- Net revenue growth of 18% year-over-year; mid-single-digit
organic revenue growth at both ADI and Products and
Solutions
- Products and Solutions gross margin of 42.2%, sixth
consecutive quarter of year-over-year improvement
- Net income available to common stockholders of $11 million; adjusted EBITDA of $190 million, above the high end of outlook
range
- Strong demand for the refreshed Honeywell Home Focus Pro™
thermostat portfolio, first in a cadence of new product
introductions
SCOTTSDALE, Ariz., Nov. 7, 2024
/PRNewswire/ -- Resideo Technologies, Inc. (NYSE: REZI), a
leading global manufacturer and distributor of technology-driven
products and solutions that provide home comfort and smart living,
security, life safety and energy efficiency to consumers and
businesses, today announced financial results for the third
quarter ended September 28, 2024.
Third Quarter 2024 Financial Highlights
- Net revenue was $1.83 billion, up
18% compared to $1.55 billion in the
third quarter 2023
- Net income available to common stockholders was $11 million, compared to $21 million in the third quarter 2023
- Adjusted EBITDA (1) was $190
million, compared to $147
million in the third quarter 2023
- Fully diluted EPS was $0.07 and
$0.14 and Adjusted EPS (1)
was $0.58 and $0.55 for the third quarter 2024 and third
quarter 2023, respectively
Management Remarks
"We delivered strong results in the third quarter with organic
sales growth at both Products and Solutions and ADI in addition to
consolidated Adjusted EBITDA again coming in ahead of our outlook,"
commented Jay Geldmacher, Resideo's
President and CEO. "Products and Solutions continued to drive gross
margin accretion, reflecting structural cost improvements. ADI also
returned to organic revenue growth driven by improved demand across
commercial categories and continued e-commerce expansion. The
integration of Snap One is progressing well with the teams focused
on cross-selling opportunities and cost reduction actions."
"We are excited by the meaningful new product introductions that
have begun to rollout at Products and Solutions. This is
highlighted by refreshes of our thermostat offering and security
solutions aimed at larger residential and small and medium business
opportunities. At ADI, improving demand trends in key categories
and cross-selling opportunities with a greater customer and product
portfolio create significant benefits moving forward. Overall, we
expect the positive business momentum to continue as we close out
2024 and look to 2025."
|
|
|
|
|
|
|
|
(1) This press release includes
certain "non-GAAP financial measures" as defined under the
Securities Exchange Act of 1934. Resideo management believes the
use of such non-GAAP financial measures, specifically Adjusted
EBITDA and Adjusted EPS, assists investors in understanding the
ongoing operating performance of Resideo by presenting the
financial results between periods on a more comparable basis. See
reconciliations of U.S. GAAP results to adjusted results in the
accompanying tables.
|
Products and Solutions Third Quarter 2024
Highlights
- Net revenue was $645 million,
down 1% compared to the third quarter 2023 and up 4% excluding the
impact of the Genesis divestiture
- Gross margin was 42.2%, up 350 basis points compared to the
third quarter 2023
- Income from operations was $128
million, compared to $94
million in the third quarter 2023
- Adjusted EBITDA was $157 million,
or 24.3% of revenue, compared to $140
million, or 21.4% of revenue, in the third quarter 2023
Products and Solutions delivered net revenue of $645 million in the third quarter 2024, down 1%
compared to third quarter 2023 and up 4% excluding the impact of
the Genesis divestiture. Pricing trends remained positive across
substantially all product categories compared with third quarter
2023. Organic revenue growth was partially offset by continued
slower activity in the EMEA region and declines in Security product
sales. During the quarter, Products and Solutions began taking
orders for its programmable and connected thermostat line, the
Honeywell Home Focus Pro, targeted at the entry tier of the
professional market, in-line with its ongoing focus to introduce a
regular cadence of new products and drive future innovation in key
categories.
Gross margin for the quarter was 42.2%, compared to 38.7% in the
third quarter 2023, reflecting improving manufacturing cost
efficiency and pricing strength. Selling, general and
administrative expenses were up $7
million and research and development expenses declined
$5 million compared to 2023. Expense
management was again strong in the quarter, and, combined with the
strong gross margin expansion, helped drive operating profit of
$128 million or 19.8% of revenue, up
from $94 million or 14.4% of revenue
in third quarter 2023. Adjusted EBITDA grew 12% year-over-year in
the third quarter 2024 to $157
million, with Adjusted EBITDA margin up 300 basis points to
24.3%.
