(Mark One) | ||
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended May 31, 2019. | ||
OR | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to . |
Delaware | 58-2632672 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
1170 Peachtree Street, N.E., Suite 2300, Atlanta, Georgia (Address of principal executive offices) | 30309-7676 (Zip Code) |
Title of each class | Trading symbol | Name of each exchange on which registered | ||
Common stock, $0.01 par value per share | AYI | New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | |
Smaller reporting company o | Emerging growth company o |
Page No. | ||
Item 1. | Financial Statements |
May 31, 2019 | August 31, 2018 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, less reserve for doubtful accounts of $1.3 and $1.3, respectively | |||||||
Inventories | |||||||
Prepayments and other current assets | |||||||
Total current assets | |||||||
Property, plant, and equipment, at cost: | |||||||
Land | |||||||
Buildings and leasehold improvements | |||||||
Machinery and equipment | |||||||
Total property, plant, and equipment | |||||||
Less — Accumulated depreciation and amortization | ( | ) | ( | ) | |||
Property, plant, and equipment, net | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Deferred income taxes | |||||||
Other long-term assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Current maturities of long-term debt | |||||||
Accrued compensation | |||||||
Other accrued liabilities | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Accrued pension liabilities | |||||||
Deferred income taxes | |||||||
Self-insurance reserves | |||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (see Commitments and Contingencies footnote) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued | |||||||
Common stock, $0.01 par value; 500,000,000 shares authorized; 53,754,706 and 53,667,327 issued, respectively | |||||||
Paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Treasury stock, at cost — 14,075,197 and 13,676,689 shares, respectively | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||
Cost of products sold | |||||||||||||||
Gross profit | |||||||||||||||
Selling, distribution, and administrative expenses | |||||||||||||||
Special charge | ( | ) | |||||||||||||
Operating profit | |||||||||||||||
Other expense (income): | |||||||||||||||
Interest expense, net | |||||||||||||||
Miscellaneous expense (income), net | ( | ) | |||||||||||||
Total other expense | |||||||||||||||
Income before income taxes | |||||||||||||||
Income tax expense | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Earnings per share: | |||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||
Basic weighted average number of shares outstanding | |||||||||||||||
Diluted earnings per share | $ | $ | $ | $ | |||||||||||
Diluted weighted average number of shares outstanding | |||||||||||||||
Dividends declared per share | $ | $ | $ | $ | |||||||||||
Comprehensive income: | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss) items: | |||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Defined benefit plans, net of tax | |||||||||||||||
Other comprehensive loss, net of tax | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive income | $ | $ | $ | $ |
Nine Months Ended | |||||||
May 31, 2019 | May 31, 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash flows from operating activities: | |||||||
Depreciation and amortization | |||||||
Share-based payment expense | |||||||
Loss on sale or disposal of property, plant, and equipment | |||||||
Deferred income taxes | ( | ) | |||||
Change in assets and liabilities, net of effect of acquisitions, divestitures, and exchange rate changes: | |||||||
Accounts receivable | |||||||
Inventories | ( | ) | |||||
Prepayments and other current assets | ( | ) | |||||
Accounts payable | ( | ) | |||||
Other current liabilities | ( | ) | ( | ) | |||
Other | |||||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Purchases of property, plant, and equipment | ( | ) | ( | ) | |||
Acquisition of businesses, net of cash acquired | ( | ) | |||||
Other investing activities | |||||||
Net cash used for investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Borrowings on credit facility | |||||||
Repayments of borrowings on credit facility | ( | ) | ( | ) | |||
Repayments of long-term debt | ( | ) | ( | ) | |||
Repurchases of common stock | ( | ) | ( | ) | |||
Proceeds from stock option exercises and other | |||||||
Payments of taxes withheld on net settlement of equity awards | ( | ) | ( | ) | |||
Dividends paid | ( | ) | ( | ) | |||
Net cash used for financing activities | ( | ) | ( | ) | |||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | |||
Net change in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
Supplemental cash flow information: | |||||||
Income taxes paid during the period | $ | $ | |||||
Interest paid during the period | $ | $ |
Three Months Ended May 31, 2018 | Nine Months Ended May 31, 2018 | ||||||||||||||||||||||
As Revised | Previously Reported | Higher (Lower) | As Revised | Previously Reported | Higher (Lower) | ||||||||||||||||||
Cost of products sold | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Selling, distribution, and administrative expenses | ( | ) | ( | ) | |||||||||||||||||||
Miscellaneous expense (income), net | ( | ) | ( | ) | ( | ) |
Consolidated Statement of Comprehensive Income | Three Months Ended May 31, 2019 | Nine Months Ended May 31, 2019 | ||||||||||||||||||||||
As Currently Reported | Without ASC 606 Adoption | Higher (Lower) | As Currently Reported | Without ASC 606 Adoption | Higher (Lower) | |||||||||||||||||||
Net sales | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||||||
Cost of products sold | ( | ) | ( | ) | ||||||||||||||||||||
Selling, distribution, and administrative expenses | ||||||||||||||||||||||||
Operating profit | ( | ) | ( | ) | ||||||||||||||||||||
Income tax expense | ( | ) | ( | ) | ||||||||||||||||||||
Net income | ( | ) | ( | ) | ||||||||||||||||||||
Basic earnings per share | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||||||
Diluted earnings per share | ( | ) | ( | ) |
Consolidated Balance Sheet | May 31, 2019 | ||||||||||
As Currently Reported | Without ASC 606 Adoption | Higher (Lower) | |||||||||
Accounts receivable, net | $ | $ | |||||||||
Prepayments and other current assets | |||||||||||
Other accrued liabilities | |||||||||||
Deferred income tax liabilities | ( | ) | |||||||||
Other long-term liabilities | |||||||||||
Retained earnings | ( | ) |
May 31, 2019 | September 1, 2018 | ||||||
Current deferred revenues | $ | $ | |||||
Non-current deferred revenues |
Three Months Ended | Nine Months Ended | ||||||
May 31, 2019 | May 31, 2019 | ||||||
Independent sales network | $ | $ | |||||
Direct sales network | |||||||
Retail sales | |||||||
Corporate accounts | |||||||
Other | |||||||
Total | $ | $ |
May 31, 2019 | August 31, 2018 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Senior unsecured public notes, net of unamortized discount and deferred costs | $ | $ | $ | $ | |||||||||||
Industrial revenue bond | |||||||||||||||
Bank loans |
Nine Months Ended | |||||||
May 31, 2019 | May 31, 2018 | ||||||
Beginning balance | $ | $ | |||||
Additions from acquired businesses | |||||||
Adjustments to provisional amounts | ( | ) | |||||
Foreign currency translation adjustments | ( | ) | ( | ) | |||
Ending balance | $ | $ |
May 31, 2019 | August 31, 2018 | ||||||
Raw materials, supplies, and work in process (1) | $ | $ | |||||
Finished goods | |||||||
Inventories excluding reserves | |||||||
Less: Reserves | ( | ) | ( | ) | |||
Total inventories | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Basic weighted average shares outstanding | |||||||||||||||
Common stock equivalents | |||||||||||||||
Diluted weighted average shares outstanding | |||||||||||||||
Basic earnings per share | $ | $ | $ | $ | |||||||||||
Diluted earnings per share | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||
Stock options | |||||||||||
Restricted stock awards |
Common Stock Outstanding | ||||||||||||||||||||||||||
Shares | Amount | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock, at cost | Total | ||||||||||||||||||||
Balance, August 31, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
ASC 606 adjustments | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||
Amortization, issuance, and cancellations of restricted stock grants | — | — | — | — | ||||||||||||||||||||||
Employee stock purchase plan issuances | — | — | — | — | — | |||||||||||||||||||||
Cash dividends of $0.13 per share paid on common stock | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||
Repurchases of common stock | ( | ) | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Balance, November 30, 2018 | ( | ) | ( | ) | ||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||
Amortization, issuance, and cancellations of restricted stock grants | — | — | — | — | ||||||||||||||||||||||
Employee stock purchase plan issuances | — | — | — | — | — | |||||||||||||||||||||
Cash dividends of $0.13 per share paid on common stock | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||
Repurchases of common stock | ( | ) | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Balance, February 28, 2019 | ( | ) | ( | ) | ||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Amortization, issuance, and cancellations of restricted stock grants | — | — | — | — | ||||||||||||||||||||||
Employee stock purchase plan issuances | — | — | — | — | — | |||||||||||||||||||||
Cash dividends of $0.13 per share paid on common stock | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||
Balance, May 31, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Common Stock Outstanding | ||||||||||||||||||||||||||
Shares | Amount | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock, at cost | Total | ||||||||||||||||||||
Balance, August 31, 2017 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Amortization, issuance, and cancellations of restricted stock grants | — | — | — | |||||||||||||||||||||||
Employee stock purchase plan issuances | — | — | — | — | — | |||||||||||||||||||||
Cash dividends of $0.13 per share paid on common stock | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||
Stock options exercised | — | — | — | — | — | |||||||||||||||||||||
Balance, November 30, 2017 | ( | ) | ( | ) | ||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | |||||||||||||||||||||
Reclassification of stranded tax effects of the TCJA (1) | — | — | — | ( | ) | — | ||||||||||||||||||||
Amortization, issuance, and cancellations of restricted stock grants | — | — | — | — | ||||||||||||||||||||||
Employee stock purchase plan issuances | — | — | — | — | — | |||||||||||||||||||||
Cash dividends of $0.13 per share paid on common stock | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||
Stock options exercised | — | — | — | — | — | |||||||||||||||||||||
Repurchases of common stock | ( | ) | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Balance, February 28, 2018 | ( | ) | ( | ) | ||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||
Amortization, issuance, and cancellations of restricted stock grants | — | — | — | — | ||||||||||||||||||||||
Employee stock purchase plan issuances | — | — | — | — | — | |||||||||||||||||||||
Cash dividends of $0.13 per share paid on common stock | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||
Repurchases of common stock | ( | ) | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||
Balance, May 31, 2018 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Foreign Currency Items | Defined Benefit Pension Plans | Accumulated Other Comprehensive Loss Items | |||||||||
Balance at August 31, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Other comprehensive (loss) income before reclassifications | ( | ) | ( | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||
Net current period other comprehensive (loss) income | ( | ) | ( | ) | |||||||
Balance at May 31, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Foreign Currency Items | Defined Benefit Pension Plans | Accumulated Other Comprehensive Loss Items | |||||||||
Balance at August 31, 2017 | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Other comprehensive loss before reclassifications | ( | ) | ( | ) | |||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||
Net current period other comprehensive (loss) income | ( | ) | ( | ) | |||||||
Reclassification of stranded tax effects of TCJA (1) | ( | ) | ( | ) | |||||||
Balance at May 31, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended | |||||||||||||||||||||||
May 31, 2019 | May 31, 2018 | ||||||||||||||||||||||
Before Tax Amount | Tax (Expense) Benefit | Net of Tax Amount | Before Tax Amount | Tax (Expense) Benefit | Net of Tax Amount | ||||||||||||||||||
Foreign currency translation adjustments | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||
Defined benefit pension plans: | |||||||||||||||||||||||
Amortization of defined benefit pension items: | |||||||||||||||||||||||
Prior service cost | ( | ) | ( | ) | |||||||||||||||||||
Actuarial losses | ( | ) | ( | ) | |||||||||||||||||||
Total defined benefit pension plans, net | ( | ) | ( | ) | |||||||||||||||||||
Other comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Nine Months Ended | |||||||||||||||||||||||
May 31, 2019 | May 31, 2018 | ||||||||||||||||||||||
Before Tax Amount | Tax (Expense) Benefit | Net of Tax Amount | Before Tax Amount | Tax (Expense) Benefit | Net of Tax Amount | ||||||||||||||||||
Foreign currency translation adjustments | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||
Defined benefit pension plans: | |||||||||||||||||||||||
Actuarial gain or loss | ( | ) | |||||||||||||||||||||
Amortization of defined benefit pension items: | |||||||||||||||||||||||
Prior service cost | ( | ) | ( | ) | |||||||||||||||||||
Actuarial losses | ( | ) | ( | ) | |||||||||||||||||||
Settlement losses | ( | ) | |||||||||||||||||||||
Total defined benefit pension plans, net | ( | ) | ( | ) | |||||||||||||||||||
Other comprehensive loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Interest expense | $ | $ | $ | $ | |||||||||||
Interest income | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Interest expense, net | $ | $ | $ | $ |
Nine Months Ended | |||||||
May 31, 2019 | May 31, 2018 | ||||||
Beginning balance | $ | $ | |||||
Warranty and recall costs | |||||||
Payments and other deductions | ( | ) | ( | ) | |||
Acquired warranty and recall liabilities | |||||||
ASC 606 adjustments (1) | ( | ) | |||||
Ending balance | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Share-based payment expense | $ | $ | $ | $ | |||||||||||
Shares issued from option exercises |
Three Months Ended | Nine Months Ended | ||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||
Interest cost | |||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Amortization of prior service cost | |||||||||||||||
Settlement loss | |||||||||||||||
Recognized actuarial loss | |||||||||||||||
Net periodic pension cost | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||
May 31, 2019 | May 31, 2018 | May 31, 2019 | May 31, 2018 | ||||||||||||
Severance and employee-related costs | $ | $ | $ | ( | ) | $ | |||||||||
Move and other restructuring costs | ( | ) | |||||||||||||
Total special charge | $ | ( | ) | $ | $ | $ |
Fiscal 2018 Actions | Fiscal 2017 Actions | Total | |||||||||
Balance at August 31, 2018 | $ | $ | |||||||||
Severance costs | ( | ) | ( | ) | ( | ) | |||||
Payments made during the period | ( | ) | ( | ) | ( | ) | |||||
