Market Newsdesk

August 4, 2023 8:23 am

Chevron Offers to Exchange 5.750% Senior Notes due 2026 Issued by PDC Energy, Inc.

Chevron Offers to Exchange 5.750% Senior Notes due 2026 Issued by PDC Energy, Inc.

For 5.750% Senior Notes due 2026 to be Issued by Chevron U.S.A. Inc. and Guaranteed by Chevron Corporation

SAN RAMON, Calif.–(BUSINESS WIRE)–
Chevron Corporation (“Chevron”) (NYSE:CVX) and Chevron U.S.A. Inc. (“CUSA”) today announced the commencement of an offer to exchange (the “exchange offer”) any and all validly tendered (and not validly withdrawn) and accepted 5.750% Senior Notes due 2026 (the “Old Notes”) issued by PDC Energy, Inc. (“PDC Energy”) for 5.750% Senior Notes due 2026 to be issued by CUSA and fully and unconditionally guaranteed by Chevron (the “CUSA Notes”) and cash, and the related solicitation of consents (the “consent solicitation”) to certain proposed amendments to the indenture pursuant to which the Old Notes were issued (the “PDC Indenture”). A registration statement on Form S-4 relating to the issuance of the CUSA Notes was filed with the Securities and Exchange Commission (“SEC”) on August 3, 2023 (the “Registration Statement”) but has not yet been declared effective. Copies of the Prospectus (as defined below) are available to holders through the exchange agent and information agent, D.F. King & Co., Inc., by calling (212) 269-5550 (toll), (888) 628-1041 (toll-free) or by emailing [email protected].

Aggregate Principal Amount (mm)

Title of Old Notes

Issuer

CUSIP No.

Title of Notes to be Issued by CUSA and Guaranteed by Chevron Corporation

Exchange Consideration(1)

Early Participation Premium(2)

Total Consideration(1)(2)(3)

$750

5.750% Senior Notes due 2026

PDC Energy, Inc.

69327RAJ0

5.750% Senior Notes due 2026

$970 of CUSA Notes

$30 of CUSA

Notes and $1 in

cash

$1,000 of

CUSA Notes and $1

in cash

_____________
(1)	Consideration in the form of principal amount of CUSA Notes per $1,000 principal amount of Old Notes validly tendered and accepted for exchange, subject to any rounding as described herein.
(2)	Consists of $30 principal amount of CUSA Notes and $1 of cash per $1,000 principal amount of Old Notes validly tendered and not validly withdrawn prior to the Early Participation Date.
(3)	Includes the Early Participation Premium (as defined below) for Old Notes validly tendered prior to the Early Participation Date described below and not validly withdrawn.

The proposed amendments to the PDC Indenture will modify or eliminate certain reporting requirements, restrictive covenants and events of default in the PDC Indenture and amend certain other provisions in the PDC Indenture. If the proposed amendments become effective with respect to the Old Notes, the amendments will apply to all the Old Notes not tendered in the exchange offer.

The exchange offer and consent solicitation commenced on August 3, 2023, and will expire at 5:00 p.m. New York City time, on August 31, 2023, unless extended by us, in our sole discretion (the “Expiration Date”).

In exchange for each $1,000 principal amount of Old Notes that is validly tendered prior to 5:00 p.m., New York City time, on August 16, 2023, unless extended (such date and time, as it may be extended, the “Early Participation Date”), and not validly withdrawn, holders of such Old Notes will be eligible to receive the total consideration set out in the table above (the “Total Consideration”), which consists of $1,000 principal amount of the CUSA Notes and $1 of cash. The Total Consideration includes an early participation premium set out in the table above (the “Early Participation Premium”), which consists of $30 principal amount of the CUSA Notes per $1,000 principal amount of Old Notes and $1 of cash per $1,000 principal amount of Old Notes. In exchange for each $1,000 principal amount of Old Notes that is validly tendered after the Early Participation Date but prior to the Expiration Date and not validly withdrawn, holders of such Old Notes will be eligible to receive only the exchange consideration set out in the table above (the “Exchange Consideration”), which consists of $970 principal amount of CUSA Notes for each $1,000 of Old Notes tendered.

The consummation of the exchange offer is subject to, and conditional upon, the satisfaction or, where permitted, waiver of the conditions set forth in the Registration Statement, including (i) the closing of the merger between PDC Energy and Bronco Merger Sub Inc., pursuant to which PDC Energy will continue as the surviving corporation and a direct, wholly owned subsidiary of Chevron, and (ii) that the holders of a majority of the outstanding Old Notes have validly tendered and not validly withdrawn such Old Notes in the exchange offer. Chevron and CUSA may, at their option and in their sole discretion, waive any such conditions except for the condition that the Registration Statement of which the Prospectus forms a part has been declared effective by the SEC. All conditions to the exchange offer must be satisfied or, where permitted, waived, at or by the Expiration Date.

The CUSA Notes will be unsecured and unsubordinated obligations of CUSA and will rank equally with all other unsecured and unsubordinated indebtedness of CUSA issued from time to time. The CUSA Notes will be fully and unconditionally guaranteed by Chevron. Chevron’s guarantees will rank pari passu with Chevron’s other unsecured and unsubordinated indebtedness for borrowed money.

The CUSA Notes issued in exchange for the Old Notes will have an interest rate and maturity that is identical to the interest rate and maturity of the Old Notes, as well as identical interest payment dates and optional redemption prices. No accrued but unpaid interest will be paid on the Old Notes in connection with the exchange offer. However, interest on the CUSA Notes will accrue from and including the most recent interest payment date of the Old Notes. The principal amount of CUSA Notes you will receive pursuant to the exchange offer will be rounded downwards to the nearest integral multiple of $1,000. No additional consideration will be paid in lieu of fractional CUSA Notes not received as a result of such rounding down. Questions concerning the terms of the exchange offer or the consent solicitation for the Old Notes should be directed to the dealer manager and solicitation agent:

Barclays Capital Inc.

745 7th Avenue

New York, New York 10019

Attention: Liability Management Group

(800) 438-3242 (toll-free)

(212) 528-7581(collect)

Email: [email protected]

Questions concerning tender procedures for the Old Notes and requests for additional copies of the Prospectus should be directed to the exchange agent and information agent:

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, New York 10005

Phone: (212) 269-5550

Toll Free: (888) 628-1041

Email: [email protected]

The exchange offer and consent solicitation are being made pursuant to the terms and conditions set forth in CUSA and Chevron’s prospectus, dated August 3, 2023 (the “Prospectus”), which forms a part of the Registration Statement. Tenders of Old Notes in connection with the exchange offer may be withdrawn at any time prior to the Expiration Date. Following the Expiration Date, tenders of Old Notes may not be validly withdrawn unless Chevron and CUSA are otherwise required by law to permit withdrawal. Consents to the proposed amendments may be revoked at any time prior to 5:00 p.m., New York City time, on August 16, 2023, unless extended (the “Consent Revocation Deadline”) but may not be revoked at any time thereafter. Consents may be revoked only by validly withdrawing the associated tendered Old Notes. A valid withdrawal of tendered Old Notes prior to the Consent Revocation Deadline will be deemed to be a concurrent revocation of the related consent to the proposed amendments to the PDC Indenture.

This press release is not an offer to sell or a solicitation of an offer to buy any of the CUSA Notes and is not a solicitation of the related consent. The exchange offer and consent solicitation may be made solely pursuant to the terms and conditions of the Prospectus and the other related materials. The exchange offer and consent solicitation are not being made in any state or jurisdiction in which such offer or solicitation would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The CUSA Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (the “EEA”). For these purposes a “retail investor” means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the “Insurance Distribution Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (as amended, the “Prospectus Regulation”). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the CUSA Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the CUSA Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

The CUSA Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom (“UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (the “FSMA”) and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the CUSA Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the CUSA Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.

This communication is only being distributed to and is only directed at: (i) persons who are outside the United Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “FPO”); or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the FPO (all such persons together being referred to as “relevant persons”). The CUSA Notes are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such CUSA Notes will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release contains forward-looking statements relating to Chevron’s operations and energy transition plans that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “progress,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond Chevron’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices and demand for Chevron’s products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changes to government policies in the countries in which Chevron operates; public health crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and any related government policies and actions; disruptions in Chevron’s global supply chain, including supply chain constraints and escalation of the cost of goods and services; changing economic, regulatory and political environments in the various countries in which Chevron operates; general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine and the global response to such conflict; changing refining, marketing and chemicals margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; the results of operations and financial condition of Chevron’s suppliers, vendors, partners and equity affiliates; the inability or failure of Chevron’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of Chevron’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond Chevron’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from pending or future litigation; the ability to successfully satisfy the requisite closing conditions and consummate the proposed acquisition of PDC Energy; the ability to successfully integrate the operations of Chevron and PDC Energy and achieve the anticipated benefits from the transaction, including the expected incremental annual free cash flow; Chevron’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures, recapitalizations, taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of Chevron’s operations; foreign currency movements compared with the U.S. dollar; higher inflation and related impacts; material reductions in corporate liquidity and access to debt markets; the receipt of required authorizations by Chevron’s board of directors to implement capital allocation strategies, including future stock repurchase programs and dividend payments; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; Chevron’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; the outcome of the exchange offer and consent solicitation in the Prospectus; and other risk factors set forth in the Prospectus, Chevron’s proxy statement/prospectus on Form S-4 filed with the SEC on June 20, 2023, June 29, 2023, and July 5, 2023, Chevron’s Annual Report on Form 10-K for the year ended December 31, 2022, Chevron’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023, and in subsequent filings with the SEC. Other unpredictable or unknown factors not discussed in this news release could also have material adverse effects on forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230801516974/en/

Randy Stuart — +1 713 283-8902

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Oil/Gas Energy

MEDIA:

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August 4, 2023 8:19 am

Kratos’ Family of High-Speed Tactical and Target Unmanned Systems will be on Display at MCAS Miramar Air Show

SAN DIEGO, Aug. 03, 2023 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a Technology Company in the Defense, National Security and Global Markets and an industry-leading provider of high-performance, jet-powered unmanned aerial systems, announced the display of its two complete full-scale families of tactical and target unmanned jet drones at the upcoming Marine Corp Air Station Miramar Air Show in September. Kratos’ tactical family, intended for operational military missions such as strike, ISR (intelligence surveillance reconnaissance), RF (radio frequency), and communications, includes the most recent and advanced versions of the XQ-58 Valkyrie, the UTAP-22 Mako, and the Tactical Firejet. Kratos’ target family, engaged to support and hone military training and to support defense system development, includes the BQM-167, the BQM-177, and the MQM-178 Firejet.

The Miramar Air Show welcomes both domestic and international visitors, where they will be able to view full-scale Kratos tactical and target UAS on display. These Kratos systems represent the future of uncrewed air systems and offer an affordable solution to the mass production, deployment, and engagement of military defense. Kratos’ unique approach aligns directly with that of the Department of Defense’s most recent technology, strategy, and affordability thrusts by delivering systems which can deploy and operate from even the most remote regions around the world.

Valkyrie in formation with F-35 and F-22 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d91c33db-8693-404d-84a6-1ab87b4dd89f

Steve Fendley, President of Kratos Unmanned Systems Division, said, “We are incredibly proud to be displaying our latest technologies across our drone families and provide an opportunity for Miramar’s attendees to see these systems, rarely available for public viewing, in person. At Kratos, affordability is a technology, and our high-performance target and tactical drone systems are representative of our affordability mission. The broad application set of these drone systems combines with the speed at which they can be developed, produced, modified, and reconfigured creates the high utility / affordable cost ratio—especially compared to manned systems, as well as other platforms in the unmanned space. The capability- and performance-per-cost ratios are key to being able to achieve quantities of mass. Such a significant and amazing event as the Miramar Air Show is the perfect place to display these game-changing systems that represent the future.”

Valkyrie deploying an Altius-600 (Anduril) Loitering is available at Munition https://www.globenewswire.com/NewsRoom/AttachmentNg/e1b57a84-2fce-4672-ac2f-836d45387516

Kratos’ family of tactical systems is led by the XQ-58A Valkyrie, Kratos’ high-performance tactical UAV capable of long-range flights at high-subsonic speeds which is currently under contract with multiple Department of Defense customers including the U.S. Marine Corps. With the Marines, the XQ-58 is providing the Corps new capability and support strengthening the assault support platforms under the Penetrating Affordable Autonomous Collaborative Killer program.

The Valkyrie is changing the paradigm for tactical UAS technology and delivers a combination of affordability, survivability, long-range, high-subsonic speeds, and maneuverability, plus flexible mission kit configurations along with the capability to deliver a mix of lethal weapons from its internal bomb bay and wing stations. With design and production approaches leveraged and evolved from Kratos’ jet drone target aircraft, the Valkyrie is in an affordability class of its own—another key discriminator.

Mako launch is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d467e70f-4c7b-4d08-90c6-eee4a07798c4

Also on display will be Kratos’ UTAP-22 Mako, an affordable, fighter-like unmanned aircraft capable of collaborative operations in contested environments with other drones or with manned assets. The unique features of the aircraft allow for extreme flexibility with a minimal footprint when it comes to rocket-assisted launch and precision-parachute recovery. The design is versatile and groundbreaking as it supports various mission requirements by accepting a wide array of internal and external payloads.

