SCOTTSDALE, Ariz., Aug. 3, 2023
/PRNewswire/ -- Resideo Technologies, Inc. (NYSE: REZI), a leading
global manufacturer and developer of technology-driven products and
components that provide critical home comfort, energy management,
and safety and security solutions and a leading wholesale
distributor of low-voltage security, life safety, audio visual,
data com, and other product categories, today announced financial
results for the second quarter ended July 1,
2023.
Financial Highlights
- Net revenue of $1.60 billion
compared to $1.69 billion in the
second quarter 2022
- Income from operations of $153
million, or 9.6% of revenue, compared to $186 million, or 11.0% of revenue in the second
quarter 2022
- Cash provided by operating activities of $121 million, up from $35
million in the second quarter 2022
- $150 million share repurchase
program approved by Board of Directors
Management Remarks
"We delivered strong operating cash flow in the second quarter
and we continue to make progress transforming our operations and
cost structure with a focus on long-term value creation," commented
Jay Geldmacher, Resideo's President
and CEO. "We are seeing momentum on new products and innovation and
believe these efforts are critical for positioning Products &
Solutions for improved growth and margin expansion as market
conditions improve."
"The current demand environment remains challenging as continued
rightsizing of channel inventory and slower housing turnover are
having impacts across the business. We delivered sequential revenue
growth at both Products & Solutions and ADI in the second
quarter but expect market conditions to limit our sales expansion
opportunities in the back half of 2023. We are continuing to reduce
our cost structure and we have further actions identified for the
second half of 2023 that combined with our Q4 2022 program are
expected to generate at least $115
million of annualized savings once fully implemented."
Products and Solutions Second Quarter 2023
Highlights
- Net revenue of $677 million, down
11% compared to the second quarter 2022
- Gross margin of 38.3%, up 100 basis points compared to the
second quarter 2022
- Operating profit of $128 million,
down 17% compared to the second quarter 2022
- Successful launch of First Alert video doorbell and on track
for further expansion of video offering
Products and Solutions delivered net revenue of $677 million in the second quarter 2023, down 11%
compared to a record second quarter 2022. Volume declines in the
quarter were partially offset by price realization. Volumes were
down year-over-year in all four product categories with the largest
headwinds in Air and Energy products. Inventory remains extended in
our HVAC distribution channel and slower new equipment sales,
unfavorable weather, and reduced retail activity have negatively
impacted our volumes and mix. First Alert smoke and CO detector
product sales were up sequentially and year-over-year driven by
continued expansion in the home builder channel.
Gross margin for the quarter was 38.3%, compared to 37.3%
in the second quarter 2022. Gross margin expansions reflects
improving material costs and reduced freight, partially offset by
lower volumes and unfavorable mix. Operating profit for the quarter
was $128 million or 18.9% of revenue,
down from 20.2% in second quarter 2022. Selling, general and
administrative and research and development expenses were up
$1 million compared to second quarter 2022 as cost savings
were offset by inflation and targeted investment.
ADI Global Distribution Second Quarter 2023
Highlights
- Net revenue of $925 million up
0.3% compared to the second quarter 2022
- Gross margin of 19.2%, down 80 basis points compared to the
second quarter 2022
- Operating profit of $79 million,
down 8% compared to the second quarter 2022
- Continued expansion of e-commerce sales and digital
initiatives
ADI second quarter 2023 net revenue of $925 million was up $3 million compared to the second quarter 2022.
Sales growth in North America was
largely offset by declines in the EMEA region. ADI saw strength in
the access control category but continued to experience slower
demand within residential focused intrusion and audio visual
categories. ADI's e-commerce channel grew 9% in the second quarter
2023 compared to the prior year period, representing 19% of
total ADI net revenue. Overall touchless revenue was 38% of ADI's
total revenue in the quarter.
