ACUITY INC. (DE)
For the period ended Feb 28, 2026. Filed Apr 2, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2026 · Filed Apr 2, 2026
AYI$323.06-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-11-30; filed 2026-01-08.
0001144215-26-000010
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-02-28; filed 2026-04-02.
0001144215-26-000021
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 66 previous paragraphs and 97 current paragraphs.
34 unchanged; 25 reworded; 32 added; 6 removed; 1 previous and 6 current paragraphs rearranged.
Tables are not compared: 4 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
Recent Developments
Current report
On February 20, 2026, the U.S. Supreme Court issued a ruling addressing the validity of certain tariffs implemented under the International Emergency Economic Powers Act (“IEEPA”). In March 2026, the U.S. Court of International Trade Court issued an additional ruling that importers that paid tariffs under IEEPA are due refunds. While we have paid tariffs on certain imported products and materials that were subject to these IEEPA‑based duties, the nature, timing, and extent of any such refunds remains uncertain.
Current report
Second Quarter of Fiscal 2026 Compared with Second Quarter of Fiscal 2025
Current report
(1) Fiscal 2025 includes $10.4 million in acquisition date fair value adjustments to inventory for the QSC acquisition.
Current report
Gross profit for the second quarter of fiscal 2026 was $520.4 million (49.3% of net sales), compared with $468.0 million (46.5% of net sales) for the prior-year period, an increase of $52.4 million, or 11.2%. This increase was due primarily to contributions from the QSC acquisition as well as the fall through of higher net sales of our Distech products. The improvement at AIS was partially offset by lower gross profit at ABL.
Current report
We recorded special charges totaling $5.9 million during the second quarter of fiscal 2026, which consisted of employee severance costs related to productivity improvements in our ABL segment. These charges primarily related to labor cost reductions.
Current report
Interest Expense, net
Current report
We reported net interest expense of $7.0 million and $6.9 million for the second quarter of fiscal 2026 and 2025, respectively. Net interest expense increased year over year as lower interest income was partially offset by a decline in interest expense. These changes reflect both lower outstanding cash balances as well as lower outstanding borrowings on our Term Loan during the second quarter of fiscal 2026.
Current report
Miscellaneous Expense, net
Current report
Our effective income tax rate was 21.2% and 24.2% for the second quarter of fiscal 2026 and 2025, respectively. This decrease primarily reflects discrete items recognized in the second quarter of fiscal 2026 that were not present in the prior year.
Current report
ABL net sales for the second quarter of fiscal 2026 decreased 2.8% compared with the prior-year period. This decrease was due primarily to lower net sales within the direct sales network, due in part from project business that did not recur, partially offset by higher net sales within the corporate accounts channel.
Current report
ABL gross profit was $373.8 million (45.7% of ABL net sales) for the second quarter of fiscal 2026, compared with $378.0 million (45.0% of ABL net sales) in the prior-year period, a decrease of $4.2 million. The decrease in gross profit was due primarily to the fall through of lower net sales and higher tariff costs, partially offset by product and productivity improvements.
Current report
ABL operating profit was $125.1 million (15.3% of ABL net sales) for the second quarter of fiscal 2026, compared with $130.3 million (15.5% of ABL net sales) in the prior-year period, a decrease of $5.2 million. The decrease in operating profit was due primarily to special charges and lower gross profit, partially offset by lower sales-related and employee costs.
Current report
AIS gross profit was $146.6 million (59.1% of AIS net sales) for the second quarter of fiscal 2026, compared with $90.0 million (52.5% of AIS net sales) in the prior-year period, an increase of $56.6 million. The increase in gross profit was due primarily to the acquisition of QSC as well as the fall through of higher Distech net sales. The second quarter of fiscal 2025 also included $10.4 million in preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory related to the acquisition of QSC, which did not recur in fiscal 2026.
Current report
First Six Months of Fiscal 2026 Compared with First Six Months of Fiscal 2025
Current report
(1)Fiscal 2025 includes $10.4 million in pre-tax nonrecurring acquisition date fair value adjustments to inventory related to the acquisition of QSC.