Mako in flight during military exercise is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/6e42c139-91eb-42b2-a929-022fc797ad48

At the high-performance end of the low-cost/affordable jet drone market, Kratos’ Firejet delivers unmatched fighter-like performance and versatility for both tactical and target missions, representing the most lethal threats from potential adversaries of the United States and its allies. Kratos’ Firejet provides the opportunity for customers to train their military personnel and to test multiple weapon systems with a single flexible and incredibly affordable high performance unmanned aerial target drone system. The Firejet supports both surface-to-air and air-to-air engagements with a combination of internal and external mission kits including tow targets, proximity scoring, passive & active RF augmentation, and infrared (IR) augmentation. In its Tactical mode, Firejet offers similar affordable deployment and flight performance capability, as it does replicating enemy threats, which enables it to be deployed as a Tactical Platform outfitted with operational mission systems including a range of strike, ISR, RF, and communications payloads; but on a physically smaller and even less costly scale than its larger Kratos siblings.

Firejet flying off pneumatic launcher is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/e504b669-9c87-4052-93c7-601cc40b6cce

Firejet ready for Launch is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/f421a0db-a065-4622-a45d-452c4b708d3c

Other Kratos target systems that will be on display at Miramar include the BQM-177A, the U.S. Navy’s next-generation Sub-Sonic Aerial Target (SSAT), and the BQM-167, which is the Air Force Subscale Aerial Target (AFSAT)—the only jet subscale aerial target platform operated by the U.S. Air Force; also in operation with the U.S. Army and several international allies.

BQM-177 pair supporting shipboard launch and at sea operations is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/0654f05e-6b92-458e-beef-5783ef9dc4d1

The BQM-177A’s aerodynamic design and incredible unmatched performance capabilities make it the best choice for highly dynamic, high-subsonic, sea-skimming anti-ship cruise missile threat emulation, as well as formidable threat emulation for air-to-air engagements. This versatile aerial target supports a variety of mission requirements by carrying a wide array of internal and external payloads, including proximity scoring, Identification Friend or Foe (IFF), passive and active RF augmentation, electronic countermeasures, infrared (IR) augmentation (plume pods), chaff and flare dispensers, and towed targets.

BQM-167 with full suite of external payloads – wing station and wingtip for broad range of threat replication and countermeasures is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/261624ab-599c-4ae7-8806-ef99d3a00619

The primary role of the BQM-167A is to provide U.S. Air Force aviators with realistic and comprehensive end-to-end weapons-release training. The versatile design of the BQM-167A supports various mission requirements by accepting a wide array of internal and external payloads, including scoring (vector and scalar), Identification Friend or Foe (IFF), passive and active radar augmentation, electronic countermeasures, infrared (IR) augmentation (plume pods), and internally stored chaff and flares.

BQM-167 pair at launch for dual ship mission is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a85fe0dc-2945-4720-bc1b-f73cf209897f

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a technology company that develops and fields transformative, affordable systems, products, and solutions for United States National Security, our allies, and global commercial enterprises. At Kratos, Affordability is a Technology, and Kratos is changing the way breakthrough technology is rapidly brought to market – at a low cost – with actual products, systems, and technologies rather than slide decks or renderings. Through proven commercial and venture capital-backed approaches, including proactive, internally funded research and streamlined development processes, Kratos is focused on being First to Market with our solutions well in advance of the competition. Kratos is the recognized Technology Disruptor in our core market areas, including Space and Satellite Communications, Cyber Security and Warfare, Unmanned Systems, Rocket and Hypersonic Systems, Next-Generation Jet Engines and Propulsion Systems, Microwave Electronics, C5ISR, and Virtual and Augmented Reality Training Systems.

For more information, visit http://www.KratosDefense.com.

Notice Regarding Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations, and assumptions of the management of Kratos and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events, or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 25, 2022, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos.

Kratos Press Contact:

Yolanda White
858-812-7302 Direct

Kratos Investor Information:

877-934-4687
[email protected]

August 4, 2023 8:16 am

Eagle Point Income Company Inc. Announces Full Exercise and Closing of Underwriters’ Option in Offering of Preferred Stock

Eagle Point Income Company Inc. Announces Full Exercise and Closing of Underwriters’ Option in Offering of Preferred Stock

GREENWICH, Conn.–(BUSINESS WIRE)–
Eagle Point Income Company Inc. (the “Company”) (NYSE: EIC, EICA, EICB) today announced, in connection with its previously disclosed underwritten public offering of 1,130,500 shares of its 7.75% Series B Term Preferred Stock due 2028 (the “Preferred Stock”) at a public offering price of $25 per share that closed on July 26, 2023, that the underwriters of such offering have fully exercised their option to purchase an additional 169,575 shares of Preferred Stock. The exercise of the option resulted in additional net proceeds to the Company of approximately $4.1 million after payment of underwriting discounts and commissions. The Preferred Stock is rated ‘BBB’ by Egan-Jones Ratings Company, an independent rating agency.

The Preferred Stock trades on the New York Stock Exchange under the symbol “EICB,” and the Preferred Stock issued pursuant to the underwriters’ option to purchase additional shares will trade under the same symbol.

Ladenburg Thalmann & Co. Inc. and B. Riley Securities, Inc. acted as joint book-running managers for the offering. InspereX LLC and Wedbush Securities Inc. acted as lead managers for the offering.

Investors should consider the Company’s investment objectives, risks, charges and expenses carefully before investing. The prospectus supplement dated July 20, 2023 and the accompanying prospectus dated June 29, 2023, each of which has been filed with the Securities and Exchange Commission (“SEC”), contains this and other information about the Company and should be read carefully before investing. The prospectus supplement, the accompanying prospectus and this press release are not offers to sell these securities and are not soliciting an offer to buy these securities in any state where such offer or sale is not permitted.

A shelf registration statement relating to these securities is on file with and has been declared effective by the SEC. The offering may be made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained by writing Ladenburg Thalmann & Co. Inc. at 640 Fifth Avenue, 4th Floor, New York, New York 10019, by calling toll-free 1-800-573-2541 or by sending an e-mail to: [email protected]; copies may also be obtained for free by visiting EDGAR on the SEC’s website at http://www.sec.gov.

Egan-Jones Ratings Company is a nationally recognized statistical rating organization (NRSRO). A security rating is not a recommendation to buy, sell or hold securities, and any such rating may be subject to revision or withdrawal at any time by the applicable rating agency.

ABOUT EAGLE POINT INCOME COMPANY

The Company is a diversified, closed-end management investment company. The Company’s primary investment objective is to generate high current income, with a secondary objective to generate capital appreciation, by investing primarily in junior debt tranches of collateralized loan obligations (“CLOs”). In addition, the Company may invest up to 35% of its total assets (at the time of investment) in CLO equity securities. The Company is externally managed and advised by Eagle Point Income Management LLC.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the prospectus and the Company’s other filings with the SEC. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803723566/en/

Investor Relations:

ICR

203-340-8510

[email protected]

www.eaglepointincome.com

KEYWORDS: United States North America Connecticut

INDUSTRY KEYWORDS: Banking Professional Services Finance

MEDIA:

August 4, 2023 8:15 am

Semrush Announces Second Quarter 2023 Financial Results

Semrush Announces Second Quarter 2023 Financial Results

– Second quarter revenue of $74.7 million, up 19% year-over-year

– Surpasses $300 million of ARR, delivering 20% year-over-year growth in the second quarter

– Raises full year 2023 guidance

BOSTON–(BUSINESS WIRE)–
Semrush Holdings, Inc. (NYSE: SEMR), a leading online visibility management SaaS platform, today reported financial results for the second quarter ended June 30, 2023.

“In the second quarter, we experienced steady growth, achieving double digit gains in revenue and paying customers year-over-year. I am pleased with our results this quarter – reporting revenue growth of 19%, ARR growth of 20% and customer growth of 14%,” said Oleg Shchegolev, CEO and Co-Founder of Semrush. “We returned to our roots, and have a healthy business focused on both growth and profitability. As a result of our strong execution, improved cost structure and continued leverage as we scale, we are raising our full year 2023 guidance.

“Our impressive results are a testament to the value we provide customers and our strategic positioning. We are continuously expanding our product offerings, investing in cutting-edge technology, particularly in Artificial Intelligence (AI), and are focused on driving new customer growth. I want to thank our growing customer base for their loyalty and support – our commitment to help businesses grow online remains unwavering,” added Mr. Shchegolev.

Second Quarter Financial Highlights

Second quarter revenue of $74.7 million, up 19% year-over-year.
ARR of $302.4 million as of June 30, 2023, up 20% year-over-year.
Dollar-based net revenue retention of 112% as of June 30, 2023, compared to 116% in the previous quarter.
Over 104,000 paying customers as of June 30, 2023, up approximately 14% from a year ago.
Net loss of $0.3 million for the second quarter, compared with a net loss of $8.3 million from a year ago.
Non-GAAP net income of $3.5 million for the second quarter, compared with non-GAAP net loss of $6.1 million from a year ago.

See “Non-GAAP Financial Measures & Definitions of Key Metrics” below for how Semrush defines ARR, dollar-based net revenue retention, non-GAAP net income (loss), and the financial tables that accompany this release for reconciliations of each non-GAAP financial measure to its closest comparable GAAP financial measure.

Second Quarter 2023 Business Highlights

We are committed to empowering our customers with the best-in-class tools and services needed to boost their online presence and gain an edge in the market. In the second quarter, we advanced and expanded many of our offerings:

Continued investments in Generative AI to provide enhanced, more efficient content creation capabilities through Semrush’s platform and App Center:
- Launched Accessibility Scan & Monitor, a website accessibility app that uses AI to identify accessibility compliance issues – improving usability and removing barriers to entry for existing and potential customers, regardless of disability status.
- Introduced Kompyte GPT, cutting-edge tracking technology that uses AI-driven automation to streamline the creation and maintenance of Battlecards, providing organizations with a strategic advantage to competitors.
- Released two new AI-powered features within the SEO Writing Assistant including the Summarizer and “Compose with AI” functions that substantially reduce research and writing time for customers.
- Added “Ask AI” feature to the ContentShake app, enabling customers to consistently produce high-quality content by entering a detailed text prompt.
Semrush customers who pay more than $10,000 annually grew by more than 34% year-over-year.
Ended the quarter with more than 951,000 registered free active customers, up 35% year-over-year.

Business Outlook

“Looking at the second half of 2023, I am confident in the underlying trends in the business and capabilities of our team to deliver profitability,” said Brian Mulroy, CFO of Semrush. “We expect revenue growth to reaccelerate with increasing adoption of our expanding product portfolio, tools, and add-ons. Importantly, we are committed to maintaining a disciplined and balanced approach to optimizing costs and improving efficiency and profitability while continuing to invest in future growth opportunities that we expect will drive long-term value.”

Based on information as of today, August 3, 2023, we are issuing the following financial guidance:

Third Quarter 2023 Financial Outlook

For the third quarter, we expect revenue in a range of $78.0 to $79.0 million, which at the mid-point would represent growth of approximately 19% year-over-year.
We expect third quarter non-GAAP net income of $3.0 to $4.0 million.

Full-Year 2023 Financial Outlook

For the full-year, we are raising our prior revenue guidance to $307.0 to $309.0 million, from $306.0 to $309.0 million, which would represent growth at the midpoint of approximately 21% year-over-year.
We are raising our non-GAAP net income guidance to $2.0 to $4.0 million, up from our prior guidance of breakeven to $3.0 million, for the full year 2023.

Reconciliation of non-GAAP net income guidance to the most directly comparable GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from this non-GAAP measure, in particular the measures and effects of share-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

Governance Update

We are delighted to announce that Mark Vranesh will transition from Semrush’s Lead Independent Director to serve as Chairperson of the Board effective as of today. Mark will remain on the Audit Committee however Anna Baird will Chair the committee effective as of today. This transition is a result of Mr. Shchegolev’s desire to focus more on day to day management as our Chief Executive Officer. Mr Shchegolev will continue to hold a position as a director of the board.

Mark Vranesh has served as a member of our board of directors since December 2019 and as an advisor from November 2017 to December 2019. Ms. Baird has served as a member of our Board since March 2023.

Conference Call Details

Semrush will host a conference call and webcast to discuss its financial results, business highlights, outlook and other matters, the details for which are provided below.

Date: Friday, August 4, 2023

Time: 8:30 a.m. ET

Hosts: Oleg Shchegolev, CEO, Eugene Levin, President, and Brian Mulroy, CFO

Conference ID: 3520221

Participant Toll Free Dial-In Number: 1 (888) 350-3436

Participant International Dial-In Number: 1 (646) 960-0185

Registration:

The live webcast of the conference call as well as the replay can be accessed for a limited time from the Semrush investor relations website at http://investors.semrush.com/.

