Rockwell Automation, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Rockwell Automation, Inc. has filed its quarterly report (10-Q) for the period ending March 31, 2024, providing a detailed financial overview.</b>

AI Summary

ROCKWELL AUTOMATION, INC (ROK) filed a Quarterly Report (10-Q) with the SEC on May 7, 2024. Rockwell Automation, Inc. filed a 10-Q report for the period ending March 31, 2024. The filing covers the fiscal quarter from January 1, 2024, to March 31, 2024. It also includes comparative data for the fiscal quarter ended March 31, 2023. The report details financial information for Rockwell Automation, Inc. The company's headquarters are located at 1201 South 2nd Street, Milwaukee, WI 53204.

Why It Matters

For investors and stakeholders tracking ROCKWELL AUTOMATION, INC, this filing contains several important signals. This 10-Q filing provides investors and analysts with the latest financial performance data for Rockwell Automation, Inc., crucial for assessing the company's current health and future prospects. The detailed financial statements and disclosures within the report are essential for understanding revenue streams, profitability, and overall financial position, enabling informed investment decisions.

Risk Assessment

Risk Level: low — ROCKWELL AUTOMATION, INC shows low risk based on this filing. The filing is a standard 10-Q, which is a routine quarterly report, indicating no immediate or unusual risks are highlighted in the header information.

Analyst Insight

Review the detailed financial statements and segment performance within the 10-Q to understand revenue trends and profitability drivers for Rockwell Automation, Inc.

Key Numbers

• 2024-03-31 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-05-07 — Filing Date (FILED AS OF DATE)
• 0930 — Fiscal Year End (FISCAL YEAR END)
• 251797617 — IRS Number (IRS NUMBER)

Key Players & Entities

• ROCKWELL AUTOMATION, INC (company) — FILER
• 2024-03-31 (date) — CONFORMED PERIOD OF REPORT
• 2024-05-07 (date) — FILED AS OF DATE
• 1201 SOUTH 2ND STREET (address) — BUSINESS ADDRESS
• MILWAUKEE (city) — BUSINESS ADDRESS
• WI (state) — BUSINESS ADDRESS
• 53204 (zip_code) — BUSINESS ADDRESS
• 414-382-2000 (phone_number) — BUSINESS PHONE

FAQ

Industry Context

Rockwell Automation operates in the industrial automation and digital transformation sector, providing solutions for manufacturing and industrial processes.

Regulatory Implications

The company is subject to standard SEC reporting requirements for publicly traded entities, including the filing of quarterly (10-Q) and annual (10-K) reports.

What Investors Should Do

1. Analyze the revenue and net income figures for the quarter ended March 31, 2024, and compare them to the prior year's quarter.
2. Examine any disclosures regarding segment performance, particularly for 'Products and Solutions' and 'Services'.
3. Review the balance sheet and cash flow statement for changes in assets, liabilities, and cash position.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-07: Filing Date — Date the 10-Q report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial 10-Q filing for the period ending March 31, 2024, and therefore, direct comparisons to a previous 10-Q filing for the same period last year are not yet available within this specific document's header.

Key Financial Figures

• $1.00 — ange on which registered Common Stock ($1.00 par value) ROK New York Stock Exchange

Filing Documents

• rok-20240331.htm (10-Q) — 1582KB
• q2fy24rokex15.htm (EX-15) — 3KB
• q2fy24rokex311.htm (EX-31.1) — 8KB
• q2fy24rokex312.htm (EX-31.2) — 9KB
• q2fy24rokex321.htm (EX-32.1) — 4KB
• q2fy24rokex322.htm (EX-32.2) — 4KB
• 0001024478-24-000052.txt (&nbsp;) — 7946KB
• rok-20240331.xsd (EX-101.SCH) — 43KB
• rok-20240331_cal.xml (EX-101.CAL) — 98KB
• rok-20240331_def.xml (EX-101.DEF) — 184KB
• rok-20240331_lab.xml (EX-101.LAB) — 584KB
• rok-20240331_pre.xml (EX-101.PRE) — 404KB
• rok-20240331_htm.xml (XML) — 1416KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheet 4 Consolidated Statement of Operations 5 Consolidated Statement of Comprehensive Income 6 Consolidated Statement of Cash Flows 7 Consolidated Statement of Shareowners' Equity 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 10 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) 27

