Sol-Gel Technologies Reports Full Year 2020 Financial Results and Corporate Update

• Epsolay

®

and
Twyneo

®

PDUFA goal date
s
set for April 26
, 2021
and August 1
, 2021
respectively

• Top-line generic product revenue of
$8.
7
million
in
fiscal
2020

• S
igned
additional
generic
product collaboration agreement
s
with Perrigo
, bringing
the number of collaborations between the companies
to 12

NESS ZIONA, Israel, March 04, 2021 (GLOBE NEWSWIRE) — Sol-Gel Technologies, Ltd. (NASDAQ: SLGL), a clinical-stage dermatology company focused on identifying, developing and commercializing branded and generic topical drug products for the treatment of skin diseases, today announced financial results for the full year ended December 31, 2020 and provided corporate updates.

“I am very pleased with the major milestones that were achieved by Sol-Gel last year. After announcing positive data from Phase 3 trials of Epsolay and Twyneo and submitting NDAs to the FDA within guided timelines, 2020 was highlighted by positive acceptances of both NDAs and allocated PDUFA dates,” commented Dr. Alon Seri-Levy, Chief Executive Officer of Sol-Gel. 

“Given the competitive landscape of the dermatology market and the significant capital that would be needed to directly commercialize our products, our current operational model assumes we will partner with a dermatology company that has a strong market presence.  This would enable us to capture market share more quickly without the need to invest in building our own marketing and sales force and would allow us to further invest in the development of our pipeline of products with larger potential markets,” continued Dr. Seri-Levy.


Corporate Highlights and Recent Developments

  • Sol-Gel announced the U.S. Food and Drug Administration’s (FDA) acceptance of New Drug Application (NDA) for Epsolay (benzoyl peroxide, 5%, cream) with a Prescription Drug User Fee Act (PDUFA) goal date set for April 26, 2021. If approved, Epsolay has the potential to be the first FDA-approved, single-agent benzoyl peroxide prescription drug product for the treatment of inflammatory lesions of rosacea.
  • Sol-Gel announced FDA acceptance of NDA for Twyneo (benzoyl peroxide, 3%, and tretinoin, 0.1%, cream) with a PDUFA goal date set for August 1, 2021. If approved, Twyneo has the potential to be the first FDA-approved acne treatment that contains fixed-dose combination of benzoyl peroxide and tretinoin.
  • Sol-Gel is in discussions with potential partners regarding the commercialization of Epsolay and Twyneo in the United States to occur if the product candidates receive regulatory approval from the FDA.
  • In preparation for commercial launch of proprietary products the Company has opened a US headquarters in Whippany, NJ.
  • Sol-Gel was informed by its collaboration partner that the launch of an FDA-approved generic drug is expected in the second quarter of 2021. Annual sales of the brand name product exceeded $180 million in the United States in 2019.
  • In 2020, Sol-Gel signed four additional collaboration agreements with Perrigo for the development, manufacture, and commercialization of new generic product candidates, bringing the total number of collaborations between the companies to 12.
  • Pre-clinical testing of erlotinib (an epidermal growth factor receptor inhibitor), tapinarof (an investigational aryl hydrocarbon receptor modulator), and roflumilast (an investigational phosphodiesterase 4 inhibitor) is progressing for various new pharmaceutical indications. A total of 25 provisional patent applications for these project candidates have been submitted to date.
  • The enrollment of patients in the Phase 1 proof-of-concept study with SGT-210 (erlotinib gel) in patients with palmoplantar keratoderma has been slowed by the COVID-19 pandemic. The Company expects to report top-line data in the third quarter of 2021.
  • In 2020, the Company completed financings totaling $28.0 million in gross proceeds, including the proceeds of the February underwritten public offering of $23.0 million and from the $5.0 million invested in April by Sol-Gel’s controlling shareholder, M. Arkin Dermatology Ltd.

Financial Results
for the
Year
Ended
December 31
, 2020

Revenue in 2020 was $8.8 million. The revenue was mainly due to sales of a generic product from a collaboration arrangement with Perrigo.

Research and development expenses were $27.9 million in 2020 compared to $40.6 million during the same period in 2019. The decrease of $12.7 million was mainly attributed to a decrease of $17.9 million in clinical trial expenses, mainly due to the completion of the clinical trials of Epsolay and Twyneo towards the end of 2019, a decrease of $0.4 million in other expenses, mainly due to the purchase of raw material for manufacturing, partially offset by an increase of $5.4 million in manufacturing expenses.

General and administrative expenses were $11.1 million in 2020 compared to $8.3 million in 2019. The increase of $2.8 million was mainly attributed to an increase of $3.0 million in commercialization expenses and an increase of $0.4 million in patent related expenses, partially offset by a decrease of $0.7 million in stock based compensation expenses.

Sol-Gel reported a loss of $29.3 million for the full year of 2020 compared to loss of $24.6 million for the same period in 2019.

As of December 31, 2020, Sol-Gel had $28.5 million in cash, cash equivalents and deposits, and $21.7 million in marketable securities for a total balance of $50.2 million. Sol-Gel expects its existing cash resources will enable funding of operational and capital expenditure requirements into the third quarter of 2022.

About Sol-Gel Technologies

Sol-Gel is a clinical-stage dermatology company focused on identifying, developing and commercializing branded and generic topical drug products for the treatment of skin diseases. Sol-Gel leverages its proprietary microencapsulation technology platform for the development of Twyneo, under investigation for the treatment of acne vulgaris, and Epsolay, under investigation for the treatment of inflammatory lesions of rosacea. The Company’s pipeline also includes SGT-210 (erlotinib gel), under investigation for the treatment of palmoplantar keratoderma, and three pre-clinical assets – erlotinib, tapinarof and roflumilast – currently being tested for various pharmaceutical indications. For additional information, please visit www.sol-gel.com.

About
Epsolay

®

Epsolay is an investigational topical cream containing encapsulated benzoyl peroxide, 5%, for the treatment of papulopustular rosacea. Epsolay utilizes a patented technology process to encapsulate benzoyl peroxide within silica-based microcapsules to create a barrier between the medication and the skin. The slow migration of medication from the microcapsules is designed to deliver an effective dose of benzoyl peroxide onto the skin, while reducing the ability of benzoyl peroxide to induce skin irritation, such as erythema, burning and stinging. If approved, Epsolay has the potential to be the first FDA-approved single-active benzoyl peroxide prescription drug product. Epsolay is not approved by the FDA and the safety and efficacy has not been established.

About Papulopustular Rosacea

Papulopustular rosacea is a chronic and recurrent inflammatory skin disorder that affects nearly 5 million Americans. The condition is common, especially in fair-skinned people of Celtic and northern European heritage. Onset is usually after age 30 and typically begins as flushing and subtle redness on the cheeks, nose, chin or forehead. If left untreated, rosacea can slowly worsen over time. As the condition progresses the redness becomes more persistent, blood vessels become visible and pimples often appear. Other symptoms may include burning, stinging, dry skin, plaques and skin thickening.

About
Twyneo

®

Twyneo is an investigational, fixed-dose combination of encapsulated benzoyl peroxide, 3%, and encapsulated tretinoin, 0.1%, cream for the treatment of acne vulgaris. If approved, it will be the first acne treatment that contains a fixed-dose combination of benzoyl peroxide and tretinoin, which are separately encapsulated in silica using Sol-Gel’s proprietary microencapsulation technology. Tretinoin and benzoyl peroxide are widely prescribed separately as a combination treatment for acne; however, benzoyl peroxide causes degradation of the tretinoin molecule, thereby potentially reducing its effectiveness if used at the same time or combined in the same formulation. The silica-based microcapsule is designed to protect tretinoin from oxidative decomposition by benzoyl peroxide, thereby enhancing the stability of the active drug ingredients. The silica-based shell is also designed to release the ingredients slowly over time to provide a favorable efficacy and safety profile. Twyneo is not approved by the FDA and the safety and efficacy has not been established.

About Acne Vulgaris

Acne vulgaris is a common multifactorial skin disease that according to the American Academy of Dermatology affects approximately 40 to 50 million people in the United States. The disease occurs most frequently during childhood and adolescence (affecting 80% to 85% of all adolescents) but it may also appear in adults. Acne patients suffer from the appearance of lesions on areas of the body with a large concentration of oil glands, such as the face, chest, neck and back. These lesions can be inflamed (papules, pustules, nodules) or non-inflamed (comedones). Acne can have a profound effect on the quality of life of those suffering from the disease. In addition to carrying a substantial risk of permanent facial scarring, the appearance of lesions may cause psychological strain, social withdrawal and lowered self-esteem.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to,
statements regarding the PDUFA goal date
s
for
Epsolay
(benzoyl peroxide, 5%, cream)
and
Twyneo
,
the timing of commercialization of
Epsolay
and
Twyneo
, the timing and expected
launch of an FDA-approved generic drug in the second quarter of 2021
, and
the timing of the Phase 1 data readout of SGT-210
. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar expressions. Forward-looking statements are based on information we have when those statements are made or our management’s current expectation and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, risks relating to the effects of COVID-19 (coronavirus) as well as the following factors: (
i
) the adequacy of our financial and other resources, particularly in light of our history of recurring losses and the uncertainty regarding the adequacy of our liquidity to pursue our complete business objectives; (ii) our ability to complete the development of our product candidates; (iii) our ability to find suitable co-development partners; (iv) our ability to obtain and maintain regulatory approvals for our product candidates in our target markets
,
the
potential delay in receiving such regula
tory approvals
and the possibility of adverse regulatory or legal actions relating to our product candidates even if regulatory approval is obtained; (v) our ability to commercialize our pharmaceutical product candidates; (vi) our ability to obtain and maintain adequate protection of our intellectual property; (vii) our ability to manufacture our product candidates in commercial quantities, at an adequate quality or at an acceptable cost; (viii) our ability to establish adequate sales, marketing and distribution channels; (ix) acceptance of our product candidates by healthcare professionals and patients; (x) the possibility that we may face third-party claims of intellectual property infringement; (xi) the timing and results of clinical trials that we may conduct or that our competitors and others may conduct relating to our or their products; (xii) intense competition in our industry, with competitors having substantially greater financial, technological, research and development, regulatory and clinical, manufacturing, marketing and sales, distribution and personnel resources than we do; (xiii) potential product liability claims; (xiv) potential adverse federal, state and local government regulation in the United States, Europe or Israel; and (xv) loss or retirement of key executives and research scientists. These and other important factors discussed in the Company’s Annual Report on Form 20-F
to be
filed
with the Securities and Exchange Commission (“SEC”) on March 4,
202
1
and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. Except as required by law, we undertake no obligation to update publicly any forward-looking statements after the date of this press release to conform these statements.

SOL-GEL TECHNOLOGIES LTD.

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except share and per share data)

     

December 31

 

Assets

 

 

 

2019

 

 

 

 

2020

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents         

 

 

$

9,412

   

 

 

$

7,122

   

Bank deposits

     

         

21,400

   

Marketable securities

     

40,966

         

21,652

   

Receivables from collaborative arrangements

     

4,120

         

2,153

   

Prepaid expenses and other current assets

     

1,293

         

1,074

   

TOTAL CURRENT ASSETS         

 

 

 

55,791

   

 

 

 

53,401

   

NON-CURRENT ASSETS:

 

 

 

   

 

 

 

      

Restricted long-term deposits and cash

 

 

 

472

   

 

 

 

1,293

   

Property and equipment, net         

 

 

 

2,314

   

 

 

 

1,817

   

Operating lease right-of-use assets

     

2,040

         

1,896

   

Funds in respect of employee rights upon retirement         

 

 

 

684

   

 

 

 

754

   

TOTAL NON-CURRENT ASSETS         

 

 

 

5,510

   

 

 

 

5,760

   

TOTAL ASSETS         

 

 

$

61,301

   

 

 

$

59,161

   

Liabilities and shareholders’ equity

 

 

 

     

 

 

 

     

CURRENT LIABILITIES:         

 

 

 

     

 

 

 

     

Accounts payable         

 

 

$

1,710

   

 

 

$

1,203

   

Other accounts payable        

 

 

 

4,123

   

 

 

 

4,088

   

Current maturities of operating leases

 

 

 

672

   

 

 

 

673

   

TOTAL CURRENT LIABILITIES         

 

 

 

6,505

   

 

 

 

5,964

   

LONG-TERM LIABILITIES:

 

 

 

     

 

 

 

     

Operating leases liabilities

     

1,373

         

1,299

   

Liability for employee rights upon retirement         

 

 

 

958

   

 

 

 

1,049

   

TOTAL LONG-TERM LIABILITIES         

 

 

 

2,331

   

 

 

 

2,348

   

COMMITMENTS         

 

 

 

     

 

 

 

     

TOTAL LIABILITIES         

 

 

 

8,836

   

 

 

 

8,312

   

SHAREHOLDERS’ EQUITY:

 

 

 

     

 

 

 

     

Ordinary shares, NIS 0.1 par value – authorized: 50,000,000 as of December 31, 2019 and 2020, respectively; issued and outstanding: 20,402,800 and 23,000,782 as of December 31, 2019 and December 31, 2020, respectively        

 

 

 

561

   

 

 

 

635

   

Additional paid-in capital

     

203,977

         

231,577

   

Accumulated deficit

     

(152,073

)

       

(181,363

)

 

TOTAL
SHAREHOLDERS’ EQUITY         

     

52,465

         

50,849

   

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY        

 

 

$

61,301

   

 

59,161

     


SOL-GEL TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except share and per share data)

   

Year ended December 31,

 

  

2018

 

 

 

2019

   

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COLLABORATION REVENUES

 

$

129

 

 

 

$

22,904

 

 

 

$

8,771

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

    Research and Development

 

 

28,146

 

 

 

 

40,578

 

 

 

 

27,913

 

 

    General and Administrative              

 

 

5,504

 

 

 

 

8,276

 

 

 

 

11,091

 

 

TOTAL OPERATING LOSS      

 

 

33,521

 

 

 

 

25,950

 

 

 

 

30,233

 

 

FINANCIAL INCOME, net       

 

 

(1,318

)

 

 

 

(1,374

)

 

 

 

(943

)

 

LOSS BEFORE INCOME TAXES

 

 

32,203

 

 

 

 

24,576

 

 

 

 

29,290

 

 

INCOME TAXES

 

 

 

 

 

 

33

 

 

 

 

 

 

LOSS FOR THE YEAR             

 

$

32,203

 

 

 

$

24,609

 

 

 

$

29,290

 

 

BASIC AND DILUTED LOSS PER ORDINARY SHARE             

 

$

1.80

 

 

 

$

1.26

 

 

 

$

1.30

 

 

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF BASIC AND DILUTED LOSS PER SHARE         

 

 

17,867,589

 

 

 

 

19,534,562

 

 

 

 

22,574,688

 

 


For further information, please contact:

Sol-Gel Contact:
Gilad Mamlok
Chief Financial Officer
+972-8-9313433

Investor Contact:
Michael Levitan
Solebury Trout
+1-646-378-2920
mlevitan@soleburytrout.com

Source: Sol-Gel Technologies Ltd.



