Hey, good afternoon, everyone. My name is Isaac Sellhausen. I work alongside Ian Zaffino on the Special Situations team here at Oppenheimer. We're happy to have Resideo with us presenting today. Representing Resideo is Tony Trunzo, the CFO, and Jason Willey, who is the Vice President of Investor Relations. They have a presentation for us today. You know, if you do have questions, please submit them on the portal, and if we have any time at the end of the presentation, we can try to get those answered. So with that, I'll turn it over to Tony and Jason. Thanks so much for joining us. Thanks, Isaac, and thanks, everybody, for joining us today. It's our pleasure to be here virtually to talk a little bit about Resideo. For those of you who aren't familiar, Resideo, New York Stock Exchange, traded under the ticker REZI. Our 2023 revenue was about $6.2 billion, generated $590 million of Adjusted EBITDA, and importantly, $335 million in free cash flow. This is an excellent free cash flow business. We're a leading global manufacturer and developer of technology products as well as a distributor. So we have two pieces to our business: our products business, and our ADI Global Distribution business. We'll talk about both of them today. Fundamentally, across our business, we have a presence in approximately 150 million homes. We cover 350,000+ products from our ADI Distribution perspective, with over 1,000 suppliers and 190 locations, and we have a collection now of trusted brands. About two years ago, we acquired a company called First Alert, which gave us a trusted brand in the safety and smoke and CO monitoring business, as well as a license to the Honeywell Home brand. And as I referenced, ADI, our distribution business, has its own strong brand, as well. The investment opportunity here really is in three areas, and we'll dive in a little bit deeper. But we have a unique array of distribution channels at Resideo across a variety of different professional relationships. We distribute through large HVAC distributors. We distribute through ADI, which is our security route to market, as well as OEM markets. The business over the last several years and the management team have worked really hard to build out the opportunity to structurally drive margin. A number of years back, when we spun out from Honeywell, this really wasn't one business. It was a series of businesses, and there was a fair bit of blocking and tackling that needed to be done to optimize manufacturing, to optimize the operating expenses, and more recently, for us to really get a focus on new product development. All of which, ultimately, we believe, gives us the opportunity to drive margin expansion. A lot of that expansion has been somewhat hidden, actually. A lot of the progress has been somewhat hidden by the supply chain and inflationary challenges that, that we've seen over the last several years. But as, and then also by, by the impact of, of some lower volumes. But as those things have begun to reverse, we've begun to see the, the fruits of a lot of the underlying work that's been, that's been done in the business. And then we, you know, we feel like we have a real right to play in the connected home space. We, we have a broad array of products, and we have access to a broad array of distribution here, and I'm gonna talk in a minute about our pending acquisition of a company called Snap One, that we think brings us even, even closer to realizing our vision of being a significant player in that smart home, connected home world. So I made reference to the last four years of transformation, and it's been a journey. It's been a lot of work to get this done. But when you step back and look at where we are today as a company versus where we were, really, our spin from Honeywell is now five years past. The new management team, including myself and Jay Geldmacher, our CEO, joined right around 4 years ago now, and we've really focused in four areas. One is portfolio rebalancing, another is cost reduction, and a third is operational improvement. And this is all, you know, I call it the blocking and tackling, building the foundation and really getting the business in a position where it can enjoy significant operating leverage. I will also say that some of these initiatives have been slower than we would like, because largely because of the supply chain challenges that we saw, and then subsequent to the supply chain challenges, some market challenges that we saw. But as I said, we're really beginning to see them. We are now, I think, at a really exciting point in terms of new product launches for the business. We have video and connected water solutions in the market today that are new. We're excited about bringing more products to market on an accelerated basis over the next few years. We've done an array of value-added M&A. The largest transaction that we've completed is the First Alert transaction, which I said was finished about two years ago, and we'll talk a little bit about that today. We did that successfully, and we've seen great value creation from that. We've also done an array of smaller M&A. A couple of acquisitions in our products business, really around bringing core engineering and design capabilities to the business, more so than really other significant product acquisitions. And then at ADI, we've been expanding into adjacent categories, including datacom and residential AV, and we'll talk a lot about residential AV here in just a minute. And we've also taken on some strategic divestitures. We have consolidated the geography around ADI, and last fall, we divested a business called Genesis Wire, which was really kind of a non-connected, non-value-added, relatively low margin, relatively slow-growing piece of our business that didn't really have a strategic fit. And these kinds of things we'll continue to evaluate, and we'll continue to look for opportunities to do M&A in areas that are consistent with our strategy, and potentially to divest businesses that are not. From a cost reduction... Oh, not done