Market Newsdesk

Electromed, Inc. Announces Fiscal 2023 Third Quarter Results

Quarterly Net Revenue Increase of 19% Year-over-Year

NEW PRAGUE, Minn.–(BUSINESS WIRE)–
Electromed, Inc. (“Electromed”) (NYSE American: ELMD), a leader in innovative airway clearance technologies, today announced financial results for the three months ended March 31, 2023 (“Q3 FY 2023”).

Q3 FY 2023 Highlights

• Record quarterly net revenues of $12.1 million, a 19% year-over-year increase

• Homecare revenue of $11.0 million, an increase of 21% year-over-year

• Generated operating income of $1.2 million, an increase of 39% year-over-year

• Net income of $1.1 million, or $0.12 per fully diluted share, compared with net income of $645,000 in the same period a year ago

• Cash as of March 31, 2023 was $6.8 million

“I’m very pleased to report 19% revenue growth in the third quarter of fiscal year 2023 coupled with net income growth that further demonstrates that our investments in growth are yielding strong results,” said Kathleen Skarvan, President and Chief Executive Officer. “Our revenue growth was driven by strong referral growth, improved productivity by our expanded sales team and the recent launch to the homecare market of our next generation SmartVest Clearway.”

Ms. Skarvan continued, “Our SmartVest Clearway has been received very positively by clinicians and patients due to its state-of-the-art patient experience with a simple touch screen user interface, remote monitoring of data, and is the lightest HFCWO generator on the market. We believe that Electromed is well-positioned for growth and profitability in calendar 2023.”

Fiscal Third Quarter Results

Net revenues for Q3 FY 2023 increased by 19% year-over-year to $12.1 million, compared with $10.1 million in the same period the prior year. The increase over the prior year was driven by an increase in referrals and approvals due to an expanded sales force and reimbursement team.

Home care revenue increased by $1,938,000, or 21.5%, for the three months ended March 31, 2023 compared to the same period in the prior year. The increase was primarily due to an increase in referrals and approvals. The increase in referrals was due to an increase in direct sales representatives as well as positive market momentum from the introduction of our newest generation SmartVest Clearway in the quarter and was partially offset by a temporary interruption in supply chain and associated operations in the quarter. Field sales force employees totaled 57 at quarter end, 48 of which were direct sales representatives. Sales productivity remained within our expected range during the quarter, with annualized home care revenues per direct sales representative at $908,000, within Electromed’s target range of $850,000 to $950,000.

Gross profit increased to $9,056,000, or 75.0% of net revenues, for the three months ended March 31, 2023, from $7,743,000, or 76.4% of net revenues, in the same period in the prior year. The decrease in gross profit as a percentage of net revenues compared to the same period in the prior year was primarily due to increased material costs and component broker fees incurred to ramp up supply for the Clearway product.

Selling, general and administrative (“SG&A”) expenses were $7,694,000 for the three months ended March 31, 2023, representing an increase of $1,150,000, or 17.6%, compared to the same period in the prior year. The increase in SG&A expense was primarily due to increased payroll and compensation expense related to the higher average number of sales, sales support, marketing, and reimbursement personnel to process higher patient referrals.

Operating income for the three months ended March 31, 2023 was $1,196,000, compared to $863,000 for the same period in the prior year. The increase in operating income was driven primarily by revenue growth and a decrease in Research & Development expenses but partially offset by increased SG&A expenses related to our sales and reimbursement investments, as well as increased material costs and broker fees incurred to accelerate the ramp up supply for the Clearway product.

Net income for the three months ended March 31, 2023 was $1,075,000, or $0.12 per diluted share, compared to $645,000, or $0.07 per diluted share, for the same period in the prior year.

As of March 31, 2023, Electromed had $6.8 million in cash, $22.3 million in accounts receivable, working capital of $28.8 million, and total shareholders’ equity of $36.4 million.

Conference Call and Webcast Information

The conference call will be held at 5:00 p.m. Eastern Time on Tuesday, May 9, 2023.

Interested parties may participate in the call by dialing (888) 999-5318 (Domestic) or (848) 280-6460 (International). The live conference call webcast will be accessible in the Investor Relations section of Electromed’s web site and directly via the following link: Fiscal Third Quarter Earnings Webcast.

For those who cannot listen to the live broadcast, a replay will be available by dialing (844) 512-2921 (Domestic) or (412) 317-6671 (International) and referencing the replay pin number 0151926. Additionally, an online replay will be available in the Investor Relations section of Electromed’s web site at: http://investors.smartvest.com/.

About Electromed, Inc.

Electromed, Inc. manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest® Airway Clearance System, to patients with compromised pulmonary function. It is headquartered in New Prague, Minnesota, and was founded in 1992. Further information about Electromed can be found at www.smartvest.com.

Cautionary Statements

Certain statements in this press release constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as “anticipate,” “assume,” “believe,” “continue,” “expect,” “may,” “potential,” “should,” “will,” and similar expressions, including the negative of these terms, but they are not the exclusive means of identifying such statements. Forward-looking statements cannot be guaranteed, and actual results may vary materially due to the uncertainties and risks, known or unknown associated with such statements. Examples of risks and uncertainties for Electromed include, but are not limited to, component or raw material shortages, changes to lead times or significant price increases, changes to Medicare, Medicaid, or private insurance reimbursement policies; the duration, extent and severity of the COVID-19 pandemic, including its effects on our business, supply chain, operations and employees as well as its impact on our customers and distribution channels and on economies and markets more generally; the competitive nature of our market; changes to state and federal health care laws; changes affecting the medical device industry; our ability to develop new sales channels for our products such as the homecare distributor channel; our need to maintain regulatory compliance and to gain future regulatory approvals and clearances; new drug or pharmaceutical discoveries; general economic and business conditions; our ability to renew our line of credit or obtain additional credit as necessary; our ability to protect and expand our intellectual property portfolio; the risks associated with expansion into international markets, as well as other factors we may describe from time to time in Electromed’s reports filed with the Securities and Exchange Commission (including Electromed’s most recent Annual Report on Form 10-K, as amended from time to time, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K). Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and other readers should not place undue reliance on “forward-looking statements,” as such statements speak only as of the date of this press release. We undertake no obligation to update them in light of new information or future events.

Source: Electromed, Inc.

Financial Tables Follow:

Electromed, Inc.   Condensed Balance Sheets
				March 31, 2023			June 30, 2022
				(Unaudited)
	Assets
	Current Assets
		Cash and cash equivalents		$	6,776,000		$	8,153,000
		Accounts receivable (net of allowances for doubtful accounts of $45,000)			22,345,000			21,052,000
		Contract assets			570,000			286,000
		Inventories			3,451,000			3,178,000
		Prepaid expenses and other current assets			1,808,000			1,870,000
		Income tax receivable			219,000			–
			Total current assets		35,169,000			34,539,000
	Property and equipment, net				5,502,000			4,568,000
	Finite-life intangible assets, net				604,000			599,000
	Other assets				60,000			120,000
	Deferred income taxes				1,506,000			1,538,000
			Total assets	$	42,841,000		$	41,364,000
	Liabilities and Shareholders’ Equity
	Current Liabilities
		Accounts payable			1,289,000			1,261,000
		Accrued compensation			2,082,000			2,742,000
		Income tax payable			–			51,000
		Warranty reserve			1,333,000			1,256,000
		Other accrued liabilities			1,713,000			1,840,000
			Total current liabilities		6,417,000			7,150,000
	Other long-term liabilities				30,000			41,000
			Total liabilities		6,447,000			7,191,000
	Commitments and Contingencies
	Shareholders’ Equity
		Common stock, $0.01 par value per share, 13,000,000 shares authorized;
			8,556,600 and 8,475,438 shares issued and outstanding, as of March 31, 2023 and June 30, 2022, respectively		86,000			85,000
		Additional paid-in capital			18,548,000			18,308,000
		Retained earnings			17,760,000			15,780,000
			Total shareholders’ equity		36,394,000			34,173,000
			Total liabilities and shareholders’ equity	$	42,841,000		$	41,364,000