Gross margin of 19.2% in the second quarter 2023 was down 80
basis points compared to second quarter 2022. The reduction was
driven by reduced inflationary pricing benefits that drove higher
margin in the comparable period. ADI gross margin has been
relatively stable the past three quarters. Selling, general and
administrative expenses were $93
million in second quarter 2023, down 3% compared to 2022,
reflecting increased focus on cost management as revenue growth has
slowed. Investment is continuing to support digital initiatives and
system enhancements. Operating profit of $79
million for second quarter 2023 was down 8% from
$86 million in second quarter 2022
and included a $2 million
restructuring charge.
Second Quarter 2023 Financial Performance
Consolidated net revenue was $1.60
billion in second quarter 2023 compared with the prior year
second quarter revenue of $1.69
billion. Gross profit margin for second quarter 2023 was
27.2%, down 50 basis points compared to 27.7% in the prior
year second quarter. Resideo's operating profit of $153 million in second quarter 2023 compared to
the prior year quarter's operating profit of $186 million was down 18%. Total Corporate
costs were $54 million, flat with the
prior year quarter. Provision for income tax was $44 million, up $7
million compared to the prior year second quarter. Net
income for second quarter 2023 was $50
million, or $0.34 per diluted
common share, compared with $94
million, or $0.63 per diluted
common share, in the second quarter 2022.
Cash Flow and Liquidity
Net cash provided by operating activities of $121 million in second quarter 2023 compared to
cash provided by operating activities of $35
million in the second quarter 2022. The improved cash from
operating activities was driven by working capital improvements
compared to the prior year period. At July 1, 2023, Resideo
had cash and cash equivalents of $381
million and total outstanding debt of $1.41 billion.
Share Repurchase Program Authorization
Today Resideo announced that the Board of Directors has approved
a stock repurchase program, pursuant to which Resideo is authorized
to purchase up to $150 million of its
common stock over an unlimited time period. Both management and the
Board see substantial opportunity for value creation at Resideo
through continued operational transformation and the ability to
deliver strong and consistent cash generation, and believe a share
repurchase is an important part of a balanced capital allocation
plan that also includes organic and inorganic investment in the
business.
Outlook
The following table summarizes the Company's current third
quarter 2023 and full year 2023 outlook.
($ in millions, except
per share data)
|
Q3
2023
|
2023
|
Net
revenue
|
$1,515 -
$1,565
|
$6,190 -
$6,290
|
Gross profit
margin
|
26.1% -
27.1%
|
26.2% -
27.2%
|
Income from
operations
|
$105 - $125
|
$530 - $570
|
GAAP Earnings per
share
|
$0.14 -
$0.24
|
$1.15 -
$1.35
|
Non-GAAP Earnings
per share
|
$0.27 -
$0.37
|
$1.29 -
$1.49
|
Non-GAAP Adjusted
EBITDA
|
$124 - $144
|
$538 - $578
|
Conference Call and Webcast Details
Resideo will hold a conference call with investors
on August 3, 2023, at 5:00 p.m.
ET. An audio webcast of the call will be accessible at
https://investor.resideo.com, where related materials will be
posted before the call. A replay of the webcast will be available
following the presentation. To join the conference call, please
dial 888-660-6357 (U.S. toll-free) or 1-929-201-6127
(international), with the conference title "Resideo Second Quarter
2023 Earnings" or the conference ID: 7301399.
About Resideo
Resideo is a leading global manufacturer and developer of
technology-driven products and components that provide critical
comfort, energy management, and safety and security solutions to
over 150 million homes globally. Through our ADI Global
Distribution business, we are also a leading wholesale distributor
of low-voltage security and life safety products for commercial and
residential markets and serve a variety of adjacent product
categories including audio visual, data com, wire and cable, and
smart home solutions. For more information about Resideo,
please visit www.resideo.com.
