Resideo(REZI)2025-02-20 22:05Financial Performance - In 2024, the company reported net revenue of $6,761 million, an increase of 8.3% from $6,242 million in 2023[240]. - Gross profit for 2024 was $1,901 million, representing a gross margin of approximately 28.1%[240]. - The company’s net income available to common stockholders for 2024 was $91 million, a decrease of 56.7% compared to $210 million in 2023[240]. - Net income for 2024 was $116 million, a decrease of 44.8% compared to $210 million in 2023[244]. - Segment income from operations for Products and Solutions increased to $503 million in 2024 from $446 million in 2023, representing a growth of 12.8%[335]. - ADI Global Distribution's net revenue rose significantly to $4,197 million in 2024, up 17.5% from $3,570 million in 2023[332]. - The total segment income from operations for both segments combined was $698 million in 2024, slightly up from $684 million in 2023[335]. Assets and Liabilities - As of December 31, 2024, total assets increased to $8,199 million from $6,645 million in 2023, reflecting a growth of 23.2%[238]. - The company’s long-term debt rose to $1,983 million in 2024, up from $1,396 million in 2023, indicating a significant increase of 42%[238]. - Total accrued liabilities increased to $717 million in 2024 from $620 million in 2023, with significant components including obligations under indemnification agreements and customer rebate reserves[415]. - The total debt as of December 31, 2024, was $2,015 million, compared to $1,419 million in 2023[409]. Cash Flow and Investments - Cash and cash equivalents at the end of 2024 were $692 million, compared to $636 million in 2023, showing a growth of 8.8%[238]. - Net cash provided by operating activities increased slightly to $444 million in 2024 from $440 million in 2023[244]. - Net cash used in investing activities significantly increased to $(1,409) million in 2024 from $(44) million in 2023, primarily due to acquisitions[244]. - Proceeds from the issuance of long-term debt in 2024 amounted to $1,176 million, compared to no proceeds in 2023[244]. - Total cash, cash equivalents, and restricted cash at the end of 2024 was $693 million, up from $637 million at the end of 2023[244]. Research and Development - Research and development expenses for 2024 were $111 million, slightly up from $109 million in 2023[240]. - Research and development expenses for ADI Global Distribution were $17 million in 2024, reflecting a new investment focus[332]. - The company conducts research and development activities focused on new product development and enhancements to existing products[288]. Acquisitions and Divestitures - The company acquired Snap One Holdings Corp. for an aggregate purchase price of $1.4 billion, enhancing its market presence in smart home and audio-visual sectors[306]. - Snap One contributed $553 million in revenue for the year ended December 31, 2024, with an immaterial impact on operating income[311]. - The company sold the Genesis Cable business for $86 million, recognizing a pre-tax gain of $18 million[313]. - The company completed the acquisition of BTX Technologies, Inc. and Sfty AS in 2023, with no material adjustments reported[317][316]. Stock and Compensation - Stock-based compensation expense for Resideo Technologies was $64 million in 2024, compared to $43 million in 2023 and $48 million in 2022[369]. - The total unrecognized compensation cost related to unvested awards under the Stock Incentive Plan is $86 million, with $68 million for RSUs and $18 million for PSUs[375]. - The Stock Incentive Plan was amended to increase the number of shares available for issuance by 3.5 million shares, totaling 27.8 million shares available as of December 31, 2024[368]. Debt and Interest Rates - An increase in interest rates by 100 basis points would have an approximate $2 million impact on the company's annual interest expense[232]. - The weighted average interest rate for the A&R Term B Facility was 6.13%, down from 7.72% in 2023[397]. - In May 2024, the interest rate margin for the A&R Term B Facility was reduced from 2.25% to 2.00%, and the SOFR floor was reduced from 0.50% to 0%[390]. - In July 2024, the company issued $600 million in Senior Notes due 2032, with a maturity date of July 15, 2032, to repay $596 million of outstanding indebtedness[391]. Pension and Benefits - The funded status of U.S. pension plans showed a deficit of $28 million as of December 31, 2024, compared to a deficit of $37 million in 2023[347]. - The net periodic benefit cost for U.S. plans in 2024 was $4 million, compared to $12 million in 2023, while for non-U.S. plans it was $6 million in 2024, up from $4 million in 2023[349]. - The projected benefit obligation for U.S. plans decreased to $209 million in 2024 from $234 million in 2023, and for non-U.S. plans it decreased to $97 million from $106 million[355]. Environmental Liabilities - Environmental expenses related to operating sites were not material for the years ended December 31, 2024, 2023, and 2022, with liabilities for environmental costs recorded at $22 million for both 2024 and 2023[417]. - The Reimbursement Agreement obligates the company to make cash payments equal to 90% of certain Honeywell environmental-liability payments, with a cap of $140 million per year[419].