Allegion (NYSE: ALLE) Reports Q1-2024 Financial Results
First quarter marked by strong execution; Company affirms full-year outlook
Quarterly Financial Highlights
(All comparisons against the first quarter of 2023, unless otherwise noted)
-
Net earnings per share (EPS) of
$1.41 , up 0.7% compared with$1.40 ; Adjusted EPS of$1.55 , down 1.9% compared with$1.58 -
Revenues of
$893.9 million , down 3.2% on a reported basis and down 3.6% on an organic basis - Operating margin of 19.3%, compared with 18.5%; Adjusted operating margin of 21.2%, up 40 basis points compared with 20.8%
Full-Year Outlook Highlights
- Affirming full-year reported revenue growth, organic revenue growth, reported EPS, adjusted EPS and available cash flow
“Allegion’s Q1 performance sets a solid foundation for the year,” said
“Continuing Allegion’s history of balanced capital allocation, we acquired Boss Door Controls and Dorcas in the quarter, while also returning cash to our shareholders in dividends and share repurchases.”
“Institutional markets remain healthy, our company is performing well, and we’re affirming our full-year 2024 guidance.”
Company Results
(All comparisons against the first quarter of 2023, unless otherwise noted)
First-quarter 2024 net revenues decreased 3.2%. Net revenues decreased 3.6% on an organic basis, excluding impacts of acquisitions, divestitures and foreign currency movements. The reported revenue reflects a modest positive impact from foreign currency and acquisitions.
First-quarter 2024 operating income was
First-quarter 2024 operating margin was 19.3%, compared with 18.5%. The adjusted operating margin in first-quarter 2024 was 21.2%, compared with 20.8%. The 40-basis-point increase in adjusted operating margin is attributable to positive price and productivity net of inflation and investments. These increases were partially offset by lower volumes.
Segment Results
(All comparisons against the first quarter of 2023, unless otherwise noted)
The
The International segment revenues increased 1.4% (down 0.8% on an organic basis). Positive price realization was more than offset by the impact of soft end markets. The reported revenue reflects a positive impact from foreign currency and acquisitions.
Additional Items
(All comparisons against the first quarter of 2023, unless otherwise noted)
Interest expense for first-quarter 2024 was
Other income, net for first-quarter 2024 was
The company’s effective tax rate for first-quarter 2024 was 19.0%, compared with 16.3%. The company’s adjusted effective tax rate for first-quarter 2024 was 19.5%, compared with 17.4%.
Cash Flow and Liquidity
Year-to-date available cash flow for 2024 was
Share Repurchase and Dividends
In the first quarter of 2024, the company repurchased approximately 0.3 million shares for approximately
Affirmed Full-Year Outlook
(All comparisons against full-year 2023, unless otherwise noted)
The company affirms its previously disclosed full-year 2024 outlook: Full-year 2024 revenues are expected to increase 1.5% to 3.5% on a reported basis and increase 1% to 3% organically, after excluding the expected impacts of acquisitions, divestitures and foreign currency movements.
Full-year 2024 reported EPS is expected to be in the range of
Adjustments to 2024 EPS include estimated impacts of approximately
The outlook assumes an average diluted share count for the full year of approximately 88 million shares.
The company expects full-year available cash flow of approximately
Conference Call Information
On
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
