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Resideo Announces Third Quarter 2024 Financial Results

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Net revenue growth of 18% year-over-year; mid-single-digit organic revenue growth at both ADI and Products and SolutionsProducts and Solutions gross margin of 42.2%, sixth consecutive quarter of year-over-year improvementNet income available to common stockholders of $11 million; adjusted EBITDA of $190 million, above the high end of outlook rangeStrong demand for the refreshed Honeywell Home Focus Pro™ thermostat portfolio, first in a cadence of new product introductions

SCOTTSDALE, Ariz., Nov. 7, 2024 /PRNewswire/ — Resideo Technologies, Inc. (NYSE: REZI), a leading global manufacturer and distributor of technology-driven products and solutions that provide home comfort and smart living, security, life safety and energy efficiency to consumers and businesses, today announced financial results for the third quarter ended September 28, 2024.

Third Quarter 2024 Financial Highlights

Net revenue was $1.83 billion, up 18% compared to $1.55 billion in the third quarter 2023Net income available to common stockholders was $11 million, compared to $21 million in the third quarter 2023Adjusted EBITDA (1) was $190 million, compared to $147 million in the third quarter 2023Fully diluted EPS was $0.07 and $0.14 and Adjusted EPS (1) was $0.58 and $0.55 for the third quarter 2024 and third quarter 2023, respectively

Management Remarks

“We delivered strong results in the third quarter with organic sales growth at both Products and Solutions and ADI in addition to consolidated Adjusted EBITDA again coming in ahead of our outlook,” commented Jay Geldmacher, Resideo’s President and CEO. “Products and Solutions continued to drive gross margin accretion, reflecting structural cost improvements. ADI also returned to organic revenue growth driven by improved demand across commercial categories and continued e-commerce expansion. The integration of Snap One is progressing well with the teams focused on cross-selling opportunities and cost reduction actions.”

“We are excited by the meaningful new product introductions that have begun to rollout at Products and Solutions. This is highlighted by refreshes of our thermostat offering and security solutions aimed at larger residential and small and medium business opportunities. At ADI, improving demand trends in key categories and cross-selling opportunities with a greater customer and product portfolio create significant benefits moving forward. Overall, we expect the positive business momentum to continue as we close out 2024 and look to 2025.”

(1) This press release includes certain “non-GAAP financial measures” as defined under the Securities Exchange Act of 1934. Resideo management believes the use of such non-GAAP financial measures, specifically Adjusted EBITDA and Adjusted EPS, assists investors in understanding the ongoing operating performance of Resideo by presenting the financial results between periods on a more comparable basis. See reconciliations of U.S. GAAP results to adjusted results in the accompanying tables.

Products and Solutions Third Quarter 2024 Highlights

Net revenue was $645 million, down 1% compared to the third quarter 2023 and up 4% excluding the impact of the Genesis divestitureGross margin was 42.2%, up 350 basis points compared to the third quarter 2023Income from operations was $128 million, compared to $94 million in the third quarter 2023Adjusted EBITDA was $157 million, or 24.3% of revenue, compared to $140 million, or 21.4% of revenue, in the third quarter 2023

Products and Solutions delivered net revenue of $645 million in the third quarter 2024, down 1% compared to third quarter 2023 and up 4% excluding the impact of the Genesis divestiture. Pricing trends remained positive across substantially all product categories compared with third quarter 2023. Organic revenue growth was partially offset by continued slower activity in the EMEA region and declines in Security product sales. During the quarter, Products and Solutions began taking orders for its programmable and connected thermostat line, the Honeywell Home Focus Pro, targeted at the entry tier of the professional market, in-line with its ongoing focus to introduce a regular cadence of new products and drive future innovation in key categories.

Gross margin for the quarter was 42.2%, compared to 38.7% in the third quarter 2023, reflecting improving manufacturing cost efficiency and pricing strength. Selling, general and administrative expenses were up $7 million and research and development expenses declined $5 million compared to 2023. Expense management was again strong in the quarter, and, combined with the strong gross margin expansion, helped drive operating profit of $128 million or 19.8% of revenue, up from $94 million or 14.4% of revenue in third quarter 2023. Adjusted EBITDA grew 12% year-over-year in the third quarter 2024 to $157 million, with Adjusted EBITDA margin up 300 basis points to 24.3%.

ADI Global Distribution Third Quarter 2024 Highlights

Net revenue was $1,183 million, up 31% compared to the third quarter 2023 and up 4% excluding the impact of the Snap One acquisitionGross margin was 21.3%, up 300 basis points compared to the third quarter 2023Income from operations was $36 million, compared to $52 million in the third quarter 2023Adjusted EBITDA was $92 million, or 7.8% of revenue, compared to $69 million, or 7.7% of revenue, in the third quarter 2023

ADI third quarter 2024 net revenue of $1,183 million increased $283 million compared to third quarter 2023, driven by the inclusion of $251 million of Snap One revenue and organic growth of $32 million, or 4%. ADI delivered year-over-year growth in all key commercial categories including Fire, Video Surveillance, professional Audio Visual, and Datacom. This was partially offset by year-over-year declines in residential Intrusion and residential Audio Visual. The e-commerce channel, excluding Snap One, grew 18% in third quarter 2024 compared to the prior year period. Exclusive brand sales grew 32% year-over-year, reflecting the inclusion of Snap One proprietary products and strong underlying growth.

Gross margin for the quarter was 21.3%, up 300 basis points compared to third quarter of 2023. The increase was driven by the inclusion of higher margin Snap One sales, partially offset by reduced inflationary pricing benefits. Selling, general and administrative and research and development expenses were $177 million in 2024, up $76 million compared to prior period including $73 million of Snap One expenses. Operating profit of $36 million for third quarter 2024 decreased 31% from $52 million in third quarter 2023. Adjusted EBITDA increased to $92 million in third quarter 2024 from $69 million in third quarter 2023.

