Sharpened focus on portfolio optimization with
sale of Genesis Cable and purchase
of Sfty, a Norwegian provider of life safety monitoring
technology
Expanded partnerships with leading national
insurance providers, USAA and Nationwide
Identified and executed on further cost
cutting initiatives
Repurchased 1.8 million shares for
$30 million as part of $150
million repurchase program
SCOTTSDALE, Ariz., Nov. 1, 2023
/PRNewswire/ -- Resideo Technologies, Inc. (NYSE: REZI), a leading
global manufacturer and developer of technology-driven products
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
third quarter ended September 30, 2023.
Third Quarter Financial Highlights
- Net revenue of $1.55 billion
compared to $1.62 billion in the
third quarter 2022
- Income from operations of $109
million, including restructuring charges of $38 million, compared to $155 million in the third quarter 2022
- Fully diluted GAAP EPS of $0.14
and non-GAAP EPS of $0.41 compared to
GAAP EPS of $0.42 and non-GAAP EPS of
$0.48 in the third quarter 2022
- Cash provided by operating activities of $60 million, up from $37
million in the third quarter 2022
Management Remarks
"We experienced more stable end market conditions and order
activity within Products and Solutions in the third quarter,
driving revenue and profitability, excluding restructuring, above
the midpoint of our outlook," commented Jay
Geldmacher, Resideo's President and CEO. "While volumes
remain a headwind, we again drove year-over-year improvement in
Products and Solutions gross margin through a focus on input cost
reductions and benefits from labor cost management."
"We executed on a number of important strategic initiatives
during the quarter, including reaching an agreement to sell our
non-strategic Genesis Cable business
at an attractive multiple, actioning additional structural cost
reductions across the organization, deepening our relationship
within the insurance channel, and opening our new Dallas, TX distribution super center
supporting ADI. We continue to actively work on opportunities to
optimize our portfolio and operational footprint, which in
conjunction with the restructuring undertaken over the past 12
months creates significant opportunity for future profitability
expansion. Despite a challenging market environment, I am confident
that we are taking the necessary steps to position the business for
profitable growth and we remain focused on executing against our
strategic priorities."
Products and Solutions Third Quarter 2023
Highlights
- Net revenue of $654 million, down
7% compared to the third quarter 2022
- Gross margin of 38.7%, up 250 basis points compared to the
third quarter 2022
- Operating profit of $107 million,
including $25 million of
restructuring costs, compared to $124
million in the third quarter 2022
- Completed the sale of Genesis
Cable business for $87.5
million with transaction closing on October 16
Products and Solutions delivered net revenue of $654 million in the third quarter 2023, down 7%
compared to third quarter 2022. Volume declines in the quarter were
partially offset by price realization. First Alert smoke and CO
detector product sales again performed well, driven by continued
expansion in the home builder channel. Inventory remains
extended in the HVAC distribution channel and overall end customer
demand is being negatively impacted by slower existing home
turnover and reduced new home construction.
Gross margin for the quarter was 38.7%, compared to 36.2% in the
third quarter 2022. Gross margin expansion reflects improving
material costs, reduced freight, and lower direct labor spending,
partially offset by lower volumes. Operating profit for the quarter
was $107 million or 16.4% of revenue,
down from 17.5% in third quarter 2022. Selling, general and
administrative and research and development expenses were down
$8 million and down $2 million compared to third quarter 2022 as cost
savings were partially offset by inflation and targeted investment.
Included in the quarter was $25
million in restructuring costs.
During the quarter the company announced an agreement for the
sale of Genesis Cable for
$87.5 million. The sale, which
closed on October 16, 2023, is part
of ongoing work to optimize the Products and Solutions product
portfolio through identifying and actioning non-core assets to
sharpen the focus on core long-term strategic initiatives. Also
completed during the third quarter was the purchase of Sfty, a
small Norwegian-based provider of life safety monitoring technology
for multi-family buildings.