Electromed, Inc.   Condensed Statements of Operations (Unaudited)
				Three Months Ended						Nine Months Ended
				March 31,						March 31,
				2023			2022			2023			2022
	Net revenues			$	12,068,000		$	10,141,000		$	34,455,000		$	30,390,000
	Cost of revenues				3,012,000			2,398,000			8,386,000			7,066,000
		Gross profit			9,056,000			7,743,000			26,069,000			23,324,000
	Operating expenses
		Selling, general and administrative			7,694,000			6,544,000			22,937,000			19,806,000
		Research and development			166,000			336,000			618,000			1,041,000
		Total operating expenses			7,860,000			6,880,000			23,555,000			20,847,000
		Operating income			1,196,000			863,000			2,514,000			2,477,000
	Interest income, net				26,000			6,000			37,000			21,000
			Net income before income taxes		1,222,000			869,000			2,551,000			2,498,000
	Income tax expense				147,000			224,000			418,000			576,000
			Net income	$	1,075,000		$	645,000		$	2,133,000		$	1,922,000
	Income per share:
		Basic		$	0.13		$	0.08		$	0.25		$	0.23
		Diluted		$	0.12		$	0.07		$	0.25		$	0.22
	Weighted-average common shares outstanding:
		Basic			8,461,531			8,454,504			8,449,623			8,485,856
		Diluted			8,710,106			8,744,535			8,694,407			8,762,963

Electromed, Inc.   Condensed Statements of Cash Flows (Unaudited)
						Nine Months Ended March 31,
						2023				2022
	Cash Flows From Operating Activities
		Net income				$	2,133,000			$	1,922,000
		Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation				370,000				368,000
			Amortization of finite-life intangible assets				52,000				105,000
			Share-based compensation expense				506,000				703,000
			Deferred income taxes				32,000				15,000
			Changes in operating assets and liabilities:
				Accounts receivable			(1,293,000	)			(2,582,000	)
				Contract assets			(284,000	)			98,000
				Inventories			(264,000	)			9,000
				Prepaid expenses and other assets			105,000				(519,000	)
				Income tax receivable, net			(270,000	)			(443,000	)
				Accounts payable and accrued liabilities			(111,000	)			550,000
				Accrued compensation			(660,000	)			(173,000	)
					Net cash provided by operating activities		316,000				53,000
	Cash Flows From Investing Activities
			Investment in property and equipment				(1,221,000	)			(980,000	)
			Investment in finite-life intangible assets				(54,000	)			(86,000	)
					Net cash used in investing activities		(1,275,000	)			(1,066,000	)
	Cash Flows From Financing Activities
			Issuance of common stock upon exercise of options				40,000				–
			Taxes paid on stock options exercised on a net basis				(305,000	)			(70,000	)
			Repurchase of common stock				(153,000	)			(962,000	)
					Net cash used in financing activities		(418,000	)			(1,032,000	)
					Net (decrease) increase in cash		(1,377,000	)			(2,045,000	)
	Cash And Cash Equivalents
		Beginning of period					8,153,000				11,889,000
		End of period				$	6,776,000			$	9,844,000

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509005307/en/

Brad Nagel, Chief Financial Officer

(952) 758-9299

[email protected]

Mike Cavanaugh, Investor Relations

ICR Westwicke

(617) 877-9641

[email protected]

KEYWORDS: Minnesota United States North America

INDUSTRY KEYWORDS: General Health Health Medical Devices

MEDIA:

Posted on May 9, 2023 6:43 pm

Exelixis Announces First Quarter 2023 Financial Results and Provides Corporate Update

Exelixis Announces First Quarter 2023 Financial Results and Provides Corporate Update

– Total Revenues of $408.8 million, Cabozantinib Franchise U.S. Net Product Revenues of $363.4 million –

– GAAP Diluted EPS of $0.12, Non-GAAP Diluted EPS of $0.16 –

– Conference Call and Webcast Today at 5:00 PM Eastern Time –

ALAMEDA, Calif.–(BUSINESS WIRE)–
Exelixis, Inc. (Nasdaq: EXEL) today reported financial results for the first quarter of 2023 and provided an update on progress toward achieving key corporate objectives, as well as commercial, clinical and pipeline development milestones.

“The Exelixis team continued to execute on our key priorities and made significant progress in advancing our commercial business and our growing pipeline,” said Michael M. Morrissey, Ph.D., President and Chief Executive Officer, Exelixis. “CABOMETYX^® maintained its status as the leading tyrosine kinase inhibitor in renal cell carcinoma in the first quarter, driven by its use in combination with nivolumab in the first-line setting. We’ve made important progress across our pipeline programs, including advancing the STELLAR-303 and STELLAR-304 phase 3 trials for zanzalintinib, as well as single-agent and combination dose-escalation cohorts of the phase 1 trial of XB002. We are on track to initiate additional pivotal studies for zanzalintinib in 2023 and are focused on accelerating XB002 into full development by year-end.”

Dr. Morrissey continued: “Our collaborations with Cybrexa and Sairopa also made steady progress. Sairopa received clearance of its Investigational New Drug application for ADU-1805 from the U.S. Food and Drug Administration in February and subsequently initiated the phase 1 study in March. Cybrexa is planning to present updated phase 1 data for CBX-12 at the ASCO Annual Meeting in June. In March, we announced a share repurchase program for up to $550 million of our common stock before the end of 2023, which reflects continued confidence in our long-term prospects and the strength of our balance sheet and reinforces our commitment to deliver value to shareholders. I’d like to thank the entire Exelixis team for their collective hard work and dedication to improving the standard-of-care for patients while driving sustainable, long-term value for shareholders as we advance our mission to help cancer patients recover stronger and live longer.”

First Quarter 2023 Financial Results

Total revenues for the quarter ended March 31, 2023 were $408.8 million, as compared to $356.0 million for the comparable period in 2022.

Total revenues for the quarter ended March 31, 2023 included net product revenues of $363.4 million, as compared to $310.3 million for the comparable period in 2022. The increase in net product revenues was primarily due to an increase in sales volume and an increase in average net selling price.

Collaboration revenues, composed of license revenues and collaboration services revenues, were $45.4 million for the quarter ended March 31, 2023, as compared to $45.7 million for the comparable period in 2022. The decrease in collaboration revenues was primarily related to a decrease in development cost reimbursements earned, which was offset by higher royalty revenues for the sales of cabozantinib outside of the U.S. generated by Exelixis’ collaboration partners, Ipsen Pharma SAS and Takeda Pharmaceutical Company Limited.

Research and development expenses for the quarter ended March 31, 2023 were $234.2 million, as compared to $156.7 million for the comparable period in 2022. The increase in research and development expenses was primarily related to increases in license and other collaboration costs, personnel expenses and manufacturing costs to support our development candidates, which were partially offset by lower stock-based compensation expense.

Selling, general and administrative expenses for the quarter ended March 31, 2023 were $131.4 million, as compared to $102.9 million for the comparable period in 2022. The increase in selling, general and administrative expenses was primarily related to an increase in personnel expenses.

Provision for income taxes for the quarter ended March 31, 2023 was $8.3 million, as compared to $16.7 million for the comparable period in 2022, primarily due to a decrease in pre-tax income.

GAAP net income for the quarter ended March 31, 2023 was $40.0 million, or $0.12 per share, basic and diluted, as compared to GAAP net income of $68.6 million, or $0.21 per share, basic and diluted, for the comparable period in 2022.

Non-GAAP net income for the quarter ended March 31, 2023 was $52.8 million, or $0.16 per share, basic and diluted, as compared to non-GAAP net income of $83.9 million, or $0.26 per share, basic and diluted, for the comparable period in 2022.

Non-GAAP Financial Measures

To supplement Exelixis’ financial results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), Exelixis presents non-GAAP net income (and the related per share measures), which excludes from GAAP net income (and the related per share measures) stock-based compensation expense, adjusted for the related income tax effect for all periods presented.

Exelixis believes that the presentation of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. In particular, Exelixis believes that these non-GAAP financial measures, when considered together with its financial information prepared in accordance with GAAP, can enhance investors’ and analysts’ ability to meaningfully compare Exelixis’ results from period to period, and to identify operating trends in Exelixis’ business. Exelixis has excluded stock-based compensation expense, adjusted for the related income tax effect, because it is a non-cash item that may vary significantly from period to period as a result of changes not directly or immediately related to the operational performance for the periods presented. Exelixis also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions.

These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Exelixis encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP financial information and the reconciliation between these presentations, to more fully understand Exelixis’ business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.

2023 Financial Guidance

Exelixis is maintaining the previously provided financial guidance for fiscal year 2023:

Total revenues		$1.775 billion – $1.875 billion
Net product revenues		$1.575 billion – $1.675 billion
Cost of goods sold		4.0% – 5.0% of net product revenues
Research and development expenses (1)		$1,000 million – $1,050 million
Selling, general and administrative expenses (2)		$475 million – $525 million
Effective tax rate		20% – 22%

____________________

(1)	Includes $45 million of non-cash stock-based compensation expense.
(2)	Includes $55 million of non-cash stock-based compensation expense.

Cabozantinib Highlights

Cabozantinib Franchise Net Product Revenues and Royalties. Net product revenues generated by the cabozantinib franchise in the U.S. were $363.4 million during the first quarter of 2023, with net product revenues of $361.8 million from CABOMETYX^® (cabozantinib) and $1.6 million from COMETRIQ^® (cabozantinib). Based upon cabozantinib-related net product revenues generated by Exelixis’ collaboration partners during the quarter ended March 31, 2023, Exelixis earned $32.7 million in royalty revenues.

