Allegion Reports Third-Quarter 2017 Financial Results
- Third-quarter 2017 net earnings per share (EPS) of $0.94, compared
with 2016 EPS of $0.02; Adjusted 2017 EPS of $1.02, up 9.7 percent
compared with 2016 adjusted EPS of $0.93
- Third-quarter 2017 revenue of $609.4 million, up 4.9 percent
compared to 2016, up 2.7 percent on an organic basis
- Third-quarter 2017 operating margin of 20.7 percent, compared with
2016 operating margin of 20.9 percent; Adjusted operating margin of
22.1 percent, improved 30 basis points compared with 2016 adjusted
operating margin of 21.8 percent
- Updating guidance for 2017 full-year revenue and EPS outlook;
Full-year 2017 reported revenue growth of 6.5 to 7 percent with
organic revenue growth of 5 to 5.5 percent; Full-year 2017 EPS
guidance of $3.21 to $3.26 and $3.75 to $3.80 on an adjusted basis
DUBLIN--(BUSINESS WIRE)--
Allegion
plc (NYSE: ALLE), a leading global provider of security
products and solutions, today reported third-quarter 2017 net revenues
of $609.4 million and net earnings of $89.8 million, or $0.94 per share,
up $0.92 per share when compared with third-quarter 2016 EPS of $0.02.
Third-quarter 2016 EPS included a $0.87 per share reduction from a loss
on divestiture. Excluding charges related to restructuring and
acquisitions as well as charges related to the refinancing of the
company’s credit facility, third-quarter 2017 adjusted net earnings were
$97.4 million, or $1.02 per share, up 9.7 percent when compared with
third-quarter 2016 adjusted EPS of $0.93.
Third-quarter net revenues increased 4.9 percent, when compared to the
prior year period (up 2.7 percent on an organic basis). Reported
revenues reflect continued organic growth, contribution from
acquisitions and benefits from foreign currency.
“I am pleased with our performance so far this year that has resulted in
strong organic growth, led by our Americas region,” said David D.
Petratis, Allegion chairman, president and CEO. “Organic growth in the
third quarter was modest, as European markets rebound, and Americas’
end-market fundamentals continue to remain solid, including electronics
growth. However, constraints across the construction supply chain,
including labor, continue to impact the completion of projects and,
therefore, the timing of our revenue.”
The Americas segment revenue increased 4.4 percent (up 2.8 percent on an
organic basis). The revenue growth was driven by favorable price and
mid-teens growth in electronics, which offset the impact of timing of
orders that was a positive benefit in the second quarter. Revenues from
acquisitions and the impact of favorable foreign currency also added to
overall growth.
The EMEIA segment revenues were up 7.5 percent (up 3.1 percent on an
organic basis), reflecting solid pricing in the quarter along with
favorable currency impacts. Strong growth in the portable security and
SimonsVoss businesses also contributed to the organic growth.
The Asia-Pacific segment revenues increased 2.1 percent, when compared
to the prior year period (up 0.4 percent on an organic basis). Favorable
price and currency impacts drove the revenue growth for the quarter.
Third-quarter 2017 operating income was $126.1 million, an increase of
$4.6 million or 3.8 percent over 2016. Adjusted operating income in
third-quarter 2017 was $134.6 million, representing an increase of $7.9
million or 6.2 percent compared to 2016.
Third-quarter 2017 operating margin was 20.7 percent, compared with 20.9
percent in 2016. The adjusted operating margin in third-quarter 2017 was
22.1 percent, compared with 21.8 percent in 2016. The 30-basis-point
improvement in adjusted operating margin was driven by strong price
performance, volume leverage and productivity, which more than offset
unfavorable product mix, increased investments and inflation.
“Overall margins continue to expand even while we invest in the
business,” Petratis added. “I am particularly pleased with the pricing
performance in a rising inflationary environment and with the margin
performance of the EMEIA region, which saw substantial improvement
versus the comparable quarter last year.”
Additional Items
Interest expense for third-quarter 2017 was $17.8 million, up from the
$15.6 million for third-quarter 2016. Expense in 2017 included $1.6
million of costs associated with the company’s refinancing of its credit
facility, which closed in September. As a result of the recently
completed debt refinancing, the company expects to see annualized
interest savings of approximately $13 million ($0.09 per share), which
will commence in the fourth quarter of 2017, where the company will see
a quarter’s worth of that savings.
Other income net for third-quarter 2017 was $3.7 million, driven by
non-operating gains. This compares to other expense net for
third-quarter 2016 of $0.4 million.
The third-quarter 2016 also included a loss on divestiture in the amount
of $84.4 million related to the divested system integration business
located in China.
