Resideo (REZI) 15 Feb 232022 Q4 Earnings call transcript

Ladies and gentlemen, at this time I would like to welcome everyone to the Resideo Technologies Fourth Quarter 2022 Earnings Conference Call. Today’s call is being recorded. All participants will be in a listen-only mode until the formal question-and-answer portion of the call.

It is now my pleasure to turn today’s call over to Mr. Jason Willey, Vice President of Investor Relations. Mr. sir. ahead, go please Willey,

Tony Good afternoon, Resideo’s call joining for Officer; you be Financial And quarter XXXX thank and Executive fourth Chief today’s Geldmacher, for our earnings Chief Jay Officer. us Resideo’s everyone. Trunzo, call. will On

of and related our on are presentation website our release page Relations Investor of earnings at copy materials available A the investors.resideo.com.

statements you historical and contains forward-looking may other than facts We future during results presentation constitute not performance would and statements. and number are afternoon’s forward-looking like guarantees of involve that this to of call made remind uncertainties. the or Statements risks a

with differ Actual update Form no performance Securities Commission. SEC affect of may and that any forward-looking as including assumes and a in of materially and principal on results statements. filings the factors, our forward-looking time-to-time filings. statements the the from company those from obligation those report We Exchange XX-K number risks annual a described such identify The result uncertainties other Resideo’s on in our to

that, the to call turn I will Jay. over With now

good income. Jason, We to afternoon, navigate record challenges XXXX and year of was and historic macroeconomic market, these you, Thank deliver revenue full-year conditions. a geopolitical operating and everyone.

However, progressed. softened around residential as business conditions end markets our XXXX

cost Given protecting reduce we've positioning this, taken are for actions long-term success. and both the we ensure to near-term business profitability and

remain progress conditions believe distribution our we macro dynamic, their in rightsizing substantial the inventories. have While OEM made and customers

of impacts build that progresses. from We XXXX expect the to expect QX and base we in will point destocking mark low as terms

taking position for advancing respond resources costs measures in global to further the Late scale in new initiate future focus to XXXX as decrease situation, inventory action to improving improved positioning by better and are momentum approximate This action financial that market to in product initiatives includes an solutions, will Resideo’s growing and workforce. strategic cost performance products expect work. We and evolving Resideo conditions we with manufacturing result These customer actions on activity the that with year, us and optimization and X% reduce will expected growth. progresses. coupled in

We business strong is appropriately flow. the and deliver focused to profitability to cash are working sized aggressively ensure and

XXXX, the and as and for year-over-year delivered at we up increase retail For realization saw the First builders price our in salesperson. XXXX tools presence positioning business position key strong visible in We connected in and average grew across a and revenue per in future throughout new activities pricing and thermostat record and significant This We drove market the all realization returns growth. from Solutions and a both Products strong OEMs, investments generated our grew price XX% in in construction force channels, Alert added portfolio. the number of channel distribution content expanded training. the is revenue with our meaningful sales

ways leadership value-added run products work platforms support top development and hardware reducing and our is on and reduce of number to -end further These platforming development building look accelerate on by are customer partnerships, enhanced ambassador We by ball efforts. engagement efforts, investments significantly the our internal to our services providing time our the support block back interface of as costs. and business our the driven software critical advanced program our simpler leverage brand with we products. increased This to

business. sensing and at XXXX. provider acquired QX end Alert, of the the and financial leading of pleased we are a carbon We performance integration monoxide the First smoke And with

First we security and integrating from connectivity around with Alert new further opportunity commercial driven into Alert deeper into will more retailers. see cross-selling penetration traditional portfolio achieve our already distribution with the builder our opportunities key channel, have time, and First positioning We improve Over add business. significant

new a record sealant-based relationships optics In processors in late adding for focus innovations security team of December, a optics engineers providing The and help AI-enabled in team [Technique] silicon original with strategy solutions. brings deep significant sensors, track end These video accelerate capabilities capabilities of with help we sensors, video and acquired intelligence will on along and and users. actionable partners. with our design advance our manufacturer (ph)

attractiveness year ADI the grown had points a another entire XXth up its X%, ADI environment. has with in the strength the continued they year the testament deliver in gross over chain operating markets great for XXXX hard XXX to its ADI in organization to year-over-year revenue XXXX ADI a up consecutive marked the income saw categories has challenging serve. worked of supply and that basis execution growing of customers margin revenue XX%. commercial and and

