Market Newsdesk

February 28, 2023 5:18 pm

URBN Reports Q4 Results

PHILADELPHIA, Feb. 28, 2023 (GLOBE NEWSWIRE) — Urban Outfitters, Inc. (NASDAQ:URBN), a leading lifestyle products and services company which operates a portfolio of global consumer brands comprised of the Anthropologie, BHLDN, Free People, FP Movement, Terrain, Urban Outfitters, Nuuly and Menus & Venues brands, today announced net income of $31.5 million and earnings per diluted share of $0.34 for the three months ended January 31, 2023. For the year ended January 31, 2023, net income was $159.7 million and earnings per diluted share were $1.70.

Total Company net sales for the three months ended January 31, 2023, increased 3.9% to a record $1.38 billion. Total Retail segment net sales increased 2%, with comparable Retail segment net sales increasing 3%, partially offset by a 1% negative impact of foreign currency translation. The increase in Retail segment comparable net sales was driven by mid- single-digit positive growth in retail store sales and low single-digit positive growth in digital channel sales. By brand, comparable Retail segment net sales increased 15% at the Free People Group and 9% at the Anthropologie Group and decreased 10% at Urban Outfitters. Wholesale segment net sales decreased 7% driven by a 13% decrease in Free People Group wholesale sales due to a decrease in sales to department stores partially offset by growth in specialty and close out account partners, while Urban Outfitters wholesale sales increased by $3 million. Nuuly segment net sales increased by $25.5 million driven by a 149% increase in our subscribers as of the current quarter end versus the end of the prior year’s comparable quarter.

For the year ended January 31, 2023, total Company net sales increased 5.4% compared to the year ended January 31, 2022. Total Retail segment net sales increased 4%, with comparable Retail segment net sales also increasing 4%. The relative proportion of Retail segment sales attributable to store and digital channels changed due in large part to the temporary global store closures and occupancy restrictions in the prior year due to the COVID-19 pandemic. With those restrictions not present in the current year, Retail segment comparable sales increased due to high single-digit positive growth in retail store sales due to increased store traffic and low single-digit positive growth in digital channel sales. By brand, comparable Retail segment net sales increased 11% at the Free People Group and 11% at the Anthropologie Group and decreased 7% at Urban Outfitters. Wholesale segment net sales decreased 1%, driven by a 1% decrease in Free People Group wholesale sales primarily due to a decrease in sales to department stores, partially offset by an increase in sales to specialty accounts. Nuuly segment net sales increased by $81.9 million due to a 149% increase in our subscribers as of the current fiscal year end versus the end of the prior year’s comparable period.

“We are pleased to report record fourth quarter sales driven by strength at the Anthropologie, Free People and Nuuly brands,” said Richard A. Hayne, Chief Executive Officer. “We enter the spring selling season with an improved inventory position which bodes well for merchandise margin opportunity in fiscal 2024,” finished Mr. Hayne.

Net sales by brand and segment for the three and twelve-month periods were as follows:

	Three Months Ended				Twelve Months Ended
	January 31,				January 31,
	2023		2022		2023		2022
Net sales by brand
Anthropologie Group	$	602,865	$	558,699	$	1,985,928	$	1,794,266
Urban Outfitters		425,636		474,385		1,547,344		1,681,559
Free People Group		306,153		276,190		1,104,012		1,003,644
Nuuly		42,733		17,277		129,637		47,724
Menus & Venues		7,186		5,648		28,323		21,570
Total Company	$	1,384,573	$	1,332,199	$	4,795,244	$	4,548,763

Net sales by segment
Retail Segment	$	1,289,201	$	1,258,268	$	4,415,358	$	4,248,681
Wholesale Segment		52,639		56,654		250,249		252,358
Nuuly Segment		42,733		17,277		129,637		47,724
Total Company	$	1,384,573	$	1,332,199	$	4,795,244	$	4,548,763

For the three months ended January 31, 2023, the gross profit rate decreased by 68 basis points compared to the three months ended January 31, 2022. Gross profit dollars increased 1.4% to $372.3 million from $367.3 million in the year ended January 31, 2022. The decrease in gross profit rate was primarily due to store impairment charges of $5.5 million, or 39 bps, in the three months ended January 31, 2023. Retail segment merchandise margins were slightly lower as improved initial merchandise markups were offset by higher markdowns at the Urban Outfitters and Free People Group brands as compared to the comparable prior year quarter. A decline in Wholesale segment gross profit rate also contributed to the total Company gross profit decline as a result of increased sales discounts to clear out excess merchandise. Finally, the Nuuly segment gross profit rate improved due to operating leverage from the significant growth in subscribers.

For the year ended January 31, 2023, the gross profit rate decreased by 308 basis points compared to the year ended January 31, 2022. Gross profit dollars decreased 4.5% to $1.43 billion from $1.49 billion in the year ended January 31, 2022. The decrease in gross profit rate and dollars was primarily due to higher markdowns driven by the Urban Outfitters and Free People Group brands in the Retail segment as compared to record low markdown rates in the comparable prior year period. Additionally, during the year ended January 31, 2023, the Company recorded store impairment charges of $6.4 million.

As of January 31, 2023, total inventory increased by $17.8 million, or 3.1%, compared to total inventory as of January 31, 2022. Total Retail segment inventory increased by 4% and Wholesale segment inventory decreased by 7%.

For the three months ended January 31, 2023, selling, general and administrative expenses increased by $21.1 million, or 6.7%, compared to the three months ended January 31, 2022, and expressed as a percentage of net sales, deleveraged 63 basis points. The deleverage in SG&A as a rate to sales and growth in SG&A dollars was primarily related to increased marketing expenses to support increased sales and customer growth and severance expenses.

For the year ended January 31, 2023, selling, general and administrative expenses increased by $115.2 million, or 10.6%, compared to the prior year’s comparable period, and expressed as a percentage of net sales, deleveraged 118 basis points. The deleverage in SG&A as a rate to sales and growth in SG&A dollars was primarily related to higher store payroll primarily due to increased store associate hours to support increased customer traffic and higher average wages in order to attract and retain employees. Additionally, marketing expenses increased to support sales and customer growth.

The Company’s effective tax rate for the three months ended January 31, 2023 was 23.6%, compared to 21.1% in the three months ended January 31, 2022. The Company’s effective tax rate for the year ended January 31, 2023 was 27.8%, compared to 23.2% in the year ended January 31, 2022. The increase in the effective tax rate for the three and twelve months ended January 31, 2023 was attributable to the ratio of foreign taxable earnings to global taxable earnings, tax rate law changes and the prior year favorable impact of equity activity.

Net income for the three months ended January 31, 2023 was $31.5 million and earnings per diluted share were $0.34. Net income for the year ended January 31, 2023 was $159.7 million and earnings per diluted share were $1.70.

On August 22, 2017, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a share repurchase program; all shares were repurchased and the authorization was completed by the end of June 2022. On June 4, 2019, the Company’s Board of Directors authorized the repurchase of 20 million common shares under a new share repurchase program. During the year ended January 31, 2023, the Company repurchased and subsequently retired 4.7 million common shares for approximately $112 million. As of January 31, 2023, 19.2 million common shares were remaining under the program.

During the year ended January 31, 2023, the Company opened a total of 33 new retail locations including: 19 Free People Group stores (including 11 FP Movement stores), 7 Urban Outfitters stores, 6 Anthropologie Group stores and 1 Menus & Venues restaurant; and closed 15 retail locations including: 6 Anthropologie Group stores, 5 Urban Outfitters stores and 4 Free People Group stores. During the year ended January 31, 2023, 4 Urban Outfitters franchisee-owned stores and 1 Anthropologie Group franchisee-owned store were opened.

Urban Outfitters, Inc. offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands comprised of 263 Urban Outfitters stores in the United States, Canada and Europe and websites; 238 Anthropologie Group stores in the United States, Canada and Europe, catalogs and websites; 188 Free People stores (including 31 FP Movement stores) in the United States, Canada and Europe, catalogs and websites, 11 Menus & Venues restaurants, 6 Urban Outfitters franchisee-owned stores and 2 Anthropologie Group franchisee-owned stores as of January 31, 2023. Free People, FP Movement and Urban Outfitters wholesale sell their products through department and specialty stores worldwide, digital businesses and the Company’s Retail segment.

A conference call will be held today to discuss fourth quarter results and will be webcast at 5:15 pm. ET at: https://edge.media-server.com/mmc/p/hs7b9uru.

This news release is being made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.
Certain matters contained in this release may contain forward-looking statements. When used in this release, the words “project,” “believe,” “plan,” “will,” “anticipate,” “expect” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any one, or all, of the following factors could cause actual financial results to differ materially from those financial results mentioned in the forward-looking statements: the impacts of public health crises such as the coronavirus (COVID-19) pandemic, overall economic and market conditions (including current levels of inflation) and worldwide political events and the resultant impact on consumer spending patterns and our pricing power, the difficulty in predicting and responding to shifts in fashion trends, changes in the level of competitive pricing and promotional activity and other industry factors, the effects of the implementation of the United Kingdom’s withdrawal from membership in the European Union (commonly referred to as “Brexit”), including currency fluctuations, economic conditions and legal or regulatory changes, any effects of war (including geopolitical instability), terrorism and civil unrest, natural disasters, severe or unseasonable weather conditions (including as a result of climate change) or public health crises, increases in labor costs, raw material costs and transportation costs, availability of suitable retail space for expansion, timing of store openings, risks associated with international expansion, seasonal fluctuations in gross sales, response to new concepts, our ability to integrate acquisitions, risks associated with digital sales, our ability to maintain and expand our digital sales channels, any material disruptions or security breaches with respect to our technology systems, the departure of one or more key senior executives, import risks (including any shortage of transportation capacities or delays at ports), changes to U.S. and foreign trade policies (including the enactment of tariffs, border adjustment taxes or increases in duties or quotas), the closing or disruption of, or any damage to, any of our distribution centers, our ability to protect our intellectual property rights, failure of our manufacturers and third-party vendors to comply with our social compliance program, risks related to environmental, social and governance activities, changes in our effective income tax rate, changes in accounting standards and subjective assumptions, regulatory changes and legal matters and other risks identified in our filings with the Securities and Exchange Commission. The Company disclaims any intent or obligation to update forward-looking statements even if experience or future changes make it clear that actual results may differ materially from any projected results expressed or implied therein.

(Tables follow)

URBAN OUTFITTERS, INC.

Condensed Consolidated Statements of Income

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

(unaudited)

	Three Months Ended						Twelve Months Ended
	January 31,						January 31,
	2023			2022			2023			2022
Net sales	$	1,384,573		$	1,332,199		$	4,795,244		$	4,548,763
Cost of sales (excluding store impairment)		1,006,794			964,903			3,361,611			3,054,813
Store impairment		5,459			—			6,417			—
Gross profit		372,320			367,296			1,427,216			1,493,950
Selling, general and administrative expenses		335,070			313,988			1,200,593			1,085,384
Income from operations		37,250			53,308			226,623			408,566
Other income (loss), net		3,926			(1,432	)		(5,344	)		(3,935	)
Income before income taxes		41,176			51,876			221,279			404,631
Income tax expense		9,714			10,924			61,580			94,015
Net income	$	31,462		$	40,952		$	159,699		$	310,616

Net income per common share:
Basic	$	0.34		$	0.42		$	1.71		$	3.17
Diluted	$	0.34		$	0.41		$	1.70		$	3.13

Weighted-average common shares outstanding:
Basic		92,178,462			97,467,049			93,199,874			98,022,583
Diluted		93,619,121			98,738,272			94,144,062			99,268,705


AS A PERCENTAGE OF NET SALES
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales (excluding store impairment)		72.7	%		72.4	%		70.1	%		67.2	%
Store impairment		0.4	%		—			0.1	%		—
Gross profit		26.9	%		27.6	%		29.8	%		32.8	%
Selling, general and administrative expenses		24.2	%		23.6	%		25.1	%		23.8	%
Income from operations		2.7	%		4.0	%		4.7	%		9.0	%
Other income (loss), net		0.3	%		(0.1	%)		(0.1	%)		(0.1	%)
Income before income taxes		3.0	%		3.9	%		4.6	%		8.9	%
Income tax expense		0.7	%		0.8	%		1.3	%		2.1	%
Net income		2.3	%		3.1	%		3.3	%		6.8	%

URBAN OUTFITTERS, INC.

Condensed Consolidated Balance Sheets

(amounts in thousands, except share data)

(unaudited)

	January 31,			January 31,
	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	201,260		$	206,575
Marketable securities		181,378			239,420
Accounts receivable, net of allowance for doubtful accounts of $1,496 and $1,348, respectively		70,339			63,760
Inventory		587,510			569,699
Prepaid expenses and other current assets		197,232			206,293
Total current assets		1,237,719			1,285,747
Property and equipment, net		1,187,735			1,145,085
Operating lease right-of-use assets		959,436			1,000,255
Marketable securities		102,844			223,557
Deferred income taxes and other assets		195,178			136,703
Total Assets	$	3,682,912		$	3,791,347

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	257,620		$	304,246
Current portion of operating lease liabilities		232,672			236,315
Accrued expenses, accrued compensation and other current liabilities		400,082			440,912
Total current liabilities		890,374			981,473
Non-current portion of operating lease liabilities		884,696			951,080
Deferred rent and other liabilities		115,159			113,054
Total Liabilities		1,890,229			2,045,607

Shareholders’ equity:
Preferred shares; $.0001 par value, 10,000,000 shares authorized, none issued		—			—
Common shares; $.0001 par value, 200,000,000 shares authorized, 92,180,709 and 96,431,044 shares issued and outstanding, respectively	9			10
Additional paid-in-capital		15,248			—
Retained earnings		1,826,061			1,770,560
Accumulated other comprehensive loss		(48,635	)		(24,830	)
Total Shareholders’ Equity		1,792,683			1,745,740
Total Liabilities and Shareholders’ Equity	$	3,682,912		$	3,791,347

URBAN OUTFITTERS, INC.

Condensed Consolidated Statements of Cash Flows

(amounts in thousands)

(unaudited)

	Twelve Months Ended
	January 31,
	2023			2022
Cash flows from operating activities:
Net income	$	159,699		$	310,616
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		102,339			105,672
Non-cash lease expense		193,863			193,032
Benefit for deferred income taxes		(2,577	)		(2,695	)
Share-based compensation expense		29,449			25,741
Store impairment		6,417			—
Loss on disposition of property and equipment, net		982			1
Changes in assets and liabilities:
Receivables		(7,103	)		26,029
Inventory		(22,286	)		(181,898	)
Prepaid expenses and other assets		(31,257	)		(10,209	)
Payables, accrued expenses and other liabilities		(49,593	)		124,840
Operating lease liabilities		(237,204	)		(231,810	)
Net cash provided by operating activities		142,729			359,319
Cash flows from investing activities:
Cash paid for property and equipment		(199,513	)		(262,429	)
Cash paid for marketable securities		(109,148	)		(505,936	)
Sales and maturities of marketable securities		276,650			280,701
Net cash used in investing activities		(32,011	)		(487,664	)
Cash flows from financing activities:
Proceeds from the exercise of stock options		376			3,290
Share repurchases related to share repurchase program		(112,016	)		(55,765	)
Share repurchases related to taxes for share-based awards		(6,760	)		(7,790	)
Net cash used in financing activities		(118,400	)		(60,265	)
Effect of exchange rate changes on cash and cash equivalents		2,367			(450	)
Decrease in cash and cash equivalents		(5,315	)		(189,060	)
Cash and cash equivalents at beginning of period		206,575			395,635
Cash and cash equivalents at end of period	$	201,260		$	206,575

Contact:		Oona McCullough
		Executive Director of Investor Relations
		(215) 454-4806

February 28, 2023 5:17 pm

Virgin Galactic Announces Fourth Quarter and Full Year 2022 Financial Results and Provides Business Update

Virgin Galactic Announces Fourth Quarter and Full Year 2022 Financial Results and Provides Business Update

Commercial Service Remains on Track for Q2 2023
Enhancements to VMS Eve and VSS Unity Complete
VMS Eve Has Returned to Spaceport America to Begin Flights with VSS Unity

ORANGE COUNTY, Calif.–(BUSINESS WIRE)–
Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic” or the “Company”) today announced its financial results for the fourth quarter and full year ended December 31, 2022 and provided a business update.

Michael Colglazier, Chief Executive Officer of Virgin Galactic said, “It is great to see our mothership back in the skies, and we are thrilled to have VMS Eve rejoin spaceship Unity back home at Spaceport America. With our enhancement program complete and validation flights underway, we remain on track to launch commercial service in the second quarter of 2023. Our near-term objective for commercial spaceline operations is to safely deliver recurring flights with our current ships while providing an unrivaled experience for private astronauts and researchers.”

Fourth Quarter 2022 Financial Highlights

Cash position remains strong, with cash and cash equivalents and marketable securities of $980 million as of December 31, 2022.
Net loss of $151 million, compared to a $81 million net loss in the fourth quarter of 2021.
GAAP selling, general and administrative expenses of $47 million, compared to $38 million in the fourth quarter of 2021. Non‐GAAP selling, general and administrative expenses of $39 million in the fourth quarter of 2022, compared to $29 million in the fourth quarter of 2021.
GAAP research and development expenses of $103 million, compared to $40 million in the fourth quarter of 2021. Non‐GAAP research and development expenses of $99 million in the fourth quarter of 2022, compared to $36 million in the fourth quarter of 2021.
Adjusted EBITDA totaled $(133) million, compared to $(65) million in the fourth quarter of 2021.
Net cash used in operating activities totaled $131 million, compared to $65 million in the fourth quarter of 2021.
Cash paid for capital expenditures totaled $4 million, compared to $2 million in the fourth quarter of 2021.
Free cash flow totaled $(135) million, compared to $(67) million in the fourth quarter of 2021.
Generated $3.8 million in gross proceeds through the issuance of 0.7 million shares of common stock as part of the Company’s at-the-market offering program announced on August 4, 2022.

Full Year 2022 Financial Highlights

Net loss of $500 million, compared to a $353 million net loss in 2021.
GAAP selling, general and administrative expenses of $175 million, compared to $167 million in 2021. Non-GAAP selling, general and administrative expenses of $143 million, compared to $121 million in 2021.
GAAP research and development expenses of $314 million, compared to $144 million in 2021. Non-GAAP research and development expenses of $300 million, compared to $129 million in 2021.
Adjusted EBITDA totaled $(431) million, compared to $(245) million in 2021.
Net cash used in operating activities totaled $380 million, compared to $231 million in 2021.
Cash paid for capital expenditures totaled $16 million, compared to $5 million in 2021.
Free cash flow totaled $(397) million, compared to $(235) million in 2021.
Generated $103.3 million in gross proceeds through the issuance of 16.3 million shares of common stock as part of the Company’s at-the-market offering program announced on August 4, 2022.
Generated $425 million in gross proceeds through the issuance of convertible senior notes on January 19, 2022.

Recent Updates and Full Year Business Highlights

Commercial service remains on track for Q2 2023.
On November 2, 2022, announced Bell Textron and Qarbon Aerospace as primary suppliers to provide major subassemblies for Delta Class spaceships.
On August 2, 2022, announced land in New Mexico secured for a new astronaut campus and training facility.
On July 14, 2022, announced new final assembly manufacturing facility in Mesa, Arizona for the Delta Class spaceships.
On July 6, 2022, announced agreement with Aurora Flight Sciences to build the next generation motherships.

