Market Newsdesk

May 4, 2023 9:20 am

Intercontinental Exchange Reports Strong First Quarter 2023

Intercontinental Exchange Reports Strong First Quarter 2023

ATLANTA & NEW YORK–(BUSINESS WIRE)–
Intercontinental Exchange (NYSE: ICE):

1Q23 net revenues of $1.9 billion; recurring revenues +4% y/y
1Q23 GAAP diluted earnings per share (EPS) of $1.17
1Q23 adj. diluted earnings per share of $1.41
1Q23 operating margin of 51%; adj. operating margin of 61%
Record exchanges net revenues +1% y/y; +3% y/y, constant currency (CC)*
Record fixed income & data services revenues, +11% y/y; +12% y/y, CC*
Top five global bank to replace in-house mortgage technology with Encompass

Jeffrey C. Sprecher,
ICE Chair & Chief Executive Officer, said,
“We are pleased to report solid first quarter results. Amidst a dynamic macroeconomic environment, our customers continue to rely on our mission-critical data and technology to provide transparency and efficiencies across asset classes and through an array of macroeconomic environments – a testament to the resiliency of our business model. As we look to the balance of the year and beyond, ICE’s diverse platform is well positioned to continue to serve our customers, generate growth and create value for our stockholders.”

Intercontinental Exchange (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported financial results for the first quarter of 2023. For the quarter ended March 31, 2023, consolidated net income attributable to ICE was $655 million on $1.9 billion of consolidated revenues, less transaction-based expenses. First quarter GAAP diluted earnings per share was $1.17. Adjusted net income attributable to ICE was $791 million in the first quarter and adjusted diluted EPS was $1.41. Please refer to the reconciliation of non-GAAP financial measures included in this press release for more information on our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted EPS and adjusted free cash flow.

Warren Gardiner, ICE Chief Financial Officer, added: “We delivered another quarter of strong operating results, including compounding growth in our recurring revenues across all three business segments. We remain well positioned to benefit from near-term cyclical tailwinds, longer-term secular trends and are focused on investing in profitable growth to create value for our stockholders.”

*Constant currency (CC) percentage changes are calculated holding both the pound sterling and euro at the average exchange rate from 1Q22, 1.3424 and 1.1229, respectively.

First Quarter 2023 Business Highlights

First quarter consolidated net revenues were $1.9 billion year-over-year including exchange net revenues of $1.1 billion, fixed income and data services revenues of $563 million and mortgage technology revenues of $236 million. Consolidated operating expenses were $927 million for the first quarter of 2023. On an adjusted basis, consolidated operating expenses were $740 million. Consolidated operating income for the first quarter was $969 million and the operating margin was 51%. On an adjusted basis, consolidated operating income for the first quarter was $1.2 billion and the adjusted operating margin was 61%.

$ (in millions)	Net Revenue	Op Margin	Adj Op Margin
	1Q23
Exchanges	$1,097	70%	74%
Fixed Income and Data Services	$563	39%	47%
Mortgage Technology	$236	(7)%	36%
Consolidated	$1,896	51%	61%

	1Q23	1Q22	% Chg
Recurring Revenue	$953	$921	4%
Transaction Revenue, net	$943	$978	(4)%

Exchanges Segment Results

First quarter exchange net revenues were $1.1 billion. Exchange operating expenses were $332 million and on an adjusted basis, were $288 million in the first quarter. Segment operating income for the first quarter was $765 million and the operating margin was 70%. On an adjusted basis, operating income was $809 million and the adjusted operating margin was 74%.

$ (in millions)	1Q23	1Q22	% Chg	Const Curr⁽¹⁾
Revenue, net:
Energy	$345	$353	(2)%	(1)%
Ags and Metals	70	61	14%	15%
Financials⁽²⁾	128	130	(1)%	6%
Cash Equities and Equity Options	95	99	(4)%	(4)%
OTC and Other⁽³⁾	101	97	4%	6%
Data and Connectivity Services	232	214	8%	8%
Listings	126	129	(2)%	(2)%
Segment Revenue	$1,097	$1,083	1%	3%

Recurring Revenue	$358	$343	5%	5%
Transaction Revenue, net	$739	$740	—%	2%

(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 1Q22, 1.3424 and 1.1229, respectively.

(2) Financials include interest rates and other financial futures and options.

(3) OTC & other includes physical energy, interest income on certain clearing margin deposits, regulatory penalties and fines, fees for use of our facilities, regulatory fees charged to member organizations of our U.S. securities exchanges, designated market maker service fees, technology development fees, exchange member fees, and agriculture grading and certification fees.

Fixed Income and Data Services Segment Results

First quarter fixed income and data services revenues were $563 million. Fixed income and data services operating expenses were $343 million and adjusted operating expenses were $301 million in the first quarter. Segment operating income for the first quarter was $220 million and the operating margin was 39%. On an adjusted basis, operating income was $262 million and the adjusted operating margin was 47%.

$ (in millions)	1Q23	1Q22	% Chg	Const Curr⁽¹⁾
Revenue:
Fixed Income Execution	$32	$15	106%	106%
CDS Clearing	101	72	41%	42%
Fixed Income Data and Analytics	276	277	—%	—%
Other Data and Network Services	154	145	6%	8%
Segment Revenue	$563	$509	11%	12%

Recurring Revenue	$430	$422	2%	3%
Transaction Revenue	$133	$87	53%	54%

(1) Net revenues in constant currency are calculated holding both the pound sterling and euro at the average exchange rate from 1Q22, 1.3424 and 1.1229, respectively.

Mortgage Technology Segment Results

First quarter mortgage technology revenues were $236 million. Mortgage technology operating expenses were $252 million and adjusted operating expenses were $151 million in the first quarter. Segment operating loss for the first quarter was $16 million and the operating margin was (7)%. On an adjusted basis, operating income was $85 million and the adjusted operating margin was 36%.

$ (in millions)	1Q23	1Q22	% Chg
Revenue:
Origination Technology	$167	$203	(18)%
Closing Solutions	40	72	(45)%
Data and Analytics	21	20	10%
Other	8	12	(30)%
Segment Revenue	$236	$307	(23)%

Recurring Revenue	$165	$156	6%
Transaction Revenue	$71	$151	(53)%

Other Matters

The effective tax rate for the first quarter of 2023 was 21%.
Operating cash flow in the first quarter of 2023 was $653 million and adjusted free cash flow was $673 million.
Unrestricted cash was $2.1 billion and outstanding debt was $18.1 billion as of March 31, 2023.
Through the first quarter of 2023, ICE paid $236 million in dividends.

Updated Financial Guidance

ICE’s second quarter 2023 GAAP operating expenses are expected to be in a range of $905 million^{to $915 million. Adjusted operating expenses⁽¹⁾ are expected to be in a range of $763 million to $773 million.}
ICE’s second quarter 2023 GAAP non-operating expense⁽²⁾ is expected to be in the range of $105 million to $110 million. Adjusted non-operating expense is expected to be in the range of $85 million to $90 million.
ICE’s diluted share count for the second quarter is expected to be in the range of 559 million to 564 million weighted average shares outstanding.

(1) 2Q23 non-GAAP operating expenses exclude amortization of acquisition-related intangibles, pending Black Knight acquisition costs, and Ellie Mae integration costs.

(2) Non-operating expense includes interest income, interest expense and net other income/expense. Non-GAAP non-operating expense excludes equity earnings/losses from unconsolidated investees and net interest on pre-acquisition related debt.

Earnings Conference Call Information

ICE will hold a conference call today, May 4, 2023, at 8:30 a.m. ET to review its first quarter 2023 financial results. A live audio webcast of the earnings call will be available on the company’s website at www.theice.com in the investor relations section. Participants may also listen via telephone by dialing 833-470-1428 from the United States or 929-526-1599 from outside of the United States. Telephone participants are required to provide the participant entry number 284962 and are recommended to call 10 minutes prior to the start of the call. The call will be archived on the company’s website for replay.

The conference call for the second quarter 2023 earnings has been scheduled for August 3rd, 2023 at 8:30 a.m. ET. Please refer to the Investor Relations website at www.ir.theice.com for additional information.

Historical futures, options and cash ADV, rate per contract, open interest data and CDS cleared information can be found at: https://ir.theice.com/investor-resources/supplemental-information/default.aspx


Consolidated Statements of Income (In millions, except per share amounts) (Unaudited)

	Three Months Ended March 31,
Revenues:		2023			2022
Exchanges	$	1,673		$	1,643
Fixed income and data services		563			509
Mortgage technology		236			307
Total revenues		2,472			2,459
Transaction-based expenses:
Section 31 fees		119			51
Cash liquidity payments, routing and clearing		457			509
Total revenues, less transaction-based expenses		1,896			1,899

Operating expenses:
Compensation and benefits		352			359
Professional services		28			34
Acquisition-related transaction and integration costs		21			9
Technology and communication		172			175
Rent and occupancy		20			21
Selling, general and administrative		74			55
Depreciation and amortization		260			254
Total operating expenses		927			907
Operating income		969			992
Other income/(expense):
Interest income		91			1
Interest expense		(176	)		(103	)
Other expense, net		(35	)		(58	)
Other income/(expense), net		(120	)		(160	)
Income before income tax expense		849			832
Income tax expense		175			165
Net income	$	674		$	667
Net income attributable to non-controlling interest		(19	)		(10	)
Net income attributable to Intercontinental Exchange, Inc.	$	655		$	657

Earnings per share attributable to Intercontinental Exchange, Inc. common stockholders:
Basic	$	1.17		$	1.17
Diluted	$	1.17		$	1.16
Weighted average common shares outstanding:
Basic		559			561
Diluted		561			564


Consolidated Balance Sheets (In millions)

	As of
	March 31, 2023			As of
	(Unaudited)			December 31, 2022
Assets:
Current assets:
Cash and cash equivalents	$	2,069		$	1,799
Short-term restricted cash and cash equivalents		6,145			6,149
Cash and cash equivalent margin deposits and guaranty funds		102,072			141,990
Invested deposits, delivery contracts receivable and unsettled variation margin		1,897			5,382
Customer accounts receivable, net		1,650			1,169
Prepaid expenses and other current assets		503			458
Total current assets		114,336			156,947
Property and equipment, net		1,727			1,767
Other non-current assets:
Goodwill		21,120			21,111
Other intangible assets, net		12,946			13,090
Long-term restricted cash and cash equivalents		405			405
Other non-current assets		1,016			1,018
Total other non-current assets		35,487			35,624
Total assets	$	151,550		$	194,338

Liabilities and Equity:
Current liabilities:
Accounts payable and accrued liabilities	$	949		$	866
Section 31 fees payable		118			223
Accrued salaries and benefits		146			352
Deferred revenue		562			170
Short-term debt		—			4
Margin deposits and guaranty funds		102,072			141,990
Invested deposits, delivery contracts payable and unsettled variation margin		1,897			5,382
Other current liabilities		262			184
Total current liabilities		106,006			149,171
Non-current liabilities:
Non-current deferred tax liability, net		3,409			3,493
Long-term debt		18,123			18,118
Accrued employee benefits		157			160
Non-current operating lease liability		233			254
Other non-current liabilities		411			381
Total non-current liabilities		22,333			22,406
Total liabilities		128,339			171,577

Equity:
Intercontinental Exchange, Inc. stockholders’ equity:
Common stock		6			6
Treasury stock, at cost		(6,274	)		(6,225	)
Additional paid-in capital		14,388			14,313
Retained earnings		15,362			14,943
Accumulated other comprehensive loss		(315	)		(331	)
Total Intercontinental Exchange, Inc. stockholders’ equity		23,167			22,706
Non-controlling interest in consolidated subsidiaries		44			55
Total equity		23,211			22,761
Total liabilities and equity	$	151,550		$	194,338

Non-GAAP Financial Measures and Reconciliation

We use non-GAAP measures internally to evaluate our performance and in making financial and operational decisions. When viewed in conjunction with our GAAP results and the accompanying reconciliation, we believe that our presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of these measures is useful to investors for period-to-period comparison of results because the items described below as adjustments to GAAP are not reflective of our core business performance. These financial measures are not in accordance with, or an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We use these adjusted results because we believe they more clearly highlight trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since these measures eliminate from our results specific financial items that have less bearing on our core operating performance. We strongly recommend that investors review the GAAP financial measures and additional non-GAAP information included in our Quarterly Report on Form 10-Q, including our consolidated financial statements and the notes thereto.

Adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income attributable to ICE common stockholders, adjusted diluted earnings per share and adjusted free cash flow for the periods presented below are calculated by adding or subtracting the adjustments described below, which are not reflective of our cash operations and core business performance, and their related income tax effect and other tax adjustments (in millions, except for per share amounts):


Adjusted Operating Income, Operating Margin and Operating Expense Reconciliation (In millions) (Unaudited)

	Exchanges Segment		Fixed Income and Data Services Segment		Mortgage Technology Segment		Consolidated
	Three Months Ended March 31,		Three Months Ended March 31,		Three Months Ended March 31,		Three Months Ended March 31,
	2023	2022	2023	2022	2023	2022	2023	2022
Total revenues, less transaction-based expenses	$1,097	$1,083	$563	$509	$236	$307	$1,896	$1,899
Operating expenses	332	299	343	354	252	254	927	907
Less: Amortization of acquisition-related intangibles	16	16	42	49	92	88	150	153
Less: Transaction and integration costs	12	—	—	—	9	8	21	8
Less: Other	16	—	—	—	—	—	16	—
Adjusted operating expenses	$288	$283	$301	$305	$151	$158	$740	$746
Operating income/(loss)	$765	$784	$220	$155	$(16)	$53	$969	$992
Adjusted operating income	$809	$800	$262	$204	$85	$149	$1,156	$1,153
Operating margin	70%	72%	39%	30%	(7)%	17%	51%	52%
Adjusted operating margin	74%	74%	47%	40%	36%	49%	61%	61%


Adjusted Net Income Attributable to ICE and Diluted EPS (In millions) (Unaudited)

	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
Net income attributable to ICE	$	655		$	657
Add: Amortization of acquisition-related intangibles		150			153
Add: Transaction and integration costs		21			8
Less: Net interest income on pre-acquisition-related debt		(6	)		—
Add: Net losses from unconsolidated investees		35			42
Add: Other		16			9
Less: Income tax effect for the above items		(57	)		(58	)
Add/(Less): Deferred tax adjustments on acquisition-related intangibles		1			(7	)
Less: Other tax adjustments		(24	)		—
Adjusted net income attributable to ICE	$	791		$	804

Diluted earnings per share	$	1.17		$	1.16

Adjusted diluted earnings per share	$	1.41		$	1.43

Diluted weighted average common shares outstanding		561			564


Adjusted Free Cash Flow Calculation (In millions) (Unaudited)

	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022
Cash flow from operations	$653		$756
Less: Capital expenditures and capitalized software development costs	(85	)	(103	)
Add: Section 31 fees, net	105		7
Adjusted free cash flow	$673		$660

About Intercontinental Exchange

Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.

Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located at http://www.intercontinentalexchange.com/terms-of-use. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE’s Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in Intercontinental Exchange, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 2, 2023. We caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of an unanticipated event. New factors emerge from time to time, and it is not possible for management to predict all factors that may affect our business and prospects. Further, management cannot assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Category: Corporate

SOURCE: Intercontinental Exchange

ICE-CORP

View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005500/en/

ICE Investor Relations Contact:

Katia Gonzalez

+1 678 981 3882

[email protected]

[email protected]

ICE Media Contact:

Josh King

+1 212 656 2490

[email protected]

[email protected]

KEYWORDS: New York Georgia United States North America

INDUSTRY KEYWORDS: Professional Services Data Management Technology Software Finance Fintech Banking

MEDIA:

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May 4, 2023 9:20 am

Better Therapeutics to Release First Quarter 2023 Financial Results and Provide Business Update on May 11, 2023

Better Therapeutics to Release First Quarter 2023 Financial Results and Provide Business Update on May 11, 2023

SAN FRANCISCO–(BUSINESS WIRE)–Better Therapeutics, Inc. (NASDAQ: BTTX), a prescription digital therapeutics (PDT) company developing a clinically validated, software-based novel form of cognitive behavioral therapy to address the root causes of cardiometabolic diseases, today announced it will release its first quarter 2023 financial results before the market opens on Thursday, May 11, 2023. Management will host a conference call and webcast to provide a business update at 8:30 a.m. ET / 5:30 a.m. PT on Thursday, May 11, 2023.

To access the conference call, please register at: https://register.vevent.com/register/BI5d9690c447df48b2b930b971560acd4f. Upon registering, each participant will be provided with call details and access codes. All participants are encouraged to join 10 minutes prior to the start time. The live webcast may be accessed by visiting the event link at: https://edge.media-server.com/mmc/p/khcj9g2y. Following the webcast, a replay of the webcast may be accessed from the Presentations & Events page in the Investors section of the Better Therapeutics corporate website at: https://investors.bettertx.com.

About Better Therapeutics

Better Therapeutics is a prescription digital therapeutics company developing a novel form of cognitive behavioral therapy to address the root causes of cardiometabolic diseases. The company has developed a proprietary platform for the development of FDA-regulated, software-based solutions for type 2 diabetes, heart disease and other conditions. The CBT delivered by Better Therapeutics’ PDT is designed to enable changes in neural pathways of the brain so lasting changes in behavior become possible. Addressing the underlying causes of these diseases has the potential to dramatically improve patient health while lowering healthcare costs. Better Therapeutics’ clinically validated mobile applications, if authorized for marketing, are intended to be prescribed by physicians and reimbursed like traditional medicines.

For more information visit: bettertx.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005506/en/

Investor Relations:

Mark Heinen

[email protected]

Media Enquiries:

Emma Williams

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Neurology Cardiology Biotechnology Pharmaceutical General Health Health Diabetes Clinical Trials

MEDIA:

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May 4, 2023 9:18 am

Ranpak Holdings Corp. Reports First Quarter 2023 Financial Results

Ranpak Holdings Corp. Reports First Quarter 2023 Financial Results

Packaging System placement up 3.8% year over year to approximately 139,600 machines at March 31, 2023
First quarter net revenue decreased 1.6% year over year to $81.2 million and increased 1.1% year over year on a constant currency basis to $84.8 million
First quarter net loss of $12.4 million compared to net loss of $14.1 million
First quarter constant currency Adjusted EBITDA (“AEBITDA”) of $15.1 million down 20.9%, or $4.0 million, year over year

CONCORD TOWNSHIP, Ohio–(BUSINESS WIRE)–
Ranpak Holdings Corp (NYSE: PACK) (“Ranpak” or “the Company”), a leading provider of environmentally sustainable, systems-based, product protection solutions for e-Commerce and industrial supply chains, today reported its first quarter 2023 financial results.

Omar Asali, Chairman and Chief Executive Officer, commented, “We consider the results of the first quarter a step in the right direction on the path towards Ranpak getting back on track after a challenging 2022. We finished the first quarter in line with our previous communication growing sales slightly from the first quarter of last year on a constant currency basis and finishing just below where we were in 1Q21. The improving input cost environment provided a boost to gross margins year over year and sequentially from the fourth quarter trough. We expect this trend to continue throughout the year. We are committed to regaining our attractive financial profile and right sizing our price / cost structure is paramount to achieving that goal. Our Adjusted EBITDA was under pressure from the first quarter of last year as we have some work to do to better align our cost structure with our top-line, but did improve sequentially from the fourth quarter on a similar revenue profile.”

“The year started off largely in-line with expectations but we are turning more cautious as consumer confidence has moved lower and industrial activity has slowed in response to the higher rate environment and reduction in credit availability due to banking stress. On a positive note, the input cost environment is more favorable than we anticipated when we started the year, providing some offset to potential top-line pressure in the near term. At the same time we are pulling back on planned spend until the environment provides more clarity.”

“We have made tremendous investments and changes to the business over the past couple of years and are at a point in our lifecycle now where we can focus on productivity and efficiency improvements without major distractions. I believe we will emerge from this period a much stronger company with even greater ability to service our customers’ needs.”

First Quarter 2023 Highlights

Packaging systems placement increased 3.8% year over year, to approximately 139,600 machines as of March 31, 2023
Net revenue decreased 1.6% and increased 1.1% adjusting for constant currency
Net loss of $12.4 million compared to net loss of $14.1 million
Constant currency AEBITDA¹ of $15.1 million for the three months ended March 31, 2023 is down 20.9%

Net revenue for the first quarter of 2023 was $81.2 million compared to net revenue of $82.5 million in the first quarter of 2022, a decrease of $1.3 million or 1.6% year over year. Net revenue was negatively impacted by decreases in void-fill and wrapping, partially offset by increases in cushioning and other products. In addition to currency headwinds, which contributed 2.7 points of pressure, revenue was negatively affected by increased business sponsoring costs; lower economic activity; and the impact inflationary pressures are having on consumer and corporate budgets. Cushioning increased $2.0 million, or 5.6%, to $37.6 million


¹		Constant currency AEBITDA is a non-GAAP financial measure. Please refer to “Presentation of Combined and Pro Forma Measures and Reconciliation of U.S. GAAP to Non-GAAP Measures” in this press release for an explanation and reconciliations of this non-GAAP financial measure

from $35.6 million; void-fill decreased $1.6 million, or 5.0%, to $30.2 million from $31.8 million; wrapping decreased $1.7 million, or 15.5%, to $9.3 million from $11.0 million; and other sales were flat at $4.1 million for the first quarter of 2023 compared to the first quarter of 2022. Other net revenue includes automated box sizing equipment and non-paper revenue from packaging systems installed in the field, such as systems accessories. The decrease in net revenue is quantified by a decrease in the volume of sales of our paper consumable products of approximately 3.5 percentage points (“pp”), partially offset by a 4.2 pp increase in the price or mix of our paper consumable products, and an increase of 0.3 pp in sales of automated box sizing equipment. Constant currency net revenue was $84.8 million for the first quarter of 2023, a 1.1% increase from constant currency net revenue of $83.9 million for the first quarter of 2022.

Net revenue in North America for the first quarter of 2023 totaled $31.1 million compared to net revenue in North America of $30.9 million in the first quarter of 2022. The increase of $0.2 million, or 0.6%, was primarily attributable to increases in cushioning, void-fill, and other sales, partially offset by decreases in wrapping sales.

Net revenue in Europe/Asia for the first quarter of 2023 totaled $50.1 million compared to net revenue in Europe/Asia of $51.6 million in the first quarter of 2022. The decrease of $1.5 million, or 2.9%, was driven by lower void-fill, wrapping, and other sales as well as currency headwinds, partially offset by increases in cushioning sales. Constant currency net revenue in Europe/Asia was $53.7 million for the first quarter of 2023, a $0.7 million, or 1.3%, increase from constant currency net revenue of $53.0 million for the first quarter of 2022.

Net loss for the first quarter of 2023 decreased $1.7 million to $12.4 million from a net loss of $14.1 million in the first quarter of 2022.

Balance Sheet and Liquidity

Ranpak completed the first quarter of 2023 with a strong liquidity position, including a cash balance of $58.6 million and no borrowings on its $45 million Revolving Credit Facility. As of May 4, 2023, the Company had First Lien Term Loan facilities outstanding consisting of a $250.0 million USD-denominated term loan and €135.1 million euro-denominated term loan resulting in an Adjusted EBITDA net leverage ratio of 5.7x based on results on a constant currency basis through the first quarter of 2023. The Bank Adjusted EBITDA net leverage ratio was 5.2x through the first quarter of 2023. The First Lien Term Loan facilities are the only debt facilities outstanding and mature in June 2026.

The following table presents Ranpak’s installed base of protective packaging systems by product line as of March 31, 2023 and 2022:

	March 31, 2023		March 31, 2022		Change			% Change
PPS Systems	(in thousands)
Cushioning machines		35.0		35.3		(0.3	)		(0.8	)
Void-Fill machines		82.3		78.3		4.0			5.1
Wrapping machines		22.3		20.9		1.4			6.7
Total		139.6		134.5		5.1			3.8

Conference Call Information

The Company will host a conference call and webcast at 8:30 a.m. (ET) on Thursday, May 4, 2023. The conference call and earnings presentation will be webcast live at the following link: https://events.q4inc.com/attendee/561171603. Investors who cannot access the webcast may listen to the conference call live via telephone by dialing (888) 330-2446 or (240) 789-2732 and use the Conference ID: 8498994.

A telephonic replay of the webcast also will be available starting at 11:30 a.m. (ET) on Thursday, May 4, 2023 and ending at 11:59 p.m. (ET) on Thursday, May 11, 2023. To listen to the replay, please dial (800) 770-2030 or (647) 362-9199 and use the passcode: 8498994.

Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. Statements that are not historical facts, including statements about the parties, perspectives and expectations, are forward-looking statements. In addition, any statements that refer to estimates, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this news release include, for example, statements about our expectations around the future performance of the business, including our forward-looking guidance.

The forward-looking statements contained in this news release are based on our current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks include, but are not limited to: (i) our inability to secure a sufficient supply of paper to meet our production requirements; (ii) the impact of the price of kraft paper on our results of operations; (iii) our reliance on third party suppliers; (iv) the COVID-19 pandemic, the Russia and Ukraine conflict, and associated responses; (v) the high degree of competition in the markets in which we operate; (vi) consumer sensitivity to increases in the prices of our products; (vii) changes in consumer preferences with respect to paper products generally; (viii) continued consolidation in the markets in which we operate; (ix) the loss of significant end-users of our products or a large group of such end-users; (x) our failure to develop new products that meet our sales or margin expectations; (xi) our future operating results fluctuating, failing to match performance or to meet expectations; (xii) our ability to fulfill our public company obligations; (xiii) our exposure to changes in interest rates; and (xiv) other risks and uncertainties indicated from time to time in filings made with the SEC.

Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from the forward-looking statements. We are not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that the trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.


Ranpak Holdings Corp. Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in millions, except share and per share data)


	Three Months Ended March 31,
	2023			2022
Paper revenue	$	64.3		$	66.2
Machine lease revenue		12.8			12.2
Other revenue		4.1			4.1
Net revenue		81.2			82.5
Cost of goods sold		53.7			57.9
Gross profit		27.5			24.6
Selling, general and administrative expenses		27.2			29.7
Depreciation and amortization expense		8.0			8.2
Other operating expense, net		1.2			0.5
Loss from operations		(8.9	)		(13.8	)
Interest expense		5.7			5.0
Foreign currency (gain) loss		0.2			(0.6	)
Other non-operating income, net		(0.3	)		–
Loss before income tax benefit		(14.5	)		(18.2	)
Income tax benefit		(2.1	)		(4.1	)
Net loss	$	(12.4	)	$	(14.1	)

Two-class method
Loss per share
Basic	$	(0.15	)	$	(0.17	)
Diluted	$	(0.15	)	$	(0.17	)
Class A – earnings (loss) per share
Basic	$	(0.15	)	$	(0.17	)
Diluted	$	(0.15	)	$	(0.17	)
Class C – earnings (loss) per share
Basic	$	(0.14	)	$	(0.17	)
Diluted	$	(0.14	)	$	(0.17	)

Weighted average number of shares outstanding – Class A and C
Basic		82,136,793			81,573,467
Diluted		82,136,793			81,573,467

Other comprehensive income (loss), before tax
Foreign currency translation adjustments	$	3.1		$	(2.8	)
Interest rate swap adjustments		(2.1	)		8.1
Cross-currency swap adjustments		(1.0	)		0.1
Total other comprehensive income (loss), before tax		–			5.4
Provision (benefit) for income taxes related to other comprehensive income (loss)		(0.8	)		2.0
Total other comprehensive income (loss), net of tax		0.8			3.4
Comprehensive loss, net of tax	$	(11.6	)	$	(10.7	)


Ranpak Holdings Corp. Unaudited Condensed Consolidated Balance Sheets (in millions, except share data)


	March 31, 2023			December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	58.6		$	62.8
Accounts receivable, net		34.4			33.0
Inventories, net		22.6			25.0
Income tax receivable		3.2			2.1
Prepaid expenses and other current assets		17.6			16.7
Total current assets		136.4			139.6

Property, plant and equipment, net		127.0			124.0
Operating lease right-of-use assets, net		21.9			6.0
Goodwill		448.7			446.7
Intangible assets, net		366.4			372.1
Deferred tax assets		0.6			0.6
Other assets		44.4			44.5
Total assets	$	1,145.4		$	1,133.5

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	21.9		$	24.3
Accrued liabilities and other		11.5			10.6
Current portion of long-term debt		1.4			1.3
Operating lease liabilities, current		2.7			2.0
Deferred machine fee revenue		1.6			0.9
Total current liabilities		39.1			39.1

Long-term debt		395.0			391.7
Deferred tax liabilities		82.3			80.8
Derivative instruments		4.7			3.7
Operating lease liabilities, non-current		19.2			4.0
Other liabilities		1.5			1.4
Total liabilities		541.8			520.7

Commitments and contingencies – Note 13
Shareholders’ equity
Class A common stock, $0.0001 par, 200,000,000 shares
authorized at March 31, 2023 and December 31, 2022
Shares issued and outstanding: 79,468,609 and 79,086,372
at March 31, 2023 and December 31, 2022, respectively		–			–
Convertible Class C common stock, $0.0001 par, 200,000,000 shares
authorized at March 31, 2023 and December 31, 2022
Shares issued and outstanding: 2,921,099
at March 31, 2023 and December 31, 2022		–			–
Additional paid-in capital		706.7			704.3
Accumulated deficit		(109.1	)		(96.7	)
Accumulated other comprehensive income (loss)		6.0			5.2
Total shareholders’ equity		603.6			612.8
Total liabilities and shareholders’ equity	$	1,145.4		$	1,133.5


Ranpak Holdings Corp. Unaudited Condensed Consolidated Statements of Cash Flows (in millions)


	Three Months Ended March 31,
	2023			2022
Cash Flows from Operating Activities
Net loss	$	(12.4	)	$	(14.1	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		16.3			18.8
Amortization of deferred financing costs		0.4			0.4
Loss on disposal of fixed assets		0.3			–
Deferred income taxes		2.0			(1.4	)
Amortization of initial value of interest rate swap		(0.2	)		(0.2	)
Currency (gain) loss on foreign denominated debt and notes payable		0.2			(0.2	)
Amortization of restricted stock units		2.8			8.8
Amortization of cloud-based software implementation costs		0.7			–
Changes in operating assets and liabilities:
(Increase) decrease in receivables, net		(1.2	)		(4.8	)
(Increase) decrease in inventory		2.7			(7.6	)
(Increase) decrease in prepaid expenses and other assets		(1.0	)		(1.2	)
Increase (decrease) in accounts payable		(2.1	)		2.9
Increase (decrease) in accrued liabilities		(0.5	)		(4.9	)
Change in other assets and liabilities		(0.5	)		(5.9	)
Net cash provided by (used in) operating activities		7.5			(9.4	)

Cash Flows from Investing Activities
Capital expenditures:
Converter equipment		(4.5	)		(8.4	)
Other capital expenditures		(7.3	)		(1.4	)
Total capital expenditures		(11.8	)		(9.8	)
Patent and trademark expenditures		–			(0.9	)
Net cash used in investing activities		(11.8	)		(10.7	)

Cash Flows from Financing Activities
Proceeds from equipment financing		0.8			–
Principal payments on term loans		(0.4	)		(0.4	)
Payments on finance lease liabilities		(0.2	)		(0.2	)
Tax payments for withholdings on stock-based awards distributed		(0.5	)		(2.5	)
Net cash used in financing activities		(0.3	)		(3.1	)

Effect of Exchange Rate Changes on Cash		0.4			(0.2	)
Net Decrease in Cash and Cash Equivalents		(4.2	)		(23.4	)
Cash and Cash Equivalents, beginning of period		62.8			103.9
Cash and Cash Equivalents, end of period	$	58.6		$	80.5

Non-GAAP Financial Data

In this press release, we present Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and constant currency EBITDA and constant currency adjusted EBITDA (“Constant currency AEBITDA”), which are non-GAAP financial measures. We have included EBITDA, constant currency EBITDA and AEBITDA because they are key measures used by our management and Board of Directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating EBITDA, constant currency EBITDA and constant currency AEBITDA can provide a useful measure for period-to-period comparisons of our primary business operations.

