX. is the quality incurred certain costs a products $XX of XXXX based its warranty the for impairment sold ABL of us who receivable million

the are supplier. pursuing recovery from We

ISG's existing an fourth million, of were $XX win new net to across business continued and customers. as for quarter Distech the increase sales XX%,

benefit over Therm. million, had we KEX $XX as acquisition long-term invest the a a decline adjusted also in of of approximately modest prior we for which quarter, ISG's was was from continued operating business to This profit year the the growth. X%

compared turning our cash days improvements by of largely million million to in full from $XXX flow cash year for over improved both of of generated XXXX. increase end capital. receivable year, fiscal XXXX, working the of the operating driven inventory flow $XXX to an and performance. prior We Now activities the accounts of We've fiscal

fiscal over fiscal fourth to flow. shares. we organic we average $XX capital XXXX, of share, and in invested funded approximately $XXX quarter allocated expenditures Since XXXX, X cash was X.X of have the of repurchased million million In per which approximately the million shares price by $XXX million at an repurchase beginning

spend outlook and our adjusted Consistent I now EPS. diluted expanding annual want to to going guidance, around are provide a minutes for XXXX XXXX. sales our guidance with anchored we few on net

provide will website with you after presentation find supplemental you the call. also certain can of available conclusion assumptions, our in which We this on the

ABL down to continue take mid-single new to fiscal geographically within as ISG conditions for total that and environment. will generate the into billion result control the And based is digits in our $X AYI. sales mid-teens and This be range growth year macro billion that will we the to sales in of expectation and sales share expand a will on XXXX, full net assumptions lighting as low planes. is continue $X.X deliver For the of

adjusted range We $XX for share total $XX.XX diluted earnings the expect AYI. to of per to within deliver

in -- and our priorities XXXX continue are delivering unchanged, Our capital we will cash on and priority flow. to allocation allocation focus margin and capital

price and we In at delivered and conclusion, cost ABL. strategically managed margin growth

from We Spaces flow operations allocated We continue the Intelligent Group. strong capital cash generated to effectively. and grow

to continue improve to and product to we improvements, continue business necessary We the forward. productivity drive steps take our transformation through the and

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

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

a you're being call cycle Maybe, environment, seeing just demand of what bit about maybe kind that out? an 'XX easier from perspective, Neil, to maybe comments calendar Or you'd that year market kind starting from any Is just kind end you're today? on the color start, could quoting environment you And there seeing a the provide comparisons? environment just to is maybe something better. kind your of perspective visibility maybe of of that anything in that

Yes, thanks for the question.

our can doesn't. that So wish I obviously We've in with demonstrated we're our economy up the environment. fiscal we first line all, And with execute would year, this it of proud performance. but really

forward choppy all our this as year, rest looking quarter the So while of consistent, relatively fiscal the is -- pretty we're much business to the of over. first kind it's and

So we strong year networks. where we kind feel of each of And we guided of in feel good for about given our kind the that. like there's still also volume

network, the business. about So the of C&I obviously, is XX%

As Karen business strong which is our our can to comparatively us. been pointed direct in out, has the for is us. channel, The business sales see OEM has retail the other for down, you remained manufacturers. And strong as lighting business

responsible got feel we for like comfortable together environment operating we're a taken we've we So in XXXX. this and like feel plan then,

Okay.

just appears up high-level, at Karen, think maybe kind about puts of about winds of digits. pretty of keeping to managing It's the business, environment ABL volume kind midpoint in kind in of down down that the least when you margins be a to think just us down the down low what give I then takes X% it's overall. what versus just, terms X%. and I Good. Okay. or stable? sales and you of think range I think of -- guess, And maybe being kind Could guidance, to mid-single And EPS

sure. Yes, Thanks, Tim.

