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LION ELECTRIC APPOINTS NEW U.S. MARKETING AND TRUCK SALES EXECUTIVES, DOMINIK BECKMAN AND SYDNEY DUNN

PR Newswire


MONTREAL
, Aug. 2, 2022 /PRNewswire/ – The Lion Electric Company (NYSE: LEV) (TSX: LEV) (“Lion” or the “Company”) a leading manufacturer of all-electric medium and heavy-duty urban vehicles, today announced the addition of two executive positions in the U.S., naming Sydney Dunn as Vice President of Truck Sales, U.S. and Dominik Beckman as Vice President of Marketing and Communications, U.S.

In her new role, Dunn will oversee the medium and heavy-duty trucking sales business division in the U.S. for Lion. She brings two decades of sales and operations leadership experience to Lion. In her most recent role as Director of Fleet Sales and Operations at ElectraMeccanica, Dunn oversaw all sales and operations for the EV manufacturer’s go-to-market commercial strategy. Prior to that, Dunn spent several years in General Motors’ fleet and commercial division. Her roles were primarily focused on the sales and marketing of conquest customers, as well as the manufacturer’s re-entry into the medium-duty truck space.

Beckman joins Lion from Toyota Group Company, Hino Trucks, where he served for the past six years as executive leader of marketing and communications, overseeing dealer network operations and connected vehicle programs, as well as EV infrastructure solutions. Beckman also serves on the board of directors for the NTEA Green Truck Association and has 20-plus years of diverse global marketing, innovation management, and competitive positioning experience spread across renowned automotive companies – Toyota/Hino, Delphi Corp., and Continental AG.

“We are pleased to welcome Sydney and Dominik to Lion’s U.S. leadership team at this critical juncture in the move to zero-emission heavy-duty transportation, and at a very exciting time in our Company’s history. Their passion for vehicle electrification and proven experience in fleet sales and marketing will aid us in accelerating the growth of both our trucking division and overall U.S. operations, as we prepare to start manufacturing ‘Made in America’ zero-emission vehicles at our Joliet, Illinois plant later this year,” said Brian Piern, Chief Commercial Officer at Lion.

About Lion Electric


Lion Electric
 is an innovative manufacturer of zero-emission vehicles. The company creates, designs and manufactures all-electric class 5 to class 8 commercial urban trucks and all-electric buses and minibuses for the school, paratransit and mass transit segments. Lion is a North American leader in electric transportation and designs, builds and assembles many of its vehicles’ components, including chassis, battery packs, truck cabins and bus bodies.

Always actively seeking new and reliable technologies, Lion vehicles have unique features that are specifically adapted to its users and their everyday needs. Lion believes that transitioning to all-electric vehicles will lead to major improvements in our society, environment and overall quality of life. Lion shares are traded on the New York Stock Exchange and the Toronto Stock Exchange under the symbol LEV.

Lion Electric, The Bright Move
Thelionelectric.com

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable Canadian and United States securities laws, including the Private Securities Litigation Reform Act of 1995. Any statements contained in this press release that are not statements of historical fact, including statements about Lion’s beliefs and expectations relating to the offer and sale of Common Shares under the ATM Program, are forward-looking statements and should be evaluated as such.

Forward-looking statements may be identified by the use of words such as “believe,” “may,” “will,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “could,” “plan,” “project,” “potential,” “seem,” “seek,” “future,” “target” or other similar expressions and any other statements that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements contain such identifying words. These forward-looking statements include statements regarding the offer and sale of Common Shares under the ATM Program, including the timing and amounts thereof, and the use of any proceeds from the ATM Program.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Such risks and uncertainties are described in greater detail in the Canadian Prospectus Supplement, the US Prospectus Supplement and section 23.0 entitled “Risk Factors” of the Company’s annual MD&A for the fiscal year 2021. Many of these risks are beyond Lion’s management’s ability to control or predict. All forward-looking statements included in this press release are expressly qualified in their entirety by the cautionary statements contained herein and the risk factors included in the Canadian Prospectus Supplement, the US Prospectus Supplement, the Company’s annual MD&A for the fiscal year 2021 and in other documents filed with the applicable Canadian regulatory securities authorities and the SEC.

Because of these risks, uncertainties and assumptions, readers should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under applicable securities laws, Lion undertakes no obligation, and expressly disclaims any duty, to update, revise or review any forward-looking information, whether as a result of new information, future events or otherwise.

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SOURCE Lion Electric

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Zimmer Biomet Announces Second Quarter 2022 Financial Results

PR Newswire

  • Second quarter net sales from continuing operations of $1.782 billion increased 1.0% and 6.0% on a constant currency1 basis
  • Second quarter diluted earnings per share from continuing operations were $0.73; adjusted1 diluted earnings per share from continuing operations were $1.82
  • Company updates 2022 financial guidance, raising range for full year outlook


WARSAW, Ind.
, Aug. 2, 2022 /PRNewswire/ — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended June 30, 2022.  The Company reported second quarter net sales from continuing operations of $1.782 billion, an increase of 1.0% over the prior year period, and an increase of 6.0% on a constant currency basis.  Net earnings from continuing operations for the second quarter were $153.7 million, or $382.4 million on an adjusted1 basis.

Diluted earnings per share from continuing operations were $0.73 for the second quarter, and adjusted diluted earnings per share from continuing operations were $1.82.

“Our performance in Q2 was well above our own internal expectations due to stronger than anticipated COVID recovery in the quarter and the continued execution from the ZB team across our regions and segments.  Despite expected increased pressure from foreign exchange rates and inflation, we are once again updating our guidance,” said Bryan Hanson, Chairman, President and CEO of Zimmer Biomet.  “We believe our focus on innovation and the transformation of our business continues to position us well for long-term growth and continued delivery for our shareholders.”

1. Reconciliations of these measures to the corresponding U.S. generally accepted accounting principles measures are included in this press release.

Recent Highlights

Aligned with the ongoing transformation of Zimmer Biomet’s business, key second quarter highlights include:

Geographic and Product Category Sales

The following sales tables provide results by geography and product category for the three and six-month periods ended June 30, 2022, as well as the percentage change compared to the applicable prior year period, on both a reported basis and a constant currency basis.


NET SALES – THREE MONTHS ENDED JUNE 30, 2022


(in millions, unaudited)


Constant


Net


Currency


Sales


% Change


% Change


Geographic Results

United States

$

1,017.6

1.3

%

1.3

%

International

764.2

0.7

12.2


Total

$

1,781.8

1.0

%

6.0

%


Product Categories


Knees

United States

$

398.4

4.5

%

4.5

%

International

306.5

7.8

20.1

Total

704.9

5.9

11.2


Hips

United States

247.5

2.6

2.6

International

239.7

2.8

14.9

Total

487.2

2.7

8.6


S.E.T. *

446.4

(3.4)

0.1


Other

143.3

(11.0)

(6.1)


Total

$

1,781.8

1.0

%

6.0

%

* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic

 


NET SALES – SIX MONTHS ENDED JUNE 30, 2022


(in millions, unaudited)


Constant


Net


Currency


Sales


% Change


% Change


Geographic Results

United States

$

1,958.8

3.5

%

3.5

%

International

1,486.2

1.0

10.2


Total

$

3,445.0

2.4

%

6.4

%


Product Categories


Knees

United States

$

777.9

7.9

%

7.9

%

International

589.8

5.5

15.1

Total

1,367.7

6.9

11.1


Hips

United States

472.1

2.9

2.9

International

466.1

0.7

10.3

Total

938.2

1.8

6.6


S.E.T. *

863.2

(1.9)

1.0


Other

275.9

(2.7)

1.5


Total

$

3,445.0

2.4

%

6.4

%

* Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic

Financial Guidance

The Company is updating its full-year 2022 financial guidance to raise its previous projected ranges for revenue growth, foreign currency exchange impact, adjusted operating profit margin and adjusted diluted EPS from continuing operations:


Projected Year Ending December 31, 2022


Previous Guidance


Updated Guidance

2022 Reported Revenue Change

(1.5)% – 0.5%

(1.0)% – 1.0%

Foreign Currency Exchange Impact

(3.5) %

(5.0) %

Adjusted Operating Profit Margin
(1)

26.5% – 27.5%

26.75% – 27.75%

Adjusted Tax Rate
(1)

16.0% – 16.5%

16.0% – 16.5%

Adjusted Diluted EPS from Continuing Operations
(1)

$6.65 – $6.85

$6.70 – $6.90

 


(1)

These measures are non-GAAP financial measures for which a reconciliation to the
most directly comparable GAAP financial measure is not available without unreasonable
efforts. See “Forward-Looking Non-GAAP Financial Measures.”

Conference Call

The Company will conduct its second quarter investor conference call today, August 2, 2022, at 8:30 a.m. ET.  The audio webcast can be accessed via Zimmer Biomet’s Investor Relations website at https://investor.zimmerbiomet.com.  It will be archived for replay following the conference call. 

About the Company

Zimmer Biomet is a global medical technology leader with a comprehensive portfolio designed to maximize mobility and improve health. We seamlessly transform the patient experience through our innovative products and suite of integrated digital and robotic technologies that leverage data, data analytics and artificial intelligence. 

With 90+ years of trusted leadership and proven expertise, Zimmer Biomet is positioned to deliver the highest quality solutions to patients and providers. Our legacy continues to come to life today through our progressive culture of evolution and innovation.

For more information about our product portfolio, our operations in 25+ countries and sales in 100+ countries or about joining our team, visit www.zimmerbiomet.com or follow Zimmer Biomet on Twitter at www.twitter.com/zimmerbiomet.  

Website Information

We routinely post important information for investors on our website, www.zimmerbiomet.com, in the “Investor Relations” section.  We use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD.  Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. 

The information contained on, or that may be accessed through, our website or any other website referenced herein is not incorporated by reference into, and is not a part of, this document.

Note on Non-GAAP Financial Measures

This press release includes non-GAAP financial measures that differ from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”).  These non-GAAP financial measures may not be comparable to similar measures reported by other companies and should be considered in addition to, and not as a substitute for, or superior to, other measures prepared in accordance with GAAP.

Net sales from continuing operations change information for the three and six-month periods ended June 30, 2022 is presented on a GAAP (reported) basis and on a constant currency basis.  Constant currency percentage changes exclude the effects of foreign currency exchange rates.  They are calculated by translating current and prior-period sales at the same predetermined exchange rate.  The translated results are then used to determine year-over-year percentage increases or decreases. 

Net earnings from continuing operations and diluted earnings per share from continuing operations for the three and six-month periods ended June 30, 2022 and 2021 are presented on a GAAP (reported) basis and on an adjusted basis.  Adjusted earnings from continuing operations and adjusted diluted earnings per share from continuing operations exclude the effects of certain items, which are detailed in the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures presented later in this press release. 

Free cash flow from continuing operations is an additional non-GAAP measure that is presented in this press release.  Free cash flow from continuing operations is computed by deducting additions to instruments and other property, plant and equipment of continuing operations from net cash provided by operating activities from continuing operations.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release.  This press release also contains supplemental reconciliations of additional non-GAAP financial measures that the Company presents in other contexts.  These additional non-GAAP financial measures are computed from the most directly comparable GAAP financial measure as indicated in the applicable reconciliation.

Management uses non-GAAP financial measures internally to evaluate the performance of the business.  Additionally, management believes these non-GAAP measures provide meaningful incremental information to investors to consider when evaluating the performance of the Company.  Management believes these measures offer the ability to make period-to-period comparisons that are not impacted by certain items that can cause dramatic changes in reported income but that do not impact the fundamentals of our operations.  The non-GAAP measures enable the evaluation of operating results and trend analysis by allowing a reader to better identify operating trends that may otherwise be masked or distorted by these types of items that are excluded from the non-GAAP measures.  In addition, constant currency sales changes, adjusted operating profit, adjusted diluted earnings per share from continuing operations and free cash flow from continuing operations are used as performance metrics in our incentive compensation programs.

Forward-Looking Non-GAAP Financial Measures

This press release also includes certain forward-looking non-GAAP financial measures for the year ending December 31, 2022.  We calculate forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures.  For instance, we exclude the impact of certain charges related to initial compliance with the European Union Medical Device Regulation; restructuring and other cost reduction initiatives; quality remediation; acquisition, integration, divestiture and related; certain legal and tax matters; and discontinued operations.  We have not provided quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because the excluded items are not available on a prospective basis without unreasonable efforts.  For example, the timing of certain transactions is difficult to predict because management’s plans may change.  In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors.  It is probable that these forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding financial guidance, the impact of the COVID-19 pandemic on our business, including any continued recovery, and any statements about our forecasts, expectations, plans, intentions, strategies or prospects. All statements other than statements of historical or current fact are, or may be deemed to be, forward-looking statements. Such statements are based upon the current beliefs, expectations and assumptions of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual outcomes and results to differ materially from the forward-looking statements. These risks, uncertainties and changes in circumstances include, but are not limited to: the effects of the COVID-19 global pandemic and other adverse public health developments on the global economy, our business and operations and the business and operations of our suppliers and customers, including the deferral of elective surgical procedures and our ability to collect accounts receivable; the failure of vaccine rollouts and other strategies to mitigate or reverse the impacts of the COVID-19 pandemic; the emergence of new pandemic variants; the failure of elective surgical procedures to recover at the levels or on the timeline anticipated; the risks and uncertainties related to our ability to successfully execute our restructuring plans; our ability to attract, retain and develop the highly skilled employees we need to support our business; the success of our quality and operational excellence initiatives, including ongoing quality remediation efforts at our Warsaw North Campus facility; the ability to remediate matters identified in inspectional observations or warning letters issued by the U.S. Food and Drug Administration (FDA), while continuing to satisfy the demand for our products; the risks and uncertainties associated with the spinoff of ZimVie Inc. (ZimVie), including, without limitation, the tax-free nature of the transaction, the tax-efficient nature of any subsequent disposal of any ZimVie common stock we retain, possible disruptions in our relationships with customers, suppliers and other business partners and the possibility that the anticipated benefits and synergies of the transaction, strategic and competitive advantages, and future growth and other opportunities will not be realized within the expected time periods or at all; the impact of substantial indebtedness on our ability to service our debt obligations and/or refinance amounts outstanding under our debt obligations at maturity on terms favorable to us, or at all; the ability to retain the employees, independent agents and distributors who market our products; dependence on a limited number of suppliers for key raw materials and outsourced activities; the possibility that the anticipated synergies and other benefits from mergers and acquisitions will not be realized, or will not be realized within the expected time periods; the risks and uncertainties related to our ability to successfully integrate the operations, products, employees and distributors of acquired companies; the effect of the potential disruption of management’s attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally; challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the FDA and foreign government regulators, such as more stringent requirements for regulatory clearance of products; the outcome of government and regulatory investigations; competition; pricing pressures; changes in customer demand for our products and services caused by demographic changes or other factors; the impact of healthcare reform measures; reductions in reimbursement levels by third-party payors and cost containment efforts sponsored by government agencies, legislative bodies, the private sector and healthcare purchasing organizations, including the volume-based procurement in China; dependence on new product development, technological advances and innovation; shifts in the product category or regional sales mix of our products and services; supply and prices of raw materials, especially of titanium used in our products, and products; control of costs and expenses; the ability to obtain and maintain adequate intellectual property protection; breaches or failures of our information technology systems or products, including by cyberattack, unauthorized access or theft; the ability to form and implement alliances; changes in tax obligations arising from tax reform measures, including European Union rules on state aid, or examinations by tax authorities; product liability, intellectual property and commercial litigation losses; changes in general industry and market conditions, including domestic and international growth rates; changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations; the domestic and international business impact of political, social and economic instability, tariffs, trade embargoes, sanctions, wars, disputes and other conflicts; the effects of inflation, including the effects of different rates of inflation in different countries, on our costs and the costs of our products; the effects of supply chain continuity disruptions; and the impact of the ongoing financial and political uncertainty on countries in EMEA relating to the Russian-Ukrainian crisis and otherwise, on the ability to collect accounts receivable in affected countries. A further list and description of these risks and uncertainties and other factors can be found in our Annual Report on Form 10-K for the year ended December 31, 2021, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and our subsequent filings with the Securities and Exchange Commission (SEC). Copies of these filings are available online at www.sec.gov, www.zimmerbiomet.com or on request from us. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers of this press release are cautioned not to rely on these forward-looking statements since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary note is applicable to all forward-looking statements contained in this press release.


ZIMMER BIOMET HOLDINGS, INC.


CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS


FOR THE THREE MONTHS ENDED JUNE 30, 2022 and 2021


(in millions, except per share amounts, unaudited)


2022


2021


Net Sales

$

1,781.8

$

1,763.3

Cost of products sold, excluding intangible asset amortization

511.0

496.2

Intangible asset amortization

133.0

132.9

Research and development

99.4

165.0

Selling, general and administrative

695.2

696.8

Intangible asset impairment

3.0

16.3

Restructuring and other cost reduction initiatives

57.0

18.8

Quality remediation

7.8

11.0

Acquisition, integration, divestiture and related

(5.5)

1.5

Operating expenses

1,500.9

1,538.5


Operating Profit

280.9

224.8

Other (expense) income, net

(42.6)

8.0

Interest expense, net

(38.8)

(54.7)

Earnings from continuing operations before income taxes

199.5

178.1

Provision for income taxes from continuing operations

45.5

33.3


Net Earnings from continuing operations

154.0

144.8

Less: Net earnings attributable to noncontrolling interest

0.3

0.6

Net Earnings from Continuing Operations of Zimmer Biomet Holdings, Inc.

153.7

144.2

Loss from discontinued operations, net of taxes

–

(2.3)


Net Earnings of Zimmer Biomet Holdings, Inc.