ADI Global Distribution Third Quarter 2024 Highlights
- Net revenue was $1,183 million,
up 31% compared to the third quarter 2023 and up 4% excluding the
impact of the Snap One acquisition
- Gross margin was 21.3%, up 300 basis points compared to the
third quarter 2023
- Income from operations was $36
million, compared to $52
million in the third quarter 2023
- Adjusted EBITDA was $92 million,
or 7.8% of revenue, compared to $69
million, or 7.7% of revenue, in the third quarter 2023
ADI third quarter 2024 net revenue of $1,183 million increased $283 million compared to third quarter 2023,
driven by the inclusion of $251 million of Snap One revenue
and organic growth of $32 million, or
4%. ADI delivered year-over-year growth in all key commercial
categories including Fire, Video Surveillance, professional Audio
Visual, and Datacom. This was partially offset by year-over-year
declines in residential Intrusion and residential Audio Visual. The
e-commerce channel, excluding Snap One, grew 18% in third quarter
2024 compared to the prior year period. Exclusive brand sales grew
32% year-over-year, reflecting the inclusion of Snap One
proprietary products and strong underlying growth.
Gross margin for the quarter was 21.3%, up 300 basis points
compared to third quarter of 2023. The increase was driven by the
inclusion of higher margin Snap One sales, partially offset by
reduced inflationary pricing benefits. Selling, general and
administrative and research and development expenses were
$177 million in 2024, up $76 million compared to prior period including
$73 million of Snap One expenses.
Operating profit of $36 million for third quarter 2024
decreased 31% from $52 million in third quarter 2023. Adjusted
EBITDA increased to $92 million in third quarter 2024 from
$69 million in third quarter 2023.
Cash Flow and Liquidity
Net cash provided by operating activities was $147 million in third quarter 2024 compared to
$60 million in the third quarter
2023. The increase was primarily driven by improved working capital
dynamics and cash earnings. At September 28, 2024, Resideo had
cash and cash equivalents of $531
million and total outstanding debt of $1.99 billion.
Outlook
The following table summarizes the Company's current fourth
quarter 2024 and updated full year 2024 outlook.
|
($ in millions, except
per share data)
|
Q4
2024
|
2024
|
|
Net
revenue
|
$1,815 -
$1,855
|
$6,720 -
$6,760
|
|
Non-GAAP Adjusted
EBITDA
|
$170 - $185
|
$672 - $687
|
|
Non-GAAP Adjusted
Earnings per share
|
$0.51 -
$0.61
|
$2.18 -
$2.28
|
|
Full Year Cash
Provided by Operating Activities
|
|
At least
$375
|
Conference Call and Webcast Details
Resideo will hold a conference call with investors
on November 7, 2024, 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
2024 Earnings" or the conference ID: 7301399.
About Resideo
Resideo is a leading manufacturer and developer of
technology-driven sensing and controls products that provide
critical comfort, energy, smoke and carbon monoxide detection home
safety products and security solutions to homes globally. We are
also a leading wholesale distributor of low-voltage security
products including access control, fire detection, fire
suppression, security, and video products, and participate
significantly in the broader related markets of, communications,
data communications, networking, power, residential and
professional audio-visual solutions, smart home, and wire and
cable. Our global footprint serves both commercial and residential
end markets. 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 2024 and full year 2024, (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 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, (4) 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), (5) the ability of Snap
One and/or Resideo to drive increased customer value and financial
returns and enhance strategic and operational capabilities, (6) the
ability of Snap One and/or Resideo to achieve the targeted amount
of synergies described in this press release, (7) the accretive
nature of the transaction to Resideo's non-GAAP EPS in the first
full year of ownership and the growth and margin profile of the
combined businesses, (8) the ability to integrate the Snap
One business into Resideo and realize the anticipated strategic
benefits of the transaction, including the anticipated operational
and strategic benefits of the transaction, and (9) 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, 2023 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 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.
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. A reconciliation of the forecasted range for Adjusted
EBITDA and Adjusted Net Income per diluted common share for the
fourth quarter of 2024 and for the fiscal period ending
December 31, 2024 are not included in
this release due to the number of variables in the projected range
and because we are currently unable to quantify accurately certain
amounts that would be required to be included in the U.S. GAAP
measure or the individual adjustments for such reconciliation. In
addition, we believe such reconciliation would imply a degree of
precision that would be confusing or misleading to investors.
