Market Newsdesk

May 2, 2023 4:38 pm

Performant Financial Corporation to Report first Quarter 2023 Earnings on May 9, 2023

LIVERMORE, Calif.–(BUSINESS WIRE)–
Performant Financial Corporation (Nasdaq: PFMT) (the Company), a leading provider of technology-enabled payment integrity, eligibility, and related analytics services, announced today that the Company will report its first quarter 2023 results after the market closes on Tuesday, May 9, 2023. The Company will also hold a conference call to discuss results at 5:00 pm (Eastern Time) that day.

The conference call can be accessed by dialing 888-886-7786 (domestic) or 416-764-8658 (international). A replay will be available approximately three hours after the call, through May 16, 2023 accessible by dialing 844-512-2921 (domestic), or 412-317-6671 (international). The passcode for the replay is 87830265.

The Company will also host a live webcast of its conference call which may be accessed on the Investor Relations section of the Company’s website at investors.performantcorp.com. A replay will be available on the website following the call.

ABOUT PERFORMANT

Performant helps commercial healthcare and government payers enhance revenue and contain costs by identifying, preventing, and recovering waste, improper payments, and defaulted assets. Performant is a leading provider of these services in several markets, including Medicare, Medicaid, and commercial healthcare. Performant has been providing healthcare recovery audit services for more than a decade and works with leading national payers, regional payers, and Blues plans.

Powered by a proprietary analytics platform and workflow technology, Performant also provides professional services related to the recovery effort, including advanced reporting capabilities, support services, customer care, and stakeholder training programs meant to mitigate future instances of improper payments. Founded in 1976, Performant is headquartered in Livermore, California.

To learn more about Performant, please visit https://www.performantcorp.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20230502006071/en/

Richard Zubek, Investor Relations

Performant Financial Corporation

(925) 960-4988

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Payments Health Technology Practice Management Health Technology Managed Care Software

MEDIA:

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May 2, 2023 4:38 pm

Mondelēz International Names Deepak Iyer as EVP & President, Asia Pacific, Middle East and Africa

25+ year veteran Iyer has successfully led growth of businesses in India, Southeast Asia and Africa
Maurizio Brusadelli to leave company in June to pursue external leadership opportunity

CHICAGO, May 02, 2023 (GLOBE NEWSWIRE) — Mondelēz International (Nasdaq: MDLZ) today announced that Deepak Iyer, 56, the company’s President, India & Southeast Asia, has been named Executive Vice President and President, Asia Pacific, Middle East and Africa (AMEA) effective June 5. In his new role, Iyer will be responsible for leading the company’s $6.8 billion AMEA business across more than 70 countries, which includes iconic brands such as Oreo and belVita biscuits, Cadbury chocolate and Kinh Do cakes.

“With close to three decades of leadership experience and a strong track record of success driving the growth of brands in emerging markets across Asia and Africa, Deepak is the ideal leader to continue our strong and sustained growth across the AMEA region,” said Chairman and CEO Dirk Van de Put. “Under his leadership these past six and a half years, India has delivered strong, profitable growth and become a consistent exporter of talent and best practices across our global network. We look forward to leveraging his skills and experience in this expanded role to drive greater positive impact across the broader region and the entire company.”

Since 2016, Iyer has successfully led the company’s India business driving sustained double-digit revenue growth, significantly expanded profit margins, strong cash flow generation and the adoption of advanced technologies and use of consumer data. An engineer with and MBA and more than three decades of management experience across Sales, Marketing and General Management, he has successfully managed businesses across India, Southeast Asia and Africa. Iyer has vast and versatile industry and operating model experiences including time at PepsiCo and Wrigley India Pvt Ltd. Importantly, he has built a top team in CPG, widely recognized for best-in-class marketing, sales, sustainability integration, talent and engagement and supply chain capability. Iyer replaces Maurizio Brusadelli, who will leave the company in June to pursue another leadership opportunity.

“I am thankful to Maurizio, for his leadership during these past seven years in AMEA and for his three decades of contributions at the company,” said Van de Put. “Maurizio is a passionate leader who has played a key role in building our AMEA business into a growth engine of the company. I appreciate the foundation he has built to set Deepak and the team up for continued success and wish him the best in his future endeavor.”

About Mondelēz International

Mondelēz International, Inc. (Nasdaq: MDLZ) empowers people to snack right in over 150 countries around the world. With 2022 net revenues of approximately $31 billion, MDLZ is leading the future of snacking with iconic global and local brands such as Oreo, Ritz, LU, Clif Bar and Tate’s Bake Shop biscuits and baked snacks, as well as Cadbury Dairy Milk, Milka and Toblerone chocolate. Mondelēz International is a proud member of the Standard and Poor’s 500, Nasdaq 100 and Dow Jones Sustainability Index. Visit www.mondelezinternational.com or follow the company on Twitter at www.twitter.com/MDLZ.

Contact:	Tracey Noe (Media)	Shep Dunlap (Investors)
	1-847-943-5678	1-847-943-5454
	[email protected]	[email protected]

May 2, 2023 4:37 pm

Mayville Engineering Company Announces First Quarter and 2023 Results

Mayville Engineering Company Announces First Quarter and 2023 Results

MAYVILLE, Wis.–(BUSINESS WIRE)–
Mayville Engineering Company (NYSE: MEC) (the “Company” or “MEC”), a leading value-added provider of design, prototyping and manufacturing solutions serving diverse end-markets, today announced results for the three months ended March 31, 2023.

FIRST QUARTER 2023 RESULTS

(All comparisons versus the prior-year period)

Net sales of $142.6 million, or +4.7% y/y
Net income of $2.6 million, ($1.3) million y/y
Diluted EPS of $0.12, including a ($0.10) per share impact from the Hazel Park facility ramp
Adjusted EBITDA of $13.8 million, or (6.3%) y/y, including $1.8 million impact from the Hazel Park facility ramp

MANAGEMENT COMMENTARY

“We delivered solid organic sales growth in the first quarter, highlighted by continued momentum within our commercial vehicle, military and powersports markets,” stated Jag Reddy, President and Chief Executive Officer. “Despite stable demand conditions, near-term supply chain disruptions and cost under-absorption impacted our margins as we ramp production at our new Hazel Park facility. As expected, Hazel Park affected first quarter Adjusted EBITDA and Adjusted EBITDA margin rate by $1.8 million and 120 basis points, respectively. Excluding the impact of Hazel Park, Adjusted EBITDA increased 5.6% on a year-over-year basis, while Adjusted EBITDA margin increased to 10.9%.”

“Our first quarter results demonstrate continued progress on our MBX-driven commercial and operational priorities, with a long-term focus on margin expansion and profitable growth,” stated Reddy. “We continue to drive MBX adoption across each of organizational centers of excellence and intend to provide MBX-led, multi-year performance targets at our first-ever Investor Day in late 2023.”

“Today, we are reiterating our full-year 2023 financial guidance,” continued Reddy. “While first quarter operating cash flow was impacted by the timing of capital payments, we continue to anticipate MEC will generate significant year-over-year growth in free cash flow this year, positioning us to reduce net leverage, while investing in new capabilities that further enhance the full suite of integrated solutions we provide our customers. As before, we see the potential to expand our fabrication capabilities to include lightweight materials, such as aluminum, plastics and composites, the combination of which position us to capitalize on demand growth within energy transition markets.”

PERFORMANCE SUMMARY

Net sales increased by 4.7% on a year-over-year basis in the first quarter 2023, driven by a combination of increased commercial sales volumes and continued price discipline, partially offset by supply chain challenges affecting some of our customers and softening demand in our construction & access end market.

Manufacturing margin was $16.4 million in the first quarter 2023, or 11.5% of net sales, versus $14.9 million, or 10.9% of net sales, in the prior year period. The year-over-year improvement in manufacturing gross margin was driven by a combination of strong volume growth resulting from new project starts and strong commercial vehicle demand, together with targeted commercial price actions, which partially offset lower scrap income.

Profit sharing, bonus and deferred compensation expense increased $0.5 million to $3.0 million in the first quarter of 2023 as the Company transitioned to an employer match program for its 401(k) plan. Other selling, general and administrative expenses were $7.0 million in the first quarter of 2023 as compared to $5.7 million for the same prior year period. The increase was predominantly attributable to increasing salaries, wages and benefits, recruiting fees and higher professional fees related to the Company preparing to be Sarbanes-Oxley Act Section 404(b) compliant for 2024.

Interest expense was $1.7 million in the first quarter 2023, compared to $0.6 million in the prior year period, primarily due to higher interest rates.

MEC reported Adjusted EBITDA of $13.8 million in the first quarter 2023, or 9.7% of net sales, versus $14.8 million, or 10.8% of net sales, in the prior-year period. First quarter 2023 Adjusted EBITDA reflects $1.8 million of cost under-absorption associated with the ramp-up of production at the Hazel Park facility. Excluding the impact of the ramp-up of the Hazel Park facility, Adjusted EBITDA margin would have been 10.9%.

Net income for the first quarter of 2023 was $2.6 million, or $0.12 per diluted share, versus $3.8 million, or $0.19 per diluted share, in the prior-year year period. The 32.7% year-over-year decline in net income in the first quarter of 2023 reflects a $1.8 million, or $0.10 per diluted share, impact from the ramp-up of the Hazel Park facility and a $1.2 million, or $0.06 per diluted share, non-recurring gain in the prior-year period resulting from an impairment on long-lived assets and a gain on contracts associated with the former fitness customer.

Net cash used in operations during the first quarter of 2023 was $6.0 million, compared to $0.4 million in the prior year period. Net cash used in operations during the quarter reflects a $7.8 million use of cash for working capital purposes.

END-MARKET UPDATE

	Three Months Ended
	March 31,
	2023		2022
Commercial Vehicle	$	59,155	$	50,865
Construction & Access		26,507		29,744
Powersports		24,098		22,575
Agriculture		14,451		15,248
Military		8,569		5,171
Other		9,866		12,649
Net Sales	$	142,645	$	136,252

Commercial Vehicles

MEC is a Tier 1 supplier to many of the country’s top original equipment manufacturers (OEM) of commercial vehicles providing exhaust & aftertreatment, engine components, cooling, fuel and structural systems for both heavy- and medium-duty commercial vehicles.

Net sales to the commercial vehicle market were $59.2 million in the first quarter of 2023, an increase of 16.3% versus the prior-year period. The increase in sales was primarily the result of volume increases and strengthened end market demand due to a 17% year-over-year increase in the class 8 commercial vehicle build schedule.

Construction & Access

MEC manufactures thousands of parts for the construction & access market including fenders, hoods, supports, frames, platforms, frame structures, doors and tubular products such as exhaust & aftertreatment, engine components, cooling system components, handrails and full electro-mechanical assemblies.

Net sales to the construction & access market were $26.5 million in the first quarter 2023, a decrease of 10.9% versus the prior-year period. The decrease in sales was primarily driven by decelerating residential construction demand.

Powersports

MEC manufactures stampings and complex metal assemblies and coatings for the marine propulsion, all-terrain vehicles (ATV), multi-utility vehicles (MUV) and motorcycle markets. MEC’s powersports expertise includes axle housings, steering columns, swing arms, fenders, suspension components, ATV/MUV racks, cowl assemblies and vehicle frames.

Net sales to the powersports market were $24.1 million in the first quarter of 2023, an increase of 6.7% versus the prior-year period. The increase in sales was the result of an increase in volumes from new project wins and share gains from both new and existing customers.

Agriculture

MEC is an integral partner in the supply chain of the world’s leading agriculture OEMs manufacturing thousands of parts including fenders, hoods, supports, frames, platforms, frame structures, doors and tubular products such as exhaust, engine components, cooling system components, handrails and full electro-mechanical assemblies.

Net sales to the agriculture market were $14.5 million during the first quarter of 2023, a decrease of 5.2% versus the prior-year period. The decrease in sales was driven mostly by a decline in small-ag equipment demand.

Military

MEC holds the International Traffic in Arms Regulations (ITAR) certification and produces components for the United States military. Products include exhaust, engine components, cooling, fuel, suspension, structural systems and chemical agent resistant coating (CARC) painting capabilities.

Net sales to the military market were $8.6 million in the first quarter of 2023, an increase of 65.7% versus the prior-year period. Contributions from new programs, new vehicle introductions and demand associated with the conflict in Ukraine contributed to the year-over-year sales growth.

Other

MEC also produces a wide variety of components and assemblies for customers in the power generation, industrial equipment, mining, forestry, communications, and medical markets.

Net sales to other end markets for the first quarter of 2023 were $9.9 million, a decrease of 22.0% year-over-year. Sales in this market primarily relate to MEC Outdoors, tooling and additional miscellaneous markets.

STRATEGIC UPDATE

During the first quarter, MEC continued the rigorous implementation of its MEC Business Excellence (MBX) initiative, a value-creation framework designed to drive sustained operational and commercial excellence execution across all aspects of the organization. Upon full implementation, MEC expects MBX to drive improved margin capture, free cash generation and profitability over a multi-year period. For the full-year 2023, MEC expects to deliver between 40-70 basis points of manufacturing margin benefit related to MBX.

Drive a High-Performance Culture. The Company is focused on effectuating cultural change across its organization by implementing performance-based metrics, daily lean management and other process-oriented strategies. Through these efforts, the Company intends to create a high-performance culture capable of driving improved performance, asset utilization and cost optimization. During the first quarter, the Company finalized the implementation and alignment of processes and best-practices across the enterprise to drive strategic execution.
Drive Operational Excellence. The Company is focused on leveraging technologies and capabilities to increase productivity and reduce costs across the value chain. The Company intends to achieve this objective through the implementation of lean initiatives such as value stream mapping, sales, inventory and operations (SIOP) planning, and further optimization of its supply chain and procurement strategies. During the first quarter, the Company held a number of kaizen events to drive continuous improvement in plant operations and commercial pricing processes.
Drive Commercial Expansion. The Company is focused on driving commercial growth through an integrated, solutions-oriented approach that leverages its full suite of design, prototyping and aftermarket services; an expansion of its fabrication capabilities beyond steel, within an emphasis on lightweight aluminum, plastics and composites; diversification within high-growth energy transition markets; further market penetration within existing end-markets; and the implementation of value-based pricing. For example, during the first quarter, MEC continued to grow its share of wallet in products supporting thermal management of electric vehicle (EV) batteries. In addition, the company continued to expand market share within the EV category within its commercial vehicle market to meet consumer demand as OEMs launch new EV platforms. MEC continues to increase engagement in the EV markets and will continue to collaborate with new and potential customers to bring products to market.
Drive Human Resource Optimization. The Company remains focused on the recruitment and retention of skilled, experienced employees to support the growth of its business. This component of the MBX value creation framework is designed to provide competitive, performance-based incentives; develop high-potential candidates for internal development and advancement; ensure business continuity through multi-tiered succession planning; and to ensure a stable recruiting pipeline. During the first quarter, the Company announced the appointment of Rachele Lehr as Chief Human Resources Officer to spearhead the Company’s strategic human resource efforts.

BALANCE SHEET UPDATE

As of March 31, 2023, MEC had net debt outstanding of $83.8 million and total cash and availability on its senior secured revolving credit facility of $196.3¹million. At the end of the first quarter, the ratio of net debt to trailing twelve-month Adjusted EBITDA was 1.4x, consistent with its long-term net leverage target of at or below 2.5x.

FINANCIAL GUIDANCE

The Company issued financial guidance for the full year 2023. All guidance is current as of the time provided and is subject to change.


	FY 2022	FY 2023
(in Millions)	Actual	Forecast
Net Sales	$539.4	$540 – $580
Adjusted EBITDA	$60.8	$62 – $71
Capital Expenditures	$58.6	$20 – $25

_____________

¹This amount is reduced to approximately $114.7 million after taking into account the $81.6 million of outstanding borrowings under the credit facility as of March 31, 2023.

The underlying assumptions behind the Company’s financial guidance have not changed. The Company continues to expect net sales for 2023 to reflect raw material pass-through costs of between negative 4% to negative 5% of total net sales for the year, as compared to positive 5% to 6% of net sales for the full year 2022. The Company’s Adjusted EBITDA guidance reflects scrap income of between $7 million and $9 million, compared to $13 million in the full year 2022. Full-year 2023 Adjusted EBITDA guidance also reflects $4 million to $6 million of under-absorbed overhead costs associated with the ramp-up of production at the Company’s Hazel Park, Michigan manufacturing facility. The Company expects that the unfavorable impact from the ramp-up of production at Hazel Park will be partially offset by a 40 to 70 basis point improvement in manufacturing margins resulting from the MBX initiatives, which will directly benefit Adjusted EBITDA.

FIRST QUARTER 2023 RESULTS CONFERENCE CALL

The Company will host a conference call on Wednesday, May 3, 2023 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).

For a live webcast of the conference call and to access the accompanying investor presentation, please visit www.mecinc.com and click on the link to the live webcast on the Investors page.

For telephone access to the conference, call (833) 470-1428 within the United States, or call (833) 950-0062 within Canada and please use the Access Code: 993353.

FORWARD-LOOKING STATEMENTS

This press release includes forward-looking statements that reflect plans, estimates and beliefs. Such statements involve risk and uncertainties. Actual results may differ materially from those contemplated by these forward-looking statements as a result of various factors. Important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements include, but are not limited to: macroeconomic conditions, including inflation, rising interest rates and recessionary concerns, as well as ongoing supply chain challenges, labor availability and cost pressures, and the COVID-19 pandemic, have had, and may continue to have, a negative impact on our business, financial condition, cash flows and results of operations (including future uncertain impacts); risks relating to developments in the industries in which our customers operate; risks related to scheduling production accurately and maximizing efficiency; our ability to realize net sales represented by our awarded business; failure to compete successfully in our markets; our ability to maintain our manufacturing, engineering and technological expertise; the loss of any of our large customers or the loss of their respective market shares; risks related to entering new markets; our ability to recruit and retain our key executive officers, managers and trade-skilled personnel; volatility in the prices or availability of raw materials critical to our business; manufacturing risks, including delays and technical problems, issues with third-party suppliers, environmental risks and applicable statutory and regulatory requirements; our ability to successfully identify or integrate acquisitions; our ability to develop new and innovative processes and gain customer acceptance of such processes; risks related to our information technology systems and infrastructure; geopolitical and economic developments, including foreign trade relations and associated tariffs; results of legal disputes, including product liability, intellectual property infringement and other claims; risks associated with our capital-intensive industry; risks related to our treatment as an S Corporation prior to the consummation of our initial public offering; risks related to our employee stock ownership plan’s treatment as a tax-qualified retirement plan; and other factors described in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022, as such may be amended or supplemented in our subsequently filed Quarterly Reports on Form 10-Q. This discussion should be read in conjunction with our audited consolidated financial statements included in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2022. We undertake no obligation to update or revise any forward-looking statements after the date on which any such statement is made, whether as a result of new information, future events or otherwise, except as required by federal securities laws.

ABOUT MAYVILLE ENGINEERING COMPANY

Founded in 1945, Mayville Engineering Company (MEC) is a leading U.S.-based, vertically integrated, value-added manufacturing partner providing a full suite of manufacturing solutions from concept to production, including design, prototyping and tooling, fabrication, coating, assembly and aftermarket components. Our customers operate in diverse end markets, including heavy- and medium-duty commercial vehicles, construction & access equipment, powersports, agriculture, military and other end markets. Along with process engineering and development services, MEC maintains an extensive manufacturing infrastructure with 20 facilities across seven states. These facilities make it possible to offer conventional and CNC (computer numerical control) stamping, shearing, fiber laser cutting, forming, drilling, tapping, grinding, tube bending, machining, welding, assembly and logistic services. MEC also possesses a broad range of finishing capabilities including shot blasting, e-coating, powder coating, wet spray and military grade chemical agent resistant coating (CARC) painting.

NON-GAAP FINANCIAL MEASURES

This press release contains financial information calculated in a manner other than in accordance with U.S generally accepted accounting principles (“GAAP”).

The non-GAAP measures used in this press release are EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin.

EBITDA represents net income before interest expense, provision for income taxes, depreciation, and amortization. EBITDA Margin represents EBITDA as a percentage of net sales for each period. Adjusted EBITDA represents EBITDA before stock-based compensation expense, Hazel Park transition and legal costs due to the former fitness customer and impairment charges on long-lived assets and gain on contracts specifically purchased to meet obligations under the agreement with our former fitness customer. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of net sales for each period. We present EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin as management uses these measures as key performance indicators, and we believe they are measures frequently used by securities analysts, investors and other parties to evaluate companies in our industry. These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures should not be considered as an alternative to net income, or any other performance measure derived in accordance with GAAP as an indicator of our operating performance. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP.

Our calculation of EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to the similarly named measures reported by other companies. Potential differences between our measures of EBITDA and Adjusted EBITDA compared to other similar companies’ measures of EBITDA and Adjusted EBITDA may include differences in capital structure and tax positions.

Please reference our reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to EBITDA, Adjusted EBITDA and the calculation of EBITDA Margin and Adjusted EBITDA Margin included in this press release.

Mayville Engineering Company, Inc. Consolidated Balance Sheet (in thousands, except share amounts) (unaudited)

	March 31,			December 31,
	2023			2022
ASSETS
Cash and cash equivalents	$	126		$	127
Receivables, net of allowances for doubtful accounts of $572 at March 31, 2023 and $545 at December 31, 2022		74,239			58,001
Inventories, net		68,948			71,708
Tooling in progress		8,039			7,938
Prepaid expenses and other current assets		3,470			3,529
Total current assets		154,822			141,303
Property, plant and equipment, net		142,956			145,771
Assets held for sale		81			83
Goodwill		71,535			71,535
Intangible assets, net		42,071			43,809
Operating lease assets		34,787			36,073
Other long-term assets		1,749			2,007
Total assets	$	448,001		$	440,581
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	52,376		$	53,735
Current portion of operating lease obligation		4,894			4,857
Accrued liabilities:
Salaries, wages, and payroll taxes		7,320			7,288
Profit sharing and bonus		1,137			6,860
Current portion of deferred compensation		17,802			18,062
Other current liabilities		12,645			11,646
Total current liabilities		96,174			102,448
Bank revolving credit notes		81,576			72,236
Operating lease obligation, less current maturities		30,648			31,891
Deferred compensation, less current portion		3,229			3,132
Deferred income tax liability		12,136			11,818
Other long-term liabilities		895			1,189
Total liabilities	$	224,658		$	222,714
Commitments and contingencies
Common shares, no par value, 75,000,000 authorized, 21,779,959 shares issued at March 31, 2023 and 21,645,193 at December 31, 2022		—			—
Additional paid-in-capital		202,011			200,945
Retained earnings		28,845			26,274
Treasury shares at cost, 1,357,929 shares at March 31, 2023 and 1,472,447 at December 31, 2022		(7,513	)		(9,352	)
Total shareholders’ equity		223,343			217,867
Total	$	448,001		$	440,581

Mayville Engineering Company, Inc. Consolidated Statement of Net Income (in thousands, except share amounts and per share data) (unaudited)

	Three Months Ended
	March 31,
	2023			2022
Net sales	$	142,645		$	136,252
Cost of sales		126,268			121,370
Amortization of intangible assets		1,738			1,738
Profit sharing, bonuses, and deferred compensation		3,003			2,548
Employee stock ownership plan expense		—			490
Other selling, general and administrative expenses		6,966			5,725
Impairment of long-lived assets and gain on contracts		—			(1,183	)
Income from operations		4,670			5,564
Interest expense		(1,658	)		(567	)
Income before taxes		3,012			4,997
Income tax expense		441			1,175
Net income and comprehensive income	$	2,571		$	3,822

Earnings per share:
Basic	$	0.13		$	0.19
Diluted	$	0.12		$	0.19

Weighted average shares outstanding:
Basic		20,315,338			20,398,933
Diluted		20,749,948			20,549,326

Mayville Engineering Company, Inc. Consolidated Statement of Cash Flows (in thousands) (unaudited)

	Three Months Ended
	March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,571	$	3,822
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		6,142		5,468
Amortization		1,738		1,738
Allowance for doubtful accounts		27		106
Inventory excess and obsolescence reserve		11		174
Stock-based compensation expense		1,066		1,257
Gain on disposal of property, plant and equipment		(138)		(62)
Impairment of long-lived assets and gain on contracts		—		(1,183)
Deferred compensation		(163)		(2,176)
Non-cash lease expense		1,286		1,266
Other non-cash adjustments		83		77
Changes in operating assets and liabilities – net of effects of acquisition:
Accounts receivable		(16,265)		(17,088)
Inventories		2,749		(2,317)
Tooling in progress		(100)		(1,246)
Prepaids and other current assets		110		(216)
Accounts payable		(2,290)		10,526
Deferred income taxes		441		1,155
Operating lease obligations		(1,206)		(1,160)
Accrued liabilities		(2,105)		(566)
Net cash used in operating activities		(6,043)		(425)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment		(2,408)		(12,979)
Proceeds from sale of property, plant and equipment		153		359
Net cash used in investing activities		(2,255)		(12,620)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank revolving credit notes		119,700		118,156
Payments on bank revolving credit notes		(110,360)		(102,436)
Repayments of other long-term debt		(286)		(272)
Purchase of treasury stock		(661)		(2,323)
Payments on finance leases		(96)		(78)
Net cash provided by financing activities		8,297		13,047
Net increase (decrease) in cash and cash equivalents		(1)		2
Cash and cash equivalents at beginning of period		127		118
Cash and cash equivalents at end of period	$	126	$	120

Mayville Engineering Company, Inc. Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) (unaudited)

	Three Months Ended
	March 31,
	2023			2022
Net income and comprehensive income	$	2,571		$	3,822
Interest expense		1,658			567
Provision for income taxes		441			1,175
Depreciation and amortization		7,880			7,207
EBITDA		12,550			12,771
Stock-based compensation expense		1,066			1,257
Hazel Park transition and legal costs due to former fitness customer		224			1,927
Impairment of long-lived assets and gain on contracts		—			(1,183	)
Adjusted EBITDA	$	13,840		$	14,772
Net sales	$	142,645		$	136,252
EBITDA Margin		8.8	%		9.4		%
Adjusted EBITDA Margin		9.7	%		10.8		%

View source version on businesswire.com: https://www.businesswire.com/news/home/20230502005410/en/

INVESTOR CONTACT

Stefan Neely or Noel Ryan

(615) 844-6248

[email protected]

KEYWORDS: Wisconsin United States North America Canada

INDUSTRY KEYWORDS: Machine Tools, Metalworking & Metallurgy Engineering Chemicals/Plastics Automotive Manufacturing Manufacturing Other Manufacturing

MEDIA:

May 2, 2023 4:36 pm

Western Union Reports First Quarter 2023 Results

Western Union Reports First Quarter 2023 Results

Q1 GAAP revenue of $1.04 billion, down 10% on a reported basis, or 1% on an adjusted basis
GAAP EPS of $0.40, a decrease of 46% year-over-year; Adjusted EPS of $0.43, a decrease of 16% year-over-year
GAAP operating margin of 19.7%, a decrease of 80 bps year-over-year; Adjusted operating margin of 20.5%, a decrease of 130 bps year-over-year
New branded digital go-to-market strategy continued momentum in Q1 with new customers up 14% and transactions up 7% globally, while U.S. outbound new customers were up 21% and transactions were up 11% ¹

DENVER–(BUSINESS WIRE)–
The Western Union Company (the “Company”) (NYSE: WU) today reported first quarter 2023 results.

The Company’s first quarter revenue of $1.04 billion declined 10% on a reported basis, or 1% on a constant currency basis excluding the contribution from Business Solutions, compared to the prior year period. The suspension of operations in Russia and Belarus negatively impacted revenue by approximately three percentage points, while Argentina inflation benefited revenue by approximately two percentage points. Softness in the retail money transfer business as well as the impact of promotional pricing activities related to the Company’s new branded digital go-to-market strategy was partially offset by Other, which includes the Company’s bill payments businesses and retail money order.

GAAP EPS in the first quarter was $0.40 compared to $0.74 in the prior year period. The year-over-year decrease in GAAP EPS was primarily due to the partial recognition of the Business Solutions gain in the prior year period.

Adjusted EPS in the first quarter was $0.43 compared to $0.51 in the prior year period. The year-over-year decline in adjusted EPS was driven by lower operating profit due to a $0.09 contribution from Business Solutions, Russia, and Belarus in the prior year period, partially offset by lower share count.

“I am pleased to say we exceeded our expectations in the first quarter,” said Devin McGranahan, President and Chief Executive Officer of Western Union. “This was achieved through momentum created by our ‘Evolve 2025’ strategic initiatives, strength in our Middle East business, and the Company’s remaining business performing in-line with our expectations.”

McGranahan added, “While revenue remained below our long-term aspirations for the Company, we were pleased to see a significant improvement in trajectory relative to the fourth quarter in many key markets around the world. We are particularly pleased with the ongoing momentum in our digital business with 14% growth in our new branded digital customer base, which accelerated global branded digital transaction growth to 7%. We remain focused on driving our ‘Evolve 2025’ strategy to become the leading provider of branded accessible financial services serving aspiring populations around the world.”

____________________
Note: for a full reconciliation between GAAP and non-GAAP metrics, please see the “Non-GAAP Measures” section of this press release.
¹ New branded digital customer growth excludes the impact of Russia and Belarus

Q1 Business Results

C2C revenues declined 6% on a reported basis, or 5% constant currency, while transactions declined 6% compared to the prior year period. The suspension of operations in Russia and Belarus negatively impacted C2C revenue and transactions by three percentage points and six percentage points, respectively. Regionally, softness in Europe & CIS, North America, and APAC was partially offset by continued strength in LACA and strength in MEASA led by Iraq.

Branded digital revenue declined 7% on a reported basis, or 6% constant currency, and represented 22% and 29% of total C2C revenues and transactions, respectively. Transactions grew 7% in the quarter driven by the Company’s new go-to-market strategy. The Company expects that revenue will be adversely impacted in the near term related to its new go-to-market strategy, which includes promotional pricing activities. The suspension of operations in Russia and Belarus negatively impacted both branded digital revenue and transactions by 2 percentage points in the quarter.

Q1 Financial Results

GAAP operating margin in the quarter was 19.7%, compared to 20.5% in the prior year period. The adjusted operating margin was 20.5% compared to 21.8% in the prior year period. The decrease in the adjusted operating margin was primarily due to increased technology investment driven by the Company’s ‘Evolve 2025’ strategy and lower revenue.

The GAAP effective tax rate in the quarter was 16.1%, compared to 19.0% in the prior year period, with the decrease primarily due to the effects of the sale of Business Solutions offset by discrete expenses in the current period. The adjusted effective tax rate was 13.5% in the quarter, compared to 13.0% in the prior year period, with the increase primarily due to discrete expenses in the current period.

Cash flow from operating activities was $137 million compared to $200 million in the prior year period due to timing of payments related to expenses incurred in previous periods. The Company returned $88 million to shareholders in the first quarter through dividends.

2023 Outlook

Today, the Company reaffirmed its 2023 adjusted full year financial outlook provided on February 7, 2023. The outlook assumes no material changes in macroeconomic conditions, including changes in foreign currencies or Argentina inflation.

The 2023 outlook is as follows:

	GAAP	Adjusted
Revenue¹	(9%) to (7%)	(4%) to (2%)
Operating Margin	18% to 20%	19% to 21%
EPS	$1.53 to $1.63	$1.55 to $1.65
¹ Adjusted revenue is constant currency excluding the impact of Argentina inflation and proforma for the planned sale of Business Solutions

Non-GAAP Measures

Western Union presents a number of non-GAAP financial measures because management believes that these metrics provide meaningful supplemental information in addition to the GAAP metrics and provide comparability and consistency to prior periods. Constant currency results assume foreign revenues are translated from foreign currencies to the U.S. dollar, net of the effect of foreign currency hedges, at rates consistent with those in the prior year.

Reconciliations of non-GAAP to comparable GAAP measures are available in the accompanying schedules and in the “Investor Relations” section of the Company’s website at https://ir.westernunion.com.

GAAP figures reflect an expected partial year of Business Solutions ownership, including contractual payments to the buyers, representing profits between the first and third closings. Adjusted constant currency revenue growth metrics exclude contributions from Business Solutions. Adjusted operating profit metrics exclude the following items, as applicable: contributions from Business Solutions, operating expense redeployment program costs, acquisition and divestiture costs, Russia and Belarus exit costs, and Business Solutions exit costs. Adjusted effective tax rate and adjusted earnings per share metrics exclude the following items and the related taxes, as applicable: Business Solutions gain, operating expense redeployment program costs, acquisition and divestiture costs, Russia and Belarus exit costs, Business Solutions exit costs, and the reversal of significant uncertain tax positions.

Additional Statistics

Additional key statistics for the quarter and historical trends can be found in the supplemental tables included with this press release. All amounts included in the supplemental tables to this press release are rounded to the nearest tenth of a million, except as otherwise noted. As a result, the percentage changes and margins disclosed herein may not recalculate precisely using the rounded amounts provided.

Environmental, Social, and Governance (ESG)

Western Union is committed to making a positive impact. For more details on how Western Union is addressing some of the most pressing issues facing society, our shared environment, and our Company, please view our latest ESG report: https://corporate.westernunion.com/esg.

Investor and Analyst Conference Call and Presentation

The Company will host a conference call and webcast at 4:30 p.m. ET today.

The webcast and presentation will be available at https://ir.westernunion.com. Registration for the event is required, so please register at least fifteen minutes prior to the scheduled start time. A webcast replay will be available shortly after the event.

To listen to the conference call via telephone in the U.S., dial +1 (719) 359-4580 fifteen minutes prior to the start of the call, followed by the meeting ID, which is 920 8368 6498 and the passcode, which is 123540. To listen to the conference call via telephone outside the U.S., dial the country number from the international directory, followed by the meeting ID, which is 920 8368 6498 and the passcode, which is 123540.

Safe Harbor Compliance Statement for Forward-Looking Statements

This press release contains certain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict. Actual outcomes and results may differ materially from those expressed in, or implied by, our forward-looking statements. Words such as “expects,” “intends,” “targets,” “anticipates,” “believes,” “estimates,” “guides,” “provides guidance,” “provides outlook,” “projects,” “designed to,” and other similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” “could,” and “might” are intended to identify such forward-looking statements. Readers of this press release of The Western Union Company (the “Company,” “Western Union,” “we,” “our,” or “us”) should not rely solely on the forward-looking statements and should consider all uncertainties and risks discussed in the Risk Factors section and throughout the Annual Report on Form 10-K for the year ended December 31, 2022. The statements are only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement.

Possible events or factors that could cause results or performance to differ materially from those expressed in our forward-looking statements include the following: (i) events related to our business and industry, such as: changes in general economic conditions and economic conditions in the regions and industries in which we operate, including global economic downturns and trade disruptions, or significantly slower growth or declines in the money transfer, payment service, and other markets in which we operate, including downturns or declines related to interruptions in migration patterns or other events, such as public health emergencies, epidemics, or pandemics, such as COVID-19, civil unrest, war, terrorism, natural disasters, or non-performance by our banks, lenders, insurers, or other financial services providers; failure to compete effectively in the money transfer and payment service industry, including among other things, with respect to price or customer experience, with global and niche or corridor money transfer providers, banks and other money transfer and payment service providers, including digital, mobile and internet-based services, card associations, and card-based payment providers, and with digital currencies and related exchanges and protocols, and other innovations in technology and business models; geopolitical tensions, political conditions and related actions, including trade restrictions and government sanctions, which may adversely affect our business and economic conditions as a whole, including interruptions of United States or other government relations with countries in which we have or are implementing significant business relationships with agents, clients, or other partners; deterioration in customer confidence in our business, or in money transfer and payment service providers generally; failure to maintain our agent network and business relationships under terms consistent with or more advantageous to us than those currently in place; our ability to adopt new technology and develop and gain market acceptance of new and enhanced services in response to changing industry and consumer needs or trends; mergers, acquisitions, and the integration of acquired businesses and technologies into our Company, divestitures, and the failure to realize anticipated financial benefits from these transactions, and events requiring us to write down our goodwill; decisions to change our business mix; changes in, and failure to manage effectively, exposure to foreign exchange rates, including the impact of the regulation of foreign exchange spreads on money transfers and payment transactions; changes in tax laws, or their interpretation, any subsequent regulation, and unfavorable resolution of tax contingencies; any material breach of security, including cybersecurity, or safeguards of or interruptions in any of our systems or those of our vendors or other third parties; cessation of or defects in various services provided to us by third-party vendors; our ability to realize the anticipated benefits from restructuring-related initiatives, which may include decisions to downsize or to transition operating activities from one location to another, and to minimize any disruptions in our workforce that may result from those initiatives; our ability to attract and retain qualified key employees and to manage our workforce successfully; failure to manage credit and fraud risks presented by our agents, clients, and consumers; adverse rating actions by credit rating agencies; our ability to protect our trademarks, patents, copyrights, and other intellectual property rights, and to defend ourselves against potential intellectual property infringement claims; material changes in the market value or liquidity of securities that we hold; restrictions imposed by our debt obligations; (ii) events related to our regulatory and litigation environment, such as: liabilities or loss of business resulting from a failure by us, our agents, or their subagents to comply with laws and regulations and regulatory or judicial interpretations thereof, including laws and regulations designed to protect consumers, or detect and prevent money laundering, terrorist financing, fraud, and other illicit activity; increased costs or loss of business due to regulatory initiatives and changes in laws, regulations and industry practices and standards, including changes in interpretations, in the United States and abroad, affecting us, our agents or their subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services, including related to anti-money laundering regulations, anti-fraud measures, our licensing arrangements, customer due diligence, agent and subagent due diligence, registration and monitoring requirements, consumer protection requirements, remittances, immigration, and sustainability reporting including climate-related reporting; liabilities, increased costs or loss of business and unanticipated developments resulting from governmental investigations and consent agreements with or enforcement actions by regulators; liabilities resulting from litigation, including class-action lawsuits and similar matters, and regulatory enforcement actions, including costs, expenses, settlements, and judgments; failure to comply with regulations and evolving industry standards regarding consumer privacy, data use, the transfer of personal data between jurisdictions, and information security, including with respect to the General Data Protection Regulation in the European Union and the California Consumer Privacy Act; failure to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as regulations issued pursuant to it and the actions of the Consumer Financial Protection Bureau and similar legislation and regulations enacted by other governmental authorities in the United States and abroad related to consumer protection and derivative transactions; effects of unclaimed property laws or their interpretation or the enforcement thereof; failure to maintain sufficient amounts or types of regulatory capital or other restrictions on the use of our working capital to meet the changing requirements of our regulators worldwide; changes in accounting standards, rules and interpretations, or industry standards affecting our business; and (iii) other events, such as catastrophic events and management’s ability to identify and manage these and other risks.

About Western Union

The Western Union Company (NYSE: WU) is committed to helping people around the world who aspire to build financial futures for themselves, their loved ones and their communities. Our leading cross-border, cross-currency money movement, payments and digital financial services empower consumers, businesses, financial institutions and governments—across more than 200 countries and territories and nearly 130 currencies—to connect with billions of bank accounts, millions of digital wallets and cards, and a global footprint of hundreds of thousands of retail locations. Our goal is to offer accessible financial services that help people and communities prosper. For more information, visit www.westernunion.com.

WU-G

THE WESTERN UNION COMPANY
KEY STATISTICS
(Unaudited)

	Notes*	1Q22		2Q22		3Q22		4Q22		FY2022		1Q23
Consolidated Metrics
Revenues (GAAP) – YoY % change		(4)	%	(12)	%	(15)	%	(15)	%	(12)	%	(10)	%
Adjusted revenues (non-GAAP) – YoY % change	(a)	(1)	%	(4)	%	(6)	%	(6)	%	(4)	%	(1)	%
Operating margin (GAAP)		20.5	%	23.2	%	21.3	%	13.9	%	19.8	%	19.7	%
Adjusted operating margin (non-GAAP)	(b)	21.8	%	23.3	%	20.6	%	15.8	%	20.4	%	20.5	%
Adjusted EBITDA margin (non-GAAP)	(b)	26.2	%	27.5	%	24.9	%	20.2	%	24.7	%	25.1	%

Consumer-to-Consumer (C2C) Segment Metrics
Revenues (GAAP) – YoY % change		(5)	%	(9)	%	(11)	%	(11)	%	(9)	%	(6)	%
Adjusted revenues (non-GAAP) – YoY % change	(f)	(3)	%	(6)	%	(8)	%	(9)	%	(6)	%	(5)	%

Transactions (in millions)		69.7		68.2		66.9		69.3		274.1		65.3
Transactions – YoY % change		(4)	%	(13)	%	(12)	%	(12)	%	(10)	%	(6)	%

Cross-border principal, as reported – YoY % change		(3)	%	(12)	%	(13)	%	(12)	%	(10)	%	(3)	%
Cross-border principal (constant currency) – YoY % change	(g)	(1)	%	(9)	%	(9)	%	(9)	%	(7)	%	(1)	%

Operating margin		20.7	%	22.0	%	19.7	%	14.1	%	19.2	%	18.9	%

Branded Digital revenues (GAAP) – YoY % change	(gg)	4	%	(1)	%	(8)	%	(8)	%	(3)	%	(7)	%
Branded Digital foreign currency translation impact	(i)	1	%	2	%	3	%	2	%	2	%	1	%
Adjusted Branded Digital revenues (non-GAAP) – YoY % change	(gg)	5	%	1	%	(5)	%	(6)	%	(1)	%	(6)	%
Branded Digital transactions – YoY % change	(gg)	0	%	(3)	%	(1)	%	2	%	0	%	7	%

C2C Segment Regional Metrics – YoY % change
NA region revenues (GAAP)	(aa), (bb)	(1)	%	(2)	%	(5)	%	(7)	%	(4)	%	(8)	%
NA region foreign currency translation impact	(i)	0	%	0	%	0	%	0	%	0	%	0	%
Adjusted NA region revenues (non-GAAP)	(aa), (bb)	(1)	%	(2)	%	(5)	%	(7)	%	(4)	%	(8)	%
NA region transactions	(aa), (bb)	(6)	%	(6)	%	(5)	%	(2)	%	(5)	%	1	%

EU & CIS region revenues (GAAP)	(aa), (cc)	(14)	%	(21)	%	(23)	%	(23)	%	(20)	%	(16)	%
EU & CIS region foreign currency translation impact	(i)	4	%	5	%	7	%	6	%	5	%	3	%
Adjusted EU & CIS region revenues (non-GAAP)	(aa), (cc)	(10)	%	(16)	%	(16)	%	(17)	%	(15)	%	(13)	%
EU & CIS region transactions	(aa), (cc)	(7)	%	(30)	%	(32)	%	(31)	%	(25)	%	(23)	%

MEASA region revenues (GAAP)	(aa), (dd)	2	%	(4)	%	(5)	%	(9)	%	(4)	%	5	%
MEASA region foreign currency translation impact	(i)	1	%	1	%	2	%	2	%	2	%	1	%
Adjusted MEASA region revenues (non-GAAP)	(aa), (dd)	3	%	(3)	%	(3)	%	(7)	%	(2)	%	6	%
MEASA region transactions	(aa), (dd)	5	%	(3)	%	(1)	%	(5)	%	(1)	%	(3)	%

LACA region revenues (GAAP)	(aa), (ee)	2	%	2	%	0	%	11	%	4	%	15	%
LACA region foreign currency translation impact	(i)	3	%	2	%	4	%	2	%	3	%	2	%
Adjusted LACA region revenues (non-GAAP)	(aa), (ee)	5	%	4	%	4	%	13	%	7	%	17	%
LACA region transactions	(aa), (ee)	2	%	4	%	3	%	8	%	5	%	9	%

APAC region revenues (GAAP)	(aa), (ff)	(6)	%	(10)	%	(16)	%	(20)	%	(13)	%	(8)	%
APAC region foreign currency translation impact	(i)	3	%	4	%	5	%	6	%	4	%	3	%
Adjusted APAC region revenues (non-GAAP)	(aa), (ff)	(3)	%	(6)	%	(11)	%	(14)	%	(9)	%	(5)	%
APAC region transactions	(aa), (ff)	(13)	%	(11)	%	(11)	%	(12)	%	(12)	%	(2)	%

% of C2C Revenue
NA region revenues	(aa), (bb)	39	%	40	%	40	%	39	%	40	%	38	%
EU & CIS region revenues	(aa), (cc)	29	%	28	%	28	%	27	%	28	%	26	%
MEASA region revenues	(aa), (dd)	17	%	16	%	16	%	16	%	16	%	19	%
LACA region revenues	(aa), (ee)	9	%	10	%	10	%	12	%	10	%	11	%
APAC region revenues	(aa), (ff)	6	%	6	%	6	%	6	%	6	%	6	%

Branded Digital revenues	(aa), (gg)	22	%	22	%	21	%	21	%	22	%	22	%

Other (primarily bill payments businesses in Argentina and the United States and money orders)
Revenues (GAAP) – YoY % change		8	%	19	%	0	%	20	%	12	%	23	%
Operating margin		31.7	%	40.1	%	33.4	%	35.5	%	35.4	%	38.6	%

% of Total Company Revenue (GAAP)
Consumer-to-Consumer segment revenues		86	%	90	%	90	%	90	%	89	%	91	%
Business Solutions segment revenues		8	%	3	%	4	%	3	%	5	%	1	%
Other revenues		6	%	7	%	6	%	7	%	6	%	8	%

____________________

* See the “Notes to Key Statistics” section of the press release for the applicable Note references and the reconciliation of non-GAAP financial measures, unless already reconciled herein.

THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in millions, except per share amounts)

	Three Months Ended
	March 31,
	2023			2022			% Change
Revenues	$	1,036.9		$	1,155.7		(10)	%
Expenses:
Cost of services		629.5			655.1		(4)	%
Selling, general, and administrative		202.7			263.1		(23)	%
Total expenses		832.2			918.2		(9)	%
Operating income		204.7			237.5		(14)	%
Other income/(expense):
Gain on divestiture of business ^(a)		—			151.4		(b)
Interest income		3.2			0.6		(b)
Interest expense		(25.0	)		(24.8	)	1	%
Other expense, net		(1.9	)		(2.5	)	(19)	%
Total other income/(expense), net		(23.7	)		124.7		(b)
Income before income taxes		181.0			362.2		(50)	%
Provision for income taxes		29.2			68.9		(58)	%
Net income	$	151.8		$	293.3		(48)	%
Earnings per share:
Basic	$	0.41		$	0.75		(45)	%
Diluted	$	0.40		$	0.74		(46)	%
Weighted-average shares outstanding:
Basic		374.4			393.1
Diluted		375.5			394.5

____________________
(a)		On March 1, 2022 and December 31, 2022, the Company completed the first and second closes, respectively, of the sale of its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC (collectively, the “Buyer”), and received cash consideration of $887.2 million, net of cash divested, subject to the remaining close and regulatory capital adjustments. The first closing excluded the operations in the European Union and the United Kingdom and the second closing included the United Kingdom operations. The third closing is expected to occur in the second quarter of 2023 and includes the European Union operations.
(b)		Calculation not meaningful.

THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions, except per share amounts)
	March 31,			December 31,
	2023			2022
Assets
Cash and cash equivalents	$	1,228.6		$	1,285.9
Settlement assets		3,386.8			3,486.8
Property and equipment, net of accumulated depreciation of $522.7 and $512.8, respectively		103.1			109.6
Goodwill		2,034.6			2,034.6
Other intangible assets, net of accumulated amortization of $637.2 and $616.3, respectively		440.2			457.9
Other assets		790.4			859.9
Assets held for sale ^(a)		249.8			261.6
Total assets	$	8,233.5		$	8,496.3
Liabilities and stockholders’ equity
Liabilities:
Accounts payable and accrued liabilities	$	409.4		$	464.0
Settlement obligations		3,386.8			3,486.8
Income taxes payable		742.2			725.3
Deferred tax liability, net		162.7			158.5
Borrowings		2,462.7			2,616.8
Other liabilities		346.2			384.6
Liabilities associated with assets held for sale ^(a)		170.7			182.5
Total liabilities		7,680.7			8,018.5

Stockholders’ equity:
Preferred stock, $1.00 par value; 10 shares authorized; no shares issued		—			—
Common stock, $0.01 par value; 2,000 shares authorized; 374.4 shares and 373.5 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		3.7			3.7
Capital surplus		1,004.1			995.9
Accumulated deficit		(296.8	)		(353.9	)
Accumulated other comprehensive loss		(158.2	)		(167.9	)
Total stockholders’ equity		552.8			477.8
Total liabilities and stockholders’ equity	$	8,233.5		$	8,496.3

____________________
(a)		Includes balances associated with the Company’s Business Solutions business, which were held for sale as of March 31, 2023 and December 31, 2022, respectively.

THE WESTERN UNION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)

	Three Months Ended
	March 31,
	2023			2022
Cash flows from operating activities
Net income	$	151.8		$	293.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		10.2			11.3
Amortization		36.4			35.5
Gain on divestiture of business, excluding transaction costs		—			(155.8	)
Other non-cash items, net		19.3			22.9
Increase/(decrease) in cash, excluding the effects of divestitures, resulting from changes in:
Other assets		(28.1	)		(93.2	)
Accounts payable and accrued liabilities		(62.2	)		36.0
Income taxes payable		17.2			56.2
Other liabilities		(7.3	)		(6.2	)
Net cash provided by operating activities		137.3			200.0
Cash flows from investing activities
Payments for capitalized contract costs		(31.0	)		(6.9	)
Payments for internal use software		(19.6	)		(12.6	)
Purchases of property and equipment		(6.8	)		(10.3	)
Purchases of settlement investments		(124.7	)		(178.4	)
Proceeds from the sale of settlement investments		22.2			71.6
Maturities of settlement investments		22.4			37.4
Purchases of non-settlement investments		—			(250.0	)
Proceeds from the sale of non-settlement investments		100.0			—
Proceeds from divestiture, net of cash divested		—			896.1
Other investing activities		1.1			(5.9	)
Net cash provided by/(used in) investing activities		(36.4	)		541.0
Cash flows from financing activities
Cash dividends and dividend equivalents paid		(88.1	)		(91.8	)
Common stock repurchased		(5.1	)		(154.4	)
Net repayments of commercial paper		(155.0	)		(175.0	)
Principal payments on borrowings		—			(300.0	)
Proceeds from exercise of options		0.3			8.9
Net change in settlement obligations		109.1			(80.4	)
Other financing activities		(0.2	)		—
Net cash used in financing activities		(139.0	)		(792.7	)
Net change in cash and cash equivalents, including settlement, and restricted cash		(38.1	)		(51.7	)
Cash and cash equivalents, including settlement, and restricted cash at beginning of period		2,040.7			2,110.9
Cash and cash equivalents, including settlement, and restricted cash at end of period	$	2,002.6		$	2,059.2

	March 31,
	2023			2022
Reconciliation of balance sheet cash and cash equivalents to cash flows:
Cash and cash equivalents on balance sheet	$	1,228.6		$	1,295.8
Settlement cash and cash equivalents		737.1			685.7
Restricted cash in Other assets		36.9			24.6
Cash and cash equivalents included in Assets held for sale		—			53.1
Cash and cash equivalents, including settlement, and restricted cash at end of period	$	2,002.6		$	2,059.2

THE WESTERN UNION COMPANY
SUMMARY SEGMENT DATA
(Unaudited)
(in millions, unless indicated otherwise)

		Three Months Ended
	March 31,
	2023			2022			% Change
Revenues:
Consumer-to-Consumer	$	938.3		$	999.0		(6)	%
Business Solutions ^(a)		15.4			89.1		(83)	%
Other ^(b)		83.2			67.6		23	%
Total consolidated revenues	$	1,036.9		$	1,155.7		(10)	%
Segment operating income:
Consumer-to-Consumer	$	177.8		$	207.2		(14)	%
Business Solutions ^(a)		1.9			27.5		(93)	%
Other ^(b)		32.1			21.5		50	%
Total segment operating income		211.8			256.2		(17)	%
Russia/Belarus exit costs ^(c)		—			(11.0	)	(e)
Business Solutions exit costs ^(c)		—			(7.7	)	(e)
Operating expense redeployment program costs ^(d)		(7.1	)		—		(e)
Total consolidated operating income	$	204.7		$	237.5		(14)	%
Segment operating income margin
Consumer-to-Consumer		18.9	%		20.7	%	(1.8)	%
Business Solutions ^(a)		12.7	%		30.8	%	(18.1)	%
Other ^(b)		38.6	%		31.7	%	6.9	%

____________________
(a)		On August 4, 2021, the Company entered into an agreement to sell its Business Solutions business to the Buyer. The sale will be completed in three closings, the first of which occurred on March 1, 2022. The second occurred on December 31, 2022 and the third is expected in the second quarter of 2023. The remaining operations of the Business Solutions business continue to be included in Revenues and Operating income until closing. During the period between the first and third closings, the Company is required to pay the Buyer a measure of profit from these operations, while owned by the Company, adjusted for other charges, as contractually agreed, which was included in Other expense, net in the Condensed Consolidated Statements of Income.
(b)		Other primarily includes the Company’s bill payment services which facilitate payments from consumers to businesses and other organizations and the Company’s money order services.
(c)		Represents the exit costs incurred in connection with the suspension of operations in Russia and Belarus and the divestiture of the Business Solutions business.
(d)		Represents severance, expenses associated with streamlining the Company’s organizational and legal structure, and other expenses associated with the Company’s program to redeploy expenses in its cost base through optimizations in vendor management, real estate, marketing, and people strategy, as previously announced in October 2022.
(e)		Calculation not meaningful.

THE WESTERN UNION COMPANY

NOTES TO KEY STATISTICS

(Unaudited)

(in millions, unless indicated otherwise)

Western Union’s management believes the non-GAAP financial measures presented within this press release and related tables provide meaningful supplemental information regarding the Company’s results to assist management, investors, analysts, and others in understanding the Company’s financial results and to better analyze operating, profitability, and other financial performance trends in the Company’s underlying business because they provide consistency and comparability to prior periods or eliminate currency volatility, increasing the comparability of the Company’s underlying results and trends.

A non-GAAP financial measure should not be considered in isolation or as a substitute for the most comparable GAAP financial measure. A non-GAAP financial measure reflects an additional way of viewing aspects of the Company’s operations that, when viewed with the Company’s GAAP results and the reconciliation to the corresponding GAAP financial measure, provides a more complete understanding of the Company’s business. Users of the financial statements are encouraged to review the Company’s financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is included below, where not previously reconciled above.

		Notes	1Q22			2Q22			3Q22			4Q22			FY2022			1Q23
	Consolidated Metrics
(a)	Revenues (GAAP)		$	1,155.7		$	1,138.3		$	1,089.6		$	1,091.9		$	4,475.5		$	1,036.9
	Foreign currency translation impact	(i)		33.2			42.1			60.8			49.4			185.5			35.2
	Revenues, constant currency (non-GAAP)			1,188.9			1,180.4			1,150.4			1,141.3			4,661.0			1,072.1
	Less Business Solutions revenues, constant currency (non-GAAP)	(i), (l)		(91.9	)		(40.1	)		(50.4	)		(34.0	)		(216.4	)		(16.0	)
	Adjusted revenues (non-GAAP)		$	1,097.0		$	1,140.3		$	1,100.0		$	1,107.3		$	4,444.6		$	1,056.1
	Prior year revenues (GAAP)		$	1,210.0		$	1,289.7		$	1,286.3		$	1,284.8		$	5,070.8		$	1,155.7
	Less prior year revenues from Business Solutions (GAAP)	(l)		(96.5	)		(99.3	)		(116.8	)		(109.2	)		(421.8	)		(89.1	)
	Adjusted prior year revenues (non-GAAP)		$	1,113.5		$	1,190.4		$	1,169.5		$	1,175.6		$	4,649.0		$	1,066.6
	Revenues (GAAP) – YoY % change			(4)	%		(12)	%		(15)	%		(15)	%		(12)	%		(10)	%
	Revenues, constant currency (non-GAAP) – YoY% change			(2)	%		(8)	%		(11)	%		(11)	%		(8)	%		(7)	%
	Adjusted revenues (non-GAAP) – YoY % change			(1)	%		(4)	%		(6)	%		(6)	%		(4)	%		(1)	%

(b)	Operating income (GAAP)		$	237.5		$	264.0		$	231.8		$	151.6		$	884.9		$	204.7
	Acquisition and divestiture costs	(k)		3.3			0.9			0.4			1.6			6.2			—
	Russia/Belarus exit costs	(m)		11.0			0.2			(0.6	)		(0.6	)		10.0			—
	Business Solutions exit costs	(m)		7.7			—			—			—			7.7			—
	Operating expense redeployment program costs	(o)		N/A			N/A			N/A			21.8			21.8			7.1
	Less Business Solutions operating income	(l)		(26.5	)		(7.9	)		(15.6	)		(6.6	)		(56.6	)		(1.9	)
	Adjusted operating income (non-GAAP)		$	233.0		$	257.2		$	216.0		$	167.8		$	874.0		$	209.9
	Depreciation and amortization			46.8			45.9			44.7			46.4			183.8			46.6
	Adjusted EBITDA (non-GAAP)	(j)	$	279.8		$	303.1		$	260.7		$	214.2		$	1,057.8		$	256.5
	Operating margin (GAAP)			20.5	%		23.2	%		21.3	%		13.9	%		19.8	%		19.7	%
	Adjusted operating margin (non-GAAP)			21.8	%		23.3	%		20.6	%		15.8	%		20.4	%		20.5	%
	Adjusted EBITDA margin (non-GAAP)			26.2	%		27.5	%		24.9	%		20.2	%		24.7	%		25.1	%

(c)	Net income (GAAP)		$	293.3		$	194.0		$	173.9		$	249.4		$	910.6		$	151.8
	Acquisition and divestiture costs	(k)		3.3			0.9			0.4			1.6			6.2			—
	Business Solutions gain	(l)		(151.4	)		—			—			(96.9	)		(248.3	)		—
	Business Solutions exit costs	(m)		7.7			—			—			—			7.7			—
	Russia/Belarus exit costs	(m)		11.0			0.2			(0.6	)		(0.6	)		10.0			—
	Operating expense redeployment program costs	(o)		N/A			N/A			N/A			21.8			21.8			7.1
	Income tax benefit from reversal of significant uncertain tax positions	(n)		N/A			N/A			(13.2	)		(68.5	)		(81.7	)		—
	Income tax expense from other adjustments	(k), (l), (m), (o)		38.7			2.0			3.0			14.7			58.4			3.7
	Adjusted net income (non-GAAP)		$	202.6		$	197.1		$	163.5		$	121.5		$	684.7		$	162.6

(d)	Effective tax rate (GAAP)			19	%		18	%		10	%		(15)	%		10	%		16	%
	Reversal of significant uncertain tax positions	(n)		N/A			N/A			7	%		32	%		8	%		0	%
	Other adjustments	(k), (l), (m), (o)		(6)	%		(1)	%		(2)	%		(2)	%		(3)	%		(2)	%
	Adjusted effective tax rate (non-GAAP)			13	%		17	%		15	%		15	%		15	%		14	%

(e)	Diluted earnings per share (GAAP) ($- dollars)		$	0.74		$	0.50		$	0.45		$	0.65		$	2.34		$	0.40
	Pretax impacts from the following:
	Acquisition and divestiture costs	(k)		0.01			—			—			—			0.01			—
	Business Solutions gain	(l)		(0.38	)		—			—			(0.25	)		(0.64	)		—
	Business Solutions exit costs	(m)		0.02			—			—			—			0.02			—
	Russia/Belarus exit costs	(m)		0.02			—			—			—			0.03			—
	Operating expense redeployment program costs	(o)		N/A			N/A			N/A			0.06			0.06			0.02
	Income tax expense/(benefit) impacts from the following:
	Reversal of significant uncertain tax positions	(n)		N/A			N/A			(0.03	)		(0.18	)		(0.21	)		—
	Other adjustments	(k), (l), (m), (o)		0.10			0.01			—			0.04			0.15			0.01
	Adjusted diluted earnings per share (non-GAAP) ($- dollars)		$	0.51		$	0.51		$	0.42		$	0.32		$	1.76		$	0.43

	C2C Segment Metrics
(f)	Revenues (GAAP)		$	999.0		$	1,026.9		$	982.4		$	985.2		$	3,993.5		$	938.3
	Foreign currency translation impact	(i)		20.8			28.1			37.1			30.9			116.9			13.8
	Revenues, constant currency (non-GAAP)		$	1,019.8		$	1,055.0		$	1,019.5		$	1,016.1		$	4,110.4		$	952.1
	Prior year revenues (GAAP)		$	1,050.9		$	1,127.1		$	1,104.5		$	1,111.5		$	4,394.0		$	999.0
	Revenues (GAAP) – YoY % change			(5)	%		(9)	%		(11)	%		(11)	%		(9)	%		(6)	%
	Adjusted revenues (non-GAAP) – YoY % change			(3)	%		(6)	%		(8)	%		(9)	%		(6)	%		(5)	%

(g)	Cross-border principal, as reported ($- billions)		$	23.8		$	23.4		$	23.0		$	23.4		$	93.6		$	23.0
	Foreign currency translation impact	(i)		0.5			0.9			1.1			0.8			3.3			0.5
	Cross-border principal, constant currency ($- billions)		$	24.3		$	24.3		$	24.1		$	24.2		$	96.9		$	23.5
	Prior year cross-border principal, as reported ($- billions)		$	24.5		$	26.6		$	26.5		$	26.5		$	104.1		$	23.8
	Cross-border principal, as reported – YoY % change			(3)	%		(12)	%		(13)	%		(12)	%		(10)	%		(3)	%
	Cross-border principal, constant currency – YoY % change			(1)	%		(9)	%		(9)	%		(9)	%		(7)	%		(1)	%

	Business Solutions Segment Metrics
(h)	Revenues (GAAP)		$	89.1		$	35.7		$	42.6		$	29.5		$	196.9		$	15.4
	Foreign currency translation impact	(i)		2.8			4.4			7.8			4.5			19.5			0.6
	Revenues, constant currency (non-GAAP)		$	91.9		$	40.1		$	50.4		$	34.0		$	216.4		$	16.0
	Prior year revenues (GAAP)		$	96.5		$	99.3		$	116.8		$	109.2		$	421.8		$	89.1
	Revenues (GAAP) – YoY % change			(8)	%		(64)	%		(63)	%		(73)	%		(53)	%		(83)	%
	Adjusted revenues (non-GAAP) – YoY % change			(5)	%		(60)	%		(57)	%		(69)	%		(49)	%		(82)	%

2023 Consolidated Outlook Metrics
	Notes	Range
Revenues (GAAP) – YoY % change			(9)	%		(7)	%
Foreign currency translation impact	(i)		1	%		1	%
Impact from Business Solutions	(l)		4	%		4	%
Revenues, constant currency, excluding Business Solutions (non-GAAP) – YoY % change			(4)	%		(2)	%

		Range
Operating margin (GAAP)			18	%		20	%
Operating expense redeployment program costs	(o)		1	%		1	%
Impact from acquisition and divestiture costs	(k)		0	%		0	%
Impact from Business Solutions	(l)		0	%		0	%
Operating margin, adjusted (non-GAAP)			19	%		21	%

		Range
Earnings per share (GAAP) ($- dollars)		$	1.53		$	1.63
Gain on the sale of Business Solutions	(l)		(0.06	)		(0.06	)
Operating expense redeployment program costs	(o)		0.08			0.08
Income taxes associated with these adjustments	(l), (o)		—			—
Earnings per share, adjusted (non-GAAP) ($- dollars)		$	1.55		$	1.65

*Non-GAAP related notes:*

(i)		Represents the impact from the fluctuation in exchange rates between all foreign currency denominated amounts and the United States dollar. Constant currency results exclude any benefit or loss caused by foreign exchange fluctuations between foreign currencies and the United States dollar, net of foreign currency hedges, which would not have occurred if there had been a constant exchange rate.
(j)		Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) results from taking operating income and adjusting for depreciation and amortization expenses. EBITDA results provide an additional performance measurement calculation which helps neutralize the operating income effect of assets acquired in prior periods.
(k)		Represents the impact from expenses incurred in connection with the Company’s acquisition and divestiture activity, including for the review and closing of these transactions.
(l)		During 2021, the Company entered into an agreement to sell its Business Solutions business to Goldfinch Partners LLC and The Baupost Group LLC (collectively, the “Buyer”) and received cash consideration of $887.2 million, net of cash divested, subject to the remaining close and regulatory capital adjustments. The sale will be completed in three closings, the first of which occurred on March 1, 2022 with the entirety of the cash consideration collected at that time and allocated to the closings on a relative fair value basis. The first closing excluded the operations in the European Union and the United Kingdom and resulted in a gain of $151.4 million. The second closing, which includes the United Kingdom operations, occurred on December 31, 2022 and resulted in a gain of $96.9 million. The third closing, which includes the European Union operations, is currently expected in the second quarter of 2023, pending regulatory approvals. Revenues have been adjusted to exclude the carved out financial information for the Business Solutions business to compare the year-over-year changes and trends in the Company’s continuing businesses, excluding the effects of this divestiture. While the sale of the Company’s Business Solutions business does not qualify for or represent discontinued operations, the Company has also adjusted operating income, beginning in the first quarter of 2022 and concurrent with the sale, to exclude the carved out direct profit of the Business Solutions business. The operations of the Business Solutions business to be sold in the third closing will continue to be included in Revenues and Operating income after the second closing. However, between the first and third closings, the Company is required to pay the Buyer a measure of the profits from these operations, while owned by the Company, adjusted for other charges, and this expense is recognized in Other expense, net. Therefore, the Company believes that providing this information enhances investors’ understanding of the profitability of the Company’s remaining businesses. The Company has also excluded the gain on the sale, net of related taxes, from its results.
(m)		Represents the exit costs incurred in connection with the Company’s suspension of its operations in Russia and Belarus and the divestiture of the Business Solutions business, primarily related to severance and non-cash impairments of property and equipment, an operating lease right-of-use asset, and other intangible assets. While certain of the expenses are identifiable to the Company’s segments, the expenses are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker for purposes of performance assessment and resource allocation. These expenses have been excluded from the Company’s operating income, the effective tax rate, and diluted earnings per share, net of related taxes.
(n)		Represents non-cash reversals of significant uncertain tax positions. While the Company continues to reverse its uncertain tax positions upon settlements with taxing authorities, the lapse of the applicable statute of limitations, and other events, the Company has excluded certain reversals of uncertain tax positions in the third and fourth quarter of 2022 because of the significance of these reversals on its reported results.
(o)		Represents severance, expenses associated with streamlining the Company’s organizational and legal structure, and other expenses associated with the Company’s program to redeploy expenses in its cost base through optimizations in vendor management, real estate, marketing, and people strategy as previously announced in October 2022. Previous expenses incurred under the program included non-cash impairments of operating lease right-of-use assets and property and equipment. The expenses are not included in the measurement of segment operating income provided to the Chief Operating Decision Maker for purposes of performance assessment and resource allocation.

*Other notes:*

(aa)		Geographic split for transactions and revenue, including transactions initiated digitally, as earlier defined, is determined entirely based upon the region where the money transfer is initiated.
(bb)		Represents the North America (United States and Canada) (“NA”) region of the Company’s Consumer-to-Consumer segment.
(cc)		Represents the Europe and the Commonwealth of Independent States (“EU & CIS”) region of the Company’s Consumer-to-Consumer segment.
(dd)		Represents the Middle East, Africa, and South Asia (“MEASA”) region of the Company’s Consumer-to-Consumer segment, including India and certain South Asian countries, which consist of Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka.
(ee)		Represents the Latin America and the Caribbean (“LACA”) region of the Company’s Consumer-to-Consumer segment, including Mexico.
(ff)		Represents the East Asia and Oceania (“APAC”) region of the Company’s Consumer-to-Consumer segment.
(gg)		Represents transactions conducted and funded through websites and mobile applications marketed under the Company’s brands (“Branded Digital”).

View source version on businesswire.com: https://www.businesswire.com/news/home/20230502005482/en/

Media Relations:

Claire Treacy

[email protected]

Investor Relations:

Tom Hadley

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KEYWORDS: Colorado United States North America

INDUSTRY KEYWORDS: Professional Services Technology Other Technology Finance Fintech Banking

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May 2, 2023 4:36 pm

CVG Reports First Quarter 2023 Results

Record quarterly revenues of $263 million, up 7.5% year-over-year

EPS of $0.26, adjusted EBITDA of $19.8 million or 7.5% of revenue

Strategy execution and operational excellence driving improvement in results

NEW ALBANY, Ohio, May 02, 2023 (GLOBE NEWSWIRE) — CVG (NASDAQ: CVGI), a diversified industrial products and services company, today announced financial results for its first quarter ended March 31, 2023.

First Quarter
2023
Highlights
(Compared with prior-year period, where comparisons are noted)

Revenues of $262.7 million, up 7.5% due to improved demand, price realization and new business win revenue.
Operating income of $14.6 million, up 74%; adjusted operating income of $15.4 million, up 62%. Improved operating income was driven by improved pricing and cost management.
Net income of $8.7 million, or $0.26 per diluted share. Adjusted net income of $9.2 million, or $0.28 per diluted share.
Adjusted EBITDA of $19.8 million, up 47% with an adjusted EBITDA margin of 7.5%, tracking towards the Company’s long-term profitability targets.
Net new business wins in the quarter were approximately $85 million. The majority of new business awards were within the Electrical Systems segment.
Cost reduction program is on track to deliver at least $30 million of cost reduction in 2023 through footprint and organizational streamlining, and a global slate of 350+ projects.

Harold Bevis, President and Chief Executive Officer of CVG, said, “In the first quarter, we delivered record revenue and new business wins on multiple new vehicle platforms. Our profits improved due to new and existing business volumes, improved pricing, and lowered costs. Our balance sheet improvement efforts also delivered with improved working capital efficiency and reduced leverage.”

“Our first quarter performance is evidence that our growth, profitability and free cash flow initiatives are working. We plan to continue these efforts during the remainder of this fiscal year. We are underway with a measured program to expand our capacity in concert with ramping up of production for our new business wins. We will continue to manage capacity as sales growth and new business programs ramp up. We are also using these opportunities to reorganize our production footprint into low-cost-countries as well as modernizing our operational processes. We are pleased with our first quarter results and we believe that CVG is firmly on track to deliver improved performance in fiscal 2023 compared to last year.”

“We believe our first quarter margin performance is sustainable for fiscal 2023 given the current vehicle production outlook. We expect that our current revenue run rate, combined with new wins that are still ramping up, puts us on track to deliver our 2027 revenue target of $1.5 billion. Additionally, our continued focus on inflation management, cost reduction, price maintenance and the accretive margin profile of our new business wins, gives us confidence as we work toward achieving a 9% EBITDA margin target by 2027.”

Andy Cheung, Chief Financial Officer, added, “The continued pace of new business awards is driving an exciting period of growth for CVG. Our focus on price and cost has allowed us to deliver significant margin expansion. As our revenues grow in the coming years, CVG expects continued improvement in operating leverage driving EBITDA margins higher. We continue to invest as needed in growth-based working capital and low-cost production capacity to support our business transformation. We expect free cash flow to drive our net leverage ratio lower by the end of 2023.”

First Quarter Financial Results

(amounts in millions except per share data and percentages)

	First Quarter
		2023			2022		Change
Revenues	$	262.7		$	244.4			7.5	%
Gross profit	$	35.2		$	25.4			38.6	%
Gross margin		13.4	%		10.4	%
Adjusted gross profit¹	$	35.9		$	26.3			36.5	%
Adjusted gross margin¹		13.7	%		10.8	%
Operating income	$	14.6		$	8.4			73.8	%
Operating margin		5.6	%		3.4	%
Adjusted operating income¹	$	15.4		$	9.5			62.1	%
Adjusted operating margin¹		5.9	%		3.9	%
Net income	$	8.7		$	4.0			117.5	%
Adjusted net income¹	$	9.2		$	5.3			73.6	%
Earnings per share, diluted	$	0.26		$	0.12			116.7	%
Adjusted earnings per share, diluted¹	$	0.28		$	0.16			75.0	%
Adjusted EBITDA¹	$	19.8		$	13.5			46.7	%
Adjusted EBITDA margin¹		7.5	%		5.5	%
¹See Appendix A for GAAP to Non-GAAP reconciliation

Consolidated Results

First Quarter 2023 Results

First quarter 2023 revenues were $262.7 million compared to $244.4 million in the prior year period, an increase of 7.5%. The increase in revenues was primarily driven by increased pricing to offset material cost increases and increased sales volume, offset by sales volume decreases in the Industrial Automation segment. Foreign currency translation also unfavorably impacted first quarter of 2023 revenues by $3.6 million, or 1.5%.
Operating income for the first quarter 2023 was $14.6 million compared to operating income of $8.4 million in the prior year period. The increase was driven by higher margins, partially offset by higher SG&A. The first quarter of 2023 adjusted operating income was $15.4 million.
Interest associated with debt and other expenses was $2.9 million and $2.0 million for the first quarter ended March 31, 2023 and 2022, respectively.
Net income was $8.7 million, or $0.26 per diluted share, for the first quarter 2023 compared to net income of $4.0 million, or $0.12 per diluted share, in the prior year period.

At March 31, 2023, the Company had $11.0 million outstanding borrowings on its US revolving credit facility and $4.4 million outstanding under the newly established China credit facility. The Company had $41.5 million of cash and total $146.5 million of availability from the US and China revolving credit facilities, resulting in liquidity of $188.0 million as of March 31, 2023.

First Quarter 2023 Segment Results

Vehicle Solutions Segment

Revenues were $160.6 million compared to $140.2 million for the prior year period, an increase of 14.6% primarily resulting from increased sales volume and increased pricing to offset material cost increases.
Operating income for the first quarter 2023 was $13.4 million compared to operating income of $6.3 million in the prior year period, an increase of 112.0%. Adjusted operating income increased 106.6%, to $13.5 million, primarily attributable to increased pricing, lower freight costs and overhead reduction.

Electrical Systems Segment

Revenues were $54.7 million compared to $39.9 million in the prior year period, an increase of 37.3% due to volume, increased pricing to offset material cost pass-through and new business wins.
Operating income was $6.1 million compared to operating income of $1.8 million in the prior year period. The increase in operating income is primarily attributable to volume, increased pricing and manufacturing efficiencies.

Aftermarket & Accessories Segment

Revenues were $37.6 million compared to $30.2 million in the prior year period, an increase of 24.5% due to increased sales volume and increased pricing to offset material cost pass-through.
Operating income was $5.6 million compared to operating income of $2.6 million in the prior year period. The increase in operating income is primarily attributable to increased pricing offsetting moderating cost inflation.

Industrial Automation Segment

Revenues were $9.7 million compared to $34.1 million in the prior year period, a decrease of 71.4%.
Operating loss was $0.9 million compared to operating income of $3.7 million in the prior year period. The decrease in operating income is primarily attributable to volume reduction and restructuring expenses. Adjusted operating loss was $0.2 million.

2023 Demand Outlook

According to ACT Research, 2023 North American Class 8 truck production levels are expected to be at 312,000 units and Class 5-7 production are expected to be at 242,000 units. Estimates from FTR for 2023 are 320,000 units, slightly higher than ACT Research for Class 8 truck builds. The 2022 actual Class 8 truck builds according to the ACT Research was 315,128 units.

The global commercial and automotive vehicle wire harness market is growing at approximately 4.5%. The global electric truck market expected to grow approximately 15% CAGR. Half of all Class 4-8 truck sales are estimated to be battery-powered EV by 2035. (ACT Feb 22)

According to Interact Analysis, the Global Off-Highway vehicle market is expected to increase approximately 4% to 6.2 million units in 2023 from 5.9 million units in 2022. Beyond 2023, the Off-Highway vehicle market is expected to grow in the 4-5% range. We expect our legacy business growth rates to be in line with this outlook.

Industry forecasts are expecting at least 4% growth in 2023 for North American aftermarket truck parts. Compounded annual growth of at least 4% is forecasted for 2023-2027.

GAAP to Non-GAAP Reconciliation

A reconciliation of GAAP to non-GAAP financial measures referenced in this release is included as Appendix A to this release.

Conference Call

A conference call to discuss this press release is scheduled for Wednesday, May 3, 2023, at 10:00 a.m. ET. Management intends to reference the Q1 2023 Earnings Call Presentation during the conference call. To participate, dial (888) 886-7786 using conference code 74688048. International participants dial (416) 764-8658 using conference code 74688048.

This call is being webcast and can be accessed through the “Investors” section of CVG’s website at ir.cvgrp.com, where it will be archived for one year.

A telephonic replay of the conference call will be available for a period of two weeks following the call. To access the replay, dial (877) 674-7070 using access code 688048 and international callers can dial (416) 764-8692 using access code 688048.

Company Contact

Andy Cheung
Chief Financial Officer
CVG
[email protected]

Investor Relations Contact

Ross Collins or Stephen Poe
Alpha IR Group
[email protected]

About CVG

At CVG, we deliver real solutions to complex design, engineering and manufacturing problems across a range of global industries by innovating, constantly adding value, and treating our customer’s bottom line as if it were our own. Information about the Company and its products is available on the internet at www.cvgrp.com.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions. In particular, this press release may contain forward-looking statements about the Company’s expectations for future periods with respect to its plans to improve financial results, the future of the Company’s end markets, including the short-term and long-term impact of the COVID-19 pandemic on our business, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company’s prospects in the wire harness, warehouse automation and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment and the Company’s financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including those included in the Company’s filings with the SEC. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, 2023 and 2022 (Unaudited) (Amounts in thousands, except per share amounts)

	Three Months Ended March 31,
		2023			2022
Revenues	$	262,709		$	244,374
Cost of revenues		227,500			218,991
Gross profit		35,209			25,383
Selling, general and administrative expenses		20,565			16,999
Operating income		14,644			8,384
Other (income) expense		(202	)		1,041
Interest expense		2,890			1,961
Income before provision for income taxes		11,956			5,382
Provision for income taxes		3,256			1,400
Net income	$	8,700		$	3,982
Earnings per Common Share:
Basic	$	0.26		$	0.12
Diluted	$	0.26		$	0.12
Weighted average shares outstanding:
Basic		32,868			32,065
Diluted		33,182			32,685

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands, except per share amounts)

ASSETS	March 31, 2023			December 31, 2022
Current assets:
Cash	$	41,484		$	31,825
Accounts receivable, net		171,878			152,626
Inventories		139,553			142,542
Other current assets		20,112			12,582
Total current assets		373,027			339,575
Property, plant and equipment, net		68,939			67,805
Intangible assets, net		13,791			14,620
Deferred income taxes, net		10,996			12,275
Other assets, net		31,087			35,993
Total assets	$	497,840		$	470,268
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	119,057		$	122,091
Accrued liabilities and other		47,340			42,809
Current portion of long-term debt and short-term debt		16,399			10,938
Total current liabilities		182,796			175,838
Long-term debt		149,221			141,499
Pension and other post-retirement benefits		8,470			8,428
Other long-term liabilities		23,564			24,463
Total liabilities		364,051			350,228
Stockholders’ equity:
Preferred stock		—			—
Common stock		330			328
Treasury stock		(15,278	)		(14,514	)
Additional paid-in capital		263,142			261,371
Retained deficit		(86,895	)		(95,595	)
Accumulated other comprehensive loss		(27,510	)		(31,550	)
Total stockholders’ equity		133,789			120,040
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	497,840		$	470,268

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES BUSINESS SEGMENT FINANCIAL INFORMATION (Unaudited) (Amounts in thousands)

	Three Months Ended March 31,
	Vehicle Solutions				Electrical Systems				Aftermarket & Accessories				Industrial Automation					Corporate / Other						Total
		2023		2022		2023		2022		2023		2022		2023			2022		2023			2022			2023		2022
Revenues	$	160,584	$	140,157	$	54,749	$	39,876	$	37,629	$	30,215	$	9,747		$	34,126	$	—		$	—		$	262,709	$	244,374
Gross profit		19,471		12,907		8,297		3,401		7,227		4,086		214			4,991		—			(2	)		35,209		25,383
Selling, general & administrative expenses		6,077		6,588		2,227		1,640		1,650		1,465		1,076			1,324		9,535			5,982			20,565		16,999
Operating income	$	13,394	$	6,319	$	6,070	$	1,761	$	5,577	$	2,621	$	(862	)	$	3,667	$	(9,535	)	$	(5,984	)	$	14,644	$	8,384

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES Appendix A: Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (Amounts in thousands, except per share amounts and percentages)

	Three Months Ended
	March 31, 2023			March 31, 2022
Gross profit	$	35,209		$	25,383
Restructuring		690			906
Adjusted gross profit	$	35,899		$	26,289
% of revenues		13.7	%		10.8	%

	Three Months Ended
	March 31, 2023			March 31, 2022
Operating income	$	14,644		$	8,384
Restructuring		713			989
Deferred consideration purchase accounting		—			78
Total operating income (loss) adjustments		713			1,067
Adjusted operating income	$	15,357		$	9,451
% of revenues		5.8	%		3.9	%

	Three Months Ended
	March 31, 2023			March 31, 2022
Net income	$	8,700		$	3,982
Operating income adjustments		713			1,067
Hryvnia fair value adjustments on forward exchange contracts		—			675
Adjusted provision for income taxes¹		(178	)		(436	)
Adjusted net income	$	9,235		$	5,288

Diluted EPS	$	0.26		$	0.12
Adjustments to diluted EPS	$	0.02		$	0.04
Adjusted diluted EPS	$	0.28		$	0.16
¹ Reported Tax (Benefit) Provision adjusted for tax effect of special charges at 25%

	Three Months Ended
	March 31, 2023			March 31, 2022
Net income	$	8,700		$	3,982
Interest expense		2,890			1,961
Provision for income taxes		3,256			1,400
Depreciation expense		3,430			3,575
Amortization expense		832			857
EBITDA	$	19,108		$	11,775
% of revenues		7.3	%		4.8	%

EBITDA adjustments
Restructuring	$	713		$	989
Hryvnia fair value adjustments on forward exchange contracts		—			675
Deferred consideration purchase accounting		—			78
Adjusted EBITDA	$	19,821		$	13,517
% of revenues		7.5	%		5.5	%

COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES Appendix B: Segment Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited) (Amounts in thousands, except percentages)

	Three Months Ended March 31, 2023
	Vehicle Solutions			Electrical Systems			Aftermarket & Accessories			Industrial Automation			Corporate/ Other			Total
Operating income	$	13,394		$	6,070		$	5,577		$	(862	)	$	(9,535	)	$	14,644
Restructuring		83			8			—			622			—			713
Adjusted operating income	$	13,477		$	6,078		$	5,577		$	(240	)	$	(9,535	)	$	15,357
% of revenues		8.4	%		11.1	%		14.8	%	(2.5) %							5.8	%

	Three Months Ended March 31, 2022
	Vehicle Solutions			Electrical Systems			Aftermarket & Accessories			Industrial Automation			Corporate/ Other			Total
Operating income	$	6,319		$	1,761		$	2,621		$	3,667		$	(5,984	)	$	8,384
Restructuring		204			—			435			350			—			989
Deferred consideration purchase accounting		—			—			—			78			—			78
Adjusted operating income	$	6,523		$	1,761		$	3,056		$	4,095		$	(5,984	)	$	9,451
% of revenues		4.7	%		4.4	%		10.1	%		12.0	%					3.9	%

Use of Non-GAAP Measures

This earnings release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). In general, the non-GAAP measures exclude items that (i) management believes reflect the Company’s multi-year corporate activities; or (ii) relate to activities or actions that may have occurred over multiple or in prior periods without predictable trends. Management uses these non-GAAP financial measures internally to evaluate the Company’s performance, engage in financial and operational planning and to determine incentive compensation.

Management provides these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on the Company’s financial and operating results and in comparing the Company’s performance to that of its competitors and to comparable reporting periods. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP. The financial results calculated in accordance with GAAP and reconciliations to those financial statements set forth above should be carefully evaluated.

May 2, 2023 4:35 pm

Startek Sets First Quarter 2023 Conference Call for Thursday, May 11, 2023 at 5:00 p.m. ET

Startek Sets First Quarter 2023 Conference Call for Thursday, May 11, 2023 at 5:00 p.m. ET

DENVER–(BUSINESS WIRE)–
Startek, Inc. (NYSE: SRT) (“Startek” or the “Company”), a global customer experience (CX) solutions provider, will hold a conference call on Thursday, May 11, 2023 at 5:00 p.m. ET to discuss its financial results for the first quarter ended March 31, 2023. The company will report its results in a press release prior to the conference call.

Startek management will host the call, followed by a question-and-answer period.

Date: Thursday, May 11, 2023

Time: 5:00 p.m. ET

Toll-free dial-in number: 1-844-826-3035

International dial-in number: 1-412-317-5195

Conference ID: 10178216

Please call the conference telephone number 10-15 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay here. In addition, a supplemental presentation will be available to download on the day of the call within the investor section of the Company’s website at www.startek.com.

A telephonic replay of the conference call will also be available after 8 p.m. ET on the same day through May 18, 2023.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 10178216

About Startek®

For more than 35 years, Startek has delivered customer experience (CX) excellence for the world’s leading brands. Spread across 12 countries, our 38,000 associates create memorable, personalized experiences in both voice and non-voice channels. Our clients span from fortune 500s to fast-growing startups in a diverse range of industries including cable, media and telecom; travel and hospitality; retail and e-commerce and banking and financial services.

By creating closer connections, Startek delivers value for our clients, opportunity for our people and sustainable growth for our shareholders.

To learn more visit www.startek.com and follow us on LinkedIn @Startek.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230502005899/en/

Investor Relations

Cody Cree

Gateway Group, Inc.

1-949-574-3860

[email protected]

Media Relations

Neha Iyer

Startek

[email protected]

KEYWORDS: Colorado United States North America

INDUSTRY KEYWORDS: Data Management Other Retail Technology Electronic Commerce Marketing Communications Other Technology Telecommunications Retail Software Networks

MEDIA:

Logo

May 2, 2023 4:34 pm

Lyell Immunopharma to Participate in BofA Securities Healthcare Conference

SOUTH SAN FRANCISCO, Calif., May 02, 2023 (GLOBE NEWSWIRE) — Lyell Immunopharma, Inc. (Nasdaq: LYEL), a clinical‑stage T-cell reprogramming company advancing a diverse pipeline of cell therapies for patients with solid tumors, today announced that members of its senior management team will participate in the BofA Securities 2023 Healthcare Conference on Tuesday, May 9 at 3:00 pm PT.

A live webcast of the fireside chat can be accessed through the investor relations section of the Company’s website at www.lyell.com. Following the live presentation, a replay of the webcast will be available on the Company’s website for 90 days following the presentation date.

About Lyell Immunopharma, Inc.

Lyell is a clinical-stage T-cell reprogramming company advancing a diverse pipeline of cell therapies for patients with solid tumors. The technologies powering its product candidates are designed to address barriers that limit consistent and long-lasting responses to cell therapy for solid tumors: T-cell exhaustion and lack of durable stemness, which includes the ability to persist and self-renew to drive durable tumor cytotoxicity. Lyell is applying its proprietary ex vivo genetic and epigenetic reprogramming technologies to address these barriers in order to develop new medicines with improved durable clinical outcomes. Lyell is based in South San Francisco, California with facilities in Seattle and Bothell, Washington. To learn more, please visit www.lyell.com.

Contact:

Ellen Rose
Senior Vice President, Communications and Investor Relations
[email protected]

May 2, 2023 4:32 pm

Methode Electronics to Present at the Oppenheimer 18th Annual Industrial Growth Conference

CHICAGO, May 02, 2023 (GLOBE NEWSWIRE) — Methode Electronics, Inc. (NYSE: MEI), a leading global supplier of custom-engineered solutions for user interface, LED lighting and power distribution applications, will present virtually at the Oppenheimer 18th Annual Industrial Growth Conference on Tuesday, May 9 at 11.15 a.m. EDT.

A simultaneous webcast can be accessed through the company’s website, www.methode.com, by selecting the Investors page. The webcast will also be archived on the same Investors page.

About Methode Electronics, Inc.

Methode Electronics, Inc. (NYSE: MEI) is a leading global supplier of custom-engineered solutions with sales, engineering and manufacturing locations in North America, Europe, Middle East and Asia. We design, engineer, and produce mechatronic products for OEMs utilizing our broad range of technologies for user interface, LED lighting system, power distribution and sensor applications.

Our solutions are found in the end markets of transportation (including automotive, commercial vehicle, e-bike, aerospace, bus, and rail), cloud computing infrastructure, construction equipment, consumer appliance, and medical devices. Our business is managed on a segment basis, with those segments being Automotive, Industrial, Interface and Medical.

For Methode Electronics, Inc.

Robert K. Cherry
Vice President, Investor Relations
[email protected]
708-457-4030

May 2, 2023 4:30 pm

Varex Announces Strong Financial Results for Second Quarter Fiscal Year 2023

Varex Announces Strong Financial Results for Second Quarter Fiscal Year 2023

SALT LAKE CITY–(BUSINESS WIRE)–
Varex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results for the second quarter of fiscal year 2023.

2QFY23 Summary

Revenues $228 million
GAAP gross margin 32% | Non-GAAP gross margin* 33%
GAAP operating margin 7% | Non-GAAP operating margin* 10%
GAAP net earnings $0.10 per diluted share | Non-GAAP net earnings* $0.26 per diluted share
Cash flow from operations $27 million

“We are pleased to report results for the second quarter that exceeded the high-end of our guidance. Demand for our products was strong during the quarter. Revenue growth for the Industrial segment exceeded our expectations, while Medical segment revenue growth was as expected,” said Sunny Sanyal, Chief Executive Officer of Varex. Sanyal added, “We are encouraged by the demand levels we are seeing, and we anticipate our growth to remain solid in the second half of the fiscal year.”

Varex’s revenue of $228 million was up 11% sequentially and 6% year-over-year. Medical segment revenue of $174 million was up 9% sequentially and 2% year-over-year. Industrial segment revenue of $54 million was up 19% sequentially and 22% year-over-year. Non-GAAP gross margin was 33% in the quarter compared to 32% in the first quarter of fiscal year 2023 and non-GAAP EPS increased to $0.26 from $0.21 last quarter.

Balance Sheet & Cash Flow

Cash flow from operations was $27 million in the second quarter of fiscal year 2023, due primarily to a reduction in inventory. Cash, cash equivalents, marketable securities and CDs increased $14 million sequentially to $122 million at the end of the second quarter.

Outlook

The following guidance is provided for the third quarter of fiscal year 2023:

Revenues are expected to be between $220 million and $240 million
Non-GAAP net earnings per diluted share is expected to be between $0.20 and $0.40

Guidance for the company’s net earnings per diluted share is provided on a non-GAAP basis only. This non-GAAP financial measure is forward-looking, and the company is unable to provide a meaningful or accurate GAAP forecast of net earnings per diluted share without unreasonable effort due to the uncertainty of amounts and timing of unusual items.

Non-GAAP Financial Measures

*Please refer to “Reconciliation between GAAP and non-GAAP Financial Measures” below for a reconciliation of non-GAAP items to the comparable GAAP measures.

Conference Call Information

Varex will conduct its earnings conference call for the second quarter of fiscal year 2023 today at 3:00 p.m. Mountain Time. The conference call, including a supplemental slide presentation, will be webcast live and can be accessed at Varex’s website at www.vareximaging.com/investor-relations. Access will also be available by dialing 877-524-8416 from anywhere in the U.S. or by dialing 412-902-1028 from non-U.S. locations. The webcast and supplemental slide presentation will be archived on Varex’s website at www.vareximaging.com/financial-reports. A replay of the call will be available from today through May 16th at 877-660-6853 from anywhere in the U.S. or 201-612-7415 from non-U.S. locations. The replay access code is 13738210. The listen-only webcast link is: https://event.choruscall.com/mediaframe/webcast.html?webcastid=X1ExHtPk

About Varex

Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components, which include X-ray tubes, digital detectors and other image processing solutions that are key components of X-ray imaging systems. With a 70+ year history of successful innovation, Varex’s products are used in medical imaging as well as in industrial and security imaging applications. Global OEM manufacturers incorporate the company’s X-ray sources, digital detectors, connecting devices and imaging software in their systems to detect, diagnose, protect and inspect. Headquartered in Salt Lake City, Utah, Varex employs approximately 2,400 people located in North America, Europe, and Asia. For more information visit vareximaging.com.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements concerning unaudited financial results; supply chain diversification activities; industry or market outlook; customer demand and revenue trends; revenues, product volumes, or other expected future financial results or performance; and any statements using the terms “believe,” “expect,” “intend,” “outlook,” “future,” “anticipate,” “will,” “could,” “estimate,” “guidance,” or similar statements are forward-looking statements that involve risks and uncertainties that could cause Varex’s actual results to differ materially from those anticipated. While forward-looking statements are based on assumptions and analyses made by us that we believe to be reasonable under the circumstances, whether actual results and developments will meet our expectations and predictions depend on a number of risks and uncertainties which could cause our actual results, performance, and financial condition to differ materially from our expectations. Such risks and uncertainties include supply chain and logistical challenges; price increases from suppliers and service providers and inflation generally; the lingering impacts of the COVID-19 pandemic on both the global economy and Varex’s business; shifts in product mix; the continued impact of tariffs or a global trade war on Varex’s products and customer purchasing patterns; global economic conditions and political conditions globally or regionally, including any impact due to armed conflicts (such as the conflict between Russia and Ukraine as well as governmental sanctions imposed in response and increasing tensions between China and Taiwan); demand for and delays in delivery of products of Varex or its customers; litigation costs; Varex’s ability to develop, commercialize and deploy new products; the impact of reduced or limited demand by purchasers of certain X-ray products; the impact of competitive products and pricing; and the other risks listed from time to time in our filings with the U.S. Securities and Exchange Commission, which by this reference are incorporated herein. Any forward-looking statements made by us in this news release speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Varex assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.

Varex has not filed its Form 10-Q for the second quarter of fiscal year 2023. All financial results described here should be considered preliminary and are subject to change to reflect any necessary adjustments or changes in accounting estimates that are identified prior to the time Varex files it’s Form 10-Q.

VAREX IMAGING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended						Six Months Ended
(In millions, except for per share amounts)	March 31, 2023			April 1, 2022			March 31, 2023			April 1, 2022
Revenues, net
Medical	$	174.1		$	170.4		$	334.2		$	326.1
Industrial		54.1			44.3			99.6			87.4
Total revenues		228.2			214.7			433.8			413.5
Gross profit
Medical		51.7			53.4			98.0			99.4
Industrial		21.0			17.4			38.0			36.2
Total gross profit		72.7			70.8			136.0			135.6
Operating expenses:
Research and development		23.0			18.9			43.0			36.6
Selling, general and administrative		34.1			25.3			64.4			58.4
Total operating expenses		57.1			44.2			107.4			95.0
Operating income		15.6			26.6			28.6			40.6
Interest income		0.7			0.1			1.2			0.1
Interest expense		(7.3	)		(11.1	)		(14.8	)		(21.0	)
Other expense, net		(1.2	)		(2.0	)		(1.8	)		(2.8	)
Interest and other expense, net		(7.8	)		(13.0	)		(15.4	)		(23.7	)
Income before taxes		7.8			13.6			13.2			16.9
Income tax expense		3.5			6.0			5.7			7.7
Net income		4.3			7.6			7.5			9.2
Less: Net income attributable to noncontrolling interests		0.2			—			0.3			0.2
Net income attributable to Varex	$	4.1		$	7.6		$	7.2		$	9.0
Net income per common share attributable to Varex
Basic	$	0.10		$	0.19		$	0.18		$	0.23
Diluted	$	0.10		$	0.18		$	0.18		$	0.21
Weighted average common shares outstanding
Basic		40.2			39.7			40.2			39.6
Diluted		40.5			42.2			40.5			43.2

VAREX IMAGING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In millions, except share and per share amounts)	March 31, 2023		September 30, 2022
Assets
Current assets:
Cash and cash equivalents	$	104.4	$	89.4
Accounts receivable, net of allowance for credit losses of $0.6 million and $0.6 million at March 31, 2023 and September 30, 2022, respectively		159.5		173.3
Inventories		310.7		303.2
Prepaid expenses and other current assets		43.8		44.0
Total current assets		618.4		609.9
Property, plant, and equipment, net		142.6		141.3
Goodwill		289.2		284.5
Intangible assets, net		28.9		33.6
Investments in privately-held companies		47.3		46.4
Deferred tax assets		2.1		2.3
Operating lease assets		23.2		23.2
Other assets		39.1		43.2
Total assets	$	1,190.8	$	1,184.4
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	74.2	$	78.2
Accrued liabilities and other current liabilities		66.9		81.4
Current operating lease liabilities		3.9		4.0
Current maturities of long-term debt		2.0		2.1
Deferred revenues		10.2		7.4
Total current liabilities		157.2		173.1
Long-term debt, net		441.0		412.3
Deferred tax liabilities		—		0.5
Operating lease liabilities		17.1		18.0
Other long-term liabilities		42.6		33.8
Total liabilities		657.9		637.7

Stockholders’ equity:
Preferred stock, $.01 par value: 20,000,000 shares authorized, none issued		—		—
Common stock, $.01 par value: 150,000,000 shares authorized
Shares issued and outstanding: 40,384,190 and 40,085,126 at March 31, 2023 and September 30, 2022, respectively.		0.4		0.4
Additional paid-in capital		441.6		469.1
Accumulated other comprehensive income		0.2		0.1
Retained earnings		77.4		63.8
Total Varex stockholders’ equity		519.6		533.4
Noncontrolling interests		13.3		13.3
Total stockholders’ equity		532.9		546.7
Total liabilities and stockholders’ equity	$	1,190.8	$	1,184.4

VAREX IMAGING CORPORATION
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES
(Unaudited)

	Three Months Ended						Six Months Ended
(In millions, except per share amounts)	March 31, 2023			April 1, 2022			March 31, 2023			April 1, 2022
GROSS PROFIT RECONCILIATION
Revenues, net	$	228.2		$	214.7		$	433.8		$	413.5
Gross profit		72.7			70.8			136.0			135.6
Amortization of intangible assets		1.8			1.8			3.6			3.6
Non-GAAP gross profit	$	74.5		$	72.6		$	139.6		$	139.2
Gross margin %		31.9	%		33.0	%		31.4	%		32.8	%
Non-GAAP gross margin %		32.6	%		33.8	%		32.2	%		33.7	%

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE RECONCILIATION
Selling, general and administrative	$	34.1		$	25.3		$	64.4		$	58.4
Amortization of intangible assets		1.6			1.9			3.2			3.8
Restructuring charges		0.8			1.1			1.5			4.3
Other non-operational costs		3.2			0.1			3.8			1.9
Non-GAAP selling, general and administrative expense	$	28.5		$	22.2		$	55.9		$	48.4

OPERATING EXPENSE RECONCILIATION
Total operating expenses	$	57.1		$	44.2		$	107.4		$	95.0
Amortization of intangible assets		1.6			1.9			3.2			3.8
Restructuring charges		0.8			1.1			1.5			4.3
Other non-operational costs		3.2			0.1			3.8			1.9
Non-GAAP operating expense	$	51.5		$	41.1		$	98.9		$	85.0

VAREX IMAGING CORPORATION
RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES
(Unaudited)

	Three Months Ended						Six Months Ended
(In millions, except per share amounts)	March 31, 2023			April 1, 2022			March 31, 2023			April 1, 2022
OPERATING INCOME RECONCILIATION
Operating income	$	15.6		$	26.6		$	28.6		$	40.6
Amortization of intangible assets (includes amortization impacts to cost of revenues)		3.4			3.7			6.8			7.4
Restructuring charges (includes restructuring impact to cost of revenues)		0.8			1.1			1.5			4.3
Other non-operational costs (includes other non-operational impacts to cost of revenues)		3.2			0.1			3.8			1.9
Total operating income adjustments		7.4			4.9			12.1			13.6
Non-GAAP operating income	$	23.0		$	31.5		$	40.7		$	54.2
Operating margin		6.8	%		12.4	%		6.6	%		9.8	%
Non-GAAP operating margin		10.1	%		14.7	%		9.4	%		13.1	%

INCOME BEFORE TAXES RECONCILIATION
Income before taxes	$	7.8		$	13.6		$	13.2		$	16.9
Total operating income adjustments		7.4			4.9			12.1			13.6
Convertible notes non-cash interest expense		—			2.2			—			4.3
Other non-operational costs		—			1.2			—			1.2
Total income before tax adjustments		7.4			8.3			12.1			19.1
Non-GAAP income before taxes	$	15.2		$	21.9		$	25.3		$	36.0

INCOME TAX EXPENSE RECONCILIATION
Income tax expense	$	3.5		$	6.0		$	5.7		$	7.7
Tax effect on non-GAAP adjustments		(0.8	)		(0.8	)		(0.1	)		(2.6	)
Non-GAAP income tax expense	$	4.3		$	6.8		$	5.8		$	10.3

VAREX IMAGING CORPORATION RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES (Unaudited)

	Three Months Ended						Six Months Ended
(In millions, except per share amounts)	March 31, 2023			April 1, 2022			March 31, 2023			April 1, 2022
NET INCOME AND DILUTED NET INCOME PER SHARE RECONCILIATION
Net income attributable to Varex	$	4.1		$	7.6		$	7.2		$	9.0
Total earnings before taxes adjustments		7.4			8.3			12.1			19.1
Effective tax rate on non-GAAP adjustments		10.8	%		9.6	%		0.8	%		13.6	%
Tax effect on non-GAAP adjustments		(0.8	)		(0.8	)		(0.1	)		(2.6	)
Non-GAAP net income		10.7			15.1			19.2			25.5
Diluted net income per share		0.10			0.18			0.18			0.21
Non-GAAP diluted net income per share	$	0.26		$	0.37		$	0.47		$	0.62

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING RECONCILIATION
GAAP weighted average common shares – dilutive		40.5			42.2			40.5			43.2
Dilution offset from convertible notes hedge transaction		—			(1.7	)		—			(2.2	)
Non-GAAP dilutive shares		40.5			40.5			40.5			41.0

ADJUSTED EBITDA RECONCILIATION
Net income attributable to Varex	$	4.1		$	7.6		$	7.2		$	9.0
Interest expense		7.3			9.9			14.8			19.8
Income tax expense		3.5			6.0			5.7			7.7
Depreciation		4.7			4.8			9.3			9.6
Amortization		3.4			3.7			6.8			7.5
Stock based compensation		3.2			3.9			6.5			7.3
Restructuring charges		0.8			1.1			1.5			4.3
Other non-operational costs		3.2			1.3			3.8			3.1
Adjusted EBITDA	$	30.2		$	38.3		$	55.6		$	68.3

Discussion of Non-GAAP Financial Measures

This press release includes non-GAAP financial measures derived from our Condensed Consolidated Statements of Operations. These measures are not presented in accordance with, nor are they a substitute for U.S. generally accepted accounting principles, or GAAP. These measures include: non-GAAP gross profit; non-GAAP gross margin; non-GAAP operating expense; non-GAAP operating earnings; non-GAAP operating earnings margin; non-GAAP earnings before taxes; non-GAAP net earnings; non-GAAP net earnings per diluted share, non-GAAP dilutive shares; and non-GAAP EBITDA. We are providing a reconciliation above of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. We are unable to provide without unreasonable effort a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential significant variability and limited visibility of the excluded items discussed.

We utilize a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of our business, in making operating decisions, and forecasting and planning for future periods. We consider the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of our business by excluding unusual and one-time costs. We believe that disclosing non-GAAP financial measures provides useful supplemental data that allows for greater transparency in the review of our financial and operational performance. We also believe that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.

Non-GAAP measures include the following items:

Amortization of intangible assets: We do not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to intangible assets and the term of amortization can vary significantly and are unique to each acquisition or purchase. We believe that excluding amortization of intangible assets allows the users of our financial statements to better review and understand the historic and current results of our operations, and also facilitates comparisons to peer companies.

Purchase price accounting charges to cost of revenues: We may incur charges to cost of revenues as a result of acquisitions. We believe that excluding these charges allows the users of our financial statements to better understand the historic and current cost of our products, our gross margin, and also facilitates comparisons to peer companies.

Restructuring charges: We incur restructuring charges that result from events, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our on-going business. Although these events are reflected in our GAAP financials, these unique transactions may limit the comparability of our on-going operations with prior and future periods.

Acquisition and integration related costs: We incur expenses or benefits with respect to certain items associated with our acquisitions, such as transaction costs, changes in fair value of acquisition related hedges, changes in the fair value of contingent consideration liabilities, gain or expense on settlement of pre-existing relationships, etc. We exclude such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of our on-going business. We also incur expenses or benefits with respect to certain items associated with our acquisitions, such as integration costs relating to acquisitions for any costs incurred prior to closing and up to 12 months after the closing date of the acquisition.

Impairment charges:We may incur impairment charges that result from events, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our on-going business and such charges may limit the comparability of our on-going operations with prior and future periods.

Other non-operational costs: Certain items may be non-recurring, unusual, infrequent and directly related to an event that is distinct and non-reflective of the Company’s ongoing business operations. These may include such items as non-ordinary course litigation, legal settlements, inventory write-downs for discontinued products, cost of facilities no longer in use, extinguishment of debt and hedge costs, environmental settlements, governmental settlements including tax settlements, and other items of similar nature.

Convertible notes non-cash interest expense: We issued convertible notes in June 2020 at a discount related to the conversion feature of the notes and capitalized certain costs related to the issuance of these notes. The discount and capitalized issuance costs are amortized into interest expense over the term of the convertible notes. The amortization recognized for the convertible notes will be greater than the cash interest payments for the notes. We believe that excluding the convertible notes non-cash interest expense allows the users of our financial statements to better understand the historic and current results of our operations. This also facilitates comparisons to peer companies.

Non-operational tax adjustments: Certain tax items may be non-recurring, unusual, infrequent and directly related to an event that is distinct and non-reflective of the Company’s normal business operations. These may include such items as the retroactive impact of significant changes in tax laws, including changes to statutory tax rates and one-time tax charges.

Tax effects of operating earnings adjustments: We apply our non-GAAP adjustments to the GAAP pretax income to calculate the non-GAAP effective tax rate. This application of our non-GAAP effective tax rate excludes any discrete items, as defined in the guidance for accounting for income taxes in interim periods, or any other non-operational tax adjustments.

Dilution offset from convertible notes hedge transaction: In connection with the issuance of the Company’s Convertible Senior Unsecured Notes (the Convertible Notes) in June 2020, the Company entered into convertible note hedge transactions (the Hedge Transactions) to reduce the potential dilutive effect on common shares upon the eventual conversion of the Convertible Notes. GAAP diluted shares outstanding includes the incremental dilutive shares from the Company’s Convertible Notes. Under GAAP, the anti-dilutive impact of the Convertible Note Hedge Transactions is not reflected in GAAP diluted shares outstanding. In periods in which the average stock price per share exceeds $20.81 and the Company has GAAP net income, the non-GAAP diluted share count includes the anti-dilutive impact of the Company’s Hedge Transactions, which reduces the potential dilution that otherwise would occur upon conversion of the Company’s Convertible Notes. We believe non-GAAP diluted shares is a useful non-GAAP metric because it provides insight into the offsetting economic effect of the Hedge Transactions against potential conversion of the Convertible Notes.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230502005394/en/

Christopher Belfiore

Director of Investor Relations

Varex Imaging Corporation

801.973.1566 | [email protected]

KEYWORDS: Utah United States North America

INDUSTRY KEYWORDS: Medical Devices Health Technology Software Radiology Hardware

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Posted on May 2, 2023 4:28 pm
Spruce Biosciences to Participate in May Investor Conferences

Spruce Biosciences to Participate in May Investor Conferences

SOUTH SAN FRANCISCO, Calif.–(BUSINESS WIRE)–Spruce Biosciences, Inc. (Nasdaq: SPRB), a late-stage biopharmaceutical company focused on developing and commercializing novel therapies for rare endocrine disorders with significant unmet medical need, today announced that company management will participate in two upcoming investor conferences taking place in May.

The JMP Securities Life Sciences Conference

Date: May 15-16, 2023

Format:Fireside chat (May 15, 2023 at 1:30 p.m. ET) and 1×1 meetings

2023 RBC Capital Markets Global Healthcare Conference

Date: May 16-17, 2023

Format:Fireside chat (May 17, 2023 at 3:05 p.m. ET) and 1×1 meetings

Interested parties can access the webcast for each conference presentation from the Events section of the company’s investor relations website at https://investors.sprucebiosciences.com. A replay of the webcasts will be available after the conclusion of the live presentations for approximately 30 days.

About Spruce Biosciences

Spruce Biosciences is a late-stage biopharmaceutical company focused on developing and commercializing novel therapies for rare endocrine disorders with significant unmet medical need. Spruce is initially developing its wholly-owned product candidate, tildacerfont, as the potential first non-steroidal therapy for patients suffering from classic congenital adrenal hyperplasia (CAH). Spruce is also developing tildacerfont for women suffering from polycystic ovary syndrome (PCOS) with primary adrenal androgen excess. To learn more, visit www.sprucebiosciences.com and follow us on Twitter @Spruce_Bio, LinkedIn, Facebook and YouTube.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230502005399/en/

Media Contact

Will Zasadny

Evoke Canale

(619) 961-8848

[email protected]

[email protected]

Investors

Xuan Yang

Solebury Strategic Communications

(415) 971-9412

[email protected]

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Research Hospitals Clinical Trials Biotechnology Other Health Health Pharmaceutical General Health Science

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