anticipate see the lighting to just would discussed, is Neil digits kind this presentation. $X.X to the net down that guidance about guidance, we $X and sales billion, That ago. the in of does that low of mid-single the you'll So be a to billion range the moment for continuation the as reiterate, talked all trends just

to expect levels we be that at it's the vitality, manage but expect that service to a to high of us continue strategically we strong expect now, year. are EPS to able the product we that at productivity plan. to maintain, deliver for $XX.XX the our levels, and performance our land of range don't we When our in $XX technology to and kind still look would stay And solid margin we the

call would up that business. ISG, mid-teens out we're predicting in to I just still

KEX continue grow Therm a to year. be that's well. to So going still will of benefit next The acquisition as

really, really pleased the So overall. with performance

Blair. question comes from the Merkel line next Our from of Ryan William

Fargo. comes Joe O'Dea question from with next Our Wells

then of combination question macro. inventory first channel the guess sort just I is of of sort and management the

terms you've what of destock? to but few gotten past gets a has bit over a where of related what any kind the transition little months, seen macro anticipating additional bit the so there through course bit challenging. the of destock Or you're little And of a rest of this less choppier, little year is headwinds a in

Yes.

have talked half at and of to compressed, the for you we backlog We a through extensively recreate times destocking as the obviously, of XXXX. year just remainder to. the led lead So little just 'XX, context FY bit we the burned kind historical through how referred first our through of fiscal of that's

more getting shipment normal and to relationship between order a We're rate. rate now

So I in comfortable in Tim's the we're what answer was this starting -- question, to and we that's alluding to we're environment. still operating to,

I we So trends. are now think experiencing macro are what lighting

out, grow And in as and pointed also just where period unfortunately, that highlight, to Karen I'll group people mid-teens. we're controls. basis a continues lighting Intelligence buying are the less lighting though,

the both to we've At Lighting business, the in same expanding. and ABL. is the layer the decline Spaces business at business sales the of able despite portfolio the So time, in margin in been

solid Got another And then I cash year on think side, generation. the of it. cash

on the side. buyback You less did

pretty strong You a with ended position. cash in

about might it of just kind little monitoring in a side little you're of be seeing be things? more what we M&A environment, so posture may hold is you the how on as bit think to cash, And XXXX? Or bias pipeline around the choppier commentary any bit a buyback should

Yes. Joe. Thank you,

year. priorities the post, for of You'll talked our the cash next that we'll about that see in presentation we've reflect some assumptions

-- priorities going cash our to the So are same. capital be our allocation

invest for will our our businesses share fourth, M&A; in current be growth; dividend; to First in third, to second, and repurchases. to maintain invest

about this quarter our since of point, repurchased XX% of at fourth we've at fiscal shares beginning we And fiscal started -- of XXXX. the so

$XX about do and we're we share then, to presentation. would And looking year million see the so repurchases you $XX you'll want at Neil, million what that in this expect, upcoming And is to on? comment in

add just I'd a couple things, Joe. of

we job First is, think, have generating -- obviously, done, very a I cash. outstanding an of

on management aggressive working side, demonstrated So sheet amount and in our we've cash. capital, of through of lighting margin the a to especially layering ability and generate the significant balance

to are our outlined, Karen remain want the grow same. -- as priorities, business. Our We

when but X.X advantage last stock we opportunities less. stock we the to up, repurchase since we've opportunities, when demonstrated when with more buy take that the presents down, so over those -- shares. goes the we market of here We've the And and us will years been goes buy

focus order business we our but the of are opportunities to And grow in all -- want current platform and those. And want our feel and them. through mentioned our we grow our We to Karen and about the priorities in good acquisitions.

acquisition very there. On We side, Intelligence some Group. expand that our is and to the cases, meaningful are to in our opportunities priority to to Spaces -- the is add interesting think there continue

the But the that's lighting to of spending time. specific our where side for also so most open we opportunities. we're business other And are on