However, EBITDA, constant currency EBITDA and constant currency AEBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, EBITDA, constant currency EBITDA and constant currency AEBITDA should not be viewed as substitutes for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are:

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA, constant currency EBITDA and constant currency AEBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
EBITDA, constant currency EBITDA and constant currency AEBITDA do not reflect changes in, or cash requirements for, our working capital needs;
constant currency AEBITDA does not consider the potentially dilutive impact of equity-based compensation;
EBITDA, constant currency EBITDA and constant currency AEBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
constant currency AEBITDA does not take into account any restructuring and integration costs;
constant currency EBITDA and constant currency AEBITDA are presented on constant currency basis and give effect to the impact of currency fluctuations; and;
other companies, including companies in our industry, may calculate EBITDA, constant currency EBITDA and constant currency AEBITDA differently, which reduces their usefulness as comparative measures.

EBITDA — EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; and depreciation and amortization.

Constant currency EBITDA — Constant currency EBITDA is a non-GAAP financial measure that we present on a constant currency basis and we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; and depreciation and amortization.

Constant currency AEBITDA — Constant currency AEBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items; as further adjusted to reflect the performance of the business on a constant currency basis.

We present constant currency EBITDA and constant currency AEBITDA on a constant currency basis because it allows a better insight into the performance of our businesses that operate in currencies other than our reporting currency. Before consolidation, our Europe/Asia financial data is derived in Euros. To calculate the adjustment that we apply to present constant currency EBITDA and constant currency AEBITDA on a constant currency basis, we multiply this Euro-derived data by 1.15 to reflect an exchange rate of 1 Euro to 1.15 U.S. dollars (“USD”), which we believe is a reasonable exchange rate to use to give a stable depiction of the business without currency fluctuations between periods, to calculate Europe/Asia data in constant currency USD. We believe that using an exchange rate of 1.15 is reasonable because it approximates the average exchange rate of the Euro to USD over the past five years. In addition, we include certain other unaudited, non-GAAP constant currency data for the three months ended March 31, 2023 and 2022. This data is based on our historical financial statements, adjusted (where applicable) to reflect a constant currency presentation between periods for the convenience of readers. We reconcile this data to our GAAP data for the same period for the three months ended March 31, 2023 and 2022.

This press release also includes forecasts for certain non-GAAP metrics. We are unable to provide a reconciliation of our forecast of net revenue on a constant currency basis for 2023 to a forecast of net revenue on a GAAP basis without unreasonable effort primarily because we are unable to forecast with reasonable certainty the associated currency impact. In addition, a reconciliation of our forecast for constant currency AEBITDA for 2023 to GAAP net income cannot be provided without unreasonable effort because we are unable to forecast with reasonable certainty several of the items necessary to calculate such comparable GAAP measure, including asset impairments, integration related expenses, reorganizations and discontinued operations related expenses, legal settlement costs, constant currency adjustments, as well as other unusual or non-recurring gains or losses. These items are uncertain, depend on various factors, and could be material to our results computed in accordance with GAAP. We believe the inherent uncertainties in reconciling such non-GAAP measures for projected periods to the most comparable GAAP measures would make the forecasted comparable GAAP measures difficult to predict with reasonable certainty or reliability.


Ranpak Holdings Corp. Non-GAAP Financial Data Reconciliation and Comparison of GAAP Statement of Income Data to Non-GAAP EBITDA and Constant Currency AEBITDA For the First Quarter of 2023 and 2022 Please refer to our discussion and definitions of Non-GAAP financial measures


	Three Months Ended March 31,
	2023			2022			$ Change			% Change
Net revenue	$	81.2		$	82.5		$	(1.3	)		(1.6	)
Cost of goods sold		53.7			57.9			(4.2	)		(7.3	)
Gross profit		27.5			24.6			2.9			11.8
Selling, general and administrative expenses		27.2			29.7			(2.5	)		(8.4	)
Depreciation and amortization expense		8.0			8.2			(0.2	)		(2.4	)
Other operating expense (income), net		1.2			0.5			0.7			140.0
Income (loss) from operations		(8.9	)		(13.8	)		4.9			(35.5	)
Interest expense		5.7			5.0			0.7			14.0
Foreign currency gain		0.2			(0.6	)		0.8			(133.3	)
Other non-operating income, net		(0.3	)		–			(0.3	)	―
Loss before income tax benefit		(14.5	)		(18.2	)		3.7			(20.3	)
Income tax benefit		(2.1	)		(4.1	)		2.0			(48.8	)
Net loss		(12.4	)		(14.1	)		1.7			(12.1	)

Depreciation and amortization expense – COS		8.3			10.6			(2.3	)		(21.7	)
Depreciation and amortization expense – D&A		8.0			8.2			(0.2	)		(2.4	)
Interest expense		5.7			5.0			0.7			14.0
Income tax benefit		(2.1	)		(4.1	)		2.0			(48.8	)
EBITDA⁽¹⁾		7.5			5.6			1.9			33.9

Adjustments⁽²⁾:
Unrealized (gain) loss translation		0.2			(0.6	)		0.8			(133.3	)
Non-cash impairment losses		0.4			–			0.4		―
M&A, restructuring, severance		0.2			0.5			(0.3	)		(60.0	)
Amortization of restricted stock units		2.8			8.8			(6.0	)		(68.2	)
Amortization of cloud-based software implementation costs⁽³⁾		0.7			0.7			–			–
Cloud-based software implementation costs		1.2			2.5			(1.3	)		(52.0	)
Other adjustments		1.3			1.2			0.1			8.3
Constant currency		0.8			0.4			0.4			100.0
Constant Currency AEBITDA⁽¹⁾	$	15.1		$	19.1		$	(4.0	)		(20.9	)


Ranpak Holdings Corp. Non-GAAP Financial Data Reconciliation of GAAP Statement of Income Data to Non-GAAP Constant Currency Statement of Income Data, Constant Currency EBITDA, and Constant Currency AEBITDA For the First Quarter of 2023 Please refer to our discussion and definitions of Non-GAAP financial measures, including Non-GAAP Constant Currency


	Three Months Ended March 31, 2023
	As reported			Constant Currency⁽⁴⁾			Non-GAAP
Net revenue	$	81.2		$	3.6		$	84.8
Cost of goods sold		53.7			2.3			56.0
Gross profit		27.5			1.3			28.8
Selling, general and administrative expenses		27.2			0.9			28.1
Depreciation and amortization expense		8.0			0.2			8.2
Other operating expense, net		1.2			–			1.2
Loss from operations		(8.9	)		0.2			(8.7	)
Interest expense		5.7			0.1			5.8
Foreign currency gain		0.2			–			0.2
Other non-operating income, net		(0.3	)		0.5			0.2
Loss before income tax benefit		(14.5	)		(0.4	)		(14.9	)
Income tax benefit		(2.1	)		–			(2.1	)
Net loss	$	(12.4	)	$	(0.4	)	$	(12.8	)

Constant currency-effected add⁽¹⁾:
Depreciation and amortization expense – COS								8.6
Depreciation and amortization expense – D&A								8.2
Interest expense								5.8
Income tax benefit								(2.1	)
Constant currency EBITDA								7.7

Constant currency-effected adjustments⁽²⁾:
Unrealized (gain) loss translation								0.2
Non-cash impairment losses								0.5
M&A, restructuring, severance								0.2
Amortization of restricted stock units								2.9
Amortization of cloud-based software implementation costs⁽³⁾								0.8
Cloud-based software implementation costs								1.1
Other adjustments								1.7
Constant currency AEBITDA							$	15.1


Ranpak Holdings Corp. Non-GAAP Financial Data Reconciliation of GAAP Statement of Income Data to Non-GAAP Constant Currency Statement of Income Data, Constant Currency EBITDA, and Constant Currency AEBITDA For the First Quarter of 2022 Please refer to our discussion and definitions of Non-GAAP financial measures, including Non-GAAP Constant Currency


	Three Months Ended March 31, 2022
	As reported			Constant Currency⁽⁴⁾			Non-GAAP
Net revenue	$	82.5		$	1.4		$	83.9
Cost of goods sold		57.9			1.0			58.9
Gross profit		24.6			0.4			25.0
Selling, general and administrative expenses		29.7			0.3			30.0
Depreciation and amortization expense		8.2			0.1			8.3
Other operating expense, net		0.5			0.2			0.7
Income from operations		(13.8	)		(0.2	)		(14.0	)
Interest expense		5.0			–			5.0
Foreign currency gain		(0.6	)		–			(0.6	)
Loss before income tax benefit		(18.2	)		(0.2	)		(18.4	)
Income tax benefit		(4.1	)		(0.1	)		(4.2	)
Net loss	$	(14.1	)	$	(0.1	)	$	(14.2	)

Constant currency-effected add⁽¹⁾:
Depreciation and amortization expense – COS								10.8
Depreciation and amortization expense – D&A								8.3
Interest expense								5.0
Income tax benefit								(4.2	)
Constant currency EBITDA								5.7

Constant currency-effected adjustments⁽²⁾:
Unrealized gain translation								(0.6	)
M&A, restructuring, severance								0.5
Amortization of restricted stock units								8.8
Amortization of cloud-based software implementation costs⁽³⁾								0.7
Cloud-based software implementation costs								2.6
Other adjustments								1.4
Constant currency AEBITDA							$	19.1


(1)		Reconciliations of EBITDA and constant currency AEBITDA for each period presented are to net (loss) income, the nearest GAAP equivalent.
(2)		Adjustments are related to non-cash unusual or infrequent costs such as: effects of non-cash foreign currency remeasurement or adjustment; impairment of returned machines; costs associated with the evaluation of acquisitions; costs associated with executive severance; costs associated with restructuring actions such as plant rationalization or realignment, reorganization, and reductions in force; costs associated with the implementation of the global ERP system; and other items deemed by management to be unusual, infrequent, or non-recurring.
(3)		Represents amortization of capitalized costs related to the implementation of the global ERP system, which are included in SG&A.
(4)		Effect of Euro constant currency adjustment to a rate of €1.00 to $1.15 on each line item is as follows:


	Three Months Ended March 31,
	2023			2022
Net revenue	$	3.6		$	1.4
Cost of goods sold		2.3			1.0
Gross profit		1.3			0.4
Selling, general and administrative expenses		0.9			0.3
Depreciation and amortization expense		0.2			0.1
Other operating expense, net		–			0.2
Loss from operations		0.2			(0.2	)
Interest expense (income)		0.1			–
Foreign currency (gain) loss		–			–
Other non-operating income, net		0.5			–
Income (loss) before income tax benefit		(0.4	)		(0.2	)
Income tax benefit		–			(0.1	)
Net income (loss)	$	(0.4	)	$	(0.1	)

View source version on businesswire.com: https://www.businesswire.com/news/home/20230503006081/en/

Bill Drew, CFO

[email protected]

(212) 763-0939

Contact for Investors:

[email protected]

KEYWORDS: Ohio United States North America

INDUSTRY KEYWORDS: Packaging Manufacturing

MEDIA:

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May 4, 2023 9:16 am

Altus Power, Inc. Announces Expansion into Maine with Completion of Newly Constructed Asset

Altus Power, Inc. Announces Expansion into Maine with Completion of Newly Constructed Asset

1.4 Megawatt Asset To Serve Altus Power Community Solar Customers

Company Footprint Grows To 25 States Across the U.S.

STAMFORD, Conn.–(BUSINESS WIRE)–
Altus Power, Inc. (“Altus Power” or the “Company”) (NYSE: AMPS), the premier independent developer, owner, and operator of commercial-scale solar facilities, today announced that it has entered Maine as its twenty-fifth market in the United States with the completion of development and construction of a 1.4 megawatt (MW) ground-mounted solar array located in the state. Altus Power is looking forward to serving additional customers with discounted clean electricity and has numerous additional arrays in the early stages of development in Maine. All of these assets are intended to serve a diversity of Mainers in the future, including commercial, industrial, municipal and community subscribers.

“Altus Power is pleased to announce the expansion of its geographic footprint into the Pine Tree State and looks forward to further expanding our presence within the state. We are also happy to highlight the completion of yet another asset by our development and construction teams,” commented Gregg Felton, Co-Chief Executive Officer of Altus Power.

The clean electricity generated by this new 1.4 MW array will serve commercial customers with discounted electricity bills. The asset is expected to produce approximately 1,600,000 kWh per year, which is the equivalent of 1,134 metric tons of carbon dioxide avoided annually.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements may be identified by the use of words such as “aims,” “believes,” “expects,” “intends,” “aims”, “may,” “could,” “will,” “should,” “plans,” “projects,” “forecasts,” “seeks,” “anticipates,” “goal,” “objective,” “target,” “estimate,” “future,” “outlook,” “strategy,” “vision,” or variations of such words or similar terminology that predict or indicate future events or trends or that are not statements of historical matters. These statements, which involve risks and uncertainties, relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable and may also relate to Altus Power’s future prospects, developments and business strategies. These statements are based on Altus Power’s management’s current expectations and beliefs, as well as a number of assumptions concerning future events.

Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Altus Power’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (1) the risk that pending acquisitions may not close in the anticipated timeframe or at all due to a closing condition not being met; (2) failure to obtain required consents or regulatory approvals in a timely manner or otherwise; (3) the ability of Altus Power to successfully integrate the acquisition of solar assets into its business and generate profit from their operations; (4) the ability of Altus Power to retain customers and maintain and expand relationships with business partners, suppliers and customers; (5) the risk of litigation and/or regulatory actions related to the proposed acquisition of solar assets; and (6) the possibility that Altus Power may be adversely affected by other economic, business, regulatory, credit risk and/or competitive factors.

Additional factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found under the heading “Risk Factors” in Altus Power’s Form 10-K filed with the Securities and Exchange Commission on March 30th, 2023, as well as the other information we file with the Securities and Exchange Commission. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made and the information and assumptions underlying such statement as we know it and on the date such statement was made, and Altus Power undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, changes in expectations, future events or otherwise.

This press release is not intended to be all-inclusive or to contain all the information that a person may desire in considering an investment in Altus Power and is not intended to form the basis of an investment decision in Altus Power. All subsequent written and oral forward-looking statements concerning Altus Power or other matters and attributable to Altus Power or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.

About Altus Power, Inc.

