(Mark One) | |||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | |||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to . |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
Title of each class | Trading symbol | Name of each exchange on which registered | ||||||||||||
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
Smaller reporting company | Emerging growth company |
Page No. | ||||||||
November 30, 2021 | August 31, 2021 | ||||||||||
(unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, less reserve for doubtful accounts of $ | |||||||||||
Inventories | |||||||||||
Prepayments and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant, and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Deferred income taxes | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Current operating lease liabilities | |||||||||||
Accrued compensation | |||||||||||
Other accrued liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Long-term operating lease liabilities | |||||||||||
Accrued pension liabilities | |||||||||||
Deferred income taxes | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (see Commitments and Contingencies footnote) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost, of | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Net sales | $ | $ | |||||||||
Cost of products sold | |||||||||||
Gross profit | |||||||||||
Selling, distribution, and administrative expenses | |||||||||||
Special charges | |||||||||||
Operating profit | |||||||||||
Other expense: | |||||||||||
Interest expense, net | |||||||||||
Miscellaneous expense, net | |||||||||||
Total other expense | |||||||||||
Income before income taxes | |||||||||||
Income tax expense | |||||||||||
Net income | $ | $ | |||||||||
Earnings per share: | |||||||||||
Basic earnings per share | $ | $ | |||||||||
Basic weighted average number of shares outstanding | |||||||||||
Diluted earnings per share | $ | $ | |||||||||
Diluted weighted average number of shares outstanding | |||||||||||
Dividends declared per share | $ | $ | |||||||||
Comprehensive income: | |||||||||||
Net income | $ | $ | |||||||||
Other comprehensive income (loss) items: | |||||||||||
Foreign currency translation adjustments | ( | ||||||||||
Defined benefit plans, net of tax | |||||||||||
Other comprehensive (loss) income items, net of tax | ( | ||||||||||
Comprehensive income | $ | $ |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Share-based payment expense | |||||||||||
Asset impairment | |||||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ||||||||||
Prepayments and other current assets | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Other | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property, plant, and equipment | ( | ( | |||||||||
Proceeds from sale of property, plant, and equipment | |||||||||||
Other investing activities | ( | ||||||||||
Net cash used for investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Issuance of long-term debt | |||||||||||
Repayments of long-term debt | ( | ||||||||||
Repurchases of common stock | ( | ( | |||||||||
Proceeds from stock option exercises and other | |||||||||||
Payments of taxes withheld on net settlement of equity awards | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Net cash used for financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net change in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Income taxes paid during the period | $ | $ | |||||||||
Interest paid during the period | $ | $ |
November 30, 2021 | August 31, 2021 | ||||||||||
Raw materials, supplies, and work in process (1) | $ | $ | |||||||||
Finished goods | |||||||||||
Inventories excluding reserves | |||||||||||
Less: Reserves | ( | ( | |||||||||
Total inventories | $ | $ |
November 30, 2021 | August 31, 2021 | ||||||||||
Land | $ | $ | |||||||||
Buildings and leasehold improvements | |||||||||||
Machinery and equipment | |||||||||||
Total property, plant, and equipment, at cost | |||||||||||
Less: Accumulated depreciation and amortization | ( | ( | |||||||||
Property, plant, and equipment, net | $ | $ |
ABL | ISG | Total | |||||||||||||||
Balance as of August 31, 2021 | $ | $ | $ | ||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | ||||||||||||||
Balance as of November 30, 2021 | $ | $ | $ |
ABL | ISG | Total | |||||||||||||||
Balance as of August 31, 2020 | $ | $ | $ | ||||||||||||||
Foreign currency translation adjustments | |||||||||||||||||
Balance as of November 30, 2020 | $ | $ | $ |
November 30, 2021 | August 31, 2021 | ||||||||||
Customer incentive programs(1) | $ | $ | |||||||||
Refunds to customers(1) | |||||||||||
Current deferred revenues(1) | |||||||||||
Sales commissions | |||||||||||
Freight costs | |||||||||||
Warranty and recall costs(2) | |||||||||||
Tax-related items(3) | |||||||||||
Interest on long-term debt(4) | |||||||||||
Other(5) | |||||||||||
Total other current liabilities | $ | $ |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Interest expense | $ | $ | |||||||||
Interest income | ( | ( | |||||||||
Interest expense, net | $ | $ |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Beginning balance | $ | $ | |||||||||
Warranty and recall costs | |||||||||||
Payments and other deductions | ( | ( | |||||||||
Ending balance | $ | $ |
Common Stock Outstanding | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock, at cost | Total | |||||||||||||||||||||||||||||||||||
Balance, August 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Share-based payment amortization, issuances, and cancellations | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Employee stock purchase plan issuances | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends of $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock options exercised | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance, November 30, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Common Stock Outstanding | |||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock, at cost | Total | |||||||||||||||||||||||||||||||||||
Balance, August 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cumulative effect of adoption of ASC 326 | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Share-based payment amortization, issuances, and cancellations | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Employee stock purchase plan issuances | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash dividends of $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Repurchases of common stock | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance, November 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||
November 30, 2021 | August 31, 2021 | ||||||||||
Current deferred revenues | $ | $ | |||||||||
Non-current deferred revenues |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
ABL: | |||||||||||
Independent sales network | $ | $ | |||||||||
Direct sales network | |||||||||||
Retail sales | |||||||||||
Corporate accounts | |||||||||||
Other | |||||||||||
Total ABL | |||||||||||
ISG | |||||||||||
Eliminations | ( | ( | |||||||||
Total | $ | $ |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Share-based payment expense | $ | $ |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | |||||||||
Amortization of prior service cost | |||||||||||
Recognized actuarial loss | |||||||||||
Net periodic pension cost | $ | $ |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Net income | $ | $ | |||||||||
Basic weighted average shares outstanding | |||||||||||
Common stock equivalents | |||||||||||
Diluted weighted average shares outstanding | |||||||||||
Basic earnings per share | $ | $ | |||||||||
Diluted earnings per share | $ | $ |
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Stock options | |||||||||||
Performance stock awards | * | ||||||||||
Restricted stock awards | * | ||||||||||
Foreign Currency Items | Defined Benefit Pension Plans | Accumulated Other Comprehensive Loss Items | |||||||||||||||
Balance at August 31, 2021 | $ | ( | $ | ( | $ | ( | |||||||||||
Other comprehensive loss before reclassifications | ( | ( | |||||||||||||||
Amounts reclassified from accumulated other comprehensive loss (1) | |||||||||||||||||
Net current period other comprehensive (loss) income | ( | ( | |||||||||||||||
Balance at November 30, 2021 | $ | ( | $ | ( | $ | ( |
Foreign Currency Items | Defined Benefit Pension Plans | Accumulated Other Comprehensive Loss Items | |||||||||||||||
Balance at August 31, 2020 | $ | ( | $ | ( | $ | ( | |||||||||||
Other comprehensive income before reclassifications | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss (1) | |||||||||||||||||
Net current period other comprehensive income | |||||||||||||||||
Balance at November 30, 2020 | $ | ( | $ | ( | $ | ( |
Three Months Ended | |||||||||||||||||||||||||||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||||||||||||||||||||||||||
Before Tax Amount | Tax (Expense) Benefit | Net of Tax Amount | Before Tax Amount | Tax (Expense) Benefit | Net of Tax Amount | ||||||||||||||||||||||||||||||
