Resideo Announces First Quarter 2021 Financial Results
Resideo Technologies reported strong Q1 2021 results, with net revenue of $1.4 billion, a 20% increase year-over-year. The gross profit margin improved to 25.9% from 24.1% in Q1 2020. Operating profit surged to $130 million, a significant rise from $34 million in the previous year. Net income rose to $49 million or $0.33 per diluted share, compared to a loss of $21 million in Q1 2020. The company expects full-year revenue of $5.5 billion to $5.7 billion and Q2 revenue between $1.40 billion and $1.45 billion.
- Net revenue increased to $1.4 billion, up 20% YoY.
- Gross profit margin improved to 25.9%, an increase of 180 basis points.
- Operating profit reached $130 million, up $96 million YoY.
- Net income of $49 million, a turnaround from a net loss of $21 million.
- Cash provided by operating activities improved by $79 million from the previous year.
- ADI Global Distribution gross profit margin declined to 17.2%, down 70 basis points.
AUSTIN, Texas, May 6, 2021 /PRNewswire/ -- Resideo Technologies, Inc. (NYSE: REZI), a leading global provider of home comfort and security solutions and distributor of commercial and residential security and audio-visual products, today announced financial and operating results for the first quarter ended April 3, 2021.
First Quarter 2021 Highlights
- Net revenue of
$1.4 billion , up20% from$1.2 billion in the first quarter 2020 - Gross profit margin of
25.9% , up 180 basis points compared to gross profit margin of24.1% in the prior year comparable period - Operating profit of
$130 million , an increase of$96 million over operating profit of$34 million in the first quarter 2020 - Positive cash provided by operating activities of
$5 million , an improvement of$79 million compared to cash used for operating activities of$74 million in the prior year comparable period
First Quarter 2021 Performance
Consolidated revenue of
Gross profit margin for the first quarter 2021 was
Resideo's operating profit of
Net income for the first quarter 2021 was
Cash Flow and Liquidity
The company reported net cash provided by operating activities of
Outlook
The company today updated its outlook for 2021 and now expects full year revenue to be in the range of
The company expects second quarter 2021 revenue to be in the range of
Management Remarks
"Our positive momentum continued across both Products & Solutions and ADI in the first quarter," commented Jay Geldmacher, Resideo's president and CEO. "Residential market demand remains robust, and ADI is seeing improved activity in commercial markets. Strong top line performance along with our ongoing transformation work enabled us to expand our consolidated margins and overall profitability while also increasing our investment in both Products & Solutions and ADI.
"We are well positioned in both of our segments to take advantage of current market tailwinds and the positive long-term secular trends of increased investment in the home and demand for professional security solutions. While we continue to closely monitor developments around COVID-19 and supply chain and logistical challenges, our current visibility indicates a favorable operating environment as we move through 2021."
Conference Call and Webcast Details
Resideo will hold a conference call with investors on May 6, 2021, at 5:00 p.m. EDT. A real-time 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 833-972-2949 (U.S., toll-free) or 1-236-714-2869 (international), with the conference title "Resideo First Quarter 2021 Earnings" or the conference ID: 9843267.
About Resideo
Resideo is a leading global manufacturer and distributor of technology-driven products and solutions that provide comfort, security, energy efficiency and control to customers worldwide. Building on a 130-year heritage, Resideo has a presence in more than 150 million homes, with 15 million systems installed in homes each year. We continue to serve more than 110,000 professionals through leading distributors, including our ADI Global Distribution business, which exports to more than 100 countries from nearly 200 stocking locations around the world. For more information about Resideo, please visit www.resideo.com.
Contacts: | |
Investors: | Media: |
Jason Willey | Oliver Clark |
Table 1: SUMMARY OF INTERIM FINANCIAL RESULTS (UNAUDITED) | ||||||||||||||||
(In millions) | ||||||||||||||||
Q1 2021 | ||||||||||||||||
Products & | ADI Global | Corporate | Total | |||||||||||||
Revenue (1) | $ | 606 | $ | 813 | $ | - | $ | 1,419 | ||||||||
Cost of goods sold | 376 | 673 | 2 | 1,051 | ||||||||||||
Gross profit (loss) | 230 | 140 | (2) | 368 | ||||||||||||
Selling, general and administrative | 100 | 81 | 57 | 238 | ||||||||||||
Operating profit (loss) | $ | 130 | $ | 59 | $ | (59) | $ | 130 | ||||||||
Q1 2020 | ||||||||||||||||
Products & | ADI Global | Corporate | Total | |||||||||||||
Revenue (1) | $ | 475 | $ | 704 | $ | - | $ | 1,179 | ||||||||
Cost of goods sold | 314 | 578 | 3 | 895 | ||||||||||||
Gross profit (loss) | 161 | 126 | (3) | 284 | ||||||||||||
Selling, general and administrative expenses | 103 | 78 | 69 | 250 | ||||||||||||
Operating profit (loss) | $ | 58 | $ | 48 | $ | (72) | $ | 34 | ||||||||
Q1 2021 % change compared to Q1 2020 | ||||||||||||||||
Products & | ADI Global | Corporate | Total | |||||||||||||
Revenue (1) | 28 | % | 15 | % | N/A | 20 | % | |||||||||
Cost of goods sold | 20 | % | 16 | % | (33) | % | 17 | % | ||||||||
Gross profit (loss) | 43 | % | 11 | % | (33) | % | 30 | % | ||||||||
Selling, general and administrative expenses | (3) | % | 4 | % | (17) | % | (5) | % | ||||||||
Operating profit (loss) | 124 | % | 23 | % | (18) | % | 282 | % | ||||||||