The company’s effective tax rate for third-quarter 2017 was 19.6
percent, compared with 90.5 percent in 2016. The company’s adjusted
effective tax rate for third-quarter 2017 was 20 percent, compared with
18.4 percent in 2016. The increase in the adjusted effective tax rate is
primarily due to the mix of income earned in higher tax rate
jurisdictions.
Cash Flow and Liquidity
Year-to-date 2017 available cash flow was $136.3 million, down $15.7
million versus the prior year. The year-over-year decrease in available
cash flow is primarily due to a previously announced $50 million
discretionary pension funding payment, in the first quarter, partially
offset by increased earnings.
The company ended third-quarter 2017 with cash of $334.9 million and
total debt of $1,447 million.
2017 Outlook
The company updated full-year 2017 reported revenue growth guidance to a
range of 6.5 to 7 percent compared to 2016. Organic revenue growth is
updated to a range of 5 to 5.5 percent.
The company updated the full-year 2017 reported EPS with a range of
$3.21 to $3.26, or $3.75 to $3.80 on an adjusted basis. Adjustments to
2017 EPS include estimated impacts for debt refinancing and for
restructuring and acquisition activities. The guidance assumes a
full-year adjusted effective tax rate of approximately 18 to 18.5
percent, as well as an average diluted share count for the full year of
approximately 96 million shares.
The company is targeting full-year available cash flow of approximately
$300 million (inclusive of the $50 million discretionary pension funding
payment).
Conference Call Information
On Thursday, Oct. 26, David D. Petratis, chairman, president and CEO,
and Patrick Shannon, senior vice president and chief financial officer,
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 http://investor.allegion.com.
About Allegion™
Allegion (NYSE: ALLE) is a global pioneer in safety and security, with
leading brands like CISA®, Interflex®, LCN®,
Schlage®, SimonsVoss® and Von Duprin®. Focusing
on security around the door and adjacent areas, Allegion produces a
range of solutions for homes, businesses, schools and other
institutions. Allegion is a $2.2 billion company, with products sold in
approximately 130 countries.
For more, visit www.allegion.com.
Non-GAAP Measures
This news release also 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.
Further information about the adjusted non-GAAP financial tables is
attached to this news 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 2017 financial performance,
the Company’s growth strategy, the Company’s capital allocation
strategy, the Company’s tax planning strategies, and the performance of
the markets in which the Company operates. These forward-looking
statements are based on the Company's current available information and
its 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, which could cause actual results
to differ materially from those in the 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
Form 10-K for the year ended Dec. 31, 2016, Form 10-Qs for the quarters
ended March 31, 2017, June 30, 2017, and Sept. 30, 2017, and in its
other SEC filings. The Company assumes no obligations to update these
forward-looking statements.
|
| |
| |
| ALLEGION PLC |
| Condensed and Consolidated Income Statements |
| (in millions, except per share data) |
|
|
UNAUDITED |
| | | |
|
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2017 |
| 2016 | | 2017 |
| 2016 |
| | | | | | | |
|
|
Net revenues
| |
$
|
609.4
| | |
$
|
581.1
| | |
$
|
1,785.1
| | |
$
|
1,668.3
| |
|
Cost of goods sold
| |
335.5
|
| |
317.6
|
| |
989.3
|
| |
921.1
|
|
|
Gross profit
| |
273.9
| | |
263.5
| | |
795.8
| | |
747.2
| |
| | | | | | | |
|
|
Selling and administrative expenses
| |
147.8
|
| |
142.0
|
| |
436.8
|
| |
418.9
|
|
|
Operating income
| |
126.1
| | |
121.5
| | |
359.0
| | |
328.3
| |
| | | | | | | |
|
|
Interest expense
| |
17.8
| | |
15.6
| | |
49.7
| | |
48.4
| |
|
Loss on divestitures
| |
—
| | |
84.4
| | |
—
| | |
84.4
| |
|
Other (income) expense, net
| |
(3.7
|
)
|
|