Foreign currency translation adjustments | $ | ( | $ | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||
Defined benefit pension plans: | |||||||||||||||||||||||||||||||||||
Amortization of defined benefit pension items: | |||||||||||||||||||||||||||||||||||
Prior service cost | ( | ( | |||||||||||||||||||||||||||||||||
Actuarial losses | ( | ( | |||||||||||||||||||||||||||||||||
Total defined benefit pension plans, net | ( | ( | |||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | $ | ( | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||
ABL | ISG | Corporate | Eliminations(1) | Total | |||||||||||||||||||||||||
Three Months Ended November 30, 2021: | |||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Operating profit (loss) | ( | ||||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||
Three Months Ended November 30, 2020: | |||||||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Operating profit (loss) | ( | ( | |||||||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||
November 30, 2021 | November 30, 2020 | ||||||||||
Operating profit - ABL | $ | $ | |||||||||
Operating profit (loss) - ISG | ( | ||||||||||
Unallocated corporate amounts | ( | ( | |||||||||
Operating profit | |||||||||||
Interest expense, net | |||||||||||
Miscellaneous expense, net | |||||||||||
Income before income taxes | $ | $ | |||||||||
Summarized Balance Sheet Information | November 30, 2021 | August 31, 2021 | ||||||||||||
Current assets | $ | 1,222.6 | $ | 1,172.0 | ||||||||||
Amounts due from non-guarantor affiliates | 238.5 | 213.4 | ||||||||||||
Non-current assets | 1,381.1 | 1,391.7 | ||||||||||||
Current liabilities | 602.7 | 595.1 | ||||||||||||
Non-current liabilities | 818.7 | 815.7 |
Summarized Income Statement Information | Three Months Ended November 30, 2021 | |||||||
Net sales | $ | 781.2 | ||||||
Gross profit | 324.7 | |||||||
Net income | 84.9 |
Three Months Ended | |||||||||||||||||||||||
November 30, 2021 | November 30, 2020 | Increase (Decrease) | Percent Change | ||||||||||||||||||||
Net sales | $ | 926.1 | $ | 792.0 | $ | 134.1 | 16.9 | % | |||||||||||||||
Cost of products sold | 540.3 | 459.6 | 80.7 | 17.6 | % | ||||||||||||||||||
Gross profit | 385.8 | 332.4 | 53.4 | 16.1 | % | ||||||||||||||||||
Percent of net sales | 41.7 | % | 42.0 | % | (30) | bps | |||||||||||||||||
Selling, distribution, and administrative expenses | 270.7 | 246.0 | 24.7 | 10.0 | % | ||||||||||||||||||
Special charges | — | 0.7 | (0.7) | NM | |||||||||||||||||||
Operating profit | 115.1 | 85.7 | 29.4 | 34.3 | % | ||||||||||||||||||
Percent of net sales | 12.4 | % | 10.8 | % | 160 | bps | |||||||||||||||||
Other expense: | |||||||||||||||||||||||
Interest expense, net | 5.9 | 4.9 | 1.0 | 20.4 | % | ||||||||||||||||||
Miscellaneous expense, net | 0.3 | 1.6 | (1.3) | NM | |||||||||||||||||||
Total other expense | 6.2 | 6.5 | (0.3) | (4.6) | % | ||||||||||||||||||
Income before income taxes | 108.9 | 79.2 | 29.7 | 37.5 | % | ||||||||||||||||||
Percent of net sales | 11.8 | % | 10.0 | % | 180 | bps | |||||||||||||||||
Income tax expense | 21.3 | 19.6 | 1.7 | 8.7 | % | ||||||||||||||||||
Effective tax rate | 19.6 | % | 24.7 | % | |||||||||||||||||||
Net income | $ | 87.6 | $ | 59.6 | $ | 28.0 | 47.0 | % | |||||||||||||||
Diluted earnings per share | $ | 2.46 | $ | 1.57 | $ | 0.89 | 56.7 | % | |||||||||||||||
NM - not meaningful |
Three Months Ended | ||||||||||||||||||||||||||
November 30, 2021 | November 30, 2020 | Increase (Decrease) | Percent Change | |||||||||||||||||||||||
ABL: | ||||||||||||||||||||||||||
Net sales | $ | $ | $ | 130.0 | 17.3 | % | ||||||||||||||||||||
Operating profit | 29.7 | 30.2 | % | |||||||||||||||||||||||
Operating profit margin | 14.5 | % | 13.1 | % | 140 | bps | ||||||||||||||||||||
ISG: | ||||||||||||||||||||||||||
Net sales | $ | $ | $ | 5.6 | 13.7 | % | ||||||||||||||||||||
Operating profit (loss) | ( | 2.1 | NM | |||||||||||||||||||||||
Operating profit margin | 4.3 | % | (0.2) | % | 450 | bps | ||||||||||||||||||||
Purchases of Equity Securities | |||||||||||||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Number of Shares that May Yet Be Purchased Under the Plans | |||||||||||||||||||
9/1/2021 through 9/30/2021 | 248,779 | $ | 174.51 | 248,779 | 3,589,445 | ||||||||||||||||||
10/1/2021 through 10/31/2021 | 51,647 | $ | 181.73 | 51,647 | 3,537,798 | ||||||||||||||||||
11/1/2021 through 11/30/2021 | — | $ | — | — | 3,537,798 | ||||||||||||||||||
Total | 300,426 | $ | 175.75 | 300,426 | 3,537,798 | ||||||||||||||||||
EXHIBIT 3 | (a) | Reference is made to Exhibit 3.1 of registrant's Form 8-K as filed with the Commission on September 26, 2007, which is incorporated herein by reference. | ||||||||||||
(b) | Reference is made to Exhibit 3.2 of registrant's Form 8-K as filed with the Commission on September 26, 2007, which is incorporated herein by reference. | |||||||||||||
(c) | Reference is made to Exhibit 3.C of registrant's Form 10-Q as filed with the Commission on January 9, 2017, which is incorporated herein by reference. | |||||||||||||
(d) | Reference is made to Exhibit 3.D of registrant's Form 10-Q as filed with the Commission on January 7, 2020, which is incorporated herein by reference. | |||||||||||||
(e) | Reference is made to Exhibit 3.E of registrant's Form 10-Q as filed with the Commission on January 7, 2020, which is incorporated herein by reference. | |||||||||||||
EXHIBIT 10 | (a) | Filed with the Commission as part of this Form 10-Q. | ||||||||||||
(b) | Filed with the Commission as part of this Form 10-Q. | |||||||||||||
(c) | Filed with the Commission as part of this Form 10-Q. | |||||||||||||
(d) | Reference is made to Appendix B of the registrant’s Proxy Statement as filed with the Commission on November 22, 2021, which is incorporated herein by reference. | |||||||||||||
EXHIBIT 22 | Reference is made to Exhibit 22 of registrant's Form 10-K as filed with the Commission on October 27, 2021, which is incorporated herein by reference. | |||||||||||||
EXHIBIT 31 | (a) | Filed with the Commission as part of this Form 10-Q. | ||||||||||||
(b) | Filed with the Commission as part of this Form 10-Q. | |||||||||||||
EXHIBIT 32 | (a) | Filed with the Commission as part of this Form 10-Q. | ||||||||||||
(b) | Filed with the Commission as part of this Form 10-Q. | |||||||||||||
EXHIBIT 101 | .INS | XBRL Instance Document | The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||
.SCH | XBRL Taxonomy Extension Schema Document. | Filed with the Commission as part of this Form 10-Q. | ||||||||||||
.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | Filed with the Commission as part of this Form 10-Q. |
.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | Filed with the Commission as part of this Form 10-Q. | ||||||||||||
.LAB | XBRL Taxonomy Extension Label Linkbase Document. | Filed with the Commission as part of this Form 10-Q. | ||||||||||||
.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | Filed with the Commission as part of this Form 10-Q. | ||||||||||||
EXHIBIT 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | Filed with the Commission as part of this Form 10-Q |
Date: | January 7, 2022 | By: | /S/ NEIL M. ASHE | |||||||||||
NEIL M. ASHE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER |
Date: | January 7, 2022 | By: | /S/ KAREN J. HOLCOM | |||||||||||
KAREN J. HOLCOM SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (Principal Financial and Accounting Officer) |
Grantee: | /$ParticipantName$/ | ||||
Grant Type: | /$GrantType$/ | ||||
Grant ID: | /$GrantID$/ | ||||
Grant Date: | /$GrantDate$/ | ||||
Award Amount: | /$AwardsGranted$/ | ||||
Vest Schedule: | 100% on the first anniversary date of the Grant Date, or, if earlier, the date of the next subsequent annual meeting of the Company’s stockholders following the Grant Date in accordance with Section 4.7 of the Plan | ||||
/$AcceptByDate$/ | |||||
Accept by Date: | /$AcceptByDate$/ |
Grantee: Grant Type: Grant ID: Grant Date: Award Amount: Vest Schedule: Accept by Date: | /$ParticipantName$/ | ||||
Grant Type: | /$ParticipantName$/ | ||||
Grant ID: | /$GrantType$/ | ||||
Grant Date: | /$GrantID$/ | ||||
Award Amount: | /$GrantDate$/ | ||||
Vest Schedule: | /$AwardsGranted$/ | ||||
100% on the first anniversary date of the Grant Date, or, if earlier, the date of the next subsequent annual meeting of the Company’s stockholders following the Grant Date in accordance with Section 4.7 of the Plan | |||||
Accept by Date: | /$AcceptByDate$/ |
/s/ Neil M. Ashe | ||||||||||||||
Neil M. Ashe | ||||||||||||||
Chairman, President and Chief Executive Officer |
/s/ Karen J. Holcom | ||||||||
Karen J. Holcom | ||||||||
Senior Vice President and Chief Financial Officer |
/s/ Neil M. Ashe | ||||||||
Neil M. Ashe | ||||||||
Chairman, President and Chief Executive Officer | ||||||||
January 7, 2022 |
/s/ Karen J. Holcom | ||||||||
Karen J. Holcom | ||||||||
Senior Vice President and Chief Financial Officer | ||||||||