Cabozantinib Data at the 2023 American Society of Clinical Oncology (ASCO) Genitourinary Cancers Symposium (ASCO GU 2023). In February, cabozantinib was the subject of multiple data presentations at ASCO GU 2023, held from February 16-18, 2023. Notable presentations included: 44-month median follow-up data and biomarker analyses from CheckMate -9ER, the phase 3 pivotal trial of cabozantinib in combination with nivolumab; outcomes by International Metastatic Renal Cell Carcinoma Database Consortium (IMDC) risk score in COSMIC-313, the phase 3 pivotal trial of cabozantinib, nivolumab and ipilimumab; and extended follow-up results from a non-clear cell renal cell carcinoma (RCC) cohort of COSMIC-021, the ongoing phase 1b trial of cabozantinib in combination with atezolizumab.

Cabozantinib Data Presentations at the 2023 ASCO Annual Meeting. In June 2023, cabozantinib will be the subject of 22 presentations at this year’s ASCO Annual Meeting, which is being held from June 2-6 in Chicago. Notable presentations will include results from the CONTACT-03 phase 3 trial evaluating the combination of cabozantinib and atezolizumab vs. cabozantinib alone in metastatic RCC patients who have progressed following treatment with an immune checkpoint inhibitor therapy, and three-year quality-of-life follow-up data from CheckMate -9ER.

Corporate Updates

Announcement of Key Priorities and Anticipated Milestones for 2023. In January 2023, Exelixis announced its key priorities and anticipated milestones for 2023, including: pivotal data readouts from the ongoing phase 3 studies evaluating the combination of cabozantinib with atezolizumab in patients with forms of metastatic castration-resistant prostate cancer (CONTACT-02) and RCC (CONTACT-03), the latter of which has subsequently occurred, and the next overall survival (OS) analysis from the phase 3 COSMIC-313 pivotal study for cabozantinib; expansion of the pivotal development program for zanzalintinib with multiple new phase 3 pivotal trial initiations; acceleration of the XB002 clinical program into full development by year-end; advancement of the XL102 QUARTZ-101 phase 1 study into the tumor-specific cohort-expansion stage and in planned combination cohorts; in collaboration with partner Cybrexa, progression of the phase 1 clinical study for CBX-12, including dose-expansion cohorts; expected filing of an Investigational New Drug application (IND) for ADU-1805 with the U.S. Food and Drug Administration (FDA) in the first quarter of 2023 by partner Sairopa B.V. (Sairopa), which has subsequently occurred; advancement of development candidates (DCs) XB010, XB014 and XB628 toward IND filings; and progress up to five new DCs into preclinical development across biotherapeutics and small molecules. Exelixis presented the details of its key priorities and anticipated milestones at the 41^st Annual J.P. Morgan Healthcare Conference.

Cabozantinib Abbreviated New Drug Application (ANDA) Litigation Against MSN Pharmaceuticals, Inc. (MSN). In January 2023, the U.S. District Court for the District of Delaware (the Delaware District Court) ruled in Exelixis’ favor in the ANDA lawsuit against MSN (MSN I), rejecting MSN’s challenge to the cabozantinib compound patent (U.S. Patent No. 7,759,473). Additionally, the District Court ruled that MSN’s proposed ANDA product does not infringe Exelixis’ N-2 polymorph patent (U.S. Patent No. 8,877,776), expiring in October 2030. The decision in MSN I does not address the validity of the ‘776 patent, which was not contested by MSN, and the Delaware District Court entered judgment that any final FDA approval of MSN’s ANDA shall not be a date earlier than August 14, 2026, the expiration date of the ‘473 patent. In addition, this ruling in MSN I does not impact Exelixis’ separate and ongoing suit against MSN (MSN II) concerning four different Orange Book-listed patents related to cabozantinib, which expire between January 15, 2030, and February 10, 2032. A bench trial in MSN II is scheduled to begin in October 2023 in the U.S. District Court for the District of Delaware.

Announcement of $550 Million Share Repurchase Program. In March, Exelixis announced that the company’s Board of Directors authorized the repurchase of up to $550 million of the company’s common stock before the end of 2023. Share repurchases under the program may be made from time to time through a variety of methods, which may include open market purchases, in block trades, accelerated share repurchase transactions, exchange transactions, or any combination of such methods. The timing and amount of any share repurchases under the share repurchase program will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of Exelixis’ common stock and general market conditions.

Pipeline Highlights

Exelixis and Sairopa Announce FDA Clearance of IND for ADU-1805 in Patients with Advanced Solid Tumors. In February, Exelixis and Sairopa announced FDA clearance of Sairopa’s IND to evaluate the safety and pharmacokinetics in a Phase 1 clinical trial of ADU-1805 in adults with advanced solid tumors, which has since been initiated. As a monoclonal antibody active against all human alleles of SIRPα, ADU-1805 has the potential to address a broader patient population than other SIRPα-directed therapies. By blocking SIRPα, a significant immune-suppressive component of the tumor microenvironment, ADU-1805 has the potential to improve the immune system’s ability to attack tumors. Under the terms of the clinical development and option agreement announced in November 2022, Exelixis has the option to obtain an exclusive, worldwide license to develop and commercialize ADU-1805 and other anti-SIRPα antibodies upon review of data from prespecified phase 1 clinical studies to be completed by Sairopa during the option period. This IND clearance triggered a $35.0 million milestone payment to Sairopa, paid in the first quarter of 2023.

Basis of Presentation

Exelixis has adopted a 52- or 53-week fiscal year that generally ends on the Friday closest to December 31^st. For convenience, references in this press release as of and for the fiscal period ended April 1, 2022 is indicated as being as of and for the period ended March 31, 2022.

Conference Call and Webcast

Exelixis management will discuss the company’s financial results for the first quarter of 2023 and provide a general business update during a conference call beginning at 5:00 p.m. ET / 2:00 p.m. PT today, Tuesday, May 9, 2023.

To access the conference call, please register using this link. Upon registration, a dial-in number and unique PIN will be provided to join the call. To access the live webcast link, log onto www.exelixis.com and proceed to the News & Events / Event Calendar page under the Investors & Media heading. Please connect to the company’s website at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to listen to the webcast. A webcast replay of the conference call will also be archived on www.exelixis.com for one year.

About Exelixis

Exelixis is a globally ambitious oncology company innovating next-generation medicines and regimens at the forefront of cancer care. Powered by bi-coastal centers of discovery and development excellence, we are rapidly evolving our product portfolio to target an expanding range of tumor types and indications with our clinically differentiated pipeline of small molecules, antibody-drug conjugates and other biotherapeutics. This comprehensive approach harnesses decades of robust investment in our science and partnerships to advance our investigational programs and extend the impact of our flagship commercial product, CABOMETYX^® (cabozantinib). Exelixis is driven by a bold scientific pursuit to create transformational treatments that give more patients hope for the future. For information about the company and its mission to help cancer patients recover stronger and live longer, visit www.exelixis.com, follow @ExelixisInc on Twitter, like Exelixis, Inc. on Facebook and follow Exelixis on LinkedIn.

