Acuity Inc.

Good morning and welcome to the Acuity Brands' second quarter earnings call of fiscal 2022. At this time, all participants are in the listen-only mode. After the speaker's presentation, the company will conduct a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Charlotte McLaughlin, Vice President of Investor Relations. Charlotte, please go ahead.

Thank you, Michelle. Good morning and welcome to the Acuity Brands Fiscal 2022 Second Quarter Earnings Call. As a reminder, some of our comments today may be forward-looking statements based on management's beliefs and assumptions and information currently available to management at this time. These beliefs are subject to known and unknown risks and uncertainties, many of which may be beyond our control, including those details in our periodic SEC filings. Please note that the company's actual results may differ materially from those anticipated, and we undertake no obligation to update these statements. Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in our 2022 second quarter earnings release, which is available on our Investor Relations website at www.investors.qtbrands.com. With me this morning is Neil Ash, our Chairman, President, and Chief Executive Officer, who will provide an update on our strategy and highlights from the last quarter, and Karen Holcomb, our Senior Vice President and Chief Financial Officer, who will walk us through our earnings performance. There will be an opportunity for Q&A at the end of the call. For those participating, please limit your remarks to one question and one follow-up, if necessary. We are webcasting today's conference call live. Thank you for your interest in Acuity Brands. I will now turn the call over to Neil Ash.

Thank you, Charlotte, and good morning to everyone joining us to discuss Acuity Brands. Our team delivered another strong performance in the second quarter of fiscal 2022. For the second consecutive quarter, we delivered net sales growth of 17%, and we maintained our gross profit margin at 41.7%, consistent with the first quarter. And compared to last year, we increased diluted earnings per share by 22%. Despite the cost challenges, we were able to convert our sales growth into operating profit and net income by effectively leveraging operating expenses. The world remains complicated. Although our demand environment is strong, costs continue to be volatile, and we are continuously dealing with the ongoing pressures resulting from the global component shortages. In spite of this, our team continues to execute well, and this is reflected in our performance. Both ABL and Spaces are performing admirably. Our decisions to prioritize shipments by investing in electrical components and transportation are resulting in higher sales and operating profits, albeit at slightly lower margins. Now, I want to move to talk to our progress at both ABL and Spaces. First, in ABL, I'm happy to report that some things are returning to the way they used to be. In March, we hosted our first in-person sales conference in three years, Next 22. It was great to be back together with our independent sales network, who have performed exceptionally through the ups and downs of the last two years. We have the best agents in the industry, and it was a great opportunity to talk about our strategic vision for Acuity Brands Lighting, share many new products, and engage our agency partners around our Earthlight initiatives. This was the first time that many of our associates and agents had seen each other in person since the pandemic started. While we have been incredibly productive working virtually with our channel, it was great to spend some quality time together in person. It was hard not to be struck by the levels of energy and enthusiasm throughout the event and the consistency of the feedback from our agents. They said, acuity is delivering. Our investments in service have allowed us to prioritize delivering for our customers when others have been unable to. At the same time, our investments in product vitality have allowed us to continue to create compelling new products that are both innovative and market moving. As I said last quarter, we have done this by focusing on three main areas. First, by focusing on strategic supplier relationships. The current environment has reminded us all that it really matters who you do business with. Because we are the largest lighting company, we have certain advantages over our direct competitors. But those same components are also used by larger industries. Consequently, we are making investments in people, time, and resources. We have recruited a new head of strategic sourcing for ABL. We are working with our key suppliers on effective planning and allocation management, and we are investing in inventory. By empowering our teams to prioritize access and speed over cost on available components, we have been able to ensure continuity of supply across many of our existing product lines, while also supporting our ongoing product vitality efforts across our product portfolio. Finally, as I said last quarter, our engineering teams continue their Herculean efforts to redesign products to the available components. At the same time, these teams have also managed to introduce around 220 new or significantly upgraded lighting and lighting control products over the last two years. We expect the challenges around access to and cost of components to continue into the foreseeable future. Our strategy around product vitality and the dexterity of our engineering teams in flexing to the changing requirements of the component shortages has been a significant part of why we are leading in this market and we expect to continue these efforts. Another highlight of the next conference was our focus on Earthlight. Earthlight is an important part of our strategy. Our product vitality efforts are not just about improving the functionality of our products. It is also about redesigning products to reduce customer energy consumption, reducing packaging and waste, and improving transportation efficiency. This quarter, we announced a new initiative that brings together both technology and sustainability to significantly reduce paper use by introducing scannable QR code instructions across our products. At Next, we also expanded our community outreach by packing 1,000 bags of food for a local Atlanta organization together with our agents. It was one of the highlights of the event. Now, moving to the intelligence basis group. space has had another solid quarter of growth. In both Distech and Atrius, we have a strong product roadmap to make spaces smarter, safer, and greener. Distech continues to win in the building controls market against significant competition. Through the Eclipse controller products, Distech is at the forefront of the technology curve with a presence in key markets and recognized leadership built on open protocol technology. In the last quarter, DISTEC won projects across North America and Canada and saw significant project wins in key verticals, including in education, commercial, infrastructure, and in data centers. DISTEC is now a key supplier to two of the largest cloud providers. We also continue to develop the Atrius platform, including progress on Atrius building insights, and we expect to expand the portfolio over time. We continue to add talent to this team. Finally, I want to update you on our capital allocation. Our capital allocation priorities remain the same. We expect to continue to prioritize investments for growth in our current businesses, to invest in acquisitions, to maintain our dividend, and to allocate capital to share repurchases when there is an opportunity to create permanent value for our shareholders. This quarter, the Board of Directors authorized additional capacity for share repurchases to increase our remaining authorization from 3 million to 5 million shares. Since May of 2020, we have repurchased approximately 13 percent of our shares outstanding. I would also like to announce the appointment of Sachin Sankpal, our Senior Vice President of Growth and Transformation. Sach joins us to manage our technology organization to deploy our better, smarter, faster company operating system, and to lead the integration efforts for future acquisitions. Satch comes to us with distinguished experience at leading companies, including Trimble and Honeywell. We're excited to have Satch on our team. As I close, I once again want to thank our team for their ongoing efforts. Each quarter, we are faced with new challenges and our team continues to deliver. Our continued focus on service and product vitality is allowing us to take advantage of the strong demand environment. I will now turn the call over to Karen, who will take a deeper dive into our quarter performance, and I'll be back later in the call for Q&A and for some closing remarks.