Financial Guidance

The following forward-looking statements reflect our expectations for the first quarter of 2023 as of February 28, 2023 and are subject to substantial uncertainty. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.”

Forecasted free cash flow for the first quarter of 2023 is expected to be in the range of $(135) million to $(145) million.

Non-GAAP Financial Measures

In addition to the Company’s results prepared in accordance with generally accepted accounting principles in the United States (GAAP), the Company is also providing certain non-GAAP financial measures. A discussion regarding the use of non-GAAP financial measures and a reconciliation of such measures to the most directly comparable GAAP information is presented later in this press release.

Conference Call Information

Virgin Galactic will host a conference call to discuss the results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today. To access the conference call, parties should dial +1 844 200 6205 or +1 646 904 5544 and enter the conference ID number 237767. The live audio webcast along with supplemental information will be accessible on the Company’s Investor Relations website at https://investors.virgingalactic.com/events-and-presentations/. A recording of the webcast will also be available following the conference call.

About Virgin Galactic Holdings

Virgin Galactic is an aerospace and space travel company, pioneering human spaceflight for private individuals and researchers with its advanced air and space vehicles. It is developing a spaceflight system designed to connect the world to the love, wonder and awe created by space travel and to offer customers a transformative experience. You can find more information at https://www.virgingalactic.com/.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding our spaceflight systems, expected flight schedule, timing of commercial launch, completion of our Delta class spaceship and motherships, our objectives for future operations and the Company’s financial forecasts, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “strategy,” “future,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the factors, risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the “SEC”), accessible on the SEC’s website at www.sec.gov and the Investor Relations section of our website at www.virgingalactic.com, which could cause our actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

Fourth Quarter 2022 Financial Results


VIRGIN GALACTIC HOLDINGS, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except for per share amounts)



	Three Months Ended						Year Ended
	December 31,						December 31,
		2022			2021			2022			2021

Revenue	$	869		$	141		$	2,312		$	3,292

Operating expenses:
Customer experience		1,169			2			1,906			272
Selling, general and administrative		47,298			38,311			175,118			166,814
Research and development		102,596			40,226			314,174			144,223
Depreciation and amortization		3,117			2,883			11,098			11,518
Total operating expenses		154,180			81,422			502,296			322,827

Operating loss		(153,311	)		(81,281	)		(499,984	)		(319,535	)

Interest income		6,175			423			12,502			1,208
Interest expense		(3,206	)		(6	)		(12,130	)		(25	)
Change in fair value of warrants		—			—			—			(34,650	)
Other income, net		51			72			58			182
Loss before income taxes		(150,291	)		(80,792	)		(499,554	)		(352,820	)
Income tax expense		529			5			598			79
Net loss		(150,820	)		(80,797	)		(500,152	)		(352,899	)
Other comprehensive income (loss):
Foreign currency translation adjustment		167			118			(146	)		129
Unrealized gain (loss) on marketable securities		2,916			(1,566	)		(5,311	)		(2,003	)
Total comprehensive loss	$	(147,737	)	$	(82,245	)	$	(505,609	)	$	(354,773	)


Net loss per share:
Basic and diluted	$	(0.55	)	$	(0.31	)	$	(1.89	)	$	(1.43	)

Weighted-average shares outstanding:
Basic and diluted		274,902			257,888			263,947			247,619



VIRGIN GALACTIC HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(In thousands)



	December 31,
		2022			2021
Assets
Current assets:
Cash and cash equivalents	$	302,291		$	524,481
Restricted cash		40,336			25,549
Marketable securities, short-term		606,716			79,418
Inventories		24,043			29,668
Prepaid expenses and other current assets		28,228			19,476
Total current assets		1,001,614			678,592
Marketable securities, long-term		30,392			301,463
Property, plant and equipment, net		53,658			47,498
Other non-current assets		54,274			41,281
Total assets	$	1,139,938		$	1,068,834
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		16,326			9,237
Accrued liabilities		61,848			28,787
Customer deposits		102,647			90,863
Other current liabilities		3,232			2,636
Total current liabilities		184,053			131,523
Non-current liabilities:
Convertible senior notes, net		415,720			—
Other long-term liabilities		59,942			43,047
Total liabilities		659,715			174,570
Stockholders’ Equity
Preferred stock		—			—
Common stock		28			26
Additional paid-in capital		2,111,316			2,019,750
Accumulated deficit		(1,623,795	)		(1,123,643	)
Accumulated other comprehensive loss		(7,326	)		(1,869	)
Total stockholders’ equity		480,223			894,264
Total liabilities and stockholders’ equity	$	1,139,938		$	1,068,834



VIRGIN GALACTIC HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)


	Three Months Ended						Year Ended
	December 31,						December 31,
		2022			2021			2022			2021
Cash flows from operating activities:
Net loss	$	(150,820	)	$	(80,797	)	$	(500,152	)	$	(352,899	)
Stock-based compensation		11,221			13,101			45,709			61,805
Depreciation and amortization		3,123			2,883			11,098			11,518
Amortization of debt issuance costs		532			—			1,998			—
Change in fair value of warrant liability		—			—			—			34,650
Other non-cash items		538			53			10,800			11
Change in operating assets and liabilities:
Inventories		(1,192	)		(363	)		5,625			815
Other current and non-current assets		(5,063	)		(9,807	)		(2,810	)		(3,465	)
Accounts payable and accrued liabilities		11,323			6,111			35,151			7,935
Customer deposits		(1,324	)		5,504			11,784			7,652
Other current and long-term liabilities		420			(1,811	)		556			1,215
Net cash used in operating activities		(131,242	)		(65,126	)		(380,241	)		(230,763	)
Cash flows from investing activities:
Capital expenditures		(4,183	)		(2,183	)		(16,489	)		(4,635	)
Purchases of marketable securities		(99,620	)		(96,752	)		(704,565	)		(382,884	)
Proceeds from maturities and calls of marketable securities		140,277			—			434,889			—
Net cash provided by (used in) investing activities		36,474			(98,935	)		(286,165	)		(387,519	)
Cash flows from financing activities:
Payments of finance lease obligations		(102	)		(35	)		(234	)		(140	)
Proceeds from convertible senior notes		—			—			425,000			—
Debt issuance costs		—			—			(11,278	)		—
Purchase of capped call		—			—			(52,318	)		—
Repayment of commercial loan		—			—			(310	)		(310	)
Proceeds from issuance of common stock		3,753			—			103,326			500,000
Proceeds from issuance of common stock pursuant to stock options exercised		—			1,124			49			19,980
Withholding taxes paid on behalf of employees on net settled stock-based awards		(505	)		(7,622	)		(3,984	)		(23,401	)
Transaction costs related to issuance of common stock		(111	)		(19	)		(1,248	)		(6,772	)
Net cash provided by (used in) financing activities		3,035			(6,552	)		459,003			489,357
Net decrease in cash, cash equivalents and restricted cash		(91,733	)		(170,613	)		(207,403	)		(128,925	)
Cash, cash equivalents and restricted cash at beginning of period		434,360			720,643			550,030			678,955
Cash, cash equivalents and restricted cash at end of period	$	342,627		$	550,030		$	342,627		$	550,030

Cash and cash equivalents	$	302,291		$	524,481		$	302,291		$	524,481
Restricted cash		40,336			25,549			40,336			25,549
Cash, cash equivalents and restricted cash	$	342,627		$	550,030		$	342,627		$	550,030

USE OF NON-GAAP FINANCIAL MEASURES

This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (GAAP), including Adjusted EBITDA, non-GAAP selling, general and administrative expenses, non-GAAP research and development expenses and free cash flow. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization, stock-based compensation, and certain other items the Company believes are not indicative of its core operating performance. It defines non-GAAP selling, general and administrative expenses as selling, general and administrative expenses other than stock-based compensation and non-GAAP research and development expenses as research and development expenses other than stock-based compensation. It defines free cash flow as net cash provided by operating activities less capital expenditures. None of these non-GAAP financial measures is a substitute for or superior to measures prepared in accordance with GAAP and should not be considered as an alternative to any other measures derived in accordance with GAAP.

The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.

A reconciliation of net loss to Adjusted EBITDA for the three months ended December 31, 2022 and 2021 and years ended December 31, 2022 and 2021, respectively, is set forth below (in thousands):

	Three Months Ended						Year Ended
	December 31,						December 31,
		2022			2021			2022			2021
Net loss	$	(150,820	)	$	(80,797	)	$	(500,152	)	$	(352,899	)
Income tax expense		529			5			598			79
Interest expense		3,206			6			12,130			25
Depreciation and amortization		3,117			2,883			11,098			11,518
EBITDA		(143,968	)		(77,903	)		(476,326	)		(341,277	)
Stock-based compensation		11,221			13,101			45,709			61,805
Change in fair value of warrants		—			—			—			34,650
Adjusted EBITDA	$	(132,747	)	$	(64,802	)	$	(430,617	)	$	(244,822	)

A reconciliation of selling, general and administrative expenses to non-GAAP selling, general and administrative expenses for the three months ended December 31, 2022 and 2021 and years ended December 31, 2022 and 2021, respectively, is set forth below (in thousands):

	Three Months Ended				Year Ended
	December 31,				December 31,
	2022		2021		2022		2021
Selling, general and administrative expenses	$	47,298	$	38,311	$	175,118	$	166,814
Stock-based compensation		7,887		9,177		31,955		46,181
Non-GAAP selling, general and administrative expenses	$	39,411	$	29,134	$	143,163	$	120,633

A reconciliation of research and development expenses to non-GAAP research and development expenses for the three months ended December 31, 2022 and 2021 and years ended December 31, 2022 and 2021, respectively, are set forth below (in thousands):

	Three Months Ended				Year Ended
	December 31,				December 31,
	2022		2021		2022		2021
Research and development expenses	$	102,596	$	40,226	$	314,174	$	144,223
Stock-based compensation		3,334		3,924		13,754		15,624
Non-GAAP research and development expenses	$	99,262	$	36,302	$	300,420	$	128,599

The following table reconciles forecasted net cash used in operating activities to forecasted free cash flow for the three months ending March 31, 2023 (in thousands):

		Forecasted Range
Net cash used in operating activities		$(127,000)-$(133,000)
Capital expenditures		$(8,000)-$(12,000)
Free cash flow		$(135,000)-$(145,000)

_______________

View source version on businesswire.com: https://www.businesswire.com/news/home/20230228006315/en/

For media inquiries:

Aleanna Crane – Vice President, Communications

[email protected]

575.800.4422

For investor inquiries:

Eric Cerny – Vice President, Investor Relations

[email protected]

949.774.7637

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Aerospace Manufacturing Other Travel Transportation Travel

MEDIA:

February 28, 2023 5:17 pm

Bumble Inc. to Participate in Morgan Stanley Technology, Media & Telecom Conference

Bumble Inc. to Participate in Morgan Stanley Technology, Media & Telecom Conference

AUSTIN, Texas–(BUSINESS WIRE)–
Bumble Inc. (NASDAQ: BMBL), the parent company of Bumble, Badoo, and Fruitz, today announced that management will participate at the following investor conference:

Morgan Stanley Technology, Media & Telecom Conference

San Francisco, CA

Monday, March 6, 2023

Fireside Chat at 2:05 p.m. PT

The fireside chat will be available via live audio webcast accessible on the Investors section of the Company’s website at https://ir.bumble.com.

About Bumble Inc.

Bumble Inc. is the parent company of Bumble, Badoo, and Fruitz. The Bumble platform enables people to connect and build equitable and healthy relationships. Founded by CEO Whitney Wolfe Herd in 2014, Bumble was one of the first dating apps built with women at the center and connects people across dating (Bumble Date), friendship (Bumble BFF) and professional networking (Bumble Bizz). Badoo, which was founded in 2006, is one of the pioneers of web and mobile dating products. Fruitz, founded in 2017, encourages open and honest communication of dating intentions through playful fruit metaphors.

For more information about Bumble, please visit www.bumble.com and follow @Bumble on social platforms.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230228006383/en/

Investor Contact

[email protected]

Media Contact

[email protected]

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Communications Social Media Apps/Applications Technology Mobile/Wireless Software Internet

MEDIA:

February 28, 2023 5:16 pm

Aravive Announces FDA Orphan Drug Designation Granted to Batiraxcept for the Treatment of Pancreatic Cancer

Dose escalation portion of ongoing Phase 1b/2 pancreatic adenocarcinoma trial initiated, with preliminary results expected in 2H 2023

HOUSTON, Feb. 28, 2023 (GLOBE NEWSWIRE) — Aravive, Inc. (Nasdaq: ARAV, “the Company”), a late clinical-stage oncology company developing targeted therapeutics to treat metastatic disease, today announced that the U.S. Food and Drug Administration (FDA) has granted Orphan Drug Designation (ODD) to batiraxcept for the treatment of pancreatic ductal adenocarcinoma cancer (PDAC).

The FDA’s Office of Orphan Products Development grants ODD status to a drug or biological product to prevent, diagnose or treat a rare disease or condition affecting fewer than 200,000 people in the USA. Companies that are granted ODD are eligible for incentives, including tax credits for qualified clinical trials, exemption from user fees and up to seven years of market exclusivity after approval.

“Receiving Orphan Drug Designation is another important milestone for batiraxcept, and it underscores the significant unmet medical need in patients with pancreatic cancer, typically diagnosed at an incurable advanced stage with a 5-year survival rate of 11%¹,” said Gail McIntyre, Ph.D., DABT, Chief Executive Officer of Aravive. “Three patients from our P1b trial are still responding to treatment with 15mg/kg batiraxcept, gemcitabine and nab-paclitaxel after 1 year and one patient has a confirmed complete response. Consistent with our other clinical trials, we noted a relationship between clinical activity and batiraxcept drug levels, however highly fibrotic tumors like PDAC may require more batiraxcept than platinum-resistant ovarian cancer and clear cell renal cell cancer patients to reach the appropriate batiraxcept drug levels. Due to this characteristic of pancreatic cancer, we are testing higher doses of batiraxcept to see if we can increase the proportion of patients who benefit from the triplet regimen.”

Batiraxcept (15mg/kg on Days 1 & 15) is currently being evaluated in a Phase 1b/2 trial (NCT04983407) as first-line treatment in combination with gemcitabine (1000 mg/m2 on Days 1, 8, & 15) and nab-paclitaxel (125 mg/m2 on Days 1, 8, & 15) in patients with locally advanced (nonresectable Stage II or Stage III) or metastatic (Stage IV) pancreatic adenocarcinoma. The Phase 1b portion of the trial is ongoing and the dose escalation phase was initiated this month. Preliminary results from the 20mg/kg batiraxcept plus gemcitabine and nab-paclitaxel cohort are anticipated in the second half of 2023. In addition to ODD granted by the FDA in pancreatic cancer, batiraxcept was previously granted ODD by the European Commission in platinum resistant recurrent ovarian cancer (PROC) and was granted Fast Track Designation by the FDA in PROC and clear cell renal cell carcinoma (ccRCC).

About Aravive

Aravive, Inc. is a late clinical-stage oncology company developing targeted therapeutics to treat metastatic disease. Batiraxcept (formerly AVB-500), is an ultra-high affinity decoy protein that binds to GAS6, the sole ligand that activates AXL, thereby inhibiting metastasis and tumor growth, and restoring sensitivity to anti-cancer agents. Batiraxcept has been granted Fast Track Designation by the U.S. FDA for both clear cell renal cell carcinoma and platinum-resistant ovarian cancer and Orphan Drug Designation by the European Commission in platinum resistant recurrent ovarian cancer. Batiraxcept is in an active registrational Phase 3 trial in platinum resistant ovarian cancer (NCT04729608), a Phase 1b/2 trial in clear cell renal cell carcinoma (NCT04300140), and a Phase 1b/2 trial in pancreatic adenocarcinoma (NCT04983407). The Company is based in Houston, Texas and received a Product Development Award from the Cancer Prevention & Research Institute of Texas (CPRIT) in 2016. Additional information at www.aravive.com.

Forward Looking Statements

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions and includes statements regarding benefitting from the ODD incentives, including tax credits for qualified clinical trials, exemption from user fees and up to seven years of market exclusivity after approval and PDAC requiring more batiraxcept than platinum-resistant ovarian cancer and clear cell renal cell cancer patients to reach the appropriate batiraxcept drug levels. Forward-looking statements are based on current beliefs and assumptions, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement as a result of various factors, including, but not limited to, risks and uncertainties related to the ability to benefit from the incentives from ODD status, the ability to enroll patients as anticipated, the ability to provide data when anticipated; the Company’s dependence upon batiraxcept; batiraxcept’s ability to have favorable results in clinical trials; the clinical trials of batiraxcept having results that are as favorable as those of preclinical and clinical trials; the ability to receive regulatory approval, potential delays in the Company’s clinical trials due to regulatory requirements or difficulty identifying qualified investigators or enrolling patients especially in light of the COVID-19 pandemic; the risk that batiraxcept may cause serious side effects or have properties that delay or prevent regulatory approval or limit its commercial potential; the risk that the Company may encounter difficulties in manufacturing batiraxcept; if batiraxcept is approved, risks associated with its market acceptance, including pricing and reimbursement; potential difficulties enforcing the Company’s intellectual property rights; and the Company’s reliance on its licensor of intellectual property and financing needs and the cash runway being sufficient to sustain operations into the fourth quarter of 2023 and beyond the readout on the Company’s Phase 3 Ovarian cancer trial. The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the risk factors included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, the Company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2022 and June 30, 2022, respectively, recent Current Reports on Form 8-K and subsequent filings with the SEC. Except as required by applicable law, the Company undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:

Corey Davis, Ph.D.
LifeSci Advisors, LLC
212-915-2577
[email protected]

¹ The Surveillance, Epidemiology, and End Results (SEER) website: https://seer.cancer.gov/statfacts/html/pancreas.html

February 28, 2023 5:16 pm

Vroom Announces Fourth Quarter and Full Year 2022 Results

Vroom Announces Fourth Quarter and Full Year 2022 Results

Significant Sequential Cost Reductions and Continued Progress on Long-Term Roadmap

NEW YORK–(BUSINESS WIRE)–
Vroom, Inc. (Nasdaq:VRM), a leading ecommerce platform for buying and selling used vehicles, today announced financial results for the fourth quarter and fiscal year ended December 31, 2022.

HIGHLIGHTS OF FOURTH QUARTER 2022 VERSUS THIRD QUARTER 2022

Ecommerce gross profit per unit of $1,233 as compared to $4,206
SG&A expenses of $90.8 million as compared to $134.6 million
Net income of $24.8 million as compared to net loss of $(51.1) million
Adjusted EBITDA of $(70.9) million as compared to $(73.3) million
Adjusted EBITDA excluding securitization gain and non-recurring costs of $(70.5) million as compared to $(73.5) million

HIGHLIGHTS OF FISCAL YEAR 2022⁽¹⁾ VERSUS FISCAL YEAR 2021

Ecommerce gross profit per unit of $2,545 compared to $2,206
SG&A expenses of $566.4 million compared to $547.8 million
Net loss of $(451.9) million compared to $(370.9) million
Adjusted EBITDA of $(337.2) million compared to $(340.2) million
Adjusted EBITDA excluding securitization gain and non-recurring costs of $(357.4) million compared to $(340.2) million

^{(1) Fiscal year 2022 includes UACC’s results of operations starting on February 1, 2022.}

Tom Shortt, Chief Executive Officer of Vroom, said, “In the fourth quarter we continued to make progress on our three key objectives and four strategic initiatives. We significantly reduced operating expenses quarter over quarter and continued to improve our operations and customer experience. We improved our titling process enabling us to end the year with 87% of units available for sale or pending sale versus 52% at the end of Q3, however it also increased the age of our inventory available for sale and inventory sold.