About Semrush

Semrush is a leading online visibility management SaaS platform that enables businesses globally to run search engine optimization, pay-per-click, content, social media and competitive research campaigns and get measurable results from online marketing. Semrush offers insights and solutions for companies to build, manage, and measure campaigns across various marketing channels. Semrush, with over 104,000 paying customers, is headquartered in Boston and has offices in Philadelphia, Trevose, Austin, Dallas, Amsterdam, Barcelona, Belgrade, Berlin, Limassol, Prague, Warsaw, and Yerevan.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements include, but are not limited to, guidance on financial results for the third quarter and full year of 2023, including revenue and non-GAAP net income; statements about future operating results, business trends, capability to deliver profits, cost reduction and structures, product development and consumer growth.

The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission (“SEC”), including in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our filings with the Securities and Exchange Commission (“SEC”), including our most recent annual report on form 10-K, and our subsequently filed quarterly reports and other SEC filings. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. The forward-looking statements in this release are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Additional information regarding these and other factors that could affect our results is included in our SEC filings, which may be obtained by visiting our Investor Relations page on its website at investors.semrush.com or the SEC’s website at www.sec.gov.

Non-GAAP Financial Measure & Definitions of Key Metrics

Semrush has provided in this release the non-GAAP financial measure of non-GAAP net income (loss). Semrush uses this non-GAAP financial measure internally in analyzing its financial results and believes it is useful to investors, as a supplement to GAAP measures, in evaluating Semrush’s ongoing operational performance. Semrush believes that the use of this non-GAAP financial measure provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in Semrush’s industry, many of which present similar non-GAAP financial measures to investors.

Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

ARR is defined as of a given date as the monthly recurring revenue that we expect to contractually receive from all paid subscription agreements that are actively generating revenue as of that date multiplied by 12. We include both monthly recurring paid subscriptions, which renew automatically unless canceled, as well as the annual recurring paid subscriptions so long as we do not have any indication that a customer has canceled or intends to cancel its subscription and we continue to generate revenue from them.

We updated our definition of ARR as of September 30, 2022. Prior to September 30, 2022, we defined ARR as the daily revenue of all paid subscription agreements that were actively generating revenue as of the last day of the reporting period multiplied by 365, except that we calculated the ARR from Prowly’s customers as the monthly recurring revenue as of the last month of the reporting period multiplied by 12. We made this change because it simplifies the calculation and internal reporting of ARR, eliminates the impact of the number of days in a given month on ARR, and we believe the updated definition is a more widely used methodology in our industry.

Dollar-Based Net Revenue Retention is defined as (a) the revenue from our customers during the twelve-month period ending one year prior to such period as the denominator and (b) the revenue from those same customers during the twelve months ending as of the end of such period as the numerator. This calculation excludes revenue from new customers and any non-recurring revenue.

Non-GAAP net income (loss). We define non-GAAP net income (loss) as GAAP net income (loss), excluding stock-based compensation expense. We believe non-GAAP net income (loss) provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations, as it eliminates the effect of stock-based compensation, which is often unrelated to overall operating performance.


SEMRUSH HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenue	$	74,693		$	62,610		$	145,563		$	119,738
Cost of revenue		12,972			12,598			25,611			24,185
Gross profit		61,721			50,012			119,952			95,553
Operating expenses
Sales and marketing		30,237			30,894			65,733			56,724
Research and development		14,116			9,671			27,996			17,809
General and administrative		19,388			14,218			38,028			28,381
Exit costs		309			3,485			1,292			3,485
Total operating expenses		64,050			58,268			133,049			106,399
Loss from operations		(2,329	)		(8,256	)		(13,097	)		(10,846	)
Other income, net		2,919			711			4,624			870
Income (loss) before income taxes		590			(7,545	)		(8,473	)		(9,976	)
Provision for income taxes		869			739			1,666			879
Net loss	$	(279	)	$	(8,284	)	$	(10,139	)	$	(10,855	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	0.00		$	(0.06	)	$	(0.07	)	$	(0.08	)
Weighted-average number of shares of common stock used in computing net loss per share attributable to common stockholders:
Basic and diluted		142,239			141,042			141,946			140,921
includes stock-based compensation expense as follows:

	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Cost of revenue	$	32		$	21		$	49		$	32
Sales and marketing		840			277			1,368			410
Research and development		542			358			885			507
General and administrative		2,351			1,548			4,259			2,187
Total stock-based compensation	$	3,765		$	2,204		$	6,561		$	3,136

	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Reconciliation of Non-GAAP net income (loss)
Net loss	$	(279	)	$	(8,284	)	$	(10,139	)	$	(10,855	)
Stock-based compensation expense		3,765			2,204			6,561			3,136
Non-GAAP net income (loss)	$	3,486		$	(6,080	)	$	(3,578	)	$	(7,719	)


SEMRUSH HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

	As of
	June 30, 2023			December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	24,072		$	79,765
Short-term investments		199,678			157,774
Accounts receivable		4,286			3,559
Deferred contract costs, current portion		7,404			6,974
Prepaid expenses and other current assets		16,898			9,307
Total current assets		252,338			257,379
Property and equipment, net		6,534			8,076
Operating lease right-of-use assets		11,188			12,009
Intangible assets, net		12,209			10,286
Goodwill		7,853			6,529
Deferred contract costs, net of current portion		2,565			2,082
Other long-term assets		1,202			2,329
Total assets	$	293,889		$	298,690
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	10,246		$	15,495
Accrued expenses		16,469			17,847
Deferred revenue		55,937			49,354
Current portion of operating lease liabilities		3,770			3,694
Other current liabilities		2,411			2,311
Total current liabilities		88,833			88,701
Deferred revenue, net of current portion		263			122
Deferred tax liability		100			11
Operating lease liabilities, net of current portion		8,125			8,929
Other long-term liabilities		674			1,023
Total liabilities		97,995			98,786
Commitments and contingencies (Note 16)
Stockholders’ equity
Undesignated preferred stock		—			—
Class A common stock		1			—
Class B common stock		—			1
Additional paid-in capital		281,184			274,057
Accumulated other comprehensive loss		(2,204	)		(1,206	)
Accumulated deficit		(83,087	)		(72,948	)
Total stockholders’ equity		195,894			199,904
Total liabilities and stockholders’ equity	$	293,889		$	298,690


SEMRUSH HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Six Months Ended
	June 30,
	2023			2022
Operating Activities
Net loss	$	(10,139	)	$	(10,855	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization expense		3,135			4,221
Amortization of deferred contract costs		4,855			4,763
Non-cash income on investments		(3,201	)		—
Non-cash lease expense		1,886			—
Stock-based compensation expense		6,561			3,136
Non-cash interest expense		105			53
Change in fair value of convertible debt securities		(380	)		(1,028	)
Deferred taxes		81			202
Other non-cash items		649			—
Changes in operating assets and liabilities
Accounts receivable		(422	)		109
Deferred contract costs		(5,768	)		(6,033	)
Prepaid expenses and other current assets		(5,869	)		(4,874	)
Accounts payable		(5,184	)		(2,714	)
Accrued expenses		(1,390	)		4,818
Other current liabilities		—			1,589
Deferred revenue		6,958			7,240
Other long-term liabilities		—			(38	)
Change in operating lease liability		(1,800	)		—
Net cash (used in) provided by operating activities		(9,923	)		589
Investing Activities
Purchases of property and equipment		(957	)		(2,798	)
Purchases of short-term investments		(172,687	)		—
Purchases of convertible debt securities		(323	)		(2,000	)
Capitalization of internal-use software development costs		(2,630	)		(782	)
Proceeds from sales and maturities of short-term investments		132,741			—
Cash paid for acquisition of businesses, net of cash acquired		(1,082	)		(13,993	)
Purchases of other investments		(150	)		—
Net cash used in investing activities		(45,088	)		(19,573	)
Financing Activities
Proceeds from exercise of stock options		302			1,194
Proceeds from issuance of shares in connection with Employee Stock Purchase Plan		264			—
Payment of finance leases		(1,209	)		(1,445	)
Net cash used in financing activities		(643	)		(251	)
Effect of exchange rate changes on cash and cash equivalents		(39	)		(1,513	)
Decrease in cash, cash equivalents and restricted cash		(55,693	)		(20,748	)
Cash, cash equivalents and restricted cash, beginning of period		79,765			269,841
Cash, cash equivalents and restricted cash, end of period	$	24,072		$	249,093

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803168815/en/

INVESTOR

Brinlea C. Johnson

Managing Director

The Blueshirt Group

[email protected]

MEDIA

Jesse Platz

VP of Analyst and Public Relations

Semrush Holdings, Inc.

[email protected]

KEYWORDS: Massachusetts United States North America

INDUSTRY KEYWORDS: Digital Marketing Communications Social Media Technology Search Engine Marketing Software Internet

MEDIA:

Logo

August 4, 2023 8:13 am

Globus Medical Reports Second Quarter 2023 Results

AUDUBON, Pa., Aug. 03, 2023 (GLOBE NEWSWIRE) — Globus Medical, Inc. (NYSE: GMED), a leading musculoskeletal solutions company, today announced its financial results for the quarter ended June 30, 2023.

Worldwide net sales were $291.6 million, an increase of 10.6%
GAAP net income for the quarter was $57.7 million
GAAP diluted earnings per share (“EPS”) was $0.57 and non-GAAP diluted EPS was $0.63
Non-GAAP adjusted EBITDA was $96.1 million, or 33.0% of net sales

“Globus achieved a record quarter, delivering our highest quarterly revenue yet of $292 million, an increase of 10.6% over the second quarter of 2022. Non-GAAP EPS was $0.63, an increase of 12.3%” said Dan Scavilla, President and CEO. “Our U.S. Spine business launched three innovative new products in the quarter, two of which are focused on the scoliosis market. The REFLECT™ Scoliosis Correction System was designed to correct progressive scoliosis in young patients while preserving motion and allowing for future modulated growth. REFLECT™ is the company’s first FDA Humanitarian Device Exemption (HDE) product launch. We also launched the MARVEL™ Growing Rod System, which is designed for pediatric patients with early onset scoliosis to obtain and maintain correction while allowing for growth through minimally invasive distraction. I would like to congratulate our talented Product Development team for bringing these two innovative products to market so we can help patients with spine disorders live more healthy lives.”

Worldwide net sales for the second quarter of 2023 were $291.6 million, an as-reported increase of 10.6% over the second quarter of 2022. U.S. net sales for the second quarter of 2023 increased by 9.0% compared to the second quarter of 2022. International net sales increased by 20.2% over the second quarter of 2022 on an as-reported basis, and an increase of 22.0% on a constant currency basis.

GAAP net income for the second quarter of 2023 was $57.7 million, an increase of 5.7% over the same period in the prior year. Diluted EPS for the second quarter was $0.57, compared to $0.53 for the second quarter of 2022. Non-GAAP diluted EPS for the second quarter of 2023 was $0.63, compared to $0.56 in the second quarter of 2022 an increase of 12.3% driven primarily by higher net sales.

Net cash provided by operating activities was $35.0 million, and non-GAAP free cash flow was $17.2 million for the second quarter of 2023. The Company remains debt free.

2023
Annual Guidance

The Company today increased its full year 2023 net sales guidance to $1.125 billion, up from $1.100 billion, and reaffirmed non-GAAP diluted earnings per share of $2.30.

Conference Call Information

Globus Medical will hold a teleconference to discuss its second quarter 2023 results with the investment community at 4:30 p.m. Eastern Time today. Participants may access the conference call live via webcast on the Investors page of Globus Medical’s website at http://www.investors.globusmedical.com/news-events/events-webcasts. http://www.investors.globusmedical.com/news-events/events-webcasts.

To participate via telephone, please register in advance at this link. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. The audio archive will be available after the call on the Investor page of the Globus Medical website.

About Globus Medical, Inc.

Based in Audubon, Pennsylvania, Globus Medical, Inc. was founded in 2003 by an experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with musculoskeletal disorders. Additional information can be accessed at www.globusmedical.com.

Non-GAAP Financial Measures

To supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), management uses certain non-GAAP financial measures. For example, non-GAAP Adjusted EBITDA, which represents net income before interest income, net and other non-operating expenses, provision for income taxes, depreciation and amortization, stock-based compensation expense, provision for litigation, acquisition related costs/licensing, and acquisition of in-process research and development, is useful as an additional measure of operating performance, and particularly as a measure of comparative operating performance from period to period, as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our capital structure, asset base, income taxes and interest income and expense. Our management also uses non-GAAP Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections. Provision for litigation represents costs incurred for litigation settlements or unfavorable verdicts when the loss is known or considered probable and the amount can be reasonably estimated, or in the case of a favorable settlement, when income is realized. Acquisition related costs/licensing represents the change in fair value of business-acquisition-related contingent consideration; costs related to integrating recently acquired businesses, including but not limited to costs to exit or convert contractual obligations, severance, and information system conversion; and specific costs related to the consummation of the acquisition process such as banker fees, legal fees, and other acquisition related professional fees, as well as one-time licensing fees. Acquisition of in-process research and development represents the expensing of acquired assets with no alternative future use and related fees.