New Research Reveals More CROs Taking Action to Meet Urgent Need for Faster Clinical Trials

New Research Reveals More CROs Taking Action to Meet Urgent Need for Faster Clinical Trials

Major transformation underway as 90% of CROs unify clinical operations

COVID-19 drives advancements in study start-up, collaboration, and execution

PLEASANTON, Calif.–(BUSINESS WIRE)–
Contract research organizations (CROs) are making significant advancements to modernize and speed clinical trials, according to the latest Veeva Unified Clinical Operations Survey: Annual CRO Report. COVID-19 dramatically accelerated the need to execute faster and with greater precision than ever before. Findings from Veeva Systems (NYSE: VEEV) show CROs have taken decisive action to streamline trial execution by adopting new digital strategies and technologies that eliminate information siloes, replace manual processes, and enable trial collaboration.

Nearly all CROs surveyed (90%) have major initiatives underway to unify clinical operations, a lynchpin to faster, more efficient research. The efforts to unify extended beyond CROs’ internal systems and processes. Streamlining collaboration and information sharing with research sites and sponsors was consistently cited by CROs as one of the highest priority areas overall and a key driver for the modernization efforts underway.

In addition to measurable progress end-to-end, the report also shows CROs are optimizing in each clinical area. Collaboration and purpose-built technology are a major focus for CROs in addressing the lag in study start-up, one of the greatest causes of trial delays. TMF management, a critical building block to information exchange, was also a bright spot as most CROs now utilize eTMF applications with advanced digital and collaboration capabilities (70%, up 49 percentage points from 2014). Another area is CTMS, where CROs are moving to modern solutions to improve compliance with standards, visibility into trial status, and monitoring.

“The industry executed with unprecedented innovation and speed in response to the pandemic, and looking ahead, there is an opportunity to take those learnings to drive long-term improvements that can speed clinical research,” said Jim Reilly, vice president, Vault R&D at Veeva Systems. “It is encouraging to see the advances CROs are making to enable the shift to a unified clinical landscape that can help make this a reality.”

The Veeva Unified Clinical Operations Survey: Annual CRO Report examines CROs’ progress toward modernizing clinical operations by gathering the experiences and opinions of CRO respondents around the globe. The annual research details the drivers, barriers, and benefits of a unified clinical operating model from a CRO perspective. It also tracks the industry’s progress to unify clinical trial systems and processes and increase stakeholder engagement throughout study execution. The full report is available online at veeva.com/CROReport.

About Veeva Systems

Veeva is the global leader in cloud software for the life sciences industry. Committed to innovation, product excellence, and customer success, Veeva serves more than 975 customers, ranging from the world’s largest pharmaceutical companies to emerging biotechs. As a Public Benefit Corporation, Veeva is committed to balancing the interests of all stakeholders, including customers, employees, shareholders, and the industries it serves. For more information, visit veeva.com.

Forward-looking Statements

This release contains forward-looking statements, including the market demand for and acceptance of Veeva’s products and services, the results from use of Veeva’s products and services, and general business conditions (including the on-going impact of COVID-19), particularly within the life sciences industry. Any forward-looking statements contained in this press release are based upon Veeva’s historical performance and its current plans, estimates, and expectations, and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Veeva’s expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Veeva disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Additional risks and uncertainties that could affect Veeva’s financial results are included under the captions, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the company’s filing on Form 10-Q for the period ended October 31, 2020. This is available on the company’s website at veeva.com under the Investors section and on the SEC’s website at sec.gov. Further information on potential risks that could affect actual results will be included in other filings Veeva makes with the SEC from time to time.

Deivis Mercado

Veeva Systems

925-226-8821

deivis.mercado@veeva.com

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Technology Clinical Trials Software Networks Internet Health Pharmaceutical General Health Data Management

MEDIA:

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New Research Reveals More CROs Taking Action to Meet Urgent Need for Faster Clinical Trials

New Research Reveals More CROs Taking Action to Meet Urgent Need for Faster Clinical Trials

Major transformation underway as 90% of CROs unify clinical operations

COVID-19 drives advancements in study start-up, collaboration, and execution

BARCELONA, Spain–(BUSINESS WIRE)–
Contract research organizations (CROs) are making significant advancements to modernize and speed clinical trials, according to the latest Veeva Unified Clinical Operations Survey: Annual CRO Report. COVID-19 dramatically accelerated the need to execute faster and with greater precision than ever before. Findings from Veeva Systems (NYSE: VEEV) show CROs have taken decisive action to streamline trial execution by adopting new digital strategies and technologies that eliminate information siloes, replace manual processes, and enable trial collaboration.

Nearly all CROs surveyed (90%) have major initiatives underway to unify clinical operations, a lynchpin to faster, more efficient research. The efforts to unify extended beyond CROs’ internal systems and processes. Streamlining collaboration and information sharing with research sites and sponsors was consistently cited by CROs as one of the highest priority areas overall and a key driver for the modernization efforts underway.

In addition to measurable progress end-to-end, the report also shows CROs are optimizing in each clinical area. Collaboration and purpose-built technology are a major focus for CROs in addressing the lag in study start-up, one of the greatest causes of trial delays. TMF management, a critical building block to information exchange, was also a bright spot as most CROs now utilize eTMF applications with advanced digital and collaboration capabilities (70%, up 49 percentage points from 2014). Another area is CTMS, where CROs are moving to modern solutions to improve compliance with standards, visibility into trial status, and monitoring.

“The industry executed with unprecedented innovation and speed in response to the pandemic, and looking ahead, there is an opportunity to take those learnings to drive long-term improvements that can speed clinical research,” said Jim Reilly, vice president, Vault R&D at Veeva Systems. “It is encouraging to see the advances CROs are making to enable the shift to a unified clinical landscape that can help make this a reality.”

The Veeva Unified Clinical Operations Survey: Annual CRO Report examines CROs’ progress toward modernizing clinical operations by gathering the experiences and opinions of CRO respondents around the globe. The annual research details the drivers, barriers, and benefits of a unified clinical operating model from a CRO perspective. It also tracks the industry’s progress to unify clinical trial systems and processes and increase stakeholder engagement throughout study execution. The full report is available online at veeva.com/CROReport.

About Veeva Systems

Veeva is the global leader in cloud software for the life sciences industry. Committed to innovation, product excellence, and customer success, Veeva serves more than 975 customers, ranging from the world’s largest pharmaceutical companies to emerging biotechs. As a Public Benefit Corporation, Veeva is committed to balancing the interests of all stakeholders, including customers, employees, shareholders, and the industries it serves. For more information, visit veeva.com/eu.

Forward-looking Statements

This release contains forward-looking statements, including the market demand for and acceptance of Veeva’s products and services, the results from use of Veeva’s products and services, and general business conditions (including the on-going impact of COVID-19), particularly within the life sciences industry. Any forward-looking statements contained in this press release are based upon Veeva’s historical performance and its current plans, estimates, and expectations, and are not a representation that such plans, estimates, or expectations will be achieved. These forward-looking statements represent Veeva’s expectations as of the date of this press announcement. Subsequent events may cause these expectations to change, and Veeva disclaims any obligation to update the forward-looking statements in the future. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially. Additional risks and uncertainties that could affect Veeva’s financial results are included under the captions, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the company’s filing on Form 10-Q for the period ended October 31, 2020. This is available on the company’s website at veeva.com under the Investors section and on the SEC’s website at sec.gov. Further information on potential risks that could affect actual results will be included in other filings Veeva makes with the SEC from time to time.

© 2021 Veeva Systems Inc. All rights reserved. Veeva, V, Vault and Crossix are registered trademarks of Veeva Systems Inc.

Deivis Mercado

Veeva Systems

925-226-8821

deivis.mercado@veeva.com

KEYWORDS: Spain Europe

INDUSTRY KEYWORDS: Data Management Health Technology Infectious Diseases Software Clinical Trials

MEDIA:

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Bally’s Corporation Announces Fourth Quarter And Full Year 2020 Results

COMPANY ESTABLISHES FOUNDATION OF ITS INTERACTIVE DIVISION

PR Newswire

PROVIDENCE, R.I., March 4, 2021 /PRNewswire/ — Bally’s Corporation (NYSE: BALY) (the “Company” or “Bally’s”), today reported financial results for the fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020 and Recent Highlights

  • Net income increased 51.4% year-over-year to $20.2 million, driven primarily by bargain purchase gains, as well as margin improvements and increased operational efficiencies
  • Adjusted EBITDA decreased 47.6% to $21.1 million year-over-year, impacted by COVID-19 related regional capacity and health limitations
  • Despite the difficulties in the quarter, the Company generated cash from operating activities of $17.8 million in the fourth quarter of 2020 compared to $21.4 million for the same period 2019
  • Quarter benefited from current year acquisitions, including Casino KC which recorded the strongest operating fourth quarter in recent history as a result of targeted marketing strategies
  • Continued execution on growth and diversification strategy, highlighted by Bet.Works, Monkey Knife Fight and SportCaller acquisitions and strategic media partnership with Sinclair Broadcast Group
  • Closed acquisitions of Bally’s Atlantic City Hotel & Casino and Eldorado Resort Casino Shreveport

George Papanier, President and Chief Executive Officer, said, “2020 was a truly remarkable year for Bally’s. Amid the ongoing impact of the COVID-19 pandemic, we continued to systematically execute our strategic growth and development initiatives. Though fourth quarter results were impacted by various regional capacity and health limitations, most notably in Rhode Island, we expect to benefit from a strong rebound in demand across our properties, as well as the operational efficiencies and strong margin improvements that we have seen as a continuing trend since re-opening from the pandemic. In fact, market indications and preliminary results show markedly stronger consumer demand in January and February.”

Papanier continued, “Without question, the highlights of the fourth quarter were our pending acquisition of Bet.Works, which will drive development of our interactive offerings, as well as our strategic media partnership with Sinclair Broadcast Group, which we expect will make Bally’s a common name in sports fans’ households across the U.S. Additionally, we are pleased to have closed on our previously announced acquisitions of Bally’s Atlantic City Hotel & Casino and the Eldorado Resort Casino Shreveport, which represent valuable additions and expanded footprint to our foundational brick-and-mortar portfolio. We also recently debuted our FanDuel Sportsbook inside Bally’s Atlantic City, which represents the first of several planned capital improvement projects at the property.”


Summary of Financial Results


Quarter Ended
December 31,


Year Ended
December 31,


(in thousands, except per share amounts and
percentages)


2020


2019


Change


2020


2019


Change

Revenue

$

118,096

$

130,419

(9.4)

%

$

372,792

$

523,577

(28.8)

%

(Loss) income from operations

$

(17,637)

$

29,022

(160.8)

%

$

(18,386)

$

114,626

(116.0)

%

(Loss) income from operations margin

(14.93)%

22.25%

(4.93)%

21.89%

Net income (loss)

$

20,223

$

13,355

51.4

%

$

(5,487)

$

55,130

(110.0)

%

Net income (loss) margin

17.12%

10.24%

(1.47)%

10.53%

Adjusted EBITDA(1)

$

21,059

$

40,212

(47.6)

%

$

70,402

$

167,150

(57.9)

%

Adjusted EBITDA Margin(1)

17.83%

30.83%

18.89%

31.92%

Earnings (loss) per diluted share (“EPS”)

$

0.61

$

0.40

52.5

%

$

(0.18)

$

1.46

(112.3)

%

Adjusted EPS(1)

$

0.39

$

0.42

(7.1)

%

$

(0.09)

$

1.81

(105.0)

%

(1) Refer to tables in this press release for a reconciliation of these non-GAAP financial measures to the most directly comparable measure calculated in accordance with GAAP.

Fourth Quarter 2020 Results

Revenue for the fourth quarter of 2020 decreased 9.4% to $118.1 million from $130.4 million in the fourth quarter of 2019. Revenue for the fourth quarter of 2020 continued to be negatively impacted by various state limitations as a result of COVID-19, including the mandated closure of both Rhode Island properties for three weeks. The Rhode Island casinos reopened on December 22, 2020 and are currently operating 24 hours a day, seven days a week. The decrease in revenue was partially offset by incremental revenues from the recent acquisitions of Casino KC and Casino Vicksburg, which were acquired on July 1, 2020, Bally’s Atlantic City, which was acquired on November 18, 2020, and Eldorado Resort Casino Shreveport, which was acquired on December 23, 2020.