$


153.7


$


141.9


Earnings Per Common Share – Basic

Earnings from continuing operations

$

0.73

$

0.69

Loss from discontinued operations

–

(0.01)


Net Earnings Per Common Share – Basic

$

0.73

$

0.68


Earnings Per Common Share – Diluted

Earnings from continuing operations

$

0.73

$

0.68

Loss from discontinued operations

–

(0.01)


Net Earnings Per Common Share – Diluted

$

0.73

$

0.67


Weighted Average Common Shares Outstanding

Basic

209.6

208.6

Diluted

210.3

210.7

 


ZIMMER BIOMET HOLDINGS, INC.


CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS


FOR THE SIX MONTHS ENDED JUNE 30, 2022 and 2021


(in millions, except per share amounts, unaudited)


2022


2021


Net Sales

$

3,445.0

$

3,364.7

Cost of products sold, excluding intangible asset amortization

1,011.0

932.5

Intangible asset amortization

263.8

266.5

Research and development

196.3

246.0

Selling, general and administrative

1,379.7

1,353.8

Intangible asset impairment

3.0

16.3

Restructuring and other cost reduction initiatives

100.9

40.1

Quality remediation

14.3

21.1

Acquisition, integration, divestiture and related

(3.3)

4.9

Operating expenses

2,965.7

2,881.2


Operating Profit

479.3

483.5

Other (expense) income, net

(98.7)

15.7

Interest expense, net

(79.9)

(107.0)

Earnings from continuing operations before income taxes

300.7

392.2

Provision for income taxes from continuing operations

73.5

54.4


Net Earnings from continuing operations

227.2

337.8

Less: Net earnings attributable to noncontrolling interest

0.5

0.2

Net Earnings from Continuing Operations of Zimmer Biomet Holdings, Inc.

226.7

337.6

(Loss) earnings from discontinued operations, net of taxes

(58.8)

2.4


Net Earnings of Zimmer Biomet Holdings, Inc.


$


167.9


$


340.0


Earnings Per Common Share – Basic

Earnings from continuing operations

$

1.08

$

1.62

(Loss) earnings from discontinued operations

(0.28)

0.01


Net Earnings Per Common Share – Basic

$

0.80

$

1.63


Earnings Per Common Share – Diluted

Earnings from continuing operations

$

1.08

$

1.60

(Loss) earnings from discontinued operations

(0.28)

0.01


Net Earnings Per Common Share – Diluted

$

0.80

$

1.61


Weighted Average Common Shares Outstanding

Basic

209.4

208.3

Diluted

210.2

210.4

 


ZIMMER BIOMET HOLDINGS, INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(in millions, unaudited)


June 30,


December 31,


2022


2021


Assets

Cash and cash equivalents

$

386.4

$

378.1

Receivables, net

1,282.1

1,259.6

Inventories

2,122.7

2,148.0

Other current assets

671.7

597.7

Current assets of discontinued operations

–

501.6

Total current assets

4,462.9

4,885.0

Property, plant and equipment, net

1,796.6

1,836.6

Goodwill

8,868.9

8,919.4

Intangible assets, net

5,304.4

5,533.6

Other assets

1,019.9

1,005.0

Noncurrent assets of discontinued operations

–

1,276.8


Total Assets

$

21,452.7

$

23,456.4


Liabilities and Stockholders’ Equity

Current liabilities

$

1,611.7

$

1,685.6

Current portion of long-term debt

851.9

1,605.1

Current liabilities of discontinued operations

–

177.2

Other long-term liabilities

1,692.5

1,690.0

Long-term debt

5,172.0

5,463.7

Noncurrent liabilities of discontinued operations

–

168.4

Stockholders’ equity

12,124.6

12,666.4


Total Liabilities and Stockholders’ Equity

$

21,452.7

$

23,456.4

 


ZIMMER BIOMET HOLDINGS, INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR THE SIX MONTHS ENDED JUNE 30, 2022 and 2021


(in millions, unaudited)


2022


2021


Cash flows provided by (used in) operating activities from continuing
operations

Net earnings from continuing operations

$

227.2

$

337.8

Depreciation and amortization

466.5

471.5

Share-based compensation

50.8

42.4

Intangible asset impairment

3.0

16.3

Changes in operating assets and liabilities, net of acquired assets and
liabilities

Income taxes

13.0

(28.1)

Receivables

(81.8)

0.6

Inventories

(26.4)

(88.9)

Accounts payable and accrued liabilities

(49.9)

(48.5)

Other assets and liabilities

58.8

(60.6)

Net cash provided by operating activities from continuing operations

661.2

642.5


Cash flows provided by (used in) investing activities from continuing
operations

Additions to instruments

(120.6)

(133.3)

Additions to other property, plant and equipment

(77.3)

(50.4)

Net investment hedge settlements

33.9

(9.6)

Business combination investments, net of acquired cash

(99.8)

–

Investments in other assets

(60.5)

(13.7)

Net cash used in investing activities from continuing operations

(324.3)

(207.0)


Cash flows provided by (used in) financing activities from continuing
operations

Proceeds from revolving facility

220.0

–

Payments on revolving facility

(220.0)

–

Redemption of senior notes

(750.0)

(200.0)

Dividends paid to stockholders

(100.5)

(99.8)

Proceeds from employee stock compensation plans

45.0

91.5

Distribution from ZimVie, Inc.

540.6

–

Business combination contingent consideration payments

–

(6.5)

Other financing activities

(3.5)

(9.3)

Net cash used in financing activities from continuing operations

(268.4)

(224.1)


Cash flows provided by (used in) discontinued operations

Net cash (used in) provided by operating activities

(71.5)

57.9

Net cash used in investing activities

(7.2)

(25.2)

Net cash used in financing activities

(68.1)

–

Net cash flows (used in) provided by discontinued operations

(146.8)

32.7

Effect of exchange rates on cash and cash equivalents

(13.8)

(3.8)

(Decrease) increase in cash and cash equivalents

(92.1)

240.3

Cash and cash equivalents, beginning of period (includes $100.4 and $27.4
at January 1, 2022 and 2021, respectively, of discontinued operations cash)

478.5

802.1

Cash and cash equivalents, end of period (includes $24.9 at June 30, 2021
of discontinued operations cash)

$

386.4

$

1,042.4

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF REPORTED NET SALES % CHANGE TO


CONSTANT CURRENCY % CHANGE


(unaudited)


For the Three Months Ended


June 30, 2022 vs. 2021


Foreign


Constant


Exchange


Currency


% Change


Impact


% Change


Geographic Results

United States

1.3

%

–

%

1.3

%

International

0.7

(11.5)

12.2


Total

1.0

%

(5.0)

%

6.0

%


Product Categories


Knees

United States

4.5

%

–

%

4.5

%

International

7.8

(12.3)

20.1

Total

5.9

(5.3)

11.2


Hips

United States

2.6

–

2.6

International

2.8

(12.1)

14.9

Total

2.7

(5.9)

8.6


S.E.T.

(3.4)

(3.5)

0.1


Other

(11.0)

(4.9)

(6.1)


Total

1.0

%

(5.0)

%

6.0

%

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF REPORTED NET SALES % CHANGE TO


CONSTANT CURRENCY % CHANGE


(unaudited)


For the Six Months Ended


June 30, 2022 vs. 2021


Foreign


Constant


Exchange


Currency


% Change


Impact


% Change


Geographic Results

United States

3.5

%

–

%

3.5

%

International

1.0

(9.2)

10.2


Total

2.4

%

(4.0)

%

6.4

%


Product Categories


Knees

United States

7.9

%

–

%

7.9

%

International

5.5

(9.6)

15.1

Total

6.9

(4.2)

11.1


Hips

United States

2.9

–

2.9

International

0.7

(9.6)

10.3

Total

1.8

(4.8)

6.6


S.E.T

(1.9)

(2.9)

1.0


Other

(2.7)

(4.2)

1.5


Total

2.4

%

(4.0)

%

6.4

%

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF REPORTED TO ADJUSTED RESULTS


FOR THE THREE MONTHS ENDED JUNE, 2022 and 2021


(in millions, except per share amounts, unaudited)


FOR THE THREE MONTHS ENDED JUNE 30, 2022


Cost of
products
sold,
excluding
intangible
asset
amortization


Intangible
asset
amortization


Research
and
development


Selling,
general and
administrative


Intangible
asset
impairment


Restructuring
and other
cost
reduction
initiatives


Quality
remediation


Acquisition,
integration,
divestiture
and related


Other
(expense)
income,
net


Provision
for income
taxes from
continuing
operations


Net
Earnings
from
Continuing
Operations
of Zimmer
Biomet
Holdings, Inc.


Diluted
earnings
from
continuing
operations
per
common
share


As Reported

$

511.0

$

133.0

$

99.4

$

695.2

$

3.0

$

57.0

$

7.8

$

(5.5)

$

(42.6)

$

45.5

$

153.7

$

0.73

Inventory and
manufacturing-related
charges(1)

(4.4)

–

–

–

–

–

–

–

–

3.7

0.7

–

Intangible asset
amortization(2)

–

(133.0)

–

–

–

–

–

–

–

26.7

106.3

0.51

Intangible asset
impairment(3)

–

–

–

–

(3.0)

–

–

–

–

0.8

2.2

0.01

Restructuring and
other cost reduction
initiatives(4)

–

–

–

–

–

(57.0)

–

–

–

11.8

45.2

0.21

Quality remediation(5)

–

–

–

–

–

–

(7.8)

–

–

1.6

6.2

0.03

Acquisition,
integration, divestiture
and related(6)

–

–

–

–

–

–

–

5.5

–

1.5

(7.0)

(0.03)

Litigation(7)

–

–

–

(3.5)

–

–

–

–

–

1.1

2.4

0.01

European Union
Medical Device
Regulation(8)

–

–

(13.1)

–

–

–

–

–

–

3.0

10.1

0.05

Other charges(9)

–

–

–

(1.0)

–

–

–

–

41.7

1.1

41.6

0.20

Other certain tax
adjustments(10)

–

–

–

–

–

–

–

–

–

(21.0)

21.0

0.10


As Adjusted

$

506.6

$

–

$

86.3

$

690.7

$

–

$

–

$

–

$

–

$

(0.9)

$

75.8

$

382.4

$

1.82

 


FOR THE THREE MONTHS ENDED JUNE 30, 2021


Cost of
products
sold,
excluding
intangible
asset
amortization


Intangible
asset
amortization


Research
and
development


Selling,
general and
administrative


Intangible
asset
impairment


Restructuring
and other
cost
reduction
initiatives


Quality
remediation


Acquisition,
integration,
divestiture
and related


Other
(expense)
income, net


Provision
for income
taxes from
continuing
operations


Net
Earnings
from
Continuing
Operations
of Zimmer
Biomet
Holdings, Inc.


Diluted
earnings
from
continuing
operations
per
common
share


As Reported

$

496.2

$

132.9

$

165.0

$

696.8

$

16.3

$

18.8

$

11.0

$

1.5

$

8.0

$

33.3

$

144.2

$

0.68

Inventory and
manufacturing-related
charges(1)

(7.1)

–

–

–

–

–

–

–

–

4.4

2.7

0.01

Intangible asset
amortization(2)

–

(132.9)

–

–

–

–

–

–

–

27.0

105.9

0.50

Intangible asset
impairment(3)

–

–

–

–

(16.3)

–

–

–

–

2.1

14.2

0.07

Restructuring and
other cost
reduction initiatives(4)

–

–

–

–

–

(18.8)

–

–

–

3.5

15.3

0.07

Quality remediation(5)

–

–

–

–

–

–

(11.0)

–

–

2.6

8.4

0.04

Acquisition,
integration, divestiture
and related(6)

–

–

–

–

–

–

–

(1.5)

–

0.1

1.4

0.01

Litigation(7)

–

–

–

(3.6)

–

–

–

–

–

0.4

3.2

0.02

European Union
Medical Device
Regulation(8)

–

–

(9.6)

–

–

–

–

–

–

2.2

7.4

0.04

Other charges(9)

–

–

–

1.5

–

–

–

–

(3.1)

(3.0)

(1.6)

(0.01)

Other certain
tax adjustments(10)

–

–

–

–

–

–

–

–

–

(17.0)

17.0

0.08


As Adjusted

$

489.1

$

–

$

155.4

$

694.7

$

–

$

–

$

–

$

–

$

4.9

$

55.6

$

318.1

$

1.51

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF REPORTED TO ADJUSTED RESULTS


FOR THE SIX MONTHS ENDED JUNE 30, 2022 and 2021


(in millions, except per share amounts, unaudited)


FOR THE SIX MONTHS ENDED JUNE 30, 2022


Cost of
products
sold,
excluding
intangible
asset
amortization


Intangible
asset
amortization


Research
and
development


Selling,
general and
administrative


Intangible
asset
impairment


Restructuring
and other
cost
reduction
initiatives


Quality
remediation


Acquisition,
integration,
divestiture
and related


Other
(expense)
income, net


Provision
for income
taxes from
continuing
operations


Net
Earnings
from
Continuing
Operations
of Zimmer
Biomet
Holdings, Inc.


Diluted
earnings
from
continuing
operations
per
common
share


As Reported

$

1,011.0

$

263.8

$

196.3

$

1,379.7

$

3.0

$

100.9

$

14.3

$

(3.3)

$

(98.7)

$

73.5

$

226.7

$

1.08

Inventory and
manufacturing-related
charges(1)

(15.3)

–

–

–

–

–

–

–

–

11.3

4.0

0.02

Intangible asset
amortization(2)

–

(263.8)

–

–

–

–

–

–

–

52.6

211.2

1.00

Intangible asset
impairment(3)

–

–

–

–

(3.0)

–

–

–

–

0.8

2.2

0.01

Restructuring and
other cost
reduction initiatives(4)

–

–

–

–

–

(100.9)

–

–

–

18.2

82.7

0.39

Quality remediation(5)

–

–

–

–

–

–

(14.3)

–

–

3.1

11.2

0.05

Acquisition, integration,
divestiture and related(6)

–

–

–

–

–

–

–

3.3

–

4.5

(7.8)

(0.04)

Litigation(7)

–

–

–

(35.1)

–

–

–

–

–

8.0

27.1

0.13

European Union
Medical Device
Regulation(8)

–

–

(23.8)

–

–

–

–

–

–

5.3

18.5

0.09

Other charges(9)

–

–

–

(5.2)

–

–

–

–

102.2

2.5

104.9

0.50

Other certain tax
adjustments(10)

–

–

–

–

–

–

–

–

–

(39.1)

39.1

0.19


As Adjusted

$

995.7

$

–

$

172.5

$

1,339.4

$

–

$

–

$

–

$

–

$

3.5

$

140.7

$

719.8

$

3.42

 


FOR THE SIX MONTHS ENDED JUNE 30, 2021


Cost of
products
sold,
excluding
intangible
asset
amortization


Intangible
asset
amortization


Research
and
development


Selling,
general and
administrative


Intangible
asset
impairment


Restructuring
and other
cost
reduction
initiatives


Quality
remediation


Acquisition,
integration,
divestiture
and related


Other
(expense)
income, net


Provision
for income
taxes from
continuing
operations


Net
Earnings
from
Continuing
Operations
of Zimmer
Biomet
Holdings, Inc.


Diluted
earnings
from
continuing
operations
per
common
share


As Reported

$

932.5

$

266.5

$

246.0

$

1,353.8

$

16.3

$

40.1

$

21.1

$

4.9

$

15.7

$

54.4

$

337.6

$

1.60

Inventory and
manufacturing-related
charges(1)

(1.2)

–

–

–

–

–

–

–

–

9.8

(8.6)

(0.04)

Intangible asset
amortization(2)

–

(266.5)

–

–

–

–

–

–

–

54.4

212.1

1.01

Intangible asset
impairment(3)

–

–

–

–

(16.3)

–

–

–

–

2.1

14.2

0.07

Restructuring and
other cost
reduction initiatives(4)

–

–

–

–

–

(40.1)

–

–

–

8.5

31.6

0.15

Quality remediation(5)

–

–

–

–

–

–

(21.1)

–

–

4.9

16.2

0.08

Acquisition, integration,
divestiture and related(6)

–

–

–

–

–

–

–

(4.9)

–

1.8

3.1

0.01

Litigation(7)

–

–

–

(9.7)

–

–

–

–

–

1.0

8.7

0.04

European Union
Medical Device
Regulation(8)

–

–

(16.1)

–

–

–

–

–

–

3.6

12.5

0.06

Other charges(9)

–

–

–

(1.4)

–

–

–

–

(7.2)

(4.5)

(1.3)

(0.01)

Other certain tax
adjustments(10)

–

–

–

–

–

–

–

–

–

(18.5)

18.5

0.09


As Adjusted

$

931.3

$

–

$

229.9

$

1,342.7

$

–

$

–

$

–

$

–

$

8.5

$

117.5

$

644.6

$

3.06


(1)   

Inventory and manufacturing-related charges include excess and obsolete inventory charges on certain product lines we intend to discontinue, incremental cost of products sold from stepping up inventory to its fair value from its manufactured cost in business combination accounting and other inventory and manufacturing-related charges or gains.


(2)   

We exclude intangible asset amortization as well as deferred tax rate changes on our intangible assets from our non-GAAP financial measures because we internally assess our performance against our peers without this amortization.  Due to various levels of acquisitions among our peers, intangible asset amortization can vary significantly from company to company.


(3)     

In the second quarters of 2022 and 2021, we recognized $3.0 million and $16.3 million, respectively, of in-process research and development (“IPR&D”) intangible asset impairments on certain IPR&D projects.


(4)  

In December 2019 and 2021, we initiated global restructuring programs that included a reorganization of key businesses and an overall effort to reduce costs in order to accelerate decision-making, focus the organization on priorities to drive growth and to prepare for the planned spinoff of ZimVie.  Restructuring and other cost reduction initiatives also include other cost reduction initiatives that have the goal of reducing costs across the organization.  The costs include employee termination benefits; contract terminations for facilities and sales agents; and other charges, such as retention period salaries and benefits and relocation costs. 


