Allegion Plc (ALLE) SEC Filing 10-Q Quarterly report for the period ending Sunday, September 30, 2018

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10-Q Quarterly Report
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Allegion Plc
Ticker: ALLE CIK: 1579241

ALLEGION REPORTS THIRD-QUARTER 2018 FINANCIAL RESULTS


•	Third-quarter 2018 net earnings per share (EPS) of $1.21, compared with 2017 EPS of $0.94; Adjusted 2018 EPS of $1.23, up 20.6 percent compared with 2017 adjusted EPS of $1.02


•	Third-quarter 2018 revenue of $711.5 million, up 16.8 percent compared to 2017, up 8.5 percent on an organic basis


•	Third-quarter 2018 operating margin of 20 percent, compared with 2017 operating margin of 20.9 percent; Adjusted operating margin of 20.9 percent, declined 140 basis points compared with 2017 adjusted operating margin of 22.3 percent due to dilution from acquisitions; 2018 acquisitions were dilutive to adjusted operating margins by 140 basis points


•	Updating outlook for 2018 full-year revenue and full-year EPS; Full-year 2018 reported revenue growth of 13 to 13.5 percent and organic revenue growth of 5 to 5.5 percent; Full-year 2018 EPS outlook of $4.23 to $4.35 and $4.43 to $4.50 per share on an adjusted basis

DUBLIN (Oct. 25, 2018) - Allegion plc (NYSE: ALLE), a leading global provider of security products and solutions, today reported third-quarter 2018 net revenues of $711.5 million and net earnings of $116 million, or $1.21 per share. Excluding charges related to restructuring, acquisitions and adjustments to provisional amounts related to the enactment of tax reform, adjusted net earnings were $117.9 million, or $1.23 per share, up 20.6 percent when compared with third-quarter 2017 adjusted EPS of $1.02.

Third-quarter net revenues increased 16.8 percent when compared to the prior year period (up 8.5 percent on an organic basis). Reported revenues reflect strong organic growth across all regions, as well as benefits from acquisitions offsetting foreign currency impacts.

Third-quarter 2018 operating income was $142.3 million, an increase of $15.2 million or 12 percent compared to 2017. Adjusted operating income in third-quarter 2018 was $149 million, representing an increase of $13.4 million or 9.9 percent compared to 2017.

Third-quarter 2018 operating margin was 20 percent, compared with 20.9 percent in 2017. The adjusted operating margin in third-quarter 2018 was 20.9 percent, compared with 22.3 percent in 2017. The 140-basis-point decline in adjusted operating margin is attributable to dilution from the 2018 acquisitions.

“I am pleased with our performance as we delivered another quarter of double-digit top-line revenue growth, with organic growth rates in the high-single digits,” said David D. Petratis, Allegion chairman, president and CEO. “Robust electronics growth as well as solid top-line performance across all three regions drove that strong organic growth, and end-market fundamentals remain healthy.

“I am also very pleased with the more than 20-percent increase in adjusted EPS as inflationary pressures continued to challenge operating margins. Excluding acquisitions, the base business margins were flat year over year, as the global team continues to drive price realization, productivity and other cost savings to mitigate significant inflationary pressures,” Petratis added.

The Americas segment revenue increased 16.5 percent (up 10.1 percent on an organic basis). The revenue growth was driven by robust growth in electronics (nearly 30 percent), very strong pricing and solid volume in both the non-residential and residential businesses. Acquisitions contributed 6.6 percent to the overall growth.

The EMEIA segment revenues were up 7.4 percent (up 3.4 percent on an organic basis), reflecting solid pricing, modest volume and contributions from acquisitions partially offset by unfavorable foreign currency.

The Asia-Pacific segment revenues increased 61.5 percent (up 5.9 percent on an organic basis). The revenue growth in the quarter was driven by the recently acquired Gainsborough Hardware and API Locksmiths business as well as solid volume partially offset by unfavorable currency.

Additional Items

Interest expense for third-quarter 2018 was $14 million, down from the $17.8 million for third-quarter 2017. The decrease is driven by the refinancing of the company’s debt completed in 2017.

The following information was filed by Allegion Plc (ALLE) on Thursday, October 25, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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