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Caldwell Issues Fiscal 2020 Fourth Quarter and Full Year Financial Results

PR Newswire

  • Fourth quarter revenue of $11.3 million.
  • Fourth quarter operating profit of $2.3 million.
  • Annual revenue of $58.2 million.
  • Annual operating profit of $3.8 million.

TORONTO, Nov. 12, 2020 /PRNewswire/ – Retained executive search firm The Caldwell Partners International Inc. (TSX: CWL) today issued its financial results for the fiscal 2020 fourth quarter and full year ended August 31, 2020. All references to quarters or years are for the fiscal periods unless otherwise noted and all currency amounts are in Canadian dollars.

Financial Highlights (in $000s except per share amounts)


THREE MONTHS ENDED
AUGUST 31


YEAR ENDED
AUGUST 31


2020


2019


2020


2019

Professional fees

$11,128

$20,502

$56,690

$69,749

License fees

$24

$71

$177

$700

Direct expense reimbursements

$102

$398

$1,326

$1,689

     Revenues

$11,254

$20,971

$58,193

$72,138

Cost of sales

$8,696

$14,838

$44,352

$53,046

Government stimulus grants

($2,205)

–

($2,446)

–

Reimbursed direct expenses

$102

$398

$1,326

$1,689

Gross profit

$4,661

$5,735

$14,961

$17,403

Selling, general and administrative expenses

$2,752

$4,460

$11,588

$14,074

Goodwill impairment

–

$1,521

–

$1,521

Government stimulus grants

($393)

–

($393)

–

     Operating profit (loss)

$2,302

($246)

$3,766

$1,808

Interest expense on lease liability¹

$147

–

$367

–

Investment income (loss)

($7)

($67)

$605

($211)

Foreign exchange (gain) loss

($128)

$105

($179)

$168

     Earnings (loss) before tax

$2,290

($284)

$2,973

$1,851

Income tax expense (income)

($282)

$670

$127

$1,526

     Net earnings (loss) after tax

$2,572

($954)

$2,846

$325

     Net earnings (loss) per share

$0.126

($0.047)

$0.139

$0.016


1.


Effective September 1, 2019 IFRS 16 was implemented resulting in a change to the way leases are treated and giving rise to interest expense on lease liability. During periods prior to fiscal 2020, all lease related expenses were recognized as occupancy costs and included in expenses in arriving at operating profit.

“Fiscal 2020 was a year unlike any other,” said John Wallace, chief executive officer. “After an incredible start to the year, the world went in a completely unexpected direction due to the pandemic and the ensuing economic uncertainty. The effect on our business has been significant, as employment levels and hiring at our clients were dramatically reduced, but it has also been the catalyst for an impressive level of innovation and adaptation inside our firm. Our team has done a superlative job of delivering outstanding and transformative leadership talent for our clients, and we have seen monthly sequential increases in new search volumes and business development activity. We remain extremely confident in the team’s ability to garner market share throughout a recovering market.”

Wallace continued: “As a result of quick and decisive steps to actively manage costs, preserve capital and enhance liquidity, we have come out of a challenging year in a position of financial strength. We have a balance sheet and a cash position with liquidity to operate during the current pandemic environment and do intend to make strategic investments to expand our industry, geographic and service coverage as the opportunities arise.”

Financial Highlights (all numbers expressed in $000s)

Impact of the COVID-19 pandemic on our business:
We experienced record growth results leading up to the pandemic’s occurrence. Fiscal 2019 revenue of $72.1 million was the highest in our firm’s history, and the first half of fiscal 2020 (September 1, 2019 to February 28, 2020) was 12% higher than the same period in fiscal 2019. Since the onset of the pandemic, we have seen significant pressure on our business.

On January 30, 2020, the World Health Organization (WHO) characterized the novel coronavirus (COVID-19) as a public health emergency. At that time, there had not been a direct negative impact seen in the regions we operate in of Canada, the United States and the United Kingdom. On March 11, the WHO expanded its characterization of COVID-19 to a global pandemic. The impact of COVID-19 on the Company has been significant, impacting both revenue and costs. We were working entirely remotely beginning in March, and while we have reopened our offices as health restrictions provide, we are still encouraging our people to continue working remotely while safety concerns remain. We do not anticipate a full return to our offices until sometime later in 2021.

Government stimulus grants:
As discussed more fully in note 11 to our annual financial statements, we have participated in available stimulus grants offered by the governments in Canada and the United States to help offset the negative impact of the COVID-19 pandemic. The total amount of government stimulus grants recognized during 2020 was $2,839 ($241 and $2,598 in the third and fourth quarters, respectively). The costs are shown as offsets to the functional cost categories they applied to. Of the total, $707 was a direct grant pertaining to Canada, shown as an offset to cost of sales in the third and fourth quarters of $241 and $466, respectively. $2,132 pertained to the United States in the form of a loan that is eligible for forgiveness if certain conditions are met. We believe we have complied with the relevant provisions of the program by validly using the entire proceeds of the loan for qualifying expenses during the coverage period and have therefore concluded that forgiveness of the loan is probable. As a result, we have recategorized the proceeds from a loan to that of a government grant, represented by deductions in cost of goods sold ($1,739) and selling, general and administrative expenses ($393), respectively.

We applied for forgiveness review by our lender and the US government on September 21, 2020. It is unknown how long the loan forgiveness review process will take, with indication from our lender of up to five months. Ultimate forgiveness is dependent on the bank review and a further review by the Small Business Administration of the United States. While we believe the forgiveness criteria has been achieved, no guarantee of forgiveness can be given until formal forgiveness is received. It is possible the loan will not be forgiven and will need to be repaid.

  • Operating revenue:

    Fourth Quarter

    • Professional fees for the fourth quarter of fiscal 2020 decreased 45.7% (46.5% excluding a favourable 0.8% variance from exchange rate fluctuations) from the comparable period last year to $11,128 (2019: $20,502).

      The decrease in professional fees is attributable to reductions in the Number of Assignments to 110 (2019: 127) and Average Fee per Assignment to $101 ($100 excluding exchange rate fluctuations; 2019: $161). The decrease in both factors is primarily the result of the pandemic’s economic impact on our clients and related pricing pressures among executive search firms. The Number of Assignments decreased on a lower Number of Assignments per Partner at 2.9 (2019: 3.2) and a lower Average Number of Partners at 37.3 (2019: 40.0).

      On a segment basis, $7,541 of professional fees were generated from the US (2019: $15,950), $2,304 from Canada (2019: $4,496) and $1,283 from Europe (2019: $56).

    • License fees from our licensee in New Zealand for the use of the Caldwell brand and intellectual property for the fiscal 2020 fourth quarter were $24 (2019: $71).
    • Direct expenses incurred and billed to clients during the fiscal 2020 fourth quarter were $102 (2019: $398).

      Full year

      Professional fees for 2020 decreased 18.7% (19.5% excluding a favourable 0.8% variance from exchange rate fluctuations) over the comparable period last year to $56,690 (2019: $69,749).

      The decrease in professional fees is attributable to a reduction in the Number of Assignments to 408 (2019: 439) and a lower Average Fee per Assignment of $139 ($138, excluding exchange rate fluctuations; 2019: $159). Similar to the fourth quarter figures, both factors were negatively impacted by the pandemic in the second half of the year. The Number of Assignments decreased on a lower Number of Assignments per Partner at 10.6 (2019: 11.1) and a lower Average Number of Partners at 38.5 (2019: 39.5).

      On a segment basis, $42,842 of professional fees was generated from the US (2019: $53,282), $10,607 from Canada (2019: $15,497) and $3,241 from Europe (2019: $970).

    • License fees for the year ended August 31, 2020 were $177 (2019: $700).
    • Year to date direct expenses incurred and billed to clients were $1,326 (2019: $1,689).
  • Operating profit:
    Fourth Quarter

    • The fourth quarter’s operating profit increased $2,548 to $2,302 (2019: loss of $246). The increase was the result of lower Revenue, Net of Reimbursements ($9,421) being more than offset by lower cost of sales ($6,142), lower selling, general and administrative expenses ($1,708), government stimulus grants received in 2020 ($2,598) and the impairment expense taken in the fourth quarter of fiscal 2019 to write-off the goodwill balance of our European segment ($1,521). Excluding the net favourable impact of exchange rate changes on our operations of for the quarter of $33, operating profit on a constant currency basis increased $2,515 to $2,269.
    • Selling, general and administrative expenses for the fourth quarter decreased $1,708 (38.3%), from $4,460 to $2,752. Excluding unfavourable exchange rate variances of $15 (0.3%), expenses decreased $1,723 (38.6%). This constant currency decrease was the result of management bonus accrual reversals as a result of not meeting targeted performance ($604); decreased share-based compensation expense, the result of a lower share price and a reduction in performance factors, as targeted performance was not achieved ($439); lower marketing and business development expenses due to our consultants’ inability to travel as a result of COVID-19 travel restrictions and reduced marketing spend ($381); a municipal tax assessment in Q4 2019 primarily related to prior years ($350); and offsetting favourable variances across other smaller cost categories (-$51).
    • Effective September 1, 2019 we implemented IFRS 16. An interest expense on lease liability of $104 (2019: $nil) was recognized during the quarter per IFRS 16.
    • On a segment basis, fourth quarter operating profit was $678 (2019: loss of $5) from Canada, $1,360 (2019: $1,714) from the US and $264 (2019: loss of $1,955) from Europe.

      Full year

    • Operating profit for the full year increased $1,958 to $3,766 (2019: $1,808). The increase was the result of lower Revenue, Net of Reimbursements ($13,582) being more than offset by lower cost of sales ($8,694), lower selling, general and administrative expenses ($2,486), government stimulus grants received in 2020 ($2,839), and the impairment expense taken in the fourth quarter of fiscal 2019 to write-off the goodwill balance of our European segment ($1,521).
    • Selling, general and administrative expenses for the full year decreased $2,486 (17.7%), to 11,588 from $14,074. Excluding unfavourable exchange rate variances of $74 (0.5%), expenses decreased $2,560 (18.2%). This constant currency decrease was the result of lower share-based compensation expense as a result of a lower share price and a reduction in performance factors as a result of not meeting targeted performance in the current period ($804); management bonus accrual reversals as a result of not meeting targeted performance ($670); lower marketing and business development expenses ($532); Lower office expenses as a result of adoption of IFRS 16 ($456), largely offset by the interest on lease liability (see below); a municipal tax assessment in Q4 2019 primarily related to prior years ($350); lower legal expenses with last year’s expenses being higher than usual due to our pursuit of a claim against a former client ($265); lower costs of annual practice meetings, held last year but not in the current year ($188); lower partner recruitment expenses ($111); and offsetting investment costs in our Caldwell Analytics growth initiative through higher consulting fees (-$501); Higher office expenses on the early termination of and losses on disposition related to Dallas lease (-$292); and unfavourable variances across other smaller cost categories (-$23).
    • For 2020 an interest expense on lease liability of $324 (2019: $nil) was recognized.
    • On a segment basis, operating profit for the year was $1,290 (2019: $1,490) from Canada, $2,494 (2019: $3,334) from the US and a loss of $18 (2019: loss of $3,016) from Europe.
  • Net earnings after tax:
    • Fourth quarter net income was $2,572 ($0.126 per share), as compared to a net loss of $954 ($0.047 per share) in the comparable period a year earlier.
    • Full-year net income was $2,846 ($0.139 per share) compared to $325 ($0.016 per share) last year.
    • Income tax expense was lower than statutory rates in the fourth quarter and for the full year. This was largely due the cancellation of an intercompany loan balance between our US and UK entities. The cancellation generated a deductible loss in the US which was able to be carried back up to five years to generate an immediate benefit. In the UK, the cancellation generated taxable income, but we were able to fully applied loss carryforward from prior years to shield current tax expense.

Average Number of Partners, Annualized Professional Fees per Partner, Number of Assignments, Number of Assignments per Partner, Average Fee per Assignment, Revenue, Net of Reimbursements and Unencumbered Cash do not have any standardized meaning under IFRS and may not be comparable to measures presented by other companies. These operating measures are used by the Company to analyze its results. Please refer to section “Non–GAAP Financial Measures and Other Operating Measures” in the Company’s MD&A for a definition of these terms.

For a complete discussion of the quarterly financial results, please see the company’s Management Discussion and Analysis posted on SEDAR at www.sedar.com.

About Caldwell

At Caldwell we believe Talent Transforms. As a leading provider of executive talent, we enable our clients to thrive and succeed by helping them identify, recruit and retain the best people. Our reputation–50 years in the making–has been built on transformative searches across functions and geographies at the very highest levels of management and operations. With offices and partners across North America, Europe and Asia Pacific, we take pride in delivering an unmatched level of service and expertise to our clients.

