Allegion (NYSE: ALLE) Reports Q3-2023 Financial Results
- Net earnings per share (EPS) increased by 36.2% compared to the same period last year.
- Revenues increased by 0.5% on a reported basis.
- The company raised its full-year adjusted EPS outlook to a range of $6.80 to $6.90.
- None.
Strong execution drives third-quarter results, company raises full-year adjusted EPS outlook
Quarterly Financial Highlights
(All comparisons against the third quarter of 2022, unless otherwise noted)
-
Net earnings per share (EPS) of
$1.77 36.2% compared with$1.30 $1.94 12.1% compared with$1.73 -
Revenues of
$917.9 million 0.5% on a reported basis and down0.6% on an organic basis -
Operating margin of
21.0% , compared with17.8% ; Adjusted operating margin of23.2% , up 110 basis points compared with22.1% - Mid-teens organic growth for electronics and software solutions
Full-Year Outlook Highlights
-
Raising full-year adjusted EPS outlook to a range of
$6.80 $6.90 - Affirming full-year 2023 revenue, reported EPS and available cash flow outlook
Allegion plc (NYSE: ALLE), a leading global security products and solutions provider, today reported financial results for its third quarter (ended Sept. 30, 2023).
“Allegion’s third-quarter results were driven by our team’s outstanding operational execution. We continued to expand margins, strengthened our balance sheet and significantly increased our year-to-date cash flow,” said President and CEO John H. Stone.
“Demand for our electronics solutions remains strong. We delivered mid-teens organic growth in electronics and software solutions in the quarter, and we continue to see a long runway for further adoption.”
“Overall, Allegion is on track for a record year of revenue, adjusted operating income and adjusted EPS results. We are raising our full-year adjusted EPS outlook, while affirming our full-year revenue and available cash flow guidance.”
Company Results
(All comparisons against the third quarter of 2022, unless otherwise noted)
Allegion reported third-quarter 2023 net revenues of
Third-quarter 2023 net revenues increased
Third-quarter 2023 operating income was
Third-quarter 2023 operating margin was
The company’s sustained focus on improving operational execution has yielded the highest year-to-date adjusted operating margins in its history.
Segment Results
(All comparisons against the third quarter of 2022, unless otherwise noted)
The
The International segment revenues increased
Additional Items
(All comparisons against the third quarter of 2022, unless otherwise noted)
Interest expense for third-quarter 2023 was
Other expense net for third-quarter 2023 was
The company’s effective tax rate for third-quarter 2023 was
Cash Flow and Liquidity
Year-to-date available cash flow for 2023 was
Updated Full-Year Outlook
The company affirms its revenue growth for full-year 2023, which is expected to be
The company is raising the outlook for full-year 2023 adjusted EPS and expects it to be in the
Adjustments to 2023 EPS include estimated impacts of approximately
The outlook assumes a headwind of approximately
The company affirms its full-year 2023 available cash flow outlook, which is expected to be approximately
Conference Call Information
On Tuesday, Oct. 31, 2023, President and CEO John H. Stone and Senior Vice President and Chief Financial Officer Mike Wagnes will conduct a conference call for analysts and investors, beginning at 8 a.m. ET, to review the company's results.
A real-time, listen-only webcast of the conference call will be broadcast live online. Individuals wishing to listen may access the call through the company's website at https://investor.allegion.com.
About Allegion
Allegion (NYSE: ALLE) is a global pioneer in seamless access, with leading brands like CISA®, Interflex®, LCN®, Schlage®, SimonsVoss® and Von Duprin®. Focusing on security around the door and adjacent areas, Allegion secures people and assets with a range of solutions for homes, businesses, schools and institutions. Allegion had
For more, visit www.allegion.com.
