ACUITY INC. (DE)

Previous wording

A discussion of the year ended August 31, 2024 compared to the year ended August 31, 2023 can be found within Part II, Item 7. Management's Discussion and Analysis within our fiscal 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 28, 2024.

Current wording

A discussion of the year ended August 31, 2025 compared to the year ended August 31, 2024 can be found within Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations within our fiscal 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 27, 2025.

Previous wording

Acuity Inc. (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) is a market-leading industrial technology company. Effective March 26, 2025, we changed our corporate name from Acuity Brands, Inc. to Acuity Inc. We use technology to solve problems in spaces, light, and more things to come. Through our two business segments, Acuity Brands Lighting (“ABL”) and Acuity Intelligent Spaces (“AIS”), we design, manufacture, and bring to market products and services that make a valuable difference in people’s lives. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and an audio, video, and control platform. We focus on customer outcomes and drive growth and productivity to increase market share and deliver superior returns. We look to aggressively deploy capital to grow the business and to enter attractive new verticals.

Current wording

Acuity Inc. is a market-leading industrial technology company. We use technology to solve problems in spaces, light, and more things to come. Through our two business segments, Acuity Brands Lighting (“ABL”) and Acuity Intelligent Spaces (“AIS”), we design, manufacture, and bring to market products and services that make a valuable difference in people’s lives. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management solutions, and an audio, video, and control platform. We focus on customer outcomes and drive growth and productivity to increase market share and deliver superior returns. We look to aggressively deploy capital to grow the business and to enter attractive new verticals.

Previous wording

Contractual purchase obligations subsequent to August 31, 2025 include $323.3 million in fiscal 2026. Contractual purchase obligations beyond fiscal 2026 are not significant.

Current wording

Contractual purchase obligations of $450.2 million at August 31, 2026 are due in fiscal 2027. Contractual purchase obligations beyond fiscal 2027 are not significant.

Previous wording

Our cash position at August 31, 2025 was $422.5 million, a decrease of $423.3 million from August 31, 2024. Cash generated from operating activities and cash on hand were used during the current year to partially fund the QSC, LLC (“QSC”) acquisition and our other capital allocation priorities as discussed below.

Current wording

Our cash position at August 31, 2026 was $636.3 million, an increase of $213.8 million from August 31, 2025. Cash generated from operating activities and cash on hand were used during the current fiscal year to voluntarily repay borrowings as well as to fund our capital allocation priorities as discussed below.

Previous wording

We generated $601.4 million of cash flows from operating activities during fiscal 2025 compared with $619.2 million in the prior-year period, a decrease of $17.8 million. Cash flows from operations decreased as payments for acquisition-related costs, higher interest, and increased purchases of inventory were partially offset by the timing of collections from customers.

Current wording

We generated $825.6 million of cash flows from operating activities during fiscal 2026 compared with $601.4 million in the prior-year period, an increase of $224.2 million. Cash flows from operations increased due primarily to higher profit, including $51.3 million of received tariff refunds, and lower income tax payments.

Previous wording

See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K for discussion of the terms of our various financing arrangements, including the 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”), the terms of our five-year unsecured revolving credit facility (“Revolving Credit Facility”), and the terms of our unsecured term loan facility (“Term Loan Facility”) due June 27, 2027.

Current wording

See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K for discussion of the terms of our various financing arrangements, including the 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”), and our five-year credit agreement (“Credit Agreement”) set to expire May 8, 2031.

Previous wording

At August 31, 2025, our outstanding debt balance was $896.8 million, which consisted of our Unsecured Notes and borrowings on our Term Loan Facility, compared to our cash position of $422.5 million. We were in compliance with all covenants under our financing arrangements as of August 31, 2025.

Current wording

At August 31, 2026, our outstanding debt balance was $697.4 million, which consisted of our Unsecured Notes and borrowings on our revolving credit facility under the Credit Agreement, compared to our cash position of $636.3 million. We were in compliance with all covenants under our financing arrangements as of August 31, 2026.

Previous wording

At August 31, 2025, we had additional borrowing capacity under the Credit Agreement of $595.8 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less outstanding letters of credit of $4.2 million issued under the Revolving Credit Facility, primarily for securing collateral requirements under our casualty insurance premiums. As of August 31, 2025, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $1.0 billion.

