Exits Residential Solar Business
Increases Quarterly Dividend by 57% and Authorizes
Continues to Strengthen Balance Sheet
Schedules Fourth Quarter and Full Year 2023 Reporting Date
“The decision to exit solar operations was made after careful deliberation, and we expect this strategic action to drive substantial operational and financial benefits to ADT,” said ADT Chairman, President and CEO,
Solar Business Update
Over the first nine months of 2023, ADT’s core business exhibited strong performance, while the solar business faced challenges, including operational difficulties and macroeconomic headwinds causing deterioration of conditions industrywide. As a result of these challenges, the Solar segment generated an Adjusted EBITDA loss of
The Company expects to incur certain one-time exit charges and cash expenditures with potential offsets from asset sales or reduced tax expenses. As previously disclosed, as of
Strong Cash Flowing Core Business Propelling Capital Allocation Update
Supported by ADT’s confidence in the strong cash flow generation of its core business, today the Company is also announcing the following:
- Dividend Increase – The Company’s Board of Directors has declared a quarterly cash dividend of
$0.055 per share, payable onApril 4, 2024 , to shareholders of record at the close of business onMarch 14, 2024 . The quarterly dividend represents a 57% increase over the previous quarterly dividend. - Share Repurchase Authorization – The Company’s Board of Directors has authorized a
$350 million share repurchase program. As the Company executes share repurchases, the Board will periodically review the remaining authorization as part of its capital allocation strategy. - Balance Sheet Fortification – Consistent with the plan from its third quarter earnings announcement, on
December 29, 2023 , the Company repaid$500 million of First Lien Senior Secured Notes due 2024, completing an overall 2023 reduction of ADT’s total debt by approximately$2 billion . Further, following two corporate rating upgrades in 2023, the Company improved borrowing costs and extended debt maturities and in 2024, will have only$150 million of maturities and amortization payments. The Company remains focused on achieving its targeted net leverage ratio of less than 3.0x. Core Investment – OnDecember 20, 2023 , the Company closed on a strategic bulk purchase of approximately 57,000 customer accounts for$89 million cash with attractive returns. This portfolio of customers is concentrated in a few key geographies, all of which align with existing platforms, enabling strong economies of scale upon integration. This transaction was not included in prior cash flow guidance.
Fourth Quarter and Full Year 2023 Earnings Conference Call
More details and an update on the business will be provided when the Company releases its fourth quarter and full year 2023 results on
Participants may listen to a live webcast through the investor relations website at investor.adt.com. A replay of the webcast will be available on the website within 24 hours of the live event. Alternatively, participants may listen to the live call by dialing 1-404-975-4839 (domestic) or 1-833-470-1428 (international) and providing the access code 533961. An audio replay will be available for two weeks following the call and can be accessed by dialing 1-866-813-9403 (domestic) or 1-929-458-6194 (international) and providing the access code 375946.
About ADT Inc.
ADT provides safe, smart and sustainable solutions for people, homes and small businesses. Through innovative offerings, unrivaled safety and a premium customer experience, all delivered by the largest network of smart home security professionals in the
ADT Contacts
Investor Relations: investorrelations@adt.com; 888-238-8525
Media Relations: media@adt.com
Forward-Looking Statements
ADT has made statements in this press release that are forward-looking and therefore subject to risks and uncertainties, including those described below. All statements, other than statements of historical fact, included in this document are, or could be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the applicable rules and regulations of the
Non-GAAP Measures
The Company is not providing forward-looking guidance for
Net Leverage Ratio is a non-GAAP measure. Net Leverage Ratio is calculated as the ratio of net debt to last twelve months (“LTM”) Adjusted EBITDA (discussed below). Net debt is calculated as GAAP total debt excluding the Receivables Facility, including capital leases, minus cash and cash equivalents.
We define Adjusted EBITDA as GAAP income or loss from continuing operations adjusted for (i) interest; (ii) taxes; (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets; (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions; (v) share-based compensation expense; (vi) merger, restructuring, integration, and other items such as separation costs; (vii) losses on extinguishment of debt; (viii) radio conversion costs net of any related incremental revenue earned; (ix) adjustments related to acquisitions, such as contingent consideration and purchase accounting adjustments, or dispositions; (x) impairment charges; and (xi) other income/gain or expense/loss items such as changes in fair value of certain financial instruments or financing and consent fees.
Source:
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