Market Newsdesk

August 3, 2023 7:57 am

MarketAxess Announces Monthly Volume Statistics for July 2023

NEW YORK–(BUSINESS WIRE)–
MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, today announced monthly trading volume and preliminary variable transaction fees per million (“FPM”) for July 2023.¹

Chris Concannon, CEO of MarketAxess, commented:

“Unusually low credit spread volatility persisted in July, temporarily reducing credit spread price dispersion and Open Trading price improvement. Lower U.S. high-yield volatility has reduced ETF market maker activity, but our leading market position remains strong. Estimated market share trends in our international product areas, emerging markets and Eurobonds, are encouraging and we are starting to see a rebound in emerging market volumes on strong local currency activity. Our new technology roll-out is gaining momentum, providing clients with new tools to access our unique liquidity pool and diverse set of trading protocols. We believe that our Open Trading liquidity pool, combined with our innovative technology solutions, will drive stronger growth in the coming quarters as markets normalize.”

Select July 2023 highlights*

Total credit average daily volume (“ADV”) of $11.4 billion, up 8.0%.
U.S. high-grade ADV of $5.2billion, up 8.9% with estimated market share of 19.9%. New issuance represented approximately 13% of U.S. high-grade TRACE in the second half of July, compared to approximately 7% in the first half of the month.
U.S. high-yield ADV of $1.4 billion, down 13.7% with estimated market share of 17.1%. ETF market maker activity decreased approximately 62% in the second half of July, compared to the first half of the month.
13.8% increase in emerging markets ADV to $2.9 billion driven by a 26.7% increase in local markets trading activity; 1.9% increasein emerging markets estimated market ADV.²

27.8% increase in Eurobonds ADVto $1.6 billion withestimated market share of 16.5%.^{Eurobonds estimated market ADV increased 29.2%.³}

Municipal bondADV of $348 million, down 12.8% withestimated market share of 5.7%(+20 bps). Municipal bond estimated market ADV decreased 16.0%.

34% Open Trading® share⁴ of total credit trading volume, down from 36% in the prior year on low volatility. Estimated price improvement⁵ via Open Trading was approximately $44million and is $453 million year-to-date through July 2023.

The preliminary FPM¹ for total credit for July 2023 was approximately $160,compared to $165 in the prior year. The decline in total credit FPM was principally due to the mix of credit products, specifically the decline in U.S. high-yield trading volume which is the highest FPM product. The preliminary FPM for total rates was $4.90, compared to $4.39 in the prior year.

*All comparisons versus July 2022 unless otherwise noted.

Table 1: July 2023 trading ADV

CREDIT RATES

US/UK
Trading Days⁶ Total
ADV 10Total
Credit High-Grade High-Yield Emerging
Markets Eurobonds Municipal
Bonds Total
Rates US Govt.
Bonds Agcy./Other
Govt. Bonds

20/21

$28,315

$11,393

$5,164

$1,370

$2,947

$1,555

$348

$16,922

$16,530

$392

20/21

$31,138

$10,551

$4,743

$1,587

$2,589

$1,217

$399

$20,587

$20,299

$288

(9%)

8%

9%

(14%)

14%

28%

(13%)

(18%)

(19%)

36%

Table 1A: July 2023 estimated market share

CREDIT RATES

(unaudited) High-Grade High-Yield High-Grade/High-
Yield Combined Eurobonds³ Composite
Corporate Bond⁷ Municipals US Govt.
Bonds

Jul-23

19.9%

17.1%

19.2%

16.5%

19.0%

5.7%

2.7%

Jul-22

20.7%

18.6%

20.1%

16.7%

20.0%

5.5%

3.9%

Bps Change

(80) bps

(150) bps

(90) bps

(20) bps

(100) bps

+20 bps

(120) bps

Table 1B: Rolling 6-month trading ADV (period ending July 31, 2023 compared to period ending July 31, 2022)

CREDIT RATES

US/UK Trading Days⁶ Total
ADV Total
Credit High-Grade High-Yield Emerging
Markets Eurobonds Municipal Bonds Total
Rates US Govt.
Bonds Agcy./Other
Govt. Bonds

124/124

$31,680

$12,549

$5,847

$1,647

$2,824

$1,830

$389

$19,131

$18,709

$422

124/124

$35,694

$11,917

$5,544

$1,684

$2,865

$1,453

$348

$23,777

$23,374

$403

(11%)

5%

5%

(2%)

(1%)

26%

12%

(20%)

(20%)

5%

Table 1C: Rolling 6-month estimated market share (period ending July 31, 2023 compared to period ending July 31, 2022)

CREDIT RATES

(unaudited) High-Grade High-Yield High-Grade/High-
Yield Combined Eurobonds³ Composite
Corporate Bond⁷ Municipals US Govt.
Bonds

Jul-23

20.3%

17.6%

19.5%

17.1%

19.5%

5.9%

2.9%

Jul-22

21.4%

16.7%

19.4%

14.4%

19.4%

4.2%

3.7%

Bps Change

(110) bps

+90 bps

+10 bps

+270 bps

+10 bps

+170 bps

(80) bps

¹The FPM for total credit and total rates for July 2023 are preliminary and may be revised in subsequent updates and public filings. The Company undertakes no obligation to update any fee information in future press releases.

² Emerging markets estimated market ADV is derived by combining MarketAxess TraX emerging markets trading volume (currently estimated to represent approximately 55% of the total emerging markets market) and FINRA TRACE-reportable emerging markets trading volume, principally U.S. dollar denominated corporates.

³ Eurobonds estimated market ADV and estimated market share is derived from MarketAxess TraX data for Eurobonds and covered bonds market trading volume, which is currently estimated to represent approximately 70% of the total European market.

⁴Total credit Open Trading share is derived by taking total Open Trading volume across all credit products where Open Trading is offered and dividing by total credit trading volume across all credit products where Open Trading is offered.

⁵Estimated price improvement consists of estimated liquidity taker price improvement (defined as the difference between the winning price and the best disclosed dealer cover price) and estimated liquidity provider price improvement (defined as the difference between the winning price and then current Composite+ bid or offer level, offer if the provider is buying, bid if provider is selling) at the time of the inquiry.

⁶ The number of U.S. trading days is based on the SIFMA holiday recommendation calendar and the number of U.K. trading days is based primarily on the U.K. Bank holiday schedule.

⁷Composite corporate bond estimated market share is defined as combined estimated market share across U.S. high-grade (derived from FINRA TRACE reported data), U.S. high-yield (derived from FINRA TRACE reported data), emerging markets (derived from FINRA TRACE-reportable emerging markets volume, principally U.S. dollar denominated corporates) and Eurobonds (derived from MarketAxess TRAX data which is currently estimated to represent approximately 70% of the total European market) product areas.

Reported MarketAxess volume in all product categories includes only fully electronic trading volume. MarketAxess trading volumes, TRACE reported volumes and MarketAxess Post-Trade processed volumes are available on the Company’s website at investor.marketaxess.com/volume.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the outlook and prospects for Company, market conditions and industry growth, as well as statements about the Company’s future financial and operating performance. These and other statements that relate to future results and events are based on MarketAxess’ current expectations. The Company’s actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: global economic, political and market factors; risks relating to the COVID-19 pandemic, including the possible effects of the economic conditions worldwide resulting from the COVID-19 pandemic; adverse effects as a result of climate change or other ESG risks that could affect our reputation; the level of trading volume transacted on the MarketAxess platform; the rapidly evolving nature of the electronic financial services industry; the level and intensity of competition in the fixed-income electronic trading industry and the pricing pressures that may result; reputational or credibility risks related to our data products and index business; the variability of our growth rate; our ability to introduce new fee plans and our clients’ response; our ability to attract clients or adapt our technology and marketing strategy to new markets; risks related to our growing international operations; our dependence on our broker-dealer clients; the loss of any of our significant institutional investor clients; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matched principal trades; risks related to self-clearing; risks related to sanctions levied against states or individuals that could expose us to operational or regulatory risks; the effect of rapid market or technological changes on us and the users of our technology; our dependence on third-party suppliers for key products and services; our ability to successfully maintain the integrity of our trading platform and our response to system failures, capacity constraints and business interruptions; the occurrence of design defects, errors, failures or delays with our platforms; our vulnerability to malicious cyber-attacks and attempted data security breaches; our actual or perceived failure to comply with privacy and data protection laws; our ability to protect our intellectual property rights or technology and defend against intellectual property infringement or other claims; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our dependence on our management team and our ability to attract and retain talent; limitations on our flexibility because we operate in a highly regulated industry; the increasing government regulation of us and our clients; risks related to the divergence of U.K. and European Union legal and regulatory requirements following the U.K.’s exit from the European Union; our exposure to costs and penalties related to our extensive regulation; our risks of litigation and securities laws liability; our future capital needs and our ability to obtain capital when needed; limitations on our operating flexibility contained in our credit agreement; and other factors. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More information about these and other factors affecting MarketAxess’ business and prospects is contained in MarketAxess’ periodic filings with the Securities and Exchange Commission and can be accessed at www.marketaxess.com.

About MarketAxess

MarketAxess (Nasdaq: MKTX) operates a leading electronic trading platform that delivers greater trading efficiency, a diversified pool of liquidity and significant cost savings to institutional investors and broker-dealers across the global fixed-income markets. Over 2,000 firms leverage MarketAxess’ patented technology to efficiently trade fixed-income securities. MarketAxess’ award-winning Open Trading® marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets. Founded in 2000, MarketAxess connects a robust network of market participants through an advanced full trading lifecycle solution that includes automated trading solutions, intelligent data and index products and a range of post-trade services. Learn more at www.marketaxess.com and on Twitter @MarketAxess.

Table 2: Trading Volume Detail

Month Ended July 31,

In millions (unaudited)

2023

2022

% Change

Volume

ADV

Volume

ADV

Volume

ADV

Credit

High-grade

$

103,276

$

5,164

$

94,875

$

4,743

8.9

%

8.9

%

High-yield

27,401

1,370

31,746

1,587

(13.7

)

(13.7

)

Emerging markets

58,932

2,947

51,779

2,589

13.8

13.8

Eurobonds

32,659

1,555

25,558

1,217

27.8

27.8

Other credit

7,143

357

8,296

415

(13.9

)

(14.0

)

Total credit trading¹

229,411

11,393

212,254

10,551

8.1

8.0

Rates

U.S. government bonds²

330,607

16,530

405,990

20,299

(18.6

)

(18.6

)

Agency and other government bonds¹

8,090

392

5,924

288

36.6

36.1

Total rates trading

338,697

16,922

411,914

20,587

(17.8

)

(17.8

)

Total trading

$

568,108

$

28,315

$

624,168

$

31,138

(9.0

)

(9.1

)

Number of U.S. Trading Days³

20

20

Number of U.K. Trading Days⁴

21

21

Year-to-Date Ended July 31,

In millions (unaudited)

2023

2022

% Change

Volume

ADV

Volume

ADV

Volume

ADV

Credit

High-grade

$

849,230

$

5,897

$

796,754

$

5,533

6.6

%

6.6

%

High-yield

241,664

1,678

242,401

1,683

(0.3

)

(0.3

)

Emerging markets

419,030

2,910

416,832

2,895

0.5

0.5

Eurobonds

267,520

1,845

209,113

1,452

27.9

27.1

Other credit

60,555

420

51,957

361

16.5

16.3

Total credit trading¹

1,837,999

12,750

1,717,057

11,924

7.0

6.9

Rates

U.S. government bonds²

2,762,026

19,181

3,365,458

23,371

(17.9

)

(17.9

)

Agency and other government bonds¹

61,872

427

59,287

412

4.4

3.6

Total rates trading

2,823,898

19,608

3,424,745

23,783

(17.5

)

(17.6

)

Total trading

$

4,661,897

$

32,358

$

5,141,802

$

35,707

(9.3

)

(9.4

)

Number of U.S. Trading Days³

144

144

Number of U.K. Trading Days⁴

145

144

¹ Consistent with FINRA TRACE reporting standards, both sides of trades are included in the Company’s reported volumes when the Company executes trades on a matched principal basis between two counterparties.

² Consistent with industry standards, U.S. government bond trades are single-counted.

³ The number of U.S. trading days is based on the SIFMA holiday recommendation calendar.

⁴ The number of U.K. trading days is based primarily on the U.K. Bank holiday schedule.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230802736778/en/

INVESTOR RELATIONS

Stephen Davidson

MarketAxess Holdings Inc.

+1 212 813 6313

[email protected]

MEDIA RELATIONS

Marisha Mistry

MarketAxess Holdings Inc.

+1 917 267 1232

[email protected]

William McBride

RF | Binder

+1 917 239 6726

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Professional Services Finance

MEDIA:

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Posted on August 3, 2023 7:51 am
Karuna Therapeutics Reports Second Quarter 2023 Financial Results and Provides General Business Updates

Karuna Therapeutics Reports Second Quarter 2023 Financial Results and Provides General Business Updates

On track to submit New Drug Application (NDA) for KarXT in schizophrenia with the U.S. FDA in the third quarter of 2023, with a product launch in the second half of 2024, assuming approval

Initiated the Phase 3 ADEPT-3 open label extension trial in the third quarter of 2023, and on track to commence the Phase 3 ADEPT-2 trial in the second half of 2023

Announced the appointment of Jonathan Rosin to Chief Human Resources Officer and the promotion of Jason Brown to Chief Financial Officer

$1.4 billion in cash expected to fund operations through 2026

Conference call and webcast to take place today at 8:00 a.m. ET

BOSTON–(BUSINESS WIRE)–
Karuna Therapeutics, Inc. (NASDAQ: KRTX), a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions, today announced financial results for the second quarter of 2023 and provided a general business update.

“We’ve made significant progress in the second quarter across our business, but most importantly in generating, analyzing, and preparing the data required for our NDA submission in schizophrenia,” said Bill Meury, president and chief executive officer of Karuna Therapeutics. “Looking ahead, we remain focused on our NDA submission, which is on track for later this quarter, and building the commercial infrastructure in preparation for the potential launch of KarXT in the second half of 2024.”

“Beyond the EMERGENT program, we continue to activate additional clinical trial sites to support recruitment in our ARISE trial, with data on track for the second half of 2024. We also initiated the ADEPT-3 open label extension trial in psychosis in Alzheimer’s earlier this quarter, with the full Phase 3 ADEPT program expected to be underway in the coming months following the initiation of ADEPT-2, our second pivotal safety and efficacy trial in this program,” added Mr. Meury.

KEY PIPELINE HIGHLIGHTS

Karuna is advancing a pipeline of novel drug candidates for the treatment of various psychiatric and neurological conditions led by KarXT (xanomeline-trospium), an oral, investigational M1/M4-preferring muscarinic agonist.