Forward-Looking Statements

This press release contains forward-looking statements, including, without limitation, statements related to: Exelixis’ research and development expectations for 2023, including initiating additional pivotal studies for zanzalintinib and, by year-end, accelerating XB002 into full development; Exelixis’ expectation that updated phase 1 data for CBX-12 will be presented at the ASCO Annual Meeting in June 2023; Exelixis’ plan to repurchase up to $550 million of its common stock before the end of 2023 as part of its commitment to deliver value to shareholders; Exelixis’ 2023 financial guidance; planned data presentations for cabozantinib at the 2023 ASCO Annual Meeting; Exelixis’ additional key priorities and anticipated milestones for 2023, including issuing pivotal data readouts from CONTACT-02 and the next OS analysis from COSMIC-313, advancing the XL102 QUARTZ-101 phase 1 study into the tumor-specific cohort-expansion stage and in planned combination cohorts, progressing the phase 1 clinical study for CBX-12 with dose-expansion cohorts, advancing of DCs XB010, XB014 and XB628 toward IND filings, and progressing up to five new DCs into preclinical development across biotherapeutics and small molecules; Exelixis’ expectation that the bench trial in MSN II will begin in October 2023 as scheduled; the clinical and therapeutic potential of ADU-1805, including its potential to improve the immune system’s ability to attack tumors, and Exelixis’ belief that ADU-1805 may address a broader patient population than other SIRPα-directed therapies; and Exelixis’ scientific pursuit to create transformational treatments that give more patients hope for the future. Any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements and are based upon Exelixis’ current plans, assumptions, beliefs, expectations, estimates and projections. Forward-looking statements involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of these risks and uncertainties, which include, without limitation: the degree of market acceptance of CABOMETYX and other Exelixis products in the indications for which they are approved and in the territories where they are approved, and Exelixis’ and its partners’ ability to obtain or maintain coverage and reimbursement for these products; the effectiveness of CABOMETYX and other Exelixis products in comparison to competing products; the level of costs associated with Exelixis’ commercialization, research and development, in-licensing or acquisition of product candidates, and other activities; Exelixis’ ability to maintain and scale adequate sales, marketing, market access and product distribution capabilities for its products or to enter into and maintain agreements with third parties to do so; the availability of data at the referenced times; the potential failure of cabozantinib, zanzalintinib and other Exelixis product candidates, both alone and in combination with other therapies, to demonstrate safety and/or efficacy in clinical testing; uncertainties inherent in the drug discovery and product development process; Exelixis’ dependence on its relationships with its collaboration partners, including their pursuit of regulatory approvals for partnered compounds in new indications, their adherence to their obligations under relevant collaboration agreements and the level of their investment in the resources necessary to complete clinical trials or successfully commercialize partnered compounds in the territories where they are approved; complexities and the unpredictability of the regulatory review and approval processes in the U.S. and elsewhere; Exelixis’ continuing compliance with applicable legal and regulatory requirements; unexpected concerns that may arise as a result of the occurrence of adverse safety events or additional data analyses of clinical trials evaluating cabozantinib and other Exelixis product candidates; Exelixis’ dependence on third-party vendors for the development, manufacture and supply of its products and product candidates; Exelixis’ ability to protect its intellectual property rights; market competition, including the potential for competitors to obtain approval for generic versions of Exelixis’ marketed products; changes in economic and business conditions, including as a result of the COVID-19 pandemic and other global events; and other factors discussed under the caption “Risk Factors” in Exelixis’ Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 7, 2023, and in Exelixis’ future filings with the SEC, including, without limitation, Exelixis’ Quarterly Report on Form 10-Q expected to be filed with the SEC on May 9, 2023. All forward-looking statements in this press release are based on information available to Exelixis as of the date of this press release, and Exelixis undertakes no obligation to update or revise any forward-looking statements contained herein, except as required by law.

Exelixis, the Exelixis logo, CABOMETYX and COMETRIQ are registered trademarks of Exelixis, Inc.

EXELIXIS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited)
	Three Months Ended March 31,
		2023				2022
Revenues:
Net product revenues	$	363,400			$	310,298
License revenues		38,292				32,067
Collaboration services revenues		7,096				13,615
Total revenues		408,788				355,980
Operating expenses:
Cost of goods sold		14,315				13,203
Research and development		234,246				156,671
Selling, general and administrative		131,397				102,863
Total operating expenses		379,958				272,737
Income from operations		28,830				83,243
Interest income		19,502				1,822
Other income (expense), net		(54	)			164
Income before income taxes		48,278				85,229
Provision for income taxes		8,250				16,656
Net income	$	40,028			$	68,573
Net income per share:
Basic	$	0.12			$	0.21
Diluted	$	0.12			$	0.21
Weighted-average common shares outstanding:
Basic		324,420				319,582
Diluted		326,279				323,289

EXELIXIS, INC. RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (in thousands, except per share amounts) (unaudited)
	Three Months Ended March 31,
		2023				2022
GAAP net income	$	40,028			$	68,573
Adjustments:
Stock-based compensation – research and development expenses (1)		3,252				8,899
Stock-based compensation – selling, general and administrative expenses (1)		13,409				10,860
Income tax effect of the above adjustments		(3,861	)			(4,439	)
Non-GAAP net income	$	52,828			$	83,893
GAAP net income per share:
Basic	$	0.12			$	0.21
Diluted	$	0.12			$	0.21
Non-GAAP net income per share:
Basic	$	0.16			$	0.26
Diluted	$	0.16			$	0.26
Weighted-average common shares outstanding:
Basic		324,420				319,582
Diluted		326,279				323,289

____________________

(1)	Non-cash stock-based compensation expense used for GAAP reporting in accordance with Accounting Standards Codification Topic 718, Compensation—Stock Compensation.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509005349/en/

Chris Senner

Chief Financial Officer

Exelixis, Inc.

650-837-7240

[email protected]

Susan Hubbard

EVP, Public Affairs & Investor Relations

Exelixis, Inc.

650-837-8194

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Biotechnology Pharmaceutical Health Oncology

MEDIA:

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Leading South African Fintech Lesaka Technologies Completes Turnaround as it Champions Financial Inclusion Across Informal Markets

JOHANNESBURG, South Africa–(BUSINESS WIRE)–
Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today released its results for the third quarter ended March 31, 2023 (“Q3 2023”) as the turnaround in the Group’s Consumer Division gathers momentum and the Merchant Division continues to outperform.

Performance highlights for Q3 2023:

• Revenue of R2.4 billion, compared to R549.8 million in Q3 2022, an increase of 337% due to the inclusion and continued outperformance of the Connect Group and momentum in the successful turnaround of the Consumer Division.

• Net loss attributable to Lesaka of R104.4 million, compared to R51.9 million in Q3 2022. Operating income (loss) before PPA amortization and net interest, a non-GAAP measure and reconciled below, was income of R34.0 million, compared to a loss R146.8 million in Q3 2022, and excludes amortization of acquired intangible assets R67.3 million, compared with R0.3 million in Q3 2022.

• Adjusted EBITDA of R137.1 million, a 221% improvement compared to the Q3 2022 loss of R112.7 million.

• Continued operating improvement demonstrated by further narrowing the operating loss to R33.2 million, representing an 77%⁽¹⁾ improvement from an operating loss of R147.1 million reported for Q3 2022.

• Continued outperformance from the Merchant Division, delivering Adjusted EBITDA of R148.7 million.

• Successful turnaround of the Consumer Division delivering Adjusted EBITDA of R29.6 million, compared to a loss of R13.5 million in Q3 2022.

• Positive net cash generated by operating activities of R133 million, compared to an outflow of R81.3 million in Q3 2022.

Note 1 – before reorganisation costs of R91.4 million in Q3 2022

Lesaka Technologies has leveraged disruptive technologies to build a unique fintech platform which meets the needs of both merchants and consumers operating in informal and formal markets. More than 72,000 merchants use the Group’s cash management solutions, bill payment technologies, value-added services, business funding and card-acquiring solutions and 1.3 million consumers access Lesaka’s unsecured credit, transactional banking and micro-insurance products and services.

Lesaka’s strong third quarter results were driven by the transformational acquisition and outperformance of the Connect Group in the Merchant Division and the successful turnaround of the Group’s Consumer Division, despite the persistently challenging economic environment.

The Merchant Division continues to exceed expectations and grow across all products. A key highlight of the quarter was the performance of the informal market business, Kazang, which delivered the best quarter in the business’ history.

Lincoln Mali CEO Lesaka Southern Africa who has been driving the turnaround in the consumer business commented: “We work hard to add value to the lives of grant beneficiaries by understanding their needs and creating relevant and affordable financial products and services. We have been largely focused on turning the consumer business around as quickly as possible and now that we have achieved EBITDA profitability we can focus all our efforts on growth.”

Lesaka Group CEO Chris Meyer added “As a result of our improved trading, cash flow and our ability to deliver against what we have promised, our funders have, in a show of confidence, extended and increased our facilities providing us with flexibility and access to resources to execute on our growth plans. Q3 represents another quarter of growth and transformation. We are excited by the Merchant Division’s outperformance and another quarter of continued improvement and profitability in the Consumer Division where we are moving strongly on to the front foot.”

The full SENS announcement can be seen here.

Full release and webcast details at https://ir.lesakatech.com/.

The discussion of our consolidated overall results of operations is based on amounts as reflected in our unaudited condensed consolidated financial statements which are prepared in accordance with U.S. GAAP. We analyze our results of operations both in U.S. dollars, as presented in the unaudited condensed consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of the entities which contribute the majority of our revenue and is the currency in which the majority of our transactions are initially incurred and measured. Due to the significant impact of currency fluctuations between the U.S. dollar and the ZAR on our reported results and because we use the U.S. dollar as our reporting currency, we believe that the supplemental presentation of our results of operations in ZAR is useful to investors to understand the changes in the underlying trends of our business.

Use of Non-GAAP Measures

U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of EBITDA, Group Adjusted EBITDA, Operating income (loss) before PPA amortization and net interest, fundamental net (loss) income and fundamental (loss) earnings per share and headline (loss) earnings per share are non-GAAP measures.

