|
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Delaware
|
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47-4116383
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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1501 Yamato Road
Boca Raton, Florida
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33431
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(Address of principal executive offices)
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(Zip Code)
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Exhibit
|
Description
|
Date: May 7, 2019
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ADT Inc.
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By:
|
/s/ Jeffrey Likosar
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Jeffrey Likosar
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Chief Financial Officer
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ADT Inc.
1501 Yamato Road
Boca Raton, FL 33431
561.322.7235
www.adt.com
|
•
|
Total revenue of
$1,243 million
,
up
11%
|
•
|
Net loss of
$66 million
, compared to net loss of
$157 million
|
•
|
Net cash provided by operating activities of
$509 million
, compared to
$505 million
|
•
|
Net cash used in investing activities of
$400 million
, compared to
$367 million
|
•
|
Net cash used in financing activities of
$380 million
, compared to net cash provided of
$748 million
|
•
|
Adjusted EBITDA of
$621 million
, compared to
$620 million
|
•
|
Free Cash Flow before special items of
$171 million
, compared to
$187 million
|
•
|
Trailing twelve-month revenue payback improved to 2.4 years from 2.5 years
|
•
|
Trailing twelve-month gross customer revenue attrition of 13.3% excluding DIY;
(2)
including DIY would have added 6 basis points to attrition
|
•
|
By dialing 1-877-407-3982 (domestic) or 1-201-493-6780 (international) and requesting the ADT First Quarter 2019 Earnings Conference Call
|
•
|
Live webcast accessed through ADT’s website at
investor.adt.com
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|
March 31, 2019
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|
March 31, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
96
|
|
|
$
|
363
|
|
Accounts receivable trade, net
|
245
|
|
|
246
|
|
||
Inventories
|
107
|
|
|
89
|
|
||
Work-in-progress
|
25
|
|
|
26
|
|
||
Prepaid expenses and other current assets
|
134
|
|
|
130
|
|
||
Total current assets
|
607
|
|
|
854
|
|
||
Property and equipment, net
|
331
|
|
|
327
|
|
||
Subscriber system assets, net
|
2,919
|
|
|
2,908
|
|
||
Intangible assets, net
|
7,349
|
|
|
7,488
|
|
||
Goodwill
|
5,133
|
|
|
5,082
|
|
||
Deferred subscriber acquisition costs, net
|
457
|
|
|
430
|
|
||
Other assets
|
238
|
|
|
120
|
|
||
Total assets
|
$
|
17,034
|
|
|
$
|
17,209
|
|
|
|
|
|
||||
Liabilities and stockholders' equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
366
|
|
|
$
|
58
|
|
Accounts payable
|
249
|
|
|
221
|
|
||
Deferred revenue
|
340
|
|
|
335
|
|
||
Accrued expenses and other current liabilities
|
426
|
|
|
398
|
|
||
Total current liabilities
|
1,382
|
|
|
1,012
|
|
||
Long-term debt
|
9,348
|
|
|
9,944
|
|
||
Deferred subscriber acquisition revenue
|
583
|
|
|
544
|
|
||
Deferred tax liabilities
|
1,321
|
|
|
1,342
|
|
||
Other liabilities
|
251
|
|
|
141
|
|
||
Total liabilities
|
12,886
|
|
|
12,984
|
|
||
Total stockholders' equity
|
4,148
|
|
|
4,225
|
|
||
Total liabilities and stockholders' equity
|
$
|
17,034
|
|
|
$
|
17,209
|
|
|
For the Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Monitoring and related services
|
$
|
1,070
|
|
|
$
|
1,017
|
|
Installation and other
|
173
|
|
|
99
|
|
||
Total revenue
|
1,243
|
|
|
1,116
|
|
||
Cost of revenue (exclusive of depreciation and amortization shown separately below)
|
326
|
|
|
248
|
|
||
Selling, general and administrative expenses
|
325
|
|
|
305
|
|
||
Depreciation and intangible asset amortization
|
496
|
|
|
484
|
|
||
Merger, restructuring, integration, and other
|
6
|
|
|
8
|
|
||
Operating income
|
90
|
|
|
71
|
|
||
Interest expense, net
|
(159
|
)
|
|
(174
|
)
|
||
Loss on extinguishment of debt
|
(22
|
)
|
|
(62
|
)
|
||
Other income (expense)
|
1
|
|
|
—
|
|
||
Loss before income taxes
|
(89
|
)
|
|
(165
|
)
|
||
Income tax benefit
|
22
|
|
|
8
|
|
||
Net loss
|
$
|
(66
|
)
|
|
$
|
(157
|
)
|
|
|
|
|
||||
Net loss per share:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.22
|
)
|
|
|
|
|
||||
Weighted-average number of shares:
|
|
|
|
||||
Basic and diluted
|
756
|
|
|
729
|
|
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For the Three Months Ended
|
||||||
|
March 31, 2019
|
|
March 31, 2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(66
|
)
|
|
$
|
(157
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and intangible asset amortization
|
496
|
|
|
484
|
|
||
Amortization of deferred subscriber acquisition costs
|
18