0.4
|
| |
(8.2
|
)
|
|
(17.0
|
)
|
|
Earnings before income taxes
| |
112.0
| | |
21.1
| | |
317.5
| | |
212.5
| |
| | | | | | | |
|
|
Provision for income taxes
| |
21.9
|
|
|
19.1
|
| |
52.9
|
|
|
56.3
|
|
|
Net earnings
| |
90.1
| | |
2.0
| | |
264.6
| | |
156.2
| |
| | | | | | | |
|
|
Less: Net earnings attributable to noncontrolling interests
| |
0.3
|
| |
0.4
|
| |
0.9
|
| |
1.9
|
|
| | | | | | | |
|
|
Net earnings attributable to Allegion plc
| |
$
|
89.8
|
| |
$
|
1.6
|
| |
$
|
263.7
|
| |
$
|
154.3
|
|
| | | | | | | |
|
| Basic earnings per ordinary share | | | | | | | | |
| attributable to Allegion plc shareholders: | |
| |
| |
| |
|
|
Net earnings
| |
$
|
0.95
|
| |
$
|
0.02
|
| |
$
|
2.77
|
| |
$
|
1.61
|
|
| | | | | | | |
|
| Diluted earnings per ordinary share | | | | | | | | |
| attributable to Allegion plc shareholders: | |
| |
| |
| |
|
|
Net earnings
| |
$
|
0.94
|
| |
$
|
0.02
|
| |
$
|
2.75
|
| |
$
|
1.59
|
|
| | | | | | | |
|
|
Shares outstanding - basic
| |
95.0
| | |
96.0
| | |
95.2
| | |
95.9
| |
|
Shares outstanding - diluted
| |
95.8
| | |
96.9
| | |
96.0
| | |
96.8
| |
| | | | | | | | | | | |
|
|
| |
| |
| ALLEGION PLC |
| Condensed and Consolidated Balance Sheets |
| (in millions) |
|
|
UNAUDITED |
| | | |
|
| | September 30, 2017 | | December 31, 2016 |
| ASSETS | | | | |
|
Cash and cash equivalents
| |
$
|
334.9
| | |
$
|
312.4
|
|
Accounts and notes receivables, net
| |
302.8
| | |
260.0
|
|
Inventories
| |
257.1
| | |
220.6
|
|
Other current assets
| |
29.8
|
| |
36.3
|
|
Total current assets
| |
924.6
| | |
829.3
|
|
Property, plant and equipment, net
| |
246.1
| | |
226.6
|
|
Goodwill
| |
755.9
| | |
716.8
|
|
Intangible assets, net
| |
393.2
| | |
357.4
|
|
Other noncurrent assets
| |
127.5
|
| |
117.3
|
|
Total assets
| |
$
|
2,447.3
|
| |
$
|
2,247.4
|
| | | |
|
| LIABILITIES AND EQUITY | | | | |
|
Accounts payable
| |
$
|
177.7
| | |
$
|
179.9
|
|
Accrued expenses and other current liabilities
| |
219.5
| | |
201.5
|
|
Short-term borrowings and current maturities
| | | | |
|
of long-term debt
| |
35.0
|
| |
48.2
|
|
Total current liabilities
| |
432.2
| | |
429.6
|
|
Long-term debt
| |
1,412.0
| | |
1,415.6
|
|
Other noncurrent liabilities
| |
231.0
|
| |
285.8
|
|
Equity
| |
372.1
|
| |
116.4
|
|
Total liabilities and equity
| |
$
|
2,447.3
|
| |
$
|
2,247.4
|
| | | | | | |
|
|
| |
| ALLEGION PLC |
| Condensed and Consolidated Cash Flows |
| (in millions) |
|
|
UNAUDITED |
| |
|
| | Nine months ended September 30, |
| | 2017 |
| 2016 |
| Operating Activities | | | | |
|
Net earnings
| |
$
|
264.6
| | |
$
|
156.2
| |
|
Depreciation and amortization
| |
49.9
| | |
50.7
| |
|
Discretionary pension plan contribution
| |
(50.0
|
)
| |
—
| |
|
Changes in assets and liabilities and other non-cash items
| |
(94.5
|
)
| |
(28.5
|
)
|
|
Net cash from operating activities
| |
170.0
| | |
178.4
| |
| | | |
|
| Investing Activities | | | | |
|
Capital expenditures
| |
(33.7
|
)
| |
(26.4
|
)
|
|
Acquisition of and equity investments in businesses, net of cash
acquired
| |
(20.8
|
)
| |
(31.4
|
)
|
|
Other investing activities, net
| |
18.4
|
| |
8.5
|
|
|
Net cash used in investing activities
| |
(36.1
|
)
| |
(49.3
|
)
|
| | | |
|
| Financing Activities | | | | |
|
Net debt proceeds (repayments)
| |
(16.1
|
)
| |
(53.6
|
)
|
|
Dividends paid to ordinary shareholders
| |
(45.6
|
)
| |
(34.5
|
)
|
|
Repurchase of ordinary shares
| |
(60.0
|
)
| |
(30.0
|
)
|
|
Other financing activities, net
| |
3.0
|
| |
2.1
|
|
|
Net cash used in financing activities
| |
(118.7
|
)
| |
(116.0
|
)
|
| | | |
|
|
Effect of exchange rate changes on cash and cash equivalents
| |
7.3
|
| |
1.7
|
|
|
Net increase in cash and cash equivalents
| |
22.5
| | |
14.8
| |
|
Cash and cash equivalents - beginning of period
| |
312.4
|
| |
199.7
|
|
|
Cash and cash equivalents - end of period
| |
$
|
334.9
|
| |
$
|
214.5
|
|
| | | | | | | |
|
|
| |
| |
SUPPLEMENTAL SCHEDULES |
| | | |
|
| ALLEGION PLC | | | |
SCHEDULE 1
|
| | | |
|
| SELECTED OPERATING SEGMENT INFORMATION |
| (in millions) |
|