Balance at May 31, 2019 | $ | $ | $ |
May 31, 2019 | |||||||||||||||||||||||
Parent | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantors | Consolidating Adjustments | Consolidated | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Accounts receivable, net | |||||||||||||||||||||||
Inventories | |||||||||||||||||||||||
Other current assets | |||||||||||||||||||||||
Total current assets | |||||||||||||||||||||||
Property, plant, and equipment, net | |||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Intangible assets, net | |||||||||||||||||||||||
Deferred income taxes | ( | ) | |||||||||||||||||||||
Other long-term assets | |||||||||||||||||||||||
Investments in and amounts due from affiliates | ( | ) | |||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Accounts payable | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Current maturities of long-term debt | |||||||||||||||||||||||
Other accrued liabilities | |||||||||||||||||||||||
Total current liabilities | |||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||
Deferred income taxes | ( | ) | |||||||||||||||||||||
Other long-term liabilities | |||||||||||||||||||||||
Amounts due to affiliates | ( | ) | |||||||||||||||||||||
Total stockholders’ equity | ( | ) | |||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | $ | $ | $ | $ | ( | ) | $ |
August 31, 2018 | |||||||||||||||||||||||
Parent | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantors | Consolidating Adjustments | Consolidated | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Accounts receivable, net | |||||||||||||||||||||||
Inventories | |||||||||||||||||||||||
Other current assets | |||||||||||||||||||||||
Total current assets | |||||||||||||||||||||||
Property, plant, and equipment, net | |||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Intangible assets, net | |||||||||||||||||||||||
Deferred income taxes | ( | ) | |||||||||||||||||||||
Other long-term assets | |||||||||||||||||||||||
Investments in and amounts due from affiliates | ( | ) | |||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Accounts payable | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Current maturities of long-term debt | |||||||||||||||||||||||
Other accrued liabilities | |||||||||||||||||||||||
Total current liabilities | |||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||
Deferred income taxes | ( | ) | |||||||||||||||||||||
Other long-term liabilities | |||||||||||||||||||||||
Amounts due to affiliates | ( | ) | |||||||||||||||||||||
Total stockholders’ equity | ( | ) | |||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | $ | $ | $ | $ | ( | ) | $ |
Three Months Ended May 31, 2019 | |||||||||||||||||||||||
Parent | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantors | Consolidating Adjustments | Consolidated | ||||||||||||||||||
Net sales: | |||||||||||||||||||||||
External sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Intercompany sales | ( | ) | |||||||||||||||||||||
Total sales | ( | ) | |||||||||||||||||||||
Cost of products sold | ( | ) | |||||||||||||||||||||
Gross profit | ( | ) | |||||||||||||||||||||
Selling, distribution, and administrative expenses | ( | ) | |||||||||||||||||||||
Intercompany charges | ( | ) | ( | ) | |||||||||||||||||||
Special charge | ( | ) | ( | ) | |||||||||||||||||||
Operating (loss) profit | ( | ) | |||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Equity earnings in subsidiaries | ( | ) | ( | ) | |||||||||||||||||||
Miscellaneous expense (income), net | ( | ) | ( | ) | |||||||||||||||||||
Income before income taxes | ( | ) | |||||||||||||||||||||
Income tax (benefit) expense | ( | ) | |||||||||||||||||||||
Net income | ( | ) | |||||||||||||||||||||
Other comprehensive income (loss) items: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Defined benefit plans, net of tax | ( | ) | |||||||||||||||||||||
Other comprehensive (loss) income items, net of tax | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Comprehensive income | $ | $ | $ | $ | $ | ( | ) | $ |
Three Months Ended May 31, 2018 | |||||||||||||||||||||||
Parent | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantors | Consolidating Adjustments | Consolidated | ||||||||||||||||||
Net sales: | |||||||||||||||||||||||
External sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Intercompany sales | ( | ) | |||||||||||||||||||||
Total sales | ( | ) | |||||||||||||||||||||
Cost of products sold | ( | ) | |||||||||||||||||||||
Gross profit | ( | ) | |||||||||||||||||||||
Selling, distribution, and administrative expenses | ( | ) | |||||||||||||||||||||
Intercompany charges | ( | ) | |||||||||||||||||||||
Special charge | |||||||||||||||||||||||
Operating (loss) profit | ( | ) | ( | ) | |||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Equity earnings in subsidiaries | ( | ) | |||||||||||||||||||||
Miscellaneous expense (income), net | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Income (loss) before income taxes | ( | ) | ( | ) | |||||||||||||||||||
Income tax (benefit) expense | ( | ) | ( | ) | |||||||||||||||||||
Net income (loss) | ( | ) | ( | ) | |||||||||||||||||||
Other comprehensive income (loss) items: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Defined benefit plans, net of tax | ( | ) | |||||||||||||||||||||
Other comprehensive (loss) income items, net of tax | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Nine Months Ended May 31, 2019 | |||||||||||||||||||||||
Parent | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantors | Consolidating Adjustments | Consolidated | ||||||||||||||||||
Net sales: | |||||||||||||||||||||||
External sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Intercompany sales | ( | ) | |||||||||||||||||||||
Total sales | ( | ) | |||||||||||||||||||||
Cost of products sold | ( | ) | |||||||||||||||||||||
Gross profit | ( | ) | |||||||||||||||||||||
Selling, distribution, and administrative expenses | ( | ) | |||||||||||||||||||||
Intercompany charges | ( | ) | ( | ) | |||||||||||||||||||
Special charge | |||||||||||||||||||||||
Operating (loss) profit | ( | ) | |||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Equity earnings in subsidiaries | ( | ) | ( | ) | |||||||||||||||||||
Miscellaneous expense (income), net | ( | ) | ( | ) | |||||||||||||||||||
Income before income taxes | ( | ) | |||||||||||||||||||||
Income tax (benefit) expense | ( | ) | |||||||||||||||||||||
Net income | ( | ) | |||||||||||||||||||||
Other comprehensive income (loss) items: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Defined benefit plans, net of tax | ( | ) | |||||||||||||||||||||
Other comprehensive (loss) income items, net of tax | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Comprehensive income | $ | $ | $ | $ | $ | ( | ) | $ |
Nine Months Ended May 31, 2018 | |||||||||||||||||||||||
Parent | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantors | Consolidating Adjustments | Consolidated | ||||||||||||||||||
Net sales: | |||||||||||||||||||||||
External sales | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Intercompany sales | ( | ) | |||||||||||||||||||||
Total sales | ( | ) | |||||||||||||||||||||
Cost of products sold | ( | ) | |||||||||||||||||||||
Gross profit | ( | ) | |||||||||||||||||||||
Selling, distribution, and administrative expenses | ( | ) | |||||||||||||||||||||
Intercompany charges | ( | ) | ( | ) | |||||||||||||||||||
Special charge | |||||||||||||||||||||||
Operating (loss) profit | ( | ) | ( | ) | |||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Equity earnings in subsidiaries | ( | ) | |||||||||||||||||||||
Miscellaneous expense (income), net | ( | ) | |||||||||||||||||||||
Income (loss) before income taxes | ( | ) | ( | ) | |||||||||||||||||||
Income tax (benefit) expense | ( | ) | ( | ) | |||||||||||||||||||
Net income (loss) | ( | ) | ( | ) | |||||||||||||||||||
Other comprehensive income (loss) items: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Defined benefit plans, net of tax | ( | ) | |||||||||||||||||||||
Other comprehensive (loss) income items, net of tax | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Comprehensive income (loss) | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Nine Months Ended May 31, 2019 | |||||||||||||||||||||||
Parent | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantors | Consolidating Adjustments | Consolidated | ||||||||||||||||||
Net cash provided by operating activities | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Purchases of property, plant, and equipment | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Other investing activities | |||||||||||||||||||||||
Net cash provided by (used for) investing activities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Borrowings on credit facility | |||||||||||||||||||||||
Repayments of borrowings on credit facility | ( | ) | ( | ) | |||||||||||||||||||
Repayments of long-term debt | ( | ) | ( | ) | |||||||||||||||||||
Proceeds from stock option exercises and other | |||||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | |||||||||||||||||||
Withholding taxes on net settlement of equity awards | ( | ) | ( | ) | |||||||||||||||||||
Dividends paid | ( | ) | ( | ) | |||||||||||||||||||
Net cash used for financing activities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Effect of exchange rates changes on cash | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Net change in cash and cash equivalents | |||||||||||||||||||||||
Cash and cash equivalents at beginning of period | |||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | $ | $ | $ | $ | $ |
Nine Months Ended May 31, 2018 | |||||||||||||||||||||||
Parent | Subsidiary Issuer | Subsidiary Guarantor | Non- Guarantors | Consolidating Adjustments | Consolidated | ||||||||||||||||||
Net cash provided by operating activities | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Purchases of property, plant, and equipment | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Investments in subsidiaries | ( | ) | |||||||||||||||||||||
Acquisitions of business, net of cash acquired | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Other investing activities | |||||||||||||||||||||||
Net cash used for investing activities | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Borrowings on credit facility | |||||||||||||||||||||||
Repayments of borrowings on credit facility | ( | ) | ( | ) | |||||||||||||||||||
Repayments of long-term debt | ( | ) | ( | ) | |||||||||||||||||||
Proceeds from stock option exercises and other | |||||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | |||||||||||||||||||
Withholding taxes on net settlement of equity awards | ( | ) | ( | ) | |||||||||||||||||||
Intercompany capital | ( | ) | |||||||||||||||||||||
Dividends paid | ( | ) | ( | ) | |||||||||||||||||||
Net cash (used for) provided by financing activities | ( | ) | ( | ) | ( | ) | |||||||||||||||||
Effect of exchange rate changes on cash | ( | ) | ( | ) | |||||||||||||||||||
Net change in cash and cash equivalents | ( | ) | ( | ) | |||||||||||||||||||
Cash and cash equivalents at beginning of period | |||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | $ | $ | $ | $ | $ |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | ||||||||||||||
May 31, 2019 | May 31, 2018 | Increase (Decrease) | Percent Change | |||||||||||
Net sales | $ | 947.6 | $ | 944.0 | $ | 3.6 | 0.4 | % | ||||||
Cost of products sold | 564.0 | 554.9 | 9.1 | 1.6 | % | |||||||||
Gross profit | 383.6 | 389.1 | (5.5 | ) | (1.4 | )% | ||||||||
Percent of net sales | 40.5 | % | 41.2 | % | (70 | ) | bps | |||||||
Selling, distribution, and administrative expenses | 263.4 | 271.8 | (8.4 | ) | (3.1 | )% | ||||||||
Special charge | (0.1 | ) | 9.9 | (10.0 | ) | NM | ||||||||
Operating profit | 120.3 | 107.4 | 12.9 | 12.0 | % | |||||||||
Percent of net sales | 12.7 | % | 11.4 | % | 130 | bps | ||||||||
Other expense (income): | ||||||||||||||
Interest expense, net | 8.3 | 8.4 | (0.1 | ) | (1.2 | )% | ||||||||
Miscellaneous expense (income), net | 0.2 | (0.2 | ) | 0.4 | NM | |||||||||
Total other expense | 8.5 | 8.2 | 0.3 | NM | ||||||||||
Income before income taxes | 111.8 | 99.2 | 12.6 | 12.7 | % | |||||||||
Percent of net sales | 11.8 | % | 10.5 | % | 130 | bps | ||||||||
Income tax expense | 23.4 | 26.2 | (2.8 | ) | NM | |||||||||
Effective tax rate | 20.9 | % | 26.4 | % | ||||||||||
Net income | $ | 88.4 | $ | 73.0 | $ | 15.4 | 21.1 | % | ||||||
Diluted earnings per share | $ | 2.22 | $ | 1.80 | $ | 0.42 | 23.3 | % | ||||||
NM - not meaningful |
(In millions, except per share data) | Three Months Ended | ||||||||||||
May 31, 2019 | May 31, 2018 | Increase (Decrease) | Percent Change | ||||||||||
Gross profit | $ | 383.6 | $ | 389.1 | |||||||||
Add-back: Acquisition-related items (1) | — | 0.5 | |||||||||||
Add-back: Excess inventory (2) | — | 3.1 | |||||||||||
Adjusted gross profit | $ | 383.6 | $ | 392.7 | $ | (9.1 | ) | (2.3 | )% | ||||
Percent of net sales | 40.5 | % | 41.6 | % | (110 | ) | bps | ||||||
Selling, distribution, and administrative expenses | $ | 263.4 | $ | 271.8 | |||||||||
Less: Amortization of acquired intangible assets | (7.7 | ) | (7.2 | ) | |||||||||
Less: Share-based payment expense | (7.6 | ) | (7.6 | ) | |||||||||
Less: Acquisition-related items (1) | — | (1.6 | ) | ||||||||||
Adjusted selling, distribution, and administrative expenses | $ | 248.1 | $ | 255.4 | $ | (7.3 | ) | (2.9 | )% | ||||
Percent of net sales | 26.2 | % | 27.1 | % | (90 | ) | bps | ||||||
Operating profit | $ | 120.3 | $ | 107.4 | |||||||||
Add-back: Amortization of acquired intangible assets | 7.7 | 7.2 | |||||||||||
Add-back: Share-based payment expense | 7.6 | 7.6 | |||||||||||
Add-back: Acquisition-related items (1) | — | 2.1 | |||||||||||
Add-back: Excess inventory (2) | — | 3.1 | |||||||||||
Add-back: Special charge | (0.1 | ) | 9.9 | ||||||||||
Adjusted operating profit | $ | 135.5 | $ | 137.3 | $ | (1.8 | ) | (1.3 | )% | ||||
Percent of net sales | 14.3 | % | 14.5 | % | (20 | ) | bps | ||||||
Net income | $ | 88.4 | $ | 73.0 | |||||||||
Add-back: Amortization of acquired intangible assets | 7.7 | 7.2 | |||||||||||
Add-back: Share-based payment expense | 7.6 | 7.6 | |||||||||||
Add-back: Acquisition-related items (1) | — | 2.1 | |||||||||||
Add-back: Excess inventory (2) | — | 3.1 | |||||||||||
Add-back: Special charge | (0.1 | ) | 9.9 | ||||||||||
Total pre-tax adjustments to net income | 15.2 | 29.9 | |||||||||||
Income tax effects | (3.0 | ) | (7.0 | ) | |||||||||
Adjusted net income | $ | 100.6 | $ | 95.9 | $ | 4.7 | 4.9 | % | |||||
Diluted earnings per share | $ | 2.22 | $ | 1.80 | |||||||||
Adjusted diluted earnings per share | $ | 2.53 | $ | 2.37 | $ | 0.16 | 6.8 | % |
Nine Months Ended | ||||||||||||||
May 31, 2019 | May 31, 2018 | Increase (Decrease) | Percent Change | |||||||||||
Net sales | $ | 2,734.6 | $ | 2,618.9 | $ | 115.7 | 4.4 | % | ||||||
Cost of products sold | 1,649.6 | 1,545.4 | 104.2 | 6.7 | % | |||||||||
Gross profit | 1,085.0 | 1,073.5 | 11.5 | 1.1 | % | |||||||||
Percent of net sales | 39.7 | % | 41.0 | % | (130 | ) | bps | |||||||
Selling, distribution, and administrative expenses | 751.1 | 745.7 | 5.4 | 0.7 | % | |||||||||
Special charge | 1.3 | 10.7 | (9.4 | ) | NM | |||||||||
Operating profit | 332.6 | 317.1 | 15.5 | 4.9 | % | |||||||||
Percent of net sales | 12.2 | % | 12.1 | % | 10 | bps | ||||||||
Other expense (income) | ||||||||||||||
Interest expense, net | 25.6 | 24.5 | 1.1 | 4.5 | % | |||||||||
Miscellaneous expense, net | 2.6 | 3.8 | (1.2 | ) | NM | |||||||||