yet, Jason. Sorry. From a cost reduction standpoint, we've reduced our corporate costs significantly with a focus on scalability and really driving our costs into the organization. Our structural cost reduction plans around getting better efficiency out of our manufacturing headcount, containing our OpEx, and also doing optimization around our manufacturing. We outsourced some castings from San Diego to a third party. And we recently divested one of our Mexico facilities to a third party as well. And then operationally, these are really more the strategic things that we've been pursuing. ADI is growing their digital capabilities. We're building out partnerships with insurance companies and utilities and finding opportunities to get our products and solutions in the market through alternative distribution channels. And we've expanded the depth of relationships with some of our existing customers as well. Particularly in the home builder sector, we've seen really significant progress in terms of expanding the level of content that we have in residential new construction through building deep relationships with the home builders themselves, and we'll continue to make those efforts. Now, Jason. I mentioned just a minute ago, we announced a couple of weeks ago, the acquisition of a company called Snap One. We're very excited about this. Snap One is approximately a $1 billion. They actually manufacture and distribute mostly smart home products. We see it as a direct adjacency to our ADI business, where our network of distributors is largely in the security space. Their network, I should say, integrators, their network of integrators is largely in the residential AV space. And it, particularly at the high end of the market, we see a pretty meaningful overlap in terms of the folks that they do business and with, and the folks that we do business with. One of the key initiatives we've had at ADI has been to expand our product capabilities and our proprietary products. Snap brings that capability. The business models we think are highly complementary. They really give us a meaningful cross-selling and market expansion opportunity, and it has a very significant financial profile because of the operational and distribution-driven synergies that we think are available to us. The transaction overview, it's approximately a $1.4 billion transaction, so it is the largest transaction we've done since the spin-out. On an adjusted EBITDA basis with projected run rate synergies, it amounts to about 7.4x their 2023 adjusted EBITDA. We think this is a very attractive valuation for this business because it really does provide significant enhancement to our overall ADI platform. And we see the synergies here as we've indicated $75 million of projected run rate synergies. We see significant, just straight up cost synergies, as well as the consolidation of our distribution and sourcing footprints. And ultimately, the opportunity to drive cross-selling through the ability to take Snap One's proprietary products and bring them to bear across the ADI network. We see it as accretive to Adjusted EPS in 2025, and we're financing this transaction with $300 million of cash from our balance sheet, $600 million of new secured Term Loan B, and we sourced a $500 million perpetual preferred equity investment from Clayton, Dubilier & Rice as part of this transaction as well. That's an exciting piece in and of itself, in that we feel like that's an attractive partner with a world-class investor who has deep experience, both in our products and solutions markets, as well as in broad-based distribution. Snap One was 72% owned by Hellman & Friedman, so the transaction does not require a shareholder vote here. H&F has given their written consent. We anticipate the close here, subject to regulatory approvals and closing conditions, in the second half of 2024. Talked a little bit about Snap One already. A little over $1 billion in revenue last year, approximately $117 million of adjusted EBITDA. The Snap business model is different than ADI's, not just in terms of the markets, which, as I said, is an adjacent market, but in terms of the level of proprietary products. About two-thirds of their revenue comes from products that they source and bring to market under their own brands and make them available only through their distribution channel. That's one of the really attractive synergies we see here, is the ability to take those products and sell them through the ADI channel, where a substantial volume of very similar products that ADI sources from third parties are sold. Those, while those sort of swapping out a third-party product for a first-party product doesn't necessarily increase revenue, it is a substantially more attractive gross margin opportunity than what we see with third-party brands. They also bring, Snap One also brings the Control4 platform with them, which is one of the leading smart living home platforms. We think that that is... It's almost an optionality play for us because we see the opportunity to expand the breadth of integration with our products and solutions products, our thermostats, our security panels, and our smoke and CO detection equipment onto that platform over time. I've already indicated most of this. We see, you know, significant value creation here, across the ability to expand and differentiate our market position. We think there is an opportunity here for integrator enablement, where we can really provide incremental capabilities to our integrator partners that will help drive and develop their businesses. This expansion of the proprietary product opportunity really takes ADI into a more of a more deeply into the specialty distribution realm, which we think is differentiating both from a competitive standpoint and also from a value standpoint. And as I said, there's significant business and financial synergies here that we're gonna achieve over the next two or three years. So I'm gonna spend a little bit of time talking about the two businesses in depth. First is the products and