Attached is the reconciliation between our GAAP measure and our non-GAAP measures.

Q3 – ended 31 March	FY23 Q3		FY22 Q3		FY23 Q3		FY22 Q3
	ZAR’000		ZAR’000		$’000		$’000
Average exchange rate for conversion from ZAR to $	17.93		15.61		17.93		15.61
Net loss attributable to Lesaka (GAAP)	(104,363	)	(51,940	)	(5,820	)	(3,327	)
Earnings from equity-accounted investments	(305	)	–		(17	)	–
Income tax (benefit) expense	(15,422	)	7,338		(860	)	470
Net loss before income tax (benefit) expense	(120,090	)	(44,602	)	(6,697	)	(2,857	)
Interest expense	89,372		10,788		4,984		691
Interest income	(8,410	)	(11,881	)	(469	)	(761	)
PPA amortization (Amortization of acquired intangible assets)	67,269		256		3,789		15
Other items, comprising:	5,900		(101,384	)	329		(6,494	)
Loss on disposal of equity accounted investments	5,900		5,402		329		346
Gain on disposal of equity securities	–		(11,241	)	–		(720	)
Gain related to fair value adjustment to currency options	–		(95,545	)	–		(6,120	)
Operating income (loss) before PPA amortization and net interest (Non-GAAP)	34,041		(146,823	)	1,936		(9,406	)
PPA amortization (Amortization of acquired intangible assets)	(67,269	)	(256	)	(3,789	)	(15	)
Operating loss	(33,228	)	(147,079	)	(1,853	)	(9,421	)
Depreciation and amortization	107,143		7,228		5,975		463
Operating loss before depreciation and amortization (Non-GAAP)	73,915		(139,851	)	4,122		(8,958	)
Adjusted for:	–		–		–		–
Stock-based compensation	29,480		9,586		1,644		614
Lease adjustments	12,481		13,895		696		890
Once-off items	21,231		3,669		1,184		235
Group Adjusted EBITDA (Non-GAAP)	137,107		(112,701	)	7,646		(7,219	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006172/en/

Investor Relations Contact:

Phillipe Welthagen

Email: [email protected]

Mobile: +27 84 512 5393

FNK IR:

Rob Fink / Matt Chesler, CFA

Email: [email protected]

Media Relations Contact:

Janine Bester Gertzen

Email: [email protected]

KEYWORDS: Africa South Africa

INDUSTRY KEYWORDS: Technology Insurance Payments Finance Security Fintech Banking Professional Services Software

MEDIA:

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Virtus Investment Partners Reports Preliminary April 30, 2023 Assets Under Management

HARTFORD, Conn.–(BUSINESS WIRE)–
Virtus Investment Partners, Inc. (NASDAQ: VRTS) today reported preliminary assets under management of $162.2 billion as of April 30, 2023. In addition, the company provided services to $2.6 billion of other fee-earning assets, which are not included in assets under management.

Assets Under Management (unaudited)
($ in millions)
By Product Type:	April 30, 2023 (1)			March 31, 2023
Open-End Funds (2)	$	56,187		$	53,865
Closed-End Funds		10,399			10,358
Retail Separate Accounts		37,300			37,397
Institutional Accounts (3)		58,329			53,229
Total	$	162,215		$	154,849

(1)		Includes $7.8 billion of assets under management related to the April 1, 2023 acquisition of AlphaSimplex Group, LLC
(2)		Represents assets under management of U.S. retail funds, global funds, exchange traded funds, and variable insurance funds
(3)		Represents assets under management of institutional separate and commingled accounts including structured products

About Virtus Investment Partners, Inc.

Virtus Investment Partners (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment management products and services from our affiliated managers, each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006191/en/

Sean Rourke

(860) 263-4709

[email protected]

KEYWORDS: Connecticut United States North America

INDUSTRY KEYWORDS: Asset Management Professional Services Finance

MEDIA:

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Dutch Bros Inc. Reports First Quarter 2023 Financial Results

Record 45 New Systemwide Shop Openings in Q1 2023

Quarterly Revenue Increased Nearly 30% to $197.3 million

Reaffirms 2023 Guidance

GRANTS PASS, Ore.–(BUSINESS WIRE)–
Dutch Bros Inc. (NYSE: BROS; “Dutch Bros” or the “Company”) one of the fastest-growing brands in the food service and restaurant industry in the United States by location count, today reported financial results for the first quarter ended March 31, 2023.

Joth Ricci, Chief Executive Officer of Dutch Bros, stated, “In Q1, we opened a record 45 shops system-wide and grew revenue almost 30%. We also saw meaningful margin expansion, driven by significant improvements in labor efficiency and G&A leverage. We doubled down in our pursuit of more profitable growth and delivered strong company-operated shop margins. I’m proud of how our teams responded quickly and decisively to the economic climate, demonstrated by their focused effort on accelerating profitability as we grow our shop footprint.”

He continued, “During the quarter, we were encouraged by our customers’ responses to our traffic-driving initiatives, including our “Fill-a-Tray” promotion, which resulted in the largest single sales day in Dutch Bros recorded history. We will continue to utilize innovative strategies to generate traffic demand and build momentum.”

He concluded, “Our new shops are highly efficient, mature quickly, and continue to demonstrate predictable and attractive margin profiles. The class of shops opened in 2019, 2020, and 2021 have already achieved our 30% contribution margin target, and the class of 2022 is maturing in line with our margin expectations. We are hitting these targets as we continue entering new trade zones across the country. This performance gives us confidence in Dutch Bros growth strategy – both in the near-term and beyond.”

First Quarter 2023 Highlights

• Opened 45 new shops, 42 of which were company-operated, across 9 states. All of these new shops continue to be led by existing or newly-promoted regional operators.
  
• Total revenues grew 29.6% to $197.3 million as compared to $152.2 million in the same period of 2022.
  
• System same shop sales² declined (2.0)%, inclusive of the impact of our fortressing strategy, which results in sales being transferred from existing shops to new ones, as compared to the same period in 2022. Company-operated same shop sales declined (3.5)%, inclusive of the impact of our fortressing strategy, as compared to the same period of 2022.
  
• Company-operated shop revenues increased 33.0% to $173.2 million, as compared to $130.2 million in the same period of 2022.
  
• Company-operated shop gross profit was $28.9 million as compared to $16.6 million in the same period of 2022. In the first quarter of 2023, company-operated shop gross margin, which includes 190bps of pre-opening expenses improved to 16.7%, a year-over-year increase of 390bps.
  
• Company-operated shop contribution¹, a non-GAAP financial measure, grew 76.1% to $41.9 million as compared to $23.8 million in the same period of 2022. In the first quarter of 2023, company-operated shop contribution margin, which includes 190bps of pre-opening expense, improved to 24.2%, a year-over-year increase of 590 bps.
  
• Selling, general, and administrative expenses were $46.0 million (23.3% of revenue) as compared to $45.2 million (29.7% of revenue) in the same period of 2022.
  
• Adjusted selling, general, and administrative expenses^1, a non-GAAP financial measure, were $36.7 million (18.6% of revenue) as compared to $31.7 million (20.8% of revenue) in the same period of 2022.
  
• Net loss was $9.4 million as compared to $16.3 million in the same period of 2022.
  
• Adjusted EBITDA¹, a non-GAAP financial measure, grew 147.2% to $23.9 million as compared to $9.7 million in the same period of 2022.
  
• Adjusted net loss¹, a non-GAAP financial measure, was $0.5 million as compared to $2.5 million in the same period of 2022.
  
• Net loss per share of Class A and Class D common stock – diluted was $0.07 as compared to net loss per share of $0.10 in the same period of 2022.
  
• Adjusted net loss per fully exchanged share of diluted common stock¹, a non-GAAP financial measure, was $0.00 as compared to $0.02 in the same period of 2022.

Outlook

Dutch Bros is reaffirming the following full-year 2023 outlook:

• Total system shop openings in 2023 are expected to be at least 150, of which at least 130 shops will be company-operated.
• Total revenues are projected to be between $950 million and $1 billion.
• Same shop sales²growth is estimated to be in the low single digits. At this point we have no plans to take additional pricing action in 2023. We expect low-single digits growth from pricing to roll-over into 2023 from pricing action taken in 2022.
• Adjusted EBITDA³ is estimated to be approximately $125 million. This includes approximately $8 million we elected to make in labor investments related to wage increases in federal minimum wage markets and approximately $11 million in mandated wage increases in markets that do not adhere to the federal minimum wage standard.
• Capital expenditures are estimated to be in the range of $225 million to $250 million, which includes approximately $15 million to $20 million in spending in 2023 for our new roasting facility projected to open in 2024.