Total other expense | 28.2 | 28.3 | (0.1 | ) | NM | |||||||||
Income before income taxes | 304.4 | 288.8 | 15.6 | 5.4 | % | |||||||||
Percent of net sales | 11.1 | % | 11.0 | % | 10 | bps | ||||||||
Income tax expense | 70.1 | 47.4 | 22.7 | NM | ||||||||||
Effective tax rate | 23.0 | % | 16.4 | % | ||||||||||
Net income | $ | 234.3 | $ | 241.4 | $ | (7.1 | ) | (2.9 | )% | |||||
Diluted earnings per share | $ | 5.87 | $ | 5.85 | $ | 0.02 | 0.3 | % | ||||||
NM - not meaningful |
(In millions, except per share data) | Nine Months Ended | ||||||||||||
May 31, 2019 | May 31, 2018 | Increase (Decrease) | Percent Change | ||||||||||
Gross profit | $ | 1,085.0 | $ | 1,073.5 | |||||||||
Add-back: Manufacturing inefficiencies (1) | 0.9 | — | |||||||||||
Add-back: Acquisition-related items (2) | 1.2 | 0.5 | |||||||||||
Add-back: Excess inventory (3) | — | 3.1 | |||||||||||
Adjusted gross profit | $ | 1,087.1 | $ | 1,077.1 | $ | 10.0 | 0.9 | % | |||||
Percent of net sales | 39.8 | % | 41.1 | % | (130 | ) | bps | ||||||
Selling, distribution, and administrative expenses | $ | 751.1 | $ | 745.7 | |||||||||
Less: Amortization of acquired intangible assets | (23.1 | ) | (20.5 | ) | |||||||||
Less: Share-based payment expense | (22.9 | ) | (24.4 | ) | |||||||||
Less: Acquisition-related items (2) | — | (1.8 | ) | ||||||||||
Adjusted selling, distribution, and administrative expenses | $ | 705.1 | $ | 699.0 | $ | 6.1 | 0.9 | % | |||||
Percent of net sales | 25.8 | % | 26.7 | % | (90 | ) | bps | ||||||
Operating profit | $ | 332.6 | $ | 317.1 | |||||||||
Add-back: Amortization of acquired intangible assets | 23.1 | 20.5 | |||||||||||
Add-back: Share-based payment expense | 22.9 | 24.4 | |||||||||||
Add-back: Manufacturing inefficiencies (1) | 0.9 | — | |||||||||||
Add-back: Acquisition-related items (2) | 1.2 | 2.3 | |||||||||||
Add-back: Excess inventory (3) | — | 3.1 | |||||||||||
Add-back: Special charge | 1.3 | 10.7 | |||||||||||
Adjusted operating profit | $ | 382.0 | $ | 378.1 | $ | 3.9 | 1.0 | % | |||||
Percent of net sales | 14.0 | % | 14.4 | % | (40 | ) | bps | ||||||
Net income | $ | 234.3 | $ | 241.4 | |||||||||
Add-back: Amortization of acquired intangible assets | 23.1 | 20.5 | |||||||||||
Add-back: Share-based payment expense | 22.9 | 24.4 | |||||||||||
Add-back: Manufacturing inefficiencies (1) | 0.9 | — | |||||||||||
Add-back: Acquisition-related items (2) | 1.2 | 2.3 | |||||||||||
Add-back: Excess inventory (3) | — | 3.1 | |||||||||||
Add-back: Special charge | 1.3 | 10.7 | |||||||||||
Total pre-tax adjustments to net income | 49.4 | 61.0 | |||||||||||
Income tax effect | (11.3 | ) | (15.7 | ) | |||||||||
Less: Discrete income tax benefits of the TCJA (4) | — | (31.2 | ) | ||||||||||
Adjusted net income | $ | 272.4 | $ | 255.5 | $ | 16.9 | 6.6 | % | |||||
Diluted earnings per share | $ | 5.87 | $ | 5.85 | |||||||||
Adjusted diluted earnings per share | $ | 6.83 | $ | 6.19 | $ | 0.64 | 10.3 | % |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1a. | Risk Factors |
Item 5. | Other Information |
• | addition of performance-based restricted shares utilizing a 3-year performance metric; |
• | elimination of stock options; |
• | addition of Return on Invested Capital in excess of Weighted Average Cost of Capital as a performance metric under both the cash bonus and equity incentive programs; and |
• | elimination of annual Diluted Earnings Per Share as a metric under both the cash bonus and equity incentive plans. |
(i) | An additional benefit was provided for those participants who were actively employed in the capacity of the Company’s Chief Executive Officer or the Company’s Chief Financial Officer on July 1, 2019. The additional benefit (“Supplemental Accrued Benefit”) provides a monthly benefit for 180 months commencing at age 60 (or following retirement thereafter) equal to 1.4% of the participant's "average annual compensation" multiplied by his years of credited service not to exceed 10 years, divided by 12. Participants may elect to receive the actuarial equivalent of the incremental benefit in the form of a lump sum cash payment. |
(ii) | A modified benefit (“Modified Accrued Benefit”) was provided for eligible employees who first become a participant on or after September 1, 2019, and who have been both an active employee and an eligible participant in the Acuity Brands, Inc. 2005 Supplemental Deferred Savings Plan for a period of at least 10 years. The Modified Accrued Benefit provides for a monthly benefit payable for 180 months commencing at age 60 (or following retirement thereafter) equal to 2.8% of the participant's "average annual compensation" multiplied by his years of credited service not to exceed 10 years, divided by 12. |
(i) | For an executive who becomes a participant in the SERP on or after September 1, 2019 and receives the Modified Accrued Benefit under the SERP, the executive shall continue to be eligible to receive the employer matching and supplemental contribution credits under the SDSP. |
Item 6. | Exhibits |
EXHIBIT 3 | (a) | Reference is made to Exhibit 3.1 of registrant's Form 8-K as filed with the Commission on September 26, 2007, which is incorporated herein by reference. | ||
(b) | Reference is made to Exhibit 3.2 of registrant's Form 8-K as filed with the Commission on September 26, 2007, which is incorporated herein by reference. | |||
(c) | Reference is made to Exhibit 3.C of registrant's Form 10-Q as filed with the Commission on January 9, 2017, which is incorporated herein by reference. | |||
(d) | Reference is made to Exhibit 3.D of registrant's Form 10-Q as filed with the Commission on January 9, 2017, which is incorporated herein by reference. | |||
EXHIBIT 10 | (a) | Reference is made to Exhibit 10.1 of registrant's Form 8-K as filed with the Commission on April 24, 2019, which is incorporated herein by reference. | ||
(b) | Filed with the Commission as part of this Form 10-Q. | |||
(c) | Filed with the Commission as part of this Form 10-Q. | |||
EXHIBIT 31 | (a) | Filed with the Commission as part of this Form 10-Q. | ||
(b) | Filed with the Commission as part of this Form 10-Q. | |||
EXHIBIT 32 | (a) | Filed with the Commission as part of this Form 10-Q. | ||
(b) | Filed with the Commission as part of this Form 10-Q. | |||
EXHIBIT 101 | .INS | XBRL Instance Document | The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
.SCH | XBRL Taxonomy Extension Schema Document. | Filed with the Commission as part of this Form 10-Q. | ||
.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | Filed with the Commission as part of this Form 10-Q. | ||
.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | Filed with the Commission as part of this Form 10-Q. | ||
.LAB | XBRL Taxonomy Extension Label Linkbase Document. | Filed with the Commission as part of this Form 10-Q. | ||
.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | Filed with the Commission as part of this Form 10-Q. |
Date: | July 2, 2019 | By: | /S/ VERNON J. NAGEL | |
VERNON J. NAGEL CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER |
Date: | July 2, 2019 | By: | /S/ RICHARD K. REECE | |
RICHARD K. REECE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (Principal Financial and Accounting Officer) |
1.1 | Definitions...................................................................................................... 1 |
(a) | Accrued Benefit...............................................................................1 |
(b) | Act....................................................................................................2 |
(c) | Actuarial (or Actuarially) Equivalent...............................................2 |
(d) | Administrator....................................................................................2 |
(e) | Authorized Leave of Absence...........................................................2 |
(f) | Annual Bonus....................................................................................2 |
(g) | Average Annual Compensation.........................................................2 |
(h) | Beneficiary.........................................................................................2 |
(i) | Board.................................................................................................3 |
(j) | Break in Service................................................................................3 |
(k) | Company...........................................................................................3 |
(l) | Compensation...................................................................................3 |
(m) | Disability Retirement Date...............................................................3 |
(n) | Early Retirement Date......................................................................3 |
(o) | Effective Date...................................................................................3 |
(p) | Executive Officer..............................................................................3 |
(q) | Fiduciaries........................................................................................3 |
(r) | Late Retirement Date.......................................................................4 |
(s) | Normal Retirement Date..................................................................4 |
(t) | NSI...................................................................................................4 |
(u) | Participant........................................................................................4 |
(v) | Plan..................................................................................................4 |
(w) | Plan Year..........................................................................................4 |
(x) | Prior Plan.........................................................................................4 |
(y) | Retirement ......................................................................................4 |
(z) | Surviving Spouse............................................................................4 |
(aa) | Termination Date.............................................................................4 |
(bb) | Total and Permanent Disability.......................................................4 |
(cc) | Vested Terminee..............................................................................4 |
(dd) | Year of Credited Service.................................................................4 |
(ee) | Pre-Section 409A Benefit...............................................................5 |
(ff) | Section 409A..................................................................................5 |
(gg) | Section 409A Benefit......................................................................5 |
(hh) | Unforeseeable Emergency..............................................................5 |
1.2 | Construction..................................................................................................5 |
2.1 | Eligibility for Participation..........................................................................6 |
(a) | In General.....................................................................................6 |
(b) | Special Eligibility.........................................................................6 |
2.2 | Break in Service..........................................................................................6 |
2.3 | Participants Bound......................................................................................6 |
2.4 | Transfers......................................................................................................6 |
(a) | When Employee Becomes Executive Officer..............................6 |
(b) | Accrued Benefit Upon Transfer To A Non-Eligible Status..........7 |
3.1 | Normal Retirement Benefit.........................................................................8 |
3.2 | Late Retirement Benefit..............................................................................8 |
3.3 | Early Retirement Benefit.............................................................................8 |
3.4 | Disability Retirement Benefit......................................................................9 |
3.5 | Vested Terminee Benefit..............................................................................9 |
3.6 | Termination Prior to Completion of Three (3) Years of Credited Service.10 |
3.7 | Form of Payment of Standard Accrued Benefit or Modified |
3.8 | Form of Payment of Incremental Accrued Benefit or Supplemental Accrued Benefit ........................................................................................................10 |
3.9 | Pre-Section 409A Benefit...........................................................................10 |
3.10 | Payments to Specified Employees............................................................. 11 |
3.11 | Payments Due to Unforeseeable Emergency:.............................................11 |
5.1 | Payment of Costs and Expenses..................................................................13 |
6.1 | Allocation of Responsibility Among Fiduciaries........................................14 |
6.2 | Fiduciary Duties..........................................................................................14 |
6.3 | Company Filing Responsibility...................................................................14 |
7.1 | General Duties.............................................................................................15 |
7.2 | Application and Forms For Benefit.............................................................15 |
7.3 | Facility of Payment......................................................................................16 |
7.4 | Rules and Decisions.....................................................................................16 |
7.5 | Company to Furnish Information................................................................16 |
7.6 | Administrator to Furnish Other Information...............................................16 |
12.1 | Nonguarantee of Employment.....................................................................21 |
12.2 | Rights Under Plan........................................................................................21 |
12.3 | Nonalienation of Benefits............................................................................21 |
12.4 | Headings for Convenience Only..................................................................21 |
12.5 | Multiple Copies...........................................................................................21 |
12.6 | Governing Law............................................................................................21 |
12.7 | Guarantee of Performance...........................................................................21 |
12.8 | Payment of Legal Fees................................................................................21 |
12.9 | Section 409A...............................................................................................22 |
13.1 | Cause............................................................................................................23 |
13.2 | Change in Control........................................................................................23 |
13.3 | Termination of Employment........................................................................24 |
13.4 | Plan Termination Upon a Section 409A Change in Control Event..............24 |