for to on XX% quarter. execute reached the e-commerce enhancing investing the force digital XX% sales the continues of exclusive and brands its to threshold time, of XXXX, crossed fourth drive ADI tools in its for e-commerce capabilities, sales ADI in total sales total revenue and expanding At same touchless and efficiency. offerings,

their leveraging wallet also to analytic are and tools This better and suppliers differentiation through customer. digital drive creates new for a AI-driven to data these offer understanding revenue We inventory These and reporting data. provides share suppliers granular customized opportunity to and subscription sales of as we access investments cloud-based ADI look with of tools. contractors provide customers and

and ADI video Capture remains We grew new compliant over a datacom and enhancement for margin and significant NDAA and brands equipment and brands which new launched for Exclusive access wire of Advance, opportunity. and wire XX% long-term during AV includes in revenue three Pro accessories. SKUs XXX control XXXX revenue XXXX.

new expansion and see to will revenue opportunity in initiatives. continue We build offerings upon sales these for SKUs and XXXX meaningful

Datacom execute These year-over-year. of on over XX% XXXX, in AV million markets. expand accounted this into for on $XXX up this and to momentum, revenue of ADI adjacent in strategy the categories customers a to Building year, to in with proposition assemblies, of and in continues mid-January capabilities the with filling AV in acquisition datacom our custom market. professional added sourcing Technologies. BTX capabilities is the distributor hole datacom AV new BTX specialist value ADI fiber a

call quarter will discuss detail. fourth to over more to Tony the and With that, turn outlook XXXX performance in I

up Thank you, quarter year. Jay, compared afternoon, billion, QX $X.XX X%, was to everyone. of last and good Fourth revenue

Excluding $XXX million of grew Fourth million quarter exchange impact. approximately $XX X%. acquisitions from by negative approximately revenue and foreign

optimization initial in spend expected and year headcount actions, general third-party for to to margin operating million, related quarter asset income was of factory million $XX was a last include last year. reduced are impairment. in million expenses $XXX quarter for compared corporate rationalization, which functional fourth These cost XXXX. $XX restructuring G&A operating flat the reductions and in while fourth million with year's XX.X% generate reductions, charge of savings quarter, Gross Included work, $XX restructuring our

are million $XX the throughout in Associated XXXX to expected year. cash approximately be costs spread

and Solutions up $XXX Products fourth million of X%. quarter revenue was

exchange from million QX. impact $XX declined compared $XXX million to last unfavorable revenue of approximately and Excluding foreign approximately X%, First Alert,

to Price and realization impacted continuing million OEM were customers Volumes by revenue inventory $XX added year-over-year, approximately aggregate to distribution XX%. levels. approximately while declined adjust volumes

year. Europe the quarter security market European revenue comparables normalize second this U.S. this begin in down new quarter affected Our of the year, products and Security radio security in After QX radio with in and in sales key was in to first expect lower revenue. countries of XG year-over-year be migration will we to

$XX $XX Solutions year. cost million operating costs. Solutions operating of gross compared of XX.X% $XXX $XX in million and to Products and XX.X% Total of and Solutions for Products was expenses due million year. sales, relatively last up First margin or compared or million Products and XX.X% Alert was profit in restructuring to were flat, last QX year-over-year, with $XX million sales

operating Products Excluding was Solutions and year-over-year. profit restructuring flat costs,

million $XXX operating of and million revenue contributed Alert First of income in QX. $XX

synergies in profit year. First at year the $XX in our and million cost synergies on of We exceeded achieve Alert expectations rate both least by operating run end $X and XXXX. track annual million revenue of for to this remain of achieved

AZ XX.X%, slower XX.X% fourth ADI compared and quarter ADI was ADI with of delivered in in gross profit largely the flat quarter million year. million, of the surveillance essentially another control with approximately of added revenue residential categories offsetting Key and million prior margin fire, last to in million $XX more strong activity revenue, QX unfavorable with the commercial offset foreign was security up was than $XX remained impact. by acquisitions quarter $XX access in residential video solid exchange X% operating categories. including year. $XXX which

prior as higher well were from up million costs million, This as $XX and costs. $XX quarter. fourth increase restructuring, the finance year in Corporate IT million of $X reflects

to full-year X.X% spend declined of corporate of down revenue the year-over-year costs from Our corporate over and XXXX $XXX X% revenue. years, past million of X.X% XX% by was have three

