Rockwell Automation(ROK) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section provides comprehensive financial data, including statements, management's analysis, market risk disclosures, and internal controls Financial Statements This section presents the unaudited consolidated financial statements for the quarter ended December 31, 2021, reflecting a significant year-over-year decrease in net income primarily due to lower fair value gains on investments Consolidated Balance Sheet Presents the company's financial position, detailing assets, liabilities, and equity at specific quarter-end dates Consolidated Balance Sheet Summary (in millions) | Account | Dec 31, 2021 | Sep 30, 2021 | | :--- | :--- | :--- | | Total Current Assets | $3,132.3 | $3,063.4 | | Total Assets | $10,743.3 | $10,701.6 | | Total Current Liabilities | $2,914.1 | $2,992.2 | | Total Liabilities | $7,936.5 | $8,007.5 | | Total Shareowners' Equity | $2,806.8 | $2,694.1 | | Total Liabilities and Shareowners' Equity | $10,743.3 | $10,701.6 | Consolidated Statement of Operations Details the company's revenues, expenses, and net income over the reporting period Consolidated Statement of Operations (in millions, except per share amounts) | Metric | Q1 2022 (ended Dec 31, 2021) | Q1 2021 (ended Dec 31, 2020) | | :--- | :--- | :--- | | Total Sales | $1,857.3 | $1,565.3 | | Gross Profit | $749.1 | $646.5 | | Change in fair value of investments | $7.6 | $390.4 | | Income before income taxes | $282.5 | $700.7 | | Net income attributable to Rockwell Automation, Inc. | $241.5 | $593.3 | | Diluted EPS | $2.05 | $5.06 | Consolidated Statement of Comprehensive Income Reports net income and other comprehensive income components, reflecting total changes in equity Consolidated Statement of Comprehensive Income (in millions) | Metric | Q1 2022 (ended Dec 31, 2021) | Q1 2021 (ended Dec 31, 2020) | | :--- | :--- | :--- | | Net income | $238.9 | $590.4 | | Other comprehensive income | $4.9 | $87.0 | | Comprehensive income attributable to Rockwell Automation, Inc. | $246.4 | $680.2 | Consolidated Statement of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities Consolidated Statement of Cash Flows (in millions) | Activity | Q1 2022 (ended Dec 31, 2021) | Q1 2021 (ended Dec 31, 2020) | | :--- | :--- | :--- | | Cash (used for) provided by operating activities | $(12.0) | $346.5 | | Cash used for investing activities | $(48.7) | $(310.1) | | Cash used for financing activities | $(52.0) | $(37.2) | | (Decrease) increase in cash, cash equivalents, and restricted cash | $(122.2) | $25.8 | Consolidated Statement of Shareowners' Equity Outlines changes in shareowners' equity, including net income, dividends, and share repurchases - Total shareowners' equity increased from $2,694.1 million at September 30, 2021, to $2,806.8 million at December 31, 2021, primarily driven by net income of $238.9 million, partially offset by cash dividends of $130.2 million and share repurchases of $49.4 million[19] - Cash dividends declared were $1.12 per share in the three months ended December 31, 2021, an increase from $1.07 per share in the same period of 2020[19] Notes to Consolidated Financial Statements Provides detailed explanations and additional information supporting the financial statements - As of December 31, 2021, the company expects to recognize approximately $720 million of revenue from unfulfilled performance obligations, with about $440 million expected in the next 12 months[30] - In fiscal 2022, the company acquired AVATA, a services provider, while major acquisitions in fiscal 2021 included Plex Systems for $2.2 billion, Oylo, and Fiix Inc[45][46][49][50] - The company's investment in PTC Inc. common stock had a fair value of $1,282.0 million at December 31, 2021, resulting in a recorded gain of $14.4 million for the quarter[62][63] Sales by Business Segment (in millions) | Segment | Q1 2022 (ended Dec 31, 2021) | Q1 2021 (ended Dec 31, 2020) | | :--- | :--- | :--- | | Intelligent Devices | $900.3 | $721.7 | | Software & Control | $513.9 | $441.0 | | Lifecycle Services | $443.1 | $402.6 | | Total | $1,857.3 | $1,565.3 | - The unaudited Consolidated Financial Statements contain all necessary adjustments, which are of a normal, recurring nature, to fairly present the financial position for the periods presented[21] - The independent registered