13.5 | Amendment or Termination.........................................................................25 |
1. | I have reviewed this report on Form 10-Q of Acuity Brands, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Vernon J. Nagel | ||||
Vernon J. Nagel | ||||
Chairman, President, and Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Acuity Brands, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Richard K. Reece | ||
Richard K. Reece | ||
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
/s/ Vernon J. Nagel | ||
Vernon J. Nagel | ||
Chairman, President, and Chief Executive Officer | ||
July 2, 2019 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation. |
/s/ Richard K. Reece | ||
Richard K. Reece | ||
Executive Vice President and Chief Financial Officer | ||
July 2, 2019 |
Document and Entity Information - shares |
9 Months Ended | |
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May 31, 2019 |
Jun. 28, 2019 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | ACUITY BRANDS INC | |
Entity Central Index Key | 0001144215 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --08-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 39,899,076 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
May 31, 2019 |
Aug. 31, 2018 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 1.3 | $ 1.3 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (shares) | 53,754,706 | 53,667,327 |
Treasury stock, shares (shares) | 14,075,197 | 13,676,689 |
Description of Business and Basis of Presentation |
9 Months Ended |
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May 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Acuity Brands, Inc. (“Acuity Brands”) is the parent company of Acuity Brands Lighting, Inc. (“ABL”) and other wholly-owned subsidiaries (Acuity Brands, ABL, and such other subsidiaries are collectively referred to herein as “we,” “our,” “us,” “the Company,” or similar references) and was incorporated in 2001 under the laws of the State of Delaware. We are one of the world’s leading providers of lighting and building management solutions and services for commercial, institutional, industrial, infrastructure, and residential applications throughout North America and select international markets. Our lighting and building management solutions include devices such as luminaires, lighting controls, controllers for various building systems, power supplies, prismatic skylights, and drivers, as well as integrated systems designed to optimize energy efficiency and comfort for various indoor and outdoor applications. Additionally, we continue to expand our solutions portfolio, including software and services, to provide a host of other economic benefits resulting from data analytics that enables the Internet of Things (“IoT”), supports the advancement of smart buildings, smart cities, and the smart grid, and allows businesses to develop custom applications to scale their operations. We have one reportable segment serving the North American lighting market and select international markets. We prepared the Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) to present the financial position, results of operations, and cash flows of Acuity Brands and its wholly-owned subsidiaries. These unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of May 31, 2019, our consolidated comprehensive income for the three and nine months ended May 31, 2019 and 2018, and our consolidated cash flows for the nine months ended May 31, 2019 and 2018. Certain information and footnote disclosures normally included in our annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. However, we believe that the disclosures included herein are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited consolidated financial statements of the Company as of and for the three years ended August 31, 2018 and notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on October 25, 2018 (File No. 001-16583) (“Form 10-K”). The results of operations for the three and nine months ended May 31, 2019 and 2018 are not necessarily indicative of the results to be expected for the full fiscal year due primarily to seasonality, which results in our net sales and net income generally being higher in the second half of our fiscal year, the impact of any acquisitions, and, among other reasons, the continued uncertainty of general economic conditions that may impact our key end markets for the remainder of fiscal 2019.
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Significant Accounting Policies |
9 Months Ended |
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May 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Reclassifications Certain prior-period amounts have been reclassified to conform to the current year presentation. No material reclassifications occurred during the current period. Refer to the New Accounting Pronouncements footnote for additional information regarding retrospective reclassifications related to accounting standards adopted in the current year.
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Acquisitions and Investments |
9 Months Ended |
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May 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions and Investments | Acquisitions and Investments No acquisitions were completed during the first nine months of fiscal 2019. The following discussion relates to acquisitions completed during fiscal 2018. IOTA Engineering, LLC On May 1, 2018, using cash on hand and borrowings available under existing credit arrangements, we acquired all of the equity interests of IOTA Engineering, LLC (“IOTA”). IOTA is headquartered in Tucson, Arizona and manufactures highly engineered emergency lighting products and power equipment for commercial and institutional applications both in the U.S. and international markets. The operating results of IOTA have been included in our consolidated financial statements since the date of acquisition and are not material to our financial condition, results of operations, or cash flows. Lucid Design Group, Inc. On February 12, 2018, using cash on hand, we acquired all of the equity interests of Lucid Design Group, Inc (“Lucid”). Lucid is headquartered in Oakland, California and provides a data and analytics platform to make data-driven decisions to improve building efficiency and drive energy conservation and savings. The operating results of Lucid have been included in our consolidated financial statements since the date of acquisition and are not material to our financial condition, results of operations, or cash flows. Accounting for Fiscal 2018 Acquisitions Acquisition-related costs were expensed as incurred. Amounts related to the acquisition accounting for these acquisitions are reflected in the Consolidated Balance Sheets. The aggregate purchase price of these acquisitions reflects total goodwill and identified intangible assets of approximately $76.8 million and $81.8 million, respectively, as of May 31, 2019. Identified intangible assets consist of indefinite-lived marketing-related intangibles as well as definite-lived customer-based and technology-based assets, which have a weighted average useful life of approximately 14 years. As of May 31, 2019, we have finalized the acquisition accounting for Lucid and IOTA. There were no material changes to our financial statements as a result of the finalization of the acquisition accounting for Lucid or IOTA.
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New Accounting Pronouncements |
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New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in Fiscal 2019 ASU 2017-01 -— Clarifying the Definition of a Business In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets obtained in an acquisition is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. We adopted ASU 2017-01 effective September 1, 2018 and applied the guidance prospectively. The provisions of ASU 2017-01 did not have a material effect on our financial condition, results of operations, or cash flows. ASU 2016-15 — Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. These cash flows include debt prepayment and extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance. We adopted ASU 2016-15 effective September 1, 2018 and applied the changes retrospectively. We maintain life insurance policies on certain former employees primarily to satisfy obligations under certain deferred compensation plans. As required by the standard, proceeds from these policies are now classified as cash inflows from investing activities. We received $0.8 million and $1.0 million from corporate-owned life insurance policies during the nine months ended May 31, 2019 and 2018, respectively. As such, cash flows from operations for the nine months ended May 31, 2018 decreased $1.0 million, with a corresponding increase to cash flows from investing activities, compared to amounts previously reported. The remaining provisions of ASU 2016-15 did not impact our financial statements for the periods presented. ASU 2017-07 — Presentation of Net Periodic Pension Cost In March 2017, the FASB issued ASU No. 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”), which changes the presentation of net periodic pension cost related to employer sponsored defined benefit plans and other postretirement benefits. Service cost is now included within the same income statement line item as other compensation costs arising from services rendered during the period, while other components of net periodic pension cost are presented separately outside of operating income. Additionally, only service costs may be capitalized in assets. We adopted ASU 2017-07 effective as of September 1, 2018. We applied the standard retrospectively for the presentation of the service cost component and the other components of net periodic pension cost within our income statements. As a practical expedient, we used amounts previously disclosed in the Pension and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements within our Form 10-K as the basis for retrospective application because amounts capitalized in inventory at a given point in time are de minimis and determining these amounts was impractical. Upon adoption of ASU 2017-07, our previously reported Operating profit for the three and nine months ended May 31, 2018 increased $1.5 million and $4.6 million, respectively, with a corresponding increase to Miscellaneous expense (income), net. The provisions of ASU 2017-07 have no impact to our net income or earnings per share. The impact of the provisions of ASU 2017-07 on the Consolidated Statement of Comprehensive Income for the three and nine months ended May 31, 2018 are as follows (in millions):
ASC 606 — Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which replaced the existing revenue recognition guidance in U.S. GAAP. Since the issuance of ASU 2014-09, the FASB released several amendments to improve and clarify the implementation guidance, as well as to change the effective date. These standards have been collectively codified within Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard also requires additional disclosures about the nature, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in those judgments. We adopted ASC 606 effective September 1, 2018 using the modified retrospective method and recognized a cumulative effect of applying ASC 606 of $13.0 million in Retained earnings on the Consolidated Balance Sheet as of this date. We applied the standard to all contracts as of the transition date. Information for prior years presented has not been restated and continues to reflect the authoritative accounting standards in effect for those periods. Adjustments related to the adoption of ASC 606 include additional deferrals of revenue recognition for service-type warranties and the gross presentation of right of return assets and refund liabilities for sales with a right of return. The effects of the adoption of ASC 606 on our Consolidated Statement of Comprehensive Income for the three and nine months ended May 31, 2019, and the Consolidated Balance Sheet as of May 31, 2019 are as follows (in millions except per share amounts):
Accounting Standards Yet to Be Adopted In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”), which will require customers to apply internal-use software guidance to determine the implementation costs that are able to be capitalized. Capitalized implementation costs will be required to be amortized over the term of the arrangement, beginning when the cloud computing arrangement is ready for its intended use. ASU 2018-15 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2019. The standard allows changes to be applied either retrospectively or prospectively. We will adopt the standard as required in fiscal 2021. The provisions of ASU 2018-15 are not expected to have a material effect on our financial condition, results of operations, or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires an entity to assess impairment of its financial instruments based on its estimate of expected credit losses. The provisions of ASU 2016-13 are effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2019. Entities are required to apply these changes through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We will adopt the amendments as required in fiscal 2021. The provisions of ASU 2016-13 are not expected to have a material effect on our financial condition, results of operations, or cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which requires lessees to include most leases on the balance sheet. ASU 2016-02 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2018. Since the issuance of ASU 2016-02, the FASB released several amendments to improve and clarify the implementation guidance, as well as to change the allowable adoption methods. These standards have been collectively codified within ASC 842, Leases (“ASC 842”). The standard allows entities to present the effects of the accounting change as either a cumulative adjustment as of the beginning of the earliest period presented or as of the date of adoption. We have an implementation team tasked with reviewing our lease obligations and determining the impact of the new standard to our financial statements. The team is also tasked with identifying appropriate changes to our business processes, systems, and controls to support recognition and disclosure under the new standard. Currently, the implementation team has substantially completed its review of outstanding property and equipment leases, which represent our primary outstanding lease obligations. The team is in the process of reviewing and analyzing other contracts that may have ASC 842 impacts, including information technology contracts. The implementation team reports its findings and progress of the project to management on a frequent basis and to the Audit Committee of the Board of Directors on a quarterly basis. Based on our current lease portfolio, we preliminarily expect ASC 842 to have a material impact on our consolidated balance sheets primarily related to the recognition of operating lease assets and liabilities. However, we do not expect the standard to have a material impact on our consolidated statements of comprehensive income or cash flows. Further details regarding our undiscounted future lease payments as well as the timing of those payments are included within the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K. We will adopt the standard as required on September 1, 2019. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.
