Second quarter net income of $30 million; Adjusted EBITDA of $175 million, above the high end of outlook
range
Products and Solutions second quarter gross
margin of 41.3%, fifth consecutive quarter of year-over-year
improvement
Continued progress on business transformation
with forthcoming new product introductions and completed
acquisition of Snap One
Appoints new Chief Financial Officer,
Mike Carlet, former Snap One
CFO
SCOTTSDALE, Ariz., Aug. 8, 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 second quarter ended
June 29, 2024, which include 15 days of Snap One financial
results following the close of the transaction on June 15, 2024.
Second Quarter 2024 Financial Highlights
- Net revenue of $1.59 billion,
down 1% compared to $1.60 billion in
the second quarter 2023
- Net income of $30 million
compared to $50 million in the second
quarter 2023
- Adjusted EBITDA(1) of $175
million compared to $155
million in the second quarter 2023
- Fully diluted EPS of $0.19 and
$0.34 and Adjusted EPS(1)
of $0.62 and $0.48 for the second quarter 2024 and second
quarter 2023, respectively.
Management Remarks
"Our second quarter results demonstrated the substantial
progress we have made in transforming the structural profitability
profile of the business and in executing on value creating
strategic transactions," commented Jay
Geldmacher, Resideo's President and CEO. "Products and
Solutions delivered gross margin and Adjusted EBITDA margin at the
highest levels since first quarter 2022. The business accomplished
these results in a market environment constrained by higher
interest rates and low housing turnover. ADI continued to make
progress in driving key strategic initiatives around e-commerce and
exclusive brands sales and saw improved customer activity as the
quarter progressed."
"I want to welcome former Snap One CFO, Mike Carlet, as CFO of Resideo effective
tomorrow. Mike brings extensive finance and industry experience and
will be a real asset across the organization. I also want to thank
Tony Trunzo, who will stay on until
March of 2025 to ensure a successful transition. Tony has been a
tremendous partner to me and instrumental in Resideo's
transformation through his leadership in rebuilding our balance
sheet, rationalizing our cost structure, and helping shape the
strategic direction of the business."
|
|
|
|
|
|
|
|
(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 measure,
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 Second Quarter 2024
Highlights
- Net revenue of $630 million,
decreased 7% compared to the second quarter 2023
- Gross margin of 41.3%, up 300 basis points compared to the
second quarter 2023
- Income from operations of $130
million compared to $115
million in the second quarter 2023
- Adjusted EBITDA of $156 million,
24.8% of revenue, compared to $137
million, 20.2% of revenue, in the second quarter 2023
Products and Solutions delivered net revenue of $630 million in the second quarter 2024,
down 7% compared to second quarter 2023 and down 2%
excluding the impact of the Genesis divestiture. First Alert safety
products again delivered strong year-over-year sales growth, driven
by continued expansion in the residential new construction channel.
Air product revenue stabilized and orders improved compared to
second quarter 2023, reflecting normalized channel inventories with
key distributor customers and strength in new construction.
Offsetting this growth was slower activity in the EMEA region,
particularly in Energy products.
Gross margin for the quarter was 41.3%, compared to 38.3%
in the second quarter 2023, reflecting improving material costs,
lower direct labor spending and more favorable factory utilization.
Selling, general and administrative expenses were down $8 million and research and development expenses
remained down compared to 2023. Expense management was again strong
in the quarter and helped drive operating profit for the quarter of
$130 million or 20.6% of revenue, up
from $115 million or 17% of revenue
in second quarter 2023. Adjusted EBITDA grew 14% year-over-year in
the second quarter 2024 to $156
million, with Adjusted EBITDA margin up 460 basis points to
24.8%.
ADI Global Distribution Second Quarter 2024
Highlights
- Net revenue of $959 million,
increased 4% compared to the second quarter 2023
- Gross margin of 19.4%, up 20 basis points compared to the
second quarter 2023
- Income from operations of $62
million compared to $71
million in the second quarter 2023
- Adjusted EBITDA of $77 million,
8.1% of revenue, compared to $79
million, 8.6% of revenue, in the second quarter 2023
- Exclusive brand sales up 18% compared to prior year second
quarter, not including Snap One
ADI second quarter 2024 net revenue of $959 million increased $34
million compared to second quarter 2023, driven by the
inclusion of $45 million of Snap One
revenue following the transaction close on June 15, 2024. ADI had growth in several
categories including Fire, Intrusion, Datacom and Professional
Audio Visual. This was offset by year-over-year declines in Video
Surveillance and Residential Audio Visual. For ADI, not including
Snap One, the e-commerce channel grew 6% in second quarter 2024
compared to the prior year period. Exclusive brand sales, not
including Snap One, grew by 18% compared to the second quarter
2023, with record sales levels achieved for the quarter.
