Resideo Announces Fourth Quarter and Full Year 2020 Financial Results

AUSTIN, Texas, Feb. 25, 2021 /PRNewswire/ -- Resideo Technologies, Inc. (NYSE: REZI), a leading global provider of home comfort and security solutions, today announced financial and operating results for the fourth quarter and full year ended Dec. 31, 2020.

Fourth Quarter 2020 Highlights

    --  Net revenue of $1.5 billion, up 15% from $1.3 billion in the prior year
    --  Operating profit of $152 million, compared to operating profit of $72
        million in the prior year
    --  Net income of $59 million, compared to a net loss of $9 million in the
        prior year
    --  Adjusted EBITDA(1) (Non-GAAP) of $212 million, compared to Adjusted
        EBITDA(1) (Non-GAAP) of $139 million in the prior year
    --  Cash provided by operating activities of $152 million, compared to cash
        provided by operating activities of $93 million in the prior year

Full Year 2020 Highlights

    --  Net revenue of $5.1 billion, up 2% from $5.0 billion in the prior year
    --  Operating profit of $311 million, compared to operating profit of $258
        million in the prior year
    --  Net income of $37 million, compared to net income of $36 million in the
        prior year
    --  Adjusted EBITDA(1) (Non-GAAP) of $562 million, compared to Adjusted
        EBITDA(1) (Non-GAAP) of $502 million in the prior year
    --  Cash provided by operating activities of $244 million, compared to cash
        provided by operating activities of $23 million in the prior year


            1             Previously presented as Adjusted
                            EBITDA (Non-GAAP) excluding
                            Honeywell reimbursement agreement
                            payments (see Table 5 for
                            description of change)

Fourth Quarter 2020 Performance
Consolidated revenue of $1.5 billion in the fourth quarter 2020 increased 15% compared with the prior year of $1.3 billion. Products & Solutions segment revenue was $676 million, an increase of 18% compared with revenue of $575 million in the prior year due to positive demand trends across each of Products & Solutions' primary end markets and channels. ADI Global Distribution segment revenue was $825 million, an increase of 13% compared with revenue of $729 million in the prior year due to strength in products serving residential markets and growth in e-commerce sales.

Gross profit margin for the fourth quarter 2020 was 28.2%, compared to 24.0% in the prior year. The increase was attributable to higher revenue volumes within Products & Solutions, lower charges related to slow-moving and obsolete inventory and transformation program cost savings.

Resideo's operating profit of $152 million in the fourth quarter 2020 more than doubled compared to a prior year operating profit of $72 million. Products & Solutions segment operating profit of $166 million in the fourth quarter 2020 increased from $84 million in the prior year. The increase was the result of higher revenue, improved fixed cost absorption and transformation savings. ADI Global Distribution segment operating profit increased to $59 million in the fourth quarter 2020 from $52 million in the prior year, primarily due to higher revenue. Total Corporate costs were $73 million, up from $64 million in the prior year primarily due to increased bonus payouts, partially offset by impacts from transformation program cost savings.

Net income for the fourth quarter 2020 was $59 million, or $0.44 per diluted common share, compared with a net loss of $9 million, or a loss of $0.07 per diluted common share, in the prior year.

Full Year 2020 Performance
Consolidated revenue for the full year 2020 was $5.1 billion, up 2% compared with consolidated revenue for the prior year of $5.0 billion. Products & Solutions segment revenue was $2.1 billion, a decrease of 2% compared with $2.2 billion for the prior year. ADI Global Distribution segment revenue was $3.0 billion, an increase of 5% compared with $2.8 billion for the prior year.

Gross profit margin for the full year 2020 was 25.9%, compared to 25.6% for the prior year. The improvement in gross profit margin was the result of positive impacts from our ongoing transformation and cost savings programs. This was partially offset by unfavorable product mix across both segments, lower volumes in Products & Solutions and costs associated with COVID-19.