(5)   

We are addressing inspectional observations on Form 483 and a Warning Letter issued by the U.S. Food and Drug Administration (“FDA”) following its previous inspections of our Warsaw North Campus facility, among other matters.  This quality remediation has required us to devote significant financial resources.  The majority of the expenses are related to consultants who are helping us to update previous documents and redesign certain processes.


(6) 

The acquisition, integration, divestiture and related gains and expenses we have excluded from our non-GAAP financial measures resulted from various acquisitions and gains related to a transition services agreement for services we will provide to ZimVie and a transition manufacturing and supply agreement for products we will supply to ZimVie for a limited period. 


(7)   

We are involved in patent litigation, product liability litigation, commercial litigation and other various litigation matters.  We review litigation matters from both a qualitative and quantitative perspective to determine if excluding the losses or gains will provide our investors with useful incremental information.  Litigation matters can vary in their characteristics, frequency and significance to our operating results.  The litigation charges and gains excluded from our non-GAAP financial measures in the periods presented relate to product liability matters where we have received numerous claims on specific products, patent litigation and commercial litigation related to a common matter in multiple jurisdictions.  In regards to the product liability matters, due to the complexities involved and claims filed in multiple districts, the expenses associated with these matters are significant to our operating results.  Once the litigation matter has been excluded from our non-GAAP financial measures in a particular period, any additional expenses or gains from changes in estimates are also excluded, even if they are not significant, to ensure consistency in our non-GAAP financial measures from period-to-period.


(8)   

The European Union Medical Device Regulation imposes significant additional premarket and postmarket requirements.  The new regulations provided a transition period until May 2021 for previously-approved medical devices to meet the additional requirements.  For certain devices, this transition period can be extended until May 2024.  We are excluding from our non-GAAP financial measures the incremental costs incurred to establish initial compliance with the regulations related to our previously-approved medical devices.  The incremental costs primarily include temporary personnel and third-party professionals necessary to supplement our internal resources.


(9)   

We have incurred other various expenses from specific events or projects that we consider highly variable or that have a significant impact to our operating results that we have excluded from our non-GAAP measures.  These include costs related to legal entity, distribution and manufacturing optimization, including contract terminations, and gains and losses from changes in fair value on our equity investments including our investment in ZimVie.


(10)   

Other certain tax adjustments are related to certain significant and discrete tax adjustments including intercompany transactions between jurisdictions, ongoing impacts of tax only amortization resulting from certain restructuring transactions and impacts of significant tax reform including Swiss reform.

 

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES FROM


CONTINUING OPERATIONS TO FREE CASH FLOW FROM CONTINUING OPERATIONS


FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 and 2021


(in millions, unaudited)


Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021

Net cash provided by operating activities from continuing operations

$

345.5

$

419.0

$

661.2

$

642.5

Additions to instruments

(64.2)

(61.1)

(120.6)

(133.3)

Additions to other property, plant and equipment

(40.9)

(24.6)

(77.3)

(50.4)

Free cash flow from continuing operations

$

240.4

$

333.3

$

463.3

$

458.8

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF GROSS PROFIT & MARGIN FROM CONTINUING OPERATIONS


TO ADJUSTED GROSS PROFIT & MARGIN FROM CONTINUING OPERATIONS


FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 and 2021


(in millions, unaudited)


Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021

Net Sales

$

1,781.8

$

1,763.3

$

3,445.0

$

3,364.7

Cost of products sold, excluding intangible asset amortization

511.0

496.2

1,011.0

932.5

Intangible asset amortization

133.0

132.9

263.8

266.5

Gross Profit

$

1,137.8

$

1,134.2

$

2,170.2

$

2,165.7

Inventory and manufacturing-related charges

4.4

7.1

15.3

1.2

Intangible asset amortization

133.0

132.9

263.8

266.5

Adjusted gross profit

$

1,275.2

$

1,274.2

$

2,449.3

$

2,433.4

Gross margin

63.9

%

64.3

%

63.0

%

64.4

%

Inventory and manufacturing-related charges

0.2

0.5

0.4

–

Intangible asset amortization

7.5

7.5

7.7

7.9

Adjusted gross margin

71.6

%

72.3

%

71.1

%

72.3

%

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF OPERATING PROFIT & MARGIN FROM CONTINUING OPERATIONS TO ADJUSTED OPERATING PROFIT & MARGIN FROM CONTINUING OPERATIONS


FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 and 2021


(in millions, unaudited)


Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021

Operating profit

$

280.9

$

224.8

$

479.3

$

483.5

Inventory and manufacturing-related charges

4.4

7.1

15.3

1.2

Intangible asset amortization

133.0

132.9

263.8

266.5

Intangible asset impairment

3.0

16.3

3.0

16.3

Restructuring and other cost reduction initiatives

57.0

18.8

100.9

40.1

Quality remediation

7.8

11.0

14.3

21.1

Acquisition, integration, divestiture and related

(5.5)

1.5

(3.3)

4.9

Litigation

3.5

3.6

35.1

9.7

European Union Medical Device Regulation

13.1

9.6

23.8

16.1

Other charges

1.0

(1.5)

5.2

1.4

Adjusted operating profit

$

498.2

$

424.1

$

937.4

$

860.8

Operating profit margin

15.8

%

12.7

%

13.9

%

14.4

%

Inventory and manufacturing-related charges

0.2

0.5

0.4

–

Intangible asset amortization

7.5

7.5

7.7

7.9

Intangible asset impairment

0.2

0.9

0.1

0.5

Restructuring and other cost reduction initiatives

3.2

1.1

2.9

1.2

Quality remediation

0.4

0.6

0.4

0.6

Acquisition, integration, divestiture and related

(0.3)

0.1

(0.1)

0.1

Litigation

0.2

0.2

1.0

0.3

European Union Medical Device Regulation

0.7

0.5

0.7

0.5

Other charges

0.1

(0.1)

0.2

0.1

Adjusted operating profit margin

28.0

%

24.0

%

27.2

%

25.6

%

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF EFFECTIVE TAX RATE FROM CONTINUING OPERATIONS  TO ADJUSTED EFFECTIVE TAX RATE FROM CONTINUING OPERATIONS


FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 and 2021


(unaudited)


Three Months Ended June 30,


Six Months Ended June 30,


2022


2021


2022


2021

Effective tax rate

22.8

%

18.7

%

24.5

%

13.9

%

Tax effect of adjustments made to earnings before taxes(1)

4.2

5.7

4.7

6.2

Other certain tax adjustments

(10.5)

(9.5)

(12.9)

(4.7)

Adjusted effective tax rate

16.5

%

14.9

%

16.3

%

15.4

%


(1) Includes inventory and manufacturing-related charges; intangible asset amortization;
intangible asset impairment; restructuring and other cost reduction initiatives; quality
remediation; acquisition, integration, divestiture and related; litigation; European Union
Medical Device Regulation; and other charges

 


ZIMMER BIOMET HOLDINGS, INC.


RECONCILIATION OF DEBT TO NET DEBT


AS OF JUNE 30, 2022 and DECEMBER 31, 2021


(in millions, unaudited)


June 30, 2022


December 31, 2021

Debt, both current and long-term

$

6,023.9

$

7,068.8

Cash and cash equivalents

(386.4)

(378.1)

Net debt

$

5,637.5

$

6,690.7

 




Media




Investors

Meredith Weissman

Keri Mattox

(703) 346-3127

(215) 275-2431



[email protected]



[email protected]

Ezgi Yagci

(617) 549-2443



[email protected]

 

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SOURCE Zimmer Biomet Holdings, Inc.

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Leidos to acquire Cobham Aviation Services Australia’s Special Mission business

PR Newswire

Transaction will bring airborne surveillance and search and rescue missions to Leidos Australia’s portfolio


MELBOURNE, Australia, and RESTON, Va., August 2, 2022 /PRNewswire/ — Leidos (NYSE: LDOS), a FORTUNE® 500 science and technology leader, announced it has entered into a definitive agreement with Cobham Limited to acquire Cobham Aviation Services Australia’s Special Mission business. The Special Mission business provides airborne border surveillance and search and rescue services to the Australian Federal Government. The acquisition is subject to customary closing conditions, including regulatory approvals.

“Cobham’s Special Mission team conducts essential operations that protect Australia’s borders, support law enforcement and environmental protection and save lives,” said Leidos Chairman and CEO Roger Krone. “The integration of Special Mission into Leidos Australia will expand the scope of our global airborne ISR capabilities, diversify revenues, and open up new growth avenues.”

“I have the greatest respect and admiration for Cobham’s Special Mission team and their performance in service to the Government,” said Leidos Australia Chief Executive Paul Chase. “The addition of the Special Mission business will bring new, expansive services to our offerings across Australia. I look forward to working with this exceptional team.”

“This is a perfect match,” said Cobham Aviation Services Chairman Kim Gillis. “Leidos has remarkably complementary operations to Cobham Special Mission in airborne ISR, as well as deep platform integration expertise, and both organisations uphold exceptional track records of delivering mission critical services to government and defence customers.”

“I’d like to recognise and thank all of the Special Mission team for their continued dedication and commitment to delivering operational outcomes for our customers,” Managing Director of Special Mission James Woodhams said. “I’m really excited about what the future holds for the team as part of Leidos.”

Cobham Special Mission owns and operates 14 modified aircraft to deliver critical services across Australia, including:

  • Conducting one of the world’s largest outsourced civil maritime surveillance operations under contract with the Australian Border Force, patrolling Australia’s 8.2 million square kilometre Exclusive Economic Zone;
  • Providing fixed wing search-and-rescue response capability over land and sea on behalf of the Australian Maritime Safety Authority (AMSA); and
  • Operating a highly specialised mission aircrew training system for more than 30 mission aircrew per year.
About Leidos

Leidos is a Fortune 500® technology, engineering, and science solutions and services leader working to solve the world’s toughest challenges in the defense, intelligence, civil, and health markets. The company’s 43,000 employees support vital missions for government and commercial customers. Headquartered in Reston, Virginia, Leidos reported annual revenues of approximately $13.7 billion for the fiscal year ended December 31, 2021. For more information, visit www.Leidos.com.

Cautionary Statements Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 with respect to Leidos’ proposed acquisition of Cobham Aviation Services Australia, including statements regarding the benefits of the transaction, the anticipated timing of the transaction and the products and markets of each company. These forward-looking statements generally are identified by the words “believe,” “project,” “predicts,” “budget,” “forecast,” “continue,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions (or the negative versions of such words or expressions).

Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this release, including but not limited to: (i) the risk that the transaction may not be completed in a timely manner or at all, (ii) the failure to satisfy the conditions to the consummation of the transaction, including the receipt of certain governmental and regulatory approvals, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement, (iv) the effect of the announcement or pendency of the transaction on Cobham Aviation Services Australia’s business relationships, operating results, and business generally, (v) risks that the proposed transaction disrupts current plans and operations of Leidos or Cobham Aviation Services Australia and potential difficulties in Cobham Aviation Services Australia’s employee retention as a result of the transaction, (vi) risks related to diverting management’s attention from Cobham Aviation Services Australia ongoing business operations, (vii) the outcome of any legal proceedings that may be instituted against Leidos or against Cobham Aviation Services Australia related to the merger agreement or the transaction, (viii) the ability of Leidos to successfully integrate Cobham Aviation Services Australia’s operations, product lines, and technology, and (ix) the ability of Leidos to implement its plans, forecasts, and other expectations with respect to Cobham Aviation Services Australia’s business after the completion of the proposed acquisition and realize additional opportunities for growth and innovation.

In addition, please refer to the documents that Leidos files with the SEC on Forms 10-K, 10-Q and 8-K. These filings identify and address other important risks and uncertainties that could cause events and results to differ materially from those contained in the forward-looking statements set forth in this press release. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Leidos assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Contact:             

Melissa Dueñas
(571) 526-6850
[email protected]                           

Thomas Doheny

(571) 474-4735
[email protected]

Brandon VerVelde

(571) 526-6257
[email protected]

 

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SOURCE Leidos

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Hut 8 Signs Partnership with Foundry

PR Newswire

Foundry selects Hut 8’s data centre infrastructure for cloud services


TORONTO
, Aug. 2, 2022 /PRNewswire/ – Hut 8 Mining Corp. (NASDAQ: HUT) (TSX: HUT) (“Hut 8” or the “Company”), one of North America’s largest, innovation-focused digital asset mining pioneers and high performance computing infrastructure provider, has signed a partnership with Foundry Digital LLC (“Foundry”), a wholly-owned subsidiary of Digital Currency Group Inc. (“DCG”) focused on digital asset infrastructure. The deal marks the first significant Blockchain-industry win for Hut 8’s high performance computing business.

Hut 8 will support multiple lines of business for Foundry, initially at the company’s Mississauga, Ontario data centre with plans to expand into the Kelowna, British Columbia data centre for infrastructure support across Canada. Foundry works with the North American digital currency mining and staking industry bringing institutional expertise, capital and market intelligence to help build decentralized infrastructure.

“We are delighted to welcome Foundry, who we’ve long supported through their digital asset mining pool, to our high performance computing data centre in Mississauga, Ontario,” said Jaime Leverton, CEO of Hut 8. “Foundry is a leader in the digital asset industry, and we look forward to enabling their continued growth with cutting-edge infrastructure.”

“Hut 8 has been a trusted partner of Foundry’s since 2020,” said Dan Magnuszewski, CTO of Foundry. “As Bitcoin industry veterans with expertise in data centre infrastructure, Hut 8 knows our industry intimately, which is why they were a natural fit when we sought infrastructure services.”

About Foundry Digital LLC

A subsidiary of DCG, Foundry Digital LLC was created to meet the institutional demand for better capital access, efficiency, and transparency in the digital asset mining and staking industry. Headquartered in Rochester, NY, Foundry leverages its institutional expertise, capital, and market intelligence to empower participants within the crypto ecosystem by providing the tools they need to build tomorrow’s decentralized infrastructure. For more information, please visit foundrydigital.com.

About Hut 8

Hut 8 is one of North America’s largest innovation-focused digital asset miners, led by a team of business-building technologists, bullish on bitcoin, blockchain, Web 3.0 and bridging the nascent and traditional high performance computing worlds. With two digital asset mining sites located in Southern Alberta and a third site in North Bay, Ontario, all located in Canada, Hut 8 has one of the highest capacity rates in the industry and one of the highest inventories of self-mined Bitcoin of any crypto miner or publicly traded company globally. With 36,000 square feet of geo-diverse data centre space and cloud capacity connected to electrical grids powered by significant renewables and emission-free resources, Hut 8 is revolutionizing conventional assets to create the first hybrid data centre model that serves both the traditional high performance compute (Web 2.0) and nascent digital asset computing sectors, blockchain gaming, and Web 3.0. Hut 8 was the first Canadian digital asset miner to list on the Nasdaq Global Select Market. Through innovation, imagination, and passion, Hut 8 is helping to define the digital asset revolution to create value and positive impacts for its shareholders and generations to come.

Cautionary Note Regarding Forward–Looking Information

This press release includes “forward-looking information” and “forward-looking statements” within the meaning of Canadian securities laws and United States securities laws, respectively (collectively, “forward-looking information”). All information, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion and growth of the Company’s businesses, operations, plans and other such matters is forward-looking information. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “allow”, “believe”, “estimate”, “expect”, “predict”, “can”, “might”, “potential”, “predict”, “is designed to”, “likely” or similar expressions. In addition, any statements in this press release that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information and include, among others, statements regarding: the Company’s expected recurring revenue and growth rate from its high performance computing business; the Company’s ability to successfully navigate the current market; and the scope of the services to be provided by Hut 8 to Foundry Digital at Hut 8’s Mississauga data centre, including the proposed expansion of those services to the Kelowna data centre.

Statements containing forward-looking information are not historical facts, but instead represent management’s expectations, estimates and projections regarding future events based on certain material factors and assumptions at the time the statement was made. While considered reasonable by Hut 8 as of the date of this press release, such statements are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the “Risk Factors” section of the Company’s Annual Information Form dated March 17, 2022, and Hut 8’s other continuous disclosure documents which are available on www.sedar.com.

These factors are not intended to represent a complete list of the factors that could affect Hut 8; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, sought, proposed, estimated, forecasted, expected, projected or targeted and such forward-looking statements included in this press release should not be unduly relied upon. The impact of any one assumption, risk, uncertainty, or other factor on a particular forward-looking statement cannot be determined with certainty because they are interdependent and Hut 8’s future decisions and actions will depend on management’s assessment of all information at the relevant time. The forward-looking statements contained in this press release are made as of the date of this press release, and Hut 8 expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law

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SOURCE Hut 8 Mining Corp

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Lear Reports Second Quarter 2022 Results

PR Newswire


SOUTHFIELD, Mich.
, Aug. 2, 2022 /PRNewswire/ — Lear Corporation (NYSE: LEA), a global automotive technology leader in Seating and E-Systems, today reported results for the second quarter 2022.


Second Quarter 2022 Highlights

  • Sales outperformed global industry production by six percentage points, reflecting growth over market in both Seating and E-Systems
  • Sales increased 7% to $5.1 billion, compared to $4.8 billion in the second quarter of 2021
  • Net income of $69 million and adjusted net income of $107 million, compared to $175 million and $148 million, respectively, in the second quarter of 2021
  • Core operating earnings of $187 million, compared to $233 million in the second quarter of 2021
  • Earnings per share of $1.14 and adjusted earnings per share of $1.79, compared to $2.89 and $2.45, respectively, in the second quarter of 2021
  • Net cash provided by operating activities of $11 million and free cash flow of $(161) million, compared to $260 million and $120 million, respectively, in the second quarter of 2021
  • Entered into a definitive agreement to acquire I.G. Bauerhin (IGB) to further expand our capabilities in thermal comfort solutions
  • Acquired Thagora Technology SRL, a company specializing in material utilization hardware and software technologies
  • Received Quality First award from Stellantis for achievements and commitment to industrial development and production
  • Released 2021 Sustainability Report, featuring progress on Lear’s renewable energy strategy, innovative green products, supplier sustainability and Diversity, Equity and Inclusion efforts
  • Returned $96 million to shareholders through share repurchases and dividends
  • Cash and cash equivalents of $828 million and total available liquidity of $2.8 billion at quarter end

“In a quarter marked with continued industry supply chain disruptions, including significant COVID-related production shutdowns in China, and increased commodity costs, Lear recorded solid financial results in the second quarter,” said Ray Scott, Lear’s President and Chief Executive Officer. “We are proactively taking steps to reduce costs and improve our manufacturing flexibility to position the Company to succeed in multiple industry volume scenarios. The IGB acquisition we announced in the quarter will further strengthen Lear’s position as the leading supplier of automotive seating. Our increased emphasis on thermal comfort will create value for our customers through innovative and efficient products that improve quality, performance, weight, and cost. The strategic actions we are taking are designed to increase earnings and cash flow, and support increased cash returns to shareholders.”