Current report
Net Sales
Current report
Net sales for the six months ended February 28, 2026 increased $241.5 million, or 12.3%, to $2.20 billion compared with $1.96 billion in the prior-year due to higher sales in our AIS segment, partially offset by lower sales in our ABL segment. The increase in our AIS segment was driven by the acquisition of QSC, as well higher net sales of our Distech products.
Current report
Gross Profit
Current report
Gross profit for the six months ended February 28, 2026 increased $156.9 million, or 17.1%, to $1.07 billion compared with $917.3 million in the prior-year period. This increase was due primarily to contributions from the QSC acquisition as well as the fall through of higher net sales of our Distech products. The improvement at AIS was partially offset by lower gross profit at ABL.
Current report
Operating Profit
Current report
SD&A expenses for the six months ended February 28, 2026 were $774.9 million compared with $673.8 million in the prior-year period, an increase of $101.1 million, or 15.0%. The increase in SD&A expenses was due primarily to amounts related to the QSC acquisition, including higher employee-related costs and higher amortization from acquired intangibles, partially offset by acquisition-related professional fees that did not recur in fiscal 2026.
Current report
We recorded special charges totaling $5.9 million during six months ended February 28, 2026, which consisted of employee severance costs related to productivity improvements in our ABL segment. These charges primarily related to labor cost reductions.
Current report
Operating profit for the six months ended February 28, 2026 was $293.4 million (13.3% of net sales) compared with $243.5 million (12.4% of net sales) for the prior-year period, an increase of $49.9 million, or 20.5%. The increase in operating profit was due to higher gross profit, partially offset by higher SD&A expenses and the recognition of special charges in the current period.
Current report
Interest Expense, net
Current report
Miscellaneous Expense, net
Current report
Income Taxes and Net Income
Current report
Our effective income tax rate was 21.1% and 22.3% for the six months ended February 28, 2026 and February 28, 2025, respectively. This decrease primarily reflects discrete items recognized in the second quarter of fiscal 2026 that were not present in the prior year.
Current report
Segment Results
Current report
ABL gross profit for the six months ended February 28, 2026 was $774.4 million (45.2% of ABL net sales), compared with $784.4 million (45.4% of ABL net sales) in the prior-year period, a decrease of $10.0 million. The decrease in gross profit was due primarily to the fall through of lower net sales and higher tariff costs, partially offset by product and productivity improvements.
Current report
AIS net sales for the six months ended February 28, 2026 increased 106.3% compared with the prior-year period. The increase in sales is attributed primarily to the acquisition of QSC as well as higher net sales of Distech products.
Current report
AIS operating profit for the six months ended February 28, 2026 was $65.3 million (12.9% of AIS net sales), compared with $20.7 million (8.4% of AIS net sales) in the prior-year period, an increase of $44.6 million. This increase primarily reflects higher operating profit from the QSC acquisition. AIS's operating results also include higher amortization from acquired intangibles as well as the impact of fair value adjustments to inventory that occurred in the prior year, both of which related to the QSC acquisition.
Removed paragraphs (6)
Previous report
First Quarter of Fiscal 2026 Compared with First Quarter of Fiscal 2025
Previous report
Gross profit for the first quarter of fiscal 2026 increased $104.5 million, or 23.3%, to $553.8 million, compared with $449.3 million in the prior-year period, and gross profit margin increased 120 basis points to 48.4%, compared with 47.2% in prior-year period. Our gross profit increased compared with the prior period due primarily to contributions from the QSC acquisition. The improvement at AIS was partially offset by lower gross profit at ABL due primarily to higher production costs, partially offset by the fall through of higher sales and lower materials costs.
Previous report
Interest Expense (Income), net
Previous report
Miscellaneous (Income) Expense, net
Previous report
Our effective income tax rate was 21.0% and 20.8% for the first quarter of fiscal 2026 and 2025, respectively.
Previous report
ABL gross profit was $400.6 million (44.8% of ABL net sales) for the first quarter of fiscal 2026, compared with $406.4 million (45.9% of ABL net sales) in the prior-year period, a decrease of $5.8 million. The decrease in gross profit was due primarily to higher production costs, partially offset by the fall through of higher net sales and favorable materials cost.