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 28

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 42

Controls and Procedures

Item 4. Controls and Procedures 42

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 43

Risk Factors

Item 1A. Risk Factors 43

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43

Other Information

Item 5. Other Information 44

Exhibits

Item 6. Exhibits 45

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ROCKWELL AUTOMATION, INC. CONSOLIDATED BALANCE SHEET (Unaudited) (in millions, except per share amounts) March 31, 2024 September 30, 2023 ASSETS Current assets Cash and cash equivalents $ 470.3 $ 1,071.8 Receivables 1,960.2 2,167.4 Inventories 1,384.7 1,404.9 Other current assets 299.0 266.7 Total current assets 4,114.2 4,910.8 Property, net of accumulated depreciation of $ 1,874.7 and $ 1,828.3 , respectively 715.4 684.2 Operating lease right-of-use assets 405.5 349.4 Goodwill 3,964.4 3,529.2 Other intangible assets, net 1,140.7 852.4 Deferred income taxes 477.8 459.3 Long-term investments 171.8 157.1 Other assets 377.5 361.6 Total $ 11,367.3 $ 11,304.0 LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities Short-term debt $ 777.4 $ 94.7 Current portion of long-term debt 309.4 8.6 Accounts payable 903.2 1,150.2 Compensation and benefits 228.2 499.9 Contract liabilities 609.8 592.5 Customer returns, rebates and incentives 427.5 452.0 Other current liabilities 447.5 567.4 Total current liabilities 3,703.0 3,365.3 Long-term debt 2,584.5 2,862.9 Retirement benefits 512.8 503.6 Operating lease liabilities 333.2 285.3 Other liabilities 511.8 543.5 Commitments and contingent liabilities (Note 13) Shareowners' equity Common stock ($ 1.00 par value, shares issued: 181.4 ) 181.4 181.4 Additional paid-in capital 2,141.9 2,102.5 Retained earnings 9,449.3 9,255.2 Accumulated other comprehensive loss ( 762.0 ) ( 790.1 ) Common stock in treasury, at cost (shares held: 67.4 and 66.6 , respectively) ( 7,467.0 ) ( 7,187.4 ) Shareowners' equity attributable to Rockwell Automation, Inc. 3,543.6 3,561.6 Noncontrolling interests 178.4 181.8 Total shareowners' equity 3,722.0 3,743.4 Total $ 11,367.3 $ 11,304.0 See Notes to Consolidated Financial Statements. 4 Table of Contents CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (in millions, except per share amounts) Three Months Ended March 31, Si

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation and Accounting Policies In the opinion of management of Rockwell Automation, Inc. (Rockwell Automation or the Company), the unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position, results of operations, and cash flows for the periods presented and, except as otherwise indicated, such adjustments consist only of those of a normal, recurring nature. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. The results of operations for the three and six months ended March 31, 2024, are not necessarily indicative of the results for the full year. All date references to years and quarters herein refer to our fiscal year and fiscal quarter, unless otherwise stated. Receivables We record an allowance for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. Receivables are recorded net of an allowance for doubtful accounts of $ 20.1 million at March 31, 2024, and $ 16.8 million at September 30, 2023. The changes to our allowance for doubtful accounts during the three and six months ended March 31, 2024 and 2023, were not material and primarily consisted of current-period provisions, write-offs charged against the allowance, recoveries collected, and foreign currency translation. Earnings Per Share The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts): Three Months Ended March 31, Six Months Ended March 31, 2024 2023 2024 2023 Net income attributable to Rockwell Automation, Inc. $ 266.2 $ 300.3 $ 481.4 $ 684.3 Less: Allocation to participating securities ( 1.2 ) ( 1.3 ) ( 2.2 ) ( 2.8 ) Net income available to common shareowners $ 265.0 $ 299.0 $ 479.2 $ 681.5 Basic weighted average outsta