Gross profit per unit declined from $4,206 in Q3 to $1,233 in Q4 primarily due to three items. The decline quarter over quarter was impacted primarily by three items. First, the percentage of sales from aged units increased 5X from Q3 to Q4; 36% of our units sold during the 4th quarter were aged units we’ve held >270 days. Second, increased industry wide market depreciation. Third, higher inventory reserves primarily driven by recent electric unit OEM price decreases.

During 2022 we strategically slowed down the business while we improved our customer experience and processes across titling and registration, pricing, marketing, reconditioning and logistics, and began to insource our sales function from our primary third-party resource. During 2023, we expect to resume growth, sell through aged vehicles, improve variable cost per unit and reduce fixed costs.”

Bob Krakowiak, Vroom’s Chief Financial Officer, commented, “During the fourth quarter we further maximized liquidity and strengthened our balance sheet by repurchasing $198 million of our convertible notes and unlocking $70 million of cash-in-inventory and restricted cash. Combined with earlier note repurchases, we repurchased $254 million of our convertible notes throughout 2022. During 2023, we will continue to pursue opportunities to enhance our liquidity.”

FOURTH QUARTER 2022 FINANCIAL DISCUSSION

All financial comparisons for the fourth quarter are on a year-over-year basis unless otherwise noted.

Ecommerce Results

	Three Months Ended December 31,												Year Ended December 31,
	2022			2021			Change			% Change			2022		2021		Change			% Change
	(in thousands, except unit data and average days to sale)												(in thousands, except unit data and average days to sale)
Ecommerce units sold		4,144			21,243			(17,099	)		(80.5	)%		39,278		74,698		(35,420	)		(47.4	)%
Ecommerce revenue:
Vehicle revenue	$	131,069		$	715,874	$		(584,805	)		(81.7	)%	$	1,304,797	$	2,360,368	$	(1,055,571	)		(44.7	)%
Product revenue		10,689			22,846			(12,157	)		(53.2	)%		59,398		82,001		(22,603	)		(27.6	)%
Total ecommerce revenue	$	141,758		$	738,720	$		(596,962	)		(80.8	)%	$	1,364,195	$	2,442,369	$	(1,078,174	)		(44.1	)%
Ecommerce gross profit:
Vehicle gross profit	$	(5,579	)	$	10,042	$		(15,621	)		(155.6	)%	$	40,575	$	82,745	$	(42,170	)		(51.0	)%
Product gross profit		10,689			22,846			(12,157	)		(53.2	)%		59,398		82,001		(22,603	)		(27.6	)%
Total ecommerce gross profit	$	5,110		$	32,888	$		(27,778	)		(84.5	)%	$	99,973	$	164,746	$	(64,773	)		(39.3	)%
Average vehicle selling price per ecommerce unit	$	31,629		$	33,699	$		(2,070	)		(6.1	)%	$	33,220	$	31,599	$	1,621			5.1	%
Gross profit per ecommerce unit:
Vehicle gross profit per ecommerce unit	$	(1,346	)	$	473	$		(1,819	)		(384.6	)%	$	1,033	$	1,108	$	(75	)		(6.8	)%
Product gross profit per ecommerce unit		2,579			1,075			1,504			139.9	%		1,512		1,098		414			37.7	%
Total gross profit per ecommerce unit	$	1,233		$	1,548	$		(315	)		(20.3	)%	$	2,545	$	2,206	$	339			15.4	%
Ecommerce average days to sale		244			76			168			221.1	%		131		74		57			77.2	%

Results by Segment

	Three Months Ended December 31,											Year Ended December 31,
	2022			2021⁽¹⁾		Change			% Change			2022			2021⁽¹⁾		Change			% Change

	(in thousands, except unit data)											(in thousands, except unit data)
Units:
Ecommerce		4,144			21,243		(17,099	)		(80.5	)%		39,278			74,698		(35,420	)		(47.4	)%
Wholesale		1,768			8,742		(6,974	)		(79.8	)%		20,876			37,163		(16,287	)		(43.8	)%
All Other ⁽²⁾		350			2,105		(1,755	)		(83.4	)%		3,758			7,212		(3,454	)		(47.9	)%
Total units		6,262			32,090		(25,828	)		(80.5	)%		63,912			119,073		(55,161	)		(46.3	)%

Revenue:
Ecommerce	$	141,758		$	738,720	$	(596,962	)		(80.8	)%	$	1,364,195		$	2,442,369	$	(1,078,174	)		(44.1	)%
Wholesale		23,039			121,543		(98,504	)		(81.0	)%		293,528			498,981		(205,453	)		(41.2	)%
Retail Financing ⁽³⁾		32,537			—		32,537			100.0	%		152,542			—		152,542			100.0	%
All Other ⁽⁴⁾		12,015			74,228		(62,213	)		(83.8	)%		138,636			242,905		(104,269	)		(42.9	)%
Total revenue	$	209,349		$	934,491	$	(725,142	)		(77.6	)%	$	1,948,901		$	3,184,255	$	(1,235,354	)		(38.8	)%
Gross profit (loss):
Ecommerce	$	5,110		$	32,888	$	(27,778	)		(84.5	)%	$	99,973		$	164,746	$	(64,773	)		(39.3	)%
Wholesale		(4,359	)		7,783		(12,142	)		(156.0	)%		(10,620	)		18,120		(28,740	)		(158.6	)%
Retail Financing ⁽³⁾		28,744			—		28,744			100.0	%		138,381			—		138,381			100.0	%
All Other ⁽⁴⁾		(36	)		4,035		(4,071	)		(100.9	)%		17,053			19,233		(2,180	)		(11.3	)%
Total gross profit	$	29,459		$	44,706	$	(15,247	)		(34.1	)%	$	244,787		$	202,099	$	42,688			21.1	%
Gross profit (loss) per unit ⁽⁵⁾:
Ecommerce	$	1,233		$	1,548	$	(315	)		(20.3	)%	$	2,545		$	2,206	$	339			15.4	%
Wholesale	$	(2,465	)	$	890	$	(3,355	)		(377.0	)%	$	(509	)	$	488	$	(997	)		(204.3	)%

(1)		In the second quarter of 2022, we reevaluated our reporting segments based on relative revenue and gross profit and significance in our long term strategy. As a result of that analysis, we determined to no longer report TDA as a separate operating segment. As of June 30, 2022, we are organized into three reportable segments: Ecommerce, Wholesale, and Retail Financing. We reclassified TDA revenue and TDA gross profit from the TDA reportable segment to the “All Other” category to conform to current year presentation.
(2)		All Other units consist of retail sales of used vehicles from TDA.
(3)		The Retail Financing segment represents UACC’s operations with its network of third-party dealership customers as of the closing of the UACC acquisition in February 2022.
(4)		All Other revenues and gross profit consist of retail sales of used vehicles from TDA and fees earned on sales of value-added products associated with those vehicles sales and the CarStory business.
(5)		Gross profit per unit metrics exclude the Retail Financing gross profit and All Other gross profit.

SG&A

	Three Months Ended December 31,													Year Ended December 31,
		2022				2021		Change			% Change				2022			2021		Change			% Change

	(in thousands)													(in thousands)
Compensation & benefits	$		52,043		$		59,332	$	(7,289	)		(12.3	)%	$		251,153	$		204,913	$	46,240			22.6	%
Marketing expense			9,852				37,214		(27,362	)		(73.5	)%			79,670			125,481		(45,811	)		(36.5	)%
Outbound logistics			(902	)			27,800		(28,702	)		(103.2	)%			39,023			85,788		(46,765	)		(54.5	)%
Occupancy and related costs			5,955				4,849		1,106			22.8	%			23,363			17,448		5,915			33.9	%
Professional fees			6,870				8,435		(1,565	)		(18.6	)%			33,455			24,386		9,069			37.2	%
Software and IT costs			11,164				8,383		2,781			33.2	%			44,570			27,749		16,821			60.6	%
Other			5,778				20,328		(14,550	)		(71.6	)%			95,153			62,058		33,095			53.3	%
Total selling, general & administrative expenses	$		90,760		$		166,341	$	(75,581	)		(45.4	)%	$		566,387	$		547,823	$	18,564			3.4	%

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance:

EBITDA;
Adjusted EBITDA;
Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues;
Adjusted EBITDA excluding securitization gain;
Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues;

These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with U.S. GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with other operating and financial performance measures presented in accordance with U.S. GAAP. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with U.S. GAAP. We have reconciled all non-GAAP financial measures with the most directly comparable U.S. GAAP financial measures.

EBITDA, Adjusted EBITDA, Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues, Adjusted EBITDA excluding securitization gain, and Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues are supplemental performance measures that our management uses to assess our operating performance and the operating leverage in our business. Because each of these non-GAAP financial measures facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes.

EBITDA

We calculate EBITDA as net loss before interest expense, interest income, income tax expense and depreciation and amortization expense.

Adjusted EBITDA

We calculate Adjusted EBITDA as EBITDA adjusted to exclude realignment costs, acquisition related costs, change in fair value of finance receivables, goodwill impairment charge, gain on debt extinguishment, acceleration of non-cash stock-based compensation, and other costs, which primarily relate to the impairment of long-lived assets. Changes in fair value of finance receivables can fluctuate significantly from period to period and relate primarily to historical loans and debt which have been securitized, and acquired on February 1, 2022 from UACC. Our ongoing business model is to originate or purchase finance receivables with the intent to sell which we recognize at the lower of cost or fair value. Therefore, these historical finance receivables acquired, which are accounted for under the fair value option, will experience fluctuations in value from period to period. We believe it is appropriate to remove this temporary volatility from our Adjusted EBITDA results to better reflect our ongoing business model. Additionally, these historical finance receivables acquired from UACC are expected to run-off within approximately 12 months.

Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues

We calculate Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the non-recurring costs incurred to address operational and customer experience issues, including rental cars for our customers and legal settlements with customers and state DMVs. While we expect to continue to incur these costs over the next few quarterly periods, we do not expect these costs to continue to be incurred once our operational issues have been resolved.

Adjusted EBITDA excluding securitization gain

We calculate Adjusted EBITDA excluding securitization gain as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC’s finance receivables, and believe that it provides a useful perspective on the underlying operating results and trends and a means to compare our period-over-period results.

Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues

We calculate Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues as Adjusted EBITDA adjusted to exclude the securitization gain from the sale of UACC’s finance receivables and the non-recurring costs incurred to address operational and customer experience issues.

The following table presents a reconciliation of the foregoing non-GAAP financial measures to net loss, which is the most directly comparable U.S. GAAP measure:

	Three Months Ended December 31,						Year Ended December 31,
	2022			2021			2022			2021

	(in thousands)						(in thousands)
Net income (loss)	$	24,765		$	(129,792	)	$	(451,910	)	$	(370,911	)
Adjusted to exclude the following:
Interest expense		12,076			7,228			40,693			21,948
Interest income		(6,372	)		(3,053	)		(19,363	)		(10,341	)
Provision (benefit) for income taxes		2,405			375			(19,680	)		754
Depreciation and amortization		10,702			3,718			38,707			13,215
EBITDA	$	43,576		$	(121,524	)	$	(411,553	)	$	(345,335	)
Realignment costs	$	2,253		$	—		$	15,025		$	—
Acquisition related costs		—			1,678			5,653			5,090
Change in fair value of finance receivables		3,917			—			8,372			—
Goodwill impairment charge		—			—			201,703			—
Gain on debt extinguishment		(126,767	)		—			(164,684	)		—
Acceleration of non-cash stock-based compensation		2,439			—			2,439			—
Other		3,679			—			5,806			—
Adjusted EBITDA	$	(70,903	)	$	(119,846	)	$	(337,239	)	$	(340,245	)
Non-recurring costs to address operational and customer experience issues		374			—			25,433			—
Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues	$	(70,529	)	$	(119,846	)	$	(311,806	)	$	(340,245	)
Securitization gain		—			—			(45,589	)		—
Adjusted EBITDA excluding securitization gain	$	(70,903	)	$	(119,846	)	$	(382,828	)	$	(340,245	)
Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues	$	(70,529	)	$	(119,846	)	$	(357,395	)	$	(340,245	)

FOURTH QUARTER 2022 AS COMPARED TO THIRD QUARTER 2022

	Three Months Ended December 31,			Three Months Ended September 30,
	2022			2022			Change			% Change
	(in thousands, except unit data)
Total revenues	$	209,349		$	340,797		$	(131,448	)		(38.6	)%
Total gross profit	$	29,459		$	67,331		$	(37,872	)		(56.2	)%
Ecommerce units sold		4,144			6,428			(2,284	)		(35.5	)%
Ecommerce revenue	$	141,758		$	225,441		$	(83,683	)		(37.1	)%
Ecommerce gross profit	$	5,110		$	27,034		$	(21,924	)		(81.1	)%
Vehicle gross (loss) profit per ecommerce unit	$	(1,346	)	$	2,267		$	(3,613	)		(159.4	)%
Product gross profit per ecommerce unit		2,579			1,939			640			33.0	%
Total gross profit per ecommerce unit	$	1,233		$	4,206		$	(2,973	)		(70.7	)%
Wholesale units sold		1,768			3,128			(1,360	)		(43.5	)%
Wholesale revenue	$	23,039		$	47,604		$	(24,565	)		(51.6	)%
Wholesale gross loss	$	(4,359	)	$	(1,574	)	$	(2,785	)		176.9	%
Wholesale gross loss per unit	$	(2,465	)	$	(503	)	$	(1,962	)		(390.1	)%
Retail Financing revenue	$	32,537		$	40,654		$	(8,117	)		(20.0	)%
Retail Financing gross profit	$	28,744		$	35,954		$	(7,210	)		(20.1	)%
Total selling, general, and administrative expenses	$	90,760		$	134,643		$	(43,883	)		(32.6	)%

	Three Months Ended December 31,			Three Months Ended September 30,
	2022			2022			Change			% Change

	(in thousands)
Net income (loss)	$	24,765		$	(51,127	)	$	75,892			148.4	%
Adjusted to exclude the following:
Interest expense		12,076			9,704			2,372			24.4	%
Interest income		(6,372	)		(5,104	)		(1,268	)		24.8	%
Provision for income taxes		2,405			899			1,506			167.5	%
Depreciation and amortization		10,702			9,995			707			7.1	%
EBITDA	$	43,576		$	(35,633	)	$	79,209			222.3	%
Realignment costs	$	2,253		$	3,243		$	(990	)		(30.5	)%
Change in fair value of finance receivables		3,917			(3,012	)		6,929			230.0	%
Gain on debt extinguishment		(126,767	)		(37,917	)		(88,850	)		234.3	%
Acceleration of non-cash stock-based compensation		2,439			—			2,439			100.0	%
Other		3,679			—			3,679			100.0	%
Adjusted EBITDA	$	(70,903	)	$	(73,319	)	$	2,416			3.3	%
Non-recurring costs to address operational and customer experience issues		374			15,785			(15,411	)		(97.6	)%
Adjusted EBITDA excluding non-recurring costs to address operational and customer experience issues	$	(70,529	)	$	(57,534	)	$	(12,995	)		(22.6	)%
Securitization gain		—			(15,972	)		15,972			100.0	%
Adjusted EBITDA excluding securitization gain	$	(70,903	)	$	(89,291	)	$	18,388			20.6	%
Adjusted EBITDA excluding securitization gain and non-recurring costs to address operational and customer experience issues	$	(70,529	)	$	(73,506	)	$	2,977			4.0	%

Financial Outlook

For the full year 2023, we expect the following results:

Adjusted EBITDA⁽¹⁾ of $(250.0) to $(200.0) million
Year-end cash and cash equivalents of $150.0 to $200.0 million

^{(1) A reconciliation of non-GAAP guidance measures to corresponding GAAP measures for the full year 2023 Financial Outlook is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, the costs and expenses that may be incurred in the future. We have provided a reconciliation of GAAP to non-GAAP financial measures for the fourth quarter and full year 2022 in the reconciliation table in the Non-GAAP Financial Measures section above.}

The foregoing estimates are forward-looking statements that reflect the Company’s expectations as of February 28, 2023 and are subject to substantial uncertainty. See “Forward-Looking Statements” below.

Conference Call & Webcast Information

Vroom management will discuss these results and other information regarding the Company during a conference call and audio webcast Wednesday, March 1, 2023 at 8:30 a.m. ET.

To access the conference call, please register at this embedded link. Registered participants will be sent a unique PIN to access the call. A listen-only webcast will also be available via the same link and at ir.vroom.com. An archived webcast of the conference call will be accessible on the website within 48 hours of its completion.

About Vroom (Nasdaq: VRM)

Vroom is an innovative, end-to-end ecommerce platform that offers a better way to buy and a better way to sell used vehicles. The Company’s scalable, data-driven technology brings all phases of the vehicle buying and selling process to consumers wherever they are and offers an extensive selection of vehicles, transparent pricing, competitive financing, and contact-free, at-home pick-up and delivery. For more information visit www.vroom.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding expected timelines with respect to, our execution of and the expected benefits from our long term roadmap and cost-saving initiatives; our ability to improve our transaction processes and customer experience; our plans to sell through aged vehicles, improve variable cost per unit and reduce fixed costs; our future growth, our business strategy and our plans, including our ongoing ability to integrate and develop United Auto Credit Corporation into a captive finance operation; our future results of operations and financial position, including our ability to improve our unit economics and our outlook for the full year 2023, including with respect to our liquidity and our plans to enhance liquidity. These statements are based on management’s current assumptions and are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, which is available on our Investor Relations website at ir.vroom.com and on the SEC website at www.sec.gov. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances.