ADI Global Distribution Third Quarter 2023
Highlights
- Net revenue of $900 million, down
1% compared to the third quarter 2022
- Gross margin of 18.3%, down 100 basis points compared to the
third quarter 2022
- Operating profit of $60 million,
including $10 million of
restructuring costs, compared to $78
million in the third quarter 2022
- Continued expansion of digital initiatives, including 5% growth
in e-commerce sales compared to third quarter 2022
ADI third quarter 2023 net revenue of $900 million was down $11
million compared to the third quarter 2022. Sales decline in
North America was partially offset
by growth in the EMEA region. ADI saw strength in the access
control category but continued slower demand within residential
security category. ADI's e-commerce channel grew 5% in the third
quarter 2023 compared to the prior year period, representing 19% of
total ADI net revenue, as the business continues to invest in the
expansion of digital capabilities. Overall touchless revenue was
38% of ADI's total revenue in the quarter.
Gross margin of 18.3% in the third quarter 2023 was down 100
basis points compared to third quarter 2022. The reduction was
driven by reduced inflationary pricing benefits that drove higher
margin in the comparable period and lower product line margin.
Selling, general and administrative expenses were $93 million in third quarter 2023, down 3%
compared to 2022, reflecting increased focus on cost management.
Investment is continuing to support digital initiatives and system
enhancements. Operating profit of $60
million for third quarter 2023 was down 23% from
$78 million in third quarter 2022 and
included a $10 million restructuring
charge.
During the quarter, ADI opened its Dallas super center, a cutting-edge facility
designed to optimize supply chain operations, enhance customer
service, and provide capacity for continued growth. The new super
center represents a significant investment in ADI's supply chain
operations and reinforces the businesses' commitment to serving
customers.
Third Quarter 2023 Financial Performance
Consolidated net revenue was $1.55
billion in third quarter 2023 compared with the prior year
third quarter revenue of $1.62
billion. Gross profit margin was 26.8%, up 20 basis
points compared to 26.6% in the prior year third quarter. Operating
profit of $109 million in third
quarter 2023 compared to the prior year quarter's operating profit
of $155 million was down 30%,
primarily driven by $38 million in
restructuring costs. Total Corporate costs were $58 million, up $11
million from the prior year quarter, driven by $3 million of restructuring costs, timing of
expected costs, and an $8 million
gain in the prior year quarter. Net income for third quarter 2023
was $21 million, or $0.14 per diluted common share, compared with
$63 million, or $0.42 per diluted common share, in the third
quarter 2022. Non-GAAP EPS was $0.41
compared with $0.48 in the third
quarter last year.
Cash Flow and Liquidity
Net cash provided by operating activities of $60 million in third quarter 2023 compared to
$37 million in the third quarter
2022. The increase was driven by working capital improvements
compared to the prior year period. At September 30, 2023,
Resideo had cash and cash equivalents of $368 million and total outstanding debt of
$1.41 billion.
Share Repurchase
As part of the $150 million share
repurchase program authorized in early August 2023, Resideo repurchased 1.8 million
shares during the third quarter 2023 at a total cost of
$30 million.
Outlook
The following table summarizes the Company's current fourth
quarter 2023 and updated full year 2023 outlook. This outlook
reflects the sale of Genesis in mid-October, which reduces our
previously communicated 2023 outlook by approximately $25 million of revenue and $4 million of operating income.