Gross margin for the quarter was 19.4%, up 20 basis points
compared to second quarter of 2023. The increase was driven by the
inclusion of higher margin Snap One sales, largely offset by
reduced inflationary pricing benefits and lower product line
margin. ADI has experienced a reduction of average cost inventory
benefits year-over-year, as supplier price increases have reduced
in pace and scale in 2024. Selling, general and administrative
expenses were $118 million in 2024,
up $16 million compared to prior
period including $12 million of Snap
One expenses. Operating profit of $62 million for second
quarter 2024 decreased 13% from $71 million in second quarter
2023. Adjusted EBITDA declined to $77 million in second
quarter 2024 from $79 million in second quarter 2023.
Cash Flow and Liquidity
Net cash provided by operating activities was $92 million in second quarter 2024 compared to
$121 million in the second quarter
2023. The decrease was primarily driven by Snap One transaction
costs. At June 29, 2024, Resideo had cash and cash equivalents
of $413 million and total outstanding
debt of $1.99 billion.
Outlook
The following table summarizes the Company's current third
quarter 2024 and full year 2024 outlook.
|
($ in millions, except
per share data)
|
Q3
2024
|
2024
|
|
Net
revenue
|
$1,790 -
$1,830
|
$6,680 -
$6,760
|
|
Non-GAAP Adjusted
EBITDA
|
$170 - $180
|
$655 - $695
|
|
Non-GAAP Adjusted
Earnings per share
|
$0.49 -
$0.59
|
$2.15 -
$2.35
|
|
Full Year Cash
Provided by Operating Activities
|
|
At least
$375
|
Conference Call and Webcast Details
Resideo will hold a conference call with investors
on August 8, 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 Second Quarter
2024 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 professionally installed electronic security and life safety
products for commercial and residential markets and serve a variety
of adjacent product categories including audio visual, data
communications, 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 third 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 and the related valuation
implications 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 accelerate brand strategy
as a result of the transaction, (9) 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 (10) 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
third 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)
|
Q2 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
|
$ 630
|
|
$ 959
|
|
$
—
|
|
$
1,589
|
|
$
1,250
|
|
$
1,825
|
|
$ —
|
|
$
3,075
|
|
Cost of goods
sold
|
370
|
|
773
|
|
(1)
|
|
1,142
|
|
745
|
|
1,483
|
|
—
|
|
2,228
|
|
Gross profit
|
260
|
|
186
|
|
1
|
|
447
|
|
505
|
|
342
|
|
—
|
|
847
|
|
Research and
development expenses
|
21
|
|
—
|
|
—
|
|
21
|
|
46
|
|
—
|
|
—
|
|
46
|
|
Selling, general and
administrative
expenses
|
103
|
|
118
|
|
59
|
|
280
|
|
200
|
|
220
|
|
91
|
|
511
|
|
Intangible asset
amortization
|
6
|
|
6
|
|
1
|
|
13
|
|
12
|
|
9
|
|
1
|
|
22
|
|
Restructuring,
impairment and
extinguishment costs, net
|
—
|
|
—
|
|
11
|
|
11
|
|
5
|
|
2
|
|
11
|
|
18
|
|
Income (loss) from
operations
|
$ 130
|
|
$
62
|
|
$ (70)