solutions business. It was about $2.7 billion in revenue in 2023, and $560 million of segment-adjusted EBITDA. We break this business into four pieces: our air business, security and safety, water, and energy. Air is identified mostly with our thermostats business, but we also have significant other capabilities in that market. It's about a third of the business, and we're a market leader, but we do see substantial growth opportunity. It's about a $3 billion market. Security and safety is our legacy and traditional security business, as well as the First Alert branded products and the BRK branded products in the smoke and carbon monoxide detection business. The water business is about 12% of the total today. We have recently invested meaningfully in the water leak detection and water shutoff market, as opposed to simply some of the valves and traditional products that we've had in that market. And then our energy business, which is about 20% of the total, is basically components, controls, and combustion systems for furnaces, water heaters, boilers, and the like. That is, it's largely an OEM business today, but a very important one. So diving a little bit deeper, I talked about the air and comfort business. Like I said, largely identified with our thermostats that largely carry the Honeywell Home brand. And we are a market leader here, given the breadth of our portfolio, from the low-end, non-connected thermostats, all the way up to our high-end T9 and T10 connected thermostat line. And then we also play in the indoor air quality market through filtration and ventilation, humidification, dehumidification, and those are areas that we see the opportunity to continue to grow, and those are areas of newly focused investment for us. The security and safety business, as I indicated, a big chunk of this came from the First Alert business that we acquired a couple of years ago, and I'll talk a little bit about the progress that we've made with that business over the last three or four years, because I think it is an indicator of our ability to identify attractive M&A opportunities and drive the synergies from them. But it also includes our existing security business, which is traditionally security panels and door sensors and those sorts of things. And we've also recently introduced, and we'll continue to expand our line of video products there to continue to drive that market. The water business, I've talked about this. The water leak detection and protection business is not the largest piece of that business today, but it is the area where we see the largest growth opportunity. Water leaks are a major source of losses for insurance companies, and this is the area where we've built out the best relationships with Nationwide and USAA and other insurance companies, whereby our products enable their... reduce their, partnered with them, enable their policyholders to receive discounts, and also obviously benefit them by reducing claims. The more historic part of that business has been valves and pressure regulators, and backflow preventers, and things like that. And that business has both a European and a U.S.-based component to it. And then finally, our global climate solutions and energy business. As I said, this is largely an OEM business, where we sell to the water heater and heat pump and boiler and furnace manufacturers. Lots and lots of different products, very long tail, a lot of long-term sort of repair and replacement opportunity here, and also very high market share. So we enjoy relationships in places like the water heater market with the major branded water heater manufacturers that puts us in a leadership position in that market. So the real summary here with respect to PNS is, you know, we have a really wide array of products that we have access to a very wide array of distribution, both the HVAC channel, the security dealer channel that I talked about, as well as our partnership with OEMs. We also have begun we've really expanded our what I'll call non-traditional distribution around things like utility grid services, where we have a demand response business. The insurance capabilities that I mentioned earlier. Residential new construction has been a real bright spot for us, particularly in the smoke detection and CO detection market. And there's a retail component of the business as well. So I referenced earlier the efforts we have around margin opportunity. It's really in this business that we see the greatest opportunity here, and we've made progress in all of these areas. We've. During the inflationary period, particularly in 2022 and early 2023, we saw significant inflation. We were able to achieve significant price realization on our own products. But really, at the same time, we were simply covering the incremental costs of our inputs. And we believed over time that as those input costs abated, which they have, we would be able to hold price because of our position in the marketplace. And in fact, that's been successful for us. Talked about the portfolio optimization and the manufacturing optimization, and really now, with these things kind of in place, the real focus is on being an innovator and really driving new product introductions across our critical markets. And these are markets with nice secular growth, but we see the opportunity to really reclaim some market share there as well. It's a business that does have attractive growth trends. You know, the connected home that I spoke about, we're going to continue to develop that theme. I talked a little bit about our energy management business. It's small today, but it's growing quite rapidly, where we engage with our utility customers to help them manage demand spikes at times of grid stress. The residential life safety requirements here, increasing concerns about smoke and fire, and as well as, you know, as well as just the life safety piece of it. And we have an opportunity to really leverage into the energy delivery transition as well. Heat pumps have been a little bit of an up-and-down market, particularly