Second Quarter Financial Results

(in millions, except per share amounts)

2022

2021

Reported

Sales

$5,071.0

$4,760.7

Net income

$68.5

$175.2

Earnings per share

$1.14

$2.89

Adjusted(1)

Core operating earnings

$187.4

$233.2

Adjusted net income

$107.4

$148.3

Adjusted earnings per share

$1.79

$2.45

 

In the second quarter, global vehicle production increased by 1% compared to a year ago, with North America up 12%, Europe down 5%, and China down 3%. Global production increased on a Lear sales-weighted basis(2) by approximately 2%.

Sales in the second quarter increased 7% to $5.1 billion compared to a year ago. Excluding the impact of foreign exchange, commodities and acquisitions, sales were up 8%, reflecting the addition of new business in both business segments and increased production on key Lear platforms. Sales growth over market in the second quarter was six percentage points, driven primarily by the impact of new business in both segments.

Core operating earnings were $187 million, or 3.7% of sales, compared to $233 million, or 4.9% of sales, in 2021. The decrease in earnings resulted primarily from higher commodity costs and the impact of foreign exchange, which were partially offset by the addition of new business and higher production on key Lear platforms. In the Seating segment, margins and adjusted margins were 5.5% and 6.0% of sales, respectively. In the E-Systems segment, margins and adjusted margins were 0.2% and 2.0% of sales, respectively.

Earnings per share were $1.14. Adjusted earnings per share were $1.79, down from $2.45 in 2021, primarily reflecting lower operating earnings.

In the second quarter of 2022, net cash provided by operating activities was $11 million, and free cash flow(1) was $(161) million.

(1) For more information regarding our non-GAAP financial measures, see “Non-GAAP Financial Information” below.

(2) The production change on a Lear sales-weighted basis is calculated using Lear’s prior year regional sales mix and second quarter fiscal calendar. Management believes this provides a more meaningful comparison of the Company’s global revenue growth relative to global vehicle production.


IGB Acquisition

On May 20, 2022, Lear announced that it had entered into a definitive agreement to acquire IGB, a German-based supplier of automotive seat heating, ventilation, active cooling, steering wheel heating, seat sensors, and electronic control modules. This acquisition will expand Lear’s product capabilities into active cooling and complement existing offerings in specialized thermal comfort seating solutions that improve vehicle performance and packaging. Under the terms of the agreement, Lear will acquire IGB for €140 million, on a cash and debt free basis. The transaction is subject to regulatory approvals and other customary closing conditions and adjustments.


Share Repurchases

During the second quarter of 2022, we repurchased 380,220 shares of our common stock for a total of $50.2 million.  At the end of the second quarter, we had a remaining share repurchase authorization of approximately $1.3 billion, which expires on December 31, 2024, and reflects approximately 14% of our total market capitalization at current market prices.

Since initiating the share repurchase program in 2011, we have repurchased 52.8 million shares of our common stock for a total of $4.8 billion at an average price of $91.27 per share. This represents a reduction of approximately 50% of our shares outstanding since the time we began the program.


2022 Financial Outlook
 

Compared to our prior financial outlook, we have narrowed the ranges, but the midpoint of the range for net sales and core operating earnings are unchanged.  Our 2022 financial outlook is summarized below:



Full Year 2022 Financial Outlook

Net Sales

$20,550 – $21,050 million

Core Operating Earnings

$815 – $915 million

Adjusted EBITDA

$1,405 – $1,505 million

Restructuring Costs

≈$150 million

Operating Cash Flow

$950 – $1,075 million

Capital Spending

$675 – $700 million

Free Cash Flow

$275 – $375 million

 

The industry volume assumptions underlying Lear’s 2022 financial outlook are derived from several sources, including internal estimates, customer production schedules and the most recent S&P Global Mobility production estimates for Lear’s vehicle platforms.

The financial outlook is based on a full year average exchange rate of $1.06/Euro and 6.60 RMB/$.

Certain of the forward-looking financial measures above are provided on a non-GAAP basis. The Company does not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with
GAAP
 because to do so would be potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant.


Second Quarter 2022 Conference Call and Webcast Information

A conference call and webcast will be held to discuss Lear’s second quarter 2022 financial results and related matters on August 2, 2022, at 8:30 a.m. EDT. The webcast link for the conference call will be available through Lear’s investor relations webpage at ir.lear.com. In addition, the conference call can be accessed by dialing 1-877-883-0383 (domestic) or 1-412-902-6506 (international) with Conference I.D. 5082523. The webcast replay will be available two hours following the call.


Non-GAAP Financial Information
 

In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included throughout this press release, the Company has provided information regarding “pretax income before equity income, interest, other (income) expense, restructuring costs and other special items” (core operating earnings or adjusted segment earnings), “pretax income before equity income, interest, other (income) expense, depreciation expense, amortization of intangible assets, restructuring costs and other special items” (adjusted EBITDA), “adjusted depreciation and amortization,” “adjusted net income attributable to Lear” (adjusted net income), “adjusted diluted net income per share attributable to Lear” (adjusted earnings per share) and “free cash flow” (each, a non-GAAP financial measure). Other (income) expense includes, among other things, non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, gains and losses on the disposal of fixed assets and the non-service cost components of net periodic benefit cost. Adjusted depreciation and amortization represents depreciation expense and amortization of intangible assets adjusted for intangible asset impairment charges. Adjusted net income and adjusted earnings per share represent net income attributable to Lear and diluted net income per share attributable to Lear, respectively, adjusted for restructuring costs and other special items, including the tax effect thereon. Free cash flow represents net cash provided by operating activities less capital expenditures.

Management believes the non-GAAP financial measures used in this press release are useful to both management and investors in their analysis of the Company’s financial position and results of operations. In particular, management believes that core operating earnings, adjusted EBITDA, adjusted depreciation and amortization, adjusted net income and adjusted earnings per share are useful measures in assessing the Company’s financial performance by excluding certain items that are not indicative of the Company’s core operating performance or that may obscure trends useful in evaluating the Company’s continuing operating activities. Management also believes that these measures provide improved comparability between fiscal periods. Management believes that free cash flow is useful to both management and investors in their analysis of the Company’s ability to service and repay its debt. Further, management uses these non-GAAP financial measures for planning and forecasting future periods.

Core operating earnings, adjusted EBITDA, adjusted depreciation and amortization, adjusted net income, adjusted earnings per share and free cash flow should not be considered in isolation or as a substitute for net income attributable to Lear, diluted net income per share attributable to Lear, cash provided by operating activities or other income statement or cash flow statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt and, therefore, does not reflect funds available for investment or other discretionary uses. Also, these non-GAAP financial measures, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies.


Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. The words “will,” “may,” “designed to,” “outlook,” “believes,” “should,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “forecasts” and similar expressions identify certain of these forward-looking statements. The Company also may provide forward-looking statements in oral statements or other written materials released to the public. All statements contained or incorporated in this press release or in any other public statements that address operating performance, events or developments that the Company expects or anticipates may occur in the future are forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements are discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, its Quarterly Report on Form 10-Q for the quarter ended April 2, 2022, and its other Securities and Exchange Commission filings. Future operating results will be based on various factors, including actual industry production volumes, the impact of the ongoing COVID-19 pandemic and the Ukraine war on the Company’s business and the global economy, supply chain disruptions, commodity prices, the impact of restructuring actions and the Company’s success in implementing its operating strategy.

Information in this press release relies on assumptions in the Company’s sales backlog. The Company’s sales backlog reflects anticipated net sales from formally awarded new programs less lost and discontinued programs. The Company enters into contracts with its customers to provide production parts generally at the beginning of a vehicle’s life cycle. Typically, these contracts do not provide for a specified quantity of production, and many of these contracts may be terminated by the Company’s customers at any time. Therefore, these contracts do not represent firm orders. Further, the calculation of the sales backlog does not reflect customer price reductions on existing or newly awarded programs. The sales backlog may be impacted by various assumptions embedded in the calculation, including vehicle production levels on new programs, foreign exchange rates and the timing of major program launches.

The forward-looking statements in this press release are made as of the date hereof, and the Company does not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after the date hereof.


About Lear Corporation

Lear, a global automotive technology leader in Seating and E-Systems, enables superior in-vehicle experiences for consumers around the world. Lear’s diverse team of talented employees in 38 countries is driven by a commitment to innovation, operational excellence, and sustainability. Lear is Making every drive better™ by providing the technology for safer, smarter, and more comfortable journeys. Lear, headquartered in Southfield, Michigan, serves every major automaker in the world and ranks 186 on the Fortune 500. Further information about Lear is available at lear.com or on Twitter @LearCorporation.


Lear Corporation and Subsidiaries


Condensed Consolidated Statements of Income

(Unaudited; in millions, except per share amounts)



Three Months Ended



July 2,



2022



July 3,



2021

Net sales

$    5,071.0

$    4,760.7

Cost of sales

4,731.1

4,359.3

Selling, general and administrative expenses

171.2

170.8

Amortization of intangible assets

24.6

25.1

Interest expense

24.9

22.3

Other (income) expense, net

14.4

(46.1)

Consolidated income before income taxes and equity in net income of affiliates

104.8

229.3

Income taxes

23.5

39.3

Equity in net income of affiliates

(4.3)

(4.9)

Consolidated net income

85.6

194.9

Net income attributable to noncontrolling interests

17.1

19.7

Net income attributable to Lear

$        68.5

$       175.2

Diluted net income per share attributable to Lear

$        1.14

$        2.89

Weighted average number of diluted shares outstanding

60.1

60.6

 


Lear Corporation and Subsidiaries


Condensed Consolidated Statements of Income

(Unaudited; in millions, except per share amounts)



Six Months Ended



July 2,



2022



July 3,



2021

Net sales

$  10,279.4

$  10,115.1

Cost of sales

9,618.0

9,220.9

Selling, general and administrative expenses

348.5

339.7

Amortization of intangible assets

40.3

41.6

Interest expense

49.8

44.6

Other (income) expense, net

41.7

(39.8)

Consolidated income before income taxes and equity in net income of affiliates

181.1

508.1

Income taxes

43.9

98.2

Equity in net income of affiliates

(15.0)

(10.8)

Consolidated net income

152.2

420.7

Net income attributable to noncontrolling interests

34.3

41.8

Net income attributable to Lear

$       117.9

$       378.9

Diluted net income per share available to Lear common stockholders

$        1.96

$        6.25

Weighted average number of diluted shares outstanding

60.2

60.6

 


Lear Corporation and Subsidiaries


Condensed Consolidated Balance Sheets

(In millions)



July 2,



2022



December 31,



2021

(Unaudited)

(Audited)




ASSETS



Current:

Cash and cash equivalents

$            828.0

$         1,318.3

Accounts receivable

3,369.7

3,041.5

Inventories

1,612.8

1,571.9

Other

874.9

833.5

6,685.4

6,765.2



Long-Term:

PP&E, net

2,778.7

2,720.1

Goodwill

1,651.9

1,657.9

Other

2,229.4

2,209.2

6,660.0

6,587.2



Total Assets

$       13,345.4

$       13,352.4




LIABILITIES AND EQUITY



Current:

Accounts payable and drafts

$         3,110.7

$         2,952.4

Accrued liabilities

1,916.2

1,806.7

Current portion of long-term debt

0.7

0.8

5,027.6

4,759.9



Long-Term:

Long-term debt

2,595.2

2,595.2

Other

1,174.7

1,188.9

3,769.9

3,784.1



Equity

4,547.9

4,808.4



Total Liabilities and Equity

$       13,345.4

$       13,352.4

 


Lear Corporation and Subsidiaries


Consolidated Supplemental Data

(Unaudited; in millions, except content per vehicle and per share amounts)



Three Months Ended



July 2,



2022



July 3,



2021




Net Sales

North America

$       2,193.5

$       1,857.0

Europe and Africa

1,744.7

1,727.0

Asia

916.0

997.2

South America

216.8

179.5

Total

$       5,071.0

$       4,760.7




Content per Vehicle




1

North America

$             617

$             574

Europe and Africa

$             433

$             399




Free Cash Flow




2

Net cash provided by operating activities

$            11.4

$          260.1

Capital expenditures

(172.2)

(140.0)

Free cash flow

$         (160.8)

$          120.1




Core Operating Earnings




2

Net income attributable to Lear

$            68.5

$          175.2

Interest expense

24.9

22.3

Other (income) expense, net

14.4

(46.1)

Income taxes

23.5

39.3

Equity in net income of affiliates

(4.3)

(4.9)

Net income attributable to noncontrolling interests

17.1

19.7

Restructuring costs and other special items –

Costs related to restructuring actions

42.6

14.8

Acquisition costs

(0.7)

—

Acquisition-related inventory fair value adjustment

1.1

—

Intangible asset impairment

8.9

8.5

Insurance recoveries related to typhoon in the Philippines, net of costs

(6.3)

—

Other

(2.3)

4.4

Core operating earnings

$          187.4

$          233.2

 


Lear Corporation and Subsidiaries


Consolidated Supplemental Data


(continued)

(Unaudited; in millions, except content per vehicle and per share amounts)



Three Months Ended



July 2,



2022



July 3,



2021




Adjusted Net Income and Adjusted Earnings Per Share




2

Net income attributable to Lear

$            68.5

$          175.2

Restructuring costs and other special items –

Costs related to restructuring actions

42.6

14.8

Acquisition costs

(0.7)

—

Acquisition-related inventory fair value adjustment

1.1

—

Intangible asset impairment

8.9

8.5

Insurance recoveries related to typhoon in the Philippines, net of costs

(6.3)

—

Foreign exchange losses due to foreign exchange rate volatility related to Russia

2.3

—

Favorable indirect tax ruling in a foreign jurisdiction

—

(47.0)

Loss related to affiliate

—

1.0

Other

4.4

0.9

Tax impact of special items and other net tax adjustments 3

(13.4)

(5.1)

Adjusted net income

$          107.4

$          148.3

Weighted average number of diluted shares outstanding

60.1

60.6

Diluted net income per share attributable to Lear

$            1.14

$            2.89

Adjusted earnings per share

$            1.79

$            2.45




Adjusted Depreciation and Amortization




2

$          151.6

$          150.2

Less – Intangible asset impairment

8.9

8.5

Adjusted depreciation and amortization

$          142.7

$          141.7

 


Lear Corporation and Subsidiaries


Consolidated Supplemental Data


(continued)

(Unaudited; in millions, except content per vehicle and per share amounts)



Six Months Ended



July 2,



2022



July 3,



2021




Net Sales

North America

$        4,391.3

$        3,868.2

Europe and Africa

3,535.9

3,804.0

Asia

1,946.1

2,082.7

South America

406.1

360.2

Total

$      10,279.4

$      10,115.1




Content per Vehicle




1

North America

$             612

$             561

Europe and Africa

$             436

$             410




Free Cash Flow




2

Net cash provided by operating activities

$           232.1

$           507.6

Capital expenditures

(302.5)

(252.9)

Free cash flow

$           (70.4)

$           254.7




Core Operating Earnings




2

Net income attributable to Lear

$           117.9

$           378.9

Interest expense

49.8

44.6

Other (income) expense, net

41.7

(39.8)

Income taxes

43.9

98.2

Equity in net income of affiliates

(15.0)

(10.8)

Net income attributable to noncontrolling interests

34.3

41.8

Restructuring costs and other special items –

Costs related to restructuring actions

74.9

39.2

Acquisition costs

9.3

—

Acquisition-related inventory fair value adjustment

1.1

—

Intangible asset impairment

8.9

8.5

Costs related to typhoon in the Philippines, net of insurance recoveries

4.5

—

Other

(0.2)

8.8

Core operating earnings

$           371.1

$           569.4

 


Lear Corporation and Subsidiaries


 Consolidated Supplemental Data


(continued)

(Unaudited; in millions, except content per vehicle and per share amounts)



Six Months Ended



July 2,



2022



July 3,



2021




Adjusted Net Income Attributable to Lear




2

Net income attributable to Lear

$          117.9

$          378.9

Restructuring costs and other special items –

Costs related to restructuring actions

74.9

39.2

Acquisition costs

9.3

—

Acquisition-related inventory fair value adjustment

1.1

—

Intangible asset impairment

8.9

8.5

Costs related to typhoon in the Philippines, net of insurance recoveries

4.5

—

Foreign exchange losses due to foreign exchange rate volatility related to Russia

13.7

—

Favorable indirect tax ruling in a foreign jurisdiction

—

(47.0)

Loss related to affiliate

—

1.0

Other

10.6

4.2

Tax impact of special items and other net tax adjustments 3

(25.4)

(10.6)

Adjusted net income attributable to Lear

$          215.5

$          374.2

Weighted average number of diluted shares outstanding

60.2

60.6

Diluted net income per share available to Lear common stockholders

$            1.96

$            6.25

Adjusted earnings per share

$            3.58

$            6.18




Adjusted Depreciation and Amortization




2

Depreciation and amortization

$          295.0

$          291.0

Less – Intangible asset impairment

8.9

8.5

Adjusted depreciation and amortization

$          286.1

$          282.5




Diluted Shares Outstanding at End of Period




4

59,801,090

60,476,183



1
Content per Vehicle for 2021 has been updated to reflect actual production levels.



2
See “Non-GAAP Financial Information” included in this press release.



3
Represents the tax effect of restructuring costs and other special items, as well as several discrete tax items. The
identification of these tax items is judgmental in nature, and their calculation is based on various assumptions and
estimates.



