SecurityWorldMarket

07/09/2019

Resideo reports strong second quarter

Austin, Tx

Resideo Technologies, Inc. has reported second-quarter financial results for the quarter ended June 30, 2019. The company reported Net Revenue of $1,242 million, Adjusted EBITDA of $81 million and adjusted basic and diluted earnings per share of $0.19.

“Our momentum continues with strong top-line growth during the second quarter, spread evenly across our ADI Global Distribution and Products & Solutions businesses,” said Mike Nefkens, president and CEO of Resideo. “In the first half of the year, we launched several new products including the T9 and T10 smart thermostats and an industry-leading universal defrost control for heat pumps. We also completed acquisitions of Lifewhere and technology from Whisker Labs. Our three acquisitions to date, including Buoy Labs, put us at the forefront of whole home monitoring across the physical home networks of air, water, energy and security. The Resideo team is focused on executing our organic and inorganic growth strategies, as well as our cost reduction programs, as we continue to drive growth and long-term value creation for shareholders.”

Net revenue for the second quarter was up 4% on a GAAP basis and up 6% on a Non-GAAP constant currency basis year over year. GAAP Net Income was down during the second quarter with a Net Loss of $11 million, while Adjusted Net Income was $23 million, and $58 million excluding the Honeywell reimbursement agreement payments. Adjusted EBITDA was $81 million, or $116 million excluding the Honeywell reimbursement agreement payments.

ADI Global Distribution revenue for the quarter increased by 4% on a GAAP basis, and 6% on a Non-GAAP constant currency basis year over year. Segment performance was driven by solid organic revenue growth in the Americas and EMEA regions. Segment Adjusted EBITDA increased by 12%, primarily driven by higher sales volumes and productivity. Growth in the quarter was driven by the Security and Life Safety product categories, as well as through continued expansion of its Professional A/V growth initiative. The ADI business also added to its product offering, notably announcing a distribution agreement with Samsung Pro. ADI continues to win high-value new business among security integrators throughout North America.

Products & Solutions revenue increased by 4% on a GAAP basis, and 6% on a Non-GAAP constant currency basis year over year. Segment growth was driven by performance from the Security business with the migration to the new next-generation Pro Series security platform. Segment EBITDA was down 36% as a result of unfavorable product mix, production cost increases, and the impact of acquisition expenses. Negative impacts were partially offset by profit from increased volume, selling prices and raw material productivity.

“As we continue investing in our business to generate sustainable growth, our balance sheet remains strong, and we continue to be disciplined in our cash management approach,” said Joe Ragan, executive vice president and chief financial officer. “Looking ahead, we expect third quarter revenue growth to be modest, driven by typical seasonality. We remain committed to our previously announced EBITDA guidance, supported by our cost reduction program, which is on track to yield $50 million in annualised savings by 2020.”


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