RESIDEO TECHNOLOGIES, INC.
For the period ended Mar 29, 2025. Filed May 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 29, 2025 · Filed May 6, 2025
REZI$19.40-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-28; filed 2024-11-07.
0001740332-24-000059
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-29; filed 2025-05-06.
0001740332-25-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 130 previous paragraphs and 114 current paragraphs.
64 unchanged; 26 reworded; 24 added; 38 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
•uncertainty in the development, deployment, and the use of artificial intelligence in our products and services, as well as our business interests more broadly;
Current report
Our ADI Global Distribution segment is a leading wholesale distributor of low-voltage products including security, fire, and access control, and participates significantly in the broader related markets of smart home, residential audio-visual, professional audio-visual, power management, networking, data communications, wire and cable, enterprise connectivity, and structured wiring products. In addition, ADI Global Distribution partners with a network of contract manufacturers and joint-development suppliers to produce a full range of proprietary smart-home technology products and solutions under our own exclusive brands. These products may be found in residential and commercial settings and utilize proprietary software platforms such as Control4 and OvrC for project commissioning and remote monitoring.
Current report
•Gross profit margin of 28.9%, compared to 26.9% in the first quarter of 2024
Current report
For the remainder of 2025, we anticipate executing our business operations against a highly dynamic global macroeconomic environment. The vast majority of costs associated with the products that the Products and Solutions segment sells in the U.S. are incurred in Mexico. Those Products and Solutions costs, along with the ADI Global Distribution segment product costs incurred in Mexico, are currently exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA). We intend to take actions to essentially mitigate the cost impact of any tariffs, which include increasing prices in a phased approach for costs not covered under the USMCA. Product costs not covered under the USMCA are primarily costs for products imported from China by our ADI Distribution segment. Trade dynamics are shifting continuously and could adversely affect our business operations and the broader macroeconomic environment. We are monitoring these dynamics very closely and will make adjustments in our business operation execution, as appropriate. Based on the aforementioned, we reaffirm our 2025 revenue outlook to be up low-to-mid single-digits year-over-year.
Current report
Net revenue for the three months ended March 29, 2025 was $1,770 million, an increase of $284 million, or 19.1%, from the same period in 2024, primarily due to $227 million of revenue from the acquisition of Snap One, $51 million from higher sales volume, and $20 million from price and mix. The increase was partially offset by $13 million in unfavorable foreign currency exchange rates.
Current report
Gross profit for three months ended March 29, 2025 was $511 million, an increase of $111 million, or 27.8%, as compared to the same period in 2024, as shown in the above waterfall.
Current report
Research and development expenses for the three months ended March 29, 2025 were $35 million, an increase of $10 million, or 40.0%, as compared to the same period in 2024. The increase wasdriven by $8 million in the ADI Global Distribution segment and $2 million in the Product and Solutions segment related to the inclusion of Snap One and planned investments that we believe will drive future growth.
Current report
Selling, general and administrative expenses for the three months ended March 29, 2025 were $306 million, an increase of $75 million, or 32.5%, as compared to the same period in 2024. The increase was primarily driven by a $71 million increase at the ADI Global Distribution segment due to the inclusion of Snap One and incremental operating costs including payroll and benefits, rent, marketing, IT, and travel expense.
Current report
Restructuring Expenses
Current report
Restructuring expenses for the three months ended March 29, 2025, were $4 million, a decrease of $3 million, or 42.9%, as compared to the same period in 2024. Restructuring expenses primarily relate to employee termination costs.
Current report
Other expenses, net for the three months ended March 29, 2025 were $96 million, an increase of $54 million, or 128.6%, as compared to the same period in 2024. The increase was driven by $47 million of incremental expenses related to the Reimbursement Agreement, and $8 million in unfavorable foreign currency exchange rates.
Current report
Interest expense, net for the three months ended March 29, 2025 was $25 million, an increase of $12 million, or 92.3%, as compared to the same period in 2024. The increase was due to an increase in our long-term debt resulting in $5 million of higher interest expense, a decrease of $4 million in interest rate derivative related receipts due to interest rate fluctuations and a lower aggregate notional due to swap maturities, and lower interest income of $3 million as a result of lower interest rates and lower cash balances.
