- Fourth quarter 2013 revenue of
$550.6 million, up 0.8% compared to 2012 (up 4.5% on an adjusted
basis*)
- Fourth quarter 2013 earnings per
share (EPS) from continuing operations of $0.10 ($0.58 on an adjusted
basis*) compared to $0.62 in the prior year
- Full year 2013 revenue of $2.1
billion, increased 2.3% compared to prior year (up 3.7% on an adjusted
basis*)
- Full year 2013 EPS from continuing
operations of $0.33 ($2.13 on an adjusted basis*) compared to $2.32 in
the prior year ($2.38 on an adjusted basis*)
- Full year 2013 available cash flow
of $203.7 million
DUBLIN--(BUSINESS WIRE)-- Allegion plc (NYSE: ALLE), a leading global
provider of security products and solutions, today reported fourth quarter
2013 net revenues of $550.6 million, up 0.8% compared to the prior year,
and EPS from continuing operations of $0.10 per share.
Excluding the impact of one-time separation costs and other special
items, adjusted net revenues increased 4.5% and adjusted EPS from
continuing operations were $0.58 per share. For the fourth quarter
of 2013, operating margin was 16.3% (17.4% on an adjusted basis). Operating
margin in the fourth quarter of 2012 was 18.2% (18.9% on an adjusted
basis). The decrease in adjusted operating margin from the fourth quarter
of 2012 was primarily due to increased investments associated with new
product development and channel and business mix.
Allegion's commercial and residential security businesses were spun off
from Ingersoll-Rand plc on December 1, 2013. Allegion achieved solid
operating performance in 2013, despite significant organizational change
during the year, and is well-positioned for growth in 2014. U.S.
institutional construction is expected to continue its recovery and
continued improvement in residential market construction and strong
performance in multi-family sector are anticipated. Since the completion of
the spin-off, Allegion has begun to implement its growth initiatives by
pursuing strategic expansion opportunities, including its recent
acquisition of Schlage Lock de Colombia and fostering organic growth of its
market-leading brands.
*Adjustments to GAAP revenue, operating margin, net earnings and EPS
from continuing operations include items such as the impact of change in
order flow through the Company's consolidated joint venture in Asia,
restructuring charges, non-cash goodwill impairment charges, one-time
separation costs related to the spin-off from Ingersoll Rand, gain on
property sale in China and discrete tax items to better illustrate year
over year performance. Please see the disclosure below and the supplemental
schedules attached to this earnings release for additional information
regarding adjusted revenue, operating margin, EBITDA, net earnings and EPS
from continuing operations.
Full Year Results
For the full year 2013, net revenues were $2,093.5 million, an increase
of 2.3% compared to the prior year (3.7% on an adjusted basis). Net
earnings from continuing operations for the full year 2013 were $31.8
million, or $0.33 per share, compared to $222.3 million, or $2.32 per
share, for the prior year. Adjusted net earnings from continuing operations
were $205.0 million, or $2.13 per share for the year ended December 31,
2013, compared to adjusted net earnings from continuing operations of
$228.0 million, or $2.38 per share for the prior year. Adjusted net
earnings and adjusted EPS were lower compared to the prior year primarily
due to higher interest expense, a higher effective tax rate, increased
investment spending and an unfavorable impact of foreign currency exchange
rates.
David D. Petratis, chairman, president and chief executive officer,
said, "Allegion's operating performance was solid in a year of large change
as we became a stand-alone public company, with adjusted revenue growth of
3.7%, adjusted operating margin of 17.8% and more than $400 million in
adjusted EBITDA. We invested in our brands and grew our core business,
continued our focus on operational excellence and developed new products in
both our existing mechanical and new electronic product categories. We have
come out of the spin-off with a good foundation to deliver sustainable
value for our shareholders and will continue to realize strategic
opportunities that further unlock our potential."
Additional Items
Interest expense for the fourth quarter of 2013 was $8.4 million higher
than the prior period due to $1.3 billion of additional indebtedness
incurred as a result of the spin-off from Ingersoll Rand. The Company's
effective tax rate for the fourth quarter of 2013 was 89.2%. Excluding
one-time items, the adjusted effective tax rate was 33.9%. The comparable
effective tax rate for the fourth quarter of 2012 was 37.3%.
Cash Flow and Liquidity
The Company generated cash from operating activities of $223.9 million
and available cash flow of $203.7 million for full year 2013, which
provides the Company with a solid financial position. The Company ended
2013 with unrestricted cash of $227.4 million and total debt of $1,343.9
million, of which $40.0 million is collateralized by $40.0 million of
restricted cash. The Company did not have any borrowings outstanding under
its $500 million revolving credit facility at December 31, 2013.
Dividends/Share Repurchase
On February 11, 2014, Allegion's board of directors declared a quarterly
dividend of $0.08 per ordinary share and approved a $200 million share
repurchase program.