Understanding that transformative talent is not limited to executive levels, our Caldwell Advance solution focuses on emerging leaders and advancing professionals who can also have a profound impact on a company’s ability to turn potential into success. We also leverage our skills and networks to provide agile talent solutions in the form of flexible and on-demand advisory solutions for companies looking for support in strategy and operations. Caldwell Analytics is a talent optimization solution that uses highly respected, results-driven assessments to align our clients’ talent and business strategies, driving better business results.

Caldwell’s Common shares are listed on The Toronto Stock Exchange (TSX: CWL). Please visit our website at www.caldwellpartners.com for further information.

Forward-Looking Statements

Forward-looking statements in this document are based on current expectations that are subject to the significant risks and uncertainties cited. These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. The Company is subject to many factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statement including, but not limited to, our ability to attract and retain key personnel; exposure to our partners taking our clients with them to another firm; the performance of the US, Canadian and international economies,
including the impact of pandemic diseases;
 competition from other companies directly or indirectly engaged in executive search; liability risk in the services we perform; potential legal liability from clients, employees and candidates for employment; cybersecurity requirements, vulnerabilities, threats and attacks; damage to our brand reputation; our ability to align our cost structure to changes in our revenue; adverse tax law rulings; our ability to generate sufficient cash flow from operations to support our growth and maintain our dividend;
 
technological advances may significantly disrupt the labour market and weaken demand for human capital at a rapid rate; foreign currency exchange rate fluctuations; affiliation agreements may fail to renew or affiliates may be acquired; marketable securities valuation fluctuations; increasing dependence on third parties for the execution of critical functions; volatility of the market price and volume of our common shares; potential impairment of our acquired goodwill and intangible assets; and disruption as a result of actions of certain stockholders or potential acquirers of the Company. For more information on the factors that could affect the outcome of forward-looking statements, refer to the “Risk Factors” section of our Annual Information Form and other public filings (copies of which may be obtained at www.sedar.com). These factors should be considered carefully, and the reader should not place undue reliance on forward-looking statements. Although any forward-looking statements are based on what management currently believes to be reasonable assumptions, we cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management’s assumptions may prove to be incorrect. Except as required by Canadian securities laws, we do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by us or on our behalf; such statements speak only as of the date made. The forward-looking statements included herein are expressly qualified in their entirety by this cautionary language.


THE CALDWELL PARTNERS INTERNATIONAL INC.


CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


(in $000s Canadian)


As at


As at


August 31


August 31


2020


2019


Assets

Current assets

Cash and cash equivalents

14,481

10,623

Marketable securities

–

5,832

Accounts receivable

7,316

11,915

Income taxes receivable

928

–

Unbilled revenue

2,430

4,086

Prepaid expenses and other assets

2,553

2,320

27,708

34,776

Non-current assets

Restricted cash

45

45

Marketable securities

71

85

Advances

695

1,047

Property and equipment

2,128

1,379

Right-of-use assets

7,691

–

Goodwill

1,288

1,313

Deferred income taxes

1,245

1,963

Total assets

40,871

40,608


Liabilities

Current liabilities

Accounts payable

1,764

3,389

Compensation payable

12,812

21,222

Lease liability

1,873

–

Dividends payable

–

459

Income taxes payable

–

576

16,449

25,646

Non-current liabilities

Compensation payable

734

1,068

Provisions

–

49

Lease liability

6,932

–

24,115

26,763

Equity attributable to owners of the Company

Share capital

7,515

7,515

Contributed surplus

15,013

15,005

Accumulated other comprehensive income

419

581

Deficit 

(6,191)

(9,256)

Total equity

16,756

13,845

Total liabilities and equity

40,871

40,608

 


THE CALDWELL PARTNERS INTERNATIONAL INC.


CONSOLIDATED STATEMENTS OF EARNINGS


Twelve months ended


August 31


(in $000s Canadian, except per share amounts)


2020


2019

Revenues

Professional fees

56,690

69,749

Licence fees

177

700

Direct expense reimbursements

1,326

1,689

58,193

72,138

Cost of sales expenses

Cost of sales

44,352

53,046

Government stimulus grants

(2,446)

–

Reimbursed direct expenses

1,326

1,689

43,232

54,735

Gross profit

14,961

17,403

Operating expenses

Selling, general and administrative

11,588

14,074

Goodwill impairment

–

1,521

Government stimulus grants

(393)

–

11,195

15,595

Operating profit

3,766

1,808

Finance expenses (income)

Interest expense on lease liability

367

–

Investment loss (income)

605

(211)

Foreign exchange (gain) loss

(179)

168

Earnings before income tax

2,973

1,851

Income tax expense

127

1,526

Net earnings for the year attributable to owners of the Company

2,846

325

Earnings per share

Basic & Diluted

$0.139

$0.016


CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS


(in $000s Canadian)


Twelve months ended


August 31


2020


2019

Net earnings for the year

2,846

325

Other comprehensive income:

Items that may be reclassified subsequently to net earnings

Gain (loss) on marketable securities

210

(55)

Cumulative translation adjustment

(372)

197

Comprehensive earnings for the year attributable to owners of the Company

2,684

467

Certain comparative figures have been restated to conform with current year presentation.


 


THE CALDWELL PARTNERS INTERNATIONAL INC.


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


(in $000s Canadian)

Accumulated Other Comprehensive

Income (Loss)

Unrealized

Cumulative

Gains (Loss) on

Contributed

Translation

Marketable

Total

Deficit

Share Capital

Surplus

Adjustment

Securities

Equity


Balance – August 31, 2018


(9,854)


7,515


15,002


770


487


13,920

Adoption of IFRS 9

818

–

–

–

(818)

0

Adoption of IFRS 15

1,291

–

–

–

–

1,291

Net earnings for the year

325

–

–

–

–

325

Dividend payments declared

(1,836)

–

–

–

–

(1,836)

Share-based payment expense

–

–

3

–

–

3

Change in unrealized loss on

–

–

–

–

(55)

(55)

     marketable securities available for sale 

Change in cumulative translation adjustment

–

–

–

197

–

197


Balance – August 31, 2019


(9,256)


7,515


15,005


967


(386)


13,845

Adoption of IFRS 16

1,137

–

–

–

–

1,137

Net earnings for the year

2,846

–

–

–

–

2,846

Dividend payments declared

(918)

–

–

–

–

(918)

Share-based payment expense

–

–

8

–

–

8

Change in unrealized loss on

–

–

–

–

210

210

     marketable securities available for sale 

Change in cumulative translation adjustment

–

–

–

(372)

–

(372)


Balance – August 31, 2020


(6,191)


7,515


15,013


595


(176)


16,756

The accompanying notes are an integral part of these consolidated financial statements.

 


THE CALDWELL PARTNERS INTERNATIONAL INC.


CONSOLIDATED STATEMENTS OF CASH FLOW


(in $000s Canadian)


Twelve months ended


   August 31


2020


2019

Cash flow provided by (used in)

Operating activities

Net earnings for the year

2,846

325

Add (deduct) items not affecting cash

Depreciation of property and equipment

461

520

Amortization of intangible assets

–

94

Depreciation of right-of-use assets

1,565

–

Amortization of advances

1,128

898

Gain on government stimulus grants

(2,132)

–

Loss on disposition of assets

103

20

Loss on disposition of right-of-use assets

87

–

Reduction in lease liability due to early termination

(91)

–

Interest expense on lease liabilities

367

–

Fees received in shares

(23)

–

Loss (gain) on marketable securities classified as FVPL

625

(177)

Share based payment expense

8

3

(Gain) loss on unrealized foreign exchange on subsidiary loans

(262)

136

Decrease in provisions

–

(44)

Decrease in deferred revenue

–

(449)

Decrease (increase) in unbilled revenue

1,623

(558)

Decrease (increase) in deferred income taxes

520

(541)

Decrease in cash settled share-based compensation

(334)

(547)

Decrease in goodwill

–

1,521

Changes in working capital

(5,102)

(1,160)

Net cash provided by operating activities

1,389

41

Investing activities

Proceeds from sale of marketable securities

5,207

–

Tenant inducement on right-of-use assets

367

–

Payment of advances

(576)

(2,260)

Proceeds from release of restricted cash

–

94

Purchase of property and equipment

(1,320)

(564)

Proceeds from the disposition of property and equipment

–

38

Net cash used in investing activities

3,678

(2,692)

Financing activities

Dividend payments

(1,377)

(1,836)

Payment of lease liabilities

(2,021)

–

Sublease payments received

310

–

Proceeds from government loan

2,267

–

Net cash provided by (used in) financing activities

(821)

(1,836)

Effect of exchange rate changes on cash and cash equivalents

(388)

225

Net increase (decrease) in cash and cash equivalents

3,858

(4,262)

Cash and cash equivalents, beginning of year

10,623

14,885

Cash and cash equivalents, end of year

14,481

10,623


The net impact of opening balance sheet adjustments as a result of implementing IFRS 15 and 16 have been
eliminated in the creation of the consolidated statements of cash flow.

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SOURCE The Caldwell Partners International Inc.

Posted on

Avalon Holdings Corporation Announces Third Quarter Results

PR Newswire

WARREN, Ohio, Nov. 12, 2020 /PRNewswire/ — Avalon Holdings Corporation (NYSE Amex: AWX) today announced financial results for the third quarter of 2020.

Net operating revenues in the third quarter of 2020 were $16.6 million compared with $18.0 million in the third quarter of 2019.  The Company recorded net income attributable to Avalon Holdings Corporation common shareholders of $0.8 million in the third quarter of 2020 compared with net income attributable to Avalon Holdings Corporation common shareholders of $0.1 million in the third quarter of 2019.  For the third quarter of 2020, basic net income per share attributable to Avalon Holdings Corporation common shareholders was $0.20 compared with basic net income per share attributable to Avalon Holdings Corporation common shareholders of $0.04 in the third quarter of 2019.

For the first nine months of 2020, net operating revenues were $44.1 million compared with $51.1 million for the first nine months of 2019.  The Company incurred a net loss attributable to Avalon Holdings Corporation common shareholders of approximately $0.5 million in the first nine months of 2020 compared with a net loss attributable to Avalon Holdings Corporation common shareholders of less than $0.1 million in the first nine months of 2019.  For the first nine months of 2020, basic net loss per share attributable to Avalon Holdings Corporation common shareholders was $0.12 compared with basic net loss per share attributable to Avalon Holdings Corporation common shareholders of $0.00 in the first nine months of 2019.

Avalon Holdings Corporation provides waste management services to industrial, commercial, municipal and governmental customers in selected northeastern and midwestern U.S. markets, captive landfill management services and salt water injection well operations.  Avalon Holdings Corporation also owns Avalon Resorts and Clubs Inc., which includes the operation of a hotel and its associated resort amenities, four golf courses and related country clubs and a multipurpose recreation center.