Working for the full-year days for million million, cash rose XXXX. XXXX. capital dollars flow was $XXX compared with in Operating and $XXX

terms, the changes all in Alert, the inventory, incremental increase. safety of some First With stock to impacts to contributing supplier addition and unfavorable inflationary

first discuss to selected wanted common financial report. unusual turning that measures of very performance clarity begin a with manner as our EBITDA, may XXXX quarter measure non-GAAP on discuss outlook and as other we with beginning I XXXX, our for companies, made better affect Before decision will This our many results. public items provide to allow well financial to us consistent providing to earnings the

adjusted the be earnings income Adjustments given and period, acquisition net disclosure per and as non-GAAP Our relevant adjusted depreciation, share. such share-based unusual adjusted costs items other EBITDA will amortization, limited include significant include scope will items. to and material related in EBITDA, compensation, extent any in

expected $X.XX be billion, in of expect operating to the XX.X% for and flat implied revenue increase expected $XXX XX.X% the the midpoint. of at outlook is gross at to the in an midpoint. $XXX to range revenue to of Consolidated million, be the profit range our X% in Turning margin we to billion full-year is the million $X.X to of range to XXXX, be

the to share earnings GAAP expect per $X.XX We in $X.XX. of range be to

XXXX on difficult working factors predict. this magnitude We be that improvement are and The days will to timing and market of cash over still expect conversion improved capital dependent in of XXXX. and supply in-year our chain

in is be quarter, rebate and As that incentive XXXX. due cash typical, annual will payments compensation accrued flow to our were softest QX

billion. For the million range expect $X.XX in gross the to GAAP in $X.XX. be share profit to range to to earnings first Consolidated the the of quarter, billion $X.XX in to GAAP of $X.XX $XXX per dollars $XXX and XX.X% operating XX.X%. million margin we between be range of and of revenue

in QX in incorporates our QX, terms impacts points as demand Our inventory as residential activity. financial mark and for the of renovation on customer further construction destocking results. expect destocking uncertain well new low We do will outlook

mid-single-digit Our actions. realization solutions, and declines and Products offset cost pricing full-year XXXX restructuring revenue pressures to targeted in material expected volumes by price is margin and be gross carryover efficiency actions. by continued price by lower assumes solutions partially impacts and and products and volume new outlook offset impacted

be to growth incorporates residential slower and intrusion. continued flat AV exclusive outlook growth XXXX by XXXX our inflationary gross offset are optimization, partially margin is by is in in as ADI, expected and continued benefits activity higher categories offset low-single-digit revenue including pricing focused progress roughly stability margin For brands. in commercial categories, with reduced as ADI on

$XX expense year-over-year. to are be for million operating down consolidated approximately million be is XXXX Full-year by expected down expected Corporate to from million $XXX approximately $XXX expenses XXXX.

opportunities evaluate optimization outlook. and restructuring initial further are result to manufacturing cost further in that included that and continuing would costs are this yield additional We actions in savings not likely

XXXX near-term XXXX quarter despite supply Products and gross second Solutions our pressures as have targets, impact Regarding chain margin of the underlying financial progress. limited inflationary significant we progress, with our indicated earnings, &

some uncertainty, our XXXX cash near-term of as macroeconomic original and of as these timeframe continuation expected on the profitability well factors, is targets our unlikely. generation achieving Given

the Solutions & line business We a mid-single-digit committed Products low remain margin improving gross is teens over believe operating still and deliver margins top positioned timeframe. longer substantially growth and to to

the turn now call take questions. we I'll a Jay remarks concluding for few back to before

Tony. Thanks

to generation cash we our XXXX, financial look key momentum targets, the across to on on and improving we business. initiatives delivering are As the accelerating focused

on to We the are energy trends and positioned analytics. security management, home player meaningful attractive focus and energy in video physical be well around transitions market a increased

within also newly Our and wallet enhance share opportunities. will increasing development and new as about growing & avenues business Products focused strategic these is We're cadence excited very of enter XXXX. with introductions opening expanded of we product Solutions growth partnership organization new an major on opportunities while accounts,

underfloor water reflects off engineering returns organizations. shut and thermostat category, and product EMEA. entry gas several and detection controller innovation These to additions increased in security into from heating investment including leak TXX for connected heater launches pro-series our enhancements, the our valve initial the includes portfolio, This products, pool