Patrick Shannon, senior vice president and chief financial officer,
said, "We generated significant cash flow in 2013 and finished the year
with additional liquidity, which will enable us to accelerate our organic
growth initiatives and expand our portfolio of products and presence in
emerging markets and technologies through our acquisition platform. In
addition, we are committed to a balanced and flexible capital allocation
program to provide returns to our shareholders through the previously
announced quarterly dividend."
2014 Outlook
For the full year 2014, the Company expects adjusted EPS from continuing
operations of $2.25 to $2.40 per share and reported EPS from continuing
operations of $1.95 to $2.15. This guidance assumes full-year revenue
growth of 0.9% to 1.9%, adjusted revenue growth of 3.5% to 4.5%, and
restructuring and spin-off costs of $0.25 to $0.30 per share, net of tax.
This guidance includes additional interest expense of $0.27 per share, net
of tax, representing the full year impact of the additional indebtedness
associated with the spin-off from Ingersoll Rand and assumes an effective
tax rate of approximately 31%. The Company's 2014 guidance assumes the
current exchange rate for the Venezuelan bolivar and does not take into
consideration the impact of a potential currency devaluation in Venezuela.
The Company also anticipates to generate available cash flow that
approximates net earnings from continuing operations.
"Allegion's solid operational performance last year positions us well
for 2014. We possess a strong portfolio of security brands and products and
are building momentum as U.S. institutional construction shows early
encouraging signs of recovery. We continue to invest in opportunities to
diversify our security solutions business outside the U.S., where we see
growth opportunities. In Europe, we have a clear vision for achieving solid
profitability and improving operating margins in a continually challenging
economic market by reducing barriers that separate us from our customers,"
Petratis added.
Conference Call Information
On Thursday, February 20, David D. Petratis, chairman,
president and chief executive officer, and Patrick Shannon, senior
vice president and chief financial officer, will conduct a conference call
for analysts and investors, beginning at 10:30 a.m. E.T., to review
the Company's results.
A real-time, listen-only webcast of the conference call will be
broadcast live over the Internet. Individuals wishing to listen can access
the call through the Company's website at http://investor.allegion.com.
About Allegion
Allegion (NYSE: ALLE) creates peace of mind by pioneering safety
and security. As a $2 billion provider of security solutions for
homes and businesses, Allegion employs more than 7,800 people and
sells products in more than 120 countries across the
world. Allegion comprises 23 global brands, including strategic
brands CISA®, Interflex®, LCN®, Schlage® and Von
Duprin®.
For more, visit http://www.allegion.com.
Non-GAAP Measures
The Company has presented revenue, operating income, operating margin,
earnings from continuing operations and diluted earnings per share (EPS)
from continuing operations on both a U.S. GAAP basis and on an adjusted
basis because the Company's management believes it may assist investors in
evaluating the Company's on-going operations as a standalone company. The
Company believes these non-GAAP disclosures provide important supplemental
information to management and investors regarding financial and business
trends relating to the Company's financial condition and results of
operations. Investors should not consider these non-GAAP measures as
alternatives to the related GAAP measures. A reconciliation of the non-GAAP
measures used to their most directly comparable GAAP measure is presented
as a supplemental schedule to this earnings release.
Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, including
statements regarding the Company's 2014 financial performance, the
Company's growth strategy, the Company's capital allocation strategy, the
Company's Europe, Middle East, India and Africa (EMEIA) strategy and the
strength of the markets in which the Company operates. These
forward-looking statements are based on the Company's current assumptions,
expectations and beliefs and involve substantial risks and uncertainties
that may cause results, performance or achievement to materially differ
from those expressed or implied by these forward-looking
statements. Further information on these factors and other risks that
may affect the Company's business is included in filings it makes with the
Securities and Exchange Commission from time to time, including its
Registration Statement on Form 10, as amended. The Company assumes no
obligations to update these forward looking statements.