Altus Power, based in Stamford, Connecticut, is the premier commercial-scale clean electrification company serving commercial, industrial, public sector and community solar customers with an end-to-end solution. Altus Power originates, develops, owns and operates a network of locally sited solar generation, energy storage and charging infrastructure across the nation. Visit www.altuspower.com to learn more.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005368/en/

Chris Shelton

Head of IR

[email protected]

KEYWORDS: Maine Connecticut United States North America

INDUSTRY KEYWORDS: Alternative Energy Energy Other Energy

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May 4, 2023 9:14 am

Arbutus Reports First Quarter 2023 Financial Results and Corporate Update

Additional AB-729 off-treatment data highlighted in an oral presentation at the Global Hepatitis Summit 2023

Dosed first subject in Phase 1 clinical trial with oral RNA Destabilizer, AB-161

Filed patent infringement lawsuit against Pfizer and BioNTech seeking compensation for use of unlicensed patented technologies in COVID-19 mRNA-LNP vaccines

Strong financial position – cash runway extends into the first quarter of 2025

Conference Call and Webcast Today at 8:45 AM ET

WARMINSTER, Pa., May 04, 2023 (GLOBE NEWSWIRE) — Arbutus Biopharma Corporation (Nasdaq: ABUS) (“Arbutus” or the “Company”), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop novel therapeutics that target specific viral diseases, today reported first quarter 2023 financial results and provided a corporate update.

“In the first quarter of 2023, we made meaningful progress advancing our pipeline of HBV and coronavirus assets to address large global market opportunities,” said William Collier, Arbutus’ President and Chief Executive Officer. “We reported data from our lead HBV-focused RNAi therapeutic, AB-729, showing low levels of HBsAg and HBV DNA in most patients persisting for at least a year and a half after their last dose of AB-729. In addition, we dosed the first healthy subject in our Phase 1 clinical trial with AB-161, our oral RNA destabilizer, for which we expect data in the second half of this year. We continue to advance our coronavirus programs and expect to initiate a Phase 1 clinical trial with our M^pro inhibitor candidate, AB-343, as well as IND-enabling studies for an nsp12 inhibitor candidate in the second half of this year.”

Pipeline Updates and Key Milestones

AB-729 (RNAi Therapeutic)

At the Global Hepatitis Summit in April, we reported in an oral presentation additional off-treatment data from the patients in our Phase 1b clinical trial (AB-729-001) who have discontinued both AB-729 and nucleos(t)ide analogue (NA) therapy. These seven remaining patients continue to maintain low HBV DNA levels off all therapy, and HBsAg levels remain below baseline (-0.8 to -1.6 log₁₀) up to one and a half years after the last dose of AB-729.
We are continuing to evaluate the safety and tolerability of AB-729 in combination with ongoing NA therapy and short courses of PEG-IFNα-2a (IFN) in 43 patients with chronic hepatitis B virus (cHBV) infection in a Phase 2a clinical trial (AB-729-201). Preliminary data from the lead-in phase of the trial further validated AB-729’s capacity to reduce HBsAg. We expect to announce preliminary data from patients receiving the combination of AB-729, NA therapy and IFN in the second quarter of 2023.
We are continuing to evaluate AB-729, NA therapy and Vaccitech’s HBV antigen-specific immunotherapeutic, VTP-300, in a Phase 2a clinical trial (AB-729-202). Once enrollment is complete in the initial portion of this trial, we will begin enrolling 20 patients in an additional arm of the trial. These patients will receive AB-729 (60mg every 8 weeks) plus NA therapy for 24 weeks, followed by VTP-300 plus one to two low doses of nivolumab (Opdivo^®). We expect preliminary data from patients who receive AB-729, NA therapy and VTP-300 in the second half of 2023, and we expect to dose the first patient in the additional arm receiving AB-729, NA therapy, VTP-300 and nivolumab in the second quarter of 2023.

AB-161 (Oral RNA destabilizer)

In March, we dosed the first healthy subject in our Phase 1 clinical trial with AB-161. The single-ascending dose data is expected in the second half of 2023. AB-161 is our next-generation oral HBV-specific RNA destabilizer, which is being developed as part of a potential all-oral treatment regimen to functionally cure HBV.
At the Global Hepatitis Summit in April, we presented preclinical data showing that AB-161 provides robust anti-HBV activity including suppression of HBV RNA and HBsAg production in vitro and in vivo. The differentiated anti-HBV mode of action of AB-161 compared to other classes of HBV inhibitors, suggest that AB-161 may be an important component in combination to provide a functional cure for cHBV.

AB-101 (Oral PD-L1 Inhibitor)

In April, we received verbal communication from the U.S. Food and Drug Administration (FDA) that the AB-101 Investigational New Drug (IND) application has been placed on clinical hold. For purposes of clarity, the Phase 1 clinical trial had not been initiated and we had not dosed any patients with AB-101. The FDA indicated they will provide an official clinical hold letter to Arbutus within 30 days of the verbal communication. Based on this communication, we no longer intend to report initial data from the single-ascending dose portion of a Phase 1 clinical trial in the second half of 2023. We are developing AB-101, our oral PD-L1 inhibitor, to reawaken and boost the immune system of patients with cHBV. Preclinical data generated thus far indicates that AB-101 is highly potent and mediates activation and reinvigoration of HBV-specific T-cells from cHBV patients.

COVID-19 and Pan-Coronavirus Programs

At the 36^th International Conference on Antiviral Research in March, we presented pre-clinical data for AB-343, our lead coronavirus drug candidate that inhibits the main protease (M^pro). The antiviral potency, selectivity and favorable pharmacokinetic data support the further development of AB-343 as a potential ritonavir-free oral treatment for COVID-19 and other human coronaviruses. We are currently conducting IND-enabling studies with AB-343, and on completion, we expect to initiate a Phase 1 clinical trial in the second half of 2023.
We are continuing to direct our research efforts to identifying an nsp12 viral polymerase clinical candidate. Such a candidate could potentially be combined with AB-343 to achieve better patient treatment outcomes and for use in prophylactic settings. We expect to nominate an nsp12 clinical candidate and initiate IND-enabling studies in the second half of 2023.

Financial Results

Cash, Cash Equivalents and Investments

As of March 31, 2023, we had cash, cash equivalents and investments in marketable securities of $178.5 million compared to $184.3 million as of December 31, 2022. During the three months ended March 31, 2023, we used $27.3 million in operating activities, which was partially offset by $19.9 million of net proceeds from the issuance of common shares under our “at-the-market” offering program. Based on AB-101’s IND being placed on clinical hold by the FDA and a resulting shift in the timing of our AB-101 Phase 1 clinical trial, we are reducing our 2023 cash burn guidance from between $95 to $100 million to between $90 to $95 million. We believe our cash runway will be sufficient to fund our operations into the first quarter of 2025.

Revenue

Total revenue was $6.7 million for the three months ended March 31, 2023 compared to $12.6 million for the same period in 2022. The decrease of $5.9 million was due primarily to less revenue recognition from our license agreement with Qilu compared to last year based on employee labor hours expended by us to perform our manufacturing obligations under the license agreement.

Operating Expenses

Research and development expenses were $18.3 million for the three months ended March 31, 2023 compared to $18.5 million for the same period in 2022. The decrease of $0.2 million was due primarily to a decrease in expenses for our AB-836 Phase 1a/1b clinical trial, which was discontinued in the fourth quarter of 2022, partially offset by an increase in expenses for our coronavirus program and other early-stage development programs.

Net Loss

For the three months ended March 31, 2023, our net loss was $16.3 million, or a loss of $0.10 per basic and diluted common share, as compared to a net loss of $15.8 million, or a loss of $0.11 per basic and diluted common share, for the three months ended March 31, 2022. Net loss for the three months ended March 31, 2022 included $4.4 million of income tax expense for withholding taxes paid to the Chinese taxing authority by Qilu on our behalf in connection with the upfront license fee Qilu paid us.

Outstanding Shares

As of March 31, 2023, we had approximately 165.1 million common shares issued and outstanding, as well as approximately 19.7 million stock options and unvested restricted stock units outstanding. Roivant Sciences Ltd. owned approximately 23% of our outstanding common shares as of March 31, 2023.


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

	Three Months Ended March 31,
		2023				2022
Revenue
Collaborations and licenses	$		5,509		$		11,218
Non-cash royalty revenue		1,178				1,363
Total revenue		6,687				12,581
Operating expenses
Research and development		18,275				18,462
General and administrative		5,552				4,892
Change in fair value of contingent consideration		273				201
Total operating expenses		24,100				23,555
Loss from operations		(17,413		)		(10,974		)
Other income (loss)
Interest income		1,268				159
Interest expense		(198		)		(506		)
Foreign exchange gain		4				—
Total other income (loss)		1,074				(347		)
Loss before income taxes			(16,339	)			(11,321	)
Income tax expense		—				(4,444		)
Net loss	$	(16,339		)	$	(15,765		)
Net loss per common share
Basic and diluted	$		(0.10	)	$		(0.11	)
Weighted average number of common shares
Basic and diluted		161,643,404				148,428,326


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)

	March 31, 2023		December 31, 2022
Cash, cash equivalents and marketable securities, current	$	146,728	$	146,913
Accounts receivable and other current assets	6,126		4,226
Total current assets	152,854		151,139
Property and equipment, net of accumulated depreciation	4,853		5,070
Investments in marketable securities, non-current	31,790		37,363
Right of use asset	1,665		1,744
Other non-current assets	62		103
Total assets	$	191,224	$	195,419
Accounts payable and accrued liabilities	$	9,653	$	16,029
Deferred license revenue, current		15,055		16,456
Lease liability, current	446		372
Total current liabilities	25,154		32,857
Liability related to sale of future royalties	9,384		10,365
Deferred license revenue, non-current	3,296		5,999
Contingent consideration	7,804		7,531
Lease liability, non-current	1,671		1,815
Total stockholders’ equity	143,915		136,852
Total liabilities and stockholders’ equity	$	191,224	$	195,419


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

	Three Months Ended March 31,
	2023			2022
Net loss	$	(16,339	)	$	(15,765	)
Non-cash items	1,372			1,642
Change in deferred license revenue	(4,104		)	38,840
Other changes in working capital	(8,230		)	(4,098		)
Net cash (used in) provided by operating activities	(27,301		)	20,619
Net cash provided by (used in) investing activities	16,678			(60,056		)
Issuance of common shares pursuant to Share Purchase Agreement	—			10,973
Issuance of common shares pursuant to the Open Market Sale Agreement	19,862			268
Cash provided by other financing activities	555			244
Net cash provided by financing activities	20,417			11,485
Effect of foreign exchange rate changes on cash and cash equivalents	4			–
Increase (decrease) in cash and cash equivalents	9,798			(27,952		)
Cash and cash equivalents, beginning of period	30,776			109,282
Cash and cash equivalents, end of period	40,574			81,330
Investments in marketable securities	137,944			153,500
Cash, cash equivalents and marketable securities, end of period	$	178,518		$	234,830

Conference Call and Webcast Today

Arbutus will hold a conference call and webcast today, Thursday, May 4, 2023, at 8:45 AM Eastern Time to provide a corporate update. To dial-in for the conference call by phone, please register using the following link: Registration Link. A live webcast of the conference call can be accessed through the Investors section of Arbutus’ website at www.arbutusbio.com.

An archived webcast will be available on the Arbutus website after the event.

About AB-729

AB-729 is an RNA interference (RNAi) therapeutic specifically designed to reduce all HBV viral proteins and antigens including hepatitis B surface antigen which is thought to be a key prerequisite to enable reawakening of a patient’s immune system to respond to the virus. AB-729 targets hepatocytes using Arbutus’ novel covalently conjugated N-Acetylgalactosamine (GalNAc) delivery technology enabling subcutaneous delivery. Clinical data generated thus far has shown single- and multi-doses of AB-729 to be generally safe and well-tolerated, while also providing meaningful reductions in hepatitis B surface antigen and hepatitis B DNA. AB-729 is currently in multiple Phase 2a clinical trials.

About AB-101

AB-101 is our lead oral PD-L1 inhibitor candidate that we believe will allow for controlled checkpoint blockade and enable oral dosing, while minimizing the systemic safety issues typically seen with checkpoint antibody therapies. Immune checkpoints such as PD-1/PD-L1 play an important role in the induction and maintenance of immune tolerance and in T-cell activation. Preclinical data generated thus far indicates that AB-101 mediates activation and reinvigoration of HBV-specific T-cells from cHBV patients. We believe AB-101, when used in combination with other approved and investigational agents, could potentially lead to a functional cure in HBV chronically infected patients. We are also exploring oncology applications for our internal PD-L1 portfolio.

About AB-161

AB-161 is our next generation oral small molecule RNA destabilizer, specifically designed to target the liver. Mechanistically, RNA destabilizers target the host proteins PAPD5/7, which are involved in regulating the stability of HBV RNA transcripts. In doing so, RNA destabilizers lead to the selective degradation of HBV RNAs, thus reducing HBsAg levels and inhibiting viral replication. To provide a proprietary all-oral treatment regimen for patients with cHBV, we believe inclusion of a small molecule RNA destabilizer is key.

About AB-343

AB-343 is our lead coronavirus drug candidate that inhibits the SARS-CoV-2 main protease (M^pro), a validated target for the treatment of COVID-19 and potential future coronavirus outbreaks. In our pre-clinical research conducted to date, AB-343 has shown pan-coronavirus antiviral activity, no reduction in potency against known SARS-CoV-2 variants, robust activity against SARS-CoV-2 M^pro resistant strains, and a favorable drug-drug interaction profile with no need for ritonavir boosting. We see an opportunity to pursue a potential combination therapeutic strategy focusing on M^pro and nsp12 viral polymerase targets to reduce hospitalizations, achieve better patient treatment outcomes and provide pre-exposure prophylactic therapy.

About HBV

Hepatitis B is a potentially life-threatening liver infection caused by the hepatitis B virus (HBV). HBV can cause chronic infection which leads to a higher risk of death from cirrhosis and liver cancer. Chronic HBV infection represents a significant unmet medical need. The World Health Organization estimates that over 290 million people worldwide suffer from chronic HBV infection, while other estimates indicate that approximately 2.4 million people in the United States suffer from chronic HBV infection. Approximately 820,000 people die every year from complications related to chronic HBV infection despite the availability of effective vaccines and current treatment options. 

About Coronaviruses

Coronaviruses are a large family of viruses that range from the common cold to more severe diseases such as severe acute respiratory syndrome (SARS), Middle East respiratory syndrome (MERS), and COVID-19. COVID-19 has caused approximately 7.2 million deaths globally according to an analysis by the Institute for Health Metrics and Evaluation (IHME). As we strive to identify and develop new antiviral small molecules to treat COVID-19 and future coronavirus outbreaks, we have focused our research efforts on two essential targets critical for replication across all coronaviruses – nsp5 protease and nsp12 polymerase. 

About Arbutus

Arbutus Biopharma Corporation (Nasdaq: ABUS) is a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop novel therapeutics that target specific viral diseases. Our current focus areas include Hepatitis B virus (HBV), SARS-CoV-2, and other coronaviruses. To address HBV, we are developing a RNAi therapeutic, an oral PD-L1 inhibitor, and an oral RNA destabilizer to potentially identify a combination regimen with the aim of providing a functional cure for patients with chronic HBV by suppressing viral replication, reducing surface antigen and reawakening the immune system. We believe our lead compound, AB-729, is the only RNAi therapeutic with evidence of immune re-awakening. AB-729 is currently being evaluated in multiple phase 2 clinical trials. We also have an ongoing drug discovery and development program directed to identifying novel, orally active agents for treating coronaviruses, (including SARS-CoV-2), for which we have nominated a compound and have begun IND-enabling pre-clinical studies. In addition, we are also exploring oncology applications for our internal PD-L1 portfolio. For more information, visit www.arbutusbio.com.