Operating profit of $311 million for the full year 2020 increased 21% compared to operating profit of $258 million for the prior year. Products & Solutions segment operating profit for the full year 2020 of $407 million represented a 24% increase from $327 million for the prior year. Within the Products & Solutions segment, operating profit was positively impacted by cost savings from transformation programs, sourcing productivity and reduced inventory reserve costs. These cost reductions more than offset the impact of lower revenue volumes, unfavorable sales mix and investments to support new product launches. ADI Global Distribution segment operating profit for the full year 2020 of $194 million, represented an 8% decline from $210 million for the prior year. ADI Global Distribution segment operating profit was negatively impacted by commercial investments, unfavorable sales mix and acquisition related costs. Corporate costs increased to $290 million from $279 million, up 4%, and were negatively impacted by expenses related to transformation projects and increased bonus payouts from improved performance. These impacts were partially offset by transformation program cost savings and reduced spin-off related costs.

For the full year 2020, the company reported net income of $37 million, or $0.29 per diluted common share. This compares to net income of $36 million, or $0.29 per diluted common share for the prior year.

Cash Flow and Liquidity
The company reported net cash provided by operating activities of $244 million for the full year 2020, an increase of $221 million from the prior year. This improvement was primarily due to higher operating profit and lower cash taxes paid. At Dec. 31, 2020, Resideo had cash and cash equivalents of $517 million and total outstanding debt of $1.2 billion.

On Feb. 12, 2021, the company completed the refinancing of its senior secured credit facilities. This included refinancing the outstanding senior secured term loan A and term loan B with the net proceeds of a new $950 million 7-year term loan B maturing in 2028. The company also entered into a new 5-year, $500 million revolving credit facility. In addition, the company redeemed $140 million of its outstanding senior unsecured notes pursuant to the terms of the underlying indenture.

Outlook
The company expects full year 2021 revenue to be in the range of $5.2 billion to $5.4 billion, gross profit margin in the range of 26% to 28% and operating profit in the range of $450 million to $500 million.

The company expects first quarter 2021 revenue to be in the range of $1.30 billion to $1.35 billion, gross profit margin in the range of 25% to 27% and operating profit in the range of $110 million to $120 million.

Management Remarks
"We closed 2020 with strong performance across Products & Solutions and ADI, producing results that highlight the profit and cash generation potential of Resideo," commented Jay Geldmacher, Resideo's President and CEO. "Demand remained robust across residential markets as interest in home investment and professional security solutions remains elevated. ADI built upon its long track record of execution, delivering growth ahead of the overall low-voltage security distribution market for the quarter and full year."

"I am proud of how the Resideo team responded to the challenges brought on by COVID-19 and the meaningful organizational changes we undertook over the past year. We continue to execute on our transformation initiatives, both in rightsizing our cost structure and in building a product innovation engine that will enable Resideo to continue to be a leader in its markets. As we look to 2021, we see solid demand trends and we plan to accelerate targeted investments to ensure Resideo is well positioned for long-term growth and profitability expansion."

Conference Call and Webcast Details
Resideo will hold a conference call with investors on Feb. 25, 2021, at 8:30 a.m. EST. A real-time 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 833-972-2949 (U.S., toll-free) or 1-236-714-2869 (international), with the conference title "Resideo Fourth Quarter 2020 Earnings".

About Resideo
Resideo is a leading global manufacturer and distributor of technology-driven products and solutions that provide comfort, security, energy efficiency and control to customers worldwide. Building on a 130-year heritage, Resideo has a presence in more than 150 million homes, with 15 million systems installed in homes each year. We continue to serve more than 110,000 professionals through leading distributors, including our ADI Global Distribution business, which exports to more than 100 countries from nearly 200 stocking locations around the world. For more information about Resideo, please visit www.resideo.com.