Contacts:
|
|
|
|
|
|
Investors:
|
|
Media:
|
Jason Willey
|
|
Garrett
Terry
|
Vice President,
Investor Relations
|
|
Lead Communications
Specialist
|
investorrelations@resideo.com
|
|
garrett.terry@resideo.com
|
Forward-Looking Statements
This release contains
"forward-looking statements." All statements, other than statements
of fact, that address activities, events or developments that we or
our management intend, expect, project, believe or anticipate will
or may occur in the future are forward-looking statements. Although
we believe forward-looking statements are based upon reasonable
assumptions, such statements involve known and unknown risks and
uncertainties, which may cause the actual results or performance of
the Company to differ materially from such forward-looking
statements. Such risks and uncertainties include, but are not
limited to, (1) our ability to achieve our outlook regarding the
third quarter 2023 and full year 2023, (2) our ability to recognize
the expected savings from, and the timing and impact of, our
existing and anticipated cost reduction actions, (3) the disruption
to our business and global economy caused by the lingering
effects of COVID-19, (4) the amount of our obligations and nature
of our contractual restrictions pursuant to, and disputes that have
or may hereafter arise under the agreements we entered into with
Honeywell in connection with our spin-off, (5) risks related
to our recently completed acquisitions including our ability to
achieve the targeted amount of annual cost synergies, successfully
integrate the acquired operations (including successfully driving
category growth in connected offerings), (6) the Company's proposed
share repurchase program, the projected timing, purchase price and
number of shares purchased under such program, if at all, the
sources of funds under the repurchase program and the impacts of
the repurchase program, and (7) the other risks described under the
headings "Risk Factors" and "Cautionary Statement Concerning
Forward-Looking Statements" in our Annual Report on Form 10-K for
the year ended December 31, 2022 and
other periodic filings we make from time to time with the
Securities and Exchange Commission. Forward-looking statements are
not guarantees of future performance, and actual results,
developments, and business decisions may differ from those
envisaged by our forward-looking statements. Except as required by
law, we undertake no obligation to update such statements to
reflect events or circumstances arising after the date of this
press release and we caution investors not to place undue reliance
on any such forward looking statements.
Use of Non-GAAP Measures
This press release and
accompanying earnings material includes certain "non-GAAP financial
measures" as defined under the Securities Exchange Act of 1934 and
in accordance with Regulation G. Management believes the use
of such non-GAAP financial measures assists investors in
understanding the ongoing operating performance of the Company by
presenting the financial results between periods on a more
comparable basis. Such non-GAAP financial measures should not be
construed as an alternative to reported results determined in
accordance with U.S. GAAP.
The Company discloses a tabular comparison of Non-GAAP Adjusted
Net Income per diluted common share and Non-GAAP Adjusted Net
Income applicable to common shares, which are non-GAAP measures,
because they are instrumental in comparing the results from period
to period. Non-GAAP Adjusted Net Income per diluted common share
and Non-GAAP Adjusted Net Income applicable to common shares should
not be considered in isolation or as a substitute for Net Income
per diluted common share and Net Income applicable to common shares
as reported on the face of our consolidated statements of
operations. We define Non-GAAP Adjusted Net Income per
diluted common share and Non-GAAP Adjusted Net Income applicable to
common shares adjusted for the following items: pension settlement
loss, restructuring and impairment expenses; acquisition related
costs; and Tax Matters Agreement gain. We have included
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measures calculated and provided in
accordance with U.S. GAAP at the end of this release.
We define Non-GAAP Adjusted EBITDA as net income, adjusted for
the following items: provision for income taxes; depreciation and
amortization; interest expense, net; stock-based compensation
expense, pension settlement loss, restructuring and impairment
expenses; acquisition related costs; and Tax Matters Agreement
gain. We have included reconciliations of the non-GAAP financial
measures to the most directly comparable financial measures
calculated and provided in accordance with U.S. GAAP at the end of
this release.
