The paragraph is an introduction from a conference call for Allegion's fourth quarter 2024 earnings report. The operator welcomes participants and introduces Josh Pokrzywinski, Vice President of Investor Relations, who starts the call by mentioning the availability of the earnings release and presentation on the company’s website. He notes that the call will be recorded and archived, and gives a disclaimer about forward-looking statements and non-GAAP financial measures. John Stone, the President and CEO, then talks about Allegion's successful year, highlighting growth, strong execution, expanded margins, and strategic capital deployment.

The paragraph highlights Allegion's strong performance in 2024, particularly in the Americas, with consistent mid-single-digit growth. The company has focused on accelerating capital deployment, returning value to shareholders, and pursuing accretive acquisitions. Allegion's robust cash generation and financial health support future growth. Notable product launches, like the Schlage XE360 series and Smart Lock integration with Airbnb, underscore the company's innovation and market leadership. Additionally, products like the Schlage Indication Solutions and Von Duprin 70 series emphasize their commitment to security and customer needs, particularly in K-12 schools and safe entry solutions.

In the given paragraph, Allegion continues to expand its mobile credential offerings by launching support for iOS and Android, as well as Wear OS smartwatches. The company completed $137 million in mergers and acquisitions in 2024, adding five bolt-on acquisitions across core markets, including Boss Doors, Dorcas, Krieger Specialty Products, Unicel Architectural, and SOSS Door Hardware. These acquisitions leverage Allegion's strengths in spec writing, manufacturing distribution, and customer relationships, bringing positive returns. Looking ahead to 2025, Allegion plans further acquisitions, including the Next Door Company in the U.S. and an intended acquisition of Lemaar in Australia. Allegion continues to be a dividend-paying stock with an 11th consecutive dividend increase, aligning dividends with earnings growth. Additionally, the company repurchased $220 million in shares, maintaining a focus on balanced capital allocation and growth investment.

The paragraph discusses Allegion's fourth-quarter financial results and overall performance. It highlights a 5.4% revenue increase to $945.6 million, with organic growth of 3.5% due to favorable pricing and volume, particularly strong in the Americas, while international organic revenue slightly declined. The Q4 adjusted operating margin rose by 10 basis points, mainly due to volume leverage and favorable mix. For the full year 2024, operating margin expanded by 70 basis points. Adjusted earnings per share grew by 10.7% to $1.86, despite minor headwinds from interest and other factors. Full-year cash flow increased by 12.9% to $582.9 million, attributed to effective working capital management. The presentation will later cover more details on the balance sheet and cash flow.

In the fourth quarter, the Americas segment experienced a 6.4% increase in reported revenue to $750 million, with 4.6% organic growth driven by favorable pricing and volume. Acquisitions contributed 1.9% of growth, while currency impacts were slightly negative. Residential business saw high-single-digit growth due to customers purchasing ahead of inflation and tariff changes, while the non-residential business grew mid-single-digits organically. Electronics revenue grew marginally, reflecting past supply chain disruptions. Adjusted operating income rose 8.9% to $205.1 million, with a 70 basis point improvement in operating margin. Price and productivity faced slight challenges in Q4 but were strong for the entire year.

In the fourth quarter, the International segment faced challenges due to the macroeconomic environment, with significant difficulties in Germany. Reported revenue increased by 1.5% to $195.6 million, though it decreased by 0.7% organically. Acquisitions helped boost reported revenue by 2.4%, while currency fluctuations and operations in China were slight obstacles. The segment saw an adjusted operating income decline of 4.3% to $30.9 million, and a 100-basis point decrease in operating margin due to lower volumes despite gains from pricing and productivity. For 2024, available cash flow was approximately $583 million, a $66.5 million increase attributable to higher earnings and better working capital management. Inventory turns and DSO saw improvements, and despite higher capital expenditures, the balance sheet remained strong with a net debt to adjusted EBITDA ratio of 1.6. The business continues to produce strong cash flow, supporting further capital deployment.

The paragraph discusses Allegion's focus on institutional markets, highlighting its strong position due to its sales footprint, specification capabilities, and long-term relationships with channel partners and architects. The company is experiencing stable growth, supported by healthy municipal bond issuance and positive indicators from Dodge Institutional Indicators. Although there is some softness in commercial office and multifamily sectors, the institutional markets are still expanding. Allegion projects a total revenue growth of 1% to 3% for 2025, with organic growth between 1.5% and 3.5% and an adjusted earnings per share of $7.65 to $7.85. Growth in the Americas is expected to come from both non-residential and residential businesses, while international markets, particularly Germany, are anticipated to remain flat due to weak macroeconomic conditions.

The paragraph outlines Allegion's financial outlook and strategic plans. The company expects growth of 1.5% to 4% over the prior year, with a projected tax rate of 17.5% in 2025. Allegion anticipates available cash flow to be 85% to 90% of adjusted net income, with an average of $86.7 million diluted shares outstanding, factoring in expected share repurchases. The M&A pipeline is active, with more capital allocated to acquisitions excluding recent ones. Current tariffs from China are included in the guidance, affecting less than 5% of cost of goods sold, while potential tariffs on Mexico, which accounts for 20-25% of the cost of goods sold, could lead to pricing actions. Allegion reported a record year in 2024 due to consistent execution and solid margin expansion, crediting its success to its team and strategic partnerships.

