Allegion plc

Good morning and welcome to the Allegiant first quarter 2023 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tom Martineau, Vice President of Investor Relations and Treasurer. Please go ahead.

Thank you, Andrew. Good morning, everyone. Thank you for joining us for Allegiant's first quarter 2023 earnings call. With me today are John Stone, President and Chief Executive Officer, and Mike Wagnus, Senior Vice President and Chief Financial Officer of Allegiant. Our earnings release, which was issued earlier this morning, and the presentation, which we will refer to in today's call, are available on our website at investor.allegiant.com. This call will be recorded and archived on our website. Please go to slides two and three. Statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Please see our most recent SEC filings for description of some of the factors that may cause actual results to differ materially from our projections. The company assumes no obligation to update these forward-looking statements. Today's presentation and commentary include non-GAAP financial measures. Please refer to the reconciliation in the financial tables of our press release for further details. Please go to slide four, and I'll turn the call over to John.

Thanks, Tom. Good morning, everyone. Thanks for joining us today. Legion delivered another quarter of outstanding operational performance. We reported revenue roughly 27% up and adjusted EPS growth of nearly 40%. Looking at our markets, we see ongoing robust demand in our North America non-residential business, along with strong demand globally for our electronic solutions. We're seeing improvement in electronics components availability, and although supply is still short of demand, America's electronic solutions grew by more than 30% this quarter. Residential markets remain rather soft in the quarter, particularly for the mechanical products. And certain international markets also remain soft, particularly our global portable security business, which Mike will address in a few slides. We expanded margins substantially, up 290 basis points versus prior year. This now represents the fourth quarter in a row of margin expansion for Allegiant as pricing momentum continues and efficiency and productivity are accelerating. We remain committed to expanding margins for 2023 and beyond, as you'll hear in our Investor Day next week. We also realize significant improvement in cash flow year over year, driven by favorable earnings and better operating efficiencies. We're raising our outlook for the year on revenue, EPS, and cash flow, given strong Q1 execution, resilient market demand in non-residential segments, improving electronics availability amid the ongoing industry transformation to electronic smart hardware. Please go to slide five. Revenue for the first quarter was $923 million, an increase of 27.6% compared to 22. Organic growth of 15% was driven by favorable volume in the Americas non-residential business and strong price realization across the portfolio. The Access Technologies acquisition contributed approximately 14% to total growth, and currency impacts remained a headwind. Adjusted operating margin and adjusted EBITDA margins in the first quarter increased by 290 basis points and 270 basis points, respectively. The increases were attributable to favorable price and productivity, positive business mix, and volume leverage associated with America's non-residential growth. Excluding the acquisition of access technologies, adjusted operating income margins were up 380 basis points. Adjusted earnings per share of $1.58 increased 45 cents or approximately 40% versus the prior year. Strong operational performance more than offset the unfavorable impact of anticipated higher interest and tax expense. As previously mentioned, available cash flow was $46.7 million in the quarter, up nearly 300% versus the prior year. Mike will now walk you through the financial results, and I'll be back to discuss our updated 2023 outlook.