     
                Contacts:



     
                Investors:                    
     
                Media:



     Jason Willey                               
     Oliver Clark



     
                investorrelations@resideo.com 
     
                oliver.clark@resideo.com





              
                Table 1: SUMMARY OF FINANCIAL RESULTS (UNAUDITED)


              
                (in millions)






                                                                              Q4 2020             Q4 2019                %    YTD   YTD              %

                                                                                                                      Change 2020   2019            Change




              Products & Solutions



              Revenue (1)                                                              $
        676           $
        575            18      $
       2,121        $
       2,175   -2
                                                                                                                                %
                                                                                                                                                                      %



              Gross profit                                                                   283                 189            50             821               786    4
                                                                                                                                %
                                                                                                                                                                      %



              Operating profit                                                               166                  84            98             407               327   24
                                                                                                                                %
                                                                                                                                                                      %



              Segment Adjusted EBITDA                                                  $
        154            $
        92            67        $
       378          $
       314   20
                                                                                                                                %
                                                                                                                                                                      %
    (Non-GAAP)(2)





              ADI Global Distribution



              Revenue                                                                  $
        825           $
        729            13      $
       2,950        $
       2,813    5
                                                                                                                                %
                                                                                                                                                                      %



              Gross profit                                                                   144                 127            13             501               499    0
                                                                                                                                %
                                                                                                                                                                      %



              Operating profit                                                                59                  52            13             194               210   -8
                                                                                                                                %
                                                                                                                                                                      %



              Segment Adjusted EBITDA                                                   $
        58            $
        47            23        $
       184          $
       188   -2
                                                                                                                                %
                                                                                                                                                                      %
    (Non-GAAP)(2)





              Total Company



              Revenue                                                                $
        1,501         $
        1,304            15      $
       5,071        $
       4,988    2
                                                                                                                                %
                                                                                                                                                                      %



              Gross profit                                                                   423                 313            35           1,313             1,277    3
                                                                                                                                %
                                                                                                                                                                      %



              Operating profit                                                               152                  72           111             311               258   21

                                                                                                                                %                                     %



              Adjusted EBITDA (Non-GAAP) (2)(3)                                        $
        212           $
        139            53        $
       562          $
       502   12
                                                                                                                                %
                                                                                                                                                                      %




              (1)              Represents Product & Solutions
                                  revenue, excluding intersegment
                                  revenue of $97 million and $367
                                  million for the three and twelve
                                  months ended December 31, 2020 and
                                  $84 million and $312 million for the
                                  three and twelve months ended
                                  December 31, 2019. ADI Global
                                  Distribution does not have any
                                  intersegment revenue.





              (2)              Table 5 includes reconciliations of
                                  Non-GAAP measures.





              (3)              Adjusted EBITDA (Non-GAAP) was
                                  previously presented as Adjusted
                                  EBITDA (Non-GAAP) excluding
                                  Honeywell reimbursement agreement
                                  payments. See Table 5 for
                                  description of change.



              
                Table 2
                : CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (UNAUDITED)




                                                                                                                     Three Months Ended                                                                         Twelve Months Ended



                                                                                                            December                                                  December                                                  December      December

                                                                                                                        31,                                                        31,                                                    31,               31,


                                                                                                                       2020                                                       2019                                                   2020              2019



                                                                                                                                                
     
     (In millions except share and per share data)



              Net revenue                                                                                                    $
              1,501                                                    $
         1,304                               $
             5,071  $
         4,988



              Cost of goods sold (1)                                                                                                     1,078                                                             991                                          3,758         3,711




              Gross profit (1)                                                                                                             423                                                             313                                          1,313         1,277



              Selling, general and administrative                                                                                          271                                                             241                                          1,002         1,019
    expenses (1)




              Operating profit                                                                                                             152                                                              72                                            311           258



              Other expense, net                                                                                                            41                                                              64                                            147           118



              Interest expense                                                                                                              14                                                              18                                             63            69




              Income (loss) before taxes                                                                                                    97                                                            (10)                                           101            71