In addition, for the period ended June 30, 2023 and for other comparative periods, we are presenting non-GAAP net income and non-GAAP Diluted Earnings Per Share, which represent net income and diluted earnings per share excluding the provision for litigation, amortization of intangibles, acquisition related costs/licensing, acquisition of in-process research and development, and the tax effects of all of the foregoing adjustments. The tax effect adjustment represents the tax effect of the pre-tax non-GAAP adjustments excluded from non-GAAP net income. The tax impact of the non-GAAP adjustments is calculated based on the consolidated effective tax rate on a GAAP basis, applied to the non-GAAP adjustments, unless the underlying item has a materially different tax treatment, in which case the estimated tax rate applicable to the adjustment is used. We believe these non-GAAP measures are also useful indicators of our operating performance, and particularly as additional measures of comparative operating performance from period to period as they remove the effects of litigation, amortization of intangibles, acquisition related costs/licensing, acquisition of in-process research and development, and the tax effects of all of the foregoing adjustments, which we believe are not reflective of underlying business trends. Additionally, for the period ended June 30, 2023 and for other comparative periods, we also define the non-GAAP measure of free cash flow as the net cash provided by operating activities, adjusted for the impact of restricted cash, less the cash impact of purchases of property and equipment. We believe that this financial measure provides meaningful information for evaluating our overall financial performance for comparative periods as it facilitates an assessment of funds available to satisfy current and future obligations and fund acquisitions. Furthermore, the non-GAAP measure of constant currency net sales growth is calculated by translating current year net sales at the same average exchange rates in effect during the applicable prior year period. We believe constant currency net sales growth provides insight to the comparative increase or decrease in period net sales, in dollar and percentage terms, excluding the effects of fluctuations in foreign currency exchange rates.

Non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency net sales growth are not calculated in conformity with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP. These measures do not include certain expenses that may be necessary to evaluate our liquidity or operating results. Our definitions of non-GAAP adjusted EBITDA, non-GAAP net income, non-GAAP diluted earnings per share, free cash flow and constant currency net sales growth may differ from that of other companies and therefore may not be comparable.

Safe Harbor Statements

All statements included in this press release other than statements of historical fact are forward-looking statements and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plan” and other similar terms. These forward-looking statements are based on our current assumptions, expectations and estimates of future events and trends. Forward-looking statements are only predictions and are subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results to differ materially from those predicted. These risks and uncertainties include, but are not limited to, the occurrence of any change, event, series of events or circumstances that could give rise to the termination of the merger contemplated by the Agreement and Plan of Merger currently pending between Globus and NuVasive, Inc. (the “Merger Agreement”), including a termination of the Merger Agreement under circumstances that could require Globus to pay a termination fee to NuVasive or require NuVasive to pay a termination fee to Globus; the inability to complete the Merger due to the failure to satisfy any of the conditions to the completion of the Merger, including receipt of the necessary approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”), in a timely manner or otherwise; any unexpected costs, liabilities or delays related to the NuVasive transaction; the respective businesses of Globus and NuVasive may suffer as a result of uncertainty surrounding the transaction; the effect of the announcement of the transaction on the ability of Globus or NuVasive to retain and hire key personnel and maintain relationships with customers, suppliers and others with whom Globus or NuVasive does business, or on Globus’ or NuVasive’s operating results and business generally; health epidemics, pandemics and similar outbreaks, including the COVID-19 pandemic, factors affecting our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop and execute on successful business strategies, our ability to comply with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property, our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions, and other risks. For a discussion of these and other risks, uncertainties and other factors that could affect our results, you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the U.S. Securities and Exchange Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our Forms 10-Q, Forms 8-K and other filings with the U.S. Securities and Exchange Commission. These documents are available at www.sec.gov. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements contained in this press release speak only as of the date of this press release. We undertake no obligation to update any forward-looking statements as a result of new information, events or circumstances or other factors arising or coming to our attention after the date hereof.

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
*(In thousands, except per share amounts)*	2023			2022			2023			2022
Net sales	$	291,615		$	263,648		$	568,303		$	494,197
Cost of goods sold		76,473			68,470			147,298			127,637
Gross profit		215,142			195,178			421,005			366,560

Operating expenses:
Research and development		21,347			17,395			42,429			34,807
Selling, general and administrative		120,069			106,718			242,485			207,466
Provision for litigation, net		(2,740	)		—			(2,740	)		2,341
Amortization of intangibles		4,547			4,393			9,148			8,905
Acquisition related costs		5,707			(1,104	)		7,068			(1,180	)
Total operating expenses		148,930			127,402			298,390			252,339

Operating income/(loss)		66,212			67,776			122,615			114,221

Other income/(expense), net
Interest income/(expense), net		8,294			2,476			14,791			5,019
Foreign currency transaction gain/(loss)		(548	)		(1,107	)		(336	)		(1,498	)
Other income/(expense)		716			1,395			793			1,696
Total other income/(expense), net		8,462			2,764			15,248			5,217

Income/(loss) before income taxes		74,674			70,540			137,863			119,438
Income tax provision		16,962			15,950			31,022			26,764

Net income/(loss)	$	57,712		$	54,590		$	106,841		$	92,674

Other comprehensive income/(loss), net of tax:
Unrealized gain/(loss) on marketable securities		40			(5,031	)		4,338			(13,859	)
Foreign currency translation gain/(loss)		315			(3,170	)		1,225			(4,737	)
Total other comprehensive income/(loss), net of tax		355			(8,201	)		5,563			(18,596	)
Comprehensive income/(loss)	$	58,067		$	46,389		$	112,404		$	74,078

Earnings per share:
Basic	$	0.57		$	0.54		$	1.06		$	0.92
Diluted	$	0.57		$	0.53		$	1.05		$	0.90
Weighted average shares outstanding:
Basic		100,373			100,671			100,326			101,136
Diluted		101,782			102,884			101,989			103,480

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)



	June 30,			December 31,
*(In thousands, except share and per share values)*	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	306,452		$	150,466
Short-term marketable securities		306,376			295,592
Accounts receivable, net of allowances of $6,245 and $4,724, respectively		240,184			213,247
Inventories		335,556			298,981
Prepaid expenses and other current assets		19,684			20,997
Income taxes receivable		1,758			4,061
Total current assets		1,210,010			983,344
Property and equipment, net of accumulated depreciation of $364,215 and $343,036, respectively		248,048			243,729
Long-term marketable securities		391,521			495,852
Intangible assets, net		54,901			63,574
Goodwill		198,932			197,471
Other assets		47,215			43,311
Deferred income taxes		61,838			48,845
Total assets	$	2,212,465		$	2,076,126

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	33,811		$	36,101
Accrued expenses		89,606			94,705
Income taxes payable		1,758			990
Business acquisition liabilities		13,595			13,308
Deferred revenue		14,945			14,100
Payable to broker		1,505			–
Total current liabilities		155,220			159,204
Business acquisition liabilities, net of current portion		52,455			54,950
Deferred income taxes		5,299			1,779
Other liabilities		14,426			13,820
Total liabilities		227,400			229,753

Equity:
Class A common stock; $0.001 par value. Authorized 500,000,000 shares; issued and outstanding 78,013,122 and 77,762,282 shares at June 30, 2023 and December 31, 2022, respectively		78			78
Class B common stock; $0.001 par value. Authorized 275,000,000 shares; issued and outstanding 22,430,097 and 22,430,097 shares at June 30, 2023 and December 31, 2022, respectively		22			22
Additional paid-in capital		657,240			630,952
Accumulated other comprehensive income/(loss)		(19,067	)		(24,630	)
Retained earnings		1,346,792			1,239,951
Total equity		1,985,065			1,846,373
Total liabilities and equity	$	2,212,465		$	2,076,126

GLOBUS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



	Six Months Ended
	June 30,
*(In thousands)*	2023			2022
Cash flows from operating activities:
Net income	$	106,841		$	92,674
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		36,183			33,764
Amortization of premium (discount) on marketable securities		786			3,208
Write-down for excess and obsolete inventories, net		3,972			4,068
Stock-based compensation expense		17,542			15,989
Allowance for doubtful accounts		1,863			(528	)
Change in fair value of business acquisition liabilities		3,280			(1,390	)
Change in deferred income taxes		(11,160	)		(7,939	)
(Gain)/loss on disposal of assets, net		129			200
Payment of business acquisition related liabilities		(1,490	)		(1,099	)
(Increase)/decrease in:
Accounts receivable		(28,237	)		(30,224	)
Inventories		(38,658	)		(31,421	)
Prepaid expenses and other assets		(2,100	)		1,268
Increase/(decrease) in:
Accounts payable		(2,769	)		12,375
Accrued expenses and other liabilities		(888	)		(7,408	)
Income taxes payable/receivable		3,047			(1,964	)
Net cash provided by/(used in) operating activities		88,341			81,573
Cash flows from investing activities:
Purchases of marketable securities		(81,381	)		(179,096	)
Maturities of marketable securities		159,328			170,572
Sales of marketable securities		21,788			66,655
Purchases of property and equipment		(33,859	)		(43,724	)
Acquisition of businesses, net of cash acquired and purchases of intangible and other assets		(2,662	)		(1,175	)
Net cash provided by/(used in) investing activities		63,214			13,232
Cash flows from financing activities:
Payment of business acquisition liabilities		(4,034	)		(3,553	)
Proceeds from exercise of stock options		8,058			11,331
Repurchase of common stock		—			(144,493	)
Net cash provided by/(used in) financing activities		4,024			(136,715	)
Effect of foreign exchange rates on cash		407			(387	)
Net increase/(decrease) in cash and cash equivalents		155,986			(42,297	)
Cash and cash equivalents at beginning of period		150,466			193,069
Cash and cash equivalents at end of period	$	306,452		$	150,772
Supplemental disclosures of cash flow information:
Income taxes paid	$	38,979		$	36,696
Purchases of property and equipment included in accounts payable and accrued expenses	$	5,366		$	5,019

Supplemental Financial Information

Net Sales by Product Category:




	Three Months Ended				Six Months Ended
	June 30,				June 30,
*(In thousands)*	2023		2022		2023		2022
Musculoskeletal Solutions	$	256,855	$	234,242	$	508,462	$	451,644
Enabling Technologies		34,760		29,406		59,841		42,553
Total net sales	$	291,615	$	263,648	$	568,303	$	494,197

Liquidity and Capital Resources:



	June 30,		December 31,
*(In thousands)*	2023		2022
Cash and cash equivalents	$	306,452	$	150,466
Short-term marketable securities		306,376		295,592
Long-term marketable securities		391,521		495,852
Total cash, cash equivalents and marketable securities	$	1,004,349	$	941,910

The following tables reconcile GAAP to Non-GAAP financial measures.

Non-GAAP Adjusted EBITDA Reconciliation Table:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
*(In thousands, except percentages)*	2023			2022			2023			2022
Net income/(loss)	$	57,712		$	54,590		$	106,841		$	92,674
Interest (income)/expense, net		(8,294	)		(2,476	)		(14,791	)		(5,019	)
Provision for income taxes		16,962			15,950			31,022			26,764
Depreciation and amortization		18,075			16,927			36,183			33,764
EBITDA		84,455			84,991			159,255			148,183
Stock-based compensation expense		8,589			7,837			17,542			15,989
Provision for litigation, net		(2,740	)		—			(2,740	)		2,341
Acquisition related costs/licensing		5,809			(943	)		7,184			(286	)
Adjusted EBITDA	$	96,113		$	91,885		$	181,241		$	166,227

Net income/(loss) as a percentage of net sales		19.8	%		20.7	%		18.8	%		18.8	%
Adjusted EBITDA as a percentage of net sales		33.0	%		34.9	%		31.9	%		33.6	%

Non-GAAP Net Income Reconciliation Table:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
*(In thousands)*	2023			2022			2023			2022
Net income/(loss)	$	57,712		$	54,590		$	106,841		$	92,674
Provision for litigation, net		(2,740	)		—			(2,740	)		2,341
Amortization of intangibles		4,547			4,393			9,148			8,905
Acquisition related costs/licensing		5,809			(943	)		7,184			(286	)
Tax effect of adjusting items		(1,730	)		(780	)		(3,059	)		(2,441	)
Non-GAAP net income/(loss)	$	63,598		$	57,260		$	117,374		$	101,192

Non-GAAP Diluted Earnings Per Share Reconciliation Table:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
*(In thousands)*	2023			2022			2023			2022
Diluted earnings per share, as reported	$	0.57		$	0.53		$	1.05		$	0.90
Provision for litigation, net		(0.03	)		—			(0.03	)		0.02
Amortization of intangibles		0.04			0.05			0.09			0.09
Acquisition related costs/licensing		0.06			(0.01	)		0.07			(0.00	)
Tax effect of adjusting items		(0.02	)		0.00			(0.03	)		(0.02	)
Non-GAAP diluted earnings per share	$	0.63		$	0.56		$	1.15		$	0.98

*amounts might not add due to rounding

Non-GAAP Free Cash Flow Reconciliation Table:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
*(In thousands)*	2023			2022			2023			2022
Net cash provided by operating activities	$	35,028		$	36,883		$	88,341		$	81,573
Purchases of property and equipment		(17,868	)		(23,753	)		(33,859	)		(43,724	)
Free cash flow	$	17,160		$	13,130		$	54,482		$	37,849

Non-GAAP Net Sales on a Constant Currency Basis Comparative Table:


	Three Months Ended				Reported		Currency Impact on			Constant Currency
	June 30,				Net Sales		Current			Net Sales
*(In thousands, except percentages)*	2023		2022		Growth		Period Net Sales			Growth
United States	$	245,490	$	225,280	9.0	%	$	—		9.0	%
International		46,125		38,368	20.2	%		(688	)	22.0	%
Total net sales	$	291,615	$	263,648	10.6	%	$	(688	)	10.9	%



	Six Months Ended				Reported		Currency Impact on			Constant Currency
	June 30,				Net Sales		Current			Net Sales
*(In thousands, except percentages)*	2023		2022		Growth		Period Net Sales			Growth
United States	$	479,609	$	421,683	13.7	%	$	—		13.7	%
International		88,694		72,514	22.3	%		(3,036	)	26.5	%
Total net sales	$	568,303	$	494,197	15.0	%	$	(3,036	)	15.6	%

Contact

:

Brian Kearns
Senior Vice President, Business Development and Investor Relations
Phone: (610) 930-1800
Email: [email protected]
www.globusmedical.com

August 4, 2023 8:12 am

Nutanix Announces Date and Conference Call Information for Fiscal Fourth Quarter and Fiscal Year 2023 Financial Results

Nutanix Announces Date and Conference Call Information for Fiscal Fourth Quarter and Fiscal Year 2023 Financial Results

SAN JOSE, Calif.–(BUSINESS WIRE)–Nutanix, Inc. (NASDAQ: NTNX), a leader in hybrid multicloud computing, today announced that it will report its financial results for the fiscal fourth quarter and fiscal year 2023, which ended July 31, 2023, after U.S. markets close on Thursday, August 31, 2023.