Table 1: SUMMARY OF FINANCIAL RESULTS (UNAUDITED)
|
Q2
2023
|
|
YTD
2023
|
|
(in
millions)
|
Products
and
Solutions
|
|
ADI
Global
Distribution
|
|
Corporate
|
|
Total
Company
|
|
Products
and
Solutions
|
|
ADI
Global
Distribution
|
|
Corporate
|
|
Total
Company
|
|
Net revenue
|
$ 677
|
|
$ 925
|
|
$
—
|
|
$
1,602
|
|
$
1,335
|
|
$
1,816
|
|
$
—
|
|
$
3,151
|
|
Cost of goods
sold
|
418
|
|
747
|
|
1
|
|
1,166
|
|
826
|
|
1,467
|
|
2
|
|
2,295
|
|
Gross profit
(loss)
|
259
|
|
178
|
|
(1)
|
|
436
|
|
509
|
|
349
|
|
(2)
|
|
856
|
|
Research and
developmentexpenses
|
28
|
|
—
|
|
1
|
|
29
|
|
55
|
|
—
|
|
1
|
|
56
|
|
Selling, general and
administrative expenses
|
98
|
|
93
|
|
51
|
|
242
|
|
196
|
|
190
|
|
100
|
|
486
|
|
Intangible asset
amortization
|
5
|
|
4
|
|
1
|
|
10
|
|
11
|
|
6
|
|
2
|
|
19
|
|
Restructuring and
impairment expenses
|
—
|
|
2
|
|
—
|
|
2
|
|
2
|
|
2
|
|
—
|
|
4
|
|
Income (loss) from
operations
|
$ 128
|
|
$
79
|
|
$ (54)
|
|
$ 153
|
|
$ 245
|
|
$ 151
|
|
$
(105)
|
|
$ 291
|
|
|
Q2
2022
|
|
YTD
2022
|
(in
millions)
|
Products
and
Solutions
|
|
ADI
Global
Distribution
|
|
Corporate
|
|
Total
Company
|
|
Products
and
Solutions
|
|
ADI
Global
Distribution
|
|
Corporate
|
|
Total
Company
|
Net revenue
|
$ 764
|
|
$ 922
|
|
$
—
|
|
$
1,686
|
|
$
1,383
|
|
$
1,809
|
|
$
—
|
|
$
3,192
|
Cost of goods
sold
|
479
|
|
738
|
|
2
|
|
1,219
|
|
829
|
|
1,455
|
|
3
|
|
2,287
|
Gross profit
(loss)
|
285
|
|
184
|
|
(2)
|
|
467
|
|
554
|
|
354
|
|
(3)
|
|
905
|
Research and
development expenses
|
27
|
|
—
|
|
1
|
|
28
|
|
51
|
|
—
|
|
1
|
|
52
|
Selling, general and
administrative expenses
|
98
|
|
96
|
|
50
|
|
244
|
|
186
|
|
185
|
|
108
|
|
479
|
Intangible asset
amortization
|
6
|
|
2
|
|
1
|
|
9
|
|
10
|
|
3
|
|
3
|
|
16
|
Restructuring and
impairment expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Income (loss) from
operations
|
$ 154
|
|
$
86
|
|
$ (54)
|
|
$ 186
|
|
$ 307
|
|
$ 166
|
|
$
(115)
|
|
$ 358
|
|
Q2 2023 % change
compared with prior period
|
|
YTD 2023 % change
compared with prior period
|
|
Products
and
Solutions
|
|
ADI
Global
Distribution
|
|
Corporate
|
|
Total
Company
|
|
Products
and
Solutions
|
|
ADI
Global
Distribution
|
|
Corporate
|
|
Total
Company
|
Net revenue
|
(11) %
|
|
— %
|
|
N/A
|
|
(5) %
|
|
(3) %
|
|
— %
|
|
N/A
|
|
(1) %
|
Cost of goods
sold
|
(13) %
|
|
1 %
|
|
(50) %
|
|
(4) %
|
|
— %
|
|
1 %
|
|
(33) %
|
|
— %
|
Gross profit
(loss)
|
(9) %
|
|
(3) %
|
|
(50) %
|
|
(7) %
|
|
(8) %
|
|
(1) %
|
|
(33) %
|
|
(5) %
|
