Allegion plc

Good morning and welcome to the Allegian third 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 2. Please note this event is being recorded. I would now like to turn the conference over to Joby Coyle, Director of Investor Relations. Please go ahead.

Thank you, Drew. Good morning, everyone. Thank you for joining us for Allegiant's third 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 Allegian. 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.allegian.com. This call will be recorded and archived on our website. Please go to slide number two. 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 a 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 three, and I'll turn the call over to John.

Thanks, Joby. And good morning, everyone. Thanks for joining us today. This current quarter was all about outstanding operational execution from the entire Allegiant team, and I'm pleased with our performance. Electronics demand remains strong with, in our opinion, a long runway for further adoption. In the quarter, Allegiant delivered mid-teens organic growth in electronics and software solutions globally, led by our America's non-residential business, which had another robust quarter. We already have the highest margins in our industry, and we're driving additional expansion at the gross and operating margin levels, despite not having some of the mechanical volume tailwinds from a year ago. Our balance sheet is getting stronger. We de-levered from the access technologies acquisition quickly. and are now building capital to deploy for growth. Bottom line, Allegiant is poised for a record year in total revenue, adjusted operating income, and adjusted earnings per share. As a result, we're raising our guidance for full year adjusted EPS. Please go to slide four. So Allegiant's vision of enabling seamless access and a safer world remains core to our company culture, performance, and results. Securing people where they live, learn, and work has never been more important. We are a pure play provider of security and access solutions. We have a great legacy of the strongest brands and the highest margins. We operate with excellence and are accelerating our year-over-year productivity with normalized lead times while still managing the massive skew complexity that we manage in a made-to-order environment. This makes Allegiant a partner of choice And we're leveraging that unique position to promote the adoption of open ecosystems that maximize our addressable market. We're also delivering new value and access, continuing our drive to wrap software and services around our hardware solutions. This is the critical unlock of additional value for our end-user customers, for Allegiant's growth, and for long-term shareholder return. A great proof point of how our company is living this vision and strategy is the Allegiant Ventures announcement we made yesterday. Allegiant Ventures has made a strategic investment in Ambient AI, whose cutting-edge AI platform utilizes innovative technology to enable seamless access in a safer world. This is the largest investment in Allegiant Ventures history, and it reflects the tremendous potential we see in Ambient and Allegiant's collaboration to deliver new value and access. Please go to slide five. I'd like to turn to our capital allocation priorities. When I joined Allegian, we had just announced the acquisition of Access Technologies, and over the last year, I feel we've done a good job in quickly delevering back to pre-acquisition levels while still investing in our business and returning cash to our shareholders. Allegian is an investment-grade company, and we expect to remain an investment-grade company. This is critically important to us. We will continue investing for above-market organic growth prioritizing projects and solutions that drive seamless access and make the world safer. We're a dividend-paying stock, and you can expect our dividends to grow commensurate with earnings over the long term. We will also drive growth through acquisitions, considering complementary portfolios, like you saw with the access technologies business, as well as software as a service related to seamless access, like you saw with Plano. High-margin recurring revenue businesses and bolt-on acquisitions that fill portfolio gaps in the hardware space will remain priorities. And while we may increase our debt for the right acquisitions, we've demonstrated the ability to quickly de-lever. Lastly, with regards to share repurchases, at a minimum, we will continue to offset incentive compensation and we will make additional share repurchases as appropriate. Mike will now walk you through third quarter financial results And I'll be back to discuss our full year 2023 outlook.