Allegion : Q3 Quarterly Report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________

• QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35971

_______________________________

ALLEGION PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

_______________________________

Ireland	98-1108930
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
	Block D
	Iveagh Court
	Harcourt Road
	Dublin 2, D02 VH94, Ireland
	(Address of principal executive offices, including zip code)
	+(353) (1) 2546200
	(Registrant's telephone number, including area code)

_______________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading symbol	Name of exchange on which registered
Ordinary shares, par value $0.01 per share	ALLE	New York Stock Exchange
3.500% Senior Notes due 2029	ALLE 3 ½	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of ordinary shares outstanding of Allegion plc as of October 18, 2021 was 89,695,862.

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ALLEGION PLC

FORM 10-Q

INDEX

PART I - FINANCIAL INFORMATION	1
Item 1 -	Financial Statements	1
	Condensed and Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and	1
	2020 (Unaudited)
	Condensed and Consolidated Balance Sheets at September 30, 2021 and December 31, 2020 (Unaudited)	2
	Condensed and Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (Unaudited)	3
	Notes to Condensed and Consolidated Financial Statements (Unaudited)	4
Item 2 -	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3 -	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4 -	Controls and Procedures	36
PART II - OTHER INFORMATION	38
Item 1 -	Legal Proceedings	38
Item 1A -	Risk Factors	38
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6 -	Exhibits	39
SIGNATURES		40

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PART I-FINANCIAL INFORMATION

Item 1 - Financial Statements

Allegion plc

Condensed and Consolidated Statements of Comprehensive Income

(Unaudited)

		Three months ended				Nine months ended
		September 30,				September 30,
In millions, except per share amounts		2021				2020				2021				2020
Net revenues	$	717.0			$	728.4			$	2,158.2			$	1,992.6
Cost of goods sold		416.5				409.2				1,239.8				1,133.7
Selling and administrative expenses		162.1				156.2				503.3				474.2
Impairment of goodwill and intangible assets		-				2.6				-				98.9
Operating income		138.4				160.4				415.1				285.8
Interest expense		12.3				12.9				37.0				38.8
Other income, net		(14.7)				(12.2)				(21.4)				(12.6)
Earnings before income taxes		140.8				159.7				399.5				259.6
(Benefit from) provision for income taxes		(2.8)				12.8				28.9				38.5
Net earnings		143.6				146.9				370.6				221.1
Less: Net earnings attributable to noncontrolling interests		0.1				-				0.4				0.1
Net earnings attributable to Allegion plc	$	143.5			$	146.9			$	370.2			$	221.0
Earnings per share attributable to Allegion plc ordinary shareholders:
Basic net earnings	$	1.60			$	1.59			$	4.11			$	2.39
Diluted net earnings	$	1.59			$	1.58			$	4.08			$	2.38
Weighted-average shares outstanding:
Basic		89.7				92.3				90.1				92.4
Diluted		90.3				92.7				90.7				92.9
Total comprehensive income	$	121.2			$	171.4			$	326.7			$	232.8
Less: Total comprehensive income attributable to noncontrolling interests		-				0.3				0.4				-
Total comprehensive income attributable to Allegion plc	$	121.2			$	171.1			$	326.3			$	232.8

See accompanying notes to condensed and consolidated financial statements.

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Allegion plc

Condensed and Consolidated Balance Sheets

(Unaudited)

In millions, except share amounts		September 30,			December 31,
	2021				2020
ASSETS
Current assets:
Cash and cash equivalents	$	503.9			$	480.4
Accounts and notes receivable, net		307.4				321.8
Inventories		345.7				283.1
Other current assets		45.4				53.9
Assets held for sale		-				5.8
Total current assets		1,202.4				1,145.0
Property, plant and equipment, net		278.6				294.9
Goodwill		808.7				819.0
Intangible assets, net		459.8				487.1
Other noncurrent assets		367.2				323.4
Total assets	$	3,116.7			$	3,069.4
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	212.4			$	220.4
Accrued expenses and other current liabilities		343.1				293.7
Short-term borrowings and current maturities of long-term debt		238.4				0.2
Liabilities held for sale		-				7.2
Total current liabilities		793.9				521.5
Long-term debt		1,192.5				1,429.4
Other noncurrent liabilities		262.7				285.9
Total liabilities		2,249.1				2,236.8
Equity:
Allegion plc shareholders' equity:
Ordinary shares, $0.01 par value (89,695,508 and 91,212,741 shares issued and outstanding at September 30, 2021		0.9				0.9
and December 31, 2020, respectively)
Capital in excess of par value		2.8				-
Retained earnings		1,061.5				985.6
Accumulated other comprehensive loss		(201.0)				(157.1)
Total Allegion plc shareholders' equity		864.2				829.4
Noncontrolling interests		3.4				3.2
Total equity		867.6				832.6
Total liabilities and equity	$	3,116.7			$	3,069.4

See accompanying notes to condensed and consolidated financial statements.

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