 


AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)


(in thousands, except for per share amounts)


Three Months Ended


Nine Months Ended 


September 30,


September 30,


2020


2019


2020


2019

Net operating revenues:

Waste management services

$            9,326

$          11,572

$          29,547

$          35,908

Food, beverage and merchandise sales

2,851

2,587

5,247

6,027

Other golf and related operations

4,448

3,859

9,301

9,116

Total golf and related operations

7,299

6,446

14,548

15,143

Total net operating revenues

16,625

18,018

44,095

51,051

Costs and expenses:

Waste management services operating costs

7,393

9,229

23,473

28,773

Cost of food, beverage and merchandise

1,092

1,169

2,184

2,683

Golf and related operations operating costs

4,270

4,266

9,777

10,361

Depreciation and amortization expense

741

630

2,152

1,848

Selling, general and administrative expenses

2,110

2,379

6,269

6,990

Operating income

1,019

345

240

396

Other income (expense):

Interest expense

(302)

(222)

(913)

(600)

Other income, net

83

41

264

257

Income (loss) before income taxes

800

164

(409)

53

Provision for income taxes

27

38

95

135

Net income (loss)

773

126

(504)

(82)

Less net loss attributable to non-controlling interest in subsidiary

(8)

(18)

(37)

(67)

Net income (loss) attributable to Avalon Holdings Corporation common shareholders

$               781

$               144

$              (467)

$                (15)

Income (loss) per share attributable to Avalon Holdings Corporation common shareholders:

Basic net income (loss) per share

$              0.20

$              0.04

$             (0.12)

$             (0.00)

Diluted net income (loss) per share

$              0.20

$              0.04

$             (0.12)

$             (0.00)

Weighted average shares outstanding – basic 

3,875

3,875

3,875

3,875

Weighted average shares outstanding – diluted

3,875

3,893

3,875

3,875

 

 


AVALON HOLDINGS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)


(in thousands)


September 30,


December 31,


2020


2019


Assets

Current Assets:

Cash and cash equivalents

$              4,667

$              1,446

Accounts receivable, net

8,679

12,009

Unbilled membership dues receivable

866

602

Inventories

1,034

813

Prepaid expenses

810

725

Other current assets

15

15

Total current assets

16,071

15,610

Property and equipment, net

50,473

48,978

Property and equipment under finance leases, net

5,913

5,878

Operating lease right-of-use assets

1,280

1,466

Restricted cash

4,246

7,185

Noncurrent deferred tax asset

8

8

Other assets, net

36

39

Total assets

$             78,027

$             79,164


Liabilities and Equity

Current liabilities:

Current portion of long term debt

$              2,622

$              1,015

Current portion of obligations under finance leases

343

295

Current portion of obligations under operating leases

533

513

Accounts payable

8,094

11,719

Accrued payroll and other compensation

956

961

Accrued income taxes

46

93

Other accrued taxes

362

434

Deferred membership dues revenue

4,041

3,153

Other liabilities and accrued expenses

1,125

839

Total current liabilities

18,122

19,022

Long term debt, net of current portion

21,972

21,570

Obligations under finance leases, net of current portion

622

555

Obligations under operating leases, net of current portion

747

953

Asset retirement obligation

100

100

Equity:

Total Avalon Holdings Corporation Shareholders’ Equity

36,567

37,030

Non-controlling interest in subsidiary

(103)

(66)

Total shareholders’ equity

36,464

36,964

Total liabilities and equity

$             78,027

$             79,164

 

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SOURCE Avalon Holdings Corporation

Posted on

The Walt Disney Company Board Decides to Forgo Next Semi-Annual Cash Dividend

The Walt Disney Company Board Decides to Forgo Next Semi-Annual Cash Dividend

BURBANK, Calif.–(BUSINESS WIRE)–
The Walt Disney Company (NYSE: DIS) Board of Directors today announced that it will not declare a semi-annual cash dividend for the second half of fiscal 2020, in light of the ongoing impact of COVID-19 and the Company’s decision to prioritize investment in its direct-to-consumer initiatives.

Forward Looking Statements

Certain statements and information in this communication may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995, including statements identified by the words “will not” or similar words and other statements that are not historical in nature. These statements are made on the basis of management’s views and assumptions regarding future events and business performance as of the time the statements are made. Management does not undertake any obligation to update these statements.

Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, integration initiatives and timing of synergy realization, new or expanded business lines or cessation of certain operations) or other business decisions, as well as from developments beyond the Company’s control, including:

  • changes in domestic and global economic conditions, competitive conditions and consumer preferences;
  • adverse weather conditions or natural disasters;
  • health concerns;
  • international, regulatory, political, or military developments;
  • technological developments; and
  • labor markets and activities;

each such risk includes the current and future impacts of, and is amplified by, COVID-19 and related mitigation efforts.

Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable):

  • the performance of the Company’s theatrical and home entertainment releases;
  • the advertising market for broadcast and cable television programming;
  • demand for our products and services;
  • construction;
  • expenses of providing medical and pension benefits;
  • income tax expense;
  • performance of some or all company businesses either directly or through their impact on those who distribute our products; and
  • achievement of anticipated benefits of the TFCF transaction.

Additional factors are set forth in the Company’s Annual Report on Form 10-K for the year ended September 28, 2019 under Item 1A, “Risk Factors,” Item 7, “Management’s Discussion and Analysis,” Item 1, “Business,” and subsequent reports, including, among others, quarterly reports on Form 10-Q.

Media Contacts

Zenia Mucha

[email protected]

(818) 560-5300

David Jefferson

[email protected]

(818) 560-4832

Investor Contact

Lowell Singer

[email protected]

(818) 560-6601

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Entertainment Theme Parks Mobile Entertainment Other Entertainment General Entertainment TV and Radio Film & Motion Pictures Music Licensing (Entertainment)

MEDIA:

Posted on

Monarch Gold Reports Its First Quarter Results

PR Newswire

MONTREAL, Nov. 12, 2020 /PRNewswire/ – MONARCH GOLD CORPORATION (“Monarch” or the “Corporation“) (TSX: MQR) (OTCQX: MRQRF) (FRANKFURT: MR7) reported its results today for the first quarter ended September 30, 2020. Amounts are in Canadian dollars unless otherwise indicated.

Summary of financial results


 (In
dollars, except per share data
)


THREE MONTHS ENDED
SEPTEMBER 30


2020

2019

Revenues


–

3,144,699

Gross margin


–

1,586,598

Net earnings (net loss)


(2,531,837)

1,178,934

Net earnings (net loss) per share, basic and diluted


(0.009)

0.005


(In dollars)


SEPTEMBER 30, 2020

JUNE 30, 2020

Cash and cash equivalents


15,809,741

11,274,470

Investments


14,825,617

14,939,261

Total assets


98,449,289

92,987,397

“The recently announced transaction with Yamana Gold (see press release dated November 2, 2020) is the highlight of this new fiscal year for Monarch and will change the face of Monarch forever for the benefit of our shareholders,” said Jean-Marc Lacoste, President and Chief Executive Officer of Monarch.

“The new company that will result from the transaction with Yamana Gold will be called Monarch Mining Corp (“Monarch Mining“). It will be a fully integrated mining company, from exploration through to production. Its assets will include the Beaufor mine, the Croinor Gold, McKenzie Break and Swanson gold properties and the Beacon mill, as well as $14 million in cash. It is important to note that all those assets will be wholly owned, and that 100% of our titles will be free and clear once the transaction is completed.”

“Monarch Mining’s mission will be to become a gold producer, while continuing to develop its projects with strong exploration potential. A 42,500-metre drilling program is currently under way at the Beaufor mine to increase the mine’s resources with a view to resuming production and exploration is ongoing at McKenzie Break to build the resource on this very promising high-grade gold project, with results expected in the coming weeks on both projects. Furthermore, given the bull market for gold, we intend to pursue of efforts to find a partner to help us put Croinor Gold into production. The material mined from Croinor Gold and Beaufor could be processed at our fully permitted and operational Beacon mill. Overall, our plan is straightforward, and we intend to execute it to the best of our abilities to make Monarch Mining a success for our shareholders as well,” concluded Mr. Lacoste.

The technical and scientific content of this press release has been reviewed and approved by Marc-André Lavergne, P.Eng., the Corporation’s qualified person under National Instrument 43–101.

Forward-Looking Statements
The forward-looking statements in this press release involve known and unknown risks, uncertainties and other factors that may cause Monarch’s actual results, performance and achievements to be materially different from the results, performance or achievements expressed or implied therein. Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this press release.


www.monarquesgold.com

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SOURCE Monarch Gold Corporation

Posted on

Creative Realities Reports Third Quarter 2020 Results

PR Newswire

LOUISVILLE, Ky., Nov. 12, 2020 /PRNewswire/ — Creative Realities, Inc. (“Creative Realities,” “CRI,” or the “Company”) (NASDAQ: CREX, CREXW), a leading provider of digital marketing solutions, announced its financial results for the three- and nine-months ended September 30, 2020.

Rick Mills, Chief Executive Officer, commented, “CRI’s third quarter results highlight the tremendous adaptability and commitment that our personnel have shown in the face of adversity and challenges in our core business throughout the COVID-19 pandemic, specifically both (1) the flexibility to pivot our business to Safe Space Solutions’ products and services that remain relevant in a marketplace with continued business closures, and (2) the ability to continue to drive reductions in expenses despite the incremental costs associated with launching new products and services.”

Mr. Mills continued, “Revenue for the third quarter 2020 increased approximately $1.4 million as compared to the first and second quarter of 2020 as we began to see adoption of our Thermal Mirror product in the marketplace. We continue to believe that CRI’s solution is a market leader and has opportunity for continued adoption in the marketplace throughout the remainder of 2020 and into 2021 as employers seek to adopt technology that will further enhance the safety of the workplace for their employees. We continued to focus on reducing controllable expenses, reducing total operating expenses by approximately $0.7 million, or 23%, versus the same quarter in 2019, exclusive of non-cash charges in each period. Net loss in the quarter reduced to $0.6 million, which resulted in the generation of $0.3 million of EBITDA, an improvement of $2.0 million versus the second quarter of 2020. As we look forward and into 2021, and as businesses continue to reopen throughout the United States and Canada, we fully expect our Safe Space Solutions, including the Thermal Mirror product, to be a go-to consideration for return to work products and for our core digital signage revenues to return to growth.”



Third Quarter Financial Update

Revenue, gross profit, and gross margin:

  • Revenues were $5.1 million for the three months ended September 30, 2020, a decrease of $1.6 million, or 24%, as compared to the same period in 2019.
  • Hardware revenues were $2.8 million for the three months ended September 30, 2020, an increase of $0.8 million, or 40%, as compared to the same quarter in the prior year, driven by the introduction of the Thermal Mirror product which generated approximately $1.8 million in hardware sales during the quarter. Gross margin on hardware revenue was 34.0% in the third quarter of 2020 as compared to 27.0% during the same period in 2019 due to the shift in mix of hardware revenues from displays to the Thermal Mirror product which generates higher gross profit.
  • Services and other revenues were $2.3 million for the three months ended September 30, 2020, a decrease of $2.4 million, or 52%, as compared to the same period in 2019, driven primarily by a reduction in installation services of $1.5 million year-over-year combined with a general reduction in other software and managed services revenue due to customer closures in response to the COVID-19 pandemic. Gross margin on services and other revenue was 65.4% in the quarter ended September 30, 2020 compared to 58.9% in the same period in 2019 driven by less labor-intensive services offerings related to the Thermal Mirror product.
  • Managed services revenue, which includes both software-as-a-service (“SaaS”) and help desk technical subscription services for our traditional digital signage and new Thermal Mirror product offerings, were $1.3 million for the three months ended September 30, 2020, a reduction of $0.5 million, or 28%, driven by customer closures in response to the COVID-19 pandemic.
  • Gross profit was $2.4 million for the three months ended September 30, 2020, a decrease of $0.9 million, or 26%, compared to the same period in 2019. Consolidated gross margin decreased to 47.9% for the three months ended September 30, 2020 from 49.1% in the same quarter in the prior year, driven primarily by a higher ratio of hardware revenue to total revenue in the period on continued sales of the Thermal Mirror product.

Operating expenses:

  • For the three months ended September 30, 2020 as compared to the same period in the prior year:
    • Sales and marketing expenses decreased by $0.1 million, or 21% while research and development expenses decreased by $0.1 million, or 25%, each driven by a reduction in employee-related expenses as a result of a combination of headcount reductions, salary reductions implemented for retained personnel, and a reduction in travel-related expenses in the current year including the elimination of participation in industry trade shows.
    • General and administrative expenses decreased by $0.3 million, or 12%; inclusive of incremental non-cash charges related to the amortization of stock compensation of $0.2 million during the period. Exclusive of the incremental year-over-year increase in non-cash charges, general and administrative expenses decreased by $0.5 million, or 22%, for the three months ended September 30, 2020 as compared to the same period in 2019.

Operating loss, net loss, and EBITDA:

  • Operating loss was $0.4 million for the three months ended September 30, 2020 as compared to operating income of $0.1 million during the same period in 2019, despite a reduction in revenue period-over-period of $1.6 million.
  • Net loss was $0.6 million for the three months ended September 30, 2020 as compared to net income of $0.2 million for the same period in 2019.
  • EBITDA was $0.3 million for the three months ended September 30, 2020 as compared to $0.8 million the same period in 2019. Adjusted EBITDA was $0.2 million for the three months ended September 30, 2020, compared to $0.4 million for the same period in 2019. See below for a description of these non-GAAP financial measures and reconciliation to our net loss.

Mr. Mills concluded, “We believe that we have weathered the worst of the COVID-19 pandemic and that the incremental changes we have made to both our business operations and cost structure will continue to benefit us well into the future as CRI returns to revenue growth. Despite the challenges that 2020 has brought, we believe that CRI has gained momentum against our peers within the industry by remaining an open, flexible, and transparent business partner to our vendors and customers and our flexibility and responsiveness during this crisis will contribute to our continued success as businesses reopen and markets stabilize.”

Conference Call Details
The Company will host a conference call to review the third quarter results and provide additional commentary about the Company’s recent performance, on Friday, November 13, 2020 at 9:00 am Eastern Time.

Prior to the call, participants should register at http://bit.ly/criearnings2020Q3. Once registered, participants can use the weblink provided in the registration email to listen to the live webcast.  An archived edition of the second quarter earnings conference call will also be posted on our website at www.cri.com later that same day and will remain available to interested parties via the same link for one year.