_________________
1		Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.
2		Same shop sales is defined in the section “Select Financial Metrics”.
3		We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.

Conference Call and Webcast Today

Joth Ricci, Chief Executive Officer, and Charles Jemley, Chief Financial Officer, will host a conference call and webcast today at 5:00 p.m. Eastern Time (ET) to discuss financial results for the first quarter ended March 31, 2023.

Event: First Quarter 2023 Conference Call and Webcast

Date: Tuesday, May 9, 2023

Time: 5:00 p.m. ET

Dial In: 1-201-493-6779

Webcast: https://investors.dutchbros.com under “Events & Presentations”.

The webcast will be archived shortly after the conference call has concluded. We will also publish earnings presentation slides related to these financial results on our website https://investors.dutchbros.com under “Events & Presentations”.

About Dutch Bros Inc.

Dutch Bros Inc. (NYSE: BROS) is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. While espresso-based beverages are still at the core of what we do, Dutch Bros now offers a wide variety of unique, customizable cold and hot beverages that delight a broad array of customers. We believe Dutch Bros is more than just the products we serve—we are dedicated to making a massive difference in the lives of our employees, customers and communities. This combination of hand-crafted and high-quality beverages, our unique drive-thru experience and our community-driven, people-first culture has allowed us to successfully open new shops and continue to share the “Dutch Luv” at 716 locations across 14 states as of March 31, 2023.

To learn more about Dutch Bros, visit www.dutchbros.com, follow Dutch Bros Coffee on Instagram, Facebook, Twitter, and TikTok, and download the Dutch Bros app to earn points and score rewards!

Dutch Bros, our Windmill logo, Dutch Bros. Blue Rebel, and our other registered and common law trade names, trademarks and service marks are the property of Dutch Bros Inc. All other trademarks, trade names and service marks appearing in this Earnings Release are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Earnings Release may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

Forward-Looking Statements

In addition to historical information, this release contains a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information concerning Dutch Bros’ possible or assumed future results of operations, including guidance for 2023, new shop openings, business strategies, and potential growth opportunities. These statements are based on Dutch Bros’ current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “estimates,” “projected,” “expects,” “should,” “guidance,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Dutch Bros’ control that could cause actual results to differ materially from the results discussed in the forward-looking statements, including those related to general economic conditions, commodity inflation, increased labor costs, disruptions in our supply chain, ability to hire and retain employees, and other risks, including those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 27, 2023, and in our future reports to be filed with the SEC, including our Quarterly Report on Form 10-Q for the period ended March 31, 2023. Forward-looking statements contained in this press release are made as of this date, and Dutch Bros undertakes no duty to update such information except as required under applicable law.

DUTCH BROS INC.
Condensed Consolidated Statements of Operations
		Three Months Ended March 31,
(in thousands, except per share amounts; unaudited)		2023				2022
REVENUES
Company-operated shops		$	173,164			$	130,187
Franchising and other			24,103				21,969
Total revenues			197,267				152,156
COSTS AND EXPENSES
Cost of sales			151,523				121,167
Selling, general and administrative			45,976				45,214
Total costs and expenses			197,499				166,381
LOSS FROM OPERATIONS			(232	)			(14,225	)
OTHER EXPENSE
Interest expense, net			(7,886	)			(2,489	)
Other income			1,307				221
Total other expense			(6,579	)			(2,268	)
LOSS BEFORE INCOME TAXES			(6,811	)			(16,493	)
Income tax expense (benefit)			2,580				(214	)
NET LOSS		$	(9,391	)		$	(16,279	)
Less: Net loss attributable to non-controlling interests			(5,549	)			(11,332	)
NET LOSS ATTRIBUTABLE TO DUTCH BROS INC.		$	(3,842	)		$	(4,947	)
Net loss per share of Class A and Class D common stock:
Basic		$	(0.07	)		$	(0.10	)
Diluted		$	(0.07	)		$	(0.10	)
Weighted-average shares of Class A and Class D common stock outstanding:
Basic			56,664				48,059
Diluted			56,664				48,059

DUTCH BROS INC.
Segment Financials
		Three Months Ended March 31,
(in thousands; unaudited)		2023				2022
Revenues:
Company-operated shops		$	173,164			$	130,187
Franchising and other			24,103				21,969
Total revenues			197,267				152,156
Cost of Sales:
Company-operated shops			144,292				113,548
Franchising and other			7,231				7,619
Total cost of sales			151,523				121,167
Segment gross profit:
Company-operated shops			28,872				16,639
Franchising and other			16,872				14,350
Total gross profit			45,744				30,989
Depreciation and amortization:
Company-operated shops			13,001				7,140
Franchising and other			1,361				1,342
All other			417				700
Total depreciation and amortization			14,779				9,182
Segment contribution:
Company-operated shops			41,873				23,779
Franchising and other			18,233				15,692
Total segment contribution			60,106				39,471
Selling, general and administrative			(45,976	)			(45,214	)
Interest expense, net			(7,886	)			(2,489	)
Other income			1,307				221
Loss before income taxes		$	(6,811	)		$	(16,493	)

DUTCH BROS INC.
Company-Operated Shop Results
		Three Months Ended March 31,
		2023				2022
(in thousands; unaudited)		$		%		$		%
Company-operated shops revenue		173,164		100.0		130,187		100.0
Beverage, food and packaging costs		48,952		28.3		35,622		27.4
Labor costs		48,549		28.0		41,761		32.0
Occupancy and other costs		30,559		17.6		23,003		17.7
Pre-opening costs		3,231		1.9		6,022		4.6
Depreciation and amortization		13,001		7.5		7,140		5.5
Company-operated shop costs and expenses		144,292		83.3		113,548		87.2
Company-operated shops gross profit		28,872		16.7		16,639		12.8
Company-operated shops contribution 1		41,873		24.2		23,779		18.3

_________________
1		Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

DUTCH BROS INC.
Summary Cash Flows Data
		Three Months Ended March 31,
(in thousands; unaudited)		2023				2022
Net cash provided by (used in) operating activities		$	3,077			$	(756	)
Net cash used in investing activities			(43,043	)			(46,021	)
Net cash provided by financing activities			34,084				55,025
Net increase (decrease) in cash and cash equivalents		$	(5,882	)		$	8,248
Cash and cash equivalents at beginning of period			20,178				18,506
Cash and cash equivalents at end of period		$	14,296			$	26,754

DUTCH BROS INC.
Condensed Consolidated Balance Sheets
(in thousands; unaudited)		March 31, 2023				December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents		$	14,296			$	20,178
Accounts receivable, net			8,778				11,966
Inventories, net			43,957				39,229
Prepaid expenses and other current assets			14,283				10,949
Total current assets			81,314				82,322
Property and equipment, net			402,841				365,468
Finance lease right-of-use assets, net			288,560				247,943
Operating lease right-of-use assets, net			174,673				169,302
Intangibles, net			7,893				8,804
Goodwill			21,629				21,629
Deferred income tax assets, net			286,385				288,765
Other long-term assets			1,670				2,127
Total assets		$	1,264,965			$	1,186,360
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	24,092			$	21,270
Accrued liabilities			28,363				27,452
Other current liabilities			7,299				7,860
Deferred revenue			21,815				25,335
Line of credit			150,978				110,865
Current portion of finance lease liabilities			8,129				7,971
Current portion of operating lease liabilities			9,536				9,317
Current portion of long-term debt			2,611				2,609
Total current liabilities			252,823				212,679
Deferred revenue, net of current portion			6,104				6,119
Tax receivable agreements liability, net of current portion			219,629				220,923
Finance lease liabilities, net of current portion			275,639				237,130
Operating lease liabilities, net of current portion			166,345				161,228
Long-term debt, net of current portion			95,714				96,297
Other long-term liabilities			8				8
Total liabilities			1,016,262				934,384
Equity:
Common stock			2				2
Additional paid in capital			148,873				145,613
Accumulated other comprehensive income			590				813
Accumulated deficit			(21,152	)			(17,310	)
Total stockholders’ equity attributable to Dutch Bros Inc.			128,313				129,118
Non-controlling interests			120,390				122,858
Total equity			248,703				251,976
Total liabilities and equity		$	1,264,965			$	1,186,360

DUTCH BROS INC.
Select Financial Metrics
		Three Months Ended March 31,
(in thousands, except number of shops data; unaudited)		2023				2022
Shop count, beginning of period
Company-operated			396				271
Franchised			275				267
			671				538
Company-operated new openings			42				34
Franchised new openings			3				—
Acquisition of franchise shops			—				5
Shop count, end of period
Company-operated			438				310
Franchised			278				262
Total shop count			716				572
Systemwide AUV 1		$	1,916			$	1,892
Company-operated shops AUV 1		$	1,879			$	1,829
Systemwide same shop sales 2, 3			(2.0	) %			6.0	%
Company-operated same shop sales 2			(3.5	) %			5.1	%
Systemwide sales 3		$	302,782			$	254,565
Company-operated operating weeks 4			5,322				3,764
Franchising and other operating weeks 4			3,546				3,363
Dutch Rewards member registrations 5			494				489