As and we momentum this year to key build expect we the move area. through in

we opportunities, costs cash and delivering growth are and we margin As to growth. managing and earnings expansion drive flow committed ongoing

and core We growth improve optimization manufacturing are with moving supply resiliency. portfolio on facility work will product areas forward pruning, maintain manufacturing and chain focus and help margins, which us

At the attractive same time, and expansion value. structural our the exposure revenue leveraging to to long-term trends deliver shareholder strength, channel long-term professional relationship focused on we drive remain and breadth, product with

I the employee Resideo want a are prepared concludes in our This we questions. to and continued entire on our Operator, efforts again quarter thank delivering for base the customers. now for for their focus ready remarks.

[Operator Mr. Morgan Geldmacher. from afternoon Erik Thank Instructions] We’ll first you, go Stanley. Woodring this at

just Hey, P&S about years I my thinking guys. you XXXX, have in has P&S mid-single-digit need But Thank down I of, XXXX you years to comments to low-to guess, I business achievable. look one that my mid-single the still kind last flat realize chain again as growth of the first three kind range? of, digit it's on to for a taking is been, what very made growth a say and you kind do and actions most COVID about since outside with more Thanks. get sustainable, two. follow-up. supply this questions, and to macro. Maybe is it be taken then back the question of I I believe four And I and been guess have into unusual, organically

of you? highlight Hey, puzzle the continue. the and wanted excited latter in important. the that a to introduction that How did one towards answer I comment cadence that of new is Jay. that's pieces for And that new part of because about call call will really is of Eric. products today's is -- P&S question. The and This I'm of our velocity about why products. are And made to very I you your that the

velocity move margin the of as as areas along for new is one that and of focus with well we expansion. introduction As of products, and opportunity forward the it big the there between of cadence

pockets add adding market really our Erik, that growth across Good share. strong portfolio, question, of pockets we're opportunity you look guess it's see of I real I'd and Tony. Yes and when we where

market share in our OEM products, market air we're we're Our equipment, thermostats and adding growing business, filters and pretty clearly zoning share.

number places. of We have a momentum in real

think the few over and or that last the three And associated rate with headwinds the XG inherent we've then years. the migration decline across seen of over growth I particularly probably had radio the quarters, last in that rise security two distorts the is some underlying business we business have the what

you're the underlying for what stronger one at the to growth is probably quarters faster the be So that is trends, a component clearly going across our looking portfolio, four at. the I think a I crucial little of to things us of which than rate trailing entirety than maybe But seeing that. of market just NPI's look order in grow

introduced the the we're North up, add we going is I'll be on that to pro-series that thing thing the other And security one Tony brought EMEA pro introducing in that America had out for that one Europe. we in us a the comes issues addresses has some been in EMEA of product months a strong new and few and that pro the that the

next to acquisition that other months excited several additional capabilities some new is engineering we've the about. the that of things gives we're beyond products standpoint our and going there. from the accelerate opportunities that security portfolio over talked of into other The us innovation existing organizations six video about have Technique We capabilities provide analytics, that really some technology to helps AI and going cool

most just that of headwinds appreciate this point super kind certain gross in as big significant helpful, think if again what's we guess for the the but emphasis there? volumes I on question obviously this most the I order of Awesome. wrong maybe about P&S is And I has really headwind and of That what rank on for most I imagine has the me in tailwind I'm what maybe second or you guys been potential was XXXX. XXXX? terms significant versus side know just you the us Can Thanks. is specific of a color. margins, correct

bit factory off to -- going Probably to cost we're of see a one structure. but and that a that able achieve is not doing I'm the labor be I been expanded think doing factory pursuing that couple is factor we a first this correct. seeing we're addressing more. come doing we've responded we've now just we'll some this head, though lot top address I yet deleveraging. over in direct of optimization biggest and our restructuring somewhat talking to did really by do rigid my we inefficiencies, years. I'll that We Even in the down. have But this over single unit about of the of we're price, been other been think both. We've Eric, little Yes. but say have the volumes some XXXX the last