Current report
Products and Solutions income from opera tions for the three months ended March 29, 2025 was $136 million, an increase of $24 million, or 21.4%, as compared to the same period in 2024. Theincrease isprimarily due to higher volumes of $10 million, net favorable price and mix shift of $9 million, lower restructuring costs of $6 million, and lower material, freight, and other manufacturing costs of $3 million. The increase was partially offset by $4 million of higher selling, general and administrative expenses, and $2 million of incremental research and development expenses related to planned investments that we believe will drive future growth.
Current report
ADI Global Distribution net revenuefor the three months ended March 29, 2025 was $1,121 million, an increase of $255 million, or 29.4%, as compared to the same period in 2024. The increase was primarily driven by $227 million of revenue from the acquisition of Snap One and $35 million from higher volumes. The increase was partially offset by $5 million from unfavorable foreign currency impacts, and a net unfavorable price and mix shift of $1 million.
Current report
ADI Global Distribution income from operationsfor the three months ended March 29, 2025 was $34 million, a decrease of $15 million, or 30.6%, as compared to the same period in 2024. The decrease was primarily due to $101 million increase in operating expenses, including $71 million of selling, general and administrative expenses, $20 million of amortization, and $8 million of research and development cost. These increases were primarily due to the inclusion of Snap One, incremental operating costs at the segment, and addition planned investment that we believe will drive future growth. This decrease was partially offset by an $86 million increase in gross profit driven by the inclusion of Snap One and higher volumes.
Current report
Corporate costs for the three months ended March 29, 2025 were $34 million, an increase of $1 million, or 3.0%, as compared to the same period in 2024. The increase was due to $1 million of restructuring costs.
Current report
Senior Notes
Current report
In August 2021, we issued $300 million in principal amount of 4.000% Senior Notes due in 2029.
Current report
The Senior Notes due 2029 and Senior Notes due 2032 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries and rank equally with all of Resideo’s senior unsecured debt and senior to all of Resideo’s subordinated debt.
Current report
Covenant Compliance
Current report
As of March 29, 2025, we were in compliance with all covenants related to the A&R Credit Agreement, Senior Notes due 2029, and Senior Notes due 2032.
Current report
Net cash used for operating activities for the three months ended March 29, 2025 was $65 million. Compared to the three months ended March 30, 2024, net cash provided by operating activities decreased $67 million. The decrease was primarily driven by a $37 million decrease in net income and a $54 million decrease in assets and liabilities, partially offset by a $23 million increase in depreciation expense. Outflows related to changes in assets and liabilities include increased uses of $57 million in accounts payable including early payments to receive supplier discounts, an increase of $46 million in payables related to the Indemnification Agreements, an increase of $47 million in accounts receivables due to higher sales, and a $10 million decrease in inventory related to supply chain optimization.
Current report
Net cash used for financing activities for the three months ended March 29, 2025 was $22 million. Compared to the three months ended March 30, 2024, net cash used for financing activities increased $14 million, primarily due to an increase in preferred stock dividend payments of $9 million and an $8 million increase for the acquisition of treasury shares to cover stock award tax withholding, partially offset by lower debt repayments of $3 million.
Current report
Environmental Liability
Removed paragraphs (38)
Previous report
•our ability to borrow funds and access capital markets in light of the terms of our debt documents or otherwise;
Previous report
•provisions in our governing documents discouraging takeovers;
Previous report
Our ADI Global Distribution business is a leading wholesale distributor of low-voltage security products including access control, fire detection, fire suppression, security, and video products and participates significantly in the broader related markets of audio, communications, data communications, networking, power, residential and professional audio-visual solutions, smart-living, software solutions, and wire and cable. Our ADI Global Distribution strategy is focused on growth in our omni-channel presence, expansion into adjacent markets, and continued enhancements to our value-add services to support our professional installers’ efficiency and profitability.
Previous report
For the fourth quarter of 2024, we anticipate executing our business against a mixed global macro-economic environment. There are a number of positive indicators, such as an improving interest rate environment and an uptick in new home sales in the United States. There are, however, some negative indicators, such as continued softness in existing home sales in the United States and market weakness in EMEA.
Previous report
Net revenue for the three months ended September 28, 2024 was $1,828 million, an increase of $274 million, or 17.6%, from the same period in 2023, primarily due to $251 million of revenue from the acquisition of Snap One and higher sales volume of $58 million. The increase was partially offset by $32 million of lower sales from the divestiture of the Genesis business during the fourth quarter of 2023, and $3 million of unfavorable price impacts driven by the ADI Global Distribution segment.