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|
ALLEGION
PLC
Consolidated and
Combined Income Statements
(in millions,
except per share data)
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
|
|
2013 |
|
2012 |
|
|
2013 |
|
2012 |
| Net
revenues |
|
|
|
|
$ |
550.6 |
|
|
$ |
546.2 |
|
|
|
$ |
2,093.5 |
|
|
$ |
2,046.6 |
|
|
Cost of goods sold |
|
|
|
|
334.1 |
|
|
326.4 |
|
|
|
1,233.9 |
|
|
1,220.6 |
|
| Gross
profit |
|
|
|
|
216.5 |
|
|
219.8 |
|
|
|
859.6 |
|
|
826.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative expenses |
|
|
|
|
126.6 |
|
|
120.5 |
|
|
|
486.2 |
|
|
457.4 |
|
|
Goodwill impairment charge |
|
|
|
|
— |
|
|
— |
|
|
|
137.6 |
|
|
— |
|
|
Operating income |
|
|
|
|
89.9 |
|
|
99.3 |
|
|
|
235.8 |
|
|
368.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
8.8 |
|
|
0.4 |
|
|
|
10.2 |
|
|
1.5 |
|
|
Other, net |
|
|
|
|
0.2 |
|
|
0.4 |
|
|
|
7.1 |
|
|
3.2 |
|
|
Earnings before income taxes |
|
|
|
|
80.9 |
|
|
98.5 |
|
|
|
218.5 |
|
|
363.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
|
|
72.2 |
|
|
36.7 |
|
|
|
174.2 |
|
|
135.9 |
|
|
Earnings from continuing operations |
|
|
|
|
8.7 |
|
|
61.8 |
|
|
|
44.3 |
|
|
228.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of tax |
|
|
|
|
(0.5 |
) |
|
(1.2 |
) |
|
|
(0.8 |
) |
|
(2.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
earnings |
|
|
|
|
8.2 |
|
|
60.6 |
|
|
|
43.5 |
|
|
225.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net earnings
(loss) attributable to noncontrolling interests
|
|
|
|
|
(1.4 |
) |
|
1.8 |
|
|
|
12.5 |
|
|
5.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Allegion plc |
|
|
|
|
$ |
9.6 |
|
|
$ |
58.8 |
|
|
|
$ |
31.0 |
|
|
$ |
219.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Allegion plc shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
$ |
10.1 |
|
|
$ |
60.0 |
|
|
|
$ |
31.8 |
|
|
$ |
222.3 |
|
|
Discontinued operations |
|
|
|
|
(0.5 |
) |
|
(1.2 |
) |
|
|
(0.8 |
) |
|
(2.7 |
) |
|
Net earnings |
|
|
|
|
$ |
9.6 |
|
|
$ |
58.8 |
|
|
|
$ |
31.0 |
|
|
$ |
219.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
(loss) per ordinary share attributable to Allegion plc
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
$ |
0.11 |
|
|
$ |
0.62 |
|
|
|
$ |
0.33 |
|
|
$ |
2.32 |
|
|
Discontinued operations |
|
|
|
|
(0.01 |
) |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
(0.03 |
) |
|
Net earnings |
|
|
|
|
$ |
0.10 |
|
|
$ |
0.61 |
|
|
|
$ |
0.32 |
|
|
$ |
2.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per ordinary share attributable to Allegion plc
shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
$ |
0.10 |
|
|
$ |
0.62 |
|
|
|
$ |
0.33 |
|
|
$ |
2.32 |
|
|
Discontinued operations |
|
|
|
|
— |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
(0.03 |
) |
|
Net earnings |
|
|
|
|
$ |
0.10 |
|
|
$ |
0.61 |
|
|
|
$ |
0.32 |
|
|
$ |
2.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares
outstanding - basic |
|
|
|
|
96.0 |
|
|
96.0 |
|
|
|
96.0 |
|
|
96.0 |
|
| Shares
outstanding - diluted |
|
|
|
|
96.4 |
|
|
96.0 |
|
|
|
96.1 |
|
|
96.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLEGION
PLC
Condensed
Consolidated and Combined Balance Sheets
(in
millions)
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013 |
|
|
December 31, 2012 |
|
ASSETS |
|
|
|
|
|
|
|
|
| Cash
and cash equivalents |
|
|
|
|
$ |
227.4 |
|
|
|
$ |
317.5 |
|
Restricted cash |
|
|
|
|
40.2 |
|
|
|
— |
|
Accounts and notes receivables, net |
|
|
|
|
266.1 |
|
|
|
288.2 |
|
Costs in excess of
billings on uncompleted contracts
|
|
|
|
|
158.8 |
|
|
|
93.7 |
|
Inventory |
|
|
|
|
155.8 |
|
|
|
166.4 |
|
Other current assets |
|
|
|
|
74.9 |
|
|
|
44.1 |
| Total
current assets |
|
|
|
|
923.2 |
|
|
|
909.9 |
|
Property, plant and equipment, net |
|
|
|
|
203.0 |
|
|
|
232.0 |
|
Goodwill |
|
|
|
|
504.9 |
|
|
|
637.9 |
|
Intangible assets, net |
|
|
|
|
146.1 |
|
|
|
150.5 |
|
Other noncurrent assets |
|
|
|
|
202.7 |
|
|
|
53.5 |
|
Total assets |
|
|
|
|
$ |
1,979.9 |
|
|
|
$ |
1,983.8 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
|
$ |
211.3 |
|
|
|
$ |
227.2 |
|
Accrued expenses and other current liabilities |
|
|
|
|
207.3 |
|
|
|
153.3 |
|
Short-term borrowings
and current maturities of long-term debt
|
|
|
|
|
71.9 |
