Good morning and welcome to the Acuity Brands 2009 first quarter financial conference call. (Operator Instructions) I would now like to introduce Dan Smith, Vice President, Treasurer and Secretary of Acuity Brands. Sir you may begin.

Good morning. With me today to discuss our first quarter results are Vernon Nagel, our Chairman, President and Chief Executive Officer and Richard Reece, our Executive Vice President and Chief Financial Officer. We are web casting today’s conference call at www.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 risk 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 the call over to Vernon Nagel.

Thank you Dan. Good morning everyone. Richard and I would like to make a few comments and then we would be happy to answer your questions. I also apologize in advance as I am fighting a cold here. Our results for the first quarter 2009 reflect the impact that the turbulent economic conditions throughout the world are having on all manufacturing companies and the impact of our aggressive streamlining actions which we announced previously. While our results for the quarter were disappointing relative to our original expectations, upon closer examination we actually executed very well overcoming a number of challenges. This quarter’s results reflect the first in 15 quarters where we did not set records for period over period improvement though I believe we performed at least as well, if not better, than our served markets. In spite of the many challenges we faced in the quarter, as I will explain in more detail, we achieved great success on a number of strategic priorities including accelerating programs to introduce new, more energy efficient products and services, enhance customer service, expand into new markets and improve our productivity. I know many of you have already seen our results and Richard will provide more detail later in the call, but I would like to make a few comments on key highlights. Net sales for the quarter were $452 million, down 11% compared with the year-ago period. Operating profit was $33.7 million, down from $54.9 million reported in first quarter last year. Diluted earnings per share was $0.48 compared with $0.72 from the year-ago period. Included in our first quarter results was a pre-tax special charge of $22.1 million or $0.34 per share. The charge in this period is for the cost associated with our previously announced actions to accelerate the streamlining of…

Thank you Vern. Good morning everyone. I would like to wish each of you a prosperous and healthy New Year. As Vern said earlier, I would like to provide some details around our earnings results and then I will discuss our cash flow, financial condition and conclude with a little more information regarding the special charge we took this quarter. Gross profit for the fourth [sic] quarter was 38.7% of sales. This gross profit margin reflects a decrease of only 120 basis points compared with the year-ago period. I will echo what Vern said. This is an impressive accomplishment considering the 11% decline in sales and significant rise in raw material and component costs. Clearly our disciplined approach to pricing, improved mix of products sold, productivity gains and benefits from previously announced streamlining efforts are benefiting our results. Selling, distribution and administrative costs held flat at 26.3% of sales in this quarter compared with the prior year. Again, highlighting the benefits of previous streamlining actions and our proactive management of these costs in anticipation of a more challenging market. Net interest expense in the first quarter increased approximately $1 million due primarily to reduced interest income on our conservatively invested cash. Miscellaneous income related primarily to the impact of exchange rates on foreign currency transactions yielded a favorable swing of $3.9 million between this quarter and last year. Lastly, the income tax rate decreased in the quarter to 35.1% compared with 35.9% for the first quarter of 2008. This decrease was due primarily to a larger benefit from increased exports of goods manufactured in the U.S. Now let’s look at the cash flow in the first quarter of fiscal 2009. Cash flow used in operation in the first three months of fiscal 2009 was $8.2 million. This reflects the typical…

Thank you Ricky. As we look forward we obviously see challenges but more importantly opportunities. Without a doubt this is the most challenging economic environment most have experienced in decades. The rapid and steep decline in demand in overall construction markets has been unprecedented. Similarly, the rise and then the dramatic fall off in commodity prices were equally unique. How long will these turbulent economic conditions prevail? Only time will tell. What we do know is key indicators for our traditional markets for residential and non-residential construction are signaling a significant decline in the available market for the balance of 2009. Clearly it is impossible to know the future growth rate of the construction markets or for how long into the future these conditions may prevail. It is clear; those factors which influence the future growth rate of new construction including the future vitality of the economy, job creation, consumer sentiment, occupancy rates and the availability of capital are all signaling declines in future demand. This information is all widely known. All this seems to support the forecast by independent third parties that unit volume for the construction put in place in the non-residential construction market could be down at least middle teens in 2009 compared to 2008. So, again the two questions many shareholders may have; what are we doing to enhance our performance in this environment and most importantly what are our strategies to drive profitable growth? First, we would like to share with you just a few key observations. With the construction forecast to be down, this creates a significant headwind for all companies serving construction in North America and Europe. Second, originally we expected material costs to be significantly higher in 2009 compared with 2008. It certainly started out that way with commodity costs increasing dramatically…

(Operator Instructions) The first question comes from the line Peter Lisnic - Robert W. Baird.