Cash Flow and Liquidity

Net cash provided by operating activities was $147 million in third quarter 2024 compared to $60 million in the third quarter 2023. The increase was primarily driven by improved working capital dynamics and cash earnings. At September 28, 2024, Resideo had cash and cash equivalents of $531 million and total outstanding debt of $1.99 billion.

Outlook

The following table summarizes the Company’s current fourth quarter 2024 and updated full year 2024 outlook.

($ in millions, except per share data)

Q4 2024

2024

Net revenue

$1,815 – $1,855

$6,720 – $6,760

Non-GAAP Adjusted EBITDA

$170 – $185

$672 – $687

Non-GAAP Adjusted Earnings per share

$0.51 – $0.61

$2.18 – $2.28

Full Year Cash Provided by Operating Activities

 At least $375

Conference Call and Webcast Details

Resideo will hold a conference call with investors on November 7, 2024, at 5:00 p.m. ET. An audio webcast of the call will be accessible at https://investor.resideo.com, where related materials will be posted before the call. A replay of the webcast will be available following the presentation. To join the conference call, please dial 888-660-6357 (U.S. toll-free) or 1-929-201-6127 (international), with the conference title “Resideo Third Quarter 2024 Earnings” or the conference ID: 7301399.

About Resideo 

Resideo is a leading manufacturer and developer of technology-driven sensing and controls products that provide critical comfort, energy, smoke and carbon monoxide detection home safety products and security solutions to homes globally. We are also a leading wholesale distributor of low-voltage security products including access control, fire detection, fire suppression, security, and video products, and participate significantly in the broader related markets of, communications, data communications, networking, power, residential and professional audio-visual solutions, smart home, and wire and cable. Our global footprint serves both commercial and residential end markets. For more information about Resideo, please visit www.resideo.com.

Contacts:

Investors:

Media:

Jason Willey

Garrett Terry

Vice President, Investor Relations

Corporate Communications Manager

investorrelations@resideo.com

garrett.terry@resideo.com

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 and uncertainties, which may cause the actual results or performance of the Company to differ materially from such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) our ability to achieve our outlook regarding the fourth quarter 2024 and full year 2024, (2) our ability to recognize the expected savings from, and the timing and impact of, our existing and anticipated cost reduction actions, and our ability to optimize our portfolio and operational footprint (3),  the amount of our obligations and nature of our contractual restrictions pursuant to, and disputes that have or may hereafter arise under the agreements we entered into with Honeywell in connection with our spin-off,  (4) risks related to our recently completed acquisitions including our ability to achieve the targeted amount of annual cost synergies and successfully integrate the acquired operations (including successfully driving category growth in connected offerings), (5) the ability of Snap One and/or Resideo to drive increased customer value and financial returns and enhance strategic and operational capabilities, (6) the ability of Snap One and/or Resideo to achieve the targeted amount of synergies described in this press release, (7) the accretive nature of the transaction to Resideo’s non-GAAP EPS in the first full year of ownership and the growth and margin profile of the combined businesses, (8)  the ability to integrate the Snap One business into Resideo and realize the anticipated strategic benefits of the transaction, including the anticipated operational and strategic benefits of the transaction, and (9) 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, 2023 and other periodic filings we make from time to time with the Securities and Exchange Commission. 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.

Use of Non-GAAP Measures
This press release includes certain “non-GAAP financial measures” as defined under the Securities Exchange Act of 1934 and in accordance with Regulation G. Management believes the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting the financial results between periods on a more comparable basis. Such non-GAAP financial measures should not be construed as an alternative to reported results determined in accordance with U.S. GAAP.

We have included reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and provided in accordance with U.S. GAAP at the end of this release. A reconciliation of the forecasted range for Adjusted EBITDA and Adjusted Net Income per diluted common share for the fourth quarter of 2024 and for the fiscal period ending December 31, 2024 are not included in this release due to the number of variables in the projected range and because we are currently unable to quantify accurately certain amounts that would be required to be included in the U.S. GAAP measure or the individual adjustments for such reconciliation. In addition, we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors.

Table 1: SUMMARY OF FINANCIAL RESULTS (UNAUDITED) 

Q3 2024 (1)

YTD 2024 (1)

(in millions)

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

$      645

$    1,183

$        —

$   1,828

$   1,895

$    3,008

$       —

$   4,903

Cost of goods sold

373

931

1,304

1,118

2,414

3,532

Gross profit

272

252

524

777

594

1,371

Research and development expenses

23

23

69

69

Selling, general and administrative expenses

107

177

33

317

307

397

124

828

Intangible asset amortization

6

22

1

29

18

31

2

51

Restructuring, impairment and extinguishment costs, net (2)

8

17

4

29

13

19

15

47

Income (loss) from operations

$      128

$         36

$      (38)

$      126

$      370

$        147

$   (141)

$      376

Q3 2023 (1)

YTD 2023 (1)

(in millions)

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

$      654

$       900

$        —

$   1,554

$   1,989

$    2,716

$        —

$   4,705

Cost of goods sold

401

735

1

1,137

1,227

2,202

3

3,432

Gross profit (loss)

253

165

(1)

417

762

514

(3)

1,273

Research and development expenses

28

28

82

2

84

Selling, general and administrative expenses

100

101

32

233

322

307

90

719

Intangible asset amortization

6

2

1

9

17

8

3

28

Restructuring and impairment expenses

25

10

3

38

27

12

3

42

Income (loss) from operations

$         94

$         52

$      (37)