Research and
development expenses
|
4 %
|
|
N/A
|
|
— %
|
|
4 %
|
|
8 %
|
|
N/A
|
|
— %
|
|
8 %
|
Selling, general and
administrative expenses
|
— %
|
|
(3) %
|
|
2 %
|
|
(1) %
|
|
5 %
|
|
3 %
|
|
(7) %
|
|
1 %
|
Intangible asset
amortization
|
(17) %
|
|
100 %
|
|
— %
|
|
11 %
|
|
10 %
|
|
100 %
|
|
(33) %
|
|
19 %
|
Restructuring and
impairment expenses
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
Income (loss) from
operations
|
(17) %
|
|
(8) %
|
|
— %
|
|
(18) %
|
|
(20) %
|
|
(9) %
|
|
(9) %
|
|
(19) %
|
|
Table 2: CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
Three Months
Ended
|
|
Six Months
Ended
|
(in millions, except
per share data)
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
Net revenue
|
$
1,602
|
|
$
1,686
|
|
$
3,151
|
|
$
3,192
|
Cost of goods
sold
|
1,166
|
|
1,219
|
|
2,295
|
|
2,287
|
Gross
profit
|
436
|
|
467
|
|
856
|
|
905
|
Research and
development expenses
|
29
|
|
28
|
|
56
|
|
52
|
Selling, general and
administrative expenses
|
242
|
|
244
|
|
486
|
|
479
|
Intangible asset
amortization
|
10
|
|
9
|
|
19
|
|
16
|
Restructuring and
impairment expenses
|
2
|
|
—
|
|
4
|
|
—
|
Income from
operations
|
153
|
|
186
|
|
291
|
|
358
|
Reimbursement Agreement
expense (1)
|
44
|
|
45
|
|
85
|
|
86
|
Other income,
net
|
(2)
|
|
$
(3)
|
|
(3)
|
|
(4)
|
Interest expense,
net
|
17
|
|
13
|
|
34
|
|
24
|
Income before
taxes
|
94
|
|
131
|
|
175
|
|
252
|
Provision for income
taxes
|
44
|
|
37
|
|
68
|
|
71
|
Net income
|
$
50
|
|
$
94
|
|
$
107
|
|
$
181
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.34
|
|
$
0.65
|
|
$
0.73
|
|
$
1.25
|
Diluted
|
$
0.34
|
|
$
0.63
|
|
$
0.72
|
|
$
1.22
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
147
|
|
145
|
|
147
|
|
145
|
Diluted
|
149
|
|
149
|
|
149
|
|
149
|
|
|
(1)
|
Represents the expense
incurred pursuant to the Reimbursement Agreement, which has an
annual cash payment cap of $140 million. The following table
summarizes information concerning the Reimbursement
Agreement:
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
millions)
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
Accrual for
Reimbursement Agreement liabilities deemed
probable and reasonably
estimable
|
$
44
|
|
$
45
|
|
$
85
|
|
$
86
|
Cash payments made to
Honeywell
|
(35)
|
|
(35)
|
|
(70)
|
|
(70)
|
Accrual increase,
non-cash component in period
|
$
9
|
|
$
10
|
|
$
15
|
|
$
16
|
|
Refer to Note 16.
Commitments and Contingencies in our Form 10Q for the period ended
July 1, 2023 for further discussion.