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, effective tax rate, 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”, “Affirmed Full-Year Outlook” and statements regarding the company's 2024 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
|
|||||||
Condensed and Consolidated Income Statements |
|||||||
(In millions, except per share data) |
|||||||
UNAUDITED |
|||||||
|
Three months ended |
||||||
|
2024 |
|
2023 |
||||
|
|
|
|
||||
Net revenues |
$ |
893.9 |
|
|
$ |
923.0 |
|
Cost of goods sold |
|
502.5 |
|
|
|
532.0 |
|
Gross profit |
|
391.4 |
|
|
|
391.0 |
|
|
|
|
|
||||
Selling and administrative expenses |
|
219.3 |
|
|
|
220.0 |
|
Operating income |
|
172.1 |
|
|
|
171.0 |
|
|
|
|
|
||||
Interest expense |
|
22.9 |
|
|
|
23.6 |
|
Other income, net |
|
(3.7 |
) |
|
|
(0.3 |
) |
Earnings before income taxes |
|
152.9 |
|
|
|
147.7 |
|
|
|
|
|
||||
Provision for income taxes |
|
29.1 |
|
|
|
24.1 |
|
Net earnings |
|
123.8 |
|
|
|
123.6 |
|
|
|
|
|
||||
Less: Net earnings attributable to noncontrolling interests |
|
— |
|
|
|
0.1 |
|
|
|
|
|
||||
Net earnings attributable to |
$ |
123.8 |
|
|
$ |
123.5 |
|
|
|
|
|
||||
Basic earnings per ordinary share |
|
|
|
||||
attributable to |
$ |
1.41 |
|
|
$ |
1.40 |
|
|
|
|
|
||||
Diluted earnings per ordinary share |
|
|
|
||||
attributable to |
$ |
1.41 |
|
|
$ |
1.40 |
|
|
|
|
|
||||
Shares outstanding - basic |
|
87.6 |
|
|
|
88.0 |
|
Shares outstanding - diluted |
|
88.1 |
|
|
|
88.4 |
|
|
|||||
Condensed and Consolidated Balance Sheets |
|||||
(In millions) |
|||||
UNAUDITED |
|||||
|
|
|
|
||
ASSETS |
|
|
|
||
Cash and cash equivalents |
$ |
391.8 |
|
$ |
468.1 |
Accounts and notes receivables, net |
|
448.0 |
|
|
412.8 |
Inventories |
|
448.3 |
|
|
438.5 |
Other current assets |
|
50.2 |
|
|
41.5 |
Total current assets |
|
1,338.3 |
|
|
1,360.9 |
Property, plant and equipment, net |
|
362.0 |
|
|
358.1 |
|
|
1,436.4 |
|
|
1,443.1 |
Intangible assets, net |
|
565.8 |
|
|
572.8 |
Other noncurrent assets |
|
584.4 |
|
|
576.6 |
Total assets |
$ |
4,286.9 |
|
$ |
4,311.5 |
|
|
|
|
||
LIABILITIES AND EQUITY |
|
|
|
||
Accounts payable |
$ |
247.5 |
|
$ |
259.2 |
Accrued expenses and other current liabilities |
|
364.7 |
|
|
407.9 |
Short-term borrowings and current maturities of long-term debt |
|
413.2 |
|
|
412.6 |
Total current liabilities |
|
1,025.4 |
|
|
1,079.7 |
Long-term debt |
|
1,600.1 |
|
|
1,602.4 |
Other noncurrent liabilities |
|
310.5 |
|
|
311.1 |
Equity |
|
1,350.9 |
|
|
1,318.3 |
Total liabilities and equity |
$ |
4,286.9 |
|
$ |
4,311.5 |
|
|||||||
Condensed and Consolidated Statements of Cash Flows |
|||||||
(In millions) |
|||||||
UNAUDITED |
|||||||
|
Three months ended |
||||||
|
2024 |
|
2023 |
||||
Operating Activities |
|
|
|
||||
Net earnings |
$ |
123.8 |
|
|
$ |
123.6 |
|
Depreciation and amortization |
|
28.8 |
|
|
|
28.3 |
|
Changes in assets and liabilities and other non-cash items |
|
(101.5 |
) |
|
|
(82.9 |
) |
Net cash provided by operating activities |
|
51.1 |
|
|
|
69.0 |
|
|
|
|
|
||||
Investing Activities |
|
|
|
||||
Capital expenditures |
|
(27.2 |
) |
|
|
(22.3 |
) |
Acquisition of businesses, net of cash acquired |
|
(19.3 |
) |
|
|
(36.6 |
) |
Other investing activities, net |
|
3.1 |
|
|
|
7.5 |
|
Net cash used in investing activities |
|
(43.4 |
) |
|
|
(51.4 |
) |
|
|
|
|
||||
Financing Activities |
|
|
|
||||
Net (repayments of) proceeds from debt |
|
(3.2 |
) |
|
|
26.9 |
|
Dividends paid to ordinary shareholders |
|
(42.1 |
) |
|
|
(39.4 |
) |
Repurchase of ordinary shares |
|
(40.0 |
) |
|
|
— |
|
Other financing activities, net |
|
5.3 |
|
|
|
(2.9 |
) |
Net cash used in financing activities |