|
|
$ 122
|
|
$ 242
|
|
$
111
|
|
$
(103)
|
|
$ 250
|
|
Q2 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
|
$ 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
development expenses
|
28
|
|
—
|
|
1
|
|
29
|
|
55
|
|
—
|
|
1
|
|
56
|
|
Selling, general and
administrative
expenses
|
111
|
|
102
|
|
30
|
|
242
|
|
221
|
|
207
|
|
58
|
|
486
|
|
Intangible asset
amortization
|
5
|
|
3
|
|
1
|
|
10
|
|
11
|
|
6
|
|
2
|
|
19
|
|
Restructuring and
impairment
expenses
|
—
|
|
2
|
|
—
|
|
2
|
|
2
|
|
2
|
|
—
|
|
4
|
|
Income (loss) from
operations
|
$ 115
|
|
$
71
|
|
$ (33)
|
|
$ 153
|
|
$ 220
|
|
$ 135
|
|
$ (64)
|
|
$ 291
|
|
Q2 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
|
(7) %
|
|
4 %
|
|
N/A
|
|
(1) %
|
|
(6) %
|
|
— %
|
|
N/A
|
|
(2) %
|
|
Cost of goods
sold
|
(11) %
|
|
3 %
|
|
N/A
|
|
(2) %
|
|
(10) %
|
|
1 %
|
|
N/A
|
|
(3) %
|
|
Gross profit
|
— %
|
|
4 %
|
|
N/A
|
|
3 %
|
|
(1) %
|
|
(2) %
|
|
N/A
|
|
(1) %
|
|
Research and
development expenses
|
(25) %
|
|
N/A
|
|
N/A
|
|
(28) %
|
|
(16) %
|
|
N/A
|
|
N/A
|
|
(18) %
|
|
Selling, general and
administrative
expenses
|
(7) %
|
|
16 %
|
|
97 %
|
|
16 %
|
|
(10) %
|
|
6 %
|
|
57 %
|
|
5 %
|
|
Intangible asset
amortization
|
20 %
|
|
100 %
|
|
— %
|
|
30 %
|
|
9 %
|
|
50 %
|
|
(50) %
|
|
16 %
|
|
Restructuring,
impairment and
extinguishment costs, net
|
N/A
|
|
N/A
|
|
N/A
|
|
450 %
|
|
150 %
|
|
— %
|
|
N/A
|
|
350 %
|
|
Income (loss) from
operations
|
13 %
|
|
(13) %
|
|
112 %
|
|
(20) %
|
|
10 %
|
|
(18) %
|
|
61 %
|
|
(14) %
|
|
(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 six months ended July 1, 2023, $13 million
and $25 million of corporate expenses have been reclassified
into the Products and Solutions while $8 million and
$16 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.
|
Table 2: CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in millions, except
per share data)
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
Net revenue
|
$
1,589
|
|
$
1,602
|
|
$
3,075
|
|
$
3,151
|
|
Cost of goods
sold
|
1,142
|
|
1,166
|
|
2,228
|
|
2,295
|
|
Gross
profit
|
447
|
|
436
|
|
847
|
|
856
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
21
|
|
29
|
|
46
|
|
56
|
|
Selling, general and
administrative expenses
|
280
|
|
242
|
|
511
|
|
486
|
|
Intangible asset
amortization
|
13
|
|
10
|
|
22
|
|
19
|
|
Restructuring,
impairment and extinguishment costs, net
|
11
|
|
2
|
|
18
|
|
4
|
|
Total operating
expenses
|
325
|
|
283
|
|
597
|
|
565
|
|
Income from
operations
|
122
|
|
153
|
|
250
|
|
291
|
|
Reimbursement Agreement
expense (1)
|
47
|
|
44
|
|
90
|
|
85
|
|
Other expense (income),
net
|
1
|
|
(2)
|
|
—
|
|
(3)
|
|
Interest expense,
net
|
15
|
|
17
|
|
28
|
|
34
|
|
Income before
taxes
|
59
|
|
94
|
|
132
|
|
175
|
|
Provision for income
taxes
|
29
|
|
44
|
|
59
|
|
68
|
|
Net
income
|
$
30
|
|
$
50
|
|
$
73
|
|
$
107
|
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.19
|
|
$
0.34
|
|
$
0.49
|
|
$
0.73
|
|
Diluted
|
$
0.19
|
|
$
0.34
|
|
$
0.48
|
|
$
0.72
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
146
|
|
147
|
|
146
|
|
147
|
|
Diluted
|
149
|
|
149
|
|
148
|
|
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)