Loss from operations in the fourth quarter of 2020 totaled $17.6 million, a decrease of $46.7 million, or 160.8%, year-over-year. Included within the loss was a $15.1 million charge, net of insurance recoveries, for storm damage from Hurricane Zeta at the Hard Rock Biloxi. Excluding this extraordinary charge, the operating results were most heavily impacted by the Rhode Island shutdown in the period noted above, as well as a loss from operations recognized at Bally’s Atlantic City since our acquisition. Historically, Bally’s Atlantic City has incurred losses during the fourth and first quarters of the calendar year and makes a majority of its profit in the summer months. The combination of this seasonality, COVID related restrictions and increased costs attributable to IT and marketing system overhead, resulted in higher than expected losses in the fourth quarter. The Company was able to convert its systems in mid-February 2021 and has commenced work on several capital improvement initiatives, including opening of the new sportsbook with its partner FanDuel, and believes the property is now on track to recovery and growth. 

At properties where the Company operated with fewer COVID restrictions, notably in the Southeast segment and at Dover Downs, the Company mitigated a portion of the impact of this revenue reduction through operational efficiencies, which had a positive impact on margins, continuing a trend noted since re-opening from the pandemic. Margin improvements were primarily driven by labor savings, reduced marketing and promotional spend, and reduced lower margin amenities.

Net income in the fourth quarter of 2020 was $20.2 million, an increase of $6.9 million, from net income of $13.4 million in the fourth quarter last year. This income was driven primarily by bargain purchase gains totaling $63.9 million, which were recorded on the Company’s fourth quarter 2020 acquisitions of Bally’s Atlantic City and Eldorado Resort Casino Shreveport coupled with a $50.9 million tax benefit recorded in the quarter, which included the utilization of net operating loss carrybacks under the CARES Act. These benefits were partially offset by the change in fair value of naming rights liabilities issued under the Sinclair arrangement and the net operating loss noted above.

Adjusted EBITDA for the fourth quarter of 2020 was $21.1 million, a decrease of $19.2 million, or 47.6%, from Adjusted EBITDA of $40.2 million in the fourth quarter 2019.

Diluted EPS for the fourth quarter of 2020 was $0.61 per share compared to $0.40 per share in the comparable period in 2019. Adjusted EPS was $0.39 for the fourth quarter of 2020 compared to Adjusted EPS of $0.42 in the same period in  2019.

Business Highlights

On November 9, 2020, the Company formally announced that it changed its corporate name from Twin River Worldwide Holdings, Inc. to Bally’s Corporation. The name change represented part of the Company’s unified branding initiative, which complements the considerable geographic growth and operational improvements the Company has achieved in 2020. It will also support the Company’s drive to become the first omni-channel gaming company to seamlessly integrate and operate physical casinos with digital solutions. On the same date, the Company’s common shares began trading on the New York Stock Exchange under the ticker symbol “BALY.”

The Company also issued three material announcements on November 18, 2020.

First, the Company announced the closing of its acquisition of Bally’s Atlantic City Hotel & Casino from Caesars Entertainment, Inc. and Vici Properties, Inc. The total cash purchase price was $25 million, subject to customary closing adjustments, funded with cash on hand. As part of the transaction, the Company also received three sports betting and five iGaming skins in New Jersey.

In addition, the Company announced that it had entered into an agreement to acquire Bet.Works, a U.S.-based, sports betting platform provider to operators in New Jersey, Iowa, Indiana and Colorado, for $125 million, subject to adjustment. Bet.Works’ proprietary technology stack and turnkey solutions, which include marketing, operations, customer service, risk management and compliance will allow the Company to become the premier, full-service, vertically integrated sports betting and iGaming company in the U.S. with a B2B2C business model and physical casinos and online gaming solutions united under a single, preeminent brand. In conjunction with the acquisition, the Company announced that it will form two distinct operating divisions: “Bally’s Casinos,” which will be comprised of Bally’s physical gaming and entertainment properties, and “Bally’s Interactive,” which will consist of new and existing contracts for sports betting and iGaming, including all of Bet.Works’ sports betting operations. The Bet.Works transaction is expected to close during the second quarter of 2021, pending regulatory approval and other customary closing conditions.

Finally, the Company announced that it had entered into agreements for a long-term strategic media partnership with Sinclair Broadcast Group. The partnership combines Bally’s vertically integrated, proprietary sports betting technology and expansive market access footprint with Sinclair’s premier portfolio of local broadcast stations and live regional sports networks (“RSNs”), STIRR, its popular Tennis Channel, and digital and over-the-air television network Stadium. Under the terms of the agreement, the Company will receive extensive access to Sinclair’s network of local, live sports content as the unified network brand and integrated partner across 19 RSNs, accounting for more than half of the U.S. MLB, NBA and NHL teams. Additionally, Sinclair’s RSNs have since been rebranded under the Bally name, as Sinclair recently unveiled the official Bally Sports logo and corresponding regional monikers that will replace the existing FOX Sports logos.

On December 23, 2020, the Company announced the closing of its acquisition of the Eldorado Resort Casino Shreveport from Caesars Entertainment, Inc. The total purchase price was $140 million, subject to customary adjustments, and funded with cash on hand and available borrowings under the Company’s revolving credit facility. Eldorado Resort Casino Shreveport is located in Shreveport, Louisiana, situated right on the banks of the Red River. This premier property includes 1,382 slots, 54 tables and 403 hotel rooms.

On January 4, 2021, the Company announced that it had signed a framework agreement with real estate developer Ira Lubert to jointly design, develop, construct and manage a Category 4 licensed casino in Centre County, Pennsylvania. The total estimated cost of the project is approximately $120 million. The Company will maintain a majority equity interest in the partnership, including 100% of the economic interests of all retail sports betting, online sports betting and iGaming activities associated with the project. Construction is expected to begin in the first half of 2021 and will take approximately one year to complete. The casino is expected to house up to 650 slot machines and 30 table games.

On January 25, 2021, the Company announced that it had entered into an agreement to acquire Monkey Knife Fight, the fastest-growing gaming platform and third-largest daily fantasy sports operator in North America. The transaction will make Bally’s just the third sports betting company in the U.S. to have a fantasy sports segment, while Monkey Knife Fight will become an integral component of the “Bally’s Interactive” division, as well as contribute to the Company’s growing player database.

On February 8, 2021, the Company announced that it had acquired SportCaller, a leading global B2B free-to-play game provider. The acquisition of SportCaller will enable the Company to use free-to-play games as an additional player engagement and retention tool in states that authorize sports betting, and expand the Company’s strong geographic presence beyond national borders, as SportCaller has more than 100 games in over 20 languages, and over 30 sports across 37 countries.

Proforma for all the pending acquisitions and the casino under development, the Company will operate 15 casino locations in 11 states.

Other Financial Information

As of December 31, 2020, the Company had $123.4 million in cash and cash equivalents, excluding restricted cash. In addition, the Company had $215.0 million of available borrowings under its credit facility. The Company has no substantial scheduled debt maturities before 2024.

Interest expense, net of interest income, for the fourth quarter of 2020 increased $8.2 million to $19.2 million compared to the fourth quarter last year. This increase was a result of debt obligations outstanding in each respective period coupled with timing and differences in interest rates.

The Company had capital expenditures of $15.3 million for the year.

Reconciliation of GAAP Measures to Non-GAAP Measures

To supplement the financial information presented on a generally accepted accounting principles (“GAAP”) basis, the Company has included in this earnings release non-GAAP financial measures for Adjusted EBITDA, Adjusted EBITDA margin, gross gaming revenue, and adjusted earnings per diluted share, which exclude certain items described below. The Company believes these measures represent important measures of financial performance that provide useful information that is helpful in understanding the Company’s ongoing operating results. The reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures are presented in the tables appearing below.

“Adjusted EBITDA” is earnings, or loss, for the Company, or where noted the Company’s reporting segments, before, in each case, interest expense, net of interest income, (benefit) provision for income taxes, depreciation and amortization, non-operating income, acquisition, integration and restructuring expense, goodwill and asset impairment, expansion and pre-opening expenses, share-based compensation, rebranding, change in fair value of naming rights liabilities, gain on bargain purchases, professional and advisory fees associated with capital return program, CARES Act credit, credit agreement amendment expenses, storm related losses, net of insurance recoveries, Bet.Works and Sinclair, sports and iGaming licensing, and certain other gains or losses as well as, when presented for the Company’s reporting segments, an adjustment related to the allocation of corporate costs among segments. Adjusted EBITDA margin is measured as Adjusted EBITDA as a percentage of revenue.

“Gross gaming revenue” represents total gaming revenue adjusted for the State of Rhode Island’s and the State of Delaware’s respective shares of net terminal income, table games revenue and other gaming revenue, and is being presented by the Company to reflect the unique structure of the Company’s operations in those states where each state’s share of the Company’s revenues is retained at the gross revenue level rather than through taxes. Management believes that the presentation of gaming revenue on a gross basis allows for comparisons to gross gaming win data provided throughout the gaming industry.

“Adjusted EPS” represents net income, or loss, per diluted share before acquisition, integration and restructuring expense, goodwill and asset impairment, storm related losses, net of insurance recoveries, expansion and pre-opening expenses, change in value of naming rights liabilities, gain on bargain purchases, rebranding, Bet.Works and Sinclair, sports and iGaming licensing, credit agreement amendment expenses, professional and advisory fees associated with capital return program, CARES Act credit, and certain other gains or losses.

Management has historically used Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EPS when evaluating operating performance because the Company believes that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of the Company’s core operating results and as a means to evaluate period-to-period performance. Management also believes that Adjusted EBITDA is a measure that is widely used for evaluating operating performance of companies in our industry and a principal basis for valuing resort and gaming companies like the Company. Management of the Company believes that while certain items excluded from Adjusted EBITDA and Adjusted EPS may be recurring in nature and should not be disregarded in evaluating the Company’s earnings performance, it is useful to exclude such items when comparing current performance to prior periods because these items can vary significantly depending on specific underlying transactions or events that may not be comparable between the periods presented or they may not relate specifically to current operating trends or be indicative of future results. Neither Adjusted EBITDA nor Adjusted EPS should be construed as an alternative to GAAP net income or GAAP diluted EPS, respectively, as an indicator of the Company’s performance. In addition, Adjusted EBITDA or Adjusted EPS as used by the Company may not be defined in the same manner as other companies in the Company’s industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies.  

Fourth Quarter Conference Call

The Company’s fourth quarter 2020 earnings conference call and audio webcast will be held today, Thursday, March 4, 2021 at 8:00 AM EDT. To access the conference call, please dial (833) 570-1160 (U.S. toll-free) and reference conference ID number 2192049. The webcast of the call will be available to the public, on a listen-only basis, via the Internet at the Investors section of the Company’s website at www.ballys.com. An online archive of the webcast will be available on the Company’s website for 120 days. Supplemental materials have also been posted to the Investors section of the website, under Events & Presentations.

About Bally’s Corporation

Bally’s Corporation currently owns and manages 11 casinos across seven  states, a horse racetrack, and 13 authorized OTB licenses in Colorado. With more than 5,400 employees, the Company’s operations include 12,890 slot machines, 443 game tables and 2,904 hotel rooms. Following the completion of pending acquisitions, which include Tropicana Evansville (Evansville, IN), Jumer’s Casino & Hotel (Rock Island, IL), and MontBleu Resort Casino & Spa (Lake Tahoe, NV), as well as the construction of a land-based casino near the Nittany Mall in State College, PA, Bally’s will own and manage 15 casinos across 11 states. Its shares trade on the New York Stock Exchange under the ticker symbol “BALY.”



Investor Contact



Media Contact

Steve Capp

Richard Goldman / David Gill

Executive Vice President and Chief Financial Officer

Kekst CNC

401-475-8564

646-847-6102 / 917-842-5384


InvestorRelations@twinriver.com


BallysMediaInquiries@kekstcnc.com

Cautionary Note Regarding Forward-Looking Statements

This document includes forward-looking statements within the meaning of the securities laws. Forward-looking statements are statements as to matters that are not historical facts, and include statements about Bally’s plans, objectives, expectations and intentions.

Forward-looking statements are not guarantees and are subject to risks and uncertainties. Forward-looking statements are based on Bally’s current expectations and assumptions. Although Bally’s believes that its expectations and assumptions are reasonable at this time, they should not be regarded as representations that Bally’s expectations will be achieved. Actual results may vary materially. Forward-looking statements speak only as of the time of this document and Bally’s does not undertake to update or revise them as more information becomes available, except as required by law.

Important factors beyond those that apply to most businesses, some of which are beyond Bally’s control, that could cause actual results to differ materially from our expectations and assumptions include, without limitation:

  • uncertainties surrounding the COVID-19 pandemic, including limitations on Bally’s operations, increased costs, changes in customer attitudes, impact on Bally’s employees and the ongoing impact of COVID-19 on general economic conditions;
  • unexpected costs, difficulties integrating and other events impacting Bally’s recently completed and proposed acquisitions and Bally’s ability to realize anticipated benefits;
  • risks associated with Bally’s rapid growth, including those affecting customer and employee retention, integration and controls;
  • risks associated with the impact of the digitalization of gaming on Bally’s casino operations, Bally’s expansion into iGaming and sports betting and the highly competitive and rapidly changing aspects of Bally’s new interactive businesses generally;
  • the very substantial regulatory restrictions applicable to Bally’s, including costs of compliance;
  • restrictions and limitations in agreements governing Bally’s debt could significantly affect Bally’s ability to operate our business and our liquidity; and
  • other risk factors as detailed under Part I. Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2020, the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020 as filed with the SEC on May 14, 2020, the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2020, and the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020 as filed with the SEC on November 6, 2020.