$      109

$      314

$       187

$    (101)

$      400

Q3 2024 % change compared with prior period

YTD 2024 % change compared with prior period

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Products
and
Solutions

ADI Global
Distribution

Corporate

Total
Company

Net revenue

(1) %

31 %

N/A

18 %

(5) %

11 %

N/A

4 %

Cost of goods sold

(7) %

27 %

N/A

15 %

(9) %

10 %

N/A

3 %

Gross profit

8 %

53 %

N/A

26 %

2 %

16 %

N/A

8 %

Research and development expenses

(18) %

N/A

N/A

(18) %

(16) %

N/A

N/A

(18) %

Selling, general and administrative expenses

7 %

75 %

3 %

36 %

(5) %

29 %

38 %

15 %

Intangible asset amortization

— %

1000 %

— %

222 %

6 %

288 %

(33) %

82 %

Restructuring, impairment and extinguishment costs, net

(68) %

70 %

33 %

(24) %

(52) %

58 %

400 %

12 %

Income (loss) from operations

36 %

(31) %

3 %

16 %

18 %

(21) %

40 %

(6) %

(1)

On January 1, 2024, certain corporate functions were decentralized into the operating segments aligning with the business strategy. Functional expenses related to information technology, finance, tax, business development, and research and development are now recorded within the Products and Solutions and ADI Global Distribution segments. 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 while $8 million and $24 million of corporate expenses have been reclassified into the ADI Global Distribution segments, respectively, decreasing reported Income from Operations to conform to the current year presentation.

(2)

Includes $1 million and $7 million of debt extinguishment expense for corporate for the three and nine months ended September 28, 2024.

Table 2: CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

Three Months Ended

Nine Months Ended

(in millions, except per share data)

September 28,
2024

September 30,
2023

September 28,
2024

September 30,
2023

Net revenue

$               1,828

$                1,554

$                4,903

$               4,705

Cost of goods sold

1,304

1,137

3,532

3,432

Gross profit

524

417

1,371

1,273

Operating expenses:

Research and development expenses

23

28

69

84

Selling, general and administrative expenses

317

233

828

719

Intangible asset amortization

29

9

51

28

Restructuring, impairment and extinguishment costs, net

29

38

47

42

Total operating expenses

398

308

995

873

Income from operations

126

109

376

400

Reimbursement Agreement expense (1)

45

43

135

128

Other expenses, net

10

13

10

10

Interest expense, net

27

16

55

50

Income before taxes

44

37

176

212

Provision for income taxes

24

16

83

84

Net income

$                     20

$                     21

$                      93

$                  128

Less: preferred stock dividends

8

10

Less: undistributed income allocated to preferred stockholders

1

4

Net income available to common stockholders

$                     11

$                     21

$                      79

$                  128

Earnings per common share:

Basic

$                 0.07

$                  0.14

$                   0.54

$                 0.87

Diluted

$                 0.07

$                  0.14

$                   0.53

$                 0.86

Weighted average common shares outstanding:

Basic

147

147

146

147

Diluted

149

148

149

149

(1)

Represents the expense incurred pursuant to the Reimbursement Agreement, which has an annual cash payment cap of $140 million. The following table summarizes information concerning the Reimbursement Agreement:

 

Three Months Ended

Nine Months Ended

(in millions)

September 28,
2024

September 30,
2023

September 28,
2024

September 30,
2023

Accrual for Reimbursement Agreement liabilities deemed

probable and reasonably estimable

$                     45

$                     43

$                   135

$                   128

Cash payments made to Honeywell

(35)

(35)

(105)

(105)

Accrual increase, non-cash component in period

$                     10

$                       8

$                     30

$                     23

Table 3: CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except par value)

September 28,
2024

December 31,
2023

ASSETS

Current assets:

Cash and cash equivalents

$                    531

$                    636

Accounts receivable, net

1,103

973

Inventories, net

1,197

941

Other current assets

206

193

Total current assets

3,037

2,743

Property, plant and equipment, net

423

390

Goodwill

3,119

2,705

Intangible assets, net

1,197

461

Other assets

359

346

Total assets

$                8,135

$                6,645

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$                1,021

$                    905

Current portion of long-term debt

6

12

Accrued liabilities

645

608

Total current liabilities

1,672

1,525

Long-term debt

1,983

1,396

Obligations payable under Indemnification Agreements

635

609

Other liabilities

491

366

Total liabilities

4,781

3,896

Stockholders’ equity

Preferred stock, $0.001 par value: 100 shares authorized, 0.5 shares issued and

outstanding at September 28, 2024 and no shares issued and outstanding at

December 31, 2023, respectively

482

Common stock, $0.001 par value: 700 shares authorized, 153 and 147 shares

issued and outstanding at September 28, 2024, respectively, and 151 and 145

shares issued and outstanding at December 31, 2023, respectively 

Additional paid-in capital

2,294

2,226

Retained earnings

893

810

Accumulated other comprehensive loss, net

(207)

(194)

Treasury stock at cost

(108)

(93)

Total stockholders’ equity

3,354

2,749

Total liabilities and stockholders’ equity

$                8,135

$                6,645

Table 4: CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Nine Months Ended

(in millions)

September 28,
2024

September 30,
2023

September 28,
2024

September 30,
2023

Cash Flows From Operating Activities:

Net income

$                      20

$                       21

$                      93

$                    128

Adjustments to reconcile net income to net cash in operating activities:

Depreciation and amortization

46

22

98

71

Restructuring, impairment and extinguishment costs, net

29

38

47

42

Stock-based compensation expense

15

11

44

36

Other, net

6

5

2

Changes in assets and liabilities, net of acquired companies:

Accounts receivable, net

(22)

26

(79)

(9)

Inventories, net

(9)

11

(13)

(4)

Other current assets

6

(8)

15

(5)

Accounts payable

31

(58)

62

(14)

Accrued liabilities

13

(20)

(65)

(114)

Other, net

12

17

34

44

Net cash provided by operating activities

147

60

241

177

Cash Flows From Investing Activities:

Acquisitions, net of cash acquired

(10)

(1,334)

(16)

Capital expenditures

(22)

(25)

(58)

(74)

Other investing activities, net

6

Net cash used in investing activities

(22)

(35)

(1,386)

(90)

Cash Flows From Financing Activities:

Proceeds from issuance of long-term debt, net

594

1,176

Proceeds from issuance of preferred stock, net of issuance costs

482

Repayments of long-term debt

(596)

(3)

(602)

(9)

Common stock repurchases

(28)

(1)

(28)

Other financing activities, net

(7)

2

(12)

(10)

Net cash provided by (used in) financing activities

(9)

(29)

1,043

(47)

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

2

(9)

(3)

1

Net (decrease) increase in cash, cash equivalents and restricted cash

118

(13)

(105)

41

Cash, cash equivalents and restricted cash at beginning of period

414

383

637

329

Cash, cash equivalents and restricted cash at end of period

$                    532

$                    370

$                    532

$                    370

 

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED NET INCOME PER DILUTED COMMON SHARE AND

NET INCOME COMPARISON

(Unaudited)

 

RESIDEO TECHNOLOGIES, INC.

Three Months Ended

Nine Months Ended

(in millions, except per share data)

September 28,
2024

September 30,
2023

September 28,
2024

September 30,
2023

GAAP Net income

$                     20

$                    21

$                     93

$                   128

Less: preferred stock dividends

8

10

Less: undistributed income allocated to preferred stockholders

1

4

GAAP Net income available to common stockholders

11

21

79

128

Restructuring, impairment and extinguishment costs, net

29

38

47

42

Intangible asset amortization

29

9

51

28

Stock-based compensation expense

15

11

44

36

Reimbursement Agreement accrual increase, non-cash component (1)

10

8

30

23

Acquisition and integration costs

3

1

37

1

Other (2)

16

14

17

5

Tax effect of applicable non-GAAP adjustments (3)

(26)

(21)

(56)

(34)

Non-GAAP Adjusted net income available to common stockholders

$                     87

$                    81

$                   249

$                   229

Three Months Ended

Nine Months Ended

September 28,
2024

September 30,
2023

September 28,
2024

September 30,
2023

GAAP Net income per diluted common share

$                 0.07

$                 0.14

$                  0.53

$                  0.86

Restructuring, impairment and extinguishment costs, net

0.19

0.26

0.32

0.28

Intangible asset amortization

0.19

0.06

0.34

0.19

Stock-based compensation expense

0.10

0.07

0.30

0.24

Reimbursement Agreement accrual increase, non-cash component (1)

0.07

0.05

0.20

0.15

Acquisition and integration costs

0.02

0.01

0.25

0.01

Other (2)

0.11

0.10

0.11

0.03

Tax effect of applicable non-GAAP adjustments (3)

(0.17)

(0.14)

(0.38)

(0.22)

Non-GAAP Adjusted net income per diluted common share

$                 0.58

$                 0.55

$                  1.67

$                  1.54

(1)

Refer to the Unaudited Consolidated Statements of Operations herein.

(2)

For 2023 periods, other includes Tax Matters Agreement gain, foreign exchange transaction loss (income), and pension costs. For 2024 periods, other includes loss on sale of assets, foreign exchange transaction loss (income), gain on sale of investments, litigation settlements, and an inventory step-up related to the Snap One acquisition.

(3)

We calculated the tax effect of non-GAAP adjustments by applying a flat statutory tax rate of 25% for the three months ended September 28, 2024 and September 30, 2023.

 

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

ADJUSTED EBITDA AND NET INCOME COMPARISON

(Unaudited)

 

RESIDEO TECHNOLOGIES, INC.

Three Months Ended

Nine Months Ended

(in millions)

September 28,
2024

September 30,
2023

September 28,
2024

September 30,
2023

Net revenue

$              1,828

$            1,554

$            4,903

$            4,705

GAAP Net income

$                   20

$                 21

$                 93

$               128

GAAP Net income as a % of net revenue

1.1 %

1.4 %

1.9 %

2.7 %

Provision for income taxes

24

16

83

84

GAAP Income before taxes

44

37

176

212

Depreciation and amortization

46

22

98

71

Restructuring, impairment and extinguishment costs, net

29

38

47

42

Interest expense, net

27

16

55

50

Stock-based compensation expense

15

11

44

36

Reimbursement Agreement accrual increase, non-cash component (1)

10

8

30

23

Acquisition and integration costs

3

1

37

1

Other (2)

16

14

17

5

Non-GAAP Adjusted EBITDA

$                 190

$               147

$               504

$               440

Non-GAAP Adjusted EBITDA as a % of net revenue

10.4 %

9.5 %

10.3 %

9.4 %

(1)

Refer to the Unaudited Consolidated Statements of Operations herein.

(2)

For 2023 periods, other includes Tax Matters Agreement gain, foreign exchange transaction loss (income), and pension costs. For 2024 periods, other includes loss on sale of assets, foreign exchange transaction loss (income), gain on sale of investments, litigation settlements, and an inventory step-up adjustment related to the Snap One acquisition.