($ in millions, except
per share data)
|
Q4
2023
|
2023
|
Net
revenue
|
$1,495 -
$1,545
|
$6,200 -
$6,250
|
Gross profit
margin
|
26.0% -
27.0%
|
26.6% -
27.2%
|
Income from
operations
|
$135 - $155
|
$535 - $555
|
GAAP Earnings per
share
|
$0.43 -
$0.53
|
$1.30 -
$1.41
|
Non-GAAP Earnings
per share
|
$0.29 -
$0.39
|
$1.39 -
$1.50
|
Non-GAAP Adjusted
EBITDA
|
$126 - $146
|
$542 - $562
|
Conference Call and Webcast Details
Resideo will hold a conference call with investors
on November 1, 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 Third 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
|
|
Corporate
Communications Manager
|
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
fourth 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, and our
ability to optimize our portfolio and operational footprint (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 and
successfully integrate the acquired operations (including
successfully driving category growth in connected offerings), (6)
the Company's announced share repurchase program, the timing,
purchase price and number of additional 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, Non-GAAP Adjusted Net Income per diluted common share,
Non-GAAP Adjusted EBITDA, and Non-GAAP Adjusted Income from
Operations, each of which is a non-GAAP measure, because management
believes that they are instrumental in comparing the results from
period to period. Non-GAAP Adjusted Net Income, Non-GAAP Adjusted
Net Income per diluted common share, Non-GAAP Adjusted EBITDA, and
Non-GAAP Adjusted Income from Operations should not be considered
in isolation or as a substitute for Net Income, Net Income per
diluted common share or Income from operations, as applicable, as
reported on the face of our consolidated statements of operations.
We define Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Net
Income per diluted common share as Net Income and Net income per
diluted common share, respectively, as set forth on the face of our
consolidated statements of operations, adjusted for the following
items: pension settlement loss, restructuring and impairment
expenses; acquisition/divestiture related costs, divestiture loss,
litigation settlement, net of insurance proceeds, Tax Matters
Agreement gain, foreign exchange transaction loss (income), and tax
effect of applicable non-GAAP adjustments. We define Non-GAAP
Adjusted EBITDA as Net Income as set forth on the face of our
consolidated statements of operations, 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/divestiture related costs, divestiture loss, litigation
settlement, net of insurance proceeds, and Tax Matters Agreement
gain, and foreign exchange transaction loss (income). We define
Non-GAAP Adjusted Income from Operations as Income from operations
as set forth on the face of our consolidated statements of
operations, adjusted for the following items: stock-based
compensation expense, restructuring and impairment charges, and
acquisition/divestiture related costs. 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.
Table 1: SUMMARY OF FINANCIAL RESULTS (UNAUDITED)
|
Q3
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
|
$ 654
|
|
$ 900
|
|
$
—
|
|
$
1,554
|
|
$
1,989
|
|
$
2,716
|
|
$
—
|
|
$
4,705
|
Cost of goods
sold
|
401
|
|
735
|
|
1
|
|
1,137
|
|
1,227
|
|
2,202
|
|
3
|
|
3,432
|
Gross profit
(loss)
|
253
|
|
165
|
|
(1)
|
|
417
|
|
762
|
|
514
|
|
(3)
|
|
1,273
|
Research and
development expenses
|
27
|
|
—
|
|
1
|
|
28
|
|
82
|
|
—
|
|
2
|
|
84
|
Selling, general and
administrative expenses
|
88
|
|
93
|
|
52
|
|
233
|
|
284
|
|
283
|
|
152
|
|
719
|
Intangible asset
amortization
|
6
|
|
2
|
|
1
|
|
9