Previous report
Net revenue for the nine months ended September 28, 2024 was $4,903 million an increase of $198 million, or 4.2%, from the same period in 2023, driven primarily by $298 million of revenue from the acquisition of Snap One and net volume increases of $5 million driven by the ADI Global Distribution segment. The increase was partially offset by $100 million of lower sales from the divestiture of the Genesis business during the fourth quarter of 2023, and unfavorable foreign currency fluctuations of $3 million.
Previous report
Gross profit of $524 million increased $107 million and gross margin of 28.7% was up 180 basis points (“bps”) as compared to the same period in 2023. The increase in gross margin was driven by lower manufacturing costs of 140 bps, favorable impacts from acquisitions, net of the Genesis divestiture of 120 bps, and higher pricing of 30 bps, which was partially offset by the impact from lower volumes of 50 bps and unfavorable margin mix shift of 60 bps.
Previous report
Research and development expenses for the three months ended September 28, 2024 of $23 million were down $5 million compared with the same period in 2023. The decrease was primarily driven by lower third-party spend and personnel costs due to optimization efforts and an enhanced focus on strategic new product programs.
Previous report
Research and development expenses for the nine months ended September 28, 2024 of $69 million were down $15 million compared with the same period in 2023. The decrease was primarily driven by lower third-party spend and personnel costs due to optimization efforts and an enhanced focus on strategic new product programs.
Previous report
Selling, general and administrative expenses for the three months ended September 28, 2024 were $317 million, an increase of $84 million, or 36.1%, as compared to the same period in 2023. The increase was primarily driven by $76 million of incremental expenses from the Snap One acquisition, which includes operating expenses and integration costs. Further, there was an increase in bad debt expense of $7 million and additional IT costs of $2 million at the Product and Solutions segment. The increase was partially offset by lower expenses of $2 million from the divestiture of the Genesis business during the fourth quarter of 2023.
Previous report
Selling, general and administrative expenses for the nine months ended September 28, 2024 were $828 million, an increase of $109 million, or 15.2%, as compared to the same period in 2023. The increase was driven by $122 million of incremental expenses from the Snap One acquisition, which includes operating expenses and acquisition costs, and $8 million of higher labor costs. The increase was partially offset by lower employee expenses of $10 million from restructuring efforts, and lower expenses of $8 million from the divestiture of the Genesis business during the fourth quarter of 2023.
Previous report
Intangible asset amortization increased $23 million for the nine months ended September 28, 2024 compared with the same period in 2023. The increase was due to additional amortization expense associated with the new intangibles from the Snap One acquisition
Previous report
Restructuring, Impairment and Extinguishment Expenses
Previous report
For the three months ended September 28, 2024, we recorded a $1 million debt extinguishment loss related to the repayment of a portion of the principal amount under the Company’s A&R Term B Facility using the proceeds from the issuance of the Senior Notes due 2032. Further, during the nine months ended September 28, 2024, we recorded $5 million in impairment expense related to an equity security and $6 million in debt extinguishment loss in connection with the Snap One acquisition financing. In addition, we continue to take actions to align our cost structure with market conditions. The intent of these actions is to lower costs, increase margins, and position us for long-term growth. For the three months ended September 28, 2024, we incurred $28 million of restructuring expenses compared to $38 million for the three months ended September 30, 2023. We incurred $35 million and $42 million of restructuring expenses for the nine months ended September 28, 2024 and September 30, 2023, respectively. Restructuring expenses primarily related to employee termination costs.
Previous report
Other expenses, net for the three months ended September 28, 2024 were $55 million, a decrease of $1 million, or 1.8%, as compared to the same period in 2023. The decrease was driven primarily by favorable foreign currency impacts of $4 million and reduced pension costs of $3 million. The decrease was partially offset by a loss on sale of certain assets and related liabilities of $3 million during the current year at the Product and Solutions segment, and an increase of $2 million related to the Reimbursement Agreement expenses.
Previous report
Other expenses, net for the nine months ended September 28, 2024 were $145 million, an increase of $7 million, or 5.1%, as compared to the same period in 2023. The increase was primarily driven by loss on sale of certain assets and related liabilities of $8 million during the current year at the Product and Solutions segment, and $7 million of additional Reimbursement Agreement expenses. The increase was partially offset by reduced pension costs of $5 million and gain of $4 million from the sale of an investment.