Non-GAAP Measures
This news release includes adjusted non-GAAP financial information which should be considered supplemental to, not a substitute for or superior to, the financial measure calculated in accordance with GAAP. The company presents operating income, operating margin, net earnings and diluted earnings per share (EPS) on both a
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements under the headings “Full-Year Outlook Highlights,” “Updated Full Year Outlook” and statements regarding the company's 2023 and future financial performance, the company’s business plans and strategy, the company’s growth strategy, the company’s capital allocation strategy, the company’s ability to successfully complete and integrate acquisitions and achieve anticipated strategic and financial benefits and the performance of the markets in which the company operates. These forward-looking statements generally are identified by the words “believe,” “aim,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” or the negative thereof or variations thereon or similar expressions generally intended to identify forward-looking statements. Forward-looking statements may relate to such matters as projections of revenue, margins, expenses, tax rate and provisions, earnings, cash flows, benefit obligations, dividends, share purchases or other financial items; any statements of the plans, strategies and objectives of management for future operations, including those relating to any statements concerning expected development, performance or market share relating to our products and services; any statements regarding future economic conditions or our performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Undue reliance should not be placed on any forward-looking statements, as these statements are based on the company's currently available information and our current assumptions, expectations and projections about future events. They are subject to future events, risks and uncertainties - many of which are beyond the company’s control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from those in the forward-looking statements. Important factors and other risks that may affect the company's business or that could cause actual results to differ materially are included in filings the company makes with the Securities and Exchange Commission from time to time, including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q and in its other SEC filings. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. The company undertakes no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
ALLEGION PLC Condensed and Consolidated Income Statements (In millions, except per share data)
UNAUDITED |
|||||||||||||||
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Three months ended
|
|
Nine months ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
|
|
|
|
|
|
|
||||||||
Net revenues |
$ |
917.9 |
|
$ |
913.7 |
|
|
$ |
2,753.4 |
|
|
$ |
2,410.4 |
|
|
Cost of goods sold |
|
514.6 |
|
|
545.7 |
|
|
|
1,557.2 |
|
|
|
1,438.7 |
|
|
Gross profit |
|
403.3 |
|
|
368.0 |
|
|
|
1,196.2 |
|
|
|
971.7 |
|
|
|
|
|
|
|
|
|
|
||||||||
Selling and administrative expenses |
|
210.2 |
|
|
205.1 |
|
|
|
647.5 |
|
|
|
544.7 |
|
|
Operating income |
|
193.1 |
|
|
162.9 |
|
|
|
548.7 |
|
|
|
427.0 |
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
22.9 |
|
|
23.1 |
|
|
|
70.2 |
|
|
|
52.2 |
|
|
Loss on divestitures |
|
— |
|
|
7.6 |
|
|
|
— |
|
|
|
7.6 |
|
|
Other (expense) income, net |
|
0.1 |
|
|
(1.5 |
) |
|
|
(1.8 |
) |
|
|
(7.1 |
) |
|
Earnings before income taxes |
|
170.1 |
|
|
133.7 |
|
|
|
480.3 |
|
|
|
374.3 |
|
|
|
|
|
|
|
|
|
|
||||||||
Provision for income taxes |
|
13.7 |
|
|
19.1 |
|
|
|
58.3 |
|
|
|
51.4 |
|
|
Net earnings |
|
156.4 |
|
|
114.6 |
|
|
|
422.0 |
|
|
|
322.9 |
|
|
|
|
|
|
|
|
|
|
||||||||
Less: Net earnings attributable to noncontrolling interests |
|
0.1 |
|
|
— |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to Allegion plc |
$ |
156.3 |
|
$ |
114.6 |
|
|
$ |
421.8 |
|
|
$ |
322.7 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per ordinary share |
|
|
|
|
|
|
|
||||||||
attributable to Allegion plc shareholders: |
$ |
1.78 |
|
$ |
1.30 |
|
|
$ |
4.80 |
|
|
$ |
3.67 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per ordinary share |
|
|
|
|
|
|
|
||||||||
attributable to Allegion plc shareholders: |
$ |
1.77 |
|
$ |
1.30 |
|
|
$ |
4.78 |
|
|
$ |
3.65 |
|
|
|
|
|
|
|
|
|
|
||||||||
Shares outstanding - basic |
|
87.9 |
|
|