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

the And first half guide we about ask what specifically, XXXX. in expect to for second versus wanted I half. ABL should

mid-single year. for the low down to So

this end year. in think talked about the pressure the I Neil market calendar through of

declines are first in would I the in half the moderate and back the then that assume steeper So half.

about as low in to the thinking how working towards slope any decline? 'XX color we mid-single-digit kind of there that be we're of should to Is about ABL

Yes.

you on quarter. we obviously, at were back in where burning fourth of would still thanks and historical sequential we quarter to kind through first trends quarter for as backlog. inflated were sequential Chris, a from quarter guide periods, those the second same to backlog from last drop off year, So question. levels And I of to basis, first we

a -- then normal half to more year. in normal more gets So get in of you back we to assumptions, cadence the the you our a

I appreciate that.

the in type like the And half, that first declines sounds in the comps run high single-digit the get is certainly, an supportive growth really of also maybe that the half? it the And will if a the just there uplift macro easier. easier half back assumption the seasonality. So become in Or function we kind back of into lot see getting half? comps back into a how I is more

So our assumptions the on aren't a on relying from environment. -- improvement macro significant

we have normal shipment between mentioned, returned a I relationship As to intake more and order rates.

and mentioned, executing comfortable are we I we're So environment. -- this as in

the So I legacy fiscal impacts half are other supply things. the of of the that chain kind of what suggesting all the backlogs and up XXXX increased we ultimately all think we of for of year, clearing is end back the

with And year. more so we end up a normal

where basis. us the normalize kind we half I year it XXXX a But where fiscal a ABL suggest, fiscal the third the up of that the the in think of and of fiscal our bit year, interest quarters with say first notice year, be the first which fourth in second economy quarters if fiscal and in and are, has down you to you back. we'll would were which of our what little will is, would is -- is it on then which no calendar gets matched in and if you you -- XXXX

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

follow just on first on question. guess is question, the for my This Brian. last Grace I to up

expecting you're Sounds like improvement.

impact out of called of increased the the all clearing assumption backlog. legacy You the

seeing to sell-through what confidence Are see like you you that curious Just improvement the quarter-over-quarter? from gives like improvement?

pointed lighting between as relationship Grace, we've a rates and Yes, order returned out, intake business the shipment the in to quarter. I normal more within

at are normal So we lead times.

business, times and orders performance So translates lead the where lighting to range in XX-day which to XX- consistent. in a shipments are our are our

through question, second Chris' -- our we As point response this first backlog. fiscal to Lighting, last and quarters for the additional I were in the explained in year we in burning were at

burning anymore. we additional are backlog So through obviously not

So we intake a have between shipment normal correlation returned rate. more order to and

next Our Instructions] TD [Operator with question Cowen. from comes Osborne Jeff

curious control expanding to activity times, Do Just, alluded I there. to mentioned Neil, you efforts the those have and You geographically comments. potentially ISG how you organic X M&A on was planes any balance meaningful there? several side. just

all basically is that So organic.

Asia continues So continue year we've over some the out where in course grow. beyond. this over course of and had called to we'll We've to that success U.K. in and Distech market, in the Australia the expand

organic primarily is growth. that So

The which acquisition would refrigeration Therm, that added be controls. to added that KEX

So those are added.

the we acquisitions some we're So I mean, make to that, interesting be organic cash, we well. and there then organic at confident growth addition in any in the would opportunities ISG as see

Neil either then around mix or volume guidance price to relates you, Karen, year? for what Perfect. the as it are the assumptions and for And the revenue

Jeff. Yes. I'll take one, that

through half has as in So the this moderated. volume first backlog. were of the half Karen XXXX again, performance price largely course burning of -- volumes delivered we volume we explained was, as have we the price. fiscal Through through was mix healthy as That a through and have year, of had this back year, both

on a decent relationship we the price. between sequential and So feel on volume pretty basis,

with those -- we XXXX. guidance for impacting for in volume we balance are comfortable our price. both the of a is and of They lighting So we're in healthy we're in think -- where are