Previous report
Interest expense, net increased $11 million for the three months ended September 28, 2024 as compared to the same period in 2023, due to an increase in our long-term debt resulting in $10 million of higher interest expense. This amount was partially offset by a $1 million decrease in interest expense as a result of a decrease in weighted average interest rates on our debt.
Previous report
Interest expense, net increased $5 million for the nine months ended September 28, 2024 due to an increase in our long-term debt resulting in $11 million of higher interest expense and $1 million higher interest expense relate to an increase in interest rates on our weighted average debt. This amount was partially offset by $7 million higher interest income as a result of effectively investing excess cash.
Previous report
Segment Results of Operations
Previous report
On January 1, 2024, certain corporate functions were decentralized into the operating segments aligning with the business strategy. For the three and nine months ended September 30, 2023, $13 million and $38 million of corporate expenses have been reclassified into the Products and Solutions segment while $8 million and $24 million of corporate expenses have been reclassified into the ADI Global Distribution segment, respectively, decreasing reported Income from Operations to conform to the current year presentation.
Previous report
Products and Solutions net revenue decreased $9 million, or 1%, as compared to the same period in 2023, primarily due to $32 million from the divestiture of the Genesis business during the fourth quarter of 2023 and unfavorable foreign currency fluctuations of $1 million. The decrease was partially offset by volume and price increases of $18 million and $6 million, respectively.
Previous report
Income from opera tions increased $34 million, or 36%, from the same period in 2023, primarily due to lower material, freight and other manufacturing costs of $24 million, lower restructuring costs of $18 million, and favorable pricing impact of $6 million. Partially offsetting the favorable impacts to income from operations were higher selling, general and administrative expenses of $6 million, $5 million from the divestiture of the Genesis business during the fourth quarter of 2023, and unfavorable mix of $3 million.
Previous report
The chart below presents net revenue and income from operations for the nine months ended September 28, 2024 and September 30, 2023.
Previous report
Income from operations increased $56 million, or 18%, from the same period in 2023, primarily due to lower material, freight and other manufacturing costs of $64 million, a favorable pricing impact of $24 million, lower restructuring expenses of $15 million, lower selling, general and administrative expenses of $13 million, and lower research and development expenses of $4 million. Partially offsetting the favorable impacts to income from operations was unfavorable mix of $41 million from mix shifts to lower priced products, impact from the divestiture of the Genesis business during the fourth quarter of 2023 of $12 million, and lower volumes of $11 million.
Previous report
ADI Global Distribution net revenue increased $283 million, or 31.4%, as compared to the same period in 2023. The increase was driven by $251 million of revenue from the acquisition of Snap One and $41 million from higher volumes. The increase was partially offset byunfavorable impacts from the decrease in price of $9 million.
Previous report
Income from operations decreased $16 million, or 31%, as compared to the same period in 2023. The decrease was primarily due to unfavorable sales mix of $7 million, incremental operating loss of $8 million from the acquisition of Snap One, higher restructuring costs of $5 million, higher operational costs of $2 million, and integration costs of $2 million. The decrease was partially offset by $7 million from higher volumes.
Previous report
The chart below presents net revenue and income from operations for the nine months ended September 28, 2024 and September 30, 2023.
Previous report
ADI Global Distribution net revenue increased by $292 million, or 10.8%, as compared to the same period in 2023, due to $298 million of revenue from the acquisition of Snap One, $15 million from higher volumes, andfavorable foreign currency fluctuations of $4 million. The increase was partially offset by adecrease in price of $23 million.
Previous report
Income from operations decreased $40 million, or 21%, due to an unfavorable sales mix of $23 million, higher operational costs of $7 million, incremental operating loss of $6 million from the acquisition of Snap One , integration costs of $2 million, and higher restructuring costs of $4 million.
Previous report
Corporate costs for the three months ended September 28, 2024 of $38 million and $36 million for the comparable period. The increase in Corporate costs was primarily driven by $1 million of debt extinguishment costs incurred during the three months ended September 30, 2024.
Previous report
Corporate costs for the nine months ended September 28, 2024 were $141 million and $101 million for the comparable period. The increase in Corporate costs was driven by $32 million of Snap One acquisition costs, $7 million of debt extinguishment costs, and a $5 million impairment of an equity security. These increases are partially offset by lower personnel expenses of $4 million.