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
Accrual for
Reimbursement Agreement liabilities deemed
probable and reasonably estimable
|
$
47
|
|
$
44
|
|
$
90
|
|
$
85
|
|
Cash payments made to
Honeywell
|
(35)
|
|
(35)
|
|
(70)
|
|
(70)
|
|
Accrual increase,
non-cash component in period
|
$
12
|
|
$
9
|
|
$
20
|
|
$
15
|
Table 3: CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(in millions, except
par value)
|
June 29,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
413
|
|
$
636
|
|
Accounts receivable,
net
|
1,071
|
|
973
|
|
Inventories,
net
|
1,188
|
|
941
|
|
Other current
assets
|
212
|
|
193
|
|
Total current
assets
|
2,884
|
|
2,743
|
|
|
|
|
|
Property, plant and
equipment, net
|
424
|
|
390
|
|
Goodwill
|
3,079
|
|
2,705
|
|
Intangible assets,
net
|
1,218
|
|
461
|
|
Other assets
|
379
|
|
346
|
|
Total
assets
|
$
7,984
|
|
$
6,645
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
980
|
|
$
905
|
|
Current portion of
long-term debt
|
12
|
|
12
|
|
Accrued
liabilities
|
602
|
|
608
|
|
Total current
liabilities
|
1,594
|
|
1,525
|
|
|
|
|
|
Long-term
debt
|
1,979
|
|
1,396
|
|
Obligations payable
under Indemnification Agreements
|
625
|
|
609
|
|
Other
liabilities
|
492
|
|
366
|
|
Total
liabilities
|
4,690
|
|
3,896
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred stock,
$0.001 par value: 100 shares authorized, 0.5 shares issued and
outstanding at June 29, 2024 and no shares issued and
outstanding at
December 31, 2023, respectively
|
482
|
|
—
|
|
Common stock, $0.001
par value: 700 shares authorized, 152 and 146 shares
issued and outstanding at June 29, 2024, respectively, and 151
and 145 shares
issued and outstanding at December 31, 2023,
respectively
|
—
|
|
—
|
|
Additional paid-in capital
|
2,276
|
|
2,226
|
|
Retained
earnings
|
881
|
|
810
|
|
Accumulated other comprehensive loss, net
|
(242)
|
|
(194)
|
|
Treasury stock at
cost
|
(103)
|
|
(93)
|
|
Total stockholders'
equity
|
3,294
|
|
2,749
|
|
Total liabilities and
stockholders' equity
|
$
7,984
|
|
$
6,645
|
Table 4: CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in
millions)
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
Cash Flows From
Operating Activities:
|
|
|
|
|
|
|
|
|
Net income
|
$
30
|
|
$
50
|
|
$
73
|
|
$
107
|
|
Adjustments to
reconcile net income to net cash in
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
28
|
|
25
|
|
52
|
|
49
|
|
Stock-based
compensation expense
|
15
|
|
13
|
|
29
|
|
25
|
|
Other, net
|
7
|
|
4
|
|
17
|
|
6
|
|
Changes in assets and
liabilities, net of acquired
companies:
|
|
|
|
|
|
|
|
|
Accounts receivable,
net
|
(91)
|
|
(58)
|
|
(57)
|
|
(35)
|
|
Inventories,
net
|
(11)
|
|
12
|
|
(4)
|
|
(15)
|
|
Other current
assets
|
6
|
|
11
|
|
9
|
|
3
|
|
Accounts
payable
|
75
|
|
56
|
|
31
|
|
44
|
|
Accrued
liabilities
|
11
|
|
(8)
|
|
(78)
|
|
(94)
|
|
Other
liabilities
|
22
|
|
16
|
|
22
|
|
27
|
|
Net cash provided by
operating activities
|
92
|
|
121
|
|
94
|
|
117
|
|
Cash Flows From
Investing Activities:
|
|
|
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
(1,334)
|
|
—
|
|
(1,334)
|
|
(6)
|
|
Capital
expenditures
|
