Rockwell Automation Files Q3 2024 10-Q

TL;DR

ROK Q3 10-Q is in. Check financials for latest performance.

AI Summary

Rockwell Automation, Inc. filed its 10-Q for the period ending June 30, 2024. The company reported financial results for the third quarter and the first nine months of its fiscal year. Key financial figures and segment performance are detailed within the filing.

Why It Matters

This filing provides investors with the latest financial performance data for Rockwell Automation, crucial for understanding the company's current operational health and future outlook.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing with no immediate red flags.

Key Players & Entities

• ROCKWELL AUTOMATION, INC (company) — Filer
• 20240630 (date) — Period of Report
• 20240807 (date) — Filing Date
• MILWAUKEE (location) — Company Headquarters City

FAQ

Key Financial Figures

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

Filing Documents

• rok-20240630.htm (10-Q) — 1623KB
• q3fy24rokex15.htm (EX-15) — 3KB
• q3fy24rokex311.htm (EX-31.1) — 8KB
• q3fy24rokex312.htm (EX-31.2) — 9KB
• q3fy24rokex321.htm (EX-32.1) — 4KB
• q3fy24rokex322.htm (EX-32.2) — 4KB
• 0001024478-24-000088.txt ( ) — 8283KB
• rok-20240630.xsd (EX-101.SCH) — 45KB
• rok-20240630_cal.xml (EX-101.CAL) — 100KB
• rok-20240630_def.xml (EX-101.DEF) — 194KB
• rok-20240630_lab.xml (EX-101.LAB) — 624KB
• rok-20240630_pre.xml (EX-101.PRE) — 425KB
• rok-20240630_htm.xml (XML) — 1440KB

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 43

Controls and Procedures

Item 4. Controls and Procedures 43

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 44

Risk Factors

Item 1A. Risk Factors 44

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44

Other Information

Item 5. Other Information 45

Exhibits

Item 6. Exhibits 46

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) June 30, 2024 September 30, 2023 ASSETS Current assets Cash and cash equivalents $ 406.7 $ 1,071.8 Receivables 1,875.1 2,167.4 Inventories 1,356.4 1,404.9 Other current assets 284.6 266.7 Total current assets 3,922.8 4,910.8 Property, net of accumulated depreciation of $ 1,832.0 and $ 1,828.3 , respectively 735.6 684.2 Operating lease right-of-use assets 406.0 349.4 Goodwill 3,953.7 3,529.2 Other intangible assets, net 1,100.4 852.4 Deferred income taxes 514.4 459.3 Long-term investments 168.3 157.1 Other assets 387.4 361.6 Total $ 11,188.6 $ 11,304.0 LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities Short-term debt $ 816.5 $ 94.7 Current portion of long-term debt 308.0 8.6 Accounts payable 844.2 1,150.2 Compensation and benefits 213.6 499.9 Contract liabilities 608.8 592.5 Customer returns, rebates and incentives 378.8 452.0 Other current liabilities 619.5 567.4 Total current liabilities 3,789.4 3,365.3 Long-term debt 2,559.3 2,862.9 Retirement benefits 512.2 503.6 Operating lease liabilities 332.9 285.3 Other liabilities 491.4 543.5 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 2,164.7 2,102.5 Retained earnings 9,395.8 9,255.2 Accumulated other comprehensive loss ( 793.5 ) ( 790.1 ) Common stock in treasury, at cost (shares held: 67.9 and 66.6 , respectively) ( 7,622.7 ) ( 7,187.4 ) Shareowners' equity attributable to Rockwell Automation, Inc. 3,325.7 3,561.6 Noncontrolling interests 177.7 181.8 Total shareowners' equity 3,503.4 3,743.4 Total $ 11,188.6 $ 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 June 30, Nine