is factory biggest the one. I deleveraging So the think

The this costs. we're targeted element -- action, in the inflation seeing. some top we're to of stage responding second the margin some at XXXX. is And of seeing in some to we're of inflation we're some price of price putting We're increasing factoring incremental element of inflation with get that still that material level going higher versus we're and through not at sort that on this the cycle while

everyone In Eric, also ’XX better others in and careful, fact that material supply certain the costs, are aspects knows. I XXXX, the really inflation little knows of be was as pockets though increased we'll aren't yet chain that and everybody the most ‘XX in challenging the that on in even there's of world add, but a certain that year. last because that, as I'd getting think

folks but as when other timing part throughout that speed will being that. have improve [Indiscernible] the of to of personally that of to going as continue year, that. be we watch closely and as this have to is question terms the that I in careful you so I the And think we're some of well think

tied with that all that's said. what So to Tony along

inflationary And about in That the to of Yes. to also was last ADI, year year. benefited their they then maybe expansion some half margin respect from business. for with add trends their

The been respect other the we've half was with a investing really in lot that business. initiatives of to that through

to in of, that year, other incorporates kind better for average we than business? overall can this of space, much see for our largely importantly around plus the dramatically pull higher brands, outlook flat the probably they than rates and around continue And Our of distribution optimization. faster those our products at maybe that as minus still levers than or have a price news we exclusive some the margins as margins And much, because grow ADI. the

the By neglected to well. thing continue we I way, P&S, is on as one see mention direct labor to inflation

Mexican have and significant in factory rates We pretty and have Mexico up in definitely that's trended continuing wage footprint XXXX.

for And mention to very I Thank super. color. just Okay, performance cap for Rob, took you ADI the my you guys you strong guys. is to and the

You do a job. great

Thanks.

Zaffino Ian [Operator go you. Thank to next Instructions] Oppenheimer. of We now

to volumes? question recovery, Hi, great. about last inflation to it do I a get of into but in maybe you. you also pushing What build do answer. Thanks. to for XXXX? pricing environment? environment, material face and think the or Thank are kind how maybe about in just And I trying that price competitive ability last assuming wanted know you're declining on also of you the your that talk

in saw to latter think our environment increases -- we're less we They'll seeing in we're ourselves price we XXXX. underlying focused And that of last be remain Clearly, competitive. competitive cost way They'll year Yes. to is part a increases in always the be making structure. attuned sure to than in put areas we expectation be the position and and this going in the our I year for of targeted. where

I incrementally of that that I hasn't points away. Inflation we numbers the are I awesome. a recognition inflation But and look were inflation gone dynamic, we're getting right. you're data bit see there's to while sure there's And when gaining competitive that I on at the think not think We make that lot that a want the market right? today's environment maybe we indicate think we general world, in a share. little mean, still really better. focused

execution our So we well. as in feel good market the in environment the about

And guys as Okay. category the ask of them lot the monitoring are products and maybe your of Thanks. How Thank or should or of monitoring a what revenues side? new lot of, you. we some is wanted then recurring to you're far expect talk introduce could products these in how tracking this that, as I the you about maybe is expect new of get and that which what to kind growth? you trying we expectations revenues to large on a

some a as couple I'll well. Jay of I Yes. probably suspect comments. input has make

and which Jay we kind of of bit gave out So now respect or connectable, effort talked that as the we a little over been direction. just our a build investment which chunk that investment, with the laundry The R&D half connected are overall of a ecosystem significant of products last in the has frankly a to in internally list. about year our that majority going means

develop the -- leak we really connected ecosystem. and always the early the that working detection, the connected of thrust it on that terms primary are going really in to outside thermostat are they're is sort to are of new pieces going be in to ecosystem. But There's fully So that products products. come water like is all of of what

of out a effect we going as we be mass to are that revenue. get a of think see where sort building a Given more piece, certain that we a meaningful piece there's products contribution of to by critical you'll network --

that in we is further accelerate the think we of of performance to to you on we look more revenue. about point out a but this of across driver that just talked with products to would I and year, that help more be that on to will and really being think revenue look on focus platform, have think today I revenue the lot and I key platform more products itself driving to we going and as the products a it, our their as

and And ecosystem that opportunity you and does that as Tony gives few a offering. software and say, a doing year, about terms over of a in you've services. quite the us talk we've that the drive we last would been built a I from know, mentioned, even be this expansion need hardware we've all also to out material standpoint, bit it that -- as Yes, talking both and Ian, platform to as that areas ahead ago more then minutes well that about expand total -- as as things in of asked for provide, that that what the opportunity it the probably just we're of months in we'll

So I why now really you, that's of I I total how of the helps us how that ecosystem I of new previous so important terms caller, that's in marketplace. am think the play I told other increasing in it the think as the see mentioned the change coming question products I differentiate out velocity on and is excited of that cadence a

great. right, very much. Thank you All

Thank you. Chung We got next out at to Paul JPMorgan.