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Revenue Recognition |
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Revenue Recognition | Revenue Recognition We recognize revenue when we transfer control of goods and services to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for goods and services and is recognized net of allowances for rebates, sales incentives, product returns, and discounts to customers. Sales and use taxes collected on behalf of governmental authorities are excluded from revenues. Payment is generally due and received within 60 days from the point of sale or prior to the transfer of control of certain goods and services. No payment terms extend beyond one year, and we apply the practical expedient within ASC 606 to conclude that no significant financing terms exist within our contracts with customers. Allowances for cash discounts to customers are estimated using the expected value method based on historical experience and are recorded as a reduction to sales. Our standard terms and conditions of sale allow for the return of certain products within four months of the date of shipment. We also provide for limited product return rights to certain distributors and other customers, primarily for slow moving or damaged items subject to certain defined criteria. The limited product return rights generally allow customers to return resalable products purchased within a specified time period and subject to certain limitations, including, at times, when accompanied by a replacement order of equal or greater value. At the time revenue is recognized, we record a refund liability for the expected value of future returns primarily based on historical experience, specific notification of pending returns, or based on contractual terms with the respective customers. Although historical product returns generally have been within expectations, there can be no assurance that future product returns will not exceed historical amounts. A significant increase in product returns could have a material adverse impact on our operating results in future periods. Total refund liabilities recorded under ASC 606 related to rights of return, cash discounts, and other miscellaneous credits to customers were $38.8 million and $41.2 million as of May 31, 2019 and September 1, 2018, respectively, and are reflected within Other accrued liabilities on the Consolidated Balance Sheets. Additionally, we record right of return assets for products expected to be returned to our distribution centers, which are included within Prepayments and other current assets on the Consolidated Balance Sheets. Such assets totaled $15.3 million and $16.4 million as of May 31, 2019 and September 1, 2018, respectively. We also maintain one-time or ongoing marketing and trade-promotion programs with certain customers that require us to estimate and accrue the expected costs of such programs. These arrangements include cooperative marketing programs, merchandising of our products, introductory marketing funds for new products, and other trade-promotion activities conducted by the customer. Costs associated with these programs are generally estimated based on the most likely amount expected to be settled based on the context of the individual contract and are reflected within the Consolidated Statements of Comprehensive Income in accordance with ASC 606, which in most instances requires such costs to be recorded as reductions of revenue. The refund liabilities associated with these programs totaled $31.8 million and $43.9 million as of May 31, 2019 and September 1, 2018, respectively, and are reflected within Other accrued liabilities on the Consolidated Balance Sheets. Costs to obtain and fulfill contracts, such as sales commissions and shipping and handling activities, are short-term in nature and are expensed as incurred. Nature of Goods and Services Products Approximately 95% of revenues for the periods presented were generated from short-term contracts with our customers to deliver tangible goods such as luminaires, lighting controllers, controllers for various building systems, power supplies, prismatic skylights, and drivers. We record revenue from these contracts when the customer obtains control of those goods. For sales designated free on board shipping point, control is transferred at the time of shipment. For sales designated free on board destination, customers take control when a product is delivered to the customer’s delivery site. Professional Services We collect fees associated with training, installation, and technical support services, primarily related to the set up of our lighting solutions. We recognize revenue for these one-time services at the time the service is performed. We also sell certain service-type warranties that extend coverages for products beyond their base warranties. We account for service-type warranties as distinct performance obligations and recognize revenue for these contracts ratably over the life of the additional warranty period. Claims related to service-type warranties are expensed as incurred. Software Software sales include licenses for software, data usage fees, and software as a service arrangements, which generally extend for one year or less. We recognize revenue for software based on the contractual rights provided to a customer, which typically results in the recognition of revenue ratably over the contractual service period. Shipping and Handling Activities We account for all shipping and handling activities as activities to fulfill the promise to transfer products to our customers. As such, we do not consider shipping and handling activities to be separate performance obligations, and we expense these costs as incurred. Contracts with Multiple Performance Obligations A small portion (approximately 5% for the periods presented) of our revenue was derived from the combination of any or all of our products, professional services, and software licenses. Significant judgment may be required to determine which performance obligations are distinct and should be accounted for separately. We allocate the expected consideration to be collected to each distinct performance obligation based on its standalone selling price. Standalone selling price is generally determined using a cost plus margin valuation when no observable input is available. The amount of consideration allocated to each performance obligation is recognized as revenue in accordance with the timing for products, professional services, and software as described above. Contract Balances Our rights related to collections from customers are unconditional and are reflected within Accounts receivable on the Consolidated Balance Sheets. We do not have any other significant contract assets. Contract liabilities arise when we receive cash or an unconditional right to collect cash prior to the transfer of control of goods or services. The amount of transaction price from contracts with customers allocated to our contract liabilities as of May 31, 2019 and September 1, 2018 consists of the following (in millions):
Current deferred revenues primarily consist of customer prepayments, software licenses, and to a lesser extent professional service and sales-type warranty fees collected prior to performing the related service. Current deferred revenues are included within Other current liabilities on the Consolidated Balance Sheets. These services are expected to be performed within one year. Non-current deferred revenues primarily consist of long-term service-type warranties, which are typically recognized ratably as revenue between five and ten years from the date of sale, and are included within Other long-term liabilities on the Consolidated Balance Sheets. Revenue recognized from beginning balances of contract liabilities during the nine months ended May 31, 2019 totaled $3.7 million. Unsatisfied performance obligations that do not represent contract liabilities consist primarily of orders for physical goods that have not yet been shipped. This backlog of orders at any given time is affected by various factors, including seasonality, cancellations, sales promotions, production cycle times, and the timing of receipt and shipment of orders, which are usually shipped within a few weeks of order receipt. Accordingly, a comparison of backlog orders from period to period is not necessarily meaningful and may not be indicative of future shipments. Disaggregated Revenues Our lighting and building management solutions are sold primarily through independent sales agents who cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, and directly to large corporate accounts. The following table shows revenue from contracts with customers by sales channel for the three and nine months ended May 31, 2019 (in millions):
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements We determine fair value measurements based on the assumptions a market participant would use in pricing an asset or liability. ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a three level hierarchy making a distinction between market participant assumptions based on (i) unadjusted quoted prices for identical assets or liabilities in an active market (Level 1), (ii) quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (Level 2), and (iii) prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (Level 3). Our cash and cash equivalents (Level 1), which are required to be carried at fair value and measured on a recurring basis, were $333.7 million and $129.1 million as of May 31, 2019 and August 31, 2018, respectively. We utilize valuation methodologies to determine the fair values of our financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC 820. All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. There were no material changes to the valuation methods or assumptions used to determine fair values during the current period. We used quoted market prices to determine the fair value of Level 1 assets and liabilities. No transfers between the levels of the fair value hierarchy occurred during the current fiscal period. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence. Disclosures of fair value information about financial instruments (whether or not recognized in the balance sheet), for which it is practicable to estimate that value, are required each reporting period in addition to any financial instruments carried at fair value on a recurring basis as prescribed by ASC 825, Financial Instruments (“ASC 825”). In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The carrying values and estimated fair values of certain of our financial instruments were as follows at May 31, 2019 and August 31, 2018 (in millions):
The senior unsecured public notes are carried at the outstanding balance, net of unamortized bond discount and deferred costs, as of the end of the reporting period. Fair value is estimated based on discounted future cash flows using rates currently available for debt of similar terms and maturity (Level 2). The industrial revenue bond is carried at the outstanding balance as of the end of the reporting period. The industrial revenue bond is a tax-exempt, variable-rate instrument that resets on a weekly basis; therefore, we estimate that the face amount of the bond approximates fair value as of May 31, 2019 based on bonds of similar terms and maturity (Level 2). The bank loans are carried at the outstanding balance as of the end of the reporting period. Fair value is estimated based on discounted future cash flows using rates currently available for debt of similar terms and maturity (Level 2). ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value to us. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instruments. In evaluating our management of liquidity and other risks, the fair values of all assets and liabilities should be taken into consideration, not only those presented above.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | odwill and Intangible Assets Through multiple acquisitions, we acquired definite-lived intangible assets consisting primarily of trademarks and trade names associated with specific products, distribution networks, patented technology, non-compete agreements, and customer relationships, which are amortized over their estimated useful lives. Indefinite-lived intangible assets consist of trade names that are expected to generate cash flows indefinitely. We recorded amortization expense of $7.7 million and $7.2 million during the three months ended May 31, 2019 and 2018, respectively, and $23.1 million and $20.5 million during the nine months ended May 31, 2019 and 2018, respectively. Amortization expense is generally recorded on a straight-line basis and is expected to be approximately $30.7 million in fiscal 2019, $30.7 million in fiscal 2020, $27.9 million in fiscal 2021, $27.0 million in fiscal 2022, and $25.8 million in fiscal 2023. The changes in the carrying amount of goodwill during the nine months ended May 31, 2019 and 2018 are summarized below (in millions):
Further discussion of goodwill and other intangible assets is included within the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.
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Inventories |
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Inventories | Inventories Inventories include materials, labor, inbound freight, and related manufacturing overhead, are stated at the lower of cost (on a first-in, first-out or average cost basis) and net realizable value, and consist of the following (in millions):
_______________________________________ (1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, we do not believe the segregation of raw materials and work in process is meaningful information.
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Earnings Per Share |
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Earnings per Share | Earnings Per Share Basic earnings per share for the periods presented is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised, all unvested share-based payment awards were vested, and other distributions related to deferred stock agreements were incurred. The following table calculates basic earnings per common share and diluted earnings per common share for the three and nine months ended May 31, 2019 and 2018 (in millions, except per share data):
The following table presents stock options and restricted stock awards that were excluded from the diluted earnings per share calculation for the three and nine months ended May 31, 2019 and 2018 as the effect of inclusion would have been antidilutive:
Further discussion of our stock options and restricted stock awards is included within the Common Stock and Related Matters and Share-based Payments footnotes of the Notes to Consolidated Financial Statements within our Form 10-K.
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Changes in Stockholders' Equity |
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Changes in Stockholders' Equity | Changes in Stockholders' Equity The following tables summarize changes in the components of stockholders' equity for the three and nine months ended May 31, 2019 and 2018 (in millions):
(1) See Income Taxes footnote of the Notes to Consolidated Financial Statements within our Form 10-K for additional details.