January 7, 2022 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Nov. 30, 2021 |
Aug. 31, 2021 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 1.0 | $ 1.2 |
Stockholders’ equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (shares) | 54,180,355 | 54,018,978 |
Treasury stock, shares (shares) | 19,127,037 | 18,826,611 |
Description of Business and Basis of Presentation |
3 Months Ended |
---|---|
Nov. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Acuity Brands, Inc. (referred to herein as “we,” “our,” “us,” the “Company,” or similar references) is a market-leading industrial technology company. We use technology to solve problems in spaces and light. Through our two business segments, Acuity Brands Lighting and Lighting Controls (“ABL”) and the Intelligent Spaces Group (“ISG”), we design, manufacture, and bring to market products and services that make the world more brilliant, productive, and connected. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management systems, and location-aware applications. ABL Segment ABL's portfolio of lighting solutions includes commercial, architectural, and specialty lighting in addition to lighting controls and components that can be combined to create integrated lighting controls systems. We offer devices such as luminaires that predominantly utilize light emitting diode (“LED”) technology designed to optimize energy efficiency and comfort for various indoor and outdoor applications. ABL's' portfolio of products includes but is not limited to the following brands: Lithonia Lighting®, Holophane®, Peerless®, Gotham®, Mark Architectural LightingTM, Winona® Lighting, Juno®, IndyTM, AculuxTM, Healthcare Lighting®, Hydrel®, American Electric Lighting®, Sunoptics®, eldoLED®, nLight®, Sensor Switch®, IOTA®, A-LightTM, CycloneTM, Eureka®, Lumniaire LEDTM, Luminis®, Dark to Light®, and RELOC® Wiring Solutions. Principal customers of ABL include electrical distributors, retail home improvement centers, electric utilities, national accounts, digital retailers, lighting showrooms, and energy service companies located in North America and select international markets serving new construction, renovation and retrofit, and maintenance and repair applications. ABL's lighting and lighting controls solutions are sold primarily through a network of independent sales agencies that cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, and directly to large corporate accounts. Products are delivered directly from our manufacturing facilities or through a network of distribution centers, regional warehouses, and commercial warehouses using both common carriers and a company-managed truck fleet. To serve international customers, the sales forces utilize a variety of distribution methods to meet specific individual customer or country requirements. ABL comprised approximately 95% of consolidated revenues during the three months ended November 30, 2021 and 2020. ISG Segment ISG delivers products and services that make spaces smarter, safer, and greener. ISG offers building management systems and location-aware applications and sells predominantly to system integrators. Our building management system includes products for controlling heating, ventilation, and air conditioning (“HVAC”), lighting, shades, and building access that deliver end-to-end optimization of those building systems. AtriusTM, our intelligent building platform, enhances the occupant experience, improves building system management, and automates labor intensive tasks while delivering operational energy efficiency and cost reductions. Through a connected and converged building system architecture, our platform delivers different applications, allows clients to upgrade over time with natural refresh cycles, and deploys new capability through both software and hardware updates. Customers of ISG primarily include system integrators as well as retail stores, airports, and enterprise campuses throughout North America and select international locations. ISG products and solutions are marketed under numerous brand names, including but not limited to Distech Controls®, AtriusTM, and Rockpile Ventures. ISG comprised approximately 5% of consolidated revenues during the three months ended November 30, 2021 and 2020. We have prepared the Consolidated Financial Statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) to present the financial position, results of operations, and cash flows of Acuity Brands, Inc. and its wholly-owned subsidiaries. These unaudited interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present fairly our consolidated financial position as of November 30, 2021, our consolidated comprehensive income for the three months ended November 30, 2021 and 2020, and our consolidated cash flows for the three months ended November 30, 2021 and 2020. Certain information and footnote disclosures normally included in our annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. However, we believe that the disclosures included herein are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the audited consolidated financial statements as of and for the three years ended August 31, 2021 and notes thereto included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on October 27, 2021 (File No. 001-16583) (“Form 10-K”). The results of operations for the three months ended November 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal 2022 year due primarily to continued uncertainty of general economic conditions that may impact our key end markets for the remainder of fiscal 2022, seasonality, and the impact of any acquisitions, among other reasons. Additionally, we are uncertain of the future impact of the ongoing COVID-19 pandemic or recovery of prior deterioration in economic conditions to our sales channels, supply chain, manufacturing, and distribution as well as overall construction, renovation, and consumer spending.
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Significant Accounting Policies |
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Nov. 30, 2021 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Reclassifications We have recast prior period segment and disaggregated revenue information to conform to the current year presentation. See Segment Information footnote of the Notes to Consolidated Financial Statements for further details. No other material reclassifications occurred during the current period.
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Acquisitions |
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Nov. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions The following discussion relates to fiscal 2021 acquisitions. There were no acquisitions during fiscal 2022. Fiscal 2021 Acquisition ams OSRAM's North American Digital Systems Business On July 1, 2021, using cash on hand, we acquired certain assets and liabilities of ams OSRAM’s North American Digital Systems business (“OSRAM DS”). This acquisition is intended to enhance our LED driver and controls technology portfolio and accelerate our innovation, expand our access to market through a more fulsome original equipment manufacturer (“OEM”) product offering, and give us more control over our supply chain. Rockpile Ventures On May 18, 2021, using cash on hand, we acquired all of the equity interests of Rockpile Ventures, an accelerator of edge artificial intelligence (“AI”) startups. Rockpile Ventures helps early-stage artificial intelligence companies drive co-engineering and co-selling partnerships with major cloud ecosystems, enabling faster adoption from proof-of-concept trials to market scale. Accounting for Acquisitions We accounted for the acquisitions of Rockpile Ventures and OSRAM DS in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”). Acquired assets and liabilities were recorded at their estimated acquisition-date fair values, and acquisition-related costs were expensed as incurred. The aggregate purchase price of these acquisitions reflects preliminary goodwill of $10.0 million and definite-lived customer-based intangible assets of $6.1 million, which have a preliminary useful life of approximately 11 years. Goodwill recognized from these acquisitions is comprised primarily of expected synergies from obtaining more control over our supply chain and technology, combining the operations of the acquired business with our operations, and acquiring the associated trained workforce. As of November 30, 2021, goodwill from these acquisitions totaling $6.9 million is expected to be tax deductible. Amounts recognized for these acquisitions are deemed to be provisional until disclosed otherwise, as we continue to gather information related to the identification and valuation of acquired assets and liabilities, including but not limited to, acquired interests in technology startups, tax-related items, final net working capital purchase adjustments, if any, and the residual impacts on the valuation of intangible assets.