VROOM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) (unaudited)

	As of December 31,
	2022			2021
ASSETS
Current Assets:
Cash and cash equivalents	$	398,915		$	1,132,325
Restricted cash (including restricted cash of consolidated VIEs of $24.7 million and $0 million, respectively)		73,095			82,450
Accounts receivable, net of allowance of $21.5 million and $8.9 million, respectively		13,967			105,433
Finance receivables at fair value (including finance receivables of consolidated VIEs of $11.5 million and $0 million, respectively)		12,939			—
Finance receivables held for sale, net (including finance receivables of consolidated VIEs of $305.9 million and $0 million, respectively)		321,626			—
Inventory		320,648			726,384
Beneficial interests in securitizations		20,592			—
Prepaid expenses and other current assets		58,327			55,700
Total current assets		1,220,109			2,102,292
Finance receivables at fair value (including finance receivables of consolidated VIEs of $119.6 million and $0 million, respectively)		140,235			—
Property and equipment, net		50,201			37,042
Intangible assets, net		158,910			28,207
Goodwill		—			158,817
Operating lease right-of-use assets		23,568			15,359
Other assets		26,004			25,033
Total assets	$	1,619,027		$	2,366,750
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	34,702		$	52,651
Accrued expenses		76,795			121,508
Vehicle floorplan		276,988			512,801
Warehouse credit facilities of consolidated VIEs		229,518			—
Current portion of securitization debt of consolidated VIEs at fair value		47,239			—
Deferred revenue		10,655			75,803
Operating lease liabilities, current		9,730			6,889
Other current liabilities		17,693			57,604
Total current liabilities		703,320			827,256
Long term debt, net of current portion (including securitization debt of consolidated VIEs of $32.6 million and $0 million at fair value, respectively)		402,154			610,618
Operating lease liabilities, excluding current portion		20,129			9,592
Other long-term liabilities		18,183			4,090
Total liabilities		1,143,786			1,451,556
Commitments and contingencies (Note 14)
Stockholders’ equity:
Common stock, $0.001 par value; 500,000,000 shares authorized as of December 31, 2022 and 2021; 138,201,903 and 137,092,891 shares issued and outstanding as of December 31, 2022 and 2021, respectively		135			135
Additional paid-in-capital		2,075,798			2,063,841
Accumulated deficit		(1,600,692	)		(1,148,782	)
Total stockholders’ equity		475,241			915,194
Total liabilities and stockholders’ equity	$	1,619,027		$	2,366,750

VROOM, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited)

	Three Months Ended December 31,						Year Ended December 31,
	2022			2021			2022			2021
Revenue:
Retail vehicle, net	$	142,579		$	785,262		$	1,425,842		$	2,583,417
Wholesale vehicle		23,039			121,543			293,528			498,981
Product, net		10,793			24,402			62,747			88,824
Finance		32,537			—			152,542			—
Other		401			3,284			14,242			13,033
Total revenue		209,349			934,491			1,948,901			3,184,255
Cost of sales:
Retail vehicle		147,867			774,613			1,382,005			2,495,587
Wholesale vehicle		27,399			113,760			304,148			480,861
Finance		3,793			—			14,161			—
Other		831			1,413			3,800			5,708
Total cost of sales		179,890			889,786			1,704,114			2,982,156
Total gross profit		29,459			44,705			244,787			202,099
Selling, general and administrative expenses		90,760			166,341			566,387			547,823
Depreciation and amortization		10,562			3,614			38,290			12,891
Impairment charges		5,746			—			211,873			—
Loss from operations		(77,609	)		(125,250	)		(571,763	)		(358,615	)
Gain on debt extinguishment		(126,767	)		—			(164,684	)		—
Interest expense		12,076			7,228			40,693			21,948
Interest income		(6,372	)		(3,053	)		(19,363	)		(10,341	)
Other loss (income), net		16,284			(7	)		43,181			(65	)
Income (loss) before provision for income taxes		27,170			(129,418	)		(471,590	)		(370,157	)
Provision (benefit) for income taxes		2,405			375			(19,680	)		754
Net income (loss)	$	24,765		$	(129,793	)	$	(451,910	)	$	(370,911	)
Net income (loss) per share attributable to common stockholders, basic	$	0.18		$	(0.95	)	$	(3.28	)	$	(2.72	)
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic		138,176,258			136,948,461			137,907,444			136,429,791
Net income (loss) per share attributable to common stockholders, diluted	$	0.18		$	(0.95	)	$	(3.28	)	$	(2.72	)
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, diluted		146,577,839			136,948,461			137,907,444			136,429,791

VROOM, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)

	Year Ended December 31,
	2022			2021
Operating activities
Net loss	$	(451,910	)	$	(370,911	)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment charges		211,873			—
Gain on debt extinguishment		(164,684	)		—
Depreciation and amortization		38,707			13,215
Amortization of debt issuance costs		4,809			2,872
Realized gains on securitization transactions		(45,589	)		—
Deferred taxes		(23,855	)		—
Losses on finance receivables and securitization debt, net		66,839			—
Stock-based compensation expense		11,957			13,409
Provision to record inventory at lower of cost or net realizable value		1,812			9,471
Provision for bad debt		13,406			9,416
Provision to record finance receivables held for sale at lower of cost or fair value		6,541			—
Amortization of unearned discounts on finance receivables at fair value		(14,593	)		—
Other, net		(7,512	)		203
Changes in operating assets and liabilities:
Finance receivables, held for sale
Originations of finance receivables held for sale		(625,575	)		—
Principal payments received on finance receivables held for sale		64,521			—
Proceeds from sale of finance receivables held for sale, net		509,612			—
Other		(7,701	)		—
Accounts receivable		78,060			(53,206	)
Inventory		403,924			(312,208	)
Prepaid expenses and other current assets		4,146			(32,452	)
Other assets		(2,546	)		(9,172	)
Accounts payable		(24,281	)		19,321
Accrued expenses		(53,553	)		61,170
Deferred revenue		(65,148	)		50,943
Other liabilities		(38,325	)		29,241
Net cash used in operating activities		(109,065	)		(568,688	)
Investing activities
Finance receivables at fair value
Purchases of finance receivables at fair value		(56,484	)		—
Principal payments received on finance receivables at fair value		132,391			—
Proceeds from sale of finance receivables at fair value, net		43,262			—
Principal payments received on beneficial interests		8,341			—
Purchase of property and equipment		(24,234	)		(28,413	)
Acquisition of business, net of cash acquired of $47.9 million		(267,488	)		(75,875	)
Net cash used in investing activities		(164,212	)		(104,288	)
Financing activities
Principal repayment under secured financing agreements		(192,839	)		—
Proceeds from vehicle floorplan		1,403,042			2,713,350
Repayments of vehicle floorplan		(1,638,855	)		(2,529,780	)
Proceeds from warehouse credit facilities		520,800			—
Repayments of warehouse credit facilities		(467,216	)		—
Repayments of convertible senior notes		(90,208	)		—
Proceeds from issuance of convertible senior notes		—			625,000
Issuance costs paid for convertible senior notes		—			(16,129	)
Proceeds from exercise of stock options		—			5,766
Other financing activities		(4,212	)		(495	)
Net cash (used in) provided by financing activities		(469,488	)		797,712
Net (decrease) increase in cash, cash equivalents and restricted cash		(742,765	)		124,736
Cash, cash equivalents and restricted cash at the beginning of period		1,214,775			1,090,039
Cash, cash equivalents and restricted cash at the end of period	$	472,010		$	1,214,775

VROOM, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) (unaudited)

Supplemental disclosure of cash flow information:
Cash paid for interest	$	34,907	$	15,964
Cash paid for income taxes	$	2,409	$	403
Supplemental disclosure of non-cash investing and financing activities:
Fair value of beneficial interests received in securitization transactions	$	30,082	$	—
Issuance of common stock for CarStory acquisition	$	—	$	38,811
Fair value of unvested stock options assumed for acquisition of business	$	—	$	1,017

View source version on businesswire.com: https://www.businesswire.com/news/home/20230228006070/en/

Investor Relations:

Vroom

Liam Harrington

[email protected]

Media Contact:

Vroom

Chris Hayes

[email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Retail Automotive General Automotive Technology Specialty Electronic Commerce

MEDIA:

Logo

February 28, 2023 5:15 pm

Myriad Genetics Reports Fourth Quarter Financial Results; Fourth Quarter Revenue of $177.8 Million Grew 11% Year-Over-Year Driven by 16% Growth in Hereditary Cancer Volumes and 23% Growth in GeneSight® Volumes

Highlights:

Fourth quarter testing volumes grew
26%
year-over-year, and 11% year-over-year excluding the contribution from the recent acquisition of Gateway Genomics and its SneakPeek
^®
Early Gender DNA Test.
GeneSight, the company’s pharmacogenomics test, grew revenue 36% for the full year 2022.
Gross margin for the fourth quarter was approximately
70%
r
eflecting underlying price stability and disciplined cost management.
Diluted GAAP earnings per share (EPS) were
$(0.52)
and adjusted EPS were
$(0.12)
in the fourth quarter of 2022.
Issued fiscal first quarter and full year 2023 financial guidance.

SALT LAKE CITY, Feb. 28, 2023 (GLOBE NEWSWIRE) — Myriad Genetics, Inc. (NASDAQ: MYGN), a leader in genetic testing and precision medicine, today announced financial results for its fourth quarter ended December 31, 2022 and provided its outlook on business performance for 2023.

“Myriad Genetics ended 2022 with a strong fourth quarter. Our market-leading hereditary cancer test, MyRisk, achieved double-digit year-over-year growth in the quarter – a reflection of our team’s hard work and the execution of our strategic growth plan,” said Paul J. Diaz, president and CEO, Myriad Genetics. “We believe 2023 will be an exciting year as we continue to invest in our Labs of the Future strategy and enabling technologies to enhance our ability to better serve our patients and provider partners. We plan to introduce a number of new products in the second half of 2023, including Precise Liquid and FirstGene. And we are on-track to introduce Precise MRD to our pharma partners for research use.” Mr. Diaz concluded, “We remain confident in our ability to achieve our goal of 10%+ annual growth by 2024 based on the progress we made in 2022 and the strong start to the year we are seeing through February. As we look to 2024 and beyond, we are excited about our robust product pipeline and a capital structure that enables Myriad Genetics to invest in future innovation and growth.”

Financial and Operational Highlights:

Diagnostic test volumes of approximately 299,000 in the fourth quarter of 2022 increased 26% year-over-year. Hereditary cancer and pharmacogenomics volumes grew 16% and 23%, respectively, in the fourth quarter of 2022 compared to the fourth quarter of 2021.
The following table summarizes year-over-year volume changes in the company’s core product categories:

	Three months ended December 31,			Year ended December 31,
	2022			2022
Product volumes:
Hereditary cancer		16	%		1	%
Tumor profiling		—	%		1	%
Prenatal		40	%		9	%
Pharmacogenomics		23	%		35	%
Total		26	%		14	%

Fourth quarter revenue of $177.8 million compared to the same period in 2021 was impacted by currency translations of $(3.6) million.
The following table summarizes year-over-year revenue changes in the company’s core businesses by product category:

	Three months ended						Twelve months ended
(in millions)	December 31, 2022		December 31, 2021		% Change		December 31, 2022		December 31, 2021		% Change
Product revenues:
Hereditary cancer	$	84.9	$	74.8	14	%	$	305.5	$	316.3	(3	)%
Tumor profiling		31.7		26.5	20	%		128.6		120.9	6	%
Prenatal		29.1		30.1	(3	)%		116.4		106.8	9	%
Pharmacogenomics		32.1		29.4	9	%		127.6		93.7	36	%
Total	$	177.8	$	160.8	11	%	$	678.1	$	637.7	6	%

GAAP gross margins of 69.7% in the fourth quarter of 2022 decreased 180 basis points year-over-year, reflecting changes in product/volume mix as well as the impact of currency translation and inflationary pressures.
GAAP total operating expenses in the fourth quarter of 2022 were $176.1 million, decreasing $18.0 million year-over-year. Adjusted operating expenses in the fourth quarter of 2022 increased $23.3 million year-over-year to $138.6 million, and reflects the incremental investments in research and development, technology and commercial tools, pipeline development and sales and marketing programs, and Gateway Genomics, as well as the impact of the inflationary environment.
GAAP operating loss in the fourth quarter of 2022 was $52.2 million, increasing $9.1 million year-over-year; adjusted operating loss was $13.9 million, increasing $14.0 million year-over-year from adjusted operating income of $0.1 million in the fourth quarter of 2021.
Ended the fourth quarter of 2022 with $169.7 million in cash, cash equivalents and marketable investment securities as compared to $257.2 million at the beginning of the quarter. The decrease was driven primarily by the acquisition of Gateway Genomics (closed November 1) and ongoing capital expenditures and investments in the company’s laboratories of the future strategy.
Cash used in operating activities in the fourth quarter of 2022 was $7.7 million.
The company ended the quarter with no debt outstanding.

Business Performance and Highlights:

Oncology

The Myriad Genetics Oncology business provides hereditary cancer testing, including the MyRisk hereditary cancer test for patients who have cancer. It also provides tumor profiling products such as the MyChoice^® CDx companion diagnostic test, the Prolaris^® prostate cancer test, and the EndoPredict^® breast cancer prognostic test. The Oncology business delivered revenue of $75.9 million in the fourth quarter of 2022.

Fourth quarter hereditary cancer testing volumes in Oncology grew 13% year-over-year. In addition, Prolaris continued to see strong demand as fourth quarter testing volumes grew 17% year-over-year.
Researcher enrollment in the first release of Myriad’s Precise treatment registry has already reached approximately 100 individuals, spanning a broad mix of community and academic institutions. Clinicians have access to our cohort browser portal developed in partnership with DNANexus. The portal has already supported multiple collaborative research projects to advance cancer care.

Women’s Health

The Myriad Genetics Women’s Health business serves women of all ancestries by assessing their risk of cancer and offers prenatal testing solutions for those who are pregnant or planning a family. The Women’s Health business delivered revenue of $69.8 million in the fourth quarter of 2022.

Fourth quarter hereditary cancer testing volumes in Women’s Health grew 19% year-over-year and were higher than any prior quarter in 2022.
Fourth quarter results include a partial quarter contribution from the acquisition of Gateway Genomics, a personal genomics company and developer of consumer genetic tests including the No. 1 selling SneakPeek Early Gender DNA Test.
Excluding the contribution from Gateway Genomics, prenatal testing volumes in the fourth quarter of 2022 grew 2% sequentially versus the third quarter of 2022 and were down 1% versus the fourth quarter of 2021.
In February, 2023, the Journal of Genetic Counseling, the official journal of the National Society of Genetic Counselors (NSGC), published evidence-based guidelines for expanded carrier screening, which supports the potential increasing adoption and the growth of the company’s carrier screening test, Foresight.

Mental Health

The Myriad Genetics Mental Health business consists of the GeneSight test that covers 64 medications commonly prescribed for depression, anxiety, attention deficit hyperactivity disorder, and other psychiatric conditions. GeneSight helps physicians understand how genetic alterations impact patient response to antidepressants and other drugs. In the pharmacogenomics category, the GeneSight test recorded revenue of $32.1 million in the fourth quarter of 2022.

GeneSight, under Proprietary Laboratory Analyses (PLA) code 0345U, has been priced on the Medicare Clinical Lab Fee Schedule at $1,336 per test.
In the fourth quarter, Myriad Genetics added over 3,000 clinicians who ordered GeneSight for the first time.
The results of the Veterans Affairs research study (PRIME Care) using GeneSight to improve treatment for veterans with depression was identified as a top 10 genomic advancement for 2022 by the Genomic Medicine Working Group of the National Human Genome Research Institute’s (NHGRI) Advisory council. The annual list of the most significant advances and accomplishments in genomic medicine was published by the American Journal of Human Genetics.

Corporate Growth Initiatives Update:

Myriad Genetics continues to execute its commercial and operational growth initiatives, including the enhancement of its core infrastructure to better communicate the company’s differentiated value proposition, remove friction from engagement with healthcare providers and their patients, and gain reimbursement levels that reflect the value of Myriad’s offering. With the ongoing support from partners, Bain Consulting and KPMG, Myriad has been able to speed decision making and increase productivity across the enterprise.

Growth Strategy

In the fourth quarter of 2022, with the help of Bain Consulting, management conducted a strategic review of its current products and product pipeline, markets, competitive positioning and developed a roadmap for all of its products (“Product 360”). The purpose of this review was to gain a more rigorous and data driven “outside in” perspective of the company’s competitiveness and ability to position each product to their full potential. This review sharpened its view on how to better address the needs of its provider partners and patients in Women’s Health, Mental Health and Oncology. In addition, this review highlighted a focus on key patient sub-segments, such as the estimated 13 million women that meet the National Comprehensive Cancer Network (NCCN) guidelines for the company’s market leading hereditary cancer test, MyRisk, as well as opportunities to better position and expand indications for Prolaris and MyChoice.

Commercial

The company continues to implement digital tools and enabling technologies to improve patient, provider, and payer awareness, engagement, ease of use, and overall experience. Myriad Genetics has made significant progress on the following:

Enhanced corporate web presence to more fully digitize provider, patient and payor engagement.
Initiated limited launch of the unified ordering portal in early 2023 with roll out planned through 2023.
Launched first Epic EMR integration with a phased roll out through 2023 and beyond.
Continued to refine revenue cycle management (RCM) activities that have already seen significant improvement during 2021-2022 to further improve reimbursement of its products.

Operations

Myriad Genetics’ laboratories of the future strategy enters 2023 with significant progress as we establish and move into modern and scalable facilities. This strategy supports the company’s long-term goals to expand laboratory capacity, reduce cost and enhance testing automation. The company remains on-track to substantially complete both new facility construction and related developments and capital expenditure targets in 2023.

Financial Guidance

Below is a table summarizing Myriad Genetics’ fiscal year 2023 financial guidance*:

(in millions, except per share amounts)	FY 2023	FY 2023 Comments	Q1 2023	Q1 2023 Comments

Revenue	$720 – $750	Reflects annual growth of between 6% – 11% over 2022	$170 – $172	Expected to decrease ~3% from Q4 ’22 reflecting seasonality
Gross margin %	68% – 70%	GM expected to remain within range given seasonality	68%	GM expected to decrease 200 basis points from Q4 ’22 due to seasonality
GAAP OPEX	$628 – $648		$165 – $167
Adjusted OPEX	$530 – $550	Adjusted operating expenses expected to remain flat-to-down from annualized Q4 ’22 range	$138 – $140	Adjusted operating expenses expected to remain flat in nominal dollars compared to Q4 ’22
GAAP EPS	$(1.43) – $(1.23)		$(0.47) – $(0.45)
Adjusted EPS	$(0.40) – $(0.20)	Adjusted EPS is expected to improve through 2023, reaching positive adjusted profitability and operating cash flow in Q4 ’23	$(0.20) – $(0.18)	Adjusted EPS loss expected to be greater than Q4 ’22 due to ongoing investments combined with seasonality

* Assumes currency rates as of February 28, 2023

Myriad Genetics’ fiscal year 2023 non-GAAP guidance begins with the comparable GAAP financial measure and excludes the estimated impact of stock-based compensation expense of approximately $40.0 million, non-cash amortization associated with acquisitions of approximately $43.0 million and special items such as costs related to transformation initiatives of approximately $15.0 million.

Myriad Genetics’ fiscal first quarter of 2023 non-GAAP guidance begins with the comparable GAAP financial measure and excludes the estimated impact of stock-based compensation expense of approximately $10 million, non-cash amortization associated with acquisitions of approximately $11 million and special items such as costs related to transformation initiatives of approximately $6 million.

These projections are forward-looking statements and are subject to the risks summarized in the safe harbor statement at the end of this press release.

Conference Call and Webcast

A conference call will be held today, Tuesday, February 28, 2023, at 4:30 p.m. EST to discuss Myriad Genetics’ financial results and business developments for the fourth quarter 2022. The dial-in number for domestic callers is 1-800-920-6941. International callers may dial 1-212-231-2939. All callers will be asked to reference reservation number 22025948. An archived replay of the call will be available for seven days by dialing 1-800-257-4607 and entering the reservation number above. The conference call and slide presentation will be available through a live webcast at www.myriad.com.

About Myriad Genetics

Myriad Genetics is a leading genetic testing and precision medicine company dedicated to advancing health and well-being for all. Myriad provides insights that help people take control of their health and enable healthcare providers to better detect, treat, and prevent disease. Myriad Genetics develops and offers genetic tests that help assess the risk of developing disease or disease progression and guide treatment decisions across medical specialties where critical genetic insights can significantly improve patient care and lower healthcare costs. For more information, visit www.myriad.com.