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Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | Comprehensive Income Comprehensive income represents a measure of all changes in equity that result from recognized transactions and other economic events other than transactions with owners in their capacity as owners. Other comprehensive income (loss) includes foreign currency translation and pension adjustments. The before tax amounts of the defined benefit pension plan items reclassified from Accumulated other comprehensive loss are included in Miscellaneous expense, net on the Consolidated Statements of Comprehensive Income. See the Pension Plans footnote within the Notes to Consolidated Financial Statements for additional details. The following table presents the changes in each component of accumulated other comprehensive loss during the nine months ended May 31, 2019 and 2018 (in millions):
(1) See Income Taxes footnote of the Notes to Consolidated Financial Statements within our Form 10-K for additional details. The following table presents the tax expense or benefit allocated to each component of other comprehensive loss for the three and nine months ended May 31, 2019 and 2018 (in millions):
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Debt and Lines of Credit |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Lines of Credit | Debt and Lines of Credit Lines of Credit On June 29, 2018, we entered into a credit agreement (“Credit Agreement”) with a syndicate of banks that provides us with a $400.0 million five-year unsecured revolving credit facility (“Revolving Credit Facility”) and a $400.0 million unsecured delayed draw term loan facility (“Term Loan Facility”). We had no borrowings outstanding under the current Revolving Credit Facility or Term Loan Facility as of May 31, 2019. Additionally, we had no borrowings outstanding under our previous credit facility as of August 31, 2018. Generally, amounts outstanding under the Revolving Credit Facility allow for borrowings to bear interest at either the Eurocurrency Rate or the base rate at our option, plus an applicable margin. Eurocurrency Rate advances can be denominated in a variety of currencies, including U.S. Dollars, and amounts outstanding bear interest at a periodic fixed rate equal to the London Interbank Offered Rate (“LIBOR”) or screen rate for the applicable currency plus an applicable margin. The Eurocurrency applicable margin is based on our leverage ratio, as defined in the Credit Agreement, with such margin ranging from 1.000% to 1.375%. Base rate advances bear interest at an alternate base rate plus an applicable margin. The base rate applicable margin is based on our leverage ratio, as defined in the Credit Agreement, with such margin ranging from 0.000% to 0.375%. The Term Loan Facility allows for borrowings to be drawn over a period ending December 31, 2019, utilizing up to four separate installments, which are U.S. dollar denominated. Borrowings under the Term Loan Facility will amortize in equal quarterly installments of 2.5% per year in year one, 2.5% per year in year two, 5.0% per year in year three, 5.0% per year in year four, and 7.5% per year in year five. Any remaining borrowings under the Term Loan Facility are due and payable in full on June 29, 2023. The Term Loan Facility allows for borrowings to bear interest at either a Eurocurrency Rate or the base rate, at our option, in each case plus an applicable margin. Eurocurrency Rate advances can be denominated in a variety of currencies, including U.S. Dollars, and amounts outstanding bear interest at a periodic fixed rate equal to the LIBOR or screen rate for the applicable currency plus an applicable margin. The Eurocurrency applicable margin is based on our leverage ratio, as defined in the Credit Agreement, with such margin ranging from 0.875% to 1.250%. Base Rate advances bear interest at an alternate base rate plus an applicable margin. The base rate applicable margin is based on our leverage ratio, as defined in the Credit Agreement, with such margin ranging from 0.0% to 0.25%. We are required to pay certain fees in connection with the Credit Agreement, including administrative service fees and annual facility fees. The annual facility fee is payable quarterly, in arrears, and is determined by our leverage ratio as defined in the Credit Agreement. The facility fee ranges from 0.125% to 0.25% of the aggregate $800.0 million commitment of the lenders under the Credit Agreement. The Credit Agreement contains financial covenants, including a minimum interest expense coverage ratio (“Minimum Interest Expense Coverage Ratio”) and a leverage ratio (“Maximum Leverage Ratio”) of total indebtedness to earnings before interest, tax, depreciation, and amortization (“EBITDA”), as such terms are defined in the Credit Agreement. These ratios are computed at the end of each fiscal quarter for the most recent 12-month period. The Credit Agreement generally allows for a Minimum Interest Expense Coverage Ratio of 2.50 and a Maximum Leverage Ratio of 3.50, subject to certain conditions, as such terms are defined in the Credit Agreement. We were in compliance with all financial covenants under the Credit Agreement as of May 31, 2019. At May 31, 2019, we had additional borrowing capacity under the Credit Agreement of $794.7 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility and the Term Loan Facility less the outstanding letters of credit of $5.3 million issued under the Revolving Credit Facility. As of May 31, 2019, we had outstanding letters of credit totaling $9.5 million, primarily for securing collateral requirements under our casualty insurance programs and for providing credit support for our industrial revenue bond, which includes the $5.3 million issued under the Revolving Credit Facility. Long-term Debt At May 31, 2019, we had $350.0 million of publicly-traded, senior unsecured notes outstanding at a 6% interest rate that are scheduled to mature in December 2019 (the “Unsecured Notes”). Although the Unsecured Notes will mature within one year from May 31, 2019, we have the ability and intent to refinance these borrowings using availability under our Term Loan Facility, subject to satisfying the applicable conditions precedent. Currently, we plan to refinance the Unsecured Notes in full at maturity with borrowings under the Term Loan Facility, of which $341.1 million of the current carrying value of the Unsecured Notes would be due more than one year from the anticipated refinancing date. As such, this amount is reflected within Long-term debt on the Consolidated Balance Sheets as of May 31, 2019. We also had $4.0 million of tax-exempt industrial revenue bonds that are scheduled to mature in 2021 and $2.8 million outstanding under fixed-rate bank loans outstanding at May 31, 2019. Further discussion of our long-term debt is included within the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements within our Form 10-K. Interest Expense, net Interest expense, net, is comprised primarily of interest expense on long-term debt, obligations in connection with non-qualified retirement benefits, and Revolving Credit Facility borrowings, partially offset by interest income earned on cash and cash equivalents. The following table summarizes the components of interest expense, net for the three and nine months ended May 31, 2019 and 2018 (in millions):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, we are subject to the effects of certain contractual stipulations, events, transactions, and laws and regulations that may, at times, require the recognition of liabilities, such as those related to self-insurance reserves and claims, legal and contractual issues, environmental laws and regulations, guarantees, and indemnities. We establish reserves when the associated costs related to uncertainties or guarantees become probable and can be reasonably estimated. For the period ended May 31, 2019, no material changes have occurred in our reserves for self-insurance, litigation, environmental matters, guarantees and indemnities, or relevant events and circumstances, from those disclosed in the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K. Product Warranty and Recall Costs Our products generally have a standard warranty term of five years that assure our products comply with agreed upon specifications. We record an allowance for the estimated amount of future warranty costs when the related revenue is recognized. Estimated costs related to product recalls based on a formal campaign soliciting repair or return of that product are accrued when they are deemed to be probable and can be reasonably estimated. Estimated future warranty and recall costs are primarily based on historical experience of identified warranty and recall claims. However, there can be no assurance that future warranty or recall costs will not exceed historical amounts or that new technology products may not generate unexpected costs. If actual future warranty or recall costs exceed historical amounts, additional allowances may be required, which could have a material adverse impact on our results of operations and cash flows. Reserves for these product warranty and recall costs are included in Other accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets. The changes in the reserves for product warranty and recall costs during the nine months ended May 31, 2019 and 2018 are summarized as follows (in millions):
______________________________ (1) Certain service-type warranties accounted for as contingent liabilities prior to the adoption of ASC 606 are now reflected as contract liabilities effective September 1, 2018. Refer to the New Accounting Pronouncements and Revenue Recognition footnotes for additional information. Securities Class Action On January 3, 2018, a shareholder filed a class action complaint in the United States District Court for the District of Delaware against the Company and certain of our officers on behalf of all persons who purchased or otherwise acquired our stock between June 29, 2016 and April 3, 2017. On February 20, 2018, a different shareholder filed a second class action complaint in the same venue against the same parties on behalf of all persons who purchased or otherwise acquired our stock between October 15, 2015 and April 3, 2017. The cases were transferred on April 30, 2018, to the United States District Court for the Northern District of Georgia and subsequently were consolidated as In re Acuity Brands, Inc. Securities Litigation, Civil Action No. 1:18-cv-02140-MHC (N.D. Ga.). On October 5, 2018, the court-appointed lead plaintiff filed a consolidated amended class action complaint (the “Consolidated Complaint”), which supersedes the initial complaints. The Consolidated Complaint is brought on behalf of all persons who purchased our common stock between October 7, 2015 and April 3, 2017 and alleges that the Company and certain of our current officers and one former executive violated the federal securities laws by making false or misleading statements and/or omitting to disclose material adverse facts that (i) concealed known trends negatively impacting sales of the Company’s products and (ii) overstated our ability to achieve profitable sales growth. The plaintiff seeks class certification, unspecified monetary damages, costs, and attorneys’ fees. We dispute the allegations and intend to vigorously defend against the claims. We have filed a motion to dismiss the Consolidated Complaint. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, we are currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the matters described above. We maintain Director and Officer insurance policies that may cover any liability arising out of this litigation up to the policies’ limits, subject to a self-insured retention and other terms and conditions. Litigation We are subject to various other legal claims arising in the normal course of business, including patent infringement, employment matters, and product liability claims. Based on information currently available, it is the opinion of management that the ultimate resolution of any such pending and threatened legal proceedings will not have a material adverse effect on our financial condition, results of operations, or cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of any such matters, if unfavorable, could have a material adverse effect on our financial condition, results of operations, or cash flows in future periods. We establish reserves for legal claims when associated costs become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher than the amounts reserved for such claims. However, we cannot make a meaningful estimate of actual costs to be incurred that could possibly be higher or lower than the amounts reserved. Trade Compliance Matters In the course of routine reviews of import and export activity, we previously determined that we misclassified and/or inaccurately valued certain international shipments of products. We are conducting a detailed review of this activity to determine the extent of any liabilities and implementing the appropriate remedial measures. At this time, we are unable to determine the likelihood or amount of loss, if any, associated with these shipments.
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Share-based Payments |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payments | Share-based Payments We account for share-based payments through the measurement and recognition of compensation expense for share-based payment awards made to employees and directors, including stock options and restricted shares (all part of our equity incentive plan), and share units representing certain deferrals into our director deferred compensation plan or our supplemental deferred savings plan. The following table presents share-based payment expense and new shares issued upon exercise of stock options for the three and nine months ended May 31, 2019 and 2018 (in millions, except shares):
Further details regarding each of these award programs and our share-based payments are included within the Share-based Payments footnote of the Notes to Consolidated Financial Statements within our Form 10-K.
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Pension Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans | Pension Plans We have several pension plans, both qualified and non-qualified, covering certain hourly and salaried employees. Benefits paid under these plans are based generally on employees’ years of service and/or compensation during the final years of employment. We make annual contributions to the plans to the extent indicated by actuarial valuations and statutory requirements. Plan assets are invested primarily in equity and fixed income securities. Service cost of net periodic pension cost is allocated between Cost of products sold and Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income based on the nature of the employee's services. All other components of net periodic pension cost are included within Miscellaneous expense, net in the Consolidated Statements of Comprehensive Income. Net periodic pension cost during the three and nine months ended May 31, 2019 and 2018 included the following components before tax (in millions):
Further details regarding our pension plans are included within the Pension and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements within our Form 10-K.
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Special Charge |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Special Charge | Special Charge During fiscal 2019, we recognized pre-tax special charges of $1.3 million. These charges primarily related to move costs associated with the previously announced transfer of activities from a planned facility closure. During fiscal 2018, we recognized special charges consisting primarily of severance and employee-related benefit costs for the elimination of certain operations and positions following a realignment of our operating structure, including positions within various selling, distribution, and administrative (“SD&A”) departments. Further details regarding our special charges are included within the Special Charge footnote of the Notes to Consolidated Financial Statements within our Form 10-K. Costs reflected within Special charge on the Consolidated Statements of Comprehensive Income for the three and nine months ended May 31, 2019 and 2018 are summarized as follows (in millions):
As of May 31, 2019, remaining restructuring reserves were $3.9 million and are included in Accrued compensation on the Consolidated Balance Sheets. The changes in the reserves related to these programs during the nine months ended May 31, 2019 are summarized as follows (in millions):
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Income Taxes |
9 Months Ended |
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May 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the second quarter of fiscal 2019, we finalized our accounting for the tax effects of the U.S. Tax Cuts and Jobs Act (“TCJA”) in accordance with Staff Accounting Bulletin No. 118 (“SAB 118”). As a result, we recorded a net tax benefit of $0.9 million related to TCJA impacts including, but not limited to, our one-time transition tax, deferred income taxes, and executive compensation. Previously, we asserted that all undistributed earnings and original investments in foreign subsidiaries were indefinitely reinvested and, therefore, had not recorded any deferred taxes related to any outside basis differences associated with our foreign subsidiaries. As of May 31, 2019, the estimated undistributed earnings from foreign subsidiaries was $84.4 million. A significant portion of these earnings was subject to U.S. federal taxation in fiscal 2018 as part of the one-time transition tax. We are no longer asserting indefinite reinvestment on the portion of our unremitted earnings that were previously subject to U.S. federal taxation with the one-time transition tax. Accordingly, we recognized a deferred income tax liability of $0.6 million for certain foreign withholding taxes and U.S. state taxes during the second quarter of fiscal 2019. With respect to unremitted earnings and original investments in foreign subsidiaries where we are continuing to assert indefinite reinvestment, any future remittances could be subject to additional foreign withholding taxes, U.S. state taxes, and certain tax impacts relating to foreign currency exchange effects. It is not practicable to estimate the amount of any unrecognized tax effects on these reinvested earnings and original investments in foreign subsidiaries. We have elected to account for the tax on Global Intangible Low-Taxed Income (“GILTI”) as a period cost and, therefore, do not record deferred taxes related to GILTI on our foreign subsidiaries. Further details regarding the effects of the TCJA are included within the Income Taxes footnote of the Notes to Consolidated Financial Statements within our Form 10-K.