Current wording

At August 31, 2026, we had additional borrowing capacity under the Credit Agreement of $593.3 million under the most restrictive covenant in effect at the time, which represents the full amount of borrowing capacity under the Credit Agreement of $800.0 million less outstanding borrowings of $200.0 million and letters of credit of $6.7 million, primarily for securing collateral requirements under our casualty insurance policies. As of August 31, 2026, our cash on hand combined with the additional borrowing capacity under the revolving credit facility totaled $1.2 billion.

Previous wording

We invested $68.4 million and $64.0 million in property, plant, and equipment in fiscal 2025 and 2024, respectively. We invested primarily in new and enhanced information technology, equipment, tooling, and facility improvements in fiscal 2025.

Current wording

We invested $77.7 million and $68.4 million in property, plant, and equipment in fiscal 2026 and 2025, respectively. We invested primarily in new and enhanced information technology, equipment, tooling, and facility improvements in fiscal 2026.

Previous wording

On January 1, 2025, we acquired all of the equity interests of QSC, a leader in the design, engineering, and manufacturing of audio, video, and control solutions and services, for $1.2 billion. This acquisition expands 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.

Current wording

On January 1, 2025, we acquired all of the equity interests of 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 $20.6 million ($0.66 per share) in fiscal 2025 and $18.2 million ($0.58 per share) in fiscal 2024. All decisions regarding the declaration and payment of dividends are at the discretion of the Board of Directors (the “Board”) and are evaluated regularly with consideration 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 $23.8 million ($0.77 per share) in fiscal 2026 and $20.6 million ($0.66 per share) in fiscal 2025. 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 fiscal 2025, we repurchased approximately 0.4 million shares of our outstanding common stock for $117.1 million. Total cash outflows for share repurchases during fiscal 2025 were $118.5 million. During fiscal 2024, we repurchased 0.5 million shares of our outstanding common stock for $87.8 million. Total cash outflows for share repurchases during fiscal 2024 were $88.7 million. 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.

Current wording

Total cash outflows for share repurchases during fiscal 2026 and 2025 were $287.2 million and $118.5 million, respectively. 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.

Previous wording

Net sales of $4.35 billion for the year ended August 31, 2025 increased by $504.6 million, or 13.1%, compared with the prior-year period due primarily to increases in sales in both our AIS and ABL segments. The increase in our AIS segment was driven by the acquisition of QSC, which contributed $428.6 million in sales, as well higher net sales of our Atrius and Distech products. Additionally, net sales increased in our ABL segment due primarily to higher net sales within the independent sales and direct sales networks, partially offset by lower net sales within the corporate accounts and retail channels.

Current wording

Net sales of $4.64 billion for the year ended August 31, 2026 increased by $296.2 million, or 6.8%, compared with the prior year due primarily 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 as higher net sales of our Distech products.

Previous wording

Operating profit for the year ended August 31, 2025 was $563.9 million (13.0% of net sales) compared with $553.3 million (14.4% of net sales) for the prior fiscal year, an increase of $10.6 million, or 1.9%. The increase in operating profit was due primarily to higher gross profit, partially offset by higher SD&A expenses and nonrecurring fiscal 2025 special charges.

Current wording

Operating profit for the year ended August 31, 2026 was $713.7 million (15.4% of net sales) compared with $563.9 million (13.0% of net sales) for the prior fiscal year, an increase of $149.8 million, or 26.6%. The increase in operating profit was due primarily to higher gross profit, partially offset by higher selling, distribution, and administrative (“SD&A”) expenses.

Previous wording

Selling, distribution, and administrative (“SD&A”) expenses for the year ended August 31, 2025 were $1.48 billion compared with $1.23 billion in the prior year, an increase of $256.5 million, or 20.9%. The increase in SD&A expenses was due primarily to higher selling costs associated with higher sales and higher employee-related costs. The increase was also due to amounts related to the QSC acquisition, including higher employee-related costs, higher amortization from acquired intangibles, and acquisition-related costs. Acquisition-related costs were recorded within unallocated corporate amounts.