public accounting firm, Deloitte & Touche LLP, concluded their review stating they are not aware of any material modifications that should be made to the interim financial information for it to be in conformity with U.S. GAAP[90] Management's Discussion and Analysis of Financial Condition and Results of Operations Sales for Q1 2022 increased 18.7% year-over-year to $1.86 billion, driven by 16.8% organic growth across all regions and segments, though net income and diluted EPS fell significantly due to a smaller gain from the company's PTC investment Fiscal 2022 Guidance | Metric | Guidance | | :--- | :--- | | Reported sales growth | 16% - 19% | | Organic sales growth | 14% - 17% | | Diluted EPS | $10.01 - $10.61 | | Adjusted EPS | $10.50 - $11.10 | - The supply chain is stressed by increased demand and global events, resulting in disruptions, difficulty procuring components, increased costs, and delivery delays[106][110] Q1 Sales Growth vs. Prior Year | Metric | Change vs. Q1 2021 | | :--- | :--- | | Total Sales | +18.7% | | Organic Sales | +16.8% | | Acquisitions | +2.6% | | Currency Translation | -0.7% | - Cash used for operating activities was $12.0 million, a significant decrease from $346.5 million provided in the prior-year quarter, primarily due to higher incentive compensation payments, increases in working capital, and higher income tax payments[133] - The company repurchased approximately 0.2 million shares for $49.4 million in Q1 2022, with approximately $502.9 million remaining for share repurchases under board authorizations as of December 31, 2021[134] Quantitative and Qualitative Disclosures About Market Risk The company states that there has been no material change to the information regarding its exposure to foreign currency risk and interest rate risk since its Annual Report on Form 10-K for the fiscal year ended September 30, 2021 - There has been no material change to the company's exposure to foreign currency risk and interest rate risk as of December 31, 2021, compared to the disclosure in the fiscal 2021 Form 10-K[154] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the quarter, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal quarter covered by this report[155] - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[156] PART II. OTHER INFORMATION This section covers non-financial disclosures, including legal matters, risk factors, and equity transactions Legal Proceedings The company reports that there has been no material change to the information regarding its legal proceedings since its Annual Report on Form 10-K for the fiscal year ended September 30, 2021 - There has been no material change in the company's legal proceedings as of December 31, 2021, compared to the disclosure in the fiscal 2021 Form 10-K[158] Risk Factors The company states that there has been no material change to its most significant risk factors since its Annual Report on Form 10-K for the fiscal year ended September 30, 2021 - There has been no material change in the company's significant risk factors as of December 31, 2021, compared to the disclosure in the fiscal 2021 Form 10-K[159] Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of fiscal 2022, the company repurchased 150,558 shares of its common stock for approximately $49.4 million, with $502.9 million remaining available for future repurchases Share Repurchases for Q1 2022 (ended Dec 31, 2021) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | October 2021 | 61,340 | $308.06 | | November 2021 | 44,620 | $338.34 | | December 2021 | 44,598 | $345.23 | | Total | 150,558 | $328.04 | - The maximum approximate dollar value of shares that may yet be purchased under the plans or programs was $502.9 million as of December 31, 2021[161] Exhibits This section lists the exhibits filed with the quarterly report, including the letter from the independent auditor, CEO and CFO certifications, and Interactive Data Files (XBRL) - Exhibits filed include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and Interactive Data Files (Exhibit 101)[163] Signatures Confirms the official signing and certification of the financial report by authorized officers - The report was signed on January 27, 2022, by Nicholas C. Gangestad, Senior Vice President and Chief Financial Officer, and Terry L. Riesterer, Vice President and Controller[166]