Table 1: SUMMARY OF FINANCIAL RESULTS
(UNAUDITED)
|
Q3 2024 (1)
|
|
YTD 2024
(1)
|
|
(in
millions)
|
Products
and
Solutions
|
|
ADI Global
Distribution
|
|
Corporate
|
|
Total
Company
|
|
Products
and
Solutions
|
|
ADI Global
Distribution
|
|
Corporate
|
|
Total
Company
|
|
Net revenue
|
$ 645
|
|
$
1,183
|
|
$
—
|
|
$
1,828
|
|
$
1,895
|
|
$
3,008
|
|
$ —
|
|
$
4,903
|
|
Cost of goods
sold
|
373
|
|
931
|
|
—
|
|
1,304
|
|
1,118
|
|
2,414
|
|
—
|
|
3,532
|
|
Gross profit
|
272
|
|
252
|
|
—
|
|
524
|
|
777
|
|
594
|
|
—
|
|
1,371
|
|
Research and
development expenses
|
23
|
|
—
|
|
—
|
|
23
|
|
69
|
|
—
|
|
—
|
|
69
|
|
Selling, general and
administrative expenses
|
107
|
|
177
|
|
33
|
|
317
|
|
307
|
|
397
|
|
124
|
|
828
|
|
Intangible asset
amortization
|
6
|
|
22
|
|
1
|
|
29
|
|
18
|
|
31
|
|
2
|
|
51
|
|
Restructuring,
impairment and extinguishment costs, net (2)
|
8
|
|
17
|
|
4
|
|
29
|
|
13
|
|
19
|
|
15
|
|
47
|
|
Income (loss) from
operations
|
$ 128
|
|
$
36
|
|
$ (38)
|
|
$ 126
|
|
$ 370
|
|
$
147
|
|
$
(141)
|
|
$ 376
|
|
|
Q3 2023 (1)
|
|
YTD 2023
(1)
|
|
(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
|
28
|
|
—
|
|
—
|
|
28
|
|
82
|
|
—
|
|
2
|
|
84
|
|
Selling, general and
administrative expenses
|
100
|
|
101
|
|
32
|
|
233
|
|
322
|
|
307
|
|
90
|
|
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
|
$
94
|
|
$
52
|
|
$ (37)
|
|
$ 109
|
|
$ 314
|
|
$ 187
|
|
$
(101)
|
|
$ 400
|
|
|
Q3 2024 % change
compared with prior period
|
|
YTD 2024 % 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
|
(1) %
|
|
31 %
|
|
N/A
|
|
18 %
|
|
(5) %
|
|
11 %
|
|
N/A
|
|
4 %
|
|
Cost of goods
sold
|
(7) %
|
|
27 %
|
|
N/A
|
|
15 %
|
|
(9) %
|
|
10 %
|
|
N/A
|
|
3 %
|
|
Gross profit
|
8 %
|
|
53 %
|
|
N/A
|
|
26 %
|
|
2 %
|
|
16 %
|
|
N/A
|
|
8 %
|
|
Research and
development expenses
|
(18) %
|
|
N/A
|
|
N/A
|
|
(18) %
|
|
(16) %
|
|
N/A
|
|
N/A
|
|
(18) %
|
|
Selling, general and
administrative expenses
|
7 %
|
|
75 %
|
|
3 %
|
|
36 %
|
|
(5) %
|
|
29 %
|
|
38 %
|
|
15 %
|
|
Intangible asset
amortization
|
— %
|
|
1000 %
|
|
— %
|
|
222 %
|
|
6 %
|
|
288 %
|
|
(33) %
|
|
82 %
|
|
Restructuring,
impairment and extinguishment costs, net
|
(68) %
|
|
70 %
|
|
33 %
|
|
(24) %
|
|
(52) %
|
|
58 %
|
|
400 %
|
|
12 %
|
|
Income (loss) from
operations
|
36 %
|
|
(31) %
|
|
3 %
|
|
16 %
|
|
18 %
|
|
(21) %
|
|
40 %
|
|
(6) %
|
|
|
|
(1)
|
On January 1, 2024,
certain corporate functions were decentralized into the operating
segments aligning with the business strategy. Functional expenses
related to information technology, finance, tax, business
development, and research and development are now recorded within
the Products and Solutions and ADI Global Distribution segments.