|
|
|
2.2 |
| Total
current liabilities |
|
|
|
|
490.5 |
|
|
|
382.7 |
|
Long-term debt |
|
|
|
|
1,272.0 |
|
|
|
2.8 |
|
Other noncurrent liabilities |
|
|
|
|
273.1 |
|
|
|
232.1 |
|
Equity |
|
|
|
|
(55.7 |
) |
|
|
1,366.2 |
|
Total liabilities and equity |
|
|
|
|
$ |
1,979.9 |
|
|
|
$ |
1,983.8 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| |
|
ALLEGION
PLC
Condensed
Consolidated and Combined Cash Flows
(in
millions)
UNAUDITED
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
|
|
2013 |
|
|
2012 |
|
Operating Activities |
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
|
|
$ |
44.3 |
|
|
|
$ |
228.0 |
|
|
Goodwill impairment charge |
|
|
|
|
137.6 |
|
|
|
— |
|
|
Depreciation and amortization |
|
|
|
|
46.1 |
|
|
|
43.8 |
|
|
Changes in assets and liabilities and other non-cash items |
|
|
|
|
(3.3 |
) |
|
|
0.1 |
|
| Net
cash from operating activities of continuing operations |
|
|
|
|
224.7 |
|
|
|
271.9 |
|
|
Net cash used in operating activities of discontinued operations |
|
|
|
|
(0.8 |
) |
|
|
(2.7 |
) |
| Net
cash from operating activities |
|
|
|
|
223.9 |
|
|
|
269.2 |
|
|
|
|
|
|
|
|
|
|
|
Investing Activities |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
|
|
(20.2 |
) |
|
|
(19.6 |
) |
|
Restricted cash |
|
|
|
|
(40.2 |
) |
|
|
— |
|
|
Proceeds from sale of property, plant and equipment |
|
|
|
|
41.7 |
|
|
|
2.1 |
|
| Net
cash used in investing activities |
|
|
|
|
(18.7 |
) |
|
|
(17.5 |
) |
|
|
|
|
|
|
|
|
|
|
Financing Activities |
|
|
|
|
|
|
|
|
| Net
debt proceeds (repayments) |
|
|
|
|
1,338.9 |
|
|
|
(1.1 |
) |
| Net
transfers to Ingersoll-Rand |
|
|
|
|
(1,598.3 |
) |
|
|
(311.6 |
) |
|
Other financing activities, net |
|
|
|
|
(33.0 |
) |
|
|
(5.2 |
) |
| Net
cash used in financing activities |
|
|
|
|
(292.4 |
) |
|
|
(317.9 |
) |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
|
|
(2.9 |
) |
|
|
6.9 |
|
| Net
decrease in cash and cash equivalents |
|
|
|
|
(90.1 |
) |
|
|
(59.3 |
) |
|
Cash and cash equivalents - beginning of period |
|
|
|
|
317.5 |
|
|
|
376.8 |
|
|
Cash and cash equivalents - end of period |
|
|
|
|
$ |
227.4 |
|
|
|
$ |
317.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
SCHEDULES
|
|
|
|
|
|
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|
|
ALLEGION
PLC
|
|
|
SCHEDULE 1
|
|
|
|
|
|
|
|
|
|
|
SELECTED
OPERATING SEGMENT INFORMATION
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
|
|
2013 |
|
2012 |
|
|
2013 |
|
2012 |
| Net
revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
$ |
360.6 |
|
|
$ |
364.7 |
|
|
|
$ |
1,514.7 |
|
|
$ |
1,471.8 |
|
|
EMEIA |
|
|
|
|
122.3 |
|
|
116.6 |
|
|
|
425.3 |
|
|
428.3 |
|
|
Asia Pacific |
|
|
|
|
67.7 |
|
|
64.9 |
|
|
|
153.5 |
|
|
146.5 |
|
|
Total net revenues |
|
|
|
|
$ |
550.6 |
|
|
$ |
546.2 |
|
|
|
$ |
2,093.5 |
|
|
$ |
2,046.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
|
|
|
$ |
87.1 |
|
|
$ |
94.5 |
|
|
|
$ |
390.0 |
|
|
$ |
377.2 |
|
|
EMEIA |
|
|
|
|
10.1 |
|
|
8.3 |
|
|
|
(140.7 |
) |
|
8.2 |
|
| Asia
Pacific |
|
|
|
|
6.6 |
|
|
8.8 |
|
|
|
25.4 |
|
|
11.4 |
|
|
Corporate unallocated |
|
|
|
|
(13.9 |
) |
|
(12.3 |
) |
|
|
(38.9 |
) |
|
(28.2 |
) |
|
Total operating income |
|
|
|
|
$ |
89.9 |
|
|
$ |
99.3 |
|
|
|
$ |
235.8 |
|
|
$ |
368.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLEGION PLC |
|
|
|
|
|
|
|
SCHEDULE 2 |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP TO NON-GAAP EARNINGS FROM CONTINUING
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
The Company has presented revenue, operating income, operating margin,
earnings from continuing operations and diluted earnings per share (EPS)
from continuing operations on both a U.S. GAAP basis and on an adjusted
basis because the Company's management believes it may assist investors in
evaluating the Company's on-going operations as a standalone public
company. Adjustments to revenue, operating income, operating margin and
earnings and diluted EPS from continuing operations include items that are
considered to be unusual or infrequent in nature such as restructuring
charges, non-cash goodwill impairment charges, one-time separation costs
related to the spin-off from Ingersoll Rand, gain on property sale in China
and certain discrete tax expenses and benefits.