Reworded paragraphs (25)
Previous wording
The purpose of this discussion and analysis is to enhance the understanding and evaluation of the results of operations, financial position, cash flows, indebtedness, and other key financial information of Acuity Inc. (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) and its subsidiaries as of November 30, 2025 and for the three months ended November 30, 2025 and November 30, 2024. The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included within this report. Also, please refer to Acuity Inc.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on October 27, 2025 (“Form 10-K”).
Current wording
The purpose of this discussion and analysis is to enhance the understanding and evaluation of the results of operations, financial position, cash flows, indebtedness, and other key financial information of Acuity Inc. (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) and its subsidiaries as of February 28, 2026 and for the three and six months ended February 28, 2026 and February 28, 2025. The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included within this report. Also, please refer to Acuity Inc.'s Annual Report on Form 10-K for the fiscal year ended August 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on October 27, 2025 (“Form 10-K”).
Previous wording
Our significant contractual cash requirements primarily include principal and interest on outstanding debt, accounts payable, accrued employee compensation, operating lease liabilities, and certain purchase obligations incurred in the ordinary course of business that are enforceable and legally binding. Our obligations related to these items are described further within Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report filed on Form 10-K. Refer to Financing Arrangements below for a discussion of significant changes to our contractual obligations for the first three months of fiscal 2026.
Current wording
Our significant contractual cash requirements primarily include principal and interest on outstanding debt, accounts payable, accrued employee compensation, operating lease liabilities, and certain purchase obligations incurred in the ordinary course of business that are enforceable and legally binding. Our obligations related to these items are described further within Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report filed on Form 10-K. Refer to Financing Arrangements below for a discussion of significant changes to our contractual obligations for the first six months of fiscal 2026.
Previous wording
Our cash position at November 30, 2025 was $376.1 million, a decrease of $46.4 million from August 31, 2025. Cash generated from operating activities and cash on hand were used during the current year to voluntarily repay $100.0 million of borrowings on our Term Loan Facility (as defined below) as well as to fund our capital allocation priorities as discussed below.
Current wording
Our cash position at February 28, 2026 was $272.5 million, a decrease of $150.0 million from August 31, 2025. Cash generated from operating activities and cash on hand were used during the current year to voluntarily repay $200.0 million of borrowings on our Term Loan Facility (as defined below) as well as to fund our capital allocation priorities as discussed below.
Previous wording
We generated $140.8 million of cash flows from operating activities during the three months ended November 30, 2025, compared to $132.2 million in the prior-year period, an increase of $8.6 million. Cash flows from operations increased due primarily to higher profit, partially offset by the timing of payments for inventory purchases.
Current wording
We generated $229.9 million of cash flows from operating activities during the six months ended February 28, 2026, compared to $191.6 million in the prior-year period, an increase of $38.3 million. Cash flows from operations increased due primarily to higher profit and lower income tax payments, partially offset by the timing of payments for inventory purchases. The decline in income tax payments is due primarily to the treatment for current and prior capitalized domestic research and development costs provided by recent tax law changes.
Previous wording
At November 30, 2025, our outstanding debt balance was $797.0 million, which consisted of our Unsecured Notes and borrowings on our Term Loan Facility, compared to our cash position of $376.1 million. We were in compliance with all covenants under our financing arrangements as of November 30, 2025.
Current wording
At February 28, 2026, our outstanding debt balance was $697.1 million, which consisted of our Unsecured Notes and borrowings on our Term Loan Facility, compared to our cash position of $272.5 million. We were in compliance with all covenants under our financing arrangements as of February 28, 2026.
Previous wording
In October 2025, we voluntarily repaid $100.0 million of our outstanding Term Loan Facility obligation. As of November 30, 2025, we had $300.0 million in borrowings outstanding under the Term Loan Facility.
Current wording
During the first six months of fiscal 2026, we voluntarily repaid $200.0 million of our outstanding Term Loan Facility obligation. As of February 28, 2026, we had $200.0 million in remaining borrowings outstanding under the Term Loan Facility.
Previous wording
At November 30, 2025, we had additional borrowing capacity under the Credit Agreement of $593.0 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility of $600.0 million less outstanding letters of credit of $7.0 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance policies. As of November 30, 2025, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $969.1 million.