Previous report
In June 2024, we completed the acquisition of Snap One. This was partially financed with $600 million in incremental term loans under our A&R Term B Facility, with a maturity date of May 14, 2031. Additionally, we issued Preferred Stock on
Previous report
June 14, 2024 for $500 million to partially finance the Snap One acquisition. The remainder of the cash purchase price was financed with our existing cash.
Previous report
In July 2024, we issued $600 million in aggregate principal of 6.500% Notes due 2032. The Senior Notes due 2032 were used to repay $596 million principal amount outstanding indebtedness under the Company’s A&R Term B Facility.
Previous report
In June 2024, we obtained $600 million in incremental term loans under our A&R Term B Facility to partially finance our acquisition of Snap One. We also extended the term of our A&R Revolving Credit Facility for a new five-year term.
Previous report
Net cash provided by operating activities for the nine months ended September 28, 2024 was $241 million. Compared to the nine months ended September 30, 2023, net cash provided by operating activities increased $64 million. The increase was primarily driven by improved working capital dynamics and cash earnings.
Previous report
Net cash provided by financing activities for the nine months ended September 28, 2024 was $1,043 million. Compared to the nine months ended September 30, 2023, net cash used for financing activities increased $1,090 million, primarily due to an increase of $1,176 million incremental term loan borrowings under our A&R Term B Facility, and the issuance of Preferred Stock in the amount of $482 million, each related to the Snap One acquisition. This increase was partially offset by an increase in debt repayments of $593 million as well as a decrease in common stock repurchases of $27 million.
Previous report
Environmental Liability Payments
Reworded paragraphs (26)
Previous wording
•risks associated with the Reimbursement Agreement, the other agreements we entered into with Honeywell in connection with the Spin-Off, and our relationships with Honeywell, including our reliance on Honeywell for the Honeywell Home trademark;
Current wording
•risks associated with the Reimbursement Agreement and our relationships with Honeywell, including our reliance on Honeywell for the Honeywell Home trademark;
Previous wording
•our ability to recruit and retain qualified personnel;
Current wording
•our ability to recruit and retain qualified personnel and to recruit a new CEO given the announced intended retirement of our current CEO;
Previous wording
•the CD&R Stockholder's interest in and influence over us that may diverge from, or event conflict with, interests of the holders of our common stock, and the reduction in the relative voting power of holders of our common stock resulting from the issuance of preferred stock;
Current wording
•the CD&R Stockholder’s interest in and influence over us that may diverge from, or even conflict with, interests of the holders of our common stock, and the reduction in the relative voting power of holders of our common stock resulting from the issuance of preferred stock;
Previous wording
•other risks detailed under the caption “Risk Factors” in this Quarterly Report, in Part I, Item 1A, in our 2023 Annual Report on Form 10-K, and other filings we make with the SEC.
Current wording
•other risks detailed under the caption “Risk Factors” in this Quarterly Report, in Part II, Item 1A, and certain factors discussed elsewhere in our 2024 Annual Report on Form 10-K, and other filings we make with the SEC.
Previous wording
These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Even if our results of operations, financial condition and liquidity and the development of the industries in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.
Current wording
Other than as set forth below in Part II, Item lA, captioned “Risk Factors”, there have been no material changes to the risk factors described in our 2024 Annual Report on Form 10-K. These risks could cause actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Even if our results of operations, financial condition, and liquidity, and the development of the industries in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.
Previous wording
We are a leading global manufacturer and distributor of technology-driven sensing and controls products and solutions that help homeowners and businesses stay connected and in control of their comfort, security and energy use. We are a leader in the home heating, ventilation and air conditioning controls markets, smoke and carbon monoxide detection home safety and fire suppression products, and security markets. We have a global footprint serving commercial and residential end-markets. We manage our business operations through two operating segments, Products and Solutions and ADI Global Distribution. The Products and Solutions operating segment, consistent with our industry, has a higher gross and operating profit profile in comparison to the ADI Global Distribution operating segment. In the second quarter of 2024, we expanded the business through the acquisition of Snap One, which has been incorporated into the ADI Global Distribution segment. The acquisition expands our distribution into and reach with smart-living products, services, and software.