|
|
17
|
|
8
|
|
3
|
|
28
|
Restructuring and
impairment expenses
|
25
|
|
10
|
|
3
|
|
38
|
|
27
|
|
12
|
|
3
|
|
42
|
Income (loss) from
operations
|
$ 107
|
|
$
60
|
|
$ (58)
|
|
$ 109
|
|
$ 352
|
|
$ 211
|
|
$
(163)
|
|
$ 400
|
|
Q3
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
|
$ 707
|
|
$ 911
|
|
$
—
|
|
$
1,618
|
|
$
2,090
|
|
$
2,720
|
|
$
—
|
|
$
4,810
|
Cost of goods
sold
|
451
|
|
735
|
|
2
|
|
1,188
|
|
1,280
|
|
2,190
|
|
5
|
|
3,475
|
Gross profit
(loss)
|
256
|
|
176
|
|
(2)
|
|
430
|
|
810
|
|
530
|
|
(5)
|
|
1,335
|
Research and
development expenses
|
29
|
|
—
|
|
—
|
|
29
|
|
80
|
|
—
|
|
1
|
|
81
|
Selling, general and
administrative expenses
|
96
|
|
96
|
|
44
|
|
236
|
|
283
|
|
281
|
|
152
|
|
716
|
Intangible asset
amortization
|
7
|
|
2
|
|
1
|
|
10
|
|
16
|
|
5
|
|
4
|
|
25
|
Restructuring and
impairment expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Income (loss) from
operations
|
$ 124
|
|
$
78
|
|
$ (47)
|
|
$ 155
|
|
$ 431
|
|
$ 244
|
|
$
(162)
|
|
$ 513
|
|
Q3 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
|
(7) %
|
|
(1) %
|
|
N/A
|
|
(4) %
|
|
(5) %
|
|
— %
|
|
N/A
|
|
(2) %
|
|
Cost of goods
sold
|
(11) %
|
|
— %
|
|
(50) %
|
|
(4) %
|
|
(4) %
|
|
1 %
|
|
(40) %
|
|
(1) %
|
|
Gross profit
(loss)
|
(1) %
|
|
(6) %
|
|
(50) %
|
|
(3) %
|
|
(6) %
|
|
(3) %
|
|
(40) %
|
|
(5) %
|
|
Research and
development expenses
|
(7) %
|
|
N/A
|
|
N/A
|
|
(3) %
|
|
3 %
|
|
N/A
|
|
100 %
|
|
4 %
|
|
Selling, general and
administrative expenses
|
(8) %
|
|
(3) %
|
|
18 %
|
|
(1) %
|
|
— %
|
|
1 %
|
|
— %
|
|
— %
|
|
Intangible asset
amortization
|
(14) %
|
|
— %
|
|
— %
|
|
(10) %
|
|
6 %
|
|
60 %
|
|
(25) %
|
|
12 %
|
|
Restructuring and
impairment expenses
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Income (loss) from
operations
|
(14) %
|
|
(23) %
|
|
23 %
|
|
(30) %
|
|
(18) %
|
|
(14) %
|
|
1 %
|
|
(22) %
|
|
Table 2: CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in millions, except
per share data)
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
Net revenue
|
$
1,554
|
|
$
1,618
|
|
$
4,705
|
|
$
4,810
|
Cost of goods
sold
|
1,137
|
|
1,188
|
|
3,432
|
|
3,475
|
Gross
profit
|
417
|
|
430
|
|
1,273
|
|
1,335
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development expenses
|
28
|
|
29
|
|
84
|
|
81
|
Selling, general and
administrative expenses
|
233
|
|
236
|
|
719
|
|
716
|
Intangible asset
amortization
|
9
|
|
10
|
|
28
|
|
25
|
Restructuring and
impairment expenses
|
38
|
|
—
|
|
42
|
|
—
|
Total operating
expenses
|
308
|
|
275
|
|
873
|
|
822
|
Income from
operations
|
109
|
|
155
|
|
400
|
|
513
|
Reimbursement Agreement
expense (1)
|
43
|
|
30
|
|
128
|
|
116
|
Other expenses,
net
|
13
|
|
$
14
|
|
10
|
|
10
|
Interest expense,
net
|
16
|
|
15
|
|
50
|
|
39
|
Income before
taxes
|
37
|
|
96
|
|
212
|
|
348
|
Provision for income
taxes
|
16
|
|
33
|
|
84
|
|
104
|
Net income
|
$
21
|
|
$
63
|
|
$
128
|
|
$
244
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.14
|
|
$
0.43
|
|
$
0.87
|
|
$
1.68
|
Diluted
|
$
0.14
|
|
$
0.42
|
|
$
0.86
|
|
$
1.64
|
|
|
|
|
|
|
|
|
Weighted average number
of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
147
|
|
146
|
|
147
|
|
145
|
Diluted
|
148
|
|
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
|
|
Nine Months
Ended
|
(in
millions)
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
Accrual for
Reimbursement Agreement liabilities deemed
probable and reasonably estimable
|
$
43
|
|
$
30
|
|
$
128
|
|
$
116
|
Cash payments made to
Honeywell
|
(35)
|
|
(35)
|
|
(105)
|
|
(105)
|
Accrual increase,
non-cash component in period
|
$
8
|
|
$
(5)
|
|
$
23
|
|
$
11
|
|
|
|
|
|
|
|
|
Refer to Note 16.