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) Leases Supplemental cash flow information related to leases consists of (in millions): Six Months Ended March 31, 2024 2023 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 91.0 $ 17.4 Finance leases 5.2 — In the six months ended March 31, 2024 and 2023, we realized changes in our right-of-use assets and lease liabilities, both as a result of new leases and existing leases for which we are reasonably certain to exercise future renewal options. Supplier Financing Arrangements The Company maintains agreements with third-party financial institutions that offer voluntary supply chain financing (SCF) programs to suppliers. The SCF programs enable suppliers, at their sole discretion, to sell their receivables to third-party financial institutions in order to receive payment on receivables earlier than the negotiated commercial terms between suppliers and the Company. Supplier sale of receivables to third-party financial institutions is on terms negotiated between the supplier and the respective third-party financial institution. The Company agrees on commercial terms for the goods and services procured from suppliers, including prices, quantities, and payment terms, regardless of whether the supplier elects to participate in the SCF programs. A supplier's voluntary participation in the SCF programs has no bearing on the Company's payment terms and the Company has no economic interest in a supplier's decision to participate in the SCF programs. The Company agrees to pay participating third-party financial institutions the stated amount of confirmed invoices from suppliers on the original maturity dates of the invoices. Amounts outstanding related to SCF programs are included in Accounts payable in the Consolidated Balance Sheet and in changes in Accounts payable on the Consolidated Statement of Cash Flows. Accounts payable included approximately $ 91.0 million

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 2. Revenue Recognition Substantially all of our revenue is from contracts with customers. We recognize revenue as promised products are transferred to, or services are performed for, customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those products and services. Our offerings consist of industrial automation and information products, solutions, and services. Our products include hardware, software, and configured-to-order products. Our solutions include custom-engineered systems and software. Our services include customer technical support and repair, asset management and optimization consulting, and training. Also included in our services is a portion of revenue related to spare parts that are managed within our services offering. Our operations are comprised of the Intelligent Devices segment, the Software & Control segment, and the Lifecycle Services segment. Revenue from the Intelligent Devices segment is predominantly comprised of product sales, which are recognized at a point in time. Revenue from the Software & Control segment is comprised of product sales, which are recognized at a point in time, and software products, which may be recognized over time if certain criteria are met. Revenue from the Lifecycle Services segment is predominantly comprised of solutions and services, which are primarily recognized over time. See Note 15 for more information. In most countries, we sell primarily through independent distributors in conjunction with our direct sales force. We sell large systems and service offerings principally through our direct sales force, though opportunities are sometimes identified through distributors. Unfulfilled Performance Obligations As of March 31, 2024, we expect to recognize approximately $ 1,069 million of revenue in future periods from unfulfilled performance obligations from existing contracts with customer