About Creative Realities, Inc.
Creative Realities helps clients use the latest omnichannel technologies to inspire better customer experiences.  Founded over 15 years ago, CRI designs, develops and deploys consumer experiences for high-end enterprise level networks, and is actively providing recurring SaaS and support services for more than fifteen diverse vertical markets, including Automotive, Advertising Networks, Apparel & Accessories, Convenience Stores, Foodservice/QSR, Gaming, Movie Theater, and Stadium Venues.

Use of Non-GAAP Measures
Creative Realities, Inc. prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding “EBITDA” and “Adjusted EBITDA.”  CRI defines “EBITDA” as earnings before interest, income taxes, depreciation and amortization of intangibles. CRI defines “Adjusted EBITDA” as EBITDA excluding stock-based compensation, fair value adjustments and both cash and non-cash non-recurring gains and charges. EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, EBITDA and Adjusted EBITDA are used internally in planning and evaluating the Company’s operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of the Company’s operations that, when coupled with the GAAP results, provides a more complete understanding of the Company’s financial results.

EBITDA and Adjusted EBITDA should not be considered as an alternative to net income/(loss) or to net cash used in operating activities as measures of operating results or liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating the Company’s performance. A reconciliation of GAAP net income/(loss) to EBITDA and Adjusted EBITDA is included in the accompanying financial schedules.

For further information, please refer to Creative Realities, Inc.’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on March 12, 2020, and its other filings available online at www.sec.gov.

Cautionary Note on Forward-Looking Statements
This press release contains certain statements that are deemed “forward-looking statements” under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and includes, among other things, discussions of our business strategies, future operations and capital resources.  Words such as “may,” “likely,” “anticipate,” “expect,” “intend,” “plans,” “seeks,” will,” should,” “future,” “propose,” “believe” and variations of these words or similar expressions (or the negative versions of such words or expressions) indicate forward-looking statements.  These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.  Some of these risks are discussed in the “Risk Factors” section contained in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2019, and Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, and the Company’s subsequent filings with the U.S. Securities and Exchange Commission.  Important factors, among others, that may affect actual results or outcomes include: the inability to recognize the anticipated benefits of our acquisition of Allure Global Solutions, Inc.; our ability to meet Nasdaq’s continued listing standards; our ability to execute on our business plan; our ability to retain key personnel; potential litigation; and general economic and market conditions impacting demand for our products and services, including those as a result of the COVID-19 pandemic.

Except where required by law, the Company assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA

(in thousands, unaudited)

Creative Realities, Inc. prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding “EBITDA” and “Adjusted EBITDA.”  CRI defines “EBITDA” as earnings before interest, income taxes, depreciation and amortization of intangibles. CRI defines “Adjusted EBITDA” as EBITDA excluding stock-based compensation, fair value adjustments and both cash and non-cash non-recurring gains and charges.

EBITDA and Adjusted EBITDA are non-GAAP financial measures and should not be considered as a substitute for net income (loss), operating income (loss) or any other performance measure derived in accordance with United States generally accepted accounting principles (“GAAP”) or as an alternative to net cash provided by operating activities as a measure of CRI’s profitability or liquidity. CRI’s management believes EBITDA and Adjusted EBITDA are useful financial metrics because they allow external users of CRI’s financial statements, such as industry analysts, investors, lenders and rating agencies, to more effectively evaluate CRI’s operating performance, compare the results of its operations from period to period and against CRI’s peers without regard to CRI’s financing methods, hedging positions or capital structure and because it highlights trends in CRI’s business that may not otherwise be apparent when relying solely on GAAP measures. CRI also presents EBITDA and Adjusted EBITDA because it believes EBITDA and Adjusted EBITDA are important supplemental measures of its performance that are frequently used by others in evaluating companies in its industry. Because EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income (loss) and may vary among companies, the EBITDA and Adjusted EBITDA CRI presents may not be comparable to similarly titled measures of other companies.

The following table presents a reconciliation of EBITDA and Adjusted EBITDA from net loss, CRI’s most directly comparable financial measure calculated and presented in accordance with GAAP.


September 30,


June 30,


March 31,


December 31,


September 30,


Quarters ended


2020


2020


2020


2019


2019

GAAP net loss

$

(585)

$

(2,459)

$

(13,183)

$

563

$

242

Interest expense:

Amortization of debt discount

85

84

85

105

105

Other interest, net

179

176

142

109

94

Depreciation/amortization:

Amortization of intangible assets

161

158

159

204

147

 Amortization of finance lease assets

5

5

7

7

8

 Amortization of share-based awards

248

100

50

21

31

    Depreciation of property, equipment & software

212

216

200

167

123

Income tax expense/(benefit)

(1)

4

(155)

128

51

EBITDA

$

304

$

(1,716)

$

(12,695)

$

1,304

$

801

Adjustments

Change in fair value of Special Loan

–

551

151

–

–

Gain on settlement of obligations

(114)

(1)

(40)

(1,632)

(406)

Gain on earnout liability

–

–

–

(250)

–

Loss on disposal of assets

13

–

–

–

–

Loss on goodwill impairment

–

–

10,646

–

–

  Stock-based compensation – Director grants

25

19

31

31

31

Stock-based compensation – PRSU vesting

–

–

–

–

–

Adjusted EBITDA

$

228

$

(1,147)

$

(1,907)

$

(547)

$

426

 

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SOURCE Creative Realities, Inc.

Posted on

American Homes 4 Rent Announces Distributions

PR Newswire

AGOURA HILLS, Calif., Nov. 12, 2020 /PRNewswire/ — American Homes 4 Rent (NYSE: AMH) (the “Company”), a leading provider of high-quality single-family homes for rent, today announced that the Board of Trustees declared a dividend of $0.05 per share on the Company’s common shares for the fourth quarter of 2020. The distribution will be payable in cash on January 11, 2021 to shareholders of record on January 4, 2021.

The Board of Trustees also declared a per share quarterly distribution on the Company’s cumulative redeemable perpetual preferred shares of $0.40625 per share on the 6.5% Series D shares, $0.39688 per share on the 6.35% Series E shares, $0.36719 per share on the 5.875% Series F shares, $0.36719 per share on the 5.875% Series G shares and $0.39063 per share on the 6.25% Series H shares payable in cash on December 31, 2020 to shareholders of record on December 15, 2020.


About American Homes 4 Rent

American Homes 4 Rent (NYSE: AMH) is a leader in the single-family home rental industry and “American Homes 4 Rent” is fast becoming a nationally recognized brand for rental homes, known for high-quality, good value and tenant satisfaction. We are an internally managed Maryland real estate investment trust, or REIT, focused on acquiring, developing, renovating, leasing, and operating attractive, single-family homes as rental properties. As of September 30, 2020, we owned 53,229 single-family properties in selected submarkets in 22 states.

Additional information about American Homes 4 Rent is available on our website at www.americanhomes4rent.com.


Forward-Looking Statements

This press release contains “forward-looking statements” that relate to beliefs, expectations or intentions and similar statements concerning matters that are not of historical fact and are generally accompanied by words such as “believe,” “expect,” “will,” “intend,” “anticipate” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements include the payment and anticipated timing of the payment of distributions of the Company’s common and preferred shares. The Company has based these forward-looking statements on its current expectations and assumptions about future events. While the Company’s management considers these expectations to be reasonable, they are inherently subject to risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company’s control and could adversely affect our cash flows and ability to pay distributions. Additional information about these and other important factors that may cause our actual results to differ materially from anticipated results expressed or implied by these forward-looking statements is available in the Company’s most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement to conform to actual results or changes in expectations, except as required by applicable law.

Contact:
American Homes 4 Rent
Investor Relations
Phone: (855) 794-2447
Email: [email protected]

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SOURCE American Homes 4 Rent

Posted on

Randon Reports Third Quarter 2020 Results

PR Newswire

CAXIAS DO SUL, Brazil, Nov. 12, 2020 /PRNewswire/ — Randon S.A – Implementos e Participações (B3 – RAPT3 and RAPT4), which operates within the segments of vehicles and trailers, auto parts and services, reports its results for the third quarter of 2020 (3Q2020) and nine months of 2020 (9M2020), ended in September 30, 2020. The financial and operating information of the Company, except when otherwise stated, are consolidated in accordance with the international standards of IFRS – International Financial Reporting Standards and the monetary values are denominated in Reais.

HIGHLIGHTS

The main highlights of the 3Q2020 are as follows:

  • 3Q20 Total Gross Revenue, before consolidation, is R$ 2.1 billion, an increase of 7.3% as compared to 3Q19 (R$ 2.0 billion);
  • 3Q20 Consolidated Net Revenue is R$ 1.5 billion, 10.5% higher than the revenue achieved in 3Q19 (R$ 1.4 billion);
  • 3Q20 Consolidated EBITDA is R$ 270.0 million, with EBITDA margin of 17.8% and 3Q20 Adjusted EBITDA of R$ 260.6 million, with adjusted EBITDA margin of 17.2%.
  • 3Q20 Net Income is R$ 116.0 million, and net margin of 7.7%, as compared to net income of R$ 78.5 million and net margin of 5.7% in 3Q19.


CONFERENCE CALL RESULTS

 



November 13, 2020, Friday,


11:00AM Brasília, 09:00AM New York and 3:00PM London


Dial–in from Brazil: +55 (11) 3181-8565 / 4210-1803                                                                        


Dial–in from USA: +1 844 204-8942 / +1 412 717-9627


Ticker: RANDON

 

The webcasting presentation of the company will be available at:
ri.randon.com.br

IR Contact

Esteban Mario Angeletti

[email protected]

 

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SOURCE Randon S.A. Implementos e Participações

Posted on

Hollysys Automation Technologies Reports Unaudited Financial Results for the First Quarter Ended September 30, 2020

PR Newswire


First Quarter of Fiscal Year 2021


Financial Highlights

  • Non-GAAP net income attributable to Hollysys was $20.8 million, a decrease of 30.2% compared to the comparable prior year period.
  • Total revenues were $129.5 million, an increase of 5.1% compared to the comparable prior year period.
  • Non-GAAP gross margin was at 33.7%, compared to 37.7% for the comparable prior year period.
  • Non-GAAP diluted EPS was $0.34, a decrease of 30.6% compared to the comparable prior year period.
  • Net cash provided by operating activities was $21.6 million for the current quarter.
  • DSO of 185 days, compared to 204 days for the comparable prior year period.
  • Inventory turnover days of 58 days, compared to 56 days for the comparable prior year period.


BEIJING
, Nov. 12, 2020 /PRNewswire/ — Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) (“Hollysys” or the “Company”), a leading provider of automation and control technologies and applications in China, today announced its unaudited financial results for the first quarter of fiscal year 2021 ended September 30, 2020 (see attached tables). The management of Hollysys, stated:

Industrial Automation (“IA”) business finished the quarter with revenue and contract at $81.9 million and $107.8 million, representing 26.8% and 28.4% YOY growth, respectively.

  • In power sector, we continued our effort in strengthening our market position in high-end coal fire market (600MW and plus power unit). Meanwhile, with respect to our current client base in this sector, we are actively responding to various regular and value-added service demand covering old system replacement, system upgrade, part component sales and annual maintenance, etc.
  • In chemical and petro-chemical sector, contract growth remains healthy. We continued our effort in key projects winning, key client cooperation, key marketing events and development and demonstration of solution capability to penetrate the market and build our reputation.

    Sector highlights of the past quarter include:

–  Winning the bidding of DCS+ESD (emergency shutdown device) + AMS (asset management system) +F&G (fire and gas) integrated solution for two offshore oil platforms. It is the 8th oil platform solution that the Company has won since the beginning of the calendar year, marking a remarkable progress for our exploration in the oil and gas industry.

–  Signing a CCS (Coordination Control System) contract with a client on its 400,000 tons/year tert-butyl alcohol and 200,000 tons/year MMA (methyl methacrylate) projects, marking a breakthrough as it is the Company’s first contract in MMA.

–  Signing a DCS + SIS + GDS + MES + OTS + AMS + information security integrated solution contract with a client on its 100,000 tons polycarbonate project. The DCS control points for the project amount to approximately 20,000, making it the largest project ever for the Company in similar craft.

  • In food & beverage and pharmaceutical sector, we continue to see healthy growth in contract. With our core control solution capability and inclusion of engineering design capability, we are building our EPC (engineering design + procurement + construction) capability so as to provide more comprehensive solution to our clients. Periodic progress was made in such model as we signed our first workshop-level EPC contract with a client for its 7-ACA (7-aminocephalosporanic acid) refining project, which is expected to lay foundation for our further pursuit of larger scale EPC project in the future.
  • In smart factory business, we continue to actively engage the potential clients through various marketing events, to stay close for in-depth grasp of market demand, and to develop and improve our solution for real value creation in economic benefit and operation safety. Highlights of the past quarter include:

–  Signing a contract with a new client from the thermal-power sector to provide a total solution with control-level and management-level data integration that covers comprehensive function modules including   control optimization, smart diagnosis, equipment management, decision making and operation management, etc. We expect such project to become a key demonstration of solution for the thermal-power sector.