              Tax expense (benefit)                                                                                                         38                                                             (1)                                            64            35




              Net income (loss)                                                                                                 $
              59                                                      $
         (9)                                 $
             37     $
         36






              
                Weighted Average Number of
    Common Shares Outstanding (in
    thousands)



              Basic                                                                                                                    131,406                                                         122,843                                        125,348       122,722



              Diluted                                                                                                                  134,424                                                         122,843                                        126,324       123,238



              
                Earnings (loss) Per Share



              Basic                                                                                                           $
              0.45                                                   $
         (0.07)                               $
             0.30   $
         0.29



              Diluted                                                                                                         $
              0.44                                                   $
         (0.07)                               $
             0.29   $
         0.29



               1)               On January 1, 2020, the Company
                                 changed its classification of
                                 research and development expenses in
                                 the Consolidated Interim Statements
                                 of Operations from Cost of goods sold
                                 to Selling, general and
                                 administrative expenses, such that
                                 research and development expenses are
                                 excluded from the calculation of
                                 Gross profit. The impact on the three
                                 and twelve months ended December 31,
                                 2019 Consolidated Interim Statements
                                 of Operations is a reduction of Cost
                                 of goods sold, an increase in Gross
                                 profit and an increase in Selling,
                                 general and administrative expenses
                                 of $21 million and $87 million,
                                 respectively.  This reclassification
                                 had no effect on the previously
                                 reported Net income (loss) or the
                                 Company's Consolidated Interim
                                 Statements of Comprehensive Income
                                 (Loss), Cash Flows, or Balance
                                 Sheets.



              
                Table 3
                : CONSOLIDATED BALANCE SHEETS (UNAUDITED)






                                                                                                  December 31,                           December 31,


                                                                                                          2020                                    2019



                                                                                                     (In millions, except number of
                                                                                          shares which are reflected in
                                                                                             thousands and par value)



              
                ASSETS



              Current assets:



              Cash and cash equivalents                                                                                 $
              517                 $
        122



              Accounts receivables - net                                                                                            863                       817



              Inventories - net                                                                                                     672                       671



              Other current assets                                                                                                  173                       175




              Total current assets                                                                                                2,225                     1,785



              Property, plant and equipment - net                                                                                   318                       316



              Goodwill                                                                                                            2,691                     2,642



              Other assets                                                                                                          376                       385




              Total assets                                                                                            $
              5,610               $
        5,128




              
                LIABILITIES



              Current liabilities:



              Accounts payable                                                                                          $
              936                 $
        920



              Current maturities of long-term debt                                                                                    7                        22



              Accrued liabilities                                                                                                   595                       552




              Total current liabilities                                                                                           1,538                     1,494



              Long-term debt                                                                                                      1,155                     1,158



              Obligations payable under Indemnification Agreements                                                                  590                       594



              Other liabilities                                                                                                     334                       280



              
                EQUITY



              Common stock, $0.001 par value, 700,000 shares authorized,
    143,959 and 143,059 shares issued and outstanding as of December
    31, 2020, 123,488 and 122,873 shares issued and outstanding as of
    December 31, 2019, respectively



              Additional paid-in capital                                                                                          2,070                     1,761



              Treasury stock, at cost                                                                                               (6)                      (3)



              Retained earnings                                                                                                      75                        38



              Accumulated other comprehensive loss                                                                                (146)                    (194)




              Total equity                                                                                                        1,993                     1,602




              Total liabilities and equity                                                                            $
              5,610               $
        5,128



              
                Table 4
                : CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)




                                                                                                             Twelve Months Ended


                                                                                                             December 31,



                                                                                                    2020                         2019



                                                                                                             (In millions)



              
                Cash flows from operating activities:



              Net income                                                                                 $
         37                    $
         36



              Adjustments to reconcile net income to net cash provided by
    operating activities:



              Depreciation and amortization                                                                     86                           80