in Europe, because of regulation. But our OEM products are all hydrogen-ready for that transition. And we do have a position, as I said, in the heat pump and gas to electric market. A little bit about ADI itself. Moving on, this, as I mentioned, this is a distribution business. We have. It's about a $3.6 billion business, $275 million of segment-adjusted EBITDA. A wide array of products across a wide array of applications. But fundamentally, the history and core of this business has been in security, both residential and more so commercial. This business is two-thirds to 70% commercial. We have been growing this business in the residential AV, the Pro AV, and the data communications market. And as I talked about the Snap transaction, that's really an opportunity for us to further broaden out this platform. It's a business that today is, as I said, about 65% security. Majority of the business is in the Americas. The majority of the business is commercial, and commercial here means, you know, small and medium business, light commercial sorts of stuff. This is not really industrial end market. We focused a lot over the last several years around touchless revenue, whether that is e-commerce or, or some other related capability. The addressable market categories here are around $14 billion. We see our value proposition here around the breadth of our ability to deliver products to the market, the breadth of the distribution network. We can have products to the vast majority of the United States in a day. And then the sales and growth culture here is something that has enabled us to grow faster than the market for a very long time, with that 6% CAGR, 2016 through 2023. So moving forward, these are the things that we have historically focused on over the last few years in terms of that enhanced customer experience, a broader offering, particularly of technology products, broader market coverage. We've pursued bolt-on M&A here, and we've worked very hard to drive salesforce effectiveness. One other critical piece of this, if you go to the next slide. Oh, we go straight to the financial summary. Sorry about that. One other focus here has been on. Oh, it's on the right side. Sorry. It has been on exclusive brands, where... This is where you are selling the majority of the ADI business today is third-party brands, but we've expanded out with our Avarro and Capture and some of our other exclusive brands that bring higher margin to the business, expand the product offering, and give options to our customers in the branches.... So we'll talk about the financials, and then I'll come back a little bit. Q1 was a solid quarter for Q1. We, particularly in the products and solutions business, we ended up with revenue right at the midpoint of our outlook. And adjusted EBITDA ended up at the higher end of the outlook, as the products and solutions business, in particular, was able to contain costs and to achieve some significant expansion in operating margin, I'm sorry, in gross margin over the prior year. Next slide, please. Specifically, PNS, we did see revenue decline of about 6%. That was entirely attributable to the divestiture of our Genesis Wire business in the fall of last year. Revenue was essentially flat, excluding the Genesis disposition, and over the last year and a half, we have been seeing fairly meaningful low double-digit volume declines in this business as our main channels have destocked and as we've seen a decline in existing home sales, which is a key driver to repair and remodel, which is a key driver to our business here. We've begun to see that channel inventory come out. We feel like that the channel inventory now is effectively normalized, and we're seeing things to begin to flatten out. We haven't yet seen a substantial recovery in the business, but even in that environment where volumes are no longer significantly shrinking, as I mentioned, we've been able to see gross margin expansion, year-over-year in Q1 of 180 basis points, and Adjusted EBITDA up 9% year-over-year, despite that lower revenue number. ADI, this has been our most steady-performing business over the last four years. It's been a little bit softer the last couple of quarters, and Q1 was not an exception. They've seen a fairly significant softness in the residential security market. But we've also seen some of our major projects business from the commercial side of that business get pushed out, and January and February were a little bit slow from that perspective. So we did see a little bit of a revenue decline in Q1 and a little bit of a step back in gross margin associated with sort of the lapping of some inflationary benefits that we saw a year ago, as well as just a little bit softer on the volume line. So our current balance sheet and cash flow is quite strong. Our current leverage is about 1.4 times adjusted EBITDA. We generate, as I mentioned, substantial amounts of cash. The business in 2023 and the first part of 2024, the last 12 months, we've generated $446 million of cash from operations, and we have generated free cash flow in excess of 100% of net income over the past 4 years, and that continues to be a focus of the business. Once we complete the Snap transaction... You want to go to the next page? Oh, that's the M&A one. Sorry, go back again. Once we complete the Snap transaction, our leverage will tick up to a little bit above 2x. We've indicated clearly that our focus is on bringing that back down below the 2x level, and we think that given growth in EBITDA and the strong cash generation, we should be in a position to do that by the middle of next year. And I should mention that both S&P and Moody's ratings are in the double B and double B plus range. Moody's took the view that the ADI—I'm sorry, that the Snap transaction was somewhat accretive to our and positive to our financial profile because of the $500 million in the convertible preferred, as well as the incremental EBITDA. S&P took a little bit of a different view. They did put us on negative watch because of the tick up in