4
 Calculated using stock price at end of quarter.

 


Lear Corporation and Subsidiaries


Segment Supplemental Data

(Unaudited; in millions, except margins)



Three Months Ended



July 2,



2022



July 3,



2021




Adjusted Segment Earnings



Seating

Net sales

$     3,874.1

$     3,608.2

Segment earnings

$        213.9

$        252.2

Restructuring costs and other special items –

Costs related to restructuring actions

18.2

9.7

Acquisition-related inventory fair value adjustment

1.1

—

Other

0.2

0.3

Adjusted segment earnings

$        233.4

$        262.2

Adjusted segment margins

6.0 %

7.3 %



E-Systems

Net sales

$     1,196.9

$     1,152.5

Segment earnings

$           2.0

$         26.6

Restructuring and other special items –

Costs related to restructuring actions

19.4

5.1

Intangible asset impairment

8.9

8.5

Insurance recoveries related to typhoon in the Philippines, net of costs

(6.5)

—

Other

0.5

0.3

Adjusted segment earnings

$         24.3

$         40.5

Adjusted segment margins

2.0 %

3.5 %

 


Lear Corporation and Subsidiaries


Segment Supplemental Data


(continued)

(Unaudited; in millions, except margins)



Six Months Ended



July 2,



2022



July 3,



2021




Adjusted Segment Earnings



Seating

Net sales

$     7,786.6

$     7,604.2

Segment earnings

$        414.0

$        544.2

Costs related to restructuring actions

35.5

24.4

Acquisition costs

0.1

—

Acquisition-related inventory fair value adjustment

1.1

—

Costs related to typhoon in the Philippines

0.1

—

Other

0.3

0.7

Adjusted segment earnings

$        451.1

$        569.3

Adjusted segment margins

5.8 %

7.5 %



E-Systems

Net sales

$     2,492.8

$     2,510.9

Segment earnings

$          17.9

$        115.9

Costs related to restructuring actions

34.4

10.6

Intangible asset impairment

8.9

8.5

Costs related to typhoon in the Philippines, net of insurance recoveries

4.0

—

Other

1.0

0.8

Adjusted segment earnings

$          66.2

$        135.8

Adjusted segment margins

2.7 %

5.4 %

 

 

 

 

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SOURCE Lear Corporation

Posted on

VIAVI Observer Expands End-User Experience Scoring and Problem Isolation to Cloud-Based Apps

PR Newswire

Observer Apex and Observer Gigastor now available in AWS Marketplace to extend service visibility and accelerate cloud deployments


CHANDLER, Ariz.
, August 2, 2022 /PRNewswire/ — Viavi Solutions Inc. (VIAVI) (NASDAQ: VIAV) today announced the latest update to its comprehensive network performance monitoring and diagnostics (NPMD) platform, Observer. Version 18.8 continues to build on the promise of simplified cloud monitoring with datacenter-like visibility, bringing two key capabilities to cloud-based applications and deployments – automated End-User Experience (EUE) scoring and problem domain isolation. The previously announced Observer 3D monitoring initiative introduced active testing for SaaS applications and now the primary components of the Observer platform have been optimized for fast, efficient cloud deployments.

Observer EUE scoring combines the unique insights of packet and active monitoring into a single, unified value for every network transaction. Adding metadata and enriched flow ensures every information technology (IT) stakeholder from network engineer to line of business owner gets the right view of network service health leading to fast troubleshooting when issues arise, across on-premises, hybrid and cloud.

As part of the update, the company announced that Observer Apex and Observer Gigastor, both integral to the performance and diagnostic capability of the Observer platform, will now also be available directly in AWS Marketplace, a digital catalog with thousands of software listings from independent software vendors that make it easy to find, test, buy, and deploy software that runs on Amazon Web Services (AWS). Organizations migrating their mission-critical applications to AWS services can now seamlessly extend their on-premise service visibility to AWS instances in the cloud.

In the most recent State of the Network survey from VIAVI, NetOps and SecOps teams highlighted their accelerating move to cloud-based hosting and the increasing pressure to maintain sufficient service awareness and deliver an exceptional EUE. The survey also revealed that emerging skills gaps and constrained budgets were adding to the pressure facing IT teams.

The latest Observer update together with AWS Marketplace availability means that current Observer customers – or those considering Observer as a solution – can be confident their service visibility should not be impaired as they continue with their cloud migration initiatives. IT teams can now easily deploy Observer across their entire hosting and IT service ecosystem, with easy-to-deploy Observer agents that can also be used for individual remote users or ad-hoc troubleshooting.

“At a time when businesses are accelerating the migration of mission-critical applications to the cloud, this release of Observer ensures they can easily maintain the service visibility they have come to expect from VIAVI,” said Chris Labac, Vice President and General Manager, Network Performance and Threat Solutions, VIAVI. “Our customers have been very clear that their network and service architectures will need to continue evolving in order to meet the needs of users and the competitive demands being placed on their business. They therefore need a simple way to extend Observer visibility, including EUE scoring, to cover on-premise, SaaS or AWS instances in the cloud. Observer 18.8 delivers just that.”

About VIAVI

VIAVI (NASDAQ: VIAV) is a global provider of network test, monitoring and assurance solutions for communications service providers, enterprises, network equipment manufacturers, original equipment manufacturers, government and avionics. We help these customers harness the power of instruments, automation, intelligence and virtualization to Command the network. VIAVI is also a leader in light management solutions for the anti-counterfeiting, consumer electronics, industrial, government and automotive markets. Learn more about VIAVI at www.viavisolutions.com. Follow us on VIAVI Perspectives, LinkedIn, Twitter, YouTube and Facebook.


Media Inquiries: 


North America

Sonus PR

Micah Warren


[email protected]


Latin America

Edelman Significa

Monica Czeszak


[email protected]


DACH

Riba:BusinessTalk

Michael Beyrau


[email protected]


EMEA & Asia Pacific/Japan

Sonus PR

Chevaan Seresinhe


[email protected]


India

Voila Communications

Manish Sharma


[email protected]


China

Archetype

Geff Pan


[email protected]

 

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SOURCE VIAVI Solutions

Posted on

Immunic, Inc. to Participate in the 2022 Wedbush PacGrow Virtual Healthcare Conference

PR Newswire


NEW YORK
, Aug. 2, 2022 /PRNewswire/ — Immunic, Inc. (Nasdaq: IMUX), a clinical-stage biopharmaceutical company developing a pipeline of selective oral immunology therapies focused on treating chronic inflammatory and autoimmune diseases, today announced that Daniel Vitt, Ph.D., Chief Executive Officer and President, will participate in a fireside chat on Tuesday, August 9, at 8:00 am ET, during the 2022 Wedbush PacGrow Virtual Healthcare Conference, taking place August 9-10, 2022.

A live webcast of the presentation will be available on the “Events and Presentations” section of Immunic’s website at: ir.imux.com/events-and-presentations. An archived replay will be available on the company’s website for a period of 90 days after the conference.

About Immunic, Inc.

Immunic, Inc. (Nasdaq: IMUX) is a clinical-stage biopharmaceutical company with a pipeline of selective oral immunology therapies focused on treating chronic inflammatory and autoimmune diseases. The company is developing three small molecule products: its lead development program, vidofludimus calcium (IMU-838), a selective immune modulator that inhibits the intracellular metabolism of activated immune cells by blocking the enzyme DHODH and exhibits a host-based antiviral effect, is currently being developed as a treatment option for multiple sclerosis, and primary sclerosing cholangitis. IMU-935, a selective inverse agonist of the transcription factor RORγ/RORγt, is targeted for development in psoriasis, castration-resistant prostate cancer and Guillain-Barré syndrome. IMU-856, which targets the restoration of the intestinal barrier function, is targeted for development in diseases involving bowel barrier dysfunction. For further information, please visit: www.imux.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release regarding strategy, future operations, future financial position, future revenue, projected expenses, expected timing and results of clinical trials, prospects, plans and objectives of management are forward-looking statements. Examples of such statements include, but are not limited to, statements relating to management’s participation in investor conferences. Immunic may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in the forward-looking statements and you should not place undue reliance on these forward-looking statements. Such statements are based on management’s current expectations and involve substantial risks and uncertainties. Actual results and performance could differ materially from those projected in the forward-looking statements as a result of many factors, including, without limitation, the COVID-19 pandemic, risks and uncertainties associated with the ability to project future cash utilization and reserves needed for contingent future liabilities and business operations, the availability of sufficient financial and other resources to meet business objectives and operational requirements, the fact that the results of earlier preclinical studies and clinical trials may not be predictive of future clinical trial results, the protection and market exclusivity provided by Immunic’s intellectual property, risks related to the drug development and the regulatory approval process and the impact of competitive products and technological changes. A further list and descriptions of these risks, uncertainties and other factors can be found in the section captioned “Risk Factors,” in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 24, 2022, and in the company’s subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov or ir.imux.com/sec-filings. Any forward-looking statement made in this release speaks only as of the date of this release. Immunic disclaims any intent or obligation to update these forward-looking statements to reflect events or circumstances that exist after the date on which they were made. Immunic expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this press release.

Contact Information

Immunic, Inc.

Jessica Breu

Head of Investor Relations and Communications
+49 89 2080 477 09
[email protected]

US IR Contact
Rx Communications Group
Paula Schwartz
+1 917 633 7790 
[email protected]

US Media Contact
KOGS Communication
Edna Kaplan
+1 617 974 8659
[email protected]

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SOURCE Immunic, Inc.

Posted on

Caris Life Sciences and Xencor Enter Target Discovery Collaboration and License Agreement for Novel XmAb® Bispecific Antibodies

PR Newswire


IRVING, Texas and MONROVIA, Calif., Aug. 2, 2022 /PRNewswire/ — Caris Life Sciences®(Caris), the leading molecular science and technology company actively developing and delivering innovative solutions to revolutionize health care, and Xencor, Inc. (NASDAQ: XNCR), a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of cancer and autoimmune diseases, announced today a multi-year strategic option and license agreement to research, develop and commercialize XmAb® bispecific antibodies directed against novel targets for the treatment of patients with cancer.

Under the terms of the agreement, Caris will apply its proprietary end-to-end discovery platform, Caris Discovery, to identify novel targets for bispecific antibody drug candidates. Caris Discovery combines insights generated from molecular interrogation of primary patient tissues using ADAPT™, the company’s exclusive aptamer-based proteomic profiling platform; a robust validation pipeline; and CODEai™, the company’s proprietary real-world data platform that integrates Caris’ extensive catalog of molecular data with cancer treatment information. This results in a highly differentiated, orthogonal multi-omics method for target-based discovery.

“There is a critical need to address the paucity of novel therapeutic targets in oncology,” said David Spetzler, M.S., Ph.D., MBA, President and Chief Scientific Officer of Caris Life Sciences. “Consequently, we have launched a comprehensive platform agnostic to therapeutic modality to discover and validate novel cancer targets. Our collaboration with Xencor will combine Caris’ proprietary, multi-omics target discovery engine and Xencor’s XmAb engineering platform to design and manufacture investigational bispecific antibodies to develop first-in-class therapies for patients with cancer.”

“Our collaboration with Caris leverages the plug-and-play nature of the XmAb platform, combining Xencor’s extensive set of protein engineering tools and capabilities with Caris’ innovation in precision oncology,” said John Desjarlais, Ph.D., Senior Vice President and Chief Scientific Officer of Xencor. “Caris has built a unique target discovery platform, coupled with deep genomics information, that will enhance our ability to create and evaluate a new generation of XmAb bispecific and multi-specific antibodies, including T cell engagers, NK cell engagers and other modalities.”

As part of the agreement, Xencor will receive exclusive options to research, develop and commercialize products directed to up to three targets. Caris will receive an upfront payment and will be eligible to receive up to approximately $120 million in license fees, discovery, development, regulatory and sales-based milestones, in addition to royalty payments on net sales of each product commercialized by Xencor and future rights for molecular profiling and companion diagnostics for drug candidates developed under the collaboration.

XmAb® is a registered trademark of Xencor, Inc.


About Caris Life Sciences

Caris Life Sciences® (Caris) is the leading molecular science and technology company actively developing and delivering innovative solutions to revolutionize healthcare and improve patient outcomes. Through comprehensive molecular profiling (Whole Exome and Whole Transcriptome Sequencing) and the application of advanced artificial intelligence (AI) and machine learning algorithms, Caris has created the large-scale clinico-genomic database and cognitive computing needed to analyze and unravel the molecular complexity of disease. This information provides an unmatched resource and the ideal path forward to conduct the basic, fundamental research to accelerate discovery for detection, diagnosis, monitoring, therapy selection and drug development to improve the human condition.

With a primary focus on cancer, Caris’ suite of market-leading molecular profiling offerings assesses DNA, RNA and proteins to reveal a molecular blueprint that helps patients, physicians and researchers better detect, diagnose and treat patients. Caris’ latest advancement is a blood-based, circulating nucleic acids sequencing (cNAS) assay that combines comprehensive molecular analysis (Whole Exome and Whole Transcriptome Sequencing from blood) and serial monitoring – making it the most powerful liquid biopsy assay ever developed.

Headquartered in Irving, Texas, Caris has offices in Phoenix, New York, Denver, Tokyo, Japan and Basel, Switzerland. Caris provides services throughout the U.S., Europe, Asia and other international markets. To learn more, please visit CarisLifeSciences.com or follow us on Twitter (@CarisLS).


About Caris Discovery

Caris Discovery is an innovative end-to-end discovery platform that combines insights generated from molecular interrogation of primary patient tissues using ADAPT™, the company’s exclusive aptamer-based proteomic profiling platform, and CODEai™, the company’s proprietary real-world data platform that integrates Caris’ extensive catalog of molecular data with cancer treatment information. This results in a fully integrated and proprietary set of complementary approaches for identification of novel targets agnostic to treatment modality and validation of existing targets. The ADAPT™ Biotargeting System uses a cancer specific library of synthetically manufactured molecules (aptamers) that bind to a wide range of biological targets and characterize complex biological systems in their native state, enabling them to profile biological samples at a systems-wide scale. The use of aptamer libraries enriched for cancer-specific proteins allows the downstream identification of novel targets directly from patient tissue. The CODEai™ state-of-the-art informatics system and big data architecture provides an unmatched resource for developing a better understanding of molecular mechanisms of cancer.


About Xencor, Inc.

Xencor is a clinical-stage biopharmaceutical company developing engineered antibodies and cytokines for the treatment of cancer and autoimmune diseases. More than 20 candidates engineered with Xencor’s XmAb® technology are in clinical development, and three XmAb medicines are marketed by partners. Xencor’s XmAb antibody engineering technology enables small changes to a protein’s structure that result in new mechanisms of therapeutic action. For more information, please visit www.xencor.com.


Xencor Forward-Looking Statements

Certain statements contained in this press release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements include statements that are not purely statements of historical fact, and can generally be identified by the use of words such as “potential,” “can,” “will,” “plan,” “may,” “could,” “would,” “expect,” “anticipate,” “seek,” “look forward,” “believe,” “committed,” “investigational,” and similar terms, or by express or implied discussions relating to the discovery of novel targets for product candidates, the research, development or commercialization of products or product candidates, the quotations from Xencor’s senior vice president and chief scientific officer and Caris Life Sciences’ president and chief scientific officer, and other statements that are not purely statements of historical fact. Such statements are made on the basis of the current beliefs, expectations, and assumptions of the management of Xencor and are subject to significant known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements and the timing of events to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Such risks include, without limitation, the risks associated with the process of discovering, developing, manufacturing and commercializing drugs that are safe and effective for use as human therapeutics and other risks, including the ability of publicly disclosed preliminary clinical trial data to support continued clinical development and regulatory approval for specific treatments, in each case as described in Xencor’s public securities filings. For a discussion of these and other factors, please refer to Xencor’s annual report on Form 10-K for the year ended December 31, 2021 as well as Xencor’s subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended to date. All forward-looking statements are qualified in their entirety by this cautionary statement and Xencor undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof, except as required by law.

Caris Life Sciences Media Contact:

Lisa Burgner

[email protected]

469.822.9330

Xencor Investor Contact:

Charles Liles

[email protected]

Xencor Media Contact:

Jason I. Spark

Canale Communications
[email protected]
619.849.6005

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SOURCE Caris Life Sciences

Posted on

Eaton Reports Record Second Quarter 2022 Results

Eaton Reports Record Second Quarter 2022 Results

  • Second Quarter Earnings Per Share of $1.50 and Record Quarterly Adjusted Earnings Per Share of $1.87, up 9% Over 2021
  • Record Quarterly Segment Marginsof 20.1%, 150 Basis Points Above the Second Quarter of 2021
  • 11% Organic Sales Growth, at the High End of Guidance, Record Backlog and Robust Order Activity up 25% in Electrical and up 19% in Aerospace
  • Raised Full Year 2022 Organic Growth and Adjusted Earnings Per Share Guidance

DUBLIN–(BUSINESS WIRE)–
Power management company Eaton Corporation plc (NYSE:ETN) today announced that earnings per share were $1.50 for the second quarter of 2022. Excluding charges of $0.24 per share related to intangible amortization, $0.11 per share related to acquisitions and divestitures, and $0.02 per share related to a multi-year restructuring program, adjusted earnings per share of $1.87 were a quarterly record and up 9% over the second quarter of 2021.

Sales in the second quarter of 2022 were $5.2 billion, flat to the second quarter of 2021. Organic sales were up 11% and acquisitions added 2%, which was offset by 11% from the divestiture of the Hydraulics business and 2% from negative currency translation.