Commitments and Contingencies in our Form 10Q for the period ended
September 30, 2023 for further discussion.
|
Table 3: CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions, except
par value)
|
September 30,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
368
|
|
$
326
|
Accounts receivable,
net
|
988
|
|
1,002
|
Inventories,
net
|
970
|
|
975
|
Other current
assets
|
289
|
|
199
|
Total current
assets
|
2,615
|
|
2,502
|
|
|
|
|
Property, plant and
equipment, net
|
380
|
|
366
|
Goodwill
|
2,687
|
|
2,724
|
Intangible assets,
net
|
456
|
|
475
|
Other assets
|
321
|
|
320
|
Total
assets
|
$
6,459
|
|
$
6,387
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
863
|
|
$
894
|
Current portion of
long-term debt
|
12
|
|
12
|
Accrued
liabilities
|
592
|
|
640
|
Total current
liabilities
|
1,467
|
|
1,546
|
|
|
|
|
Long-term
debt
|
1,397
|
|
1,404
|
Obligations payable
under Indemnification Agreements
|
599
|
|
580
|
Other
liabilities
|
351
|
|
328
|
Total
liabilities
|
3,814
|
|
3,858
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Common stock, $0.001
par value: 700 shares authorized, 151 and 146 shares
issued and outstanding at September 30, 2023, respectively,
and 148 and 146
shares issued and outstanding at December 31, 2022,
respectively
|
—
|
|
—
|
Additional paid-in
capital
|
2,219
|
|
2,176
|
Retained
earnings
|
728
|
|
600
|
Accumulated other
comprehensive loss, net
|
(221)
|
|
(212)
|
Treasury stock at
cost
|
(81)
|
|
(35)
|
Total stockholders'
equity
|
2,645
|
|
2,529
|
Total liabilities and
stockholders' equity
|
$
6,459
|
|
$
6,387
|
Table 4: CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
millions)
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
Cash Flows From
Operating Activities:
|
|
|
|
|
|
|
|
Net income
|
$
21
|
|
$
63
|
|
$
128
|
|
$
244
|
Adjustments to
reconcile net income to net cash in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
22
|
|
24
|
|
71
|
|
69
|
Restructuring and
impairment expenses
|
38
|
|
—
|
|
42
|
|
—
|
Stock-based
compensation expense
|
11
|
|
14
|
|
36
|
|
36
|
Other, net
|
—
|
|
13
|
|
2
|
|
8
|
Changes in assets and
liabilities, net of acquired companies:
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
26
|
|
3
|
|
(9)
|
|
(142)
|
Inventories,
net
|
11
|
|
(2)
|
|
(4)
|
|
(129)
|
Other current
assets
|
(8)
|
|
(17)
|
|
(5)
|
|
(38)
|
Accounts
payable
|
(58)
|
|
(49)
|
|
(14)
|
|
5
|
Accrued
liabilities
|
(20)
|
|
22
|
|
(114)
|
|
(25)
|
Other, net
|
17
|
|
(34)
|
|
44
|
|
(15)
|
Net cash provided by
operating activities
|
60
|
|
37
|
|
177
|
|
13
|
Cash Flows From
Investing Activities:
|
|
|
|
|
|
|
|
Capital
expenditures
|
(25)
|
|
(10)
|
|
(74)
|
|
(34)
|
Acquisitions, net of
cash acquired
|
(10)
|
|
(27)
|
|
(16)
|
|
(660)
|
Other investing
activities, net
|
—
|
|
—
|
|
—
|
|
(13)
|
Net cash used in
investing activities
|
(35)