Our Sprague Research line Jeffrey next Vertical the comes question with of from Partners.

said on price. Can back we bit what just follow to just you a up little

understand, I in that what that just price. you're of of you if we most clarify? quarter the meant? revenue is the decline So kind Could you saying see Is

Yes.

that if that left with intended impression, I not was what to Sorry, I say.

was -- year. sales which net to we so lighting was we talking Jeff's to fiscal in and So next our assumptions for 'XX how response other the I got about how question, business

have recall, additional haven't this year. major I market actions part move time? the of the a point then do you actually the for And better in it. you pricing at in pricing made Got Is And that if correct?

and have strategy manage we underlying service, -- strategically our opportunity us afforded to technology Jeff, more strategy, of consistently, has productivity price. product mentioned the the vitality, we've as So

broad kind So more while 'XX, actions there actions a 'XX were we've those and now. number of in through of targeted pricing significantly become

for in quarter. just now. the price controls a increase So example, we're certain announced products around this market recently We

also we our to portfolio, and choose share generally Select in the expand about in distribution we're targeted. -- invest strategic channel. where it's And highly The market That's Contractor price. in to generally electrical the it's

comparative it's very dollars So on low percentage a basis. investment

more So the us price. to strategy has manage empowered strategically

And and different so we longer broad-based like pricing and but up categories changes down, after going that are no for really more on strategically managing reasons. different

just And one. last then maybe one

flow working the So solid was Can now Maybe 'XX. point? inventory inventory little are fair outlook capital the more or By just actually at XXXX. math, on cash do some on thoughts this below cash for a days in a amount my you normal.

Jeff, look agree, this good flow performance generation, a our year as and think I we our had days. I improve with ahead, were we cash able Yes, really we to

see the to as think of XXXX. not what we probably still ahead, you in look or -- we opportunity some I magnitude in saw there's what

for as is productivity, at think we service, the I around But there and kind improvement strategy we the business. inventory. room still ABL, that drive example, continue think our we strategy, about We of our able as product a if So of high drive had to than levels 'XX, bit in better levels normal that from times where suppliers. inventory down little were of of for bring you lead to vitality, particularly because some to we throughout were technology

kind to capital that from think And to margins perspective, Obviously, when demonstrated a Jeff, from are highlighted where business. take increase this we It's declining. we've we opportunity performance to summarize kind make the working I I'd demonstrated you can of the are sales a improved structurally it's do and we've We've improvements that of to hard that. love also hard perspective.

Karen and as outlined, we strategy, successfully we where operate. The we how can has -- operate both changed, how

our us around generation. performance very margin cash and makes comfortable that So with continuing

of the Wells Joe O'Dea with question next Our Fargo. comes from line

I back kind of just the want circle to sequential to commentary.

revenue kind dealing roughly you're the you midpoint. that sort where of fourth seems of with the from normal we So an if inventory imply going ends. seasonality to it quarter out would that that get environment were channel rate, also like rationalization we of I run seem to guess

there uplift little incremental macro a arguably, an so challenging. should more And that bit pressures maybe is be and the the

verticals wanted that just of then to thoughts and on tremendous would within dynamic non-res commentary of potential have And amount focus bit a bit softness. think touch little on so again be on that, to maybe within that of so of more. And attention sort of any I a verticals you little where around that kind any sort stronger closer a additional you're paying sort

Joe, for the follow-up. Yes, thanks

much performance. to would like kind we So again, of read really macro a provide only we comment the as we you our can of but through as can, on

reiterate, And to the kind of that, so to backlog. as of first we as it relates just in half fiscal XXXX, were through burning

rates, shipments lighting -- within shipment to basically order and so between and is it times, where the time the XX- to our quarter, business. we're average and relationship at order a lead the a rate order returned of more have lead now XX-day normal We kind drives in

back normal. things So are to relatively

seasonality So out. play the sequential traditional how a basis, that's sequential you more see on

as The macro can we be wherever portfolio -- know advantage, but addresses So to like say growth the more side there we -- than I on in marketplace. that environment look advantage lighting forward, think our don't about the the is really I'd The we we we others. have do. the

strong each strong that retail, we have distribution, positioned the in be So we well the for vitality undertaken, the infrastructure. us electrical have in product in service of categories, allows undertaken to strong efforts levels

where So are places lighting the changes we we the in can benefit from in market. any