Current wording

SD&A expenses for the year ended August 31, 2026 were $1.61 billion compared with $1.48 billion in the prior year, an increase of $128.4 million, or 8.6%. 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

We recorded special charges totaling $29.7 million for the year ended August 31, 2025, which consisted primarily of impairments of long-lived assets as well as employee severance costs related to productivity initiatives. Please refer to the Special Charges footnote of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K for further details.

Current wording

Please refer to the Special Charges footnote of the Notes to Consolidated Financial Statements within this Annual Report on Form 10-K for further details.

Previous wording

We reported net miscellaneous expense of $41.7 million in fiscal 2025 compared with $9.2 million in fiscal 2024. This year-over-year change was due primarily to the recognition of $30.9 million for non-cash pension settlement charges in the fourth quarter of fiscal 2025.

Current wording

We reported net miscellaneous expense of $7.4 million in fiscal 2026 compared with $41.7 million in fiscal 2025. This year-over-year change was due primarily to the recognition of $30.9 million for non-cash pension settlement charges in the fourth quarter of fiscal 2025 that did not recur in fiscal 2026.

Previous wording

The details of the pension settlement charges are described in the Pension and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements.

Current wording

The details of the fiscal 2025 pension settlement charges are described in the Pension and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements.

Previous wording

Our effective income tax rate was 20.7% and 23.0% for the years ended August 31, 2025 and 2024, respectively. This reduction was due primarily to a one-time $8.2 million tax benefit related to the expiration of the statute in fiscal 2025 of limitations on tax reserves for uncertain tax positions. Further details regarding income taxes are included in the Income Taxes footnote of the Notes to Consolidated Financial Statements.

Current wording

Our effective income tax rate was 21.9% and 20.7% for the years ended August 31, 2026 and 2025, respectively. This year-over-year increase was due primarily to a one-time $8.2 million tax benefit recorded in fiscal 2025 related to the expiration of the statute of limitations on tax reserves for uncertain tax positions. Further details regarding income taxes are included in the Income Taxes footnote of the Notes to Consolidated Financial Statements.

Previous wording

Net income for fiscal 2025 decreased $26.0 million, or 6.2%, to $396.6 million from $422.6 million reported for the prior year. This decrease was due primarily to the recognition of non-cash pension settlement charges, nonrecurring special charges, higher SD&A expenses, and higher net interest expense, partially offset by higher gross profit and lower income tax expense.

Current wording

Net income for fiscal 2026 increased $134.7 million, or 34.0%, to $531.3 million from $396.6 million reported for the prior year. This increase was due primarily to higher operating profit and lower net miscellaneous expense, partially offset by higher income tax expense associated with the increase in profit and higher net interest expense.

Previous wording

Diluted earnings per share for fiscal 2025 was $12.53 compared with $13.44 for the prior-year period, a decrease of $0.91, or 6.8%. This decrease reflects lower net income as well as higher outstanding diluted shares.

Current wording

Diluted earnings per share for fiscal 2026 was $17.05 compared with $12.53 for the prior-year period, an increase of $4.52, or 36.1%. This increase reflects higher net income as well as lower outstanding diluted shares.

Previous wording

ABL gross profit was $1.7 billion (45.8% of ABL net sales) for the year ended August 31, 2025 compared with $1.6 billion (45.1% of ABL net sales) in the prior year, an increase of $42.0 million. The increase in gross profit was due primarily to fall through of higher net sales and favorable materials cost. These increases were partially offset by higher production and tariff costs.

Current wording

ABL gross profit was $1.67 billion (46.8% of ABL net sales) for the year ended August 31, 2026 compared with $1.65 billion (45.8% of ABL net sales) in the prior year, an increase of $18.1 million. The increase in gross profit was due primarily to lower net tariffs cost, including $38.2 million in IEEPA refunds, lower material costs, and lower quality costs. These increases were partially offset by the fall through of lower net sales as well as higher production costs.

Previous wording

ABL operating profit was $590.6 million (16.4% of ABL net sales) for the year ended August 31, 2025 compared with $582.8 million (16.3% of ABL net sales) in the prior year, an increase of $7.8 million. The increase in operating profit was primarily due to higher gross profit, partially offset by the recognition of nonrecurring special charges and higher selling costs associated with higher sales.