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Supplemental Guarantor Condensed Consolidating Financial Statements |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor Condensed Consolidating Financial Statements | Supplemental Guarantor Condensed Consolidating Financial Statements In December 2009, ABL, the 100% owned and principal operating subsidiary of Acuity Brands, refinanced the then current outstanding debt through the issuance of the Unsecured Notes. See Debt and Lines of Credit footnote for further information. In accordance with the registration rights agreement by and between ABL and the guarantors to the Unsecured Notes and the initial purchasers of the Unsecured Notes, ABL and the guarantors to the Notes filed a registration statement with the SEC for an offer to exchange the Unsecured Notes for an issue of SEC-registered notes with identical terms. Due to the filing of the registration statement and offer to exchange, we determined the need for compliance with Rule 3-10 of SEC Regulation S-X (“Rule 3-10”). In lieu of providing separate audited financial statements for ABL and ABL IP Holding, we have included the accompanying Condensed Consolidating Financial Statements in accordance with Rule 3-10(d) of SEC Regulation S-X since the Unsecured Notes are fully and unconditionally guaranteed by Acuity Brands and ABL IP Holding. The column marked “Parent” represents the financial condition, results of operations, and cash flows of Acuity Brands. The column marked “Subsidiary Issuer” represents the financial condition, results of operations, and cash flows of ABL. The column entitled “Subsidiary Guarantor” represents the financial condition, results of operations, and cash flows of ABL IP Holding. Lastly, the column listed as “Non-Guarantors” includes the financial condition, results of operations, and cash flows of the non-guarantor direct and indirect subsidiaries of Acuity Brands, which consist primarily of foreign subsidiaries. Consolidating adjustments were necessary in order to arrive at consolidated amounts. In addition, the equity method of accounting was used to calculate investments in subsidiaries. Accordingly, this basis of presentation is not intended to present the Company's financial condition, results of operations, or cash flows for any purpose other than to comply with the specific requirements for parent-subsidiary guarantor reporting. CONDENSED CONSOLIDATING BALANCE SHEETS (In millions)
CONDENSED CONSOLIDATING BALANCE SHEETS (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (In millions)
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Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Accounting | We prepared the Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) to present the financial position, results of operations, and cash flows of Acuity Brands and its wholly-owned subsidiaries.
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Use of Estimates | Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.
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Reclassifications | Reclassifications Certain prior-period amounts have been reclassified to conform to the current year presentation. No material reclassifications occurred during the current period.
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New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in Fiscal 2019 ASU 2017-01 -— Clarifying the Definition of a Business In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which requires an evaluation of whether substantially all of the fair value of assets obtained in an acquisition is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transaction does not qualify as a business. The guidance also requires an acquired business to include at least one substantive process and narrows the definition of outputs. We adopted ASU 2017-01 effective September 1, 2018 and applied the guidance prospectively. The provisions of ASU 2017-01 did not have a material effect on our financial condition, results of operations, or cash flows. ASU 2016-15 — Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. These cash flows include debt prepayment and extinguishment costs, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and proceeds from the settlement of corporate-owned life insurance. We adopted ASU 2016-15 effective September 1, 2018 and applied the changes retrospectively. We maintain life insurance policies on certain former employees primarily to satisfy obligations under certain deferred compensation plans. As required by the standard, proceeds from these policies are now classified as cash inflows from investing activities. We received $0.8 million and $1.0 million from corporate-owned life insurance policies during the nine months ended May 31, 2019 and 2018, respectively. As such, cash flows from operations for the nine months ended May 31, 2018 decreased $1.0 million, with a corresponding increase to cash flows from investing activities, compared to amounts previously reported. The remaining provisions of ASU 2016-15 did not impact our financial statements for the periods presented. ASU 2017-07 — Presentation of Net Periodic Pension Cost In March 2017, the FASB issued ASU No. 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”), which changes the presentation of net periodic pension cost related to employer sponsored defined benefit plans and other postretirement benefits. Service cost is now included within the same income statement line item as other compensation costs arising from services rendered during the period, while other components of net periodic pension cost are presented separately outside of operating income. Additionally, only service costs may be capitalized in assets. We adopted ASU 2017-07 effective as of September 1, 2018. We applied the standard retrospectively for the presentation of the service cost component and the other components of net periodic pension cost within our income statements. As a practical expedient, we used amounts previously disclosed in the Pension and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements within our Form 10-K as the basis for retrospective application because amounts capitalized in inventory at a given point in time are de minimis and determining these amounts was impractical. Upon adoption of ASU 2017-07, our previously reported Operating profit for the three and nine months ended May 31, 2018 increased $1.5 million and $4.6 million, respectively, with a corresponding increase to Miscellaneous expense (income), net. The provisions of ASU 2017-07 have no impact to our net income or earnings per share. The impact of the provisions of ASU 2017-07 on the Consolidated Statement of Comprehensive Income for the three and nine months ended May 31, 2018 are as follows (in millions):
ASC 606 — Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which replaced the existing revenue recognition guidance in U.S. GAAP. Since the issuance of ASU 2014-09, the FASB released several amendments to improve and clarify the implementation guidance, as well as to change the effective date. These standards have been collectively codified within Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard also requires additional disclosures about the nature, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in those judgments. We adopted ASC 606 effective September 1, 2018 using the modified retrospective method and recognized a cumulative effect of applying ASC 606 of $13.0 million in Retained earnings on the Consolidated Balance Sheet as of this date. We applied the standard to all contracts as of the transition date. Information for prior years presented has not been restated and continues to reflect the authoritative accounting standards in effect for those periods. Adjustments related to the adoption of ASC 606 include additional deferrals of revenue recognition for service-type warranties and the gross presentation of right of return assets and refund liabilities for sales with a right of return. The effects of the adoption of ASC 606 on our Consolidated Statement of Comprehensive Income for the three and nine months ended May 31, 2019, and the Consolidated Balance Sheet as of May 31, 2019 are as follows (in millions except per share amounts):
Accounting Standards Yet to Be Adopted In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018-15”), which will require customers to apply internal-use software guidance to determine the implementation costs that are able to be capitalized. Capitalized implementation costs will be required to be amortized over the term of the arrangement, beginning when the cloud computing arrangement is ready for its intended use. ASU 2018-15 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2019. The standard allows changes to be applied either retrospectively or prospectively. We will adopt the standard as required in fiscal 2021. The provisions of ASU 2018-15 are not expected to have a material effect on our financial condition, results of operations, or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires an entity to assess impairment of its financial instruments based on its estimate of expected credit losses. The provisions of ASU 2016-13 are effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2019. Entities are required to apply these changes through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We will adopt the amendments as required in fiscal 2021. The provisions of ASU 2016-13 are not expected to have a material effect on our financial condition, results of operations, or cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which requires lessees to include most leases on the balance sheet. ASU 2016-02 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2018. Since the issuance of ASU 2016-02, the FASB released several amendments to improve and clarify the implementation guidance, as well as to change the allowable adoption methods. These standards have been collectively codified within ASC 842, Leases (“ASC 842”). The standard allows entities to present the effects of the accounting change as either a cumulative adjustment as of the beginning of the earliest period presented or as of the date of adoption. We have an implementation team tasked with reviewing our lease obligations and determining the impact of the new standard to our financial statements. The team is also tasked with identifying appropriate changes to our business processes, systems, and controls to support recognition and disclosure under the new standard. Currently, the implementation team has substantially completed its review of outstanding property and equipment leases, which represent our primary outstanding lease obligations. The team is in the process of reviewing and analyzing other contracts that may have ASC 842 impacts, including information technology contracts. The implementation team reports its findings and progress of the project to management on a frequent basis and to the Audit Committee of the Board of Directors on a quarterly basis. Based on our current lease portfolio, we preliminarily expect ASC 842 to have a material impact on our consolidated balance sheets primarily related to the recognition of operating lease assets and liabilities. However, we do not expect the standard to have a material impact on our consolidated statements of comprehensive income or cash flows. Further details regarding our undiscounted future lease payments as well as the timing of those payments are included within the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K. We will adopt the standard as required on September 1, 2019. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.
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Revenue Recognition | We recognize revenue when we transfer control of goods and services to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for goods and services and is recognized net of allowances for rebates, sales incentives, product returns, and discounts to customers. Sales and use taxes collected on behalf of governmental authorities are excluded from revenues. Payment is generally due and received within 60 days from the point of sale or prior to the transfer of control of certain goods and services. No payment terms extend beyond one year, and we apply the practical expedient within ASC 606 to conclude that no significant financing terms exist within our contracts with customers. Allowances for cash discounts to customers are estimated using the expected value method based on historical experience and are recorded as a reduction to sales. Our standard terms and conditions of sale allow for the return of certain products within four months of the date of shipment. We also provide for limited product return rights to certain distributors and other customers, primarily for slow moving or damaged items subject to certain defined criteria. The limited product return rights generally allow customers to return resalable products purchased within a specified time period and subject to certain limitations, including, at times, when accompanied by a replacement order of equal or greater value. At the time revenue is recognized, we record a refund liability for the expected value of future returns primarily based on historical experience, specific notification of pending returns, or based on contractual terms with the respective customers. Although historical product returns generally have been within expectations, there can be no assurance that future product returns will not exceed historical amounts. A significant increase in product returns could have a material adverse impact on our operating results in future periods. Total refund liabilities recorded under ASC 606 related to rights of return, cash discounts, and other miscellaneous credits to customers were $38.8 million and $41.2 million as of May 31, 2019 and September 1, 2018, respectively, and are reflected within Other accrued liabilities on the Consolidated Balance Sheets. Additionally, we record right of return assets for products expected to be returned to our distribution centers, which are included within Prepayments and other current assets on the Consolidated Balance Sheets. Such assets totaled $15.3 million and $16.4 million as of May 31, 2019 and September 1, 2018, respectively. We also maintain one-time or ongoing marketing and trade-promotion programs with certain customers that require us to estimate and accrue the expected costs of such programs. These arrangements include cooperative marketing programs, merchandising of our products, introductory marketing funds for new products, and other trade-promotion activities conducted by the customer. Costs associated with these programs are generally estimated based on the most likely amount expected to be settled based on the context of the individual contract and are reflected within the Consolidated Statements of Comprehensive Income in accordance with ASC 606, which in most instances requires such costs to be recorded as reductions of revenue. The refund liabilities associated with these programs totaled $31.8 million and $43.9 million as of May 31, 2019 and September 1, 2018, respectively, and are reflected within Other accrued liabilities on the Consolidated Balance Sheets. Costs to obtain and fulfill contracts, such as sales commissions and shipping and handling activities, are short-term in nature and are expensed as incurred. Nature of Goods and Services Products Approximately 95% of revenues for the periods presented were generated from short-term contracts with our customers to deliver tangible goods such as luminaires, lighting controllers, controllers for various building systems, power supplies, prismatic skylights, and drivers. We record revenue from these contracts when the customer obtains control of those goods. For sales designated free on board shipping point, control is transferred at the time of shipment. For sales designated free on board destination, customers take control when a product is delivered to the customer’s delivery site. Professional Services We collect fees associated with training, installation, and technical support services, primarily related to the set up of our lighting solutions. We recognize revenue for these one-time services at the time the service is performed. We also sell certain service-type warranties that extend coverages for products beyond their base warranties. We account for service-type warranties as distinct performance obligations and recognize revenue for these contracts ratably over the life of the additional warranty period. Claims related to service-type warranties are expensed as incurred. Software Software sales include licenses for software, data usage fees, and software as a service arrangements, which generally extend for one year or less. We recognize revenue for software based on the contractual rights provided to a customer, which typically results in the recognition of revenue ratably over the contractual service period. Shipping and Handling Activities We account for all shipping and handling activities as activities to fulfill the promise to transfer products to our customers. As such, we do not consider shipping and handling activities to be separate performance obligations, and we expense these costs as incurred. Contracts with Multiple Performance Obligations A small portion (approximately 5% for the periods presented) of our revenue was derived from the combination of any or all of our products, professional services, and software licenses. Significant judgment may be required to determine which performance obligations are distinct and should be accounted for separately. We allocate the expected consideration to be collected to each distinct performance obligation based on its standalone selling price. Standalone selling price is generally determined using a cost plus margin valuation when no observable input is available. The amount of consideration allocated to each performance obligation is recognized as revenue in accordance with the timing for products, professional services, and software as described above. Contract Balances Our rights related to collections from customers are unconditional and are reflected within Accounts receivable on the Consolidated Balance Sheets. We do not have any other significant contract assets. Contract liabilities arise when we receive cash or an unconditional right to collect cash prior to the transfer of control of goods or services. The amount of transaction price from contracts with customers allocated to our contract liabilities as of May 31, 2019 and September 1, 2018 consists of the following (in millions):
Current deferred revenues primarily consist of customer prepayments, software licenses, and to a lesser extent professional service and sales-type warranty fees collected prior to performing the related service. Current deferred revenues are included within Other current liabilities on the Consolidated Balance Sheets. These services are expected to be performed within one year. Non-current deferred revenues primarily consist of long-term service-type warranties, which are typically recognized ratably as revenue between five and ten years from the date of sale, and are included within Other long-term liabilities on the Consolidated Balance Sheets. Revenue recognized from beginning balances of contract liabilities during the nine months ended May 31, 2019 totaled $3.7 million. Unsatisfied performance obligations that do not represent contract liabilities consist primarily of orders for physical goods that have not yet been shipped. This backlog of orders at any given time is affected by various factors, including seasonality, cancellations, sales promotions, production cycle times, and the timing of receipt and shipment of orders, which are usually shipped within a few weeks of order receipt. Accordingly, a comparison of backlog orders from period to period is not necessarily meaningful and may not be indicative of future shipments. Disaggregated Revenues Our lighting and building management solutions are sold primarily through independent sales agents who cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, and directly to large corporate accounts
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Methodologies used to determine fair values of financial assets and liabilities | We utilize valuation methodologies to determine the fair values of our financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC 820. All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. There were no material changes to the valuation methods or assumptions used to determine fair values during the current period.