 

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

(Unaudited)

 

PRODUCTS AND SOLUTIONS SEGMENT

Three Months Ended

Nine Months Ended

(in millions)

September 28,
2024

September 30,
2023

September 28,
2024

September 30,
2023

Net revenue

$               645

$               654

$           1,895

$           1,989

GAAP Income from operations

$               128

$                 94

$               370

$               314

GAAP Income from operations as a % of net revenue

19.8 %

14.4 %

19.5 %

15.8 %

Restructuring and impairment expense

8

25

13

30

Stock-based compensation expense

5

4

15

13

Other (1)

1

4

1

Non-GAAP Adjusted Income from Operations

$               141

$               124

$               402

$               358

Depreciation and amortization

16

16

51

51

Non-GAAP Adjusted EBITDA

$               157

$               140

$               453

$               409

Non-GAAP Adjusted EBITDA as a % of net revenue

24.3 %

21.4 %

23.9 %

20.6 %

(1)

Other includes litigation settlements and acquisition costs.

 

ADI GLOBAL DISTRIBUTION SEGMENT

Three Months Ended

Nine Months Ended

(in millions)

September 28,
2024

September 30,
2023

September 28,
2024

September 30,
2023

Net revenue

$           1,183

$               900

$           3,008

$           2,716

GAAP Income from operations

$                 36

$                 52

$               147

$               187

GAAP Income from operations as a % of net revenue

3.0 %

5.8 %

4.9 %

6.9 %

Restructuring and impairment expense

17

10

19

17

Stock-based compensation expense

4

2

9

5

Acquisition and integration costs

2

6

Other (1)

5

5

Non-GAAP Adjusted Income from Operations

$                 64

$                 64

$               186

$               209

Depreciation and amortization

28

5

41

13

Non-GAAP Adjusted EBITDA

$                 92

$                 69

$               227

$               222

Non-GAAP Adjusted EBITDA as a % of net revenue

7.8 %

7.7 %

7.5 %

8.2 %

(1)

Other includes inventory adjustment related to the Snap One acquisition.

 

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Two Schools, One Vision: XCL World Academy and XCL American Academy to Merge

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SINGAPORE, Nov. 8, 2024 /PRNewswire/ — XCL Education Group today announced the merger of XCL American Academy into XCL World Academy in August 2025, creating a single, unified campus dedicated to providing an exceptional learning environment that fosters diversity, academic excellence, and personal growth for all students.

This will bring together the strengths of both schools, their innovative learning spaces, and experienced educators. Students will benefit from an enriched learning environment that seamlessly integrates the best of both worlds: the renowned IB program, along with the strong academic foundation provided by the American AERO standards.

“Following careful consideration and extensive consultation, we have made the strategic decision to merge XCL American Academy into XCL World Academy, to create an even stronger and cohesive learning environment for our students,” said Gilles Mahe, CEO of XCL Education Group. “This merger will allow us to better leverage our facilities and resources, for all our students.”

XCL also announced the launch of the new Innovation Hub earlier this year. The state-of-the-art multi-level building is purpose-designed to enhance the learning environment with the latest technology and specialized labs for students. The Innovation Hub is designed to be environmentally friendly and with sustainability at the forefront of design. The building includes clean air filtration in all learning spaces and home to a digital multimedia lab, specialist labs, and a multi-use esports arena.

“The $80 million investment in the Innovation Hub and other facilities at our campus in Singapore is a testament to our commitment to providing our students with the best possible learning environment,” said Mahe. “These facilities will provide our students with the opportunity to learn and grow in a world-class setting.”

“We are confident that this merger will deliver the best possible outcomes for every XCL student in Singapore,” said Mahe. “We look forward to welcoming all of our students to the unified campus in August 2025.”

About XCL Education Group
XCL Education is one of the largest, fastest growing K-12 education platforms in Southeast Asia. Headquartered in Singapore, it serves over 20,000 students across 17 K-12 campuses and 45 Preschools in Malaysia, Singapore, Thailand, and Vietnam.  XCL Education aspires to be a trusted and respected future-focused family of schools, fostering curiosity, excellence, and creating life-shaping impact on our students, staff, and communities we serve.  To learn more, visit XCL Education.  

About XCL World Academy
XCL World Academy is a premium international school in Singapore, offering a rigorous academic program for students aged 2 to 18 years. The school is authorized to offer the International Baccalaureate (IB) Primary Years Programme (PYP), Middle Years Programme (MYP), and Diploma Programme (DP). XCL World Academy is committed to providing a holistic education that develops students’ intellectual, social, emotional, and physical well-being.

About XCL American Academy
XCL American Academy is an international school in Singapore, offering high-quality, rigorous, and accessible American education for children aged 4 – 14 years.

 

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Sabre Corporation Announces Exchange Offers by Sabre GLBL Inc. for Certain Senior Secured Debt Securities

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SOUTHLAKE, Texas, Nov. 7, 2024 /PRNewswire/ — Sabre Corporation (“Sabre”) today announced that Sabre GLBL Inc. (“Sabre GLBL”), a wholly-owned subsidiary of Sabre, has commenced exchange offers (each, an “Exchange Offer” and together, the “Exchange Offers”) to exchange certain of its outstanding 11.250% Senior Secured Notes due 2027 (the “December 2027 Notes”) and 8.625% Senior Secured Notes due 2027 (the “June 2027 Notes” and, together with the December 2027 Notes, the “Existing Notes” and each of them a “series” of Existing Notes) for up to $500 million (as such amount may be amended by Sabre GLBL in its sole discretion, the “Maximum Exchange Amount”) in aggregate principal amount of Sabre GLBL’s new 10.750% Senior Secured Notes due 2029 (the “New Notes” and together with the Existing Notes, the “Securities”), upon the terms and subject to the conditions described in the confidential offering circular, dated as of November 7, 2024, for the Exchange Offers (as it may be amended or supplemented, the “Offering Circular”). The primary purpose of the Exchange Offers is to improve the Company’s maturity profile by extending the maturity date of the indebtedness represented by the Existing Notes from 2027 to 2029.