| | Three months ended | | Nine months ended |
| | September 30, | | September 30, |
| | 2017 |
| 2016 | | 2017 |
| 2016 |
| Net revenues | | | | | | | | |
| Americas | |
$
|
455.2
| | |
$
|
436.2
| | |
$
|
1,331.4
| | |
$
|
1,235.7
| |
|
EMEIA
| |
125.1
| | |
116.4
| | |
372.7
| | |
356.5
| |
| Asia Pacific | |
29.1
|
| |
28.5
|
| |
81.0
|
| |
76.1
|
|
|
Total net revenues
| |
$
|
609.4
|
| |
$
|
581.1
|
| |
$
|
1,785.1
|
| |
$
|
1,668.3
|
|
| | | | | | | |
|
| Operating income (loss) | | | | | | | | |
| Americas | |
$
|
131.8
| | |
$
|
131.5
| | |
$
|
379.7
| | |
$
|
351.7
| |
|
EMEIA
| |
9.1
| | |
3.4
| | |
24.5
| | |
20.3
| |
| Asia Pacific | |
2.2
| | |
1.8
| | |
5.1
| | |
3.8
| |
|
Corporate unallocated
| |
(17.0
|
)
| |
(15.2
|
)
| |
(50.3
|
)
| |
(47.5
|
)
|
|
Total operating income
| |
$
|
126.1
|
| |
$
|
121.5
|
| |
$
|
359.0
|
| |
$
|
328.3
|
|
| | | | | | | | | | | | | | | |
|
|
|
ALLEGION PLC | SCHEDULE 2 |
|
|
| | |
The Company presents operating income, operating margin, net
earnings, diluted earnings per share (EPS), on both a U.S. GAAP
basis and on an adjusted basis, organic revenue growth on a U.S.
GAAP basis, and also presents adjusted EBITDA and adjusted EBITDA
margin. The Company presents these measures because management
believes they provide useful perspective of the Company’s
underlying business results, trends and a more comparable measure
of period-over-period results. These measures are also used to
evaluate senior management and are a factor in determining at-risk
compensation. Investors should not consider non-GAAP measures as
alternatives to the related U.S. GAAP measures.
|
| |
|
|
The Company defines the presented non-GAAP measures as follows:
|
•
| |
Adjustments to revenue, operating income, operating margin, net
earnings, EPS, and EBITDA include items that are considered to be
unusual or infrequent in nature such as goodwill impairment
charges, restructuring charges, asset impairments, merger and
acquisitions costs, and charges related to the divestiture of
businesses
|
•
| |
Organic revenue growth is defined as U.S. GAAP revenue growth
excluding the impact of divestitures, acquisitions and currency
effects
|
•
| |
Available cash flow is defined as U.S. GAAP net cash operating
activities less capital expenditures.
|
|
|
|
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, 2017 | | Three months ended September 30, 2016 |
| | |
| | |
|
Adjusted
| | |
| | |
|
Adjusted
|
| |
Reported
| |
Adjustments
| | |
(non-GAAP)
| |
Reported
| |
Adjustments
| | |
(non-GAAP)
|
|
Net revenues
| |
$
|
609.4
| | |
$
|
—
| | | |
$
|
609.4
| | |
$
|
581.1
| | |
$
|
—
| | | |
$
|
581.1
| |
| | | | | | | | | | | | | |
|
|
Operating income
| |
126.1
| | |
8.5
| | (1) | |
134.6
| | |
121.5
| | |
5.2
| | (1) | |
126.7
| |
|
Operating margin
| |
20.7
|
%
| | | | |
22.1
|
%
| |
20.9
|
%
| | | | |
21.8
|
%
|
| | | | | | | | | | | | | |
|
|
Earnings before income taxes
| |
112.0
| | |
10.1
| | (2) | |
122.1
| | |
21.1
| | |
89.6
| | (2) | |
110.7
| |
|
Provision for income taxes
| |
21.9
| | |
2.5
| | (3) | |
24.4
| | |
19.1
| | |
1.3
| | (3) | |
20.4
| |
|
Effective income tax rate
| | 19.6 | % | |
| | | 20.0 | % | | 90.5 | % | |
| | | 18.4 | % |
|
Net earnings
| |
90.1
| | |
7.6
| | | |
97.7
| | |
2.0
| | |
88.3
| | | |
90.3
| |
| | | | | | | | | | | | | |
|
|
Non-controlling interest
| |
0.3
|
| |
—
|
| | |
0.3
|
| |
0.4
|
| |
—
|
| | |
0.4
|
|
| | | | | | | | | | | | | |
|
Net earnings attributable to Allegion plc
| |
$
|
89.8
|
| |
$
|
7.6
|
| | |
$
|
97.4
|
| |
$
|
1.6
|
| |
$
|
88.3
|
| | |
$
|
89.9
|
|
| | | | | | | | | | | | | |
|
|
Diluted earnings per ordinary
| | | | | | | | | | | | | | |
|
share attributable to Allegion plc
| |
| |
| | |
| |
| |
| | |
|
|
shareholders:
| |
$
|
0.94
|
| |
$
|
0.08
|
| | |
$
|
1.02
|
| |
$
|
0.02
|
| |
$
|
0.91
|
| | |
$
|
0.93
|
|
|
(1)
|
|
Adjustments to operating income for the three months ended September
30, 2017 and September 30, 2016 consist of $8.5 million and $5.2
million, respectively, of restructuring charges and merger and
acquisition expenses.