Current wording
We are a leading global manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions that help homeowners and businesses stay connected and in control of their comfort, security, energy use, and smart living. We are a leader in key product markets including home heating, ventilation and air conditioning controls, smoke and carbon monoxide detection home safety and fire suppression, and security. Our global footprint serves residential and commercial end-markets. Our solutions and services can be found in over 150 million residential and commercial spaces globally, with tens of millions of new devices sold annually. We manage our business operations through two business segments, Products and Solutions and ADI Global Distribution.
Previous wording
Our Products and Solutions operating segment offerings include temperature and humidity control, energy products and solutions, water and air solutions, smoke and carbon monoxide detection home safety products, security panels, sensors, peripherals, communications devices, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software.
Current wording
Our Products and Solutions segment offerings include temperature and humidity control, water and air solutions, smoke and carbon monoxide detection home safety products, residential and small business security products, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software. We also sell components to manufacturers of water heaters, heat pumps and boilers.
Previous wording
Our financial performance is influenced by macroeconomic factors underlying end user demand such as repair and remodeling activity, residential and non-residential construction, new and existing home sales, employment rates, interest rates and bank lending standards, and supply chain dynamics that can be influenced by geopolitics. The ongoing uncertainty and volatility in the global macroeconomic conditions have affected and could continue to affect our visibility toward future performance. While supply chain and logistics continue to normalize over 2024, customer demand continues to moderate as uncertainties remain including the potential for changes in inflation and interest rates, increased labor costs, reduced consumer spending due to softening labor markets, elevated mortgage rates, unfavorable foreign currency impacts from a stronger U.S. dollar, shift to cleaner energy, and potential market and other disruption from the ongoing conflict between Russia and Ukraine as well as the Middle East crisis.
Current wording
Our financial performance is influenced by macroeconomic factors underlying end user demand such as repair and remodeling activity, residential and non-residential construction, new and existing home sales, employment rates, interest rates and bank lending standards, and supply chain dynamics that can be influenced by geopolitics. The ongoing uncertainty and volatility in the global macroeconomic environment have affected, and could continue to affect, our visibility toward future performance. Uncertainties remain including the potential for changes in inflation and interest rates, tariffs, increased labor costs, reduced consumer spending due to softening labor markets, elevated mortgage rates, shifts in energy policies, and potential market and other disruption from the ongoing conflict between Russia and Ukraine as well as the Middle East crisis.
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•Net revenue of $1.83 billion, up 17.6% from $1.55 billion in the third quarter of 2023
Current wording
•Net revenue of $1.77 billion, up 19.1% from $1.49 billion in the first quarter of 2024
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•Income from operations of $126 million, or 6.9% of revenue, compared to $109 million, or 7.0% of revenue in thethird quarter of 2023
Current wording
•Income from operationsof $136 million, or 7.7% of revenue, compared to $128 million, or 8.6% of revenue in thefirst quarter of 2024
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•Fully diluted earnings per common share of $0.07, compared to $0.14 per common share in thethird quarter of 2023
Current wording
•Fully diluted loss per common share of $0.02, compared to $0.29 diluted earnings per common share in thefirst quarter of 2024
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•Cash Flow From Operations of $147 million in the third quarter of 2024, compared to $60 million in the third quarter of 2023
Current wording
•Cash used in operations was $65 million in the first quarter of 2025, compared to cash flow from operations of $2 million in the first quarter of 2024
Previous wording
Gross profit of $1,371 million increased $98 million and gross margin of 28.0% was up 90 basis points (“bps”) as compared to the same period in 2023. The increase in gross margin was driven by lower manufacturing costs of 140 bps, favorable impacts from acquisitions, net of Genesis divestiture of 70 bps, and higher pricing of 50 bps, which was partially offset by unfavorable margin mix shift of 130 bps and the impact from lower volumes of 20 bps.
Current wording
Gross margin rate for the three months ended March 29, 2025 was 28.9%, an increase of 200 basis points (“bps”) as compared to the same period in 2024. The increasewas primarily driven by favorable impacts from the acquisition of Snap One of 140 bps, lower manufacturing costs of 20 bps, higher volume of 20 bps, and net favorable price and mix shift of 10 bps.
Previous wording
Intangible asset amortization increased $20 million for the three months ended September 28, 2024 compared with the same period in 2023. The increase was due to additional amortization expense associated with the new intangibles from the Snap One acquisition.