The paragraph is from a conference call where Allegion is discussing its future growth prospects, focusing on 2025 as a key opportunity. During the question-and-answer session, Jeff Sprague from Vertical Research asks about the negative shift in Allegion's price-cost productivity investment equation for the first time. There is a technical issue with the speaker line, causing a delay. Eventually, Mike Wagnes from Allegion addresses the question, explaining that the decrease in pricing was due to the timing of rebate accruals, not changes in core pricing.

The paragraph discusses a company's positive volume and pricing trends in the latter half of 2024, particularly in the non-residential sector in the Americas. The company expects pricing and productivity to outpace inflation and investments in 2025. John Stone addresses concerns about tariffs on steel and aluminum, indicating that the impact on their non-residential business is minimal since it is primarily sourced and produced in the United States. Jeffrey Sprague and John Stone conclude their discussion with a brief mention of operating margins, noting good margin expansion in the previous year.

The paragraph details a discussion between Julian Mitchell and Mike Wagnes about financial expectations for 2025. Wagnes confirms that there will be margin expansion for the year, albeit at the lower end of previously given guidelines of 50 to 100 basis points, following substantial expansion in 2023 and 2024. It is noted that 2025 will follow a similar seasonal pattern to 2024. In terms of sales guidance for the Americas, non-residential sales are expected to outpace residential sales, with electronics growth anticipated to recover and exceed the overall growth in the Americas.

The paragraph is a transcript from a Q&A session during a conference call. Joe O'Dea from Wells Fargo asks about Allegion's margin expansion and international growth, specifically mentioning the Americas' contribution and the impact of exiting China. Mike Wagnes explains that the Americas are expected to lead margin expansion, with some international growth and corporate leverage despite inflation. He notes the revenue loss from exiting China is minimal. Timothy Wojs from Baird inquires about non-residential business confidence, referencing positive developments and quoting activity, which John Stone appears ready to discuss.

In the article paragraph, John Stone and Mike Wagnes discuss the outlook for the Americas business in 2025, highlighting an unexpected acceleration in the non-residential sector in 2024 that has continued into 2025. Early indicators like those from Dodge Starch and Dodge Momentum suggest favorable conditions, with positive project work and volume outlooks. Wagnes notes that it is early in the year to adjust revenue forecasts but points out that the non-residential side is stable, whereas the residential sector may not perform as strongly. There's also mention of a healthy pipeline for mergers and acquisitions (M&A) deals.

The paragraph is part of a conversation during an earnings call. Tim asks John Stone about the impact of mergers and acquisitions (M&A) on margins in 2024 and the potential variance in forthcoming deals. John notes that while they can't speculate on future deals, the M&A environment is healthy, with high-quality targets in the pipeline. They aim for disciplined acquisitions even if not all lead to industry-leading margins, expressing optimism about 2025. Brett Linzey then inquires about the organic sales outlook, specifically in the non-residential sector, asking about growth expectations in commercial versus institutional areas and the phasing of growth throughout the year. Mike Wagnes remarks that 2024 should be a more typical year without significant front-end or back-end weighting, while John Stone emphasizes a focus on institutional verticals like education and healthcare, supported by strong municipal bond issuance in 2024.

The paragraph discusses Allegion's business performance across different sectors. The company has a strong and growing presence in data centers, which are expanding quickly. However, in the commercial office market, especially in major metro areas, new construction in the multifamily segment is softer. Despite this, there is cautious optimism due to return-to-office mandates. There is also mention of evaluating potential pricing strategies related to tariffs from Mexico, which are still uncertain. The company plans to implement various pricing actions to counter any financial impact from tariffs, but specifics are not yet determined. The paragraph ends with a discussion on a question from Chris Snyder regarding the impact of tariffs on Q4.

The paragraph is a discussion between Chris and Mike Wagnes about the performance of their residential (resi) business, which grew at high-single-digits, surpassing market demand expectations. Mike estimates a mid-single-digit growth, attributing it to large orders from channel partners. For Q1, he anticipates the mid-single-digit millions to act as a headwind for resi, but it's not a major factor for total Americas. Additionally, Chris inquires about the impact of government exposure within their institutional business, particularly amid uncertain times with potential layoffs in government buildings, to which Mike acknowledges the concern and its timeliness.

The paragraph discusses the funding sources for project work, particularly in K-12 schools, emphasizing that most of it comes from local sources like municipal bonds and property taxes rather than federal funding. As a result, end-user customers are somewhat insulated from federal funding changes. The paragraph transitions to the conclusion of a call, where John Stone, President and CEO, expresses pride in the team's performance in 2024 and optimism for 2025. The conference is then concluded by the operator.

This summary was generated with AI and may contain some inaccuracies.