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New Accounting Pronouncements |
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Nov. 30, 2021 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in Fiscal 2022 Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”) In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC Topic 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, or our fiscal 2022. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We adopted ASU 2019-11 as of September 1, 2021 as required by the standard. This standard did not have a material effect on our financial condition, results of operations, or cash flows. Accounting Standards Yet to Be Adopted ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) In October 2021, the FASB issued ASU 2021-08, which requires companies to recognize and measure contract assets and contract liabilities acquired in a business combination as if the acquiring company originated the related revenue contracts. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, or our fiscal 2024, with early adoption permitted. We are currently assessing the impacts of ASU 2021-08 to determine whether we will adopt early or in fiscal 2024. Amendments within the standard are required to be applied on a prospective basis from the date of adoption. We will apply the provisions of ASU 2021-08 after adoption to future acquisitions, if any. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.
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Fair Value Measurements |
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Nov. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We determine fair value measurements based on the assumptions a market participant would use in pricing an asset or liability. ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a three level hierarchy that distinguishes between market participant assumptions based on (i) unadjusted quoted prices for identical assets or liabilities in an active market (Level 1), (ii) quoted prices in markets that are not active or inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (Level 2), and (iii) prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement (Level 3). We utilize valuation methodologies to determine the fair values of our financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC 820. All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. There were no material changes to the valuation methods or assumptions used to determine fair values during the current period. No transfers between the levels of the fair value hierarchy occurred during the current fiscal period. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence. Financial Instruments Recorded at Fair Value We used quoted market prices to determine the fair value of Level 1 assets and liabilities. Our cash and cash equivalents (Level 1), which are required to be carried at fair value and measured on a recurring basis, were $504.0 million and $491.3 million as of November 30, 2021 and August 31, 2021, respectively. We hold a small number of investments in equity and debt financial instruments totaling $8.8 million and $5.3 million as of November 30, 2021 and August 31, 2021, respectively. We generally account for these investments at fair value on a recurring basis. Changes in the fair values of these financial instruments during the three months ended November 30, 2021 and November 30, 2020 were de minimis. Our strategic equity investments represent less than a 20% ownership interest in each of the privately-held entities, and we do not exercise significant influence or control any of the entities. Certain of these investments do not have readily determinable fair value. We have elected the practical expedient in ASC Topic 321, Investments—Equity Securities, to measure these investments at cost less any impairment adjusted for observable price changes, if any. During the first quarter of fiscal 2021, we recorded an impairment charge of $4.0 million for one of these investments as a recapitalization of the underlying company diluted our holding value. This impairment is reflected in Miscellaneous expense, net for the three months ended November 30, 2020 within our Consolidated Statements of Comprehensive Income. Disclosures of Fair Value of Financial Instruments Disclosures of fair value information about financial instruments, for which it is practicable to estimate that value, are required each reporting period in addition to any financial instruments carried at fair value on a recurring basis as prescribed by ASC Topic 825, Financial Instruments (“ASC 825”). In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Our senior unsecured public notes are carried at the outstanding balance, net of unamortized bond discount and deferred costs, as of the end of the reporting period. Fair value is estimated based on discounted future cash flows using rates currently available for debt of similar terms and maturity (Level 2). The estimated fair value of our senior unsecured public notes was $488.9 million and $496.5 million as of November 30, 2021 and August 31, 2021, respectively. See Debt and Lines of Credit footnote for further details on our long-term borrowings. ASC 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value to us. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instruments. In evaluating our management of liquidity and other risks, the fair values of all assets and liabilities should be taken into consideration, not only those presented above.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories include materials, labor, inbound freight, and related manufacturing overhead; are stated at the lower of cost (on a first-in, first-out or average cost basis) and net realizable value; and consist of the following as of the dates presented (in millions):
_______________________________________ (1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, we do not believe the segregation of raw materials and work in process is meaningful information. We review inventory quantities on hand and record a provision for excess or obsolete inventory primarily based on estimated future demand and current market conditions. A significant change in customer demand or market conditions could render certain inventory obsolete and could have a material adverse impact on our operating results in the period the change occurs.
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Property, Plant, and Equipment |
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Property, Plant, and Equipment | Property, Plant, and Equipment Property, plant, and equipment consist of the following as of the dates presented (in millions):
As of November 30, 2021 and August 31, 2021, we classified as held for sale one building with a total carrying value of $6.6 million within Prepayments and other current assets on the Consolidated Balance Sheets. At each balance sheet date, we concluded the fair value less costs to sell exceeded the carrying value of each of these assets.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Through multiple acquisitions, we acquired definite-lived intangible assets consisting primarily of customer relationships, patented technology, distribution networks, and trademarks and trade names associated with specific products, which are amortized over their estimated useful lives. Indefinite-lived intangible assets consist of trade names that are expected to generate cash flows indefinitely. We recorded amortization expense for definite-lived intangible assets of $10.3 million and $10.1 million during the three months ended November 30, 2021 and 2020, respectively. Amortization expense is generally recorded on a straight-line basis and is expected to be approximately $41.2 million in fiscal 2022, $40.5 million in fiscal 2023, $40.0 million in fiscal 2024, $31.9 million in fiscal 2025, and $29.1 million in fiscal 2026. The following table summarizes the changes in the carrying amount of goodwill by segment during the periods presented (in millions):
Further discussion of goodwill and other intangible assets is included within the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements within our Form 10-K.
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Other Current Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other Current Liabilities Other current liabilities consist of the following as of the dates presented (in millions):
____________________________________ (1)Refer to the Revenue Recognition footnote of the Notes to Consolidated Financial Statements within our Form 10-K for additional information. (2)Refer to the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements for additional information. (3)Includes accruals for income, property, sales and use, and value added taxes. (4)Refer to the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for additional information. (5)Includes an accrual of $15.8 million as of November 30, 2021, related to the securities class action matter. Refer to the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements for additional information.