The aggregate principal amount of New Notes to be issued pursuant to the Exchange Offers is subject to a minimum principal amount of $250 million (the “New Notes Issuance Minimum”).

In addition, the principal amount of each series of Existing Notes that is accepted pursuant to the Exchange Offers will be subject to the “Acceptance Priority Level” (in numerical priority order), as set forth in the table below and as further described in the Offering Circular.

The following table summarizes certain terms of the Exchange Offers:

CUSIP No./ ISIN

Title of
Security

Principal
Amount
Outstanding

Acceptance
Priority
Level(1)

Exchange
Consideration(2)

Early Exchange
Premium(2)(3)

Total Exchange
Consideration(1)(2)(3)

CUSIP: 78573NAH5 (144A);
U86043AF0 (Reg. S) / ISIN:
US78573NAH52 (144A);
USU86043AF04 (Reg. S)           

11.250%
Senior
Secured Notes
due 2027

$555,000,000

1

$1,000.00 principal
amount of New Notes

$82.50 principal
amount of New
Notes

$1,082.50 principal
amount of New Notes

CUSIP: 78573NAJ1 (144A);
U86043AG8 (Reg. S) / ISIN:
US78573NAJ19 (144A);
USU86043AG86 (Reg. S)

8.625%
Senior
Secured Notes
due 2027

$903,077,000

2

$930.00 principal
amount of New Notes

$82.50 principal
amount of New
Notes

$1,012.50 principal
amount of New Notes

(1)   Acceptance of the Existing Notes is subject to the Acceptance Priority Level as described below.

(2)   For each $1,000 principal amount of Existing Notes.

(3)   Includes Early Exchange Premium.

If the aggregate principal amount of Existing Notes validly tendered on or before the Early Exchange Date (as defined below) constitutes a principal amount of Existing Notes that, if accepted by the Company, would result in issuing New Notes having an aggregate principal amount equal to or in excess of the Maximum Exchange Amount, the Company will not accept any Existing Notes tendered for exchange after the Early Exchange Date (even if they are of Acceptance Priority Level 1).  If acceptance of all validly tendered Existing Notes of a series on the Early Exchange Date or the Expiration Date (as defined below), as applicable, would result in the Company issuing New Notes having an aggregate principal amount in excess of the Maximum Exchange Amount, the tendered Existing Notes of such series will be accepted on a pro rata basis as described in the Offering Circular. On each settlement date, Existing Notes of a series having a higher Acceptance Priority Level will be accepted for exchange before any Existing Notes of a series having a lower Acceptance Priority Level. For the avoidance of doubt, if the Exchange Offers are not fully subscribed as of the Early Exchange Date, subject to the terms and conditions of the Exchange Offers, all existing Notes tendered at or prior to the Early Exchange Date will be accepted for exchange in priority to all Existing Notes tendered after the Early Exchange Date even if such Existing Notes tendered after the Early Exchange Date have a higher Acceptance Priority Level than the Existing Notes tendered at or prior to the Early Exchange Date.

The New Notes will mature on November 15, 2029 and will bear interest at a rate per annum equal to 10.750%. The New Notes will first be redeemable, at Sabre GLBL’s option, starting on November 15, 2026, at 105.375% of their outstanding principal amount, plus accrued interest, and under certain other circumstances described in the Offering Circular.

The New Notes and the guarantees thereof will be senior secured indebtedness and will rank equal in right of payment with all of the existing and future senior secured indebtedness of Sabre GLBL and the guarantors. The New Notes will initially be jointly and severally, irrevocably and unconditionally guaranteed by Sabre Holdings Corporation (“Sabre Holdings”) and all of Sabre GLBL’s current and future restricted subsidiaries that are borrowers under or guarantee Sabre GLBL’s senior secured credit facilities under certain of its existing credit agreements or certain other secured indebtedness. The New Notes and the guarantees thereof will be secured, subject to permitted liens, by a first-priority security interest in substantially all present and hereinafter acquired assets of Sabre GLBL and each of the guarantors (other than certain excluded assets). The New Notes will be guaranteed by the same parties and on the same basis, and secured by the same assets and on the same basis, as the Existing Notes. In addition, the covenants in the indenture for the New Notes will be substantially the same as the covenants applicable to the Existing Notes.

The Exchange Offers will expire at 5:00 p.m., New York City time, on December 9, 2024, unless extended (such date and time, as it may be extended, the “Expiration Date”), unless earlier terminated. Tenders of Existing Notes may be withdrawn from the Exchange Offers at or prior to, but not after, 5:00 p.m., New York City time, on November 21, 2024, unless extended (such date and time, as it may be extended, the “Withdrawal Deadline”). Eligible Holders (as defined below) must validly tender their Existing Notes at or prior to 5:00 p.m., New York City time, on November 21, 2024, unless extended (such date and time, as it may be extended, the “Early Exchange Date”), to be eligible to receive the Total Exchange Consideration (as set forth above), which includes the Early Exchange Premium (as set forth above) for such Existing Notes. Eligible Holders tendering Existing Notes after the Early Exchange Date and on or before the Expiration Date will only be eligible to receive the Exchange Consideration (as set forth above), which will equal the Total Exchange Consideration for such series of Existing Notes less the applicable Early Exchange Premium.