Current wording

ABL operating profit was $623.5 million (17.4% of ABL net sales) for the year ended August 31, 2026 compared with $590.6 million (16.4% of ABL net sales) in the prior year, an increase of $32.9 million. The increase in operating profit was due primarily to higher gross profit as well as lower special charges.

Previous wording

AIS gross profit was $424.0 million (55.5% of AIS net sales) for the year ended August 31, 2025 compared with $169.2 million (58.0% of AIS net sales) in the prior-year period, an increase of $254.8 million. The increase in gross profit was due primarily to fall through of higher net sales, including contributions from the QSC acquisition. These increases were partially offset by preliminary pre-tax fair value adjustments to QSC's inventory and higher tariffs.

Current wording

AIS gross profit was $678.1 million (61.3% of AIS net sales) for the year ended August 31, 2026 compared with $424.0 million (55.5% of AIS net sales) in the prior-year period, an increase of $254.1 million. The increase in gross profit was due primarily to the acquisition of QSC, the fall through of higher Distech net sales, and $29.6 million in pre-tax nonrecurring acquisition date fair value adjustments to inventory related to the acquisition of QSC, which did not recur in fiscal 2026. Additionally, we recognized $13.1 million in IEEPA tariff refunds in fiscal 2026.

Previous wording

AIS operating profit was $76.1 million (10.0% of AIS net sales) for the year ended August 31, 2025 compared with $43.6 million (14.9% of AIS net sales) in the prior-year period, an increase of $32.5 million. This increase primarily reflects higher gross profit, partially offset by higher SD&A costs due primarily to contributions from the QSC acquisition. AIS's operating results also include preliminary pre-tax fair value adjustments to inventory and amortization of intangible assets related to the QSC acquisition.

Current wording

AIS operating profit was $186.5 million (16.9% of AIS net sales) for the year ended August 31, 2026 compared with $76.1 million (10.0% of AIS net sales) in the prior-year period, an increase of $110.4 million. This increase primarily reflects higher gross profit, partially offset by higher SD&A expenses, including increased employee costs and amortization due to the QSC acquisition.

Previous wording

An assessment of our goodwill and indefinite-lived intangible assets for impairment considers the use of significant judgments and estimates in accordance with U.S. GAAP including, but not limited to, economic, industry, and Company-specific qualitative factors, projected future net sales, operating results, and cash flows. Under a quantitative assessment, fair values for goodwill and indefinite-lived intangible assets are estimated using discounted future cash flows or another appropriate fair value method. We currently believe that the estimates used in the evaluation of goodwill and indefinite-lived intangibles are reasonable. However, future differences between actual and expected net sales, operating results, and cash flows and/or changes in the discount rates, or theoretical royalty rates for indefinite-lived intangible assets, used could require us to record additional non-cash impairment charges to earnings for the write-down in the value of such assets. Such charges could have a material adverse effect on our results of operations and financial position but not our cash flows from operations.

Current wording

An assessment of our goodwill and indefinite-lived intangible assets for impairment considers the use of significant judgments and estimates in accordance with U.S. GAAP including, but not limited to, economic, industry, and Company-specific qualitative factors, projected future net sales, operating results, and cash flows. Under a quantitative assessment, fair values for goodwill and indefinite-lived intangible assets are estimated using discounted future cash flows or another appropriate fair value method, and corroborated with market data, such as relevant market multiples. We currently believe that the estimates used in the evaluation of goodwill and indefinite-lived intangibles are reasonable. However, future differences between actual and expected net sales, operating results, and cash flows and/or changes in the discount rates, or theoretical royalty rates for indefinite-lived intangible assets, used could require us to record additional non-cash impairment charges to earnings for the write-down in the value of such assets. Such charges could have a material adverse effect on our results of operations and financial position but not our cash flows from operations.

Previous wording

We last performed a quantitative goodwill impairment analysis in fiscal 2023 and concluded that any reasonably likely change in the assumptions used in those analyses, including revenue growth rates, discount rates, longer term growth rates, or relevant multiples would not cause the carrying value of any reporting unit to exceed its estimated fair value. See the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for additional information.

Current wording

Any reasonably likely change in the assumptions used in these analyses, including revenue growth rates, discount rates, long-term growth rates, or relevant multiples would not cause the carrying value of any reporting unit to exceed its estimated fair value as determined under the goodwill impairment analysis. See the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements for additional information.