|
Table 3: CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except
par value)
|
July 1,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
381
|
|
$
326
|
Accounts receivable,
net
|
1,043
|
|
1,002
|
Inventories,
net
|
1,001
|
|
975
|
Other current
assets
|
197
|
|
199
|
Total current
assets
|
2,622
|
|
2,502
|
|
|
|
|
Property, plant and
equipment, net
|
388
|
|
366
|
Goodwill
|
2,737
|
|
2,724
|
Intangible assets,
net
|
467
|
|
475
|
Other assets
|
322
|
|
320
|
Total
assets
|
$
6,536
|
|
$
6,387
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
948
|
|
$
894
|
Current portion of
long-term debt
|
12
|
|
12
|
Accrued
liabilities
|
564
|
|
640
|
Total current
liabilities
|
1,524
|
|
1,546
|
|
|
|
|
Long-term
debt
|
1,400
|
|
1,404
|
Obligations payable
under Indemnification Agreements
|
591
|
|
580
|
Other
liabilities
|
344
|
|
328
|
Total
liabilities
|
3,859
|
|
3,858
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common stock, $0.001
par value: 700 shares authorized, 151 and 148 shares
issued and outstanding
at July 1, 2023, and 148 and 146 shares issued and
outstanding at
December 31, 2022, respectively
|
—
|
|
—
|
Additional paid-in
capital
|
2,204
|
|
2,176
|
Retained
earnings
|
707
|
|
600
|
Accumulated other
comprehensive loss, net
|
(184)
|
|
(212)
|
Treasury stock at
cost
|
(50)
|
|
(35)
|
Total stockholders'
equity
|
2,677
|
|
2,529
|
Total liabilities and
stockholders' equity
|
$
6,536
|
|
$
6,387
|
Table 4: CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
millions)
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
Cash Flows From
Operating Activities:
|
|
|
|
|
|
|
|
Net income
|
$
50
|
|
$
94
|
|
$
107
|
|
$
181
|
Adjustments to
reconcile net income to net cash in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
25
|
|
25
|
|
49
|
|
45
|
Restructuring and
impairment expenses
|
2
|
|
—
|
|
4
|
|
—
|
Stock-based
compensation expense
|
13
|
|
11
|
|
25
|
|
22
|
Other, net
|
2
|
|
(7)
|
|
2
|
|
(5)
|
Changes in assets and
liabilities, net of acquired companies:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
(58)
|
|
(84)
|
|
(35)
|
|
(145)
|
Inventories,
net
|
12
|
|
(61)
|
|
(15)
|
|
(127)
|
Other current
assets
|
11
|
|
(9)
|
|
3
|
|
(21)
|
Accounts
payable
|
56
|
|
37
|
|
44
|
|
54
|
Accrued
liabilities
|
(8)
|
|
19
|
|
(94)
|
|
(47)
|
Other, net
|
16
|
|
10
|
|
27
|
|
19
|
Net cash provided by
(used in) operating activities
|
121
|
|
35
|
|
117
|
|
(24)
|
Cash Flows From
Investing Activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(29)
|
|
(5)
|
|
(49)
|
|
(24)
|
Acquisitions, net of
cash acquired
|
—
|
|
—
|
|
(6)
|
|
(633)
|
Other investing
activities, net
|
—
|
|
—
|
|
—
|
|
(13)
|
Net cash used in
investing activities
|
(29)
|
|
(5)
|
|
(55)
|
|
(670)
|
Cash Flows From
Financing Activities:
|
|
|
|
|
|
|
|
Proceeds from issuance
of A&R Term B Facility
|
—
|
|
—
|
|
—
|
|
200
|
Repayments of
long-term debt
|
(3)
|
|
(3)
|
|
(6)
|
|
(6)
|
Other financing
activities, net
|
(6)
|
|
(3)
|
|
(12)
|
|
(11)
|
Net cash (used in)
provided by financing activities
|
(9)
|
|
(6)
|
|
(18)
|
|
183
|
Effect of foreign
exchange rate changes on cash, cash equivalents and restricted
cash
|
4
|
|
(13)
|
|
10
|
|
(13)
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
87
|
|
11
|
|
54
|
|
(524)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
296
|
|
244
|
|
329
|
|
779
|
Cash, cash equivalents
and restricted cash at end of period
|
$
383
|
|
$
255
|
|
$
383
|
|
$
255
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
ADJUSTED NET INCOME
PER DILUTED COMMON SHARE AND
NET INCOME
COMPARISON
(Unaudited)
RESIDEO
TECHNOLOGIES, INC.
