Acuity Inc.

Good morning, and welcome to the Acuity Brands Fiscal 2024 First 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. Good morning and welcome to the Acuity Brands Fiscal 2024 First 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 2024 first quarter earnings release, which is available on our investor relations website at www.investors.acuitybrands.com. With me this morning is Neil Ashe, our Chairman, President, and Chief Executive Officer, who will provide an update on our strategy and give an overview of the quarter. And Karen Holcomb, our Senior Vice President and Chief Financial Officer, who will walk us through our fiscal first 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 thanks to all of you for joining us this morning. We continue to demonstrate strong execution in our fiscal 2024 first quarter. We increased our adjusted operating profit, our adjusted operating profit margin, and our adjusted diluted earnings per share. We generated significant free cash flow, and we allocated capital effectively to drive value. Both our lighting and our intelligent spaces businesses continued to perform well during the quarter. Particularly in ABL, our performance was excellent. We increased adjusted operating profit by $15 million on $71 million less sales and increased the adjusted operating profit margin 280 basis points to 17.5%. Our strategy is yielding results. We're increasing product vitality, elevating service levels, using technology to improve and differentiate both our products and how we operate the business, and we are driving productivity. Today, our products are perceived as being more valuable in the marketplace at the same time we are lowering costs. Our product vitality efforts are the combination of new product introductions and improvements to our existing portfolio to ensure that our products are more valuable to our customers and more profitable for us. Our contractor select portfolio is about 300 of our most popular products. They are used in common everyday lighting applications and are in stock at retailers and electrical distributors. We continue to invest in product vitality and we have expanded our Lithonia Lighting ESXF floodlight family. This is a better product for distributors because it allows them to carry less inventory and is better for contractors because it is easier to install. This product family was first introduced in 2022 to offer a uniform lighting solution for parking lots, walkways, and outer buildings. It uses switchable technology to provide installers 36 on-site options, including lumen output, color temperature, photocell, and mounting options. Our design select portfolio consists of configurable product options that meet the key choices of lighting specifiers with high levels of service. This quarter, we added additional products in our downlighting, panel, emergency lighting, and outdoor categories. As we expand the options available in this portfolio, our focus is on product vitality and making it easier for the specification community to choose superior solutions. Our efforts to elevate service are having a positive impact on our customers. In October, we were once again recognized by the voters of iMark Electrical as one of the suppliers of the year for 2023. We also continue to invest in productivity improvements in our operations. Earlier this quarter, we traveled with a group of associates to our Mexican manufacturing facilities to open our new state-of-the-art Santa Rosa production facility, which includes our highly efficient new paint line. This facility embraces technology to deliver a better product to our customers and improves the efficiency of the paint line process while also reducing the environmental impact. I'd like to highlight a couple of ways we're doing this. Our paint guns and torque guns in our new facility are powered by a high efficiency air compressor that aims to reduce approximately half of our CO2 generation compared to the air compressor from our previous paint line. High efficiency walls, burners, and booster technology in our ovens require less gas than similar systems and use around 40% less natural gas than our previous infrared ovens. The transition to this facility has been seamless. We relocated an existing facility to the new SPF facility without any service interruption and now have capacity available for future growth. Our combined paint and natural gas savings are delivering on our required financial return for the facility while also meeting our sustainability objectives. You can learn more about this project and other accomplishments in our recently released Earthlight Report, available on our ESG for Investors page on our Investor Relations website. Now, moving to our Spaces Group. Our mission in our Intelligent Spaces business is to make spaces smarter, safer, and greener through our strategy of connecting the edge to the cloud. Distech has the best edge control devices on the market, while Atrius will be the best in cloud applications. At Distech, we are focused on expanding our addressable market in two ways. The first is geographic, and the second is increasing what we control in a built space. This quarter, we continued our geographic expansion, adding several new system integrators in the UK, Asia, and Australia. In one of our original markets, France, our hard work is paying off. The Building Services Research and Information Association called out DISTEC as dominating the French building automation and control systems market in a newly released report. We also continue to increase what we can control in a built space. In October, we launched our DISTEC Resense Move Sensor at several industry conferences in Europe. This is an advanced 7-in-1 ceiling-mounted sensor that is able to detect occupancy in spaces. It counts the number of people using a space, providing feedback on occupancy requirements to the building users. It is AI-powered and can be used to optimize indoor air quality, reduce energy and cleaning costs, and enhance occupancy comfort. It will be revealed to our North American and international customers at the AHR Expo in Chicago later this month. Our expansion into refrigeration controls is also going well, with the integration of Key2Therm on track and performing as we expected. During the quarter, we released the Key2Therm Edge Manager with a BACnet communication stack. This is the same open protocol technology that is used by DISTEC and is an important step to ensure compatibility between both the DISTEC edge controllers and the Key2Therm edge controllers. Now turning to our outlook, the changes that we have made to the business are impactful and long lasting. Our order rates are growing both year over year and sequentially. We're back to typical lead times and absent the excess backlog from last year, we would be experiencing sales growth. We are focused on controlling what we can control and we are confident our execution will continue. In our lighting and lighting controls business, we will continue to focus on delivering margin and cash flow. In our spaces group, we will continue to grow geographically and by adding to what we can control in a built space. We're delivering applications that are making a difference. Now, I'll turn the call over to Karen, who will update you on our first quarter performance.