–  Signing a contract with a client from the coal-fire sector for its new 2*660MW power plant. Contract covers a similar total solution at control and management level, and marks a significant breakthrough in our smart factory solution for high-end coal-fire market.

–  Signing a contract with an existing client from the petro-chemical sector to provide management-level solution based on our industrial internet platform.

  • Aftersales business of IA is keeping the healthy pace. We continued to engage our valuable client base and respond with both regular and value-adding initiatives covering old system upgrade and replacement, part component sales, annual maintenance, control optimization, data integration and energy management, etc.
  • Under our big automation initiatives, we continued to improve our capability for wider range of solution covering entire life cycle. By end of September, we have put into operation our in-house instrument production line, with which we will be capable of manufacturing certain types of instruments contained in our total control solution. Such is expected to be a valuable addition to our project delivery, market opportunities and operation.

Rail business finished the quarter with revenue and contract at $28.7 million and $24.2 million, recording 35.6% YOY decrease and 15.0% YOY growth, respectively.

  • In high-speed rail (“HSR”) sector, we continued our delivery of on-ground solution along with the rail-road construction progress. Periodic progress was achieved for the smart solution initiatives for the sector, and we have completed our top-level design of the smart maintenance solution. Meanwhile, bidding from the client was seeing its gradual recovery in the post-pandemic period, both for on-ground and on-board equipment. Highlights of the quarter include:

–  Winning the bidding of 140 sets (out of the total package of 274 sets) of ATP for C2 (250km) China Standard High-speed train in August.

  • In subway sector, our cloud-based SCADA project for Shenzhen Subway Line 6 was fully delivered, which was the second cloud-based SCADA project of the Company and represents our constant effort in innovation for continued value creation for our clients. In delivery, our enhancement in supply chain management and engineering standardization has contributed to improved quality and efficiency of project execution.
  • In aftersales business, we continued to strengthen local service network, to expand service solution and to develop technology-and-service-centered service for better differentiation. In HSR sector, we continued to respond to regular services including advanced maintenance, system and software upgrade and part component sales, as well as total replacement. We continued to act as the service provider to Hong Kong–Shenzhen high-speed rail, with our service quality being highly recognized. In subway sector, we continued to explore potentials from the current client base and signed contracts covering system upgrade, maintenance and product sales.
  • Under our big transportation initiatives, the Company has established the smart highway solution and was actively involved in marketing events for new contracts breakthrough in new business. Highlight for the quarter includes:

–  Signing a breakthrough contract of smart traffic meteorology solution for a section of the highway connecting Sichuan and Yunnan province. The data-driven solution targets highway administration as the intended clients and through collection and processing of meteorological, geographical and traffic data, advices the highway administration on more effective decision making in highway management, in particular under extreme weather condition.

Mechanical and Electrical Solutions (“M&E”) business finished the quarter with revenue and contract at $18.8 million and $12.3 million, recording 34.4% increase and 63.4% YOY decrease respectively.

COVID-19 remains a challenge to M&E and overseas business. We will keep monitoring the impact on this sector and risk control remains to be the key focus.


Fiscal
Quarter
 Ended September 30, 2020 Unaudited
Financial Results
Summary


 (In USD thousands, except for number of shares and per share data)


Three months ended


Sep 30, 2020


 Sep 30, 2019


%
Change

Revenues

$

129,468

123,230

5.1%

    Integrated solutions contracts revenue

$

105,706

104,466

1.2%

    Products sales

$

6,569

6,123

7.3%

    Service rendered

$

17,193

12,641

36.0%

Cost of revenues

$

85,891

76,771

11.9%

Gross profit

$

43,577

46,459

(6.2)%

Total operating expenses

$

22,558

23,291

(3.1)%

    Selling

$

8,176

7,277

12.4%

    General and administrative

$

10,179

10,592

(3.9)%

    Research and development

$

9,981

8,942

11.6%

    VAT refunds and government subsidies

$

(5,778)

(3,520)

64.1%

Income from operations

$

21,019

23,168

(9.3)%

Other income, net

$

1,229

2,025

(39.3)%

Foreign exchange (loss) gain

$

(2,323)

604

(484.6)%

Gains on disposal of an investment in an equity investee

$

–

5,763

(100.0)%

Share of net income of equity investees

$

1,891

1,541

22.7%

Interest income

$

3,798

3,029

25.4%

Interest expenses

$

(137)

(113)

21.2%

Income tax expenses

$

4,760

6,209

(23.3)%

Net (losses) income attributable to non-controlling interests

$

(80)

26

(407.7)%

Non-GAAP net income attributable to Hollysys Automation 
    Technologies Ltd.

$

20,797

29,782

(30.2)%

Non-GAAP basic EPS

$

0.34

0.49

(30.6)%

Non-GAAP diluted EPS

$

0.34

0.49

(30.6)%

$

Share-based compensation expenses

175

26

573.1%

Amortization of acquired intangible assets

$

76

75

1.3%

GAAP Net income attributable to Hollysys Automation Technologies
    Ltd.

$

20,546

29,681

(30.8)%

GAAP basic EPS

$

0.34

0.49

(30.6)%

GAAP diluted EPS

$

0.34

0.49

(30.6)%

Basic weighted average common shares outstanding

60,552,099

60,470,611

0.1%

Diluted weighted average common shares outstanding

60,552,099

60,483,884

0.1%

Operational Results Analysis for the First Quarter Ended September 30, 2020

Comparing to the first quarter of the prior fiscal year, the total revenues for the three months ended September 30, 2020 increased from $123.2 million to $129.5 million, representing an increase of 5.1%. Broken down by the revenue types, integrated contracts revenue increased by 1.2% to $105.7 million, products sales revenue increased by 7.3% to $6.6 million, and services revenue increased by 36.0% to $17.2 million.

The Company’s total revenues can also be presented in segments as shown in the following chart:


(In USD thousands)


Three months ended Sep 30,


2020


2019


$


% to Total
Revenue


$


% to Total
Revenue

Industrial Automation

81,931

63.2%

64,637

52.4%

Rail Transportation Automation

28,696

22.2%

44,576

36.2%

Mechanical and Electrical Solution

18,841

14.6%

14,017

11.4%


Total


129,468


100.0%


123,230


100.0%

Overall
 gross margin
 excluding non-cash amortization of acquired intangibles (non-GAAP
gross margin) was 33.7% for the three months ended September 30, 2020, as compared to 37.7% for the same period of the prior year. The non-GAAP gross margin for integrated contracts, product sales, and services rendered were 25.3%, 73.7% and 70.0% for the three months ended September 30, 2020, as compared to 32.6%, 79.9% and 59.5% for the same period of the prior year, respectively. The gross margin fluctuation was mainly due to the different revenue mix with different margins. The GAAP overall gross margin which includes non-cash amortization of acquired intangibles was 33.6% for the three months ended September 30, 2020, as compared to 37.6% for the same period of the prior year. The GAAP gross margin for integrated contracts, product sales, and service rendered was 25.2%, 73.7% and 70.0% for the three months ended September 30, 2020, as compared to 32.5%, 79.9% and 59.5% for the same period of the prior year, respectively.

S
elling expenses were $8.2 million for the three months ended September 30, 2020, representing an increase of $0.9 million or 12.4% compared to $7.3 million for the same quarter of the prior year. Presented as a percentage of total revenues, selling expenses were 6.3% and 5.9% for the three months ended September 30, 2020, and 2019, respectively.

G
eneral and administrative
 
expenses
, excluding non-cash share-based compensation expenses (non-GAAP G&A expenses), were $10.2 million for the quarter ended September 30, 2020, representing a decrease of $0.4 million or 3.9% compared to $10.6 million for the same quarter of the prior year. Presented as a percentage of total revenues, non-GAAP G&A expenses were 7.9% and 8.6% for quarters ended September 30, 2020 and 2019, respectively. The GAAP G&A expenses which include the non-cash share-based compensation expenses were $10.4 million and $10.6 million for the three months ended September 30, 2020 and 2019, respectively.

Research and development expenses were $10.0 million for the three months ended September 30, 2020, representing an increase of $1.0 million or 11.6% compared to $8.9 million for the same quarter of the prior year. Presented as a percentage of total revenues, R&D expenses were 7.7% and 7.3% for the quarter ended September 30, 2020 and 2019, respectively.

The VAT refunds and government subsid
ies were $5.8 million for three months ended September 30, 2020, as compared to $3.5 million for the same period in the prior year, representing a $2.3 million or 64.1% increase, which was primarily due to increase of the VAT refunds.

The income tax expenses and the effective tax rate were $4.8 million and 18.9% for the three months ended September 30, 2020, as compared to $6.2 million and 17.3% for comparable prior year period. The effective tax rate fluctuation was mainly due to the different pre-tax income mix with different tax rates, as the Company’s subsidiaries are subject to different tax rates in various jurisdictions.

The non-GAAP net income attributable to Hollysys, which excludes the non-cash share-based compensation expenses calculated based on the grant-date fair value of shares or options granted, amortization of acquired intangible assets, and fair value adjustments of a bifurcated derivative, was $20.8 million or $0.34 per diluted share based on 60.6 million diluted weighted average ordinary shares outstanding for the three months ended September 30, 2020. This represents a 30.2% decrease over $29.8 million or $0.49 per share based on 60.5 million diluted weighted average ordinary shares outstanding reported in the comparable prior year period. On a GAAP basis, net income attributable to Hollysys was $20.5 million or $0.34 per diluted share representing a decrease of 30.8% over $29.7 million or $0.49 per diluted share reported in the comparable prior year period.


Contracts and


Backlog Highlights

Hollysys achieved $144.3 million of new contracts for the three months ended September 30, 2020. The backlog as of September 30, 2020 was $596.1 million. The detailed breakdown of new contracts and backlog by segments is shown below:


(In USD thousands)


New contracts achieved


Backlog


for the three months


 ended Sep 30, 2020


as of Sep 30, 2020


$


% to Total
Contract


$


% to Total
Backlog

Industrial Automation

107,806

74.7%

252,299

42.3%

Rail Transportation

24,167

16.8%

254,833

42.7%

Mechanical and Electrical Solutions

12,304

8.5%

89,005

14.9%


Total


144,277


100.0%


596,137


100.0%


Ca


sh Flow Highlights

For the three months ended September 30, 2020, the total net cash inflow was $34.9 million. The net cash provided by operating activities was $21.6 million. The net cash provided by investing activities was $2.6 million and mainly consisted of $114.6 million of matured time deposits, which were partially offset by $108.8 million of time deposits placed with banks. The net cash used in financing activities was $0.2 million.


Balance Sheet Highlights

The total amount of cash and cash equivalents were $321.6 million, $288.8 million, and $340.0 million as of September 30, 2020, June 30, 2020 and September 30, 2019, respectively.

For the three months ended September 30, 2020, DSO was 185 days, as compared to 204 days for the comparable prior year period and 167 days for the last quarter; and inventory turnover was 58 days, as compared to 56 days for the comparable prior year period and 66 days for the last quarter.


Conference Call

The Company will host a conference call at 8:00 pm November 12, 2020 U.S. Eastern Time / 9:00 amNovember 13, 2020 Beijing Time, to discuss the financial results for fiscal year 2021 first quarter ended September 30, 2020 and business outlook.

Joining the Conference Call:

  1. Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode and unique registrant ID.
  2. In the 10 minutes prior to the call start time, you will need to use the conference access information provided in the email received at the point of registering.

Note: Due to regional restrictions some participants may receive operator assistance when joining this conference call and will not be automatically connected.

Helpful keypad commands:
*0 – Operator assistance
*6 – Self mute/unmute

Direct Event online registration: http://apac.directeventreg.com/registration/event/3446698. Please use Conference ID 3446698 for entry if the link fails to lead directly to the registration page.

SAFE HARBOUR:

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are “forward-looking statements,” including statements regarding: the ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involve known and unknown risks and uncertainties. Such forward-looking statements, based upon the current beliefs and expectations of Hollysys’ management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For further information, please contact:

Hollysys Automation Technologies Ltd.
www.hollysys.com
+8610-58981386
[email protected]

 

 

 


HOLLYSYS AUTOMATION TECHNOLOGIES LTD.


CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


(In USD thousands except for number of shares and per share data)


Three months ended


Sep 30,


2020


2019


(Unaudited)


(Unaudited)


Net revenues

Integrated solutions contracts revenue

$

105,706

$

104,466

Products sales

6,569

6,123

Revenue from services

17,193

12,641


Total net revenues


129,468


123,230

Costs of integrated solutions contracts

79,081

70,500

Cost of products sold

1,729

1,231

Costs of services rendered

5,157

5,115


Gross profit


43,501


46,384


Operating expenses

Selling

8,176

7,277

General and administrative

10,354

10,618

Research and development

9,981

8,942

VAT refunds and government subsidies

(5,778)

(3,520)


Total operating expenses


22,733


23,317


Income from operations


20,768


23,067

Other income, net

1,229

2,025

Foreign exchange (loss) gain

(2,323)

604

Gains on disposal of investments in an equity investee

–

5,763

Share of net income of equity investees

1,891

1,541

Interest income

3,798

3,029

Interest expenses

(137)

(113)


Income before income taxes


25,226


35,916

Income taxes expenses

4,760

6,209


Net income


20,466


29,707

Less: Net (losses) income attributable to non-controlling interests

(80)

26


Net income attributable to Hollysys Automation Technologies Ltd.


$


20,546


$


29,681


Other comprehensive income, net of tax of nil

Translation adjustments

38,950

(34,174)


Comprehensive income (loss)


59,416


(4,467)

Less: Comprehensive income (loss) attributable to non-controlling interests

80

(25)


Comprehensive income (loss) attributable to Hollysys Automation
Technologies Ltd.


$


59,336


$


(4,442)


Net income per share:

Basic

0.34

0.49

Diluted

0.34

0.49


Shares used in income per share computation:

Basic

60,552,099

60,470,611

Diluted

60,552,099

60,483,884

 

 

 


HOLLYSYS AUTOMATION TECHNOLOGIES LTD.


CONSOLIDATED BALANCE SHEETS


(In USD thousands except for number of shares and per share data)


Sep 30,


Jun 30,


2020


2020


(Unaudited)


(audited)


ASSETS


Current assets

Cash and cash equivalents

$

321,641

$

288,782

Time deposits with maturities over three months

330,432

324,949

Restricted cash

11,827

8,663

Accounts receivable, net of allowance for doubtful accounts of $54,069 and
    $41,618 as of September 30, 2020 and June 30, 2020, respectively

268,270

242,449

Costs and estimated earnings in excess of billings, net of allowance for doubtful 
     accounts of $8,185 and $6,150 as of September 30, 2020 and June 30, 2020,
     respectively

189,834

186,879

Accounts receivable retention

5,227

6,088

Other receivables, net of allowance for doubtful accounts of $6,382 and $6,224 as
     of September 30, 2020 and June 30, 2020, respectively

28,408

28,257

Advances to suppliers

18,614

17,255

Amounts due from related parties

22,222

21,444

Inventories

56,805

48,210

Prepaid expenses

654

648

Income tax recoverable

87

870


Total current assets


1,254,021


1,174,494


Non-current assets

Restricted cash

20,558

21,652

Costs and estimated earnings in excess of billings

1,771

2,309

Accounts receivable retention

5,559

4,717

Prepaid expenses

8

6

Property, plant and equipment, net

84,261

78,050

Prepaid land leases

16,168

15,742

Intangible assets, net

1,665

1,713

Investments in equity investees

45,814

41,133

Investments securities

4,816

4,640

Goodwill

1,516

1,460

Deferred tax assets

10,738

8,909

Operating lease right-of-use assets

6,496

6,010


Total non-current assets

199,370

186,341


Total assets


1,453,391


1,360,835


LIABILITIES AND STOCKHOLDERS’ EQUITY


Current liabilities

Current portion of long-term loans

334

320

Accounts payable

129,336

117,460

Construction cost payable

1,762

2,350.00

Deferred revenue

161,692

139,242

Accrued payroll and related expenses

21,766

17,245

Income tax payable

7,021

3,142

Warranty liabilities

6,074

6,604

Other tax payables

4,129

3,279

Accrued liabilities

36,738

31,595

Amounts due to related parties

3,394

3,576

Operating lease liabilities

2,211

2,489


Total current liabilities


374,457


327,302


Non-current liabilities

Accrued liabilities

3,000

5,635

Long-term loans

15,885

15,780

Accounts payable

3,221

2,530

Deferred tax liabilities

14,307

13,940

Warranty liabilities

1,847

3,460

Operating lease liabilities

3,901

3,302


Total non-current liabilities

42,161

44,647


Total liabilities


416,618


371,949


Commitments and contingencies


–


–


Stockholders’ equity:

Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized;
    60,537,099 shares issued and outstanding as of September 30, 2020 and June
    30, 2020

61

61

Additional paid-in capital

224,218

224,043

Statutory reserves

49,423

49,423

Retained earnings*

783,315

774,473

Accumulated other comprehensive income

(24,728)

(63,517)


Total Hollysys Automation Technologies Ltd. stockholder’s equity


1,032,289


984,483

Non-controlling interests

4,484

4,403


Total equity


1,036,773


988,886


Total liabilities and equity

$


1,453,391

$


1,360,835

* The adoption of ASC 326 started in July 1st had a one-off effect on the beginning of balance sheet accounts.

 

 

 


HOLLYSYS AUTOMATION TECHNOLOGIES LTD


CONSOLIDATED STATEMENTS OF CASH FLOWS


(In USD thousands).




Three months ended 






Sep 30, 2020




(Unaudited)


Cash flows from operating activities:

Net income

$

20,466


Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of property, plant and equipment

2,548

Amortization of prepaid land leases

101

Amortization of intangible assets

76

Allowance for doubtful accounts

952

Gains on disposal of long-lived assets

(11)

Share of net income of equity investees

(1,891)

Share-based compensation expenses

175

Deferred income tax benefit

(1,363)


Changes in operating assets and liabilities:

Accounts receivable and retention

(25,949)

Costs and estimated earnings in excess of billings

4,397

Inventories 

(6,640)

Advances to suppliers

(702)

Other receivables 

621

Due from related parties

(1,148)

Accounts payable

7,901

Deferred revenue

16,963

Accruals and other payables

154

Due to related parties

(182)

Income tax payable

4,499

Other tax payables

713

Operating lease right-of-use assets

(305)

Operating lease liabilities

222


Net cash provided by operating activities


21,597


Cash flows from investing activities:

Time deposits placed with banks

(108,757)

Purchases of property, plant and equipment

(3,354)

Proceeds from disposal of property, plant and equipment

65

Maturity of time deposits

114,597


Net cash provided by investing activities


2,551


Cash flows from financing activities:

Proceeds from long-term bank loans

37

Repayments of long-term bank loans

(194)


Net cash used in financing activities


(157)

Effect of foreign exchange rate changes

10,938


Net increase in cash, cash equivalents and restricted cash

$


34,929

Cash, cash equivalents and restricted cash, beginning of period

$

319,097

Cash, cash equivalents and restricted cash, end of period

354,026

 

Non-GAAP Measures

In evaluating our results, the non-GAAP measures of “Non-GAAP cost of integrated contracts”, “Non-GAAP general and administrative expenses”, “Non-GAAP other income (expenses), net”, “Non-GAAP net income attributable to Hollysys Automation Technologies Ltd. stockholders”, “Non-GAAP basic earnings per share”, and “Non-GAAP diluted earnings per share” serve as additional indicators of our operating performance and not as a replacement for other measures in accordance with U.S. GAAP. We believe these non-GAAP measures are useful to investors, as they exclude the non-cash share-based compensation expenses, which is calculated based on the number of shares or options granted and the fair value as of the grant date, amortization of acquired intangible assets, and fair value adjustments of a bifurcated derivative. They will not result in any cash inflows or outflows. We believe that using non-GAAP measures help our shareholders to have a better understanding of our operating results and growth prospects. In addition, given the business nature of the Company, it has been a common practice for investors to use such non-GAAP measures to evaluate the Company.

The following table provides a reconciliation of the non-GAAP measures with the most directly comparable U.S. GAAP measures for the periods indicated:



(In USD thousands, except for number of shares and per share data)


Three months ended


Sep 30,


2020


2019


(Unaudited)


(Unaudited)


Cost of integrated solutions contracts

$


79,081

$


70,500

Less: Amortization of intangible assets

76

75


Non-GAAP cost of integrated solutions contracts

$


79,005

$


70,425


General and administrative expenses

$


10,354

$


10,618

Less: Share-based compensation expenses

175

26


Non-GAAP general and administrative expenses

$


10,179

$


10,592


Net income attributable to Hollysys Automation Technologies Ltd.

$


20,546

$


29,681

Add:

      Share-based compensation expenses

175

26

      Amortization of intangible assets

76

75


Non-GAAP net income attributable to Hollysys Automation
Technologies Ltd.

$


20,797

$


29,782

      Weighted average number of basic ordinary shares

60,552,099

60,470,611

      Weighted average number of diluted ordinary shares

60,552,099

60,483,884


Non-GAAP basic earnings per share

$

0.34

$

0.49


Non-GAAP diluted earnings per share

$

0.34

$

0.49

 

 

Cision View original content:http://www.prnewswire.com/news-releases/hollysys-automation-technologies-reports-unaudited-financial-results-for-the-first-quarter-ended-september-30-2020-301171659.html

SOURCE Hollysys Automation Technologies Ltd.

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Sumitovant Biopharma and Urovant Sciences Announce Sumitovant’s Acquisition of Remaining Stake in Urovant

– Sumitovant Biopharma to acquire all outstanding shares of Urovant it does not already own

– Transaction increases Urovant’s ability to provide patient therapies and achieve commercial success as it prepares to launch its first potential therapy, vibegron, for the treatment of patients with overactive bladder (OAB)

– Agreement unanimously recommended by Special Committee of Urovant Independent Directors

PR Newswire

NEW YORK and LONDON and IRVINE, Calif. and BASEL, Switzerland, Nov. 12, 2020 /PRNewswire/ — Sumitovant Biopharma and Urovant Sciences (Nasdaq: UROV) today announced that they have entered into a definitive merger agreement for Sumitovant to acquire the outstanding shares of Urovant common stock not already owned by Sumitovant at a price of $16.25 per share in cash. Sumitovant currently owns 72% of the outstanding shares of Urovant common stock.

The acquisition consideration represents an equity value for Urovant of $584 million and an enterprise value of $681 million. The per share consideration represents a premium of 96% to Urovant’s closing price on November 12, 2020, and a premium of 92% to Urovant’s 30-day volume weighted average share price on November 12, 2020. The merger agreement has been unanimously approved by a special committee of Urovant’s Board of Directors. The special committee of Urovant’s Board of Directors has recommended that Urovant’s shareholders vote in favor of the transaction.

“After careful consideration and consultation with our financial advisors, the special committee of the Urovant Board of Directors has found that Sumitovant’s offer represents exceptional value for shareholders,” said Pierre Legault, lead independent member of the Urovant Board of Directors and chairman of the special committee.

“Our foremost purpose is to give Urovant access to capital for its long-term business objectives and ensure focus on its mission to develop and commercialize innovative therapies for its patients,” said Myrtle Potter, Chief Executive Officer of Sumitovant Biopharma. “By bringing Urovant into the fold as a privately-held company under the Sumitovant family of companies, we can enable the Urovant team to fully concentrate on the important task of preparing for its potential commercial launch of vibegron, the first new branded prescription drug for the treatment of OAB in nearly a decade.” 

“During this pivotal phase of growth, fully becoming a part of our parent company, Sumitovant, positions Urovant to invest in all opportunities around vibegron including launching and building our commercial organization while maintaining our strategic direction, our commitment to patients with urologic conditions, and our unique corporate culture for employees,” said James Robinson, Chief Executive Officer of Urovant. “This transaction benefits Urovant shareholders by derisking our future and providing current and certain value going forward.”

Additional Transaction Details

The transaction is subject to the approval of Urovant’s shareholders, including holders of a majority of Urovant’s outstanding shares that are not held by Sumitovant and other customary closing conditions. The transaction is not subject to any financing condition.

Upon closing, Urovant will become a wholly owned subsidiary of Sumitovant and Urovant’s common stock will cease trading on the Nasdaq stock market. The closing of the transaction is expected to take place in the first quarter of 2021.

Citi is acting as exclusive financial advisor to Sumitovant. Jones Day is serving as Sumitovant’s legal counsel. Lazard Frères & Co. LLC is acting as exclusive financial advisor to the special committee of Urovant’s Board of Directors. O’Melveny & Myers is serving as the special committee’s legal counsel.

About Sumitovant Biopharma Ltd.

