Acuity Inc.

Good morning and welcome to the Acuity Brands Fiscal 2023 Third 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 Brands Fiscal 2023 Third 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 and 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 statements. Reconciliations of certain non-GAAP financial metrics with their corresponding GAAP measures are available in our 2023 third quarter earnings release, which is available on our investor relations website at www.investors.qtbrands.com. With me this morning is Neil Ashe, our Chairman, President, and Chief Executive Officer, who will provide an update on our strategy and our third quarter highlights, and Karen Holcomb, our Senior Vice President and Chief Financial Officer, who will walk us through our fiscal third 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, and welcome to all of you joining us this morning. In the third quarter of fiscal 2023, we expanded adjusted operating profit margin, both sequentially and year over year. We continued to grow adjusted diluted EPS, and we generated strong cash flow from operations, despite a decline in net sales. We completed the acquisition of Key2Therm and we continue to repurchase our shares. We are making meaningful progress in both our lighting and spaces businesses. In the Acuity brand's lighting and lighting controls business, our strategy is clear. Increase product vitality, increase service levels, and use technology to improve and differentiate both our products and our services. This quarter, we launched Design Select, We developed Design Select to elevate our service for the specification community by making it easy for them to choose superior solutions with dependable service. Design Select consists of 3,000 configurable products that meet important specification needs from some of our core families of lighting and lighting control brands, including AccuLux, Gotham, Lithonia Lighting, Enlite, and SensorSwitch. Design Select is an important addition to our service strategy. ABL lighting and lighting control products are now organized into three clear categories. Contractor Select is 300 of the most important everyday lighting and lighting control products available in stock at retailers and electrical distributors. Design Select is 3,000 configurable products that meet the key choices of lighting specifiers with dependable service. And the remainder is made to order. Through the combination of high product vitality and improved service levels with the specification community, distributors, and contractors, we continue to differentiate ourselves and challenge the existing industry standards. We also continue to introduce new products during the quarter. Our luminous brand launched the inline family of exterior luminaires for use in plazas and arenas. Each light module can rotate 355 degrees and can be individually controlled. allowing installers to position the luminaire on-site for improved flexibility to create optimal illumination solutions. The recognition of our product vitality efforts is important to our team and our customers. In this quarter, several of our products won prestigious Red Dot Design Awards, including products from Luminous and Eureka. The Eureka Tangram Trace was awarded a Red Dot Best of the Best Distinction for its groundbreaking design. Other winners in this category included products from Apple, IBM, and Sonos, and spanned categories from VR headsets to first responder drones. We're proud to be in this company of innovators. Now, moving to our Intelligent Spaces group. This was a big quarter for our Spaces team, both at Distech and at Atrius. First, on Distech, our strategic priority is to expand our addressable market, which we are doing in two ways. The first is geographic, which continues to progress successfully. The second is by increasing what we control in a built space. During the quarter, we announced the completion of the acquisition of Key2Therm, which allows us to expand DISTEC's addressable market by entering the commercial refrigeration control space. By controlling commercial refrigeration, we are able to more effectively sell the entire DISTEC portfolio in verticals like retail, restaurants, and schools. The timing is significant as the refrigeration industry responds to the need for ultra-low global warming potential refrigerant technologies. This has led to growing demand for trans-critical CO2 solutions, which require the precision of digital controls to provide safety, efficiency, and reliability while delivering cost savings to the customer. I now want to spend a few minutes on Atrius. Our strategy with Atrius has been to build a data layer that connects the edge to the cloud and use that data to develop applications that make a difference in built spaces. Earlier this month, we showcased our products at the IvyCon 2023 conference in Las Vegas. This is the largest smart building conference for commercial real estate and facilities companies. At IvyCon, we launched Atrius Data Lab, a powerful data layer that supports a portfolio of Atrius applications that is foundational to our ability to automate the environment of a built space. Atrius Data Lab captures data from a building management system and organizes it in the cloud. From there, it harmonizes the data for accessibility and usefulness and creates a digital twin. Applications are then built on top of that digital twin, allowing users to analyze historic scenarios get live updates of the current building environment, and model other scenarios. This service is important because every building is different. Our Atrius applications have been built to ensure that our partners achieve their specific energy and sustainability goals through the collection, measurement, and management of data in each of their built spaces. Atrius Sustainability and Atrius Energy are live and were built on the foundation of Atrius Building Insights. Atrius Sustainability is an automation tool that captures, categorizes, and reports on carbon emissions within built spaces. Atrius Energy facilitates the reduction of energy and carbon usage by allowing facilities teams to benchmark their usage against science-based targets. Later this year, our team will be rolling out Atrius Facilities and Atrius Resolve. Now, looking to the remainder of fiscal 2023, Our third quarter played out as we expected, with sales being impacted by both lead time normalization and the macro environment. Entering our fourth quarter, we believe that there will be a continuation of these trends. While our order rates and our shipment rates are returning into closer alignment with each other, we have not yet returned to normal sequential seasonality. In ABL, we are going to focus on strategic pricing, continued productivity improvements, and managing material costs. In ISG, we're going to focus on the continued growth of Distech and Atrius and the successful integration of Key2Therm. We will continue to prioritize managing margin, generating strong cash flow, and allocating capital effectively. Now, I'll turn the call over to Karen, who will update you on our third quarter performance.