|
(80.0 |
) |
|
|
(15.4 |
) |
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
(4.0 |
) |
|
|
2.6 |
|
Net (decrease) increase in cash and cash equivalents |
|
(76.3 |
) |
|
|
4.8 |
|
Cash and cash equivalents - beginning of period |
|
468.1 |
|
|
|
288.0 |
|
Cash and cash equivalents - end of period |
$ |
391.8 |
|
|
$ |
292.8 |
|
SUPPLEMENTAL SCHEDULES |
|
|
SCHEDULE 1 |
SELECTED OPERATING SEGMENT INFORMATION |
|||||||
(In millions) |
|||||||
|
Three months ended |
||||||
|
2024 |
|
2023 |
||||
Net revenues |
|
|
|
||||
Allegion Americas |
$ |
709.3 |
|
|
$ |
740.9 |
|
|
|
184.6 |
|
|
|
182.1 |
|
Total net revenues |
$ |
893.9 |
|
|
$ |
923.0 |
|
|
|
|
|
||||
Operating income (loss) |
|
|
|
||||
Allegion Americas |
$ |
187.0 |
|
|
$ |
186.6 |
|
|
|
13.0 |
|
|
|
10.6 |
|
Corporate unallocated |
|
(27.9 |
) |
|
|
(26.2 |
) |
Total operating income |
$ |
172.1 |
|
|
$ |
171.0 |
|
|
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 |
|
Three months ended |
||||||||||||||||||
|
Reported |
|
Adjustments |
|
Adjusted (non-GAAP) |
|
Reported |
|
Adjustments |
|
Adjusted (non-GAAP) |
||||||||||
Net revenues |
$ |
893.9 |
|
|
$ |
— |
|
$ |
893.9 |
|
|
$ |
923.0 |
|
|
$ |
— |
|
$ |
923.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income |
|
172.1 |
|
|
|
17.2 |
(1) |
|
189.3 |
|
|
|
171.0 |
|
|
|
21.4 |
(1) |
|
192.4 |
|
Operating margin |
|
19.3 |
% |
|
|
|
|
21.2 |
% |
|
|
18.5 |
% |
|
|
|
|
20.8 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before income taxes |
|
152.9 |
|
|
|
17.2 |
(2) |
|
170.1 |
|
|
|
147.7 |
|
|
|
21.4 |
(2) |
|
169.1 |
|
Provision for income taxes |
|
29.1 |
|
|
|
4.1 |
(3) |
|
33.2 |
|
|
|
24.1 |
|
|
|
5.4 |
(3) |
|
29.5 |
|
Effective income tax rate |
|
19.0 |
% |
|
|
|
|
19.5 |
% |
|
|
16.3 |
% |
|
|
|
|
17.4 |
% |
||
Net earnings |
|
123.8 |
|
|
|
13.1 |
|
|
136.9 |
|
|
|
123.6 |
|
|
|
16.0 |
|
|
139.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noncontrolling interests |
|
— |
|
|
|
— |
|
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings attributable to |
$ |
123.8 |
|
|
$ |
13.1 |
|
$ |
136.9 |
|
|
$ |
123.5 |
|
|
$ |
16.0 |
|
$ |
139.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per ordinary share attributable to |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
$ |
1.41 |
|
|
$ |
0.14 |
|
$ |
1.55 |
|
|
$ |
1.40 |
|
|
$ |
0.18 |
|
$ |
1.58 |
|
(1) | Adjustments to operating income for the three months ended |
|
(2) | Adjustments to earnings before income taxes for the three months ended |
|
(3) | Adjustments to the provision for income taxes for the three months ended |
|
SCHEDULE 3 |
RECONCILIATION OF GAAP TO NON-GAAP REVENUE AND OPERATING INCOME BY REGION |
|||||||||||||
(In millions) |
|||||||||||||
|
Three months ended |
|
Three months ended |
||||||||||
|
As Reported |
|
Margin |
|
As Reported |
|
Margin |
||||||
Allegion Americas |
|
|
|
|
|
|
|
||||||
Net revenues (GAAP) |
$ |
709.3 |
|
|
|
|
$ |
740.9 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Operating income (GAAP) |
$ |
187.0 |
|
|
26.4 |
% |
|
$ |
186.6 |
|
|
25.2 |
% |
Restructuring charges |
|
0.1 |
|
|
— |
% |
|
|
— |
|
|
— |
% |
Acquisition and integration costs |
|
1.9 |
|
|
0.3 |
% |
|
|
3.1 |
|
|
0.4 |
% |
Amortization of acquired intangible assets |
|
8.3 |
|
|
1.2 |
% |
|
|
8.4 |
|
|
1.1 |
% |
Adjusted operating income |
|
197.3 |
|
|
27.9 |
% |
|
|
198.1 |
|
|
26.7 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
9.2 |
|
|
1.3 |
% |
|
|
8.2 |
|
|
1.1 |
% |
Adjusted EBITDA |
$ |
206.5 |
|
|
29.2 |
% |
|
$ |
206.3 |
|
|
27.8 |
% |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