Sumitovant is a global biopharmaceutical company with offices in New York City and London. Sumitovant is a wholly owned subsidiary of Sumitomo Dainippon Pharma. Sumitovant is the majority shareholder of Urovant Sciences and Myovant Sciences, and wholly owns Enzyvant Therapeutics, Spirovant Sciences, and Altavant Sciences. Sumitovant’s promising pipeline is comprised of early-through late-stage investigational medicines across a range of disease areas targeting high unmet need. For further information about Sumitovant, please visit https://www.sumitovant.com.

About Urovant Sciences     

Urovant is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for urologic conditions. Urovant’s lead product candidate, vibegron, is an oral, once-daily small molecule beta-3 agonist that is being evaluated for overactive bladder (OAB).  Urovant reported positive data from the vibegron 12-week, Phase 3 pivotal EMPOWUR study and demonstrated favorable longer-term efficacy, safety, and tolerability in a 40-week extension study.  Urovant submitted a New Drug Application to the FDA seeking approval of vibegron for the treatment of patients with OAB in December 2019.  Vibegron is also being evaluated for treatment of OAB in men with benign prostatic hyperplasia (OAB+BPH) and for abdominal pain associated with irritable bowel syndrome (IBS). Urovant’s second product candidate, URO-902, is a novel gene therapy being developed for patients with OAB who have failed oral pharmacologic therapy. Urovant, a subsidiary of Sumitovant Biopharma Ltd., which is a wholly-owned subsidiary of Sumitomo Dainippon Pharma, intends to develop novel treatments for additional urologic diseases.  Learn more about us at www.urovant.com.

About Sumitomo Dainippon Pharma Co., Ltd.

Sumitomo Dainippon Pharma is among the top-ten listed pharmaceutical companies in Japan, operating globally in major pharmaceutical markets, including Japan, the U.S., China, and the European Union. Sumitomo Dainippon Pharma is based on the 2005 merger between Dainippon Pharmaceutical Co., Ltd., and Sumitomo Pharmaceuticals Co., Ltd. Today, Sumitomo Dainippon Pharma has more than 6,000 employees worldwide. Additional information about Sumitomo Dainippon Pharma is available through its corporate website at https://www.ds-pharma.com. 

Additional Information and Where to Find It

This communication is being made in respect of the proposed transaction involving Urovant and Sumitovant. Urovant intends to file with the Securities and Exchange Commission (“SEC”) relevant materials, including a proxy statement in connection with the proposed transaction with Sumitovant on Schedule 14A, and Urovant and certain other persons, including Sumitovant, intend to file a Schedule 13E-3 transaction statement with the SEC. The definitive proxy statement and Schedule 13E-3 transaction statement will be sent or given to the stockholders of Urovant and will contain important information about the proposed transaction and related matters. UROVANT’S SECURITYHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION, THE SCHEDULE 13E-3 AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement, Schedule 13E-3 and other relevant materials (when they become available), and any other documents filed by Urovant with the SEC, may be obtained free of charge at the SEC’s website, at www.sec.gov. In addition, securityholders of Urovant will be able to obtain free copies of the proxy statement and Schedule 13E-3 through Urovant’s website, www.Urovant.com, or by contacting Urovant by mail at Attn: Investor Relations.

Participants in the Solicitation

Urovant, Sumitovant and its directors, executive officers and other members of management and certain other people may be deemed to be participants in the solicitation of proxies in connection with the proposed merger. Information about Urovant’s directors and executive officers is included in Urovant’s Annual Report on Form 10-K for the year ended March 31, 2020 filed with the SEC on June 19, 2020, and the proxy statement for Urovant’s annual meeting of stockholders for 2020, filed with the SEC on July 27, 2020. Additional information regarding these persons and their interests in the merger will be included in the proxy statement and Schedule 13E-3 relating to the proposed merger when they are filed with the SEC. These documents, when available, can be obtained free of charge from the sources indicated above.  This press release does not constitute a solicitation of a proxy, an offer to purchase or a solicitation of an offer to sell any securities.

Safe Harbor for Forward-looking Statements

This press release contains forward-looking statements. Forward-looking statements include all statements that are not historical statements of fact and statements regarding Urovant’s intent, belief or expectations and can be identified by words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “strive,” “to be,” “will,” “would,” or the negative or plural of these words or other similar expressions or variations, although not all forward-looking statements contain these identifying words. In this press release, forward-looking statements include, but are not limited to, statements regarding expectations about the proposed transaction involving Urovant and Sumitovant and statements regarding Urovant’s expectations for the commercialization of vibegron for the treatment of overactive bladder and plans and strategies for the clinical development of vibegron and other treatments for urologic diseases. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially and reported results should not be considered as an indication of future performance. Risks and uncertainties related to the proposed merger include, but are not limited to, the risk that the merger transaction does not close, due to the failure of one or more conditions to closing or otherwise; the risk that required Urovant shareholder approvals of the merger transaction will not be obtained or that such approvals will be delayed or conditioned beyond current expectations; risks related to the disruption of management time from ongoing business operations due to the proposed transaction and possible difficulties in maintaining customer, supplier, key personnel and other strategic relationships; and the possibility of unexpected costs, liabilities or litigation related to the proposed transaction.  Additional risks and uncertainties related to Urovant and its business include, but are not limited to, Urovant’s dependence on the success of its lead product candidate, vibegron, including uncertainties regarding FDA approval; the failure to achieve the market acceptance necessary for commercial success for vibegron or any other product candidate; the success and cost of Urovant’s efforts to commercialize vibegron; the impact on Urovant’s business, financial results, results of operations and ongoing clinical trials from the effects of the COVID-19 pandemic; risks related to clinical trials, including uncertainties relating to the success of Urovant’s clinical trials for vibegron and URO-902 and any future therapy or product candidates; uncertainties surrounding the regulatory landscape that governs gene therapy products; Urovant’s dependence on Merck Sharp & Dohme Corp. and Ion Channel Innovations, LLC to have accurately reported results and collected and interpreted data related to vibegron and URO-902 prior to Urovant’s acquisition of the rights related to these product candidates; reliance on a single supplier for the enzyme used to manufacture vibegron; the ability to obtain, maintain, and enforce intellectual property protection for Urovant’s technology and products; risks related to significant competition from other biotechnology and pharmaceutical companies; Urovant’s ability to realize the anticipated benefits of the co-promotion agreement with Sunovion in the manner or timeline expected; and other risks and uncertainties listed in Urovant’s filings with the SEC, including under the heading “Risk Factors” in Urovant’s most recently filed Quarterly Report on Form 10-Q, as such risk factors may be amended, supplemented or superseded from time to time by other filings with the SEC. Given these risks and uncertainties, you should not place undue reliance on any forward-looking statements. These forward-looking statements are based on information available to Sumitovant as of the date of this press release and speak only as of the date of this release. Urovant and Sumitovant disclaims any obligation to update these forward-looking statements, except as may be required by law.

M
edia Contacts:

Sumitovant Biopharma

Mary Stutts

[email protected]

Urovant Sciences    

Ryan Kubota

[email protected]

Cision View original content:http://www.prnewswire.com/news-releases/sumitovant-biopharma-and-urovant-sciences-announce-sumitovants-acquisition-of-remaining-stake-in-urovant-301172414.html

SOURCE Sumitovant Biopharma

Posted on

Centrus Reports Third Quarter 2020 Results

– Raised approximately $25 million, before expenses, through an underwritten public offering of Class A Common Stock

– Announced cash tender offer to retire up to $60 million of Series B Senior Preferred Stock

– Net loss of $7.0 million – a decrease of $29.8 million compared to the net income of $22.8 million in 3Q 2019 — due to variability in the timing of customer deliveries

– Signed an agreement with TerraPower to pursue commercial-scale, domestic production capabilities for High-Assay, Low-Enriched Uranium (HALEU)

– Consolidated cash balance of $152.8 million as of September 30, 2020

PR Newswire

BETHESDA, Md., Nov. 12, 2020 /PRNewswire/ — Centrus Energy Corp. (NYSE American: LEU) today reported a net loss of $7.0 million for the quarter ended September 30, 2020, compared to a net income of $22.8 million for the third quarter of 2019. The net loss allocable to common stockholders was $8.9 million, or $0.83 (basic and diluted) per common share, compared to a net income allocable to common stockholders of $20.9 million or $2.18 (basic) and $2.17 (diluted) per common share, for the third quarter of 2019.

“This has been an exciting quarter for the company, with the launch of the Department of Energy’s Advanced Reactor Demonstration Program – which could jump-start commercial demand for HALEU – and our successful capital raise,” said Daniel B. Poneman, Centrus president and chief executive officer.  “Construction of our HALEU demonstration plant is on schedule and on budget, and we are poised to be first to market with this promising new fuel when the demonstration is completed in 2022. We are continuing our efforts to improve our capital structure, having raised approximately $25 million and launched our tender offer to retire up to $60 million of the preferred.”

Financial Results

Centrus generated total revenue of $33.6 million for the third quarter of 2020, a decrease of $71.1 million from the prior year period.

As noted in previous filings, Centrus’ LEU segment is primarily built upon multi-year contracts contained in our sales order book to deliver SWU in which our utility customers have annual, not quarterly, purchase commitments, and Centrus recognizes the revenue from those sales in whatever quarter the customer elects to take delivery of their annual purchase commitment.  Revenue in this segment varies considerably from quarter to quarter based on the timing of customer deliveries.  That said, there were no SWU deliveries in the three months ended September 30, 2020, with revenue of $0.1 million for ancillary services. As a result, revenue from the LEU segment declined $69.1 million (or 79%) in the three months and $12.7 million (or 10%) in the nine months ended September 30, 2020, compared to the corresponding periods in 2019.  SWU sales volume in the nine months ended September 30, 2020, declined 54% compared to the corresponding period in 2019 reflecting the variability in timing of utility customer orders. SWU revenue in the nine months ended September 30, 2020, includes $32.4 million collected in the second quarter from a customer in settlement of a supply contract rejected in bankruptcy court. Excluding these proceeds, the average price per SWU increased 42% in the nine-month period compared to 2019, reflecting the particular contracts under which SWU were sold during the periods.

Revenue from uranium sales increased $5.8 million in the three months and declined $14.7 million in nine months ended September 30, 2020, compared to the corresponding periods in 2019.  For the nine-month period, the volume of uranium sold declined 45% and the average price increased 12%.

We anticipate that revenue in the fourth quarter of this year for LEU segment will be the highest of any quarter for 2020, assuming there are no interruptions to our planned customer deliveries based on changes in the market or Covid-19. Cost of sales for the LEU segment declined $34.8 million in the three months and $48.6 million in the nine months ended September 30, 2020, compared to the corresponding periods in 2019.  There were no SWU deliveries in the three months ended September 30, 2020.  For the nine-month period, the decline in cost of sales reflects the 54% decline in SWU sales volume and the 45% decline in uranium sales volume, partially offset by a 10% increase in the average unit cost of sales for uranium. Cost of sales includes legacy costs related to former employees of the Portsmouth and Paducah Gaseous Diffusion Plants of $2.4 million in the nine months ended September 30, 2020, compared to $2.8 million in the nine months ended September 30, 2019. The average cost of sales per SWU excluding legacy costs declined approximately 3% in the nine months ended September 30, 2020, compared to the corresponding period in 2019. Our inventories are valued at the lower of cost or net realizable value. Valuation adjustments for our uranium inventory to reflect declines in uranium market price indicators totaled $2.3 million in the nine months ended September 30, 2019.

Revenue from the technical solutions segment declined $2.0 million in the three months and increased $13.0 million in the nine months ended September 30, 2020, compared to the corresponding periods in 2019. The increases were primarily the result of work performed under the HALEU contract. Revenue in the current periods included work performed under the UT-Battelle contract and revenue in the prior periods included work performed under an agreement with DOE to decontaminate and decommission its K-1600 facility in Tennessee. The K-1600 contract was completed in October 2019.

Cost of sales for the technical solutions segment was flat in the three months and increased $12.0 million in the nine months ended September 30, 2020, compared to the corresponding periods in 2019, reflecting in part the mix of technical solutions work performed in each of the periods including work performed under the HALEU contract in the current period. Cost of sales benefited by $3.4 million in the three months and $8.7 million in the nine months ended September 30, 2020, for previously accrued contract losses attributable to work performed under the HALEU contract in 2020.

Centrus realized a gross loss of $0.8 million in the three months ended September 30, 2020, compared to a gross profit of $35.5 million in the corresponding period in 2019.  In the nine months ended September 30, 2020, we realized a gross profit of $62.6 million compared to a gross profit of $25.7 million in the corresponding period in 2019. We ended the third quarter of 2020 with a consolidated cash balance of $152.8 million.

Selling, general and administrative (SG&A) expenses decreased $2.0 million in the three months compared to the corresponding period in 2019, primarily a result of a decrease in consulting costs of $1.3 million and a decrease in compensation expense of $0.8 million. The decrease in compensation expense is primarily due to a remeasurement of obligations under long-term incentive plans associated with the stock price. Other SG&A expenses increased by a net $0.1 million.