|
|
|
13
|
|
||
Amortization of deferred subscriber acquisition revenue
|
(24
|
)
|
|
(17
|
)
|
||
Share-based compensation expense
|
24
|
|
|
49
|
|
||
Deferred income taxes
|
(24
|
)
|
|
(6
|
)
|
||
Provision for losses on accounts receivable and inventory
|
13
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|
|
13
|
|
||
Loss on extinguishment of debt
|
22
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|
|
62
|
|
||
Other non-cash items, net
|
29
|
|
|
—
|
|
||
Changes in operating assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||
Deferred subscriber acquisition costs
|
(46
|
)
|
|
(43
|
)
|
||
Deferred subscriber acquisition revenue
|
63
|
|
|
62
|
|
||
Other, net
|
4
|
|
|
44
|
|
||
Net cash provided by operating activities
|
509
|
|
|
505
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Dealer generated customer accounts and bulk account purchases
|
(163
|
)
|
|
(160
|
)
|
||
Subscriber system assets
|
(145
|
)
|
|
(138
|
)
|
||
Capital expenditures
|
(38
|
)
|
|
(33
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(54
|
)
|
|
(36
|
)
|
||
Other investing, net
|
—
|
|
|
—
|
|
||
Net cash used in investing activities
|
(400
|
)
|
|
(367
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from initial public offering, net of related fees
|
—
|
|
|
1,410
|
|
||
Repayment of long-term borrowings, including call premiums
|
(332
|
)
|
|
(662
|
)
|
||
Dividends on common stock
|
(26
|
)
|
|
—
|
|
||
Repurchases of common stock under approved program
|
(22
|
)
|
|
—
|
|
||
Other financing, net
|
—
|
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(380
|
)
|
|
748
|
|
||
|
|
|
|
||||
Effect of currency translation on cash
|
1
|
|
|
—
|
|
||
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents
|
(270
|
)
|
|
885
|
|
||
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period
|
367
|
|
|
127
|
|
||
Cash and cash equivalents and restricted cash and cash equivalents at end of period
|
$
|
97
|
|
|
$
|
1,012
|
|
|
For the Three Months Ended
|
||||||
(in millions)
|
March 31, 2019
|
|
March 31, 2018
|
||||
Net loss
|
$
|
(66
|
)
|
|
$
|
(157
|
)
|
Interest expense, net
|
159
|
|
|
174
|
|
||
Income tax benefit
|
(22
|
)
|
|
(8
|
)
|
||
Depreciation and intangible asset amortization
|
496
|
|
|
484
|
|
||
Amortization of deferred subscriber acquisition costs
|
18
|
|
|
13
|
|
||
Amortization of deferred subscriber acquisition revenue
|
(24
|
)
|
|
(17
|
)
|
||
Share-based compensation expense
|
24
|
|
|
49
|
|
||
Merger, restructuring, integration and other
|
6
|
|
|
8
|
|
||
Loss on extinguishment of debt
|
22
|
|
|
62
|
|
||
Radio conversion costs
|
—
|
|
|
1
|
|
||
Financing and consent fees
|
1
|
|
|
—
|
|
||
Foreign currency (gains)/losses
|
(1
|
)
|
|
1
|
|
||
Other, net
|
10
|
|
|
9
|
|
||
Adjusted EBITDA
|
$
|
621
|
|
|
$
|
620
|
|
|
|
|
|
||||
Net loss to total revenue ratio
|
(5.3
|
)%
|
|
(14.1
|
)%
|
||
Adjusted EBITDA Margin
(as percentage of M&S Revenue) |
58.0
|
%
|
|
60.9
|
%
|
|
For the Three Months Ended
|
||||||
(in millions)
|
March 31, 2019
|
|
March 31, 2018
|
||||
Net cash provided by operating activities
|
$
|
509
|
|
|
$
|
505
|
|
Net cash used in investing activities
|
(400
|
)
|
|
(367
|
)
|
||
Net cash (used in) provided by financing activities
|
(380
|
)
|
|
748
|
|
||
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
509
|
|
|
$
|
505
|
|
Dealer generated customer accounts and bulk account
purchases |
(163
|
)
|
|
(160
|
)
|
||
Subscriber system assets
|
(145
|
)
|
|
(138
|
)
|
||
Capital expenditures
|
(38
|
)
|
|
(33
|
)
|
||
Free Cash Flow
|
163
|
|
|
174
|
|
||
Restructuring and integration payments
|
3
|
|
|
6
|
|
||
Integration related capital expenditures
|
—
|
|
|
4
|
|
||
Radio conversion costs
|
—
|
|
|
2
|
|
||
Other, net
|
4
|
|
|
2
|
|
||
Free Cash Flow before special items
|
$
|
171
|
|
|
$
|
187
|
|
|
For the Three Months Ended
|
||||||
(in millions)
|
March 31, 2019
|
|
March 31, 2018
|
||||
Net loss
|
$
|
(66
|
)
|
|
$
|
(157
|
)
|
Merger, restructuring, integration, and other
|
6
|
|
|
8
|
|
||
Financing and consent fees
|
1
|
|
|
—
|
|
||
Foreign currency (gains)/losses
|
(1
|
)
|
|
1
|
|
||
Loss on extinguishment of debt
|
22
|
|
|
62
|
|
||
Radio conversion costs
|
—
|
|
|
1
|
|
||
Share-based compensation expense
|
24
|
|
|
49
|
|
||
Other
|
13
|
|
|
3
|
|
||
Tax adjustments
(1)
|
(14
|
)
|
|
8
|
|
||
Net loss before special items
|
$
|
(16
|
)
|
|
$
|
(25
|
)
|
|
For the Three Months Ended
|
||||||
(in millions, except per share data)
|
March 31, 2019
|
|
March 31, 2018
|
||||
Diluted EPS (GAAP)
|
$
|
(0.09
|
)
|
|
$
|
(0.22
|
)
|
Impact of special items
|
0.09
|
|
|
0.17
|
|
||
Impact of tax adjustments
|
(0.02
|
)
|
|
0.01
|
|
||
Diluted EPS before special items
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
||||
Basic and diluted weighted-average number of shares outstanding
|
756
|
|
|
729
|
|