The foregoing list of important factors is not exclusive and does not include matters like changes in general economic conditions that affect substantially all gaming businesses.

You should not to place undue reliance on Bally’s forward-looking statements.


BALLY’S CORPORATION


CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


(In thousands, except share data)


December 31,


2020


2019



Assets

Cash and cash equivalents

$

123,445

$

182,581

Restricted cash

3,110

2,921

Accounts receivable, net

14,798

23,190

Inventory

9,296

7,900

Tax receivable

84,483

Prepaid expenses and other assets

53,823

28,439


Total current assets

288,955

245,031

Property and equipment, net

749,029

510,436

Right of use assets, net

36,112

17,225

Goodwill

186,979

133,082

Intangible assets, net

663,395

110,373

Other assets

5,385

5,740


Total assets

$

1,929,855

$

1,021,887



Liabilities and Stockholders’ Equity

Current portion of long-term debt

$

5,750

$

3,000

Current portion of lease obligations

1,520

1,014

Accounts payable

15,869

14,921

Accrued liabilities

120,055

70,849


Total current liabilities

143,194

89,784

Lease obligations, net of current portion

62,025

16,214

Long-term debt, net of current portion

1,094,105

680,601

Pension benefit obligations

9,215

8,688

Deferred tax liability

36,983

13,790

Naming rights liabilities

243,965

Other long-term liabilities

13,770

1,399


Total liabilities

1,603,257

810,476


Commitments and contingencies


Stockholders’ equity:

Common stock, par value $0.01; 100,000,000 shares authorized; 30,685,938 and 41,193,018 shares issued as of December 31, 2020 and 2019, respectively; 30,685,938 and 32,113,328 shares outstanding as of December 31, 2020 and 2019, respectively

307

412

Additional paid-in-capital

294,643

185,544

Treasury Stock, at cost, 0 and 9,079,690 shares as of December 31, 2020 and 2019, respectively.

(223,075)

Retained earnings

34,792

250,418

Accumulated other comprehensive loss

(3,144)

(1,888)


Total stockholders’ equity

326,598

211,411


Total liabilities and stockholders’ equity

$

1,929,855

$

1,021,887

 


BALLY’S CORPORATION


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)


(In thousands, except per share data)


Quarter Ended December 31,


Year Ended December 31,


2020


2019


2020


2019


Revenue:

Gaming

$

95,467

$

88,531

$

291,658

$

367,948

Racing

1,595

3,136

6,412

13,114

Hotel

8,107

10,174

24,742

38,988

Food and beverage

8,257

19,538

32,132

69,904

Other

4,670

9,040

17,848

33,623

Total revenue

118,096

130,419

372,792

523,577


Operating costs and expenses:

Gaming

30,375

23,282

89,455

93,965

Racing

1,569

2,275

6,446

9,592

Hotel

3,218

3,754

10,144

14,841

Food and beverage

7,416

16,382

29,367

58,447

Retail, entertainment and other

796

2,624

3,257

8,327

Advertising, general and administrative

59,928

44,079

176,943

180,400

Goodwill and asset impairment

105

8,659

Expansion and pre-opening

342

921

Acquisition, integration and restructuring expense

6,273

1,121

13,257

12,168

Storm related losses, net of insurance recoveries

15,131

(1,181)

14,095

(1,181)

Rebranding

792

792

Depreciation and amortization

9,788

9,061

37,842

32,392

Total operating costs and expenses

135,733

101,397

391,178

408,951


(Loss) income from operations

(17,637)

29,022

(18,386)

114,626


Other income (expense):

Interest income

315

327

612

1,904

Interest expense, net of amounts capitalized

(19,560)

(11,352)

(63,248)

(39,830)

Change in value of naming rights liabilities

(57,660)

(57,660)

Gain on bargain purchases

63,871

63,871

Loss on extinguishment and modification of debt

(212)

(1,703)

Other, net

183

Total other expense, net

(13,034)

(11,237)

(56,425)

(39,446)

(Loss) income before provision for income taxes

(30,671)

17,785

(74,811)

75,180

(Benefit) provision for income taxes

(50,894)

4,430

(69,324)

20,050


Net income (loss)

$

20,223

$

13,355

$

(5,487)

$

55,130

Net income (loss) per share, basic

$

0.62

$

0.40

$

(0.18)

$

1.46

Weighted average common shares outstanding, basic

32,774,612

33,675,830

31,315,151

37,705,179

Net income (loss) per share, diluted

$

0.61

$

0.40

$

(0.18)

$

1.46

Weighted average common shares outstanding, diluted

33,117,823

33,773,935

31,315,151

37,819,617

 


Year Ended December 31,


2020


2019


Cash flows from operating activities:

Net (loss) income

$

(5,487)

$

55,130

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization

37,842

32,392

Amortization of operating lease right of use assets

804

1,215

Share-based compensation

17,706

3,826

Amortization of deferred financing costs and discounts on debt

4,636

2,684

Loss on debt extinguishment and modification of debt

1,703

Bad debt expense

353

239

Net pension and other post-retirement benefit income

(39)

Deferred income taxes

1,191

8,995

Goodwill and asset impairment

8,659

Storm related losses

14,408

Loss on disposal of property and equipment

35

98

Accretion of trade name liability and naming rights

594

Change in value of naming rights liabilities

57,660

Gain on bargain purchase

(63,871)

Changes in operating assets and liabilities:

Accounts receivable

11,622

5,211

Inventory

125

(89)

Prepaid expenses and other assets

(76,099)

(14,172)

Accounts payable

(4,976)

(3,860)

Accrued liabilities

14,300

767

Net cash provided by operating activities

19,502

94,100


Cash flows from investing activities:

Cash paid for acquisitions, net of cash acquired

(425,063)

(9,606)

Deposit for pending acquisition of Jumer’s Casino & Hotel

(4,000)

Proceeds from sale of property and equipment

10

Capital expenditures

(15,283)

(28,237)

Payments associated with licenses and market access fees

(500)

(1,092)

Net cash used in investing activities

(444,846)

(38,925)


Cash flows from financing activities:

Revolver borrowings

285,000

25,000

Revolver repayments

(250,000)

(80,000)

Term loan proceeds, net of fees of $13,820 and $10,655, respectively

261,180

289,345

Term loan repayments

(4,375)

(343,939)

Senior note proceeds, net of fees of $2,500 and $6,130, respectively

122,500

393,870

Payment of financing fees

(1,734)

(4,340)

Share repurchases

(33,292)

(223,075)

Payment of shareholder dividends

(3,204)

(7,539)

Share redemption for tax withholdings – restricted stock

(9,762)

(426)

Stock options exercised

84

Net cash provided by financing activities

366,397

48,896

Net change in cash and cash equivalents and restricted cash

(58,947)

104,071

Cash and cash equivalents and restricted cash, beginning of period

185,502

81,431


Cash and cash equivalents and restricted cash, end of period


$


126,555


$


185,502


Supplemental disclosure of cash flow information:

Cash paid for interest

$

57,234

$

35,040

Cash paid for income taxes

3,835

16,519

 


BALLY’S CORPORATION


Reconciliation of Net Income (Loss) and Net Income (Loss) Margin to


Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)


Quarter Ended December 31,


Year Ended December 31,


(in thousands, except percentages)


2020


2019


2020


2019

Revenue

$

118,096

$

130,419

$

372,792

$

523,577

Net income (loss)

$

20,223

$

13,355

$

(5,487)

$

55,130

Interest expense, net of interest income

19,245

11,025

62,636

37,926

(Benefit) provision for income taxes

(50,894)

4,430

(69,324)

20,050

Depreciation and amortization

9,788

9,061

37,842

32,392

Non-operating income

(183)

Acquisition, integration and restructuring expense

6,273

1,121

13,257

12,168

Goodwill and asset impairment

105

8,659

Expansion and pre-opening expenses

342

921

Share-based compensation

8,238

1,019

17,706

3,826

Rebranding

792

792

Change in value of naming rights liabilities

57,660

57,660

Gain on bargain purchase

(63,871)

(63,871)

Professional and advisory fees associated with capital return program

10

(17)

3,510

CARES Act credit (1)

20

(3,928)

Credit Agreement amendment expenses (2)

87

764

810

2,915

Storm related losses, net of insurance recoveries (3)

15,131

(1,181)

14,095

(1,333)

Bet.Works and Sinclair(4)

1,248

1,248

Sports and iGaming Licensing(5)

226

226

Other (6)

(3,554)

608

(2,823)

749

Adjusted EBITDA

$

21,059

$

40,212

$

70,402

$

167,150

Net (loss) income margin

17.12

%

10.24

%

(1.47)

%

10.53

%

Adjusted EBITDA margin

17.83

%

30.83

%

18.89

%

31.92

%

__________________________________

(1)

Amount represents the Employee Retention Credit under the CARES Act which provides the Company with a refundable tax credit of 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

(2)

Credit Agreement amendment expenses include costs associated with amendments made to the Company’s Credit Agreement.

(3)

Represents losses incurred from damage resulting from Hurricane Zeta at Hard Rock Biloxi in the fourth quarter of 2020 offset by insurance recovery proceeds received for a damaged roof at the Company’s Arapahoe Park racetrack and insurance recoveries associated with damage from Hurricane Nate at Hard Rock Biloxi for the respective periods.

(4)

Expenses incurred to establish the partnership with Sinclair Broadcast Group and acquisition costs attributable to the Bet.Works acquisition in the fourth quarter of 2020.

(5)

Represents costs incurred to apply for and obtain sports and iGaming licenses in various jurisdictions.

(6)

Other includes the following non-recurring items for the applicable periods (i) expenses incurred associated with the Rhode Island State Police investigation into a former tenant in the Lincoln property and a former employee of the Company, (ii) a pension audit payment representing an adjustment to a charge for out-of-period unpaid contributions, inclusive of estimated interest and penalties, to one of the Company’s multi-employer pension plans, (iii) expenses incurred associated with the campaign attempting to create an open bid process for the Rhode Island Lottery Contract, (iv) non-routine legal expenses incurred in connection with certain litigation matters (net of insurance reimbursements), and (v) costs incurred in connection with the implementation of a new human resources information system.

 


B
ALLY’S CORPORATION


Revenue and Reconciliation of Net Income (Loss) to


Adjusted EBITDA by Segment (unaudited)


(in thousands)



Quarter Ended December 31, 2020


Rhode
Island


Mid-
Atlantic


Southeast


West


Other


Total

Revenue

$

32,402

$

26,454

$

35,483

$

22,642

$

1,115

$

118,096

Net income (loss)

$

15,103

$

(1,670)

$

(2,210)

$

4,274

$

4,726

$

20,223

Interest expense, net of interest income

25

(17)

19,237

19,245

(Benefit) provision for income taxes

(12,221)

(1,780)

(4,150)

(920)

(31,823)

(50,894)

Depreciation and amortization

3,681

1,689

2,824

1,513

81

9,788

Acquisition, integration and restructuring expense

6,273

6,273

Expansion and pre-opening expenses

342

342

Goodwill and asset impairment

105

105

Share-based compensation

8,238

8,238

Rebranding

792

792

Change in value of naming rights liabilities

57,660

57,660

Gain on bargain purchases

(63,871)

(63,871)

CARES Act credit (1)

163

(175)

22

9

1

20

Credit Agreement amendment expenses (1)

87

87

Storm related losses, net of insurance recoveries (1)

15,131

15,131

Bet.Works and Sinclair(1)

1,248

1,248

Sports and iGaming Licensing(1)

226

226

Other (1)

157

(3,711)

(3,554)

Allocation of corporate costs

1,597

1,303

1,747

1,115

(5,762)

Adjusted EBITDA

$

8,822

$

(608)

$

13,347

$

6,096

$

(6,598)

$

21,059

_______________________________

(1)

See descriptions of adjustments in the “Reconciliation of Net Income (Loss) and Net Income (Loss) Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.

 



Quarter Ended December 31, 2019


Rhode
Island


Mid-
Atlantic


Southeast


Other


Total

Revenue

$

69,483

$

27,637

$

31,187

$

2,112

$

130,419

Net income

$

16,479

$

2,016

$

4,065

$

(9,205)

$

13,355

Interest expense, net of interest income

31

(7)

11,001

11,025

Provision for income taxes

6,399

1,363

1,345

(4,677)

4,430

Depreciation and amortization

4,733

1,390

2,896

42

9,061

Acquisition, integration and restructuring expense

21

58

1,042

1,121

Share-based compensation

1,019

1,019

Professional and advisory fees associated with capital return program

10

10

Credit Agreement amendment expenses (1)

764

764

Storm related losses, net of insurance recoveries

(1,181)

(1,181)

Other (1)

608

608

Allocation of corporate costs

1,813

556

807

(3,176)

Adjusted EBITDA

$

29,445

$

5,414

$

9,106

$

(3,753)

$

40,212

______________________________

(1)

See descriptions of adjustments in the “Reconciliation of Net Income (Loss) and Net Income (Loss) Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.