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
millions)
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
GAAP Net
income applicable to common shares
|
$
50
|
|
$
94
|
|
$
107
|
|
$
181
|
Restructuring and
impairment expenses
|
2
|
|
—
|
|
4
|
|
—
|
Acquisition related
costs
|
—
|
|
—
|
|
—
|
|
10
|
Pension settlement
loss
|
—
|
|
—
|
|
3
|
|
—
|
Tax Matters Agreement
gain
|
(2)
|
|
—
|
|
(4)
|
|
—
|
Tax effect of
applicable non-GAAP adjustments (1)
|
—
|
|
—
|
|
(1)
|
|
(2)
|
Non-GAAP Adjusted
net income applicable to common shares
|
$
50
|
|
$
94
|
|
$
109
|
|
$
189
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
GAAP Net income per
diluted common share
|
$
0.34
|
|
$
0.63
|
|
$
0.72
|
|
$
1.22
|
Restructuring and
impairment expenses
|
0.01
|
|
—
|
|
0.03
|
|
—
|
Acquisition related
costs
|
—
|
|
—
|
|
—
|
|
0.07
|
Pension settlement
loss
|
—
|
|
—
|
|
0.02
|
|
—
|
Tax Matters Agreement
gain
|
(0.01)
|
|
—
|
|
(0.03)
|
|
—
|
Tax effect of
applicable non-GAAP adjustments (1)
|
—
|
|
—
|
|
(0.01)
|
|
(0.02)
|
Non-GAAP Adjusted
net income per diluted common share
|
$
0.34
|
|
$
0.63
|
|
$
0.73
|
|
$
1.27
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Company calculated
the tax effect of non-GAAP adjustments by applying a flat statutory
tax rate of 25% for the three and six months ended July 1,
2023 and July 2, 2022.
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
(Unaudited)
RESIDEO
TECHNOLOGIES, INC.
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
millions)
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
Net
revenue
|
$
1,602
|
|
$
1,686
|
|
$
3,151
|
|
$
3,192
|
|
|
|
|
|
|
|
|
GAAP Net
income applicable to common shares
|
$
50
|
|
$
94
|
|
$
107
|
|
$
181
|
Provision for income
taxes
|
44
|
|
37
|
|
68
|
|
71
|
GAAP Income before
taxes
|
94
|
|
131
|
|
175
|
|
252
|
Depreciation and
amortization
|
25
|
|
25
|
|
49
|
|
45
|
Interest expense,
net
|
17
|
|
13
|
|
34
|
|
24
|
Stock-based
compensation expense
|
13
|
|
11
|
|
25
|
|
22
|
Pension settlement
loss
|
—
|
|
—
|
|
3
|
|
—
|
Restructuring and
impairment expenses
|
2
|
|
—
|
|
4
|
|
—
|
Acquisition related
costs
|
—
|
|
—
|
|
—
|
|
10
|
Tax Matters Agreement
gain
|
(2)
|
|
—
|
|
(4)
|
|
—
|
Non-GAAP Adjusted
EBITDA
|
$
149
|
|
$
180
|
|
$
286
|
|
$
353
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
9.3 %
|
|
10.7 %
|
|
9.1 %
|
|
11.1 %
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
(Unaudited)
PRODUCTS AND
SOLUTIONS SEGMENT
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
millions)
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
Net
revenue
|
$
677
|
|
$
764
|
|
$
1,335
|
|
$ 1,383
|
|
|
|
|
|
|
|
|
GAAP Income from
operations
|
$
128
|
|
$
154
|
|
$
245
|
|
$
307
|
Stock-based
compensation expense
|
5
|
|
4
|
|
9
|
|
8
|
Restructuring and
impairment expenses
|
—
|
|
—
|
|
2
|
|
—
|
Non-GAAP Adjusted