Hi, taking thanks questions. my for

you of the if So outsource initiatives more manufacturing to of impact you so portfolio? the and margins you're cost expand et on P&S are about Or longer-term on and respective just looking initiatives, saves cost could the cetera? thinking the on some

factories certain to will we which some to really where initially is Sure, the leverage we going areas in-source to to in around on to we those think in create efforts is efficient to to going range great of going in part factories from we going automation, there the but it's at outsource. sort trying are outsource the be cost of more is from of activities factory or going it, have that look have environment first

make supply we've how cautious to clear are be and going to being to want chain been resiliency. I and about outsource where cautious mindful that we of continue

resiliency be a have roll steps, rigidity pretty work mind but we cost to because opportunity, clearest And one of to that some market the a number balance we any end to to keeping transition but we the resiliency. there's the going because got a have But supply think as in there'll through factories. that is we've structure, chain We footprint, of reserved our XXXX for that also first in good and continue lot we're and lower while I QX cost more in ‘XX. today, of

have the last but during very built of just cautious it plans we I actually or a supply is impact for, factory the of risk call it the that very may the think at to I that during -- that would COVID optimization there level Paul, some maybe and forward in mentioned craziness, had those, a not high the projects ourselves on of risk have chain moving were provided created. we by number because

in the and lot we for last the over and a on folks few because until the things, brought that cost now of and And that are out variety doing in too, coming of put now really it are the opportunity us that at other just the of of that now that terms had gives it us a have in with in we a excited about gives First piece Tony playbook for exercise the while of Alert, us course automation good to position very our that different talked work. we parts to we're experience and factory optimization, company that levers automation but that years I'm that sideline the opportunities about of

you that. Alert, Great, year. on to thanks follow-up better-than-expected mentioned for asset And the then this First just performing

into in what looking the asset how So and Thank at mind you. ‘XX this we your portfolio? drove do momentum assets And then other upside incremental the then to may be think complement you heading about original to projections? that of your

your to integration, think -- But what be him will see I'll better-than-expected. comment, the down. over I too, I Tony because way

any You never care know if million it's I when $X do billion. don't acquisition, you $XX to million, $XXX

of out in First but both we've to and somewhat able from of teams things been that well together the we that our business part am I pleased very some the why things are Some of laid to that case. unpredictable, the reason original worked the team outperform of Resideo the super had say that's Alert people

et are places that we new a from there in standpoint before that small it's I products those carbon in with There many, as that many the certain sensors types about the all opportunities types Alert things the we future. and in types you then off and and offices or in so talking ecosystem monoxide it to First comes And the additional as cetera, products about were portfolio. house different the business building, back mean, in move and this in they're the the comment platforms in incorporate of are of know are of question of opportunity your us base forward. to connect gives moving forward smoke,

has we're pretty excited we technology help opportunities come productize us. over cool that can So some about with up the years ideas innovation group there, and that the our ahead

then have our And that are our super of we to network. commercial side that leveraging -- tied things course, very really pro one channels, channels the leveraging and things the commercial Resideo's that's strong of of on big of that the strength important the of were

year And so I'm holds. you voice, about what less can pretty by the my tell we've hopefully where a excited and done than can in future

detectors we're Yes, being the about excited the about offerings coming smoke standards out only work we will the point a underway our monoxide drive in products First that position of bring into and in on and the thing that connected to are the we're have of the middle to the growth additional for them in able the of a I'd and terms carbon to XXXX add pretty there bit excited technology. to made Alert real estate that that transition that, is is product there's to should capitalize as ecosystem. category now some on requirements the that pretty about sensors fair continued in ecosystem, that capitalize enhance basically And Jay all

forward, us. area of real is looking think growth for So this meaningful that I an

you. Okay, great. Thank

to has mean, really a that got say a in team don't want really When you said it we on with about I one one long definitely the for time lead having on and a done executing has after know other of acquisitions, early Alert. we and First make count think we solid management that I acquisition. this to been the I things Jay great this team guys, is I that, Those place really for thing time, job. a that in team they've been marketplace long