Myriad, the Myriad logo, BRACAnalysis, BRACAnalysis CDx, Colaris, ColarisAP, MyRisk, Myriad MyRisk, MyRisk Hereditary Cancer, MyChoice, Tumor BRACAnalysis CDx, MyChoice CDx, Prequel, Prequel with Amplify, Amplify, Foresight, Precise, FirstGene, SneakPeek, SneakPeek Early Gender DNA Test, Health.Illuminated., RiskScore, Prolaris, GeneSight, and EndoPredict are registered trademarks or trademarks of Myriad Genetics, Inc.. All third-party marks—^® and ^™—are the property of their respective owners. © 2023 Myriad Genetics, Inc. All rights reserved.

Revenue by Product (Unaudited):

	Three months ended December 31,
(in millions)	2022										2021
	WH		ONC		MH		Other		Total		WH		ONC		MH		Other		Total		% Change
Hereditary Cancer	$	40.7	$	44.2	$	—	$	—	$	84.9	$	34.1	$	40.7	$	—	$	—	$	74.8	14	%
Tumor Profiling		—		31.7		—		—		31.7		—		26.5		—		—		26.5	20	%
Prenatal		29.1		—		—		—		29.1		30.1		—		—		—		30.1	(3	)%
Pharmacogenomics		—		—		32.1		—		32.1		—		—		29.4		—		29.4	9	%
Total Revenue	$	69.8	$	75.9	$	32.1	$	—	$	177.8	$	64.2	$	67.2	$	29.4	$	—	$	160.8	11	%

	Year ended December 31,
(in millions)	2022										2021
	WH		ONC		MH		Other		Total		WH		ONC		MH		Other		Total		% Change
Hereditary Cancer	$	143.1	$	162.4	$	—	$	—	$	305.5	$	139.2	$	177.1	$	—	$	—	$	316.3	(3	)%
Tumor Profiling		—		128.6		—		—		128.6		—		120.9		—		—		120.9	6	%
Prenatal		116.4		—		—		—		116.4		106.8		—		—		—		106.8	9	%
Pharmacogenomics		—		—		127.6		—		127.6		—		—		93.7		—		93.7	36	%
Autoimmune		—		—		—		0.3		0.3		—		—		—		28.2		28.2	(99	)%
Other		—		—		—		—		—		—		—		—		0.5		0.5	(99	)%
Total testing revenue		259.5		291.0		127.6		0.3		678.4		246.0		298.0		93.7		28.7		666.4	2	%
Total other revenue		—		—		—		—		—		—		—		—		24.2		24.2	(100	)%
Total Revenue	$	259.5	$	291.0	$	127.6	$	0.3	$	678.4	$	246.0	$	298.0	$	93.7	$	52.9	$	690.6	(2	)%

Business Units:
WH = Women’s Health
ONC = Oncology
MH = Mental Health

Product Categories:
Hereditary Cancer – MyRisk, BRACAnalysis, BRACAnalysis CDx
Tumor Profiling – MyChoice CDx, Prolaris, EndoPredict
Prenatal – Foresight, Prequel, SneakPeek
Pharmacogenomics – GeneSight
Autoimmune – Vectra (sold in September 2021)
Other (testing) – myPath (sold in May 2021)
Other revenue – RBM (sold in July 2021), COVID-19 testing


MYRIAD GENETICS, INC. AND SUBSIDIARIES Consolidated Statements of Operations (in millions, except per share amounts)

	Three months ended December 31,						Year ended December 31,
		2022			2021			2022			2021
	(unaudited)
Testing revenue	$	177.8		$	160.8		$	678.4		$	666.4
Other revenue		—			—			—			24.2
Total revenue		177.8			160.8			678.4			690.6
Costs and expenses:
Cost of testing revenue		53.9			45.8			202.0			185.7
Cost of other revenue		—			—			—			11.9
Research and development expense		23.4			16.6			85.4			81.9
Selling, general, and administrative expense		146.5			127.5			514.7			537.8
Legal charges pending settlement		—			14.0			—			62.0
Goodwill and long-lived asset impairment charges		6.2			—			16.9			1.8
Total costs and expenses		230.0			203.9			819.0			881.1
Operating loss		(52.2	)		(43.1	)		(140.6	)		(190.5	)
Other income (expense):
Interest income		1.0			0.2			2.6			0.7
Interest expense		(0.9	)		(0.5	)		(3.2	)		(6.6	)
Other		—			(0.1	)		0.6			139.3
Total other income (expense)		0.1			(0.4	)		—			133.4
Loss before income tax		(52.1	)		(43.5	)		(140.6	)		(57.1	)
Income tax benefit		(9.8	)		(35.9	)		(28.6	)		(29.9	)
Net loss	$	(42.3	)	$	(7.6	)	$	(112.0	)	$	(27.2	)
Net loss attributable to non-controlling interest		—			—			—			—
Net loss attributable to Myriad Genetics, Inc. stockholders	$	(42.3	)	$	(7.6	)	$	(112.0	)	$	(27.2	)
Net loss per share:
Basic and diluted	$	(0.52	)	$	(0.10	)	$	(1.39	)	$	(0.35	)
Weighted average shares outstanding:
Basic and diluted		81.5			79.9			80.6			78.0


MYRIAD GENETICS, IN C. AND SUBSIDIARIES Consolidated Balance Sheets (in millions, except share information)

	December 31, 2022			December 31, 2021

ASSETS
Current assets:
Cash and cash equivalents	$	56.9		$	257.4
Marketable investment securities		58.0			81.4
Trade accounts receivable		101.6			91.3
Inventory		20.1			15.3
Prepaid taxes		17.6			18.4
Prepaid expenses and other current assets		20.4			21.0
Total current assets		274.6			484.8
Operating lease right-of-use assets		103.9			81.8
Long-term marketable investment securities		54.8			59.0
Property, plant and equipment, net		83.4			43.5
Intangibles, net		379.7			404.1
Goodwill		286.8			239.2
Other assets		15.5			8.3
Total assets	$	1,198.7		$	1,320.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		28.8			29.6
Accrued liabilities		94.3			161.7
Current maturities of operating lease liabilities		14.1			13.0
Total current liabilities		137.2			204.3
Unrecognized tax benefits		26.8			27.9
Long-term deferred taxes		3.5			35.8
Noncurrent operating lease liabilities		130.9			79.3
Other long-term liabilities		14.5			5.6
Total liabilities		312.9			352.9
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 81.2 and 80.0 shares outstanding at December 31, 2022 and 2021, respectively		0.8			0.8
Additional paid-in capital		1,260.1			1,226.3
Accumulated other comprehensive loss		(8.9	)		(5.1	)
Accumulated deficit		(366.2	)		(254.2	)
Total Myriad Genetics, Inc. stockholders’ equity		885.8			967.8
Non-controlling interest		—			—
Total stockholders’ equity		885.8			967.8
Total liabilities and stockholders’ equity	$	1,198.7		$	1,320.7


MYRIAD GENETICS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (in millions)

	Year Ended December 31,
		2022			2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss attributable to Myriad Genetics, Inc. stockholders	$	(112.0	)	$	(27.2	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		52.7			62.8
Non-cash interest expense		1.7			1.5
Non-cash lease expense		11.7			12.8
Tenant improvement allowance received		18.0			—
Stock-based compensation expense		38.1			36.3
Deferred income taxes		(30.8	)		(32.1	)
Unrecognized tax benefits		(1.1	)		(2.6	)
Loss on inventory		—			6.5
Impairment of goodwill and long-lived assets		16.9			1.8
Gain on sale of assets		—			(162.0	)
Changes in assets and liabilities:
Prepaid expenses and other current assets		1.6			(6.6	)
Trade accounts receivable		(10.3	)		(8.8	)
Inventory		(2.9	)		1.6
Prepaid taxes		0.7			89.9
Other assets		(0.9	)		(3.6	)
Accounts payable		(3.5	)		9.2
Accrued liabilities		(81.2	)		65.7
Deferred revenue		(5.0	)		(26.6	)
Net cash provided by (used in) operating activities		(106.3	)		18.6
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(45.3	)		(18.0	)
Acquisitions, net of cash acquired		(57.2	)		—
Proceeds from sale of business and assets		—			379.1
Purchases of marketable investment securities		(103.2	)		(147.8	)
Proceeds from maturities and sales of marketable investment securities		128.2			61.1
Net cash provided by (used in) investing activities		(77.5	)		274.4
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issued under stock-based compensation plans		6.3			91.8
Payment of tax withheld for common stock issued under stock-based compensation plans		(10.6	)		(11.5	)
Payment of contingent consideration recognized at acquisition		(3.0	)		(3.3	)
Fees associated with refinancing of revolving credit facility		(0.7	)		(1.2	)
Repayment of revolving credit facility		—			(226.4	)
Net cash used in financing activities		(8.0	)		(150.6	)
Effect of foreign exchange rates on cash, cash equivalents, and restricted cash		(0.6	)		(0.6	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(192.4	)		141.8
Cash, cash equivalents, and restricted cash at beginning of the period		258.8			117.0
Cash, cash equivalents, and restricted cash at end of the period	$	66.4		$	258.8

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including the company’s fiscal year 2023 and first quarter 2023 financial guidance, and statements relating to the company’s continuing investment in its laboratories of the future strategy and enabling technologies, the company’s plans to introduce a number of new products in the second half of 2023, including Precise Liquid and FirstGene, the company’s goal of achieving 10%+ annual revenue growth by 2024, the planned roll out of the unified ordering portal through 2023, the phased roll out of the Epic EMR integration through 2023 and beyond, and the company’s expectation that both new facility construction and related developments and capital expenditure targets will be substantially completed in 2023. These “forward-looking statements” are management’s present expectations of future events as of the date hereof and are subject to a number of known and unknown risks and uncertainties that could cause actual results, conditions, and events to differ materially and adversely from those anticipated. These risks include, but are not limited to: the risk that sales and profit margins of the company’s existing tests may decline or that the company may not be able to operate its business on a profitable basis; risks related to the company’s ability to achieve certain revenue growth targets and generate sufficient revenue from its existing product portfolio or in launching and commercializing new tests to be profitable; risks related to changes in governmental or private insurers’ coverage and reimbursement levels for the company’s tests or the company’s ability to obtain reimbursement for its new tests at comparable levels to its existing tests; risks related to increased competition and the development of new competing tests; continued uncertainties associated with COVID-19, including its possible effects on the company’s operations and the demand for its products; the risk that the company may be unable to develop or achieve commercial success for additional tests in a timely manner, or at all; the risk that the company may not successfully develop new markets or channels for its tests, including the company’s ability to successfully generate substantial revenue outside the United States; the risk that licenses to the technology underlying the company’s tests and any future tests are terminated or cannot be maintained on satisfactory terms; risks related to delays or other problems with constructing and operating the company’s laboratory testing facilities; risks related to public concern over genetic testing in general or the company’s tests in particular; risks related to regulatory requirements or enforcement in the United States and foreign countries and changes in the structure of the healthcare system or healthcare payment systems; risks related to the company’s ability to obtain new corporate collaborations or licenses and acquire or develop new technologies or businesses on satisfactory terms, if at all; risks related to the company’s ability to successfully integrate and derive benefits from any technologies or businesses that it licenses, acquires or develops; the risk that the company is not able to secure additional financing to fund its business, if needed, in a timely manner or on favorable terms, if it all; risks related to the company’s projections about the potential market opportunity for the company’s current and future products; the risk that the company or its licensors may be unable to protect or that third parties will infringe the proprietary technologies underlying the company’s tests; the risk of patent-infringement claims or challenges to the validity of the company’s patents; risks related to changes in intellectual property laws covering the company’s tests, or patents or enforcement, in the United States and foreign countries; risks related to security breaches, loss of data and other disruptions, including from cyberattacks; risks of new, changing and competitive technologies in the United States and internationally and that the company may not be able to keep pace with the rapid technology changes in its industry, or properly leverage new technologies to achieve or sustain competitive advantages in its products; the risk that the company may be unable to comply with financial operating covenants under the company’s credit or lending agreements; risks related to the company’s inability to achieve and maintain effective disclosure controls and procedures and internal control over financial reporting; risks related to current and future investigations, claims or lawsuits, including derivative claims, product or professional liability claims, and risks related to the amount of the company’s insurance coverage limits and scope of insurance coverage with respect thereto; and other factors discussed under the heading “Risk Factors” contained in Item 1A of the company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on February 25, 2022, as well as any updates to those risk factors filed from time to time in the company’s Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

Reconciliation of Revenue to Revenue Excluding Divested Businesses for the Three Months and Year ended December 31, 2022 and 2021

(unaudited data in millions)

	Three months ended				Year ended
	December 31, 2022		December 31, 2021		December 31, 2022			December 31, 2021
Revenue Excluding Divested Businesses
Revenue	$	177.8	$	160.8	$	678.4		$	690.6
Myriad RBM Revenues		—		—		—			(21.2	)
Autoimmune Revenues		—		—		(0.3	)		(28.3	)
COVID Testing Revenues		—		—		—			(2.9	)
MyPath Revenues		—		—		—			(0.5	)
Revenue Excluding Divested Businesses	$	177.8	$	160.8	$	678.1		$	637.7

Statement reg
arding use of non-GAAP financial measures
In this press release, the company’s financial results and financial guidance are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of the company’s core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and to manage the company’s business. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the schedules below and a description of the adjustments made to the GAAP financial measures is included at the end of the schedules.

The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Non-GAAP financial results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.


Reconciliation of GAAP to Non-GAAP Financial Measures for the Three Months and Year ended December 31, 2022 and 2021 (unaudited data in millions, except per share amounts)

	Three months ended December 31,						Year ended December 31,
		2022			2021			2022			2021
Adjusted Gross Margin
GAAP Gross Profit ⁽¹⁾	$	123.9		$	115.0		$	476.4		$	493.0
Equity compensation		0.4			0.4			1.4			1.4
Acquisition – amortization of intangible assets		0.2			—			0.2			—
Acquisition-related costs		0.1			—			0.1			—
Other adjustments		—			—			—			1.3
Adjusted Gross Profit	$	124.6		$	115.4		$	478.1		$	495.7
Adjusted Gross Margin		70.1%			71.8%			70.5%			71.8%
(1) Consists of total revenues less cost of testing revenue and cost of other revenue from the Consolidated Statements of Operations.

	Three months ended December 31,						Year ended December 31,
		2022			2021			2022			2021
Adjusted Operating Expenses
GAAP Operating Expenses ⁽¹⁾	$	176.1		$	158.1		$	617.0		$	683.5
Acquisition – amortization of intangible assets		(10.3	)		(9.8	)		(40.7	)		(50.1	)
Goodwill and long-lived asset impairment charges		(6.1	)		—			(16.8	)		(1.8	)
Equity compensation		(7.8	)		(8.0	)		(36.5	)		(34.9	)
Transformation initiatives		(5.6	)		(6.0	)		(17.8	)		(24.8	)
Divestiture-related costs		—			—			—			(1.8	)
Acquisition-related costs		(4.8	)		—			(5.0	)		—
Legal charges, net of insurance reimbursement		(1.5	)		(14.0	)		11.4			(62.0	)
Other adjustments		(1.4	)		(5.0	)		(0.7	)		(21.4	)
Adjusted Operating Expenses	$	138.6		$	115.3		$	510.9		$	486.7
(1) Consists of research and development expense, selling, general, and administrative expense, and goodwill and long-lived asset impairment charges from the Consolidated Statements of Operations.



	Three months ended December 31,						Year ended December 31,
		2022			2021			2022			2021
Adjusted Operating Income (Loss)
GAAP Operating Loss	$	(52.2	)	$	(43.1	)	$	(140.6	)	$	(190.5	)
Acquisition – amortization of intangible assets		10.5			9.8			40.9			50.1
Goodwill and long-lived asset impairment charges		6.1			—			16.8			1.8
Equity compensation		8.2			8.4			37.8			36.3
Transformation initiatives		5.7			6.0			17.9			24.8
Divestiture-related costs		—			—			—			1.9
Acquisition-related costs		4.9			—			5.1			—
Legal charges, net of insurance reimbursement		1.5			14.0			(11.4	)		62.0
Other adjustments		1.4			5.0			0.7			22.7
Adjusted Operating Income (Loss)	$	(13.9	)	$	0.1		$	(32.8	)	$	9.1

	Three months ended December 31,						Year ended December 31,
		2022			2021			2022			2021
Adjusted Net Income (Loss) ⁽¹⁾
GAAP Net Loss Attributable to Myriad Genetics, Inc. Stockholders	$	(42.3	)	$	(7.6	)	$	(112.0	)	$	(27.2	)
Acquisition – amortization of intangible assets		10.5			9.8			40.9			50.1
Goodwill and long-lived asset impairment charges		6.1			—			16.8			1.8
Equity compensation		8.2			8.4			37.8			36.3
Transformation initiatives		5.7			6.0			17.9			24.8
Gain on sale		—			—			—			(151.6	)
Divestiture-related costs		—			—			—			14.5
Acquisition-related costs		4.9			—			5.1			—
Legal charges, net of insurance reimbursement		1.5			14.0			(11.4	)		62.0
Other adjustments		1.4			5.0			0.7			21.9
Tax impact of non-GAAP adjustments		(5.7	)		(37.2	)		(20.0	)		(31.2	)
Adjusted Net Income (Loss)	$	(9.7	)	$	(1.6	)	$	(24.2	)	$	1.4
Weighted average shares outstanding:
Basic		81.5			79.9			80.6			78.0
Diluted		81.5			79.9			80.6			80.2
Adjusted Net Earnings Per Share
Basic	$	(0.12	)	$	(0.02	)	$	(0.30	)	$	0.02
Diluted	$	(0.12	)	$	(0.02	)	$	(0.30	)	$	0.02
(1) To determine Adjusted Net Earnings Per Share, or adjusted EPS.