For the three and nine months ended September 30, 2023,
$13 million and $38 million of corporate expenses have
been reclassified into the Products and Solutions while
$8 million and $24 million of corporate expenses have
been reclassified into the ADI Global Distribution segments,
respectively, decreasing reported Income from Operations to conform
to the current year presentation.
|
|
(2)
|
Includes $1 million and
$7 million of debt extinguishment expense for corporate for the
three and nine months ended September 28, 2024.
|
Table 2: CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in millions, except
per share data)
|
September 28,
2024
|
|
September 30,
2023
|
|
September 28,
2024
|
|
September 30,
2023
|
|
Net revenue
|
$
1,828
|
|
$
1,554
|
|
$
4,903
|
|
$
4,705
|
|
Cost of goods
sold
|
1,304
|
|
1,137
|
|
3,532
|
|
3,432
|
|
Gross
profit
|
524
|
|
417
|
|
1,371
|
|
1,273
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
23
|
|
28
|
|
69
|
|
84
|
|
Selling, general and
administrative expenses
|
317
|
|
233
|
|
828
|
|
719
|
|
Intangible asset
amortization
|
29
|
|
9
|
|
51
|
|
28
|
|
Restructuring,
impairment and extinguishment costs, net
|
29
|
|
38
|
|
47
|
|
42
|
|
Total operating
expenses
|
398
|
|
308
|
|
995
|
|
873
|
|
Income from
operations
|
126
|
|
109
|
|
376
|
|
400
|
|
Reimbursement Agreement
expense (1)
|
45
|
|
43
|
|
135
|
|
128
|
|
Other expenses,
net
|
10
|
|
13
|
|
10
|
|
10
|
|
Interest expense,
net
|
27
|
|
16
|
|
55
|
|
50
|
|
Income before
taxes
|
44
|
|
37
|
|
176
|
|
212
|
|
Provision for income
taxes
|
24
|
|
16
|
|
83
|
|
84
|
|
Net income
|
$
20
|
|
$
21
|
|
$
93
|
|
$
128
|
|
Less: preferred stock
dividends
|
8
|
|
—
|
|
10
|
|
—
|
|
Less: undistributed
income allocated to preferred stockholders
|
1
|
|
—
|
|
4
|
|
—
|
|
Net income available
to common stockholders
|
$
11
|
|
$
21
|
|
$
79
|
|
$
128
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.07
|
|
$
0.14
|
|
$
0.54
|
|
$
0.87
|
|
Diluted
|
$
0.07
|
|
$
0.14
|
|
$
0.53
|
|
$
0.86
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
147
|
|
147
|
|
146
|
|
147
|
|
Diluted
|
149
|
|
148
|
|
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 28,
2024
|
|
September 30,
2023
|
|
September 28,
2024
|
|
September 30,
2023
|
|
Accrual for
Reimbursement Agreement liabilities deemed
probable and reasonably
estimable
|
$
45
|
|
$
43
|
|
$
135
|
|
$
128
|
|
Cash payments made to
Honeywell
|
(35)
|
|
(35)
|
|
(105)
|
|
(105)
|
|
Accrual increase,
non-cash component in period
|
$
10
|
|
$
8
|
|
$
30
|
|
$
23
|
Table 3: CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(in millions, except
par value)
|
September 28,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
531
|
|
$
636
|
|
Accounts receivable,
net
|
1,103
|
|
973
|
|
Inventories,
net
|
1,197
|
|
941
|
|
Other current
assets
|
206
|
|
193
|
|
Total current
assets
|
3,037
|
|
2,743
|
|
|
|
|
|
Property, plant and
equipment, net
|
423
|
|
390
|
|
Goodwill
|
3,119
|
|
2,705
|
|
Intangible assets,
net
|
1,197
|
|
461
|
|
Other assets
|
359
|
|
346
|
|
Total
assets
|