Karen the of these at and levels to the guidance. operating comfortable activity of cash deliver the we're margins and meantime, the highlighted kind market effectively In through flow continuing that

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

margin talk ask million, revenue million, has just believe in $XX million gross of just next going don't I what guide come the $XX is on wanted of you billion implied billion to gross I to as year to earnings? of about up. that $XX Can $X margin. $X.X this we're level from

as that don't in math -- we quickly Karen are pointed next the Yes, the -- so that sure. full confident we be to that, we you'll of to that implies EPS. -- guiding in margin is that. take range. levels are out, adjusted year sales and were deliver I'm we for skill, year to all The at need -- your the Chris, quarter I'll net fourth the realize to

as higher saying company profit It's at company. that, of us What it which operate history responding structurally the have the margins does gross in margins though, operated this fourth the say, quarter that the Sprague business, earlier, to past. than Jeff the allows is the worth we are was improved I highest in to has

we don't to the what those value profits growing as consider have cash to creation about levels performance. as balance is fast. to growing -- into we turning further, pointed have repeatedly, outstanding sales, our be net the model I deliver out So sheet and to And maintain and continue not

So we've at which allow to margin made these into cash. margins operate us higher to structural changes, and levels those turn

grow through kind businesses to we the the have portfolio. and same portfolio we've made permanence the really improve feel that. Lighting time, continue can we in that good the to we changes continued to about ISG adding of the additional and then the the business So of through opportunity At

versus more, really we I does up the company maybe could same at dynamic. any volumes rolled. I that that from it's But is a feels I time, mean with look have probably think softer. points this of basis And the margin? question is the bit sliding gross the margin, if incredible, I in X understand there's And start follow this year. I when at impact guys XXX But a up uplift that. It pretty the backlog appreciate the it's negative and biggest gross there's how there you understand think is macro that? like that do about maybe a of balancing the volume big dynamic. I bit get, scale

manage in But appreciate to to in this we which past. has productivity and us on us manage third a price talked bit way Yes. asking more, around call. reflect strategy No, you lighting vitality, position better in is a We our I it importantly, address margins it. function the in to the I the the some have and want in step technology question opportunity giving about most business than service biotic the quarter to put and a

good really that. feel we so And about

evaluated to managed where we volume. of we strategically levels, and we Jeff's value. drive we amount realize We addressing that where with question, we this choose margin think I a created significant As have can price we've these volumes, was at

have margin we to so operate incentive to a levels. And these at lot continue of

that's looking goal says pricing All over volume of verticals for data we appropriately market. in And we the time. the at that the are available that's our are that across

flow volume So we some of continued low layer well during return why -- growth we're for the in and that's positioned to future. margin this will period at the why in cash inevitable we've believe and we point volume

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

through about performance, thank all, as we've of some great We all this talked performance. with of We financial First a delivered time had proud spending We're our year. really for strong you the call. us financial morning.

continue can the the Spaces to and structurally continue We capital Intelligence Group, we allocate to business, and lighting both effectively. grow we improve

making consistent Our allocation same. capital to our the priorities going be for priorities. operating next and lighting remain with the business on business, We'll grow the to will We're and to repeatable and predictable, continue scalable. Spaces excellence in focus it year more continue we

for forward back of you you in So a Acuity together Brands. we being with quarter, Thank have your and of your you look at end good hope the rest to interest the day.

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

now may You disconnect.