leverage, but we've been clear with them that it's our intention over time to bring that down, and we anticipate that we'll do that, and we will continue to maintain those ratings. So I wanted to spend a minute talking about First Alert because I think it's important in the context of Snap. I mentioned we did that business just a little over three years ago. It was about a $600 million transaction. The headline multiple was right around 10x, but on an adjusted basis, given the synergies that we anticipated, as well as significant tax benefits, it was about a 6.5x transaction. This is an example of an area where we believed that it was gonna add to both our product breadth in a very logical and adjacent way. The security market and the fire market are right next to each other, very much like the traditional security and residential AV markets and on the distribution side are aligned with each other. When we acquired First Alert, we didn't feel like we really paid for the First Alert brand, but we felt like there was significant value in that brand. We have begun to roll out that brand into a broader array of products recently, including our video doorbell and water leak detection products. We laid out a $30 million synergy target for that transaction by 2023, and we were able to achieve that. So, we see a lot of relationships, a lot of similarities between the First Alert transaction and the Snap One transaction. One was on the product side of the business. Obviously, the Snap One is largely focused on our distribution business, but very similar type of strategy, where it's a little bit of an expansion, a little bit of a step out, offers significant opportunity for value creation around synergies, and then has features and benefits that, you know, maybe you didn't really have to pay for. Like, in this case, like the brand, we're gonna talk about it in this presentation 'cause it is pretty, we're pretty tight on time. But along with the Snap One acquisition, we got a home control platform called Control4, that we feel like we have the opportunity to leverage, but it's really not built into our deal model. So investment opportunity here, we've, you know, we've given you a lot of information over the last 30 minutes. We feel like we're really well positioned. We feel like we've made substantial efforts in our transformation. We feel like we have some really unique positioning with respect to our channels and with respect to our product breadth. We have, with our NPI and with the acquisition of Snap One, we feel like we've continued to improve our position in the connected home market, which we think has substantial growth associated with it. And based on just the basic blocking and tackling nuts and bolts work that the team here has done over the last four years, we feel like we're poised for some meaningful structural margin expansion. I'll stop there. I think I got it done and with a couple of minutes to spare. Isaac or anybody else, if you have any questions, I'd be happy to take them on. Awesome. Yeah. Thanks so much, Tony. That was very comprehensive. Yeah, we only have two or three minutes here, but, you know, I guess the main topic, you know, we talked about is the Snap One deal. And maybe if you could, you know, talk about how that fits with an ADI portfolio in terms of maybe new categories or products added to the portfolio, or, you know, you know, potential new end markets that you're entering, obviously, on the, the home security or, sorry, home entertainment side. Yeah. What it really does is it. You know, the—as I said, these two product lines, we were moving toward each other. Snap was moving into the security business, we were moving into the to the AV business, because they're increasingly sold together in the channel, particularly the the high-end Snap One dealers. They're not just home automation and, you know, and, and home entertainment dealers. They're increasingly getting into home security and offering those products and, and capabilities as well. And the ability to bring that integrator network together, the ability to enable it and give integrators the opportunity to expand their business, not just, you know, if they're, if they're on the, if they're on the pro AV or the residential AV side, to really have access to, to our expertise in, in the security space and, and vice versa. We think there's a really exciting opportunity associated with that. The Snap One origins have been in e-commerce, and they were recently building out a branch network. The origins of ADI are in a branch network, and we've recently been expanding our e-commerce presence. We really believe that by driving that omni-channel capability across both customer sets and also driving their product set through our distribution, we think there's some really exciting synergy there. And importantly, we think that it is driven by enabling the underlying customer base to grow their businesses and to be more successful. Okay, great. And then just last one here quickly. You know, Snap One does definitely have a large e-commerce platform as well, too. You know, e-commerce has continued to steadily grow for just the ADI's overall business. Maybe briefly, how do you see that channel developing over time, you know, and just going forward? They do, and we've taken the view that we wanna meet our customers wherever they are. We wanna give them an excellent branch experience. We wanna give them an excellent e-commerce experience. And the reason you see the synergy growth here being significant in the first year, and a little bit slower in the second year, and then significant again in the third year, is because of the investments that we're gonna make, both from an IT standpoint and from a physical branch standpoint, to bring those capabilities together in a way that's gonna feel seamless for both customer bases. Okay, great. Yeah, with that, thank you so much for joining us, Tony and Jason. That was great conversation, and thank you for the presentation. Have a nice rest of the day. Appreciate the-