Income from Operations
|
$
133
|
|
$
158
|
|
$
256
|
|
$
315
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
18
|
|
18
|
|
35
|
|
33
|
Non-GAAP Adjusted
EBITDA
|
$
151
|
|
$
176
|
|
$
291
|
|
$
348
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
22.3 %
|
|
23.0 %
|
|
21.8 %
|
|
25.2 %
|
ADI GLOBAL
DISTRIBUTION SEGMENT
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(in
millions)
|
July 1,
2023
|
|
July 2,
2022
|
|
July 1,
2023
|
|
July 2,
2022
|
Net
revenue
|
$
925
|
|
$
922
|
|
$
1,816
|
|
$ 1,809
|
|
|
|
|
|
|
|
|
GAAP Income from
operations
|
$
79
|
|
$
86
|
|
$
151
|
|
$
166
|
Stock-based
compensation expense
|
1
|
|
2
|
|
3
|
|
4
|
Restructuring and
impairment expenses
|
2
|
|
—
|
|
2
|
|
—
|
Non-GAAP Adjusted
Income from Operations
|
$
82
|
|
$
88
|
|
$
156
|
|
$
170
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
5
|
|
3
|
|
9
|
|
6
|
Non-GAAP Adjusted
EBITDA
|
$
87
|
|
$
91
|
|
$
165
|
|
$
176
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
9.4 %
|
|
9.9 %
|
|
9.1 %
|
|
9.7 %
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
ADJUSTED NET INCOME
PER DILUTED COMMON SHARE
(Unaudited)
RESIDEO
TECHNOLOGIES, INC.
|
|
|
Q3
2023
|
|
Fiscal Year
2023
|
|
Low
|
|
High
|
|
Low
|
|
High
|
GAAP Net income per
diluted common share
|
$
0.14
|
|
$
0.24
|
|
$
1.15
|
|
$
1.35
|
Restructuring and
impairment expenses
|
0.17
|
|
0.17
|
|
0.19
|
|
0.19
|
Pension settlement
loss
|
—
|
|
—
|
|
0.02
|
|
0.02
|
Tax Matters Agreement
gain
|
—
|
|
—
|
|
(0.03)
|
|
(0.03)
|
Tax effect of
applicable non-GAAP adjustments (1)
|
(0.04)
|
|
(0.04)
|
|
(0.04)
|
|
(0.04)
|
Non-GAAP Adjusted
net income per diluted common shares
|
$
0.27
|
|
$
0.37
|
|
$
1.29
|
|
$
1.49
|
|
|
(1)
|
The Company calculated
the tax effect of non-GAAP adjustments by applying a flat statutory
tax rate of 25% for third quarter 2023 and full year
2023.
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
(Unaudited)
RESIDEO
TECHNOLOGIES, INC.
|
|
|
Q3
2023
|
|
Fiscal Year
2023
|
(in
millions)
|
Low
|
|
High
|
|
Low
|
|
High
|
Net revenue
|
$
1,515
|
|
$
1,565
|
|
$
6,190
|
|
$
6,290
|
|
|
|
|
|
|
|
|
GAAP Net
income applicable to common shares
|
$
21
|
|
$
36
|
|
$
172
|
|
$
201
|
Provision for income
taxes
|
22
|
|
27
|
|
117
|
|
128
|
GAAP Income before
taxes
|
43
|
|
63
|
|
289
|
|
329
|
Depreciation and
amortization
|
25
|
|
25
|
|
100
|
|
100
|
Interest expense,
net
|
18
|
|
18
|
|
71
|
|
71
|
Stock-based
compensation expense
|
13
|
|
13
|
|
50
|
|
50
|
Pension settlement
loss
|
—
|
|
—
|
|
3
|
|
3
|
Restructuring and
impairment expenses
|
25
|
|
25
|
|
29
|
|
29
|
Tax Matters Agreement
gain
|
—
|
|
—
|
|
(4)
|
|
(4)
|
Non-GAAP Adjusted
EBITDA
|
$
124
|
|
$
144
|
|
$
538
|
|
$
578
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
8.2 %
|
|
9.2 %
|
|
8.7 %
|
|
9.2 %
|
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SOURCE Resideo Technologies, Inc.