Good morning, and welcome to Acuity Brands' Fiscal 2017 Fourth Quarter Financial Conference Call. After today's presentation, there will be a formal question-and-answer session. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now, I would like to introduce Mr. Dan Smith, Senior Vice President, Treasurer and Secretary. Sir, you may begin.

Thank you, and good morning. With me today to discuss our fiscal 2017 fourth quarter and full-year results are Vern Nagel, our Chairman, President and Chief Executive Officer; and Ricky Reece, our Executive Vice President and Chief Financial Officer. We are webcasting today's conference call at acuitybrands.com. I would like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or future financial performance of the company. Such statements involve risks and uncertainties such that actual results may differ materially. Please refer to our most recent 10-K and 10-Q SEC filings and today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Now, let me turn this call over to Vern Nagel.

Thank you, Dan. Good morning everyone. First of all, I apologize, I'm fighting a little bit of a cold here, but we will work through this. Ricky and I would like to make a few comments, and then we will be happy to answer your questions. While our results for the fourth quarter and the full-year were records, we had higher expectations coming into 2017. Market conditions were far more subdued from a growth perspective than most had originally expected, as demand remained flat throughout much of the year. Our results for the quarter and the full-year reflected solid performance given these market conditions, while our strategic accomplishments this year were very significant as I'll describe later in the call. I know many of you have already seen our results, and Ricky will provide more detail later in the call, but I would like to make a few comments on the key highlights, first for the fourth quarter. Net sales for the fourth quarter were a record $958 million, an increase of almost 4% compared with the year-ago period. Reported operating profit was $153 million compared with the $135 million in the year-ago period. Reported diluted earnings per share was $2.15 compared with the $1.89 in the year-ago period. There were adjustments in both quarters for certain special items as well as certain other add-backs necessary for our results to be comparable between periods, as Ricky will explain later in the call. And adding back these items, one can see adjusted operating profit for the fourth quarter of 2017 was $176 million, a quarterly record, compared with adjusted operating profit of $157 million in the year-ago period, an increase of 13%. Adjusted operating profit margin was 18.4%, an increase of 150 basis points compared with the margin reported in the…

Thank you, Vern and good morning everyone. As Vern noted, we had a record fourth quarter and full-year results, however I had some further insights to our financial performance for the fourth quarter and year ended August 31, 2017. As Vern mentioned earlier, we had some adjustments to the GAAP results in fiscal 2017 and 2016 which we find useful to add back and order for the results to be comparable. In our earnings release, we provide a detailed reconciliation of non-GAAP measures for both the fourth quarter and full fiscal year. Primarily, due to the impact of the four acquisitions completed in fiscal year 2016, we experienced noticeable increases in amortization of acquired intangible assets, share based compensation expense since we used restricted stock as a tool to improve retention and to align the interest of key leaders of acquired businesses with those of shareholders, special charges as we streamline and integrated recent acquisitions, other acquisition related items including acquire profit in inventory, professional fees and certain contract termination cost and impairment of intangible assets as we rationalized acquire trade names. Additionally, fiscal 2017 adjusted results exclude a gain associated with the sale of an investment in an unconsolidated affiliate. We believe adjusting for these items and providing these non-GAAP measures provide greater comparability and enhanced visibility into our results of operations. We think you'll find this transparency very helpful in your analysis of our performance. In addition, many of our peer companies especially as we become more of a technology company make similar adjustments so will help as you compare our performance to other public companies in our industry. During the fourth quarter and full-year of fiscal 2017, the company recorded a pretax special charge of $9.6 million and $11.3 million respectively, the fourth quarter charge consists primarily…

Thank you, Ricky. At Acuity, we remain very bullish regarding our future, despite recent market softness. We continue to see significant long-term growth opportunities that are ever changing and evolving in a positive direction for our company. We are often asked about the vitality and conditions of the key end markets we serve. We now know that the overall growth rate of the lighting market over the last two quarters was essentially flat and even slightly down compared with a year-ago periods. This was considerably different from the growth rate anticipated by various forecasting organizations at the start of the year. Many reasons have been cited for this softness including among others, lack of skill labor, uncertainty over tax regulations and pricing pressures in certain end markets for certain less feature products. While all of this is true to varying degrees, we continue to pull our vast customer base and excuse me and from the majority we hear optimism regarding the prospects for future growth. Generally speaking, the trades are busy and backlogs are favorable. Having said that, well forecast from various data sources we collected very widely, the consensus estimate suggest that growth through the lighting fixture market, could remain sluggish for the next few quarters especially giving the devastating impact of recent hurricanes in certain areas and then rebounding in the second half of our fiscal 2018. Therefore, we remain bullish regarding the company's long-term prospects for continued profitable growth particularly as we bring more value-added solutions the market for both new constructions and a conversion of the installed base. While this tamped market conditions may be with us in the short-term, we continue to see science that give us optimism regarding the future growth of the markets we serve. Leading indicators for the North American market such…

Thank you. [Operator Instructions] Our first question is coming from Ryan Merkel with William Blair. Your line is open.