(15)
|
|
(29)
|
|
(36)
|
|
(49)
|
|
Other investing
activities, net
|
7
|
|
—
|
|
6
|
|
—
|
|
Net cash used in
investing activities
|
(1,342)
|
|
(29)
|
|
(1,364)
|
|
(55)
|
|
Cash Flows From
Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance
of incremental term loans
under the A&R Term B Facility, net
|
582
|
|
—
|
|
582
|
|
—
|
|
Proceeds from issuance
of preferred stock, net of
issuance costs
|
482
|
|
—
|
|
482
|
|
—
|
|
Repayments of
long-term debt
|
(3)
|
|
(3)
|
|
(6)
|
|
(6)
|
|
Other financing
activities, net
|
(1)
|
|
(6)
|
|
(6)
|
|
(12)
|
|
Net cash provided by
(used in) financing activities
|
1,060
|
|
(9)
|
|
1,052
|
|
(18)
|
|
Effect of foreign
exchange rate changes on cash, cash
equivalents and restricted cash
|
—
|
|
4
|
|
(5)
|
|
10
|
|
Net (decrease) increase
in cash, cash equivalents and
restricted cash
|
(190)
|
|
87
|
|
(223)
|
|
54
|
|
Cash, cash equivalents
and restricted cash at beginning
of period
|
604
|
|
296
|
|
637
|
|
329
|
|
Cash, cash equivalents
and restricted cash at end of
period
|
$
414
|
|
$
383
|
|
$
414
|
|
$
383
|
|
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, except
per share data)
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
GAAP Net
income
|
$
30
|
|
$
50
|
|
$
73
|
|
$
107
|
|
Less: preferred stock
dividends
|
2
|
|
—
|
|
2
|
|
—
|
|
GAAP Net income
available to common stockholders
|
28
|
|
50
|
|
71
|
|
107
|
|
Acquisition and
integration costs
|
34
|
|
—
|
|
34
|
|
—
|
|
Stock-based
compensation expense
|
15
|
|
13
|
|
29
|
|
25
|
|
Intangible asset
amortization
|
13
|
|
10
|
|
22
|
|
19
|
|
Reimbursement
Agreement accrual increase, non-cash
component (1)
|
12
|
|
9
|
|
20
|
|
15
|
|
Other
(2)
|
12
|
|
(3)
|
|
17
|
|
(5)
|
|
Tax effect of
applicable non-GAAP adjustments (3)
|
(22)
|
|
(7)
|
|
(31)
|
|
(14)
|
|
Non-GAAP Adjusted
net income available to common
stockholders
|
$
92
|
|
$
72
|
|
$
162
|
|
$
147
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
GAAP Net income per
diluted common share
|
$
0.19
|
|
$
0.34
|
|
$
0.48
|
|
$
0.72
|
|
Acquisition and
integration costs
|
0.23
|
|
—
|
|
0.23
|
|
—
|
|
Stock-based
compensation expense
|
0.10
|
|
0.09
|
|
0.20
|
|
0.17
|
|
Intangible asset
amortization
|
0.09
|
|
0.06
|
|
0.15
|
|
0.13
|
|
Reimbursement
Agreement accrual increase, non-cash
component (1)
|
0.08
|
|
0.06
|
|
0.14
|
|
0.10
|
|
Other
(2)
|
0.08
|
|
(0.02)
|
|
0.11
|
|
(0.03)
|
|
Tax effect of
applicable non-GAAP adjustments (3)
|
(0.15)
|
|
(0.05)
|
|
(0.22)
|
|
(0.10)
|
|
Non-GAAP Adjusted
net income per diluted common
share
|
$
0.62
|
|
$
0.48
|
|
$
1.09
|
|
$
0.99
|
|
|
|
|
|
|
|
|
|
(1)
|
Refer to the Unaudited
Consolidated Statements of Operations herein.
|
|
(2)
|
Other includes
restructuring expenses, impairment charges, extinguishment costs,
loss on sale of assets, Tax Matters Agreement gain, foreign
exchange transaction loss (income), and litigation
settlements.
|
|
(3)
|
We calculated the tax
effect of non-GAAP adjustments by applying a flat statutory tax
rate of 25% for the three months ended June 29, 2024 and
July 1, 2023.
|
|
NON-GAAP
FINANCIAL MEASURES AND RECONCILIATIONS
(Unaudited)
RESIDEO
TECHNOLOGIES, INC.