Forward-Looking Statements and Information

This press release contains forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and forward-looking information within the meaning of Canadian securities laws (collectively, forward-looking statements). Forward-looking statements in this press release include statements about our future development plans for our product candidates; the expected cost, timing and results of our clinical development plans and clinical trials with respect to our product candidates; our expectations with respect to the release of data from our clinical trials and the expected timing thereof; our expectations and goals for our collaborations with third parties and any potential benefits related thereto; the potential for our product candidates to achieve success in clinical trials; and our expected financial condition, including our anticipated net cash burn, the anticipated duration of cash runways and timing regarding needs for additional capital.

With respect to the forward-looking statements contained in this press release, Arbutus has made numerous assumptions regarding, among other things: the effectiveness and timeliness of preclinical studies and clinical trials, and the usefulness of the data; the timeliness of regulatory approvals; the continued demand for Arbutus’ assets; and the stability of economic and market conditions. While Arbutus considers these assumptions to be reasonable, these assumptions are inherently subject to significant business, economic, competitive, market and social uncertainties and contingencies, including uncertainties and contingencies related to the ongoing COVID-19 pandemic and patent litigation matters.

Additionally, there are known and unknown risk factors which could cause Arbutus’ actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements contained herein. Known risk factors include, among others: anticipated pre-clinical studies and clinical trials may be more costly or take longer to complete than anticipated, and may never be initiated or completed, or may not generate results that warrant future development of the tested product candidate; Arbutus may elect to change its strategy regarding its product candidates and clinical development activities; Arbutus may not receive the necessary regulatory approvals for the clinical development of Arbutus’ products; economic and market conditions may worsen; uncertainties associated with litigation generally and patent litigation specifically; Arbutus and its collaborators may never realize the expected benefits of the collaborations; market shifts may require a change in strategic focus; and the ongoing COVID-19 pandemic could significantly disrupt Arbutus’ clinical development programs.

A more complete discussion of the risks and uncertainties facing Arbutus appears in Arbutus’ Annual Report on Form 10-K, Arbutus’ Quarterly Reports on Form 10-Q and Arbutus’ continuous and periodic disclosure filings, which are available at www.sedar.com and at www.sec.gov. All forward-looking statements herein are qualified in their entirety by this cautionary statement, and Arbutus disclaims any obligation to revise or update any such forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments, except as required by law.

Contact Information

Investors and Media

Lisa M. Caperelli
Vice President, Investor Relations
Phone: 215-206-1822
Email: [email protected]

May 4, 2023 9:13 am

The Real Brokerage Opens Operations in Manitoba

The Real Brokerage Opens Operations in Manitoba

Expansion gives Real a presence in four Canadian provinces and 46 U.S. states

TORONTO & NEW YORK–(BUSINESS WIRE)–
The Real Brokerage Inc. (TSX: REAX) (NASDAQ: REAX), the fastest-growing publicly traded real estate brokerage, announced today that it has expanded into Manitoba, giving the company a presence in four Canadian provinces and 46 states throughout the United States. Real opens for business in Manitoba with 22 agents, including two of the area’s top producing teams, Peters Herosian Group and Nolin Group.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230504005337/en/

20-year real estate veteran Susan Auch to lead The Real Brokerage’s Manitoba operations. (Photo: Business Wire)

The Real Brokerage’s operations in Manitoba will be led by Susan Auch, a five-time Olympian and three-time Olympic speed skating medalist who joined Real from eXp in April. Auch brings more than 20 years of real estate experience.

“Manitoba offers its residents a strong economy, some of the most affordable home prices in Canada and a diverse mix of urban and rural settings, making it an attractive place to call home,” said Real Chairman and CEO Tamir Poleg. “We are thrilled to begin operating in Manitoba with some of the area’s leading professionals. Susan, Jesse Peters, Addison Herosian, Dale and Nigel Nolin and the agents they have brought with them provide a strong foundation from which to launch Real’s unique agent-centric model and attractive value proposition in Manitoba.”

Auch said, “Realtors are constantly on the go and a virtual brokerage like The Real Brokerage is just the thing they need to save time and money to focus on what they do best, serving clients in selling and buying real estate. I am so excited that Real is opening in Manitoba.”

Led by Jesse Peters and Addison Herosian, the Peters Herosian Group joins Real from RE/MAX Executives in Winnipeg, where they ranked as one of the brokerage’s top performing teams in Canada. Known as Social Savvy^® Realtor^TMfor his use of social media and video to market his clients’ properties and raise the bar among real estate professionals, Peters began his real estate career in 2012 and has ranked among the Top 1% of agents in Manitoba for a number of years. He is also a RE/MAX multi-Diamond Award winner and was recently awarded RE/MAX Hall of Fame status. Herosian began his real estate career with real estate investment properties in 2015, and joined Peters in 2017 to form the Peters Herosian Group. They have closed more than 700 real estate transactions valued at over $234 million since 2017.

“It was important to align ourselves with a brand that shares our core values. Real’s value of ‘Word Hard. Be Kind’ is how we approach our business, and its culture of collaboration will allow us to serve our clients better,” Peters said. “It’s also very exciting to help bring Real to Manitoba. It’s not often you have an opportunity to be on the ground floor and launch something new. We have that opportunity.”

Founded by the father-son team of Dale and Nigel Nolin in 2014, the Nolin Group brings a total of 10 agents to Real and will serve the Brandon and Winnipeg markets. Dale Nolin launched his real estate career in 2004 with Royal LePage, where he rose to the level of Director’s Platinum. Nigel Nolin has built a reputation for helping real estate agents double their sales within 12 months through coaching, marketing strategy and high-performance lead generation and nurturing. The team joins from 3 Percent Realty, where they consistently ranked among the region’s top producers having closed more than 400 real estate transactions valued at over $100 million a year since 2020.

“Our focus has always been to provide our clients with a value-driven real estate experience. This extends beyond just saving them money to providing pre-eminent customer service in an honest and ethical way, which in turn generates consistent referral business,” Dale Nolin said.

“Real’s focus on technology to increase efficiencies along with its culture of collaboration and commitment will ensure that our agents have the opportunity to continue developing a loyal client base, which will help them build long-term wealth. We are thrilled to offer this opportunity to our team and are excited to help grow the Real brand in Canada.”

About Real

The Real Brokerage Inc. (TSX: REAX) (NASDAQ: REAX) is revolutionizing the residential real estate industry by pairing best-in-class technology with the trusted guidance of the agent-led experience. Real delivers a cloud-based platform to improve efficiencies and empower agents to provide a seamless end-to-end experience for home buyers and sellers. The company was founded in 2014 and serves 46 states, D.C., and four Canadian provinces with over 10,000 agents. Additional information can be found on its website at www.onereal.com.

Forward-Looking Information

This press release contains forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”, “likely” and “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. These statements reflect management’s current beliefs and are based on information currently available to management as of the date hereof. Forward-looking information in this press release includes, without limiting the foregoing, expectations regarding agents that join Real.

Forward-looking information is based on assumptions that may prove to be incorrect, including but not limited to Real’s business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. Real considers these assumptions to be reasonable in the circumstances. However, forward-looking information is subject to known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking information. Important factors that could cause such differences include, but are not limited to, slowdowns in real estate markets, economic and industry downturns and Real’s ability to attract new agents and retain current agents. These factors should be carefully considered and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, Real cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and Real assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005337/en/

Investor inquiries:

Jason Lee

Vice President, Capital Markets & Investor Relations

[email protected]

908.280.2515

For media inquiries, please contact:

Elisabeth Warrick

Director, Communications

[email protected]

201.564.4221

KEYWORDS: United States North America Canada New York

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

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Photo

20-year real estate veteran Susan Auch to lead The Real Brokerage’s Manitoba operations. (Photo: Business Wire)

Photo

Addison Herosian (left) and Jesse Peters (right), of the Peters Herosian Group, join Real from RE/MAX Executives in Winnipeg, where their team ranked as one of the brokerage’s top performing teams in Canada. (Photo: Business Wire)

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Along with his son, Dale Nolin, of the Nolin Group team, brings total of 10 agents to The Real Brokerage and will serve the Brandon and Winnipeg markets. (Photo: Business Wire)

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Along with his father, Nigel Nolin, of the Nolin Group team, joins from 3 Percent Realty, where they consistently ranked among the region’s top producers having closed more than 400 real estate transactions valued at over $100 million a year since 2020. (Photo: Business Wire)

May 4, 2023 9:11 am

Aramark Named to DiversityInc’s 2023 Top 50 Companies for Diversity and Top Companies for Supplier Diversity Lists

Aramark Named to DiversityInc’s 2023 Top 50 Companies for Diversity and Top Companies for Supplier Diversity Lists

PHILADELPHIA–(BUSINESS WIRE)–Aramark (NYSE: ARMK), a global provider of hospitality, facilities, and uniform services in 19 countries, today announced it was ranked number 40 on DiversityInc’s 2023 Top 50 Companies for Diversity list, up five spots from last year’s ranking. This is the seventh consecutive year Aramark appeared on the Top 50 list. For the first time, the company was also ranked on the Top Companies for Supplier Diversity list, at number 20.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230504005246/en/

Aramark announced it was ranked number 40 on DiversityInc’s 2023 Top 50 Companies for Diversity list, up five spots from last year’s ranking. This is the seventh consecutive year Aramark appeared on the Top 50 list. For the first time, the company was also ranked on the Top Companies for Supplier Diversity list, at number 20. (Graphic: Business Wire)

Aramark’s commitment to people is a core component of the company’s environmental, social, and corporate governance (ESG) platform, Be Well. Do Well., focused on positively impacting people and the planet. Aramark’s “people” priority is to facilitate access to opportunities that will improve the well-being of the company’s employees, consumers, and communities in its supply chain. This includes engaging employees by prioritizing inclusion, engagement, growth, and safety.

As reported in its 2022 Be Well. Do Well. Progress Report, diversity, equity, and inclusion (DEI) is an essential part of Aramark’s culture, and a key area of focus in all aspects of the business. Centered around a shared purpose, Aramark’s ability to foster an equal and inclusive culture is vital to meeting the needs of its employees, customers, and the communities Aramark serves. The company’s priorities are expanding diversity across management roles, developing its people, and supporting business growth.

“Aramark is rooted in service, focused on people and our planet, so recognition from DiversityInc, makes us proud of our progress as well as focused on where we need to improve,” said Fenimore Fisher, Vice President of DEI at Aramark. “Aligning these with our business strategy of overall growth, drives sustainable action. Valuing our more than 200,000 employees around the world, supporting communities, and partnering with our diverse suppliers are not just part of an obligation, they are engrained in our values.”

This is the first time Aramark is being recognized for it’s supplier diversity efforts by DiversityInc. Supplier diversity is not only a key supply chain and DEI initiative for Aramark, it is a business imperative that delivers success for the company’s clients, consumers, and communities.

“We are committed to continuously developing an innovative and inclusive supply chain and are proud to partner with a broad network of small organizations and businesses owned and operated by minorities, women, and other diverse populations,” said Natily Santos, VP of Responsible Sourcing at Aramark. “This recognition by DiversityInc validates our customized approach to our supplier diversity efforts and our goal of creating a supplier base that reflects our values of equity and inclusion and the communities we serve.”

“Since 2001, the DiversityInc Top 50 survey has become the external validator for large U.S. employers committed to promoting diversity, equity, and inclusion,” said Carolynn Johnson, CEO of DiversityInc. “These rankings represent evidence-based, superior human capital outcomes that are achieved only by data transparency and an unwavering commitment to workplace fairness for everyone.”

Aramark’s diversity efforts have been well recognized this year, as the company was named to Newsweek’s list of America’s Most Responsible Companies 2023 and also recognized as a Top 50 Employer by CAREERS & the disABLED Magazine, for the ninth consecutive year.

To view the entire Top 50 list and specialty lists, visit https://www.fair360.com/top-50-list/2023/ or follow the conversation at #DITop50.

About Be Well. Do Well.

Introduced in 2019, Be Well. Do Well. is Aramark’s ESG platform and directly connects to the company’s mission: Because we’re rooted in service, we do great things for our people, our partners, our communities, and our planet. Be Well. Do Well. outlines the company’s goal to make a positive impact on people and planet by working to reduce inequity, support and grow local communities, and protect the planet. Learn more at https://www.aramark.com/environmental-social-governance.

About Aramark

Aramark (NYSE: ARMK) proudly serves the world’s leading educational institutions, Fortune 500 companies, world champion sports teams, prominent healthcare providers, iconic destinations and cultural attractions, and numerous municipalities in 19 countries around the world with food, facilities, and uniform services. Because our culture is rooted in service, our employees strive to do great things for each other, our partners, our communities, and the planet. Aramark has been recognized on FORTUNE’s list of “World’s Most Admired Companies,” DiversityInc’s “Top 50 Companies for Diversity” and “Top Companies for Supplier Diversity,” Newsweek’s list of “America’s Most Responsible Companies 2023,” the HRC’s “Best Places to Work for LGBTQ Equality,” and scored 100% on the Disability Equality Index. Learn more at www.aramark.com and connect with us on Facebook, Twitter, and LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005246/en/

Erin Noss

(215) 409-7403

[email protected]

KEYWORDS: Pennsylvania United States North America

INDUSTRY KEYWORDS: Food/Beverage Retail Professional Services Other Professional Services DEI (Diversity, Equity and Inclusion)

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May 4, 2023 9:10 am

Upbound Group, Inc. Reports First Quarter 2023 Results

Upbound Group, Inc. Reports First Quarter 2023 Results

Total Revenue of $1.016 Billion

GAAP Diluted EPS of $0.84; Non-GAAP Diluted EPS $0.83

$105.4 Million of Cash From Operations; $95.9 Million of Free Cash Flow

Consolidated Skip-Stolen Loss Rate Improved 150 bps Year-Over-Year

Raises Full Year 2023 Targets for Adjusted EBITDA and Non-GAAP EPS

PLANO, Texas–(BUSINESS WIRE)–
Upbound Group, Inc. (the “Company” or “Upbound”) (NASDAQ:UPBD) today announced results for the quarter ended March 31, 2023.

“The first quarter was a promising start to the year for the Company. Although external conditions remain uncertain our businesses performed better than expected. Demand for our leasing solutions and top line trends at both the Rent-A-Center Business and Acima segments were consistent with our outlook despite a muted tax season, while effective underwriting and account management drove sequential improvement in loss rates. These factors, combined with cost management efforts, contributed to first quarter Non-GAAP earnings per share that exceeded the assumptions underlying our 2023 outlook,” said CEO Mitch Fadel.

“Looking forward to the rest of the year, we remain cautiously optimistic. Considering our performance so far this year, the health of our portfolio following a year of tighter underwriting standards and our assessment of the still uncertain external environment, we are raising our full-year 2023 Adjusted EBITDA and Non-GAAP EPS outlook,” concluded Mr. Fadel.

First Quarter Consolidated Results

First quarter 2023 consolidated revenues of $1.016 billion decreased 12.4% year-over-year, with rentals and fees revenue and merchandise sales revenue contributing similar amounts to the decrease. Rentals and fees revenues decreased 8.6%, primarily due to a lower lease portfolio value for the Acima Segment in the current year period. Merchandise sales revenue decreased 30.0%, primarily due to fewer customers electing early payouts at both segments potentially attributable to lower tax refunds this year.

GAAP operating loss for the first quarter of 2023 was $35.1 million and included $127.6 million of pre-tax costs relating to special items described below, compared to $11.0 million of GAAP operating profit and $70.1 million of pre-tax costs relating to special items in the prior year period. The decrease in GAAP operating profit was primarily attributable to higher stock compensation expense related to the accelerated vesting of restricted stock agreements issued to the former owners of Acima Holdings. GAAP operating profit margin for the first quarter of 2023 was (3.5%), compared to 1.0% in the prior year period. The year-over-year increase in GAAP operating profit, excluding special items, for the first quarter of 2023 was primarily due to improved gross margin and loss rates for the Acima Segment, partially offset by lower revenue and higher loss rates for the Rent-A-Center Business segment.

Adjusted EBITDA for the first quarter of 2023 increased 12.1% year-over-year to $111.5 million, primarily due to improved gross margin and loss rates for the Acima Segment, partially offset by lower revenue and higher loss rates for the Rent-A-Center Business segment. First quarter 2023 Adjusted EBITDA margin of 11.0% increased 240 basis points compared to the prior year period due to the items noted above that affected the year-over-year change in Adjusted EBITDA.

GAAP diluted earnings per share for the first quarter of 2023 was $0.84 compared to a $0.08 loss per share in the prior year period. Non-GAAP diluted earnings per share, which excludes the impact of special items described below, for the first quarter of 2023 was $0.83 compared to $0.74 in the prior year period.

First Quarter Segment Highlights

Rent-A-Center Business Segment: First quarter 2023 revenues of $485.0 million decreased 6.5% year-over-year with a 6.6% decrease in same-store sales that was primarily attributable to lower rentals and fee revenues resulting from a smaller lease portfolio value compared to the prior year period. Merchandise sales revenue also decreased year-over-year, primarily due to fewer customers electing early payout options. At the end of the first quarter, the segment lease portfolio value was 3.2% lower than the prior year period. E-commerce accounted for approximately 25% of revenue in our lease-to-own stores in the first quarter, compared to approximately 23% in the prior year period.

Skip/stolen losses in our lease to own stores were 4.8% of revenue in the first quarter of 2023 compared to 3.9% in the prior year period and 5.8% in the fourth quarter of 2022. On a GAAP basis, segment operating profit in the quarter was $69.0 million with an operating profit margin of 14.2%, compared to $100.2 million and 19.3% in the first quarter of 2022. Adjusted EBITDA in the quarter was $73.9 million with an Adjusted EBITDA margin of 15.2%, compared to $107.4 million and 20.7% in the first quarter of 2022. The year-over-year decline in Adjusted EBITDA and Adjusted EBITDA margin was primarily attributable to lower revenues and higher loss rates, both of which are attributable to pressure on customers’ discretionary income. As of March 31, 2023, the Rent-A-Center segment had 1,850 company-operated locations.

Acima Segment: First quarter 2023 GMV decreased 12.6% year-over-year due to fewer lease applications compared to the prior year period that resulted from lower durable goods demand at merchant partners. We believe this was mainly attributable to pressure on consumer discretionary income and demand pulled forward with stimulus programs in 2020 and 2021. First quarter revenues of $483.8 million decreased 19.3% year-over-year, on lower rentals and fees revenue and lower merchandise sales revenue. The decrease in rentals and fees revenue was primarily due to fewer open lease agreements during the current year period for the same reasons as described above. The decrease in merchandise sales revenues was primarily attributable to year-over-year decreases in GMV and fewer customers electing early payout options in the current year period.

Skip/stolen losses improved 370 bps to 8.9% of revenue in the first quarter of 2023 compared to 12.6% in the prior year period. Skip/stolen losses for just the virtual business was 7.7% in first quarter of 2023, which is within the 6% – 8% long-term target range we initially identified in 2021. On a GAAP basis, first quarter of 2023 segment operating profit was $53.9 million with an operating profit margin of 11.1%, compared to $9.6 million and 1.6% in the first quarter of 2022. Adjusted EBITDA was $68.6 million with an Adjusted EBITDA margin of 14.2% in the first quarter of 2023, compared to $29.0 million and 4.8% in the first quarter of 2022. The increase in Adjusted EBITDA was primarily attributable to fewer customers electing early payouts and lower loss rates compared to the prior year period.

Franchising Segment:First quarter 2023 revenues of $29.8 million increased 14.0% year-over-year due to higher inventory purchases per store. Segment operating profit, on a GAAP basis, and Adjusted EBITDA were each $4.8 million in the first quarter and decreased slightly compared to the prior year period. As of March 31, 2023, there were 440 franchise-operated locations.

Mexico Segment:First quarter 2023 revenues of $17.4 million increased 1.1% year-over-year on a constant currency basis. Segment operating profit, on a GAAP basis, and Adjusted EBITDA were approximately $1.0 million and $1.2 million, respectively. As of March 31, 2023, the Mexico business had 126 company-operated locations.

Corporate Segment: First quarter 2023 GAAP basis expenses increased 55.0% primarily due to higher stock compensation expense related to the accelerated vesting of restricted stock agreements issued to the former owners of Acima Holdings. Non-GAAP basis expenses decreased $7.6 million year-over-year or 13.1%, primarily due to lower payroll costs and professional fees compared to the prior year period. Excluding the impact of stock based compensation and depreciation, expenses decreased 16.0% year-over year.

Key Metrics

Table 1	Q1 2023			Q1 2022			Q4 2022
Metrics ($’s Millions – except per share & store count data)	Q1 2023			Q1 2022			Q4 2022
Consolidated
Revenue	$	1,016.1		$	1,159.7		$	990.5
GAAP Operating (Loss) Profit	$	(35.1	)	$	11.0		$	42.3
Adj. EBITDA⁽¹⁾	$	111.5		$	99.5		$	110.1
Skip / Stolen Loss Rate⁽⁴⁾		7.1	%		8.6	%		7.5	%
Adj. EBITDA Margin⁽¹⁾		11.0	%		8.6	%		11.1	%
GAAP Operating Expenses as % of Total Revenue		53.3	%		46.1	%		45.7	%
GAAP Diluted EPS	$	0.84		$	(0.08	)	$	0.05
Non-GAAP Diluted EPS⁽¹⁾	$	0.83		$	0.74		$	0.86
Operating Cash Flow	$	105.4		$	205.3		$	56.4
Free Cash Flow⁽¹⁾	$	95.9		$	188.9		$	44.4

Rent-A-Center Business Segment
Lease Portfolio – Monthly Value (as of period end) ⁽²⁾	$	140.2		$	144.9		$	142.8
Lease Portfolio Value (Y/Y % Change – as of period end)⁽²⁾		(3.2	) %		5.6	%		(4.7	) %
Same Store Sales (Y/Y % Change)⁽³⁾		(6.6	) %		(1.1	) %		(8.1	) %
Revenue	$	485.0		$	518.5		$	467.4
GAAP Operating Profit	$	69.0		$	100.2		$	63.2
Adj. EBITDA⁽¹⁾	$	73.9		$	107.4		$	68.3
Adj. EBITDA Margin⁽¹⁾		15.2	%		20.7	%		14.6	%
Skip / Stolen Loss Rate⁽⁴⁾		4.8	%		3.9	%		5.8	%
30+ Day Past Due Rate⁽⁵⁾		3.0	%		2.6	%		3.5	%
Corporate Owned Store Count (U.S. & PR – as of period end)		1,850			1,852			1,851

Acima Business Segment
GMV⁽⁶⁾	$	348.2		$	398.3		$	399.5
GMV (Y/Y % Change)⁽⁶⁾		(12.6	) %		(21.2	) %		(23.4	) %
Revenue	$	483.8		$	599.4		$	476.3
GAAP Operating Profit	$	53.9		$	9.6		$	57.0
Adj. EBITDA⁽¹⁾	$	68.6		$	29.0		$	71.7
Adj. EBITDA Margin⁽¹⁾		14.2	%		4.8	%		15.0	%
Skip / Stolen Loss Rate⁽⁴⁾		8.9	%		12.6	%		8.9	%
60+ Day Past Due Rate⁽⁷⁾		13.8	%		14.4	%		13.9	%

⁽¹⁾		Non-GAAP financial measure. Refer to the explanations and reconciliations elsewhere in this release.
⁽²⁾		Lease Portfolio Value: Represents the aggregate dollar value of the expected monthly rental income associated with current active lease agreements from our Rent-A-Center Business stores and e‑commerce platform at the end of any given period.
⁽³⁾		Same Store Sales (SSS): Same store sales generally represents revenue earned in stores that were operated by us for 13 months or more and are reported on a constant currency basis as a percentage of total revenue earned in stores of the segment during the indicated period. The Company excludes from the same store sales base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store sales base in the 30th full month following account transfer.
⁽⁴⁾		Skip / Stolen Loss Rate: Represents charge-offs of the depreciated value of unrecoverable on-rent merchandise with lease-to-own customers who are past due as a percentage of revenues. For the Rent-A-Center Business Segment skip / stolen losses excludes the Get It Now and Home Choice lines of business
⁽⁵⁾		30+ Days Past Due Rate: Defined as the average number of accounts 30+ days past due as a % of total open leases.
⁽⁶⁾		Gross Merchandise Volume (GMV): The Company defines Gross Merchandise Volume as the retail value in U.S. dollars of merchandise acquired by the Company that is leased to customers through a transaction that occurs within a defined period, net of cancellations.
⁽⁷⁾		60+ Days Past Due Rate: Defined as the average number of accounts 60+ days past due as a % of total open leases.

Full Year 2023 Guidance

The Company is providing the following guidance for its 2023 fiscal year. Because of the inherent uncertainty related to the special items identified in the tables below, management does not believe it is able to provide a meaningful forecast of the comparable GAAP measures or reconciliation to any forecasted GAAP measure without unreasonable effort. The actual amount of these items during 2023 may have a significant impact on our future GAAP results.

Table 2
Guidance	Full Year 2023 Updated	Full Year 2023 Prior
Consolidated⁽¹⁾
Revenues ($’s billion)	$3.8 – $4.0	$3.8 – $4.0
Adjusted EBITDA Excluding Stock Based Compensation⁽²⁾($’s million)	$395 – $435	$380 – $415
Non-GAAP Diluted Earnings Per Share⁽²⁾⁽³⁾	$2.70 – $3.20	$2.50 – $3.00
Free Cash Flow⁽²⁾($’s million)	$200 – $235	$180 – $215

⁽¹⁾		Consolidated includes Acima, Rent-A-Center Business, Franchising, Mexico and Corporate Segments.
⁽²⁾		Non-GAAP financial measure. See descriptions below in this release. Adjusted EBITDA figures exclude stock based compensation beginning with the first quarter of 2022.
⁽³⁾		Non-GAAP diluted earnings per share excludes the impact of incremental depreciation and amortization related to the estimated fair value of acquired Acima assets, stock compensation expense associated with the Acima Acquisition equity consideration, which is subject to vesting conditions, and one-time transaction and integration costs related to the Acima Acquisition. Guidance excludes the impact of any future share repurchases.

Webcast Information

Upbound Group, Inc. will host a conference call to discuss the first quarter results, guidance and other operational matters on the morning of Thursday, May 4, 2023, at 9:00 a.m. ET. For a live webcast of the call, visit https://investor.upbound.com. Certain financial and other statistical information that will be discussed during the conference call will also be provided on the same website. Participants can access the call by phone via this link (registration link), where the dial-in details will be provided.

Investor Day Event

Upbound Group, Inc. will host its Investor Day on Wednesday, May 24, 2023, in New York City. The event will feature presentations from senior leadership highlighting the Company’s strong underlying fundamentals, progress since the transformational acquisition of Acima Holdings in February 2021 and go-forward strategy. The event is scheduled to start at 10:00 am (ET) and conclude at 1:00 pm (ET). A live webcast will be available through the investor relations website at https://investor.upbound.com.

About Upbound Group, Inc.

Upbound Group, Inc. (NASDAQ: UPBD) is an omni-channel platform company committed to elevating financial opportunity for all through innovative, inclusive, and technology-driven financial solutions that address the evolving needs and aspirations of consumers. The Company’s customer-facing operating units include industry-leading brands such as Rent-A-Center® and Acima® that facilitate consumer transactions across a wide range of store-based and digital retail channels, including over 2,400 company branded retail units across the United States, Mexico and Puerto Rico. Upbound Group, Inc. is headquartered in Plano, Texas. For additional information about the Company, please visit our website Upbound.com.

Forward-Looking Statements

This press release, and the guidance above and the Company’s related conference call contain forward-looking statements that involve risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “could,” “estimate,” “predict,” “continue,” “maintain,” “should,” “anticipate,” “believe,” or “confident,” or the negative thereof or variations thereon or similar terminology and including, among others, statements concerning (i) the Company’s guidance for 2023 and future outlook, (ii) the impact of ongoing challenging macro-economic conditions on the Company’s business operations, financial performance, and prospects, (iii) the future business prospects and financial performance of the Company following the acquisition of Acima Holdings, LLC (“Acima Holdings”), (iv) cost and revenue synergies and other benefits expected to result from the Acima Holdings acquisition, (v) the Company’s expectations, plans and strategy relating to its capital structure and capital allocation, including any share repurchases under the Company’s share repurchase program, and (vi) other statements that are not historical facts. However, there can be no assurance that such expectations will occur. The Company’s actual future performance could differ materially and adversely from such statements. Factors that could cause or contribute to these differences include, but are not limited to: (1) risks relating to the Acima Holdings acquisition, (2) the impact of the COVID-19 pandemic and subsequent post pandemic impacts and related government and regulatory restrictions issued to combat the pandemic, including adverse changes in such restrictions, the expiration of governmental stimulus programs, and impacts on (i) demand for the Company’s lease-to-own products offered in the Company’s operating segments, (ii) the Company’s Acima retail partners, (iii) the Company’s customers and their willingness and ability to satisfy their lease obligations, (iv) the Company’s suppliers’ ability to satisfy its merchandise needs and related supply chain disruptions, (v) the Company’s employees, including the ability to adequately staff its operating locations, (vi) the Company’s financial and operational performance, and (vii) the Company’s liquidity; (3) the general strength of the economy and other economic conditions affecting consumer preferences and spending, including the availability of credit to the Company’s target consumers and to other consumers, impacts from the continued inflation, central bank monetary policy initiatives to address inflation concerns and possible recession or slowdown in economic growth; (4) factors affecting the disposable income available to the Company’s current and potential customers; (5) changes in the unemployment rate; (6) capital market conditions, including availability of funding sources for the Company; (7) changes in the Company’s credit ratings; (8) difficulties encountered in improving the financial and operational performance of the Company’s business segments; (9) risks associated with pricing changes and strategies being deployed in the Company’s businesses; (10) the Company’s ability to continue to realize benefits from its initiatives regarding cost-savings and other EBITDA enhancements, efficiencies and working capital improvements; (11) the Company’s ability to continue to effectively execute its strategic initiatives, including mitigating risks associated with any potential mergers and acquisitions, or refranchising opportunities; (12) the Company’s ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies; (13) failure to manage the Company’s store labor and other store expenses, including merchandise losses; (14) disruptions caused by the operation of the Company’s store information management systems or disruptions in the systems of the Company’s host retailers; (15) risks related to the Company’s virtual lease-to-own business, including the Company’s ability to continue to develop and successfully implement the necessary technologies; (16) the Company’s ability to achieve the benefits expected from its integrated virtual and staffed retail partner offering and to successfully grow this business segment; (17) exposure to potential operating margin degradation due to the higher cost of merchandise in the Company’s Acima offering and higher merchandise losses than compared to our Rent-A-Center Business segment; (18) the Company’s transition to more-readily scalable, “cloud-based” solutions; (19) the Company’s ability to develop and successfully implement digital or E-commerce capabilities, including mobile applications; (20) the Company’s ability to protect its proprietary intellectual property; (21) the Company’s ability or that of the Company’s host retailers to protect the integrity and security of customer, employee and host retailer information, which may be adversely affected by hacking, computer viruses, or similar disruptions; (22) impairment of the Company’s goodwill or other intangible assets; (23) disruptions in the Company’s supply chain; (24) limitations of, or disruptions in, the Company’s distribution network; (25) rapid inflation or deflation in the prices of the Company’s products and other related costs; (26) allegations of product safety and quality control issues, including recalls; (27) the Company’s ability to execute, as well as, the effectiveness of store consolidations, including the Company’s ability to retain the revenue from customer accounts merged into another store location as a result of a store consolidation; (28) the Company’s available cash flow and its ability to generate sufficient cash flow to continue paying dividends; (29) increased competition from traditional competitors, virtual lease-to-own competitors, online retailers, Buy-Now-Pay-Later and other fintech companies and other competitors, including subprime lenders; (30) the Company’s ability to identify and successfully market products and services that appeal to its current and future targeted customer segments and to accurately estimate the size of the total addressable market; (31) consumer preferences and perceptions of the Company’s brands; (32) the Company’s ability to retain the revenue associated with acquired customer accounts and enhance the performance of acquired stores; (33) the Company’s ability to enter into new, and collect on, its rental or lease purchase agreements; (34) changes in the enforcement of existing laws and regulations and the enactment of new laws and regulations adversely affecting the Company’s business, including any legislative or regulatory enforcement efforts that seek to re-characterize store-based or virtual lease-to-own transactions as credit sales and to apply consumer credit laws and regulations to the Company’s business; (35) the Company’s compliance with applicable statutes or regulations governing its businesses; (36) changes in interest rates; (37) changes in tariff policies; (38) adverse changes in the economic conditions of the industries, countries or markets that the Company serves; (39) information technology and data security costs; (40) the impact of any breaches in data security or other disturbances to the Company’s information technology and other networks (41) changes in estimates relating to self-insurance liabilities, and income tax and litigation reserves; (42) changes in the Company’s effective tax rate; (43) fluctuations in foreign currency exchange rates; (44) the Company’s ability to maintain an effective system of internal controls; (45) litigation or administrative proceedings to which the Company is or may be a party to from time to time; and (46) the other risks detailed from time to time in the Company’s SEC reports, including but not limited to, its Annual Report on Form 10-K for the year ended December 31, 2022 and in its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company is not obligated to publicly release any revisions to these forward-looking statements to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Upbound Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS – UNAUDITED
Table 3	Three Months Ended March 31,
(In thousands, except per share data)		2023			2022
Revenues
Store
Rentals and fees	$	806,717		$	883,047
Merchandise sales		162,989			232,881
Installment sales		15,847			17,089
Other		1,445			1,290
Total store revenues		986,998			1,134,307
Franchise
Merchandise sales		22,827			18,521
Royalty income and fees		6,236			6,894
Total revenues		1,016,061			1,159,722
Cost of revenues
Store
Cost of rentals and fees		297,146			338,633
Cost of merchandise sold		184,260			250,331
Cost of installment sales		5,619			5,921
Total cost of store revenues		487,025			594,885
Franchise cost of merchandise sold		22,772			18,742
Total cost of revenues		509,797			613,627
Gross profit		506,264			546,095
Operating expenses
Store expenses
Labor		156,489			166,603
Other store expenses		196,711			227,369
General and administrative expenses		47,726			56,403
Depreciation and amortization		12,881			14,529
Other charges		127,570			70,148
Total operating expenses		541,377			535,052
Operating (loss) profit		(35,113	)		11,043
Interest expense		28,100			18,970
Interest income		(420	)		(45	)
Loss before income taxes		(62,793	)		(7,882	)
Income tax benefit		(110,123	)		(3,645	)
Net earnings (loss)	$	47,330		$	(4,237	)
Basic weighted average shares		55,157			53,751
Basic earnings (loss) per common share	$	0.86		$	(0.08	)
Diluted weighted average shares		56,437			53,751
Diluted earnings (loss) per common share	$	0.84		$	(0.08	)

Upbound Group, Inc. and Subsidiaries

SELECTED BALANCE SHEETS HIGHLIGHTS – UNAUDITED

Table 4	March 31,
(In thousands)		2023		2022
Cash and cash equivalents	$	171,698	$	95,684
Receivables, net		101,772		121,185
Prepaid expenses and other assets		44,833		47,460
Rental merchandise, net
On rent		943,487		1,017,485
Held for rent		126,762		127,663
Operating lease right-of-use assets		300,731		299,109
Goodwill		289,750		289,761
Total assets		2,741,125		2,777,121

Operating lease liabilities	$	304,063	$	301,047
Senior debt, net		889,950		964,113
Senior notes, net		438,440		436,460
Total liabilities		2,070,783		2,254,063
Stockholders’ equity		670,342		523,058

Upbound Group, Inc. and Subsidiaries

SEGMENT INFORMATION HIGHLIGHTS – UNAUDITED

Table 5	Three Months Ended March 31,
(In thousands)		2023		2022
Revenues
Rent-A-Center Business	$	485,008	$	518,505
Acima		483,847		599,377
Mexico		17,430		15,712
Franchising		29,776		26,128
Total revenues	$	1,016,061	$	1,159,722

Table 6	Three Months Ended March 31,
(In thousands)		2023		2022
Gross profit
Rent-A-Center Business	$	331,725	$	363,380
Acima		155,144		164,228
Mexico		12,391		11,101
Franchising		7,004		7,386
Total gross profit	$	506,264	$	546,095

Table 7	Three Months Ended March 31,
(In thousands)		2023			2022
Operating (loss) profit
Rent-A-Center Business	$	68,961		$	100,176
Acima		53,870			9,600
Mexico		995			2,066
Franchising		4,760			4,790
Total segments		128,586			116,632
Corporate		(163,699	)		(105,589	)
Total operating (loss) profit	$	(35,113	)	$	11,043

Table 8	Three Months Ended March 31,
(In thousands)		2023		2022
Depreciation and amortization
Rent-A-Center Business	$	4,970	$	6,413
Acima		427		582
Mexico		242		149
Franchising		38		37
Total segments		5,677		7,181
Corporate		7,204		7,348
Total depreciation and amortization	$	12,881	$	14,529

Table 9	Three Months Ended March 31,
(In thousands)		2023		2022
Capital expenditures
Rent-A-Center Business	$	2,977	$	13,408
Acima		58		46
Mexico		716		222
Franchising		1		112
Total segments		3,752		13,788
Corporate		5,782		2,615
Total capital expenditures	$	9,534	$	16,403

Table 10	On lease at March 31,				Held for lease at March 31,
(In thousands)		2023		2022		2023		2022
Lease merchandise, net
Rent-A-Center Business	$	450,162	$	455,828	$	116,936	$	117,617
Acima		472,550		542,437		605		1,159
Mexico		20,775		19,220		9,221		8,887
Total lease merchandise, net	$	943,487	$	1,017,485	$	126,762	$	127,663

Table 11	March 31,
(In thousands)		2023		2022
Assets
Rent-A-Center Business	$	1,003,245	$	1,003,246
Acima		1,135,502		1,287,869
Mexico		53,854		43,243
Franchising		18,009		15,904
Total segments		2,210,610		2,350,262
Corporate		530,515		426,859
Total assets	$	2,741,125	$	2,777,121

Non-GAAP Financial Measures

This release and the Company’s related conference call contain certain financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including (1) Non-GAAP diluted earnings per share (net earnings or loss, as adjusted for special items (as defined below), net of taxes, divided by the number of shares of our common stock on a fully diluted basis), (2) Adjusted EBITDA (net earnings before interest, taxes, stock-based compensation, depreciation and amortization, as adjusted for special items) on a consolidated and segment basis, (3) Free Cash Flow (net cash provided by operating activities less capital expenditures), (4) Adjusted EBITDA margin on a consolidated and segment basis, and (5) net debt to Adjusted EBITDA ratio. “Special items” refers to certain gains and charges we view as extraordinary, unusual or non-recurring in nature or which we believe do not reflect our core business activities. For the periods presented herein, these special items are described in the quantitative reconciliation tables included below in this release. Because of the inherent uncertainty related to these special items, management does not believe it is able to provide a meaningful forecast of the comparable GAAP measures or reconciliation to any forecasted GAAP measure without unreasonable effort.

These non-GAAP measures are additional tools intended to assist our management in comparing our performance on a more consistent basis for purposes of business decision-making by removing the impact of certain items management believes do not directly reflect our core operations. These measures are intended to assist management in evaluating operating performance and liquidity, comparing performance and liquidity across periods, planning and forecasting future business operations, helping determine levels of operating and capital investments and identifying and assessing additional trends potentially impacting our Company that may not be shown solely by comparisons of GAAP measures. Consolidated Adjusted EBITDA is also used as part of our incentive compensation program for our executive officers and others.

We believe these non-GAAP financial measures also provide supplemental information that is useful to investors, analysts and other external users of our consolidated financial statements in understanding our financial results and evaluating our performance and liquidity from period to period. However, non-GAAP financial measures have inherent limitations and are not substitutes for, or superior to, GAAP financial measures and they should be read together with, our consolidated financial statements prepared in accordance with GAAP. Further, because non-GAAP financial measures are not standardized, it may not be possible to compare such measures to the non-GAAP financial measures presented by other companies, even if they have the same or similar names.

Reconciliation of net earnings to net earnings excluding special items and non-GAAP diluted earnings per share:

Table 12	Three Months Ended March 31, 2023
(In thousands)	Gross Profit		Operating (Loss) Profit			(Loss) Earnings Before Income Tax			Tax (Benefit) Expense			Net Earnings			Diluted Earnings per Share
GAAP Results	$	506,264	$	(35,113	)	$	(62,793	)	$	(110,123	)	$	47,330		$	0.84
Plus: Special Items
Acima equity consideration vesting⁽¹⁾		—		109,473			109,473			108,767			706			0.01
Acima acquired assets depreciation and amortization ⁽²⁾		—		18,234			18,234			18,116			118			—
Legal settlement		—		(437	)		(437	)		(434	)		(3	)		—
Legal settlement reserves		—		300			300			298			2			—
Discrete income tax items		—		—			—			1,125			(1,125	)		(0.02	)
Non-GAAP Adjusted Results	$	506,264	$	92,457		$	64,777		$	17,749		$	47,028		$	0.83

⁽¹⁾		Stock compensation expense recognized during the three months ended March 31, 2023 related to Acima equity consideration includes $78.4 million attributable to the acceleration of restricted stock agreement vesting provisions, primarily related to Aaron Allred’s transition from Executive Vice President of Acima to an advisory role.
⁽²⁾		Includes amortization of approximately $14.2 million related to the total fair value of acquired intangible assets and incremental depreciation of approximately $4.0 million.

Table 13	Three Months Ended March 31, 2022
(In thousands)	Gross Profit			Operating Profit			(Los) Earnings Before Income Tax			Tax (Benefi) Expense			Net (Los) Earnings			Diluted (Los) Earnings per Share
GAAP Results	$	546,095		$	11,043		$	(7,882	)	$	(3,645	)	$	(4,237	)	$	(0.08	)
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
Acima equity consideration vesting		—			36,559			36,559			10,099			26,460			0.44
Acima acquired assets depreciation and amortization⁽¹⁾		(2,853	)		23,238			23,238			6,420			16,818			0.28
Asset disposals		—			4,238			4,238			1,171			3,067			0.05
Cost savings initiatives		—			2,197			2,197			607			1,590			0.03
Legal settlement reserves		—			715			715			198			517			0.01
Store closure costs		—			500			500			138			362			0.01
Acima transaction costs		—			187			187			52			135			—
Other		—			(339	)		(339	)		(94	)		(245	)		—
Non-GAAP Adjusted Results	$	543,242		$	78,338		$	59,413		$	14,946		$	44,467		$	0.74

⁽¹⁾

Includes amortization of approximately $22.1 million related to the total fair value of acquired intangible assets and incremental depreciation of approximately $4.0 million.

Reconciliation of operating profit (loss) to Adjusted EBITDA (consolidated and by segment):

Table 14	Three Months Ended March 31, 2023
(In thousands)	Rent-A-Center Business		Acima		Mexico		Franchising		Corporate			Consolidated
GAAP Operating Profit (Loss)	$	68,961	$	53,870	$	995	$	4,760	$	(163,699	)	$	(35,113	)
Plus: Amortization, Depreciation		4,970		427		242		38		7,204			12,881
Plus: Stock-based compensation		—		—		—		—		6,208			6,208
Plus: Special Items
Acima equity consideration vesting⁽¹⁾		—		—		—		—		109,473			109,473
Acima acquired assets depreciation and amortization ⁽²⁾		—		14,262		—		—		3,972			18,234
Legal settlement		—		—		—		—		(437	)		(437	)
Legal settlement reserves		—		—		—		—		300			300
Adjusted EBITDA	$	73,931	$	68,559	$	1,237	$	4,798	$	(36,979	)	$	111,546

⁽¹⁾		Stock compensation expense recognized during the three months ended March 31, 2023 related to Acima equity consideration includes $78.4 million attributable to the acceleration of restricted stock agreement vesting provisions, primarily related to Aaron Allred’s transition from Executive Vice President of Acima to an advisory role.
⁽²⁾		Includes amortization of approximately $14.2 million related to the total fair value of acquired intangible assets and incremental depreciation of approximately $4.0 million.

Table 15	Three Months Ended March 31, 2022
(In thousands)	Rent-A-Center Business		Acima			Mexico		Franchising		Corporate			Consolidated
GAAP Operating Profit (Loss)	$	100,176	$	9,600		$	2,066	$	4,790	$	(105,589	)	$	11,043
Plus: Amortization, Depreciation		6,413		582			149		37		7,348			14,529
Plus: Stock-based compensation		—		—			—		—		6,630			6,630
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
Acima equity consideration vesting		—		—			—		—		36,559			36,559
Acima acquired assets depreciation and amortization ⁽¹⁾		—		19,266			—		—		3,972			23,238
Asset disposals		—		—			—		—		4,238			4,238
Cost savings initiatives		116		(404	)		—		—		2,485			2,197
Store closure costs		715		—			—		—		—			715
Legal settlement reserves		—		—			—		—		500			500
Acima Transaction costs		—		—			—		—		187			187
Other		—		—			—		—		(339	)		(339	)
Adjusted EBITDA	$	107,420	$	29,044		$	2,215	$	4,827	$	(44,009	)	$	99,497

⁽¹⁾

Includes amortization of approximately $22.1 million related to the total fair value of acquired intangible assets and incremental depreciation of approximately $4.0 million.

Reconciliation of net cash provided by operating activities to free cash flow:

Table 16	Three Months Ended March 31,
(In thousands)	2023			2022
Net cash provided by operating activities	$	105,417		$	205,291
Purchase of property assets		(9,534	)		(16,40	)
Free cash flow	$	95,883		$	188,888

View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005300/en/

Investors:

Upbound Group, Inc.

Brendan Metrano

VP, Investor Relations

972-801-1280

[email protected]

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: Online Retail Retail Other Retail Discount/Variety Home Goods Department Stores Specialty

MEDIA:

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May 4, 2023 9:10 am

SIGA Declares Special Cash Dividend of $0.45 Per Share

NEW YORK, May 04, 2023 (GLOBE NEWSWIRE) — SIGA Technologies, Inc. (SIGA) (NASDAQ: SIGA), a commercial-stage pharmaceutical company, today announced that the Board of Directors declared a special cash dividend of $0.45 per share on the common stock of the Company. The special cash dividend is payable on June 1, 2023 to shareholders of record at the close of business on May 16, 2023.

Phil Gomez, CEO of SIGA, commented, “Based on the Company’s current cash resources and strong balance sheet, we are well positioned to declare a special cash dividend for our shareholders. This action is a reflection of the financial performance of SIGA over the past several years and reinforces our optimism about the Company’s business prospects going forward.”