              Stock compensation expense                                                                        29                           25



              Deferred income taxes                                                                             22                         (25)



              Other                                                                                             21                           18



              Changes in assets and liabilities, net of acquired companies:



              Accounts receivables                                                                            (27)                           7



              Inventories - net                                                                                 19                         (44)



              Other current assets                                                                               5                         (53)



              Other assets                                                                                                                (15)



              Accounts payable                                                                                 (1)                        (38)



              Accrued liabilities                                                                               31                           28



              Obligations payable under Indemnification Agreements                                             (4)                        (35)



              Other liabilities                                                                                 26                           39




              Net cash provided by operating activities                                                        244                           23




              
                Cash flows (used for) provided by investing activities:



              Expenditures for property, plant and equipment and software                                     (70)                        (95)



              Cash paid for acquisitions, net of cash acquired                                                (35)                        (17)



              Other                                                                                              2




              Net cash used for investing activities                                                         (103)                       (112)




              
                Cash flows provided by (used for) financing activities:



              Issuance of common stock through public offering, net of issuance                                279
    cost



              Payment of debt facility issuance and modification costs                                                                     (4)



              Repayment of long-term debt                                                                     (22)                        (22)



              Non-operating obligations from Honeywell, net                                                    (2)                        (24)



              Other                                                                                            (2)                         (3)




              Net cash provided by (used for) financing activities                                             253                         (53)




              Effect of foreign exchange rate changes on cash and cash equivalents                               1                          (1)




              Net increase (decrease) in cash and cash equivalents                                             395                        (143)



              Cash and cash equivalents at beginning of period                                                 122                          265




              Cash and cash equivalents at end of period                                                $
         517                   $
         122



              
                Table 5
                : RECONCILIATION OF NET INCOME (LOSS) (UNAUDITED) TO NON-GAAP FINANCIAL MEASURES




                                                                                                                                          Three Months Ended                                          Twelve Months Ended



                                                                                                                                 December                                            December                                 December         December

                                                                                                                                             31,                                               31,                                      31,              31,


                                                                                                                                            2020                                              2019                                     2020             2019



                                                                                                                                                         
           
         (In millions)



              
                Reconciliation of Net income (loss) to
    Adjusted EBITDA (Non-GAAP)



              
                Net income (loss)                                                                                                       $
            
         59                             $
             
               (9)               $
      
           37   $
     
       36



              Net interest expense                                                                                                                                 13                                                     17                            61          66



              Tax expense (benefit)                                                                                                                                38                                                    (1)                           64          35



              Depreciation and amortization                                                                                                                        22                                                     25                            86          80



              Reimbursement Agreement expense (1)                                                                                                                  39                                                     51                           146         108



              Stock compensation expense (2)                                                                                                                        8                                                      3                            29          25



              Restructuring charges                                                                                                                                13                                                      3                            40          37



              Other (3)                                                                                                                                            20                                                     50                            99         115




              
                Adjusted EBITDA (Non-GAAP)(4)                                                                                          $
            
         212                             $
             
               139               $
      
           562  $
     
       502






              
                Segment Adjusted EBITDA (Non-GAAP)



              Products and Solutions                                                                                                                         $
       154                                          $
             92                    $
         378      $
     314



              ADI Global Distribution                                                                                                                              58                                                     47                           184         188




              
                Adjusted EBITDA (Non-GAAP)                                                                                             $
            