KarXT

KarXT is being evaluated in Phase 3 clinical trials as a potential treatment for schizophrenia as a monotherapy and adjunctive therapy, as well as for psychosis in Alzheimer’s disease.

Schizophrenia

Presented additional data analyses from the EMERGENT program evaluating KarXT in schizophrenia at the American Society of Clinical Psychopharmacology (ASCP) Annual Meeting and the 2023 Congress of the Schizophrenia International Research Society (SIRS) in the second quarter of 2023.

In the EMERGENT-3 trial, KarXT demonstrated a statistically significant and clinically meaningful improvement in the Clinical Global Impression – Severity (CGI-S) score, a prespecified secondary endpoint, compared to placebo starting at week 2 and maintained such improvement throughout the trial to week 5 (-1.1 KarXT vs. -0.6 placebo; p<0.0001), consistent with the EMERGENT-1 and EMERGENT-2 trials.

In an exploratory pooled analysis of the EMERGENT-2 and EMERGENT-3 trials, KarXT was associated with statistically significant and clinically meaningful improvements in cognitive function compared to placebo at week 5 in patients with cognitive impairment at baseline (0.41 KarXT vs. 0.13 placebo; p<0.01, Cohen’s d=0.52) as measured by the CANTAB composite score. Additionally, there was no significant correlative relationship between changes in Positive and Negative Syndrome Scale (PANSS) total score and changes in CANTAB composite score in the KarXT group, suggesting that improvements observed in cognition were largely independent of improvements in PANSS-related symptoms.

Completed enrollment in the EMERGENT-5 trial in the second quarter of 2023.

Topline data from the EMERGENT-4 and EMERGENT-5 trials evaluating the long-term safety of KarXT in schizophrenia are anticipated in 2024.

The Phase 1b trial evaluating the effect of KarXT on 24-hour ambulatory blood pressure in adults with schizophrenia completed enrollment in the second quarter of 2023.

Topline data from the trial is expected in the fourth quarter of 2023.

The Company remains on track to submit an NDA for KarXT in schizophrenia with the FDA in the third quarter of 2023, with a launch in the second half of 2024, if approved.

Adjunctive treatment in schizophrenia

Topline data from the ARISE trial evaluating the efficacy and safety of KarXT in schizophrenia when combined with a background antipsychotic is anticipated in the second half of 2024.

Psychosis in Alzheimer’s disease

The ADEPT-1 trial is ongoing, with the ADEPT-2 trial on track to initiate in the second half of 2023.

Topline data from the ADEPT-1 and ADEPT-2 trials are anticipated in 2025.

Initiated the ADEPT-3 open-label extension trial in the third quarter of 2023.

Early-stage and discovery programs

The Karuna pipeline also includes clinical-stage candidate KAR-2618, a TRPC4/5 inhibitor for the treatment of mood and anxiety disorders, as well as pre-clinical muscarinic, TRPC4/5, and target-agnostic compounds for the treatment of psychiatric and neurological conditions.

The Company plans to share next steps on the development of KAR-2618 for the treatment of mood and anxiety disorders in the second half of 2023.

BUSINESS UPDATES

Announced key leadership appointments. In a separate press release, the Company today announced the appointment of Jonathan Rosin to Chief Human Resources Officer in July 2023, and the promotion of Jason Brown to Chief Financial Officer. Mr. Brown succeeds Troy Ignelzi who will remain at Karuna for a transition period through the end of the third quarter of 2023.

ANTICIPATED UPCOMING MILESTONES

NDA submission of KarXT in schizophrenia (3Q 2023)

Initiation of the Phase 3 ADEPT-2 trial (2H 2023)

Topline data from the Phase 3 EMERGENT-4 trial (2024)

Topline data from the Phase 3 EMERGENT-5 trial (2024)

Launch of KarXT in schizophrenia, if approved (2H 2024)

Topline data from the Phase 3 ARISE trial (2H 2024)

Topline data from the Phase 3 ADEPT-1 trial (2025)

Topline data from the Phase 3 ADEPT-2 trial (2025)

SECOND QUARTER 2023 FINANCIAL RESULTS

The Company reported a net loss of $103.2 million for the second quarter of 2023, as compared to $64.9 million for the prior year period. The increase in net loss for the quarter was driven by research and development expenses related to the Company’s ongoing KarXT clinical programs, NDA-supporting activities, pre-commercialization activities, increased employee headcount across the organization, and higher stock-based compensation.

Research and development expenses were $92.5 million for the second quarter of 2023, as compared to $52.5 million for the prior year period. The increase in research and development expenses for the quarter was primarily driven by expenses related to the KarXT clinical programs, NDA-supporting activities, increased employee headcount, and higher stock-based compensation.

General and administrative expenses were $27.4 million for the second quarter of 2023, as compared to $17.8 million for the prior year period. The increase in general and administrative expenses for the quarter was primarily driven by the Company’s pre-commercialization activities, increased employee headcount, and higher stock-based compensation.

The Company ended the quarter with $1.4 billion in cash, cash equivalents, and available-for-sale investment securities compared to $1.1 billion as of December 31, 2022. The increase was primarily the result of the completion of the Company’s follow-on public offering in March 2023, which resulted in net proceeds of $436.7 million. The Company expects that current cash, cash equivalents, and available-for-sale investment securities as of June 30, 2023 will enable the Company to fund its operating expenses and capital expenditure requirements through the end of 2026.

CONFERENCE CALL AND WEBCAST DETAILS

The second quarter 2023 financial results and business update will be discussed during a conference call and webcast today at 8:00 a.m. ET. A webcast of the live call may be accessed on the Investors section of the Karuna website at investors.karunatx.com. A replay of the webcast will be available for up to 30 days following the event.

About Karuna Therapeutics

Karuna Therapeutics is a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions. At Karuna, we understand there is a need for differentiated and more effective treatments that can help patients navigate the challenges presented by these severe and disabling disorders. Utilizing our extensive knowledge of neuroscience, we are harnessing the untapped potential of the brain in pursuit of novel pathways to develop medicines that make meaningful differences in peoples’ lives. For more information, please visit www.karunatx.com.

Forward Looking Statements

This press release contains 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, including statements regarding our expectations about the timing of our ongoing and planned clinical trials and regulatory filings, our goals to develop and commercialize our product candidates, our liquidity and capital resources and other statements identified by words such as “could,” “expects,” “intends,” “may,” “plans,” “potential,” “should,” “will,” “would,” or similar expressions and the negatives of those terms. Forward looking statements are not promises or guarantees of future performance, and are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in such forward-looking statements. These factors include risks related to our limited operating history, our ability to obtain necessary funding, our ability to generate positive clinical trial results for our product candidates and other risks inherent in clinical development, the timing and scope of regulatory approvals, changes in laws and regulations to which we are subject, competitive pressures, our ability to identify additional product candidates, risks relating to business interruptions resulting from the coronavirus (COVID-19) pandemic, and other risks set forth under the heading “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022 and in our subsequent filings with the Securities and Exchange Commission. Our actual results could differ materially from the results described in or implied by such forward looking statements. Forward-looking statements speak only as of the date hereof, and, except as required by law, we undertake no obligation to update or revise these forward-looking statements.

Karuna Therapeutics, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except share and per share data)

Three Months Ended

Six Months Ended

June 30,

June 30,

2023

2022

2023

2022

License and other revenue

$

–

$

5,278

$

654

$

5,278

Operating expenses:

Research and development

92,490

52,487

177,957

96,293

General and administrative

27,417

17,843

51,670

32,631

Total operating expenses

119,907

70,330

229,627

128,924

Loss from operations

(119,907

)

(65,052

)

(228,973

)

(123,646

)

Other income, net:

Interest income

16,597

490

27,942

727

Sublease income

147

147

294

286

Total other income, net

16,744

637

28,236

1,013

Net loss before income taxes

(103,163

)

(64,415

)

(200,737

)

(122,633

)

Income tax provision

—

(528

)

—

(528

)

Net loss attributable to common stockholders

$

(103,163

)

$

(64,943

)

$

(200,737

)

$

(123,161

)

Net loss per share, basic and diluted

$

(2.75

)

$

(2.17

)

$

(5.55

)

$

(4.13

)

Weighted average common shares

outstanding used in computing net loss per

share, basic and diluted

37,524,640

29,896,332

36,170,166

29,851,396

Karuna Therapeutics, Inc.

Unaudited Consolidated Balance Sheet Data

(in thousands)

June 30,

2023

December 31,

2022

Cash, cash equivalents and investments

$

1,434,477

$

1,124,044

Working capital

1,413,344

1,120,823

Total assets

1,472,103

1,163,334

Total stockholders’ equity

$

1,419,563

$

1,126,238

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803699470/en/

Investor:

Alexis Smith

+1 (518) 338-8990

[email protected]

KEYWORDS: Massachusetts United States North America

INDUSTRY KEYWORDS: Research Mental Health Neurology Clinical Trials Health Insurance Biotechnology General Health Pharmaceutical Health Science

MEDIA:

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Posted on August 3, 2023 7:49 am
Willis Lease Finance Corporation Reports Second Quarter Pre-tax Income of $19.0 million

COCONUT CREEK, Fla., Aug. 03, 2023 (GLOBE NEWSWIRE) — Willis Lease Finance Corporation (NASDAQ: WLFC) today reported second quarter total revenues of $109.0 million and pre-tax earnings of $19.0 million. For the three months ended June 30, 2023, aggregate lease rent and maintenance reserve revenues were $89.8 million and spare parts and equipment sales were $4.6 million. The Company reported increased total revenues in the second quarter when compared to the prior year period, primarily due to an increase in the Company’s core lease rent and short-term maintenance revenues driven by continued global recovery in travel.

“Our second quarter results reflect the fundamental strength of our core leasing business,” said Austin Willis, the Company’s Chief Executive Officer. “A scarcity of serviceable spare engines and strong demand from the airlines, continues to drive favorable lease rates and terms.”

“Despite huge demand and industry-wide shortages, our teams continue to deliver for our customers that planned ahead and signed up for our custom-built programs as well as for those requiring ad hoc support,” said Brian R. Hole, President. “As always, people make the difference and ours are world class.”

Second
Quarter
2023
Highlights (at or for the period ended June 30, 2023, as compared to June 30, 2022, and December 31, 2022):

Lease rent revenue increased by $17.7 million, or 48.3%, to $54.4 million in the second quarter of 2023, compared to $36.7 million in the second quarter of 2022. The increase is due to an increase in the number of engines acquired and placed on lease, including an increase in utilization compared to that of the prior period.

Maintenance reserve revenue was $35.4 million in the second quarter of 2023, an increase of 46.1%, compared to $24.2 million in the same quarter of 2022. There was $6.8 million long-term maintenance revenue recognized for the three months ended June 30, 2023, compared to $15.1 million in the comparable prior period. “Non-reimbursable” maintenance reserve revenue is directly influenced by on lease engine flight hours and cycles. Engines out on lease with “non-reimbursable” usage fees generated $28.6 million of short-term maintenance revenues, compared to $9.2 million in the comparable prior period. As of June 30, 2023 and December 31, 2022, there was $19.8 million and $6.3 million, respectively, of cumulative deferred in-substance fixed payment use fees included in “Unearned revenue.”

Spare parts and equipment sales decreased to $4.6 million in the second quarter of 2023, compared to $6.8 million in the second quarter of 2022.

Gain on sale of leased equipment was $4.5 million in the second quarter of 2023, reflecting the sale of two engines and other parts and equipment from the lease portfolio. Gain on sale of leased equipment was $0.5 million in the second quarter of 2022, reflecting the sale of eight engines.

There was no gain on sale of financial assets during the second quarter of 2023 as we did not sell any notes receivable. Gain on sale of financial assets was $3.1 million in the second quarter of 2022, reflecting the sale of four notes receivable.

The Company generated $19.0 million of pre-tax income in the second quarter of 2023, a 73.2% increase as compared to pre-tax income of $11.0 million in the second quarter of 2022.

The book value of lease assets we own directly or through our joint ventures, inclusive of our notes receivable, maintenance rights, and investments in sales-type leases, was $2,551.3 million at June 30, 2023. As of June 30, 2023, the Company also managed 339 engines, aircraft and related equipment on behalf of other parties.

The Company maintained $242.0 million of undrawn revolver capacity at June 30, 2023.

Diluted weighted average income per common share was $2.02 for the second quarter of 2023, compared to diluted weighted average income of $0.81 in the second quarter of 2022.

Book value per diluted weighted average common share outstanding increased to $64.69 at June 30, 2023, compared to $64.27 at December 31, 2022.

Balance Sheet

As of June 30, 2023, $2,161.7 million of equipment held in our operating lease portfolio, $95.0 million of notes receivable, $14.0 million of maintenance rights, and $5.8 million of investments in sales-type leases, which represented 348 engines, 12 aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2022, the Company had $2,111.9 million equipment held in our operating lease portfolio, $81.4 million of notes receivable, $17.7 million of maintenance rights, and $6.4 million of investments in sales-type leases, which represented 339 engines, 13 aircraft, one marine vessel and other leased parts and equipment.

Willis Lease Finance Corporation

Willis Lease Finance Corporation (“WLFC”) leases large and regional spare commercial aircraft engines, auxiliary power units and aircraft to airlines, aircraft engine manufacturers and maintenance, repair and overhaul providers worldwide. These leasing activities are integrated with engine and aircraft trading, engine lease pools and asset management services through Willis Asset Management Limited, as well as various end-of-life solutions for engines and aviation materials provided through Willis Aeronautical Services, Inc. Additionally, through Willis Engine Repair Center®, Jet Centre by Willis, and Willis Aviation Services Limited, the Company’s service offerings include Part 145 engine maintenance, aircraft line and base maintenance, aircraft disassembly, parking and storage, airport FBO and ground and cargo handling services.

Except for historical information, the matters discussed in this press release contain forward-looking statements that involve risks and uncertainties. Do not unduly rely on forward-looking statements, which give only expectations about the future and are not guarantees. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to: the effects on the airline industry and the global economy of events such as war, terrorist activity and the COVID-19 pandemic; changes in oil prices, rising inflation and other disruptions to world markets; trends in the airline industry and our ability to capitalize on those trends, including growth rates of markets and other economic factors; risks associated with owning and leasing jet engines and aircraft; our ability to successfully negotiate equipment purchases, sales and leases, to collect outstanding amounts due and to control costs and expenses; changes in interest rates and availability of capital, both to us and our customers; our ability to continue to meet changing customer demands; regulatory changes affecting airline operations, aircraft maintenance, accounting standards and taxes; the market value of engines and other assets in our portfolio; and risks detailed in the Company’s Annual Report on Form 10-K and other continuing reports filed with the Securities and Exchange Commission.