I've Yes, XXX%. agreed

We of now you. go William Thank Blair. Paul next to Dircks

Thank my questions. afternoon. good taking for Hi,

remind gives -- of So could of can sales will comment first maybe XXXX, are distribution channel the quarter cetera percent in fact for that what you be here versus tie by into OEM end confidence a et Products us you within first P&S destocking business, at that question point? the me and what you low the

particularly them not as but seen we've our Let and question, you're their that we days, last at track top and as talked with think, get only of because scrambling we've me context. quarter, here collaborate going get about provide from to XX talked for well this to point think their send and try trade in some part but us We customers -- them what And terms that of the I answer sell-in, sale numbers try to of objectives. time. sort information that for their we about is in inventory levels this January last quarter inventory our of level I too, second to we

as down the little be were that going to hold long take, go levels, maybe of a well. is as have but the far pretty continues the going good, we think point-of-sale and the going to think destocking low to darn we're and the how it to there'll less with seeing up, to as was that than how coming sale of we're and is was we to I decline we think point still just like I had anticipated inventory little data I levels out QX it feeling not point uncertain feel be the slope desired a originally come

Got helpful. it. That's

maybe I offline the Speakers] guess guys. follow-up I can [Multiple regarding sales Okay,

XX% or the OEM code. in trade minus plus I zip somewhere XX% roughly got

you. I appreciate that. Okay, Thank

go question of obviously manufacturing behind speaking me, the was that back manufacturing realize P&S. the different key market, optimization about for margin I early plans, in in Next the of Investor Day a target one XX% XXXX your XX% XXXX at operating components but it's optimization, to

to I'm today those bring related read what through the of appetite, maybe about start an savings to can and there I as margin thinking manufacturing plans the me there right those P&L for guess some exiting plans announced fast-forwarding to beyond the I target is internal sensing an well, to is here you've try almost year? So help here to to exiting what's walk And XXXX? is today you that guess operating realistic accelerate optimization

has of know follow-up make me I Tony don't comments, a couple Let if on. some

minutes things mentioning ‘XX part I we there And during factory and optimization, and on to because Day. living just I good ’XX, isn't opportunity and it's we the a all really we're think it’s a the of we there, very but -- factory access variety as beyond things the were ago, world is few different for definitely this. of ‘XX that again, was playbook it cautious have of a what levers it's a automation, have the automation, of As in, we playbook of even at Investor time

And to as said to different about to a levers as to these though have before, by. leverage before Tony my those at strength have even that variety a look operations excited through that of that of being opportunity the we I take able opportunities we thought and and about the benefit talked move group dynamics take I'm we had

Let's see Tony's.

I my more we're cadence remain from on for years there -- perspective, ago. beyond follow clearly QX. The Paul, to so would what those are strong two -- cases were of in actions Yes, reserved they to somewhat at say, manage, The carefully. we least business are as as I going other we guess

Alert year to real then. we automation opportunity we're factory to but did pretty year, over And where learn at we and in another is due next a First we from have to factory call-out those and as was to in plans half, first it the least think think well. as that's the the good we going didn't the So the have as not ‘XX automation, opportunity

probably opportunity the bigger suite than there significant and in is So it was ‘XX.

The maybe and able resilience good we we to last our chain have over then. we cadence and years that unwind were couple to we sure customer it supply build patient, relationships, demand more be be a to today successful than at of meet to supplier those and a because which were others than the better I we making going focus we're would did on of that say

going balance to going be those proceed multiyear what's through we a two we're to things as process. So,

certainly relate and world. from the business margin to increasingly that distributor I Got the agree side switching investments quite with part of into the it. and and your for I is to digital think outlook XXXX Very other the your expanding performance business, a the helpful one into than comments color. do me bit that Last peers. to ADI many the has better internally

So whether business increasing could us my your you the is, of into you exclusive that will could be margin about think you categories question other perhaps further here traditional? brand And investments adjacent briefly the into it's remind or business difference XXXX? of touchless in versus expanding into maybe for talk powerful also or channel some sales drivers