Hi, thanks. Good morning everyone.

Good morning.

So first, I wanted to ask about Chinese competition at the low end of the market, and I am wondering what percent of sales would this impact and is lower pricing impacting the stock in flow business?

It's apparent there are all sorts of different information; I get emails probably like many of you do with china.com. It is becoming more and more clear that the folks there and some of these manufacturers are being subsidized, if you will, to come into these markets. We actually have seen some data around that. I believe that at the margin, it's probably impacting some of the pricing for certain channels for certain of these lower de-featured products. But I would say that, overall, when we look at our price mix and I talk to our customer base, they are seeing some impact but I would not say it's a material impact, whether the product has the quality and the features that they are after, too often to the untrained eyes, someone says, "I have this product at this price." But for most folks who are purchasing these kinds of products, they actually have a level of knowledge of what they are putting in. And so, they understand that potential price is not really indicative of the value that they are after. I can't give you a percentage of -- I actually don't know, of what some of these products' price point would be. We see them being fairly narrow in what they are targeting. And so, I don't consider this to be a meaningful impact on some of the things that we are doing. Price competition in the marketplace in general, I think continues to be probably at a bit more of an aggressive level overall as demand has slowed down a little bit. But for us, overall price mix, and we think that price mix it was a point was mostly priced mostly LED luminaires and mostly due to the -- if you will, decline in component level pricing, which we feel is decelerating. So, I know I am not giving you a specific answer to your question, but I see that the china.com sort of syndrome is in a very, very small select group of products.

Okay. No, that's helpful. I mean that's kind of what I was looking for, at least some direction there, and my thought process was that it was a smaller piece of what you do. And then secondly, when is the supply chain disruption going to be behind us? And when do you see gross margins rising year-over-year again?

Sure. So, I believe that the gross margin -- excuse me; the supply chain issues are behind us. We've actually seen great stability and improvement in our productivity. Some of the year-over-year cost that we had in increasing certain benefits to stabilize the workforce, we're now starting to annualize those, but when I -- when we look at our productivity within the supply chain, they are in a very favorable trend. A couple of other things that have impacted us, when we talk about price mix being about a point with most of it being priced, that's flowing through. It's being offset to a large degree by component cost savings, but when we look at steel, steel has definitely been eating into the margin capability. So, we are now looking to, if you will, cost out. As an example, redesign certain products that contain more steel than what we can design, if you will too. And we are also looking at certain pricing opportunities to evolve that. I am actually bullish, the long-term prospects for our gross profit margin because of our ability to leverage. Some of the margin issue just to also talk a little bit about warranty, you know, we've expanded and we've been growing in our outdoor and our utility space, and part of the warranty cost have been the event of extended warranties. So it's really just Acuity, if you will, meeting market conditions, but yet we recognize that if you will, warranty cost when we make that sale, and it's a higher portion of the expense than what it has been historically, where warranties have been in the more normal range of a year or so. So, I think that you are going to see gross profit margins improve for the full-year 2018. It's always impossible for us to predict. I know you all want us see it predicted to the tenth of a basis point each quarter, but I feel that the trends that we have and what we are focusing on will be favorable for us in 2018 and beyond. As I said in my prepared remarks, gross profit margin is -- and improvement there is an intense focus for us.

Okay. Thank you very much.

Our next question will come from Rich Kwas with Wells Fargo Securities. Your line is now open.

Hi, good morning everyone. Just a couple of questions; one on the market, Vern, can you give us some clarity on what's happening between renovation, retrofit, and new construction? Earlier in the year project activity is pretty robust and would seem like new construction on the non-res side is picking up some steam. What are the implications given the overall growth rate for the retrofit renovation market that seems that slowdown a bit here over the course of last few quarters, just an update there and your thoughts and the outlook for fiscal '18?