Nutanix will host a conference call and earnings webcast beginning at 4:30 p.m. EDT / 1:30 p.m. PDT on the same day to discuss the company’s financial results. Interested parties may access the conference call by registering at this link to receive dial in details and a unique PIN number. The conference call will also be webcast live on the Nutanix Investor Relations website at ir.nutanix.com.

An archived replay of the webcast will be available on the Nutanix Investor Relations website at ir.nutanix.com shortly after the call.

About Nutanix

Nutanix is a global leader in cloud software, offering organizations a single platform for running apps and data across clouds. With Nutanix, companies can reduce complexity and simplify operations, freeing them to focus on their business outcomes. Building on its legacy as the pioneer of hyperconverged infrastructure, Nutanix is trusted by companies worldwide to power hybrid multicloud environments consistently, simply, and cost-effectively. Learn more at www.nutanix.com or follow us on social media @nutanix.

© 2023 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo, and all Nutanix product and service names mentioned herein are registered trademarks or unregistered trademarks of Nutanix, Inc. in the United States and other countries. Other brand names and marks mentioned herein are for identification purposes only and may be the trademarks of their respective holder(s). This press release contains links to external websites that are not part of Nutanix.com. Nutanix does not control these sites and disclaims all responsibility for the content or accuracy of any external site. Our decision to link to an external site should not be considered an endorsement of any content on such a site.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803799418/en/

Investor Contact

Richard Valera

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Internet Data Management Apps/Applications Technology Software

MEDIA:

August 4, 2023 8:11 am

Host Hotels & Resorts Provides Updated Second Quarter 2023 Investor Presentation

BETHESDA, Md., Aug. 03, 2023 (GLOBE NEWSWIRE) — Host Hotels & Resorts, Inc. (NASDAQ: HST) (the “Company”), the nation’s largest lodging real estate investment trust, today provided an updated investor presentation for second quarter 2023 results. The investor presentation can be found on the Investor Relations section on the Company’s website at https://www.hosthotels.com/#key-investors-materials.

ABOUT HOST HOTELS & RESORTS

Host Hotels & Resorts, Inc. is an S&P 500 company and is the largest lodging real estate investment trust and one of the largest owners of luxury and upper-upscale hotels. The Company currently owns 72 properties in the United States and five properties internationally totaling approximately 41,900 rooms. The Company also holds non-controlling interests in seven domestic and one international joint ventures.

SOURAV GHOSH	JAIME MARCUS
Chief Financial Officer	Investor Relations
(240) 744-5267	(240) 744-5117
	[email protected]

August 4, 2023 8:09 am

HASI Announces Second Quarter 2023 Results, Affirms Guidance, Reports Increasing Investment Volume and Yields

HASI Announces Second Quarter 2023 Results, Affirms Guidance, Reports Increasing Investment Volume and Yields

ANNAPOLIS, Md.–(BUSINESS WIRE)–
Hannon Armstrong Sustainable Infrastructure Capital, Inc. (“HASI,” “we,” “our” or the “Company”) (NYSE: HASI), a leading investor in climate solutions, today reported results for the second quarter of 2023.

Business Highlights

Largest first half volume of $815m and investment yields >8.5% highlight continued execution of business objectives. Portfolio yield increases to 7.7%
Investment pipeline of >$5b and diversification of asset classes provide strong visibility on portfolio growth
Announce intention to discontinue electing REIT status in 2024, subject to board approval, to better capture growing investment opportunities while maintaining existing strategy, guidance, dividend policy and tax efficiency

Financial Results

Delivered $0.14 GAAP diluted EPS QTD compared with $(0.21) a year ago
Delivered $0.53 Distributable EPS QTD compared to $0.60 a year ago
Increased Portfolio by 4% in the quarter and 26% in the last twelve months to $4.9 billion. Managed assets grew 15% year over year to $10.7 billion
Increased GAAP-based Net Investment Income by 33% year over year to $14.8 million QTD and Distributable Net Investment Income by 13% year over year to $54.0 million QTD
Closed $426 million of investments in the second quarter of 2023
Affirm guidance that Distributable Earnings Per Share is expected to grow at a compound annual rate of 10% to 13% from 2021 to 2024, relative to the 2020 baseline of $1.55 per share, which is equivalent to a 2024 midpoint of $2.40 per share. The Company also expects growth of annual dividends per share to be at a compounded annual rate of 5% to 8%
Declared dividend of $0.395 per share
Announce 4% discount on 2023 Dividend Reinvestment and Stock Purchase Plan (“DRIP”) for the third quarter

ESG Highlights

An estimated 147,000 metric tons of carbon emissions will be avoided annually by our transactions closed this quarter, equating to a CarbonCount^®score of 0.31 metric tons per $1,000 invested

“The combination of record investment volumes and higher yields provides us with a strong foundation for continued growth and success in the second half of 2023 and beyond,” said Jeffrey A. Lipson, HASI President and Chief Executive Officer.

“As the demand for climate solutions continues to grow in the U.S. and across the world, HASI’s differentiated business model remains ideally positioned to address the accelerating energy transition markets.”

A summary of our results is shown in the table below:

	For the three months ended June 30, 2023				For the three months ended June 30, 2022
	$ in thousands		Per Share (Diluted)		$ in thousands			Per Share (Diluted)
GAAP Net Income	$	13,522	$	0.14	$	(18,449	)	$	(0.21	)
Distributable earnings		53,146		0.53		53,524			0.60

	For the six months ended June 30, 2023				For the six months ended June 30, 2022
	$ in thousands		Per Share (Diluted)		$ in thousands			Per Share (Diluted)
GAAP Net Income	$	37,628	$	0.39	$	26,896		$	0.30
Distributable earnings		102,804		1.07		99,257			1.13

Financial Results

“Our strong liquidity position and second quarter capital raising activities positions us well to capitalize on future investments with higher yields,” said Marc Pangburn, HASI Chief Financial Officer. “With our equity capital raise completed in May, we can now focus on our diversified debt funding platform.”

Comparison of the quarter ended June 30, 2023 to the quarter ended June 30, 2022

Total revenue increased by $12 million, driven by $16 million in higher interest and securitization income from a larger portfolio and a higher average rate, and an increase in the managed assets balance. There was a $5 million decrease in gain on sale driven by a change in the mix and volume of assets being securitized.

Interest expense increased $11 million primarily due to a larger average outstanding debt balance and a higher average interest rate. We recorded a $1 million provision for loss on receivables as a result of loans and loan commitments made during the quarter, offset partially by the release of a loan specific reserve where we collected the loan in full. Other expenses (compensation and benefits and general and administrative expenses) decreased by approximately $6 million primarily due to higher share-based compensation recognized in the prior year for certain awards to employees eligible for retirement, offset partially by a one-time transaction related payment.

We recognized income of $2 million using the hypothetical liquidation at book value method (HLBV) for our equity method investments in the second quarter of 2023, compared to loss of $20 million for the same period in 2022. The second quarter of 2022 result was primarily due to the impact of increasing power prices and the resulting unrealized mark to market losses on economic hedges used by some of our projects to reduce the impact of power price fluctuations.

Income tax benefit decreased by approximately $3 million in the second quarter of 2023 compared to the same period in 2022 due to an increase in GAAP earnings.

GAAP net income (loss) in the second quarter of 2023 was $14 million, compared to $(18) million in the same period in 2022. Distributable earnings in the second quarter of 2023 was approximately $53 million, largely in line with the same period in 2022.

Leverage

The calculation of our fixed-rate debt and leverage ratios as of June 30, 2023 and December 31, 2022 are shown in the table below:

	June 30, 2023		% of Total		December 31, 2022		% of Total
	($ in millions)				($ in millions)
Floating-rate borrowings ⁽¹⁾	$	108	3	%	$	431	14	%
Fixed-rate debt ⁽²⁾		3,159	97	%		2,545	86	%
Total	$	3,267	100	%	$	2,976	100	%
Leverage ⁽³⁾	1.6 to 1				1.8 to 1

(1)	Floating-rate borrowings include borrowings under our floating-rate credit facilities and commercial paper issuances with less than six months original maturity, to the extent such borrowings are not hedged using interest rate swaps.
(2)	Included in Fixed-rate debt is the present notional value of debt that is hedged using interest rate swaps and collars. Debt excludes securitizations that are not consolidated on our balance sheet.
(3)	Leverage, as measured by our debt-to-equity ratio.

Portfolio

Our balance sheet portfolio totaled approximately $4.9 billion as of June 30, 2023, which included approximately $2.5 billion of behind-the-meter assets and approximately $2.1 billion of grid-connected assets, with the remainder in fuels, transport, and nature. The following is an analysis of the performance ratings of our portfolio as of June 30, 2023:

	Portfolio Performance
	Government			Commercial
	1⁽¹⁾			1⁽¹⁾			2⁽²⁾			3⁽³⁾			Total
	(dollars in millions)
Total receivables		97			2,178			—			—			2,275
Less: Allowance for loss on receivables		—			(44	)		—			—			(44	)
Net receivables ⁽⁴⁾		97			2,134			—			—			2,231
Receivables held-for-sale		3			2			—			—			5
Investments		2			8			—			—			10
Real estate		—			351			—			—			351
Equity method investments ⁽⁵⁾		—			2,276			23			—			2,299
Total	$	102		$	4,771		$	23		$	—		$	4,896
Percent of Portfolio		2	%		98	%		—	%		—	%		100	%

(1)	This category includes our assets where based on our credit criteria and performance to date, we believe that our risk of not receiving our invested capital remains low.
(2)	This category includes our assets where based on our credit criteria and performance to date, we believe there is a moderate level of risk of not receiving some or all of our invested capital.
(3)	This category includes our assets where based on our credit criteria and performance to date, we believe there is substantial doubt regarding our ability to recover some or all of our invested capital. Loans in this category are placed on non-accrual status. Previously included in this category was $11 million of loans we had made in a new market venture where the performance was not meeting expectations. We collected this loan in full in the second quarter of 2023 and accordingly released the related allowance.
(4)	Total reconciles to the total of the government receivables and commercial receivables lines of the consolidated balance sheets.
(5)	Some of the individual projects included in portfolios that make up our equity method investments have government off-takers. As they are part of large portfolios, they are not classified separately.

Guidance

The Company expects that annual distributable earnings per share will grow at a compounded annual rate of 10% to 13% from 2021 to 2024, relative to the 2020 baseline of $1.55 per share, which is equivalent to a 2024 midpoint of $2.40 per share. The Company also expects growth of annual dividends per share to be at a compounded annual rate of 5% to 8%. This guidance reflects the Company’s judgments and estimates of (i) yield on its existing portfolio; (ii) yield on incremental portfolio investments, inclusive of the Company’s existing pipeline; (iii) the volume and profitability of transactions; (iv) amount, timing, and costs of debt and equity capital to fund new investments; (v) changes in costs and expenses reflective of the Company’s forecasted operations; and (vi) the general interest rate and market environment. All guidance is based on current expectations of the regulatory environment, the dynamics of the markets in which we operate and the judgment of the Company’s management team, among other factors. In addition, distributions are subject to approval by the Company’s Board of Directors on a quarterly basis. The Company has not provided GAAP guidance as discussed in the Forward-Looking Statements section of this press release.

Dividend

The Company is announcing today that its Board of Directors approved a quarterly cash dividend of $0.395 per share of common stock. This dividend will be paid on October 11, 2023, to stockholders of record as of October 4, 2023.

2024 REIT Election

As a result of the increasing non-REIT qualifying assets in our pipeline and expected future growth opportunities in part due to the Inflation Reduction Act, we now expect to discontinue our REIT status for 2024. We do not expect this plan to change our investment strategy, guidance or our dividend policy. This plan is subject to board and other approvals and we will provide further updates late in 2023.