		Three Months Ended March 31,
		2023						2022
(in thousands; unaudited)		$			%			$			%
Company-operated shop revenues		173,164			100.0			130,187			100.0
Company-operated gross profit		28,872			16.7			16,639			12.8
Company-operated shop contribution 6		41,873			24.2			23,779			18.3
Selling, general, and administrative expenses		45,976			23.3			45,214			29.7
Adjusted selling, general, and administrative expenses 6		36,656			18.6			31,680			20.8
Net loss		(9,391	)		(4.8	)		(16,279	)		(10.7	)
Adjusted EBITDA 6		23,880			12.1			9,662			6.4

___________
1		AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months. AUVs are calculated by dividing the systemwide and company-operated shop net sales by the total number of systemwide and company-operated shops, respectively. Management uses this metric as an indicator of shop growth and future expectations of mature locations.
2		Same shop sales reflects the change in year-over-year sales for the comparable shop base, which we define as shops open for 15 complete months or longer. Management uses this metric as an indicator of shop growth and future expansion strategy. The number of shops included in the systemwide and company-operated comparable bases for the respective periods are presented in the following table.

		Three Months Ended March 31,
		2023		2022
Systemwide shop base		503		414
Company-operated shop base		246		173

3		Systemwide sales and systemwide same shop sales are operating measures that include sales at company-operated shops and sales at franchised shops during the comparable periods presented. Franchise sales represent sales at all franchise shops and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and advertising fund contributions are calculated based on a percentage of franchise sales. As these metrics include sales reported to us by our non-consolidated franchise partners, these metrics should be considered as a supplement to, not a substitute for, our results as reported under GAAP. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.
4		Company-operated and franchise shops operating weeks are calculated based on the number operating days for the shop base and dividing by 7. Our shop base is defined as shops opened as of the end date of the periods presented. The operating weeks calculations reflect re-acquired franchises through 2022. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.
5		Dutch Rewards is our digitally-based rewards program available exclusively through the Dutch Rewards app. Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans.
6		Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

Non-GAAP Financial Measures

In addition to disclosing financial results in accordance with U.S. GAAP, this release contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance.

Our non-GAAP financial measures reflect adjustments based on one or more of the following items, as well as the related income tax effects where applicable. Income tax effects have been calculated based on the combined total non-GAAP adjustments using our total effective tax rate. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the financial results calculated in accordance with U.S. GAAP and reconciliations from these results should be carefully evaluated.

Company-operated shop contribution (in dollars and as a percentage of revenue)

Definition and/or calculation

Company-operated segment gross profit, before company-operated shop depreciation and amortization. Company-operated shop contribution in dollars (as defined), taken as a percentage of company-operated shop revenue.

Usefulness to management and investors

This non-GAAP measure is used by our management in making performance decisions without the impact of non-cash depreciation and amortization charges. This is a standard metric used across the industry by our investors.

EBITDA, Adjusted EBITDA (in dollars and as a percentage of revenue)

EBITDA — definition and/or calculation

Net loss before interest expense (net of interest income), income tax expense (benefit), and depreciation and amortization expense.

Adjusted EBITDA — definition and/or calculation

Defined as EBITDA (as defined above), excluding equity-based compensation, COVID-19: “Thank You” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, and (gain) loss on the remeasurement of the liability related to the TRAs.

Usefulness to management and investors

These non-GAAP measures are supplemental operating performance measures we believe facilitate comparisons to historical performance and competitors’ operating results. We believe these non-GAAP measures presented provide investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance.

Adjusted selling, general, and administrative (in dollars and as a percentage of revenue)

Definition and/or calculation

Selling, general, and administrative expenses, excluding equity-based compensation expense, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, and executive transitions costs.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe the non-GAAP measure presented provides investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because it excludes items that may not be indicative of our ongoing operating performance.

Adjusted net loss

Definition and/or calculation

Net loss, excluding equity-based compensation expense, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, and income tax effects of items excluded from net loss.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Adjusted fully exchanged weighted-average shares of diluted common stock outstanding

Definition and/or calculation

Weighted-average shares of Class A and Class D common stock outstanding – basic with addition of dilutive impacts of RSAs and RSUs, as well as the assumed exchange of the weighted-average shares of Class B and Class C common stock.

Usefulness to management and investors

This non-GAAP measure is used a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By adding in the assumed full exchange of all of our outstanding Class B and Class C common stock, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Adjusted net loss per fully exchanged share of diluted common stock

Definition and/or calculation

Net loss per share of Class A and Class D common stock – diluted, excluding per share impacts of equity-based compensation expense, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, income tax effects of items excluded from net loss, and removal of per share impacts of controlling and non-controlling interests.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all of our outstanding Class B and Class C common stock and related net loss adjustments, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Non-GAAP adjustments

Below are the definitions of the non-GAAP adjustments that are used in the calculation of our non-GAAP measures, as described above.

Equity-based compensation

Non-cash expenses related to the grant and vesting of stock awards, restricted stock awards and restricted stock units in Dutch Bros PubCo¹ and/or Profit Interest Units in Dutch Bros OpCo² to certain eligible employees.

COVID-19: “thank you” pay and catastrophic leave

Costs related to two separate programs established to support employees during the COVID-19 pandemic. We implemented an hourly wage supplement program for shop employees who continued to work while their state or county was under a stay at home order or similar lockdown requirement. This program lasted in various markets until April 2021. We also established a catastrophic leave policy that provided paid leave to employees who were required to quarantine due to in-shop exposures and could not work their regular hours. All COVID-19-related protocols, including catastrophic leave, will remain in effect until the end of the COVID-19 pandemic as determined by the appropriate government agency.

COVID-19: Prepaid costs not utilized

Costs related to the write-off of previously prepaid expenses for the development of a virtual corporate engagement platform built in response to the health restrictions of the COVID-19 pandemic. The platform was developed as a substitute for in person engagement practices used pre-pandemic. The platform has been determined ineffective, particularly as we shift back to in-person events with the easing of restrictions related to the COVID-19 pandemic.

Milestone events

Costs incurred for company-wide events to celebrate 30 years of serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE to our customers.

Executives transition costs

Employee severance and related benefit costs, as well as sign-on bonus(es) for several executive level transitions occurring in 2022 and 2023.

TRAs remeasurements

(Gain) loss impacts on condensed consolidated statements of operations related to adjustments of our TRAs liabilities.

Dilutive effects of RSAs and RSUs

Addition of incremental shares of RSAs and RSUs calculated under the treasury stock method, when they are dilutive for the calculation of weighted-average shares on a non-GAAP and GAAP basis.

Assumed exchange of weighted-average Class B and Class C shares of common stock

Weighted-average shares of Class B and C common stock that are assumed to be exchanged for Class A common stock.

Removal of allocation for controlling and non-controlling interests

Removal of the net loss allocation to controlling and non-controlling interests to align the numerator of the net loss per share to the denominator, which assumes the full exchange of shares of Class B and Class C common stock.

___________
1		Dutch Bros PubCo refers to Dutch Bros Inc., a Delaware corporation, of which its Class A common stock is publicly traded on the New York Stock Exchange under the symbol “BROS”.
2		Dutch Bros OpCo refers to Dutch Mafia, LLC, a Delaware limited liability company, and a direct subsidiary of Dutch Bros Inc.