         212                             $
             
               139               $
      
           562  $
     
       502




              (1)              Represents recorded expenses /gains
                                  related to the Reimbursement Agreement
                                  with Honeywell. Pursuant to the
                                  Reimbursement Agreement, we are
                                  responsible to indemnify Honeywell in
                                  amounts equal to 90% of payments,
                                  which include amounts billed, with
                                  respect to certain environmental
                                  claims, remediation and, to the extent
                                  arising after the Spin-Off, hazardous
                                  exposure or toxic tort claims, in each
                                  case including consequential damages
                                  in respect of specified properties
                                  contaminated through historical
                                  business operations, including the
                                  legal and other costs of defending and
                                  resolving such liabilities, less 90%
                                  of Honeywell's net insurance receipts
                                  relating to such liabilities, and less
                                  90% of the net proceeds received by
                                  Honeywell in connection with (i)
                                  affirmative claims relating to such
                                  liabilities, (ii) contributions by
                                  other parties relating to such
                                  liabilities and (iii) certain property
                                  sales; such payments are subject to a
                                  cap of $140 million in respect of
                                  liabilities arising in any given year
                                  (exclusive of any late payment fees up
                                  to 5% per annum). Such amounts are
                                  recorded in net income when they are
                                  probable and reasonably estimable. The
                                  cash payments under the Reimbursement
                                  Agreement for the three and twelve
                                  months ended December 31, 2020 are $70
                                  and $140 million, respectively, and
                                  for the three and twelve months ended
                                  December 31, 2019 are $35 million and
                                  $140 million, respectively.





              (2)              Stock compensation expense adjustment
                                  includes only non-cash expenses.





              (3)              For the three and twelve months ended
                                  December 31, 2020, Other represents
                                  $11 million and $46 million of items
                                  related to the Spin-Off, $6 million
                                  and $48 million of consulting and
                                  other fees related to transformation
                                  programs, and $3 million and $3
                                  million of other expenses,
                                  respectively. For the three and twelve
                                  months ended December 31, 2019, Other
                                  represents $26 million and $80 million
                                  of items related to the Spin-Off, $8
                                  million and $20 million of consulting
                                  fees related to restructuring programs
                                  and developments on legal claims that
                                  arose prior to Spin-Off, $2 million
                                  and $2 million of environmental
                                  expense for Resideo's owned sites as
                                  well as pre-Spin-Off historical
                                  environmental expenses as reported
                                  under 100% carryover basis for sites
                                  now covered under the Reimbursement
                                  Agreement, and $14 million and $13
                                  million of non-operating expense
                                  adjustment which excludes net interest
                                  (income), respectively.





              (4)              Adjusted EBITDA (Non-GAAP) was
                                  previously presented as Adjusted
                                  EBITDA (Non-GAAP) excluding
                                  Reimbursement Agreement payments (Non-
                                  GAAP). The change in presentation was
                                  made beginning with our first quarter
                                  2020 results to more accurately
                                  reflect the underlying performance
                                  indicators of the business in Adjusted
                                  EBITDA (Non-GAAP). The Reimbursement
                                  Agreement cash payments are a
                                  liquidity measure and will be included
                                  within the cash flow and liquidity
                                  discussions. Management believes that
                                  this presentation more clearly
                                  presents underlying operations as the
                                  amounts related to the Reimbursement
                                  Agreement are recorded in Net income
                                  (loss) are based on when such amounts
                                  become probable and reasonably
                                  estimable.






     
                Table 6
                : RECONCILIATION OF QUARTERLY FINANCIAL RESULTS (UNAUDITED) - SEGMENT


     
                (in millions)






                                                                                                             Q1 2020             Q2 2020                 Q3 2020        Q4 2020   YTD 2020




     Products & Solutions



     Revenue                                                                                                          $
        475               $
        397            $
            573              $
          676     $
           2,121



     Gross profit                                                                                                           161                     135                      242                      283                821



     Operating profit                                                                                                        58                      42                      141                      166                407



     Segment Adjusted EBITDA (Non-GAAP)(1)                                                                             $
        53                $
        35            $
            136              $
          154       $
           378





     ADI Global Distribution



     Revenue                                                                                                          $
        704               $
        632            $
            789              $
          825     $
           2,950



     Gross profit                                                                                                           126                     101                      130                      144                501



     Operating profit                                                                                                        48                      31                       56                       59                194