|
|
(2)
| |
Adjustments to earnings before income taxes for the three months
ended September 30, 2017 consist of the adjustments to operating
income discussed above and $1.6 million of charges related to the
refinance of the Company's Credit Facility. Adjustments to earnings
before income taxes for the three months end September 30, 2016
consist of the adjustments to operating income discussed above and a
$84.4 million loss related to the divestiture of the Company's
systems integration business in China.
|
|
(3)
| |
Adjustments to the provision for income taxes for the three months
ended September 30, 2017 and September 30, 2016 consist of $2.5
million and $1.3 million, respectively, of tax expense related to
the excluded items discussed above.
|
| |
|
|
| |
| |
| | Nine months ended September 30, 2017 | | Nine months ended September 30, 2016 |
| | |
| | |
|
Adjusted
| | |
| | |
|
Adjusted
|
| |
Reported
| |
Adjustments
| | |
(non-GAAP)
| |
Reported
| |
Adjustments
| | |
(non-GAAP)
|
|
Net revenues
| |
$
|
1,785.1
| | |
$
|
—
| | | |
$
|
1,785.1
| | |
$
|
1,668.3
| | |
$
|
—
| | | |
$
|
1,668.3
| |
| | | | | | | | | | | | | |
|
|
Operating income
| |
359.0
| | |
12.3
| | (1) | |
371.3
| | |
328.3
| | |
8.7
| | (1) | |
337.0
| |
|
Operating margin
| |
20.1
|
%
| | | | |
20.8
|
%
| |
19.7
|
%
| | | | |
20.2
|
%
|
| | | | | | | | | | | | | |
|
|
Earnings before income taxes
| |
317.5
| | |
13.9
| | (2) | |
331.4
| | |
212.5
| | |
93.1
| | (2) | |
305.6
| |
|
Provision for income taxes
| |
52.9
| | |
3.8
| | (3) | |
56.7
| | |
56.3
| | |
2.2
| | (3) | |
58.5
| |
|
Effective income tax rate
| | 16.7 | % | |
| | | 17.1 | % | | 26.5 | % | |
| | | 19.1 | % |
|
Net earnings
| |
264.6
| | |
10.1
| | | |
274.7
| | |
156.2
| | |
90.9
| | | |
247.1
| |
| | | | | | | | | | | | | |
|
|
Non-controlling interest
| |
0.9
|
| |
—
|
| | |
0.9
|
| |
1.9
|
| |
—
|
| | |
1.9
|
|
| | | | | | | | | | | | | |
|
|
Net earnings attributable to Allegion plc
| |
$
|
263.7
|
| |
$
|
10.1
|
| | |
$
|
273.8
|
| |
$
|
154.3
|
| |
$
|
90.9
|
| | |
$
|
245.2
|
|
| | | | | | | | | | | | | |
|
|
Diluted earnings per ordinary share
| | | | | | | | | | | | | | |
|
attributable to Allegion plc
| |
| |
| | |
| |
| |
| | |
|
|
shareholders:
| |
$
|
2.75
|
| |
$
|
0.10
|
| | |
$
|
2.85
|
| |
$
|
1.59
|
| |
$
|
0.94
|
| | |
$
|
2.53
|
|
|
(1)
|
|
Adjustments to operating income for the nine months ended September
30, 2017 and September 30, 2016 consist of $12.3 million and $8.7
million, respectively, of restructuring charges and merger and
acquisition expenses.
|
|
(2)
| |
Adjustments to earnings before income taxes for the nine months
ended September 30, 2017 consist of the adjustments to operating
income discussed above and $1.6 million of charges related to the
refinance of the Company's Credit Facility. Adjustments to earnings
before income taxes for the nine months ended September 30, 2016
consist of the adjustments to operating income discussed above and a
$84.4 million loss related to the divestiture of the Company's
systems integration business in China.