The Company considers these items unrelated to its core, on-going
operating performance, and believes the use of these non-GAAP measures
allows comparison of operating results that are consistent over time. The
Company believes these non-GAAP disclosures provide important supplemental
information to management and investors regarding financial and business
trends relating to the Company's financial condition and results of
operations. Management uses these non-GAAP measures internally to evaluate
the performance of the business. Investors should not consider these
non-GAAP measures as alternatives to the related GAAP measures.
|
|
|
|
|
Three months ended December 31, 2013 |
|
|
Three months ended December 31, 2012 |
|
|
|
|
|
Reported |
|
Spin-off
related and
other charges
|
|
|
Adjusted
(non-GAAP)
|
|
|
Reported |
|
Spin-off
related and
other charges
|
|
|
Adjusted
(non-GAAP)
|
| Net
revenues |
|
|
|
|
$ |
550.6 |
|
|
$ |
— |
|
|
|
$ |
550.6 |
|
|
|
$ |
546.2 |
|
|
$ |
(19.5 |
) |
(4) |
|
$ |
526.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
|
89.9 |
|
|
6.1 |
|
(1) |
|
96.0 |
|
|
|
99.3 |
|
|
— |
|
|
|
99.3 |
|
|
Operating margin |
|
|
|
|
16.3 |
% |
|
|
|
|
17.4 |
% |
|
|
18.2 |
% |
|
|
|
|
18.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
|
|
80.9 |
|
|
6.1 |
|
|
|
87.0 |
|
|
|
98.5 |
|
|
— |
|
|
|
98.5 |
|
|
Provision for income taxes |
|
|
|
|
72.2 |
|
|
(42.7 |
) |
(2) |
|
29.5 |
|
|
|
36.7 |
|
|
— |
|
|
|
36.7 |
|
|
Earnings from continuing operations |
|
|
|
|
8.7 |
|
|
48.8 |
|
|
|
57.5 |
|
|
|
61.8 |
|
|
— |
|
|
|
61.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest |
|
|
|
|
(1.4 |
) |
|
2.6 |
|
(3) |
|
1.2 |
|
|
|
1.8 |
|
|
— |
|
|
|
1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from
continuing operations
attributable to Allegion plc
|
|
|
|
|
$ |
10.1 |
|
|
$ |
46.2 |
|
|
|
$ |
56.3 |
|
|
|
$ |
60.0 |
|
|
$ |
— |
|
|
|
$ |
60.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable to
Allegion plc shareholders:
|
|
|
|
|
$ |
0.10 |
|
|
$ |
0.48 |
|
|
|
$ |
0.58 |
|
|
|
$ |
0.62 |
|
|
$ |
— |
|
|
|
$ |
0.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
(1) |
|
|
Adjustments to operating income for the three months ended December
31, 2013 consist of $6.1 million of costs incurred as part of the
spin-off from Ingersoll Rand and restructuring charges. |
|
|
|
|
(2) |
|
|
Adjustments to the provision for income taxes for the three months
ended December 31, 2013 consist of $2.1 million of tax expense
related to the items excluded from operating income discussed above
and a benefit of $44.8 million of discrete tax adjustments consisting
of $31.5 million of expense related to valuation allowances on
deferred tax assets that are no longer expected to be utilized and
$13.3 million of net tax expense resulting primarily from
transactions occurring to effect the spin-off from Ingersoll
Rand. |
|
|
|
|
(3) |
|
|
Adjustments to non-controlling interest for the three months ended
December 31, 2013 consist of the portion of adjustments described in
(1) and (2) above that are not attributable to Allegion plc
shareholders. |
|
|
|
|
(4) |
|
|
Adjustment to net revenue for the three months ended December 31,
2012 reflects the impact of a change in order flow through the
Company's consolidated joint venture in Asia resulting from a revised
joint venture operating agreement signed in late 2013. Previously,
the joint venture acted as a pass-through to the end customer. Going
forward, products are shipped direct to the end customer with the
joint venture receiving a royalty in an amount that approximates the
lost margin. The consolidated joint venture will no longer recognize
the revenue and cost of goods sold on these products. The change is