87.9 |
|
|
|
87.9 |
|
|
|
88.0 |
|
|
Shares outstanding - diluted |
|
88.2 |
|
|
88.2 |
|
|
|
88.3 |
|
|
|
88.4 |
|
|
ALLEGION PLC Condensed and Consolidated Balance Sheets
(In millions) UNAUDITED |
|||||
|
September 30, 2023 |
|
December 31, 2022 |
||
ASSETS |
|
|
|
||
Cash and cash equivalents |
$ |
364.3 |
|
$ |
288.0 |
Accounts and notes receivables, net |
|
439.7 |
|
|
395.6 |
Inventories |
|
468.7 |
|
|
479.0 |
Other current assets |
|
47.4 |
|
|
48.5 |
Assets held for sale |
|
— |
|
|
3.5 |
Total current assets |
|
1,320.1 |
|
|
1,214.6 |
Property, plant and equipment, net |
|
334.9 |
|
|
308.7 |
Goodwill |
|
1,428.1 |
|
|
1,413.1 |
Intangible assets, net |
|
580.3 |
|
|
608.9 |
Other noncurrent assets |
|
519.7 |
|
|
445.9 |
Total assets |
$ |
4,183.1 |
|
$ |
3,991.2 |
|
|
|
|
||
LIABILITIES AND EQUITY |
|
|
|
||
Accounts payable |
$ |
245.7 |
|
$ |
280.7 |
Accrued expenses and other current liabilities |
|
391.5 |
|
|
410.3 |
Short-term borrowings and current maturities of long-term debt |
|
12.6 |
|
|
12.6 |
Total current liabilities |
|
649.8 |
|
|
703.6 |
Long-term debt |
|
2,005.1 |
|
|
2,081.9 |
Other noncurrent liabilities |
|
296.8 |
|
|
261.2 |
Equity |
|
1,231.4 |
|
|
944.5 |
Total liabilities and equity |
$ |
4,183.1 |
|
$ |
3,991.2 |
ALLEGION PLC Condensed and Consolidated Statements of Cash Flows (In millions)
UNAUDITED |
|||||||
|
Nine months ended September 30, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Operating Activities |
|
|
|
||||
Net earnings |
$ |
422.0 |
|
|
$ |
322.9 |
|
Depreciation and amortization |
|
83.7 |
|
|
|
69.6 |
|
Changes in assets and liabilities and other non-cash items |
|
(124.6 |
) |
|
|
(125.4 |
) |
Net cash provided by operating activities |
|
381.1 |
|
|
|
267.1 |
|
|
|
|
|
||||
Investing Activities |
|
|
|
||||
Capital expenditures |
|
(60.7 |
) |
|
|
(41.5 |
) |
Acquisition of businesses, net of cash acquired |
|
(31.7 |
) |
|
|
(923.1 |
) |
Other investing activities, net |
|
9.0 |
|
|
|
(1.3 |
) |
Net cash used in investing activities |
|
(83.4 |
) |
|
|
(965.9 |
) |
|
|
|
|
||||
Financing Activities |
|
|
|
||||
Net (repayments of) proceeds from debt |
|
(78.5 |
) |
|
|
789.6 |
|
Debt financing costs |
|
— |
|
|
|
(10.2 |
) |
Dividends paid to ordinary shareholders |
|
(119.2 |
) |
|
|
(107.9 |
) |
Repurchase of ordinary shares |
|
(19.9 |
) |
|
|
(61.0 |
) |
Other financing activities, net |
|
(2.3 |
) |
|
|
(4.4 |
) |
Net cash (used in) provided by financing activities |
|
(219.9 |
) |
|
|
606.1 |
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
(1.5 |
) |
|
|
(23.0 |
) |
Net increase (decrease) in cash and cash equivalents |
|
76.3 |
|
|
|
(115.7 |
) |
Cash and cash equivalents - beginning of period |
|
288.0 |
|
|
|
397.9 |
|
Cash and cash equivalents - end of period |
$ |
364.3 |
|
|
$ |
282.2 |
|
SUPPLEMENTAL SCHEDULES
ALLEGION PLC |
SCHEDULE 1 |
||||||||||||||
SELECTED OPERATING SEGMENT INFORMATION (In millions)
Due to a reporting change effective January 1, 2023, results for the Company's Global Portable Security brands (inclusive of the AXA, Kryptonite and Trelock businesses) are now fully reflected within the Allegion International segment. Accordingly, the summary of Net revenues and Operating income (loss) by reportable segment as presented below for the three and nine months ended September 30, 2022, has been recast to conform with the current year presentation. |
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|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenues |
|
|
|
|
|
|
|
||||||||
Allegion Americas |
$ |
740.9 |
|
|
$ |
741.9 |
|
|
$ |
2,209.0 |
|
|
$ |
1,851.1 |
|
Allegion International |
|
177.0 |
|
|
|
171.8 |
|
|
|
544.4 |
|
|
|
559.3 |
|
Total net revenues |
$ |
917.9 |
|
|
$ |
913.7 |
|
|
$ |
2,753.4 |
|
|
$ |
2,410.4 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
|
|
|
|
|
|
||||||||
Allegion Americas |
$ |
200.2 |
|
|
$ |
178.5 |
|
|
$ |
582.2 |
|
|
$ |
454.4 |
|
Allegion International |
|
15.7 |
|
|
|
14.8 |
|
|
|
40.2 |
|
|
|
47.4 |
|
Corporate unallocated |
|
(22.8 |
) |
|
|
(30.4 |
) |
|
|
(73.7 |
) |
|
|
(74.8 |
) |
Total operating income |
$ |
193.1 |
|
|
$ |
162.9 |
|
|
$ |
548.7 |
|
|
$ |
427.0 |
|
ALLEGION PLC |
SCHEDULE 2 |
The Company presents operating income, operating margin, net earnings and diluted earnings per share (EPS) on both a
The Company defines the presented non-GAAP measures as follows:
These non-GAAP measures may not be defined and calculated the same as similar measures used by other companies.