Current wording
At February 28, 2026, we had additional borrowing capacity under the Credit Agreement of $593.4 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility of $600.0 million less outstanding letters of credit of $6.6 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance policies. As of February 28, 2026, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $865.9 million.
Previous wording
We invested $26.0 million and $18.9 million in property, plant, and equipment during the three months ended November 30, 2025 and November 30, 2024, respectively. We invested primarily in new and enhanced equipment, information technology, tooling, and facility improvements in fiscal 2026.
Current wording
We invested $41.8 million and $28.6 million in property, plant, and equipment during the six months ended February 28, 2026 and February 28, 2025, respectively. We invested primarily in new and enhanced equipment, information technology, tooling, and facility improvements in fiscal 2026.
Previous wording
On January 1, 2025, we acquired all of the equity interests of QSC, LLC (“QSC”), a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $1.2 billion. This acquisition expanded AIS into a cloud-manageable audio, video, and control platform that includes controls, sensors, and software with broad applications across multiple end-markets including education, commercial, hospitality, government, healthcare, and transportation. We funded the transaction using cash on hand and proceeds from our
Current wording
On January 1, 2025, we acquired all of the equity interests of QSC, LLC (“QSC”), a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $1.2 billion. This acquisition expanded AIS into a cloud-manageable audio, video, and control platform that includes controls, sensors, and software with broad applications across multiple end-markets including education, commercial, hospitality, government, healthcare, and transportation. We funded the transaction using cash on hand and proceeds from our Term Loan Facility. The operating results, assets, liabilities, and cash flows of QSC have been included in our consolidated financial statements since the date of acquisition.
Previous wording
We paid dividends on our common stock of $5.3 million ($0.17 per share) and $4.5 million ($0.15 per share) during the three months ended November 30, 2025 and November 30, 2024, respectively. All decisions regarding the declaration and payment of dividends are at the discretion of the Board of Directors (the “Board”) and are evaluated regularly in light of our financial condition, earnings, growth prospects, funding requirements, applicable law, and any other factors the Board deems relevant.
Current wording
We paid dividends on our common stock of $11.6 million ($0.37 per share) and $10.0 million ($0.32 per share) during the six months ended February 28, 2026 and February 28, 2025, respectively. All decisions regarding the declaration and payment of dividends are at the discretion of the Board of Directors (the “Board”) and are evaluated regularly in light of our financial condition, earnings, growth prospects, funding requirements, applicable law, and any other factors the Board deems relevant.
Previous wording
During the first three months of fiscal 2026 and 2025, we repurchased approximately 0.1 million shares and less than 0.1 million shares of our outstanding common stock for $27.6 million and $5.4 million, respectively.
Current wording
During the first six months of fiscal 2026 and 2025, we repurchased approximately 0.3 million shares and 0.1 million shares of our outstanding common stock for $105.5 million and $21.5 million, respectively.
Previous wording
Total cash outflows for share repurchases during the three months ended November 30, 2025 and November 30, 2024 were $27.1 million and $6.7 million, respectively.
Current wording
Total cash outflows for share repurchases during the six months ended February 28, 2026 and February 28, 2025 were $103.0 million and $22.6 million, respectively.
Previous wording
We expect to repurchase shares on an opportunistic basis subject to various factors including stock price, Company performance, market conditions, and other possible uses of cash. As of November 30, 2025, 3.3 million shares remained available within the program to repurchase.
Current wording
We expect to repurchase shares on an opportunistic basis subject to various factors including stock price, Company performance, market conditions, and other possible uses of cash. As of February 28, 2026, 3.0 million shares remained available within the program to repurchase.
Previous wording
(1) Fiscal 2025 includes $4.6 million in acquisition-related costs.
Current wording
(2) Fiscal 2025 includes $14.1 million in acquisition-related costs.
Previous wording
Net sales for the first quarter of fiscal 2026 increased $192.1 million, or 20.2%, to $1.1 billion, compared with $951.6 million in the prior-year period due primarily to an increase in sales in our AIS segment, driven by the acquisition of QSC, as well as an increase in net sales in our ABL segment.
Current wording
Net sales for the second quarter of fiscal 2026 increased $49.4 million, or 4.9%, to $1.06 billion, compared with $1.01 billion in the prior-year period due primarily to an increase in sales in our AIS segment, driven by the acquisition of QSC, as well as higher net sales of our Distech products. This increase was partially offset by a decrease in net sales in our ABL segment.