The first question I’m trying to get my head around is really the marketing story. The first question for the material side of the question, it looks like what you are saying is that impact and spike prices really dissipates after the second quarter. Am I understanding that right?

We are anticipating, based on current commodity costs, it should dissipate after the second quarter.

If you look at the margin profile X sort of the material hit you took in the first quarter, can you give us a better view of how you are maintaining or actually improving margin X those materials costs? Is it really just a function of new products, or is it productivity? Could you maybe give us a sense as to what is really driving that more than anything else?

Sure. Productivity has been a key driver in our profitability and our performance and it will continue to do so. I am extremely pleased with how the organization performed with regard to productivity in the first quarter and it is productivity throughout the organization. When we look at our spending levels within our manufacturing facilities we had a very nice gain in productivity. When we look at our spending levels in terms of just normal expenses and managing the organization structure we continue to be very diligent in terms of what we spend on and the investments we are making. As Richard pointed out in his comments, we believe we have fully realized the benefits from the streamlining efforts as part of the spin off of our chemical business and we initiated more aggressive and an acceleration of our streamlining efforts in this quarter for which we received some benefit. What I find kind of interesting and you need to do this math yourself, if you imagine that as we said in the press release the volume was down collectively mid-teens and you assume a normal manufacturing margin, you can use any number you like, 25-28% and you adjust year-over-year for that and you then take into account the spike in materials I think you are going to see that our margins really on base business improved pretty substantially. Again, that is a reflection of the crisp execution we have had around productivity but it is also a reflection as we drive new products into the marketplace and the benefit of our pricing initiatives in June. We believe that was all a strong contributor to that pretty significant period over period improvement in the margin.

I think I used the 30% number for the incremental and the part that I’m really trying to burst out is really I’m trying to figure out how much of it is permanent and how much more do you have in terms of dry powder on the productivity side of the equation?

Our focus internally is continuous improvement. So we are again targeting 70 basis points or more. We believe the streamlining actions we have put in place will help us not only achieve that but exceed that. In answer to your question I believe there is more there. We are going to stick to our goals we have committed to. We have done a very nice job of out performing those goals. The thing I also find very interesting is we continue to invest back into our business. As you know the renovation and re-light market we have ramped up an organization. We are not out looking to acquire. So we are green fielding that yet we are absorbing the cost of going from no people to over 50 folks in this organization. I am very excited about that. I am excited about the investments we are making to expand our market presence in other areas, New York City just being one example. So, we are performing at this level while still investing back in our business. As we mentioned earlier in our comments, our product introduction schedule for 2009 is the largest in our history. I really like how the organization is creating proper priorities around what is really important to win business now and what investments should we be making to continue the position in our future. I think we are doing a good job in this environment.

On the incremental restructuring relative to prior expectations, can you just give us a sense as to what that entailed? Is that just incremental heads, more facility line moves?

It is more incremental heads as we continue to streamline the business, the plants and the move in production is consistent with what we had previously indicated.

I would also add, we continue to add to our organization in areas that are both part of our product creation efforts as well as add to our organization in terms of customer facing opportunities. So we are trying to size our business appropriately for this environment, but also continuing to make investments back in head count. So these are net numbers if you will to help again drive our future growth.

The next question comes from Matt McCall - BB&T Markets. Matt McCall - BB&T Markets: A lot of chatter, I think you mentioned it briefly in the press release, but a lot of chatter about the stimulus package and wondering if you had any further thoughts on what it can mean for the lighting industry and for Acuity specifically?

We believe that it will happen. We believe that the lighting industry and more particularly Acuity Brands is uniquely positioned to participate in that. I believe any credible energy policy is going to have to address lighting. If you look at the renovation and re-light market there is tremendous opportunity. We believe the marketplace as it is being currently served is really more about just energy savings. As it becomes more into the mainstream those folks who own these buildings like retailers who really understand this know it is about the quality of lighting as well as the energy savings. This is where I think Acuity Brands Lighting is uniquely positioned. From an infrastructure perspective, we are again the largest manufacturer and supplier of outdoor lighting fixtures and so we believe that infrastructure; roads, bridges and things of this nature, all consume lighting. We are optimistic that will happen but obviously that is not going to impact Q2 or Q3. On the longer term basis it would be very positive. Matt McCall - BB&T Markets: Specifically, on the non-government segment with the economy and the situation we are in and energy prices pulling back in general, discuss the trends and how your outlook may have changed. What is the selling proposition and how is the selling proposition being viewed by those customers?