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Debt and Lines of Credit |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Lines of Credit | Debt and Lines of Credit Long-term Debt On November 10, 2020, Acuity Brands Lighting, Inc. issued $500.0 million aggregate principal amount of 2.150% senior unsecured notes due December 15, 2030 (the "Unsecured Notes"). The Unsecured Notes bear interest at a rate of 2.150% per annum and were issued at a price equal to 99.737% of their face value. Interest on the Unsecured Notes is paid semi-annually in arrears on June 15 and December 15 of each year. The Unsecured Notes are fully and unconditionally guaranteed on a senior unsecured basis by Acuity Brands, Inc. and ABL IP Holding LLC, a wholly-owned subsidiary of Acuity Brands, Inc. We recorded $4.8 million of deferred issuance costs related to the Unsecured Notes as a direct deduction from the face amount of the Unsecured Notes. These issuance costs are amortized over the 10-year term of the Unsecured Notes. As of November 30, 2021, the balance of the Unsecured Notes net of unamortized discount and deferred issuance costs was $494.5 million. Lines of Credit On June 29, 2018, we entered into a credit agreement (the “Credit Agreement”) with a syndicate of banks that provides us with a $400.0 million five-year unsecured revolving credit facility (the “Revolving Credit Facility”). We had no borrowings outstanding under the Revolving Credit Facility as of November 30, 2021 or August 31, 2021. The Credit Agreement expires in June 2023, and we plan to enter into a new agreement prior to this expiration. Generally, amounts outstanding under the Revolving Credit Facility allow for borrowings to bear interest at either the Eurocurrency Rate or the base rate at our option, plus an applicable margin. Eurocurrency Rate advances can be denominated in a variety of currencies, including U.S. Dollars, and amounts outstanding bear interest at a periodic fixed rate equal to the London Inter-Bank Offered Rate (“LIBOR”) or screen rate for the applicable currency plus an applicable margin. The Eurocurrency Rate applicable margin is based on our leverage ratio, as defined in the Credit Agreement, with such margin ranging from 1.000% to 1.375%. Base rate advances bear interest at an alternate base rate plus an applicable margin. The base rate applicable margin is based on our leverage ratio with such margin ranging from 0.000% to 0.375%. On July 27, 2017, the U.K. Financial Conduct Authority, which regulates LIBOR, announced that it will phase out rates for the calculation of LIBOR. As a result of this change, certain LIBOR tenors and currencies were eliminated on December 31, 2021 with all other tenors and currencies of LIBOR anticipated to be eliminated on June 30, 2023. We are required to pay certain fees in connection with the Credit Agreement, including administrative service fees and an annual facility fee. The annual facility fee is payable quarterly, in arrears, and is determined by our leverage ratio. The annual facility fee ranges from 0.125% to 0.250% of the aggregate $400.0 million commitment of the lenders under the Credit Agreement. The Credit Agreement contains financial covenants, including a minimum interest expense coverage ratio (“Minimum Interest Expense Coverage Ratio”) and a leverage ratio (“Maximum Leverage Ratio”) of total indebtedness to earnings before interest, tax, depreciation, and amortization (“EBITDA”), as such terms are defined in the Credit Agreement. These ratios are computed at the end of each fiscal quarter for the most recent 12-month period. The Credit Agreement generally allows for a Minimum Interest Expense Coverage Ratio of 2.50 and a Maximum Leverage Ratio of 3.50, subject to certain conditions. We were in compliance with all financial covenants under the Credit Agreement as of November 30, 2021. As of November 30, 2021, we had outstanding letters of credit totaling $4.1 million, primarily for securing collateral requirements under our casualty insurance programs. At November 30, 2021, we had additional borrowing capacity under the Credit Agreement of $395.9 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less the outstanding letters of credit of $4.1 million issued under the Revolving Credit Facility. Borrowings and repayments on our Revolving Credit Facility with terms of three months or less are reported on a net basis on our Consolidated Statements of Cash Flows. Interest Expense, net Interest expense, net, is comprised primarily of interest expense on long-term debt, line of credit borrowings, and loans that are secured by and presented net of company-owned life insurance policies on our Consolidated Balance Sheets. Interest expense is partially offset by interest income earned on cash and cash equivalents. The following table summarizes the components of interest expense, net for the periods presented (in millions):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and ContingenciesIn the normal course of business, we are subject to the effects of certain contractual stipulations, events, transactions, and laws and regulations that may, at times, require the recognition of liabilities, such as those related to self-insurance estimated liabilities and claims, legal and contractual issues, environmental laws and regulations, guarantees, and indemnities. We establish estimated liabilities when the associated costs related to uncertainties or guarantees become probable and can be reasonably estimated. For the period ended November 30, 2021, no material changes have occurred in our estimated liabilities for self-insurance, litigation, environmental matters, guarantees and indemnities, or relevant events and circumstances, from those disclosed in the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements within our Form 10-K other than the items discussed below. Product Warranty and Recall Costs Our products generally have a standard warranty term of five years that assure our products comply with agreed upon specifications. We record an accrual for the estimated amount of future warranty costs when the related revenue is recognized. Estimated costs related to product recalls based on a formal campaign soliciting repair or return of that product are accrued when they are deemed to be probable and can be reasonably estimated. Estimated future warranty and recall costs are primarily based on historical experience of identified warranty and recall claims. However, there can be no assurance that future warranty or recall costs will not exceed historical amounts or that new technology products may not generate unexpected costs. If actual future warranty or recall costs exceed historical amounts, additional increases in the accrual may be required, which could have a material adverse impact on our results of operations and cash flows. Estimated liabilities for product warranty and recall costs are included in Other accrued liabilities and Other long-term liabilities on the Consolidated Balance Sheets based upon when we expect to settle the incurred warranty. The following table summarizes changes in the estimated liabilities for product warranty and recall costs during the periods presented (in millions):
Securities Class Action On October 5, 2021, the parties to the shareholder class action litigation previously disclosed (and further described below) executed a term sheet for settlement of the litigation, subject to documentation of the settlement and approval of the District Court after notice to class members. On December 2, 2021, the lead plaintiff in the case filed an unopposed motion seeking preliminary approval of the settlement which attaches the settlement stipulation and exhibits thereto. If the settlement is approved, we expect that the agreed-upon settlement payment of $15.8 million will be funded entirely by applicable Directors and Officers liability insurance. As such, we do not anticipate a significant net loss or cash outflow as a result of the settlement of this matter. As of November 30, 2021, we reflected a liability for the settlement amount within Other current liabilities and a corresponding receivable for the offsetting insurance proceeds within Prepayments and other current assets on the Consolidated Balance Sheets. The case was originally filed on January 3, 2018, in the United States District Court for the District of Delaware against the Company and certain of our officers on behalf of all persons who purchased or otherwise acquired our stock between June 29, 2016 and April 3, 2017. On February 20, 2018, a different shareholder filed a second class action complaint in the same venue against the same parties on behalf of all persons who purchased or otherwise acquired our stock between October 15, 2015 and April 3, 2017. The cases were transferred on April 30, 2018, to the United States District Court for the Northern District of Georgia and subsequently were consolidated as In re Acuity Brands, Inc. Securities Litigation, Civil Action No. 1:18-cv-02140-MHC (N.D. Ga.). On October 5, 2018, the court-appointed lead plaintiff filed a consolidated amended class action complaint (the “Consolidated Complaint”), which supersedes the initial complaints. The Consolidated Complaint is brought on behalf of all persons who purchased our common stock between October 7, 2015 and April 3, 2017 and alleges that we and certain of our former officers/executives violated the federal securities laws by making false or misleading statements and/or omitting to disclose material adverse facts that (i) concealed known trends negatively impacting sales of our products and (ii) overstated our ability to achieve profitable sales growth. The plaintiffs seek unspecified monetary damages, costs, and attorneys’ fees. We dispute the allegations in the complaints. We filed a motion to dismiss the Consolidated Complaint. On August 12, 2019, the court entered an order granting our motion to dismiss in part and dismissing all claims based on 42 of the 47 statements challenged in the Consolidated Complaint but also denying the motion in part and allowing claims based on five challenged statements to proceed to discovery. The Eleventh Circuit Court of Appeals granted the Company permission to file an interlocutory appeal of the District Court’s class certification order, and the briefing of that appeal has been completed. On October 7, 2021, the Eleventh Circuit Court of Appeals entered an order holding the appeal from the class certification order in abeyance pending a decision from the District Court concerning approval of the proposed settlement. Shareholder Derivative Complaint On October 1, 2021, certain alleged shareholders of the Company filed a putative derivative complaint in the United States District Court for the Northern District of Georgia asserting claims against three of the individuals named as defendants in the above securities action for breach of fiduciary duty and certain other claims arising out of the alleged facts and circumstances upon which the claims in the above securities class action are based (the “Derivative Complaint”). The Company is named as a nominal defendant, and the plaintiffs seek on behalf of the Company unspecified damages from the individual defendants and other relief. Prior to filing the Derivative Complaint, the derivative plaintiffs sent letters to the Company’s Board of Directors (the “Board”) demanding that the Company investigate and pursue substantially the same claims against the individual defendants that are asserted in the Derivative Complaint. The Company’s Board formed a demand evaluation committee consisting of independent directors to investigate these matters and make a recommendation to the Board regarding the best interests of the Company in connection therewith. The committee’s work is ongoing. On December 14, 2021, the Company filed a motion to stay the derivative action pending the conclusion of the related securities class action or, in the alternative, to dismiss the derivative action without prejudice as premature, given the demand evaluation committee’s ongoing work. Also on December 14, 2021, the individual defendants filed a motion to dismiss the Derivative Complaint for failure to adequately plead any claim for relief against them. Estimating an amount or range of possible losses or gains resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key evidential and legal issues have not been resolved. For these reasons, we are currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or gains or a range of possible losses or gains resulting from the matters described above. Litigation We are subject to various other legal claims arising in the normal course of business, including patent infringement, employment matters, and product liability claims. Based on information currently available, it is the opinion of management that the ultimate resolution of pending and threatened legal proceedings will not have a material adverse effect on our financial condition, results of operations, or cash flows. However, in the event of unexpected future developments, it is possible that the ultimate resolution of any such matters, if unfavorable, could have a material adverse effect on our financial condition, results of operations, or cash flows in future periods. We establish estimated liabilities for legal claims when associated costs become probable and can be reasonably estimated. The actual costs of resolving legal claims may be substantially higher than the amounts accrued for such claims. However, we cannot make a meaningful estimate of actual costs to be incurred that could possibly be higher or lower than the accrued amounts.