Previous wording

As of June 1, 2025, the current fiscal year testing date, we held eight indefinite-lived intangible assets with an aggregate carrying value of $132.5 million. For fiscal 2025, we performed a qualitative analysis to assess our indefinite-lived intangible assets for impairment. Our qualitative analysis considered and assessed external factors such as macroeconomic, industry, cost, and market conditions as well as asset-specific factors, such as each trade name's actual and planned financial performance. Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for all of the indefinite-lived intangible assets, and no quantitative test for these assets was required. We last performed a quantitative analysis in fiscal 2023 for the trade names and concluded that any reasonably likely change in the assumptions used in those analyses, including revenue growth rates, discount rates, long-term growth rates, or implied royalty rates would not result in an impairment.

Current wording

As of June 1, 2026, the current fiscal year testing date, we held eight indefinite-lived intangible assets with an aggregate carrying value of $132.6 million. For fiscal 2026, we performed a qualitative analysis to assess our indefinite-lived intangible assets for impairment. Our qualitative analysis considered and assessed external factors such as macroeconomic, industry, cost, and market conditions as well as asset-specific factors, such as each trade name's actual and planned financial performance. Based on the results of our analysis, we determined there was not a more likely than not probability of impairment for all of the indefinite-lived intangible assets, and no quantitative test for these assets was required. We last performed a quantitative analysis in fiscal 2023 for the trade names and concluded that any reasonably likely change in the assumptions used in those analyses, including revenue growth rates, discount rates, long-term growth rates, or implied royalty rates would not result in an impairment.

Previous wording

This filing contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements include, among other things, statements that describe or relate to the Company’s plans, initiatives, projections, vision, goals, targets, commitments, expectations, objectives, prospects, strategies, or financial outlook, and the assumptions underlying or relating thereto. In some cases, we may use words such as “expect,” “believe,” “intend,” “anticipate,” “estimate,” “forecast,” “indicate,” “project,” “predict,” “plan,” “may,” “will,” “could,” “should,” “would,” “potential,” and words of similar meaning, as well as other words or expressions referencing future events, conditions, or circumstances, to identify forward-looking statements. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Act. Forward-looking statements are not guarantees of future performance. Our forward-looking statements are based on our current beliefs, expectations, and assumptions, which may not prove to be accurate, and are subject to known and unknown risks and uncertainties, many of which are outside of our control. These risks and uncertainties could cause actual events or results to differ materially from our historical experience and management’s present expectations or projections. These risks and uncertainties are discussed in our filings with the U.S. Securities and Exchange Commission, including this Annual Report on Form 10-K (including, but not limited to, Part I, Item 1A. Risk Factors), quarterly reports on Form 10-Q, and current reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made. You are cautioned not to place undue reliance on any forward-looking statements. Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this quarterly report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events, or otherwise.

Current wording

This filing contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements include, but are not limited to, statements that describe or relate to the Company’s plans, initiatives, projections, vision, goals, targets, commitments, expectations, objectives, prospects, strategies, or financial outlook, and the assumptions underlying or relating thereto. In some cases, we may use words such as “expect,” “believe,” “intend,” “anticipate,” “estimate,” “forecast,” “indicate,” “project,” “predict,” “plan,” “may,” “will,” “could,” “should,” “would,” “potential,” and words of similar meaning, as well as other words or expressions referencing future events, conditions, or circumstances, to identify forward-looking statements. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Act. Forward-looking statements are not guarantees of future performance. Our forward-looking statements are based on our current beliefs, expectations, and assumptions, which may not prove to be accurate, and are subject to known and unknown risks and uncertainties, assumptions, and other important factors, many of which are outside of our control and any of which could cause our actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties are discussed in our filings with the U.S. Securities and Exchange Commission, including this Annual Report on Form 10-K (including, but not limited to, Part I, Item 1A. Risk Factors), quarterly reports on Form 10-Q, and current reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made. This Annual Report is not comprehensive, and for that reason, should be read in conjunction with such filings. You are cautioned not to place undue reliance on any forward-looking statements. Except as required by law, we undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect any events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, whether as a result of new information, future events, or otherwise.