AUSTIN, Texas, Jan. 27, 2021 /PRNewswire/ -- Resideo
Technologies, Inc. (NYSE: REZI), a leading global provider of home
comfort and security solutions, today announced the company has
launched a process to refinance its senior secured credit
facilities. The strategic refinancing is intended to improve
financial flexibility, including by extending the company's debt
maturities. In connection with the announcement of the launch of
the debt refinancing process, Resideo is releasing preliminary
fourth quarter 2020 financial results.
Debt Refinancing
Resideo has launched a process to refinance its outstanding
senior secured term loan A and term loan B with the net proceeds of
a new 7-year term loan B. The company also expects to enter into a
new 5-year, $500 million revolving
credit facility. In addition, the company intends to redeem up to
$140 million of its outstanding
senior unsecured notes pursuant to the terms of the underlying
indenture. The objectives of the refinancing are to increase the
company's financial flexibility and extend its weighted average
debt maturity. Resideo's net debt position at December 31, 2020 was approximately $645 million.
"The strategic refinancing is another proactive step to ensure
our capital structure is well positioned to take advantage of the
opportunities for growth and investment we see across our
businesses," commented Chief Financial Officer Tony Trunzo. "Coupled with our improved
financial performance, strong fourth quarter cash generation and
recently executed equity offering, these debt refinancing actions
will allow us to begin 2021 with a stronger balance sheet and
meaningfully increased financial flexibility."
Terms of the potential refinancing will be disclosed upon the
completion of the transaction. The proposed refinancing is subject
to market and other conditions and the approval of our Board of
Directors, and there can be no assurance that it will be completed
on favorable terms or at all.
Preliminary Fourth Quarter 2020 Results
In connection with its launch of the refinancing process,
Resideo is releasing preliminary fourth quarter 2020 financial
results that are above the high end of the previous outlook range.
The company intends to release full results for the fourth quarter
and full year 2020 on Feb. 25, 2021
before the market open. Based on currently available information,
the company estimates the following results for the quarter ended
December 31, 2020:
- Net revenue of approximately $1.50
billion, up approximately 15% from the fourth quarter
2019
- Operating profit of approximately $152
million
- Adjusted EBITDA of approximately $212
million
"We experienced solid demand trends in the fourth quarter across
both our Products & Solutions and ADI Global Distribution
segments," commented Jay Geldmacher,
Resideo's President and CEO. "Our performance in the quarter
exceeded our previous expectations and reflects resilient market
conditions and highlights the ongoing progress in our
transformation efforts. We look forward to sharing more details
when we report our full results in late February."
The estimated financial results described above are preliminary,
unaudited and represent the most recent current information
available to Resideo management. Resideo's actual results may
differ from these estimated financial results, including due to the
completion of its financial closing procedures, final adjustments
and other developments that may arise between the date of this
press release and the time that financial results for the fourth
quarter of 2020 are finalized, and such differences may be
material.
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 more than 200 stocking locations around the world.
For more information about Resideo, please visit
www.resideo.com.
Contacts:
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Investors:
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Media:
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Jason
Willey
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Oliver
Clark
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investorrelations@resideo.com
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oliver.clark@resideo.com
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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) our ability
to complete the refinancing of our senior secured credit
facilities, enter into a new revolving credit facility, and redeem
a portion of our unsecured notes, and whether the terms and
conditions of any such transaction will be favorable to Resideo,
(2) our actual results for the fourth quarter ended December 31, 2020 differing from the estimated
financial results included in this press release, including due to
the completion of our financial closing procedures, final
adjustments and other developments that may arise between the date
of this press release and the time that financial results for the
fourth quarter of 2020 are finalized, and (3) 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, 2019, our Quarterly Report on Form
10-Q for the quarter ended September 26,
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. 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.
Non-GAAP Financial Measures
This press release includes an estimate of Adjusted EBITDA which
is not compliant with generally accepted accounting principles in
the United States (GAAP). Adjusted
EBITDA is adjusted for certain items as reflected in the Company's
prior earnings releases and may not be directly comparable to
similar measures used by other companies in our industry, as other
companies may define such measures differently. Management believes
that, when considered together with reported amounts, this measure
is useful to investors and management in understanding our ongoing
operations and in analysis of ongoing operating trends and provides
useful additional information relating to our operations and
financial condition. This metric should be considered in addition
to, and not as a replacement for, the most comparable GAAP measure.
We believe Adjusted EBITDA is a relevant indicator of operating
performance. It should be read in connection with our financial
statements presented in accordance with GAAP.
A reconciliation of Adjusted EBITDA to the corresponding GAAP
measure (GAAP net income) is not available on a forward-looking
basis without unreasonable efforts because Resideo is currently
working through the accounting close process for the quarter ended
December 31, 2020 and an estimate of
GAAP net income is not yet available. The company expects to
provide GAAP net income for the quarter ended December 31, 2020, and the corresponding
reconciliation to Adjusted EBITDA, with its full results
announcement, expected on February
25, 2021.
Adjusted EBITDA (Non-GAAP) was previously presented as Adjusted
EBITDA excluding Honeywell reimbursement agreement payments
(Non-GAAP). The change in presentation was made beginning with our
first quarter 2020 results to more accurately reflect the
underlying performance indicators of the business in Adjusted
EBITDA. The Honeywell reimbursement agreement cash payments are a
liquidity measure and will be included within the cash flow and
liquidity discussions. Management believes that this presentation
more clearly presents underlying operations as the amounts related
to the Honeywell reimbursement agreement are recorded in net income
are based on when such amounts become probable and reasonably
estimable.
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SOURCE Resideo Technologies, Inc.