|
|
(3)
| |
Adjustments to the provision for income taxes for the nine months
ended September 30, 2017 and September 30, 2016 consist of $3.7
million and $2.2 million, respectively, of tax expense related to
the excluded items discussed above.
|
| |
|
|
| |
| |
ALLEGION PLC | | | | SCHEDULE 3 |
|
|
RECONCILIATION OF GAAP TO NON-GAAP REVENUE AND OPERATING INCOME
BY REGION |
| (in millions) |
| | | |
|
| | Three months ended September 30, 2017 | | Three months ended September 30, 2016 |
| |
As Reported
|
|
Margin
| |
As Reported
|
|
Margin
|
| Americas | | | | | | | | |
|
Net revenues (GAAP)
| |
$
|
455.2
| | | | |
$
|
436.2
| | | |
| | | | | | | |
|
|
Operating income (GAAP)
| |
$
|
131.8
| | |
29.0
|
%
| |
$
|
131.5
| | |
30.1
|
%
|
|
Restructuring charges
| |
5.3
|
| |
1.2
|
%
| |
0.8
|
| |
0.2
|
%
|
|
Adjusted operating income
| |
137.1
| | |
30.2
|
%
| |
132.3
| | |
30.3
|
%
|
|
Depreciation and amortization
| |
6.4
|
| |
1.4
|
%
| |
6.6
|
| |
1.5
|
%
|
|
Adjusted EBITDA
| |
$
|
143.5
|
| |
31.6
|
%
| |
$
|
138.9
|
| |
31.8
|
%
|
| | | | | | | |
|
| EMEIA | | | | | | | | |
|
Net revenues (GAAP)
| |
$
|
125.1
| | | | |
$
|
116.4
| | | |
| | | | | | | |
|
|
Operating income (GAAP)
| |
$
|
9.1
| | |
7.3
|
%
| |
$
|
3.4
| | |
2.9
|
%
|
|
Restructuring charges
| |
1.5
| | |
1.2
|
%
| |
3.6
| | |
3.1
|
%
|
|
Merger and acquisition costs
| |
—
|
| |
—
|
%
| |
0.3
|
| |
0.3
|
%
|
|
Adjusted operating income
| |
10.6
| | |
8.5
|
%
| |
7.3
| | |
6.3
|
%
|
|
Depreciation and amortization
| |
7.5
|
| |
6.0
|
%
| |
7.3
|
| |
6.3
|
%
|
|
Adjusted EBITDA
| |
$
|
18.1
|
| |
14.5
|
%
| |
$
|
14.6
|
| |
12.6
|
%
|
| | | | | | | |
|
| Asia Pacific | | | | | | | | |
|
Net revenues (GAAP)
| |
$
|
29.1
| | | | |
$
|
28.5
| | | |
| | | | | | | |
|
|
Operating income (GAAP)
| |
$
|
2.2
| | |
7.6
|
%
| |
$
|
1.8
| | |
6.3
|
%
|
| | | | | | | |
|
|
Adjusted operating income
| |
2.2
| | |
7.6
|
%
| |
1.8
| | |
6.3
|
%
|
|
Depreciation and amortization
| |
0.6
|
| |
2.0
|
%
| |
0.6
|
| |
2.1
|
%
|
|
Adjusted EBITDA
| |
$
|
2.8
|
| |
9.6
|
%
| |
$
|
2.4
|
| |
8.4
|
%
|
| | | | | | | |
|
| Corporate | | | | | | | | |
|
Operating loss (GAAP)
| |
$
|
(17.0
|
)
| | | |
$
|
(15.2
|
)
| | |
|
Merger and acquisition costs
| |
1.2
| | | | |
0.5
| | | |
|
Restructuring charges
| |
0.5
|
| | | |
—
|
| | |
|
Adjusted operating loss
| |
(15.3
|
)
| | | |
(14.7
|
)
| | |
|
Depreciation and amortization
| |
1.0
|
| | | |
1.4
|
| | |
|
Adjusted EBITDA
| |
$
|
(14.3
|
)
| | | |
$
|
(13.3
|
)
| | |
| | | | | | | |
|
| Total | | | | | | | | |
|
Net revenues
| |
$
|
609.4
| | | | |
$
|
581.1
| | | |
| | | | | | | |
|
|
Adjusted operating income
| |
134.6
| | |
22.1
|
%
| |
126.7
| | |
21.8
|
%
|
|
Depreciation and amortization
| |
15.5
|
| |
2.5
|
%
| |
15.9
|
| |
2.7
|
%
|
|
Adjusted EBITDA
| |
$
|
150.1
|
| |
24.6
|
%
| |
$
|
142.6
|
| |
24.5
|
%
|
| | | | | | | | | | | | | |
|
|
| |
| |
