Acuity Brands 2019 financial results included:

• Net sales of $3.67 billion, flat compared with fiscal 2018;
• Operating profit of $462.9 million, an increase of $2.1 million compared with fiscal 2018;
• Net income of $330.4 million and diluted earnings per share of $8.29, a decrease of 5% and 3%, respectively, compared with fiscal 2018 as prior year’s earnings benefited from $34.6 million, or $0.84 per share, of discrete income tax benefits associated with the passage of the Tax Cuts and Jobs Act of 2017;
• Record net cash provided by operating activities of $494.7 million, an increase of 41% compared with fiscal 2018;
• Fiscal 2019 year-end cash balance of $461.0 million, after investing $53.0 million in capital expenditures, repurchasing $81.6 million of the Company’s common stock, and paying $20.8 million of dividends to stockholders; and
• Return on stockholders’ equity of 18.2%.

On the strategic front, we had many significant accomplishments in fiscal 2019, including the following:

• Introduced almost 100 new product families, expanding our industry leading portfolio, partially offsetting the impact of our pruning efforts to reduce the sale of lower margin products sold primarily in the retail channel, where price capture was a challenge;
• Increased the net sales of our Contractor Select value-oriented portfolio of basic, lesser featured products, which now makes up approximately 10% of our net sales;
• Expanded our industry-leading nLight lighting controls platform, as well as our Distech Controls’ building management solutions, which both grew double digits in 2019. We believe Acuity Brands has the most comprehensive and feature rich wired and wireless lighting control solutions available, which are connected to our growing building management solutions to provide customers with even greater functionality;
• Grew our networked lighting solutions approximately 15%, which now make up approximately 20% of our total net sales;
• Increased the sales of our connected lighting, Atrius IoT-enabled solutions, which we believe are now deployed in over 5,000 retail stores in North America encompassing over 500 million square feet of sales floor space under our connected lighting sensory network. Increasingly, we see data analytics and data science opportunities generated by our connected lighting Atrius platforms as critical areas of investment allowing retailers to garner valuable insights about their business from our services;
• Continued to execute and make progress on our multi-year Cultural “Break-Through-Objectives,” which include increasing our scores in customer satisfaction, associate engagement, and environmental, social and governance (“ESG”);
• Launched the EarthLIGHT program, the Company’s comprehensive approach to ESG, through which we coordinate our efforts to lighten our own environmental footprint and those of our customers, benefit the lives of our associates and our communities and hold ourselves and our partners to high ethical standards; and
• Expanded our technology portfolio with the acquisition of White Optics, LLC.

OUR FUTURE: GROWTH, INNOVATION, EXCELLENCE

Rapid advancements in technology, along with the need for greater energy efficiency, changes in public policy, and demand for environmental sustainability, continue to drive profound changes in our industry creating exciting opportunities. Acuity Brands is capitalizing on these changes to provide lighting and building management solutions that are efficient, elegant, and sophisticated, while at the same time simple to install, maintain, and use. We are at the forefront of transforming the lighting and building management industries. Our experience, knowledge, and skill as lighting experts allow us to deliver lighting solutions for virtually any application in our served markets.

Advancements in digital technologies has afforded Acuity Brands the opportunity to create and provide customers with connected, intelligent building solutions that allow them to transform their buildings into strategic assets. Our company is uniquely positioned to accelerate the adoption of connected, intelligent buildings because of our unique collection of hardware and software assets along with our multiple channel access to market that are unmatched in the industry today. Our solutions, which contain embedded sensors and software, are ubiquitous, dense, and powered, affording the opportunity to collect vast amounts of actionable data to optimize the efficiency and utilization of the space, support wayfinding to direct people to get to where they want to go, and track assets, among other activities. The value creating potential of these capabilities are endless as customers are finding out.

We know that superior quality of light enhances how we live and interact, whether it is increasing students’ learning ability in schools, improving worker productivity and comfort in offices and industrial facilities, enhancing the shopping experience in retail establishments, or accelerating patient healing in hospitals. The possibilities of what can be achieved using intelligent lighting and building management solutions are still being explored.

As we enter 2020, our mission is to continue to build on our rich legacy of excellence, growth, and innovation to provide great returns for our stockholders, superior value for our customers, and growth opportunities for our associates. Our passion and intense focus continue to be centered on creating lighting and building management solutions that deliver superior quality, energy efficiency and performance, as well as IoT solutions. As the market leader in North America, we believe our deep expertise in lighting and building management; our understanding of the art and science of lighting; and our ability to provide tailored lighting and building management solutions for numerous applications have positioned the company to excel.

Our key strategies and tactical focus have remained consistent over the last few years. We expect to continue to execute our profitable growth strategy by focusing on three mission-critical areas of operational excellence that we refer to as the 3 Cs: