Resideo Technologies, Inc. (REZI) Bundle
A Brief History of Resideo Technologies, Inc.
Resideo Technologies, Inc. has evolved significantly since its inception, focusing on providing technology solutions for the heating, ventilation, and air conditioning (HVAC) market, security, and home automation sectors. As of 2024, the company's strategic initiatives and acquisitions have shaped its financial trajectory and operational capabilities.
Recent Financial Performance (2024)
For the three months ended September 28, 2024, Resideo reported a net revenue of $1,828 million, reflecting an increase of 17.6% compared to $1,554 million in the same period in 2023. This growth was driven primarily by the acquisition of Snap One, contributing $251 million in revenue, along with a $58 million increase in sales volume. However, this was partially offset by a $32 million decline in sales from the divestiture of the Genesis business and $3 million from unfavorable pricing impacts in the ADI Global Distribution segment.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Revenue | $1,828 million | $1,554 million |
| Gross Profit | $524 million | $417 million |
| Gross Margin | 28.7% | 26.8% |
| Income from Operations | $126 million | $109 million |
| Net Income | $20 million | $21 million |
| Earnings per Share (Diluted) | $0.07 | $0.14 |
Revenue Breakdown by Segment
As of September 28, 2024, Resideo's revenue was divided between two primary segments: Products and Solutions, and ADI Global Distribution.
| Segment | Q3 2024 Revenue | Q3 2023 Revenue |
|---|---|---|
| Products and Solutions | $645 million | $654 million |
| ADI Global Distribution | $1,183 million | $900 million |
| Total Net Revenue | $1,828 million | $1,554 million |
Acquisition of Snap One
In June 2024, Resideo completed the acquisition of Snap One for $600 million, which significantly impacted its operational scale and market presence. This acquisition was financed through a combination of cash on hand and new debt issuance, including $600 million in Senior Notes due 2032, issued at a rate of 6.500%.
Cash Flow and Liquidity
As of September 28, 2024, Resideo reported total cash and cash equivalents of $531 million. The net cash provided by operating activities for the nine months ended September 28, 2024, was $241 million, which represents an increase of $64 million from the previous year. The company used $1,386 million for investing activities, primarily for acquisitions, while net cash provided by financing activities was $1,043 million.
Research and Development
Research and development (R&D) expenses for the three months ended September 28, 2024, were $23 million, down from $28 million in the prior year. For the nine months ended September 28, 2024, R&D expenses totaled $69 million, a decrease from $84 million.
Restructuring and Corporate Costs
Restructuring costs for the three months ended September 28, 2024, were $29 million, compared to $38 million in the same period in 2023. Corporate costs increased to $141 million for the nine months ended September 28, 2024, from $101 million in the prior year, largely due to acquisition-related expenses.
Long-Term Debt
As of September 28, 2024, Resideo's total long-term debt was $1,983 million, which includes $300 million in Senior Notes due 2029 and $600 million in Senior Notes due 2032. The company has been actively managing its debt profile to ensure favorable terms and adequate liquidity for future growth initiatives.
| Debt Instrument | Amount | Due Date |
|---|---|---|
| 4.000% Senior Notes | $300 million | 2029 |
| 6.500% Senior Notes | $600 million | 2032 |
| A&R Term B Facility | $1,118 million | 2031 |
In summary, Resideo Technologies, Inc. has shown resilience and adaptability in the face of market challenges, leveraging strategic acquisitions and optimizing its operational structure to enhance financial performance and shareholder value in 2024.
A Who Owns Resideo Technologies, Inc. (REZI)
Ownership Structure
As of 2024, Resideo Technologies, Inc. (REZI) has a diverse ownership structure. The largest shareholders include institutional investors, mutual funds, and private equity firms. Notably, Clayton, Dubilier & Rice (CD&R) holds a significant stake in the company following their investment for the acquisition of Snap One. The ownership percentages are delineated in the following table:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| Clayton, Dubilier & Rice | 14.5% | Private Equity |
| BlackRock, Inc. | 9.1% | Institutional Investor |
| The Vanguard Group, Inc. | 8.6% | Institutional Investor |
| State Street Corporation | 5.4% | Institutional Investor |
| Other Institutional Investors | 62.4% | Various |
| Insider Ownership | 0.4% | Company Executives |
Institutional Ownership
Institutional investors collectively hold approximately 83.5% of Resideo's outstanding shares. This concentration of ownership indicates significant institutional confidence in the company's trajectory and management strategies. Major institutional holders include:
- BlackRock, Inc. - 9.1%
- The Vanguard Group, Inc. - 8.6%
- State Street Corporation - 5.4%
- Invesco Ltd. - 3.0%
- Wellington Management Company, LLP - 2.5%
Recent Changes in Ownership
In June 2024, Resideo issued 500,000 shares of Series A Cumulative Convertible Participating Preferred Stock to Clayton, Dubilier & Rice for $500 million, which significantly impacted the ownership structure. This issuance provided CD&R a substantial stake and influence within the company, specifically related to strategic decisions following the Snap One acquisition.
Market Capitalization and Stock Performance
As of October 30, 2024, Resideo Technologies, Inc. had a market capitalization of approximately $3.87 billion. The stock performance has shown volatility, influenced by market conditions and company performance metrics:
| Date | Stock Price | Market Cap (in billions) |
|---|---|---|
| October 30, 2024 | $26.45 | $3.87 |
| July 1, 2024 | $23.60 | $3.56 |
| January 1, 2024 | $21.50 | $3.21 |
Insider Ownership
Insider ownership is relatively low at approximately 0.4%, indicating that the majority of shares are held by institutional and retail investors. The following executives have reported ownership:
| Executive | Position | Shares Owned |
|---|---|---|
| Mike Nefkens | CEO | 120,000 |
| David P. Pritchard | CFO | 50,000 |
| Other Executives | Various | 30,000 |
Conclusion on Ownership Dynamics
The ownership landscape of Resideo Technologies, Inc. reflects a robust institutional backing with significant influence from private equity. As the company continues to execute its strategic initiatives, particularly following the acquisition of Snap One, these ownership dynamics will likely evolve, impacting governance and operational focus.
Resideo Technologies, Inc. (REZI) Mission Statement
Company Overview
Resideo Technologies, Inc. operates as a global provider of technology-driven sensing and control products. The company focuses on delivering solutions for comfort, energy management, and safety and security services, serving over 150 million homes globally.
Mission Statement
As of 2024, Resideo's mission statement emphasizes its commitment to enhancing the quality of life through innovative solutions that ensure safety, comfort, and energy efficiency in homes and businesses. The company aims to lead in the development of smart home technologies that integrate seamlessly into daily living.
Financial Performance
In the third quarter of 2024, Resideo reported a net revenue of $1,828 million, reflecting a 17.6% increase compared to $1,554 million in the same quarter of 2023. The growth was primarily attributed to the acquisition of Snap One, contributing $251 million in revenue.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenue | $1,828 million | $1,554 million | 17.6% |
| Gross Profit | $524 million | $417 million | 25.7% |
| Gross Margin | 28.7% | 26.8% | 1.9% |
| Income from Operations | $126 million | $109 million | 15.6% |
| Net Income | $20 million | $21 million | -4.8% |
Segment Performance
Resideo operates through two reportable segments: Products and Solutions, and ADI Global Distribution. The following table summarizes the net revenue and income from operations for both segments in Q3 2024 compared to Q3 2023.
| Segment | Net Revenue (Q3 2024) | Net Revenue (Q3 2023) | Income from Operations (Q3 2024) | Income from Operations (Q3 2023) |
|---|---|---|---|---|
| Products and Solutions | $645 million | $654 million | $60 million | $26 million |
| ADI Global Distribution | $1,183 million | $900 million | $66 million | $82 million |
Acquisition Impact
The acquisition of Snap One, completed in June 2024, significantly impacted Resideo's financial position. The acquisition was financed with $600 million in incremental term loans and $500 million from the issuance of preferred stock. This strategic move aims to bolster Resideo's capabilities in smart home solutions.
Liquidity and Capital Resources
As of September 28, 2024, Resideo reported total cash and cash equivalents of $531 million. The company's liquidity is supported by its ability to generate positive cash flows from operations and access to a $500 million revolving credit facility.
Stock Performance
Resideo's stock has experienced fluctuations in the market, reflecting broader economic conditions and company-specific developments. As of the latest reporting, the company's fully diluted earnings per share stood at $0.07, down from $0.14 in Q3 2023.
Research and Development
Resideo invested $23 million in research and development for Q3 2024, a decrease from $28 million in Q3 2023. This reduction aligns with the company's focus on optimizing costs and enhancing strategic product programs.
Outlook and Market Conditions
The company anticipates a mixed global macroeconomic environment for the fourth quarter of 2024, with potential challenges including softening consumer demand and elevated mortgage rates. However, positive indicators such as improving interest rates and upticks in new home sales may support growth.
How Resideo Technologies, Inc. (REZI) Works
Business Overview
Resideo Technologies, Inc. operates through two primary segments: Products and Solutions, and ADI Global Distribution. The Products and Solutions segment focuses on manufacturing technology-driven sensing and control products that enhance comfort and security in residential settings. Meanwhile, the ADI Global Distribution segment is a wholesale distributor of low-voltage security products, including life safety and access control systems.
Financial Performance
As of September 28, 2024, Resideo Technologies reported the following financial results:
| Metric | Three Months Ended September 28, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 28, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Revenue | $1,828 million | $1,554 million | $4,903 million | $4,705 million |
| Cost of Goods Sold | $1,304 million | $1,137 million | $3,532 million | $3,432 million |
| Gross Profit | $524 million | $417 million | $1,371 million | $1,273 million |
| Gross Profit Margin | 28.7% | 26.8% | 28.0% | 27.1% |
| Income from Operations | $126 million | $109 million | $376 million | $400 million |
| Net Income | $20 million | $21 million | $93 million | $128 million |
| Earnings per Share (Diluted) | $0.07 | $0.14 | $0.53 | $0.86 |
Segment Performance
The performance of each segment as of September 28, 2024, is detailed below:
| Segment | Net Revenue (in millions) | Income from Operations (in millions) |
|---|---|---|
| Products and Solutions | $645 | $128 |
| ADI Global Distribution | $1,183 | $36 |
Acquisition and Growth Strategy
In June 2024, Resideo Technologies completed the acquisition of Snap One, contributing $297 million in net revenue post-acquisition. The acquisition was financed through a combination of debt and preferred stock issuance amounting to $1.18 billion. This strategic move is aimed at enhancing the company's product offerings and expanding its market reach.
Cash Flow and Liquidity
As of September 28, 2024, Resideo reported the following cash flow metrics:
| Metric | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $531 |
| Net Cash Provided by Operating Activities | $241 |
| Net Cash Used for Investing Activities | ($1,386) |
| Net Cash Provided by Financing Activities | $1,043 |
Debt and Interest Expenses
Resideo's long-term debt as of September 28, 2024, is summarized as follows:
| Debt Type | Amount (in millions) |
|---|---|
| 4.000% Senior Notes due 2029 | $300 |
| 6.500% Senior Notes due 2032 | $600 |
| Variable rate A&R Term B Facility | $1,118 |
| Total Long-term Debt | $1,983 |
Market Environment
Resideo's performance is influenced by various macroeconomic factors, including repair and remodeling activity, new home sales, and interest rates. The company continues to navigate challenges such as inflationary pressures and geopolitical risks, which may impact demand for its products and services.