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Changes in Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Stockholders' Equity | Changes in Stockholders' Equity The following tables summarize changes in the components of stockholders' equity for the periods presented (in millions):
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition We recognize revenue when we transfer control of goods and services to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for goods and services and is recognized net of allowances for rebates, sales incentives, product returns, and discounts to customers. Further details regarding revenue recognition are included within the Revenue Recognition footnote of the Notes to Consolidated Financial Statements within our Form 10-K. Contract Balances Our rights related to collections from customers are unconditional and are reflected within Accounts receivable on the Consolidated Balance Sheets. We do not have any other significant contract assets. Contract liabilities arise when we receive cash or an unconditional right to collect cash prior to the transfer of control of goods or services. The amount of transaction price from contracts with customers allocated to our contract liabilities consists of the following as of the periods presented (in millions):
Current deferred revenues primarily consist of software licenses as well as professional service and sales-type warranty fees collected prior to performing the related service. Current deferred revenues are included within Other current liabilities on the Consolidated Balance Sheets. These services are expected to be performed within one year from the dates presented. Non-current deferred revenues primarily consist of long-term service-type warranties, which are typically recognized ratably as revenue between five and ten years from the date of sale, and are included within Other long-term liabilities on the Consolidated Balance Sheets. Revenue recognized from beginning balances of contract liabilities during the three months ended November 30, 2021 totaled $3.1 million. Unsatisfied performance obligations that do not represent contract liabilities are expected to be satisfied within one year from November 30, 2021 and consist primarily of orders for physical goods that have not yet been shipped. Disaggregated Revenues Our ABL segment's lighting and lighting controls are sold primarily through independent sales agents who cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, and directly to large corporate accounts. ISG sells predominantly to system integrators. The following table shows revenue from contracts with customers by sales channel and reconciles to our segment information for the periods presented (in millions):
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Share-based Payments |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payments | Share-based Payments We account for share-based payments through the measurement and recognition of compensation expense for share-based payment awards made to employees and directors over the related requisite service period, including stock options, performance stock units, and restricted stock (all part of our equity incentive plan), as well as stock units representing certain deferrals into our director deferred compensation plan or our supplemental deferred savings plan. The following table presents share-based payment expense for the periods presented (in millions):
We recognized excess tax benefits of $4.2 million related to share-based payment awards during the three months ended November 30, 2021. Further details regarding our share-based payments are included within the Share-based Payments footnote of the Notes to Consolidated Financial Statements within our Form 10-K.
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Pension Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plans | Pension Plans We have several pension plans, both qualified and non-qualified, covering certain hourly and salaried employees. Benefits paid under these plans are based generally on employees’ years of service and/or compensation during the final years of employment. We make at least the minimum annual contributions to the plans to the extent indicated by actuarial valuations and statutory requirements. Plan assets are invested primarily in fixed income and equity securities. Service cost of net periodic pension cost is allocated between Cost of products sold and Selling, distribution, and administrative expenses in the Consolidated Statements of Comprehensive Income based on the nature of the employee's services. All other components of net periodic pension cost are included within Miscellaneous expense, net in the Consolidated Statements of Comprehensive Income. Net periodic pension cost included the following components before tax for the periods presented (in millions):
Further details regarding our pension plans are included within the Pension and Defined Contribution Plans footnote of the Notes to Consolidated Financial Statements within our Form 10-K.
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Earnings Per Share |
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Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is computed similarly but reflects the potential dilution that would occur if dilutive options were exercised, all unvested share-based payment awards were vested, and other distributions related to deferred stock agreements were incurred. Common stock equivalents are calculated using the treasury stock method. The dilutive effects of share-based payment awards subject to market and/or performance conditions that were not met during the period are excluded from the computation of diluted earnings per share. The following table calculates basic earnings per common share and diluted earnings per common share for the periods presented (in millions, except per share data):
The following table presents stock options, performance stock awards, and restricted stock awards that were excluded from the diluted earnings per share calculation for the periods presented as the effect of inclusion would have been antidilutive (in millions):
_______________________________________ * Represents shares of less than 0.1 million. Further discussion of our share-based payment awards is included within the Common Stock and Related Matters and Share-based Payments footnotes of the Notes to Consolidated Financial Statements within our Form 10-K.
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Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income | Comprehensive Income Comprehensive income represents a measure of all changes in equity that result from recognized transactions and other economic events other than transactions with owners in their capacity as owners. Comprehensive income includes our net income as well as other comprehensive income (loss) items. Other comprehensive income (loss) items include foreign currency translation and pension adjustments. The following table presents the changes in each component of accumulated other comprehensive loss net of tax during the periods presented (in millions):
(1) The before tax amounts of the defined benefit pension plan items are included in net periodic pension cost. See the Pension and Defined Contribution Plans footnote for additional details. The following table summarizes the tax expense or benefit allocated to each component of other comprehensive income (loss) for the periods presented (in millions):
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information During the third quarter of fiscal 2021, we completed a realignment of our operations and structure to better support our business strategy. As a result, beginning in the third quarter of fiscal 2021, we now report our financial results of operations in two reportable segments, ABL and ISG, consistent with how our chief operating decision maker currently evaluates operating results, assesses performance, and allocates resources within the Company. We have recast historical information to conform to the current segment structure. The accounting policies of our reportable segments are the same as those described in the Significant Accounting Policies footnote of the Notes to Consolidated Financial Statements within our Form 10-K. Corporate expenses that are primarily administrative in function and benefit the Company on an entity-wide basis are not allocated to our segments. These include expenses related to governance, policy setting, compliance, and certain other shared services functions. Additionally, we do not allocate net interest expense, net miscellaneous expense, special charges, or assets to our segments. Accordingly, this information is not used by the chief operating decision maker to make operating decisions and assess performance and is therefore excluded from our disclosures. The following table presents financial information by operating segment for the periods presented (in millions):
____________________________ (1) This column represents intersegment sales. Profit on these sales eliminates within gross profit on a consolidated basis. The following table reconciles operating profit by segment to income before income taxes (in millions):
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Significant Accounting Policies (Policies) |
3 Months Ended |
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Nov. 30, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.
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Reclassifications | Reclassifications We have recast prior period segment and disaggregated revenue information to conform to the current year presentation. See Segment Information footnote of the Notes to Consolidated Financial Statements for further details. No other material reclassifications occurred during the current period.