|
|
(37)
|
|
(90)
|
|
(707)
|
Cash Flows From
Financing Activities:
|
|
|
|
|
|
|
|
Common stock
repurchases
|
(28)
|
|
—
|
|
(28)
|
|
—
|
Proceeds from issuance
of A&R Term B Facility
|
—
|
|
—
|
|
—
|
|
200
|
Repayments of
long-term debt
|
(3)
|
|
(3)
|
|
(9)
|
|
(9)
|
Other financing
activities, net
|
2
|
|
2
|
|
(10)
|
|
(9)
|
Net cash (used in)
provided by financing activities
|
(29)
|
|
(1)
|
|
(47)
|
|
182
|
Effect of foreign
exchange rate changes on cash, cash equivalents and restricted
cash
|
(9)
|
|
1
|
|
1
|
|
(12)
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
(13)
|
|
—
|
|
41
|
|
(524)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
383
|
|
255
|
|
329
|
|
779
|
Cash, cash equivalents
and restricted cash at end of period
|
$
370
|
|
$
255
|
|
$
370
|
|
$
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
|
|
Nine Months
Ended
|
(in millions, except
per share data)
|
September
30, 2023
|
|
October 1,
2022
|
|
September
30, 2023
|
|
October 1,
2022
|
GAAP Net income
applicable to common shares
|
$
21
|
|
$
63
|
|
$
128
|
|
$
244
|
Restructuring and
impairment expenses
|
38
|
|
—
|
|
42
|
|
—
|
Acquisition and
divestiture related costs
|
1
|
|
—
|
|
1
|
|
10
|
Divestiture
loss
|
—
|
|
5
|
|
—
|
|
5
|
Litigation settlement,
net of insurance proceeds
|
—
|
|
14
|
|
—
|
|
14
|
Pension settlement
loss
|
3
|
|
—
|
|
6
|
|
—
|
Tax Matters Agreement
gain
|
—
|
|
(8)
|
|
(4)
|
|
(8)
|
Foreign exchange
transaction loss (income)
|
10
|
|
—
|
|
2
|
|
(1)
|
Tax effect of
applicable non-GAAP adjustments (1)
|
(13)
|
|
(3)
|
|
(12)
|
|
(5)
|
Non-GAAP Adjusted
net income applicable to common shares
|
$
60
|
|
$
71
|
|
$
163
|
|
$
259
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30, 2023
|
|
October 1,
2022
|
|
September
30, 2023
|
|
October 1,
2022
|
GAAP Net income per
diluted common share
|
$
0.14
|
|
$
0.42
|
|
$
0.86
|
|
$
1.64
|
Restructuring and
impairment expenses
|
0.26
|
|
—
|
|
0.28
|
|
—
|
Acquisition and
divestiture related costs
|
0.01
|
|
—
|
|
0.01
|
|
0.07
|
Divestiture
loss
|
—
|
|
0.03
|
|
—
|
|
0.03
|
Litigation settlement,
net of insurance proceeds
|
—
|
|
0.10
|
|
—
|
|
0.09
|
Pension settlement
loss
|
0.02
|
|
—
|
|
0.04
|
|
—
|
Tax Matters Agreement
gain
|
—
|
|
(0.05)
|
|
(0.03)
|
|
(0.05)
|
Foreign exchange
transaction loss (income)
|
0.07
|
|
—
|
|
0.01
|
|
(0.01)
|
Tax effect of
applicable non-GAAP adjustments (1)
|
(0.09)
|
|
(0.02)
|
|
(0.08)
|
|
(0.03)
|
Non-GAAP Adjusted
net income per diluted common share
|
$
0.41
|
|
$
0.48
|
|
$
1.09
|
|
$
1.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) We calculated
the tax effect of non-GAAP adjustments by applying a flat statutory
tax rate of 25% for the three and nine months ended
September 30, 2023 and October 1, 2022.
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
(Unaudited)
|
|
|
RESIDEO
TECHNOLOGIES, INC.