Adjusted Free Cash Flow Reconciliation for the Three Months and Year Ended December 31, 2022 and 2021 (unaudited data in millions)

	Three months ended December 31,						Year ended December 31,
		2022			2021			2022			2021
Cash flow from operations	$	(7.7	)	$	(9.5	)	$	(106.3	)	$	18.6
Capital expenditures		(14.6	)		(3.4	)		(45.3	)		(18.0	)
Free cash flow	$	(22.3	)	$	(12.9	)	$	(151.6	)	$	0.6
Transformation initiatives		5.7			6.0			17.9			24.4
Legal charges, net of insurance reimbursement		—			—			49.9			—
Acquisition-related costs		4.9			—			5.1			—
Other adjustments		—			5.0			—			10.2
Adjusted free cash flow¹	$	(11.7	)	$	(1.9	)	$	(78.7	)	$	35.2
(1) The Company revised its Adjusted Free Cash Flow metric in the quarter ended June 30, 2022 to exclude the tax impact, if any, associated with non-GAAP adjustments

Following is a description of the adjustments made to GAAP financial measures:

Acquisition – amortization of intangible assets – represents recurring amortization charges resulting from the acquisition of intangible assets.
Goodwill and long-lived asset impairment charges – impairment charges on long-lived assets and goodwill.
Equity compensation – non-cash equity-based compensation provided to Myriad Genetics employees and directors.
Transformation initiatives – transitory costs such as consulting and professional fees related to transformation initiatives and additional rent as a result of the build-out of our new laboratories in Salt Lake City, Utah and in South San Francisco, California, while maintaining our current laboratories in those locations.
Gain on sale — gain recognized in our divestitures of Myriad RBM, Inc. and the Myriad myPath, LLC laboratory.
Divestiture-related costs — non-recurring costs associated with our divestitures of the Myriad myPath, LLC laboratory, Myriad RBM, Inc., and the Myriad Autoimmune business.
Acquisition-related costs – non-recurring costs associated with our acquisition of Gateway Genomics, LLC.
Legal charges, net of insurance reimbursement – one-time legal expenses, net of insurance reimbursement. For the year ended December 31, 2021, we accrued $48.0 million for the settlement of the qui tam lawsuit and $14.0 million for settlement of the Abelli lawsuit.
Other adjustments – other one-time non-recurring expenses including changes in the fair value of contingent consideration related to acquisitions from prior years and severance costs for the three months and year ended December 31, 2022. For the three months and year ended December 31, 2021, the other one-time non-recurring expenses included expenses related to leadership transition, expenses related to non-recurring severance and retention agreements, non-recurring legal expenses and potential future consideration related to acquisitions from prior years.
Tax impact of non-GAAP adjustments – tax expense/(benefit) due to non-GAAP adjustments and differences between stock compensation recorded for book purposes as compared to the allowable tax deductions and, for the three months and year ended December 31, 2021, the CARES Act legislation.


Media Contact:	Megan Manzari	Investor Contact:	Matt Scalo
	(385) 318-3718		(801) 584-3532
	[email protected]		[email protected]

February 28, 2023 5:14 pm

Lumos Pharma Completes Patient Enrollment in Two Phase 2 OraGrowtH Trials Evaluating Oral LUM-201 in Moderate Idiopathic PGHD

Phase 2 OraGrowtH210 and Phase 2 PK/PD OraGrowtH212 Trials Are Fully Enrolled

Primary Outcome Data for Both OraGrowtH Trials Expected 4Q 2023

AUSTIN, Texas, Feb. 28, 2023 (GLOBE NEWSWIRE) — Lumos Pharma, Inc. (NASDAQ:LUMO), a biopharmaceutical company advancing an oral therapeutic candidate for Pediatric Growth Hormone Deficiency (PGHD) through Phase 2 clinical trials, announced today that the last subjects have been enrolled and randomized in the Company’s OraGrowtH210 and OraGrowtH212 trials evaluating LUM-201 for the treatment of moderate idiopathic PGHD. The Company now expects data on 82 subjects in the OraGrowtH210 Trial and 22 subjects in the PK/PD OraGrowtH212 Trial.

“We are very pleased to have reached these important milestones, which will allow us to complete our OraGrowtH trials and announce top line results in the fourth quarter of 2023,” said Rick Hawkins, Chairman and CEO of Lumos Pharma. “The interim data we announced in November showed that in the 1.6 mg/kg/day LUM-201 arm in the OraGrowtH210 study, mean annualized height velocity of 8.6 cm/yr was observed, in line with 8.3 – 8.6 cm/yr expected based on growth on rhGH for moderate PGHD subjects consistently observed in multiple large datasets. We look forward to building on these initial data, reporting primary outcome results, and continuing to advance our clinical program and planning for our pivotal Phase 3 trial for potentially the first oral therapeutic for PGHD.”

About Lumos Pharma’s Clinical Trials

Phase 2 OraGrowtH210 Trial of Oral LUM-201 in PGHD

The OraGrowtH210 Trial is a multi-site, global trial evaluating orally administered LUM-201 at three dose levels (0.8, 1.6, 3.2 mg/kg/day) against a standard dose of injectable rhGH in approximately 80 subjects diagnosed with idiopathic (moderate) PGHD. The objective of this trial is to identify the optimal dose of LUM-201 to be used in a Phase 3 registration trial, based on annualized height velocity from a 6-month dataset, and to prospectively confirm the utility of our Predictive Enrichment Marker (PEM) strategy. The interim analysis demonstrated that LUM-201 in the 1.6 mg/kg/day arm met expectations at six months of treatment with an AHV of 8.6 cm as compared to the AHV of 8.3 cm observed in the PEM-positive moderate naive-to-treatment PGHD subjects for 12 months on rhGH as derived from the large 20-year Phase 4 Eli Lilly GeNeSIS database. The complete set of six-month, primary outcome data for 82 subjects is anticipated in the fourth quarter of 2023. Subjects will be treated for up to 24 months.

OraGrowtH212 Trial Evaluating PK/PD and Pulsatility of Oral LUM-201 in PGHD

The OraGrowtH212 Trial is a single site, open-label trial evaluating the pharmacokinetic (PK) and pharmacodynamic (PD) effects of oral LUM-201 in up to 24 PGHD subjects at two dose levels, 1.6 and 3.2 mg/kg/day. The primary objective of the OraGrowtH212 Trial is to confirm prior clinical data demonstrating the amplified pulsatile release of endogenous growth hormone from LUM-201 therapy, contributes to its efficacy in PGHD. The primary endpoint for this trial is six months of PK/PD (pulsatility) and height velocity data in 22 subjects. Subjects will be allowed to remain on treatment until they reach their near-adult height. Primary data readout in 22 subjects is anticipated in the fourth quarter of 2023.

Switch Study, OraGrowtH213 Trial, Evaluating LUM-201 in OraGrowtH210 Subjects Previously on rhGH

The OraGrowtH213 Trial is an open-label, multi-center, Phase 2 study evaluating the growth effects and safety of LUM-201 following 12 months of daily rhGH in up to 20 idiopathic PGHD subjects who have completed the OraGrowtH210 Trial. Subjects are administered LUM-201 at a dose level of 3.2 mg/kg/day for up to 12 months. This trial is currently enrolling subjects.

About Lumos Pharma

Lumos Pharma, Inc. is a clinical stage biopharmaceutical company focused on the development and commercialization of therapeutics for rare diseases. Lumos Pharma was founded and is led by a management team with longstanding experience in rare disease drug development. Lumos Pharma’s lead therapeutic candidate is LUM-201, an oral growth hormone stimulating small molecule, currently being evaluated in a Phase 2 clinical trial, the OraGrowtH210 Trial, a PK/PD trial, the OraGrowtH212 Trial, and a switch trial, the OraGrowtH213 Trial for the treatment of Pediatric Growth Hormone Deficiency (PGHD). If approved by the FDA, LUM-201 would provide an orally administered alternative to recombinant growth hormone injections that PGHD subjects otherwise endure for many years of treatment. LUM-201 has received Orphan Drug Designation in both the US and EU. For more information, please visit https://lumos-pharma.com/.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements of Lumos Pharma, Inc. that involve substantial risks and uncertainties. All such statements contained in this press release are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. A law that, in part, gives us the opportunity to share our outlook for the future without fear of litigation if it turns out our predictions were not correct.

We are passionate about our business – including LUM-201 and the potential it may have to help patients in the clinic. This passion feeds our optimism that our efforts will be successful and bring about meaningful change for patients. Please keep in mind that actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make.

We have attempted to identify forward-looking statements by using words such as “projected,” “upcoming,” “will,” “would,” “plan,” “intend,” “anticipate,” “approximate,” “expect,” “potential,” “imminent,” and similar references to future periods or the negative of these terms. Not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding the encouraging growth response in our LUM-201 trials, progress in our clinical efforts including comments concerning screening and enrollment for our trials, expecting the primary outcome data readout for our trials, the potential to expand our LUM-201 platform into other indications, anticipated market reception to our treatment regimen for PGHD and other indications, plans related to initiation and execution of clinical trials; plans related to moving additional indications into clinical development; future financial performance, results of operations, cash position and sufficiency of capital resources to fund our operating requirements through the primary outcome data readout from the OraGrowtH210 and OraGrowtH212 Trials, our belief that LUM-201 will demonstrate a favorable safety profile and any other statements other than statements of historical fact.

We wish we were able to predict the future with 100% accuracy, but that just is not possible. Our forward-looking statements are neither historical facts nor assurances of future performance. You should not rely on any of these forward-looking statements and, to help you make your own risk determinations, we have provided an extensive discussion of risks that could cause actual results to differ materially from our forward-looking statements including risks related to the final results of our LUM-201 Trials being different than our interim results, the effects of pandemics, other widespread health problems or the Ukraine-Russia conflict, the outcome of our future interactions with regulatory authorities, our ability to project future cash utilization and reserves needed for contingent future liabilities and business operations, the ability to obtain and maintain the necessary patient enrollment for our product candidate in a timely manner, the ability to successfully develop our product candidate, the timing and ability of Lumos to raise additional equity capital as needed and other risks that could cause actual results to differ materially from those matters expressed in or implied by such forward-looking statements including information in the “Risk Factors” section and elsewhere in Lumos Pharma’s Annual Report on Form 10-K for the year ended December 31, 2021, as well as other reports filed with the SEC including our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2022. All of these documents are available on our website. Before making any decisions concerning our stock, you should read and understand those documents.

We anticipate that subsequent events and developments will cause our views to change. We may choose to update these forward-looking statements at some point in the future, however, we disclaim any obligation to do so. As a result, you should not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

Investor & Media Contact:

Lisa Miller
Lumos Pharma Investor Relations
512-792-5454
[email protected]

February 28, 2023 5:14 pm

Agilent Reports First-Quarter Fiscal Year 2023 Financial Results

Agilent Reports First-Quarter Fiscal Year 2023 Financial Results

Delivers excellent start to the year; raises full-year guidance

Highlights:

Revenue of $1.76 billion represents 5% reported growth year-over-year; and up 10% on a core⁽¹⁾ basis.
GAAP net income of $352 million with earnings per share (EPS) of $1.19, up 28% from the first quarter of 2022.
Non-GAAP⁽²⁾ net income of $406 million with EPS of $1.37, up 13% from the first quarter of 2022.
Full-year revenue has been raised and is now expected to be in the range of $7.03 billion to $7.10 billion, representing reported growth of 2.7% to 3.7% and core⁽¹⁾ growth of 5.5% to 6.5%. Fiscal year 2023 non-GAAP⁽³⁾ EPS has also been raised and is now estimated to be in the range of $5.65 to $5.70.
Second-quarter revenue expected to be in the range of $1.655 billion to $1.680 billion with non-GAAP⁽³⁾ EPS of $1.24 to $1.27.

SANTA CLARA, Calif.–(BUSINESS WIRE)–
Agilent Technologies Inc. (NYSE: A) today reported revenue of $1.76 billion for the first quarter ended January 31, 2023, an increase of 5% compared to the first quarter of 2022 and up 10% on a core⁽¹⁾ basis.

First-quarter GAAP net income was $352 million, or $1.19 per share. This compares with $283 million, or 93 cents per share, in the first quarter of fiscal year 2022. Non-GAAP⁽²⁾ net income was $406 million, or $1.37 per share during the quarter, compared with $368 million or $1.21 per share during the first quarter a year ago.

“The Agilent team delivered an excellent start to 2023 with broad-based growth across our end markets and geographic regions,” said Agilent President and CEO Mike McMullen. “These positive results reflect the resiliency and durability of our diversified business and put us in a solid position for the year ahead.”

Financial Highlights

Life Sciences and Applied Markets Group

Agilent’s Life Sciences and Applied Markets Group (LSAG) reported first-quarter revenue of $1.033 billion, a year-over-year increase of 6% (up 11% on a core⁽¹⁾ basis). LSAG’s operating margin for the quarter was 30.4%.

Agilent CrossLab Group

The Agilent CrossLab Group (ACG) reported first-quarter revenue of $381 million, a year-over-year increase of 6% (up 13% on a core⁽¹⁾ basis). ACG’s operating margin for the quarter was 27.0%.

Diagnostics and Genomics Group

The Diagnostics and Genomics Group (DGG) reported first-quarter revenue of $342 million, a year-over-year increase of 1% (up 5% on a core⁽¹⁾ basis). DGG’s operating margin for the quarter was 17.2%.

Full Year and Second-Quarter Outlook

Full-year revenue has been raised and is now expected to be in the range of $7.03 billion to $7.10 billion, representing reported growth of 2.7% to 3.7% and core⁽¹⁾ growth of 5.5% to 6.5%. Fiscal year 2023 non-GAAP⁽³⁾ EPS guidance has also been raised and is now estimated to be in the range of $5.65 to $5.70.

The outlook for second-quarter revenue is expected to be in a range of $1.655 billion to $1.680 billion. Second-quarter non-GAAP⁽³⁾ earnings guidance is expected to be in the range of $1.24 to $1.27 per share.

The outlook is based on forecasted currency exchange rates.

Conference Call

Agilent’s management will present additional details regarding the company’s first-quarter 2023 financial results on a conference call with investors today at 1:30 p.m. PST. This event will be broadcast live online in listen-only mode. To listen to the webcast, select the “Q1 2023 Agilent Technologies Inc. Earnings Conference Call” link on the Agilent Investor Relations website. The webcast will remain on the company site for 90 days.

About Agilent Technologies

Agilent Technologies Inc. (NYSE: A) is a global leader in the life sciences, diagnostics, and applied chemical markets, delivering insight and innovation that advance the quality of life. Agilent’s full range of solutions includes instruments, software, services, and expertise that provide trusted answers to our customers’ most challenging questions. The company generated revenue of $6.85 billion in fiscal 2022 and employs 18,000 people worldwide. Information about Agilent is available at www.agilent.com. To receive the latest Agilent news, subscribe to the Agilent Newsroom. Follow Agilent on LinkedIn and Facebook.

Forward-Looking Statements

This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding Agilent’s growth prospects, business, financial results, revenue, and non-GAAP earnings guidance for Q2 and fiscal year 2023 and future amortization of intangibles. These forward-looking statements involve risks and uncertainties that could cause Agilent’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of Agilent’s customers’ businesses; unforeseen changes in the demand for current and new products, technologies, and services; unforeseen changes in the currency markets; customer purchasing decisions and timing; and the risk that Agilent is not able to realize the savings expected from integration and restructuring activities. In addition, other risks that Agilent faces in running its operations include the ability to execute successfully through business cycles; the ability to meet and achieve the benefits of its cost-reduction goals and otherwise successfully adapt its cost structures to continuing changes in business conditions; ongoing competitive, pricing and gross-margin pressures; the risk that its cost-cutting initiatives will impair its ability to develop products and remain competitive and to operate effectively; the impact of geopolitical uncertainties and global economic conditions on its operations, its markets and its ability to conduct business; the ability to improve asset performance to adapt to changes in demand; the ability of its supply chain to adapt to changes in demand; the ability to successfully introduce new products at the right time, price and mix; the ability of Agilent to successfully integrate recent acquisitions; the ability of Agilent to successfully comply with certain complex regulations; and other risks detailed in Agilent’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the fiscal year ended October 31, 2022. Forward-looking statements are based on the beliefs and assumptions of Agilent’s management and on currently available information. Agilent undertakes no responsibility to publicly update or revise any forward-looking statement.

(1) Core revenue growth excludes the impact of currency and acquisitions and divestitures within the past 12 months. Core revenue is a non-GAAP measure. Reconciliations between GAAP revenue and core revenue for Q1 fiscal year 2023 are set forth on page 6 of the attached tables along with additional information regarding the use of this non-GAAP measure. Core revenue growth rate as projected for Q2 fiscal year 2023 and full fiscal year 2023 excludes the impact of currency and acquisitions and divestitures within the past 12 months. Most of the excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy and could differ materially. Therefore, no reconciliation to GAAP amounts has been provided for the projection.

(2) Non-GAAP net income and non-GAAP earnings per share primarily exclude the impacts of intangibles amortization, transformational initiatives, acquisition and integration costs, change in fair value of contingent consideration and net loss on equity securities. Agilent also excludes any tax benefits or expenses that are not directly related to ongoing operations, and which are either isolated or are not expected to occur again with any regularity or predictability. A reconciliation between non-GAAP net income and GAAP net income is set forth on page 4 of the attached tables along with additional information regarding the use of this non-GAAP measure.

(3) Non-GAAP earnings per share as projected for Q2 fiscal year 2023 and full fiscal year 2023 exclude primarily the estimated impacts of non-cash intangibles amortization, transformational initiatives, and acquisition and integration costs. Agilent also excludes any tax benefits or expenses that are not directly related to ongoing operations, and which are either isolated or are not expected to occur again with any regularity or predictability. Most of these excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy and could differ materially. Therefore, no reconciliation to GAAP amounts has been provided. Future amortization of intangibles is expected to be approximately $36 million per quarter.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY

	Three Months Ended
	January 31,
		2023			2022

Net revenue	$	1,756		$	1,674

Costs and expenses:
Cost of products and services		788			764
Research and development		123			117
Selling, general and administrative		419			417
Total costs and expenses		1,330			1,298

Income from operations		426			376

Interest income		9			1
Interest expense		(25	)		(21	)
Other income (expense), net		—			(37	)

Income before taxes		410			319

Provision for income taxes		58			36

Net income	$	352		$	283



Net income per share:
Basic	$	1.19		$	0.94
Diluted	$	1.19		$	0.93

Weighted average shares used in computing net income per share:
Basic		296			301
Diluted		297			303


The preliminary income statement is estimated based on our current information.

Page 1

AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions, except par value and share amounts)
(Unaudited)
PRELIMINARY


				January 31,			October 31,
					2023			2022
ASSETS

Current assets:
	Cash and cash equivalents			$	1,250		$	1,053
	Accounts receivable, net				1,459			1,405
	Inventory				1,111			1,038
	Other current assets				258			282
		Total current assets			4,078			3,778

Property, plant and equipment, net					1,147			1,100
Goodwill and other intangible assets, net					4,793			4,773
Long-term investments					188			195
Other assets					713			686
		Total assets		$	10,919		$	10,532

LIABILITIES AND EQUITY

Current liabilities:
	Accounts payable			$	540		$	580
	Employee compensation and benefits				296			455
	Deferred revenue				521			461
	Short-term debt				238			36
	Other accrued liabilities				341			329
		Total current liabilities			1,936			1,861

Long-term debt					2,733			2,733
Retirement and post-retirement benefits					99			97
Other long-term liabilities					542			536
		Total liabilities			5,310			5,227

Total Equity:
	Stockholders’ equity:
	Preferred stock; $0.01 par value; 125 million
		shares authorized; none issued and outstanding			—			—
	Common stock; $0.01 par value, 2 billion
		shares authorized; 296 million shares at January 31, 2023
		and 295 million shares at October 31, 2022, issued and outstanding			3			3
	Additional paid-in-capital				5,345			5,325
	Retained earnings				541			324
	Accumulated other comprehensive loss				(280	)		(347	)
		Total stockholders’ equity			5,609			5,305
			Total liabilities and stockholders’ equity	$	10,919		$	10,532


The preliminary balance sheet is estimated based on our current information.