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in
millions)
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
Net
revenue
|
$
1,589
|
|
$
1,602
|
|
$
3,075
|
|
$
3,151
|
|
|
|
|
|
|
|
|
|
GAAP Net
income
|
$
30
|
|
$
50
|
|
$
73
|
|
$
107
|
|
GAAP Net income as a
% of net revenue
|
1.9 %
|
|
3.1 %
|
|
2.4 %
|
|
3.4 %
|
|
Provision for income
taxes
|
29
|
|
44
|
|
59
|
|
68
|
|
GAAP Income before
taxes
|
59
|
|
94
|
|
132
|
|
175
|
|
Acquisition and
integration costs
|
34
|
|
—
|
|
34
|
|
—
|
|
Depreciation and
amortization
|
28
|
|
25
|
|
52
|
|
49
|
|
Stock-based
compensation expense
|
15
|
|
13
|
|
29
|
|
25
|
|
Interest expense,
net
|
15
|
|
17
|
|
28
|
|
34
|
|
Reimbursement
Agreement accrual increase, non-cash
component (1)
|
12
|
|
9
|
|
20
|
|
15
|
|
Other
(2)
|
12
|
|
(3)
|
|
17
|
|
(5)
|
|
Non-GAAP Adjusted
EBITDA
|
$
175
|
|
$
155
|
|
$
312
|
|
$
293
|
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
11.0 %
|
|
9.7 %
|
|
10.1 %
|
|
9.3 %
|
|
(1)
|
Refer to the Unaudited
Consolidated Statements of Operations herein.
|
|
(2)
|
Other includes
restructuring expenses, impairment charges, extinguishment costs,
loss on sale of assets, Tax Matters Agreement gain, foreign
exchange transaction loss (income), and litigation
settlements.
|
|
NON-GAAP FINANCIAL
MEASURES AND RECONCILIATIONS
(Unaudited)
PRODUCTS AND
SOLUTIONS SEGMENT
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in
millions)
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
Net
revenue
|
$
630
|
|
$
677
|
|
$
1,250
|
|
$
1,335
|
|
|
|
|
|
|
|
|
|
GAAP Income from
operations
|
$
130
|
|
$
115
|
|
$
242
|
|
$
220
|
|
GAAP Income from
operations as a % of net revenue
|
20.6 %
|
|
17.0 %
|
|
19.4 %
|
|
16.5 %
|
|
Stock-based
compensation expense
|
4
|
|
5
|
|
10
|
|
9
|
|
Other
(1)
|
4
|
|
—
|
|
9
|
|
2
|
|
Non-GAAP Adjusted
Income from Operations
|
$
138
|
|
$
120
|
|
$
261
|
|
$
231
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
18
|
|
17
|
|
35
|
|
34
|
|
Non-GAAP Adjusted
EBITDA
|
$
156
|
|
$
137
|
|
$
296
|
|
$
265
|
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
24.8 %
|
|
20.2 %
|
|
23.7 %
|
|
19.9 %
|
|
(1)
Other includes restructuring expenses and litigation
settlements.
|
|
ADI GLOBAL
DISTRIBUTION SEGMENT
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(in
millions)
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
Net
revenue
|
$
959
|
|
$
925
|
|
$
1,825
|
|
$
1,816
|
|
|
|
|
|
|
|
|
|
GAAP Income from
operations
|
$
62
|
|
$
71
|
|
$
111
|
|
$
135
|
|
GAAP Income from
operations as a % of net revenue
|
6.5 %
|
|
7.7 %
|
|
6.1 %
|
|
7.4 %
|
|
Stock-based
compensation expense
|
3
|
|
1
|
|
5
|
|
3
|
|
Acquisition and
integration costs
|
4
|
|
—
|
|
4
|
|
—
|
|
Other
(1)
|
—
|
|
2
|
|
2
|
|
2
|
|
Non-GAAP Adjusted
Income from Operations
|
$
69
|
|
$
74
|
|
$
122
|
|
$
140
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
8
|
|
5
|
|
13
|
|
9
|
|
Non-GAAP Adjusted
EBITDA
|
$
77
|
|
$
79
|
|
$
135
|
|
$
149
|
|
Non-GAAP Adjusted
EBITDA as a % of net revenue
|
8.0 %
|
|
8.5 %
|
|
7.4 %
|
|
8.2 %
|
|
(1)
Other includes restructuring expenses.
|
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SOURCE Resideo Technologies, Inc.