I believe you mean energy referring to the price of oil, but if you look at many of these markets and these geographies the price of energy is actually slated to go up. We believe that the benefit people are experiencing at the pump is probably going to be short lived so we believe the longer term trends from an energy perspective are still going to be intact to help be one element of stimulating renovation and re-light. We believe the government and the new administration will further stimulate that opportunity and that activity. So my feeling, pretty strongly, is that we will be the benefactor of that because of our strength, the breadth and extent of our energy efficient leading product portfolio. We are intently focused on furthering capabilities in that renovation and re-light market with new products and services. That is what our Cerus organization is directly focused on. We are now in the process of ramping up our formidable sales forces in various channels to help stimulate that. I am actually quite pleased with our re-light revenues holding steady in this quarter because retailers have been under such tremendous pressure and so focused on the holiday sales season actually coming into the quarter I had fully expected we would have been down. So again I am quite pleased by that performance. Matt McCall - BB&T Markets: Remind us again of the mix of your business. When you talk about some of these end markets obviously the outlook for some looks worse than others. You mentioned retail several times. There are some concerns about lodging and obviously the office. Then the manufacturing space. Can you give us an idea of what your mix looks like from an end market perspective?

I can. I think we described it reasonably well in our 10K. We believe we are pretty well diversified visa vie how the non-residential construction market breaks down. Dodge provides a great deal of new information around that. I would say that we have some pluses here and minuses there but generally speaking the sweet spot of our business is commercial, industrial, institutional and infrastructure type business. As I look at the various percentages of what makes up that market we are probably not inconsistent with that. I believe that in the marketplace today, and you see construction putting place numbers coming out, what is very interesting to me is I believe a lot of those buildings have their financing in place and so they are building them. So those dollars are coming into the construction put in place numbers. The issue is that as vacancy rates continue to increase a lot of those buildings don’t have tenants for them. Without tenants you don’t need light fixtures. Ultimately what is going to happen is those buildings will have tenants as the economy comes back, so on and so forth, and so the construction put in place numbers will actually be less while our revenues will be going up because they will be putting fixtures into those commercial buildings.

The next question comes from Chris Glynn – Oppenheimer.

At the risk of being master of the obvious, I just want to go back to what you are looking for on some of the price cost trends. I think you had an $8 million net drag in the first quarter and $5 million in the second quarter. So with the cost coming down but price coming out you are looking for some sequential improvement and maybe neutral in the second half?

At this point in time with commodity costs being where they are currently with pricing in the marketplace being where it is currently we would expect to get past what I’m calling spike increase, which we were really unable because of the speed and severity of the change. So you have it right. First quarter being impacted we are guestimating around an $8 million. Similarly, we feel at this moment in time we have boxed in this sort of $5 million number. But then going into the second half things, if they stay as they are, we should now be past that and back to if you will…I won’t say business as normal because this environment is not normal, but these unusual swings in pricing should be past us. Again, I just want to re-emphasize, as I said in our fourth quarter conference call, we put in the price increase at the end of August. Our expectation was that it would simply cover rising raw material cost. So we now think that comes out of the equation and as prices for raw materials have come back to pre-August levels.

On the SG&A and sales, certainly percentage year-over-year was pretty impressive. Do you think that is sustainable?

With the additional streamlining actions we announced earlier and then took the charge this quarter our goal is to right size the business based on where we see it today. Obviously the crystal ball is very fuzzy as we look out as to where the market will go. Then as you know there are certain fixed costs that are there regardless of any reasonable level of volume. I think it will be a challenge to continue to keep it flat but we feel good with the streamlining efforts we are managing the business as appropriately as we can in these challenging times.

The further re-structuring charges, I don’t know if it was restructuring charges or expense in the second quarter and third quarter. What did you say, a couple of more quarters of $2.5 million?

Yes, in the aggregate, and these are costs related to the actual moving of the production and some stay bonuses and those types of activities that the accounting rules don’t allow you to accrue up front and put in a charge. So those will flow through over the next couple of quarters based on currently planned activities.