In addition to the Total Exchange Consideration or Exchange Consideration (as described in the table above), as applicable, Eligible Holders whose Existing Notes are accepted for exchange will be paid the accrued and unpaid interest, if any, on the Existing Notes to, but not including, the early settlement date, which is expected to be November 25, 2024, unless extended (such date and time, as it may be extended, the “Early Settlement Date”) on such Existing Notes; provided, however, that since any New Notes issued on the final settlement date, which is expected to be December 11, 2024, unless extended (such date and time, as it may be extended, the “Final Settlement Date”) will be issued with accrued interest from the Early Settlement Date up to, but not including, the Final Settlement Date, the amount of such accrued interest on any such New Notes will be deducted, from the cash payable as accrued interest on the Existing Notes exchanged on the Final Settlement Date, provided further that such net amount will not be below zero. For the avoidance of doubt, Eligible Holders (as defined below) who validly tender Existing Notes of a series after the Early Exchange Date but on or before the Expiration Date, will not receive accrued and unpaid interest, if any, on such Existing Notes from the Early Settlement Date through the Final Settlement Date. In addition, Eligible Holders of the December 2027 Notes whose tenders are settled after December 1, 2024 and before December 15, 2024 will be deemed to have consented to giving up any claim to the interest payment due on December 15 in respect of the December 2027 Notes that they might otherwise have as a result of the related interest payment record date of December 1, 2024, and will receive only the accrued interest described above. Interest on the New Notes will accrue from (and including) the Early Settlement Date. Interest on the New Notes will accrue from (and including) the Early Settlement Date.

Sabre GLBL’s obligation to accept for exchange the Existing Notes validly tendered and not validly withdrawn in each Exchange Offer is subject to the satisfaction or waiver of certain conditions as described in the Offering Circular, including the New Notes Issuance Minimum. Such conditions may be waived by Sabre GLBL in its sole discretion, subject to applicable law. Any waiver of a condition by Sabre GLBL will not constitute a waiver of any other condition. For avoidance of doubt, the Exchange Offer in respect of the December 2027 Notes is not conditioned on the Exchange Offer in respect of the June 2027 Notes, or vice versa. Sabre GLBL reserves the right to extend, amend or terminate any Exchange Offer for any reason or for no reason. In addition, Sabre GLBL reserves the right to increase, decrease or otherwise change the Maximum Exchange Amount in its sole discretion without extending the Early Exchange Date or the Withdrawal Deadline or otherwise reinstating withdrawal rights, subject to compliance with applicable law and the terms of outstanding indebtedness. Sabre GLBL will not receive any cash proceeds from the Exchange Offers and will not incur additional indebtedness in excess of the aggregate principal amount of Existing Notes that are exchanged in the Exchange Offers. 

Concurrently with the Exchange Offers, Sabre GLBL is offering lenders under its senior secured term loans (the “Old Term Loans”) to exchange up to approximately $375 million of their Old Term Loans for the same amount of new senior secured term loans maturing in November 2029 (the “New Term Loans”). Except for the extended maturity and new pricing terms of the New Term Loans, we expect that the New Term Loans will have substantially similar terms as the Old Term Loans. The consummation of each term loan exchange is conditioned on participation from at least $50 million in principal amount per tranche of the New Term Loans.

The consummation of each Exchange Offer is not subject to, or conditioned upon, the consummation of such term loan exchanges. The consummation of such term loan exchanges is not subject to, or conditioned upon, the consummation of any Exchange Offer. The proposed term loan exchanges are subject to market conditions and there can be no assurance that any or all of them will in fact be consummated in the manner described herein or at all.

The Exchange Offers are being made only to holders of Existing Notes that have certified, by submitting an instruction to the clearing system, that they are either (i) “qualified institutional buyers” as defined in Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) are located outside the United States and are not “U.S. persons” as defined in Rule 902 under the Securities Act (such holders, “Eligible Holders”). Only Eligible Holders are authorized to receive or review the Offering Circular or to participate in the Exchange Offers. Non U.S.-persons may also be subject to additional eligibility criteria.

Information Relating to the Exchange Offers

The complete terms and conditions of the Exchange Offers are set forth in the Offering Circular.  The Offering Circular contains important information and Eligible Holders are encouraged to read it in its entirety.  The Offering Circular will only be distributed to Eligible Holders who complete and return an eligibility form confirming that they are either a “qualified institutional buyer” under Rule 144A or not a “U.S. person” under Regulation S under the Securities Act for purposes of applicable securities laws.  Holders of Existing Notes who desire to complete an eligibility form should either visit www.dfking.com/sabre or request instructions by sending an e-mail to sabre@dfking.com or by calling D.F. King & Co., Inc., the information and exchange agent for the Exchange Offers, at (toll-free) (800) 848-3374 (toll-free) or (banks and brokers) (212) 269-5550.

None of Sabre, Sabre Holdings, Sabre GLBL, their affiliates, their respective boards of directors and stockholders, the Exchange Agent or Computershare Trust Company, N.A., as trustee for the Existing Notes and New Notes, are making any recommendation as to whether holders should tender any Existing Notes in response to the Exchange Offers. Holders must make their own decision as to whether to tender any of their Existing Notes, and, if so, the principal amount of Existing Notes to tender.

This press release is for informational purposes only and is neither an offer to buy nor a solicitation of an offer to sell any of the New Notes or any other securities. The Exchange Offers are not being made to holders of Existing Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. The Exchange Offers are only being made pursuant to the Offering Circular. Eligible Holders are strongly encouraged to read the Offering Circular carefully because it will contain important information.

The New Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.  The New Notes have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the Offering Circular.