     Segment Adjusted EBITDA (Non-GAAP)(1)                                                                             $
        46                $
        28             $
            52               $
          58       $
           184





     Corporate Costs



     Gross loss                                                                                                       $
        (3)         
     $                      $
            (2)             $
          (4)      $
           (9)



     Operating loss                                                                                                  $
        (72)             $
        (79)          $
            (66)            $
          (73)    $
           (290)





     Total Company



     Revenue                                                                                                        $
        1,179             $
        1,029          $
            1,362            $
          1,501     $
           5,071



     Gross profit                                                                                                           284                     236                      370                      423              1,313



     Operating profit (loss)                                                                                                 34                     (6)                     131                      152                311



     Adjusted EBITDA (Non-GAAP)                                                                                        $
        99                $
        63            $
            188              $
          212       $
           562




              (1)              Segment Adjusted EBITDA (Non-
                                  GAAP) for the Products &
                                  Solutions and ADI Global
                                  Distribution segments contain
                                  allocations of Corporate costs
                                  to be consistent with historical
                                  presentation.

Forward-Looking Statements
This release contains "forward-looking statements." All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Although we believe forward-looking statements are based upon reasonable assumptions, such statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, (1) the duration and severity of the COVID-19 pandemic and the disruption to our business and the global economy caused by it, including (A) its effect on the demand for our products and services, (B) its effect on our and our business partners' supply chains, workforce, liquidity, spending and timing for payments and disbursements, and (C) the impact of potential facility closures and the modified working conditions at our corporate offices, Product & Solutions segment and ADI Global Distribution segment, (2) 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, (3) the likelihood of continued success of our transformation programs and initiatives, and (4) 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, 2020 and other periodic filings we make from time to time with the Securities and Exchange Commission (SEC). You are cautioned not to place undue reliance on these forward-looking statements, such as (i) the outlook regarding first quarter 2021 and full year 2021 and (ii) the impact of the COVID-19 pandemic on our business and operations. Forward-looking statements are not guarantees of future performance, and actual results, developments, and business decisions may differ from those envisaged by our forward-looking statements. Except as required by law, we undertake no obligation to update such statements to reflect events or circumstances arising after the date of this press release, and we caution investors not to place undue reliance on any such forward-looking statements.

Non-GAAP Financial Measures
This release includes Adjusted EBITDA (Non-GAAP) and Segment Adjusted EBITDA (Non-GAAP) for each of our Product and Solutions and ADI Global Distribution segments, which are not compliant with generally accepted accounting principles in the United States (GAAP). Adjusted EBITDA (Non-GAAP) is adjusted for certain items as reflected in Table 5 above and may not be directly comparable to similar measures used by other companies in our industry, as other companies may define such measures differently. Management believes that, when considered together with reported amounts, this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends and provides useful additional information relating to our operations and financial condition. This metric should be considered in addition to, and not as a replacement for, the most comparable GAAP measure. Refer to Table 5 above in this release for a reconciliation of Non-GAAP financial measures to the most directly comparable GAAP measure. It should be read in connection with our financial statements presented in accordance with GAAP.

Adjusted EBITDA (Non-GAAP) was previously presented as Adjusted EBITDA (Non-GAAP) excluding Honeywell reimbursement agreement payments (Non-GAAP). The change in presentation was made beginning with our first quarter 2020 results to more accurately reflect the underlying performance indicators of the business in Adjusted EBITDA (Non-GAAP). The Honeywell reimbursement agreement cash payments are a liquidity measure and will be included within the cash flow and liquidity discussions. Management believes that this presentation more clearly presents underlying operations as the amounts related to the Honeywell reimbursement agreement are recorded in net income (loss) are based on when such amounts become probable and reasonably estimable.

View original content to download multimedia:http://www.prnewswire.com/news-releases/resideo-announces-fourth-quarter-and-full-year-2020-financial-results-301235151.html

SOURCE Resideo Technologies, Inc.