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New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Adopted in Fiscal 2022 Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”) In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC Topic 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, or our fiscal 2022. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We adopted ASU 2019-11 as of September 1, 2021 as required by the standard. This standard did not have a material effect on our financial condition, results of operations, or cash flows. Accounting Standards Yet to Be Adopted ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) In October 2021, the FASB issued ASU 2021-08, which requires companies to recognize and measure contract assets and contract liabilities acquired in a business combination as if the acquiring company originated the related revenue contracts. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, or our fiscal 2024, with early adoption permitted. We are currently assessing the impacts of ASU 2021-08 to determine whether we will adopt early or in fiscal 2024. Amendments within the standard are required to be applied on a prospective basis from the date of adoption. We will apply the provisions of ASU 2021-08 after adoption to future acquisitions, if any. All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.
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Fair Value Measurement | We utilize valuation methodologies to determine the fair values of our financial assets and liabilities in conformity with the concepts of “exit price” and the fair value hierarchy as prescribed in ASC 820. All valuation methods and assumptions are validated at least quarterly to ensure the accuracy and relevance of the fair values. There were no material changes to the valuation methods or assumptions used to determine fair values during the current period. |
Fair Value Transfers | No transfers between the levels of the fair value hierarchy occurred during the current fiscal period. In the event of a transfer in or out of a level within the fair value hierarchy, the transfers would be recognized on the date of occurrence. |
Inventories | We review inventory quantities on hand and record a provision for excess or obsolete inventory primarily based on estimated future demand and current market conditions. A significant change in customer demand or market conditions could render certain inventory obsolete and could have a material adverse impact on our operating results in the period the change occurs. |
Revenue Recognition | We recognize revenue when we transfer control of goods and services to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for goods and services and is recognized net of allowances for rebates, sales incentives, product returns, and discounts to customers. Further details regarding revenue recognition are included within the Revenue Recognition footnote of the Notes to Consolidated Financial Statements within our Form 10-K. Contract Balances Our rights related to collections from customers are unconditional and are reflected within Accounts receivable on the Consolidated Balance Sheets. We do not have any other significant contract assets. Contract liabilities arise when we receive cash or an unconditional right to collect cash prior to the transfer of control of goods or services. Current deferred revenues primarily consist of software licenses as well as professional service and sales-type warranty fees collected prior to performing the related service. Current deferred revenues are included within Other current liabilities on the Consolidated Balance Sheets. These services are expected to be performed within one year from the dates presented. Non-current deferred revenues primarily consist of long-term service-type warranties, which are typically recognized ratably as revenue between five and ten years from the date of sale, and are included within Other long-term liabilities on the Consolidated Balance Sheets.Unsatisfied performance obligations that do not represent contract liabilities are expected to be satisfied within one year from November 30, 2021 and consist primarily of orders for physical goods that have not yet been shipped. Disaggregated Revenues Our ABL segment's lighting and lighting controls are sold primarily through independent sales agents who cover specific geographic areas and market channels, by internal sales representatives, through consumer retail channels, and directly to large corporate accounts. ISG sells predominantly to system integrators.
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Inventories (Tables) |
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Nov. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventories include materials, labor, inbound freight, and related manufacturing overhead; are stated at the lower of cost (on a first-in, first-out or average cost basis) and net realizable value; and consist of the following as of the dates presented (in millions):
_______________________________________ (1) Due to the immaterial amount of estimated work in process and the short lead times for the conversion of raw materials to finished goods, we do not believe the segregation of raw materials and work in process is meaningful information.
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Property, Plant, and Equipment (Tables) |
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Schedule of Property, Plant and Equipment | Property, plant, and equipment consist of the following as of the dates presented (in millions):
As of November 30, 2021 and August 31, 2021, we classified as held for sale one building with a total carrying value of $6.6 million within Prepayments and other current assets on the Consolidated Balance Sheets. At each balance sheet date, we concluded the fair value less costs to sell exceeded the carrying value of each of these assets.
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill by segment during the periods presented (in millions):
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Other Current Liabilities (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other current liabilities consist of the following as of the dates presented (in millions):
____________________________________ (1)Refer to the Revenue Recognition footnote of the Notes to Consolidated Financial Statements within our Form 10-K for additional information. (2)Refer to the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements for additional information. (3)Includes accruals for income, property, sales and use, and value added taxes. (4)Refer to the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for additional information. (5)Includes an accrual of $15.8 million as of November 30, 2021, related to the securities class action matter. Refer to the Commitments and Contingencies footnote of the Notes to Consolidated Financial Statements for additional information.
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Debt and Lines of Credit (Tables) |
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Components of Interest Expense, Net | The following table summarizes the components of interest expense, net for the periods presented (in millions):
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability |
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Changes in Stockholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Stockholders' Equity | The following tables summarize changes in the components of stockholders' equity for the periods presented (in millions):
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Revenue Recognition (Tables) |
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Amount of transaction price from contracts with customers allocated to the Company's contract liabilities | The amount of transaction price from contracts with customers allocated to our contract liabilities consists of the following as of the periods presented (in millions):
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Revenue from contracts with customers by sales channel | The following table shows revenue from contracts with customers by sales channel and reconciles to our segment information for the periods presented (in millions):
|
Share-based Payments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Components of share-based payment expense | The following table presents share-based payment expense for the periods presented (in millions):
|
Pension Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Pension Cost | Net periodic pension cost included the following components before tax for the periods presented (in millions):
|
Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table calculates basic earnings per common share and diluted earnings per common share for the periods presented (in millions, except per share data):
|
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table presents stock options, performance stock awards, and restricted stock awards that were excluded from the diluted earnings per share calculation for the periods presented as the effect of inclusion would have been antidilutive (in millions):
_______________________________________ * Represents shares of less than 0.1 million.
|
Comprehensive Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in each component of accumulated other comprehensive loss | The following table presents the changes in each component of accumulated other comprehensive loss net of tax during the periods presented (in millions):
(1) The before tax amounts of the defined benefit pension plan items are included in net periodic pension cost. See the Pension and Defined Contribution Plans footnote for additional details.
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Schedule of tax expense or benefit allocated to each component of other comprehensive income (loss) | The following table summarizes the tax expense or benefit allocated to each component of other comprehensive income (loss) for the periods presented (in millions):
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following table presents financial information by operating segment for the periods presented (in millions):
____________________________ (1) This column represents intersegment sales. Profit on these sales eliminates within gross profit on a consolidated basis.