RECONCILIATION OF GAAP TO NON-GAAP NET EARNINGS
(In millions, except per share data) |
|||||||||||||||||||||
|
Three months ended September 30, 2023 |
|
Three months ended September 30, 2022 |
||||||||||||||||||
|
Reported |
|
Adjustments |
|
Adjusted
|
|
Reported |
|
Adjustments |
|
Adjusted
|
||||||||||
Net revenues |
$ |
917.9 |
|
|
$ |
— |
|
$ |
917.9 |
|
|
$ |
913.7 |
|
|
$ |
— |
|
$ |
913.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income |
|
193.1 |
|
|
|
20.3 |
(1) |
|
213.4 |
|
|
|
162.9 |
|
|
|
39.4 |
(1) |
|
202.3 |
|
Operating margin |
|
21.0 |
% |
|
|
|
|
23.2 |
% |
|
|
17.8 |
% |
|
|
|
|
22.1 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before income taxes |
|
170.1 |
|
|
|
20.3 |
(2) |
|
190.4 |
|
|
|
133.7 |
|
|
|
47.0 |
(2) |
|
180.7 |
|
Provision for income taxes |
|
13.7 |
|
|
|
5.1 |
(3) |
|
18.8 |
|
|
|
19.1 |
|
|
|
8.8 |
(3) |
|
27.9 |
|
Effective income tax rate |
|
8.1 |
% |
|
|
|
|
9.9 |
% |
|
|
14.3 |
% |
|
|
|
|
15.4 |
% |
||
Net earnings |
|
156.4 |
|
|
|
15.2 |
|
|
171.6 |
|
|
|
114.6 |
|
|
|
38.2 |
|
|
152.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noncontrolling interests |
|
0.1 |
|
|
|
— |
|
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings attributable to Allegion plc |
$ |
156.3 |
|
|
$ |
15.2 |
|
$ |
171.5 |
|
|
$ |
114.6 |
|
|
$ |
38.2 |
|
$ |
152.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per ordinary share attributable to |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allegion plc shareholders: |
$ |
1.77 |
|
|
$ |
0.17 |
|
$ |
1.94 |
|
|
$ |
1.30 |
|
|
$ |
0.43 |
|
$ |
1.73 |
|
| (1) |
Adjustments to operating income for the three months ended September 30, 2023, consist of |
|
| (2) |
Adjustments to earnings before income taxes for the three months ended September 30, 2023, consist of the adjustments to operating income discussed above. Adjustments to earnings before income taxes for the three months ended September 30, 2022, consist of the adjustments to operating income discussed above, as well as a |
|
| (3) |
Adjustments to the provision for income taxes for the three months ended September 30, 2023, and 2022, consist of |
|
Nine months ended September 30, 2023 |
|
Nine months ended September 30, 2022 |
||||||||||||||||||
|
Reported |
|
Adjustments |
|
Adjusted
|
|
Reported |
|
Adjustments |
|
Adjusted
|
||||||||||
Net revenues |
$ |
2,753.4 |
|
|
$ |
— |
|
$ |
2,753.4 |
|
|
$ |
2,410.4 |
|
|
$ |
— |
|
$ |
2,410.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income |
|
548.7 |
|
|
|
59.7 |
(1) |
|
608.4 |
|
|
|
427.0 |
|
|
|
66.2 |
(1) |
|
493.2 |
|
Operating margin |
|
19.9 |
% |
|
|
|
|
22.1 |
% |
|
|
17.7 |
% |
|
|
|
|
20.5 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before income taxes |
|
480.3 |
|
|
|
59.7 |
(2) |
|
540.0 |
|
|
|
374.3 |
|
|
|
72.1 |
(2) |
|
446.4 |
|
Provision for income taxes |
|
58.3 |
|
|
|
15.1 |
(3) |
|
73.4 |
|
|
|
51.4 |
|
|
|
15.5 |
(3) |
|
66.9 |
|
Effective income tax rate |
|
