Strategy in TECH...
Resideo Technologies, Inc. (NYSE: REZI) – the new parent company of residential integration company Snap One – recently released the financial results for its third quarter of fiscal 2024, the 90-day period that ended September 28, 2024. While the overall numbers looked fairly strong with revenues increasing 18% to $1.83 billion with gross profit expansion, when looked at organically, the results show a more moderate revenue growth of 4%.
Last week, Resideo Technologies, Inc. (NYSE: REZI), the new owner of Snap One, announced its financial results for the second quarter of Fiscal 2024. This is the first earnings report that follows the closing on its acquisition of Snap One, the largely residential AV integration business, and therefore the first earnings in which Snap One’s business contributed to the results. Even with Snap One included in its numbers, the surprise was that the company reported a 1% revenue decline…and a 40% drop in Net Income.
I’d call that an inauspicious start for this new partnership.
Resideo Technologies, Inc. (NYSE: REZI), a manufacturer and distributor of security and related products for business and home – and soon to be the new owner of Snap One and Control4 – announced its fiscal 2024, first quarter financial results. Considering the looming event that will make Resideo an important partner to many in the custom integration business – the closing of its acquisition of Snap One/Control4 on Friday, June 14, 2024 – I am launching a more detailed coverage of the company.
So…given that Resideo is about to spend $1.4 billion, or 20% of their gross revenues – to acquire Snap One, you’d think that things must be going really, really well for Resideo. But are they???
Snap One Holdings Corp, soon to be part of Resideo Technologies’ ADI distribution business, reported their financial performance for the first quarter of Fiscal 2024 yesterday. In the wash, it looks much like its other recent quarterly reports – sales decline, losses increase, sales shift from its own proprietary brands to third-party brands, etc. But a couple of things did change, starting with my assessment that much less effort than usual was expended in creating this pretty thin report than is typical for them…there isn’t even a quote from CEO John Heyman or anyone in management…and the company even chose not to hold an earnings conference call with analysts as they typically do every quarter.
I suspect that this is due to the fact that the entire company – and its investors – are simply waiting for the new owners to take over.
In the matter of Snap One, LLC v. AVA, Inc, and Josh.ai, Inc., we finally see a substantive move after the initial filing by plaintiff Snap One and subsequent answers from the defendants AVA and Josh.ai. And that subsequent move is a doozy – Josh.ai has gone on offense and filed a motion to dismiss multiple major claims in the Snap One lawsuit.
Josh.ai’s filing is well written and puts Snap One on defense, forcing them to submit genuine facts and evidence to support their many claims, including a few allegations that were really quite salacious.
On Tuesday this week, a previously announced program being offered by Snap One – now Resideo – has begun. This program, called Control4 Connect, is a mandatory program that requires all integrators to connect all new client installations of Control4 products directly to Snap One’s central station for future software updates and data collection.
It is a new kind of transactional connection that establishes a direct relationship with the client for direct-to-user system updates and base-level client support supplied – not by the local integrator – but by Control4 support.
The day after we learned about the acquisition of Snap One by security company Resideo, Moody’s Investors Service, Inc., one of the nation’s preeminent credit rating agencies, issued its initial judgment of the impact of this deal on Resideo’s creditworthiness. What they had to say kind of swung two ways so I thought I would share its perspective with you.
This morning we learned that Snap One Holdings, Corp. (Nasdaq: SNPO) has been acquired by large security provider Resideo Technologies, Inc. (NYSE: REZI) and private equity company Clayton, Dubilier & Rice (CD&R) in a $1.4 billion deal. If you aren’t familiar with the Resideo name, you may know them by ADI, their distribution wing.
The deal is expected to close in the second half of 2024.
At the end of last week, Snap One Holdings Corporation [NASDAQ: SNPO] announced the results of its Fiscal Fourth Quarter and Full Year 2023. Much as we’ve seen quarter-by-quarter all year long, the company remained subsumed by a challenging “destocking” market, with Net Sales in Fiscal 2023 finishing down 5.6%, and its Net Loss last year increasing by another 146.3% this year. CEO John Heyman called it “another strong year.”
But was it truly “another strong year?”
Portal, one of the custom integration industry’s most popular AV proposal & design software solutions used by thousands of custom integrators every day, has announced that they have struck a deal with two industry powerhouse brands – Snap One and Sonos – who will make the software available to their respective integration dealer bases. Both brands will underwrite the full monthly subscription cost for their dealers in an effort to help those integrators raise their level of professionalism, improve the efficiency of their operations, and increase their deal closing rates.