not expected to have a material impact on operating income or on cash
flows in future periods. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2013 |
|
|
Year ended December 31, 2012 |
|
|
|
|
|
Reported |
|
Spin-off
related and
other charges
|
|
|
Adjusted
(non-GAAP)
|
|
|
Reported |
|
Spin-off
related and
other charges
|
|
|
Adjusted
(non-GAAP)
|
| Net
revenues |
|
|
|
|
$ |
2,093.5 |
|
|
$ |
(52.0 |
) |
(1) |
|
$ |
2,041.5 |
|
|
|
$ |
2,046.6 |
|
|
$ |
(78.0 |
) |
(1) |
|
$ |
1,968.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
|
235.8 |
|
|
127.8 |
|
(2) |
|
363.6 |
|
|
|
368.6 |
|
|
8.2 |
|
(2) |
|
376.8 |
|
|
Operating margin |
|
|
|
|
11.3 |
% |
|
|
|
|
17.8 |
% |
|
|
18.0 |
% |
|
|
|
|
19.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
|
|
218.5 |
|
|
127.8 |
|
|
|
346.3 |
|
|
|
363.9 |
|
|
8.2 |
|
|
|
372.1 |
|
|
Provision for income taxes |
|
|
|
|
174.2 |
|
|
(40.1 |
) |
(3) |
|
134.1 |
|
|
|
135.9 |
|
|
2.5 |
|
(3) |
|
138.4 |
|
|
Earnings from continuing operations |
|
|
|
|
44.3 |
|
|
167.9 |
|
|
|
212.2 |
|
|
|
228.0 |
|
|
5.7 |
|
|
|
233.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest |
|
|
|
|
12.5 |
|
|
(5.3 |
) |
(4) |
|
7.2 |
|
|
|
5.7 |
|
|
— |
|
(4) |
|
5.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from
continuing operations
attributable to Allegion plc
|
|
|
|
|
$ |
31.8 |
|
|
$ |
173.2 |
|
|
|
$ |
205.0 |
|
|
|
$ |
222.3 |
|
|
$ |
5.7 |
|
|
|
$ |
228.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable to
Allegion plc shareholders:
|
|
|
|
|
$ |
0.33 |
|
|
$ |
1.80 |
|
|
|
$ |
2.13 |
|
|
|
$ |
2.32 |
|
|
$ |
0.06 |
|
|
|
$ |
2.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
(1) |
|
|
Adjustments to net revenues for the year ended December 31, 2013 and
2012 reflect the impact of a change in order flow through the
Company's consolidated joint venture in Asia resulting from a revised
joint venture operating agreement signed in late 2013. Previously,
the consolidated joint venture acted as a pass-through to the end
customer. Going forward, products are shipped direct to the end
customer with the joint venture receiving a royalty in an amount that
approximates the lost margin. The consolidated joint venture will no
longer recognize the revenue and cost of goods sold on these
products. The change is not expected to have a material impact on
operating income or on cash flows in future periods. |
|
|
|
|
(2) |
|
|
Adjustments to operating income for the year ended December 31, 2013
consist of $5.9 million of costs incurred as part of the spin-off
from Ingersoll Rand, $5.8 million of restructuring charges, a $137.6
million goodwill impairment charge and a $21.5 million gain on a
property sale in China. Adjustments to operating income for the year
ended December 31, 2012 include $8.2 million of restructuring charges
and other expenses. |
|
|
|
|
(3) |
|
|
Adjustments to the provision for income taxes for the year ended
December 31, 2013 consist of $4.7 million of tax expense related to
the items excluded from operating income discussed above and a
benefit of $44.8 million of discrete adjustments consisting of $31.5
million of expense related to valuation allowances on deferred tax
assets that are no longer expected to be utilized and $13.3 million
of net tax expense resulting primarily from transactions occurring to
effect the spin-off from Ingersoll Rand. Adjustments to the provision
for income taxes for the year ended December 31, 2012 consist of $2.5
million of tax expense related to the items excluded from operating
income discussed above. |
|
|
|
|
(4) |
|
|
Adjustments to non-controlling interest for the year ended December
31, 2013 consist of the portion of adjustments described in (2) and