Unaudited Consolidated Statements of Income

(In thousands, except per share data)

Three months ended June 30, Six months ended June 30,

2023 2022 % Change 2023 2022 % Change

REVENUE

Lease rent revenue $ 54,416 $ 36,704 48.3 % $ 107,636 $ 74,829 43.8 %

Maintenance reserve revenue 35,415 24,245 46.1 % 58,913 39,079 50.8 %

Spare parts and equipment sales 4,550 6,792 (33.0 )% 9,602 13,422 (28.5 )%

Interest revenue 2,258 1,865 21.1 % 4,304 3,978 8.2 %

Gain on sale of leased equipment 4,461 498 795.8 % 4,328 2,796 54.8 %

Gain on sale of financial assets — 3,116 (100.0 )% — 3,116 (100.0 )%

Other revenue 7,896 4,855 62.6 % 13,748 9,672 42.1 %

Total revenue 108,996 78,075 39.6 % 198,531 146,892 35.2 %

EXPENSES

Depreciation and amortization expense 22,494 21,612 4.1 % 45,043 43,421 3.7 %

Cost of spare parts and equipment sales 3,058 7,014 (56.4 )% 7,557 11,876 (36.4 )%

Write-down of equipment 1,671 78 2,042.3 % 1,671 21,195 (92.1 )%

General and administrative 38,327 20,427 87.6 % 71,598 44,032 62.6 %

Technical expense 4,919 3,436 43.2 % 7,748 9,082 (14.7 )%

Net finance costs:

Interest expense 19,085 16,023 19.1 % 37,474 32,906 13.9 %

Total net finance costs 19,085 16,023 19.1 % 37,474 32,906 13.9 %

Total expenses 89,554 68,590 30.6 % 171,091 162,512 5.3 %

Income (Loss) from operations 19,442 9,485 105.0 % 27,440 (15,620 ) (275.7 )%

(Loss) Income from joint ventures (474 ) 1,469 (132.3 )% (1,635 ) (1,147 ) 42.5 %

Income (Loss) before income taxes 18,968 10,954 73.2 % 25,805 (16,767 ) (253.9 )%

Income tax expense (benefit) 5,152 5,046 2.1 % 7,595 (1,474 ) (615.3 )%

Net income (loss) 13,816 5,908 133.9 % 18,210 (15,293 ) (219.1 )%

Preferred stock dividends 811 811 — % 1,612 1,612 — %

Accretion of preferred stock issuance costs 21 21 — % 42 42 — %

Net income (loss) attributable to common shareholders $ 12,984 $ 5,076 155.8 % $ 16,556 $ (16,947 ) (197.7 )%

Basic weighted average income (loss) per common share $ 2.04 $ 0.83 $ 2.65 $ (2.81 )

Diluted weighted average income (loss) per common share $ 2.02 $ 0.81 $ 2.57 $ (2.81 )

Basic weighted average common shares outstanding 6,354 6,129 6,239 6,040

Diluted weighted average common shares outstanding 6,442 6,246 6,449 6,040

Unaudited Consolidated Balance Sheets

(In thousands, except per share data)

June 30, 2023 December 31, 2022

ASSETS

Cash and cash equivalents $ 5,918 $ 12,146

Restricted cash 49,094 76,870

Equipment held for operating lease, less accumulated depreciation 2,161,650 2,111,935

Maintenance rights 14,032 17,708

Equipment held for sale 2,713 3,275

Receivables, net of allowances 52,259 46,954

Spare parts inventory 41,764 38,577

Investments 53,716 56,189

Property, equipment & furnishings, less accumulated depreciation 37,329 35,350

Intangible assets, net 1,100 1,129

Notes receivable, net of allowances 95,047 81,439

Investments in sales-type leases, net of allowances 5,827 6,440

Other assets 83,507 87,205

Total assets $ 2,603,956 $ 2,575,217

LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS’ EQUITY

Liabilities:

Accounts payable and accrued expenses $ 41,927 $ 43,040

Deferred income taxes 137,884 132,516

Debt obligations 1,827,021 1,847,278

Maintenance reserves 73,872 59,453

Security deposits 22,528 20,490

Unearned revenue 33,626 17,863

Total liabilities 2,136,858 2,120,640

Redeemable preferred stock ($0.01 par value) 49,931 49,889

Shareholders’ equity:

Common stock ($0.01 par value) 68 66

Paid-in capital in excess of par 21,740 20,386

Retained earnings 373,965 357,493

Accumulated other comprehensive income, net of tax 21,394 26,743

Total shareholders’ equity 417,167 404,688

Total liabilities, redeemable preferred stock and shareholders’ equity $ 2,603,956 $ 2,575,217

CONTACT: Scott B. Flaherty

Chief Financial Officer

(561) 349-9989

Posted on August 3, 2023 7:46 am
InfuSystem Reports Second Quarter 2023 Financial Results

InfuSystem Reports Second Quarter 2023 Financial Results

Record Net Revenues of $31.7 million Representing 17% Growth From the Prior Year

ROCHESTER HILLS, Mich.–(BUSINESS WIRE)–InfuSystem Holdings, Inc. (NYSE American: INFU) (“InfuSystem” or the “Company”), a leading national health care service provider, facilitating outpatient care for durable medical equipment manufacturers and health care providers, today reported financial results for the second quarter ended June 30, 2023.

2023 Second Quarter Overview:

Net revenues totaled $31.7 million, an increase of 17% vs. prior year.

Patient Services (formerly Integrated Therapy Services (“ITS”)) net revenue was $19.3 million, an increase of 12% vs. prior year.

Device Solutions (formerly Durable Medical Equipment Services (“DME Services”)) net revenue was $12.4 million, an increase of 27% vs. prior year.

Gross profit was $16.4 million, an increase of 10% vs. prior year.

Gross margin was 51.8%, a decrease of 3.3% vs. prior year.

Patient Services gross margin was 61.3%, an increase of 2.7% vs. prior year.

Device Solutions gross margin was 37.0%, a decrease of 11.8% vs. prior year, up 2.5% sequentially.

Net income increased $0.6 million to $0.4 million, or $0.02 per diluted share vs. prior year net loss of $0.2 million, or $(0.01) per diluted share.

Adjusted earnings before interest, income taxes, depreciation, and amortization (“Adjusted EBITDA”) (non-GAAP) was $5.8 million, an increase of 4% vs. prior year, up 36% sequentially.

Updating Net Revenue and Adjusted EBITDA guidance.

Management Discussion

Richard DiIorio, chief executive officer of InfuSystem, said, “I am extremely pleased with the results of the second quarter, which reflect the sixth consecutive quarter with record revenues. We continue to demonstrate positive momentum against our plan by delivering solid revenue growth of 17% for the second quarter. The strength of our core businesses coupled with the execution of our long-term growth strategy in biomedical services and wound care, drove double-digit growth for both Patient Services (formerly ITS), with revenue up 12%, and Device Solutions (formerly DME Services), with revenue up 27%. Our current progress is a direct result of our team’s hard work and commitment to providing high level service and solutions to our patients and providers.”

“Additionally, with a focus on operational improvements, we had sizable gains in profitability with Adjusted EBITDA margins up 4.2% sequentially. We believe that we are having substantial success in terms of executing our plan to deliver sustainable top-line growth and improved profitability. Given our positive momentum, we now believe our current year revenue growth to exceed the top end of our previous range of 8% to 10%, and Adjusted EBITDA margin to be between 17% and 18% for the year. Our unwavering commitment to help people live healthier and longer lives provides the foundation to deliver meaningful growth and drive shareholder value for our loyal shareholders in the years to come,” concluded Mr. DiIorio.

2023 Second Quarter Financial Review

Net revenues for the quarter ended June 30, 2023 were $31.7 million, an increase of $4.7 million, or 17.4%, compared to $27.0 million for the quarter ended June 30, 2022. The increase included higher net revenues for both the Patient Services and Device Solutions segment.

Patient Services net revenue of $19.3 million increased $2.1 million, or 12.0%, during the second quarter of 2023 as compared to the prior year period. This increase was primarily attributable to additional treatment volume in Oncology, revenue from sales-type leases of NPWT pumps, improved third party payer collections on billings and higher prices. Net revenue in Oncology represented the largest increase totaling $0.9 million, or 5.8%, compared to the same prior year period. This was followed by an increase in revenue for Wound Care which increased by $1.2 million, or 443%, compared to the same prior year period, mainly due to an increase in sales of equipment on sales-type leases, partially offset by lower treatment volumes.

Device Solutions net revenue of $12.4 million (exclusive of inter-segment revenues) increased $2.6 million, or 26.7%, during the second quarter of 2023 as compared to the prior year period. This increase included higher biomedical services revenue which increased by $2.5 million, or 163%. The biomedical services revenue included initial amounts of revenue from a new master services agreement with a leading global healthcare technology and diagnostic company that was launched in April 2022.

Gross profit of $16.4 million for the second quarter of 2023 increased $1.5 million, or 10.3%, from $14.9 million for the second quarter of 2022. The increase was driven by the increase in net revenue and was partially offset by a lower gross profit percentage of net revenue (“gross margin”). Gross margin was 51.8% during the second quarter of 2023 as compared to 55.1% during the prior year, a decrease of 3.3%. Gross profit and gross margin increased in the Patient Services segment, but were both lower in the Device Solutions segment.

Patient Services gross profit was $11.8 million during the second quarter of 2023, representing an increase of $1.7 million compared to the prior year. The increase reflected the higher net revenues and a higher gross margin, which increased from the prior year by 2.7% to 61.3%. The increase in the gross margin reflected lower pump disposal expenses, improved third party payer collections on billings and improved coverage of fixed costs from the higher net revenue. These improvements were partially offset by unfavorable product mix favoring lower margin revenues. Pump disposal expenses, which include retirements of damaged pumps and reserves for missing pumps, decreased by $0.7 million during the second quarter of 2023 as compared to the prior year period which included an unusually high adjustment related to an updated estimate of the volume of pumps considered missing based on pump return data and physical inventories. The unfavorable gross margin mix was mainly related to the increase in revenue related to NPWT equipment leases which have a lower average gross margin than other Patient Services revenue categories.

Device Solutions gross profit during the second quarter of 2023 was $4.6 million, representing a decrease of $0.2 million, or 4.0%, compared to the prior year period. This decrease was due to a decrease in the gross margin partially offset by higher net revenues. The Device Solutions gross margin was 37.0% during the current quarter, which was 11.8% lower than the prior year. This decrease was due to an increase in labor costs related to an increase in the number of biomedical technicians and other expenses associated with the rapid on-boarding of the new master services agreement. Some of the additional labor costs include training activities and other labor expenses associated with building a larger team in order to have the capacity required to support much higher planned revenue volume. Over time, higher revenue levels are expected to absorb a portion of the increased labor costs and result in an improved gross margin. Other increased expenses associated with the on-boarding ramp, which include increased travel expenses and employee acquisitions costs, are expected to decrease in the future. We currently estimate that the additional expenses incurred during the second quarter of 2023 that will either be absorbed or reduced totaled approximately $0.9 million.

Selling and marketing expenses were $3.0 million for the second quarter of 2023, representing a decrease of $0.1 million, or 3.2%, compared to the prior year period. Selling and marketing expenses as a percentage of net revenues decreased to 9.4% compared to the prior year period at 11.4%. This decrease reflected a reduction in sales team members and improved coverage of fixed costs from the higher net revenue. The selling and marketing expenses during these periods consisted of sales personnel salaries, commissions and associated fringe benefit and payroll-related items, marketing, travel and entertainment and other miscellaneous expenses.

General and administrative (“G&A”) expenses for the second quarter of 2023 were $12.0 million, an increase of 9.9% from $10.9 million for the second quarter of 2022. The increase of $1.1 million was due to a higher short-term incentive bonus accrued expense totaling $0.5 million and increased expenses totaling $0.7 million associated with revenue volume growth which included the cost of additional personnel, information technology and general business expenses including inflationary increases. These amounts were partially offset by lower stock-based compensation expense of $0.1 million. G&A expenses as a percentage of net revenues for the second quarter of 2023, decreased to 37.9% compared to 40.5% for the prior year mainly reflecting improved net revenue leverage over fixed costs.

Net income for the second quarter of 2023 was $0.4 million, or $0.02 per diluted share, compared to a net loss of $0.2 million, or $(0.01) per diluted share for the second quarter of 2022.

Adjusted EBITDA, a non-GAAP measure, for the second quarter of 2023 was $5.8 million, or 18.2% of net revenue, and increased by $0.2 million, or 4.3%, compared to Adjusted EBITDA for the same prior year quarter of $5.5 million, or 20.4% of prior period net revenue.

Balance sheet, cash flows and liquidity

During the six-month period ended June 30, 2023, operating cash flow decreased to $2.3 million, a $7.2 million or 76% decrease over operating cash flow during the same prior year six-month period. The decrease reflected lower operating margins during the year, resulting from the additional biomedical labor expenses and higher working capital levels. Capital expenditures during the first half of 2023 included purchases of medical devices totaling $7.0 million which was $0.3 million, or 5%, higher than the amount purchased during the same prior year period.

On April 26, 2023, the Company amended the 2021 Credit Agreement which features a $75 million revolving line of credit, does not include any term indebtedness, and, as amended, matures on April 26, 2028. On May 11, 2023, the Company entered into a rate swap agreement to fix the amount of interest expense for $20 million of the outstanding borrowings under the loans with a termination date matching the new credit agreement maturity date. Two interest rate swaps existing prior to the amendment date were settled. As of June 30, 2023, available liquidity for the Company totaled $38.2 million and consisted of $38.1 million in available borrowing capacity under the revolving line of credit plus cash and cash equivalents of $0.1 million. Net debt, a non-GAAP measure (calculated as total debt of $36.1 million less cash and cash equivalents of $0.1 million) as of June 30, 2023 was $36.0 million representing an increase of $3.0 million as compared to net debt of $33.0 million as of December 31, 2022 (calculated as total debt of $33.2 million less cash and cash equivalents of $0.2 million). Our ratio of Adjusted EBITDA to net debt (non-GAAP) for the last four quarters was 1.56 to 1.00 (calculated as net debt of $36.0 million divided by Adjusted EBITDA of $21.8 million).

Full Year 2023 Guidance

InfuSystem is providing updated annual guidance for the full year 2023 with net revenue growth estimated to be above the previously stated range of 8% to 10% and Adjusted EBITDA margin (non-GAAP) to be between 17% and 18% for the year.