Conference Call and Webcast Information

HASI will host an investor conference call today, Thursday, August 3, 2023, at 5:00 p.m. Eastern Time. The conference call can be accessed live over the phone by dialing 1-877-407-0890 (Toll-Free) or +1-201-389-0918 (toll). Participants should inform the operator you want to be joined to the HASI call. The conference call will also be accessible as an audio webcast with slides on our website. A replay after the event will be accessible as on-demand webcast on our website.

About HASI

HASI (NYSE: HASI) is a leading climate positive investment firm that actively partners with clients to deploy real assets that facilitate the energy transition. With more than $10 billion in managed assets, our vision is that every investment improves our climate future. For more information, please visit hasi.com.

Forward-Looking Statements:

Some of the information contained in this press release is forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks and uncertainties. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions, we intend to identify forward-looking statements. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements.

Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements include those discussed under the caption “Risk Factors” included in our most recent Annual Report on Form 10-K as well as in other periodic reports that we file with the U.S. Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including, but not limited to, unanticipated events, after the date on which such statement is made, unless otherwise required by law. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement.

The Company has not provided GAAP guidance as forecasting a comparable GAAP financial measure, such as net income, would require that the Company apply the HLBV method to these investments. In order to forecast under the HLBV method, the Company would be required to make various assumptions related to expected changes in the net asset value of the various entities and how such changes would be allocated under HLBV. GAAP HLBV earnings over a period of time are very sensitive to these assumptions especially in regard to when a partnership transaction flips and thus the liquidation scenarios change materially. The Company believes that these assumptions would require unreasonable efforts to complete and if completed, the wide variation in projected GAAP earnings based upon a range of scenarios would not be meaningful to investors. Accordingly, the Company has not included a GAAP reconciliation table related to any distributable earnings guidance.

Estimated carbon savings are calculated using the estimated kilowatt hours, gallons of fuel oil, million British thermal units of natural gas and gallons of water saved as appropriate, for each project. The energy savings are converted into an estimate of metric tons of CO2 equivalent emissions based upon the project’s location and the corresponding emissions factor data from the U.S. Government and International Energy Agency. Portfolios of projects are represented on an aggregate basis.

HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2023		2022			2023		2022
Revenue
Interest income	$	48,222	$	33,358		$	91,330	$	63,601
Rental income		6,487		6,609			12,973		13,108
Gain on sale of receivables and investments		14,791		19,664			30,510		36,762
Securitization income		4,330		2,798			7,762		5,540
Other income		504		374			860		2,269
Total revenue		74,334		62,803			143,435		121,280
Expenses
Interest expense		39,903		28,827			77,118		55,479
Provision for loss on receivables		806		8,064			2,689		8,685
Compensation and benefits		13,862		22,246			32,232		37,176
General and administrative		10,095		7,408			18,117		14,546
Total expenses		64,666		66,545			130,156		115,886
Income before equity method investments		9,669		(3,742	)		13,279		5,394
Income (loss) from equity method investments		2,252		(19,585	)		24,670		27,981
Income (loss) before income taxes		11,921		(23,327	)		37,949		33,375
Income tax (expense) benefit		1,601		4,789			171		(6,209	)
Net income (loss)	$	13,522	$	(18,538	)	$	38,120	$	27,166
Net income (loss) attributable to non-controlling interest holders		—		(89	)		492		270
Net income (loss) attributable to controlling stockholders	$	13,522	$	(18,449	)	$	37,628	$	26,896
Basic earnings (loss) per common share	$	0.14	$	(0.21	)	$	0.39	$	0.31
Diluted earnings (loss) per common share	$	0.14	$	(0.21	)	$	0.39	$	0.30
Weighted average common shares outstanding—basic		96,996,805		87,049,777			94,065,873		86,316,464
Weighted average common shares outstanding—diluted		99,989,158		87,049,777			97,075,329		89,541,858

HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

	June 30, 2023			December 31, 2022
Assets
Cash and cash equivalents	$	126,907		$	155,714
Equity method investments		2,298,962			1,869,712
Commercial receivables, net of allowance of $44 million and $41 million, respectively		2,134,154			1,887,483
Government receivables		96,558			102,511
Receivables held-for-sale		5,244			85,254
Real estate		351,455			353,000
Investments		10,213			10,200
Securitization assets		203,743			177,032
Other assets		147,993			119,242
Total Assets	$	5,375,229		$	4,760,148
Liabilities and Stockholders’ Equity
Liabilities:
Accounts payable, accrued expenses and other	$	114,446		$	120,114
Credit facilities		282,859			50,698
Green commercial paper notes		100,044			192
Term loan facility		374,996			379,742
Non-recourse debt (secured by assets of $599 million and $632 million, respectively)		389,950			432,756
Senior unsecured notes		1,770,047			1,767,647
Convertible notes		348,982			344,253
Total Liabilities		3,381,324			3,095,402
Stockholders’ Equity:
Preferred stock, par value $0.01 per share, 50,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, par value $0.01 per share, 450,000,000 shares authorized, 106,769,719 and 90,837,008 shares issued and outstanding, respectively		1,068			908
Additional paid in capital		2,283,255			1,924,200
Accumulated deficit		(326,413	)		(285,474	)
Accumulated other comprehensive income (loss)		(8,003	)		(10,397	)
Non-controlling interest		43,998			35,509
Total Stockholders’ Equity		1,993,905			1,664,746
Total Liabilities and Stockholders’ Equity	$	5,375,229		$	4,760,148

HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED)

	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities
Net income (loss)	$	38,120		$	27,166
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for loss on receivables		2,689			8,685
Depreciation and amortization		1,862			1,925
Amortization of financing costs		6,318			5,632
Equity-based compensation		11,478			15,933
Equity method investments		(6,355	)		(12,186	)
Non-cash gain on securitization		(14,603	)		(14,952	)
(Gain) loss on sale of receivables and investments		1,305			(218	)
Changes in receivables held-for-sale		51,538			(51,649	)
Changes in accounts payable and accrued expenses		(9,733	)		3,666
Change in accrued interest on receivables and investments		(14,518	)		(7,334	)
Other		(2,375	)		(3,558	)
Net cash provided by (used in) operating activities		65,726			(26,890	)
Cash flows from investing activities
Equity method investments		(429,944	)		(136,582	)
Equity method investment distributions received		4,203			36,381
Proceeds from sales of equity method investments		—			1,700
Purchases of and investments in receivables		(317,805	)		(264,618	)
Principal collections from receivables		74,328			87,799
Proceeds from sales of receivables		7,634			5,047
Purchases of real estate		—			(4,550	)
Purchases of investments and securitization assets		(12,969	)		(2,329	)
Proceeds from sales of investments and securitization assets		—			7,020
Withdrawal from escrow accounts		—			15,156
Posting of hedge collateral		(13,380	)		—
Other		(473	)		(574	)
Net cash provided by (used in) investing activities		(688,406	)		(255,550	)
Cash flows from financing activities
Proceeds from credit facilities		467,000			100,000
Principal payments on credit facilities		(235,000	)		—
Principal payments on term loan		(4,788	)		—
Proceeds from issuance of commercial paper notes		100,000			50,000
Principal payments on non-recourse debt		(10,069	)		(13,529	)
Proceeds from issuance of convertible notes		—			200,000
Net proceeds of common stock issuances		357,594			77,974
Payments of dividends and distributions		(72,129	)		(64,930	)
Withholdings on employee share vesting		(1,433	)		(3,161	)
Payment of financing costs		(921	)		(8,241	)
Other		(1,768	)		(2,545	)
Net cash provided by (used in) financing activities		598,486			335,568
Increase (decrease) in cash, cash equivalents, and restricted cash		(24,194	)		53,128
Cash, cash equivalents, and restricted cash at beginning of period		175,972			251,073
Cash, cash equivalents, and restricted cash at end of period	$	151,778		$	304,201
Interest paid	$	68,167		$	48,402
Supplemental disclosure of non-cash activity
Residual assets retained from securitization transactions	$	26,020		$	14,952
Issuance of common stock from conversion of Convertible Notes		—			7,674
Deconsolidation of non-recourse debt		32,923			—
Deconsolidation of assets pledged for non-recourse debt		31,371			—

EXPLANATORY NOTES

Non-GAAP Financial Measures

Distributable Earnings

We calculate distributable earnings as GAAP net income (loss) excluding non-cash equity compensation expense, provisions for loss on receivables, amortization of intangibles, non-cash provision (benefit) for taxes, losses or (gains) from modification or extinguishment of debt facilities, any one-time acquisition related costs or non-cash tax charges and the earnings attributable to our non-controlling interest of Hannon Armstrong Sustainable Infrastructure, L.P., a Delaware limited partnership (our “Operating Partnership”). We also make an adjustment to our equity method investments in the renewable energy projects as described below. We will use judgment in determining when we will reflect the losses on receivables in our distributable earnings, and will consider certain circumstances such as the time period in default, sufficiency of collateral as well as the outcomes of any related litigation. In the future, distributable earnings may also exclude one-time events pursuant to changes in GAAP and certain other adjustments as approved by a majority of our independent directors.

We believe a non-GAAP measure, such as distributable earnings, that adjusts for the items discussed above is and has been a meaningful indicator of our economic performance in any one period and is useful to our investors as well as management in evaluating our performance as it relates to expected dividend payments over time. As a REIT, we are required to distribute substantially all of our taxable income to investors in the form of dividends, which is a principal focus of our investors. Additionally, we believe that our investors also use distributable earnings, or a comparable supplemental performance measure, to evaluate and compare our performance to that of our peers, and as such, we believe that the disclosure of distributable earnings is useful to our investors.

Certain of our equity method investments in renewable energy and energy efficiency projects are structured using typical partnership “flip” structures where the investors with cash distribution preferences receive a pre-negotiated return consisting of priority distributions from the project cash flows, in many cases, along with tax attributes. Once this preferred return is achieved, the partnership “flips” and the common equity investor, often the operator or sponsor of the project, receives more of the cash flows through its equity interests while the previously preferred investors retain an ongoing residual interest. We have made investments in both the preferred and common equity of these structures. Regardless of the nature of our equity interest, we typically negotiate the purchase prices of our equity investments, which have a finite expected life, based on our underwritten project cash flows discounted back to the net present value, based on a target investment rate, with the cash flows to be received in the future reflecting both a return on the capital (at the investment rate) and a return of the capital we have committed to the project. We use a similar approach in the underwriting of our receivables.

Under GAAP, we account for these equity method investments utilizing the HLBV method. Under this method, we recognize income or loss based on the change in the amount each partner would receive, typically based on the negotiated profit and loss allocation, if the assets were liquidated at book value, after adjusting for any distributions or contributions made during such quarter. The HLBV allocations of income or loss may be impacted by the receipt of tax attributes, as tax equity investors are allocated losses in proportion to the tax benefits received, while the sponsors of the project are allocated gains of a similar amount. The investment tax credit available for election in solar projects is a one-time credit realized in the quarter when the project is considered operational for tax purposes and is fully allocated under HLBV in that quarter (subject to an impairment test), while the production tax credit required for wind projects and electable for solar projects is a ten year credit and thus is allocated under HLBV over a ten year period. In addition, the agreed upon allocations of the project’s cash flows may differ materially from the profit and loss allocation used for the HLBV calculations in a given period. We also consider the impact of any OTTI in determining our income from equity method investments.

The cash distributions for those equity method investments where we apply HLBV are segregated into a return on and return of capital on our cash flow statement based on the cumulative income (loss) that has been allocated using the HLBV method. However, as a result of the application of the HLBV method, including the impact of tax allocations, the high levels of depreciation and other non-cash expenses that are common to renewable energy projects and the differences between the agreed upon profit and loss and the cash flow allocations, the distributions and thus the economic returns (i.e. return on capital) achieved from the investment are often significantly different from the income or loss that is allocated to us under the HLBV method in any one period. Thus, in calculating distributable earnings, for certain of these investments where there are characteristics as described above, we further adjust GAAP net income (loss) to take into account our calculation of the return on capital (based upon the underwritten investment rate) from our renewable energy equity method investments, as adjusted to reflect the performance of the project and the cash distributed. We believe this equity method investment adjustment to our GAAP net income (loss) in calculating our distributable earnings measure is an important supplement to the HLBV income allocations determined under GAAP for an investor to understand the economic performance of these investments where HLBV income can differ substantially from the economic returns in any one period.

We have acquired equity investments in portfolios of renewable energy projects which have the majority of the distributions payable to more senior investors in the first few years of the project. The following table provides our results related to our equity method investments for the three and six months ended June 30, 2023 and 2022.

	Three Months Ended June 30,					Six Months Ended June 30,
	2023		2022			2023		2022
	(in millions)
Income (loss) under GAAP	$	2	$	(20	)	$	25	$	28

Collections of Distributable earnings	$	9	$	13		$	18	$	21
Return of capital		2		26			5		31
Cash collected	$	11	$	39		$	23	$	52

Distributable earnings does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), or an indication of our cash flow from operating activities (determined in accordance with GAAP), or a measure of our liquidity, or an indication of funds available to fund our cash needs, including our ability to make cash distributions. In addition, our methodology for calculating distributable earnings may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported distributable earnings may not be comparable to similar metrics reported by other companies.