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 nine months ended June 30, 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 $ 22.2 million at June 30, 2024, and $ 16.8 million at September 30, 2023. The changes to our allowance for doubtful accounts during the three and nine months ended June 30, 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 June 30, Nine Months Ended June 30, 2024 2023 2024 2023 Net income attributable to Rockwell Automation, Inc. $ 232.0 $ 400.2 $ 713.4 $ 1,084.5 Less: Allocation to participating securities ( 1.1 ) ( 1.7 ) ( 3.2 ) ( 4.6 ) Net income available to common shareowners $ 230.9 $ 398.5 $ 710.2 $ 1,079.9 Basic weighted average outs

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): Nine Months Ended June 30, 2024 2023 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 118.9 $ 38.5 Finance leases 5.2 — In the nine months ended June 30, 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 $ 77.2 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 16 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 June 30, 2024, we expect to recognize approximately $ 1,035 million of revenue in future periods from unfulfilled performance obligations from existing contracts with customers

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 June 30, 2024 Three Months Ended June 30, 2023 Intelligent Devices Software & Control Lifecycle Services Total Intelligent Devices Software & Control Lifecycle Services Total North America $ 636.7 $ 335.6 $ 296.1 $ 1,268.4 $ 548.5 $ 460.9 $ 251.5 $ 1,260.9 Europe, Middle East, and Africa 144.0 75.9 135.4 355.3 220.4 137.3 136.7 494.4 Asia Pacific 98.6 58.5 103.8 260.9 133.7 113.6 96.2 343.5 Latin America 78.0 42.1 45.9 166.0 65.5 38.8 35.6 139.9 Total Company Sales $ 957.3 $ 512.1 $ 581.2 $ 2,050.6 $ 968.1 $ 750.6 $ 520.0 $ 2,238.7 Nine Months Ended June 30, 2024 Nine Months Ended June 30, 2023 Intelligent Devices Software & Control Lifecycle Services Total Intelligent Devices Software & Control Lifecycle Services Total North America $ 1,877.6 $ 1,084.9 $ 846.6 $ 3,809.1 $ 1,714.6 $ 1,297.0 $ 738.8 $ 3,750.4 Europe, Middle East, and Africa 468.7 271.8 402.0 1,142.5 608.2 371.7 373.8 1,353.7 Asia Pacific 296.8 207.3 302.3 806.4 401.7 281.6 290.9 974.2 Latin America 215.0 121.7 134.0 470.7 203.0 114.7 99.1 416.8 Total Company Sales $ 2,858.1 $ 1,685.7 $ 1,684.9 $ 6,228.7 $ 2,927.5 $ 2,065.0 $ 1,502.6 $ 6,495.1 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): June 30, 2024 June 30, 2023 Balance as of beginning of year $ 653.6 $ 541.3 Balance as of end of period 669.2 672.5 The most significant changes in our Contract liabilities balance during b

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 3. Share-Based Compensation We recognized $ 24.0 million and $ 75.0 million of pre-tax share-based compensation expense during the three and nine months ended June 30, 2024, respectively. We recognized $ 23.4 million and $ 65.0 million of pre-tax share-based compensation expense during the three and nine months ended June 30, 2023, respectively. Our annual grant of share-based compensation takes place during the 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): Nine Months Ended June 30, 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 251 276.75 236 262.24 Unrestricted stock 6 278.35 7 261.72 4. Inventories Inventories consist of (in millions): June 30, 2024 September 30, 2023 Finished goods $ 509.8 $ 545.9 Work in process 338.8 395.7 Raw materials 507.8 463.3 Inventories $ 1,356.4 $ 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 282.8 Intangible assets 313.4 All other assets 10.2 Total assets acquired 636.5 Less: Deferred tax liability ( 8.9 ) Less: Liabilities assumed ( 18.6 ) Net assets acquired $ 609.0 Purchase Consideration Cash co

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 multi-period excess earnings method. The relief from royalty method calculates value based on hypothetical payments that would be saved by owning an asset rather than licensing it. The multi-period excess earnings method is the i

View Full Filing

View this 10-Q filing on SEC EDGAR