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
millions)
|
September
30, 2023
|
|
October 1,
2022
|
|
September
30, 2023
|
|
October 1,
2022
|
Net
revenue
|
$
1,554
|
|
$
1,618
|
|
$
4,705
|
|
$
4,810
|
|
|
|
|
|
|
|
|
GAAP Net income
applicable to common shares
|
$
21
|
|
$
63
|
|
$
128
|
|
$
244
|
Provision for income
taxes
|
16
|
|
33
|
|
84
|
|
104
|
GAAP Income before
taxes
|
37
|
|
96
|
|
212
|
|
348
|
Depreciation and
amortization
|
22
|
|
24
|
|
71
|
|
69
|
Interest expense,
net
|
16
|
|
15
|
|
50
|
|
39
|
Stock-based
compensation expense
|
11
|
|
14
|
|
36
|
|
36
|
Pension settlement
loss
|
3
|
|
—
|
|
6
|
|
—
|
Restructuring and
impairment expenses
|
38
|
|
—
|
|
42
|
|
—
|
Acquisition and
divestiture related costs
|
1
|
|
—
|
|
1
|
|
10
|
Divestiture
loss
|
—
|
|
5
|
|
—
|
|
5
|
Litigation settlement,
net of insurance proceeds
|
—
|
|
14
|
|
—
|
|
14
|
Tax Matters Agreement
gain
|
—
|
|
(8)
|
|
(4)
|
|
(8)
|
Foreign exchange
transaction loss (income)
|
10
|
|
—
|
|
2
|
|
(1)
|
Non-GAAP Adjusted
EBITDA
|
$
138
|
|
$
160
|
|
$
416
|
|
$
512
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
8.9 %
|
|
9.9 %
|
|
8.8 %
|
|
10.6 %
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
(Unaudited)
|
|
|
PRODUCTS AND
SOLUTIONS SEGMENT
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
millions)
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
Net
revenue
|
$
654
|
|
$
707
|
|
$
1,989
|
|
$ 2,090
|
|
|
|
|
|
|
|
|
GAAP Income from
operations
|
$
107
|
|
$
124
|
|
$
352
|
|
$
431
|
Stock-based
compensation expense
|
4
|
|
5
|
|
13
|
|
13
|
Restructuring and
impairment expenses
|
25
|
|
—
|
|
27
|
|
—
|
Acquisition and
divestiture related costs
|
1
|
|
—
|
|
1
|
|
—
|
Non-GAAP Adjusted
Income from Operations
|
$
137
|
|
$
129
|
|
$
393
|
|
$
444
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
16
|
|
17
|
|
51
|
|
50
|
Non-GAAP Adjusted
EBITDA
|
$
153
|
|
$
146
|
|
$
444
|
|
$
494
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
23.4 %
|
|
20.7 %
|
|
22.3 %
|
|
23.6 %
|
ADI GLOBAL
DISTRIBUTION SEGMENT
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(in
millions)
|
September 30,
2023
|
|
October 1,
2022
|
|
September 30,
2023
|
|
October 1,
2022
|
Net
revenue
|
$
900
|
|
$
911
|
|
$
2,716
|
|
$ 2,720
|
|
|
|
|
|
|
|
|
GAAP Income from
operations
|
$
60
|
|
$
78
|
|
$
211
|
|
$
244
|
Stock-based
compensation expense
|
1
|
|
2
|
|
4
|
|
6
|
Pension settlement
loss
|
—
|
|
—
|
|
—
|
|
—
|
Restructuring and
impairment expenses
|
10
|
|
—
|
|
12
|
|
—
|
Divestiture
loss
|
—
|
|
5
|
|
—
|
|
5
|
Non-GAAP Adjusted
Income from Operations
|
$
71
|
|
$
85
|
|
$
227
|
|
$
255
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
4
|
|
4
|
|
13
|
|
10
|
Non-GAAP Adjusted
EBITDA
|
$
75
|
|
$
89
|
|
$
240
|
|
$
265
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
8.3 %
|
|
9.8 %
|
|
8.8 %
|
|
9.7 %
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
ADJUSTED NET INCOME
PER DILUTED COMMON SHARE
(Unaudited)
|
|
|
RESIDEO
TECHNOLOGIES, INC.