The full year 2023 guidance reflects management’s current expectation for operational performance, given the current market conditions. This includes our best estimate of revenue and Adjusted EBITDA. The Company and its businesses are subject to certain risks, including those risk factors discussed in our most recent annual report on Form 10-K for the year ended December 31, 2022, filed on March 16, 2023. The financial guidance is subject to risks and uncertainties applicable to all forward-looking statements as described elsewhere in this press release.

Conference Call

The Company will conduct a conference call for all interested investors on Thursday, August 3, 2023, at 9:00 a.m. Eastern Time to discuss its second quarter 2023 financial results. The call will include discussion of Company developments, forward-looking statements and other material information about business and financial matters.

To participate in this call, please dial (833) 366-1127 or (412) 902-6773, or listen via a live webcast, which is available in the Investors section of the Company’s website at https://ir.infusystem.com/. A replay of the call will be available by visiting https://ir.infusystem.com/ for the next 90 days or by calling (877) 344-7529 or (412) 317-0088, replay access code 9921883, through August 10, 2023.

Non-GAAP Measures

This press release contains information prepared in conformity with GAAP as well as non-GAAP financial information. Non-GAAP financial measures presented in this press release include EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, net debt and Adjusted EBITDA to net debt ratio. The Company believes that the non-GAAP financial measures presented in this press release provide useful information to the Company’s management, investors and other interested parties about the Company’s operating performance because they allow them to understand and compare the Company’s operating results during the current periods to the prior year periods in a more consistent manner. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP, and similarly titled non-GAAP measures may be calculated differently by other companies. The Company calculates those non-GAAP measures by adjusting for non-recurring or non-core items that are not part of the normal course of business. A reconciliation of those measures to the most directly comparable GAAP measures is provided in the accompanying schedule, titled “GAAP to Non-GAAP Reconciliation” below. Future period non-GAAP guidance includes adjustments for items not indicative of our core operations, which may include, without limitation, items included in the accompanying schedule below. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as non-core, nonrecurring, unusual or unanticipated changes, expenses or gains or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP guidance to the most comparable GAAP measures and, therefore, such comparable GAAP measures and reconciliations are excluded from this release in reliance upon applicable SEC staff guidance.

About InfuSystem Holdings, Inc.

InfuSystem Holdings, Inc. (NYSE American: INFU), is a leading national health care service provider, facilitating outpatient care for durable medical equipment manufacturers and health care providers. INFU services are provided under a two-platform model. The first platform is Patient Services (formerly Integrated Therapy Services, or ITS), providing the last-mile solution for clinic-to-home healthcare where the continuing treatment involves complex durable medical equipment and services. The Patient Services segment is comprised of Oncology, Pain Management, Wound Therapy and Lymphedema businesses. The second platform, Device Solutions (formerly Durable Medical Equipment Services, or DME Services), supports the Patient Services platform and leverages strong service orientation to win incremental business from its direct payer clients. The Device Solutions segment is comprised of direct payer rentals, pump and consumable sales, and biomedical services and repair. Headquartered in Rochester Hills, Michigan, the Company delivers local, field-based customer support and also operates Centers of Excellence in Michigan, Kansas, California, Massachusetts, Texas and Ontario, Canada.

Forward-Looking Statements

The financial results in this press release reflect preliminary results, which are not final until the Company’s quarterly report on Form 10-Q for the quarter year ended June 30, 2023 is filed. In addition, certain statements contained in this press release are 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, such as statements relating to future actions, our share repurchase program and capital allocation strategy, business plans, strategic partnerships, growth initiatives, objectives and prospects, future operating or financial performance, guidance and expected new business relationships and the terms thereof (including estimated potential revenue under new or existing contracts). The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “goal,” “expect,” “strategy,” “future,” “likely,” variations of such words, and other similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Forward-looking statements are subject to factors, risks and uncertainties that could cause actual results to differ materially, including, but not limited to, our ability to successfully execute on our growth initiatives and strategic partnerships, our ability to enter into definitive agreements for the new business relationships on expected terms or at all, our ability to generate estimated potential revenue amounts under new or existing contracts, the uncertain impact of the COVID-19 pandemic, our dependence on estimates of collectible revenue, potential litigation, changes in third-party reimbursement processes, changes in law, global financial conditions and recessionary risks, rising inflation and interest rates, supply chain disruptions, systemic pressures in the banking sector, including disruptions to credit markets, the Company’s ability to remediate its previously disclosed material weaknesses in internal control over financial reporting, contributions from acquired businesses or new business lines, products or services and other risk factors disclosed in the Company’s most recent annual report on Form 10-K and, to the extent applicable, quarterly reports on Form 10-Q. Our strategic partnerships are subject to similar factors, risks and uncertainties. All forward-looking statements made in this press release speak only as of the date hereof. We do not undertake any obligation to update any forward-looking statements to reflect future events or circumstances, except as required by law.

Additional information about InfuSystem Holdings, Inc. is available at www.infusystem.com.

FINANCIAL TABLES FOLLOW

INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended

June 30,

Six Months Ended

June 30,

(in thousands, except share and per share data)

2023

2022

2023

2022

Net revenues

$

31,735

$

27,042

$

62,105

$

53,805

Cost of revenues

15,293

12,141

30,123

23,537

Gross profit

16,442

14,901

31,982

30,268

Selling, general and administrative expenses:

Provision for doubtful accounts

(67

)

(41

)

47

6

Amortization of intangibles

247

711

495

1,421

Selling and marketing

2,985

3,083

6,209

6,402

General and administrative

12,029

10,941

24,090

22,757

Total selling, general and administrative

15,194

14,694

30,841

30,586

Operating income (loss)

1,248

207

1,141

(318

)

Other income (expense):

Interest expense

(620

)

(314

)

(1,104

)

(591

)

Other income (expense)

2

(30

)

(33

)

(58

)

Income (loss) before income taxes

630

(137

)

4

(967

)

(Provision for) benefit from income taxes

(195

)

(27

)

107

435

Net income (loss)

$

435

$

(164

)

$

111

$

(532

)

Net income (loss) per share:

Basic

$

0.02

$

(0.01

)

$

0.01

$

(0.03

)

Diluted

$

0.02

$

(0.01

)

$

0.01

$

(0.03

)

Weighted average shares outstanding:

Basic

20,955,048

20,583,928

20,904,315

20,596,580

Diluted

21,600,346

20,583,928

21,565,667

20,596,580

INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

SEGMENT REPORTING

(UNAUDITED)

Three Months Ended

June 30,

Better/

(Worse)

(in thousands)

2023

2022

Net revenues:

Patient Services

$

19,319

$

17,244

$

2,075

Device Solutions (inclusive of inter-segment revenues)

14,097

11,560

2,537

Less: elimination of inter-segment revenues

(1,681

)

(1,762

)

81

Total

31,735

27,042

4,693

Gross profit (inclusive of certain inter-segment allocations) (a):

Patient Services

11,845

10,113

1,732

Device Solutions

4,597

4,788

(191

)

Total

$

16,442

$

14,901

$

1,541

(a) Inter-segment allocations are for cleaning and repair services performed on medical equipment.

Six Months Ended

June 30,

Better/

(Worse)

(in thousands)

2023

2022

Net revenues:

Patient Services

$

38,093

$

33,885

$

4,208

Device Solutions (inclusive of inter-segment revenues)

27,323

23,170

4,153

Less: elimination of inter-segment revenues

(3,311

)

(3,250

)

(61

)

Total

62,105

53,805

8,300

Gross profit (inclusive of certain inter-segment allocations) (a):

Patient Services

23,386

20,851

2,535

Device Solutions

8,596

9,417

(821

)

Total

$

31,982

$

30,268

$

1,714

(a) Inter-segment allocations are for cleaning and repair services performed on medical equipment.

INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(UNAUDITED)

NET INCOME (LOSS) TO EBITDA, ADJUSTED EBITDA, NET INCOME (LOSS) MARGIN AND ADJUSTED EBITDA MARGIN:

Three Months Ended

June 30,

Six Months Ended

June 30,

(in thousands)

2023

2022

2023

2022

GAAP net income (loss)

$

435

$

(164

)

$

111

$

(532

)

Adjustments:

Interest expense

620

314

1,104

591

Income tax provision (benefit)

195

27

(107

)

(435

)

Depreciation

2,846

2,689

5,801

5,395

Amortization

247

711

495

1,421

Non-GAAP EBITDA

$

4,343

$

3,577

$

7,404

$

6,440

Stock compensation costs

1,016

1,123

1,736

2,170

Medical equipment reserve and disposals (1)

336

721

766

891

SOX readiness costs

—

70

—

110

Management reorganization/transition costs

72

37

72

37

Certain other non-recurring costs

(6

)

(2

)

18

20

Non-GAAP Adjusted EBITDA

$

5,761

$

5,526

$

9,996

$

9,668

GAAP Net Revenues

$

31,735

$

27,042

$

62,105

$

53,805

Net Income (Loss) Margin (2)

1.4

%

(0.6

)%

0.2

%

(1.0

)%

Non-GAAP Adjusted EBITDA Margin (3)

18.2

%

20.4

%

16.1

%

18.0

%

(1)

Amounts represent a non-cash expense recorded to adjust the reserve for missing medical equipment and/or the disposal of medical equipment and is being added back due to its similarity to depreciation.

(2)

Net Income (Loss) Margin is defined as GAAP Net Income (Loss) as a percentage of GAAP Net Revenues.

(3)

Non-GAAP Adjusted EBITDA Margin is defined as Non-GAAP Adjusted EBITDA as a percentage of GAAP Net Revenues.

INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

As of

(in thousands, except par value and share data)

June 30,

2023

December 31,

2022

ASSETS

Current assets:

Cash and cash equivalents

$

134

$

165

Accounts receivable, net

18,870

16,871

Inventories

5,706

4,821

Other current assets

3,916

2,922

Total current assets

28,626

24,779

Medical equipment for sale or rental

3,206

2,790

Medical equipment in rental service, net of accumulated depreciation

37,697

39,450

Property & equipment, net of accumulated depreciation

4,303

4,385

Goodwill

3,710

3,710

Intangible assets, net

7,942

8,436

Operating lease right of use assets

4,392

4,168

Deferred income taxes

9,739

9,625

Derivative financial instruments

1,910

1,965

Other assets

1,224

80

Total assets

$

102,749

$

99,388

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

5,481

$

8,341

Current portion of long-term debt

—

—

Other current liabilities

7,386

6,126

Total current liabilities

12,867

14,467

Long-term debt, net of current portion

36,140

33,157

Operating lease liabilities, net of current portion

3,786

3,761

Total liabilities

52,793

51,385

Stockholders’ equity:

Preferred stock, $0.0001 par value: authorized 1,000,000 shares; none issued

—

—

Common stock, $0.0001 par value: authorized 200,000,000 shares; 21,051,045 issued and outstanding as of June 30, 2023 and 20,781,977 issued and outstanding as of December 31, 2022

2

2

Additional paid-in capital

107,898

105,856

Accumulated other comprehensive income

1,442

1,489

Retained deficit

(59,386

)

(59,344

)

Total stockholders’ equity

49,956

48,003

Total liabilities and stockholders’ equity

$

102,749

$

99,388

INFUSYSTEM HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended June 30,

(in thousands)

2023

2022

OPERATING ACTIVITIES

Net income (loss)

$

111

$

(532

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Provision for doubtful accounts

47

6

Depreciation

5,801

5,395

Loss on disposal of and reserve adjustments for medical equipment

828

1,101

Gain on sale of medical equipment

(1,402

)

(883

)

Amortization of intangible assets

495

1,421

Amortization of deferred debt issuance costs

78

37

Stock-based compensation

1,736

2,170

Deferred income taxes

(106

)

(435

)

Changes in assets – (increase)/decrease:

Accounts receivable

(506

)

(924

)

Inventories

(885

)

(937

)

Other current assets

(994

)

599

Other assets

(1,719

)

(19

)

Changes in liabilities – (decrease)/increase:

Accounts payable and other liabilities

(1,183

)

2,496

NET CASH PROVIDED BY OPERATING ACTIVITIES

2,301

9,495

INVESTING ACTIVITIES

Purchase of medical equipment

(6,994

)

(6,669

)

Purchase of property and equipment

(494

)

(336

)

Proceeds from sale of medical equipment, property and equipment

2,098

2,081

NET CASH USED IN INVESTING ACTIVITIES

(5,390

)

(4,924

)

FINANCING ACTIVITIES

Principal payments on long-term debt

(29,451

)

(20,665

)

Cash proceeds from long-term debt

32,585

21,218

Debt issuance costs

(229

)

—

Cash payment of contingent consideration

—

(750

)

Common stock repurchased as part of share repurchase program

(153

)

(4,356

)

Common stock repurchased to satisfy statutory withholding on employee stock-based compensation plans

(523

)

(639

)

Cash proceeds from stock plans

829

746

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

3,058

(4,446

)

Net change in cash and cash equivalents

(31

)

125

Cash and cash equivalents, beginning of period

165

186

Cash and cash equivalents, end of period

$

134

$

311

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803952121/en/

Joe Dorame, Joe Diaz & Robert Blum

Lytham Partners, LLC

602-889-9700

KEYWORDS: United States North America Michigan

INDUSTRY KEYWORDS: General Health Health Medical Supplies Medical Devices

MEDIA:

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Posted on August 3, 2023 7:43 am
Henry Schein to Acquire a Majority Interest in Shield Healthcare, a Leading Supplier of Homecare Medical Products to Patients in the Home; Expands Henry Schein Medical’s Continuum-of-Care Delivery Model

Henry Schein to Acquire a Majority Interest in Shield Healthcare, a Leading Supplier of Homecare Medical Products to Patients in the Home; Expands Henry Schein Medical’s Continuum-of-Care Delivery Model

MELVILLE, N.Y.–(BUSINESS WIRE)–
Henry Schein, Inc. (Nasdaq: HSIC), the world’s largest provider of health care solutions to office-based dental and medical practitioners, announced today that it has signed an agreement to acquire a majority ownership position in Shield Healthcare, Inc., a leading supplier of homecare medical products delivered directly to patients in their homes. The addition of Shield Healthcare will advance Henry Schein Medical’s continuum-of-care delivery model.

The Shield Healthcare agreement follows Henry Schein’s 2021 acquisition of Prism Medical Products LLC, and represents a further investment in the homecare medical supplies market delivering products directly to patients in their homes. With this acquisition, Henry Schein’s homecare medical products platform will have a revenue base of more than $300 million in annualized revenue. The Shield Healthcare transaction enhances Henry Schein’s existing medical business by delivering a wide range of products, including incontinence, urology, ostomy, enteral nutrition, advanced wound, and diabetes supplies, as well as continuous glucose monitoring devices, directly to patients in their homes.