 


BALLY’S CORPORATION


Revenue and Reconciliation of Net Income (Loss) to


Adjusted EBITDA by Segment (unaudited)


(in thousands)



Year Ended December 31. 2020


Rhode
Island


Mid-
Atlantic


Southeast


West


Other


Total

Revenue

$

132,028

$

73,676

$

114,832

$

47,332

$

4,924

$

372,792

Net income (loss)

20,276

(241)

10,486

(712)

(35,296)

(5,487)

Interest expense, net of interest income

(56)

132

(42)

62,602

62,636

(Benefit) provision for income taxes

(10,326)

(1,232)

(763)

(3,697)

(53,306)

(69,324)

Depreciation and amortization

17,310

6,082

10,037

4,104

309

37,842

Acquisition, integration and restructuring expense

20

13,237

13,257

Expansion and pre-opening expenses

921

921

Goodwill and asset impairment

8,659

8,659

Share-based compensation

17,706

17,706

Rebranding

792

792

Change in value of naming rights liabilities

57,660

57,660

Gain on bargain purchases

(63,871)

(63,871)

Professional and advisory fees associated with capital return program

(17)

(17)

CARES Act credit(1)

(2,215)

(755)

(548)

(361)

(49)

(3,928)

Credit Agreement amendment expenses (1)

810

810

Storm related losses, net of insurance recoveries(1)

15,131

(1,036)

14,095

Bet.Works and Sinclair(1)

1,248

1,248

Sports and iGaming Licensing(1)

226

226

Other (1)

157

(2,980)

(2,823)

Allocation of corporate costs

7,505

4,078

6,317

2,339

(20,239)

Adjusted EBITDA

$

33,572

$

8,084

$

40,618

$

10,332

$

(22,204)

$

70,402

_______________________________

(1)

See descriptions of adjustments in the “Reconciliation of Net Income (Loss) and Net Income (Loss) Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.

 



Year Ended December 31, 2019


Rhode
Island


Mid-
Atlantic


Southeast


Other


Total

Revenue

$

306,306

$

80,806

$

127,432

$

9,033

$

523,577

Net income

$

71,124

$

6,031

$

18,165

$

(40,190)

$

55,130

Interest expense, net of interest income

3,265

145

(30)

34,546

37,926

Provision for income taxes

26,653

2,903

5,108

(14,614)

20,050

Depreciation and amortization

18,473

3,996

9,743

180

32,392

Non-operating income

(39)

(144)

(183)

Acquisition, integration and restructuring expense

425

1,155

10,588

12,168

Share-based compensation

3,826

3,826

Professional and advisory fees associated with capital return program

3,510

3,510

Credit Agreement amendment expenses (1)

1,038

1,877

2,915

Storm related losses, net of insurance recoveries(1)

(152)

(1,181)

(1,333)

Other (1)

(419)

275

893

749

Allocation of corporate costs

10,124

2,466

4,148

(16,738)

Adjusted EBITDA

$

130,683

$

16,657

$

37,257

$

(17,447)

$

167,150

_______________________________

(1)

See descriptions of adjustments in the “Reconciliation of Net Income (Loss) and Net Income (Loss) Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.

 


BALLY’S CORPORATION


Calculation of Gross Gaming Revenue (unaudited)


Quarter Ended
December 31,


Year Ended
December 31,


(in thousands, except percentages)


2020


2019


Change


2020


2019


Change

Gaming revenue

$

95,467

$

88,531

7.8

%

$

291,658

$

367,948

(20.7)

%

Adjustment for State of RI’s share of net terminal income, table games revenue and other gaming revenue (1)

52,927

96,906

206,526

401,772

Adjustment for State of DE’s share of net terminal income, table games revenue and other gaming revenue at Dover Downs (1)

17,353

21,728

60,250

66,600

Gross gaming revenue

$

165,747

$

207,165

(20.0)

%

$

558,434

$

836,320

(33.2)

%

_______________________________

(1)

Adjustment made to show gaming revenue on a gross basis consistent with gross gaming win data provided throughout the gaming industry.

 


Reconciliation of Net Income (Loss) Per Diluted Share to


Adjusted Net Income (Loss) Per Diluted Share (unaudited)


Quarter Ended
December 31,


Year Ended
December 31,


2020


2019


2020


2019

Net income (loss) per diluted share

$

0.61

$

0.40

$

(0.18)

$

1.46

Acquisition, integration and restructuring expense

0.19

0.03

0.42

0.32

Goodwill and asset impairment

0.28

Storm related losses, net of insurance recoveries (1)

0.46

(0.03)

0.45

(0.03)

Expansion and pre-opening expenses

0.01

0.03

Change in value of naming rights liabilities

1.74

1.84

Gain on bargain purchases

(1.93)

(2.04)

Rebranding

0.02

0.03

Bet.Works and Sinclair(1)

0.04

0.04

Sports and iGaming Licensing(1)

0.01

0.01

Credit Agreement amendment expenses (1)

0.02

0.03

0.08

Professional and advisory fees associated with capital return program

0.09

CARES Act credit (1)

(0.13)

Other (1)

(0.11)

0.02

(0.09)

0.02

Tax effect of adjustments (2)

(0.66)

(0.01)

(0.78)

(0.13)

Adjusted net income (loss) per diluted share

$

0.39

$

0.42

$

(0.09)

$

1.81

_______________________________

Note:

Amounts in table may not subtotal due to rounding.

(1)

See descriptions of adjustments in the “Reconciliation of Net Income (Loss) and Net Income (Loss) Margin to Adjusted EBITDA and Adjusted EBITDA Margin (unaudited)” table above.

(2)

Represents the tax effect based upon the nature of the adjustments.

 

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SOURCE Bally’s Corporation

Shift4 Payments Announces Fourth Quarter and Full Year 2020 Results

Shift4 Payments Announces Fourth Quarter and Full Year 2020 Results

ALLENTOWN, Pa. & LAS VEGAS–(BUSINESS WIRE)–
Shift4 Payments (NYSE: FOUR), the leader in integrated payment processing solutions, has posted its fourth quarter and full year 2020 financial results as part of its 4Q 2020 shareholder letter under the Financials section of its Investor Relations website at https://investors.shift4.com/overview/default.aspx.

The Company’s shareholder letter can also be viewed here – Shift4 Payments 4Q 2020 Shareholder Letter

Management will host a conference call today, March 4, 2021, at 8:30 am ET to discuss the results. Due to high call volumes, we urge interested parties to join the live webcast of the event through Shift4 Payments’ website at https://investors.shift4.com/events-and-presentations/default.aspx.

To register for the live teleconference, please use this link. After registering, a confirmation will be sent through email, including dial-in details and unique conference call codes for entry. Registration is open through the live call, but to ensure you are connected for the full call we suggest registering a minimum 10 minutes before the start of the call.

About Shift4 Payments, Inc.

Shift4 Payments (NYSE: FOUR) is a leading provider of integrated payment processing and technology solutions, delivering a complete omnichannel ecosystem that extends beyond payments to include a wide range of commerce-enabling services. The company’s technologies help power over 350 software providers in numerous industries, including hospitality, retail, F&B, eCommerce, lodging, gaming, and many more. With over 7,000 sales partners, the company securely processed more than $200 billion in payments volume for over 200,000 businesses in 2019. For more information, visit shift4.com.

Investor Relations

Sloan Bohlen

610.596.4475

investors@shift4.com

Media Contacts

James McCusker

jmccusker@soleburytrout.com

Nate Hirshberg

Vice President, Marketing

Shift4 Payments

nhirshberg@shift4.com

KEYWORDS: United States North America Nevada Pennsylvania

INDUSTRY KEYWORDS: Professional Services Online Retail Retail Technology Software Internet Banking

MEDIA:

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Mastercard SpendingPulse: U.S. Retail Sales Grow in February Despite Winter Blast

Mastercard SpendingPulse: U.S. Retail Sales Grow in February Despite Winter Blast

Another Big Month for E-commerce, which Increased 54.7% YOY

PURCHASE, N.Y.–(BUSINESS WIRE)–
Despite the inclement weather felt across many parts of the country this February, U.S. retail sales excluding automotive and gasoline increased 4.6%* year-over-year when adjusted for Leap Year, according to Mastercard SpendingPulseTM. Online sales grew 54.7% compared to 2020. Mastercard SpendingPulse measures in-store and online retail sales across all forms of payment.

At a national level, key retail trends from February include:

  • Grocery Aisle Touchdown: With more people watching football’s big game from home, Grocery spend was up 30% the three days prior. That contributed to the Grocery sector growing +12.4% YOY for the month.
  • Love is in the Air—and in the Mail: Also known for being the month of love, February saw Jewelry spend rise +5.9% and +63.1% online YOY. Restaurant spend remained down (-13.5%) but has showed improvement over the past two months.
  • Cabin Fever Leads to Home Enhancements: No big surprises here, as Furniture & Furnishings (+8.6%) continued to post solid gains as seasonally cooler weather led to home improvements and décor projects.
  • Apparel Shopping Continues to Shift Online: While Apparel sales were down -5.3% overall, Apparel e-commerce sales grew +47.3% YOY. This month, 73.9% of all Apparel purchases were made online; a year ago, in February 2020, 47.5% were purchased online vs. in-store.
  • Stimulus Sales Lift Continued, though Fading: The infusion of stimulus payments in early January appeared to boost consumer spending in January and through early February, though the impacts have waned.

At the local level, the situation varied widely. A series of winter storms the week ending February 20 affected retail activity across the South—no state more than Texas. Mastercard SpendingPulse analysis shows how the extreme winter freeze impacted retail sales locally and at the national level.

  • On February 17, Dallas, Austin and Houston all had year-over-year total retail sale declines of 35-50% as retail locations closed amid crippling cold. With Texas typically accounting for approximately 10% to 11% of U.S. retail sales volume, this widespread event pulled the national growth rate down –2.2% for the week.
  • Online sales activity also took a hit as power outages limited consumers’ ability to recharge phones and other devices. This lack of connectivity drove online sales in the region into negative territory for several days.
  • As the weather cleared, a wave of recovery spending with daily YOY rates exceeded 30% in markets such as Dallas, Austin and up to Nashville.

“While in-store sales decelerated slightly as a result of winter storms, consumers are continuing to show up online,” said Steve Sadove, Mastercard senior advisor and former CEO of Saks, Inc. “From jewelry to apparel, e-commerce has opened doors for consumers to shop online while warmer days, widespread vaccinations and the loosening of restrictions appear on the horizon.”

*Data has been adjusted to account for the leap year in 2020. Without seasonal adjustment the total retail sales growth would be +1%.

About Mastercard SpendingPulse:

Mastercard SpendingPulse™ reports on national retail sales across all payment types in select markets around the world. The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check. As such, SpendingPulse™ insights do not in any way contain, reflect or relate to actual Mastercard operational or financial performance, or specific payment-card-issuer data.

Mastercard SpendingPulse defines “U.S. retail sales” as sales at retailers and food services merchants of all sizes. Sales activity within the services sector (for example, travel services such as airlines and lodging) are not included. Holiday spending insights are preliminary.

About Mastercard (NYSE: MA)

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.

www.mastercard.com

William Tsang, Mastercard

914.249.2640 | William.Tsang@mastercard.com

Julia Monti, Mastercard

914.217.9533 | Julia.Monti@mastercard.com

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Professional Services Online Retail Retail Other Retail Finance Banking

MEDIA:

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Schrödinger Reports Financial Results for the Fourth Quarter and Full Year 2020 and Provides Outlook for 2021

Schrödinger Reports Financial Results for the Fourth Quarter and Full Year 2020 and Provides Outlook for 2021

Total revenue of $108.1 million in 2020, up 26 percent year-over-year

Software revenue of $92.5 million in 2020, up 39 percent year-over-year

Strong financial position enables continued investment in advancing the science underlying Schrödinger’s computational platform

Internal pipeline progressing, with plans to submit investigational new drug applications in 2022

Conference call today, Thursday, March 4, at 8:30 a.m. ET

NEW YORK–(BUSINESS WIRE)–Schrödinger, Inc. (Nasdaq: SDGR), whose physics-based software platform is transforming the way therapeutics and materials are discovered, today announced financial results for the fourth quarter and full year ended December 31, 2020, and provided its financial outlook for 2021.

“2020 was a very strong year for Schrödinger across all aspects of our business. Software revenue increased substantially, and we expect continued growth in 2021. We believe this growth reflects the power of our physics-based platform to accelerate the discovery of new medicines and materials,” stated Ramy Farid, Ph.D., chief executive officer at Schrödinger.

“We finished 2020 in a strong financial position. Looking across multiple key indicators, we believe our underlying business is poised for continued growth this year,” said Joel Lebowitz, chief financial officer at Schrödinger. “Importantly, our balance sheet and growing revenue enable us to make strategic investments in both our computational platform and our internal pipeline to build for the future.”