Rich, it's interesting to us. I have in front of me just some data that Dan provided to me, and when we look at, you know, this is -- excuse me, this is construction spent, it's for August, right. So, this not the lighting market, but it's just interesting, non-residential both private and public down in the month of August. July was not terribly dissimilar, but yet when we talk to the trades, when we talk to architects, engineers, contractors, people generally speaking are busy and backlogs are building. So, the release of some of these things are just taking a bit longer. It's all over the board, frankly. Again, in one market, folks will say, "Well, it's because we are having difficulty finding labor," and in other market they say, "No, that's not the issue, it's people waiting to see whether they are going to be able to get a pull right off of their renovation or the upgrading of their facility." So, all of this to us suggest that there is still pent-up demand. We believe that the smaller short cycle project has slowed down a little bit. Some folks have tried to guess, well, how much pricing as a part of that. There is probably a little bit of that, but generally speaking, the markets that we see and the markets that we serve and we seem them all by the way, have favorability, and yet the words in the music don't seem to quite match. And so, we sit back and say, "Okay, our customer base is telling us that they have these things, we can see this project cancellations don't seem to be happening. It seems that things are getting pushed out a little bit." So, at Acuity, we remain favorable on what the market trend is going to be, not in the very, very short-term but overall both for full '18 and going into '19, because of just again more of the macro type trends. And then we will get into specific aspects of the business. We see opportunities; I mean, look at our Tier 3 solutions there. That is project-based business typically, and it continues to grow at a favorable rate, people are interested in adding luminaires with technology. So, we are seeing growth there. It's on that smaller project side that we seem to be experiencing more of the slowdown. I just -- I see as we add more value into that chain or into the channel, I see growth continuing.

Okay. And then, just a follow-up, your comments around SD&A as a percent of sale, so this is a near-term trough this year, meaning fiscal '17, how should we think about the expected increase for 2018? Because you have some bogies for earnings growth, EPS growth, operating margins et cetera that you target to get paid, and I'm just curious, you know, do we think that the -- the SD&A as a percent of sale goes back that 27% range, or is that more subdued than that as we think about the next year?

Yes. Listen, for us to earn incentive compensation at Acuity, all salaried people are on some form of incentive compensation. It's all based on period-over-period improvement. So, just to make it easy for you, I will pick -- the three areas are operating profit dollars for most people, so growth in operating profit dollars, improvement in operating profit margin, and cash flow. And so, each of those things have to improve on a year-over-year basis, so there is a maniacal focus on driving solutions that's for the customers to make that happen. I think that as we think about where our business should be, we need to have top line growth and margin improvement to really earn, if you will, incentive comp. We are going to continue to invest in headcount along our tiered solutions strategy. This year, we added almost 400 folks to our salary headcount, almost 13%. I don't think it will be as much next year, that's why we are targeting our variable contribution margin to still be in that mid to upper 20s expecting to really leverage what we are doing. So, as I think about your models, I think that something north of 26% as a percentage of sales is probably in the range of reasonableness. I think 27 is probably a little too high. We are getting leverage as we grow our business on our SDA, but the key is how we continue to improve margins, we are seeing steel that kind of level off, which is favorable. I don't know if they will stay that way. We are driving productivity throughout our company, our supply chain is kicking along, I think that some of the warranty issues that we've had will still continue to pursue aggressively. The outdoor and the utility market, we are again - we are matching competitive, if you will, pressures around those things, but on a year-over-year basis as that basis grows, we will see additional warranty as a percentage of our sales. So, that will be a drag if you will on gross profit. So, your model, it's gross profit - it's top line growth, it's gross profit improvement because of the things that we are doing and it's leveraging our SDA, but leveraging at probably more in the 26-plus percent range.

Okay. Thank you for the color.

Our next question comes from Sophie Karp with Guggenheim Securities. Your line is open.

Hi, good morning, and thank you for taking my question. I have a question on your capital allocation strategy here, maybe have you guys considered raising your dividend or changing what you've been doing given that the cash flow is pretty healthy and the dividend yield is low, and it seems like the growth has been slow recently, so it that something that could be up for consideration?

So, each quarter, the board reviews our dividend policy, if you will. And so, we feel comfortable with where the dividend is. We continue to see really significant growth opportunities, I think if you look at over the last six years, seven years, we've deployed in acquisitions using both cash and our stock, but close to a billion or two, somewhere in that range, I think.

Right.