| | Nine months ended September 30, 2017 | | Nine months ended September 30, 2016 |
| |
As Reported
|
|
Margin
| |
As Reported
|
|
Margin
|
| Americas | | | | | | | | |
|
Net revenues (GAAP)
| |
$
|
1,331.4
| | | | |
$
|
1,235.7
| | | |
| | | | | | | |
|
|
Operating income (GAAP)
| |
$
|
379.7
| | |
28.5
|
%
| |
$
|
351.7
| | |
28.5
|
%
|
|
Restructuring charges
| |
5.4
| | |
0.4
|
%
| |
2.0
| | |
0.2
|
%
|
|
Merger and acquisition costs
| |
0.3
|
| |
—
|
%
| |
0.1
|
| |
—
|
%
|
|
Adjusted operating income
| |
385.4
| | |
28.9
|
%
| |
353.8
| | |
28.7
|
%
|
|
Depreciation and amortization
| |
19.6
|
| |
1.5
|
%
| |
19.8
|
| |
1.6
|
%
|
|
Adjusted EBITDA
| |
$
|
405.0
|
| |
30.4
|
%
| |
$
|
373.6
|
| |
30.3
|
%
|
| | | | | | | |
|
| EMEIA | | | | | | | | |
|
Net revenues (GAAP)
| |
$
|
372.7
| | | | |
$
|
356.5
| | | |
| | | | | | | |
|
|
Operating income (GAAP)
| |
$
|
24.5
| | |
6.6
|
%
| |
$
|
20.3
| | |
5.7
|
%
|
|
Restructuring charges
| |
3.9
| | |
1.0
|
%
| |
4.2
| | |
1.2
|
%
|
|
Merger and acquisition costs
| |
—
|
| |
—
|
%
| |
0.5
|
| |
0.1
|
%
|
|
Adjusted operating income
| |
28.4
| | |
7.6
|
%
| |
25.0
| | |
7.0
|
%
|
|
Depreciation and amortization
| |
21.0
|
| |
5.6
|
%
| |
21.1
|
| |
5.9
|
%
|
|
Adjusted EBITDA
| |
$
|
49.4
|
| |
13.2
|
%
| |
$
|
46.1
|
| |
12.9
|
%
|
| | | | | | | |
|
| Asia Pacific | | | | | | | | |
|
Net revenues (GAAP)
| |
$
|
81.0
| | | | |
$
|
76.1
| | | |
| | | | | | | |
|
|
Operating income (GAAP)
| |
5.1
| | |
6.3
|
%
| |
3.8
| | |
5.0
|
%
|
|
Restructuring charges
| |
—
|
| |
—
|
%
| |
0.3
|
| |
0.4
|
%
|
|
Adjusted operating income
| |
5.1
| | |
6.3
|
%
| |
4.1
| | |
5.4
|
%
|
|
Depreciation and amortization
| |
1.8
|
| |
2.2
|
%
| |
1.8
|
| |
2.4
|
%
|
|
Adjusted EBITDA
| |
$
|
6.9
|
| |
8.5
|
%
| |
$
|
5.9
|
| |
7.8
|
%
|
| | | | | | | |
|
| Corporate | | | | | | | | |
|
Operating loss (GAAP)
| |
$
|
(50.3
|
)
| | | |
$
|
(47.5
|
)
| | |
|
Merger and acquisition costs
| |
2.1
| | | | |
1.6
| | | |
|
Restructuring charges
| |
0.6
|
| | | |
—
|
| | |
|
Adjusted operating loss
| |
(47.6
|
)
| | | |
(45.9
|
)
| | |
|
Depreciation and amortization
| |
3.0
|
| | | |
3.9
|
| | |
|
Adjusted EBITDA
| |
$
|
(44.6
|
)
| | | |
$
|
(42.0
|
)
| | |
| | | | | | | |
|
| Total | | | | | | | | |
|
Net revenues
| |
$
|
1,785.1
| | | | |
$
|
1,668.3
| | | |
| | | | | | | |
|
|
Adjusted operating income
| |
371.3
| | |
20.8
|
%
| |
337.0
| | |
20.2
|
%
|
|
Depreciation and amortization
| |
45.4
|
| |
2.5
|
%
| |
46.6
|
| |
2.8
|
%
|
|
Adjusted EBITDA
| |
$
|
416.7
|
| |
23.3
|
%
| |
$
|
383.6
|
| |
23.0
|
%
|
| | | | | | | | | | | | | |
|
|
| |
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, |
| | 2017 |
|
| 2016 |
|
Net cash provided by operating activities
| |
$
|
170.0
| | | |
$
|
178.4
| |
|
Capital expenditures
| |
(33.7
|
)
| | |
(26.4
|
)
|
|
Available cash flow
| |
$
|
136.3
|
| | |
$
|
152.0
|
|
| | | | | | | | |
|
|
| |
| |