Previous wording
Selling, distribution, and administrative expenses (“SD&A”) expenses for the first quarter of fiscal 2026 were $393.4 million, compared with $316.0 million in the prior-year period, an increase of $77.4 million, or 24.5%. The increase in SD&A expenses was due primarily to amounts related to the QSC acquisition, including higher employee-related costs and higher amortization from acquired intangibles.
Current wording
Selling, distribution, and administrative expenses (“SD&A”) expenses for the second quarter of fiscal 2026 were $381.5 million, compared with $357.8 million in the prior-year period, an increase of $23.7 million, or 6.6%. The increase in SD&A expenses was due primarily to amounts related to the QSC acquisition, including higher employee-related costs and higher amortization from acquired intangibles, partially offset by acquisition-related professional fees that did not recur in fiscal 2026.
Previous wording
Operating profit for the first quarter of fiscal 2026 was $160.4 million (14.0% of net sales), compared with $133.3 million (14.0% of net sales) for the prior-year period, an increase of $27.1 million, or 20.3%. The increase in operating profit was due to higher gross profit, partially offset by higher SD&A expenses.
Current wording
Operating profit for the second quarter of fiscal 2026 was $133.0 million (12.6% of net sales), compared with $110.2 million (11.0% of net sales) for the prior-year period, an increase of $22.8 million, or 20.7%. The increase in operating profit was due to higher gross profit, partially offset by higher SD&A expenses and the recognition of special charges.
Previous wording
Miscellaneous (income) expense, net consists of non-service components of net periodic pension cost, gains and losses associated with foreign currency-related transactions, and non-operating gains and losses. We reported net miscellaneous income of $0.6 million and net miscellaneous expense of $2.5 million for the first quarter of fiscal 2026 and 2025, respectively.
Current wording
Miscellaneous expense, net consists of non-service components of net periodic pension cost, gains and losses associated with foreign currency-related transactions, and non-operating gains and losses. We reported net miscellaneous expense of $3.1 million and $1.0 million for the second quarter of fiscal 2026 and 2025, respectively.
Previous wording
AIS net sales for the first quarter of fiscal 2026 increased 250.2% compared with the prior-year period. The increase was due primarily to the acquisition of QSC. Additionally, sales of Distech products increased during the first quarter of fiscal 2026.
Current wording
AIS net sales for the second quarter of fiscal 2026 increased 44.7% compared with the prior-year period. The increase was due primarily to the acquisition of QSC and higher sales of Distech products.
Previous wording
AIS operating profit was $37.0 million (14.4% of AIS net sales) for the first quarter of fiscal 2026, compared with $10.8 million (14.7% of AIS net sales) in the prior-year period, an increase of $26.2 million. This increase primarily reflects higher operating profit from the QSC acquisition. AIS's operating results also include higher amortization from acquired intangibles from the QSC acquisition.
Current wording
AIS operating profit was $28.3 million (11.4% of AIS net sales) for the second quarter of fiscal 2026, compared with $9.9 million (5.8% of AIS net sales) in the prior-year period, an increase of $18.4 million. This increase primarily reflects higher operating profit from the QSC acquisition. AIS's operating results also include higher amortization from acquired intangibles as well as the impact of fair value adjustments to inventory that occurred in the prior year, both of which related to the QSC acquisition.
Previous wording
We reported net interest expense of $8.4 million and net interest income of $4.0 million for the first quarter of fiscal 2026 and 2025, respectively. The increase in net interest expense was due primarily to interest incurred on our outstanding Term Loan Facility and lower interest-bearing cash and cash equivalent balances held during the period as a result of our purchase of QSC in the second quarter of fiscal 2025.
Current wording
We reported net interest expense of $15.4 million and $2.9 million for the six months ended February 28, 2026 and February 28, 2025, respectively. The increase in net interest expense was due primarily to lower interest-bearing cash and cash equivalent balances as a result of our purchase of QSC and higher interest incurred on our outstanding Term Loan Facility.