|
|
|
|
|
|
Q4
2023
|
|
Fiscal Year
2023
|
(in millions, except
per share data)
|
Low
|
|
High
|
|
Low
|
|
High
|
GAAP Net income per
diluted common share
|
$
0.43
|
|
$
0.53
|
|
$
1.30
|
|
$
1.41
|
Restructuring and
impairment expenses
|
—
|
|
—
|
|
0.28
|
|
0.28
|
Pension settlement
loss (1)
|
—
|
|
—
|
|
0.04
|
|
0.04
|
Foreign exchange
transaction loss (1)
|
—
|
|
—
|
|
0.01
|
|
0.01
|
Acquisition related
costs
|
—
|
|
—
|
|
0.01
|
|
0.01
|
Divestiture gain, net
of tax
|
(0.19)
|
|
(0.19)
|
|
(0.19)
|
|
(0.19)
|
Tax Matters Agreement
gain
|
—
|
|
—
|
|
(0.03)
|
|
(0.03)
|
Tax effect of
applicable non-GAAP adjustments (2)
|
0.05
|
|
0.05
|
|
(0.03)
|
|
(0.03)
|
Non-GAAP Adjusted
net income per diluted common share
|
$
0.29
|
|
$
0.39
|
|
$
1.39
|
|
$
1.50
|
|
|
|
|
|
|
|
|
(1)
|
We are unable to
estimate the fourth quarter 2023 amounts. The Fiscal Year 2023
amounts represent actual results through the nine months ended
September 30, 2023.
|
|
|
(2)
|
We calculated the tax
effect of non-GAAP adjustments by applying a flat statutory tax
rate of 25% for fourth quarter 2023 and full year 2023.
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
(Unaudited)
|
|
|
RESIDEO
TECHNOLOGIES, INC.
|
|
|
|
|
|
Q4
2023
|
|
Fiscal Year
2023
|
(in
millions)
|
Low
|
|
High
|
|
Low
|
|
High
|
Net
revenue
|
$
1,495
|
|
$
1,545
|
|
$
6,200
|
|
$
6,250
|
|
|
|
|
|
|
|
|
GAAP Net income
applicable to common shares
|
$
63
|
|
$
79
|
|
$
194
|
|
$
210
|
Provision for income
taxes
|
27
|
|
31
|
|
108
|
|
112
|
GAAP Income before
taxes
|
90
|
|
110
|
|
302
|
|
322
|
Depreciation and
amortization
|
27
|
|
27
|
|
98
|
|
98
|
Interest expense,
net
|
19
|
|
19
|
|
69
|
|
69
|
Stock-based
compensation expense
|
14
|
|
14
|
|
50
|
|
50
|
Restructuring and
impairment expenses
|
—
|
|
—
|
|
42
|
|
42
|
Pension settlement
loss (1)
|
—
|
|
—
|
|
6
|
|
6
|
Foreign exchange
transaction loss (1)
|
—
|
|
—
|
|
2
|
|
2
|
Acquisition related
costs
|
—
|
|
—
|
|
1
|
|
1
|
Divestiture
gain
|
(24)
|
|
(24)
|
|
(24)
|
|
(24)
|
Tax Matters Agreement
gain
|
—
|
|
—
|
|
(4)
|
|
(4)
|
Non-GAAP Adjusted
EBITDA
|
$
126
|
|
$
146
|
|
$
542
|
|
$
562
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
8.4 %
|
|
9.4 %
|
|
8.7 %
|
|
9.0 %
|
|
|
|
|
|
|
|
|
(1)
|
We are unable to
estimate the fourth quarter 2023 amounts. The Fiscal Year 2023
amounts represent actual results through the nine months ended
September 30, 2023.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/resideo-announces-third-quarter-2023-financial-results-301974684.html
SOURCE Resideo Technologies, Inc.