Allegion(ALLE)2025-04-24 10:02Financial Performance - Net revenues for Q1 2025 increased to $941.9 million, up 5.9% from $893.9 million in Q1 2024[10] - Operating income rose to $196.4 million, reflecting a 14.1% increase compared to $172.1 million in the same period last year[10] - Net earnings attributable to Allegion plc reached $148.2 million, a 19.7% increase from $123.8 million in Q1 2024[10] - Basic earnings per share increased to $1.72, up 21.9% from $1.41 in Q1 2024[10] - Total comprehensive income attributable to Allegion plc for Q1 2025 was $184.8 million, significantly higher than $99.8 million in Q1 2024[10] - Net earnings for the three months ended March 31, 2025, were $148.2 million, an increase from $123.8 million for the same period in 2024[47] - The total equity of Allegion plc increased from $1,500.7 million at December 31, 2024, to $1,606.9 million at March 31, 2025[47] Assets and Liabilities - Total assets as of March 31, 2025, were $4,564.1 million, compared to $4,487.8 million at the end of 2024, marking a 1.7% increase[12] - As of March 31, 2025, total long-term debt was $1,972.0 million, a slight decrease from $1,977.6 million as of December 31, 2024[27] - The Company has an outstanding $209.4 million on its $250.0 million Term Facility and no balance on its $750.0 million Revolving Facility as of March 31, 2025[28] - Total current assets as of March 31, 2025, were $12.2 million for Allegion plc and $692.7 million for Allegion US Hold Co[118] - Total current liabilities as of March 31, 2025, were $50.4 million for Allegion plc and $805.8 million for Allegion US Hold Co[118] Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of Q1 2025 were $494.5 million, down from $503.8 million at the beginning of the period[14] - Capital expenditures for Q1 2025 were $21.1 million, a decrease from $27.2 million in Q1 2024[14] - Net cash provided by operating activities increased by $53.4 million to $104.5 million in Q1 2025 compared to Q1 2024, driven by higher net earnings and lower working capital usage[103] - Net cash used in investing activities decreased by $15.4 million to $28.0 million in Q1 2025, primarily due to lower capital expenditures and reduced cash used for acquisitions[104] - Net cash used in financing activities increased by $11.3 million to $91.3 million in Q1 2025, mainly due to higher cash used for other financing activities[104] Segment Performance - Allegion Americas segment reported net revenues of $757.8 million, up from $709.3 million in 2024, while Allegion International segment revenues slightly decreased to $184.1 million from $184.6 million[66] - Segment operating income for Allegion Americas was $211.4 million in Q1 2025, compared to $187.0 million in Q1 2024, while Allegion International's operating income decreased to $11.7 million from $13.0 million[66] - Allegion Americas segment net revenues increased by 6.8%, or $48.5 million, to $757.8 million, driven by higher volumes and acquisitions[90] - Allegion International segment net revenues decreased by 0.3%, or $0.5 million, to $184.1 million, primarily due to unfavorable foreign currency exchange rates[97] Debt and Interest - The interest rate on outstanding borrowings under the Credit Facilities was 5.550% as of March 31, 2025, based on SOFR plus a margin of 1.225%[30] - Interest expense for Q1 2025 increased by $1.8 million to $24.7 million due to higher interest rates on outstanding debt[82] - The company had $400.0 million of 3.550% Senior Notes due 2027 and $600.0 million of 5.411% Senior Notes due 2032 outstanding as of March 31, 2025[31] Shareholder Activities - The company repurchased $40.0 million of ordinary shares during the three months ended March 31, 2025, with approximately $200.0 million remaining under the share repurchase authorization[47] - The company has authorized the repurchase of up to $500.0 million of its ordinary shares under the existing share repurchase program[133] - A total of 312,000 shares were purchased during the first quarter of 2025 at an average price of $128.29 per share[133] Tax and Compliance - The effective income tax rate decreased to 15.4% in Q1 2025 from 19.0% in Q1 2024, primarily due to favorable changes in uncertain tax positions and income tax credits[54] - The company remains in compliance with all applicable covenants under the credit agreement as of March 31, 2025[107] Acquisitions and Investments - The company completed acquisitions of Next Door and Lemaar for a total consideration of approximately $11.1 million in Q1 2025[19][20] - Allegion completed the acquisition of Trimco Hardware on April 2, 2025, which will be integrated into the Allegion Americas segment[67] - The company had investments in debt and equity securities without readily determinable fair values of $64.9 million as of March 31, 2025[46] Risk Management - The company continues to face risks related to increased competition and technological developments[127] - The company has not identified any new risk factors beyond those disclosed in its Annual Report for the year ended December 31, 2024[132] - The company is committed to managing its global supply chain effectively to mitigate disruptions[127] Operational Efficiency - The company experienced mid-single digit revenue growth in Q1 2025, driven by strong demand in the Americas non-residential business[71] - The company estimates that approximately 20-25% of its cost of goods sold (COGS) is sourced from Mexico, with less than 5% from China[72] Internal Controls and Reporting - There have been no changes in the company's internal control over financial reporting that materially affected its effectiveness during the first quarter of 2025[129] - The management has concluded that the disclosure controls and procedures are effective as of March 31, 2025[126]