And so, the pipeline of opportunity, both for investment, partnership relationship, straight-out acquisitions, continues to be robust for us. But as you know, acquisitions are impossible to predict, and so they are lumpy. And we used almost $380 million in our third quarter to repurchase stock. So, our focus is how do we drive strategy of the business? So, it's acquisitions and commercial relationships first, stock repurchases second, and then lastly what is our dividend policy. I'm very proud of the organization in terms of what we delivered, our cash flow return on investment, and what was arguably a very tough market environment, we continue to manage our business very well, we paid for some of that through incentive compensation programs, but all of us believe strongly that the growth opportunities and the ability to drive superior returns on our invested capital are well-available to the organization. And so, most shareholders have encouraged us to deploy the capital back into the business, because we are generating such strong returns after that. But just to be clear, we look at that on a regular basis. Ricky, do you have any additional thoughts?

I will just reiterate that acquisitions is clearly been an area where we think we have created value over time, and is the highest priority. We see a lot of opportunities in the M&A space to continue to build out, whether it's filling product gaps, whether it's acquiring greater technology or access to market, and then geographic expansion is certainly an option, at one point today we are still 97%, North America focused as well. We are very strong here in North America. There is a huge growth opportunity for us geographically. So, we still see a lot of growth engines to use that cash flow in the M&A area.

Sophie, I would also add, we spent a lot of time talking with our shareholder base and both current shareholders as well as perspective shareholders and we talked a lot about this very topic, and given the growth potential that our industry has over the next decade given the significant position that we have in the broad industry, and it's being redefined by the way, and for the opportunities of the interconnected world coming to our space to add an investment into that, it's really a growth environment. So, the capital ebbs and flows a little bit, but we see the growth opportunity, that's really why we are, if you will, holding our powder dry…

All right, thank you, this is helpful. And then, my another question was, this environment where like you said the bookings seem to be strong, but they conversion to sales seems to be slow, I assume it's a little bit puzzling for I guess us, analysts and investors as well. Have you seen similar dynamic in prior cycles? And what could this be indicative of? And how in your experiences this could ultimately get resolved?

Yes. So, prior cycles have typically experienced a greater boom, if you will, then followed by a greater decline. This recovery, and I won't play economist here, you all know it better than me, but this recovery has been long and slow. And so, we do not necessarily see the speculative overbuild, I'm talking broadly, you can pick some market and say oh, no, residential is bubble again in this area. We just don't see the speculative overbuild broadly defined in both non-residential as well as residential. Obviously, some markets not withstanding. So, it feels to us like what is -- we've grown to a fairly high level in terms of dollar value, but why are we taking a breather right now? All of the indicators that we see the people that we talked to would suggest that this is a temporary law and I don't know that there is something historically that I can drawback on to say that ultimately this looks that way. In fact we have the opposite view. We see more and more people interested in writing solutions both new construction as well as if you will renovation of existing spaces to take advantage of energy savings, to take advantage of the IOT capabilities that Acuity is uniquely positioned to offer. We are just at a high level and we are kind of holding that pattern right and but we are not seeing the kind of growth that we think is pent up and available to us. The installed base is still significantly under converted. I think we are talking hundred millions of dollars of opportunity. Why is it not moving faster at this stage? I can give you all of the things I hear but it's impossible for me to say it's this specific reason.

Got it. Thank you. It's helpful. I will jump back on the queue.

Our next question comes from Matt McCall with Seaport Global Securities. Your line is now open.

Thank you. Good morning guys.

Good morning.

Vern, I just want to clarify, you hit the margin question a few times, but just making sure I have all the puts in the undertakes. So you talk about the 25% to 30% I understand it's on a full-year basis. But and you gave some insight into the SD&A while we expect that to be - talk a little bit about gross margin and the expectation I know you say is going to show some improvement next year, but maybe one or some of the components of that improvement, some of the offsets of headcount additions or if there are headcount additions there, just I know you are going to eliminate some issues this year that will help next year. I'm just trying to understand, what kind of visibility you have in that gross margin number. What kind of assumptions you having to make to get us into that 25% or 30% contribution margin for the full-year?