12.1 |
% |
|
|
|
|
13.6 |
% |
|
|
13.7 |
% |
|
|
|
|
15.0 |
% |
||
Net earnings |
|
422.0 |
|
|
|
44.6 |
|
|
466.6 |
|
|
|
322.9 |
|
|
|
56.6 |
|
|
379.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noncontrolling interests |
|
0.2 |
|
|
|
0.1 |
|
|
0.3 |
|
|
|
0.2 |
|
|
|
— |
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings attributable to Allegion plc |
$ |
421.8 |
|
|
$ |
44.5 |
|
$ |
466.3 |
|
|
$ |
322.7 |
|
|
$ |
56.6 |
|
$ |
379.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per ordinary share attributable to |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allegion plc shareholders: |
$ |
4.78 |
|
|
$ |
0.50 |
|
$ |
5.28 |
|
|
$ |
3.65 |
|
|
$ |
0.64 |
|
$ |
4.29 |
|
| (1) |
Adjustments to operating income for the nine months ended September 30, 2023, consist of |
|
| (2) |
Adjustments to earnings before income taxes for the nine months ended September 30, 2023, consist of the adjustments to operating income discussed above. Adjustments to operating income for the nine months ended September 30, 2022, consist of the adjustments to operating income discussed above, as well as |
|
| (3) |
Adjustments to the provision for income taxes for the nine months ended September 30, 2023, and 2022, consist of |
ALLEGION PLC |
SCHEDULE 3 |
RECONCILIATION OF GAAP TO NON-GAAP REVENUE AND OPERATING INCOME BY REGION (In millions) |
|||||||||||||
|
Three months ended September 30, 2023 |
|
Three months ended September 30, 2022 |
||||||||||
|
As Reported |
|
Margin |
|
As Reported |
|
Margin |
||||||
Allegion Americas |
|
|
|
|
|
|
|
||||||
Net revenues (GAAP) |
$ |
740.9 |
|
|
|
|
$ |
741.9 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Operating income (GAAP) |
$ |
200.2 |
|
|
27.0 |
% |
|
$ |
178.5 |
|
|
24.1 |
% |
Restructuring charges |
|
0.8 |
|
|
0.1 |
% |
|
|
— |
|
|
— |
% |
Acquisition and integration costs |
|
1.1 |
|
|
0.2 |
% |
|
|
5.9 |
|
|
0.8 |
% |
Amortization of acquired intangible assets |
|
8.5 |
|
|
1.1 |
% |
|
|
10.4 |
|
|
1.4 |
% |
Amortization of inventory step-up |
|
— |
|
|
— |
% |
|
|
5.5 |
|
|
0.7 |
% |
Adjusted operating income |
|
210.6 |
|
|
28.4 |
% |
|
|
200.3 |
|
|
27.0 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
8.5 |
|
|
1.2 |
% |
|
|
8.3 |
|
|
1.1 |
% |
Adjusted EBITDA |
$ |
219.1 |
|
|
29.6 |
% |
|
$ |
208.6 |
|
|
28.1 |
% |
|
|
|
|
|
|
|
|
||||||
Allegion International |
|
|
|
|
|
|
|
||||||
Net revenues (GAAP) |
$ |
177.0 |
|
|
|
|
$ |
171.8 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Operating income (GAAP) |
$ |
15.7 |
|
|
8.9 |
% |
|
$ |
14.8 |
|
|
8.6 |
% |
Restructuring charges |
|
2.1 |
|
|
1.2 |
% |
|
|
0.2 |
|
|
0.1 |
% |
Acquisition and integration costs |
|
— |
|
|
— |
% |
|
|
0.3 |
|
|
0.2 |
% |
Amortization of acquired intangible assets |
|
5.9 |
|
|
3.3 |
% |
|
|
4.7 |
|
|
2.7 |
% |
Adjusted operating income |
|
23.7 |
|
|
13.4 |
% |
|
|
20.0 |
|
|
11.6 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
4.4 |
|
|
2.5 |
% |
|
|
