Acuity Inc.

Good morning, and welcome to the Acuity Brands Fiscal 2023 Second Quarter Earnings Call. At this time, all participants are in a 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, Liz. Good morning and welcome to the Acuity Brand's fiscal 2023 second quarter earnings call. As a reminder, some of our comments today may be forward-looking statements based on our management's beliefs and assumptions and information currently available to our management at this time. These beliefs are subject to known and unknown risks or uncertainties, many of which may be beyond our control, including those detailed in our periodic SEC filings. Please note that our company's actual results may differ materially from those anticipated, and we undertake no obligation to update these results. Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in our 2023 second quarter earnings release, which is available on our investor relations website at www.investors.acuitybrands.com. With me this morning is Neil Ash. our Chairman, President, and Chief Executive Officer, who will provide an update on our strategy and our fiscal second quarter highlights, and Karen Holcomb, our Senior Vice President and Chief Financial Officer, who will walk us through our fiscal second quarter financial performance. There will be an opportunity for Q&A at the end of this 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. Good morning. Welcome to all of you joining us on this call. We delivered solid performance again in the second quarter of fiscal 23. We grew sales in both our lighting and spaces businesses, expanded adjusted operating profit, and grew adjusted diluted earnings per share. We generated strong cash flow from operations, and created permanent value for shareholders through share purchases. Both our lighting and spaces businesses delivered solid revenue while improving adjusted operating profit. In the Yakuti brand's lighting and lighting controls business, our strategy of increasing product vitality and service levels continued to differentiate in the market. A few weeks ago, we hosted our annual sales conference in Atlanta, Next 23. It was a great event where we brought together our network of independent sales agents and shared our strategic vision for ABL and introduced new products. I'd like to take a minute to describe our independent sales network. Stated simply, we have the best agency network in the industry. To give you an idea of their scope, we have about 80 agents in North America, and they have about 50 employees per agency. In other words, we have over 4,000 local sales and sales support people working for us every day throughout North America. While our agents are independent, they are exclusive to us for key controls and do not represent the other majors. They are generally the largest in their market, and we are their most important partner. Our partnership works very well. With our product vitality and service efforts, we make products that deserve to be chosen, and our independent sales agents ensure that they are chosen. Product vitality is driving success across our portfolio, and during Next 23, we introduced several new products. I want to highlight a couple here. The first was the new Enlite Air System input device. This is an indoor controller that can be used in multiple spaces, including office, commercial, and retail. The device converts analog outputs to wireless broadcast to control intelligent luminaires. This reduces the need for complex wiring solutions during installation and reduces the associated cost for the customer. The second was the Enlight Air R-Pod Micro. This is a battery-powered wall switch that can be used as a traditional wall switch or as a remote, providing control from anywhere within a built space. This is a really exciting extension of the technology and an elegant response to our customers' need for flexibility. These and other products continue to gain market attention. This quarter, several of our architectural lighting brands, Alight, Eureka, and Luminous, won a total of eight Good Design Awards from the Chicago Athenium, which recognizes products and industry leaders in design and manufacturing that have chartered new directions for innovation. Now, moving to our Intelligent Spaces group. The Spaces team continued to perform well, delivering another quarter of solid sales and operating profit growth, driven by the continued success of DISTEC. DISTEC is winning because we have the best digital control solutions in the market, Its technology is open protocol, which means you can connect our controller to most new or existing systems in a built space, giving our customers significant flexibility. We are also winning because Distech goes to market through independent system integrators. We are continually curating the highest quality network of SIs in each market in which we compete. Our focus is on expanding the addressable market for Distech, which we have started to do in two ways. The first is geographic, as we mentioned last quarter. Today, we sell our controls primarily in the US, Canada, and France, and we are expanding our presence in the UK and in the future in Asia. As we enter new markets, we are identifying and recruiting the highest quality SIs as our partners. Second, we believe that any control that is currently mechanical or analog will become digital over time. So we are increasing what we can control and build Spaces. This will provide us a second vector for continued growth. Finally, I also joined our Spaces team at the AHR Expo in Atlanta, where HVACR professionals gathered to share ideas and to showcase technology. It was great to hear firsthand from the SIs there how differentiated our Distech and Atrius products are. Now, looking to the rest of fiscal 2023, we've been intentional around our product vitality and service efforts and how we operate the business. We have demonstrated our ability to manage price and cost, both in our go-to-market efforts and in our operations. Today, we are in greater control of the things we can control than we have ever been. As you know, there are meaningful changes in the economic climate. During the quarter, we began to see a slowing in the order rate for our project business while we continued to work through our extended backlog. We believe that the slower order rate is driven by the lead time compression that we discussed last quarter and now the changing C&I lending environment. At the same time, our contractor select business continued to be strong. We will continue our focus on end markets and identifying new ways to grow. As we deal with these changing market conditions, our focus is on generating profits and turning those profits into cash. We are continuing to manage the price-cost relationship and will continue to generate strong cash flow. In closing, we enter the second half of fiscal 23 with our strategy unchanged. We are in control of what we can control, and we are confident in our ability to adapt to the changing market conditions and requirements of our customers. Now, I'll turn the call over to Karen, who will update you on her second quarter performance.