(1) Represents Product & Solutions revenue, excluding intersegment revenue of |
Table 2: CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||
Three Months Ended | ||||||||
April 3, | March 28, | |||||||
2021 | 2020 | |||||||
(In millions except share and per share data) | ||||||||
Net revenue | $ | 1,419 | $ | 1,179 | ||||
Cost of goods sold | 1,051 | 895 | ||||||
Gross profit | 368 | 284 | ||||||
Selling, general and administrative expenses | 238 | 250 | ||||||
Operating profit | 130 | 34 | ||||||
Other expense, net | 44 | 42 | ||||||
Interest expense | 13 | 17 | ||||||
Income (loss) before taxes | 73 | (25) | ||||||
Tax expense (benefit) | 24 | (4) | ||||||
Net income (loss) | $ | 49 | $ | (21) | ||||
Weighted Average Number of Common Shares Outstanding (in thousands) | ||||||||
Basic | 143,382 | 122,962 | ||||||
Diluted | 147,656 | 122,962 | ||||||
Earnings (loss) Per Share | ||||||||
Basic | $ | 0.34 | $ | (0.17) | ||||
Diluted | $ | 0.33 | $ | (0.17) | ||||
Table 3: CONSOLIDATED INTERIM BALANCE SHEETS (UNAUDITED) | ||||||||
April 3, | December 31, | |||||||
2021 | 2020 | |||||||
(In millions, except number of shares which are reflected in thousands and par value) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 508 | $ | 517 | ||||
Accounts receivables – net | 875 | 863 | ||||||
Inventories – net | 681 | 672 | ||||||
Other current assets | 156 | 173 | ||||||
Total current assets | 2,220 | 2,225 | ||||||
Property, plant and equipment – net | 307 | 318 | ||||||
Goodwill | 2,675 | 2,691 | ||||||
Other assets | 374 | 376 | ||||||
Total assets | $ | 5,576 | $ | 5,610 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 908 | $ | 936 | ||||
Current maturities of long-term debt | 10 | 7 | ||||||
Accrued liabilities | 528 | 595 | ||||||
Total current liabilities | 1,446 | 1,538 | ||||||
Long-term debt | 1,186 | 1,155 | ||||||
Obligations payable under Indemnification Agreements | 583 | 590 | ||||||
Other liabilities | 329 | 334 | ||||||
EQUITY | ||||||||
Common stock, | - | - | ||||||
Additional paid-in capital | 2,088 | 2,070 | ||||||
Treasury stock, at cost | (10) | (6) | ||||||
Retained earnings | 124 | 75 | ||||||
Accumulated other comprehensive loss | (170) | (146) | ||||||
Total equity | 2,032 | 1,993 | ||||||
Total liabilities and equity | $ | 5,576 | $ | 5,610 | ||||
Table 4: CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||||
Three Months Ended | ||||||||||
April 3, | March 28, | |||||||||
2021 | 2020 | |||||||||
(In millions) | ||||||||||
Cash flows provided by (used for) operating activities: | ||||||||||
Net income (loss) | $ | 49 | $ | (21) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||||||||||
Depreciation and amortization | 23 | 21 | ||||||||
Stock compensation expense | 9 | 7 | ||||||||
Other | 25 | 12 | ||||||||
Changes in assets and liabilities, net of acquired companies: | ||||||||||
Accounts receivable | (17) | (17) | ||||||||
Inventories – net | (10) | (6) | ||||||||
Other current assets | 16 | 10 | ||||||||
Accounts payable | (15) | (1) | ||||||||
Accrued liabilities | (66) | (75) | ||||||||
Obligations payable under Indemnification Agreements | (7) | (2) | ||||||||
Other | (2) | (2) | ||||||||
Net cash provided by (used for) operating activities | 5 | (74) | ||||||||
Cash flows used for investing activities: | ||||||||||
Expenditures for property, plant, equipment and other intangibles | (19) | (16) | ||||||||
Cash paid for acquisitions, net of cash acquired | (5) | (35) | ||||||||
Net cash used for investing activities | (24) | (51) | ||||||||
Cash flows provided by financing activities: | ||||||||||
Proceeds from long-term debt | 950 | - | ||||||||
Payment of debt facility issuance and modification costs | (21) | - | ||||||||
Net proceeds from revolving credit facility | - | 350 | ||||||||
Repayment of long-term debt | (921) | - | ||||||||
Other | 5 | (1) | ||||||||
Net cash provided by financing activities | 13 | 349 | ||||||||
Effect of foreign exchange rate changes on cash and cash equivalents | (3) | (8) | ||||||||
Net (decrease) increase in cash and cash equivalents | (9) | 216 | ||||||||
Cash and cash equivalents at beginning of period | 517 | 122 | ||||||||
Cash and cash equivalents at end of period | $ | 508 | $ | 338 | ||||||
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, uncertainties, and other factors, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) the duration and severity of the COVID-19 pandemic and the disruption to our business and the global economy caused by it, including (A) its effect on the demand for our products and services, (B) its effect on our and our business partners' supply chains, workforce, liquidity, spending and timing for payments and disbursements, and (C) the impact of potential facility closures and the modified working conditions at our corporate offices, Product & Solutions segment and ADI Global Distribution segment, (2) 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, (3) the likelihood of continued success of our transformation programs and initiatives, and (4) 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, 2020 and other periodic filings we make from time to time with the Securities and Exchange Commission (SEC). You are cautioned not to place undue reliance on these forward-looking statements, such as (i) the outlook regarding second quarter 2021 and full year 2021 and (ii) the impact of the COVID-19 pandemic on our business and operations. 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.
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SOURCE Resideo Technologies, Inc.
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