4.0 |
|
|
2.4 |
% |
Adjusted EBITDA |
$ |
28.1 |
|
|
15.9 |
% |
|
$ |
24.0 |
|
|
14.0 |
% |
|
|
|
|
|
|
|
|
||||||
Corporate |
|
|
|
|
|
|
|
||||||
Operating loss (GAAP) |
$ |
(22.8 |
) |
|
|
|
$ |
(30.4 |
) |
|
|
||
Acquisition and integration costs |
|
1.9 |
|
|
|
|
|
12.4 |
|
|
|
||
Adjusted operating loss |
|
(20.9 |
) |
|
|
|
|
(18.0 |
) |
|
|
||
Depreciation and amortization of nonacquired intangible assets |
|
0.3 |
|
|
|
|
|
0.8 |
|
|
|
||
Adjusted EBITDA |
$ |
(20.6 |
) |
|
|
|
$ |
(17.2 |
) |
|
|
||
|
|
|
|
|
|
|
|
||||||
Total |
|
|
|
|
|
|
|
||||||
Net revenues |
$ |
917.9 |
|
|
|
|
$ |
913.7 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Adjusted operating income |
$ |
213.4 |
|
|
23.2 |
% |
|
$ |
202.3 |
|
|
22.1 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
13.2 |
|
|
1.5 |
% |
|
|
13.1 |
|
|
1.5 |
% |
Adjusted EBITDA |
$ |
226.6 |
|
|
24.7 |
% |
|
$ |
215.4 |
|
|
23.6 |
% |
|
Nine months ended September 30, 2023 |
|
Nine months ended September 30, 2022 |
||||||||||
|
As Reported |
|
Margin |
|
As Reported |
|
Margin |
||||||
Allegion Americas |
|
|
|
|
|
|
|
||||||
Net revenues (GAAP) |
$ |
2,209.0 |
|
|
|
|
$ |
1,851.1 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Operating income (GAAP) |
$ |
582.2 |
|
|
26.4 |
% |
|
$ |
454.4 |
|
|
24.5 |
% |
Restructuring charges |
|
0.8 |
|
|
— |
% |
|
|
— |
|
|
— |
% |
Acquisition and integration costs |
|
6.3 |
|
|
0.3 |
% |
|
|
5.9 |
|
|
0.4 |
% |
Amortization of acquired intangible assets |
|
25.3 |
|
|
1.1 |
% |
|
|
13.7 |
|
|
0.7 |
% |
Amortization of inventory step-up |
|
— |
|
|
— |
% |
|
|
5.5 |
|
|
0.3 |
% |
Adjusted operating income |
|
614.6 |
|
|
27.8 |
% |
|
|
479.5 |
|
|
25.9 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
24.9 |
|
|
1.1 |
% |
|
|
22.8 |
|
|
1.2 |
% |
Adjusted EBITDA |
$ |
639.5 |
|
|
28.9 |
% |
|
$ |
502.3 |
|
|
27.1 |
% |
|
|
|
|
|
|
|
|
||||||
Allegion International |
|
|
|
|
|
|
|
||||||
Net revenues (GAAP) |
$ |
544.4 |
|
|
|
|
$ |
559.3 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Operating income (GAAP) |
$ |
40.2 |
|
|
7.4 |
% |
|
$ |
47.4 |
|
|
8.5 |
% |
Restructuring charges |
|
6.8 |
|
|
1.2 |
% |
|
|
4.7 |
|
|
0.8 |
% |
Acquisition and integration costs |
|
0.4 |
|
|
0.1 |
% |
|
|
0.4 |
|
|
0.1 |
% |
Amortization of acquired intangible assets |
|
16.9 |
|
|
3.1 |
% |
|
|
14.9 |
|
|
2.7 |
% |
Adjusted operating income |
|
64.3 |
|
|
11.8 |
% |
|
|
67.4 |
|
|
12.1 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
13.5 |
|
|
2.5 |
% |
|
|
12.8 |
|
|
2.2 |
% |
Adjusted EBITDA |
$ |
77.8 |
|
|
14.3 |
% |
|
$ |
80.2 |
|
|
14.3 |
% |
|
|
|
|
|
|
|
|
||||||
Corporate |
|
|
|
|
|
|
|
||||||
Operating loss (GAAP) |
$ |
(73.7 |
) |
|
|
|
$ |
(74.8 |
) |
|
|
||
Acquisition and integration costs |
|
3.2 |
|
|
|
|
|
21.1 |
|
|
|
||
Adjusted operating loss |
|
(70.5 |
) |
|
|
|
|
(53.7 |
) |
|
|
||
Depreciation and amortization of nonacquired intangible assets |
|
1.2 |
|
|
|
|
|
2.4 |
|
|
|
||