Page 2

AGILENT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
PRELIMINARY


			Three Months Ended
			January 31,			January 31,
				2023			2022
Cash flows from operating activities:
	Net income		$	352		$	283

Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization			67			82
	Share-based compensation			44			44
	Deferred taxes			4			24
	Excess and obsolete inventory related charges			7			5
	Net loss on equity securities			10			47
	Change in fair value of contingent consideration			1			3
	Other non-cash expenses, net			1			—
	Changes in assets and liabilities:
		Accounts receivable, net		(5	)		(46	)
		Inventory		(69	)		(54	)
		Accounts payable		(27	)		37
		Employee compensation and benefits		(174	)		(210	)
		Other assets and liabilities		85			40
Net cash provided by operating activities ^(a)				296			255

Cash flows from investing activities:
	Investments in property, plant and equipment			(76	)		(75	)
	Payment to acquire equity securities			(1	)		(3	)
	Proceeds from sale of equity securities			4			—
	Proceeds from convertible loan			2			—
	Payment in exchange for convertible note			(3	)		(1	)
	Acquisition of businesses and intangible assets, net of cash acquired			(30	)		—
Net cash used in investing activities				(104	)		(79	)

Cash flows from financing activities:
	Issuance of common stock under employee stock plans			35			27
	Payment of taxes related to net share settlement of equity awards			(51	)		(63	)
	Payment for contingent consideration			(62	)		—
	Payment of dividends			(67	)		(63	)
	Proceeds from commercial paper			527			240
	Repayment of commercial paper			(324	)		(240	)
	Treasury stock repurchases			(75	)		(447	)
Net cash used in financing activities				(17	)		(546	)

Effect of exchange rate movements				22			(4	)

Net increase (decrease) in cash, cash equivalents and restricted cash				197			(374	)

Cash, cash equivalents and restricted cash at beginning of period				1,056			1,490

Cash, cash equivalents and restricted cash at end of period			$	1,253		$	1,116


Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:

	Cash and cash equivalents		$	1,250		$	1,113
	Restricted cash, included in other assets			3			3
	Total cash, cash equivalents and restricted cash		$	1,253		$	1,116


^(a) Cash payments included in operating activities:

	Income tax payments, net		$	17		$	22
	Interest payments		$	15		$	18


The preliminary cash flow is estimated based on our current information.


Page 3

AGILENT TECHNOLOGIES, INC.
NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY

			Three Months Ended
			January 31,
				2023		Diluted EPS				2022		Diluted EPS

GAAP net income			$	352		$	1.19		$	283		$	0.93
	Non-GAAP adjustments:
		Intangible amortization		36			0.12			51			0.17
		Transformational initiatives		7			0.02			4			0.01
		Acquisition and integration costs		2			0.01			7			0.02
		Change in fair value of contingent consideration		1			—			3			0.01
		Net loss on equity securities		12			0.04			45			0.15
		Other		3			0.01			—			—
		Adjustment for taxes ^(a)		(7	)		(0.02	)		(25	)		(0.08	)
Non-GAAP net income			$	406		$	1.37		$	368		$	1.21

^(a) The adjustment for taxes excludes tax benefits that management believes are not directly related to on-going operations and which are either isolated, temporary or cannot be expected to occur again with any regularity or predictability such as windfall benefits on stock compensation and the impact of R&D capitalization under section 174 of the Tax Cuts and Jobs Act of 2017. For the three months ended January 31, 2023, management used a non-GAAP effective tax rate of 13.75%. For the three months ended January 31, 2022, management used a non-GAAP effective tax rate of 14.25%.

We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to amortization of intangibles, transformational initiatives, acquisition and integration costs, change in fair value of contingent consideration and net loss on equity securities.

	Transformational initiatives include expenses associated with targeted cost reduction activities such as manufacturing transfers including costs to move manufacturing, small site consolidations, legal entity and other business reorganizations, insourcing or outsourcing of activities. Such costs may include move and relocation costs, one-time termination benefits and other one-time reorganization costs. Included in this category are also expenses associated with company programs to transform our product lifecycle management (PLM) system, human resources and financial systems.
	Acquisition and integration costs include all incremental expenses incurred to effect a business combination. Such acquisition costs may include advisory, legal, accounting, valuation, and other professional or consulting fees. Such integration costs may include expenses directly related to integration of business and facility operations, the transfer of assets and intellectual property, information technology systems and infrastructure and other employee-related costs.
	Change in fair value of contingent consideration represents changes in the fair value estimate of acquisition-related contingent consideration.
	Net loss on equity securities relates to the realized and unrealized mark-to-market adjustments for our marketable and non-marketable equity securities.
	Other includes certain legal costs and settlements, special compliance costs and acceleration of share-based compensation expense in addition to other miscellaneous adjustments.

Our management uses non-GAAP measures to evaluate the performance of our core businesses, to estimate future core performance and to compensate employees. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results “through the eyes” of management in addition to seeing our GAAP results. This information facilitates our management’s internal comparisons to our historical operating results as well as to the operating results of our competitors.

Our management recognizes that items such as amortization of intangibles can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance.

Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.

The preliminary non-GAAP net income and diluted EPS reconciliation is estimated based on our current information.


Page 4

AGILENT TECHNOLOGIES, INC.
SEGMENT INFORMATION
(In millions, except where noted)
(Unaudited)
PRELIMINARY


Quarter-over-Quarter

Life Sciences and Applied Markets Group
	Q1’23			Q1’22
Revenue	$	1,033		$	976
Gross Margin, %		61.2	%		60.5	%
Income from Operations	$	314		$	282
Operating margin, %		30.4	%		28.9	%


Diagnostics and Genomics Group
	Q1’23			Q1’22
Revenue	$	342		$	339
Gross Margin, %		51.2	%		52.8	%
Income from Operations	$	59		$	68
Operating margin, %		17.2	%		20.1	%


Agilent CrossLab Group
	Q1’23			Q1’22
Revenue	$	381		$	359
Gross Margin, %		48.5	%		47.5	%
Income from Operations	$	103		$	91
Operating margin, %		27.0	%		25.2	%

Income from operations reflect the results of our reportable segments under Agilent’s management reporting system which are not necessarily in conformity with GAAP financial measures. Income from operations of our reporting segments exclude, among other things, charges related to amortization of intangibles, transformational initiatives, acquisition and integration costs and change in fair value of contingent consideration.

Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.

The preliminary segment information is estimated based on our current information.


Page 5

AGILENT TECHNOLOGIES, INC.
RECONCILIATIONS OF REVENUE BY SEGMENT
EXCLUDING ACQUISITIONS, DIVESTITURES AND THE IMPACT OF CURRENCY ADJUSTMENTS (CORE)
(in millions)
(Unaudited)
PRELIMINARY

	Year-over-Year

	GAAP
					Year-over-Year
GAAP Revenue by Segment	Q1’23		Q1’22		% Change

Life Sciences and Applied Markets Group	$	1,033	$	976	6	%
Diagnostics and Genomics Group		342		339	1	%
Agilent CrossLab Group		381		359	6	%
Agilent	$	1,756	$	1,674	5	%


	Non-GAAP (excluding Acquisitions & Divestitures)						Year-over-Year at Constant Currency ^(a)
					Year-over-Year		Year-over-Year		Percentage Point Impact from Currency	Current Quarter Currency Impact^(b)
Non GAAP Revenue by Segment	Q1’23		Q1’22		% Change		% Change

Life Sciences and Applied Markets Group	$	1,031	$	976	6	%	11	%	-5 ppts	$	(52	)
Diagnostics and Genomics Group		342		339	1	%	5	%	-4 ppts		(14	)
Agilent CrossLab Group		381		359	6	%	13	%	-7 ppts		(23	)
Agilent (Core)	$	1,754	$	1,674	5	%	10	%	-5 ppts	$	(89	)



We compare the year-over-year change in revenue excluding the effect of recent acquisitions and divestitures and foreign currency rate fluctuations to assess the performance of our underlying business.

^(a) The constant currency year-over-year growth percentage is calculated by recalculating all periods in the comparison period at the foreign currency exchange rates used for accounting during the last month of the current quarter and then using those revised values to calculate the year-over-year percentage change.

^(b) The dollar impact from the current quarter currency impact is equal to the total year-over-year dollar change less the constant currency year-over-year change.

The preliminary reconciliation of GAAP revenue adjusted for recent acquisitions and divestitures and impact of currency is estimated based on our current information.

Page 6

View source version on businesswire.com: https://www.businesswire.com/news/home/20230228006266/en/

Investor Contact:

Parmeet Ahuja

+1 408-345-8948

[email protected]

Media Contact:

Tom Beermann

+1 408-553-2914

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Health Technology Health Technology Other Technology Other Science Software Science

MEDIA:

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February 28, 2023 5:13 pm

SPS Commerce to Present at the JMP Securities Technology Conference

MINNEAPOLIS, Feb. 28, 2023 (GLOBE NEWSWIRE) — SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail cloud services, today announced that management will present at the JMP Securities Technology Conference on Tuesday, March 7, 2023, at 9:00 AM P.T.

A webcast of the presentation will be available on the company’s investor relations website at http://investors.spscommerce.com/events.cfm.

About SPS Commerce

SPS Commerce is the world’s leading retail network, connecting trading partners around the globe to optimize supply chain operations for all retail partners. We support data-driven partnerships with innovative cloud technology, customer-obsessed service and accessible experts so our customers can focus on what they do best. To date, more than 115,000 companies in retail, grocery, distribution, supply, and logistics have chosen SPS as their retail network. SPS has achieved 88 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, contact SPS at 866-245-8100 or visit www.spscommerce.com.

SPS COMMERCE, SPS, SPS logo, 1=INFINITY logo, AS THE NETWORK GROWS, SO DOES YOUR OPPORTUNITY, INFINITE RETAIL POWER, MASTERING THE RETAIL GAME and RSX are marks of SPS Commerce, Inc. and Registered in the U.S. Patent and Trademark Office. IN:FLUENCE, and others are further marks of SPS Commerce, Inc. These marks may be registered or otherwise protected in other countries.

SPS-F

Contact:

Investor Relations
The Blueshirt Group
Irmina Blaszczyk
Lisa Laukkanen
[email protected]
415-217-4962

February 28, 2023 5:13 pm

Quotient Technology Inc. Announces Fourth Quarter and Full Year 2022 Results

Quotient Technology Inc. Announces Fourth Quarter and Full Year 2022 Results

Fourth Quarter 2022

Quarterly Revenue of $70.7M

GAAP Net Income of $0.3M

Adjusted EBITDA of $13.2M

Full Year 2022

Revenue of $288.8M

GAAP Net Loss of $76.5M

Adjusted EBITDA of $14.9M

SALT LAKE CITY–(BUSINESS WIRE)–
Quotient Technology Inc. (NYSE: QUOT), a leading digital promotions and media technology company, today reported financial results for the fourth quarter and full year ended December 31, 2022. Quotient’s complete fourth quarter and full year 2022 financial results and presentation can be found by accessing the investor relations section of the Company’s website.

“2022 was a transformational year for Quotient. Shifting our focus towards being a technology provider has enabled us to materially lower our cost structure, improve margins and invest in growth initiatives,” said Matt Krepsik, Quotient CEO. “We are proud that despite a challenging fourth quarter across the digital marketing sector, we delivered $13 million of adjusted EBITDA and positive GAAP net income for the first time since 2017. We have built a new leadership team that will look to build on the stronger foundation and capture the power of our network.”

Quotient Completes $105 Million Non-Dilutive Debt Financing

As announced in a press release on December 6, 2022, Quotient completed a $105 million non-dilutive debt financing. On November 30, 2022, Quotient entered into a Financing Agreement with PNC Bank, N.A. with respect to a senior secured asset-based revolving credit facility in an aggregate principal amount of $50 million. Quotient also on November 30, 2022 entered into a Financing Agreement with Blue Torch Capital LP, which enabled Quotient to obtain senior secured term loans in an aggregate principal amount of $55 million. The proceeds of the term loans were used to help retire Quotient’s maturing five-year convertible note obligations due December 1, 2022, which were repaid in full on December 1, 2022. Houlihan Lokey served as Quotient’s financial advisor with respect to the debt restructuring.

Quotient has no other outstanding long-term debt. The agreed-upon financing does not include any equity or equity-linked component and is therefore non-dilutive to stockholders. Additional information regarding the financing facilities is available in the Company’s Form 8-K filed December 6, 2022, with the U.S. Securities and Exchange Commission.

Financial Outlook

Quotient is providing guidance for its first quarter and full year 2023 as follows:

Quotient’s guidance for the first quarter 2023:

Revenue: $55 million to $65 million
Non-GAAP Gross Profit: $30 million to $35 million
Adjusted EBITDA: $1 million to $5 million
Operating Cash Flow: $(5) million to $(10) million

Quotient’s guidance for the full year 2023:

Revenue: $275 million to $305 million
Non-GAAP Gross Profit: $145 million to $165 million
Adjusted EBITDA: $32 million to $45 million
Operating Cash Flow: $10 million to $25 million

Call Information

The Company has posted an earnings presentation on the Investor Relations section of the Company’s website at: http://investors.quotient.com/. Management will host a conference call and live webcast to discuss the highlights of the quarter and address questions today at 5:00 p.m. ET / 2:00 p.m. PT.

To access the call, we encourage you to pre-register to eliminate long wait times using this link: Quotient Q4 2022 Earnings Pre Registration. After registering, a confirmation will be sent via email and will include dial-in details and a unique PIN code for entry to the call. Registration will be open through the live call. You may also access the call and register with a live operator by dialing 1 (844) 200 6205, or +1 (929) 526 1599 for outside the U.S. You will be able to access the call by using code 613815. We suggest registering for the call at least 15 minutes prior to the 2:00 p.m. PST start time. The live webcast and all accompanying materials can be accessed on the Investor Relations section of the Company website at: http://investors.quotient.com/. A replay of the webcast will be available on the website following the conference call.

Use of Non-GAAP Financial Measures

Quotient reports its financial statements in accordance with generally accepted accounting principles in the United States (GAAP) and the rules of the Securities and Exchange Commission (SEC). To supplement its financial statements presented in accordance with GAAP, Quotient provides investors in this press release with non-GAAP Gross Profit, non-GAAP Gross Margin, Adjusted EBITDA, Adjusted EBITDA margin and non-GAAP Operating Expenses, each a non-GAAP financial measure. Quotient believes that these non-GAAP measures provide investors with additional useful information used by Quotient’s management and Board of Directors for financial and operating decision making. In particular, Quotient believes that the exclusion of certain income and expenses in calculating these metrics can provide useful measures for period-to-period comparisons of its core business as well as a useful comparison to peer companies.

Quotient defines non-GAAP Gross Profit as revenue less cost of revenues adjusted for stock-based compensation, amortization of acquired intangible assets, impairment of certain intangible assets, impairment of long-lived and right-of-use assets, business transformation and certain strategic growth initiatives costs, and restructuring charges, and defines non-GAAP Gross Margin as non-GAAP Gross Profit divided by Revenue.

Quotient defines Adjusted EBITDA as net income (loss) adjusted for interest expense, provision for (benefit from) income taxes, other (income) expense, net, depreciation and amortization, stock-based compensation, change in fair value of contingent consideration, impairment of certain intangible assets, acquisition related costs, impairment of certain long-lived and right-of-use assets, shareholder activism response costs, litigation settlements, restructuring charges, and certain business transformation and strategic growth initiatives costs. In addition, Quotient defines Adjusted EBITDA margin as the ratio of Adjusted EBITDA and revenues; and non-GAAP operating expenses as operating expenses adjusted for stock-based compensation, amortization of acquired intangible assets, restructuring charges, acquisition related costs, impairment of certain long-lived and right-of-use assets, shareholder activism response costs, litigation settlements, and certain business transformation and strategic growth initiatives costs.

Quotient excludes certain GAAP items from these measures because it believes these items are not indicative of ordinary results of operations and do not reflect expected future operating expenses. Additionally, certain items are inconsistent in size and frequency—making it difficult to contribute to a meaningful evaluation of Quotient’s current or past operating performance.

There are a number of limitations related to the use of these non-GAAP financial measures. Quotient compensates for these limitations by providing specific information regarding the GAAP amount excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant GAAP financial measures.

These non-GAAP financial measures are not intended to be considered in isolation from, as substitute for, or as superior to the corresponding financial measure prepared in accordance with GAAP. Because of these and other limitations, the non-GAAP financial measures used in this press release should be considered along with other GAAP-based financial performance measures, including various cash flow metrics, net income (loss) and Quotient’s other GAAP financial results.

For a reconciliation of these non-GAAP financial measures to the nearest comparable GAAP financial measures, see “Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDA Margin,” “Reconciliation of Gross Profit to Non-GAAP Gross Profit,” “Reconciliation of Operating Expenses to Non-GAAP Operating Expenses” and “Reconciliation of Gross Profit to Non-GAAP Gross Profit (Forecasted)” included in this press release.

A reconciliation of the Adjusted EBITDA guidance metrics, which are non-GAAP guidance measures, to a corresponding GAAP measure is not available on a forward-looking basis without unreasonable efforts due to the high variability and low visibility of certain (income) expense items that are excluded in calculating Adjusted EBITDA.

Forward-Looking Statements

This press release contains forward-looking statements concerning the Company’s current expectations and projections about future events and financial trends affecting its business. Forward-looking statements in this press release include the Company’s new leadership team’s intent to capture the power of the Company’s network by building upon the Company’s stronger foundation, evidenced by the Company’s strategic transformation during 2022 as well as its financial performance in the fourth quarter of 2022; and the future financial performance of Quotient including estimates for the first quarter of 2023 and the full fiscal year 2023. Forward-looking statements are based on the Company’s current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, impacts of changes in the Company’s business model, including pricing model changes, and the degree of advertiser and retailer response to this transition, and increasing the proportion of self-service and automated offerings; a reduction in overall advertising spend by advertisers in reaction to rising inflation, continuing supply chain disruption and economic uncertainty, particularly in verticals that comprise a significant portion of the Company’s revenue such as the food category; the Company’s ability to adapt to changes in marketing goals, strategies and budgets of advertisers and retailers and the timing of their marketing spend; the Company’s ability to maintain and grow the retailer component of its network, expand its network with new verticals, and increase its number of network partners and publishers; the Company’s ability to maintain and expand our data rights with our retailer network; the Company’s ability to leverage retailer demands to increase consumer product goods (CPG) spend on retailer performance media; the Company’s ability to adapt to industry changes in, and the evolution of, retail media networks as well as how CPGs leverage such networks; the impact of competitors or competitive products and services, and our ability to compete in digital marketing; the impact of pricing pressures from the Company’s competitors, advertisers or CPGs, and agencies representing advertisers or CPGs; the impact of increasing media acquisition and data acquisition costs; the impact of litigation involving the Company, its industry or both, including investigations by regulators or claims made by the Company’s competitors or other third parties; reduction in demand or volatility in demand for one or more of the Company’s products, which may be caused by, among other things: delay or cancellation of marketing campaigns by advertisers and retailers as they focus on manufacturing in-demand products, replenishing out-of-stock items, adjusting to changes in consumer purchasing behavior, contending with supply-chain challenges; the Company’s ability to grow existing consumer usage of, and attract new consumers to, the Company’s digital promotion offerings and more generally to interactions with the Company’s platforms, including through its retailer partner sites and its publisher network; the Company’s ability to obtain and increase the number of high quality promotions; changes in consumer behavior with respect to digital promotions and media, how consumers access digital promotions and media, and the Company’s ability to develop applications that are widely accepted and generate revenues for advertisers, retailers and the Company; our ability to control costs including the costs of obtaining consumer data and investing, maintaining and enhancing our technology infrastructure; increased legal and compliance costs associated with data protection laws and regulations in various jurisdictions, including state and international privacy laws, and new follow-on compliance obligations; changes in the legislative or regulatory environment, including with respect to privacy and data protection, or enforcement by government regulators, including fines, orders, or consent decrees; the costs of developing new products, solutions and enhancements to the Company’s platforms; whether new products successfully launch on time; the Company’s ability to manage its growth, including scaling its platforms; the Company’s ability to manage innovation, including extent of investments in and success in deploying new offerings, and the Company’s ability to manage transitions from legacy platforms and solutions to new platforms and solutions such as those with self-service and automation capabilities; the success of the Company’s sales and marketing efforts; the attraction and retention of qualified employees and key personnel, whether or not related to changes in U.S. immigration policies; and other factors identified in the Company’s filings with the SEC, including its Annual Report on Form 10-K filed with the SEC on March 1, 2022, its Form 10-K/A Amendment No. 1 filed with the SEC on April 29, 2022, its Report on Form 10-Q filed with the SEC on May 5, 2022, its Report on Form 10-Q filed with the SEC on August 9, 2022, its Report on Form 10-Q filed with the SEC on November 9, 2022, and future filings and reports by the Company. Quotient disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise and does not assume responsibility for the accuracy and completeness of the forward-looking statements.

