Resideo(REZI)2024-02-14 22:16Financial Performance - The company reported net revenue of $6,242 million for 2023, a decrease of 2% from $6,370 million in 2022 [226]. - Gross profit for 2023 was $1,696 million, down from $1,766 million in 2022, reflecting a gross margin of approximately 27.2% [226]. - Net income for 2023 was $210 million, a decline of 26% compared to $283 million in 2022, resulting in diluted earnings per share of $1.42 [226]. - Income from operations for 2023 was $547 million, down from $611 million in 2022, representing a decline of 10.5% [298]. - Products and Solutions segment revenue for 2023 was $2,672 million, down from $2,783 million in 2022, reflecting a decline of 4% [298]. - ADI Global Distribution segment revenue for 2023 was $3,570 million, a slight decrease from $3,587 million in 2022 [298]. - Net income for 2023 was $210 million, a decrease of 25.8% from $283 million in 2022 [230]. Cash Flow and Assets - Net cash provided by operating activities increased significantly to $440 million in 2023, compared to $152 million in 2022 [230]. - The company's total assets increased to $6,645 million in 2023 from $6,387 million in 2022, with cash and cash equivalents rising to $636 million [224]. - Cash, cash equivalents, and restricted cash at the end of 2023 totaled $637 million, up from $329 million at the end of 2022 [230]. - Total inventories decreased to $941 million in 2023 from $975 million in 2022, reflecting improved inventory management [247]. Expenses and Liabilities - Operating expenses totaled $1,149 million in 2023, slightly lower than $1,155 million in 2022, with research and development expenses at $109 million [226]. - Interest paid in 2023 was $80 million, an increase from $54 million in 2022, reflecting higher borrowing costs [230]. - The total accrued liabilities as of December 31, 2023, amounted to $608 million, a decrease from $640 million in 2022 [389]. - The company accrued warranty costs based on estimates of future obligations, adjusting provisions to reflect actual experience [257]. Debt and Interest Rates - Long-term debt stood at $1,396 million as of December 31, 2023, with $1,119 million of this debt carrying variable interest rates [215]. - The weighted average interest rate for the A&R Term B Facility increased from 6.78% in 2022 to 7.72% in 2023 [365]. - The aggregate required principal payments on long-term debt for 2024 to 2028 total $1,419 million, with a significant payment of $1,073 million due in 2028 [357]. - The company has exposure to interest rate movements and may enter into interest rate protection agreements to mitigate this risk [385]. Acquisitions and Investments - The company acquired 100% of Sfty AS, a developer of cloud-based services, enhancing its product offerings in smoke, carbon monoxide, and water leak detection [285]. - The company acquired 100% of BTX Technologies, Inc., a distributor of professional audio, video, and broadcast equipment, expanding its distribution capabilities [286]. - Capital expenditures rose to $105 million in 2023, up from $85 million in 2022, indicating increased investment in growth [230]. Pension and Compensation - The benefit obligation for U.S. pension plans decreased from $348 million in 2022 to $234 million in 2023, a reduction of approximately 32.8% [313]. - The actual return on U.S. plan assets for the year ended December 31, 2023, was $21 million, compared to a loss of $62 million in 2022 [314]. - Stock-based compensation expense for 2023 was $43 million, down from $48 million in 2022 [337]. - The number of Performance Stock Units (PSUs) non-vested as of December 31, 2023, was 1,593,866, with an average grant date fair value of $35.80 [342]. Environmental and Indemnification Liabilities - The company has ongoing liability for certain environmental claims, which are part of its ongoing business [406]. - The estimated liability for environmental-related liabilities recorded on the balance sheets is calculated as if the company were responsible for 100% of the environmental-liability payments associated with certain sites [395]. - As of December 31, 2023, total indemnification liabilities amounted to $749 million, an increase from $720 million in 2022 [404]. - The total indemnification liabilities reflect a consistent increase year-over-year, indicating a growing financial obligation [404].