Adjusted EBITDA |
$ |
(69.3 |
) |
|
|
|
$ |
(51.3 |
) |
|
|
||
|
|
|
|
|
|
|
|
||||||
Total |
|
|
|
|
|
|
|
||||||
Net revenues |
$ |
2,753.4 |
|
|
|
|
$ |
2,410.4 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Adjusted operating income |
$ |
608.4 |
|
|
22.1 |
% |
|
$ |
493.2 |
|
|
20.5 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
39.6 |
|
|
1.4 |
% |
|
|
38.0 |
|
|
1.5 |
% |
Adjusted EBITDA |
$ |
648.0 |
|
|
23.5 |
% |
|
$ |
531.2 |
|
|
22.0 |
% |
ALLEGION PLC |
SCHEDULE 4 |
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO AVAILABLE CASH FLOW AND NET EARNINGS TO ADJUSTED EBITDA (In millions) |
|||||||
|
Nine months ended September 30, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by operating activities |
$ |
381.1 |
|
|
$ |
267.1 |
|
Capital expenditures |
|
(60.7 |
) |
|
|
(41.5 |
) |
Available cash flow |
$ |
320.4 |
|
|
$ |
225.6 |
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|||||||||||
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net earnings (GAAP) |
$ |
156.4 |
|
$ |
114.6 |
|
|
$ |
422.0 |
|
|
$ |
322.9 |
|
Provision for income taxes |
|
13.7 |
|
|
19.1 |
|
|
|
58.3 |
|
|
|
51.4 |
|
Interest expense |
|
22.9 |
|
|
23.1 |
|
|
|
70.2 |
|
|
|
52.2 |
|
Amortization of acquired intangible assets |
|
14.4 |
|
|
15.1 |
|
|
|
42.2 |
|
|
|
28.6 |
|
Amortization of inventory step-up |
|
— |
|
|
5.5 |
|
|
|
— |
|
|
|
5.5 |
|
Depreciation and amortization of nonacquired intangible assets |
|
13.2 |
|
|
13.1 |
|
|
|
39.6 |
|
|
|
38.0 |
|
EBITDA |
|
220.6 |
|
|
190.5 |
|
|
|
632.3 |
|
|
|
498.6 |
|
|
|
|
|
|
|
|
|
|||||||
Other expense (income), net |
|
0.1 |
|
|
(1.5 |
) |
|
|
(1.8 |
) |
|
|
(7.1 |
) |
Loss on divestitures |
|
— |
|
|
7.6 |
|
|
|
— |
|
|
|
7.6 |
|
Acquisition and integration costs and restructuring charges |
|
5.9 |
|
|
18.8 |
|
|
|
17.5 |
|
|
|
32.1 |
|
Adjusted EBITDA |
$ |
226.6 |
|
$ |
215.4 |
|
|
$ |
648.0 |
|
|
$ |
531.2 |
|
ALLEGION PLC |
SCHEDULE 5 |
RECONCILIATION OF GAAP REVENUE GROWTH TO NON-GAAP ORGANIC REVENUE GROWTH BY REGION |
|||||||||||
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||
Allegion Americas |
|
|
|
|
|
|
|
||||
Revenue growth (GAAP) |
(0.1 |
)% |
|
43.1 |
% |
|
19.3 |
% |
|
18.8 |
% |
Acquisitions |
— |
% |
|
(17.1 |
)% |
|
(10.8 |
)% |
|
(5.6 |
)% |
Currency translation effects |
0.1 |
% |
|
0.2 |
% |
|
0.3 |
% |
|
0.1 |
% |
Organic growth (non-GAAP) |
— |
% |
|
26.2 |
% |
|
8.8 |
% |
|
13.3 |
% |
|
|
|
|
|
|
|
|
||||
Allegion International |
|
|
|
|
|
|
|
||||
Revenue growth (GAAP) |
3.0 |
% |
|
(13.5 |
)% |
|
(2.7 |
)% |
|
(7.3 |
)% |
Acquisitions and divestitures |
(0.6 |
)% |
|
(0.1 |
)% |
|
— |
% |
|
0.1 |
% |
Currency translation effects |
(5.2 |
)% |
|
12.5 |
% |
|
(0.2 |
)% |
|
10.1 |
% |
Organic growth (non-GAAP) |
(2.8 |
)% |
|
(1.1 |
)% |
|
(2.9 |
)% |
|
2.9 |
% |
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
||||
Revenue growth (GAAP) |
0.5 |
% |
|
27.4 |
% |
|
14.2 |
% |
|
11.7 |
% |
Acquisitions and divestitures |