About Quotient Technology Inc.

Quotient Technology (NYSE: QUOT) is a leading digital promotions and media technology company for advertisers, retailers and consumers. Quotient’s omnichannel platform is powered by exclusive consumer spending data, location intelligence and purchase intent data to reach millions of shoppers daily and deliver measurable, incremental sales.

Quotient partners with leading advertisers, publishers and retailers, including Clorox, Procter & Gamble, Unilever, CVS, Dollar General, Ahold Delhaize USA, Amazon and Microsoft. Quotient is headquartered in Salt Lake City, Utah, and has offices across the U.S. as well as in Bangalore, Paris, London and Tel Aviv. For more information visit www.quotient.com.

Quotient and the Quotient logo are trademarks or registered trademarks of Quotient Technology Inc. and its subsidiaries in the United States and other countries. Other marks are the property of their respective owners.

QUOTIENT TECHNOLOGY INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)

	December 31,
	2022			2021
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	56,891		$	237,417
Accounts receivable, net		98,049			177,216
Prepaid expenses and other current assets		19,791			19,312
Total current assets		174,731			433,945
Property and equipment, net		28,773			22,660
Operating lease right-of-use-assets		14,475			23,874
Intangible assets, net		4,494			13,003
Goodwill		128,427			128,427
Other assets		12,259			13,571
Total assets	$	363,159		$	635,480
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	30,027		$	18,021
Accrued compensation and benefits		12,060			20,223
Other current liabilities		53,255			95,279
Deferred revenues		15,519			26,778
Contingent consideration related to acquisitions		—			22,275
Short-term debt		2,750			—
Convertible senior notes, net		—			188,786
Total current liabilities		113,611			371,362
Operating lease liabilities		21,221			26,903
Other non-current liabilities		468			522
Long-term debt		48,034			—
Deferred tax liabilities		2,030			1,991
Total liabilities		185,364			400,778

Stockholders’ equity:
Common stock		1			1
Additional paid-in capital		713,201			731,672
Accumulated other comprehensive loss		(1,756	)		(1,099	)
Accumulated deficit		(533,651	)		(495,872	)
Total stockholders’ equity		177,795			234,702
Total liabilities and stockholders’ equity	$	363,159		$	635,480

QUOTIENT TECHNOLOGY INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data)

	Three Months Ended December 31,						Year Ended December 31,
	2022			2021			2022			2021
Revenues	$	70,723		$	146,414		$	288,766		$	521,494
Cost of revenues⁽¹⁾		31,768			91,992			154,878			332,672
Gross Profit		38,955			54,422			133,888			188,822
Operating Expenses:
Sales and marketing⁽¹⁾		20,745			27,030			84,079			112,263
Research and development⁽¹⁾		4,572			10,400			26,299			44,941
General and administrative⁽¹⁾		12,908			16,690			94,886			56,776
Change in fair value of contingent consideration		—			620			—			1,392
Total operating expenses		38,225			54,740			205,264			215,372
Net income (loss) from operations		730			(318	)		(71,376	)		(26,550	)
Interest expense		(1,471	)		(3,871	)		(5,641	)		(15,177	)
Other income (expense), net		1,209			(80	)		1,028			(210	)
Net income (loss) before income taxes		468			(4,269	)		(75,989	)		(41,937	)
Provision for income taxes		148			2,841			522			3,631
Net income (loss)	$	320		$	(7,110	)	$	(76,511	)	$	(45,568	)

Net income (loss) per share:
Basic	$	—		$	(0.08	)	$	(0.80	)	$	(0.49	)
Diluted	$	—		$	(0.08	)	$	(0.80	)	$	(0.49	)

Weighted-average shares used to compute net income (loss) per share:
Basic		96,772			94,531			95,869			93,686
Diluted		97,916			94,531			95,869			93,686

(1) The stock-based compensation expense included above was as follows:

	Three Months Ended December 31,						Year Ended December 31,
	2022			2021			2022			2021
Cost of revenues	$	425		$	556		$	1,899		$	1,905
Sales and marketing		733			1,165			3,213			5,012
Research and development		361			851			2,413			3,876
General and administrative		3,085			3,166			24,928			12,019
Total stock-based compensation	$	4,604		$	5,738		$	32,453		$	22,812

QUOTIENT TECHNOLOGY INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

	Year Ended December 31,
	2022			2021
	(unaudited)
Cash flows from operating activities:
Net loss	$	(76,511	)	$	(45,568	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		17,929			29,464
Stock-based compensation		32,453			22,812
Amortization of debt discount and issuance cost		1,808			11,618
Impairment of long-lived and right-of-use assets		11,448			—
Impairment of intangible asset		—			9,086
Allowance (recovery) for credit losses		(1,595	)		568
Deferred income taxes		39			138
Change in fair value of contingent consideration		—			1,392
Other non-cash expenses		6,790			5,465
Changes in operating assets and liabilities:
Accounts receivable		80,761			(40,135	)
Prepaid expenses and other assets		(1,150	)		(14,326	)
Accounts payable and other liabilities		(33,728	)		27,576
Payments for contingent consideration and bonuses		(19,008	)		(2,901	)
Accrued compensation and benefits		(8,289	)		6,070
Deferred revenues		(11,259	)		14,751
Net cash (used in) provided by operating activities		(312	)		26,010

Cash flows from investing activities:
Purchases of property and equipment		(19,608	)		(14,720	)
Net cash used in investing activities		(19,608	)		(14,720	)

Cash flows from financing activities:
Proceeds from issuance of common stock under stock plans		1,375			16,219
Proceeds from borrowing on term loan, net of issuance costs		50,694			—
Payments for taxes related to net share settlement of equity awards		(4,406	)		(6,333	)
Debt issuance costs for line of credit		(2,554	)		—
Repayment of convertible senior notes		(200,000	)		—
Principal payments on promissory note and finance lease obligations		(396	)		(456	)
Payments for contingent consideration		(5,686	)		(6,121	)
Net cash (used in) provided by financing activities		(160,973	)		3,309
Effect of exchange rates on cash and cash equivalents		367			66
Net (decrease) increase in cash and cash equivalents		(180,526	)		14,665
Cash and cash equivalents at beginning of period		237,417			222,752
Cash and cash equivalents at end of period	$	56,891		$	237,417

QUOTIENT TECHNOLOGY INC. RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited, in thousands)

	Three Months Ended December 31,										Year Ended December 31,
	2022					2021					2022					2021
Net Income (Loss) ($) / Profit (Loss) Margin (%)⁽³⁾	$	320		—	%	$	(7,110	)	(5	)%	$	(76,511	)	(26	)%	$	(45,568	)	(9	)%
Adjustments:
Stock-based compensation		4,604		7	%		5,738		4	%		32,453		11	%		22,812		4	%
Depreciation and amortization		3,901		6	%		5,039		3	%		17,929		6	%		29,464		6	%
Other⁽¹⁾⁽²⁾		3,962		6	%		1,980		2	%		35,851		12	%		14,433		3	%
Change in fair value of contingent consideration		—		—	%		620		—	%		—		—	%		1,392		—	%
Interest expense		1,471		2	%		3,871		3	%		5,641		2	%		15,177		3	%
Other (income) expense, net		(1,209	)	(2	)%		80		—	%		(1,027	)	—	%		210		—	%
Provision for income taxes		148		—	%		2,841		2	%		522		—	%		3,631		1	%

Total adjustments	$	12,877		19	%	$	20,168		14	%	$	91,369		31	%	$	87,119		17	%

Adjusted EBITDA ($) / Adjusted EBITDA Margin (%)⁽³⁾	$	13,197		19	%	$	13,059		9	%	$	14,858		5	%	$	41,551		8	%

(1) For the year ended December 31, 2022, Other includes a charge of $11.4 million related to the impairment of certain long-lived and right-of-use assets; $9.3 million related to litigation settlements; $8.9 million related to restructuring charges; $4.9 million related to shareholder activism response costs; $1.3 million related to certain business transformation and strategic growth initiatives costs, which includes $1.0 million related to the launch and scaling of Shopmium in the U.S. to replace coupons.com as our direct-to-consumer offering. For the year ended December 31, 2021, Other includes a charge of $9.1 million related to the impairment of certain intangible assets due to the circumstances surrounding the termination of our partnership with Albertsons, restructuring charges of $2.7 million, acquisition related costs of $1.7 million, and $0.9 million related to adjusted shareholder activism response costs. Restructuring charges relate to severance for impacted employees. Acquisition related costs primarily include certain bonuses contingent upon the acquired company meeting certain financial metrics over the contingent consideration period and diligence, accounting, and legal expenses incurred related to certain acquisitions.

(2) Beginning Q1 2022, shareholder activism response costs were excluded from Adjusted EBITDA. Prior period results have been revised for comparability, which impacted Adjusted EBITDA for the three months and year ended December 31, 2021.

(3) Profit (Loss) Margin and Adjusted EBITDA Margin is the ratio of Profit (Loss) to Revenues and Adjusted EBITDA to Revenues.

QUOTIENT TECHNOLOGY INC. RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited, in thousands)

	Q4 FY 21			Q1 FY 22			Q2 FY 22			Q3 FY 22			Q4 FY 22
Net Income (loss)	$	(7,110	)	$	(26,306	)	$	(43,358	)	$	(7,167	)	$	320
Adjustments:
Stock-based compensation		5,738			5,742			17,127			4,980			4,604
Depreciation and amortization		5,039			4,561			4,670			4,797			3,901
Other⁽¹⁾⁽²⁾		1,980			7,621			16,349			7,919			3,962
Change in fair value of contingent consideration		620			—			—			—			—
Interest expense		3,871			1,154			1,179			1,837			1,471
Other (income) expense, net		80			(36	)		417			(200	)		(1,209	)
Provision for (benefit from) income taxes		2,841			166			2,346			(2,138	)		148

Total adjustments	$	20,169		$	19,208		$	42,088		$	17,195		$	12,877

Adjusted EBITDA⁽¹⁾	$	13,059		$	7,098		$	(1,270	)	$	10,028		$	13,197

Adjusted EBITDA Margin⁽³⁾	9%			(9)%			(2)%			14%			19%

(1) Adjusted EBITDA, a non-GAAP financial measure, is net income (loss) adjusted for stock-based compensation, depreciation and amortization, change in fair value of contingent consideration, interest expense, other (income) expense, net, provision for (benefit from) income taxes, and other, which includes: adjusted shareholder activism response costs of $0.9 million, restructuring charges of $0.7 million, and acquisition related costs of $0.4 million during Q4 FY21; charge of $6.1 million related to the impairment of certain long-lived and right-of-use assets, $1.4 million related to shareholder activism response costs, and $0.1 million related to acquisition related costs during Q1 FY22; charge of $4.8 million related to litigation settlements; $5.3 million related to the impairment of certain long-lived and right-of-use assets, $3.7 million related to shareholder activism response costs, and restructuring charges of $2.6 million during Q2 FY22; charge of $5.0 million related to litigation settlements, $2.8 million related to restructuring charges, and $0.1 million related to shareholder activism response costs during Q3 FY22; charge of $3.4 million related to restructuring charges, $1.3 million related to certain business transformation and strategic growth initiatives which includes $1.0 million related to the launch and scaling of Shopmium in the U.S. to replace coupons.com as our direct-to-consumer offering, $0.5 million related to litigation settlement recovery and $0.2 million shareholder activism response costs recovery during Q4 FY22.

(2) Beginning Q1 2022, shareholder activism response costs were excluded from Adjusted EBITDA. Prior period results have been revised for comparability, which impacted Adjusted EBITDA for Q4 FY21.

(3) Adjusted EBITDA margin is the ratio of Adjusted EBITDA and Revenues.

QUOTIENT TECHNOLOGY INC. RECONCILIATION OF GROSS PROFIT TO NON-GAAP GROSS PROFIT (Unaudited, in thousands)

	Q4 FY 21			Q3 FY 22			Q4 FY 22			FY 2021			FY 2022
Revenues	$	146,414		$	70,336		$	70,723		$	521,494		$	288,766

Cost of revenues (GAAP)	$	91,992		$	36,765		$	31,768		$	332,672		$	154,878
(less) Stock-based compensation		(556	)		(442	)		(425	)		(1,905	)		(1,899	)
(less) Amortization of acquired intangible assets		(2,337	)		(1,966	)		(613	)		(18,603	)		(7,092	)
(less) Impairment of certain intangible assets		—			—			—			(9,086	)		—
(less) Impairment of certain long-lived and right-of-use assets		—			—			—			—			(1,434	)
(less) Business transformation and strategic growth initiatives costs		—			—			(154	)		—			(154	)
(less) Restructuring charges		(158	)		(450	)		(662	)		(163	)		(1,200	)
Cost of revenues (Non-GAAP)	$	88,941		$	33,907		$	29,914		$	302,915		$	143,099


Gross profit (GAAP)	$	54,422		$	33,571		$	38,955		$	188,822		$	133,888
Gross margin percentage (GAAP)		37.2	%		47.7	%		55.1	%		36.2	%		46.4	%

Gross profit (Non-GAAP)*	$	57,473		$	36,429		$	40,809		$	218,579		$	145,667
Gross margin percentage (Non-GAAP)		39.3	%		51.8	%		57.7	%		41.9	%		50.4	%

* Non-GAAP gross profit excludes stock-based compensation, amortization of acquired intangible assets, impairment of certain intangible assets, impairment of long-lived and right-of-use assets, certain business transformation and strategic growth initiatives costs and restructuring charges.

QUOTIENT TECHNOLOGY INC. RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES (Unaudited, in thousands)

	Q4 FY 21			Q1 FY 22			Q2 FY 22			Q3 FY 22			Q4 FY 22			FY 2021			FY 2022
Revenues	$	146,414		$	78,456		$	69,251		$	70,336		$	70,723		$	521,494		$	288,766

Sales and marketing expenses		27,030			21,936			21,459			19,939			20,745			112,263			84,079
(less) Stock-based compensation		(1,165	)		(891	)		(812	)		(777	)		(733	)		(5,012	)		(3,213	)
(less) Amortization of acquired intangible assets		(637	)		(354	)		(354	)		(354	)		(354	)		(3,206	)		(1,416	)
(less) Business transformation and strategic growth initiatives costs		—			—			—			—			(928	)		—			(928	)
(less) Restructuring charges		(328	)		3			(131	)		(762	)		(1,595	)		(1,448	)		(2,485	)
Non-GAAP Sales and marketing expenses	$	24,900		$	20,694		$	20,162		$	18,046		$	17,135		$	102,597		$	76,037
Non-GAAP Sales and marketing percentage		17	%		26	%		29	%		26	%		24	%		20	%		26	%

Research and development		10,400			9,756			7,072			4,899			4,572			44,941			26,299
(less) Stock-based compensation		(851	)		(967	)		(674	)		(411	)		(361	)		(3,876	)		(2,413	)
(less) Business transformation and strategic growth initiatives costs		—			—			—			—			(54	)		—			(54	)
(less) Restructuring charges		(106	)		3			(170	)		(246	)		(108	)		(569	)		(521	)
Non-GAAP Research and development expenses	$	9,443		$	8,792		$	6,228		$	4,242		$	4,049		$	40,496		$	23,311
Non-GAAP Research and development percentage		6	%		11	%		9	%		6	%		6	%		8	%		8	%

General and administrative expenses		16,690			22,708			42,869			16,401			12,908			56,776			94,886
(less) Stock-based compensation		(3,166	)		(3,352	)		(15,141	)		(3,350	)		(3,085	)		(12,019	)		(24,928	)
(less) Restructuring charges		(83	)		(45	)		(2,240	)		(1,411	)		(1,037	)		(546	)		(4,733	)
(less) Acquisition related costs		(381	)		—			—			—			—			(1,696	)		—
(less) Impairment of long-lived and right-of-use assets		—			(6,119	)		(3,895	)		—			—			—			(10,014	)
(less) Business transformation and strategic growth initiatives costs		—			—			—			—			(173	)		—			(173	)
(less) Shareholder activism response costs		(925	)		(1,450	)		(3,654	)		(51	)		250			—			(4,905	)
(less) Litigation settlements		—			—			(4,750	)		(5,000	)		500			—			(9,250	)
Non-GAAP General and administrative expenses	$	12,135		$	11,742		$	13,189		$	6,589		$	9,363		$	42,515		$	40,883
Non-GAAP General and administrative percentage		8	%		15	%		19	%		9	%		13	%		8	%		14	%

Non-GAAP Operating expenses*	$	46,478		$	41,228		$	39,579		$	28,877		$	30,547		$	185,608		$	140,231
Non-GAAP Operating expense percentage		32	%		53	%		57	%		41	%		43	%		36	%		49	%

* Non-GAAP operating expenses excludes stock-based compensation, amortization of acquired intangible assets, restructuring charges, acquisition related costs, impairment of certain long-lived and right-of-use assets, shareholder activism response costs, litigation settlements, and certain business transformation and strategic growth initiatives costs.

QUOTIENT TECHNOLOGY INC. RECONCILIATION OF GROSS PROFIT TO NON-GAAP GROSS PROFIT (FORECASTED) (Unaudited, in thousands)

	Q1 FY 23 (Forecast)						FY23 (Forecast)
	Low			High			Low			High
Revenues	$	55,000		$	65,000		$	275,000		$	305,000

Cost of revenues (GAAP)	$	26,000		$	31,100		$	133,100		$	143,200
(less) Stock-based compensation		(400	)		(500	)		(900	)		(1,000	)
(less) Amortization of acquired intangible assets		(600	)		(600	)		(2,200	)		(2,200	)
Cost of revenues (Non-GAAP)	$	25,000		$	30,000		$	130,000		$	140,000

Gross profit (GAAP)	$	29,000		$	33,900		$	141,900		$	161,800

Gross profit (Non-GAAP)	$	30,000		$	35,000		$	145,000		$	165,000

View source version on businesswire.com: https://www.businesswire.com/news/home/20230228006293/en/

Investor Relations:

Drew Haroldson

The Blueshirt Group for Quotient

[email protected]

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