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Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table reconciles operating profit by segment to income before income taxes (in millions):
|
Description of Business and Basis of Presentation (Details) - segment |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
Nov. 30, 2021 |
|
Concentration Risk [Line Items] | |||
Number of reportable segments | 2 | 2 | |
Revenue | Customer concentration | ABL | |||
Concentration Risk [Line Items] | |||
Concentration (percent) | 95.00% | 95.00% | |
Revenue | Customer concentration | ISG | |||
Concentration Risk [Line Items] | |||
Concentration (percent) | 5.00% | 5.00% |
Acquisitions (Details) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Nov. 30, 2021
USD ($)
acquisition
|
Aug. 31, 2021
USD ($)
|
Nov. 30, 2020
USD ($)
|
Aug. 31, 2020
USD ($)
|
|
Business Acquisition [Line Items] | ||||
Number of acquisitions completed | acquisition | 0 | |||
Goodwill | $ 1,091.0 | $ 1,094.7 | $ 1,080.6 | $ 1,080.0 |
Fiscal 2021 Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 10.0 | |||
Identified intangible assets | $ 6.1 | |||
Weighted average useful life of acquired intangible assets | 11 years | |||
Goodwill expected to be tax deductible | $ 6.9 |
Fair Value Measurements (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Nov. 30, 2021
USD ($)
|
Nov. 30, 2020
USD ($)
investment
|
Aug. 31, 2021
USD ($)
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 504.0 | $ 491.3 | |
Asset impairment | 0.0 | $ 4.0 | |
Number of equity instruments | investment | 1 | ||
Reported Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments | 8.8 | 5.3 | |
Estimate of Fair Value Measurement | Unsecured debt | 2.150% Senior Unsecured Notes Due December 2030 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying and estimated fair values of financial instruments | $ 488.9 | $ 496.5 |
Inventories (Details) - USD ($) $ in Millions |
Nov. 30, 2021 |
Aug. 31, 2021 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw materials, supplies, and work in process | $ 228.9 | $ 209.5 |
Finished goods | 251.5 | 227.2 |
Inventories excluding reserves | 480.4 | 436.7 |
Less: Reserves | (40.7) | (38.0) |
Total inventories | $ 439.7 | $ 398.7 |
Property, Plant, and Equipment - Schedule of Property, Plant, and Equipment (Details) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Nov. 30, 2021
USD ($)
building
|
Aug. 31, 2021
USD ($)
building
|
|
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment, at cost | $ 846.2 | $ 845.3 |
Less: Accumulated depreciation and amortization | (585.2) | (576.2) |
Property, plant, and equipment, net | $ 261.0 | $ 269.1 |
Held-for-sale | ||
Property, Plant and Equipment [Line Items] | ||
Building classified as held for sale | building | 1 | 1 |
Property, plant and equipment held for sale | $ 6.6 | |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment, at cost | 22.1 | $ 22.4 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment, at cost | 198.0 | 198.0 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant, and equipment, at cost | $ 626.1 | $ 624.9 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 10.3 | $ 10.1 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Amortization expense in fiscal 2022 | 41.2 | |
Amortization expense in fiscal 2023 | 40.5 | |
Amortization expense in fiscal 2024 | 40.0 | |
Amortization expense in fiscal 2025 | 31.9 | |
Amortization expense in fiscal 2026 | $ 29.1 |
Goodwill and Intangible Assets - Changes in Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 1,094.7 | $ 1,080.0 |
Foreign currency translation adjustments | (3.7) | 0.6 |
Goodwill, Ending Balance | 1,091.0 | 1,080.6 |
ABL | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 1,022.2 | 1,012.6 |
Foreign currency translation adjustments | (3.0) | 0.4 |
Goodwill, Ending Balance | 1,019.2 | 1,013.0 |
ISG | ||
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | 72.5 | 67.4 |
Foreign currency translation adjustments | (0.7) | 0.2 |
Goodwill, Ending Balance | $ 71.8 | $ 67.6 |
Other Current Liabilities (Details) - USD ($) $ in Millions |
Nov. 30, 2021 |
Aug. 31, 2021 |
---|---|---|
Other Current Liabilities [Line Items] | ||
Customer incentive programs | $ 40.4 | $ 33.9 |
Refunds to customers | 26.3 | 28.1 |
Current deferred revenues | 8.9 | 7.7 |
Sales commissions | 25.6 | 28.9 |
Freight costs | 16.7 | 17.5 |
Warranty and recall costs | 16.3 | 16.8 |
Tax-related items | 5.7 | 11.7 |
Interest on long-term debt | 5.0 | 2.4 |
Other | 57.7 | 42.4 |
Total other current liabilities | 202.6 | $ 189.4 |
Securities Class Action | ||
Other Current Liabilities [Line Items] | ||
Other | 15.8 | |
Accrual related to the securities class action matter | $ 15.8 |
Commitments and Contingencies (Details) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Oct. 01, 2021
individual
|
Aug. 12, 2019
claim
statement
|
Nov. 30, 2021
USD ($)
|
Nov. 30, 2020
USD ($)
|
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Standard warranty term | 5 years | |||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning balance | $ 20.3 | $ 16.1 | ||
Warranty and recall costs | 4.4 | 6.6 | ||
Payments and other deductions | (4.5) | (5.9) | ||
Ending balance | 20.2 | $ 16.8 | ||
Securities Class Action | ||||
Loss Contingencies [Line Items] | ||||
Accrual related to the securities class action matter | $ 15.8 | |||
Number of statements used as basis for dismissing claims | statement | 42 | |||
Total number of statements challenged in the Consolidated Complaint | statement | 47 | |||
Number of challenged statements allowed to proceed to discovery | claim | 5 | |||
Shareholder Derivative Complaint | ||||
Loss Contingencies [Line Items] | ||||
Number of former executives alleged to be in violation | individual | 3 |
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Millions |
Nov. 30, 2021 |
Aug. 31, 2021 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Current deferred revenues | $ 8.9 | $ 7.7 |
Non-current deferred revenues | $ 55.9 | $ 56.7 |
Revenue Recognition - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Nov. 30, 2021
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Timing of revenue recognition | Current deferred revenues primarily consist of software licenses as well as professional service and sales-type warranty fees collected prior to performing the related service. Current deferred revenues are included within Other current liabilities on the Consolidated Balance Sheets. These services are expected to be performed within one year from the dates presented. Non-current deferred revenues primarily consist of long-term service-type warranties, which are typically recognized ratably as revenue between five and ten years from the date of sale, and are included within Other long-term liabilities on the Consolidated Balance Sheets. |
Revenue recognized from beginning balances of contract liabilities | $ 3.1 |
Revenue Recognition - Disaggregated Revenues (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Disaggregation of Revenue [Line Items] | ||
Total sales | $ 926.1 | $ 792.0 |
Operating segments | ABL | ||
Disaggregation of Revenue [Line Items] | ||
Total sales | 883.6 | 753.6 |
Operating segments | ISG | ||
Disaggregation of Revenue [Line Items] | ||
Total sales | 46.4 | 40.8 |
Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Total sales | (3.9) | (2.4) |
Independent sales network | Operating segments | ABL | ||
Disaggregation of Revenue [Line Items] | ||
Total sales | 636.8 | 559.5 |
Direct sales network | Operating segments | ABL | ||
Disaggregation of Revenue [Line Items] | ||
Total sales | 90.0 | 80.1 |
Retail sales | Operating segments | ABL | ||
Disaggregation of Revenue [Line Items] | ||
Total sales | 46.9 | 56.0 |
Corporate accounts | Operating segments | ABL | ||
Disaggregation of Revenue [Line Items] | ||
Total sales | 37.0 | 22.9 |
Other | Operating segments | ABL | ||
Disaggregation of Revenue [Line Items] | ||
Total sales | $ 72.9 | $ 35.1 |
Share-based Payments (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Share-based Payment Arrangement [Abstract] | ||
Share-based payment expense | $ 7.6 | $ 7.7 |
Share-based payment arrangement, expense, tax benefit | $ 4.2 |
Pension Plans (Details) - Pension Plan - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||
Service cost | $ 1.2 | $ 1.2 |
Interest cost | 1.5 | 1.6 |
Expected return on plan assets | (3.4) | (3.3) |
Amortization of prior service cost | 0.7 | 0.7 |
Recognized actuarial loss | 0.9 | 1.4 |
Net periodic pension cost | $ 0.9 | $ 1.6 |
Earnings Per Share - Basic and Diluted Earnings Per Share, Treasury Stock Method (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Earnings Per Share [Abstract] | ||
Net income | $ 87.6 | $ 59.6 |
Basic weighted average shares outstanding (in shares) | 35.1 | 37.6 |
Common stock equivalents (in shares) | 0.4 | 0.2 |
Diluted weighted average shares outstanding (in shares) | 35.5 | 37.8 |
Basic earnings per share (in dollars per share) | $ 2.50 | $ 1.58 |
Diluted earnings per share (in dollars per share) | $ 2.46 | $ 1.57 |
Earnings Per Share - Antidilutive Securities Excluded from EPS Computation (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
|
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Awards excluded from diluted earnings per share (in shares) | 0.1 | 1.1 |
Performance share units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Awards excluded from diluted earnings per share (in shares) | 0.0 | 0.0 |
Restricted stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Awards excluded from diluted earnings per share (in shares) | 0.0 | 0.2 |
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