$2.5 million in aggregate. Lastly, I put a lot of emphasis on it being your most robust year for new product introductions. Would you anticipate the mix impact on margins would be more substantial than last year or is that just impossible to analyze given the kind of demand?

We believe on a go-forward basis and really as we mentioned in our comments more particularly in 2010 and beyond with very exciting products, we believe it will have a very positive impact on our margins on a go-forward basis. Many of these products are not just LED based but they are complete lines or families of products that are really directed at the sweet spot of better lighting and tremendous energy efficiency. We continue to work with our supply partners to drive that kind of capability and the marketplace has responded favorably both in the past and we are expecting in the future to these types of value propositions because they bring great value to the end customer.

Would you view a potential carbon cap in trade legislation as kind of the Holy Grail for you in re-lighting and how are you gauging how that legislation might be formulated?

As a free market person I don’t know that I completely enjoy that piece of legislation but as a person who participates in the lighting industry we believe there will be opportunities as that type of legislation or whatever is going to come to market will be favorable to a sustainable energy management policy. We believe given the lighting industry particularly ourselves are in the sweet spot of that. Frankly, the acquisition of LC&D will help further our capabilities in helping end customers manage their energy efficiencies as well as creating a better lighting experience for their environment. So, again we are putting investments not only in new products but in these types of acquisitions and affiliations to help drive that capability as well.

The next question comes from Steve [Gambootha] – Longbow Capital. Steve [Gambootha] – Longbow Capital : I just wanted to clarify the comments regarding price and volume outlook. Is it your view that the price increases you put in August you will simply kind of adjust your price sheets to take back those price increases?

The answer is we have to be cognizant of market level pricing. Much of our business is bid business and so as we look at what our pricing discipline is within that type of environment we are seeing market level pricing more consistent with pre-August pricing levels. Steve [Gambootha] – Longbow Capital : So if current commodity prices held and that assumption held forward I guess my question is what would kind of be the full year impact on revenue from taking back those price increases in 2009?

We really did not get any meaningful benefit from the August price increase. As you know, we had put a price increase in place just a few months earlier effective for the end of June for select products in the 3-5% range. We are very disciplined in getting the price we put in place. I feel like on a go forward basis in the second half it was kind of a no-harm, no-foul sort of thing. Steve [Gambootha] – Longbow Capital : So the August price increases never really stuck? Is that how to think about it?

I would say at this point in time market level pricing is pre-August pricing. Steve [Gambootha] – Longbow Capital : So when we think about the outlook for mid-teens decline in volume is that in proxy for what revenue should be and you would hope to do a little better than that through share gain and new product introductions?

Yes. Steve [Gambootha] – Longbow Capital : With respect to the pricing element you mentioned some competitors have been…you have seen an increase in competitive behavior in the face of lower volumes. How might pricing impact or competitive price behavior impact the revenue outlook? Do you expect it to have a negative or neutral impact?

I have to believe in this environment we will see a bit more of a competitive sort of spirit or nature coming from certain competitors but for the most part it is not dissimilar to what we have experienced for the last handful of years. It is very local. It is very specific and it ebbs and flows. So for me to say one day in this particular geography is this competitor who is doing something, that could very well change two quarters later. It is our expectation the market will become slightly more competitive but we are not, at this point in time, calling for any meaningful change in what is happening in that environment. Steve [Gambootha] – Longbow Capital : Are you aware of any smaller, and I realize there are kind of four major players that dominate the U.S. market, are you aware of any of the smaller, more marginal players experiencing distress or potentially going into bankruptcy?

I would be reluctant to say I have knowledge of folks going into bankruptcy. I would say that it is evident that there are players, small, medium and large that at times use pricing as their lead punch because they don’t have the product portfolio or service capability to compete out of a full value basis. So they use price to work into the range. We are seeing certain sectors of the market, certain geographies where pricing is aggressive but again that is not dissimilar from what we have experienced over the last handful of years. I would be really quite reluctant to say that I am going to see people go bankrupt but it makes sense to me that there will be people who will be experiencing financial challenges whether it is because of their capital structure or whether it is because they just don’t have the ability to compete. I don’t have any specific names that I could mention.

The next question comes from Glen Wortman – Sidoti and Company. Glen Wortman – Sidoti and Company: Can you just give us a sense of the impact that lower sales commissions had on the SG&A expense?