$
8,135
|
|
$
6,645
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
1,021
|
|
$
905
|
|
Current portion of
long-term debt
|
6
|
|
12
|
|
Accrued
liabilities
|
645
|
|
608
|
|
Total current
liabilities
|
1,672
|
|
1,525
|
|
|
|
|
|
Long-term
debt
|
1,983
|
|
1,396
|
|
Obligations payable
under Indemnification Agreements
|
635
|
|
609
|
|
Other
liabilities
|
491
|
|
366
|
|
Total
liabilities
|
4,781
|
|
3,896
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred stock,
$0.001 par value: 100 shares authorized, 0.5 shares issued
and
outstanding at
September 28, 2024 and no shares issued and outstanding
at
December 31, 2023,
respectively
|
482
|
|
—
|
|
Common stock, $0.001
par value: 700 shares authorized, 153 and 147 shares
issued and outstanding
at September 28, 2024, respectively, and 151 and 145
shares issued and
outstanding at December 31, 2023, respectively
|
—
|
|
—
|
|
Additional paid-in
capital
|
2,294
|
|
2,226
|
|
Retained
earnings
|
893
|
|
810
|
|
Accumulated other
comprehensive loss, net
|
(207)
|
|
(194)
|
|
Treasury stock at
cost
|
(108)
|
|
(93)
|
|
Total stockholders'
equity
|
3,354
|
|
2,749
|
|
Total liabilities and
stockholders' equity
|
$
8,135
|
|
$
6,645
|
Table 4: CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in
millions)
|
September 28,
2024
|
|
September 30,
2023
|
|
September 28,
2024
|
|
September 30,
2023
|
|
Cash Flows From
Operating Activities:
|
|
|
|
|
|
|
|
|
Net income
|
$
20
|
|
$
21
|
|
$
93
|
|
$
128
|
|
Adjustments to
reconcile net income to net cash in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
46
|
|
22
|
|
98
|
|
71
|
|
Restructuring,
impairment and extinguishment costs, net
|
29
|
|
38
|
|
47
|
|
42
|
|
Stock-based
compensation expense
|
15
|
|
11
|
|
44
|
|
36
|
|
Other, net
|
6
|
|
—
|
|
5
|
|
2
|
|
Changes in assets and
liabilities, net of acquired companies:
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
(22)
|
|
26
|
|
(79)
|
|
(9)
|
|
Inventories,
net
|
(9)
|
|
11
|
|
(13)
|
|
(4)
|
|
Other current
assets
|
6
|
|
(8)
|
|
15
|
|
(5)
|
|
Accounts
payable
|
31
|
|
(58)
|
|
62
|
|
(14)
|
|
Accrued
liabilities
|
13
|
|
(20)
|
|
(65)
|
|
(114)
|
|
Other, net
|
12
|
|
17
|
|
34
|
|
44
|
|
Net cash provided by
operating activities
|
147
|
|
60
|
|
241
|
|
177
|
|
Cash Flows From
Investing Activities:
|
|
|
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
—
|
|
(10)
|
|
(1,334)
|
|
(16)
|
|
Capital
expenditures
|
(22)
|
|
(25)
|
|
(58)
|
|
(74)
|
|
Other investing
activities, net
|
—
|
|
—
|
|
6
|
|
—
|
|
Net cash used in
investing activities
|
(22)
|
|
(35)
|
|
(1,386)
|
|
(90)
|
|
Cash Flows From
Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of long-term debt, net
|
594
|
|
—
|
|
1,176
|
|
—
|
|
Proceeds from issuance
of preferred stock, net of issuance costs
|
—
|
|
—
|
|
482
|
|
—
|
|
Repayments of
long-term debt
|
(596)
|
|
(3)
|
|
(602)
|
|
(9)
|
|
Common stock
repurchases
|
—
|
|
(28)
|
|
(1)
|
|
(28)
|
|
Other financing
activities, net
|
(7)
|
|
2
|
|
(12)
|
|
(10)
|
|
Net cash provided by
(used in) financing activities
|
(9)
|
|