Previous wording
Net income for the first quarter of fiscal 2026 increased $13.8 million, or 12.9%, to $120.5 million, from $106.7 million reported for the prior-year period. This increase was due primarily to higher operating profit, partially offset by higher net interest expense and income tax expense. Diluted earnings per share for the first quarter of fiscal 2026 increased $0.47, or 14.0%, to $3.82 compared with diluted earnings per share of $3.35 for the prior-year period. This increase reflects higher net income, as well as lower outstanding diluted shares.
Current wording
Net income for the first six months of fiscal 2026 increased $33.1 million, or 18.0%, to $217.3 million from $184.2 million reported for the prior-year period. This increase was due primarily to higher operating profit, partially offset by higher net interest expense. Diluted earnings per share for the six months ended February 28, 2026 increased $1.11 to $6.91 compared with diluted earnings per share of $5.80 for the prior-year period. This increase reflects higher net income as well as lower outstanding diluted shares.
Previous wording
ABL net sales for the first quarter of fiscal 2026 increased 1.0% compared with the prior-year period. This increase was due primarily to higher net sales within the independent sales network and corporate accounts channels, partially offset by lower net sales within the direct sales network.
Current wording
ABL net sales for the six months ended February 28, 2026 decreased 0.8% compared with the prior-year period due primarily to lower net sales within the direct sales network, partially offset by higher sales within the independent sales network and the corporate accounts channel.
Previous wording
ABL operating profit was $149.0 million (16.6% of ABL net sales) for the first quarter of fiscal 2026, compared with $143.3 million (16.2% of ABL net sales) in the prior-year period, an increase of $5.7 million. The increase in operating profit was due primarily to lower selling and employee costs, which more than offset the decline in gross profit.
Current wording
ABL operating profit for the six months ended February 28, 2026 was $274.1 million (16.0% of ABL net sales), compared with $273.6 million (15.8% of ABL net sales) in the prior-year period, an increase of $0.5 million. The increase in operating profit was due primarily to lower selling and employee costs, which more than offset the decline in gross profit and the recognition of nonrecurring special charges.
Previous wording
AIS gross profit was $153.2 million (59.5% of AIS net sales) for the first quarter of fiscal 2026, compared with $42.9 million (58.4% of AIS net sales) in the prior-year period, an increase of $110.3 million. The increase in gross profit was due primarily to the acquisition of QSC as well as the fall through of higher Distech net sales.
Current wording
AIS gross profit for the six months ended February 28, 2026 was $299.8 million (59.3% of AIS net sales), compared with $132.9 million (54.2% of AIS net sales) in the prior-year period, an increase of $166.9 million. The increase in gross profit was due primarily to the acquisition of QSC as well as the fall through of higher Distech net sales. The second quarter of fiscal 2025 also included $10.4 million in preliminary pre-tax nonrecurring acquisition date fair value adjustments to inventory related to the acquisition of QSC, which did not recur in fiscal 2026.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Net income for the second quarter of fiscal 2026 increased $19.3 million, or 24.9%, to $96.8 million, from $77.5 million reported for the prior-year period. This increase was due primarily to higher operating profit. Diluted earnings per share for the second quarter of fiscal 2026 increased $0.64, or 26.1%, to $3.09 compared with diluted earnings per share of $2.45 for the prior-year period. This increase reflects higher net income as well as lower outstanding diluted shares.
Current report — wording carried from elsewhere
The following table sets forth information comparing the components of net income for the six months ended February 28, 2026 and February 28, 2025 (in millions except per share data):
Current report — wording carried from elsewhere
(2) Fiscal 2025 includes $18.7 million in acquisition-related costs.
Current report — wording carried from elsewhere
Miscellaneous expense, net consists of non-service components of net periodic pension cost, gains and losses associated with foreign currency-related transactions, and non-operating gains and losses.
Current report — wording carried from elsewhere
We reported net miscellaneous expense of $2.5 million for the six months ended February 28, 2026 and $3.5 million for the six months ended February 28, 2025.
Current report — wording carried from elsewhere
The following table sets forth information comparing the operating results of our segments, ABL and AIS, for the six months ended February 28, 2026 and February 28, 2025 (in millions):
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Term Loan Facility. The operating results, assets, liabilities, and cash flows of QSC have been included in our consolidated financial statements since the date of acquisition.