(3) above that are not attributable to Allegion plc
shareholders. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLEGION PLC |
|
|
|
|
|
|
|
SCHEDULE 3 |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP TO NON-GAAP REVENUE AND OPERATING INCOME BY
REGION |
|
|
|
|
|
|
|
|
|
|
|
| (in
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2013
|
|
|
Three Months
Ended
December 31, 2012
|
|
|
|
|
|
As Reported |
|
Margin |
|
|
As Reported |
|
Margin |
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
| Net
revenues |
|
|
|
|
$ |
360.6 |
|
|
|
|
|
$ |
364.7 |
|
|
|
|
Impact of Asia JV
order flow change
|
|
|
|
|
— |
|
|
|
|
|
(19.5 |
) |
|
|
|
Adjusted net revenues |
|
|
|
|
$ |
360.6 |
|
|
|
|
|
$ |
345.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
|
|
|
|
$ |
87.1 |
|
|
24.2 |
% |
|
|
$ |
94.5 |
|
|
27.4 |
% |
|
Restructuring charges |
|
|
|
|
— |
|
|
— |
% |
|
|
— |
|
|
— |
% |
|
Adjusted operating income |
|
|
|
|
87.1 |
|
|
24.2 |
% |
|
|
94.5 |
|
|
27.4 |
% |
|
Depreciation and amortization |
|
|
|
|
8.4 |
|
|
2.3 |
% |
|
|
6.4 |
|
|
1.9 |
% |
|
Adjusted EBITDA |
|
|
|
|
$ |
95.5 |
|
|
26.5 |
% |
|
|
$ |
100.9 |
|
|
29.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEIA |
|
|
|
|
|
|
|
|
|
|
|
|
| Net
revenues |
|
|
|
|
$ |
122.3 |
|
|
|
|
|
$ |
116.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
|
|
|
|
$ |
10.1 |
|
|
8.3 |
% |
|
|
$ |
8.3 |
|
|
7.1 |
% |
|
Restructuring charges |
|
|
|
|
0.2 |
|
|
0.1 |
% |
|
|
— |
|
|
— |
% |
|
Spin-off related and
other charges
|
|
|
|
|
2.4 |
|
|
2.0 |
% |
|
|
— |
|
|
— |
% |
|
Adjusted operating income |
|
|
|
|
$ |
12.7 |
|
|
10.4 |
% |
|
|
$ |
8.3 |
|
|
7.1 |
% |
|
Depreciation and amortization |
|
|
|
|
4.7 |
|
|
3.8 |
% |
|
|
4.4 |
|
|
3.8 |
% |
|
Adjusted EBITDA |
|
|
|
|
$ |
17.4 |
|
|
14.2 |
% |
|
|
$ |
12.7 |
|
|
10.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
|
|
|
|
|
|
|
|
|
|
| Net
revenues |
|
|
|
|
$ |
67.7 |
|
|
|
|
|
$ |
64.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
|
|
|
|
$ |
6.6 |
|
|
9.7 |
% |
|
|
$ |
8.8 |
|
|
13.6 |
% |
|
Spin-off related charges |
|
|
|
|
0.1 |
|
|
0.2 |
% |
|
|
— |
|
|
— |
% |
|
Adjusted operating income |
|
|
|
|
6.7 |
|
|
9.9 |
% |
|
|
8.8 |
|
|
13.6 |
% |
|
Depreciation and amortization |
|
|
|
|
0.2 |
|
|
0.3 |
% |
|
|
0.6 |
|
|
0.9 |
% |
|
Adjusted EBITDA |
|
|
|
|
$ |
6.9 |
|
|
10.2 |
% |
|
|
$ |
9.4 |
|
|
14.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
|
|
|
|
$ |
(13.9 |
) |
|
|
|
|
$ |
(12.3 |
) |
|
|
|
Spin-off related charges |
|
|
|
|
3.4 |
|
|
|
|
|
— |
|
|
|
|
Adjusted operating income |
|
|
|
|
(10.5 |
) |
|
|
|
|
(12.3 |
) |
|
|
|
Depreciation and amortization |
|
|
|
|
0.5 |
|
|
|
|
|
— |
|
|
|
|
Adjusted EBITDA |
|
|
|
|
$ |
(10.0 |
) |
|
|
|
|
$ |
(12.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income |
|
|
|
|
$ |
96.0 |
|
|
17.4 |
% |
|
|
$ |
99.3 |
|
|
18.9 |
% |
|
Depreciation and amortization |
|
|
|
|
13.8 |
|
|
2.5 |
% |
|
|
11.4 |
|
|
2.1 |
% |
|
Adjusted EBITDA |
|
|
|
|
$ |
109.8 |
|
|
19.9 |
% |
|
|
$ |
110.7 |
|
|
21.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2013
|
|
|
Year Ended
December 31, 2012
|
|
|
|
|
|
As Reported |
|
Margin |
|
|
As Reported |
|
Margin |
|
Americas |
|
|
|
|
|
|
|
|
|
|
|
|
| Net
revenues |
|
|
|
|
$ |
1,514.7 |
|
|
|
|
|
$ |
1,471.8 |
|
|
|
|
Impact of Asia JV
order flow change
|
|
|
|
|
(52.0 |
) |
|
|
|
|
(78.0 |
) |
|
|
|
Adjusted net revenues |
|
|
|
|
$ |
1,462.7 |
|
|
|
|
|
$ |
1,393.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
|
|
|
|
$ |
390.0 |
|
|
26.7 |
% |
|
|
$ |
377.2 |
|
|
27.1 |
% |
|
Restructuring charges |
|
|
|
|
0.1 |
|
|
— |
% |
|
|
1.6 |
|
|
0.1 |
% |
|
Adjusted operating income |
|
|
|
|