Current wording
Intangible asset amortization for the three months ended March 29, 2025 was $30 million, an increase of $21 million, or 233.3%, as compared with the same period in 2024. Theincrease was primarily due to additional amortization expense of $19 million associated with the new intangibles from the acquisition of Snap One.
Previous wording
Income tax expense decreased by $1 million for the nine months ended September 28, 2024 compared to the same period in 2023. The effective income tax rate increased by 750 bps for the nine months ended September 28, 2024 compared to the same period in 2023. The changes are primarily driven by lower income before taxes, the mix of earnings across the jurisdictions in which we operate, relatively fixed non-deductible expenses, and U.S. taxation of foreign earnings.
Current wording
Income tax expense for the three months ended March 29, 2025 was $9 million, a decrease of $21 million, or 70.0%, as compared to the same period in 2024. The decrease was primarily driven by a decrease in income before taxes, partially offset by an increase in effective tax rate. The effective income tax rate increased by 1,890 bps, primarily driven by the mix of earnings across the jurisdictions in which we operate, decreased income before taxes with relatively fixed non-deductible expenses, U.S. taxation of foreign earnings, and discrete items.
Previous wording
Products and Solutions net revenue decreased $94 million, or 4.7%, as compared to the same period in 2023, primarily due to $100 million from the divestiture of the Genesis business during the fourth quarter of 2023, lower sales volume of $10 million and unfavorable foreign currency fluctuations of $7 million. The decrease was partially offset by price increases of $24 million.
Current wording
Products and Solutions net revenue for the three months ended March 29, 2025 was $649 million, anincrease of $29 million, or 4.7%, as compared to the same period in 2024. The increase is due to a $21 million favorable impact from price and mix, and $16 million from higher volumes. The increase was partially offset by $8 million in unfavorable foreign currency exchange rates.
Previous wording
As of September 28, 2024, total cash and cash equivalents were $531 million, of which 44% were held by foreign subsidiaries. Our liquidity is primarily dependent on our ability to continue to generate positive cash flows from operations, supplemented by external sources of capital, as needed. Additional liquidity may also be provided through access to the capital markets and our $500 million A&R Revolving Credit Facility.
Current wording
As of March 29, 2025, total cash and cash equivalents were $577 million, of which 31% were held by foreign subsidiaries. Our liquidity is primarily dependent on our ability to continue to generate positive cash flows from operations, supplemented by external sources of capital, as needed. Additional liquidity may also be provided through access to the capital markets and our A&R Revolving Credit Facility in an aggregate principal amount of $500 million.
Previous wording
As of September 28, 2024, we had $1,989 million of net long-term debt outstanding under our A&R Credit Agreement, Senior Notes due 2029, and Senior Notes due 2032, of which $6 million is due in the next 12 months. We have entered into certain interest rate swap agreements to effectively convert a portion of our variable-rate debt to fixed-rate debt. Additionally, as part of our acquisition of Snap One, we acquired an interest rate cap with a notional of $345 million and a strike rate of 4.79%, which effectively caps SOFR on the notional amount at that rate.
Current wording
As of March 29, 2025, we had $1,983 million of net long-term debt outstanding under our A&R Credit Agreement, Senior Notes due 2029, and Senior Notes due 2032, and $8 million is due in the next 12 months. We have also entered into certain interest rate swap agreements based on Term SOFR. These interest rate swap agreements effectively convert a portion of our variable-rate debt to fixed rate debt. Additionally, we assumed an interest rate cap in 2024 which effectively caps the interest on a portion of our variable rate debt with a notional amount of $344 million and a strike rate of 4.79%.
Previous wording
In July 2024, we issued $600 million in aggregate principal of 6.500% Senior Notes due 2032. The Senior Notes due 2032 were used to repay $596 million principal amount outstanding indebtedness under the Company’s A&R Term B Facility.
Current wording
In July 2024, we issued $600 million in aggregate principal of 6.500% Senior Notes due 2032.
Previous wording
Refer to Note 12. Long-Term Debt and Note 13. Derivative Financial Instrumentsto the Unaudited Consolidated Financial Statements for a description of our debt obligations and the timing of future principal and interest payments, including impacts from our Swap Agreements.
Current wording
Refer to Note 12. Long-Term Debt and Note 13. Derivative Financial Instrumentsto the Unaudited Consolidated Financial Statements for a description of our debt obligations and the timing of future principal and interest payments, including impacts from our interest rate derivatives.