(0.1 |
)% |
|
(12.4 |
)% |
|
(8.3 |
)% |
|
(4.1 |
)% |
Currency translation effects |
(1.0 |
)% |
|
3.6 |
% |
|
0.2 |
% |
|
2.9 |
% |
Organic growth (non-GAAP) |
(0.6 |
)% |
|
18.6 |
% |
|
6.1 |
% |
|
10.5 |
% |
ALLEGION PLC |
SCHEDULE 6 |
RECONCILIATION OF NET EARNINGS TO ADJUSTED EBITDA |
||||||||||
|
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
TTM 2023 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings |
175.2 |
153.9 |
229.1 |
273.3 |
434.9 |
401.8 |
314.3 |
483.0 |
458.0 |
557.1 |
Adjustments to arrive at operating income: |
|
|
|
|
|
|
|
|
|
|
Income tax provision |
84.2 |
54.6 |
63.8 |
119.0 |
39.8 |
73.1 |
50.9 |
40.7 |
56.2 |
63.1 |
Interest expense (income), net |
53.8 |
52.9 |
64.3 |
105.7 |
54.0 |
56.0 |
51.1 |
50.2 |
75.9 |
93.9 |
Other (income)/expense, net |
4.6 |
104.0 |
75.0 |
(8.9) |
(3.4) |
33.9 |
(13.0) |
(44.1) |
(4.0) |
(6.3) |
Noncontrolling interests |
(2.6) |
0.4 |
2.1 |
3.4 |
0.5 |
0.3 |
0.2 |
0.4 |
0.3 |
0.3 |
Discontinued operations |
11.1 |
0.4 |
— |
— |
— |
— |
— |
— |
— |
— |
Operating Income |
326.3 |
366.2 |
434.3 |
492.5 |
525.8 |
565.1 |
403.5 |
530.2 |
586.4 |
708.1 |
% margin |
15.4 % |
17.7 % |
19.4 % |
20.5 % |
19.2 % |
19.8 % |
14.8 % |
18.5 % |
17.9 % |
19.6 % |
|
|
|
|
|
|
|
|
|
|
|
Restructuring and Other Costs |
7.1 |
16.1 |
10.8 |
13.9 |
6.5 |
20.4 |
26.8 |
5.1 |
4.9 |
7.8 |
Spin Costs |
29.3 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
M&A Costs |
— |
17.8 |
2.7 |
4.6 |
10.0 |
2.0 |
2.4 |
4.4 |
30.5 |
13.1 |
Backlog Amortization |
— |
— |
— |
— |
6.3 |
— |
— |
— |
8.8 |
11.0 |
Amortization of Acquired Intangibles |
9.3 |
11.5 |
19.4 |
20.6 |
28.4 |
29.7 |
29.6 |
28.7 |
35.4 |
46.6 |
Inventory Step Up (Access Technologies) |
— |
— |
— |
— |
— |
— |
— |
— |
6.0 |
0.5 |
Goodwill and Intangible asset Impairment |
— |
— |
— |
— |
— |
5.9 |
101.7 |
— |
— |
— |
Loss on asset held for sale (QMI) |
— |
— |
— |
— |
— |
— |
37.9 |
— |
— |
— |
Venezuela Inventory Impairment |
33.3 |
4.2 |
— |
— |
— |
— |
— |
— |
— |
— |
Adjusted Operating Income |
405.3 |
415.8 |
467.2 |
531.6 |
577.0 |
623.1 |
601.9 |
568.4 |
672.0 |
787.1 |
% margin |
19.1 % |
20.1 % |
20.9 % |
22.1 % |
21.1 % |
21.8 % |
22.1 % |
19.8 % |
20.5 % |
21.8 % |
Depreciation & amortization |
34.9 |
37.3 |
42.0 |
41.0 |
47.6 |
48.4 |
48.4 |
50.0 |
50.9 |
52.6 |
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
% margin |
20.8 % |
21.9 % |
22.8 % |
23.8 % |
22.9 % |
23.5 % |
23.9 % |
21.6 % |
22.1 % |
23.2 % |
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20231031620111/en/
Media Contact:
Whitney Moorman – Reputation Management Leader
317-810-3241
Whitney.Moorman@allegion.com
Analyst Contact:
Jobi Coyle – Director, Investor Relations
317-810-3107
Jobi.Coyle@allegion.com
Source: Allegion plc
FAQ
What were Allegion's net earnings per share (EPS) in the third quarter?
What was the change in revenues for Allegion in the third quarter?
What is Allegion's updated full-year adjusted EPS outlook?