Forward-Looking Statements

Certain statements herein are forward-looking statements about trends, future events, uncertainties and our plans and expectations of what may happen in the future. Any statements that are not historical or current facts are forward-looking statements. In many cases, you can identify forward-looking statements by terms such as “guidance,” “outlook,” “target,” “expect, ” “anticipate,” “on track,” “continue,” “believe,” “momentum,” “position,” “continue,” “progress,” “confident,” “trend,” “plan,” “recurring,” “trajectory,” “pipeline,” “opportunity,” “potential,” “positioned,” “benefit,” “goal,” “confident,” “indicate,” “optimistic,” “will,” “forecast,” “strategy,” “estimate,” “project,” “may,” “should,” “would,” “intend,” or the negative of these terms, where applicable, or other comparable terminology. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Sabre’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. The potential risks and uncertainties include, among others, our ability to realize the anticipated benefits of the Exchange Offers and the proposed term loan exchange transaction and the risk that the Exchange Offers and the proposed term loan exchange transaction may not be consummated, financial condition and credit ratings, as well as on the travel industry and consumer spending more broadly, the effect of remote working arrangements on our operations and the speed and extent of the recovery across the broader travel ecosystem, dependency on transaction volumes in the global travel industry, particularly air travel transaction volumes, the timing, implementation and effects of our growth strategies and technology transformation, the completion and effects of travel platforms, exposure to pricing pressure in the Travel Solutions business, changes affecting travel supplier customers, maintenance of the integrity of our systems and infrastructure and the effect of any security incidents, our ability to recruit, train and retain employees, competition in the travel distribution industry and solutions industry, failure to adapt to technological advancements, implementation of software solutions, implementation and effects of new, amended or renewed agreements and strategic partnerships, dependence on establishing, maintaining and renewing contracts with customers and other counterparties and collecting amounts due to us under these agreements, dependence on relationships with travel buyers, the ability to achieve our cost savings and efficiency goals and the effects of these goals, our collection, processing, storage, use and transmission of personal data and risks associated with PCI compliance, the effects of cost savings initiatives, the effects of new legislation or regulations or the failure to comply with regulations or other legal requirements, use of third-party distributor partners, the financial and business results and effects of acquisitions and divestitures of businesses or business operations, reliance on the value of our brands, reliance on third parties to provide information technology services and the effects of these services, the effects of any litigation, regulatory reviews and investigations, adverse global and regional economic and political conditions, risks related to global conflicts, risks arising from global operations, risks related to our significant amount of indebtedness, including increases in interest rates and our ability to refinance our debt, and tax-related matters.

More information about potential risks and uncertainties that could affect our business and results of operations is included in the “Risk Factors” and “Forward-Looking Statements” sections of Sabre Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on October 31, 2024 and Sabre Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 15, 2024, as well as other risks and uncertainties specified in the “Risk Factors” section of the Offering Circular. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, outlook, guidance, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. Unless required by law, Sabre undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date they are made.

About Sabre

Sabre Corporation is a software and technology company that takes on the biggest opportunities and solves the most complex challenges in travel. The Company connects travel suppliers and buyers around the globe and across the ecosystem through innovative products and next-generation technology solutions. Sabre harnesses speed, scale and insights to build tomorrow’s technology today – empowering airlines, hoteliers, agencies and other partners to retail, distribute and fulfill travel worldwide. Headquartered in Southlake, Texas, USA, Sabre serves customers in more than 160 countries around the world.

SABR-F

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Shinsegae spreads Christmas magic to the world with a new global landmark ‘Shinsegae Square’

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SEOUL, South Korea, Nov. 8, 2024 /PRNewswire/ — “Heritage meets digital technology, Shinsegae paves its way to become an iconic landmark of Seoul, alluring customers from all around the world.”

Twinkling lights and glamorous moving images on the screen, Shinsegae Department Store, Korea’s first department store since 1963, presents a new landmark of Seoul in Myeong-dong which is located in the center of the capital and brings in the highest population of tourists.

Shinsegae Department Store has been an absolute favourite amongst millions of global customers along with Harrods(UK) and Isetan(Japan), taking the chart of No.1 leading position in the Korean department store industry by far.

Last year, Shinsegae Department Store in Myeong-dong has been visited by over 6 million customers from different countries, making the spot a ‘must-visit-place’ for Christmas season.

For the past 10 years, Shinsegae has delivered hopes and excitements to its onlookers visiting the place, wishing the best Christmas and New Year’s Eve for everyone.

With a size of three basketball courts(1292.3㎡), Shinsegae’s mega-sized digital signage is now recreated as ‘Shinsegae Square’ and presents an overwhelming beauty with the visuals from the screen.

This year, Shinsegae is showcasing a short film called ‘Pursuit of Christmas Moments’ to give the experience of joy and magical moments to the audience, elevating thrills for Christmas and New Year’s Eve.

The film depicts a story of Shinsegae Department Store being transformed into a magical Christmas castle along with fancy dinner parties inside and amusement parks embellished with glittering lights in the night sky, which will leave unforgettable memories for the visitors.

On the 31st of December, Shinsegae Square district will be presented as the spot to celebrate New Year’s Eve as it will exhibit diverse K-culture contents and media artworks.

Harmoniously permeated with historical buildings nearby, the audience will be fascinated by magnificent and breath-taking sceneries with feasts of colorful lights that Shinsegae Square sheds.

“Shinsegae Department Store now presents ‘Shinsegae Square’ where visual beauty and cutting-edge technologies are met to make the most cherishable memories to those visiting Seoul,” Shinsegae said.

“Rebranded as the iconic cultural hub with its K-culture contents and media artworks, Shinsegae Square will proceed to become the ultimate ‘lifestyle destination’, nowhere to be compared in Seoul.”

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