So historically over the last couple of years been able to reasonably be in that mid to upper 20 variable contributions. 2017, it was a rough start. So if you all remember coming out of the fourth quarter of 2016, the disruption at that point in time to the supply chain was heavy turnover particularly at a couple of our facilities in Mexico, where there are fantastic facilities. But other competitor, excuse me other companies were coming in there and competing for labor to look forward as an example was one of those folks, so they started to ram up then they pullback. So we've been able to significantly stabilize our workforce, we provided some additional benefits to be competitive, we have now in the second half of our fiscal 2017 addressed those issues and actually were driving productivity gains again. So we have offset some of those costs. I think the headwinds on the gross profit margin were mix, right. So, mix has a bit of an issue that flows through dollar-for-dollar at the gross profit level actually flows Q2 operating profit. Number two, we experienced, if you will, cost declines in certain LEDs, but those things are offset a little bit by the pricing in products, steel costs rose reasonably significantly in 2017, you guys could see the trend there you know how much steel we use. So, pricing in some of those markets for some of those products we're able to do some pricing, some price increases, in other areas we're offsetting that or looking to offset that through cost outs, through engineering redesign. So, our feeling is that steel prices maybe level off a little bit given overall market demand plus our ability to price, take pricing actions as well as our ability to cost out…

Okay. All right, that's helpful. And the other question I had, you mentioned the hurricane kind of the near term drag, any estimate of what the pressure is going to be, I think you said over the next couple of few quarters you could see some pressure if I heard you correctly any estimates on what the near term drag could be and is there a longer term opportunity at all, I wouldn't think there's much but…

You know Matt, at the end of the day I don't know what the end of the day will be all the stuff will level itself out but if you look at the port folks in Houston, you look at the port folks in Florida, Puerto Rico, our agents and their customers were out of business for a while. And now best business is starting to come back, it's coming back at a measured pace eventually all of that is stuff that was damaged there is going to need to be replaced and so that will be an accelerant ultimately. I just think that in the shorter term, I don't know is that a quarter, is that two quarters, I just think it will have some drag on the broad opportunity of those markets than converting to an accelerant as people start to repair out. I would also say labor in those markets is going to be a serious issue.

Ricky, you -- I've been in the hurricane tracker here lately you think like I was in Houston when Harvey hit and I was in Florida when Irma hit, so don't ask me to come to your city.

Okay, you're doing it wrong. And I'm sorry, Dan, for one more, I just want to make sure I understood some of these about the incremental margin, so the mid to high 20 that you're targeting that's an all-in number for the next year's expectation that is with the return of bonuses, that's an all-in expectation.

Correct.

Okay. All right, thank you guys.

Yes, we have to pay for our incentive compensation, it's not period over period results and in those results of improvement, you have to pay for your own incentive compensation. So that's correct, it's inclusive.

Okay, okay. Just clarified, thank you, Vern.

Thanks.

Our next question will come from John Quealy with Canaccord. Your line is open.

Hey, good morning, folks. First question please just big picture as we think about the investments that we're doing in people and process in '18 to support a number of different things, just big picture as we get into '19 does that cadence slowdown, revenue being put aside for this question but this investment period do we see a year type track or we're just going to keep doing it as long as the market is there?

Well, with that last caveat we will always invest as long as we see the market potential but our current expectation is that 2018 is still, if you will, a year of investing, I think that as you get into '19 and '20 we continue to invest that we start to harvest some of that investment, so our expectation is that, our variable contribution margins in that '19, '20 and beyond period start to expand fairly meaningfully. That does not mean by the way that we won't continue to invest in our business, it just means that we will be leveraging more and more of the phase that we have established. And this is throughout our business, it's interesting to me when I think about our company over the last just four years the non-residential market which is a benchmark that most of you use to gauge Acuity success on an inflation adjusted basis, it still hasn't come back to 2008 levels but yet in the last four years, we've grown our top line by two-thirds, we've improved our gross profit margin by 250 basis points, we've improved our operating profit margin by 400 basis points and our operating profit dollars are two and half times as high as they were. So, you think about the formidable base that Acuity has been able to create in a marketplace that began the way you measuring it under inflation adjusted basis, it's still not back to its historical high, I think that's a testament to the investments and the returns that we're getting off of our investments to expand our portfolio, to expand our access to market and to really drive our capabilities in this technology market. I mean, the fact of the matter is that Tier 3 sales today represent probably 15% or a little bit more of our business and yet those things didn't exist four years ago. So, we're getting to returns that are there and we want to continue to drive that in a robust way but the short answer to your question is we would expect as we get into 2019 and 2020 to start to see the variable contribution margin half of our business and half of the sales dollar improved.

Okay, thank you. My last piece on Atrius, so that 350 million square feet type number that we've talked about the last year, do you need other technologies to get there as you know building based locational services technologies pretty dynamic, what else can you put into that Atrius toolbox and does that expand the opportunity longer term? Thanks guys.

