Resideo Reports Upbeat Q1 Performance on Strong Sales Volumes
The security segment demonstrated strong growth, led by the launch of Resideo’s next generation smart home residential platform.
AUSTIN, Texas — Resideo Technologies (NYSE: REZI) on May 8 reported first-quarter earnings of $48 million on net revenue of $1.22 billion, a 4% increase compared to the same period the year prior.
The company said earnings, adjusted for non-recurring gains, were 29 cents per share.
Adjusted EBITDA was $92 million — besting Wall Street estimates by $6 million — which the company attributed primarily to cost management efforts. EBITDA was also positively driven by increased sales volumes, specifically the introduction of the Honeywell Home Pro Series Security and Smart Home Platform, and volume increase in connected products.
During an earnings call with inventors, Resideo President and CEO Mike Nefkens billed the new platform as a comprehensive portfolio that redefines the traditional pro security industry.
“The platform delivers entry-level security protection and scales to a fully integrated smart home security solution. It features new self-contained wireless panels, advanced encrypted sensing and offers dealers one system for easy installation and support,” he said.
“The expanded line of sensors and life-safety devices are interchangeable across the entire platform to help reduce inventory and training costs and user replaceable parts provide added convenience and help to reduce truck loads for our dealers,” Nefkins continued.
Resideo reported Products & Solutions revenue of $523 million on a GAAP basis for a 5% increase compared to the same period the year prior. The company said new leadership for the global integrated supply chain drove improvements that allowed it to begin overcoming a number of spin headwinds in manufacturing.
However, the Products & Solutions segment posted a 31% year-over-year decrease on adjusted EBITDA revenue of $81 million, which the company attributed to new products launch mix headwinds, combined with higher-than-planned product and solution overhead costs.
During the quarter, Resideo acquired Buoy Labs for undisclosed terms, which will enable the company to expand in water-leak protection to increase its whole home solutions and recurring revenue potential.
The Buoy Labs solution integrates smart software and hardware that can identify potential leaks and intervene to prevent them through its subscription-based app services, according to an announcement.
The ADI Global Distribution segment had revenue of $665 million for the quarter, a 4% improvement on a GAAP basis. Segment performance was said to be driven by solid organic growth in the Americas and EMEA regions, with an adjusted EBITDA increase of 12%.
ADI achieved growth in the quarter driven by the security and life safety product categories, as well as through expansion of its professional A/V growth initiative. ADI also added to its product offering, notably announcing a distribution agreement with Paxton, a leading access control provider. The company also claimed ADI is winning high-value new business among security integrators throughout North America.
The company reiterated full-year 2019 guidance for revenue growth of 2% to 5% and adjusted EBITDA ranging between $410 million to $430 million.
Resideo shares have increased 11% since the beginning of the year.
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