Reconciliation of our GAAP Net Income to Distributable Earnings

We have calculated our distributable earnings and provided a reconciliation of our GAAP net income to distributable earnings for the three and six months ended June 30, 2023 and 2022 in the tables below.

	For the three months ended June 30, 2023					For the three months ended June 30, 2022
	(dollars in thousands, except per share amounts)
	$			per share		$			per share
Net income attributable to controlling stockholders ⁽¹⁾	$	13,522		$	0.14	$	(18,449	)	$	(0.21	)
Distributable earnings adjustments:
Reverse GAAP (income) loss from equity method investments		(2,252	)				19,585
Add equity method investments earnings		38,461					36,048
Equity-based expense		3,438					12,393
Provision for loss on receivables		806					8,064
Amortization of intangibles ⁽²⁾		772					761
Non-cash provision (benefit) for income taxes		(1,601	)				(4,789	)
Net income attributable to non-controlling interest		—					(89	)
Distributable earnings ⁽³⁾	$	53,146		$	0.53	$	53,524		$	0.60

(1)		The per share amounts represent GAAP diluted earnings per share and is the most comparable GAAP measure to our distributable earnings per share.
(2)		Adds back non-cash amortization of lease and pre-IPO intangibles.
(3)		Distributable earnings per share for the three months ended June 30, 2023 and 2022, are based on 99,581,898 shares and 88,994,421 shares outstanding, respectively, which represents the weighted average number of fully-diluted shares outstanding including our restricted stock awards, restricted stock units, long-term incentive plan units, and the non-controlling interest in our Operating Partnership. We include any potential common stock issuances related to share based compensation units in the amount we believe is reasonably certain to vest. As it relates to Convertible Notes, we will assess the market characteristics around the instrument to determine if it is more akin to debt or equity based on the value of the underlying shares compared to the conversion price. If the instrument is more debt-like then we will include any related interest expense and exclude the underlying shares issuable upon conversion of the instrument. If the instrument is more equity-like and is more dilutive when treated as equity then we will exclude any related interest expense and include the weighted average shares underlying the instrument.


	For the six months ended June 30, 2023					For the six months ended June 30, 2022
	(dollars in thousands, except per share amounts)
	$			per share		$			per share
Net income attributable to controlling stockholders ⁽¹⁾	$	37,628		$	0.39	$	26,896		$	0.30
Distributable earnings adjustments:
Reverse GAAP (income) loss from equity method investments		(24,670	)				(27,981	)
Add equity method investments earnings		72,419					67,645
Equity-based expense		12,873					15,933
Provision for loss on receivables		2,689					8,685
Amortization of intangibles ⁽²⁾		1,544					1,600
Non-cash provision (benefit) for income taxes		(171	)				6,209
Net income attributable to non-controlling interest		492					270
Distributable earnings ⁽³⁾	$	102,804		$	1.07	$	99,257		$	1.13

(1)		The per share amounts represent GAAP diluted earnings per share and is the most comparable GAAP measure to our distributable earnings per share.
(2)		Adds back non-cash amortization of lease and pre-IPO intangibles.
(3)		Distributable earnings per share for the three months ended June 30, 2023 and 2022, are based on 96,441,450 shares and 88,100,480 shares outstanding, respectively, which represents the weighted average number of fully-diluted shares outstanding including our restricted stock awards, restricted stock units, long-term incentive plan units, and the non-controlling interest in our Operating Partnership. We include any potential common stock issuances related to share based compensation units in the amount we believe is reasonably certain to vest. As it relates to Convertible Notes, we will assess the market characteristics around the instrument to determine if it is more akin to debt or equity based on the value of the underlying shares compared to the conversion price. If the instrument is more debt-like then we will include any related interest expense and exclude the underlying shares issuable upon conversion of the instrument. If the instrument is more equity-like and is more dilutive when treated as equity then we will exclude any related interest expense and include the weighted average shares underlying the instrument.

Distributable Net Investment Income

We have a portfolio of debt and equity investments in climate change solutions. We calculate distributable net investment income by adjusting GAAP-based net investment income for those distributable earnings adjustments described above which impact investment income. We believe that this measure is useful to investors as it shows the recurring income generated by our Portfolio after the associated interest cost of debt financing. Our management also uses distributable net investment income in this way. Our non-GAAP distributable net investment income measure may not be comparable to similarly titled measures used by other companies. The following is a reconciliation of our GAAP-based net investment income to our distributable net investment income:

	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
	(in thousands)
Interest income	$	48,222	$	33,358	$	91,330	$	63,601
Rental income		6,487		6,609		12,973		13,108
GAAP-based investment revenue		54,709		39,967		104,303		76,709
Interest expense		39,903		28,827		77,118		55,479
GAAP-based net investment income		14,806		11,140		27,185		21,230
Equity method earnings adjustment ⁽¹⁾		38,461		36,048		72,419		67,645
Amortization of real estate intangibles ⁽²⁾		772		761		1,544		1,532
Distributable net investment income	$	54,039	$	47,949	$	101,148	$	90,407

(1)		Reflects adjustment for equity method investments described above.
(2)		Adds back non-cash amortization related to acquired real estate leases.

Managed Assets

As we both consolidate assets on our balance sheet and securitize assets, certain of our receivables and other assets are not reflected on our balance sheet where we may have a residual interest in the performance of the investment, such as servicing rights or a retained interest in cash flows. Thus, we present our investments on a non-GAAP “managed” basis, which assumes that securitized receivables are not sold. We believe that our Managed Asset information is useful to investors because it portrays the amount of both on- and off-balance sheet receivables that we manage, which enables investors to understand and evaluate the credit performance associated with our portfolio of receivables, investments, and residual assets in securitized receivables. Our non-GAAP Managed Assets measure may not be comparable to similarly titled measures used by other companies.

The following is a reconciliation of our GAAP-based Portfolio to our Managed Assets as of June 30, 2023 and December 31, 2022:

	As of
	June 30, 2023		December 31, 2022
	(dollars in millions)
Equity method investments	$	2,299	$	1,870
Commercial receivables, net of allowance		2,134		1,887
Government receivables		97		103
Receivables held-for-sale		5		85
Real estate		351		353
Investments		10		10
GAAP-Based Portfolio		4,896		4,308
Assets held in securitization trusts		5,793		5,486
Managed assets	$	10,689	$	9,794

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803425566/en/

Investor:

Neha Gaddam

[email protected]

410-571-6189

Media:

Gil Jenkins

[email protected]

443-321-5753

KEYWORDS: United States North America Maryland

INDUSTRY KEYWORDS: Construction & Property REIT Professional Services Environmental Health Other Energy Green Technology Alternative Energy Environment Energy Finance Sustainability

MEDIA:

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August 4, 2023 8:07 am

Olympic Steel Reports Second-Quarter 2023 Results

Olympic Steel Reports Second-Quarter 2023 Results

Company performance continues to reflect the benefits of its diversification strategy and investments in enhanced capabilities

Carbon segment delivers strong profitability, while Tubular and Pipe Products segment further capitalizes on growing demand for value-added offerings

CLEVELAND–(BUSINESS WIRE)–Olympic Steel, Inc. (Nasdaq: ZEUS), a leading national metals service center, today announced financial results for the three months ended June 30, 2023.

Net income for the second quarter totaled $15.0 million, or $1.30 per diluted share, compared with net income of $37.6 million, or $3.26 per diluted share, in the second quarter of 2022. The results include $1.0 million of LIFO pre-tax income in the second quarter of 2023, compared to no LIFO adjustment in the second quarter of 2022. Adjusted EBITDA for the second quarter of 2023 was $31.2 million, compared with $58.8 million in the second quarter of 2022.

The Company reported sales of $569 million in the second quarter of 2023, compared with $709 million in the second quarter of 2022. Distribution shipping volumes increased 2.4% year-over-year, while average selling prices decreased.

“Olympic Steel continued to deliver strong performance in the second quarter,” said Richard T. Marabito, Chief Executive Officer. “The consistency of our results, despite lower metals prices and challenges in the overall economy, is directly attributable to our efforts to diversify our product offerings and invest capital in higher-return opportunities. Our Carbon and Tubular and Pipe segments led the way, while our Specialty Metals business remained steady in the face of industry-wide white metals headwinds.”

Marabito said, “Our Carbon segment earned $18.4 million of Adjusted EBITDA for the quarter, while our Tubular and Pipe Products segment posted its fourth-strongest quarter of profitability ever with $10.1 million of Adjusted EBITDA by capitalizing on growing demand for our enhanced value-added processing capabilities.”

Marabito continued, “Our second-quarter results include the full earnings effect of Metal-Fab, our second largest acquisition in Company history, which was added to our family of companies in January 2023. Metal-Fab was a strong contributor to our second-quarter earnings and we will further benefit from Olympic Steel’s supply chain synergies during the second half of 2023. Several of our fabrication and automation projects also became operational during the quarter, including our new specialty metals and carbon fabricating facility in the Chicago market, further enhancing our capabilities and production efficiency. With a strong balance sheet and more than $340 million of borrowing availability, we are actively evaluating acquisitions and capital investments to advance our diversification strategy and foster additional profitable growth.”

Marabito concluded, “As we move into the third quarter, we expect overall demand to remain steady while reflecting normal seasonal trends. While the near-term economic outlook is somewhat unsettled, we remain optimistic about the long-term outlook for the steel market and we are confident that the steps we have taken position Olympic Steel to deliver more consistent results in all environments.”

The Board of Directors approved a regular quarterly cash dividend of $0.125 per share, which is payable on September 15, 2023, to shareholders of record on September 1, 2023. The Company has paid a regular quarterly dividend since March 2006.

The table that follows provides a reconciliation of certain non-GAAP measures to the most directly comparable measures prepared in accordance with GAAP. Additional reconciliations can be found in the Segment Financial Information table which also follows.

Olympic Steel, Inc. Reconciliation of Net Income Per Diluted Share to Adjusted Net Income Per Diluted Share (Figures may not foot due to rounding.) The following table reconciles adjusted net income per diluted share to the most directly comparable GAAP financial measure:
	Three months ended					Six months ended
	June 30,					June 30,
	2023			2022		2023			2022

Net income per diluted share	$	1.30		$	3.26	$	2.15		$	6.49

Excluding the following items
LIFO income		(0.06	)		–		(0.06	)		–
Metal-Fab inventory fair market value adjustment		–			–		0.13			–
Acquisition related expenses		–			–		0.16			–
Gain on sale of Milan, IA warehouse		–			–		–			(0.13	)

Adjusted net income per diluted share (non-GAAP)	$	1.24		$	3.26	$	2.38		$	6.36


Reconciliation of Net Income to Adjusted EBITDA (in thousands) The following table reconciles Adjusted EBITDA to the most directly comparable GAAP financial measure:
	Three Months Ended					Six Months Ended
	6/30/2023			6/30/2022		6/30/2023			6/30/2022

Net income (GAAP):	$	15,019		$	37,624	$	24,891		$	74,926
Excluding the following items:
Foreign exchange loss included in net income		28			15		39			21
Interest and other expense on debt		4,203			2,271		8,426			4,269
Income tax provision		6,522			13,955		10,139			27,771
Depreciation and amortization		6,473			4,946		12,674			9,928

Earnings before interest, taxes, depreciation and
amortization (EBITDA)		32,245			58,811		56,169			116,915

LIFO income		(1,000	)		–		(1,000	)		–
Metal-Fab inventory fair market value adjustment		–			–		2,079			–
Acquisition related expenses		–			–		2,556			–
Gain on sale of Milan, IA warehouse		–			–		–			(2,083	)

Adjusted EBITDA (non-GAAP)	$	31,245		$	58,811	$	59,804		$	114,832

Conference Call and Webcast

A simulcast of Olympic Steel’s 2023 second-quarter earnings conference call can be accessed via the Investor Relations section of the Company’s website at www.olysteel.com. The live simulcast will begin at 10 a.m. ET on August 4, 2023, and a replay will be available for approximately 14 days thereafter.