Previous wording
On August 3, 2023, we announced that our Board of Directors authorized a share repurchase program for the repurchase of up to $150 million of our common stock over an unlimited time period. During the three months ended September 28, 2024, we did not make any common share repurchases. As of September 28, 2024, we had $108 million of authorized repurchases remaining under the Share Repurchase Program.
Current wording
In August 2023, we announced that our Board of Directors authorized a share repurchase program for the repurchase of up to $150 million of our common stock over an unlimited time period. During the three months ended March 29, 2025, there were no common share repurchases. As of March 29, 2025, we had $108 million of authorized repurchases remaining under the Share Repurchase Program.
Previous wording
Cash Flow Summary for the Nine Months Ended September 28, 2024 and September 30, 2023
Current wording
Cash Flow Summary for the Three Months Ended March 29, 2025 and March 30, 2024
Previous wording
Our cash flows from operating, investing and financing activities for the nine months ended September 28, 2024 and September 30, 2023, as reflected in the Unaudited Consolidated Financial Statements, are summarized as follows:
Current wording
Our cash flows from operating, investing, and financing activities for the three months ended March 29, 2025 and March 30, 2024, as reflected in the Unaudited Consolidated Financial Statements, are summarized as follows:
Previous wording
Net cash used for investing activities for the nine months ended September 28, 2024 was $1,386 million. Compared to the nine months ended September 30, 2023, net cash used for investing activities increased $1,296 million, primarily due to an increase in cash used for acquisitions of $1,318 million mainly related to the Snap One acquisition offset by favorable changes in capital expenditures of $16 million and $6 million of favorable changes in other investing activities, including proceeds from sales of assets.
Current wording
Net cash used for investing activities for the three months ended March 29, 2025 was $31 million. Compared to the three months ended March 30, 2024, net cash used for investing activities increased $9 million, primarily due to unfavorable changes in capital expenditures of $10 million partially offset by $1 million of favorable changes in other investing activities.
Previous wording
In connection with the Spin-Off, we entered into the Reimbursement Agreement with Honeywell. As of September 28, 2024, a liability of $682 million was deemed probable and reasonably estimable; however, it is possible we could pay $140 million per year (exclusive of any late payment fees up to 5% per annum) until the earlier of: (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $25 million. During the nine months ended September 28, 2024, we paid Honeywell $105 million under the Reimbursement Agreement. For further discussion on the Reimbursement Agreement, refer to Note 16. Commitments and Contingencies to the Unaudited Consolidated Financial Statements.
Current wording
In connection with the Spin-Off, we entered into the Reimbursement Agreement with Honeywell. As of March 29, 2025, a liability of $778 million was deemed probable and reasonably estimable; however, it is possible we could pay $140 million per year (exclusive of any late payment fees up to 5% per annum) until the earlier of: (1) December 31, 2043; or (2) December 31 of the third consecutive year during which the annual reimbursement obligation (including in respect of deferred payment amounts) has been less than $25 million. During the three months ended March 29, 2025, we paid Honeywell $35 million under the Reimbursement Agreement. For further discussion on the Reimbursement Agreement, refer to Note 16. Commitments and Contingencies to the Unaudited Consolidated Financial Statements.
Previous wording
We have operating lease arrangements for the majority of our manufacturing sites, offices, engineering and lab sites, stocking locations, warehouses, automobiles, and certain equipment. As of September 28, 2024, we had operating lease payment obligations of $238 million, with $50 million payable within 12 months.
Current wording
We have operating lease arrangements for the majority of our manufacturing sites, offices, engineering and lab sites, stocking locations, warehouses, automobiles, and certain equipment. As of March 29, 2025, we had operating lease payment obligations of $258 million, with $51 million payable within 12 months.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The chart below presents the drivers of the gross profit variance from thenine months ended September 30, 2023 to thenine months ended September 28, 2024.
Previous report — wording carried elsewhere
Income tax expense increased by $8 million for the three months ended September 28, 2024 compared to the same period in 2023. The effective income tax rate increased by 1,130 bps for the three months ended September 28, 2024 compared to the same period in 2023. The changes are primarily driven by the mix of earnings across the jurisdictions in which we operate, relatively fixed non-deductible expenses, and U.S. taxation of foreign earnings.