(29)
|
|
1,043
|
|
(47)
|
|
Effect of foreign
exchange rate changes on cash, cash equivalents and restricted
cash
|
2
|
|
(9)
|
|
(3)
|
|
1
|
|
Net (decrease) increase
in cash, cash equivalents and restricted cash
|
118
|
|
(13)
|
|
(105)
|
|
41
|
|
Cash, cash equivalents
and restricted cash at beginning of period
|
414
|
|
383
|
|
637
|
|
329
|
|
Cash, cash equivalents
and restricted cash at end of period
|
$
532
|
|
$
370
|
|
$
532
|
|
$
370
|
|
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 28,
2024
|
|
September 30,
2023
|
|
September 28,
2024
|
|
September 30,
2023
|
|
GAAP Net
income
|
$
20
|
|
$
21
|
|
$
93
|
|
$
128
|
|
Less: preferred stock
dividends
|
8
|
|
—
|
|
10
|
|
—
|
|
Less: undistributed
income allocated to preferred stockholders
|
1
|
|
—
|
|
4
|
|
—
|
|
GAAP Net income
available to common stockholders
|
11
|
|
21
|
|
79
|
|
128
|
|
Restructuring,
impairment and extinguishment costs, net
|
29
|
|
38
|
|
47
|
|
42
|
|
Intangible asset
amortization
|
29
|
|
9
|
|
51
|
|
28
|
|
Stock-based
compensation expense
|
15
|
|
11
|
|
44
|
|
36
|
|
Reimbursement
Agreement accrual increase, non-cash component
(1)
|
10
|
|
8
|
|
30
|
|
23
|
|
Acquisition and
integration costs
|
3
|
|
1
|
|
37
|
|
1
|
|
Other
(2)
|
16
|
|
14
|
|
17
|
|
5
|
|
Tax effect of
applicable non-GAAP adjustments (3)
|
(26)
|
|
(21)
|
|
(56)
|
|
(34)
|
|
Non-GAAP Adjusted
net income available to common stockholders
|
$
87
|
|
$
81
|
|
$
249
|
|
$
229
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 28,
2024
|
|
September 30,
2023
|
|
September 28,
2024
|
|
September 30,
2023
|
|
GAAP Net income per
diluted common share
|
$
0.07
|
|
$
0.14
|
|
$
0.53
|
|
$
0.86
|
|
Restructuring,
impairment and extinguishment costs, net
|
0.19
|
|
0.26
|
|
0.32
|
|
0.28
|
|
Intangible asset
amortization
|
0.19
|
|
0.06
|
|
0.34
|
|
0.19
|
|
Stock-based
compensation expense
|
0.10
|
|
0.07
|
|
0.30
|
|
0.24
|
|
Reimbursement
Agreement accrual increase, non-cash component
(1)
|
0.07
|
|
0.05
|
|
0.20
|
|
0.15
|
|
Acquisition and
integration costs
|
0.02
|
|
0.01
|
|
0.25
|
|
0.01
|
|
Other
(2)
|
0.11
|
|
0.10
|
|
0.11
|
|
0.03
|
|
Tax effect of
applicable non-GAAP adjustments (3)
|
(0.17)
|
|
(0.14)
|
|
(0.38)
|
|
(0.22)
|
|
Non-GAAP Adjusted
net income per diluted common share
|
$
0.58
|
|
$
0.55
|
|
$
1.67
|
|
$
1.54
|
|
|
|
(1)
|
Refer to the Unaudited
Consolidated Statements of Operations herein.
|
|
(2)
|
For 2023 periods, other
includes Tax Matters Agreement gain, foreign exchange transaction
loss (income), and pension costs. For 2024 periods, other includes
loss on sale of assets, foreign exchange transaction loss (income),
gain on sale of investments, litigation settlements, and an
inventory step-up related to the Snap One acquisition.
|
|
(3)
|
We calculated the tax
effect of non-GAAP adjustments by applying a flat statutory tax
rate of 25% for the three months ended September 28, 2024 and
September 30, 2023.
|
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
ADJUSTED EBITDA AND
NET INCOME COMPARISON
(Unaudited)
RESIDEO
TECHNOLOGIES, INC.