Headquartered in Valencia, Calif., Shield Healthcare had 2022 net sales of approximately $180 million. Henry Schein expects the transaction to be neutral to 2023 non-GAAP earnings per share and accretive thereafter. Closing is subject to standard closing conditions and is expected to be completed in the third quarter of 2023. Financial terms were not disclosed.

“As the U.S. population ages and care increasingly moves into the home, Henry Schein is meeting this trend by enhancing our homecare medical products offering,” said Stanley M. Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein. “We are delighted to expand our presence in delivering medical products directly to patients through Shield Healthcare. Together, we share an unwavering commitment to customer satisfaction.”

Shield Healthcare will operate as a part of Henry Schein Medical, which reported global sales for 2022 of $4.45 billion. The current owners of Shield Healthcare, including members of the company’s management team, will retain the remaining minority ownership position in the company.

About Henry Schein, Inc.

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

Henry Schein operates through a centralized and automated distribution network, with a selection of more than 300,000 branded products and Henry Schein private-brand products in stock.

A FORTUNE 500 Company and a member of the S&P 500® index, Henry Schein is headquartered in Melville, N.Y., and has operations or affiliates in 32 countries and territories. The Company’s sales reached $12.6 billion in 2022, and have grown at a compound annual rate of approximately 12.1 percent since Henry Schein became a public company in 1995.

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

Cautionary Note Regarding Forward-Looking Statements

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

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

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20230802534109/en/

Investors

Ronald N. South

Senior Vice President and Chief Financial Officer

[email protected]

(631) 843-5500

Graham Stanley

Vice President, Investor Relations and Strategic Financial Project Officer

[email protected]

(631) 843-5500

Media

Ann Marie Gothard

Vice President, Global Corporate Media Relations

[email protected]

(631) 390-8169

KEYWORDS: New York United States North America

INDUSTRY KEYWORDS: Medical Supplies Medical Devices Health Other Health Dental Managed Care

MEDIA:

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Posted on August 3, 2023 7:39 am
IDACORP, Inc. Announces Second Quarter 2023 Results, Reaffirms 2023 Earnings Guidance

IDACORP, Inc. Announces Second Quarter 2023 Results, Reaffirms 2023 Earnings Guidance

BOISE, Idaho–(BUSINESS WIRE)–
IDACORP, Inc. (NYSE: IDA) reported second quarter 2023 net income attributable to IDACORP of $68.6 million, or $1.35 per diluted share, compared with $64.3 million, or $1.27 per diluted share, in the second quarter of 2022.

“Customer growth continues to be a catalyst for our positive results,” said IDACORP President and Chief Executive Officer Lisa Grow. “This growth, combined with a mid-year rate change last year and lower maintenance costs compared with 2022’s second quarter, benefited this quarter’s results.”

IDACORP is reaffirming its previously reported full-year 2023 earnings guidance in the range of $4.95 to $5.15 per diluted share, along with the expectation that Idaho Power will use approximately $15 million of additional tax credits available under its Idaho earnings support regulatory mechanism in 2023. The earnings guidance assumes normal weather conditions through the remainder of the year.

Summary of Financial Results

The following is a summary of Idaho Power’s net income, net income attributable to IDACORP, and IDACORP’s earnings per diluted share for the three and six months ended June 30, 2023 and 2022 (in thousands, except earnings per share amounts):

Three months ended

June 30,

Six months ended

June 30,

2023

2022

2023

2022

Net income attributable to IDACORP, Inc.

$

68,574

$

64,287

$

124,672

$

110,548

Weighted average outstanding shares – diluted

50,758

50,687

50,741

50,673

IDACORP, Inc. earnings per diluted share

$

1.35

$

1.27

$

2.46

$

2.18

The table below provides a reconciliation of net income attributable to IDACORP for the three and six months ended June 30, 2023, from the same periods in 2022 (items are in millions and are before related income tax impact unless otherwise noted):

Three months

ended

Six months

ended

Net income attributable to IDACORP, Inc. – June 30, 2022

$

64.3

$

110.5

Increase (decrease) in Idaho Power net income:

Customer growth, net of associated power supply costs and power cost adjustment (PCA) mechanisms

4.1

6.8

Usage per retail customer, net of associated power supply costs and PCA mechanisms

(1.7

)

(1.2

)

Idaho fixed cost adjustment revenues

0.2

(1.0

)

Retail revenues per megawatt-hour (MWh), net of associated power supply costs and PCA mechanisms

2.4

10.8

Transmission wheeling-related revenues

1.7

6.8

Other operations and maintenance (O&M) expenses

3.4

3.5

Depreciation expense

(12.3

)

(13.2

)

Other changes in operating revenues and expenses, net

3.0

(4.0

)

Increase in Idaho Power operating income

0.8

8.5

Non-operating expense, net

2.8

5.5

Additional accumulated deferred investment tax credits (ADITC) amortization

3.8

7.5

Income tax expense, excluding additional ADITC amortization

(2.8

)

(7.4

)

Total increase in Idaho Power net income

4.6

14.1

Other IDACORP changes (net of tax)

(0.3

)

0.1

Net income attributable to IDACORP, Inc. – June 30, 2023

$

68.6

$

124.7

Net Income – Second Quarter 2023

IDACORP’s net income increased $4.3 million for the second quarter of 2023 compared with the second quarter of 2022, due primarily to higher net income at Idaho Power. At Idaho Power, customer growth increased operating income by $4.1 million in the second quarter of 2023 compared with the second quarter of 2022, as the number of Idaho Power customers grew by approximately 13,100, or 2.1 percent, during the twelve months ended June 30, 2023. Usage per customer decreased operating income by $1.7 million in the second quarter of 2023 compared with the second quarter of 2022, due primarily to a 5 percent decrease in usage per industrial customer. In addition to slightly lower economic activity in a few industrial sectors, operation of a customer-owned-and-operated co-generation facility reduced industrial customer energy usage during the second quarter of 2023 compared with the second quarter of 2022 when the co-generation facility was down for maintenance.

The net increase in retail revenues per MWh, net of associated power supply costs and power cost adjustment mechanisms, increased operating income by $2.4 million in the second quarter of 2023 compared with the second quarter of 2022. The net increase in retail revenues per MWh was primarily due to the June 1, 2022, rate increase for Idaho Power’s Idaho retail customers related to an order from the IPUC that authorized Idaho Power to accelerate the depreciation on and recover through 2030 the net book value of coal-related assets at Idaho Power’s jointly-owned Jim Bridger plant as of December 31, 2020, plus forecasted plant investments (Bridger Order).

Total other O&M expenses in the second quarter of 2023 were $3.4 million lower than the second quarter of 2022, due primarily to lower expenses from scheduled cyclical plant maintenance projects compared with the same period in 2022, offset partially by inflationary pressures on labor-related and other costs.

Depreciation expense increased $12.3 million in the second quarter of 2023 compared with the second quarter of 2022 due primarily to the notable impact in the second quarter of 2022 of the Bridger Order. The Bridger Order resulted in Idaho Power recording the deferral of certain depreciation expense in the second quarter of 2022. In addition, the increase in the second quarter of 2023 compared with the second quarter of 2022 is also partially due to an increase in plant-in-service.

Other changes in operating revenues and expenses, net, increased operating income by $3.0 million in the second quarter of 2023 compared with the second quarter of 2022, due primarily to a decrease in net power supply expenses that were not deferred for future recovery in rates through Idaho Power’s power cost adjustment mechanisms. Lower wholesale natural gas and power market prices in the western United States decreased Idaho Power’s net power supply expenses in the second quarter of 2023 compared with the second quarter of 2022.

Non-operating expense, net, decreased $2.8 million in the second quarter of 2023 compared with the second quarter of 2022. Allowance for equity funds used during construction (AFUDC) increased as the average construction work in progress balance was higher throughout the second quarter of 2023 compared with the second quarter of 2022. Also, interest income increased due to higher market interest rates. These increases were partially offset by higher interest expense on long-term debt in the second quarter of 2023 compared with the second quarter of 2022.

The decrease in income tax expense in the second quarter of 2023 compared with the second quarter of 2022 was principally the result of additional ADITC amortization, partially offset by higher pre-tax income. Based on Idaho Power’s current expectations of full-year 2023 results, Idaho Power recorded $3.8 million of additional ADITC amortization under its Idaho regulatory settlement stipulation during the second quarter of 2023. Idaho Power currently expects to amortize up to $15 million of additional ADITC for the full-year 2023, but did not record any additional ADITC amortization in 2022.

Net Income – Year-To-Date 2023

IDACORP’s net income increased $14.2 million for the first six months of 2023 compared with the first six months of 2022, due primarily to higher net income at Idaho Power. At Idaho Power, customer growth increased operating income by $6.8 million while usage per retail customer was relatively consistent in the first six months of 2023 compared with the first six months of 2022.

The net increase in retail revenues per MWh, net of associated power supply costs and power cost adjustment mechanisms, increased operating income by $10.8 million in the first six months of 2023 compared with the first six months of 2022. The net increase in retail revenues per MWh was primarily due to the June 1, 2022 rate increase for Idaho Power’s Idaho retail customers related to the Bridger Order.

Transmission wheeling-related revenues increased $6.8 million during the first six months of 2023 compared with the first six months of 2022, resulting from Idaho Power’s Open Access Transmission Tariff rates being 1 percent higher and due to elevated energy prices in the western United States in the first quarter of 2023 compared with the first quarter of 2022.

Total other O&M expenses in the first six months of 2023 were $3.5 million lower than the first six months of 2022, due primarily to lower expenses from scheduled cyclical plant maintenance projects compared with the same period in 2022, as well as the timing of regulatory deferrals and payment credits received related to a jointly-funded project. These decreases in other O&M expenses were offset partially by inflationary pressures on labor-related and other costs.

Depreciation expense increased $13.2 million due primarily to the impacts of the Bridger Order. The Bridger Order resulted in Idaho Power recording the deferral of certain depreciation expense in the second quarter of 2022. In addition, the increase is also partially due to an increase in plant-in-service.

Other changes in operating revenues and expenses, net, decreased operating income by $4.0 million in the first six months of 2023 compared with the first six months of 2022, due primarily to the net increase in net power supply expenses that were not deferred for future recovery in rates through Idaho Power’s power cost adjustment mechanisms. Compared with the same periods of 2022, the increase in Idaho Power’s net power supply expenses due to higher wholesale natural gas and power market prices in the western United States in the first quarter of 2023 was partially offset by the decrease in Idaho Power’s net power supply costs due to lower wholesale natural gas and power market prices in the western United States in the second quarter of 2023.

Non-operating expense, net, decreased $5.5 million in the first six months of 2023 compared with the first six months of 2022. AFUDC increased as the average construction work in progress balance was higher throughout the first six months of 2023 compared with the first six months of 2022. Also, interest income increased due to higher market interest rates. These increases were partially offset by higher interest expense on long-term debt in the first six months of 2023 compared with the first six months of 2022.

Income tax expense in the first six months of 2023 was consistent with the first six months of 2022 as increased taxes from higher pre-tax income was more than offset by $7.5 million of additional ADITC amortization. Idaho Power did not record any additional ADITC amortization in 2022.

2023 Annual Earnings Guidance and Key Operating and Financial Metrics

IDACORP is reaffirming its earnings guidance estimate for 2023. The 2023 guidance incorporates all of the key operating and financial assumptions listed in the table that follows (in millions, except per share amounts):

Current⁽¹⁾

Previous⁽²⁾

IDACORP Earnings Guidance (per share)

No change

$ 4.95 – $ 5.15

Idaho Power Additional ADITCs

No change

Approximately $15

Idaho Power O&M Expense

No change

$ 385 – $ 395

Idaho Power Capital Expenditures, Excluding AFUDC

No change

$ 650 – $ 700

Idaho Power Hydropower Generation (MWh)

No change

6.0 – 7.5

⁽¹⁾

As of August 3, 2023.

⁽²⁾

As of May 4, 2023, the date of filing IDACORP’s and Idaho Power’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

More detailed financial and operational information is provided in IDACORP’s Quarterly Report on Form 10-Q filed today with the U.S. Securities and Exchange Commission, which is also available for review on IDACORP’s website at www.idacorpinc.com.

Web Cast / Conference Call

IDACORP will hold an analyst conference call today at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time). All parties interested in listening may do so through a live webcast on IDACORP’s website (www.idacorpinc.com), or by calling (855) 761-5600 for listen-only mode. The passcode for the call is 3990987. The conference call logistics are also posted on IDACORP’s website and will be included in IDACORP’s earnings news release. Slides will be included during the conference call. To access the slide deck, register for the event just prior to the call at www.idacorpinc.com/investor-relations/earnings-center/default.aspx. A replay of the conference call will be available on the company’s website for 12 months and will be available shortly after the call.

Background Information

IDACORP, Inc. (NYSE: IDA), Boise, Idaho-based and formed in 1998, is a holding company comprised of Idaho Power, a regulated electric utility; IDACORP Financial, an investor in affordable housing and other real estate tax credit investments; and Ida-West Energy, an operator of small hydroelectric generation projects that satisfy the requirements of the Public Utility Regulatory Policies Act of 1978. Idaho Power, headquartered in vibrant and fast-growing Boise, Idaho, has been a locally operated energy company since 1916. Today, it serves a 24,000-square-mile service area in Idaho and Oregon. Idaho Power’s goal to provide 100% clean energy by 2045 builds on its long history as a clean-energy leader that provides reliable service at affordable prices. With 17 low-cost hydropower projects at the core of its diverse energy mix, Idaho Power’s residential, business, and agricultural customers pay among the nation’s lowest prices for electricity. Its 2,000 employees proudly serve more than 620,000 customers with a culture of safety first, integrity always, and respect for all. To learn more about IDACORP or Idaho Power, visit www.idacorpinc.com or www.idahopower.com.