Forward-Looking Statements

It is the Company’s policy not to endorse any analyst’s sales or earnings estimates. Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “anticipate,” “should,” “intend,” “expect,” “believe,” “estimate,” “project,” “plan,” “potential,” and “continue,” as well as the negative of these terms or similar expressions. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Such risks and uncertainties include, but are not limited to: risks of falling metals prices and inventory devaluation; supply disruptions and inflationary pressures, including the availability and rising costs of transportation, energy, logistical services and labor; risks associated with shortages of skilled labor, increased labor costs and our ability to attract and retain qualified personnel; rising interest rates and their impacts on our variable interest rate debt; risks associated with supply chain disruption resulting from the imbalance of metal supply and end-user demands, including additional shutdowns as a result of infectious disease outbreaks in large markets, such as China, and other factors; risks associated with the invasion of Ukraine, including economic sanctions, or additional war or military conflict, could adversely affect global metals supply and pricing; general and global business, economic, financial and political conditions, including, but not limited to, recessionary conditions and legislation passed under the current administration; supplier consolidation or addition of new capacity; risks associated with infectious disease outbreaks, including, but not limited to customer closures, reduced sales and profit levels, slower payment of accounts receivable and potential increases in uncollectible accounts receivable, falling metals prices that could lead to lower of cost or net realizable value inventory adjustments and the impairment of intangible and long-lived assets, negative impacts on our liquidity position, inability to access our traditional financing sources and increased costs associated with and less ability to access funds under our asset-based credit facility, or ABL Credit Facility, and the capital markets; our ability to successfully integrate recent acquisitions into our business and risks inherent with the acquisitions in the achievement of expected results, including whether the acquisition will be accretive and within the expected timeframe; the adequacy of our existing information technology and business system software, including duplication and security processes; the levels of imported steel in the United States and the tariffs initiated by the U.S. government in 2018 under Section 232 of the Trade Expansion Act of 1962 and imposed tariffs and duties on exported steel or other products, U.S. trade policy and its impact on the U.S. manufacturing industry; the inflation or deflation existing within the metals industry, as well as product mix and inventory levels on hand, which can impact our cost of materials sold as a result of the fluctuations in the last-in, first-out, or LIFO, inventory valuation; increased customer demand without corresponding increase in metal supply could lead to an inability to meet customer demand and result in lower sales and profits; competitive factors such as the availability, and global pricing of metals and production levels, industry shipping and inventory levels and rapid fluctuations in customer demand and metals pricing; customer, supplier and competitor consolidation, bankruptcy or insolvency; the timing and outcomes of inventory lower of cost or net realizable value adjustments and LIFO income or expense; reduced production schedules, layoffs or work stoppages by our own, our suppliers’ or customers’ personnel; cyclicality and volatility within the metals industry; reduced availability and productivity of our employees, increased operational risks as a result of remote work arrangements, including the potential effects on internal controls, as well as cybersecurity risks and increased vulnerability to security breaches, information technology disruptions and other similar events; fluctuations in the value of the U.S. dollar and the related impact on foreign steel pricing, U.S. exports, and foreign imports to the United States; the successes of our efforts and initiatives to improve working capital turnover and cash flows, and achieve cost savings; our ability to generate free cash flow through operations and repay debt; the amounts, successes and our ability to continue our capital investments and strategic growth initiatives, including acquisitions and our business information system implementations; events or circumstances that could adversely impact the successful operation of our processing equipment and operations; the impacts of union organizing activities and the success of union contract renewals; changes in laws or regulations or the manner of their interpretation or enforcement could impact our financial performance and restrict our ability to operate our business or execute our strategies; events or circumstances that could impair or adversely impact the carrying value of any of our assets; risks and uncertainties associated with intangible assets, including impairment charges related to indefinite lived intangible assets; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; our ability to repurchase shares of our common stock and the amounts and timing of repurchases, if any; our ability to sell shares of our common stock under the at-the-market equity program; and unanticipated developments that could occur with respect to contingencies such as litigation, arbitration and environmental matters, including any developments that would require any increase in our costs for such contingencies.

In addition to financial information prepared in accordance with GAAP, this document also contains adjusted earnings per diluted share, adjusted EBITDA and segment adjusted EBITDA, which are non-GAAP financial measures. Management’s view of the Company’s performance includes adjusted earnings per share, adjusted EBITDA and segment adjusted EBITDA, and management uses these non-GAAP financial measures internally for planning and forecasting purposes and to measure the performance of the Company. We believe these non-GAAP financial measures provide useful and meaningful information to us and investors because they enhance investors’ understanding of the continuing operating performance of our business and facilitate the comparison of performance between past and future periods. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Additionally, the presentation of these measures may be different from non-GAAP financial measures used by other companies. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is provided above.

About Olympic Steel

Founded in 1954, Olympic Steel is a leading U.S. metals service center focused on the direct sale of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel, aluminum, tin plate, and metal-intensive branded products. The Company’s CTI subsidiary is a leading distributor of steel tubing, bar, pipe, valves and fittings, and fabricator of value-added parts and components. Headquartered in Cleveland, Ohio, Olympic Steel operates from 44 facilities in North America.

For additional information, please visit the Company’s website at www.olysteel.com.

Olympic Steel, Inc.
Consolidated Statements of Net Income (in thousands, except per-share data)

	Three months ended				Six months ended
	June 30				June 30
	2023		2022		2023		2022

Net sales	$	569,268	$	709,176	$	1,142,344	$	1,405,509

Costs and expenses
Cost of materials sold (excludes items shown separately below)		441,872		560,546		894,508		1,115,653
Warehouse and processing		31,522		27,624		62,171		51,672
Administrative and general		31,681		31,969		64,866		61,591
Distribution		17,448		16,441		35,189		31,482
Selling		10,389		10,494		20,786		21,316
Occupancy		4,111		3,291		8,655		6,880
Depreciation		5,245		4,354		10,322		8,704
Amortization		1,228		592		2,352		1,224

Total costs and expenses		543,496		655,311		1,098,849		1,298,522

Operating income		25,772		53,865		43,495		106,987

Other loss, net		28		15		39		21

Income before interest and income taxes		25,744		53,850		43,456		106,966

Interest and other expense on debt		4,203		2,271		8,426		4,269

Income before income taxes		21,541		51,579		35,030		102,697

Income tax provision		6,522		13,955		10,139		27,771

Net income	$	15,019	$	37,624	$	24,891	$	74,926


Earnings per share:

Net income per share – basic	$	1.30	$	3.26	$	2.15	$	6.49

Weighted average shares outstanding – basic		11,569		11,538		11,570		11,536

Net income per share – diluted	$	1.30	$	3.26	$	2.15	$	6.49

Weighted average shares outstanding – diluted		11,572		11,545		11,572		11,540

Olympic Steel, Inc.
Balance Sheets (in thousands)

	As of June 30, 2023			As of December 31, 2022
Assets

Cash and cash equivalents	$	15,170		$	12,189
Accounts receivable, net		227,992			219,789
Inventories, net (includes LIFO reserves of $19,301 and $20,301 as of June 30, 2023 and December 31, 2022, respectively)		405,944			416,931
Prepaid expenses and other		11,510			9,197

Total current assets		660,616			658,106

Property and equipment, at cost		463,291			429,810
Accumulated depreciation		(288,300	)		(281,478	)

Net property and equipment		174,991			148,332

Goodwill		43,690			10,496
Intangible assets, net		84,944			32,035
Other long-term assets		15,958			14,434
Right of use asset, net		33,783			28,224

Total assets	$	1,013,982		$	891,627

Liabilities

Accounts payable	$	124,087		$	101,446
Accrued payroll		25,180			40,334
Other accrued liabilities		22,647			16,824
Current portion of lease liabilities		6,878			6,098

Total current liabilities		178,792			164,702

Credit facility revolver		238,240			165,658
Other long-term liabilities		17,334			12,619
Deferred income taxes		13,611			10,025
Lease liabilities		27,542			22,655

Total liabilities		475,519			375,659


Shareholders’ Equity

Preferred stock		–			–
Common stock		135,566			134,724
Accumulated other comprehensive income		856			1,311
Retained earnings		402,041			379,933

Total shareholders’ equity		538,463			515,968

Total liabilities and shareholders’ equity	$	1,013,982		$	891,627

Olympic Steel, Inc.
Segment Financial Information (In thousands, except tonnage and per-ton data. Figures may not foot to consolidated totals due to Corporate expenses.)

	Three months ended June 30,
	Carbon Flat Products				Specialty Metals Flat Products				Tubular and Pipe Products
	2023		2022		2023		2022		2023			2022

Tons sold ¹		226,275		210,604		28,711		38,386		N/A			N/A

Net sales	$	326,629	$	370,665	$	147,000	$	226,964	$	95,639		$	111,547
Average selling price per ton		1,444		1,760		5,120		5,913		N/A			N/A
Cost of materials sold		253,072		310,633		122,600		164,441		66,200			85,472
Gross profit		73,557		60,032		24,400		62,523		29,439			26,075
Operating expenses		58,862		44,414		17,721		26,050		20,068			18,775
Operating income		14,695		15,618		6,679		36,473		9,371			7,300

Depreciation and amortization		3,716		2,698		1,023		1,008		1,716			1,222
LIFO income		–		–		–		–		(1,000	)		–
Adjusted EBITDA		18,411		18,316		7,702		37,481		10,087			8,522


	Six months ended June 30,
	Carbon Flat Products				Specialty Metals Flat Products				Tubular and Pipe Products
	2023		2022		2023		2022		2023			2022

Tons sold ¹		444,613		416,687		61,227		76,830		N/A			N/A

Net sales	$	636,447	$	750,214	$	313,564	$	426,443	$	192,333		$	228,852
Average selling price per ton		1,431		1,800		5,121		5,550		N/A			N/A
Cost of materials sold		501,508		638,346		260,313		305,431		132,687			171,876
Gross profit		134,939		111,868		53,251		121,012		59,646			56,976
Operating expenses		114,298		86,375		37,313		50,455		40,534			35,094
Operating income		20,641		25,493		15,938		70,557		19,112			21,882

Depreciation and amortization		7,323		5,372		2,007		2,013		3,309			2,508
LIFO income		–		–		–		–		(1,000	)		–
Metal-Fab inventory fair market value adjustment		2,079		–		–		–		–			–
Gain on sale of Milan, IA warehouse		–		–		–		–		–			(2,083	)
Adjusted EBITDA		30,043		30,865		17,945		72,570		21,421			22,307

¹ The Company does not report tons sold for McCullough Industries, EZ Dumper, or Metal-Fab in the Carbon Flat Products Segment, Shaw Stainless in the Specialty Metals Flat Products Segment or the Tubular and Pipe Products Segment.

Other Information (in thousands, except per-share and ratio data)

	As of June 30, 2023		As of December 31, 2022
Assets
Flat-products	$	737,819	$	631,607
Tubular and pipe products		274,562		258,412
Corporate		1,601		1,608
Total assets	$	1,013,982	$	891,627


Other information

	As of June 30, 2023		As of December 31, 2022
Shareholders’ equity per share	$	48.37	$	46.36

Debt to equity ratio	0.44 to 1		0.32 to 1


	Six Months Ended June 30,
	2023		2022

Net cash from operating activities	$	79,196	$	47,687

Cash dividends per share	$	0.25	$	0.18

View source version on businesswire.com: https://www.businesswire.com/news/home/20230802582756/en/

Richard A. Manson

Chief Financial Officer

(216) 672-0522

[email protected]

KEYWORDS: Ohio United States North America

INDUSTRY KEYWORDS: Steel Manufacturing

MEDIA:

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August 4, 2023 8:05 am

Gainey McKenna & Egleston Announces A Class Action Lawsuit Has Been Filed Against Eos Energy Enterprises (EOSE)

NEW YORK, Aug. 03, 2023 (GLOBE NEWSWIRE) — Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the District of New Jersey on behalf of all persons or entities who purchased the securities of Eos Energy Enterprises Inc. (“Eos Energy” or the “Company”) (NYSE: EOSE) between May 9, 2022 and July 27, 2023, both dates inclusive (the “Class Period”).

Eos Energy purports to design, develop, manufacture, and market zinc-based energy storage solutions for utility-scale, microgrid, and commercial and industrial applications. On March 9, 2022, Eos Energy issued a press release titled “Eos Energy Enterprises Secures Record-Breaking Order from Bridgelink Commodities, LLC,” touting, among other things, that Bridgelink “has committed to purchase 240 MWh of energy storage capacity provided by Eos’s Znyth™ zinc-based technology.”

The Complaint alleges that Defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Bridgelink is connected to a group whose assets were seized by a creditor and sold in an auction; (ii) as such, Bridgelink’s commitment and ability to purchase Eos Energy products was not as secure as Eos Energy had led investors to believe; (iii) as a result, Eos Energy’s backlog was overstated; and (iv) such backlog overstatement negatively impacts Eos Energy’s ability to secure a loan from the U.S. Department of Energy.

On July 27, 2023, Iceberg Research published a report titled “62% of $EOSE’s Backlog Is With Financially Distressed Bridgelink Whose Renewable Energy Assets Were Foreclosed And Auctioned Off In May,” which detailed that 62% of Eos Energy’s $535 million backlog is accounted for by Bridgelink and that Bridgelink’s assets were “recently seized by a creditor and sold in an auction.” On this news, the price of Eos Energy stock declined nearly 24%.

Then, later on July 27, 2023, Eos Energy responded to Iceberg Research’s report by telling investors that Eos Energy “believes that its customer, Bridgelink Commodities, LLC, is a separate legal entity which is not implicated in the legal matters highlighted in today’s statements” and that “[t]his customer, representing 45% of [Eos Energy’s] backlog, reconfirmed today that it continues to build pipeline and is actively seeking financing for energy storage projects covered by Eos [Energy]’s multi-year Master Supply Agreement.” On this news, the price of Eos Energy stock declined more than 14%, further damaging investors.

Investors who purchased or otherwise acquired shares of Eos Energy should contact the Firm prior to the October 2, 2023 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at [email protected] or [email protected].

Please visit our website at http://www.gme-law.com for more information about the firm.