Second quarter segment margins were 20.1%, a quarterly record and above the high end of the guidance. This represents a 150-basis point improvement over the second quarter of 2021. Operating cash flow in the second quarter of 2022 was $340 million and free cash flow was $201 million.

Craig Arnold, Eaton chairman and chief executive officer, said, “We had another record quarter amid the external challenges of today’s environment. Robust order growth in Electrical and Aerospace demonstrates continuing strong demand. This performance validates our active portfolio management strategy aimed at capitalizing on secular growth drivers and maintaining resilience amid potential economic weakness. I want to thank our dedicated teams for their strong execution.”

For the full year 2022, the company is raising its organic growth guidance from 9-11% to 11-13% and raising adjusted earnings per share to between $7.36 and $7.76. For the third quarter of 2022, the company anticipates organic growth of 13-15% and adjusted earnings per share of between $1.95 and $2.05.

Business Segment Results

Sales for the Electrical Americas segment were $2.1 billion, up 15% from the second quarter of 2021. Organic sales were up 16%, partially offset by negative currency translation of 1%. Operating profits were $495 million, up 26% over the second quarter of 2021. Operating margins in the quarter were 23.2%, up 190 basis points over the second quarter of 2021.

The twelve-month rolling average of orders remained strong in the second quarter and was up 29% organically, with strength across all end markets. Backlog at the end of June remained strong and was a record, up 89% organically over June 2021.

Sales for the Electrical Global segment were $1.5 billion, up 5% over the second quarter of 2021. Organic sales were up 12%, partially offset by negative currency translation of 7%. Operating profits were $282 million, up 9% over the second quarter of 2021. Operating margins in the quarter were 18.9%, up 60 basis points over the second quarter of 2021.

The twelve-month rolling average of orders in this segment also remained strong in the second quarter and was up 19% organically, driven by strength across all end markets. At the end of June, backlog was also strong, up 38% organically over June 2021.

Aerospace segment sales were $742 million, up 19% from the second quarter of 2021. Organic sales were up 10% and the acquisition of Mission Systems added 12%, which was partially offset by 3% negative currency translation. Operating profits were $163 million, up 24% from the second quarter of 2021. Operating margins in the quarter were 21.9%, up 90 basis points over the second quarter of 2021.

The twelve-month rolling average of orders continued to be strong in the second quarter and was up 19% organically, driven by strength in commercial OEM and commercial aftermarket. Backlog at the end of June was up 12% organically over June 2021.

The Vehicle segment posted sales of $708 million, up 5% from the second quarter of 2021. Organic sales were up 7%, partially offset by 2% from negative currency translation. Operating profits were $108 million and operating margins in the quarter were 15.3%.

eMobility segment sales were $136 million, up 55% over the second quarter of 2021. Organic sales were up 11% and the acquisition of Royal Power Solutions added 46%, which was partially offset by 2% negative currency translation. The segment recorded an operating loss of $2 million, reflecting continued investment in research and development and start-up costs associated with new program wins. Operating margins improved 530 basis points, driven by higher volumes and the impact of the Royal Power Solutions acquisition.

Eaton is an intelligent power management company dedicated to improving the quality of life and protecting the environment for people everywhere. We are guided by our commitment to do business right, to operate sustainably and to help our customers manage power ─ today and well into the future. By capitalizing on the global growth trends of electrification and digitalization, we’re accelerating the planet’s transition to renewable energy, helping to solve the world’s most urgent power management challenges, and doing what’s best for our stakeholders and all of society.

Founded in 1911, Eaton has been listed on the NYSE for nearly a century. We reported revenues of $19.6 billion in 2021 and serve customers in more than 170 countries. For more information, visit www.eaton.com. Follow us on Twitter and LinkedIn.

Notice of conference call: Eaton’s conference call to discuss its second quarter results is available to all interested parties as a live audio webcast today at 11 a.m. United States Eastern time via a link on Eaton’s home page. This news release can be accessed under its headline on the home page. Also available on the website prior to the call will be a presentation on second quarter results, which will be covered during the call.

This news release contains forward-looking statements concerning the third quarter and full year 2022 adjusted earnings per share and organic sales growth, as well as anticipated restructuring program charges. These statements should be used with caution and are subject to various risks and uncertainties, many of which are outside the company’s control. The following factors could cause actual results to differ materially from those in the forward-looking statements: the course of the COVID-19 pandemic globally and government actions related thereto; unanticipated changes in the markets for the company’s business segments; unanticipated downturns in business relationships with customers or their purchases from us; competitive pressures on sales and pricing; supply chain disruptions, unanticipated changes in the cost of material, labor, and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; strikes or other labor unrest; natural disasters; the performance of recent acquisitions; unanticipated difficulties completing or integrating acquisitions; new laws and governmental regulations; interest rate changes; changes in tax laws or tax regulations; stock market and currency fluctuations; and unanticipated deterioration of economic and financial conditions in the United States and around the world. We do not assume any obligation to update these forward-looking statements.

Financial Results

The company’s comparative financial results for the three months ended June 30, 2022, are available on the company’s website, www.eaton.com.

EATON CORPORATION plc

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

June 30

 

Six months ended

June 30

 

 

(In millions except for per share data)

2022

 

2021

 

2022

 

2021

Net sales

$

5,212

 

 

$

5,215

 

 

$

10,054

 

 

$

9,907

 

 

 

 

 

 

 

 

 

Cost of products sold

 

3,505

 

 

 

3,545

 

 

 

6,774

 

 

 

6,729

 

Selling and administrative expense

 

828

 

 

 

876

 

 

 

1,618

 

 

 

1,671

 

Research and development expense

 

168

 

 

 

154

 

 

 

333

 

 

 

302

 

Interest expense – net

 

31

 

 

 

37

 

 

 

63

 

 

 

75

 

Gain on sale of business

 

—

 

 

 

—

 

 

 

24

 

 

 

—

 

Other income – net

 

(41

)

 

 

(17

)

 

 

(50

)

 

 

(28

)

Income before income taxes

 

720

 

 

 

620

 

 

 

1,339

 

 

 

1,158

 

Income tax expense

 

119

 

 

 

114

 

 

 

205

 

 

 

193

 

Net income

 

601

 

 

 

506

 

 

 

1,135

 

 

 

965

 

Less net income for noncontrolling interests

 

—

 

 

 

—

 

 

 

(1

)

 

 

(1

)

Net income attributable to Eaton ordinary shareholders

$

601

 

 

$

506

 

 

$

1,133

 

 

$

964

 

 

 

 

 

 

 

 

 

Net income per share attributable to Eaton ordinary shareholders

 

 

 

 

 

 

 

Diluted

$

1.50

 

 

$

1.26

 

 

$

2.82

 

 

$

2.40

 

Basic

 

1.51

 

 

 

1.27

 

 

 

2.84

 

 

 

2.42

 

 

 

 

 

 

 

 

 

Weighted-average number of ordinary shares outstanding

 

 

 

 

 

 

 

Diluted

 

400.7

 

 

 

401.4

 

 

 

401.2

 

 

 

401.2

 

Basic

 

399.0

 

 

 

398.8

 

 

 

399.1

 

 

 

398.6

 

 

 

 

 

 

 

 

 

Cash dividends declared per ordinary share

$

0.81

 

 

$

0.76

 

 

$

1.62

 

 

$

1.52

 

 

 

 

 

 

 

 

 

Reconciliation of net income attributable to Eaton ordinary shareholders to adjusted earnings

 

 

 

 

 

 

 

Net income attributable to Eaton ordinary shareholders

$

601

 

 

$

506

 

 

$

1,133

 

 

$

964

 

Excluding acquisition and divestiture charges, after-tax

 

44

 

 

 

72

 

 

 

47

 

 

 

109

 

Excluding restructuring program charges, after-tax

 

8

 

 

 

11

 

 

 

22

 

 

 

23

 

Excluding intangible asset amortization expense, after-tax

 

99

 

 

 

101

 

 

 

198

 

 

 

171

 

Adjusted earnings

$

751

 

 

$

690

 

 

$

1,400

 

 

$

1,267

 

 

 

 

 

 

 

 

 

Net income per share attributable to Eaton ordinary shareholders – diluted

$

1.50

 

 

$

1.26

 

 

$

2.82

 

 

$

2.40

 

Excluding per share impact of acquisition and divestiture charges, after-tax

 

0.11

 

 

 

0.18

 

 

 

0.12

 

 

 

0.27

 

Excluding per share impact of restructuring program charges, after-tax

 

0.02

 

 

 

0.03

 

 

 

0.05

 

 

 

0.06

 

Excluding per share impact of intangible asset amortization expense, after-tax

 

0.24

 

 

 

0.25

 

 

 

0.50

 

 

 

0.43

 

Adjusted earnings per ordinary share

$

1.87

 

 

$

1.72

 

 

$

3.49

 

 

$

3.16

 

See accompanying notes.

 
 

EATON CORPORATION plc

 

 

 

 

 

 

 

BUSINESS SEGMENT INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

June 30

 

Six months ended

June 30

 

 

(In millions)

2022

 

2021

 

2022

 

2021

Net sales

 

 

 

 

 

 

 

Electrical Americas

$

2,131

 

 

$

1,849

 

 

$

4,022

 

 

$

3,471

 

Electrical Global

 

1,495

 

 

 

1,418

 

 

 

2,932

 

 

 

2,671

 

Hydraulics

 

—

 

 

 

560

 

 

 

—

 

 

 

1,121

 

Aerospace

 

742

 

 

 

625

 

 

 

1,459

 

 

 

1,144

 

Vehicle

 

708

 

 

 

675

 

 

 

1,379

 

 

 

1,329

 

eMobility

 

136

 

 

 

88

 

 

 

262

 

 

 

171

 

Total net sales

$

5,212

 

 

$

5,215

 

 

$

10,054

 

 

$

9,907

 

 

 

 

 

 

 

 

 

Segment operating profit (loss)

 

 

 

 

 

 

 

Electrical Americas

$

495

 

 

$

393

 

 

$

857

 

 

$

725

 

Electrical Global

 

282

 

 

 

259

 

 

 

561

 

 

 

472

 

Hydraulics

 

—

 

 

 

73

 

 

 

—

 

 

 

157

 

Aerospace

 

163

 

 

 

131

 

 

 

321

 

 

 

227

 

Vehicle

 

108

 

 

 

121

 

 

 

221

 

 

 

234

 

eMobility

 

(2

)

 

 

(6

)

 

 

(5

)

 

 

(13

)

Total segment operating profit

 

1,046

 

 

 

971

 

 

 

1,955

 

 

 

1,802

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

Intangible asset amortization expense

 

(122

)

 

 

(108

)

 

 

(250

)

 

 

(200

)

Interest expense – net

 

(31

)

 

 

(37

)

 

 

(63

)

 

 

(75

)

Pension and other postretirement benefits income

 

9

 

 

 

16

 

 

 

28

 

 

 

30

 

Restructuring program charges

 

(10

)

 

 

(13

)

 

 

(28

)

 

 

(29

)

Other expense – net

 

(171

)

 

 

(209

)

 

 

(302

)

 

 

(370

)

Income before income taxes

 

720

 

 

 

620

 

 

 

1,339

 

 

 

1,158

 

Income tax expense

 

119

 

 

 

114

 

 

 

205

 

 

 

193

 

Net income

 

601

 

 

 

506

 

 

 

1,135

 

 

 

965

 

Less net income for noncontrolling interests

 

—

 

 

 

—

 

 

 

(1

)

 

 

(1

)

Net income attributable to Eaton ordinary shareholders

$

601

 

 

$

506

 

 

$

1,133

 

 

$

964

 

See accompanying notes.

 

EATON CORPORATION plc

 

 

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(In millions)

2022

2021

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash

$

364

 

 

$

297

 

Short-term investments

 

259

 

 

 

271

 

Accounts receivable – net

 

3,837

 

 

 

3,297

 

Inventory

 

3,445

 

 

 

2,969

 

Prepaid expenses and other current assets

 

781

 

 

 

677

 

Total current assets

 

8,687

 

 

 

7,511

 

 

 

 

 

 

 

Property, plant and equipment – net

 

3,043

 

 

 

3,064

 

 

 

 

 

 

 

Other noncurrent assets

 

 

 

 

 

Goodwill

 

14,805

 

 

 

14,751

 

Other intangible assets

 

5,689

 

 

 

5,855

 

Operating lease assets

 

493

 

 

 

442

 

Deferred income taxes

 

403

 

 

 

392

 

Other assets

 

2,033

 

 

 

2,012

 

Total assets

$

35,153

 

 

$

34,027

 

 

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Short-term debt

$

1,392

 

 

$

13

 

Current portion of long-term debt

 

2,030

 

 

 

1,735

 

Accounts payable

 

3,013

 

 

 

2,797

 

Accrued compensation

 

363

 

 

 

501

 

Other current liabilities

 

2,176

 

 

 

2,166

 

Total current liabilities

 

8,974

 

 

 

7,212

 

 

 

 

 

 

 

Noncurrent liabilities

 

 

 

 

 

Long-term debt

 

6,277

 

 

 

6,831

 

Pension liabilities

 

772

 

 

 

872

 

Other postretirement benefits liabilities

 

253

 

 

 

263

 

Operating lease liabilities

 

386

 

 

 

337

 

Deferred income taxes

 

628

 

 

 

559

 

Other noncurrent liabilities

 

1,446

 

 

 

1,502

 

Total noncurrent liabilities

 

9,762

 

 

 

10,364

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Eaton shareholders’ equity

 

16,380

 

 

 

16,413

 

Noncontrolling interests

 

36

 

 

 

38

 

Total equity

 

16,416

 

 

 

16,451

 

Total liabilities and equity

$

35,153

 

 

$

34,027

 

See accompanying notes.

 

EATON CORPORATION plc

NOTES TO THE SECOND QUARTER 2022 EARNINGS RELEASE

Amounts are in millions of dollars unless indicated otherwise (per share data assume dilution). Columns and rows may not add and the sum of components may not equal total amounts reported due to rounding.

Note 1. NON-GAAP FINANCIAL INFORMATION

This earnings release includes certain non-GAAP financial measures. These financial measures include adjusted earnings, adjusted earnings per ordinary share, and free cash flow, each of which differs from the most directly comparable measure calculated in accordance with generally accepted accounting principles (GAAP). A reconciliation of each of these financial measures to the most directly comparable GAAP measure is included in this earnings release. Management believes that these financial measures are useful to investors because they provide additional meaningful financial information that should be considered when assessing our business performance and trends, and they allow investors to more easily compare Eaton Corporation plc’s (Eaton or the Company) financial performance period to period. Management uses this information in monitoring and evaluating the on-going performance of Eaton and each business segment.

The Company’s third quarter and full year adjusted earnings guidance for 2022 is as follows:

 

Three months ended

September 30, 2022

 

Year ended

December 31, 2022

Net income per share attributable to Eaton ordinary shareholders – diluted

$1.60 – $1.70

 

$5.99 – $6.39

Excluding per share impact of acquisition and divestiture charges (after-tax)

0.08

 

0.28

Excluding per share impact of restructuring program charges (after-tax)

0.03

 

0.11

Excluding per share impact of intangible asset amortization expense (after-tax)

0.24

 

0.98

Adjusted earnings per ordinary share

$1.95 – $2.05

 

$7.36 – $7.76

A reconciliation of operating cash flow to free cash flow is as follows:

(In millions)

Three months ended June 30, 2022

Operating cash flow

$

340

 

Capital expenditures for property, plant and equipment

 

(139

)

Free cash flow

$

201

 

Note 2. ACQUISITIONS AND DIVESTITURE OF BUSINESSES

Acquisition of a 50% stake in Jiangsu Huineng Electric Co., Ltd’s circuit breaker business

On July 1, 2022, Eaton acquired a 50 percent stake in Jiangsu Huineng Electric Co., Ltd’s circuit breaker business, which manufactures and markets low-voltage circuit breakers in China. Eaton will account for this investment on the equity method of accounting and will report it within the Electrical Global business segment.

Russia

During the second quarter of 2022, in light of the ongoing war with Ukraine, the Company decided to exit its business operations in Russia and recorded charges of $29 million. The charges consisted primarily of write-downs of accounts receivable, inventory and other assets, and accruals for severance.

Acquisition of Royal Power Solutions

On January 5, 2022, Eaton acquired Royal Power Solutions for $612 million, net of cash received. Royal Power Solutions is a U.S. based manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. Royal Power Solutions is reported within the eMobility business segment.

Sale of Hydraulics business

On August 2, 2021, Eaton completed the sale of the Hydraulics business to Danfoss A/S. As a result of the sale, the Company received $3.1 billion, net of cash sold, and recognized a pre-tax gain of $617 million in 2021. According to the terms of the sales agreement, the Company finalized negotiations of post-closing adjustments with Danfoss A/S during the first quarter of 2022. As a result of these negotiations, the Company recognized an additional pre-tax gain of $24 million. In the second quarter of 2022, Eaton received cash of $22 million from Danfoss A/S to fully settle all post-closing adjustments. The business had sales of $1.3 billion in 2021 through the date of the sale.

Acquisition of Mission Systems

On June 1, 2021, Eaton acquired Mission Systems for $2.80 billion, net of cash received. Mission Systems is a leading manufacturer of air-to-air refueling systems, environmental systems, and actuation primarily for defense markets. Mission Systems is reported within the Aerospace business segment.

Acquisition of Tripp Lite

On March 17, 2021, Eaton acquired Tripp Lite for $1.65 billion, net of cash received. Tripp Lite is a leading supplier of power quality products and connectivity solutions including single-phase uninterruptible power supply systems, rack power distribution units, surge protectors, and enclosures for data centers, industrial, medical, and communications markets in the Americas. Tripp Lite is reported within the Electrical Americas business segment.