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enablement I'd are operating expenses the really to two in down building going sort to that and those are things I in position we out, the down think I another initiatives didn't I critical is also relative investments new gone those the but ERP the that business. to made year could and out and of we the we around we're call -- system investments, we drive in there going and have we not driven have business So them wave the sales mean, today, this because we're next be because was chunk, that think of that

the that's other that a complete slip match of in rest strategy that like else continue with offers. up they that adjacency and still not the that at add, moved into they The part and well I'd left continuing a I think space their very datacom out talked and to and as they look that own only what opportunities you thing successful is as mentioned field growing of will so there, adjacent about like adjacencies products we've they've with are the

job that. a done nice with they’ve So

guys. Appreciate the you, color. Thank

you. Thank

Thanks, Paul.

now you. at Kearney Brett question We from Thank Gabelli take our next Funds.

my for and afternoon taking question. good guys, thanks Hi

bet. You

Brett. Hey,

was your But New you platforming that yourselves remarks able for see unlocking and offer just You talked longer interesting you customers vision capabilities fits term, finding the and actionable but over have underway. broadly about talked contractors how I about you you an Zealand, sounds is, it about are to guess might to you guess like what it these curious said the obviously software your medium-term? like acquisition in I intelligence what some customers, be engineering sounds and with believe point prepared you I initiatives it

Yes, now with opportunity, us about what internally point terms but earlier this products acquisition this -- along in meeting about to talking of it we're and in that eight. they our also up of really have can just would a before say, in that it where believe have many this morning, guys lot capability two work provides Brett, done they products new we can believe is too. new the these two we the of group of And hardware, equals capabilities terms provide really, a of accelerating excited in other very plus products I it what to for that I we're additional innovative software impressive hardware the time, are the

year, So AI, a in up up but that one the cool to going talk do we we think the security, of that out some video I us. I they're analytics really cameras on have came for software stuff particular some this on question following that on coming hardware, opportunities, video mentioned things,

brainstorming share lot excited around I forward, spent on ramped really Christmas Founder move with and and is out ideas but of things they've we frankly fit. more the quickly and we of a that which guys CES timeframe great that integrated a and the with it's our teammates, and the got the bunch time company deal after a we're to good So CEO up with company, together you very into as cultural

So, we're excited about that.

thanks guys. Great, much so

got to We now of Imperial next you. Capital. Ruttenbur Thank Brian

you you price from what potentially any on increases, given XXXX increases, Quick talked anticipate in push total the of pushback finance. were all, any increases first there hopefully and XXXX, back much. XXXX and were market? in potentially question, in very your Yes, XXXX thanks on average about Price on price do

the was or number $XXX million. minus plus 'XX price So

less. exactly what looking collaborative Nobody, fraction know increases large number the customers don't and tried we cost, collaboratively our price we're than it's think -- of price increases part at this but The the what increases, substantially I'd to in I that stuck. do be year they I right. less our substantially worked of going see us But that, to way happy we've in with because is channel. give, a included, that. we

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this over really tried take to we've So get any advantage of not or form. in skis out and environment shape way, our

explained, to how just Tony do, the for the that then that Tony but opportunity that's think we the the I be I'd it, more and you that. and price And way mentioned way that sticky, add do

see if that's that's Tony up spot on different. from XX of from for Now I year comments. think months to but a his normalcy back inflation, now, now, we how think everything that all in months more I We'll goes, gets this

when just -- to follow-up, seasonality spring, a the me standard you normally those a is impose as your Is is that price increases, there the you fall, if could price potential? is of it would there remind just increases

Usually I in the spring. mean historically did get we saw we some

hasn't there last Over of it's that -- been couple the of been years, level seasonality.

all it's us over of the last dynamics the that Yes, some the on the allow through to also just tied two we've that to gone together brands unique the say strong help too. years. price dynamic, them I'd also

been that's think factor I So another us. for

thank Great, you.

Thanks, Brian.

Thanks, Brian.

comments. you Thank back you. Willey, And further closing hand gentlemen, it any Mr. I have afternoon. no this for appears things to questions we

speaking you good their I'd look like for to we with a Thank Everyone forward to you the today coming much. very and over day. weeks participation have thank months. and everyone

Thanks, everybody.

you. Thank

us gentlemen, call. that joining We'd wish Resideo much conclude quarter conference a bye. does so ladies, to Again, like evening. for thank fourth XXXX Technologies you you today's Good all great and earnings all