Yes, there are other technologies that we will continue to add, I prefer not to talk about that until we actually introduce those capabilities but I believe that what Atrius is really a quilt of capabilities, there will be no one particular silver bullet that says this is why you buy Atrius, you're buying Atrius because it can take advantage of a mass of sensory network ubiquitous nature of lighting and the fact that lighting will convert from conventional lighting to LED lighting because of the energy savings to pay for really that conversion and with the Atrius or with Acuity and Atrius enabled solution set, you get all these features and benefits that will continue to expand the features and benefits that users will have, again between building management and lighting and lighting control, we believe that's north of 85% of all the data that's being generated and building can be collected off of those systems and the Atrius platform allows us to enhance that using third-party sensors as well. So, our belief is that the Atrius platform literally will be able to collect 100% of the information being generated inside of building and then use at to build, help the building due to things that needs to do efficiency wise and then business solution wise, and now we're tying at into our outdoor capability so, we see this as a robust platform that will always be adding new technologies and new capability.

And I would add while we will be adding capabilities in all of this sensory platform. We were also be working with other technology partners to bring in some of their capabilities to enhance the overall solution capability that we can deliver using that sensory network of Atrius so, it's not all that we're going to need to do ourselves. We can partner with it and are partnering with other very formidable technology companies to help build out the full solutions suite and capability that we believe Atrius can provide.

Our next question will come from Vishal Shah with Deutsche Bank. Your line is open.

Yes, hi. Thanks for taking my question. I wanted to just better understand your Tier 2, Tier 4 pilot projects can you expand on and what you seeing there and when you can expect to convert some of those pilot projects into in your awards and then secondly on going back to question, the point of margins, you mentioned that you're going to have some pricing initiatives as part of the margin expansion strategy in 2018. Can you talk about what your feedback has been so far from the customers? And do we see the margin expansion more of towards second half 2018 story or do you see some of that playing out even before that? Thank you.

Yes. So, on the margin question, I'll address that first. Our expectations that all of the things that we're doing we'll continue to see margin improvement. I don't want to go on quarter-by-quarter and I think that's a very difficult challenge because mix place a big part in that but if I think about the full-year and the activities that we have going on we see favorable trends as I mentioned. Our productivity in our supply chain robustly positive, I think will start to anniversary some of these steel increases so, that should be less of a drag we're working hard as we create new products to think about how do we position that features and benefits but we have a cost process that allows us to improve our margins we're very focused on how do we cost out existing designs where these products still have a lot of life left in them, if you will, from a lifecycle perspective. So I think you're going to see an improvement that kind of fairly consistent basis I just Ricky would be reluctant to try and say what does that look like by quarter. You will see improvement. It's a maniacal focus that we have this year. And then the first question was…

Tier 3, Tier 4 and movement from pilots and…

So, it's interesting the discussions that we are having with many, many customers have expanded quite significantly the interest level, and if you will, technology-based lighting solutions where these things can be that sensory network is really had a frenzy peak there's, there are people that now the lean goes in the marketplace. So we're no longer having to it in July's when we walk into customers with our solutions that we're able to show them if you will very specifically how we're doing these things. So, the dialog now is how can this help me and so the pilot, the number of pilots are expanding and we are now having folks that are moving from pilot to actual implementation and it's very exciting I mean as we pointed out the number of square foot that we improved in just a quarter it was like a 30 some percent increase we went from 60 to 90 million square feet, 50% improvement so and no one else is anywhere even close to that just to be extremely clear so, we are excited that the growth rates and the acceptance of what is happening and again we're so early in this game that it's, it's very opportunistic for Acuity and our customer sets are responding more and more to it and I'm really excited about the number of partnerships that our team has expanded with, you'll continue to see us make announcements on these types of partners, which really expands our access to market, but more importantly, it really puts a sense of approval on what we are doing. And it's just not easy, I mean, unfortunately you saw that Equifax had an issue with people hacking; security on our systems and the things that we are doing here are truly industry-leading to be sensitive to these kinds of issues, and that's how we are differentiating -- one of the ways we are differentiating ourselves with our solutions.

Great, thank you.

Thank you.

I would like to turn the call back over to Mr. Vern Nagel for closing remarks.

Thank you everyone for your time this morning, and again, we strongly believe we are focusing on the right objectives deploying the proper strategies and driving the organization to succeed in critical areas that will over the long-term continues to deliver strong returns to our key stakeholders. Our future is very, very bright. Thank you for your support.

And with that, we will conclude today's conference. Thank you for participating. You may disconnect your lines at this time.