Allegion plc (NYSE: ALLE), a leading global provider of security
products and solutions, today announced business updates related to
the 2019 novel coronavirus (COVID-19) pandemic and ongoing impact
on market conditions.
Allegion is closely monitoring the most recent developments
regarding the COVID-19 pandemic, remaining focused on the health
and safety of employees and business health, both in the short and
long term. Allegion continues to monitor, evaluate and manage its
operating plans, inventory levels and supply of materials around
the world in light of the most recent developments in its markets.
The company is adhering to best-practice safe hygiene guidelines by
recognized health experts like the World Health Organization (WHO)
as well as any applicable government mandates related to the
COVID-19 pandemic.
“During this time of uncertainty, we remain deeply committed to
do what’s right for our employees, customers and the communities
where we operate, as well as our business health and essential
critical infrastructure,” said David D. Petratis, President,
Chairman and CEO. “We will continue to be mindful of best practices
for employee health and safety, relying on smart working, safe
hygiene and social distancing measures, whenever and wherever
possible. I thank all Allegion employees for their dedication to
living our values and delivering on our commitments. Thank you,
also, to our customers and suppliers for their continued engagement
and trust in our business. We express our gratitude, especially, to
those on the front lines of combating this global pandemic.”
Employee Welfare
A global COVID-19 response team continues to monitor the most
recent developments and share regular updates to all Allegion
employees. Allegion has taken active steps to maintain a safe
working environment, including adhering to guidelines set by the
WHO and other health agencies, conducting deep cleaning of its
facilities on a regular basis, restricting non-essential business
travel, restricting visitor access to facilities and taking social
distancing measures. Where possible, the company has instructed
managers to take a flexible approach to enable employees to work
from home and has ensured that those employees have effective IT
tools and resources in place to support connectivity and to
minimize disruption to the business.
Supply Chain and Operations
Allegion remains focused on business continuity and ensuring its
facilities remain operational where safe and appropriate to do so.
Today, Allegion’s operations in Mexico are temporarily suspended
due to a general public health decree, which follows our earlier
response to similar decrees in Italy and Spain. At this time,
Allegion expects to resume these operations upon expiration of the
local orders or earlier, if permitted. The company will comply with
future government orders if and as they apply to its operations. In
addition, the company anticipates periodic work stoppages at
certain plants due to temporary reduction in customer demand or
material shortages. Allegion will continue to serve its customers
when possible through its channel partners or inventory on
hand.
These temporary measures are implemented in a way that allows
prompt production startup when public health and market conditions
improve. To the extent any additional temporary closures or
adjustments to production are necessary, such measures will be
implemented in a way that minimizes disruption to customers and the
overall business, including continuing to take prudent measures to
mitigate, to the extent possible, any financial impacts.
Financial Updates
Allegion recently implemented several actions to address the
COVID-19 impact to its business, including reductions to
discretionary spending, elimination of non-essential investments, a
hiring freeze and re-prioritization of all capital expenditures.
These actions will help mitigate the financial implications
associated with COVID-19.
Allegion leadership believes the company has an extremely strong
balance sheet and liquidity that provide flexibility and position
the company well throughout this time of uncertainty. Allegion’s
net debt to adjusted EBITDA was 1.6 times at Dec. 31, 2019. The
company currently has an undrawn credit facility up to $500 million
available, if needed, and no principal payments due on outstanding
debt until September 2022. In addition, Allegion’s business
generates significant annual cash flow due to industry-leading
EBITDA margins and low capital intensity. As a result, on average,
the company’s available cash flow conversion to earnings ratio has
exceeded 100 percent over the past several years.
While Allegion has taken the above actions and its financial
position remains strong, the company’s fiscal year 2020 full-year
guidance, previously issued on Feb. 18, 2020, did not anticipate
the impact of a global pandemic. Given the high uncertainty around
the duration and severity of the COVID-19 pandemic around the
world, the company is withdrawing its full-year guidance until
visibility in the global markets returns to more predictable
levels. Allegion will provide its business and financial updates in
its quarterly earnings release and 10-Q report that will be filed
with the U.S. Securities and Exchange Commission on April 23,
2020.
About Allegion
Allegion (NYSE: ALLE) is a global pioneer in seamless access,
with leading brands like CISA®, Interflex®, LCN®, Schlage®,
SimonsVoss® and Von Duprin®. Focusing on security around the door
and adjacent areas, Allegion secures people and assets with a range
of solutions for homes, businesses, schools and institutions.
Allegion had $2.9 billion in revenue in 2019, and sells products in
almost 130 countries.
For more, visit www.allegion.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, Section 27A of the Securities Act of 1933, and Section 21E of
the Securities Exchange Act of 1934, including statements regarding
the expected impact of the global COVID-19 pandemic. These
forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,”
“forecast,” “outlook,” “intend,” “strategy,” “future,”
“opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,”
“will continue,” “will likely result” or the negative thereof or
variations thereon or similar expressions generally intended to
identify forward-looking statements. Forward-looking statements may
relate to such matters as projections of revenue, margins,
expenses, tax provisions, earnings, cash flows, benefit
obligations, dividends, share purchases or other financial items;
any statements of the plans, strategies and objectives of
management for future operations, including those relating to any
statements concerning expected development, performance or market
share relating to its products and services; any statements
regarding future economic conditions or its performance; any
statements regarding pending investigations, claims or disputes;
any statements of expectation or belief; and any statements of
assumptions underlying any of the foregoing. These statements are
based on the company's currently available information and its
current assumptions, expectations and projections about future
events. They are subject to future events, risks and uncertainties
- many of which are beyond the company’s control - as well as
potentially inaccurate assumptions, that could cause actual results
to differ materially from those in the forward-looking statements.
Further information on these factors and other risks that may
affect the company's business is included in filings it makes with
the Securities and Exchange Commission from time to time, including
its Form 10-K for the year ended Dec. 31, 2019, Form 10-Q for the
quarters ended March 31, 2019, June 30, 2019, and Sept. 30, 2019,
and in its other SEC filings. The company undertakes no obligation
to update these forward-looking statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20200409005459/en/
Media Contact: Whitney Moorman – Reputation Management
Leader 317-810-3241 Whitney.Moorman@allegion.com
Analyst Contact: Tom Martineau – Vice President,
Treasurer and Investor Relations 317-810-3759
Tom.Martineau@allegion.com
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