Net revenues (GAAP) |
$ |
184.6 |
|
|
|
|
$ |
182.1 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Operating income (GAAP) |
$ |
13.0 |
|
|
7.0 |
% |
|
$ |
10.6 |
|
|
5.8 |
% |
Restructuring charges |
|
0.3 |
|
|
0.2 |
% |
|
|
3.2 |
|
|
1.8 |
% |
Acquisition and integration costs |
|
0.4 |
|
|
0.2 |
% |
|
|
0.2 |
|
|
0.1 |
% |
Amortization of acquired intangible assets |
|
5.6 |
|
|
3.0 |
% |
|
|
5.7 |
|
|
3.1 |
% |
Adjusted operating income |
|
19.3 |
|
|
10.4 |
% |
|
|
19.7 |
|
|
10.8 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
4.6 |
|
|
2.5 |
% |
|
|
4.7 |
|
|
2.6 |
% |
Adjusted EBITDA |
$ |
23.9 |
|
|
12.9 |
% |
|
$ |
24.4 |
|
|
13.4 |
% |
|
|
|
|
|
|
|
|
||||||
Corporate |
|
|
|
|
|
|
|
||||||
Operating loss (GAAP) |
$ |
(27.9 |
) |
|
|
|
$ |
(26.2 |
) |
|
|
||
Restructuring charges |
|
0.1 |
|
|
|
|
|
— |
|
|
|
||
Acquisition and integration costs |
|
0.5 |
|
|
|
|
|
0.8 |
|
|
|
||
Adjusted operating loss |
|
(27.3 |
) |
|
|
|
|
(25.4 |
) |
|
|
||
Depreciation and amortization of nonacquired intangible assets |
|
0.2 |
|
|
|
|
|
0.7 |
|
|
|
||
Adjusted EBITDA |
$ |
(27.1 |
) |
|
|
|
$ |
(24.7 |
) |
|
|
||
|
|
|
|
|
|
|
|
||||||
Total |
|
|
|
|
|
|
|
||||||
Net revenues |
$ |
893.9 |
|
|
|
|
$ |
923.0 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Adjusted operating income |
$ |
189.3 |
|
|
21.2 |
% |
|
$ |
192.4 |
|
|
20.8 |
% |
Depreciation and amortization of nonacquired intangible assets |
|
14.0 |
|
|
1.6 |
% |
|
|
13.6 |
|
|
1.5 |
% |
Adjusted EBITDA |
$ |
203.3 |
|
|
22.8 |
% |
|
$ |
206.0 |
|
|
22.3 |
% |
|
SCHEDULE 4 |
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO AVAILABLE CASH FLOW AND NET EARNINGS TO ADJUSTED EBITDA |
|||||||
(In millions) |
|||||||
|
Three months ended |
||||||
|
2024 |
|
2023 |
||||
Net cash provided by operating activities |
$ |
51.1 |
|
|
$ |
69.0 |
|
Capital expenditures |
|
(27.2 |
) |
|
|
(22.3 |
) |
Available cash flow |
$ |
23.9 |
|
|
$ |
46.7 |
|
|
Three months ended |
||||||
|
2024 |
|
2023 |
||||
Net earnings (GAAP) |
$ |
123.8 |
|
|
$ |
123.6 |
|
Provision for income taxes |
|
29.1 |
|
|
|
24.1 |
|
Interest expense |
|
22.9 |
|
|
|
23.6 |
|
Amortization of acquired intangible assets |
|
13.9 |
|
|
|
14.1 |
|
Depreciation and amortization of nonacquired intangible assets |
|
14.0 |
|
|
|
13.6 |
|
EBITDA |
|
203.7 |
|
|
|
199.0 |
|
|
|
|
|
||||
Other income, net |
|
(3.7 |
) |
|
|
(0.3 |
) |
Acquisition and integration costs and restructuring charges |
|
3.3 |
|
|
|
7.3 |
|
Adjusted EBITDA |
$ |
203.3 |
|
|
$ |
206.0 |
|
|
SCHEDULE 5 |
RECONCILIATION OF GAAP REVENUE GROWTH TO NON-GAAP ORGANIC REVENUE GROWTH BY REGION |
|||||
|
Three months ended |
||||
|
2024 |
|
2023 |
||
Allegion Americas |
|
|
|
||
Revenue growth (GAAP) |
(4.3 |
)% |
|
42.0 |
% |
Acquisitions |
— |
% |
|
(19.8 |
)% |
Currency translation effects |
— |
% |
|
0.4 |
% |
Organic growth (non-GAAP) |
(4.3 |
)% |
|
22.6 |
% |
|
|
|
|
||
|
|
|
|
||
Revenue growth (GAAP) |
1.4 |
% |
|
(9.7 |
)% |
Acquisitions and divestitures |
(1.4 |
)% |
|
0.5 |
% |
Currency translation effects |
(0.8 |
)% |
|
4.4 |
% |
Organic growth (non-GAAP) |
(0.8 |
)% |
|
(4.8 |
)% |
|
|
|
|
||
Total |
|
|
|
||
Revenue growth (GAAP) |
(3.2 |
)% |
|
27.6 |
% |
Acquisitions and divestitures |
(0.3 |
)% |
|
(14.1 |
)% |
Currency translation effects |
(0.1 |
)% |
|
1.5 |
% |
Organic growth (non-GAAP) |
(3.6 |
)% |
|
15.0 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240425421949/en/
Media Contact:
317-810-3241
Whitney.Moorman@allegion.com
Analyst Contacts:
317-810-3107
Jobi.Coyle@allegion.com
463-210-8595
Joshua.Pokrzywinski@allegion.com
Source: