Market Newsdesk

July 27, 2023 7:42 am

Carmell Therapeutics Announces Merger with Axolotl Biologix, a Profitable Regenerative Medicine Company

Carmell Therapeutics Announces Merger with Axolotl Biologix, a Profitable Regenerative Medicine Company

PITTSBURGH & FLAGSTAFF, Ariz.–(BUSINESS WIRE)–
Carmell Therapeutics Corporation (Nasdaq: CTCX) (“Carmell”), a regenerative medicine company today announced the execution of a definitive agreement and plan of merger (the “Merger Agreement”) with Flagstaff-based Axolotl Biologix, a profitable regenerative medicine company developing products for active soft tissue repair, aesthetics and orthopedic indications (“Axolotl”).

Axolotl Highlights:

Axolotl designs, develops and sells human amnion-based allograft products for active soft tissue repair, aesthetics and orthopedic indications.
Axolotl’s marketed products meet all criteria for regulation under section 361 of the PHS Act and 21 CFR part 1271 as recommended by the FDA Tissue Reference Group (TRG).
In Q2 2023, two of Axolotl’s products were added to CMS Part B Drug and Biological Average Sales Price pricing files.
Axolotl is also enrolling a Phase I/II clinical trial for Ankle Osteoarthritis and developing a topical cosmeceutical for skin rejuvenation.
In Q2 2023, Axolotl became a preferred vendor via a national pricing contract with one of the 3 largest group purchasing organizations, which serves over 1,500 hospitals in the United States.
As of June 30, 2023, Axolotl achieved approximately $50 million in unaudited trailing 12-month (“TTM”) net revenue and approximately $5 million in unaudited TTM EBITDA from the sales of its products.

Transaction Details:

Per the terms of the Merger Agreement, Axolotl’s shareholders will receive $65 million in Initial Equity Value (structured as $8 million in cash and $57 million in CTCX stock at Closing), plus up to $75 million in potential Milestone Equity Payments (structured as 12% cash and 88% in CTCX stock) linked with the achievement of certain revenue and business milestones.
Shares received by Axolotl’s shareholders in the Merger Agreement will be locked up for 12 months following closing.
Upon the Closing, Axolotl will operate as wholly owned subsidiary of Carmell.
Upon the Closing, all full-time employees are expected to remain with Carmell except for Mr. Josh Sandberg, CEO of Axolotl who shall serve as Strategic Advisor to the Executive Chairman of Carmell.
Transaction Closing is subject to completion of customary approvals and other customary conditions.
Goodwin Procter LLP acted as legal counsel to Carmell. Doyen Sebesta & Poelma LLP acted as legal counsel to Axolotl. Cabrillo Advisors acted as financial advisor to Carmell.

Said Mr. Sandberg, “I am excited to partner with Rajiv and Carmell to build on our shared vision of offering industry leading products that positively impact patients’ lives. Our teams have worked very diligently, and this transaction creates unlimited possibilities.”

Said Mr. Rajiv Shukla, the Executive Chairman of Carmell, “I look forward to working with Josh and the Axolotl team to accelerate our goal of building Carmell into an Industry-leading regenerative medicine company through a combination of in-house product development, bolt-on acquisitions and business development aimed at aesthetics/soft tissue and orthopedic indications.”

About Carmell

Carmell Therapeutics is a Phase 2 stage regenerative medicine platform company developing allogeneic plasma-based biomaterials that are designed to boost innate regenerative pathways across a variety of bone and soft tissue indications. Carmell received FDA clearance for a Phase 2-stage clinical trial designed to study accelerated healing and reduced infections in open tibia (shinbone) fractures with intramedullary rodding. Carmell expects to initiate a Phase 2 trial for Foot/Ankle Fusion. Pre-clinical development is also underway in Spinal Fusion, Dental Bone Graft Substitute, Androgenetic Alopecia, Active Soft Tissue Repair and Cosmetic Skin Rejuvenation. For more information, visit www.carmellrx.com.

Forward-Looking Statements

This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this press release include, but are not limited to, statements regarding the proceeds of the business combination,the leadership of the combined company, the benefits of the transaction, as well as statements about the potential attributes and benefits of Axolotl’s product candidates and the format and timing of Axolotl’s product development activities and clinical trials. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward-looking statements are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from expected results, including, among others, the ability to recognize the anticipated benefits of the transaction, the outcome of any legal proceedings that may be instituted against Carmell following completion of the transaction, the impact of COVID-19 on Axolotl’s business, costs related to the proposed transaction, changes in applicable laws or regulations, the possibility that CTCX or Axolotl may be adversely affected by other economic, business, and/or competitive factors, and other risks and uncertainties, including those to be included under the header “Risk Factors” in the registration statement on Form S-4 filed by ALPA with the SEC, as amended (File No. 333-269733). Most of these factors are outside of Carmell’s control and are difficult to predict. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727117957/en/

Carmell Investor:

Rajiv Shukla

Executive Chairman

[email protected]

KEYWORDS: United States North America Pennsylvania Arizona

INDUSTRY KEYWORDS: Research FDA Clinical Trials Other Health Physical Therapy Alternative Medicine Health Pharmaceutical Science

MEDIA:

July 27, 2023 7:39 am

Martin Marietta Reports Second-Quarter 2023 Results

Established Quarterly Records for Revenues, Profitability and Unit Margins

Second-Quarter Aggregates Gross Profit Per Ton Increased 27.9 Percent to $6.80

Raised Full-Year 2023 Adjusted EBITDA Guidance to $2.0 – $2.1 Billion

RALEIGH, N.C., July 27, 2023 (GLOBE NEWSWIRE) — Martin Marietta Materials, Inc. (NYSE: MLM) (“Martin Marietta” or the “Company”), a leading national supplier of aggregates and heavy building materials, today reported results for the second quarter ended June 30, 2023.

Second-Quarter Highlights

(Financial highlights are for continuing operations)

	Quarter Ended June 30,
(In millions, except per share)	2023		2022		% Change
Total revenues ¹	$	1,820.8	$	1,641.7	10.9	%
Gross profit	$	560.4	$	425.2	31.8	%
Earnings from operations ²	$	463.3	$	478.6	(3.2	)%
Net earnings from continuing operations attributable to Martin Marietta ²	$	347.6	$	353.2	(1.6	)%
Adjusted EBITDA ³	$	596.1	$	478.3	24.6	%
Earnings per diluted share from continuing operations ²	$	5.60	$	5.65	(0.9	)%

Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues.
Quarter ended June 30, 2022 earnings from operations, net earnings from continuing operations attributable to Martin Marietta and earnings per diluted share from continuing operations include $151.7 million, $108.1 million and $1.73 per diluted share, respectively, for a nonrecurring gain on a divestiture.
Earnings from continuing operations before interest, income taxes, depreciation, depletion and amortization expense, the earnings/loss from nonconsolidated equity affiliates, acquisition and integration expenses and a nonrecurring gain on a divestiture, or Adjusted EBITDA, is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings from continuing operations attributable to Martin Marietta.

Ward Nye, Chairman and CEO of Martin Marietta, stated, “Martin Marietta delivered exceptional performance across nearly every safety, financial and operational measure in the second quarter. These impressive results, despite lower aggregates shipments, demonstrate the success of our value-over-volume commercial strategy and the durability of our business model through various macroeconomic conditions. Our second-quarter results, together with our expectations for an even stronger next six months, underpin our revised full-year Adjusted EBITDA guidance range of $2.0 – $2.1 billion, a 28 percent increase at the midpoint as compared with the prior year.”

“As record-setting public funds for infrastructure and manufacturing begin to enter the U.S. economy, we continue to expect that aggregates demand will accelerate in the second half of 2023. This well-chronicled increased investment should largely offset the current residential construction air pocket, which we expect to bottom in the third quarter of 2023.”

Mr. Nye concluded, “This scenario, combined with continued commercial momentum and moderating cost inflation, should contribute to a record-setting year in 2023 and provide a solid foundation for an even brighter 2024 and beyond. Our fidelity to safety, enterprise excellence, sustainable business practices and execution of our strategic plan reinforces our confidence in Martin Marietta’s ability to consistently deliver superior shareholder value.”

Mr. Nye’s CEO Commentary and Market Perspective can be found on the Investor Relations section of the Company’s website.

Second-Quarter Financial and Operating Results

(All financial and operating results are for continuing operations and comparisons are versus the prior-year second quarter, unless otherwise noted)

Building Materials Business

The Building Materials business generated record quarterly revenues $1.74 billion, an 11.6 percent increase. Gross profit increased 34.3 percent to a quarterly record of $536.1 million. Pricing gains contributed to gross margin improvement of 520 basis points.

Aggregates

Second-quarter aggregates shipments decreased 5.7 percent while pricing increased 18.6 percent, or 17.0 percent on a mix-adjusted basis.

Aggregates gross profit increased 20.7 percent to a quarterly record of $370.9 million.

Cement

Second quarter cement shipments increased to 1.1 million tons while pricing increased 21.8 percent, or 21.3 percent on a mix-adjusted basis.

Cement gross profit increased 84.0 percent to an all-time quarterly record of $93.3 million.

Downstream businesses

Ready mixed concrete revenues and gross profit increased 19.7 percent and 142.3 percent, respectively.

Asphalt and paving revenues and gross profit increased 11.7 percent and 37.9 percent, respectively.

Portfolio Optimization

During the second quarter, the Company completed the divestiture of its Stockton, California cement import terminal and terminated the agreement with CalPortland Company regarding the sale of the Tehachapi, California cement plant in light of being unable to timely obtain the necessary approval by the U.S. Federal Trade Commission. The Company is actively exploring the potential sale of Tehachapi to other interested parties. The Tehachapi cement business is classified within assets held for sale on the Company’s consolidated balance sheet and the associated financial results continue to be reported as discontinued operations on the consolidated statement of earnings.

Magnesia Specialties Business

Magnesia Specialties revenues were $80.5 million in the second quarter while gross profit increased 13.0 percent to $27.7 million due to pricing and a moderation of energy expenses.

Cash Generation, Capital Allocation and Liquidity

Cash provided by operating activities for the six months ended June 30, 2023 was $518.5 million compared with $286.2 million for the prior-year period.

Cash paid for property, plant and equipment additions for the six months ended June 30, 2023 was $293.4 million.

During the six months ended June 30, 2023, the Company returned $232.5 million to shareholders through dividend payments and share repurchases. As of June 30, 2023, 12.7 million shares remained under the current repurchase authorization.

The Company had $421.5 million of unrestricted cash and cash equivalents on hand and $1.20 billion of unused borrowing capacity on its existing credit facilities as of June 30, 2023.

Full-Year 2023 Guidance

The Company’s 2023 guidance excludes businesses classified as discontinued operations.

2023 GUIDANCE
(Dollars in Millions)	Low *			High *
Consolidated
Total revenues¹	$	6,725		$	6,860
Interest expense	$	165		$	170
Estimated tax rate (excluding discrete events)		21	%		22	%
Net earnings from continuing operations attributable to Martin Marietta	$	1,040		$	1,150
Adjusted EBITDA²	$	2,000		$	2,100
Capital expenditures	$	575		$	625

Building Materials Business
Aggregates
Volume % growth³		(5.0	)%		(1.0	)%
ASP % growth⁴		17.0	%		19.0	%
Gross profit	$	1,330		$	1,395

Cement, Ready Mixed Concrete and Asphalt and Paving
Gross profit	$	470		$	515

Magnesia Specialties Business
Gross profit	$	100		$	110

* Guidance range represents the low end and high end of the respective line items provided above.

Total revenues include the sales of products and services to customers (net of any discounts or allowances) and freight revenues.
Adjusted EBITDA is a non-GAAP financial measure. See Appendix to this earnings release for a reconciliation to net earnings from continuing operations attributable to Martin Marietta.
Volume growth range is for aggregates shipments, inclusive of internal tons, and is in comparison to 2022 shipments of 207.7 million tons.
ASP growth is for aggregates average selling price and is in comparison to 2022 ASP of $16.68 per ton.

Non-GAAP Financial Information

This earnings release contains financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Reconciliations of non-GAAP financial measures to the closest GAAP measures are included in the Appendix to this earnings release. Management believes these non-GAAP measures are commonly used financial measures for investors to evaluate the Company’s operating performance and, when read in conjunction with the Company’s consolidated financial statements, present a useful tool to evaluate the Company’s ongoing operations, performance from period to period and anticipated performance. In addition, these are some of the factors the Company uses in internal evaluations of the overall performance of its businesses. Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.

Conference Call Information

The Company will discuss its second-quarter 2023 earnings results on a conference call and an online webcast today (July 27, 2023). The live broadcast of the Martin Marietta conference call will begin at 10:00 a.m. Eastern Time and can be accessed by dialing +1 (416) 764-8658 and using conference ID 80604974. Please dial in at least 15 minutes in advance to ensure a timely connection to the call. An online replay will be available approximately two hours following the conclusion of the live broadcast. A link to these events will be available at the Company’s website. Additionally, the Company has posted Q2 2023 Supplemental Information on the Investors section of its website.

About Martin Marietta

Martin Marietta, a member of the S&P 500 Index, is an American-based company and a leading supplier of building materials, including aggregates, cement, ready mixed concrete and asphalt. Through a network of operations spanning 28 states, Canada and The Bahamas, dedicated Martin Marietta teams supply the resources necessary for building the solid foundations on which our communities thrive. Martin Marietta’s Magnesia Specialties business provides a full range of magnesium oxide, magnesium hydroxide and dolomitic lime products. For more information, visit www.martinmarietta.com or www.magnesiaspecialties.com.

Investor Contacts:

Jennifer Park	Jacklyn Rooker
Vice President, Investor Relations	Director, Investor Relations
+1 (919) 510-4736	+1 (919) 510-4709
[email protected]	[email protected]

MLM-E.

If you are interested in Martin Marietta stock, management recommends that, at a minimum, reading the Company’s current annual report and Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission (SEC) over the past year. The Company’s recent proxy statement for the annual meeting of shareholders also contains important information. These and other materials that have been filed with the SEC are accessible through the Company’s website at www.martinmarietta.com and are also available at the SEC’s website at www.sec.gov. You may also write or call the Company’s Corporate Secretary, who will provide copies of such reports.

Investors are cautioned that all statements in this release that relate to the future involve risks and uncertainties, and are based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. These statements, which are forward-looking statements under the Private Securities Litigation Reform Act of 1995, provide the investor with the Company’s expectations or forecasts of future events. You can identify these statements by the fact that they do not relate only to historical or current facts. They may use words such as “guidance”, “anticipate”, “may”, “expect”, “should”, “believe”, “will”, and other words of similar meaning in connection with future events or future operating or financial performance. Any or all of the Company’s forward-looking statements here and in other publications may turn out to be wrong.

Second-quarter results and trends described in this release may not necessarily be indicative of the Company’s future performance. The Company’s outlook is subject to various risks and uncertainties and is based on assumptions that the Company believes in good faith are reasonable but which may be materially different from actual results. Factors that the Company currently believes could cause actual results to differ materially from the forward-looking statements in this release (including the outlook) include, but are not limited to: the ability of the Company to face challenges, including shipment declines resulting from economic events beyond the Company’s control; a widespread decline in aggregates pricing, including a decline in aggregates shipment volume negatively affecting aggregates price; the history of both cement and ready mixed concrete being subject to significant changes in supply, demand and price fluctuations; the termination, capping and/or reduction or suspension of the federal and/or state fuel tax(es) or other revenue related to public construction; the level and timing of federal, state or local transportation or infrastructure or public projects funding and any issues arising with such federal and state budgets, most particularly in Texas, Colorado, California, North Carolina, Georgia, Minnesota, Iowa, Florida, Indiana and Arizona; the United States Congress’ inability to reach agreement among themselves or with the Administration on policy issues that impact the federal budget; the ability of states and/or other entities to finance approved projects either with tax revenues or alternative financing structures; levels of construction spending in the markets the Company serves; a reduction in defense spending and the subsequent impact on construction activity on or near military bases; a decline in energy-related construction activity resulting from suspension of the fuel tax or a sustained period of low global oil prices or changes in oil production patterns or capital spending, particularly in Texas and West Virginia; increasing residential mortgage interest rates and other factors that could result in a slowdown in residential construction; unfavorable weather conditions, particularly Atlantic Ocean, Pacific Ocean and Gulf of Mexico storm and hurricane activity, wildfires, the late start to spring or the early onset of winter and the impact of a drought or excessive rainfall in the markets served by the Company, any of which can significantly affect production schedules, volumes, product and/or geographic mix and profitability; the volatility of fuel costs, particularly diesel fuel and the impact on the cost, or the availability generally, of other consumables, namely steel, explosives, tires and conveyor belts, and with respect to the Company’s Magnesia Specialties business, natural gas; continued increases in the cost of other repair and supply parts; construction labor shortages and/or supply‐chain challenges; unexpected equipment failures, unscheduled maintenance, industrial accident or other prolonged and/or significant disruption to production facilities; the resiliency and potential declines of the Company’s various construction end-use markets; the potential negative impacts of new waves of COVID-19 or its variants, or any other outbreak of disease, epidemic or pandemic, or similar public health threat, or fear of such event and its related economic and societal response; increasing governmental regulation, including environmental laws and climate change regulations; transportation availability or a sustained reduction in capital investment by the railroads, notably the availability of railcars, locomotive power and the condition of rail infrastructure to move trains to supply the Company’s Texas, Colorado, Florida, Carolinas and Gulf Coast markets, including the movement of essential dolomitic lime for magnesia chemicals to the Company’s plant in Manistee, Michigan and its customers; increased transportation costs, including increases from higher or fluctuating passed-through energy costs or fuel surcharges, and other costs to comply with tightening regulations, as well as higher volumes of rail and water shipments; availability of trucks and licensed drivers for transport of the Company’s materials; availability and cost of construction equipment in the United States; weakening in the steel industry markets served by the Company’s dolomitic lime products; trade disputes with one or more nations impacting the U.S. economy, including the impact of tariffs on the steel industry; unplanned changes in costs or realignment of customers that introduce volatility to earnings, including that of the Magnesia Specialties business that is running at capacity; proper functioning of information technology and automated operating systems to manage or support operations; inflation and its effect on both production and interest costs; the concentration of customers in construction markets and the increased risk of potential losses on customer receivables; the impact of the level of demand in the Company’s end-use markets, production levels and management of production costs on the operating leverage and therefore profitability of the Company; the possibility that the expected synergies from acquisitions will not be realized or will not be realized within the expected time period, including achieving anticipated profitability to maintain compliance with the Company’s leverage ratio debt covenant; changes in tax laws, the interpretation of such laws and/or administrative practices, including acquisitions or divestitures, that would increase the Company’s tax rate; violation of the Company’s debt covenant if price and/or volumes return to previous levels of instability; downward pressure on the Company’s common stock price and its impact on goodwill impairment evaluations; the possibility of a reduction of the Company’s credit rating to non-investment grade; and other risk factors listed from time to time found in the Company’s filings with the SEC.

You should consider these forward-looking statements in light of risk factors discussed in Martin Marietta’s Annual Report on Form 10-K for the year ended December 31, 2022 and other periodic filings made with the SEC. All of the Company’s forward-looking statements should be considered in light of these factors. In addition, other risks and uncertainties not presently known to the Company or that it considers immaterial could affect the accuracy of its forward-looking statements, or adversely affect or be material to the Company. The Company assumes no obligation to update any such forward-looking statements.

MARTIN MARIETTA MATERIALS, INC.

Unaudited Statements of Earnings

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
	(In Millions, Except Per Share Data)
Total Revenues	$	1,820.8		$	1,641.7		$	3,174.9		$	2,872.5
Total Cost of Revenues		1,260.4			1,216.5			2,311.7			2,291.2

Gross Profit		560.4			425.2			863.2			581.3

Selling, general and administrative expenses		111.6			104.1			216.0			201.2
Acquisition and integration expenses		0.4			2.9			1.2			4.3
Other operating income, net		(14.9	)		(160.4	)		(13.3	)		(162.6	)
Earnings from Operations		463.3			478.6			659.3			538.4

Interest expense		42.2			43.1			84.3			83.6
Other nonoperating income, net		(18.7	)		(22.0	)		(34.9	)		(32.9	)
Earnings from continuing operations before income tax expense		439.8			457.5			609.9			487.7
Income tax expense		91.9			104.4			127.5			110.2
Earnings from continuing operations		347.9			353.1			482.4			377.5
Earnings (Loss) from discontinued operations, net of income tax expense (benefit)		0.7			13.3			(12.2	)		10.2
Consolidated net earnings		348.6			366.4			470.2			387.7
Less: Net earnings (loss) attributable to noncontrolling interests		0.3			(0.1	)		0.5			(0.2	)
Net Earnings Attributable to Martin Marietta	$	348.3		$	366.5		$	469.7		$	387.9

Net Earnings (Loss) Attributable to Martin Marietta
Per Common Share:
Basic from continuing operations	$	5.61		$	5.66		$	7.78		$	6.06
Basic from discontinued operations		0.01			0.21			(0.20	)		0.16
	$	5.62		$	5.87		$	7.58		$	6.22

Diluted from continuing operations	$	5.60		$	5.65		$	7.76		$	6.04
Diluted from discontinued operations		0.01			0.21			(0.20	)		0.16
	$	5.61		$	5.86		$	7.56		$	6.20

Weighted-Average Common Shares Outstanding:
Basic		61.9			62.4			62.0			62.4
Diluted		62.1			62.5			62.2			62.6

MARTIN MARIETTA MATERIALS, INC.
Unaudited Operating Segment Financial Highlights

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
	(Dollars in Millions)
Total revenues:
Building Materials:
East Group	$	735.1		$	674.5		$	1,264.7		$	1,093.3
West Group		1,005.2			885.5			1,746.3			1,620.5
Total Building Materials		1,740.3			1,560.0			3,011.0			2,713.8
Magnesia Specialties		80.5			81.7			163.9			158.7
Total	$	1,820.8		$	1,641.7		$	3,174.9		$	2,872.5

Earnings (Loss) from operations:
Building Materials:
East Group	$	227.5		$	210.6		$	336.4		$	238.5
West Group		239.6			274.5			334.3			317.6
Total Building Materials		467.1			485.1			670.7			556.1
Magnesia Specialties		23.3			20.3			43.9			41.8
Corporate		(27.1	)		(26.8	)		(55.3	)		(59.5	)
Total	$	463.3		$	478.6		$	659.3		$	538.4

MARTIN MARIETTA MATERIALS, INC.
Unaudited Product Line Financial Highlights

	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2023				2022				2023				2022
	Amount			% of Revenues	Amount			% of Revenues	Amount			% of Revenues	Amount			% of Revenues
	(Dollars in Millions)
Total revenues:
Building Materials:
Aggregates	$	1,151.4			$	1,057.6			$	2,063.3			$	1,814.2
Cement		197.7				162.5				366.2				300.8
Ready mixed concrete		271.4				226.6				491.3				517.8
Asphalt and paving		240.9				215.7				298.8				272.5
Less: Interproduct sales		(121.1	)			(102.4	)			(208.6	)			(191.5	)
Total Building Materials		1,740.3				1,560.0				3,011.0				2,713.8
Magnesia Specialties		80.5				81.7				163.9				158.7
Consolidated total revenues	$	1,820.8			$	1,641.7			$	3,174.9			$	2,872.5

Gross profit (loss):
Building Materials:
Aggregates	$	370.9		32.2%	$	307.3		29.1%	$	608.9		29.5%	$	410.0		22.6%
Cement		93.3		47.2%		50.7		31.2%		140.4		38.3%		77.5		25.8%
Ready mixed concrete		35.4		13.0%		14.6		6.4%		46.6		9.5%		36.6		7.1%
Asphalt and paving		36.5		15.2%		26.5		12.3%		16.0		5.4%		13.4		4.9%
Total Building Materials		536.1		30.8%		399.1		25.6%		811.9		27.0%		537.5		19.8%
Magnesia Specialties		27.7		34.4%		24.5		30.0%		52.7		32.1%		50.2		31.6%
Corporate		(3.4	)	NM		1.6		NM		(1.4	)	NM		(6.4	)	NM
Consolidated gross profit	$	560.4		30.8%	$	425.2		25.9%	$	863.2		27.2%	$	581.3		20.2%

MARTIN MARIETTA MATERIALS, INC.
Balance Sheet Data

	June 30,		December 31,
	2023		2022
	Unaudited		Audited
	(In millions)
ASSETS
Cash and cash equivalents	$	421.5	$	358.0
Restricted cash		—		0.8
Restricted investments (to satisfy discharged debt and related interest)		702.3		704.6
Accounts receivable, net		979.2		785.9
Inventories, net		954.7		873.7
Current assets held for sale		44.8		73.2
Other current assets		89.8		80.7
Property, plant and equipment, net		6,312.8		6,316.7
Intangible assets, net		4,483.3		4,497.3
Operating lease right-of-use assets, net		384.4		383.5
Noncurrent assets held for sale		325.6		372.5
Other noncurrent assets		547.8		546.7
Total assets	$	15,246.2	$	14,993.6

LIABILITIES AND EQUITY
Current maturities of discharged long-term debt	$	700.0	$	699.1
Current liabilities held for sale		0.9		4.5
Other current liabilities		741.5		742.0
Long-term debt (excluding current maturities)		4,343.1		4,340.9
Noncurrent liabilities held for sale		17.5		21.8
Other noncurrent liabilities		2,019.8		2,012.5
Total equity		7,423.4		7,172.8
Total liabilities and equity	$	15,246.2	$	14,993.6

MARTIN MARIETTA MATERIALS, INC.

Unaudited Statements of Cash Flows

	Six Months Ended
	June 30,
	2023			2022
	(Dollars in Millions)
Cash Flows from Operating Activities:
Consolidated net earnings	$	470.2		$	387.7
Adjustments to reconcile consolidated net earnings to net cash provided by operating activities:
Depreciation, depletion and amortization		253.1			256.6
Stock-based compensation expense		27.7			24.5
Gain on sales of assets, divestitures and extinguishment of debt		(16.3	)		(173.9	)
Deferred income taxes, net		0.7			(32.7	)
Other items, net		(4.5	)		(3.4	)
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
Accounts receivable, net		(196.2	)		(252.6	)
Inventories, net		(92.2	)		(79.5	)
Accounts payable		44.5			68.5
Other assets and liabilities, net		31.5			91.0
Net Cash Provided by Operating Activities		518.5			286.2

Cash Flows from Investing Activities:
Additions to property, plant and equipment		(293.4	)		(220.7	)
Acquisitions, net of cash acquired		—			11.0
Proceeds from sales of assets and divestitures		95.5			644.4
Investments in life insurance contracts, net		4.8			1.8
Other investing activities, net		(4.2	)		(3.0	)
Net Cash (Used for) Provided by Investing Activities		(197.3	)		433.5

Cash Flows from Financing Activities:
Repayments of debt		—			(47.7	)
Payments on finance lease obligations		(8.4	)		(7.3	)
Dividends paid		(82.5	)		(77.0	)
Repurchases of common stock		(150.0	)		(50.0	)
Distributions to owners of noncontrolling interest		(0.5	)		—
Proceeds from exercise of stock options		0.8			0.6
Shares withheld for employees’ income tax obligations		(17.9	)		(25.1	)
Net Cash Used for Financing Activities		(258.5	)		(206.5	)
Net Increase in Cash, Cash Equivalents and Restricted Cash		62.7			513.2
Cash, Cash Equivalents and Restricted Cash, beginning of period		358.8			258.9
Cash, Cash Equivalents and Restricted Cash, end of period	$	421.5		$	772.1

MARTIN MARIETTA MATERIALS, INC.

Unaudited Operational Highlights

	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2023		2022		% Change			2023		2022		% Change
Total Shipments (in millions)
Aggregates tons		54.5		57.8		(5.7	)%		96.3		99.9		(3.6	)%
Cement tons		1.1		1.1		0.2	%		2.1		2.1		(3.2	)%
Ready mixed concrete cubic yards		1.8		1.8		(1.7	)%		3.3		4.2		(21.9	)%
Asphalt tons		2.6		2.6		1.7	%		3.1		3.3		(3.9	)%

Average unit sales price by product line (including internal sales):
Aggregates (per ton)	$	19.37	$	16.34		18.6	%	$	19.57	$	16.27		20.3	%
Cement (per ton)	$	170.46	$	140.00		21.8	%	$	170.55	$	134.79		26.5	%
Ready mixed concrete (per cubic yard)	$	151.75	$	124.51		21.9	%	$	148.68	$	122.34		21.5	%
Asphalt (per ton)	$	65.34	$	60.54		7.9	%	$	65.87	$	60.93		8.1	%

MARTIN MARIETTA MATERIALS, INC.

Non-GAAP Financial Measures

Earnings from continuing operations before interest; income taxes; depreciation, depletion and amortization expense; the earnings/loss from nonconsolidated equity affiliates; acquisition and integration expenses; and the nonrecurring gain on divestiture (Adjusted EBITDA) is an indicator used by the Company and investors to evaluate the Company’s operating performance from period to period. Adjusted EBITDA is not defined by generally accepted accounting principles and, as such, should not be construed as an alternative to earnings from operations, net earnings attributable to Martin Marietta or operating cash flow. For further information on Adjusted EBITDA, refer to the Company’s website at www.martinmarietta.com.

Reconciliation of Net Earnings from Continuing Operations Attributable to Martin Marietta to Adjusted EBITDA

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2023		2022			2023		2022
	(Dollars in Millions)
Net earnings from continuing operations attributable to Martin Marietta	$	347.6	$	353.2		$	481.9	$	377.7
Add back (Deduct):
Interest expense, net of interest income		29.6		42.2			61.2		82.7
Income tax expense for controlling interests		91.9		104.4			127.4		110.2
Depreciation, depletion and amortization expense and earnings/loss from nonconsolidated equity affiliates		126.6		127.3			248.3		252.3
Acquisition and integration expenses		0.4		2.9			1.2		4.3
Nonrecurring gain on divestiture		—		(151.7	)		—		(151.7	)
Adjusted EBITDA	$	596.1	$	478.3		$	920.0	$	675.5

Reconciliation of the GAAP Measure to 2023 Adjusted EBITDA Guidance Range

	Low Point of Range		High Point of Range
	(Dollars in Millions)
Net earnings from continuing operations attributable to Martin Marietta	$	1,040.0	$	1,150.0
Add back:
Interest expense, net of interest income		150.0		155.0
Income tax expense for controlling interests		310.0		275.0
Depreciation, depletion and amortization expense and earnings/loss from nonconsolidated equity affiliates		500.0		520.0
Adjusted EBITDA	$	2,000.0	$	2,100.0

MARTIN MARIETTA MATERIALS, INC.

Non-GAAP Financial Measures (Continued)

Mix-adjusted average selling price (mix-adjusted ASP) is a non-GAAP measure that excludes the impact of period-over-period product, geographic and other mix on the average selling price. Mix-adjusted ASP is calculated by comparing current-period shipments to like-for-like shipments in the comparable prior period. Management uses this metric to evaluate the realization of pricing increases and believes this information is useful to investors. The following reconciles reported average selling price to mix-adjusted ASP and corresponding variances.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2023			2022		2023			2022
Aggregates:
Reported average selling price	$	19.37		$	16.34	$	19.57		$	16.27
Adjustment for impact of product, geographic and other mix		(0.25	)				(0.33	)
Mix-adjusted ASP	$	19.12				$	19.24

Reported average selling price variance		18.6	%				20.3	%
Mix-adjusted ASP variance		17.0	%				18.3	%

Cement – Continuing Operations:
Reported average selling price	$	170.46		$	140.00	$	170.55		$	134.79
Adjustment for impact of product, geographic and other mix		(0.63	)				(0.61	)
Mix-adjusted ASP	$	169.83				$	169.94

Reported average selling price variance		21.8	%				26.5	%
Mix-adjusted ASP variance		21.3	%				26.1	%

July 27, 2023 7:36 am

Bread Financial™ to Provide Consumer Credit Program for Top Technology Company

Bread Financial™ to Provide Consumer Credit Program for Top Technology Company

COLUMBUS, Ohio–(BUSINESS WIRE)–Bread Financial (NYSE: BFH), a tech-forward financial services company that provides simple, flexible payment, lending and saving solutions, today announced it has signed an agreement to provide a suite of payment solutions, including a private label credit program, for Dell Technologies, which provides the industry’s broadest and most innovative technology and services portfolio.

Bread Financial also signed a definitive agreement to acquire Dell’s existing consumer credit portfolio. The transaction is expected to close in early Q4 2023, subject to customary closing conditions. The new relationship will expand the suite of payment options for Dell’s consumer customers.

Expected to launch in Q4 2023, the Dell Pay program will offer six and 12-month special financing on products and services for Dell consumers, while providing a consistent and frictionless journey. Using capabilities from Bread Financial’s Enhanced Digital Suite, Dell customers can seamlessly apply for and, if approved, immediately begin using their account for Dell products and support.

“This announcement reflects our expansion in the consumer technology market,” said Val Greer, chief commercial officer, Bread Financial. “Through our comprehensive suite of payment products and tech-forward capabilities, Bread Financial will empower Dell customers with financial flexibility and deliver best-in-class experiences.”

About Bread Financial^TM

Bread Financial^TM (NYSE: BFH) is a tech-forward financial services company providing simple, personalized payment, lending and saving solutions. The company creates opportunities for its customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, Bread Financial delivers growth for its partners through a comprehensive suite of payment solutions that includes private label and co-brand credit cards and Bread Pay™ buy now, pay later products. Bread Financial also offers direct-to-consumer products that give customers more access, choice and freedom through its branded Bread Cashback^TM American Express^® Credit Card and Bread Savings^TM products.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727571807/en/

Rachel Stultz – Media

Bread Financial

[email protected]

KEYWORDS: Ohio United States North America

INDUSTRY KEYWORDS: Professional Services Payments Technology Finance Fintech Banking

MEDIA:

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July 27, 2023 7:34 am

Tractor Supply Company Reports Second Quarter 2023 Financial Results; Updates Fiscal 2023 Financial Outlook and Long-Term Store Growth Targets

Tractor Supply Company Reports Second Quarter 2023 Financial Results; Updates Fiscal 2023 Financial Outlook and Long-Term Store Growth Targets

BRENTWOOD, Tenn.–(BUSINESS WIRE)–Tractor Supply Company (NASDAQ: TSCO), the largest rural lifestyle retailer in the United States (the “Company”), today reported financial results for its second quarter ended July 1, 2023.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230727281593/en/

Net Sales Increase of 7.2% to $4.18 Billion with Comparable Store Sales Increase of 2.5%, Led by Comparable Transaction Growth of 1.8%
Diluted Earnings per Share Growth of 8.5% to $3.83
Announces New Long-Term Target of 3,000 Stores in the U.S. and Plan to Increase Annual New Store Openings to 90 per Year

“As has been well documented, U.S. consumer spending on goods is moderating. Additionally, our business was further impacted by seasonal underperformance, particularly in June. Consequently, our second quarter results, while solid, were below our expectations. My thanks and appreciation go out to our 52,000 Tractor Supply Team Members. Through their efforts, we delivered record customer service scores and positive comparable transaction growth in the quarter. Given our first half performance and our view that our customers will continue to be discerning in their spending for the remainder of the year, we are adjusting our full year outlook,” said Hal Lawton, President and Chief Executive Officer of Tractor Supply.

“We believe we have a robust, distinct business model in an attractive market. We have achieved remarkable growth and market share gains over the last three plus years. We remain excited about the many vectors that exist for us to expand our competitive advantages and deliver attractive growth. Today, based on market insights, we are announcing an increase to our long-term store target to 3,000 organic sites. Additionally, we are announcing our intention to increase our annual new store openings to 90 beginning in 2025 with 2024 being a transition year. With significant share opportunity in a total addressable market of more than $180 billion, we have a long growth runway ahead of us as we continue to execute on our Life Out Here strategy,” said Lawton.

Second Quarter 2023 Results

Net sales for the second quarter of 2023 increased 7.2% to $4.18 billion from $3.90 billion in the second quarter of 2022. The increase in net sales was driven by contributions from the acquisition of Orscheln Farm and Home, new store openings and growth in comparable store sales. Comparable store sales increased 2.5%, as compared to an increase of 5.5% in the prior year’s second quarter, driven by comparable average transaction count increase of 1.8% and comparable average ticket growth of 0.6%. Comparable store sales growth reflects continued strength in core year-round merchandise, including consumable, usable and edible (“C.U.E.”) products which significantly outpaced the chain average. This performance offset softness in demand for seasonal goods and declines in big-ticket items.

Gross profit increased 9.3% to $1.51 billion from $1.39 billion in the prior year’s second quarter, and gross margin increased 69 basis points to 36.2% from 35.5% in the prior year’s second quarter. Gross margin continued to benefit from the Company’s ongoing execution of an everyday low price strategy to manage the impact of year-over-year product cost inflation. The gross margin rate increase was primarily attributable to lower transportation costs driven by improvement in the global supply chain and efficiencies from a new distribution center, modestly offset by negative product mix.

Selling, general and administrative (“SG&A”) expenses, including depreciation and amortization, increased 10.9% to $955.4 million from $861.2 million in the prior year’s second quarter. As a percentage of net sales, SG&A expenses increased 77 basis points to 22.8% from 22.1% in the second quarter of 2022. The increase in SG&A as a percentage of net sales was primarily attributable to the Company’s planned growth investments which included higher depreciation and amortization and the onboarding of a new distribution center. Additionally, higher medical claims contributed to the increase in SG&A as a percentage of net sales.

Operating income increased 6.5% to $559.3 million from $525.0 million in the second quarter of 2022.

The effective income tax rate improved to 23.0% compared to 23.5% in the second quarter of 2022.

Net income increased 6.2% to $421.2 million from $396.5 million, and diluted earnings per share was $3.83 compared to $3.53 in the second quarter of 2022.

The Company repurchased approximately 0.7 million shares of its common stock for $153.9 million and paid quarterly cash dividends totaling $112.8 million, returning $266.7 million of capital to shareholders in the second quarter of 2023.

The Company opened 17 new Tractor Supply stores and three new Petsense by Tractor Supply stores in the second quarter of 2023.

Real Estate Strategy Update

Tractor Supply announced today an update to the Company’s long-term store opportunity and several new real estate programs that leverage the strength of its balance sheet and real estate portfolio. These announcements create a longer runway for growth and strengthen the Company’s financial model.

Based on its market analysis, the Company is establishing a new target of 3,000 Tractor Supply stores in the U.S., an increase of 200 locations from its prior guidance. Additionally, the Company anticipates accelerating its annual new store growth to approximately 90 stores per year beginning in 2025, with a step up to 80 new stores in 2024.

Tractor Supply is also updating its real estate development and portfolio management strategy for its store real estate to include owned development and sale-leaseback capability. The owned development program enables the Company to capture incremental cost savings through a fixed fee model and have more control in the development process of new stores. The Company currently anticipates executing a sale-leaseback transaction of new stores built under this program within a reasonable time after construction is completed.

Additionally, the Company plans to periodically execute the sale-leaseback of its existing ownership of 117 stores to fund the cash required by the new development program and to capture the value of its existing real estate. The benefit from the new development program is anticipated to more than offset the incremental rent expense from the sale-leaseback of Company’s currently owned stores. The expectation is that the sale-leaseback of existing stores would be executed routinely over approximately the next eight to 10 years, beginning this year. Given this approach, the total number of Company-owned stores is anticipated to remain relatively stable and consistent over time. For 2023, the Company expects an after-tax benefit of approximately $0.20 of diluted earnings per share anticipated in the second half of the year from the sale-leaseback of 10 to 15 stores. A similar benefit is anticipated to be achieved each year over the near term.

Fiscal 2023 Financial Outlook

The Company is updating its fiscal 2023 financial guidance to reflect its performance from the first half of the year along with its expectations for the remainder of the year, including the positive impact of the updates to the real estate portfolio strategy. The updated fiscal 2023 guidance includes the benefit of the sale-leaseback.

For fiscal 2023, the Company now expects the following:

	Updated	Previous
Net Sales	$14.8 billion – $14.9 billion	$15.0 billion – $15.3 billion
Comparable Store Sales	+1.3% – +2.5%	+3.5% – +5.5%
Operating Margin Rate	10.2% – 10.3%	10.1% – 10.3%
Net Income	$1.12 billion – $1.15 billion	$1.13 billion – $1.17 billion
Earnings per Diluted Share	$10.20 – $10.40	$10.30 – $10.60

In light of the updates to the Company’s real estate strategy, anticipated capital expenditures for the year are now forecasted to be in the range of $800 million to $850 million, compared to its prior range of $700 million to $775 million. The increase in capital expenditures reflects the implementation of the development program for new store growth that will be fully funded through the sale of existing Company-owned stores. Additionally, capital plans for 2023 include opening a total of approximately 70 Tractor Supply stores, completing the Orscheln Farm and Home conversions to Tractor Supply, continuing the Project Fusion remodels and garden center transformations, building of its 10^th distribution center and opening a total of 10 to 15 new Petsense by Tractor Supply stores.

Conference Call Information

Tractor Supply Company will hold a conference call today, Thursday, July 27, 2023 at 10 a.m. ET. The call will be webcast live at IR.TractorSupply.com. An investor presentation will be available on the investor relations section of the Company’s website at least 15 minutes prior to the conference call.

Please allow extra time prior to the call to visit the site and download the streaming media software required to listen to the webcast.

A replay of the webcast will also be available at IR.TractorSupply.com shortly after the conference call concludes.

About Tractor Supply Company

For 85 years, Tractor Supply Company (NASDAQ: TSCO) has been passionate about serving the needs of recreational farmers, ranchers, homeowners, gardeners, pet enthusiasts and all those who enjoy living Life Out Here. Tractor Supply is the largest rural lifestyle retailer in the U.S., ranking 291 on the Fortune 500. The Company’s 52,000 Team Members are known for delivering legendary service and helping customers pursue their passions, whether that means being closer to the land, taking care of animals or living a hands-on, DIY lifestyle. In store and online, Tractor Supply provides what customers need – anytime, anywhere, any way they choose at the low prices they deserve.

As of July 1, 2023, the Company operated 2,181 Tractor Supply stores in 49 states, including 81 stores acquired from Orscheln Farm and Home in 2022 that will be rebranded to Tractor Supply by the end of 2023. For more information on Tractor Supply, visit www.tractorsupply.com.

Tractor Supply Company also owns and operates Petsense by Tractor Supply, a small-box pet specialty supply retailer providing products and services for pet owners. As of July 1, 2023, the Company operated 192 Petsense by Tractor Supply stores in 23 states. For more information on Petsense by Tractor Supply, visit www.Petsense.com.

Forward-Looking Statements

This press release contains certain forward-looking statements, including statements regarding growth and value creation, consumer spending trends, new stores and distribution centers, the Orscheln Farm and Home conversion, property development plans, our plans to enter into sale-leaseback transactions, and financial guidance for 2023, including, net sales, comparable store sales, operating margin rates, net income, diluted earnings per share, capital expenditures and share repurchases. All forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to the finalization of the Company’s quarterly financial and accounting procedures, and may be affected by certain risks and uncertainties, any one, or a combination, of which could materially affect the results of the Company’s operations. Forward-looking statements are usually identified by or are associated with such words as “will,” “would,” “intend,” “expect,” “continue,” “believe,” “anticipate,” “optimistic,” “forecasted” and similar terminology. Actual results could vary materially from the expectations reflected in these statements. As with any business, all phases of our operations are subject to facts outside of our control. These factors include, without limitation, national, regional, and local economic conditions affecting consumer spending; the timing and mix of goods sold; the timing and acceptance of new products; purchase price volatility (including inflationary and deflationary pressures), transportation costs and constraints in the supply chain affecting timing and availability of merchandise inventory; the ability to increase sales at existing stores or on our e-commerce platforms; the ability to manage growth and identify suitable locations; the ability to open new stores in the time, manner, and number currently contemplated; the ability to execute definitive agreements, satisfy closing conditions and close the planned sale-leaseback transactions on a timely basis, on favorable terms or at all; economic uncertainty, including rising costs for commodities, raw materials, energy, and finished goods; the ability to successfully manage expenses and to execute our key gross margin enhancing initiatives; the ability to open distribution centers in the anticipated timeframe and within budget; the impact of new stores on our business; competition, including that from online competitors; weather conditions; the seasonal nature of our business; the ability to retain vendors and our reliance on foreign suppliers; the ability to attract, train, and retain qualified employees, as well as increasing labor and benefit costs; rising interest rates; tightening of credit markets; continued domestic impact of global geopolitical unrest; continued disruption and uncertainty in the supply chain and shipping channels, including potential disruption to domestic transportation channels; the impact of public health issues; difficulties in integration of Orscheln Farm and Home and the potential for conflicts with regulators if the sale of the Orscheln headquarters or distribution center are delayed; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of an acquisition; significant increases in costs or significant delays associated with new store openings, remodels, relocations, or conversion of Orscheln stores; our ability to meet our sustainability, stewardship, carbon emission, and Diversity, Equity, and Inclusion related Environmental, Social, and Governance projections, goals, and commitments; the imposition of tariffs on imported products or the disallowance of tax deductions on imported products; potential judgments, fines, legal fees, and other costs; breach of information systems or theft of employee or customer data; effective tax rate changes and results of examination by taxing authorities; the ability to maintain an effective system of internal control over financial reporting and changes in accounting standards, assumptions, and estimates; severe weather and the effects of climate change. Forward-looking statements made by or on behalf of the Company are based on knowledge of its business and the environment in which it operates, but because of the factors listed above, actual results could differ materially from those reflected by any forward-looking statements. Consequently, all of the forward-looking statements made are qualified by these cautionary statements and those contained in the Company’s Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. There can be no assurance that the results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business and operations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

(Financial tables to follow)

Condensed Consolidated Statements of Income *(Unaudited)* (in thousands, except per share and percentage data)

	Three Months Ended								Six Months Ended
	July 1, 2023				June 25, 2022				July 1, 2023				June 25, 2022
			% of				% of				% of				% of
			Net				Net				Net				Net
			Sales				Sales				Sales				Sales
Net sales	$	4,184,695	100.00	%	$	3,903,406	100.00	%	$	7,483,920	100.00	%	$	6,927,538	100.00	%
Cost of merchandise sold		2,669,926	63.80			2,517,151	64.49			4,799,243	64.13			4,484,774	64.74
Gross profit		1,514,769	36.20			1,386,255	35.51			2,684,677	35.87			2,442,764	35.26
Selling, general and administrative expenses		853,158	20.39			777,860	19.93			1,681,393	22.47			1,512,437	21.83
Depreciation and amortization		102,279	2.44			83,360	2.14			199,512	2.67			161,006	2.32
Operating income		559,332	13.37			525,035	13.45			803,772	10.74			769,321	11.11
Interest expense, net		12,343	0.30			7,097	0.18			25,023	0.33			14,166	0.20
Income before income taxes		546,989	13.07			517,938	13.27			778,749	10.41			755,155	10.91
Income tax expense		125,755	3.01			121,460	3.11			174,427	2.33			171,450	2.47
Net income	$	421,234	10.07	%	$	396,478	10.16	%	$	604,322	8.07	%	$	583,705	8.43	%

Net income per share:
Basic	$	3.85			$	3.55			$	5.51			$	5.21
Diluted	$	3.83			$	3.53			$	5.47			$	5.17

Weighted average shares outstanding:
Basic		109,426				111,590				109,735				112,060
Diluted		110,041				112,318				110,411				112,911

Dividends declared per common share outstanding	$	1.03			$	0.92			$	2.06			$	1.84

Note: Percent of net sales amounts may not sum to totals due to rounding.

Condensed Consolidated Statements of Comprehensive Income *(Unaudited)* (in thousands)

	Three Months Ended				Six Months Ended
	July 1, 2023		June 25, 2022		July 1, 2023			June 25, 2022
Net income	$	421,234	$	396,478	$	604,322		$	583,705

Other comprehensive income / (loss):
Change in fair value of interest rate swaps, net of taxes		778		1,810		(1,059	)		7,803
Total other comprehensive income / (loss)		778		1,810		(1,059	)		7,803
Total comprehensive income	$	422,012	$	398,288	$	603,263		$	591,508

Condensed Consolidated Balance Sheets *(Unaudited)* (in thousands)

	July 1, 2023			June 25, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	620,031		$	530,822
Inventories		2,660,052			2,485,138
Prepaid expenses and other current assets		297,191			214,436
Total current assets		3,577,274			3,230,396
Property and equipment, net		2,185,476			1,744,556
Operating lease right-of-use assets		2,957,792			2,760,148
Goodwill and other intangible assets		267,088			55,520
Other assets		45,193			78,574
Total assets	$	9,032,823		$	7,869,194

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,272,232		$	1,280,518
Accrued employee compensation		66,181			42,474
Other accrued expenses		464,267			470,082
Current portion of finance lease liabilities		2,860			3,502
Current portion of operating lease liabilities		317,730			364,643
Income taxes payable		114,194			80,959
Total current liabilities		2,237,464			2,242,178
Long-term debt		1,727,504			987,411
Finance lease liabilities, less current portion		32,999			35,859
Operating lease liabilities, less current portion		2,762,877			2,543,133
Deferred income taxes		59,157			36,256
Other long-term liabilities		125,670			110,490
Total liabilities		6,945,671			5,955,327

Stockholders’ equity:
Common stock		1,418			1,414
Additional paid-in capital		1,283,589			1,220,682
Treasury stock		(5,210,524	)		(4,640,236	)
Accumulated other comprehensive income		10,216			9,148
Retained earnings		6,002,453			5,322,859
Total stockholders’ equity		2,087,152			1,913,867
Total liabilities and stockholders’ equity	$	9,032,823		$	7,869,194

Condensed Consolidated Statements of Cash Flows *(Unaudited)* (in thousands)

	Six Months Ended
	July 1, 2023			June 25, 2022
Cash flows from operating activities:
Net income	$	604,322		$	583,705
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		199,512			161,006
(Gain)/loss on disposition of property and equipment		(474	)		594
Share-based compensation expense		30,179			24,850
Deferred income taxes		30,916			38,693
Change in assets and liabilities:
Inventories		34,626			(293,946	)
Prepaid expenses and other current assets		(22,439	)		(50,318	)
Accounts payable		(126,400	)		124,888
Accrued employee compensation		(56,795	)		(67,144	)
Other accrued expenses		(26,994	)		(22,896	)
Income taxes		104,723			98,059
Other		11,145			28,114
Net cash provided by operating activities		782,321			625,605
Cash flows from investing activities:
Capital expenditures		(349,586	)		(265,308	)
Proceeds from sale of property and equipment		761			178
Proceeds from Orscheln acquisition net working capital settlement		4,310			—
Net cash used in investing activities		(344,515	)		(265,130	)
Cash flows from financing activities:
Borrowings under debt facilities		1,767,000			—
Repayments under debt facilities		(1,195,000	)		—
Debt discounts and issuance costs		(9,729	)		—
Principal payments under finance lease liabilities		(2,805	)		(2,527	)
Repurchase of shares to satisfy tax obligations		(23,121	)		(27,672	)
Repurchase of common stock		(345,653	)		(484,390	)
Net proceeds from issuance of common stock		15,252			12,995
Cash dividends paid to stockholders		(226,221	)		(206,089	)
Net cash used in financing activities		(20,277	)		(707,683	)
Net increase/(decrease) in cash and cash equivalents		417,529			(347,208	)
Cash and cash equivalents at beginning of period		202,502			878,030
Cash and cash equivalents at end of period	$	620,031		$	530,822

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	20,462		$	11,673
Income taxes		36,226			36,820
Supplemental disclosures of non-cash activities:
Non-cash accruals for property and equipment	$	27,031		$	42,974
Increase of operating lease assets and liabilities from new or modified leases		260,268			135,858
Increase of finance lease assets and liabilities from new or modified leases		450			5,143

Selected Financial and Operating Information *(Unaudited)*

	Three Months Ended						Six Months Ended
	July 1, 2023			June 25, 2022			July 1, 2023			June 25, 2022
Sales Information:
Comparable store sales increase		2.5	%		5.5	%		2.3	%		5.4	%
New store sales (% of total sales)		4.8	%		2.2	%		4.5	%		2.4	%
Average transaction value	$	63.56		$	63.52		$	61.44		$	60.29
Comparable store average transaction value increase ^(a)		0.6	%		7.5	%		1.6	%		7.1	%
Comparable store average transaction count increase/(decrease)		1.8	%		(2.0	)%		0.7	%		(1.7	)%
Total selling square footage (000’s)		37,809			33,759			37,809			33,759
Exclusive brands (% of total sales)		28.0	%		28.8	%		29.8	%		29.3	%
Imports (% of total sales)		11.5	%		11.5	%		11.5	%		11.6	%

Store Count Information:
Tractor Supply (including Orscheln Farm and Home stores)
Beginning of period		2,164			2,003			2,147			2,003
New stores opened		17			13			34			13
Stores closed		—			—			—			—
End of period		2,181			2,016			2,181			2,016
Petsense by Tractor Supply
Beginning of period		189			178			186			178
New stores opened		3			—			6			1
Stores closed		—			—			—			(1	)
End of period		192			178			192			178
Consolidated end of period		2,373			2,194			2,373			2,194

Pre-opening costs (000’s)	$	4,878		$	1,587		$	7,942		$	2,389

Balance Sheet Information:
Average inventory per store (000’s) ^(b)	$	1,032.9		$	1,051.0		$	1,032.9		$	1,051.0
Inventory turns (annualized)		3.92			4.20			3.57			3.94
Share repurchase program:
Cost (000’s) ^(c)	$	157,448		$	188,210		$	354,616		$	484,390
Average purchase price per share	$	222.42		$	199.88		$	225.34		$	210.62

(a)	Comparable store average transaction value changes include the impact of transaction value changes achieved on the current period change in transaction count.
(b)	Assumes average inventory cost, excluding inventory in transit.
(c)	Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases represent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock.
Note: Comparable store metrics percentages may not sum to total due to rounding.
Note: With the exception of store count information, new stores sales (% of total sales), total selling square footage, and average inventory per store, all metrics listed above exclude unconverted Orscheln Farm and Home stores.

	Three Months Ended				Six Months Ended
	July 1, 2023		June 25, 2022		July 1, 2023		June 25, 2022
Capital Expenditures (millions):
Existing stores	$	79.1	$	70.5	$	162.1	$	136.5
New and relocated stores and stores not yet opened		28.3		18.8		61.5		31.3
Information technology		29.2		30.7		51.1		49.1
Distribution center capacity and improvements		54.1		32.4		73.7		46.2
Corporate and other		1.0		0.5		1.2		2.2
Total	$	191.7	$	152.9	$	349.6	$	265.3

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727281593/en/

Tractor Supply Company

Mary Winn Pilkington (615) 440-4212

Tricia Whittemore (615) 440-4410

[email protected]

KEYWORDS: Tennessee United States North America

INDUSTRY KEYWORDS: Agriculture Natural Resources Other Retail Pets Specialty Consumer Discount/Variety Retail

MEDIA:

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July 27, 2023 7:31 am

Piedmont Lithium’s Tennessee Project Receives Final Permit Required to Advance to Construction

Piedmont Lithium’s Tennessee Project Receives Final Permit Required to Advance to Construction

Tennessee Lithium to provide IRA-qualified lithium hydroxide to growing U.S. market

Piedmont now holds all the material permits required to commence project construction
Tennessee Lithium’s planned capacity of 30,000 tons per year would nearly triple current domestic production
Robust economics of recent DFS demonstrate positive impact of America’s pro-EV policies
Advisors retained to arrange strategic financing, customer offtake agreements, and project debt as the DOE grant process advances
Tennessee Lithium’s construction is targeted for 2024 with first production in 2026

BELMONT, N.C.–(BUSINESS WIRE)–Piedmont Lithium (“Piedmont” or the “Company”) (Nasdaq: PLL; ASX: PLL), announced today that the Tennessee Department of Environment and Conservation issued a Conditional Major Non-Title V Construction and Air Permit (“Air Permit”) for the Company’s proposed Tennessee Lithium project in McMinn County, Tennessee. With receipt of the Air Permit for the planned 30,000 metric ton per year (“tpy”) lithium hydroxide manufacturing plant, Piedmont Lithium now holds all the material permits required to begin construction at Tennessee Lithium. The Air Permit issuance marks an important step in developing the approximately $800 million project, which will help significantly bolster the current U.S. lithium hydroxide production capacity of approximately 17,000 tpy.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230727906063/en/

Figure 1 – Engineering model of the 30,000 tpy Tennessee Lithium project (Photo: Business Wire)

Piedmont Lithium President and Chief Executive Officer Keith Phillips applauded the successful work of the project team in advancing Tennessee Lithium toward becoming a world-class lithium manufacturer and key contributor to U.S. energy security. “Tennessee Lithium is uniquely positioned in America’s emerging Battery Belt to supply the domestic market with crucial, made-in-America lithium resources,” said Phillips. “Since announcing the selection of the site in McMinn County, Tennessee nearly one year ago, our team has been focused on permitting, engineering, and working with local officials to prepare this project to support the electric vehicle and battery manufacturing supply chain. As demand for lithium hydroxide continues to soar in the U.S., this conversion facility will be key in the domestic effort to reduce reliance on foreign nations for lithium processing.”

Piedmont Lithium previously announced robust project economics for Tennessee Lithium in a definitive feasibility study (“DFS”) released in April of this year. With a project net present value of $2.5 billion and internal rate of return of 32%, the DFS underscored the positive impact of America’s clean energy policies and the value of the Company’s hard-rock production strategy.

In October 2022, Tennessee Lithium was selected by the United States Department of Energy to receive a $141.7 million grant to support the construction of the project. The funding process related to the grant continues to progress as Piedmont Lithium and its advisors commence discussions with potential strategic partners for the balance of funding required for the project. Piedmont Lithium’s intent is to secure necessary funding from partners or lenders.

Plans to lease and renovate local office space are developing with the goal of supporting the revitalization efforts of downtown Etowah, Tennessee. Workforce development activities have also begun with local technical schools to develop key training programs and curricula for certain positions. Piedmont Lithium plans to hire 120 employees when Tennessee Lithium is operational. Hiring is expected to begin in H2 2023 and continue through 2026 to support construction and prepare for commercial production.

About Piedmont Lithium

Piedmont Lithium (Nasdaq: PLL; ASX: PLL) is developing a world-class, multi-asset, integrated lithium business focused on enabling the transition to a net zero world and the creation of a clean energy economy in North America. Our goal is to become one of the largest lithium hydroxide producers in North America by processing spodumene concentrate produced from assets where we hold an economic interest. Our projects include our Carolina Lithium and Tennessee Lithium projects in the United States and partnerships in Quebec with Sayona Mining (ASX: SYA) and in Ghana with Atlantic Lithium (AIM: ALL; ASX: A11). These geographically diversified operations will enable us to play a pivotal role in supporting America’s move toward energy independence and the electrification of transportation and energy storage. For more information, follow us on Twitter @PiedmontLithium and visit www.piedmontlithium.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of or as described in securities legislation in the United States and Australia, including statements regarding exploration, development construction and production activities of Sayona Mining, Atlantic Lithium and Piedmont; current plans for Piedmont’s mineral and chemical processing projects; Piedmont’s potential acquisition of an ownership interest in Ewoyaa; and strategy. Such forward-looking statements involve substantial and known and unknown risks, uncertainties, and other risk factors, many of which are beyond our control, and which may cause actual timing of events, results, performance or achievements and other factors to be materially different from the future timing of events, results, performance, or achievements expressed or implied by the forward-looking statements. Such risk factors include, among others: (i) that Piedmont, Sayona Mining or Atlantic Lithium may be unable to commercially extract mineral deposits, (ii) that Piedmont’s, Sayona Mining’s or Atlantic Lithium’s properties may not contain expected reserves, (iii) risks and hazards inherent in the mining business (including risks inherent in exploring, developing, constructing and operating mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), (iv) uncertainty about Piedmont’s ability to obtain required capital to execute its business plan, (v) Piedmont’s ability to hire and retain required personnel, (vi) changes in the market prices of lithium and lithium products, (vii) changes in technology or the development of substitute products, (viii) the uncertainties inherent in exploratory, developmental and production activities, including risks relating to permitting, zoning and regulatory delays related to our projects as well as the projects of our partners in Quebec and Ghana, (ix) uncertainties inherent in the estimation of lithium resources, (x) risks related to competition, (xi) risks related to the information, data and projections related to Sayona Mining or Atlantic Lithium, (xii) occurrences and outcomes of claims, litigation and regulatory actions, investigations and proceedings, (xiii) risks regarding our ability to achieve profitability, enter into and deliver product under supply agreements on favorable terms, our ability to obtain sufficient financing to develop and construct our projects, our ability to comply with governmental regulations and our ability to obtain necessary permits, and (xiv) other uncertainties and risk factors set out in filings made from time to time with the U.S. Securities and Exchange Commission (“SEC”) and the Australian Securities Exchange, including Piedmont’s most recent filings with the SEC. The forward-looking statements, projections and estimates are given only as of the date of this press release and actual events, results, performance and achievements could vary significantly from the forward-looking statements, projections and estimates presented in this press release. Readers are cautioned not to put undue reliance on forward-looking statements. Piedmont disclaims any intent or obligation to update publicly such forward-looking statements, projections, and estimates, whether as a result of new information, future events or otherwise. Additionally, Piedmont, except as required by applicable law, undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Piedmont, its financial or operating results or its securities.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727906063/en/

Erin Sanders

SVP, Corporate Communications & Media Inquiries

Investor Relations

T: +1 704 575 2549

E: [email protected]

Christian Healy/Jeff Siegel

Media Inquiries

E: [email protected]

E: [email protected]

KEYWORDS: Australia/Oceania United States United Kingdom North America Australia Europe North Carolina Tennessee

INDUSTRY KEYWORDS: Natural Resources Alternative Energy Energy Automotive Chemicals/Plastics General Automotive Mining/Minerals Manufacturing

MEDIA:

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Photo

Figure 1 – Engineering model of the 30,000 tpy Tennessee Lithium project (Photo: Business Wire)

July 27, 2023 7:28 am

Kimco Realty® Announces Second Quarter 2023 Results

Kimco Realty^® Announces Second Quarter 2023 Results

– Leasing Results Propelled by Robust Demand and Strong Absorption Opportunities –

– Further Expands Liquidity with Ongoing Monetization of Albertsons Investment –

– Board Declares Dividends and Expects to Announce Special Dividend to Shareholders by Year End –

– Updates 2023 Outlook –

JERICHO, N.Y.–(BUSINESS WIRE)–
Kimco Realty^® (NYSE: KIM), North America’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centers and a growing portfolio of mixed-use assets, today reported results for the second quarter ended June 30, 2023. For the three months ended June 30, 2023 and 2022, Kimco Realty’s net income/(loss) available to the company’s common shareholders per diluted share was $0.16 and ($0.21), respectively.

Second Quarter Highlights

Produced Funds From Operations* (FFO) of $0.39 per diluted share.
Increased pro-rata portfolio occupancy 70 basis points year-over-year to 95.8%.
Grew pro-rata small shop occupancy 30 basis points sequentially to 91.0%, representing an increase of 180 basis points year-over-year.
Generated pro-rata cash rent spreads of 25.3% for new leases on comparable spaces, including four former Bed Bath & Beyond (Nasdaq: BBBY) leases with a blended rent increase of 31%.
Produced 2.3% growth in Same-Property Net Operating Income* (NOI) over the same period a year ago.
Generated $144.9 million in proceeds from the sale of 7.0 million shares of Albertsons Companies, Inc. (NYSE: ACI).
Published 10th annual Corporate Responsibility Report detailing ESG performance.

*Reconciliations of non-GAAP measures to the most directly comparable GAAP measure are provided in the tables accompanying this press release.

“Our results demonstrate the strength of our operating platform with the strong execution on backfilling vacancies in an accretive manner at meaningful rental spreads that will drive cashflow. It is a true testament to the quality of our portfolio and dedicated leasing team,” stated Kimco CEO Conor Flynn. “Further, with over $500 million of cash on hand from the ongoing monetization of our Albertsons stock, we also have a unique advantage to quickly execute on external growth opportunities as well as further reduce leverage in our continuous effort to maximize results for all of our stakeholders. This includes the returning of capital to shareholders in the form of a one-time special dividend, expected to be announced and paid by year end.”

Financial Results

Net income available to the company’s common shareholders for the second quarter of 2023 was $100.4 million, or $0.16 per diluted share, for the second quarter of 2023, compared to Net (loss) available to the company’s common shareholders of ($125.8) million, or ($0.21) per diluted share, for the second quarter of 2022. Included in the change was a $276.0 million benefit from mark-to-market gains on marketable securities, primarily stemming from a change in the value of ACI common stock held by the company. Partially offsetting this benefit was a $30.9 million increase in provision for income taxes, net, mainly attributable to the capital gains from the monetization of 7.0 million shares of ACI during the second quarter of 2023, and a $27.0 million reduction in Equity in income of joint ventures, net, primarily due to a lower level of gains on sales of properties during the second quarter of 2023, compared to the second quarter of 2022.

FFO was $243.9 million, or $0.39 per diluted share, for the second quarter of 2023, compared to $246.4 million, or $0.40 per diluted share, for the second quarter 2022. The company excludes from FFO all realized or unrealized marketable securities gains and losses as well as any income tax implications, including those related to its investment in ACI. Also excluded from FFO are gains and losses from the sale of operating properties, real estate-related depreciation, and profit participations from other investments.

Operating Results

Executed 485 leases totaling 2.7 million square feet, generating blended pro-rata rent spreads on comparable spaces of 9.9%, with pro-rata rental rates for new leases up 25.3% and renewals and options growing 7.6%.
Pro-rata portfolio occupancy ended the quarter at 95.8%, which was flat sequentially and an increase of 70 basis points year-over-year. This includes the impact of vacating 8 BBBY and 11 Tuesday Morning spaces during the second quarter of 2023 which reduced occupancy by approximately 25 basis points.
Pro-rata small shop occupancy expanded 30 basis points sequentially and 180 basis points year-over-year to 91.0%, which is 10 basis points below the company’s all-time high.
Pro-rata anchor occupancy ended the quarter at 97.7%, representing an increase of 10 basis points year-over-year.
Reported a 300-basis-point spread between leased (reported) occupancy versus economic occupancy at the end of the second quarter, representing approximately $50 million in future annual base rent.
Produced 2.3% growth in Same-Property NOI over the same period a year ago, driven by a 3.1% increase in minimum rent.

Investment Activities

Sold five wholly-owned parcels during the second quarter for $46.2 million, totaling 87,000 square feet of gross leasable area.

Capital Market Activities

As previously announced, Kimco sold 7.0 million shares of ACI common stock resulting in net proceeds of $144.9 million. The company recorded a $31.0 million provision for income taxes during the second quarter of 2023.
Repurchased 38,237 depositary shares of its 5.125% Preferred Series L with a weighted average price of $22.56 for over $862,000. In addition, the company also repurchased 16,050 depositary shares of its 5.250% Preferred Series M with a weighted average price of $22.37 for over $359,000.
Ended the second quarter with over $2.5 billion of immediate liquidity, including full availability of the company’s $2.0 billion unsecured revolving credit facility and over $500 million of cash and cash equivalents on the balance sheet. In addition, the company held 14.2 million shares of ACI common stock valued at $310.1 million as of June 30, 2023.

Dividend Declarations

Kimco’s board of directors declared a cash dividend of $0.23 per common share, representing a 4.5% increase over the quarterly dividend in the corresponding period of the prior year. The quarterly cash dividend on common shares is payable on September 21, 2023, to shareholders of record on September 7, 2023.
The board of directors also declared quarterly dividends with respect to each of the company’s Class L and Class M series of cumulative redeemable preferred shares. These dividends on the preferred shares will be paid on October 16, 2023, to shareholders of record on October 2, 2023.

2023 Full Year Outlook

Based on the actual results of the second quarter, including gains, net of impairments and other charges impacting net income available to the company’s common shareholders and outlook for the remainder of 2023, the company has updated its full-year guidance ranges as follows:

	Current	Previous
Net income available to the company’s common shareholders (per diluted share):	$0.92 to $0.95	$0.92 to $0.96
FFO (per diluted share)*:	$1.55 to $1.57	$1.54 to $1.57

*The tables accompanying this press release provide a reconciliation for the Current forward-looking non-GAAP measure.

Conference Call Information

When:		8:30 AM ET, July 27, 2023
Live Webcast:		2Q23 Kimco Realty Earnings Conference Call or on Kimco Realty’s website investors.kimcorealty.com (replay available through October 27, 2023)
Dial #:		1-888-317-6003 (International: 1-412-317-6061). Passcode: 0454076

About Kimco Realty^®

Kimco Realty^® (NYSE:KIM) is a real estate investment trust (REIT) headquartered in Jericho, N.Y. that is North America’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centers and a growing portfolio of mixed-use assets. The company’s portfolio is primarily concentrated in the first-ring suburbs of the top major metropolitan markets, including those in high-barrier-to-entry coastal markets and rapidly expanding Sun Belt cities, with a tenant mix focused on essential, necessity-based goods and services that drive multiple shopping trips per week. Kimco Realty is also committed to leadership in environmental, social and governance (ESG) issues and is a recognized industry leader in these areas. Publicly traded on the NYSE since 1991, and included in the S&P 500 Index, the company has specialized in shopping center ownership, management, acquisitions, and value enhancing redevelopment activities for more than 60 years. As of June 30, 2023, the company owned interests in 528 U.S. shopping centers and mixed-use assets comprising 90 million square feet of gross leasable space. For further information, please visit www.kimcorealty.com.

The company announces material information to its investors using the company’s investor relations website (investors.kimcorealty.com), SEC filings, press releases, public conference calls, and webcasts. The company also uses social media to communicate with its investors and the public, and the information the company posts on social media may be deemed material information. Therefore, the company encourages investors, the media, and others interested in the company to review the information that it posts on the social media channels, including Facebook (www.facebook.com/kimcorealty), Twitter (www.twitter.com/kimcorealty) and LinkedIn (www.linkedin.com/company/kimco-realty-corporation). The list of social media channels that the company uses may be updated on its investor relations website from time to time.

Safe Harbor Statement

This communication contains certain 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. The company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “commit,” “anticipate,” “estimate,” “project,” “will,” “target,” “plan,” “forecast” or similar expressions. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which, in some cases, are beyond the company’s control and could materially affect actual results, performances or achievements. Factors which may cause actual results to differ materially from current expectations include, but are not limited to, (i) general adverse economic and local real estate conditions, (ii) the impact of competition, including the availability of acquisition or development opportunities and the costs associated with purchasing and maintaining assets, (iii)the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business, (iv) the reduction in the company’s income in the event of multiple lease terminations by tenants or a failure of multiple tenants to occupy their premises in a shopping center, (v) the potential impact of e-commerce and other changes in consumer buying practices, and changing trends in the retail industry and perceptions by retailers or shoppers, including safety and convenience, (vi) the availability of suitable acquisition, disposition, development and redevelopment opportunities, and risks related to acquisitions not performing in accordance with our expectations, (vii) the company’s ability to raise capital by selling its assets, (viii) disruptions and increases in operating costs due to inflation and supply chain issues, (ix) risks associated with the development of mixed-use commercial properties, including risks associated with the development and ownership of non-retail real estate, (x) changes in governmental laws and regulations, including, but not limited to, changes in data privacy, environmental (including climate change), safety and health laws, and management’s ability to estimate the impact of such changes, (xi) valuation and risks related to the company’s joint venture and preferred equity investments and other investments, (xii) valuation of marketable securities and other investments, including the shares of Albertsons Companies, Inc. common stock held by the company, (xiii) impairment charges, (xiv) criminal cybersecurity attacks disruption, data loss or other security incidents and breaches, (xv) impact of natural disasters and weather and climate-related events, (xvi) pandemics or other health crises, such as coronavirus disease 2019 (“COVID-19”), (xvii) our ability to attract, retain and motivate key personnel, (xviii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the company, (xix) the level and volatility of interest rates and management’s ability to estimate the impact thereof, (xx) changes in the dividend policy for the company’s common and preferred stock and the company’s ability to pay dividends at current levels, (xxi) unanticipated changes in the company’s intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity, (xxii) the company’s ability to continue to maintain its status as a REIT for federal income tax purposes and potential risks and uncertainties in connection with its UPREIT structure, and (xxiii) the other risks and uncertainties identified under Item 1A, “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year-ended December 31, 2022 and in the company’s other filings with the Securities and Exchange Commission (“SEC”). Accordingly, there is no assurance that the company’s expectations will be realized. The company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to refer to any further disclosures the company makes or related subjects in the company’s quarterly reports on Form 10-Q and current reports on Form 8-K that the company files with the SEC.

Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)

	June 30, 2023			December 31, 2022
Assets:
Real estate, net of accumulated depreciation and amortization
of $3,631,686 and $3,417,414, respectively	$	15,019,986		$	15,039,828
Investments in and advances to real estate joint ventures		1,098,336			1,091,551
Other investments		136,555			107,581
Cash and cash equivalents		536,477			149,829
Marketable securities		314,826			597,732
Accounts and notes receivable, net		294,608			304,226
Operating lease right-of-use assets, net		130,287			133,733
Other assets		396,643			401,642
Total assets	$	17,927,718		$	17,826,122

Liabilities:
Notes payable, net	$	6,775,080		$	6,780,969
Mortgages payable, net		359,609			376,917
Accounts payable and accrued expenses		207,545			207,815
Dividends payable		5,308			5,326
Operating lease liabilities		111,129			113,679
Other liabilities		620,706			601,574
Total liabilities		8,079,377			8,086,280
Redeemable noncontrolling interests		92,933			92,933

Stockholders’ Equity:
Preferred stock, $1.00 par value, authorized 7,054,000 shares;
Issued and outstanding (in series) 19,367 and 19,435 shares, respectively;
Aggregate liquidation preference $484,179 and $485,868, respectively		19			19
Common stock, $.01 par value, authorized 750,000,000 shares; issued
and outstanding 619,888,890 and 618,483,565 shares, respectively		6,199			6,185
Paid-in capital		9,621,686			9,618,271
Cumulative distributions in excess of net income		(20,748	)		(119,548	)
Accumulated other comprehensive income		15,942			10,581
Total stockholders’ equity		9,623,098			9,515,508
Noncontrolling interests		132,310			131,401
Total equity		9,755,408			9,646,909
Total liabilities and equity	$	17,927,718		$	17,826,122

Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues
Revenues from rental properties, net	$	439,008		$	423,273		$	877,346		$	845,927
Management and other fee income		3,832			3,925			8,386			8,520
Total revenues		442,840			427,198			885,732			854,447
Operating expenses
Rent		(4,145	)		(4,070	)		(8,158	)		(8,151	)
Real estate taxes		(57,621	)		(56,075	)		(115,127	)		(110,389	)
Operating and maintenance		(75,073	)		(69,784	)		(150,315	)		(139,009	)
General and administrative		(32,734	)		(27,981	)		(67,483	)		(57,929	)
Impairment charges		–			(14,419	)		(11,806	)		(14,691	)
Depreciation and amortization		(129,245	)		(124,611	)		(255,546	)		(254,905	)
Total operating expenses		(298,818	)		(296,940	)		(608,435	)		(585,074	)

Gain on sale of properties		13,170			2,944			52,376			7,137
Operating income		157,192			133,202			329,673			276,510

Other income/(expense)
Special dividend income		–			–			194,116			–
Other income, net		7,571			6,642			10,703			12,625
Gain/(loss) on marketable securities, net		14,561			(261,467	)		4,417			(139,703	)
Interest expense		(60,674	)		(56,466	)		(121,980	)		(113,485	)
Early extinguishment of debt charges		–			(57	)		–			(7,230	)
Income/(loss) before income taxes, net, equity in income of joint ventures,
net, and equity in income from other investments, net		118,650			(178,146	)		416,929			28,717

(Provision)/benefit for income taxes, net		(31,027	)		(96	)		(61,856	)		57
Equity in income of joint ventures, net		17,128			44,130			41,332			67,700
Equity in income of other investments, net		4,519			3,385			6,641			8,758

Net income/(loss)		109,270			(130,727	)		403,046			105,232
Net (income)/loss attributable to noncontrolling interests		(2,644	)		11,226			(6,657	)		12,569
Net income/(loss) attributable to the company		106,626			(119,501	)		396,389			117,801
Preferred dividends, net		(6,200	)		(6,250	)		(12,451	)		(12,604	)
Net income/(loss) available to the company’s common shareholders	$	100,426		$	(125,751	)	$	383,938		$	105,197

Per common share:
Net income/(loss) available to the company’s common shareholders: (1)
Basic	$	0.16		$	(0.21	)	$	0.62		$	0.17
Diluted (2)	$	0.16		$	(0.21	)	$	0.62		$	0.17
Weighted average shares:
Basic		617,077			615,642			616,785			615,207
Diluted		617,257			615,642			619,749			616,943

(1)		Adjusted for earnings attributable from participating securities of ($647) and ($533) for the three months ended June 30, 2023 and 2022, respectively. Adjusted for earnings attributable from participating securities of ($2,074) and ($1,000) for the six months ended June 30, 2023 and 2022, respectively.
(2)		Reflects the potential impact if certain units were converted to common stock at the beginning of the period. The impact of the conversion would have an antidilutive effect on net income and therefore have not been included. Distributions on convertible units did not have a dilutive impact for the three months ended June 30, 2023 and 2022. Adjusted for distributions on convertible units of $1,479 and $0 for the six months ended June 30, 2023 and 2022, respectively.

Reconciliation of Net Income/(Loss) Available to the Company’s Common Shareholders
to FFO Available to the Company’s Common Shareholders (1)
(in thousands, except per share data)
(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net income/(loss) available to the company’s common shareholders	$	100,426		$	(125,751	)	$	383,938		$	105,197
Gain on sale of properties		(13,170	)		(2,944	)		(52,376	)		(7,137	)
Gain on sale of joint venture properties		(180	)		(27,198	)		(7,890	)		(30,184	)
Depreciation and amortization – real estate related		127,725			123,672			253,003			253,133
Depreciation and amortization – real estate joint ventures		15,599			16,616			32,146			33,501
Impairment charges (including real estate joint ventures)		–			17,233			11,803			17,933
Profit participation from other investments, net		(2,792	)		(1,988	)		(2,761	)		(5,651	)
Special dividend income		–			–			(194,116	)		–
(Gain)/loss on marketable securities, net		(14,561	)		261,467			(4,417	)		139,703
Provision/(benefit) for income taxes, net (2)		31,259			3			62,132			(8	)
Noncontrolling interests (2)		(424	)		(14,729	)		507			(19,459	)
FFO available to the company’s common shareholders	$	243,882		$	246,381		$	481,969		$	487,028		(4	)

Weighted average shares outstanding for FFO calculations:
Basic		617,077			615,642			616,785			615,207
Units		2,563			2,473			2,551			2,509
Dilutive effect of equity awards		122			1,419			490			1,689
Diluted		619,762			619,534			619,826			619,405

FFO per common share – basic	$	0.40		$	0.40		$	0.78		$	0.79
FFO per common share – diluted (3)	$	0.39		$	0.40		$	0.78		$	0.79

(1)		The company considers FFO to be an important supplemental measure of its operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting results. Comparison of the company’s presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the Nareit definition used by such REITs.
(2)		Related to gains, impairments, depreciation on properties and gains/(losses) on sales of marketable securities, where applicable.
(3)		Reflects the potential impact if certain units were converted to common stock at the beginning of the period. FFO available to the company’s common shareholders would be increased by $584 and $483 for the three months ended June 30, 2023 and 2022, respectively. FFO available to the company’s common shareholders would be increased by $1,166 and $955 for the six months ended June 30, 2023 and 2022, respectively. The effect of other certain convertible units would have an anti-dilutive effect upon the calculation of FFO available to the company’s common shareholders per share. Accordingly, the impact of such conversion has not been included in the determination of diluted earnings per share calculations.
(4)		Includes Early extinguishment of debt charges of $7.2 million recognized during the six months ended June 30, 2022.

Reconciliation of Net income/(loss) Available to the Company’s Common Shareholders
to Same Property NOI (1)(2)
(in thousands)
(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net income/(loss) available to the company’s common shareholders	$	100,426		$	(125,751	)	$	383,938		$	105,197
Adjustments:
Management and other fee income		(3,832	)		(3,925	)		(8,386	)		(8,520	)
General and administrative		32,734			27,981			67,483			57,929
Impairment charges		–			14,419			11,806			14,691
Depreciation and amortization		129,245			124,611			255,546			254,905
Gain on sale of properties		(13,170	)		(2,944	)		(52,376	)		(7,137	)
Special dividend income		–			–			(194,116	)		–
Interest expense and other income, net		53,103			49,881			111,277			108,090
(Gain)/loss on marketable securities, net		(14,561	)		261,467			(4,417	)		139,703
Provision/(benefit) for income taxes, net		31,027			96			61,856			(57	)
Equity in income of other investments, net		(4,519	)		(3,385	)		(6,641	)		(8,758	)
Net income/(loss) attributable to noncontrolling interests		2,644			(11,226	)		6,657			(12,569	)
Preferred dividends, net		6,200			6,250			12,451			12,604
Non same property net operating income		(15,549	)		(15,513	)		(32,379	)		(33,119	)
Non-operational expense/(income) from joint ventures, net		22,766			(2,858	)		38,805			16,826
Same Property NOI	$	326,514		$	319,103		$	651,504		$	639,785

(1)		The company considers same property NOI as an important operating performance measure because it is frequently used by securities analysts and investors to measure only the net operating income of properties that have been owned by the company for the entire current and prior year reporting periods. It excludes properties under redevelopment, development and pending stabilization; properties are deemed stabilized at the earlier of (i) reaching 90% leased or (ii) one year following a project’s inclusion in operating real estate. Same property NOI assists in eliminating disparities in net income due to the development, acquisition or disposition of properties during the particular period presented, and thus provides a more consistent performance measure for the comparison of the company’s properties. The company’s method of calculating Same property NOI may differ from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
(2)		Amounts represent Kimco Realty’s pro-rata share.

Reconciliation of the Projected Range of Net Income Available to the Company’s Common Shareholders
to Funds From Operations Available to the Company’s Common Shareholders
(unaudited, all amounts shown are per diluted share)

	Projected Range
	Full Year 2023
	Low			High
Net income available to the company’s common shareholders	$	0.92		$	0.95

Gain on sale of properties		(0.08	)		(0.11	)

Gain on sale of joint venture properties		(0.01	)		(0.02	)

Depreciation & amortization – real estate related		0.82			0.84

Depreciation & amortization – real estate joint ventures		0.10			0.11

Impairment charges (including real estate joint ventures)		0.02			0.02

Special dividend income (1)		(0.31	)		(0.31	)

Gain on marketable securities, net		(0.01	)		(0.01	)

Provision for income taxes (2)		0.10			0.10

FFO available to the company’s common shareholders	$	1.55		$	1.57

(1)		Related to the special cash dividend from ACI
(2)		Related to gains, impairments, depreciation on properties and gains/(losses) on sales of marketable securities, where applicable.

Projections involve numerous assumptions such as rental income (including assumptions on percentage rent), interest rates, tenant defaults, occupancy rates, selling prices of properties held for disposition, expenses (including salaries and employee costs), insurance costs and numerous other factors. Not all of these factors are determinable at this time and actual results may vary from the projected results, and may be above or below the range indicated. The above range represents management’s estimate of results based upon these assumptions as of the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727040584/en/

David F. Bujnicki

Senior Vice President, Investor Relations and Strategy

Kimco Realty Corporation

1-866-831-4297

[email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Other Construction & Property Commercial Building & Real Estate Construction & Property REIT

MEDIA:

July 27, 2023 7:24 am

Bread Financial™ Reports Second Quarter 2023 Results

Bread Financial™ Reports Second Quarter 2023 Results

COLUMBUS, Ohio–(BUSINESS WIRE)–Bread Financial Holdings, Inc. (NYSE: BFH), a tech-forward financial services company that provides simple, flexible payment, lending and saving solutions, today announced its second quarter 2023 financial results. All earnings-related materials are now available at the company’s investor relations website, here.

Bread Financial President and Chief Executive Officer Ralph Andretta and Chief Financial Officer Perry Beberman will host a conference call at 8:30 a.m. ET today to discuss results. A link to the conference call will be available at the company’s investor relations website, and a replay will also be available there following the call.

About Bread Financial™

Bread Financial™ (NYSE: BFH) is a tech-forward financial services company providing simple, personalized payment, lending and saving solutions. The company creates opportunities for its customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, Bread Financial delivers growth for its partners through a comprehensive suite of payment solutions that includes private label and co-brand credit cards and Bread Pay™ buy now, pay later products. Bread Financial also offers direct-to-consumer products that give customers more access, choice and freedom through its branded Bread Cashback™ American Express^® Credit Card and Bread Savings™products.

Headquartered in Columbus, Ohio, Bread Financial is powered by its 7,500+ global associates and is committed to sustainable business practices. To learn more about Bread Financial, visit BreadFinancial.com or follow us on Facebook, LinkedIn, Twitter and Instagram.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727539171/en/

Brian Vereb — Investor Relations

[email protected]

Susan Haugen — Investor Relations

[email protected]

Rachel Stultz — Media

[email protected]

KEYWORDS: United States North America Ohio

INDUSTRY KEYWORDS: Finance Banking Accounting Professional Services Asset Management

MEDIA:

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Posted on July 27, 2023 7:20 am
Merck Announces V116, an Investigational, 21-valent Pneumococcal Conjugate Vaccine Specifically Designed for Adults, Met Key Immunogenicity and Safety Endpoints in Two Phase 3 Trials

Merck Announces V116, an Investigational, 21-valent Pneumococcal Conjugate Vaccine Specifically Designed for Adults, Met Key Immunogenicity and Safety Endpoints in Two Phase 3 Trials

Topline results demonstrated V116 elicited positive immune responses in both vaccine-naïve and vaccine-experienced adult patient populations

The 21 serotypes covered by V116 are responsible for 85% of invasive pneumococcal disease in individuals 65 and older

RAHWAY, N.J.–(BUSINESS WIRE)–
Merck (NYSE: MRK), known as MSD outside of the United States and Canada, today announced positive topline results from two Phase 3 trials evaluating V116, the company’s investigational 21-valent pneumococcal conjugate vaccine in vaccine-naïve and previously vaccinated individuals. If approved, V116 would be the first pneumococcal conjugate vaccine specifically designed for adults. Results from the STRIDE-3 trial demonstrated statistically significant immune responses compared to PCV20 (pneumococcal 20-valent conjugate vaccine) in vaccine-naïve adults for serotypes common to both vaccines as assessed by serotype-specific opsonophagocytic activity (OPA) 30 days post-vaccination. Positive immune responses were also observed for serotypes unique to V116. Additionally, results from STRIDE-6 demonstrated that V116 was immunogenic for all 21 pneumococcal serotypes in the vaccine among adults who previously received a pneumococcal vaccine at least one year prior to the study. In both studies, V116 had a safety profile comparable to the comparator in the studies. Results will be shared with the scientific community in the near future and will support global regulatory licensure applications.

According to pre-pandemic 2019 CDC data, the 21 serotypes covered by V116 are responsible for 85% of invasive pneumococcal disease in individuals 65 and older. V116 includes eight serotypes not currently covered by approved pneumococcal vaccines. Serotypes unique to V116 include 15A, 15C, 16F, 23A, 23B, 24F, 31 and 35B, which were responsible for approximately 30% of invasive pneumococcal disease in individuals 65 and older, based on pre-pandemic 2019 CDC data.

“Despite the availability of current pneumococcal conjugate vaccines, many adults remain vulnerable to pneumococcal disease, especially those who are older,” said Dr. Eliav Barr, senior vice president, head of global clinical development and chief medical officer, Merck Research Laboratories. “These results support the potential for V116 to become an important new preventative option for adults, regardless of prior pneumococcal vaccination status, by expanding coverage to include eight serotypes not currently included in any licensed vaccine. We are very grateful to the patients and investigators who contributed to these studies.”

About STRIDE-3

STRIDE-3 (NCT05425732) is a Phase 3, randomized, double-blind, active comparator-controlled study evaluating the safety, tolerability, and immunogenicity of V116 compared to PCV20 (pneumococcal 20-valent conjugate vaccine) in pneumococcal vaccine-naïve adults (n=2,600). Participants were randomized to receive a single dose of either V116 or PCV20. Primary endpoints included safety, serotype-specific opsonophagocytic activity (OPA) geometric mean titers (GMTs) 30 days post-vaccination and percentage of participants with ≥4-fold rise from baseline in serotype-specific OPAs.

About STRIDE-6

STRIDE-6 (NCT05420961) is a Phase 3, randomized, double-blind, active comparator-controlled study evaluating the safety, tolerability, and immunogenicity of V116 in adults 50 years of age or older (n=717) who previously received a pneumococcal vaccination at least one year before enrollment, including PPSV23 (pneumococcal vaccine, polyvalent [23-valent]), PCV13 (pneumococcal 13-valent conjugate vaccine), PCV15 (pneumococcal 15-valent conjugate vaccine) or PCV20 (pneumococcal 20-valent conjugate vaccine), PCV13+PPSV23, PCV15+PPSV23 or PPSV23+PCV13. Participants were randomized to receive one dose of either V116, PCV15, or PPSV23. The primary endpoints were safety and geometric mean titer (GMT) of serotype-specific opsonophagocytic activity (OPA) responses 30 days post-vaccination.

About V116

V116 is an investigational, 21-valent pneumococcal conjugate vaccine in Phase 3 development for the prevention of invasive pneumococcal disease and pneumococcal pneumonia in the adult population. V116 is specifically designed to address the serotypes that represent adult pneumococcal disease, including eight unique serotypes, 15A, 15C, 16F, 23A, 23B, 24F, 31 and 35B, which account for approximately 30% of adult disease, according to 2019 pre-pandemic CDC data. V116 has potential to expand disease coverage to help protect against invasive pneumococcal disease in more than 85% of individuals 65 and older, based on the same data.

Multiple Phase 3 trials of V116 were initiated within the last 12 months, including STRIDE-3 (NCT05425732), STRIDE-6 (NCT05420961), STRIDE-7 (NCT05393037), STRIDE-4 (NCT05464420), STRIDE-5 (NCT05526716), and STRIDE-8 (NCT05696080).

About Pneumococcal Disease

The global prevalence of pneumococcal disease, an infection caused by bacteria called Streptococcus pneumoniae, is evolving. There are more than 100 different types of pneumococcal bacteria, which can affect adults differently than children. Highly aggressive strains, or serotypes, threaten to put more people at risk for invasive pneumococcal illnesses such as bacteremia (infection in the bloodstream); bacteremic pneumonia (pneumonia with bacteremia); and meningitis (infection of the coverings of the brain and spinal cord), as well as non-invasive pneumonia (when pneumococcal disease is confined to the lungs). While healthy adults can suffer from pneumococcal disease, patient populations particularly vulnerable to infection include adults 65 years of age and older and those with certain chronic or immunocompromising health conditions.

Merck’s Commitment to Pneumococcal Disease Protection

Merck has been at the forefront of pneumococcal disease prevention through vaccination for more than four decades and remains committed to helping to protect people of all ages from this disease. Merck’s ongoing pneumococcal vaccine development program is designed to provide options to address the specific needs of different populations, including infants and children, healthy adults and at-risk subgroups. This approach recognizes that disease burden in pediatric and adult populations is often driven by different bacterial strains, or serotypes, and aims to address unmet needs by offering vaccine options that target serotypes posing the greatest global risk to each population. To learn more about Merck’s pipeline, visit https://www.merck.com.

About Merck

At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA

This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of the global outbreak of novel coronavirus disease (COVID-19); the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2022 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727120762/en/

Media Contacts:

Julie Cunningham

(617) 519-6264

Stacy Quinn

(908) 873-2622

Investor Contacts:

Peter Dannenbaum

(732) 594-1579

Alexis Constantine

(732) 594-1578

KEYWORDS: New Jersey United States North America

INDUSTRY KEYWORDS: Biotechnology Infectious Diseases Health Pharmaceutical Clinical Trials

MEDIA:

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Posted on July 27, 2023 7:18 am
Granite Reports Second Quarter 2023 Results

Granite Reports Second Quarter 2023 Results

Record Committed and Awarded Projects (“CAP”) (1) of $5.4 billion, a sequential increase of $334 million and year-over-year increase of $1.2 billion

Q2 revenue increased $50 million year-over-year led by the California and Mountain Groups

Q2 diluted EPS of $(0.39) and adjusted diluted EPS (2) of $1.03

WATSONVILLE, Calif.–(BUSINESS WIRE)–
Granite Construction Incorporated (NYSE: GVA) today announced results for the quarter ended June 30, 2023.

Second Quarter 2023 Results

Net loss totaled $17 million, or $(0.39) per diluted share, compared to net income of $19 million, or $0.39 per diluted share, for the same period in the prior year. Net loss in the quarter was primarily attributable to a $51 million non-cash charge related to the refinancing of our convertible bonds and a $12 million charge for litigation. Adjusted net income (2) totaled $46 million, or $1.03 per diluted share, compared to adjusted net income (2) of $34 million, or $0.76 per diluted share, in the same period in the prior year.

Revenue increased $50 million to $899 million compared to $849 million in the same period in the prior year. Both Construction and Materials segments posted year-over-year increases with the California and Mountain Groups more than offsetting a slight decrease in revenue in the Central Group.

Gross profit increased $5 million to $103 million compared to $98 million in the same period in the prior year.

Selling, general, and administrative (“SG&A”) expenses increased $5 million to $65 million, or 7.2% of revenue, compared to $60 million, or 7.1% of revenue, in the same period in the prior year. The increase in SG&A expense was primarily due to higher non-qualified deferred compensation expense of $4.4 million, which was mostly offset in Other (income) expense, net.

Adjusted EBITDA (2) was $80 million compared to $63 million in the same period in the prior year.

“We ended the second quarter with a record CAP balance,” said Kyle Larkin, Granite President and Chief Executive Officer. “Our public and private markets remain very strong across our geographies, and we believe we are winning the work necessary to meet our 2024 growth and margin targets.”

“In the second quarter, as we expected, the California and Mountain Groups grew construction revenue year-over-year, more than offsetting the decrease in revenue in the Central Group. Our materials business, which is integral to our home market strategy, showed impressive revenue and gross profit margin growth over the prior year as we recovered from a weather-impacted first quarter of 2023. I expect we will see continued year-over-year improvement in materials and construction revenue and gross profit in the second half of the year.”

“As a reminder, we disclosed our 2024 strategic plan revenue and adjusted EBITDA margin targets back in the first quarter of 2021. Since that time, we have taken steps to de-risk the company, grow a higher-quality CAP portfolio, and with a renewed focus on operational excellence, I believe we are well on our way to meet these targets.”

Six Months Ended June 30, 2023 Results

Net loss totaled $40 million, or $(0.91) per diluted share, compared to a net loss of $8 million, or $(0.18) per diluted share, in the prior year. In addition to the litigation and convertible bond charges described above, the six months ended June 30, 2023 were significantly impacted by inclement weather in the first half of the year compared to the same period in the prior year. Adjusted net income (2) totaled $28 million, or $0.63 per diluted share, compared to adjusted net income (2) of $22 million, or $0.48 per diluted share, in the prior year.

Revenue was flat at $1.5 billion compared to the same period in the prior year as project teams and plants rebounded from the weather-impacted first quarter.

Gross profit decreased $23 million to $135 million compared to $158 million in the same period in the prior year primarily due to schedule impacts on the I-64 High Rise Bridge project and weather impacts in the first quarter of 2023.

SG&A expenses were $138 million or 9.4% of revenue, compared to $130 million or 8.7% of revenue in the same period of the prior year primarily due to higher non-qualified deferred compensation expenses in 2023, which was mostly offset in Other (income) expense, net. Increased stock-based compensation expense also contributed to the higher SG&A expenses. These increases for the six months ended June 30, 2023 were partially offset by the sale of Inliner on March 16, 2022.

Adjusted EBITDA (2) totaled $71 million compared to $69 million in the prior year.

(1) CAP is comprised of revenue we expect to record in the future on executed contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts, as well as the general construction portion of construction manager/general contractor, construction manager/at risk and progressive design build contracts to the extent contract execution and funding is probable.

(2) Adjusted net income, adjusted diluted earnings per share, earnings before interest, taxes, depreciation, and amortization (“EBITDA”), EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. Please refer to the description and reconciliation of non-GAAP measures in the attached tables.

Second Quarter 2023 Segment Results (Unaudited – dollars in thousands)

Construction Segment

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

As Restated and Recast

As Recast

2023

2022

Change

2023

2022

Change

Revenue

$

749,413

$

713,221

$

36,192

5.1

%

$

1,252,829

$

1,291,487

$

(38,658

)

(3.0

)%

Gross profit

$

79,154

$

80,252

$

(1,098

)

(1.4

)%

$

115,859

$

138,731

$

(22,872

)

(16.5

)%

Gross profit as a percent of revenue

10.6

%

11.3

%

9.2

%

10.7

%

Committed and Awarded Projects

June 30, 2023

March 31, 2023

Change – Quarter over Quarter

June 30, 2022

Change – Year over Year

California

$

2,345,611

$

1,913,634

$

431,977

22.6

%

$

1,629,765

$

715,846

43.9

%

Central

1,599,538

1,750,375

(150,837

)

(8.6

%)

1,518,970

80,568

5.3

%

Mountain

1,492,439

1,439,944

52,495

3.6

%

1,064,925

427,514

40.1

%

Total

$

5,437,588

$

5,103,953

$

333,635

6.5

%

$

4,213,660

$

1,223,928

29.0

%

Revenue in the second quarter increased compared to the same period in the prior year led by increases in the California and Mountain Groups, which more than offset a decline in the Central Group. The increase in revenue was driven by higher levels of CAP going into the quarter that will continue to support the groups for the remainder of 2023. For the six months ended June 30, 2023, revenue declined compared to the same period in the prior year primarily due to the wind down of several large projects in the Central Group, as well as the sale of Granite Inliner in the first quarter of 2022.

Gross profit and gross profit margin during the three and six months ended June 30, 2023 were negatively impacted by additional costs on the I-64 High Rise Bridge project in Virginia. The impact to gross profit from this project in the second quarter was a $21 million decrease, and the impact after non-controlling interest was $10 million. For the six months ended June 30, 2023, the impact to gross profit from the project was $32 million and the impact after non-controlling interest was $16 million. Final completion for the project is expected early in the fourth quarter.

CAP increased $334 million sequentially and increased $1.2 billion year-over-year. Our markets have benefited from a strong public funding environment, with California leading the way. We are pursuing many opportunities that we believe will allow us to continue to build strong quality CAP in the remainder of 2023.

Materials Segment

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

As Recast

2023

2022

Change

2023

2022

Change

Revenue

$

149,139

$

136,026

$

13,113

9.6

%

$

205,791

$

211,646

$

(5,855

)

(2.8

)%

Gross profit

$

23,932

$

17,314

$

6,618

38.2

%

$

19,586

$

18,927

$

659

3.5

%

Gross profit as a percent of revenue

16.0

%

12.7

%

9.5

%

8.9

%

Materials revenue and gross profit in the second quarter increased compared to the same period of the prior year driven by higher asphalt and aggregate sales prices and increased aggregate sales volume. Aggregate sales volume increased 9% year-over-year, while asphalt sales volumes were flat.

Outlook

Our guidance for 2023 is updated as noted below:

Revenue in the range of $3.35 billion to $3.45 billion

Adjusted EBITDA margin in the range of 7.5% to 8.5%

SG&A expense in the range of 8.0% to 8.5% of revenue

Mid-20s effective tax rate for adjusted net income

Capital expenditures range of $100 million to $120 million

The Company does not provide a reconciliation of forward-looking adjusted EBITDA margin to the most directly comparable forward-looking GAAP measure of net income (loss) attributable to Granite Construction Incorporated because the Company cannot predict with a reasonable degree of certainty and without unreasonable efforts certain excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the probable significance of the unavailable information.

Kyle Larkin added, “Although our teams recovered well from the wet first quarter and continued to win work across the company, we are lowering our expectation for the amount of work that will be completed in 2023. However, we continue to believe that our record CAP will drive expected revenue growth in 2024 and 2025. Additionally, we are narrowing the range of our guidance for adjusted EBITDA margin to 7.5% to 8.5% for 2023 primarily due to the losses incurred on the I-64 High Rise Bridge project. As I have discussed in the past, we are executing on our plan and believe that the work we have been adding to CAP supports our 2024 target of 9.0% to 11.0% adjusted EBITDA margin.”

Conference Call

Granite will conduct a conference call today, July 27, 2023, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter ended June 30, 2023. The Company invites investors to listen to a live audio webcast of the investor conference call on its Investor Relations website, https://investor.graniteconstruction.com. The investor conference call will also be available by calling 1-877-328-5503; international callers may dial 1-412-317-5472. An archive of the webcast will be available on Granite’s Investor Relations website approximately one hour after the call. A replay will be available after the live call through August 3, 2023, by calling 1-877-344-7529, replay access code 9668964; international callers may dial 1-412-317-0088.

About Granite

Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified construction and construction materials companies in the United States as well as a full-suite civil construction provider. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit graniteconstruction.com, and connect with Granite on LinkedIn, Twitter, Facebook, and Instagram.

Forward-looking Statements

Any statements contained in this news release that are not based on historical facts, including statements regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, 2023 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, Committed and Awarded Projects (“CAP”), results, our belief that we are winning the work necessary to meet both our growth and margin targets in 2024, our expectation that we will continue to see year-over-year improvement in materials and construction revenue and gross profit in the second half of the year, our 2024 strategic plan revenue and adjusted EBITDA margin targets, our belief that we are well on our way to meet those targets, higher levels of CAP going into the quarter will continue to support the groups for the remainder of 2023, final completion of the I-64 project is expected early in the fourth quarter, our pursuit of opportunities that we believe will allow us to continue to build strong quality CAP in the remainder of 2023, lowering expectation for work to be completed in 2023, record backlog will drive expected revenue growth in 2024 and 2025, narrowing adjusted EBITDA margin guidance and our belief that the work we have been adding to CAP supports our 2024 target of 9.0% to 11.0% adjusted EBITDA margin constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” “guidance” and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are estimates reflecting the best judgment of senior management and reflect our current expectations regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, 2023 fiscal year guidance for revenue, adjusted EBITDA margin, SG&A expense, effective tax rate, and capital expenditures, CAP, results, our belief that we are winning the work necessary to meet both our growth and margin targets in 2024, our expectation that we will continue to see year-over-year improvement in materials and construction revenue and gross profit in the second half of the year, our 2024 strategic plan revenue and adjusted EBITDA margin targets, our belief that we are well on our way to meet those targets, higher levels of CAP going into the quarter will continue to support the groups for the remainder of 2023, final completion of the I-64 project is expected early in the fourth quarter, our pursuit of opportunities that we believe will allow us to continue to build strong quality CAP in the remainder of 2023, lowering expectation for work to be completed in 2023, record backlog will drive expected revenue growth in 2024 and 2025, narrowing adjusted EBITDA margin guidance and our belief that the work we have been adding to CAP supports our 2024 target of 9.0% to 11.0% adjusted EBITDA margin. These expectations may or may not be realized. Some of these expectations may be based on beliefs, assumptions or estimates that may prove to be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this news release and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited – in thousands, except share and per share data)

June 30, 2023

December 31, 2022

ASSETS

Current assets

Cash and cash equivalents

$

214,446

$

293,991

Short-term marketable securities

24,981

39,374

Receivables, net

636,797

463,987

Contract assets

288,349

241,916

Inventories

92,151

86,809

Equity in construction joint ventures

188,093

183,808

Other current assets

46,376

37,411

Total current assets

1,491,193

1,347,296

Property and equipment, net

564,077

509,210

Long-term marketable securities

11,575

26,569

Investments in affiliates

86,611

80,725

Goodwill

78,603

73,703

Right of use assets

53,509

49,079

Deferred income taxes, net

31,304

22,208

Other noncurrent assets

59,706

59,143

Total assets

$

2,376,578

$

2,167,933

LIABILITIES AND EQUITY

Current liabilities

Current maturities of long-term debt

$

1,466

$

1,447

Accounts payable

382,458

334,392

Contract liabilities

173,288

173,286

Accrued expenses and other current liabilities

310,022

288,469

Total current liabilities

867,234

797,594

Long-term debt

458,692

286,934

Long-term lease liabilities

38,397

32,170

Deferred income taxes, net

4,571

1,891

Other long-term liabilities

66,234

64,199

Commitments and contingencies

Equity

Preferred stock, $0.01 par value, authorized 3,000,000 shares, none outstanding

—

—

Common stock, $0.01 par value, authorized 150,000,000 shares; issued and outstanding: 43,918,798 shares as of June 30, 2023 and 43,743,907 shares as of December 31, 2022

439

437

Additional paid-in capital

470,511

470,407

Accumulated other comprehensive income

795

788

Retained earnings

429,797

481,384

Total Granite Construction Incorporated shareholders’ equity

901,542

953,016

Non-controlling interests

39,908

32,129

Total equity

941,450

985,145

Total liabilities and equity

$

2,376,578

$

2,167,933

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited – in thousands, except per share data)

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

As Restated

and Recast

As Restated

and Recast

2023

2022

2023

2022

Revenue

Construction

$

749,413

$

713,221

$

1,252,829

$

1,291,487

Materials

149,139

136,026

205,791

211,646

Total revenue

898,552

849,247

1,458,620

1,503,133

Cost of revenue

Construction

670,259

632,969

1,136,970

1,152,756

Materials

125,207

118,712

186,205

192,719

Total cost of revenue

795,466

751,681

1,323,175

1,345,475

Gross profit

103,086

97,566

135,445

157,658

Selling, general and administrative expenses

64,563

60,121

137,685

130,241

Other costs, net

13,607

16,612

18,130

22,891

Gain on sales of property and equipment, net

(3,944

)

(8,915

)

(5,981

)

(9,513

)

Operating income (loss)

28,860

29,748

(14,389

)

14,039

Other (income) expense

Loss on debt extinguishment

51,052

—

51,052

—

Interest income

(3,232

)

(782

)

(6,994

)

(1,352

)

Interest expense

4,131

3,899

7,022

7,484

Equity in income of affiliates, net

(7,044

)

(4,876

)

(12,231

)

(6,165

)

Other (income) expense, net

(1,225

)

3,261

(3,175

)

4,569

Total other expense, net

43,682

1,502

35,674

4,536

Income (loss) before income taxes

(14,822

)

28,246

(50,063

)

9,503

Provision for (benefit from) income taxes

9,024

8,668

(445

)

15,020

Net income (loss)

(23,846

)

19,578

(49,618

)

(5,517

)

Amount attributable to non-controlling interests

6,846

(897

)

9,595

(2,535

)

Net income (loss) attributable to Granite Construction Incorporated

$

(17,000

)

$

18,681

$

(40,023

)

$

(8,052

)

Net income (loss) per share attributable to common shareholders:

Basic

$

(0.39

)

$

0.42

$

(0.91

)

$

(0.18

)

Diluted

$

(0.39

)

$

0.39

$

(0.91

)

$

(0.18

)

Weighted average shares outstanding:

Basic

43,892

44,534

43,829

45,128

Diluted

43,892

52,295

43,829

45,128

(1)

As previously disclosed in our 2022 Annual Report on Form 10-K filed on February 21, 2023, the restatement of our unaudited quarterly financial information for the first three quarters in the year ended December 31, 2022 is necessary. In addition to those restatements, the financial information for the three and six months ended June 30, 2022 presented herein includes adjustments to retrospectively reclassify the results of the former Water and Mineral Services businesses from discontinued operations to continuing operations.

GRANITE CONSTRUCTION INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited – in thousands)

As Restated

Six Months Ended June 30,
2023

2022

Operating activities

Net loss

$

(49,618

)

$

(5,517

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation, depletion and amortization

41,528

32,328

Amortization related to long-term debt

988

1,423

Non-cash loss on debt extinguishment

51,052

—

Gain on sale of business

—

(6,234

)

Gain on sales of property and equipment, net

(5,981

)

(9,513

)

Deferred income taxes

—

2,545

Stock-based compensation

6,702

4,376

Equity in net loss from unconsolidated joint ventures

4,005

17,228

Net income from affiliates

(12,231

)

(6,165

)

Other non-cash adjustments

(7

)

(84

)

Changes in assets and liabilities

(155,386

)

(133,665

)

Net cash used in operating activities

(118,948

)

(103,278

)

Investing activities

Purchases of marketable securities

—

(49,968

)

Maturities of marketable securities

30,000

—

Purchases of property and equipment

(79,689

)

(73,216

)

Proceeds from sales of property and equipment

10,564

15,289

Proceeds from company owned life insurance

1,545

—

Proceeds from the sale of business

—

142,571

Acquisition of business

(26,933

)

—

Issuance of notes receivable

—

(4,560

)

Collection of notes receivable

135

201

Net cash provided by (used in) investing activities

(64,378

)

30,317

Financing activities

Proceeds from long-term debt

55,000

50,000

Debt principal repayments

(249,589

)

(124,660

)

Issuance of capped call

(53,035

)

—

Redemption of warrant

(13,201

)

—

Proceeds from issuance of 3.75% Convertible Notes

373,750

—

Debt issuance costs

(9,806

)

—

Cash dividends paid

(11,391

)

(11,857

)

Repurchases of common stock

(3,766

)

(70,374

)

Contributions from non-controlling partners

22,400

6,327

Distributions to non-controlling partners

(6,850

)

(6,700

)

Other financing activities, net

269

209

Net cash provided by (used in) financing activities

103,781

(157,055

)

Net decrease in cash, cash equivalents and restricted cash

(79,545

)

(230,016

)

Cash, cash equivalents and $0 and $1,512 in restricted cash at beginning of period

293,991

413,655

Cash, cash equivalents and $0 in restricted cash at end of period

$

214,446

$

183,639

Non-GAAP Financial Information

The tables below contain financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, management believes that non-GAAP financial measures such as EBITDA and EBITDA margin are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates. We are also providing adjusted EBITDA and adjusted EBITDA margin, non-GAAP measures, to indicate the impact of loss on debt extinguishment and other costs, net, which include investigation-related legal fees and settlement charges, a litigation charge, reorganization costs, strategic acquisition and divestiture expenses, and a gain on sale of a business in 2022.

We provide adjusted income before income taxes, adjusted provision for income taxes, adjusted net income attributable to Granite Construction Incorporated, adjusted diluted weighted average shares of common stock and adjusted diluted earnings per share attributable to common shareholders, non-GAAP measures, to indicate the impact of the following:

Other costs, net;

Transaction costs which includes acquired intangible amortization expense and acquisition related depreciation related to the acquisition of Layne and Liquiforce;

Loss on debt extinguishment, and

Income taxes related to the disposal of Inliner goodwill.

Management believes that these additional non-GAAP financial measures facilitate comparisons between industry peer companies, and management uses these non-GAAP financial measures in evaluating the Company’s performance. However, the reader is cautioned that any non-GAAP financial measures provided by the Company are provided in addition to, and not as alternatives for, the Company’s reported results prepared in accordance with GAAP. Items that may have a significant impact on the Company’s financial position, results of operations and cash flows must be considered when assessing the Company’s actual financial condition and performance regardless of whether these items are included in non-GAAP financial measures. The methods used by the Company to calculate its non-GAAP financial measures may differ significantly from methods used by other companies to compute similar measures. As a result, any non-GAAP financial measures provided by the Company may not be comparable to similar measures provided by other companies.

GRANITE CONSTRUCTION INCORPORATED

EBITDA AND ADJUSTED EBITDA⁽¹⁾

(Unaudited – dollars in thousands)

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

As Restated

and Recast

As Restated

and Recast

2023

2022

2023

2022

EBITDA:

Net income (loss) attributable to Granite Construction Incorporated

$

(17,000

)

$

18,681

$

(40,023

)

$

(8,052

)

Net income (loss) margin (2)

(1.9

)%

2.2

%

(2.7

)%

(0.5

)%

Depreciation, depletion and amortization expense (3)

21,937

15,769

41,811

32,827

Provision for (benefit from) income taxes

9,024

8,668

(445

)

15,020

Interest expense, net

899

3,117

28

6,132

EBITDA(1)

$

14,860

$

46,235

$

1,371

$

45,927

EBITDA margin(1)(2)

1.7

%

5.4

%

0.1

%

3.1

%

ADJUSTED EBITDA:

Other costs, net

13,607

16,612

18,130

22,891

Loss on debt extinguishment

51,052

—

51,052

—

Adjusted EBITDA(1)

$

79,519

$

62,847

$

70,553

$

68,818

Adjusted EBITDA margin(1)(2)

8.8

%

7.4

%

4.8

%

4.6

%

(1)

We define EBITDA as GAAP net income (loss) attributable to Granite Construction Incorporated, adjusted for net interest expense, taxes, depreciation, depletion and amortization. Adjusted EBITDA and adjusted EBITDA margin exclude the impact of Other costs, net, and loss on debt extinguishment, as described above.

(2)

Represents net income (loss), EBITDA and adjusted EBITDA divided by consolidated revenue of $899 million and $849 million, for the three months ended June 30, 2023 and 2022, respectively and $1.5 billion and $1.5 billion for the six months ended June 30, 2023 and 2022, respectively.

(3)

Amount includes the sum of depreciation, depletion and amortization which are classified as cost of revenue and selling, general and administrative expenses in the condensed consolidated statements of operations.

GRANITE CONSTRUCTION INCORPORATED

ADJUSTED NET INCOME (LOSS) RECONCILIATION

(Unaudited – in thousands, except per share data)

Three Months Ended

June 30, 2023

Six Months Ended

June 30, 2023

As Restated

and Recast

As Restated

and Recast

2023

2022

2023

2022

Income (loss) before income taxes

$

(14,822

)

$

28,246

$

(50,063

)

$

9,503

Other costs, net

13,607

16,612

18,130

22,891

Transaction costs

2,460

—

4,954

—

Loss on debt extinguishment

51,052

—

51,052

—

Adjusted income before income taxes

$

52,297

$

44,858

$

24,073

$

32,394

Provision for (benefit from) income taxes

$

9,024

$

8,668

$

(445

)

$

15,020

Tax effect of goodwill disposal related to sale of business

—

—

—

(10,070

)

Tax effect of adjusting items (1)

4,177

1,199

6,002

2,832

Adjusted provision for income taxes

$

13,201

$

9,867

$

5,557

$

7,782

Net income (loss) attributable to Granite Construction Incorporated

$

(17,000

)

$

18,681

$

(40,023

)

$

(8,052

)

After-tax adjusting items

62,942

15,413

68,134

30,129

Adjusted net income attributable to Granite Construction Incorporated

$

45,942

$

34,094

$

28,111

$

22,077

Diluted weighted average shares of common stock

43,892

52,295

43,829

45,128

Add: dilutive effect of restricted stock units and Convertible Notes (2)

10,681

—

10,679

7,802

Less: dilutive effect of Convertible Notes (3)

(10,095

)

(7,309

)

(10,095

)

(7,309

)

Adjusted diluted weighted average shares of common stock

44,478

44,986

44,413

45,621

Diluted net income (loss) per share attributable to common shareholders

$

(0.39

)

$

0.39

$

(0.91

)

$

(0.18

)

After-tax adjusting items per share attributable to common shareholders

1.42

0.37

1.54

0.66

Adjusted diluted earnings per share attributable to common shareholders

$

1.03

$

0.76

$

0.63

$

0.48

(1)

The tax effect of adjusting items was calculated using the Company’s estimated annual statutory tax rate. The tax effect of adjusting items for the three and six months ended June 30, 2023 excludes the $51 million loss on debt extinguishment which is not tax deductible. The tax effect of adjusting items for the three and six months ended June 30, 2022 excludes a $12 million accrual related to the resolution of the SEC investigation which is not tax deductible.

(2)

Represents the dilutive effect on adjusted net income attributable to Granite Construction Incorporated of 586,000, 584,000 and 493,000 related to restricted stock units and 10,095,000, 10,095,000 and 7,309,000 related to the 2.75% Convertible Notes and the 3.75% Convertible Notes potentially converting into shares for the three months ended June 30, 2023 and the six months ended June 30, 2023 and 2022, respectively.

(3)

When calculating diluted net income (loss) attributable to common shareholders, GAAP requires that we include potential share dilution from the 2.75% Convertible Notes and the 3.75% Convertible Notes. For the purposes of calculating adjusted diluted net income per share attributable to common shareholders, the dilutive effect from the 2.75% Convertible Notes and 3.75% Convertible Notes is removed to reflect the impact of the purchased equity derivative instruments which offset any potential share dilution above the $31.47 conversion price up to a share price of $53.44 for the 2.75% Convertible Notes and above the $46.12 conversion price up to a share price of $79.83 for the 3.75% Convertible Notes. The average share price did not exceed $53.44 in any period.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230726258322/en/

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Posted on July 27, 2023 7:17 am
Pfizer Announces Executive Leadership to Advance Oncology Research and Development Strategy

Pfizer Announces Executive Leadership to Advance Oncology Research and Development Strategy

NEW YORK–(BUSINESS WIRE)–Pfizer Inc. (NYSE: PFE) today announced changes to its executive leadership team to further advance its aspirations to discover and develop new medicines and vaccines, with an emphasis on oncology.

Effective today, Chris Boshoff, M.D., PhD, will join Pfizer’s Executive Leadership Team as Chief Oncology Research and Development Officer and Executive Vice President reporting to Chairman and Chief Executive Officer, Albert Bourla. Under his leadership, Pfizer will continue to invest in its fight against cancer and Dr. Boshoff will be the single point of accountability for the entire oncology pipeline – from discovery to early and late-phase clinical development.

“We are delighted to welcome Chris Boshoff to our executive leadership team as he works to accelerate the delivery of the next generation of cancer breakthroughs to patients around the world,” said Dr. Albert Bourla, Chairman and CEO, Pfizer Inc. “About 1 in 3 people will be diagnosed with cancer during their lifetime in the United States, which means just about every family will be impacted by this dreaded disease. Chris is an exceptional physician-scientist with the vision and expertise to unleash the scale and strength of Pfizer’s ambition in cancer research.”

Previously, Dr. Boshoff oversaw clinical research and product development activities for Pfizer’s Oncology portfolio, including 24 approved innovative cancer medicines and biosimilars in more than 30 indications, as well as Pfizer’s industry-leading Rare Disease portfolio of innovative medicines spanning four therapeutic areas. Before assuming leadership roles in the biopharmaceutical industry, Dr. Boshoff served as Director of the University College London (UCL) Cancer Institute. Dr. Boshoff earned his medical degree from University of Pretoria in South Africa, a PhD from the Institute of Cancer Research in London and trained as a medical oncologist at the Royal Marsden and Royal Free Hospitals in London. In addition to his expanded role, Dr Boshoff is leading the integration planning for Seagen’s medicines and team.

Mikael Dolsten, M.D., PhD, currently Chief Scientific Officer & President, Pfizer Worldwide Research, Development and Medical, will now expand his role to lead all discovery, early- and late-stage clinical development, for all non-oncology therapeutic areas as Chief Scientific Officer, President, Pfizer Research & Development. In addition to his current leadership of discovery and early-phase clinical development, he will lead an end-to-end model across all of Pfizer’s other therapeutic areas. These therapeutic areas include Vaccines, Inflammation and Immunology, Internal Medicine and Infectious Diseases as well as non-malignant hematology and rare neuromuscular diseases.

As a result of these moves, William Pao, Chief Development Officer, and Executive Vice President will be leaving Pfizer in the month ahead to pursue new opportunities outside the company. A highly capable and results-oriented leader, William always displayed high integrity and rigorous scientific standards in his work and made significant contributions to the Global Product Development (GPD) organization by bringing strong, data-driven decision-making that always put patients at the center.

In March, Pfizer announced its proposed acquisition of Seagen and, subject to receipt of all required regulatory approvals, the intention is to bring together both organizations to create a leading company in the battle against cancer. Pfizer believes the changes announced today will benefit the company in its current stand-alone structure, and also aligns with Pfizer’s vision for the potentially combined organizations. Pfizer strongly believes the transaction is pro-patient, pro-competitive, and pro-innovation in the battle to defeat cancer. The two companies continue to operate independently until the time of close which is expected in late 2023 or early 2024.

About Pfizer: Breakthroughs That Change Patients’ Lives

At Pfizer, we apply science and our global resources to bring therapies to people that extend and significantly improve their lives. We strive to set the standard for quality, safety and value in the discovery, development and manufacture of health care products, including innovative medicines and vaccines. Every day, Pfizer colleagues work across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge the most feared diseases of our time. Consistent with our responsibility as one of the world’s premier innovative biopharmaceutical companies, we collaborate with health care providers, governments and local communities to support and expand access to reliable, affordable health care around the world. For more than 170 years, we have worked to make a difference for all who rely on us. We routinely post information that may be important to investors on our website at www.Pfizer.com. In addition, to learn more, please visit us on www.Pfizer.com and follow us on Twitter at @Pfizer and @Pfizer News, LinkedIn, YouTube and like us on Facebook at Facebook.com/Pfizer.

DISCLOSURE NOTICE:

The information contained in this release is as of July 27, 2023. Pfizer assumes no obligation to update forward-looking statements contained in this release as the result of new information or future events or developments.

This release contains forward-looking information about Pfizer’s oncology and research and development organizations, portfolios and strategy, planned investment and Pfizer’s proposed acquisition of Seagen, including their potential benefits, that involves substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Risks and uncertainties include, among other things, risks and uncertainties related to Pfizer’s proposed acquisition of Seagen, including risks related to the satisfaction or waiver of the conditions to closing the proposed acquisition (including the failure to obtain necessary regulatory approvals) in the anticipated timeframe or at all, including the possibility that the proposed acquisition does not close; risks related to the ability to realize the anticipated benefits of the proposed acquisition, including the possibility that the expected benefits from the acquisition will not be realized or will not be realized within the expected time period; the risk that the businesses will not be integrated successfully; disruption from the transaction making it more difficult to maintain business and operational relationships; negative effects of the announcement or the consummation of the proposed acquisition on the market price of Pfizer’s common stock and/or operating results; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed acquisition or Seagen’s business; risks related to the financing of the transaction; other business effects and uncertainties, including the effects of industry, market, business, economic, political or regulatory conditions; future exchange and interest rates; changes in tax and other laws, regulations, rates and policies; the impact of the proposed acquisition on future business combinations or disposals; uncertainties regarding the commercial success of Pfizer’s and Seagen’s commercialized and pipeline products; the uncertainties inherent in research and development, including the ability to meet anticipated clinical endpoints, commencement and/or completion dates for clinical trials, regulatory submission dates, regulatory approval dates and/or launch dates, as well as the possibility of unfavorable new clinical data and further analyses of existing clinical data; risks associated with interim data; the risk that clinical trial data are subject to differing interpretations and assessments by regulatory authorities; whether regulatory authorities will be satisfied with the design of and results from the clinical studies; whether and when drug applications may be filed in any jurisdictions for Pfizer’s or Seagen’s pipeline products; whether and when any such applications may be approved by regulatory authorities, which will depend on myriad factors, including making a determination as to whether the product’s benefits outweigh its known risks and determination of the product’s efficacy and, if approved, whether any such products will be commercially successful; uncertainties regarding the impact of COVID-19; and competitive developments.

A further description of risks and uncertainties can be found in Pfizer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and in its subsequent reports on Form 10-Q, including in the sections thereof captioned “Risk Factors” and “Forward-Looking Information and Factors That May Affect Future Results”, as well as in its subsequent reports on Form 8-K, all of which are filed with the U.S. Securities and Exchange Commission and available at www.sec.gov and www.pfizer.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230726258329/en/

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