Supplemental Reconciliations of GAAP Actuals to Non-GAAP Actuals

Following are the reconciliations of the most comparable GAAP financial measure to non-GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the reconciliations from U.S. GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to “Explanation of Non-GAAP Financial Measures” in this release for a detailed explanation of the adjustments made to the comparable U.S. GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

		Three Months Ended March 31,
		2023				2022
(in thousands; unaudited)		$		%		$		%
Company-operated shop gross profit		28,872		16.7		16,639		12.8
Depreciation and amortization		13,001		7.5		7,140		5.5
Company-operated shop contribution		41,873		24.2		23,779		18.3

		Three Months Ended March 31,
		2023						2022
(in thousands; unaudited)		$			%			$			%
Net loss		(9,391	)		(4.8	)		(16,279	)		(10.7	)
Depreciation and amortization		14,779			7.5			9,182			6.0
Interest expense, net		7,886			4.0			2,489			1.6
Income tax expense (benefit)		2,580			1.3			(214	)		(0.1	)
EBITDA		15,854			8.0			(4,822	)		(3.2	)
Equity-based compensation		9,170			4.6			9,900			6.5
COVID-19: “thank you pay” and catastrophic leave		—			—			950			0.7
COVID-19: prepaid costs not utilized		—			—			1,200			0.8
Milestone events		—			—			2,434			1.6
Executives transition costs		150			0.1			—			—
TRAs remeasurements		(1,294	)		(0.6	)		—			—
Adjusted EBITDA		23,880			12.1			9,662			6.4

		Three Months Ended March 31,
		2023						2022
(in thousands; unaudited)		$			%			$			%
Selling, general, and administrative 1		45,976			23.3			45,214			29.7
Equity-based compensation		(9,170	)		(4.6	)		(9,900	)		(6.5	)
COVID-19: prepaid costs not utilized		—			—			(1,200	)		(0.8	)
Milestone events		—			—			(2,434	)		(1.6	)
Executives transition costs		(150	)		(0.1	)		—			—
Adjusted selling, general, and administrative		36,656			18.6			31,680			20.8

		Three Months Ended March 31,
(in thousands; unaudited)		2023				2022
Net loss		$	(9,391	)		$	(16,279	)
Equity-based compensation			9,170				9,900
COVID-19: “thank you pay” and catastrophic leave			—				950
COVID-19: prepaid costs not utilized			—				1,200
Milestone events			—				2,434
Executives transition costs			150				—
TRAs remeasurements			(1,294	)			—
Income tax effects			830				(721	)
Adjusted net loss		$	(535	)		$	(2,516	)

_________________
1		Selling, general, and administrative expenses include depreciation and amortization.

		Three Months Ended March 31,
(in thousands, except per share amounts; unaudited)		2023				2022
Weighted-average shares of Class A and Class D common stock outstanding – diluted			56,664				48,059
Dilutive effects of RSAs and RSUs 1			—				—
Assumed exchange of weighted-average Class B and Class C shares of common stock			105,756				112,861
Adjusted fully exchanged weighted-average shares of common stock outstanding – diluted			162,420				160,920
Net loss per share of Class A and Class D common stock – diluted		$	(0.07	)		$	(0.10	)
Controlling and non-controlling interest adjustments			0.01				(0.02	)
Equity-based compensation			0.06				0.06
COVID-19: “thank you pay” and catastrophic leave			—				0.01
COVID-19: prepaid costs not utilized			—				0.01
Milestone events			—				0.02
Executives transition costs			—				—
TRAs remeasurements			(0.01	)			—
Income tax effects			0.01				—
Adjusted net loss per fully exchanged share of diluted common stock		$	—			$	(0.02	)

_________________
1		No impact as the RSAs and RSUs were anti-dilutive for the periods presented.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509005914/en/

For Investor Relations inquiries:

Raphael Gross

ICR

(203) 682-8253

[email protected]

For Media Relations inquiries:

Jessica Liddell

ICR

(203) 682-8208

[email protected]

KEYWORDS: Oregon United States North America

INDUSTRY KEYWORDS: Retail Restaurant/Bar Food/Beverage

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Posted on May 9, 2023 6:41 pm

Rogers Expanding Power Substrate Capacity in China to Meet Growing EV and Renewable Energy Demand

Rogers Expanding Power Substrate Capacity in China to Meet Growing EV and Renewable Energy Demand

CHANDLER, Arizona–(BUSINESS WIRE)–
Rogers Corporation (NYSE:ROG) (“Rogers”), announced its plan to build a new factory in China to manufacture its curamik® AMB (Active Metal Brazed) and DBC (Direct Bonded Copper) substrates to meet significant demand growth. The first phase of the expansion is slated for completion in 2025. This follows last year’s investment in expanding the company’s curamik® factory in Eschenbach, Germany.

“To better support our global customers and meet the growing demand for power substrates used in electric and hybrid electric vehicles (EV/HEV) and renewable energy applications, we are planning to build a new state-of-the-art factory in China. Upon completion, this new factory will help shorten lead times and deepen technical collaborations with customers in Asia,” said Jeff Tsao, Advanced Electronic Solutions (AES) Vice President and General Manager. “We have been a trusted partner to leading power module suppliers for decades, delivering efficient and reliable power semiconductor substrates, and today’s announcement further strengthens that position.”

This latest investment continues Rogers’ manufacturing strategy of positioning capacity to serve its global customer base. The company continues to focus on supporting growth opportunities across its markets with ongoing initiatives to drive capacity throughput improvements at existing facilities and make measured investments in new capacity. The expansion plan will be discussed in the company’s Q2 2023 earnings conference call, and any further developments will be communicated at that time. Rogers continues to expect capital expenditures for full-year 2023 to be in the range of $65 to $75 million.

About Rogers Corporation

Rogers Corporation (NYSE:ROG) is a global leader in engineered materials to power, protect and connect our world. Rogers delivers innovative solutions to help our customers solve their toughest material challenges. Rogers’ advanced electronic and elastomeric materials are used in applications for EV/HEV, automotive safety and radar systems, mobile devices, renewable energy, wireless infrastructure, energy-efficient motor drives, industrial equipment and more. Headquartered in Chandler, Arizona, Rogers operates manufacturing facilities in the United States, Asia and Europe, with sales offices worldwide. For more information, visit www.rogerscorp.com.

Safe Harbor Statement

Statements included in this release that are not a description of historical facts are forward-looking statements. Words or phrases such as “believe,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,” “should,” “would” or similar expressions are intended to identify forward-looking statements, and are based on Rogers’ current beliefs and expectations. This release contains forward-looking statements regarding our plans, objectives, outlook, goals, strategies, future events, future net sales or performance, capital expenditures, future restructuring, plans or intentions relating to expansions, business trends and other information that is not historical information. All forward-looking statements are based upon information available to us on the date of this release and are subject to risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to differ materially from those indicated by the forward-looking statements. Other risks and uncertainties that could cause such results to differ include: the duration and impacts of the novel coronavirus global pandemic and efforts to contain its transmission and distribute vaccines, including the effect of these factors on our business, suppliers, customers, end users and economic conditions generally; continuing disruptions to global supply chains and our ability, or the ability of our suppliers, to obtain necessary product components; failure to capitalize on, volatility within, or other adverse changes with respect to the Company’s growth drivers, including advanced mobility and advanced connectivity, such as delays in adoption or implementation of new technologies; uncertain business, economic and political conditions in the United States (U.S.) and abroad, particularly in China, South Korea, Germany, the United Kingdom, Hungary and Belgium, where we maintain significant manufacturing, sales or administrative operations; the trade policy dynamics between the U.S. and China reflected in trade agreement negotiations and the imposition of tariffs and other trade restrictions, including trade restrictions on Huawei Technologies Co., Ltd. (Huawei); fluctuations in foreign currency exchange rates; our ability to develop innovative products and the extent to which our products are incorporated into end-user products and systems and the extent to which end-user products and systems incorporating our products achieve commercial success; the ability and willingness of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely and cost-effective manner; intense global competition affecting both our existing products and products currently under development; business interruptions due to catastrophes or other similar events, such as natural disasters, war, including the ongoing conflict between Russia and Ukraine, terrorism or public health crises; the impact of sanctions, export controls and other foreign asset or investment restrictions; failure to realize, or delays in the realization of anticipated benefits of acquisitions and divestitures due to, among other things, the existence of unknown liabilities or difficulty integrating acquired businesses; our ability to attract and retain management and skilled technical personnel; our ability to protect our proprietary technology from infringement by third parties and/or allegations that our technology infringes third party rights; changes in effective tax rates or tax laws and regulations in the jurisdictions in which we operate; failure to comply with financial and restrictive covenants in our credit agreement or restrictions on our operational and financial flexibility due to such covenants; the outcome of ongoing and future litigation, including our asbestos-related product liability litigation or risks arising from the terminated DuPont Merger; changes in environmental laws and regulations applicable to our business; and disruptions in, or breaches of, our information technology systems. Should any risks and uncertainties develop into actual events, these developments could have a material adverse effect on the Company. For additional information about the risks, uncertainties and other factors that may affect our business, please see our most recent annual report on Form 10-K and any subsequent reports filed with the Securities and Exchange Commission, including quarterly reports on Form 10-Q. Rogers Corporation assumes no responsibility to update any forward-looking statements contained herein except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006092/en/

Media Contact:

Amy Kweder

Director, Corporate Communications

Phone: 480.203.0058

Email: [email protected]

Investor Contact:

Steve Haymore

Director, Investor Relations

Phone: 480.917.6026

Email: [email protected]

KEYWORDS: Arizona United States North America

INDUSTRY KEYWORDS: EV/Electric Vehicles Automotive Technology Manufacturing Semiconductor Green Technology Alternative Vehicles/Fuels Alternative Energy Environment Energy Engineering

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