Forward-Looking Statements

In addition to the historical information contained in this press release, this press release contains (and oral communications made by IDACORP, Inc. (IDACORP) and Idaho Power Company (Idaho Power) may contain) statements that relate to future events and expectations, such as statements regarding projected or future financial performance, cash flows, capital expenditures, dividends, capital structure or ratios, load forecasts, strategic goals, challenges, objectives, and plans for future operations. Such statements constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, or future events or performance, often, but not always, through the use of words or phrases such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “potential,” “plans,” “predicts,” “preliminary,” “projects,” “may,” “may result,” “may continue,” or similar expressions, are not statements of historical facts and may be forward-looking. Forward-looking statements are not guarantees of future performance and involve estimates, assumptions, risks, and uncertainties that may differ materially from actual results, performance, or outcomes. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in forward-looking statements include those factors set forth in this press release, IDACORP’s and Idaho Power’s most recent Annual Report on Form 10-K, particularly Part I, Item 1A – “Risk Factors” and Part II, Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of that report, subsequent reports filed by IDACORP and Idaho Power with the U.S. Securities and Exchange Commission (SEC), and the following important factors: (a) decisions by the Idaho and Oregon public utilities commissions and the Federal Energy Regulatory Commission that impact Idaho Power’s ability to recover costs and earn a return on investment; (b) changes to or the elimination of Idaho Power’s regulatory cost recovery mechanisms; (c) expense and risks associated with capital expenditures for, and the permitting and construction of, utility infrastructure projects that Idaho Power may be unable to complete or that may not be deemed prudent by regulators for full cost recovery or full return on investment; (d) expenses and risks associated with supplier and contractor delays and failure to satisfy project quality and performance standards, on utility infrastructure projects and the potential impacts of those delays on Idaho Power’s ability to serve customers; (e) power demand exceeding supply, and the rapid addition of new industrial and commercial customer load and the volatility of such new load demand, resulting in increased costs for purchasing energy and capacity in the market, if available, or acquiring or constructing additional generation and transmission resources, and battery storage facilities; (f) impacts of economic conditions, including an inflationary or recessionary environment and increasing interest rates, on items such as operations and capital investments, supply costs and delivery delays, supply scarcity and shortages, population growth or decline in Idaho Power’s service area, changes in customer demand for electricity, revenue from sales of excess power, credit quality of counterparties and suppliers and their ability to meet financial and operational commitments, and collection of receivables; (g) changes in residential, commercial, and industrial growth and demographic patterns within Idaho Power’s service area, and the associated impacts on loads and load growth; (h) employee workforce factors, including the operational and financial costs of unionization or the attempt to unionize all or part of the companies’ workforce, the cost and ability to attract and retain skilled workers and third-party contractors and suppliers, the cost of living and the related impact on recruiting employees, and the ability to adjust to fluctuations in labor costs; (i) changes in, failure to comply with, and costs of compliance with laws, regulations, policies, and orders, including those relating to reliability and security, the environment, climate change, natural resources, and threatened and endangered species, and associated mitigation requirements, which may result in penalties and fines, increase compliance and operational costs, and impact recovery associated with increased costs through rates; (j) abnormal or severe weather conditions (including conditions and events associated with climate change), wildfires, droughts, earthquakes, and other natural phenomena and natural disasters, which affect customer sales, hydropower generation, repair costs, service interruptions, liability for damage caused by utility property, and the availability and cost of fuel for generation plants or purchased power to serve customers; (k) advancement of self-generation, energy storage, energy efficiency, alternative energy sources, and other technologies that may reduce Idaho Power’s sale or delivery of electric power or introduce operational vulnerabilities to the power grid; (l) variable hydrological conditions and over-appropriation of surface and groundwater in the Snake River Basin, which may impact the amount of power generated by Idaho Power’s hydropower facilities; (m) ability to acquire fuel, power, electrical equipment, and transmission capacity on reasonable terms and prices, particularly in the event of unanticipated or abnormally high resource demands, price volatility, lack of physical availability, transportation constraints, outages due to maintenance or repairs to generation or transmission facilities, disruptions in the supply chain, or credit quality or lack of counterparty and supplier credit; (n) disruptions or outages of Idaho Power’s generation or transmission systems or of any interconnected transmission systems, which can result in liability for Idaho Power, increase power supply costs and repair expenses, and reduce revenues; (o) accidents, electrical contacts, fires (either affecting or caused by Idaho Power facilities or infrastructure), explosions, infrastructure failures, general system damage or dysfunction, and other unplanned events that may occur while operating and maintaining assets, which can cause unplanned outages; reduce generating output, damage company assets, operations, or reputation; subject Idaho Power to third-party claims for property damage, personal injury, or loss of life; or result in the imposition of fines and penalties; insurance coverage for such operating and event risks is subject to the terms and limitations of the available policies and may not be sufficient in amount to cover Idaho Power’s ultimate liability; (p) acts or threats of terrorist incidents, acts of war, social unrest, cyber or physical security attacks, and other malicious acts of individuals or groups seeking to disrupt Idaho Power’s operations or the electric power grid or compromise data, or the disruption or damage to the companies’ business, operations, or reputation resulting from such events; (q) increased purchased power costs and operational and reliability challenges associated with purchasing and integrating intermittent renewable energy sources into Idaho Power’s resource portfolio; (r) Idaho Power’s concentration in one industry and one region, and the resulting exposure to regional economic conditions and regional legislation and regulation; (s) changes in tax laws or related regulations or interpretations of applicable laws or regulations by federal, state, or local taxing jurisdictions, and the availability of tax credits; (t) inability to timely obtain and the cost of obtaining and complying with required governmental permits and approvals, licenses, rights-of-way, and siting for transmission and generation projects and hydropower facilities; (u) ability to obtain debt and equity financing or refinance existing debt when necessary and on satisfactory terms, which can be affected by factors such as credit ratings, reputational harm, volatility or disruptions in the financial markets, interest rate fluctuations, decisions by the Idaho or Oregon public utility commissions, and the companies’ past or projected financial performance; (v) ability to enter into financial and physical commodity hedges with creditworthy counterparties to manage price and commodity risk for fuel, power, and transmission, and the failure of any such risk management and hedging strategies to work as intended, and the potential losses the companies may incur on those hedges, which can be affected by factors such as the volume of hedging transactions and degree of price volatility; (w) changes in actuarial assumptions, changes in interest rates, increasing health care costs, and the actual and projected return on plan assets for pension and other post-retirement plans, which can affect future pension and other postretirement plan funding obligations, costs, and liabilities and the companies’ cash flows; (x) remediation costs associated with planned exits from participation in Idaho Power’s co-owned coal plants; (y) ability to continue to pay dividends and achieve target dividend payout ratios based on financial performance, capital requirements, and in light of credit rating considerations, contractual covenants and restrictions, and regulatory limitations; and (z) adoption of or changes in accounting policies and principles, changes in accounting estimates, and new SEC or New York Stock Exchange requirements or new interpretations of existing requirements. Any forward-looking statement speaks only as of the date on which such statement is made. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. IDACORP and Idaho Power disclaim any obligation to update publicly any forward-looking information, whether in response to new information, future events, or otherwise, except as required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803921873/en/

Investor and Analyst Contact

Amy I. Shaw

Director of Investor Relations, Compliance, & Risk

Phone: (208) 388-5611

[email protected]

Media Contact

Jordan Rodriguez

Corporate Communications

Phone: (208) 388-2460

[email protected]

KEYWORDS: Idaho United States North America

INDUSTRY KEYWORDS: Energy Other Construction & Property Construction & Property Other Energy Utilities

MEDIA:

Logo

Posted on August 3, 2023 7:36 am
Affimed to Report Second Quarter 2023 Financial Results & Corporate Update on August 10, 2023

HEIDELBERG, Germany, Aug. 03, 2023 (GLOBE NEWSWIRE) — Affimed N.V. (Nasdaq: AFMD), a clinical-stage immuno-oncology company committed to giving patients back their innate ability to fight cancer, announced today that it will release second quarter 2023 results and corporate update on Thursday, August 10, 2023. The Company will host a conference call at 8:30 a.m. EDT / 14:30 CET.

The conference call will be available via phone and webcast. The live audio webcast of the call will be available in the “Webcasts” section on the “Investors” page of the Affimed website at https://www.affimed.com/investors/webcasts-and-corporate-presentation/. To access the call by phone, please use link https://register.vevent.com/register/BI1a95f0d05ae14e099ffc1c7872731338, and you will be provided with dial-in details and a pin number.

Note: To avoid delays, we encourage participants to dial into the conference call 15 minutes ahead of the scheduled start time. A replay of the webcast will be accessible at the same link for 30 days following the call.

About Affimed N.V.

Affimed (Nasdaq: AFMD) is a clinical-stage immuno-oncology company committed to giving patients back their innate ability to fight cancer by actualizing the untapped potential of the innate immune system. The Company’s proprietary ROCK^® platform enables a tumor-targeted approach to recognize and kill a range of hematologic and solid tumors, enabling a broad pipeline of wholly-owned and partnered single agent and combination therapy programs. The ROCK^® platform predictably generates customized innate cell engager (ICE^®) molecules, which use patients’ immune cells to destroy tumor cells. This innovative approach enabled Affimed to become the first company with a clinical-stage ICE^®. Headquartered in Heidelberg, Germany, with offices in New York, NY, Affimed is led by an experienced team of biotechnology and pharmaceutical leaders united by a bold vision to stop cancer from ever derailing patients’ lives. For more about the Company’s people, pipeline and partners, please visit: www.affimed.com.

Investor Relations Contact

Alexander Fudukidis
Director, Head of Investor Relations
E-Mail: [email protected]
Tel.: +1 (917) 436-8102

Posted on August 3, 2023 7:33 am
Great Elm Capital Corp. Announces Second Quarter 2023 Financial Results

Company to Host Conference Call and Webcast at 8:30 AM ET Today

WALTHAM, Mass., Aug. 03, 2023 (GLOBE NEWSWIRE) — Great Elm Capital Corp. (“we,” “our,” the “Company” or “GECC,”) (NASDAQ: GECC), a business development company, today announced its financial results for the second quarter ended June 30, 2023.

Second Quarter and Other Recent Highlights:

Net investment income (“NII”) for the quarter ended June 30, 2023 grew 19% to $3.4 million, or $0.44 per share, as compared to $2.8 million, or $0.37 per share, for the quarter ended March 31, 2023.

Second consecutive quarter of NII more than covering the dividend.

NII growth was driven by strategic capital deployment and rotation into higher-yielding, secured floating rate investments.

Highest cash income quarter in the Company’s history, with only 13% of GECC’s $9.0 million Total Investment Income attributable to PIK and accretion income.

Net assets were $92.9 million, or $12.21 per share, on June 30, 2023, as compared to $90.3 million, or $11.88 per share, on March 31, 2023, and $97.6 million, or $12.84 per share, on June 30, 2022.

GECC’s asset coverage ratio was approximately 161.5% as of June 30, 2023, as compared to 159.8% as of March 31, 2023, and 166.9% as of June 30, 2022.

The Board of Directors approved a quarterly dividend of $0.35 per share for the third quarter of 2023, equating to a 16.7% annualized yield on the Company’s closing market price on August 2, 2023 of $8.37.

Management Commentary

“We are very pleased with our second quarter performance, as we generated another quarter of record total investment income, our NII once again exceeded our quarterly dividend and we grew NAV for the second consecutive quarter,” said Matt Kaplan, GECC’s Chief Executive Officer. “We continued to proactively deploy capital into higher-yielding, secured and floating rate investments and thanks to our actions over the past year, our portfolio is generating enough cash to cover our dividend – a notable transformation from one year ago. We also made progress in expanding our Specialty Finance platform, closing attractive new transactions at Prestige, Great Elm Healthcare Finance and Sterling Commercial Credit. Looking ahead, we believe we are well positioned to cover our quarterly dividend and create additional value for our shareholders.”

Financial Highlights – Per Share Data

Q2/2022 Q3/2022 Q4/2022 Q1/2023 Q2/2023

Earnings Per Share (“EPS”) ($0.87) $0.18 ($0.96) $1.07 $0.69

Net Investment Income (“NII”) Per Share $0.23 $0.14 $0.30 $0.37 $0.44

Pre-Incentive Net Investment Income Per Share $0.23 $0.14 $0.37 $0.47 $0.56

Net Realized and Unrealized Gains / (Losses) Per Share ($1.10) $0.04 ($1.26) $0.70 $0.24

Net Asset Value Per Share at Period End $12.84 $12.56 $11.16 $11.88 $12.21

Distributions Paid / Declared Per Share $0.45 $0.45 $0.45 $0.35 $0.35

Portfolio and Investment Activity

As of June 30, 2023, GECC held total investments of $236.4 million at fair value, as follows:

40 debt investments in corporate credit, totaling approximately $167.9 million and representing 71.0% of the fair market value of the Company’s total investments. Secured debt investments comprised a substantial majority of the fair market value of the Company’s debt investments.

8 debt investments in specialty finance, totaling approximately $30.9 million and representing 13.1% of the fair market value of the Company’s total investments.

4 equity investments in specialty finance companies, totaling approximately $23.3 million, representing 9.8% of the fair market value of the Company’s total investments.

3 dividend paying equity investments, totaling approximately $7.9 million, representing 3.3% of the fair market value of the Company’s total investments.

Other equity investments, totaling approximately $6.4 million, representing 2.7% of the fair market value of the Company’s total investments.

In July, GECC exited its entire equity and subordinated note investments in Lenders Funding at valuations consistent with the June 30, 2023 fair values. The Company continues to hold a commitment under Lenders Funding’s senior credit facility.

As of June 30, 2023, the weighted average current yield on the Company’s debt portfolio was 13.5%. Floating rate instruments comprised approximately 63% of the fair market value of debt investments (compared to 58% as of March 31, 2023) and the Company’s fixed rate debt investments had a weighted average maturity of 2.9 years.

During the quarter ended June 30, 2023, we deployed approximately $23.0 million into 19 investments⁽¹⁾ at a weighted average current yield of 14.8%.

During the quarter ended June 30, 2023, we monetized, in part or in full, 34 investments for approximately $16.0 million⁽²⁾, at a weighted average current yield of 10.1%. Monetizations include $3.8 million of mandatory debt paydowns and redemptions at a weighted average current yield of 11.6%. Sales aggregated to $12.1 million at a weighted average current yield of 8.9%.

Financial Review

Total investment income for the quarter ended June 30, 2023 was $9.0 million, or $1.18 per share. Net expenses for the quarter ended June 30, 2023 were approximately $5.6 million, or $0.74 per share.

Net realized and unrealized gains for the quarter ended June 30, 2023 were approximately $1.8 million, or $0.24 per share.

Liquidity and Capital Resources

As of June 30, 2023, cash and money market securities totaled approximately $11.8 million, exclusive of holdings of United States Treasury Bills.

As of June 30, 2023, total debt outstanding (par value) was $150.9 million, comprised of 6.50% senior notes due June 2024 (NASDAQ: GECCN), 6.75% senior notes due January 2025 (NASDAQ: GECCM), 5.875% senior notes due June 2026 (NASDAQ: GECCO), and $5.0 million outstanding on the $25.0 million revolving credit facility due May 2024.