Business Highlights

Delivered strong operating performance and strategic execution

  • Reported 28 percent total revenue growth in the fourth quarter of 2020, driven by continued uptake of Schrödinger’s core technologies including FEP+ and its enterprise solution, LiveDesign
  • Entered into a strategic collaboration with Bristol Myers Squibb to discover, develop, and commercialize therapeutics in multiple disease areas. Under the terms of the agreement, Schrödinger received $55 million in an upfront payment and is eligible to receive up to $2.7 billion in preclinical, development, regulatory and sales-based milestone payments in addition to royalties on net sales of each product commercialized by Bristol Myers Squibb.
  • Ended the fourth quarter of 2020 with cash, cash equivalents, restricted cash and marketable securities of $643.2 million, compared to $599.5 million at September 30, 2020

Progressed internal pipeline

  • Presented preclinical data on the company’s MALT1 inhibitor program at the American Society of Hematology (ASH) Annual Meeting highlighting that its MALT1 inhibitors demonstrated anti-tumor activity alone and in combination with approved anti-cancer therapies in models of B-cell lymphoma
  • Continued to advance multiple programs toward IND-enabling studies; subject to completion of the preclinical data packages, the company expects to submit up to three IND applications in 2022, with the first submission expected in the first half of next year
  • Advanced discovery efforts to allow addition of new programs to the company’s internal pipeline in 2021

Advanced the science underlying Schrödinger’s computational platform

  • Expanded its collaboration with Google Cloud to further increase the speed and capacity of its computational platform, effectively tripling Schrödinger’s previous throughput under the collaboration
  • Released a major update to Schrödinger’s proprietary force field, called OPLS4, which underlies Schrödinger’s most powerful molecular design technologies, such as FEP+, allowing for even greater accuracy of the computational predictions
  • Published four scientific papers, including a publication describing how to improve outcomes for fragment linking, an important technique used in early drug discovery, to potentially enable the design of novel drug-like inhibitors for challenging targets

Fourth Quarter 2020 Financial Results

  • Revenue was $33.0 million for the fourth quarter of 2020, an increase of 28 percent compared to the fourth quarter of 2019.
  • Software revenue was $25.0 million for the fourth quarter of 2020, an increase of 42 percent compared to the fourth quarter in 2019.
  • Drug discovery revenue was $8.1 million for the fourth quarter of 2020, compared to $8.3 million in the fourth quarter of 2019. Drug discovery revenue in the fourth quarter of 2020 included $1.0 million related to the $55 million up-front payment from the strategic agreement with Bristol Myers Squibb announced in November 2020.
  • Gross profit was $19.0 million in the fourth quarter of 2020, an increase of 22 percent over the fourth quarter in 2019. Software gross margin was 77 percent in the fourth quarter, compared to 79 percent for the same period in the prior year.
  • Operating expenses for the fourth quarter of 2020 were $35.6 million, compared to $23.4 million in fourth quarter of 2019.
  • Other income, which included gains on equity investments, changes in fair value of such investments and interest income, was $5.2 million in the fourth quarter of 2020 compared to $0.7 million for the fourth quarter of 2019. Other income for the fourth quarter of 2020 included a $5.2 million non-cash gain from Schrödinger’s equity stake in Morphic Therapeutic.
  • Net loss, after adjusting for non-controlling interests, was $11.1 million for the fourth quarter of 2020, compared to a net loss of $6.8 million in the fourth quarter of 2019.

Full Year 2020 Financial Results

  • Total revenue was $108.1 million for 2020, an increase of 26 percent compared to 2019.
  • Software revenue was $92.5 million for 2020, an increase of 39 percent over 2019.
  • Drug discovery revenue was $15.6 million for 2020, compared to $18.8 million in 2019.
  • Gross profit was $63.5 million for 2020, an increase of 29 percent over 2019. Software gross margin was 81 percent for the year, compared to 80 percent in 2019.
  • Operating expenses for 2020 were $124.4 million, compared to $87.8 million in 2019.
  • Other income, which included gains on equity investments, changes in fair value of such investments and interest income was $34.6 million in 2020 compared to $12.7 million in 2019. Other income for 2020 included a $17.6 million non-cash gain from Schrödinger’s equity stake in Relay Therapeutics and a $13.7 million non-cash gain from the company’s equity stake in Morphic Therapeutic, partially offset by a loss of $3.0 million related to the company’s equity stake in Nimbus Therapeutics.
  • Net loss, after adjusting for non-controlling interests, was $24.5 million for 2020, compared to a net loss of $24.6 million in 2019.
  • At December 31, 2020, Schrödinger had cash, cash equivalents, restricted cash and marketable securities of $643.2 million.

Full Year 2020 Key Performance Indicators

  • Total annual contract value (ACV) was $92.1 million in 2020, up 22 percent over 2019
  • Number of customers over $1 million in ACV was 16 in 2020, up from 10 in 2019
  • Number of customers over $100,000 in ACV was 153 in 2020, up from 131 in 2019; customer retention in this cohort was 99 percent
  • Number of Active Customers with ACV over $1,000 was 1,463, up from 1,266 in 2019

For additional information about our Key Performance Indicators, see “Operating Metrics” below.

Full-Year 2021 Revenue Outlook

As of March 4, 2021, Schrödinger expects total revenue to range from $124 million to $142 million, with software revenue expected to range from $102 million to $110 million, and drug discovery revenue expected to range from $22 million to $32 million for the fiscal year ended December 31, 2021.

Webcast and Conference Call Information

Schrödinger will host a conference call to discuss its third quarter financial results on Thursday, March 4, 2020, at 8:30 a.m. ET. The conference call can be accessed live by dialing (833) 727-9520 (domestic) or +1 (830) 213-7697 (international) and referring to conference ID 9686253. The webcast can also be accessed under “News & Events” in the investors section of Schrödinger’s website, https://ir.schrodinger.com/news-and-events/event-calendar. The archived webcast will be available on Schrödinger’s website following the event.

About Schrödinger

Schrödinger is transforming the way therapeutics and materials are discovered. Schrödinger has pioneered a physics-based software platform that enables discovery of high-quality, novel molecules for drug development and materials applications more rapidly and at lower cost compared to traditional methods. The software platform is used by biopharmaceutical and industrial companies, academic institutions, and government laboratories around the world. Schrödinger’s multidisciplinary drug discovery team also leverages its software platform to advance collaborative programs and its own pipeline of novel therapeutics to address unmet medical needs.

Founded in 1990, Schrödinger has over 450 employees and is engaged with customers and collaborators in more than 70 countries. To learn more visit www.schrodinger.com and follow us on LinkedIn and Twitter.

Operating Metrics

To supplement the financial measures presented in our press release and related conference call or webcast in accordance with generally accepted accounting principles in the United States (“GAAP”), we also present certain other performance metrics, such as annual contract value and customer retention rate.

Annual Contract Value (ACV). We track the ACV for each of our customers. With respect to contracts that have a duration of one year or less, or contracts of more than one year in duration that are billed annually, we define ACV as the contract value billed during the applicable period. For contracts with a duration of more than one year that are billed upfront, ACV in each period represents the total billed contract value divided by the term. ACV should be viewed independently of revenue and does not represent revenue calculated in accordance with GAAP on an annualized basis, as it is an operating metric that can be impacted by contract execution start and end dates and renewal rates. ACV is not intended to be a replacement for, or forecast of, revenue.

Customer Retention for our customers with an ACV of over $100,000. We calculate year-over-year customer retention for our customers in this cohort by starting with the number of customers we had in the previous fiscal year. We then calculate how many of these customers were active customers in the current fiscal year. We then divide this number by the number of customers with an ACV over $100,000 we had in the previous fiscal year to arrive at the year-over-year customer retention rate for such customers.

Active Customers. We define an active customer as a customer that had an ACV of at least $1,000 in the fiscal year. We use $1,000 as a threshold for defining our active customers as this amount will generally exclude customers that only license our PyMOL software, which is our open-source molecular visualization system broadly available at low cost.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 including, but not limited to those regarding our expectations about the speed and capacity of our computational platform, our outlook for the fiscal year ended December 31, 2021, our plans to continue to invest in research and our strategic plans to accelerate the growth of our software business and advance our collaborative and internal drug discovery programs, our ability to improve and advance the science underlying our platform, including through these use of new technologies, the timing of potential IND applications for our internal drug discovery programs, our ability to realize potential milestones, royalties or other payments under our collaborations, as well as our expectations related to the use of our cash, cash equivalents, and marketable securities. Statements including words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and statements in the future tense are forward-looking statements. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Actual results may differ materially from those described in these forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are beyond our control, including the demand for our software solutions, our ability to further develop our computational platform, our reliance upon third-party providers of cloud-based infrastructure to host our software solutions, our reliance upon our third-party drug discovery collaborators, the uncertainties inherent in drug development and commercialization, uncertainties associated with the regulatory review of clinical trials and applications for marketing approvals, the ability to retain and hire key personnel and the direct and indirect impacts of the ongoing COVID-19 pandemic on our business and other risks detailed under the caption “Risk Factors” and elsewhere in our Securities and Exchange Commission filings and reports, including our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 4, 2021, as well as future filings and reports by us. Any forward-looking statements contained in this press release speak only as of the date hereof. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events, changes in expectations or otherwise.

Consolidated Statements of Operations

 

(in thousands, except for share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

Software products and services

 

$

92,530

 

 

$

66,735

 

Drug discovery

 

 

15,565

 

 

 

18,808

 

Total revenues

 

 

108,095

 

 

 

85,543

 

Cost of revenues:

 

 

 

 

 

 

 

 

Software products and services

 

 

18,003

 

 

 

13,646

 

Drug discovery

 

 

26,620

 

 

 

22,804

 

Total cost of revenues

 

 

44,623

 

 

 

36,450

 

Gross profit

 

 

63,472

 

 

 

49,093

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

64,695

 

 

 

39,404

 

Sales and marketing

 

 

17,795

 

 

 

21,364

 

General and administrative

 

 

41,898

 

 

 

27,040

 

Total operating expenses

 

 

124,388

 

 

 

87,808

 

Loss from operations

 

 

(60,916

)

 

 

(38,715

)

Other income:

 

 

 

 

 

 

 

 

Gain on equity investments

 

 

4,108

 

 

 

943

 

Change in fair value

 

 

28,263

 

 

 

9,922

 

Interest income

 

 

2,253

 

 

 

1,878

 

Total other income

 

 

34,624

 

 

 

12,743

 

Loss before income taxes

 

 

(26,292

)

 

 

(25,972

)

Income tax expense (benefit)

 

 

345

 

 

 

(291

)

Net loss

 

 

(26,637

)

 

 

(25,681

)

Net loss attributable to noncontrolling interest

 

 

(2,174

)

 

 

(1,110

)

Net loss attributable to Schrödinger common and limited common stockholders

 

$

(24,463

)

 

$

(24,571

)

Net loss per share attributable to Schrödinger common and limited common stockholders, basic and diluted:

 

$

(0.41

)

 

$

(4.09

)

Weighted average shares used to compute net loss per share attributable to Schrödinger common and limited common stockholders, basic and diluted:

60,024,658

6,004,500

 

Consolidated Balance Sheets

 

(in thousands, except for share and per share amounts)

 

 

 

 

 

 

 

 

 

 

Assets

 

December 31, 2020

 

 

December 31, 2019

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

202,296

 

 

$

25,986

 

Restricted cash

 

 

500

 

 

 

500

 

Marketable securities

 

 

440,395

 

 

 

59,844

 

Accounts receivable, net of allowance for doubtful accounts of $60 and $50

 

 

31,423

 

 

 

18,676

 

Unbilled and other receivables

 

 

3,955

 

 

 

7,062

 

Prepaid expenses

 

 

4,409

 

 

 

6,468

 

Total current assets

 

 

682,978

 

 

 

118,536

 

Property and equipment, net

 

 

5,140

 

 

 

6,268

 

Equity investments

 

 

45,664

 

 

 

15,366

 

Right of use assets

 

 

10,129

 

 

 

12,762

 

Other assets

 

 

2,352

 

 

 

2,338

 

Total assets

 

$

746,263

 

 

$

155,270

 

Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

8,398

 

 

$

3,524

 

Accrued payroll, taxes, and benefits

 

 

12,000

 

 

 

7,034

 

Deferred revenue

 

 

45,403

 

 

 

25,054

 

Lease liabilities

 

 

4,543

 

 

 

5,584

 

Other accrued liabilities

 

 

2,861

 

 

 

3,824

 

Total current liabilities

 

 

73,205

 

 

 

45,020

 

Deferred revenue, long-term

 

 

41,164

 

 

 

2,205

 

Lease liabilities, long-term

 

 

7,221

 

 

 

8,888

 

Other liabilities, long-term

 

 

654

 

 

 

900

 

Total liabilities

 

 

122,244

 

 

 

57,013

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Convertible preferred stock:

 

 

 

 

 

 

 

 

Series E convertible preferred stock, $0.01 par value. Authorized zero and 77,150,132 shares; zero and 73,795,777 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

 

 

 

 

 

109,270

 

Series D convertible preferred stock, $0.01 par value. Authorized zero and 39,540,611 shares; zero and 39,540,611 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

 

 

 

 

 

22,000

 

Series C convertible preferred stock, $0.01 par value. Authorized zero and 47,242,235 shares; zero and 47,242,235 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

 

 

 

 

 

19,844

 

Series B convertible preferred stock, $0.01 par value. Authorized zero and 29,468,101 shares; zero and 29,468,101 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

 

 

 

 

 

9,840

 

Series A convertible preferred stock, $0.01 par value. Authorized zero and 134,704,785 shares; zero and 134,704,785 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

 

 

 

 

 

30,626

 

Total convertible preferred stock

 

 

 

 

 

191,580

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

Common stock, $0.01 par value. Authorized 500,000,000 and 425,000,000 shares; 60,713,534 and 6,121,821 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

 

 

607

 

 

 

61

 

Limited common stock, $0.01 par value. Authorized 100,000,000 and 146,199,885 shares; 9,164,193 and zero shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

 

 

92

 

 

 

 

Additional paid-in capital

 

 

752,558

 

 

 

11,655

 

Accumulated deficit

 

 

(129,559

)

 

 

(105,096

)

Accumulated other comprehensive income

 

 

317

 

 

 

16

 

Total stockholders’ equity (deficit) of Schrödinger stockholders

 

 

624,015

 

 

 

(93,364

)

Noncontrolling interest

 

 

4

 

 

 

41

 

Total stockholders’ equity (deficit)

 

 

624,019

 

 

 

(93,323

)

Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)

$

746,263

$

155,270

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(26,637

)

 

$

(25,681

)

Adjustments to reconcile net loss to net cash provided by (used in)

 

 

 

 

 

 

 

 

operating activities:

 

 

 

 

 

 

 

 