SG&A expenses increased $1.1 million in the nine months ended September 30, 2020, compared to the corresponding period in 2019, primarily due to an increase in consulting costs of $1.7 million related to initiatives including capital financing evaluation, claim recoveries and international trade. Travel and recruiting expenses declined by a total of $0.5 million and other SG&A expenses declined by a net $0.1 million.

About Centrus Energy Corp.

Centrus is a trusted supplier of nuclear fuel and services for the nuclear power industry. Centrus provides value to its utility customers through the reliability and diversity of its supply sources – helping them meet the growing need for clean, affordable, carbon-free electricity. Since 1998, the Company has provided its utility customers with more than 1,750 reactor years of fuel, which is equivalent to 7 billion tons of coal.

With world-class technical capabilities, Centrus offers turnkey engineering and advanced manufacturing solutions to its customers. The Company is also advancing the next generation of centrifuge technologies so that America can restore its domestic uranium enrichment capability in the future. Find out more at www.centrusenergy.com.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. In this context, forward-looking statements mean statements related to future events, may address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “will”, “should”, “could”, “would” or “may” and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For Centrus Energy Corp., particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include but are not limited to the following, which may be amplified by the novel coronavirus (COVID-19) pandemic: risks related to our significant long-term liabilities, including material unfunded defined benefit pension plan obligations and postretirement health and life benefit obligations; risks relating to our 8.25% notes (the “8.25% Notes”) maturing in February 2027 and our Series B Senior Preferred Stock; risks related to the use of our net operating loss (“NOLs”) carryforwards and net unrealized built-in losses (“NUBILs”) to offset future taxable income and the use of the Rights Agreement (as defined herein) to prevent an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) and our ability to generate taxable income to utilize all or a portion of the NOLs and NUBILs prior to the expiration thereof; risks related to the limited trading markets in our securities; risks related to our ability to maintain the listing of our Class A Common Stock on the NYSE American LLC (the “NYSE American”); risks related to decisions made by our Class B stockholders and our Series B Senior Preferred stockholders regarding their investment in the Company based upon factors that are unrelated to the Company’s performance; risks related to the Company’s capital concentration; risks related to natural and other disasters, including the continued impact of the March 2011 earthquake and tsunami in Japan on the nuclear industry and on our business, results of operations and prospects; the impact and potential extended duration of the current supply/demand imbalance in the market for low-enriched uranium (“LEU”); our dependence on others for deliveries of LEU including deliveries from the Russian government-owned entity TENEX, Joint-Stock Company (“TENEX”), under a commercial supply agreement with TENEX and deliveries under a long-term supply agreement with Orano Cycle (“Orano”); risks related to existing or new trade barriers and contract terms that limit our ability to deliver LEU to customers; risks related to actions, including government reviews, that may be taken by the United States government, the Russian government or other governments that could affect our ability to perform under our contract obligations or the ability of our sources of supply to perform under their contract obligations to us, including the imposition of sanctions, restrictions or other requirements, and risks relating to the 1992 Russian Suspension Agreement (“RSA”); risks related to our ability to sell the LEU we procure pursuant to our purchase obligations under our supply agreements; risks relating to our sales order book, including uncertainty concerning customer actions under current contracts and in future contracting due to market conditions and lack of current production capability; risks related to financial difficulties experienced by customers, including possible bankruptcies, insolvencies or any other inability to pay for our products or services or delays in making timely payment; pricing trends and demand in the uranium and enrichment markets and their impact on our profitability; movement and timing of customer orders; risks related to the value of our intangible assets related to the sales order book and customer relationships; risks associated with our reliance on third-party suppliers to provide essential products and services to us; the impact of government regulation including by the U.S. Department of Energy (“DOE”) and the U.S. Nuclear Regulatory Commission; uncertainty regarding our ability to commercially deploy competitive enrichment technology; risks and uncertainties regarding funding for deployment of the American Centrifuge technology and our ability to perform and absorb costs under our agreement with DOE to demonstrate the capability to produce high assay low enriched uranium (“HALEU”) and our ability to obtain and/or perform under other agreements; risks relating to whether or when government or commercial demand for HALEU will materialize; the potential for further demobilization or termination of our American Centrifuge work; risks related to our ability to perform and receive timely payment under agreements with DOE or other government agencies, including risk and uncertainties related to the ongoing funding of the government and potential audits; the competitive bidding process associated with obtaining a federal contract; risks related to our ability to perform fixed-price and cost-share contracts, including the risk that costs could be higher than expected; risks that we will be unable to obtain new business opportunities or achieve market acceptance of our products and services or that products or services provided by others will render our products or services obsolete or noncompetitive; risks that we will not be able to timely complete the work that we are obligated to perform; failures or security breaches of our information technology systems; risks related to pandemics and other health crises, such as the global COVID-19 pandemic; potential strategic transactions, which could be difficult to implement, disrupt our business or change our business profile significantly; the outcome of legal proceedings and other contingencies (including lawsuits and government investigations or audits); the competitive environment for our products and services; changes in the nuclear energy industry; the impact of financial market conditions on our business, liquidity, prospects, pension assets and insurance facilities; the risks of revenue and operating results fluctuating significantly from quarter to quarter, and in some cases, year to year; and other risks and uncertainties discussed in this and our other filings with the Securities and Exchange Commission, including under Part II, Item1A – “Risk Factors” in this report and under Part I, Item1A – “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019.

These factors may not constitute all factors that could cause actual results to differ from those discussed in any forward-looking statement. Accordingly, forward-looking statements should be not be relied upon as a predictor of actual results. Readers are urged to carefully review and consider the various disclosures made in this report and in our other filings with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business. We do not undertake to update our forward-looking statements to reflect events or circumstances that may arise after the date of this Quarterly Report on Form 10-Q, except as required by law.

Contacts:

Investors: Dan Leistikow (301) 564-3399 or [email protected]
Media: Lindsey Geisler (301) 564-3392 or [email protected]

 

 


CENTRUS ENERGY CORP.

CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(
Unaudited;
in millions, except share and per share data)


Three Months Ended
September 30,


Nine Months Ended
September 30,


2020


2019


2020


2019

Revenue:

Separative work units

$

0.1

$

75.0

$

89.4

$

87.4

Uranium

18.6

12.8

23.4

38.1

Technical solutions

14.9

16.9

41.5

28.5

Total revenue

33.6

104.7

154.3

154.0

Cost of Sales:

Separative work units and uranium

19.6

54.4

51.8

100.4

Technical solutions

14.8

14.8

39.9

27.9

Total cost of sales

34.4

69.2

91.7

128.3

Gross profit (loss)

(0.8)

35.5

62.6

25.7

Advanced technology costs

0.2

1.3

1.8

13.0

Selling, general and administrative

6.7

8.7

25.6

24.5

Amortization of intangible assets

1.2

1.8

4.3

4.1

Special charges (credits) for workforce reductions

0.6

0.8

0.5

(2.2)

Gain on sales of assets

—

(0.2)

—

(0.7)

Operating income (loss)

(9.5)

23.1

30.4

(13.0)

Nonoperating components of net periodic benefit expense (income)

(2.2)

(0.1)

(6.6)

(0.2)

Interest expense

—

0.9

0.1

2.9

Investment income

(0.1)

(0.5)

(0.5)

(1.9)

Income (loss) before income taxes

(7.2)

22.8

37.4

(13.8)

Income tax expense (benefit)

(0.2)

—

(0.6)

(0.1)

Net income (loss) and comprehensive income (loss)

(7.0)

22.8

38.0

(13.7)

Preferred stock dividends – undeclared and cumulative

1.9

1.9

5.9

5.9

Net income (loss) allocable to common stockholders

$

(8.9)

$

20.9

$

32.1

$

(19.6)

Net income (loss) per common share:

   Basic

$

(0.83)

$

2.18

$

3.21

$

(2.05)

   Diluted

$

(0.83)

$

2.17

$

3.12

$

(2.05)

Average number of common shares outstanding (in thousands):

   Basic

10,723

9,582

10,008

9,560

   Diluted

10,723

9,626

10,282

9,560

 

 


CENTRUS ENERGY CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except share and per share data)


September 30,

2020


December 31,

2019


ASSETS

Current assets:

Cash and cash equivalents

$

152.8

$

130.7

Accounts receivable

14.1

21.1

Inventories

66.6

64.5

Deferred costs associated with deferred revenue

145.4

144.1

Other current assets

7.4

9.2

Total current assets

386.3

369.6

Property, plant and equipment, net of accumulated depreciation of $2.5 as of September 30, 2020 and $2.2 as of December 31, 2019

4.4

3.7

Deposits for financial assurance

5.7

5.7

Intangible assets, net

65.2

69.5

Other long-term assets

6.6

7.4

Total assets

$

468.2

$

455.9


LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accounts payable and accrued liabilities

$

52.2

$

50.7

Payables under SWU purchase agreements

—

8.1

Inventories owed to customers and suppliers

7.8

5.6

Deferred revenue and advances from customers

249.7

266.3

Current debt

6.1

6.1

Total current liabilities

315.8

336.8

Long-term debt

108.0

114.1

Postretirement health and life benefit obligations

131.3

138.6

Pension benefit liabilities

121.2

141.8

Advances from customers

44.9

29.4

Other long-term liabilities

22.6

32.1

Total liabilities

743.8

792.8

Commitments and contingencies (Note 13)

Stockholders’ deficit:

Preferred stock, par value $1.00 per share, 20,000,000 shares authorized

Series A Participating Cumulative Preferred Stock, none issued

—

—

Series B Senior Preferred Stock, 7.5% cumulative, 104,574 shares issued and outstanding and an aggregate liquidation preference of $133.1 as of September 30, 2020 and $127.2 as of December 31, 2019

4.6

4.6

Class A Common Stock, par value $0.10 per share, 70,000,000 shares authorized, 11,320,689 and 8,347,427 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

1.1

0.8

Class B Common Stock, par value $0.10 per share, 30,000,000 shares authorized, 719,200 and 1,117,462 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

0.1

0.1

Excess of capital over par value

84.8

61.5

Accumulated deficit

(367.0)

(405.0)

Accumulated other comprehensive income, net of tax

0.8

1.1

Total stockholders’ deficit

(275.6)

(336.9)

Total liabilities and stockholders’ deficit

$

468.2

$

455.9

 

 


CENTRUS ENERGY CORP.

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS

(
Unaudited;
in millions)


Nine Months Ended
September 30,


2020


2019


OPERATING

Net income (loss)

$

38.0

$

(13.7)

Adjustments to reconcile net income (loss) to cash used in operating activities:

Depreciation and amortization

4.7

4.5

PIK interest on paid-in-kind toggle notes

—

1.1

Gain on sales of assets

—

(0.7)

Inventory valuation adjustments

—

2.3

Changes in operating assets and liabilities:

Accounts receivable

7.0

31.3

Inventories, net

17.1

(9.3)

Accounts payable and other liabilities

(0.3)

(11.2)

Payables under SWU purchase agreements

(8.1)

(33.0)

Deferred revenue and advances from customers, net of deferred costs

(17.5)

18.9

Accrued loss on long-term contract

(8.7)

—

Pension and postretirement benefit liabilities

(28.1)

(15.9)

Other, net

1.1

(0.8)

Cash provided by (used in) operating activities

5.2

(26.5)


INVESTING

Capital expenditures

(0.9)

—

Proceeds from sales of assets

—

0.7

Cash (used in) provided by investing activities

(0.9)

0.7


FINANCING

Proceeds from the sale of common stock, net

23.8

—

Exercise of stock options

0.2

—

Principal payments on debt

—

(27.5)

Payment of deferred issuance costs

(0.1)

(0.2)

Payment of interest classified as debt

(6.1)

(6.1)

Cash provided by (used) in financing activities

17.8

(33.8)

Increase (decrease) in cash, cash equivalents and restricted cash

22.1

(59.6)

Cash, cash equivalents and restricted cash, beginning of period (Note 4)

136.6

159.7

Cash, cash equivalents and restricted cash, end of period (Note 4)

$

158.7

$

100.1

Supplemental cash flow information:

Interest paid in cash

$

—

$

1.5

Non-cash activities:

Conversion of interest payable-in-kind to debt

$

—

$

0.7

Deferred financing costs included in accounts payable and accrued liabilities

$

0.7

$

0.4

Right to use lease assets acquired under operating leases

$

—

$

2.9

Disposal of right to use lease assets for early termination

$

—

$

0.2

Property, plant and equipment included in accounts payable and accrued liabilities

$

0.1

$

—

 

 

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SOURCE Centrus Energy Corp.