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) Disaggregation of Revenue The following tables present our revenue disaggregation by geographic region for our three operating segments (in millions). We attribute sales to the geographic regions based on the country of destination. Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Intelligent Devices Software & Control Lifecycle Services Total Intelligent Devices Software & Control Lifecycle Services Total North America $ 636.6 $ 362.7 $ 294.3 $ 1,293.6 $ 598.7 $ 452.0 $ 259.9 $ 1,310.6 Europe, Middle East, and Africa 158.1 96.1 144.7 398.9 216.6 148.6 121.3 486.5 Asia Pacific 100.3 69.8 99.8 269.9 136.7 99.6 97.9 334.2 Latin America 78.5 41.4 43.7 163.6 71.2 40.9 32.0 144.1 Total Company Sales $ 973.5 $ 570.0 $ 582.5 $ 2,126.0 $ 1,023.2 $ 741.1 $ 511.1 $ 2,275.4 Six Months Ended March 31, 2024 Six Months Ended March 31, 2023 Intelligent Devices Software & Control Lifecycle Services Total Intelligent Devices Software & Control Lifecycle Services Total North America $ 1,240.9 $ 749.3 $ 550.5 $ 2,540.7 $ 1,166.1 $ 836.1 $ 487.3 $ 2,489.5 Europe, Middle East, and Africa 324.7 195.9 266.6 787.2 387.8 234.4 237.1 859.3 Asia Pacific 198.2 148.8 198.5 545.5 268.0 168.0 194.7 630.7 Latin America 137.0 79.6 88.1 304.7 137.5 75.9 63.5 276.9 Total Company Sales $ 1,900.8 $ 1,173.6 $ 1,103.7 $ 4,178.1 $ 1,959.4 $ 1,314.4 $ 982.6 $ 4,256.4 Contract Liabilities Contract liabilities primarily relate to consideration received in advance of performance under the contract. Below is a summary of our Contract liabilities balance, the portion not expected to be recognized within twelve months is included within Other liabilities in the Consolidated Balance Sheet (in millions): March 31, 2024 March 31, 2023 Balance as of beginning of year $ 653.6 $ 541.3 Balance as of end of period 678.4 636.9 The most significant changes in our Contract liabilities balance during the six m

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 3. Share-Based Compensation We recognized $ 26.8 million and $ 51.0 million of pre-tax share-based compensation expense during the three and six months ended March 31, 2024, respectively. We recognized $ 23.2 million and $ 41.6 million of pre-tax share-based compensation expense during the three and six months ended March 31, 2023, respectively. Our annual grant of share-based compensation takes place during first quarter of each year. The number of shares granted to employees and non-employee directors and the weighted average fair value per share during the periods presented were (in thousands, except per share amounts): Six Months Ended March 31, 2024 2023 Grants Wtd. Avg. Share Fair Value Grants Wtd. Avg. Share Fair Value Stock options 217 $ 85.91 233 $ 77.62 Performance shares 79 295.06 66 340.77 Restricted stock units 238 276.36 228 261.59 Unrestricted stock 6 278.35 7 261.72 4. Inventories Inventories consist of (in millions): March 31, 2024 September 30, 2023 Finished goods $ 521.5 $ 545.9 Work in process 345.6 395.7 Raw materials 517.6 463.3 Inventories $ 1,384.7 $ 1,404.9 5. Acquisitions 2024 Acquisitions In October 2023, we acquired Clearpath Robotics, Inc., including its industrial division OTTO Motors (Clearpath), a company that specializes in autonomous robotics for industrial applications, headquartered in Ontario, Canada. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of October 2, 2023. The preliminary aggregate purchase price allocation is as follows (in millions): Purchase Price Allocation Receivables $ 8.1 Inventory 22.0 Goodwill 289.0 Intangible assets 313.4 All other assets 10.2 Total assets acquired 642.7 Less: Deferred tax liability ( 21.9 ) Less: Liabilities assumed ( 12.3 ) Net assets acquired $ 608.5 Purchase Consideration Cash cons

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) Intangible assets identified include $ 269.9 million of technology, $ 41.6 million of trademarks, and $ 1.9 million of customer relationships. We assigned the full amount of goodwill and all other assets acquired to our Intelligent Devices segment. The goodwill recorded represents intangible assets that do not qualify for separate recognition. This goodwill arises because the purchase price for Clearpath reflects a number of factors including the future earnings and cash flow potential for the business and resulting synergies from the business portfolio and industry expertise. We do not expect the goodwill to be deductible for tax purposes. The intangible assets were valued using an income approach, specifically the relief from royalty method and m

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