Gain on equity investments

 

 

(4,108

)

 

 

(943

)

Noncash revenue from equity investments

 

 

(397

)

 

 

(186

)

Fair value adjustments

 

 

(28,263

)

 

 

(9,922

)

Depreciation

 

 

3,658

 

 

 

3,640

 

Stock-based compensation

 

 

10,545

 

 

 

2,193

 

Noncash research and development expenses

 

 

2,137

 

 

 

1,051

 

Noncash investment accretion

 

 

646

 

 

 

(506

)

Decrease (increase) in assets:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(12,747

)

 

 

(5,038

)

Unbilled and other receivables

 

 

3,468

 

 

 

(1,556

)

Reduction in the carrying amount of right of use assets

 

 

5,342

 

 

 

4,177

 

Prepaid expenses and other assets

 

 

187

 

 

 

410

 

Increase (decrease) in liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

 

4,882

 

 

 

(294

)

Accrued payroll, taxes, and benefits

 

 

4,966

 

 

 

2,948

 

Deferred revenue

 

 

59,705

 

 

 

6,715

 

Lease liabilities

 

 

(5,417

)

 

 

(4,025

)

Other accrued liabilities

 

 

(1,210

)

 

 

958

 

Net cash provided by (used in) operating activities

 

 

16,757

 

 

 

(26,059

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,538

)

 

 

(1,836

)

Purchases of equity investments

 

 

(2,869

)

 

 

 

Distribution from equity investment

 

 

4,582

 

 

 

943

 

Purchases of marketable securities

 

 

(519,668

)

 

 

(110,187

)

Proceeds from sale and maturity of marketable securities

 

 

138,772

 

 

 

57,225

 

Net cash used in investing activities

 

 

(381,721

)

 

 

(53,855

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Issuances of common stock upon initial public offering, net

 

 

211,491

 

 

 

 

Issuances of common stock upon follow-on public offering, net

 

 

325,600

 

 

 

 

Issuances of Series E preferred stock, net

 

 

 

 

 

29,893

 

Issuances of common stock upon stock option exercise

 

 

4,183

 

 

 

549

 

Contribution by noncontrolling interest

 

 

 

 

 

100

 

Deferred offering costs

 

 

 

 

 

(1,858

)

Net cash provided by financing activities

 

 

541,274

 

 

 

28,684

 

Net increase (decrease) in cash and cash equivalents and restricted cash

 

 

176,310

 

 

 

(51,230

)

Cash and cash equivalents and restricted cash, beginning of year

 

 

26,486

 

 

 

77,716

 

Cash and cash equivalents and restricted cash, end of year

 

$

202,796

 

 

$

26,486

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow and noncash information

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

381

 

 

$

139

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

 

 

 

 

Accrued deferred offering costs

 

 

 

 

 

2,142

 

Purchases of property and equipment

 

 

8

 

 

 

90

 

Acquisitions of right of use assets in exchange for lease obligations

 

 

2,709

 

 

 

464

 

Right of use assets recognized on adoption

 

 

 

 

 

16,475

 

Reclassification of deferred financing costs to additional paid-in capital

 

 

1,858

 

 

 

 

 

Jaren Irene Madden

Schrödinger, Inc.

jaren.madden@schrodinger.com

617-286-6264

Stephanie Simon (media)

Ten Bridge Communications

617-581-9333

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Science Software Biotechnology Research Pharmaceutical Health Technology Other Technology

MEDIA:

RaySecur Wins Prism Award for Security Imaging Innovation

RaySecur™ receives prestigious Prism Award for its MailSecur™ scanner, selected as the top new optics and photonics innovation in security technology for 2021.

CAMBRIDGE, Mass., March 04, 2021 (GLOBE NEWSWIRE) — RaySecur, the new standard in mail security, announced today that its MailSecur scanner was recognized by the 13th annual Prism Awards for Photonics Innovation – a prestigious international competition sponsored by the International Society for Optics and Photonics (SPIE) and Photonics Media. RaySecur was selected as a winner in the Safety & Security category.

Past Prism Award recipients include GE, Intel, Corning, Leica, Dolby, and Raytheon, among others. “The PRISM Awards represent the highest honor the photonics industry can bestow,” said Photonics Media CEO Tom Laurin. “The pandemic challenged — and continues to challenge — the global economy. But the contributions from this year’s winners go to show that no obstacle can stifle innovation.”

MailSecur™ is a desktop-sized scanner used by Fortune 500 companies in banking, financial services, tech, and other high-profile industries to scan incoming mail for threats and dangerous items.

“It’s truly an honor to receive this award among such a prestigious group of nominees,” said RaySecur CEO Alex Sappok, Ph.D. “This award represents the culmination of many years of hard work by the RaySecur team to bring this technology to market, along with our collaborators at INO and support from the National Science Foundation (NSF).”

RaySecur’s award-winning imaging technology provides the ability to “see inside” packages and other items in real-time using millimeter wave (mmWave) technology. Unlike X-ray systems which use harmful ionizing radiation and produce only 2D images, mmWave technology is safe, providing dynamic, full motion 3D imaging of concealed items.

About SPIE

SPIE is the international society for optics and photonics, an educational not-for-profit organization founded to advance light-based science, engineering, and technology. The Society serves ove 258,000 constituents from 184 countries, offering conferences and published proceedings, continuing education, books, journals, and the SPIE Digital Library.

About RaySecur

RaySecur™ is revolutionizing security imaging with the world’s first, scalable millimeter wave scanners and remote analysis and threat detection solutions. RaySecur’s MailSecur™ is used by Fortune 500 companies, heads of state, and government agencies around the world.

RaySecur and MailSecur are trademarks of RaySecur, Inc.

RaySecur Contact:

TJ Kelly
Marketing Director
P: 844-729-7328
E: tjkelly@raysecur.com

Photo available: https://www.globenewswire.com/NewsRoom/AttachmentNg/3d67487e-4a80-4d23-9325-06a6e58d34cf



Sun Communities, Inc. Commences Public Offering of 7,000,000 Shares of Common Stock

Southfield, MI, March 04, 2021 (GLOBE NEWSWIRE) — Sun Communities, Inc. (NYSE:SUI) (the “Company”), a real estate investment trust (“REIT”) that owns and operates or has an interest in manufactured housing communities,  recreational vehicle resorts and marinas, today announced that it has commenced an underwritten public offering of an aggregate of 7,000,000 shares of its common stock, consisting of 4,000,000 shares offered directly by the Company and 3,000,000 shares offered on a forward basis in connection with the forward sale agreement described below. The Company expects to grant the underwriters a 30-day option to purchase up to an additional 1,050,000 shares of its common stock. 

The Company expects to enter into a forward sale agreement with Citibank, N.A. (the “Forward Purchaser”) with respect to 3,000,000 shares of its common stock (or an aggregate of 4,050,000 shares if the underwriters exercise their option to purchase additional shares in full). In connection with the forward sale agreement, the Forward Purchaser or its affiliates are expected to borrow and sell to the underwriters an aggregate of 3,000,000 shares of the common stock that will be delivered in this offering (or an aggregate of 4,050,000 shares if the underwriters exercise their option to purchase additional shares in full). Subject to the Company’s right to elect cash or net share settlement, which right is subject to certain conditions, the Company intends to deliver, upon physical settlement of such forward sale agreement on one or more dates specified by the Company occurring no later than March 9, 2022, an aggregate of 3,000,000 shares of its common stock (or an aggregate of 4,050,000 shares if the underwriters exercise their option to purchase additional shares in full) to the Forward Purchaser in exchange for cash proceeds per share equal to the applicable forward sale price, which will be the public offering price, less underwriting discounts and commissions, and will be subject to certain adjustments as provided in the forward sale agreement.

The Company will not initially receive any proceeds from the sale of shares of its common stock by the Forward Purchaser or its affiliates in the offering.

The Company intends to use the net proceeds from the sale of 4,000,000 shares of common stock offered directly by the Company and the net proceeds, if any, received upon the future settlement of the forward sale agreement to repay borrowings outstanding under the revolving loan under the credit facility of its subsidiary Safe Harbor Marinas, LLC, to fund possible future acquisitions of properties and for working capital and general corporate purposes.

Citigroup, BofA Securities, BMO Capital Markets, J.P. Morgan and RBC Capital Markets are acting as book-running managers for the offering. 

The offering will be made only by means of a prospectus supplement and accompanying prospectus, copies of which may be obtained by contacting Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 (Tel: 800-831-9146 or email to: Prospectus@citi.com); by contacting BofA Securities, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte NC 28255-0001, Attn: Prospectus Department or by email at dg.prospectus_requests@bofa.com; by contacting BMO Capital Markets, 3 Times Square, 25th Floor, New York, NY 10036, Attention: Syndicate Department, Telephone: (800) 414-3627, or by email at bmoprospectus@bmo.com; by contacting J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by telephone at (866) 803-9204 or by email at prospectus-eq_fin@jpmchase.com; or by contacting RBC Capital Markets, LLC, 200 Vesey Street, 8th Floor, New York, NY 10281-8098; Attention: Equity Syndicate; Phone: 877-822-4089; Email: equityprospectus@rbccm.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor will there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale is not permitted.

Sun Communities, Inc. is a REIT that, as of December 31, 2020, owned, operated, or had an interest in a portfolio of 552 developed manufactured housing, recreational vehicle and marina properties comprising over 188,000 developed sites in 39 states and Ontario, Canada.

Forward Looking Statements

This press release contains various “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. Forward-looking statements can be identified by words such as “will,” “may,” “could,” “expect,” “anticipate,” “believes,” “intends,” “should,” “plans,” “estimates,” “approximate,” “guidance,” and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters.

These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks, uncertainties, and other factors, some of which are beyond the Company’s control. These risks, uncertainties, and other factors may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include the effects of the COVID-19 pandemic and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations; national, regional and local economic climates; difficulties in the Company’s ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully; the ability to maintain rental rates and occupancy levels; competitive market forces; the performance of recent acquisitions; changes in market rates of interest; changes in foreign currency exchange rates; the ability of purchasers of manufactured homes and boats to obtain financing; and the level of repossessions by manufactured home lenders. Further details of potential risks that may affect the Company are described in the Company’s periodic reports filed with the U.S. Securities and Exchange Commission, including in the “Risk Factors” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

The forward-looking statements contained in this press release speak only as of the date hereof and the Company expressly disclaims any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in the Company’s assumptions, expectations of future events, or trends.

For Further Information at the Company:

Karen J. Dearing
Chief Financial Officer
(248) 208-2500
www.suncommunities.com



Fulcrum Therapeutics Reports Recent Business Highlights and Fourth Quarter and Full Year 2020 Financial Results

– Company on track to present data from Phase 2b ReDUX4 trial with losmapimod in facioscapulohumeral muscular dystrophy (FSHD) in late-2Q 2021 –

– 
On track to report results from Phase 1 trial in healthy adult volunteers with FTX-6058 for sickle cell disease in mid-2021 –

– Company to discontinue Phase 3 COVID-19 trial (LOSVID) –


Extended cash runway into 4Q 2022; raised $50.6 million in gross proceeds from January 2021 public offering


Conference call scheduled for 8:00 a.m. ET today

CAMBRIDGE, Mass., March 04, 2021 (GLOBE NEWSWIRE) — Fulcrum Therapeutics, Inc. (Nasdaq: FULC), a clinical-stage biopharmaceutical company focused on improving the lives of patients with genetically defined rare diseases, today provided a business update and reported financial results for the fourth quarter and full year of 2020.

“In 2020, we made meaningful progress in advancing our pipeline despite the extraordinary challenges brought on by COVID-19,” said Robert J. Gould, Ph.D., president and chief executive officer. “We have laid the foundation to achieve several key milestones in 2021, including a comprehensive assessment of our Phase 2 ReDUX4 trial with losmapimod in facioscapulohumeral muscular dystrophy late in the second quarter and completing our Phase 1 trial in healthy adult volunteers with FTX-6058, a highly potent small molecule EED inhibitor in development for the treatment of select hemoglobinopathies, including sickle cell disease and beta-thalassemia. Additionally, after careful consideration and a strategic review of the COVID-19 landscape, we are discontinuing our LOSVID trial. This enables us to focus on rare diseases. I would like to thank the patients and investigators who participated in this trial and the Fulcrum team who worked tirelessly to rapidly design and launch the LOSVID trial during a global pandemic.”

“Furthermore, we have made great progress with our next-generation product engine including new levels of validation in our internal research efforts and externally through our strategic collaborations,” continued Dr. Gould. “With the additional capital from our recent public offering, we have extended our cash runway into the fourth quarter of 2022 and we believe that we are well positioned to continue progress on our goal to advance therapies to improve the lives of patients with genetically defined rare diseases.”