Note 3. ACQUISITION AND DIVESTITURE CHARGES

Eaton incurs integration charges and transaction costs to acquire and integrate businesses, and transaction, separation and other costs to divest and exit businesses. Eaton also recognizes gains and losses on the sale of businesses. A summary of these Corporate items is as follows:

 

Three months ended

June 30

 

Six months ended

June 30

(In millions except for per share data)

2022

 

2021

 

2022

 

2021

Acquisition integration, divestiture charges and transaction costs

$

51

 

 

$

87

 

 

$

79

 

 

$

133

 

Gain on the sale of the Hydraulics business

 

—

 

 

 

—

 

 

 

(24

)

 

 

—

 

Total before income taxes

 

51

 

 

 

87

 

 

 

55

 

 

 

133

 

Income tax benefit

 

7

 

 

 

15

 

 

 

8

 

 

 

24

 

Total after income taxes

$

44

 

 

$

72

 

 

$

47

 

 

$

109

 

Per ordinary share – diluted

$

0.11

 

 

$

0.18

 

 

$

0.12

 

 

$

0.27

 

Acquisition integration, divestiture charges and transaction costs in 2022 are primarily related to the acquisitions of Royal Power Solutions, Souriau-Sunbank Connection Technologies, Green Motion, Tripp Lite, and Mission Systems, and other charges to acquire and exit businesses. These costs also included charges of $29 million related to the decision in the second quarter to exit the Company’s business operations in Russia. These charges consisted primarily of write-downs of accounts receivable, inventory and other assets, and accruals for severance. Charges in 2021 are primarily related to the divestiture of the Hydraulics business, the acquisitions of Tripp Lite, Mission Systems, Souriau-Sunbank Connection Technologies, and Ulusoy Elektrik Imalat Taahhut ve Ticaret A.S., and other charges to exit businesses. These charges were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other income – net. In Business Segment Information, the charges were included in Other expense – net.

Note 4. RESTRUCTURING CHARGES

In the second quarter of 2020, Eaton decided to undertake a multi-year restructuring program to reduce its cost structure and gain efficiencies in its business segments and at corporate in order to respond to declining market conditions brought on by the COVID-19 pandemic. Since the inception of the program, the Company has incurred charges of $320 million. These restructuring activities are expected to incur additional expenses of $30 million in 2022 primarily comprised of plant closing and other costs, resulting in total estimated charges of $350 million for the entire program.

A summary of restructuring program charges is as follows:

 

Three months ended

June 30

 

Six months ended

June 30

(In millions except for per share data)

2022

 

2021

 

2022

 

2021

Workforce reductions

$

2

 

 

$

(2

)

 

$

7

 

 

$

—

 

Plant closing and other

 

8

 

 

 

15

 

 

 

21

 

 

 

29

 

Total before income taxes

 

10

 

 

 

13

 

 

 

28

 

 

 

29

 

Income tax benefit

 

2

 

 

 

2

 

 

 

6

 

 

 

6

 

Total after income taxes

$

8

 

 

$

11

 

 

$

22

 

 

$

23

 

Per ordinary share – diluted

$

0.02

 

 

$

0.03

 

 

$

0.05

 

 

$

0.06

 

Restructuring program charges related to the following segments:

 

Three months ended

June 30

 

Six months ended

June 30

(In millions)

2022

 

2021

 

2022

 

2021

Electrical Americas

$

5

 

 

$

3

 

 

$

10

 

 

$

8

 

Electrical Global

 

1

 

 

 

—

 

 

 

6

 

 

 

2

 

Aerospace

 

2

 

 

 

2

 

 

 

5

 

 

 

3

 

Vehicle

 

3

 

 

 

5

 

 

 

6

 

 

 

11

 

eMobility

 

—

 

 

 

1

 

 

 

—

 

 

 

1

 

Corporate

 

—

 

 

 

2

 

 

 

2

 

 

 

4

 

Total

$

10

 

 

$

13

 

 

$

28

 

 

$

29

 

These restructuring program charges were included in Cost of products sold, Selling and administrative expense, Research and development expense, or Other income – net, as appropriate. In Business Segment Information, these restructuring program charges are treated as Corporate items. The projected mature year savings from these restructuring actions are expected to be $250 million when fully implemented in 2023.

Note 5. INTANGIBLE ASSET AMORTIZATION EXPENSE

Intangible asset amortization expense is as follows:

 

Three months ended

June 30

 

Six months ended

June 30

(In millions except for per share data)

2022

 

2021

 

2022

 

2021

Intangible asset amortization expense

$

122

 

 

$

108

 

 

$

250

 

 

$

200

 

Income tax benefit

 

23

 

 

 

7

 

 

 

52

 

 

 

29

 

Total after income taxes

$

99

 

 

$

101

 

 

$

198

 

 

$

171

 

Per ordinary share – diluted

$

0.24

 

 

$

0.25

 

 

$

0.50

 

 

$

0.43

 

 

Eaton Corporation plc

Jennifer Tolhurst, Media Relations, +1 (440) 523-4006

[email protected]

or

Yan Jin, Investor Relations, +1 (440) 523-7558

KEYWORDS: Europe Ireland United States North America Ohio

INDUSTRY KEYWORDS: Other Energy Alternative Energy Energy Engineering Chemicals/Plastics Automotive Manufacturing Aerospace Manufacturing

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Henry Schein Reports Record Second-Quarter 2022 Financial Results

Henry Schein Reports Record Second-Quarter 2022 Financial Results

  • Second-quarter net sales of $3.0 billion up 2.1% compared with second-quarter 2021; internal sales up 6.7% in local currencies when excluding sales of PPE and other COVID-19 related products
  • GAAP diluted EPS of $1.16 compared with second-quarter 2021 GAAP diluted EPS of $1.10 and second-quarter 2021 non-GAAP diluted EPS of $1.11
  • Affirms full-year 2022 GAAP diluted EPS guidance range of $4.75 to $4.91, reflecting growth of 7% to 10% over full-year 2021 GAAP diluted EPS and growth of 5% to 9% over full-year 2021 non-GAAP diluted EPS

MELVILLE, N.Y.–(BUSINESS WIRE)–
Henry Schein, Inc. (Nasdaq: HSIC), the world’s largest provider of health care solutions to office-based dental and medical practitioners, today reported record second-quarter financial results.

“We are pleased to report record second-quarter financial results that reflect good underlying momentum in the business and execution of our strategy,” said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein. “Our solid operational execution this quarter and our results demonstrate the strength of our business. While we are maintaining our full-year 2022 diluted EPS guidance range of $4.75 to $4.91, we are adjusting our expectations for full-year sales growth to reflect changes including a continued strengthening of the U.S. dollar and declining demand for COVID-19 test kits.

“Our Global Dental business once again was driven by strong equipment sales as dentists continued to invest in their practices. Consumable merchandise internal sales growth in local currencies excluding personal protective equipment (PPE) and COVID-19 related products was impacted by an increase in patient appointment cancellations and staff shortages, which we believe were related to COVID-19 infections.

“Our Global Medical business had another excellent quarter with double-digit internal sales growth in local currencies when excluding PPE and COVID-19 related products. During the second quarter, we had strong sales of point-of-care diagnostic tests including flu test kits, as well as generic pharmaceuticals and equipment. Patient traffic was bolstered by a high number of visits for seasonal influenza.

“We are pleased with the good growth in our Technology & Value-Added Services business where, once again, North America and International sales increased by double-digit percentages. Henry Schein One sales growth accelerated compared with prior-year growth, and we are seeing healthy demand from our national DSO accounts for these solutions,” concluded Mr. Bergman.

Second-Quarter Financial Results

  • Total net sales for the quarter ended June 25, 2022, were $3.0 billion, up 2.1% compared with the second quarter of 2021. The 2.1% increase included 2.4% internal growth in local currencies, 2.1% growth from acquisitions, and a 2.4% decrease related to foreign currency exchange. (See Exhibit A for details of sales growth.) Second-quarter internal sales growth in local currencies excluding sales of PPE and COVID-19 related products was 6.7% compared with the prior year.
  • GAAP net income attributable to Henry Schein, Inc. for the second quarter of 2022 was $160 million, or $1.16 per diluted share, compared with second-quarter 2021 GAAP net income attributable to Henry Schein, Inc. of $156 million, or $1.10 per diluted share, and second-quarter 2021 non-GAAP net income attributable to Henry Schein, Inc. of $157 million, or $1.11 per diluted share. (See Exhibit B for a reconciliation of GAAP net income and diluted EPS to non-GAAP net income and diluted EPS.)
  • Global Dental sales for the second quarter of 2022 of $1.9 billion decreased 3.1% compared with the prior-year period. Internally generated sales in local currencies decreased 0.3%, with 0.7% growth from acquisitions and a 3.5% decrease related to foreign currency exchange. The 0.3% internal sales decrease in local currencies included a 1.1% decrease in North America and 1.0% growth internationally.
    • Global Dental consumable merchandise internal sales decreased by 2.2% in local currencies. Excluding sales of PPE and COVID-19 related products, internal sales growth in local currencies was 2.4%. Global Dental equipment internal sales growth was 7.0% in local currencies.
      • North America dental consumable merchandise internal sales in local currencies decreased 3.5% and increased 2.2% when excluding sales of PPE and COVID-19 related products. North America dental equipment internal sales in local currencies increased 8.1%.
      • International dental consumable merchandise internal sales in local currencies decreased 0.3% and increased 2.7% when excluding sales of PPE and COVID-19 related products. International dental equipment internal sales in local currencies increased 5.5%.
  • Global Medical sales for the second quarter of 2022 of $1.0 billion increased 10.3% compared with the same period last year. Internally generated sales in local currencies increased 6.7%, with 3.9% growth from acquisitions and a 0.3% decrease related to foreign currency exchange. Internal sales in local currencies increased 13.6% excluding sales of PPE and COVID-19 related products.
  • Global Technology and Value-Added Services sales of $181 million increased 18.1% compared with the prior-year quarter, driven by Henry Schein One. This included 10.8% internal sales growth in local currencies, 8.8% growth from acquisitions, and a 1.5% decline related to foreign currency exchange.

Year-to-Date Financial Results

  • Total net sales for the first half of 2022 were $6.2 billion, an increase of 5.4% compared with the first half of 2021. The 5.4% increase included 5.0% internal growth in local currencies, 2.3% growth from acquisitions, and a 1.9% decrease related to foreign currency exchange. First-half internal sales growth in local currencies excluding sales of PPE and COVID-19 related products was 7.5% compared with the prior year.
  • GAAP net income attributable to Henry Schein, Inc. for the first half of 2022 was $341 million, or $2.46 per diluted share, compared with first half 2021 GAAP net income attributable to Henry Schein, Inc. of $322 million, or $2.26 per diluted share, and first half 2021 non-GAAP net income attributable to Henry Schein, Inc. of $335 million, or $2.35 per diluted share. Non-GAAP results for the first half of 2021 exclude certain items noted in Exhibit B, which provides a reconciliation of GAAP net income and diluted EPS to non-GAAP net income and diluted EPS.

Stock Repurchase Plan

During the second quarter of 2022, the Company repurchased approximately 1.3 million shares of its common stock at an average price of $81.42 per share, for a total of $110 million. The impact of the repurchase of shares on second-quarter diluted EPS was immaterial. At quarter-end, Henry Schein had approximately $90 million authorized and available for future stock repurchases.

Restructuring Program

Henry Schein is today also announcing a company-wide restructuring plan that is focused on funding the priorities of the strategic plan and streamlining operations and other initiatives to increase efficiency.

The Company expects to record restructuring charges in 2022 and 2023, however an estimate of the amount of these charges has not yet been determined. Any restructuring charges are expected primarily to include severance pay and facility-related costs. The expense savings realized from this plan are expected to mainly affect 2023 and beyond.

Financial Guidance

Henry Schein today provides full-year 2022 financial guidance, as follows:

  • Affirms guidance for full-year 2022 GAAP diluted EPS attributable to Henry Schein, Inc. of $4.75 to $4.91, reflecting growth of 7% to 10% compared with 2021 GAAP diluted EPS of $4.45 and growth of 5% to 9% compared with 2021 non-GAAP diluted EPS of $4.52.

  • Updates full-year 2022 expected sales growth to be approximately 3% to 6% over 2021. This compares with previous guidance for growth of 5% to 8% over 2021 and reflects adverse effects from foreign exchange rates and a decrease in anticipated sales of PPE and COVID-related products, including COVID-19 test kits. Sales of COVID-19 test kits are now expected to decline 25% to 30% from 2021, versus a previously estimated decline of 15% to 25%.

  • Affirms expectations for full-year 2022 operating margin expansion of 39-44 basis points over 2021 GAAP operating margin and expansion of 20-25 basis points over 2021 non-GAAP operating margin.

Guidance for 2022 GAAP diluted EPS and sales growth is for completed or previously announced acquisitions and does not include potential future acquisitions or restructuring expenses. Guidance also assumes that foreign currency exchange rates will remain generally consistent with current levels, that end markets will remain stable and consistent with current market conditions, and that there are no material adverse market changes associated with COVID-19.

Second-Quarter 2022 Conference Call Webcast and Presentation

The Company will hold a conference call to discuss second-quarter 2022 financial results today, beginning at 10:00 a.m. Eastern time. Individual investors are invited to listen to the conference call through Henry Schein’s website by visiting www.henryschein.com/IRwebcasts. In addition, a replay will be available beginning shortly after the call has ended for a period of one week.

The Company will be posting slides that provide a summary of its second-quarter 2022 financial results on its website at https://www.henryschein.com/us-en/Corporate/investor-presentations.aspx

About Henry Schein, Inc.

Henry Schein, Inc. (Nasdaq: HSIC) is a solutions company for health care professionals powered by a network of people and technology. With more than 22,000 Team Schein Members worldwide, the Company’s network of trusted advisors provides more than 1 million customers globally with more than 300 valued solutions that help improve operational success and clinical outcomes. Our Business, Clinical, Technology, and Supply Chain solutions help office-based dental and medical practitioners work more efficiently so they can provide quality care more effectively. These solutions also support dental laboratories, government and institutional health care clinics, as well as other alternate care sites.

Henry Schein operates through a centralized and automated distribution network, with a selection of more than 120,000 branded products and Henry Schein private-brand products in stock, as well as more than 180,000 additional products available as special-order items.

A FORTUNE 500 Company and a member of the S&P 500® index, Henry Schein is headquartered in Melville, N.Y., and has operations or affiliates in 32 countries and territories. The Company’s sales reached $12.4 billion in 2021, and have grown at a compound annual rate of approximately 12.5 percent since Henry Schein became a public company in 1995.

For more information, visit Henry Schein at www.henryschein.com, Facebook.com/HenrySchein, Instagram.com/HenrySchein, and Twitter.com/HenrySchein.

Cautionary Note Regarding Forward-Looking Statements and Use of Non-GAAP Financial Information

In accordance with the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein. All forward-looking statements made by us are subject to risks and uncertainties and are not guarantees of future performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements include EPS guidance and are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. A fuller discussion of our operations, financial condition and status of litigation matters, including factors that may affect our business and future prospects, is contained in documents we have filed with the United States Securities and Exchange Commission, or SEC, including our Annual Report on Form 10-K, and will be contained in all subsequent periodic filings we make with the SEC. These documents identify in detail important risk factors that could cause our actual performance to differ materially from current expectations. Forward looking statements include the overall impact of the Novel Coronavirus Disease 2019 (COVID-19) on the Company, its results of operations, liquidity and financial condition (including any estimates of the impact on these items), the rate and consistency with which dental and other practices resume or maintain normal operations in the United States and internationally, expectations regarding personal protective equipment (“PPE”) and COVID-19 related product sales and inventory levels, whether additional resurgences or variants of the virus will adversely impact the resumption of normal operations, whether vaccine mandates will adversely impact the Company (by disrupting our workforce and/or business), whether supply chain disruptions will adversely impact our business, the impact of restructuring programs as well as of any future acquisitions, and more generally current expectations regarding performance in current and future periods. Forward looking statements also include the (i) ability of the Company to have continued access to a variety of COVID-19 test types, expectations regarding COVID-19 test sales, demand and inventory levels, as well as the efficacy or relative efficacy of the test results given that the test efficacy has not been, or will not have been, independently verified under normal FDA procedures and (ii) potential for the Company to distribute the COVID-19 vaccines and ancillary supplies.

Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: risks associated with COVID-19 and any variants thereof, as well as other disease outbreaks, epidemics, pandemics, or similar wide-spread public health concerns and other natural disasters; our dependence on third parties for the manufacture and supply of our products; our ability to develop or acquire and maintain and protect new products (particularly technology products) and technologies that achieve market acceptance with acceptable margins; transitional challenges associated with acquisitions, dispositions and joint ventures, including the failure to achieve anticipated synergies/benefits; financial and tax risks associated with acquisitions, dispositions and joint ventures; certain provisions in our governing documents that may discourage third-party acquisitions of us; effects of a highly competitive (including, without limitation, competition from third-party online commerce sites) and consolidating market; the repeal or judicial prohibition on implementation of the Affordable Care Act; changes in the health care industry; risks from expansion of customer purchasing power and multi-tiered costing structures; increases in shipping costs for our products or other service issues with our third-party shippers; general global and domestic macroeconomic and political conditions, including inflation, deflation, fluctuations in the value of the U.S. dollar as compared to foreign currencies and changes to other economic indicators, international trade agreements, potential trade barriers and terrorism; failure to comply with existing and future regulatory requirements; risks associated with the EU Medical Device Regulation; failure to comply with laws and regulations relating to health care fraud or other laws and regulations; failure to comply with laws and regulations relating to the collection, storage and processing of sensitive personal information or standards in electronic health records or transmissions; changes in tax legislation; risks related to product liability, intellectual property and other claims; litigation risks; new or unanticipated litigation developments and the status of litigation matters; risks associated with customs policies or legislative import restrictions; cyberattacks or other privacy or data security breaches; risks associated with our global operations; our dependence on our senior management, employee hiring and retention, and our relationships with customers, suppliers and manufacturers; and disruptions in financial markets. The order in which these factors appear should not be construed to indicate their relative importance or priority.