Distributions

The Company’s Board of Directors has approved a quarterly cash distribution of $0.35 per share for the quarter ending September 30, 2023. The third quarter distribution will be payable on September 29, 2023 to stockholders of record as of September 15, 2023.

The distribution equates to a 16.7% annualized dividend yield on the Company’s closing market price on August 2, 2023 of $8.37 and an 11.5% annualized dividend yield on the Company’s June 30, 2023 NAV of $12.21 per share.

Conference Call and Webcast

GECC will discuss these results in a conference call today at 8:30 a.m. ET.

Conference Call Details

Date/Time: Thursday, August 3, 2023 – 8:30 a.m. ET

Participant Dial-In Numbers:

(United States): 877-407-0789

(International): 201-689-8562

To access the call, please dial-in approximately five minutes before the start time and, when asked, provide the operator with passcode “GECC”. An accompanying slide presentation will be available in pdf format via the “Investor Relations” section of Great Elm Capital Corp.’s website here after the issuance of the earnings release.

Webcast

The call and presentation will also be simultaneously webcast over the internet via the “News & Events” section of GECC’s website or by clicking on the conference call link here.

About Great Elm Capital Corp.

GECC is an externally managed business development company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses.

Cautionary Statement Regarding Forward-Looking Statements

Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are: conditions in the credit markets, rising interest rates, inflationary pressure, the price of GECC common stock and the performance of GECC’s portfolio and investment manager. Information concerning these and other factors can be found in GECC’s Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

This press release does not constitute an offer of any securities for sale.

Endnotes:

⁽
¹
⁾ This includes new deals, additional fundings (inclusive of those on revolving credit facilities), refinancings and capitalized PIK income. Amounts included herein do not include investments in short-term securities, including United States Treasury Bills.
⁽²⁾ This includes scheduled principal payments, prepayments, sales and repayments (inclusive of those on revolving credit facilities). Amounts included herein do not include investments in short-term securities, including United States Treasury Bills.

Media & Investor Contact:

Investor Relations
[email protected]

GREAT ELM CAPITAL CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited)

Dollar amounts in thousands (except per share amounts)

June 30, 2023 December 31, 2022

Assets

Investments

Non-affiliated, non-controlled investments, at fair value (amortized cost of $191,570 and $183,061, respectively) $ 186,091 $ 171,743

Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of $78,158 and $76,140, respectively) 78,139 76,127

Affiliated investments, at fair value (amortized cost of $13,427 and $13,433, respectively) 1,450 1,304

Controlled investments, at fair value (amortized cost of $52,882 and $54,684, respectively) 48,890 51,910

Total investments 314,570 301,084

Cash and cash equivalents 3,352 587

Receivable for investments sold 90 396

Interest receivable 2,932 3,090

Dividends receivable 1,124 1,440

Due from portfolio company 3 1

Deferred financing costs 146 226

Prepaid expenses and other assets 260 3,288

Total assets $ 322,477 $ 310,112

Liabilities

Notes payable (including unamortized discount of $2,213 and $2,781, respectively) $ 143,721 $ 143,152

Revolving credit facility 5,000 10,000

Payable for investments purchased 77,049 70,022

Interest payable 56 42

Accrued incentive fees payable 2,116 565

Due to affiliates 1,174 1,042

Accrued expenses and other liabilities 511 480

Total liabilities $ 229,627 $ 225,303

Commitments and contingencies $ – $ –

Net Assets

Common stock, par value $0.01 per share (100,000,000 shares authorized, 7,601,958 shares issued and outstanding and 7,601,958 shares issued and outstanding, respectively) $ 76 $ 76

Additional paid-in capital 284,107 284,107

Accumulated losses (191,333 ) (199,374 )

Total net assets $ 92,850 $ 84,809

Total liabilities and net assets $ 322,477 $ 310,112

Net asset value per share $ 12.21 $ 11.16

GREAT ELM CAPITAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Dollar amounts in thousands
(except per share amounts)

For the Three Months Ended
June 30, For the Six Months Ended
June 30,

2023 2022 2023 2022

Investment Income:

Interest income from:

Non-affiliated, non-controlled investments $ 5,836 $ 3,016 $ 11,312 $ 6,275

Non-affiliated, non-controlled investments (PIK) 590 223 1,039 469

Affiliated investments 32 22 62 43

Affiliated investments (PIK) – – – 58

Controlled investments 623 473 1,065 930

Controlled investments (PIK) – – 233 –

Total interest income 7,081 3,734 13,711 7,775

Dividend income from:

Non-affiliated, non-controlled investments 327 454 645 957

Controlled investments 700 935 1,316 1,699

Total dividend income 1,027 1,389 1,961 2,656

Other income from:

Non-affiliated, non-controlled investments 869 390 1,715 640

Total other income 869 390 1,715 640

Total investment income $ 8,977 $ 5,513 $ 17,387 $ 11,071

Expenses:

Management fees $ 884 $ 771 $ 1,753 $ 1,551

Incentive fees 842 – 1,552 –

Administration fees 341 262 636 483

Custody fees 21 14 43 28

Directors’ fees 53 44 105 107

Professional services 434 373 970 791

Interest expense 2,769 2,667 5,590 5,337

Other expenses 265 194 503 385

Total expenses $ 5,609 $ 4,325 $ 11,152 $ 8,682

Incentive fee waiver – – – (4,854 )

Net expenses 5,609 4,325 $ 11,152 $ 3,828

Net investment income before taxes $ 3,368 $ 1,188 $ 6,235 $ 7,243

Excise tax $ – $ – $ 28 $ 101

Net investment income $ 3,368 $ 1,188 $ 6,207 $ 7,142

Net realized and unrealized gains (losses):

Net realized gain (loss) on investment transactions from:

Non-affiliated, non-controlled investments $ 542 $ 1,033 $ 2,387 $ (18,900 )

Affiliated investments – (110,784 ) – (110,784 )

Total net realized gain (loss) 542 (109,751 ) 2,387 (129,684 )

Net change in unrealized appreciation (depreciation) on investment transactions from:

Non-affiliated, non-controlled investments 3,054 (11,424 ) 5,835 5,112

Affiliated investments (11 ) 116,009 152 108,320

Controlled investments (1,751 ) (540 ) (1,219 ) (517 )

Total net change in unrealized appreciation (depreciation) 1,292 104,045 4,768 112,915

Net realized and unrealized gains (losses) $ 1,834 $ (5,706 ) $ 7,155 $ (16,769 )

Net increase (decrease) in net assets resulting from operations $ 5,202 $ (4,518 ) $ 13,362 $ (9,627 )

Net investment income per share (basic and diluted): (1 ) $ 0.44 $ 0.23 $ 0.82 $ 1.46

Earnings per share (basic and diluted): (1 ) $ 0.68 $ (0.87 ) $ 1.76 $ (1.97 )

Weighted average shares outstanding (basic and diluted): (1 ) 7,601,958 5,194,910 7,601,958 4,878,439

(1) Weighted average shares outstanding and per share amounts have been adjusted for the periods shown to reflect the six-for-one reverse stock split effected on February 28, 2022 on a retroactive basis.

Posted on August 3, 2023 7:28 am
Crown LNG Holdings AS, a Leading Provider of Offshore LNG Liquefaction and Regasification Terminal Infrastructure Solutions for Harsh Weather Locations, To Go Public via Business Combination with Catcha Investment Corp.

Crown LNG Holdings AS, a Leading Provider of Offshore LNG Liquefaction and Regasification Terminal Infrastructure Solutions for Harsh Weather Locations, To Go Public via Business Combination with Catcha Investment Corp.

Crown LNG Holdings AS (“Crown” or the “Company”), a leading provider of offshore liquefied natural gas (“LNG”) liquefaction and regasification terminal infrastructure for harsh weather locations, has entered into a business combination agreement with Catcha Investment Corp (“CHAA” or “Catcha”) (NYSE American: CHAA). The combined company intends to apply to list its shares on the New York Stock Exchange under the ticker symbol “CGBS”

Crown designs and plans to own and operate all-weather LNG liquefaction and regasification terminals, utilizing both bottom-fixed, gravity based structures (“GBS”) and floating storage and regasification units (“FSRU”)

Global demand for LNG is expected to increase from 351 million tons per annum (mtpa) in 2020 to approximately 570 mtpa by 2030, a 62% increase in a decade, driven by energy security concerns and the use of natural gas as a transition fuel across both developed markets as well as under-served developing markets

Crown is well positioned to take advantage of this significant LNG demand growth given the advantages of offshore LNG import and export facilities over onshore facilities with regard to regulatory demands, environmental impact, security requirements and overall cost

GBS applications extend beyond LNG to hydrogen, ammonia and power, extending Crown’s global addressable market

Since 2016, Crown has been developing its first two anchor projects in Kakinada, India and Grangemouth, Scotland; the Company has over 21 additional targets in its pipeline of under-served harsh-weather markets

Crown’s senior management team has 100+ years of combined industry experience with deep capabilities in oil and gas project management, multinational expansion and energy production

Pro forma implied enterprise value of the combined company will be approximately USD $685 million. The transaction, forecasted to be completed during the fourth quarter of 2023, is expected to provide $50 million of capital, with net proceeds going to fund both the Kakinada and Grangemouth projects to final investment decision (FID)

SINGAPORE & OSLO, Norway–(BUSINESS WIRE)–
Crown LNG Holdings AS, a leading provider of LNG liquefaction and regasification terminal technologies for harsh weather locations, and Catcha Investment Corp (NYSE American: CHAA), a publicly traded special purpose acquisition company, today announced a definitive agreement for a business combination that would result in Crown becoming a U.S. publicly listed company. The combined company, named Crown LNG Holdings Limited (“PubCo”), intends to apply to list its shares on the New York Stock Exchange under the new ticker symbol “CGBS”.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230802145176/en/

Founded with a vision to secure stable energy supplies to growth markets exposed to harsh weather conditions, Crown designs and plans to own and operate offshore LNG terminals in locations where onshore facilities are not feasible or desirable for reasons of harsh weather, safety, cost, or environmental impact.

Crown is active in the two critical parts of the LNG value chain: (1) liquefaction, where natural gas from producers is supercooled to a liquid for transport by ship as LNG, and (2) regasification, where the LNG is turned back into gas and delivered to consumers and businesses as natural gas. With expertise in both areas, Crown has the potential to enable stable, secure, year-round LNG supplies to growing markets and locations exposed to harsh weather conditions. In doing so, the Company aims to expand the global market for LNG (particularly LNG supplied from the U.S.) and contribute to lower carbon emissions in markets it serves by replacing coal with LNG. Crown’s bottom-fixed, gravity based structure (“GBS”) design also is expected to ensure lower cost and a reduced environmental footprint versus a comparable land-based LNG terminal alternative.

“This business combination with Catcha is a transformative step for accelerating Crown’s growth, with the aim to provide its investors with a stable, long-term return on their investment,” said Swapan Kataria, CEO of Crown. “Our targeted blue-chip potential customer base will reflect the strong and growing global demand for harsh weather LNG infrastructure allowing for year-round operation to enable the global energy transition and ensure energy security by facilitating access to reliable natural gas supplies, as well as hydrogen, ammonia and power. The capital raised in this transaction will further strengthen our ability to execute on our diversified project pipeline in India, the UK, Vietnam, Canada, and other global markets.”

Catcha’s Patrick Grove said, “Catcha is excited to be partnering with Crown today. The LNG market is being driven by strong market tailwinds, including rising energy security concerns and the increasing use of natural gas as a transition fuel with a tenth of the emissions of coal fired plants. Crown will help to enable LNG access for under-served markets which have been traditionally ignored by existing operators and at the same time benefit everyone in the ecosystem – customers, governments, producers and investors. There is clearly a massive addressable market and use case in regions which experience harsh weather conditions, and we strongly believe that Crown, with their deep industry experience and innovative culture, will be a leader in addressing that demand.”

Strong Growth in LNG Demand

Driven by the use of natural gas as a transition fuel to replace decommissioned coal infrastructure, as well as overall energy security concerns, global demand for LNG is anticipated to increase from 351 million tons per annum (mtpa) in 2020 to approximately 570 mtpa by 2030, an increase of more than 60%. At the same time, and as a result of this rapid and dramatic increase in demand, there is expected to be an LNG supply deficit of more than 40 mtpa by 2030.

Differentiated LNG Technology for Extreme Weather

To reduce the anticipated LNG supply shortfall, additional new facilities for both export and import of LNG are needed over the next decade, many of which will need to be located in geographies prone to extreme weather events. Crown’s GBS designs for both liquefaction and regasification offshore terminals are able to significantly reduce impacts and downtime resulting from extreme weather. This is accomplished through advanced facility design that improves on and replaces floating and land-based alternatives for liquefaction and regasification.

Crown’s GBS facilities are designed to rest directly on the seabed, after preparation and leveling. The rectangular concrete structure, built onshore in drydock, is then towed to location. A typical GBS contains two membrane tank compartments, which store the LNG temporarily after unloading, or prior to delivery onshore. This ‘LNG island’ offers greater reliability allowing operations year-round, including in harsh weather conditions, when compared with floating alternatives.

Bottom-fixed solutions for energy development have a nearly 50-year track record in the offshore energy sector, with the first regasification GBS coming online in 2009. Crown will construct its GBS facilities in partnership with Aker Solutions, the leader in offshore bottom-fixed facility development and construction, as well as technology provider Wärtsilä Gas Solutions and Siemens Energy.

India and Scotland Projects Advancing to FID

Currently, Crown is advancing development of two projects toward FID – Kakinada, on the east coast of India, and Grangemouth, in Scotland.

The Kakinada project, utilizing GBS facilities, directly supports the Indian government’s target of increasing natural gas in the country’s energy mix from approximately 7% today, to 15% by 2030. India’s gas demand is expected to double during the same period to 115 BCM, with growth coming from several sectors, including city gas distribution, petrochemicals, heavy industry, fertilizer and power generation. Crown’s Kakinada project is able to uniquely address this demand growth, having received a full-year, 365-day license to operate from the Indian government’s Ministry of Environment, Forest & Climate Change based on the Company’s stable GBS terminal design. Comparable floating solutions for LNG delivery on the east coast of India have been approved for operation for just 270 days per year.

Preliminary Front End Engineering and Design (“Pre-FEED”) studies for the Kakinada project have been completed by Crown’s international partners. The project will take advantage of existing onshore natural gas infrastructure in the country, including the East-West Pipeline, which has a capacity of 3 Bcf per day and connects Kakinada to Gujarat via Hyderabad.

The Company’s Grangemouth project, located on the east coast of Scotland, seeks to address the UK’s increasing drive for energy security post-Brexit and in the context of the Ukraine War’s impact on energy markets. Currently, the UK relies on just three facilities for LNG imports, which increased 74% from 2021 to 2022.

