Strategy in TECH...
On Tuesday, Emerald Holding, Inc. [NYSE: EEX], aka Emerald Expositions, a national B2B tradeshow company, reported its financial results for the First Quarter of Fiscal 2024. Emerald, as most Strata-gee readers know, is the owner of the CEDIA Expo show, the Total Tech Summit show, and various publishing entities like CE Pro, Custom Integrator and more.
The consolidated results looked pretty good, but one business unit was a decided under-performer. Can you guess which one? Read on…
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.
Masimo Corporation (Nasdaq: MASI) announced on Monday that it could confirm that activist investment group Politan Capital Management – whose founder and Chief Investment Officer is Quentin Koffey – has provided it with notice of its intent to nominate two candidates to stand for election to the company’s Board of Directors at its upcoming 2024 Annual Meeting. This action by Politan, management says, “run[s] counter to the stockholders’ best interests…”
Oh-oh…the knives are coming out…
One business day after Masimo Corp. [Nasdaq: MASI] announced plans for a spin-off of its Consumer division, the business unit formed by the acquisition of Sound United, activist investor Politan Capital Management and its CIO Quentin Koffey – a current Masimo Director – announced the nomination of two more independent director candidates for the Board of Directors. In a statement accompanying the announcement, Koffey takes the gloves off alleging Board dysfunction, uncooperative management, and says Kiani’s desire for control “is troubling.”
Pop a fresh bowl of popcorn and settle into a comfortable chair…things are getting pretty interesting in this story of escalating boardroom and management drama.
In a release distributed late in the day on Friday after the close of financial markets, Masimo announced that the Board of Directors has “authorized” company management to prepare a spin-off of the company’s Consumer Business. Masimo Consumer is the business unit created when the company acquired Sound United in early 2022.
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?”
Emerald Holding, Inc. (NYSE: EEX), the parent company of Emerald Expositions, one of the country’s largest B2B tradeshow exposition companies, reported its Fiscal 2023 fourth quarter and full-year results. The results were mixed with full-year revenues growing by 17.5% compared to Fiscal 2022, but profits collapsing by 102% to a Net Loss.
Company management expressed extreme optimism on a call with financial analysts, but its stock value dropped dramatically the day it released these numbers.
Masimo Corporation (Nasdaq: MASI) announced on Tuesday its financial results for the fourth quarter and full year of fiscal 2023, the period that ended December 30, 2023. Results were mixed with revenues down double digits in the quarter but flat for the year. But a more sobering picture emerged for the “non-healthcare” division, also known as Masimo Consumer, which is the division that was formed when the company acquired Sound United almost exactly two years ago.
On Tuesday, Sonos, Inc. [Nasdaq: SONO] reported its first quarter, fiscal 2024 results for the period that ended December 30, 2023. While the actual numbers were a bit of a mixed bag with revenues down – even though the company embarked on a strong holiday promotional push – the company booked strong gross profit improvements and generated more cash beating Wall Street estimates. This resulted in a big jump in its share price on the next trading day.