Recent Business Highlights

  • On track to report data from ReDUX4, a Phase 2b trial of losmapimod, a selective p38α/β mitogen activated protein kinase (MAPK) inhibitor, in FSHD late in the second quarter of 2021.
    • Data will include the primary endpoint, reduction from baseline of DUX4-driven gene expression, as well as a pre-specified sensitivity analysis assessing biopsies with the highest pre-treatment level of DUX4-driven gene expression. Additionally, secondary endpoints, including skeletal muscle MRI and exploratory endpoints, including clinical outcome assessments and patient reported outcomes will also be reported.
    • Continued evaluation of the Phase 2 Open Label Study.
  • On track to report results from the Phase 1 trial in healthy adult volunteers with FTX-6058 in development for sickle cell disease (SCD) in mid-2021, and to begin dosing patients with SCD by year end.
    • FTX-6058, a highly potent small molecule EED inhibitor, is designed to induce expression of fetal hemoglobin (HbF) in red blood cells following oral administration to compensate for the mutated adult hemoglobin associated with hemoglobinopathies, including sickle cell disease and beta-thalassemia.
    • Preclinical data with FTX-6058 showed an increase in HbF levels up to approximately 30% of total hemoglobin, indicating the potential to have a significant impact on patients with sickle cell disease.
  • After careful consideration, Fulcrum is discontinuing LOSVID, a Phase 3 trial with losmapimod for hospitalized subjects with COVID-19, due to significant changes in the COVID-19 treatment paradigm, including new therapeutic options and emerging vaccines.
    • The company has decided to redeploy its resources to other clinical programs and discovery efforts, with a continued focus on rare diseases.
    • Losmapimod was generally well tolerated in LOSVID, and an independent data safety monitoring board did not identify any safety concerns related to losmapimod.
  • Multiple scientific meeting presentations
    • Presentation on FulcrumSeek, the company’s next generation product engine approach, at the Society for Laboratory Automation and Screening annual meeting in January 2021.
    • Presented multiple posters supporting the potential of FTX-6058 in sickle cell disease at the 62nd American Society of Hematology (ASH) annual meeting, December 5-8, 2020.
    • Presented target engagement and good tolerability with FTX-6058 in multiple preclinical rodent models with once-a-day oral dosing at the 14th Annual Sickle Cell Disease Research & Educational Symposium and 43rd National Sickle Cell Disease Scientific Meeting, September 25, 2020.
    • Presented multiple posters supporting Fulcrum’s integrated approach to the evaluation of FSHD patients during the 25th International Congress of the World Muscle Society (WMS), October 1, 2020.
  • Advanced FulcrumSeek discovery efforts and strategic collaborations with Acceleron and MyoKardia, a wholly owned subsidiary of Bristol-Myers Squibb Company.
  • Raised gross proceeds of $50.6 million from a public offering in January 2021.
    • The underwritten public offering of 4,600,000 shares of the company’s common stock at a public offering price of $11.00 per share included 600,000 shares issued upon the exercise in full by the underwriters of their option to purchase additional shares at the public offering price.
  • Key management updates
    • CEO transition: On March 4, 2021, Fulcrum announced that Bryan E. Stuart will be promoted to president and chief executive officer and Robert J. Gould, Ph.D. will retire from his role as president and chief executive officer, each effective March 31, 2021. Mr. Stuart has also been appointed to Fulcrum’s Board of Directors. Dr. Gould will continue to serve on Fulcrum’s Board and has also been appointed to the Scientific & Technology committee of the Board. Additionally, Mark Levin, Fulcrum’s Board chair, will assume the role of executive chair effective upon Dr. Gould’s retirement.
    • CSO transition: On January 19, 2021, Fulcrum announced that Chris Moxham, Ph.D. was promoted to chief scientific officer and Owen Wallace, Ph.D. stepped down from his role as chief scientific officer, each effective February 5, 2021. Dr. Wallace has been appointed to Fulcrum’s Scientific Advisory Board.


Fourth Quarter and Full Year 2020 Financial Results

  • Cash Position: As of December 31, 2020, cash, cash equivalents, and marketable securities were $112.9 million, as compared to $96.7 million as of December 31, 2019. Based on current plans, the company expects that its cash, cash equivalents, and marketable securities as of December 31, 2020, together with the net proceeds of $46.4 million from the sale of its common stock in a public offering on January 22, 2021, will be sufficient to enable Fulcrum to fund operating expenses and capital expenditure requirements into the fourth quarter of 2022.
  • Collaboration Revenue: Collaboration revenue was $4.2 million for the fourth quarter of 2020, as compared to no revenue recognized during the fourth quarter of 2019. The increase in collaboration revenue was due to the execution of the company’s collaboration and license agreements with Acceleron and MyoKardia in December 2019 and July 2020, respectively.

    Collaboration revenue was $8.8 million for the year ended December 31, 2020, as compared to no revenue recognized during the year ended December 31, 2019. The increase in collaboration revenue was due to the execution of the collaboration and license agreements with Acceleron and MyoKardia in December 2019 and July 2020, respectively.

  • R&D Expenses: Research and development expenses were $16.1 million for the fourth quarter of 2020, as compared to $12.1 million for the fourth quarter of 2019. The increase of $4.0 million was primarily due to increased costs to support the company’s ongoing and planned clinical trials and increased personnel-related costs to support the growth of Fulcrum’s research and development organization, including increased stock-based compensation expense.

    Research and development expenses were $59.0 million for the year ended December 31, 2020, as compared to $71.1 million for the year ended December 31, 2019. Research and development expenses for the year ended December 31, 2019 include $25.6 million of one-time costs incurred associated with the issuance of Series B convertible preferred stock under the company’s license agreement with GSK for losmapimod and $2.5 million of one-time costs incurred associated with the achievement of a milestone under the company’s license agreement with GSK for losmapimod. Excluding these one-time costs, the increase of $16.0 million was primarily due to increased costs to support the company’s ongoing and planned clinical trials and increased personnel-related costs to support the growth of Fulcrum’s research and development organization, including increased stock-based compensation expense.

  • G&A Expenses: General and administrative expenses were $5.9 million for the fourth quarter of 2020, as compared to $4.4 million for the fourth quarter of 2019. The increase of $1.5 million was primarily due to increased costs associated with operating as a public company and increased personnel-related costs to support the growth of the organization, including increased stock-based compensation expense.

    General and administrative expenses were $21.4 million for the year ended December 31, 2020, as compared to $13.1 million for the year ended December 31, 2019. The increase of $8.3 million was primarily due to increased costs associated with operating as a public company and increased personnel-related costs to support the growth of the organization, including increased stock-based compensation expense.

  • Net Loss: Net loss was $17.7 million for the fourth quarter of 2020, as compared to a net loss of $16.1 million for the fourth quarter of 2019.

    Net loss was $70.8 million for the year ended December 31, 2020, as compared to $82.7 million for the year ended December 31, 2019.


Conference Call and Webcast


Fulcrum Therapeutics, Inc. will host a conference call and webcast today at 8:00 a.m. ET to discuss the company’s fourth quarter and full year 2020 financial results and recent business highlights. The webcast will be accessible through the Investor Relations section of Fulcrum’s website at www.fulcrumtx.com. Following the live webcast, an archived replay will also be available.

Dial-in Number

U.S./Canada Dial-in Number: 800-527-6973
International Dial-in Number: 470-495-9162
Conference ID: 6376419

Replay Dial-in Number: 855-859-2056
Replay International Dial-in Number: 404-537-3406
Conference ID: 6376419

About FSHD

FSHD is characterized by progressive skeletal muscle loss that initially causes weakness in muscles in the face, shoulders, arms and trunk, and progresses to weakness throughout the lower body. Skeletal muscle weakness results in significant physical limitations, including an inability to smile and difficulty using arms for activities, with many patients ultimately becoming dependent upon the use of a wheelchair for daily mobility.

FSHD is caused by mis-expression of DUX4 in skeletal muscle, resulting in the presence of DUX4 proteins that are toxic to muscle tissue. Normally, DUX4-driven gene expression is limited to early embryonic development, after which time the DUX4 gene is silenced. In people with FSHD, the DUX4 gene is turned “on” as a result of a genetic mutation. The result is death of muscle and its replacement by fat, leading to skeletal muscle weakness and progressive disability. There are no approved therapies for FSHD, one of the most common forms of muscular dystrophy, with an estimated patient population of 16,000 to 38,000 in the United States alone.

About Losmapimod

Losmapimod is a selective p38α/β mitogen activated protein kinase (MAPK) inhibitor that was exclusively in-licensed from GSK by Fulcrum Therapeutics following Fulcrum’s discovery of the role of p38α/β inhibitors in the reduction of DUX4 expression and an extensive review of known compounds. Utilizing its internal product engine, Fulcrum discovered that inhibition of p38α/β reduced expression of the DUX4 gene in muscle cells derived from patients with FSHD. Losmapimod has been evaluated in more than 3,600 subjects in clinical research across multiple indications, including in several Phase 2 trials and a large Phase 3 trial in acute myocardial infarction. No safety signals were attributed to losmapimod in any of these trials. In 2020, the company received U.S. and European Orphan Drug Designation for losmapimod for the treatment of FSHD. Fulcrum is currently conducting Phase 2 trials investigating the safety, tolerability, and efficacy of losmapimod to treat the root cause of FSHD.

About Sickle Cell Disease

Sickle cell disease (SCD) is a genetic disorder of the red blood cells caused by a mutation in the HBB gene. This gene encodes a protein that is a key component of hemoglobin, a protein complex whose function is to transport oxygen in the body. The result of the mutation is less efficient oxygen transport and the formation of red blood cells that have a sickle shape. These sickle shaped cells are much less flexible than healthy cells and can block blood vessels or rupture cells. SCD patients typically suffer from serious clinical consequences, which may include anemia, pain, infections, stroke, heart disease, pulmonary hypertension, kidney failure, liver disease and reduced life expectancy.

About FTX-6058

FTX-6058 is a highly potent small molecule inhibitor of Embryonic Ectoderm Development (EED) capable of inducing robust HbF protein expression in cell and murine models. Fulcrum believes the pharmacokinetics and human dose simulations support that FTX-6058 may be given as a once daily oral compound. The validation of EED as a target for sickle cell disease and the discovery of FTX-6058 as a novel HbF-inducing small molecule were conducted using Fulcrum’s proprietary product engine. Preclinical data with FTX-6058 showed an increase in HbF levels up to approximately 30% of total hemoglobin. Fulcrum has initiated a Phase 1 trial with FTX-6058 in healthy adult volunteers.

About Fulcrum Therapeutics

Fulcrum Therapeutics is a clinical-stage biopharmaceutical company focused on improving the lives of patients with genetically defined rare diseases in areas of high unmet medical need. Fulcrum’s proprietary product engine identifies drug targets which can modulate gene expression to treat the known root cause of gene mis-expression. The company has advanced losmapimod to Phase 2 clinical development for the treatment of facioscapulohumeral muscular dystrophy (FSHD). Fulcrum has also advanced FTX-6058, a small molecule designed to increase expression of fetal hemoglobin for the treatment of sickle cell disease and beta-thalassemia into Phase 1 clinical development.

Please visit www.fulcrumtx.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties, including statements regarding the development status of the Company’s product candidates, the potential advantages and therapeutic potential of Fulcrum’s product candidates, initiation and enrollment of clinical trials and availability of clinical trial data, and the Company’s ability to fund its operations with cash on hand. All statements, other than statements of historical facts, contained in this press release, including statements regarding the Company’s strategy, future operations, future financial position, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in, or implied by, such forward-looking statements. These risks and uncertainties include, but are not limited to, risks associated with Fulcrum’s ability to obtain and maintain necessary approvals from the FDA and other regulatory authorities; continue to advance its product candidates in clinical trials; initiate and enroll clinical trials on the timeline expected or at all; correctly estimate the potential patient population and/or market for the Company’s product candidates; replicate in clinical trials positive results found in preclinical studies and/or earlier-stage clinical trials of losmapimod, FTX-6058 and its other product candidates; advance the development of its product candidates under the timelines it anticipates in current and future clinical trials; obtain, maintain or protect intellectual property rights related to its product candidates; manage expenses; and raise the substantial additional capital needed to achieve its business objectives. For a discussion of other risks and uncertainties, and other important factors, any of which could cause the Company’s actual results to differ from those contained in the forward-looking statements, see the “Risk Factors” section, as well as discussions of potential risks, uncertainties and other important factors, in the Company’s most recent filings with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company’s views as of the date hereof and should not be relied upon as representing the Company’s views as of any date subsequent to the date hereof. The Company anticipates that subsequent events and developments will cause the Company’s views to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so.





Fulcrum Therapeutics, Inc.

Selected Consolidated Balance Sheet Data

(In thousands)

(Unaudited)

  December 31,

2020
    December 31,

2019
 
Cash, cash equivalents, and marketable securities $ 112,914     $ 96,713  
Working capital(1)   92,785       87,943  
Total assets   129,577       110,439  
Total stockholders’ equity   95,181       87,153  

(1)   We define working capital as current assets minus current liabilities.

Fulcrum Therapeutics, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

  Three Months Ended

December 31,
    Year Ended

December 31,
 
  2020     2019     2020     2019  
Collaboration revenue $ 4,225     $     $ 8,823     $  
Operating expenses:                              
Research and development   16,145       12,087       59,042       71,072  
General and administrative   5,867       4,403       21,392       13,145  
Total operating expenses   22,012       16,490       80,434       84,217  
Loss from operations   (17,787 )     (16,490 )     (71,611 )     (84,217 )
Other income, net   67       367       792       1,540  
Net loss $ (17,720 )   $ (16,123 )   $ (70,819 )   $ (82,677 )
Cumulative convertible preferred stock dividends                     (7,128 )
Net loss attributable to common stockholders $ (17,720 )   $ (16,123 )   $ (70,819 )   $ (89,805 )
Net loss per share attributable to common stockholders, basic and diluted $ (0.64 )   $ (0.71 )   $ (2.79 )   $ (8.13 )
Weighted average number of common shares used in net loss per share attributable to common stockholders, basic and diluted   27,537       22,610       25,354       11,046  





Contact:

Investors:
Christi Waarich
Director, Investor Relations and Corporate Communications
cwaarich@fulcrumtx.com
617-651-8664

Stephanie Ascher
Stern Investor Relations, Inc.
stephanie.ascher@sternir.com
212-362-1200

Media:
Kaitlin Gallagher
Berry & Company Public Relations
kgallagher@berrypr.com
212-253-8881