Revenue Analysis
Total and Operating Revenue: The total revenue for ALLE has shown an increasing trend over the observed periods, moving from $912.5 million in 2023-06 to $923 million in 2023-03, then a slight decrease followed by an increase, peaking at $893.9 million in 2024-03. Operating Revenue has paralleled total revenue, maintaining consistent values which indicates the company’s primary operations remain stable and highly contributory to the total revenue.
Gross Profit Margins: Gross profit has also increased correlatively, from $401.9 million in 2023-06 to $391.4 million in 2024-03, reflecting a decrease in gross margin in the most recent quarter. This suggests that costs of goods sold may have increased or sales prices have decreased relative to cost.
Cost Management
Cost of Revenue: Cost of Revenue was highest in 2023-03 at $532 million and then trended slightly downwards. The costs depict variability but are a major component impacting gross profit.
Operating Expense: Consistently close figures across the periods indicate stable operating activities, ranging from $210.2 million in 2023-09 to $219.3 million in 2024-03, although this presents an increasing trend that could potentially erode operating income.
Total Expenses: From $727.9 million in 2023-06, total expenses peaked in 2023-03 at $752 million but saw a reduction in the recent quarter of 2024-03 at $721.8 million. Effective expense management can reflect better profitability if sustained.
Profitability Analysis
EBITDA: Earnings before interest, taxes, depreciation, and amortization (EBITDA) peaked in 2023-09 at $221.2 million and decreased to $204.6 million by 2024-03, a significant indicator of earnings health before non-operating costs and taxes are considered.
Operating Income: Operating income has consistently been high, peaking at $193.1 million in 2023-09 and then decreasing to $172.1 million in 2024-03. It shows the operational efficiency before financing and other costs.
Pretax Income: The pretax income was highest at $170.1 million in 2023-09 but again saw a reduction to $152.9 million by 2024-03, indicating slightly increased burden from non-operating costs or decreased efficiency.
Net Income Metrics: Observing net income, there was a peak of $156.4 million in 2023-09, with a slight decrease to $123.8 million in 2024-03.
Cash Flow Indicators
Reconciled Depreciation: This figure gives an idea of the capital expense allocation, which has been fairly steady, showing a slight increase from $27.2 million in 2023-06 to $28.8 million in 2024-03.
Interest Expense: Interest expenses have been notably steady across the periods, which indicates consistent financing activities likely related to maintaining or slightly increasing debt levels.
Taxation
Tax Rate: The effective tax rate has varied, showing fluctuations from 12.6% in 2023-06 to 19% by 2024-03, which affects net income after tax.
Tax Provision: There was an increasing tax provision from $20.5 million in 2023-06 to $29.1 million in 2024-03, in line with increasing pretax-income and perhaps stricter tax regulations or lesser benefits utilized.
Shareholder Metrics
Diluted and Basic EPS: Earnings per share (both diluted and basic) have shown a downward adjustment from $1.78 (Basic) in 2023-09 to $1.41 in 2024-03, which needs watching as it directly affects investor returns.
Average Shares: Average shares outstanding have been managed quite tightly, from approximately 88 million to 88.1 million, indicating little dilution or share buybacks.
Net Income Available to Common Stockholders: This figure follows the pattern of net income, peaking in 2023-09 at $156.3 million, which aligns with EPS trends.
Conclusion
ALLE has demonstrated compelling revenue growth and managed expenses leading to overall profitability across the observed periods. The slight decline in certain profitability and EPS metrics in the latest period might demand cost-controlled measures and efficiency improvements. Continued vigilance on cost management, particularly operating expenses, and strategic measures to bolster revenue could enhance profitability in subsequent quarters.