We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control or predict. Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction of actual results. We undertake no duty and have no obligation to update forward-looking statements except as required by law.

Included within the press release are non-GAAP financial measures that supplement the Company’s Consolidated Statements of Income prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company’s actual results prepared under GAAP to exclude certain items. In the schedules attached to the press release, the non-GAAP measures have been reconciled to and should be considered together with the Consolidated Statements of Income. Management believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures.

(TABLES TO FOLLOW)

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in millions, except share and per share data)

(unaudited)

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

 

June 25,

 

June 26,

 

June 25,

 

June 26,

 

 

 

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

3,030

 

$

2,967

 

$

6,209

 

$

5,892

Cost of sales

 

 

2,085

 

 

2,076

 

 

4,291

 

 

4,110

 

 

Gross profit

 

 

945

 

 

891

 

 

1,918

 

 

1,782

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

680

 

 

635

 

 

1,362

 

 

1,249

 

Depreciation and amortization

 

 

45

 

 

45

 

 

92

 

 

89

 

Restructuring costs

 

 

–

 

 

1

 

 

–

 

 

4

 

 

Operating income

 

 

220

 

 

210

 

 

464

 

 

440

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

3

 

 

1

 

 

5

 

 

3

 

Interest expense

 

 

(9)

 

 

(7)

 

 

(16)

 

 

(13)

 

Other, net

 

 

–

 

 

1

 

 

–

 

 

1

 

 

Income before taxes, equity in earnings of affiliates

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and noncontrolling interests

 

 

214

 

 

205

 

 

453

 

 

431

Income taxes

 

 

(52)

 

 

(47)

 

 

(109)

 

 

(104)

Equity in earnings of affiliates

 

 

5

 

 

6

 

 

9

 

 

12

Net income

 

 

167

 

 

164

 

 

353

 

 

339

 

Less: Net income attributable to noncontrolling interests

 

 

(7)

 

 

(8)

 

 

(12)

 

 

(17)

Net income attributable to Henry Schein, Inc.

 

$

160

 

$

156

 

$

341

 

$

322

Earnings per share attributable to Henry Schein, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.17

 

$

1.11

 

$

2.49

 

$

2.28

 

Diluted

 

$

1.16

 

$

1.10

 

$

2.46

 

$

2.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

137,350,488

 

 

140,358,428

 

 

137,323,076

 

 

141,316,258

 

Diluted

 

 

138,869,064

 

 

141,656,883

 

 

139,055,205

 

 

142,537,906

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

 

 

 

 

 

June 25,

 

December 25,

 

 

 

 

 

2022

 

2021

 

 

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

108

 

$

118

 

Accounts receivable, net of reserves of $63 and $67

 

 

1,409

 

 

1,452

 

Inventories, net

 

 

1,823

 

 

1,861

 

Prepaid expenses and other

 

 

449

 

 

413

 

 

 

Total current assets

 

 

3,789

 

 

3,844

Property and equipment, net

 

 

356

 

 

366

Operating lease right-of-use assets

 

 

327

 

 

325

Goodwill

 

 

2,833

 

 

2,854

Other intangibles, net

 

 

603

 

 

668

Investments and other

 

 

416

 

 

424

 

 

 

Total assets

 

$

8,324

 

$

8,481

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

901

 

$

1,054

 

Bank credit lines

 

 

85

 

 

51

 

Current maturities of long-term debt

 

 

4

 

 

11

 

Operating lease liabilities

 

 

74

 

 

76

 

Accrued expenses:

 

 

 

 

 

 

 

 

Payroll and related

 

 

328

 

 

385

 

 

Taxes

 

 

124

 

 

137

 

 

Other

 

 

560

 

 

593

 

 

 

Total current liabilities

 

 

2,076

 

 

2,307

Long-term debt

 

 

769

 

 

811

Deferred income taxes

 

 

33

 

 

42

Operating lease liabilities

 

 

276

 

 

268

Other liabilities

 

 

357

 

 

377

 

 

 

Total liabilities

 

 

3,511

 

 

3,805

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

586

 

 

613

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Preferred stock, $0.01 par value, 1,000,000 shares authorized,

 

 

 

 

 

 

 

 

none outstanding

 

 

–

 

 

–

 

Common stock, $0.01 par value, 480,000,000 shares authorized,

 

 

 

 

 

 

 

 

136,439,560 outstanding on June 25, 2022 and

 

 

 

 

 

 

 

 

137,145,558 outstanding on December 25, 2021

 

 

1

 

 

1

 

Additional paid-in capital

 

 

–

 

 

–

 

Retained earnings

 

 

3,834

 

 

3,595

 

Accumulated other comprehensive loss

 

 

(241)

 

 

(171)

 

 

Total Henry Schein, Inc. stockholders’ equity

 

 

3,594

 

 

3,425

 

Noncontrolling interests

 

 

633

 

 

638

 

 

 

Total stockholders’ equity

 

 

4,227

 

 

4,063

 

 

Total liabilities, redeemable noncontrolling interests and stockholders’ equity

 

$

8,324

 

$

8,481

 

 

 

 

 

 

 

 

 

 

 

 

 

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

 

 

 

June 25,

 

June 26,

 

June 25,

 

June 26,

 

 

 

 

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

167

 

$

164

 

$

353

 

$

339

 

 

Adjustments to reconcile net income to net cash provided by

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

53

 

 

50

 

 

108

 

 

99

 

 

 

 

Stock-based compensation expense

 

 

15

 

 

17

 

 

27

 

 

30

 

 

 

 

Benefit from losses on trade and other accounts receivable

 

 

(1)

 

 

(1)

 

 

–

 

 

(4)

 

 

 

 

Provision for (benefit from) deferred income taxes

 

 

(12)

 

 

(5)

 

 

(15)

 

 

6

 

 

 

 

Equity in earnings of affiliates

 

 

(5)

 

 

(6)

 

 

(9)

 

 

(12)

 

 

 

 

Distributions from equity affiliates

 

 

6

 

 

6

 

 

10

 

 

11

 

 

 

 

Changes in unrecognized tax benefits

 

 

(5)

 

 

(9)

 

 

(1)

 

 

(6)

 

 

 

 

Other

 

 

(6)

 

 

3

 

 

(13)

 

 

3

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

5

 

 

(17)

 

 

21

 

 

102

 

 

 

 

 

Inventories

 

 

13

 

 

(46)

 

 

4

 

 

(124)

 

 

 

 

 

Other current assets

 

 

(63)

 

 

(41)

 

 

(37)

 

 

(86)

 

 

 

 

 

Accounts payable and accrued expenses

 

 

(10)

 

 

44

 

 

(198)

 

 

(136)

 

Net cash provided by operating activities

 

 

157

 

 

159

 

 

250

 

 

222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of fixed assets

 

 

(24)

 

 

(18)

 

 

(43)

 

 

(32)

 

 

Payments related to equity investments and business acquisitions,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

net of cash acquired

 

 

(2)

 

 

(92)

 

 

(7)

 

 

(296)

 

 

Proceeds from (payments for) loan to affiliate

 

 

2

 

 

(2)

 

 

6

 

 

(2)

 

 

Other

 

 

(8)

 

 

(6)

 

 

(15)

 

 

(11)

 

Net cash used in investing activities

 

 

(32)

 

 

(118)

 

 

(59)

 

 

(341)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in bank borrowings

 

 

–

 

 

(5)

 

 

30

 

 

(5)

 

 

Proceeds from issuance of long-term debt

 

 

–

 

 

200

 

 

–

 

 

200

 

 

Principal payments for long-term debt

 

 

(4)

 

 

(102)

 

 

(57)

 

 

(120)

 

 

Payments for repurchases and retirement of common stock

 

 

(110)

 

 

(112)

 

 

(110)

 

 

(201)

 

 

Payments for taxes related to shares withheld for employee taxes

 

 

(3)

 

 

(2)

 

 

(29)

 

 

(8)

 

 

Proceeds from (distributions to) noncontrolling shareholders

 

 

(7)

 

 

3

 

 

(12)

 

 

(4)

 

 

Acquisitions of noncontrolling interests in subsidiaries

 

 

(9)

 

 

(1)

 

 

(19)

 

 

(1)

 

Net cash used in financing activities

 

 

(133)

 

 

(19)

 

 

(195)

 

 

(139)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(10)

 

 

1

 

 

(6)

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(18)

 

 

23

 

 

(10)

 

 

(254)

 

Cash and cash equivalents, beginning of period

 

 

126

 

 

144

 

 

118

 

 

421

 

Cash and cash equivalents, end of period

 

$

108

 

$

167

 

$

108

 

$

167

 

Exhibit A – Second Quarter Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Schein, Inc.

 

2022 Second Quarter

 

Sales Summary

 

(in millions)

 

(unaudited)

 

Q2 2022 over Q2 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global

Q2 2022

 

Q2 2021

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

Dental Merchandise

$

1,441

 

$

1,508

 

-4.5%

 

-3.2%

 

-1.3%

 

0.9%

 

-2.2%

 

Dental Equipment

 

412

 

 

404

 

2.2%

 

-4.8%

 

7.0%

 

0.0%

 

7.0%

 

Total Dental

 

1,853

 

 

1,912

 

-3.1%

 

-3.5%

 

0.4%

 

0.7%

 

-0.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical

 

996

 

 

902

 

10.3%

 

-0.3%

 

10.6%

 

3.9%

 

6.7%

 

Total Health Care Distribution

 

2,849

 

 

2,814

 

1.2%

 

-2.5%

 

3.7%

 

1.7%

 

2.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

181

 

 

153

 

18.1%

 

-1.5%

 

19.6%

 

8.8%

 

10.8%

 

Total Global

$

3,030

 

$

2,967

 

2.1%

 

-2.4%

 

4.5%

 

2.1%

 

2.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

Q2 2022

 

Q2 2021

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dental Merchandise

$

879

 

$

902

 

-2.5%

 

-0.3%

 

-2.2%

 

1.3%

 

-3.5%

 

Dental Equipment

 

245

 

 

227

 

7.6%

 

-0.5%

 

8.1%

 

0.0%

 

8.1%

 

Total Dental

 

1,124

 

 

1,129

 

-0.4%

 

-0.3%

 

-0.1%

 

1.0%

 

-1.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical

 

977

 

 

875

 

11.6%

 

0.0%

 

11.6%

 

4.0%

 

7.6%

 

Total Health Care Distribution

 

2,101

 

 

2,004

 

4.8%

 

-0.2%

 

5.0%

 

2.3%

 

2.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

158

 

 

131

 

20.5%

 

-0.1%

 

20.6%

 

10.2%

 

10.4%

 

Total North America

$

2,259

 

$

2,135

 

5.8%

 

-0.1%

 

5.9%

 

2.8%

 

3.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

Q2 2022

 

Q2 2021

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dental Merchandise

$

562

 

$

606

 

-7.5%

 

-7.4%

 

-0.1%

 

0.2%

 

-0.3%

 

Dental Equipment

 

167

 

 

177

 

-4.7%

 

-10.3%

 

5.6%

 

0.1%

 

5.5%

 

Total Dental

 

729

 

 

783

 

-6.8%

 

-8.0%

 

1.2%

 

0.2%

 

1.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical

 

19

 

 

27

 

-30.4%

 

-8.3%

 

-22.1%

 

0.0%

 

-22.1%

 

Total Health Care Distribution

 

748

 

 

810

 

-7.6%

 

-8.0%

 

0.4%

 

0.2%

 

0.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

23

 

 

22

 

3.5%

 

-9.9%

 

13.4%

 

0.0%

 

13.4%

 

Total International

$

771

 

$

832

 

-7.3%

 

-8.1%

 

0.8%

 

0.2%

 

0.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

 

Exhibit A – Year-to-Date Sales
 

Henry Schein, Inc.

2022 Second Quarter Year-to-Date

Sales Summary

(in millions)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2 2022 Year-to Date over Q2 2021 Year-to-Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global

Q2 2022

 

Q2 2021

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dental Merchandise

$

2,867

 

$

2,929

 

-2.1%

 

-2.6%

 

0.5%

 

1.0%

 

-0.5%

Dental Equipment

 

814

 

 

772

 

5.5%

 

-3.9%

 

9.4%

 

0.1%

 

9.3%

Total Dental

 

3,681

 

 

3,701

 

-0.5%

 

-2.8%

 

2.3%

 

0.7%

 

1.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical

 

2,168

 

 

1,893

 

14.5%

 

-0.2%

 

14.7%

 

3.8%

 

10.9%

Total Health Care Distribution

 

5,849

 

 

5,594

 

4.6%

 

-1.9%

 

6.5%

 

1.8%

 

4.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

360

 

 

298

 

20.7%

 

-1.1%

 

21.8%

 

10.8%

 

11.0%

Total Global

$

6,209

 

$

5,892

 

5.4%

 

-1.9%

 

7.3%

 

2.3%

 

5.0%

 

North America

Q2 2022

 

Q2 2021

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dental Merchandise

$

1,745

 

$

1,736

 

0.6%

 

-0.1%

 

0.7%

 

1.2%

 

-0.5%

Dental Equipment

 

484

 

 

438

 

10.3%

 

-0.3%

 

10.6%

 

0.0%

 

10.6%

Total Dental

 

2,229

 

 

2,174

 

2.5%

 

-0.2%

 

2.7%

 

1.0%

 

1.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical

 

2,127

 

 

1,838

 

15.7%

 

0.0%

 

15.7%

 

4.0%

 

11.7%

Total Health Care Distribution

 

4,356

 

 

4,012

 

8.6%

 

-0.1%

 

8.7%

 

2.4%

 

6.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

314

 

 

255

 

23.0%

 

0.0%

 

23.0%

 

12.6%

 

10.4%

Total North America

$

4,670

 

$

4,267

 

9.4%

 

-0.1%

 

9.5%

 

3.0%

 

6.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

Q2 2022

 

Q2 2021

 

Total Sales Growth

 

Foreign Exchange Growth

 

Local Currency Growth

 

Acquisition Growth

 

Local Internal Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dental Merchandise

$

1,122

 

$

1,193

 

-6.0%

 

-6.2%

 

0.2%

 

0.6%

 

-0.4%

Dental Equipment

 

330

 

 

334

 

-0.9%

 

-8.7%

 

7.8%

 

0.1%

 

7.7%

Total Dental

 

1,452

 

 

1,527

 

-4.9%

 

-6.7%

 

1.8%

 

0.4%

 

1.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical

 

41

 

 

55

 

-25.4%

 

-6.8%

 

-18.6%

 

0.0%

 

-18.6%

Total Health Care Distribution

 

1,493

 

 

1,582

 

-5.6%

 

-6.7%

 

1.1%

 

0.4%

 

0.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Technology and value-added services

 

46

 

 

43

 

7.0%

 

-7.5%

 

14.5%

 

0.0%

 

14.5%

Total International

$

1,539

 

$

1,625

 

-5.3%

 

-6.8%

 

1.5%

 

0.5%

 

1.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

Exhibit B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Henry Schein, Inc.

2022 Second Quarter

Reconciliation of reported GAAP net income and diluted EPS attributable to Henry Schein, Inc.

to non-GAAP net income and diluted EPS attributable to Henry Schein, Inc.

(in millions, except per share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Second Quarter

 

 

 

Year-to-Date

 

 

 

 

 

 

 

 

%

 

 

 

 

 

 

 

 

%

 

 

 

2022

 

 

2021

 

Growth

 

 

 

2022

 

 

2021

  

Growth

 

Net income attributable to Henry Schein, Inc.

$

160

 

$

156

 

3.3

%

 

$

341

 

$

322

  

6.1

%

Diluted EPS attributable to Henry Schein, Inc.

$

1.16

 

$

1.10

 

5.5

%

 

$

2.46

 

$

2.26

  

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring costs-Pre-tax (1)

$

–

 

$

1

 

 

 

 

$

–

 

$

4

 

 

 

Income tax benefit for restructuring costs (1)

 

–

 

 

–

 

 

 

 

 

–

 

 

(1)

 

 

 

Settlement and litigation costs – Pre-tax (2)

 

–

 

 

1

 

 

 

 

 

–

 

 

14

 

 

 

Income tax benefit for settlement and litigation costs (2)

 

–

 

 

(1)

 

 

 

 

 

–

 

 

(4)

 

 

 

Total non-GAAP adjustments to net income

$

–

 

$

1

 

 

 

 

$

–

 

$

13

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjustments to diluted EPS

 

–

 

 

0.01

 

 

 

 

 

–

 

 

0.09

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income attributable to Henry Schein, Inc.

$

160

 

$

157

 

2.3

%

 

$

341

 

$

335

  

1.9

%

Non-GAAP diluted EPS attributable to Henry Schein, Inc.

$

1.16

 

$

1.11

 

4.5

%

 

$

2.46

 

$

2.35

  

4.7

%

Management believes that non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures.

  1. Represents Q2 2021 restructuring costs and an after-tax effect of $1 million and YTD 2021 restructuring costs of $4 million, net of $1 million tax expense, resulting in an after-tax effect of $3 million.
  2. Represents a Q2 2021 pre-tax charge of $3 million, net of $2 million of noncontrolling interests, related to settlement and litigation costs, net of a tax benefit of $1 million resulting in a net after-tax charge of $0 million. Represents a YTD 2021 pre-tax charge of $16 million, net of $2 million of noncontrolling interests, related to settlement and litigation costs, net of a tax benefit of $4 million, resulting in a net after-tax charge of $10 million.

 

Investors

Ronald N. South

Senior Vice President and Chief Financial Officer

[email protected]

(631) 845-2802

Graham Stanley

Vice President, Investor Relations and Strategic Financial Project Officer

[email protected]

(631) 843-5963

Media

Ann Marie Gothard

Vice President, Global Corporate Media Relations

[email protected]

(631) 390-8169

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: General Health Health Dental Practice Management Health Technology

MEDIA:

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