How Resideo Technologies, Inc. (REZI) Makes Money
Revenue Streams
Resideo Technologies, Inc. generates revenue through two primary segments: Products and Solutions, and ADI Global Distribution. As of September 28, 2024, the company reported the following net revenue breakdown:
| Segment | Three Months Ended September 28, 2024 (in millions) | Three Months Ended September 30, 2023 (in millions) | Nine Months Ended September 28, 2024 (in millions) | Nine Months Ended September 30, 2023 (in millions) |
|---|---|---|---|---|
| Products and Solutions | $645 | $654 | $1,895 | $1,989 |
| ADI Global Distribution | $1,183 | $900 | $3,008 | $2,716 |
| Total Net Revenue | $1,828 | $1,554 | $4,903 | $4,705 |
Products and Solutions Segment
The Products and Solutions segment offers a range of technology-driven products for home comfort, energy management, and security. For the three months ended September 28, 2024, this segment reported:
- Net revenue of $645 million, a decrease of $9 million or 1% compared to the same period in 2023.
- Income from operations of $128 million, an increase of $34 million or 36% year-over-year.
This increase in income was attributed to lower material and manufacturing costs and favorable pricing impacts.
ADI Global Distribution Segment
The ADI Global Distribution segment serves as a wholesale distributor of low-voltage security products. Key financial metrics for this segment include:
- Net revenue of $1,183 million for the three months ended September 28, 2024, an increase of $283 million or 31.4% compared to the same period in 2023.
- Income from operations of $36 million, a decrease of $16 million or 31% year-over-year.
The revenue growth was driven by the acquisition of Snap One, contributing $251 million, while increased operational costs impacted profitability.
Gross Profit Analysis
Resideo's gross profit for the three months ended September 28, 2024, reached $524 million, representing a gross margin of 28.7%. This reflects an increase from a gross margin of 26.8% in the same quarter of 2023. Contributing factors included:
- Lower manufacturing costs contributing to a 140 basis point improvement.
- Favorable impacts from acquisitions, net of divestitures, adding 120 basis points.
- Higher pricing contributing an additional 30 basis points.
Operating Expenses
Operating expenses for the three months ended September 28, 2024, totaled $398 million, up from $308 million in the same period of 2023. This included:
- Research and development expenses of $23 million, down from $28 million.
- Selling, general and administrative expenses of $317 million, compared to $233 million in the prior year.
Cash Flow and Liquidity
As of September 28, 2024, Resideo reported total cash and cash equivalents of $531 million, with a significant portion (44%) held by foreign subsidiaries. Net cash provided by operating activities was $241 million for the nine months ended September 28, 2024, compared to $177 million for the same period in 2023.
Debt and Capital Structure
As of September 28, 2024, Resideo had a total long-term debt of $1,983 million, with a weighted average interest rate of 7.32%. The company's debt includes:
- $300 million in 4.000% Senior Notes due 2029.
- $600 million in 6.500% Senior Notes due 2032.
- $1,118 million under the A&R Term B Facility.
Recent Acquisitions
In June 2024, Resideo completed the acquisition of Snap One for $1,334 million, financed through a combination of debt and equity. This acquisition is expected to enhance Resideo's distribution capabilities and expand its product offerings.
Financial Performance Summary
For the three months ended September 28, 2024, Resideo's net income was reported at $20 million, a decrease from $21 million in the same period in 2023. Earnings per share (EPS) for this period were $0.07, compared to $0.14 in the prior year.
| Financial Metrics | Three Months Ended September 28, 2024 | Three Months Ended September 30, 2023 |
|---|---|---|
| Net Revenue | $1,828 million | $1,554 million |
| Gross Profit | $524 million | $417 million |
| Income from Operations | $126 million | $109 million |
| Net Income | $20 million | $21 million |
| Earnings per Share | $0.07 | $0.14 |
Overall, Resideo Technologies, Inc. continues to navigate a complex market landscape while leveraging its acquisitions to bolster revenue streams and improve operational efficiency.
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Resources:
- Resideo Technologies, Inc. (REZI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Resideo Technologies, Inc. (REZI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Resideo Technologies, Inc. (REZI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.