| | Three months ended September 30, | | Nine months ended September 30, |
| | 2017 |
| 2016 | | 2017 |
| 2016 |
|
Net earnings (GAAP)
| |
$
|
90.1
| | |
$
|
2.0
| | |
$
|
264.6
| | |
$
|
156.2
| |
|
Provision for income taxes
| |
21.9
| | |
19.1
| | |
52.9
| | |
56.3
| |
|
Interest expense
| |
17.8
| | |
15.6
| | |
49.7
| | |
48.4
| |
|
Depreciation and amortization
| |
15.5
|
| |
15.9
|
| |
45.4
|
| |
46.6
|
|
|
EBITDA
| |
145.3
| | |
52.6
| | |
412.6
| | |
307.5
| |
| | | | | | | |
|
|
Other (income) expense, net
| |
(3.7
|
)
| |
0.4
| | |
(8.2
|
)
| |
(17.0
|
)
|
|
Loss on divestitures
| |
—
| | |
84.4
| | |
—
| | |
84.4
| |
|
Merger and acquisition costs and restructuring charges
| |
8.5
|
| |
5.2
|
| |
12.3
|
| |
8.7
|
|
|
Adjusted EBITDA
| |
$
|
150.1
|
| |
$
|
142.6
|
| |
$
|
416.7
|
| |
$
|
383.6
|
|
| | | | | | | | | | | | | | | |
|
|
| |
| |
| |
| |
| ALLEGION PLC | | SCHEDULE 5 |
|
|
| RECONCILIATION OF GAAP REVENUE GROWTH TO NON-GAAP ORGANIC REVENUE
GROWTH BY REGION |
| | | | | | | |
|
| | Three months ended | | Nine months ended |
| | September 30, | | September 30, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Americas | | | | | | | | |
|
Revenue growth (GAAP)
| |
4.4
|
%
| |
4.1
|
%
| |
7.7
|
%
| |
5.1
|
%
|
|
Acquisitions and Divestitures
| |
(1.5
|
)%
| |
1.5
|
%
| |
(1.5
|
)%
| |
0.9
|
%
|
|
Currency translation effects
| |
(0.1
|
)%
| |
—
|
%
| |
—
|
%
| |
0.4
|
%
|
|
Organic growth (non-GAAP)
| |
2.8
|
%
| |
5.6
|
%
| |
6.2
|
%
| |
6.4
|
%
|
| | | | | | | |
|
| EMEIA | | | | | | | | |
|
Revenue growth (GAAP)
| |
7.5
|
%
| |
27.2
|
%
| |
4.5
|
%
| |
38.7
|
%
|
|
Acquisitions and Divestitures
| |
—
|
%
| |
(27.0
|
)%
| |
(2.2
|
)%
| |
(37.3
|
)%
|
|
Currency translation effects
| |
(4.4
|
)%
| |
1.4
|
%
| |
1.3
|
%
| |
1.2
|
%
|
|
Organic growth (non-GAAP)
| |
3.1
|
%
| |
1.6
|
%
| |
3.6
|
%
| |
2.6
|
%
|
| | | | | | | |
|
| Asia Pacific | | | | | | | | |
|
Revenue growth (GAAP)
| |
2.1
|
%
| |
(16.4
|
)%
| |
6.4
|
%
| |
(15.7
|
)%
|
|
Acquisitions and Divestitures
| |
—
|
%
| |
26.1
|
%
| |
(1.0
|
)%
| |
24.1
|
%
|
|
Currency translation effects
| |
(1.7
|
)%
| |
(2.4
|
)%
| |
(1.2
|
)%
| |
1.2
|
%
|
|
Organic growth (non-GAAP)
| |
0.4
|
%
| |
7.3
|
%
| |
4.2
|
%
| |
9.6
|
%
|
| | | | | | | |
|
| Total | | | | | | | | |
|
Revenue growth (GAAP)
| |
4.9
|
%
| |
6.7
|
%
| |
7.0
|
%
| |
9.6
|
%
|
|
Acquisitions and Divestitures
| |
(1.0
|
)%
| |
(1.8
|
)%
| |
(1.6
|
)%
| |
(4.2
|
)%
|
|
Currency translation effects
| |
(1.2
|
)%
| |
0.1
|
%
| |
0.1
|
%
| |
0.5
|
%
|
|
Organic growth (non-GAAP)
| |
2.7
|
%
| |
5.0
|
%
| |
5.5
|
%
| |
5.9
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171026005386/en/
Allegion plc
Media Contact:
Maria Pia Tamburri - Director,
Public Affairs, 317-810-3399
[email protected]
or
Analyst
Contact:
Mike Wagnes – Vice President, Treasurer and Investor
Relations, 317-810-3494
[email protected]
Source: Allegion plc