For the Grangemouth project, Crown has entered into an exclusivity agreement with GBTron Lands Limited for use of the proposed offshore site on the Forth River. A site study for the deepwater port with LNG vessel access has been completed, and Crown has begun the consenting process with the Scottish Government, which can be completed in as few as seven months. Existing power grid and gas grid access is available within ten miles of the proposed site location. The Company will employ FSRU technology for the Grangemouth project.

Transaction Overview

Catcha has agreed to combine with Crown through PubCo based on a pre-money valuation of Crown at approximately $600 million. The transaction is expected to provide $50 million of capital, with net proceeds going to fund both the Kakinada and Grangemouth projects to final investment decision (FID). The implied pro forma enterprise valuation of PubCo is expected to be approximately $685 million.

The Company has agreed to cause all of its shareholders to roll their interest into PubCo. Shareholders who are expected to represent approximately 90% of Crown’s equity before closing have already agreed to not sell any shares and contribute their shares in exchange for PubCo’s shares, which reflects the Company’s support for the combination and confidence in the go-forward prospects for the PubCo.

After the close of the transaction, the existing Crown leadership team will remain in place, and will continue to execute on the Company’s strategy.

The transaction has been unanimously approved by the Boards of Directors of CHAA and Crown. Completion of the proposed transaction is subject to customary closing conditions, and is anticipated to occur in the fourth quarter of 2023.

Additional information about the proposed transaction, including a copy of the business combination agreement and the investor presentation, will be provided in a Current Report on Form 8-K to be filed by CHAA with the U.S. Securities and Exchange Commission (the “SEC”) and made available at www.sec.gov.

Investor Conference Call

Catcha and Crown will host a joint investor conference call at 8:30 AM EDT, today, August 3, 2023, to discuss the proposed transaction. To listen to the prepared remarks live via telephone, please dial 1-888-886-7786 or 1-416-764-8658 and reference Catcha / Crown LNG. A telephone replay will be available via telephone by dialing 1-844-512-2921 and referencing Access ID 32635263. The replay will be available through February 3, 2024. A transcript of this conference call can also be found on Crown LNG’s webpage at: www.crownlng.com/investors and will be filed by CHAA with the SEC, which will be available at www.sec.gov.

Advisors

Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC (“CCM”), serves as exclusive financial advisor and lead capital markets advisor to Catcha. In partnership with CCM, WestOak Advisors serves as energy capital markets advisor to Catcha. Emerging Asia Capital Partners Co Ltd (“EACP”) serves as financial advisors to Crown. Goodwin Procter LLP serves as legal counsel to Catcha. Nelson Mullins Riley & Scarborough LLP serves as legal counsel to Crown.

About Crown LNG Holdings AS

Crown LNG Holdings AS is a leading provider of offshore LNG liquefaction and regasification terminal infrastructure solutions for harsh weather locations, which represent a significant addressable market for bottom-fixed, gravity based (“GBS”) liquefaction and regasification plants, as well as associated green hydrogen, ammonia and power projects. Through this approach, Crown aims to provide lower carbon sources of energy securely to under-served markets across the globe. Visit www.crownlng.com/investors for more information.

About Catcha Investment Corp

Catcha Investment Corp (NYSE American: CHAA) is a blank check company, also commonly referred to as a Special Purpose Acquisition Company, or SPAC, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Catcha is led by Chief Executive Officer Patrick Grove and Chief Financial Officer Wai Kit Wong, and is sponsored by Catcha Group, one of the earliest and most established new economy-focused investment groups in Southeast Asia and Australia.

Important Information and Where to Find It

In connection with the proposed transactions, PubCo intends to file a registration statement on Form F-4 (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”), which will include a proxy statement/prospectus and certain other related documents, which will be both the proxy statement to be distributed to holders of ordinary shares of Catcha in connection with Catcha’s solicitation of proxies for the vote by Catcha’s stockholders with respect to the proposed transactions and other matters as may be described in the Registration Statement, as well as the prospectus relating to the offer and sale of the securities of PubCo to be issued in the proposed transactions. Catcha’s stockholders and other interested persons are advised to read, when available, the preliminary proxy statement/prospectus included in the Registration Statement and the amendments thereto and the definitive proxy statement/prospectus and documents incorporated by reference therein filed in connection with the proposed transactions, as these materials will contain important information about the parties to the related transaction documents, Catcha and the Company. After the Registration Statement is declared effective, the definitive proxy statement/prospectus will be mailed to Catcha’s stockholders as of a record date to be established for voting on the proposed transactions and other matters as may be described in the Registration Statement. Stockholders will also be able to obtain copies of the proxy statement/prospectus and other documents filed with the SEC that will be incorporated by reference in the proxy statement/prospectus, without charge, once available, at the SEC’s web site at www.sec.gov, or by directing a request to: Catcha Investment Corp, Level 42, Suntec Tower Three, 8 Temasek Blvd, Singapore, Attention: Patrick Grove.

Participants in the Solicitation of Proxies

Catcha and its directors and executive officers may be deemed participants in the solicitation of proxies from Catcha’s stockholders with respect to the proposed transactions. A list of the names of those directors and executive officers and a description of their interests in Catcha is contained in the registration statement on Form S-1, as amended, which was initially filed by Catcha with the SEC on January 25, 2021 and is available free of charge at the SEC’s web site at www.sec.gov, or by directing a request to Catcha Investment Corp, Level 42, Suntec Tower Three, 8 Temasek Blvd, Singapore, Attention: Patrick Grove. Additional information regarding the interests of such participants will be contained in the Registration Statement when available.

The Company’ directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of Catcha in connection with the proposed transactions. A list of the names of such directors and executive officers and information regarding their interests in the proposed transactions will be included in the Registration Statement when available.

No Offer or Solicitation

This press release is for informational purposes only and shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the transactions described herein. This press release shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933 (as amended), or an exemption therefrom.

Forward-Looking Statements

Certain statements in this communication may be considered forward-looking statements. These forward-looking statements include, without limitation, Catcha’s, the Company’s and PubCo’s expectations with respect to future performance and anticipated financial impacts of the proposed transactions, the satisfaction of the closing conditions to the proposed transactions and the timing of the completion of the proposed transactions. For example, projections of future enterprise value, revenue and other metrics are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Catcha and its management, and PubCo and the Company and their management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of negotiations and any subsequent definitive agreements with respect to the proposed transactions; (2) the outcome of any legal proceedings that may be instituted against Catcha, the Company, the combined company or others; (3) the inability to complete the proposed transactions due to the failure to obtain approval of the stockholders of Catcha or to satisfy other conditions to closing; (4) changes to the proposed structure of the proposed transactions that may be required or appropriate as a result of applicable laws or regulations; (5) the ability to meet stock exchange listing standards following the consummation of the proposed transactions ; (6) the risk that the proposed transactions disrupts current plans and operations of Catcha or the Company as a result of the announcement and consummation of the proposed transactions; (7) the ability to recognize the anticipated benefits of the proposed transactions , which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (8) costs related to the proposed transactions ; (9) changes in applicable laws or regulations; (10) the possibility that Catcha, the Company or the combined company may be adversely affected by other economic, business, and/or competitive factors; (11) the Company’s estimates of expenses and profitability and underlying assumptions with respect to stockholder redemptions and purchase price and other adjustments; and (12) other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in Catcha’s final prospectus relating to its initial public offering dated February 11, 2021 and in subsequent filings with the SEC, including the proxy statement relating to the proposed transactions expected to be filed by Catcha.

Nothing in this communication should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date hereof. None of Catcha or the Company undertakes any duty to update these forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230802145176/en/

Investors

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ICR, Inc.

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Media

Zach Gorin

ICR, Inc.

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Posted on August 3, 2023 7:20 am
Agios Announces Exclusive Worldwide License Agreement for Novel siRNA for the Potential Treatment of Polycythemia Vera

– Preclinical siRNA Targeting TMPRSS6 is a Potential Disease-Modifying Treatment for Polycythemia Vera –

– Agreement Combines Agios’ Scientific Expertise and Capabilities in Rare Hematologic Diseases with Alnylam’s Industry-Leading siRNA Platform –

– Alnylam to Receive a $17.5 million Upfront Payment and is Eligible to Receive Potential Future Development and Commercial Milestone Payments and Royalties –

CAMBRIDGE, Mass., Aug. 03, 2023 (GLOBE NEWSWIRE) — Agios Pharmaceuticals, Inc. (Nasdaq: AGIO) has entered into an exclusive worldwide license agreement with Alnylam Pharmaceuticals, Inc. under which Agios will acquire the rights to develop and commercialize Alnylam’s novel preclinical siRNA targeting TMPRSS6, as a potential disease-modifying treatment for patients with polycythemia vera (PV). This agreement combines Agios’ deep scientific expertise and capabilities in rare hematologic diseases with Alnylam’s industry-leading siRNA platform and strong track record of success.

PV is a rare hematologic disease with no disease-modifying treatments that affects approximately 100,000 patients in the U.S. PV is characterized by excessive production of red blood cells, which leads to increased blood volume and viscosity, and can result in thrombosis, cardiovascular events, and death.

“PV is a rare and potentially fatal hematologic disease for which phlebotomy is the standard of care,” said Brian Goff, chief executive officer at Agios. “We are pleased to license this program from Alnylam, the leading RNAi therapeutics company, with the goal of delivering a convenient, disease-modifying treatment option that addresses the underlying pathophysiology of PV and reduces or eliminates the need for phlebotomy. This program is highly aligned with our core scientific expertise, clinical development and commercial capabilities in rare hematology as well as our business development strategy to expand beyond our industry-leading pipeline of PK activators. We look forward to initiating IND-enabling studies this year with the aim of delivering a transformative treatment option for this patient community with profound unmet need.”

The siRNA development candidate targets knockdown of TMPRSS6, a key driver of red blood cell production. This results in increased hepcidin, reducing iron available to the hematopoietic compartment, thereby reducing red blood cell production. This has the potential to maintain hematocrit within the normal range and reduce the risk of complications in individuals living with PV. TMPRSS6 siRNA has demonstrated low off-target activity, a favorable safety profile in rats, and a 90% knockdown of TMPRSS6 mRNA over 3 months in non-human primates, supporting the potential for an infrequent dosing regimen.

Under the terms of the agreement, Agios will make an upfront payment of $17.5 million to Alnylam for an exclusive global license to the TMPRSS6 siRNA program. In addition, Alnylam is eligible to receive up to $130 million in potential development and regulatory milestone payments, in addition to sales milestones and tiered royalties. Agios will assume sole responsibility for all development, regulatory, and commercial activities and costs related to the program. Alnylam will provide manufacturing support for Phase 1, after which Agios will assume full responsibility for manufacturing.

About RNAi

RNAi (RNA interference) is a natural cellular process of gene silencing that represents one of the most promising and rapidly advancing frontiers in biology and drug development today. Its discovery has been heralded as “a major scientific breakthrough that happens once every decade or so,” and was recognized with the award of the 2006 Nobel Prize for Physiology or Medicine. By harnessing the natural biological process of RNAi occurring in our cells, a new class of medicines known as RNAi therapeutics is now a reality. Small interfering RNA (siRNA), the molecules that mediate RNAi and comprise Alnylam’s RNAi therapeutic platform, function upstream of today’s medicines by potently silencing messenger RNA (mRNA) – the genetic precursors – that encode for disease-causing or disease pathway proteins, thus preventing them from being made. This is a revolutionary approach with the potential to transform the care of patients with genetic and other diseases.

About Agios Pharmaceuticals

Agios is the pioneering leader in PK activation and is dedicated to developing and delivering transformative therapies for patients living with rare diseases. In the U.S., Agios markets a first-in-class pyruvate kinase (PK) activator for adults with PK deficiency, the first disease-modifying therapy for this rare, lifelong, debilitating hemolytic anemia. Building on the company’s leadership in the field of cellular metabolism and rare hematologic diseases, Agios is advancing a robust clinical pipeline of investigational medicines with programs in alpha- and beta-thalassemia, sickle cell disease, pediatric PK deficiency and MDS-associated anemia. In addition to its clinical pipeline, Agios has a PAH stabilizer in preclinical development as a potential treatment for phenylketonuria (PKU) and deep scientific expertise in classical hematology. For more information, please visit the company’s website at www.agios.com.

Agios Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those regarding the potential benefits of, and plans relating to, Agios’ license agreement with Alnylam; the potential benefits of the licensed siRNA development candidate; the potential of TMPRSS6 as a therapeutic target; and the potential benefits of Agios’ strategic plans and focus. The words “aim,” “anticipate,” “expect,” “goal,” “hope,” “milestone,” “plan,” “potential,” “possible,” “strategy,” “will,” “vision,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from Agios’ current expectations and beliefs. For example, there can be no guarantee that the licensed siRNA development candidate or any product candidate Agios is developing will successfully commence or complete necessary preclinical and clinical development phases, or that development of any of Agios’ product candidates will successfully continue. There can be no guarantee that any positive developments in Agios’ business will result in stock price appreciation. Management’s expectations and, therefore, any forward-looking statements in this press release could also be affected by risks and uncertainties relating to a number of other important factors, including, without limitation: risks and uncertainties related to the impact of the COVID-19 pandemic or other public health emergencies to Agios’ business, operations, strategy, goals and anticipated milestones, including its ongoing and planned research activities, ability to conduct ongoing and planned clinical trials, clinical supply of current or future drug candidates, commercial supply of current or future approved products, and launching, marketing and selling current or future approved products; Agios’ results of clinical trials and preclinical studies, including subsequent analysis of existing data and new data received from ongoing and future studies; the content and timing of decisions made by the U.S. FDA, the EMA or other regulatory authorities, investigational review boards at clinical trial sites and publication review bodies; Agios’ ability to obtain and maintain requisite regulatory approvals and to enroll patients in its planned clinical trials; unplanned cash requirements and expenditures; competitive factors; Agios’ ability to obtain, maintain and enforce patent and other intellectual property protection for any product candidates it is developing; Agios’ ability to maintain key collaborations; the failure of Agios to receive milestone or royalty payments related to the sale of its oncology business, the uncertainty of the timing of any receipt of any such payments, and the uncertainty of the results and effectiveness of the use of proceeds from the transaction with Servier; and general economic and market conditions. These and other risks are described in greater detail under the caption “Risk Factors” included in Agios’ public filings with the Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and Agios expressly disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contacts:

Agios Pharmaceuticals

Investor Contact

Chris Taylor, VP Investor Relations and Corporate Communications
Agios Pharmaceuticals
[email protected]

Media Contact

Dan Budwick
1AB Media
[email protected]

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