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Recognition of transfers between levels within the fair value hierarchy | We used quoted market prices to determine the fair value of Level 1 assets and liabilities. No transfers between the levels of the fair value hierarchy occurred during the current fiscal period. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence.
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New Accounting Pronouncements (Tables) |
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Accounting Changes and Error Corrections [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The impact of the provisions of ASU 2017-07 on the Consolidated Statement of Comprehensive Income for the three and nine months ended May 31, 2018 are as follows (in millions):
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amount of transaction price from contracts with customers allocated to the Company's contract liabilities | The amount of transaction price from contracts with customers allocated to our contract liabilities as of May 31, 2019 and September 1, 2018 consists of the following (in millions):
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Revenue from contracts with customers by sales channel | The following table shows revenue from contracts with customers by sales channel for the three and nine months ended May 31, 2019 (in millions):
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Fair Value Measurements (Tables) |
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Schedule of Carrying Value and Estimated Fair Value of Financial Instruments | The carrying values and estimated fair values of certain of our financial instruments were as follows at May 31, 2019 and August 31, 2018 (in millions):
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The changes in the carrying amount of goodwill during the nine months ended May 31, 2019 and 2018 are summarized below (in millions):
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Inventories (Tables) |
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Schedule of Inventory | Inventories include materials, labor, inbound freight, and related manufacturing overhead, are stated at the lower of cost (on a first-in, first-out or average cost basis) and net realizable value, and consist of the following (in millions):
_______________________________________ (1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, we do not believe the segregation of raw materials and work in process is meaningful information.
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Earnings Per Share (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted | The following table calculates basic earnings per common share and diluted earnings per common share for the three and nine months ended May 31, 2019 and 2018 (in millions, except per share data):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents stock options and restricted stock awards that were excluded from the diluted earnings per share calculation for the three and nine months ended May 31, 2019 and 2018 as the effect of inclusion would have been antidilutive:
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Changes in Stockholders' Equity (Tables) |
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May 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Stockholders' Equity | The following tables summarize changes in the components of stockholders' equity for the three and nine months ended May 31, 2019 and 2018 (in millions):
(1) See Income Taxes footnote of the Notes to Consolidated Financial Statements within our Form 10-K for additional details.
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Comprehensive Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in components of accumulated other comprehensive income (loss) items | The following table presents the changes in each component of accumulated other comprehensive loss during the nine months ended May 31, 2019 and 2018 (in millions):
(1) See Income Taxes footnote of the Notes to Consolidated Financial Statements within our Form 10-K for additional details. |
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Schedule of comprehensive income (loss) | The following table presents the tax expense or benefit allocated to each component of other comprehensive loss for the three and nine months ended May 31, 2019 and 2018 (in millions):
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Debt and Lines of Credit (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Interest Expense, Net | The following table summarizes the components of interest expense, net for the three and nine months ended May 31, 2019 and 2018 (in millions):
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Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | The changes in the reserves for product warranty and recall costs during the nine months ended May 31, 2019 and 2018 are summarized as follows (in millions):
______________________________ (1) Certain service-type warranties accounted for as contingent liabilities prior to the adoption of ASC 606 are now reflected as contract liabilities effective September 1, 2018. Refer to the New Accounting Pronouncements and Revenue Recognition footnotes for additional information.
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Share-based Payments (Tables) |
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May 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Expense and Shares Issued Upon Exercise of Options | The following table presents share-based payment expense and new shares issued upon exercise of stock options for the three and nine months ended May 31, 2019 and 2018 (in millions, except shares):
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Pension Plans (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Pension Cost | Net periodic pension cost during the three and nine months ended May 31, 2019 and 2018 included the following components before tax (in millions):
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Special Charge (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | Costs reflected within Special charge on the Consolidated Statements of Comprehensive Income for the three and nine months ended May 31, 2019 and 2018 are summarized as follows (in millions):
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Supplemental Guarantor Condensed Consolidating Financial Statements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEETS | CONDENSED CONSOLIDATING BALANCE SHEETS (In millions)
CONDENSED CONSOLIDATING BALANCE SHEETS (In millions)
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CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME | CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (In millions)
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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (In millions)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (In millions)
|
Description of Business and Basis of Presentation (Details) |
9 Months Ended |
---|---|
May 31, 2019
Segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 1 |
Acquisitions and Investments - Narrative (Details) $ in Millions |
9 Months Ended | |||
---|---|---|---|---|
May 31, 2019
USD ($)
acquisition
|
Aug. 31, 2018
USD ($)
|
May 31, 2018
USD ($)
|
Aug. 31, 2017
USD ($)
|
|
Business Acquisition [Line Items] | ||||
Number of acquisitions completed | acquisition | 0 | |||
Goodwill | $ 964.1 | $ 970.6 | $ 970.5 | $ 900.9 |
Fiscal 2018 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 76.8 | |||
Identified intangible assets | $ 81.8 | |||
Weighted average useful life of acquired intangible assets | 14 years |
New Accounting Pronouncements (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
May 31, 2019 |
May 31, 2018 |
May 31, 2019 |
May 31, 2018 |
Sep. 01, 2018 |
|
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Decrease in cash flows from operations | $ (312.0) | $ (299.7) | |||
Increase in cash flows from investing activities | (36.9) | (194.7) | |||
Increase to operating profit and corresponding increase to Miscellaneous expense (income) | $ (0.2) | $ 0.2 | (2.6) | (3.8) | |
ASU 2016-15 | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Proceeds from corporate-owned life insurance policies | $ 0.8 | 1.0 | |||
Decrease in cash flows from operations | 1.0 | ||||
Increase in cash flows from investing activities | 1.0 | ||||
ASU 2017-07 | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Increase to operating profit and corresponding increase to Miscellaneous expense (income) | $ (1.5) | $ (4.6) | |||
ASC 606 | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
ASC 606 adjustments | $ 13.0 |
New Accounting Pronouncements - Effects of ASU 2017-07 on Consolidated Statements of Comprehensive Income (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2019 |
May 31, 2018 |
May 31, 2019 |
May 31, 2018 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of products sold | $ 564.0 | $ 554.9 | $ 1,649.6 | $ 1,545.4 |
Selling, distribution, and administrative expenses | 263.4 | 271.8 | 751.1 | 745.7 |
Miscellaneous expense (income), net | $ 0.2 | (0.2) | $ 2.6 | 3.8 |
ASU 2017-07 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of products sold | 0.3 | 1.0 | ||
Selling, distribution, and administrative expenses | (1.8) | (5.6) | ||
Miscellaneous expense (income), net | 1.5 | 4.6 | ||
Previously Reported | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of products sold | 554.6 | 1,544.4 | ||
Selling, distribution, and administrative expenses | 273.6 | 751.3 | ||
Miscellaneous expense (income), net | $ (1.7) | $ (0.8) |
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Millions |
May 31, 2019 |
Sep. 01, 2018 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Current deferred revenues | $ 8.5 | $ 4.8 |
Non-current deferred revenues | $ 43.7 | $ 35.0 |
Revenue Recognition - Disaggregated Revenues (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2019 |
May 31, 2018 |
May 31, 2019 |
May 31, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 947.6 | $ 944.0 | $ 2,734.6 | $ 2,618.9 |
Independent sales network | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 650.3 | 1,871.4 | ||
Direct sales network | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 97.2 | 283.5 | ||
Retail sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 58.7 | 217.8 | ||
Corporate accounts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | 97.1 | 224.5 | ||
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total sales | $ 44.3 | $ 137.4 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2019 |
May 31, 2018 |
May 31, 2019 |
May 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 7.7 | $ 7.2 | $ 23.1 | $ 20.5 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Amortization expense in fiscal 2019 | 30.7 | 30.7 | ||
Amortization expense in fiscal 2020 | 30.7 | 30.7 | ||
Amortization expense in fiscal 2021 | 27.9 | 27.9 | ||
Amortization expense in fiscal 2022 | 27.0 | 27.0 | ||
Amortization expense in fiscal 2023 | $ 25.8 | $ 25.8 |
Goodwill and Intangible Assets (Changes in Goodwill) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
May 31, 2019 |
May 31, 2018 |
|
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 970.6 | $ 900.9 |
Additions from acquired businesses | 0.0 | 75.7 |
Adjustments to provisional amounts | (0.2) | 0.0 |
Foreign currency translation adjustments | (6.3) | (6.1) |
Goodwill, Ending Balance | $ 964.1 | $ 970.5 |
Inventories (Details) - USD ($) $ in Millions |
May 31, 2019 |
Aug. 31, 2018 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw materials, supplies, and work in process | $ 178.9 | $ 196.8 |
Finished goods | 240.3 | 251.8 |
Inventories excluding reserves | 419.2 | 448.6 |
Less: Reserves | (28.6) | (36.8) |
Total inventories | $ 390.6 | $ 411.8 |
Earnings Per Share (Basic and Diluted Earnings per Share - Treasury Stock Method) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
May 31, 2019 |
Feb. 28, 2019 |
Nov. 30, 2018 |
May 31, 2018 |
Feb. 28, 2018 |
Nov. 30, 2017 |
May 31, 2019 |
May 31, 2018 |
|
Earnings Per Share [Abstract] | ||||||||
Net Income | $ 88.4 | $ 66.3 | $ 79.6 | $ 73.0 | $ 96.9 | $ 71.5 | $ 234.3 | $ 241.4 |
Basic weighted average shares outstanding (in shares) | 39.7 | 40.4 | 39.8 | 41.2 | ||||
Common stock equivalents (in shares) | 0.1 | 0.1 | 0.1 | 0.1 | ||||
Diluted weighted average shares outstanding (in shares) | 39.8 | 40.5 | 39.9 | 41.3 | ||||
Basic earnings per share (in dollars per share) | $ 2.23 | $ 1.81 | $ 5.89 | $ 5.86 | ||||
Diluted earnings per share (in dollars per share) | $ 2.22 | $ 1.80 | $ 5.87 | $ 5.85 |
Earnings Per Share (Antidilutive Securities Excluded from EPS Computation) (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2019 |
May 31, 2018 |
May 31, 2019 |
May 31, 2018 |
|
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options and restricted stock awards excluded from diluted earnings per share (in shares) | 283,731 | 239,230 | 297,445 | 179,385 |
Restricted stock awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options and restricted stock awards excluded from diluted earnings per share (in shares) | 107,800 | 240,783 | 169,672 | 257,617 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
May 31, 2019 |
May 31, 2018 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Standard warranty term | 5 years | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 27.3 | $ 22.0 |
Warranty and recall costs | 12.9 | 21.4 |
Payments and other deductions | (14.2) | (19.5) |
Acquired warranty and recall liabilities | 0.0 | 0.6 |
ASC 606 adjustments | (14.8) | 0.0 |
Ending balance | $ 11.2 | $ 24.5 |
Share-based Payments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2019 |
May 31, 2018 |
May 31, 2019 |
May 31, 2018 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Share-based payment expense | $ 7.6 | $ 7.6 | $ 22.9 | $ 24.4 |
Shares issued from option exercises (shares) | 0 | 0 | 0 | 9,364 |
Pension Plans (Details) - Pension Plan - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2019 |
May 31, 2018 |
May 31, 2019 |
May 31, 2018 |
|
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 0.8 | $ 0.7 | $ 2.4 | $ 2.1 |
Interest cost | 2.2 | 2.2 | 6.7 | 6.6 |
Expected return on plan assets | (3.1) | (3.1) | (9.4) | (9.3) |
Amortization of prior service cost | 0.8 | 0.8 | 2.3 | 2.4 |
Settlement loss | 0.0 | 0.0 | 0.4 | 0.0 |
Recognized actuarial loss | 1.0 | 1.7 | 3.1 | 5.1 |
Net periodic pension cost | $ 1.7 | $ 2.3 | $ 5.5 | $ 6.9 |
Special Charge (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2019 |
May 31, 2018 |
May 31, 2019 |
May 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Special charge | $ (0.1) | $ 9.9 | $ 1.3 | $ 10.7 |
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | 10.1 | |||
Severance costs | (0.8) | |||
Payments made during the period | (5.4) | |||
Balance, end of period | 3.9 | 3.9 | ||
Fiscal 2018 Actions | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | 9.2 | |||
Severance costs | (0.4) | |||
Payments made during the period | (4.9) | |||
Balance, end of period | 3.9 | 3.9 | ||
Fiscal 2017 Actions | ||||
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | 0.9 | |||
Severance costs | (0.4) | |||
Payments made during the period | (0.5) | |||
Balance, end of period | 0.0 | 0.0 | ||
Severance and employee-related costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charge | 0.0 | 9.9 | (0.8) | 10.5 |
Move and other restructuring costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Special charge | $ (0.1) | $ 0.0 | $ 2.1 | $ 0.2 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Feb. 28, 2019 |
May 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Net tax benefit related to preliminary TCJA impacts | $ 0.9 | |
Estimated undistributed earnings of foreign subsidiaries | $ 84.4 | |
Deferred income tax liability for certain foreign withholding taxes and U.S. state taxes | $ 0.6 |
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