390.1 |
|
|
26.7 |
% |
|
|
378.8 |
|
|
27.2 |
% |
|
Depreciation and amortization |
|
|
|
|
26.5 |
|
|
1.8 |
% |
|
|
23.3 |
|
|
1.7 |
% |
|
Adjusted EBITDA |
|
|
|
|
$ |
416.6 |
|
|
28.5 |
% |
|
|
$ |
402.1 |
|
|
28.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMEIA |
|
|
|
|
|
|
|
|
|
|
|
|
| Net
revenues |
|
|
|
|
$ |
425.3 |
|
|
|
|
|
$ |
428.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
|
|
|
|
$ |
(140.7 |
) |
|
(33.1 |
)% |
|
|
$ |
8.2 |
|
|
1.9 |
% |
|
Restructuring charges |
|
|
|
|
5.7 |
|
|
1.3 |
% |
|
|
5.8 |
|
|
1.4 |
% |
|
Spin-off related
and other charges
|
|
|
|
|
2.4 |
|
|
0.6 |
% |
|
|
0.8 |
|
|
0.2 |
% |
|
Goodwill impairment charge |
|
|
|
|
137.6 |
|
|
32.4 |
% |
|
|
— |
|
|
— |
% |
|
Adjusted operating income |
|
|
|
|
$ |
5.0 |
|
|
1.2 |
% |
|
|
$ |
14.8 |
|
|
3.5 |
% |
|
Depreciation and amortization |
|
|
|
|
18.2 |
|
|
4.3 |
% |
|
|
18.3 |
|
|
4.3 |
% |
|
Adjusted EBITDA |
|
|
|
|
$ |
23.2 |
|
|
5.5 |
% |
|
|
$ |
33.1 |
|
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
|
|
|
|
|
|
|
|
|
|
| Net
revenues |
|
|
|
|
$ |
153.5 |
|
|
|
|
|
$ |
146.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
|
|
|
|
$ |
25.4 |
|
|
16.5 |
% |
|
|
$ |
11.4 |
|
|
7.8 |
% |
|
Spin-off related charges |
|
|
|
|
0.1 |
|
|
0.1 |
% |
|
|
— |
|
|
— |
% |
|
Gain on property sale |
|
|
|
|
(21.5 |
) |
|
(14.0 |
)% |
|
|
— |
|
|
— |
% |
|
Adjusted operating income |
|
|
|
|
4.0 |
|
|
2.6 |
% |
|
|
11.4 |
|
|
7.8 |
% |
|
Depreciation and amortization |
|
|
|
|
0.9 |
|
|
0.6 |
% |
|
|
2.2 |
|
|
1.5 |
% |
|
Adjusted EBITDA |
|
|
|
|
$ |
4.9 |
|
|
3.2 |
% |
|
|
$ |
13.6 |
|
|
9.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP) |
|
|
|
|
$ |
(38.9 |
) |
|
|
|
|
(28.2 |
) |
|
|
|
Spin-off related charges |
|
|
|
|
3.4 |
|
|
|
|
|
— |
|
|
|
|
Adjusted operating income |
|
|
|
|
(35.5 |
) |
|
|
|
|
(28.2 |
) |
|
|
|
Depreciation and amortization |
|
|
|
|
0.5 |
|
|
|
|
|
— |
|
|
|
|
Adjusted EBITDA |
|
|
|
|
$ |
(35.0 |
) |
|
|
|
|
$ |
(28.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income |
|
|
|
|
$ |
363.6 |
|
|
17.8 |
% |
|
|
$ |
376.8 |
|
|
19.1 |
% |
|
Depreciation and amortization |
|
|
|
|
46.1 |
|
|
2.3 |
% |
|
|
43.8 |
|
|
2.2 |
% |
|
Adjusted EBITDA |
|
|
|
|
$ |
409.7 |
|
|
20.1 |
% |
|
|
$ |
420.6 |
|
|
21.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLEGION PLC |
|
|
|
|
|
SCHEDULE 4 |
|
|
|
|
|
|
|
|
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO
AVAILABLE CASH FLOW AND NET INCOME TO ADJUSTED EBITDA |
|
|
|
|
|
|
|
| (in
millions) |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
|
2013 |
|
2012 |
| Net
cash provided by operating activities |
|
|
|
$ |
223.9 |
|
|
$ |
269.2 |
|
|
Capital expenditures |
|
|
|
(20.2 |
) |
|
(19.6 |
) |
|
Available cash flow |
|
|
|
$ |
203.7 |
|
|
$ |
249.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
|
2013 |
|
2012 |
| Net
earnings |
|
|
|
$ |
43.5 |
|
|
$ |
225.3 |
|
|
Provision for income taxes |
|
|
|
174.2 |
|
|
135.9 |
|
|
Interest expense |
|
|
|
10.2 |
|
|
1.5 |
|
|
Depreciation and amortization |
|
|
|
46.1 |
|
|
43.8 |
|
|
EBITDA |
|
|
|
274.0 |
|
|
406.5 |
|
|
|
|
|
|
|
|
|
Discontinued operations |
|
|
|
0.8 |
|
|
2.7 |
|
| Other,
net |
|
|
|
7.1 |
|
|
3.2 |
|
|
Goodwill impairment charge |
|
|
|
137.6 |
|
|
— |
|
| Gain
on property sale |
|
|
|
(21.5 |
) |
|
— |
|
|
Restructuring
charges, spin-off related costs and other expenses
|
|
|
|
11.7 |
|
|
8.2 |
|
|
Adjusted EBITDA |
|
|
|
$ |
409.7 |
|
|
$ |
420.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Allegion plc
Media:
Susana Duarte de Suarez, 317-810-3393
[email protected]
or
Analysts:
Tom Martineau, 317-810-3759
[email protected]
Source: Allegion plc
News Provided by Acquire Media
