Allegion(US:ALLE)2023-07-25 16:00Financial Performance - Net earnings for the six months ended June 30, 2023, were $265.6 million, up from $208.3 million in the same period of 2022, representing a year-over-year increase of about 27.5%[13] - Pro forma net revenues for the six months ended June 30, 2023, were $1,835.5 million, compared to $1,673.8 million in 2022, indicating a growth of approximately 9.7%[22] - Net revenues for the six months ended June 30, 2023, were $1,741.8 million, a 16.3% increase from $1,496.7 million in the same period of 2022[72] - Allegion's total net revenues for the six months ended June 30, 2023, were $1,741.8 million, compared to $1,496.7 million in 2022, marking an increase of approximately 16.4%[72] - Net revenues for the three months ended June 30, 2023, were $727.2 million, an increase from $587.3 million in the same period of 2022, representing a growth of approximately 24%[72] Assets and Liabilities - Total assets increased to $4,163.8 million as of June 30, 2023, compared to $3,991.2 million at December 31, 2022, reflecting a growth of approximately 4.3%[9] - Allegion's total liabilities decreased slightly to $3,023.3 million as of June 30, 2023, from $3,046.7 million at the end of 2022, a reduction of about 0.8%[9] - Total long-term debt as of June 30, 2023, was $2,046.7 million, a decrease from $2,081.9 million as of December 31, 2022[30] - The company had $231.3 million outstanding under the 2021 Term Facility and $39.0 million under the 2021 Revolving Facility as of June 30, 2023[31] - Total current assets for Allegion plc were $3.9 million, and for Allegion US Hold Co, they were $403.6 million as of June 30, 2023[128] Cash Flow - The company reported a net cash provided by operating activities of $230.1 million for the six months ended June 30, 2023, compared to $109.1 million in the same period of 2022, reflecting a significant increase of 110.5%[13] - Net cash used in investing activities during the six months ended June 30, 2023, increased by $37.3 million compared to the same period in 2022, primarily due to cash paid for the plano acquisition[120] - The company expects cash flows from operations to be sufficient to maintain a sound financial position and liquidity for at least the next 12 months[119] Acquisitions - The company completed the acquisition of plano. group for an initial cash consideration of $36.6 million, enhancing its SaaS workforce management solutions[17] - Allegion's acquisition of Stanley Access Technologies LLC for $915.2 million is expected to broaden its access solutions portfolio and enhance service capabilities across the U.S. and Canada[17] Shareholder Returns - The company paid dividends totaling $79.3 million to ordinary shareholders during the six months ended June 30, 2023, compared to $71.5 million in the same period of 2022, an increase of approximately 10.9%[13] - Dividends to ordinary shareholders for the six months ended June 30, 2023, totaled $39.6 million[55] - The Company repurchased $19.9 million of ordinary shares during the six months ended June 30, 2023[56] Expenses - The company incurred $6.9 million in acquisition and integration-related expenses during the first half of 2023, compared to $8.8 million in the same period of 2022[24] - Total rental expense for the six months ended June 30, 2023, was $31.6 million, up from $21.5 million in the same period of 2022[38] - Share-based compensation expense for the six months ended June 30, 2023, was $14.4 million, a decrease from $15.9 million in the same period of 2022[59] Goodwill and Intangible Assets - The company recognized approximately $3 million of net working capital and $22 million of goodwill from the acquisition of plano[17] - The net carrying amount of goodwill as of June 30, 2023, was $1,439.1 million, down from $1,413.1 million as of December 31, 2022[28] - Intangible asset amortization expense for the six months ended June 30, 2023, was $30.9 million, compared to $16.1 million for the same period in 2022[29] Taxation - The effective income tax rate for the six months ended June 30, 2023, was 14.4%, up from 13.4% in 2022, primarily due to a change in the mix of income earned in higher tax rate jurisdictions[103] - The effective income tax rate for the three months ended June 30, 2023, was 12.6%, down from 13.6% in 2022, primarily due to a change in the mix of income earned in higher tax rate jurisdictions[69] Segment Performance - Segment operating income for Allegion Americas rose to $195.4 million in Q2 2023, up from $153.3 million in Q2 2022, reflecting a significant increase in profitability[81] - Allegion International segment net revenues decreased by 5.2% for the six months ended June 30, 2023, compared to the same period in 2022, reflecting lower volumes[105] - Net revenues from electronic products in the Allegion Americas segment increased by approximately 40% for the three months ended June 30, 2023, compared to the same period in the prior year[108] Market Conditions - Allegion experienced stable demand for non-residential products, although there was a decline in volumes for residential mechanical products in Q2 2023[85] - The increase in net revenues was partially offset by unfavorable foreign currency exchange rate movements, which impacted overall performance[99] Other Financial Metrics - The company incurred a foreign currency exchange loss of $1.7 million for the six months ended June 30, 2023, compared to a loss of $1.9 million in the same period of 2022[67] - The total accumulated other comprehensive loss as of June 30, 2023, was $(266.8) million, compared to $(285.8) million as of December 31, 2022, reflecting a decrease of $19 million[58]