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in
millions)
|
September 28,
2024
|
|
September 30,
2023
|
|
September 28,
2024
|
|
September 30,
2023
|
|
Net
revenue
|
$
1,828
|
|
$
1,554
|
|
$
4,903
|
|
$
4,705
|
|
|
|
|
|
|
|
|
|
GAAP Net
income
|
$
20
|
|
$
21
|
|
$
93
|
|
$
128
|
|
GAAP Net income as a
% of net revenue
|
1.1 %
|
|
1.4 %
|
|
1.9 %
|
|
2.7 %
|
|
Provision for income
taxes
|
24
|
|
16
|
|
83
|
|
84
|
|
GAAP Income before
taxes
|
44
|
|
37
|
|
176
|
|
212
|
|
Depreciation and
amortization
|
46
|
|
22
|
|
98
|
|
71
|
|
Restructuring,
impairment and extinguishment costs, net
|
29
|
|
38
|
|
47
|
|
42
|
|
Interest expense,
net
|
27
|
|
16
|
|
55
|
|
50
|
|
Stock-based
compensation expense
|
15
|
|
11
|
|
44
|
|
36
|
|
Reimbursement
Agreement accrual increase, non-cash component
(1)
|
10
|
|
8
|
|
30
|
|
23
|
|
Acquisition and
integration costs
|
3
|
|
1
|
|
37
|
|
1
|
|
Other
(2)
|
16
|
|
14
|
|
17
|
|
5
|
|
Non-GAAP Adjusted
EBITDA
|
$
190
|
|
$
147
|
|
$
504
|
|
$
440
|
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
10.4 %
|
|
9.5 %
|
|
10.3 %
|
|
9.4 %
|
|
|
|
(1)
|
Refer to the Unaudited
Consolidated Statements of Operations herein.
|
|
(2)
|
For 2023 periods, other
includes Tax Matters Agreement gain, foreign exchange transaction
loss (income), and pension costs. For 2024 periods, other includes
loss on sale of assets, foreign exchange transaction loss (income),
gain on sale of investments, litigation settlements, and an
inventory step-up adjustment related to the Snap One
acquisition.
|
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
(Unaudited)
PRODUCTS AND
SOLUTIONS SEGMENT
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in
millions)
|
September 28,
2024
|
|
September 30,
2023
|
|
September 28,
2024
|
|
September 30,
2023
|
|
Net
revenue
|
$
645
|
|
$
654
|
|
$
1,895
|
|
$
1,989
|
|
|
|
|
|
|
|
|
|
GAAP Income from
operations
|
$
128
|
|
$
94
|
|
$
370
|
|
$
314
|
|
GAAP Income from
operations as a % of net revenue
|
19.8 %
|
|
14.4 %
|
|
19.5 %
|
|
15.8 %
|
|
Restructuring and
impairment expense
|
8
|
|
25
|
|
13
|
|
30
|
|
Stock-based
compensation expense
|
5
|
|
4
|
|
15
|
|
13
|
|
Other
(1)
|
—
|
|
1
|
|
4
|
|
1
|
|
Non-GAAP Adjusted
Income from Operations
|
$
141
|
|
$
124
|
|
$
402
|
|
$
358
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
16
|
|
16
|
|
51
|
|
51
|
|
Non-GAAP Adjusted
EBITDA
|
$
157
|
|
$
140
|
|
$
453
|
|
$
409
|
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
24.3 %
|
|
21.4 %
|
|
23.9 %
|
|
20.6 %
|
|
|
|
(1)
|
Other includes
litigation settlements and acquisition costs.
|
|
ADI GLOBAL
DISTRIBUTION SEGMENT
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
(in
millions)
|
September 28,
2024
|
|
September 30,
2023
|
|
September 28,
2024
|
|
September 30,
2023
|
|
Net
revenue
|
$
1,183
|
|
$
900
|
|
$
3,008
|
|
$
2,716
|
|
|
|
|
|
|
|
|
|
GAAP Income from
operations
|
$
36
|
|
$
52
|
|
$
147
|
|
$
187
|
|
GAAP Income from
operations as a % of net revenue
|
3.0 %
|
|
5.8 %
|
|
4.9 %
|
|
6.9 %
|
|
Restructuring and
impairment expense
|
17
|
|
10
|
|
19
|
|
17
|
|
Stock-based
compensation expense
|
4
|
|
2
|
|
9
|
|
5
|
|
Acquisition and
integration costs
|
2
|
|
—
|
|
6
|
|
—
|
|
Other
(1)
|
5
|
|
—
|
|
5
|
|
—
|
|
Non-GAAP Adjusted
Income from Operations
|
$
64
|
|
$
64
|
|
$
186
|
|
$
209
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
28
|
|
5
|
|
41
|
|
13
|
|
Non-GAAP Adjusted
EBITDA
|
$
92
|
|
$
69
|
|
$
227
|
|
$
222
|
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
7.8 %
|
|
7.7 %
|
|
7.5 %
|
|
8.2 %
|
|
|
|
(1)
|
Other includes
inventory adjustment related to the Snap One
acquisition.
|
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SOURCE Resideo Technologies, Inc.