Actually our sales commissions as a percentage of revenues are up slightly.

It is down in the aggregate, as obviously the sales are down and that is variable, but the actual percentage is slightly higher as a percent of revenue. Glen Wortman – Sidoti and Company: As far as maybe any future plans for cash? By the way was it a $20 million acquisition? I know it was $20 million in sales, the company you have purchased.

We have not disclosed the acquisition price. As far as use of cash we do have the public note, about $150 million outstanding on that which is due February 1, 2009. We are intending to go ahead and pay those off using the cash we have on the balance sheet for that. We are, as evidenced by LC&D, looking at acquisitions as a use of cash. We think in these economic situations there could be some good opportunities for us to continue to expand our portfolio in the specialty product areas as well as some of these other energy capabilities including lighting controls that would be of interest to us. Then as Vern has highlighted, we are continuing to invest. We have about $35-40 million estimate of capital expenditures for the year as we will continue to invest in product development, tooling and so forth that goes with that. So those would be our top priorities at the moment. Debt reduction, M&A activities, and we have the dividend that we are paying shareholders and Vern’s expectation is obviously to maintain that. That would be our priorities.

The next question comes from Jay [Schwartzrike] – Glenview Capital. Jay [Schwartzrike] – Glenview Capital: If inventories had declined somewhat in line with sales what would the impact have been on gross margins?

It would have been negative because we did capitalize some of this excess purchase cost obviously got capitalized into the inventory that will now affect the numbers Vern was talking about in our second quarter as that flows through under our FIFO inventory. You are talking less than $5 million though would be my estimate of the impact. I don’t have a precise number for you but it would have been an adverse impact if inventories had stayed flat. Jay [Schwartzrike] – Glenview Capital: Back on the price cost again, I know we have been drilling into this a little bit, but if I added the $8 million back and I think you said it was kind of price cost was kind of a push in prior quarters, eventually when the fourth quarter revenues are down 14% but gross margins are essentially almost flat, is that correct?

You said revenues are down from the fourth quarter, we typically have modest seasonality. Our fourth quarter is typically our largest. Jay [Schwartzrike] – Glenview Capital: On a year-over-year basis excluding the price cost the margins were actually up year-over-year on a gross margin line even with revenues down 11%?

I believe that math will yield that outcome. Jay [Schwartzrike] – Glenview Capital: They would have been down if we had factored in the inventory increase?

To be clear on the first point, we believe price mix is virtually impossible to distinguish the difference between price and mix and we won’t get into all that, but we believe price mix continues to be favorable for us. We believe that the productivity measures we have put in place, largely driven around some of the streamlining actions both put in place in the first quarter of last year as well as the ones we are doing now will continue to benefit our business. We have talked about continuous improvement on our margins in our base business so we have tried to say that revenues or unit volume going up or going down let’s pull that aside and then lets try and measure our productivity and improvements there. I believe your math, or at least the outcome of improvement, yes that is true. Jay [Schwartzrike] – Glenview Capital: Lastly, when you talk about if commodity costs hold flat we have obviously seen some volatility especially in oil recently. When you say hold flat from current levels does that kind of level as of yesterday?

To be precisely that precise I think we are trying to say that there is always ebbing and flowing. There is always daily activity. But to not see any meaningful changes when steel goes up 50% and oil prices go from $140 a barrel, I like it when they go down to $40. Now they are back up to $52 or $53. Those things are difficult because you are really unable to pass those along so you absorb some of those. Our comment in general was as long as we stay this basket of commodity costs stays relatively at current levels we would expect, based on current levels of market pricing, it would be neutral. Jay [Schwartzrike] – Glenview Capital: If we were to see a rebound in these costs in this environment would you be able to recapture that again or would that might be tough in this environment?

It is always tough so I will just state that as the obvious. Again, we have been pretty disciplined in the last four years in driving our pricing strategies and we believe that we need to recover our costs to continue to invest back in new products and innovation and people who can make that happen. So, we will continue to drive our disciplined pricing structure.

There are no further questions at this time. I will now turn the call back over to Vernon Nagel for closing remarks.

Thank you for your time this morning. We understand the current environment is unsettling. However, 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 longer term deliver on the expectations of our key stakeholders. Our future is bright and we thank you for your support.

This concludes today’s conference. You may disconnect at this time. Thank you.