ABOUT SIGA TECHNOLOGIES, INC. and TPOXX®

SIGA Technologies, Inc. is a commercial-stage pharmaceutical company focused on the health security market. Health security comprises countermeasures for biological, chemical, radiological and nuclear attacks (biodefense market), vaccines and therapies for emerging infectious diseases, and health preparedness. Our lead product is TPOXX®, also known as tecovirimat and ST-246®, an orally administered and IV formulation antiviral drug for the treatment of human smallpox disease caused by variola virus. TPOXX is a novel small-molecule drug and the US maintains a supply of TPOXX under Project BioShield. The oral formulation of TPOXX was approved by the FDA for the treatment of smallpox in 2018, and the IV formulation was approved for the same indication in 2022. The full label is available by clicking here. Oral tecovirimat received approval from the European Medicines Agency (EMA) and the Medicines and Healthcare Products Regulatory Agency (MHRA) in the United Kingdom in 2022. The EMA and UK approvals include labeling for oral tecovirimat indicating its use for the treatment of smallpox, monkeypox, cowpox, and vaccinia complications following vaccination against smallpox. The full label is available by clicking here. In September 2018, SIGA signed a contract with the Biomedical Advanced Research and Development Authority (BARDA), part of the office of the Assistant Secretary for Preparedness and Response within the U.S. Department of Health and Human Services, for additional procurement and development related to both oral and intravenous formulations of TPOXX. For more information about SIGA, please visit www.siga.com.

About Smallpox

Smallpox is a contagious, disfiguring and often deadly disease that has affected humans for thousands of years. Naturally-occurring smallpox was eradicated worldwide by 1980, the result of an unprecedented global immunization campaign. Samples of smallpox virus have been kept for research purposes. This has led to concerns that smallpox could someday be used as a biological warfare agent. A vaccine can prevent smallpox, but the risk of the current vaccine’s side effects is too high to justify routine vaccination for people at low risk of exposure to the smallpox virus.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements relating to the progress of SIGA’s development programs and timelines for bringing products to market, delivering products to the Strategic Stockpile, the enforceability of our procurement contracts, such as the 19C BARDA Contract (the “BARDA Contract”), with BARDA, the impact of the COVID pandemic and responding to the global outbreak of monkeypox. The words or phrases “can be,” “expects,” “may affect,” “may depend,” “believes,” “estimate,” “project” and similar words and phrases are intended to identify such forward-looking statements. Such forward-looking statements are subject to various known and unknown risks and uncertainties, and SIGA cautions you that any forward-looking information provided by or on behalf of SIGA is not a guarantee of future performance. SIGA’s actual results could differ materially from those anticipated by such forward-looking statements due to a number of factors, some of which are beyond SIGA’s control, including, but not limited to, (i) the risk that BARDA elects, in its sole discretion as permitted under the BARDA Contract, not to exercise all, or any, of the remaining unexercised options under those contracts, (ii) the risk that SIGA may not complete performance under the BARDA Contract on schedule or in accordance with contractual terms, (iii) the risk that the BARDA Contract, DoD Contract #2 or PEP Label Expansion R&D Contract are modified or canceled at the request or requirement of the U.S. Government, (iv) the risk that the nascent international biodefense market does not develop to a degree that allows SIGA to continue to successfully market TPOXX® internationally, (v) the risk that potential products, including potential alternative uses or formulations of TPOXX® that appear promising to SIGA or its collaborators, cannot be shown to be efficacious or safe in subsequent pre-clinical or clinical trials, (vi) the risk that SIGA or its collaborators will not obtain appropriate or necessary governmental approvals to market these or other potential products or uses, (vii) the risk that SIGA may not be able to secure or enforce sufficient legal rights in its products, including intellectual property protection, (viii) the risk that any challenge to SIGA’s patent and other property rights, if adversely determined, could affect SIGA’s business and, even if determined favorably, could be costly, (ix) the risk that regulatory requirements applicable to SIGA’s products may result in the need for further or additional testing or documentation that will delay or prevent SIGA from seeking or obtaining needed approvals to market these products, (x) the risk that the volatile and competitive nature of the biotechnology industry may hamper SIGA’s efforts to develop or market its products, (xi) the risk that changes in domestic or foreign economic and market conditions may affect SIGA’s ability to advance its research or may affect its products adversely, (xii) the effect of federal, state, and foreign regulation, including drug regulation and international trade regulation, on SIGA’s businesses, (xiii) the risk of disruptions to SIGA’s supply chain for the manufacture of TPOXX®, causing delays in SIGA’s research and development activities, causing delays or the re-allocation of funding in connection with SIGA’s government contracts, or diverting the attention of government staff overseeing SIGA’s government contracts, (xiv) risks associated with actions or uncertainties surrounding the debt ceiling, (xv) the risk that the U.S. or foreign governments’ responses (including inaction) to national or global economic conditions or infectious diseases, such as COVID-19, are ineffective and may adversely affect SIGA’s business, and (xvi) risks associated with responding to the current mpox outbreak, as well as the risks and uncertainties included in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022 and SIGA’s subsequent filings with the Securities and Exchange Commission. SIGA urges investors and security holders to read those documents free of charge at the SEC’s website at http://www.sec.gov. All such forward-looking statements are current only as of the date on which such statements were made. SIGA does not undertake any obligation to update publicly any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

The information contained in this press release does not necessarily reflect the position or the policy of the Government and no official endorsement should be inferred.

Contacts:

Investor Contact

Laine Yonker, Edison Group
[email protected]

Public Relations

Holly Stevens, Berry & Company
[email protected]

May 4, 2023 9:10 am

Lancaster Colony Reports Third Quarter Sales and Earnings

Lancaster Colony Reports Third Quarter Sales and Earnings

WESTERVILLE, Ohio–(BUSINESS WIRE)–
Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company’s fiscal third quarter ended March 31, 2023.

Summary

Consolidated net sales increased 15.2% to a third quarter record $464.9 million versus $403.5 million last year. Retail net sales advanced 16.0% to $247.2 million while Foodservice net sales grew 14.4% to $217.7 million.
Consolidated gross profit increased $25.9 million, or 37.9%, to $94.2 million. Third quarter gross margin improved to 20.3%, an increase of 330 basis points from last year’s third quarter.
Consolidated operating income was $29.4 million compared to an operating loss of $7.6 million last year. Prior-year operating income was unfavorably impacted by a restructuring and impairment charge of $22.7 million.
Net income was $0.89 per diluted share versus a net loss of $0.17 per diluted share last year. The restructuring and impairment charge reduced last year’s net income by $0.63 per diluted share.

CEO David A. Ciesinski commented, “We were pleased to report another quarter of record sales and higher profits. In the Retail segment, beyond the favorable impact of our pricing actions, net sales growth of 16.0% includes strong volume growth of 6.1% driven by our successful program for licensed dressings and sauces and another solid quarter for our New York BRAND Bakery^® frozen garlic bread products. Retail net sales also reflect a modest benefit from a favorable shift in the timing of shipments in advance of the Easter holiday. In our Foodservice segment, net sales growth of 14.4% reflects the benefit of inflationary pricing, increased demand from several of our national chain restaurant customers, and improved sales volumes for our branded Foodservice products.”

“While we continued to experience significant cost inflation, the pricing actions we have implemented in both our Retail and Foodservice segments served to offset the higher input costs. The $25.9 million increase in gross profit reflects the pricing and continued progress in our management of manufacturing costs along with a more stable and predictable operating environment. In our fiscal third quarter, we successfully added our largest dressing and sauce facility in Horse Cave, Kentucky to our new ERP system as we completed the Wave 3 implementation phase of our ERP initiative, Project Ascent. As anticipated, the ERP implementation reduced our reported gross profit as production at that facility was unfavorably impacted by the system cutover process.”

“Looking ahead to our fiscal fourth quarter, we anticipate Retail sales will continue to benefit from our licensing program, including incremental growth from the new products, flavors, and sizes we have introduced this fiscal year. In the Foodservice segment, we expect sustained volume growth from select customers in our mix of national chain restaurant accounts. Consolidated net sales will compare to last year’s fourth quarter that benefited from an estimated $25 million in incremental net sales attributed to advance customer orders ahead of our July 1 ERP go-live date for Wave 1. Cost inflation will remain a headwind to our financial results, but the pricing actions we have in place along with our cost savings initiatives are expected to offset the increased costs.”

Third Quarter Results

Consolidated net sales increased 15.2% to a third quarter record $464.9 million versus $403.5 million last year. Retail segment net sales grew 16.0% to $247.2 million, including the favorable impact of our pricing actions. Retail segment sales volume, measured in pounds shipped, increased 6.1%. Retail sales volume growth was driven by the continued success of our program for licensed dressings and sauces. Our New York BRAND Bakery^® frozen garlic bread products also contributed to the increase in the Retail sales volume. In the Foodservice segment, net sales improved 14.4% to $217.7 million as inflationary pricing combined with increased demand from several of our national chain restaurant account customers and growth for our branded Foodservice products led the segment’s sales higher. Foodservice sales volume, measured in pounds shipped, increased 0.4%.

Consolidated gross profit increased $25.9 million, or 37.9%, to $94.2 million as our pricing actions effectively offset the significant inflationary costs we have experienced for commodities, packaging, labor and warehousing. The higher gross profit also reflects improved manufacturing efficiencies, cost savings initiatives and the benefit of a more stable operating environment partially offset by the impact of the Wave 3 implementation phase of Project Ascent as our dressing and sauce production facility in Horse Cave, Kentucky transitioned to our new ERP system in early February as planned. The current-year gross profit compares to a very challenging year-ago quarter characterized by escalating inflationary costs across our entire supply chain, increased costs to service the shifting demands of our business, and shortages of select ingredients and packaging supplies.

SG&A expenses increased $10.3 million to $64.8 million, which reflects higher expenditures to support the continued growth of our business including investments in personnel and consumer promotions in addition to higher brokerage costs associated with the increased sales. SG&A expenses also include some nonrecurring legal charges for closed operations. Expenditures for Project Ascent, our ERP initiative, totaled $7.6 million in the current-year quarter versus $10.3 million last year.

In the prior-year quarter, the change in contingent consideration reflected the favorable impact of a $1.3 million noncash reduction to the fair value of the contingent consideration for Bantam Bagels in addition to noncash restructuring and impairment charges of $22.7 million for that business, which the company ultimately exited near the end of our fiscal fourth quarter ended June 30, 2022.

Consolidated operating income of $29.4 million compares to an operating loss of $7.6 million in the prior-year quarter. The increase in operating income was driven by the higher gross profit and the impact of last year’s restructuring and impairment charges, partially offset by the increase in SG&A expenses.

Net income of $24.6 million, or $0.89 per diluted share, compares to a net loss of $4.5 million, or a net loss of $0.17 per diluted share, last year. In the current-year quarter, expenditures for Project Ascent reduced net income by $5.9 million, or $0.21 per diluted share. Net income and earnings per diluted share in the current quarter benefited from a lower overall effective tax rate. In the prior-year quarter, the restructuring and impairment charges reduced net income by $17.4 million, or $0.63 per diluted share; expenditures for Project Ascent reduced net income by $7.9 million, or $0.29 per diluted share; and the adjustment to the contingent consideration increased net income by $1.0 million, or $0.04 per diluted share.

Fiscal Year-to-Date Results

For the nine months ended March 31, 2023, net sales increased 11.8% to $1.37 billion compared to $1.22 billion a year ago. Net income for the nine-month period totaled $102.1 million, or $3.71 per diluted share, versus the prior-year amount of $60.5 million, or $2.20 per diluted share. In the current-year period, spend for Project Ascent decreased net income by $18.7 million, or $0.68 per diluted share. In the prior-year period, spend for Project Ascent decreased net income by $21.6 million, or $0.79 per diluted share; restructuring and impairment charges reduced net income by $18.8 million, or $0.68 per diluted share; and the change in contingent consideration increased net income by $2.7 million, or $0.10 per diluted share.

Conference Call on the Web

The company’s third quarter conference call is scheduled for this morning, May 4, at 10:00 a.m. ET. Access to a live webcast of the call is available through a link on the company’s Internet home page at www.lancastercolony.com. A replay of the webcast will also be made available on the company’s website.

About the Company

Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels.

Forward-Looking Statements

We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). This news release contains various “forward-looking statements” within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words “anticipate,” “estimate,” “project,” “believe,” “intend,” “plan,” “expect,” “hope” or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments; and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in the forward-looking statements. Some of the key factors that could cause actual results to differ materially from those expressed in the forward-looking statements include:

inflationary pressures resulting in higher input costs;
the reaction of customers or consumers to pricing actions we take to offset inflationary costs;
efficiencies in plant operations and our overall supply chain network;
complexities related to the implementation of our new enterprise resource planning system;
adequate supply of labor for our manufacturing facilities;
adverse changes in freight, energy or other costs of producing, distributing or transporting our products;
the impact of customer store brands on our branded retail volumes;
fluctuations in the cost and availability of ingredients and packaging;
dependence on contract manufacturers, distributors and freight transporters, including their operational capacity and financial strength in continuing to support our business;
price and product competition;
stability of labor relations;
dependence on key personnel and changes in key personnel;
cyber-security incidents, information technology disruptions, and data breaches;
capacity constraints that may affect our ability to meet demand or may increase our costs;
geopolitical events, such as Russia’s invasion of Ukraine, that could create unforeseen business disruptions and impact the cost or availability of raw materials and energy;
the potential for loss of larger programs, including licensing agreements, or key customer relationships;
significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of epidemics, pandemics or similar widespread public health concerns and disease outbreaks;
changes in demand for our products, which may result from loss of brand reputation or customer goodwill;
the possible occurrence of product recalls or other defective or mislabeled product costs;
the success and cost of new product development efforts;
the lack of market acceptance of new products;
the extent to which business acquisitions are completed and acceptably integrated;
the ability to successfully grow acquired businesses;
the effect of consolidation of customers within key market channels;
maintenance of competitive position with respect to other manufacturers;
the outcome of any litigation or arbitration;
changes in estimates in critical accounting judgments;
the impact of any regulatory matters affecting our food business, including any required labeling changes and their impact on consumer demand;
the impact of fluctuations in our pension plan asset values on funding levels, contributions required and benefit costs; and
risks related to other factors described under “Risk Factors” in other reports and statements filed by us with the Securities and Exchange Commission, including without limitation our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q (available at www.sec.gov).

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on statements that are based on current expectations.

LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)

	Three Months Ended March 31,					Nine Months Ended March 31,
		2023		2022			2023		2022
Net sales	$	464,935	$	403,494		$	1,367,866	$	1,223,977
Cost of sales		370,698		335,162			1,072,472		966,676
Gross profit		94,237		68,332			295,394		257,301
Selling, general & administrative expenses		64,829		54,526			165,361		157,920
Change in contingent consideration		—		(1,300	)		—		(3,470	)
Restructuring and impairment charges		—		22,723			—		24,651
Operating income (loss)		29,408		(7,617	)		130,033		78,200
Other, net		607		119			815		250
Income (loss) before income taxes		30,015		(7,498	)		130,848		78,450
Taxes based on income (loss)		5,460		(3,015	)		28,728		17,908
Net income (loss)	$	24,555	$	(4,483	)	$	102,120	$	60,542

Net income (loss) per common share: (a)
Basic and diluted	$	0.89	$	(0.17	)	$	3.71	$	2.20

Cash dividends per common share	$	0.85	$	0.80		$	2.50	$	2.35

Weighted average common shares outstanding:
Basic		27,465		27,442			27,462		27,448
Diluted		27,487		27,442			27,479		27,478


(a) Based on the weighted average number of shares outstanding during each period.


LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION (Unaudited)
(In thousands)

	Three Months Ended March 31,						Nine Months Ended March 31,
		2023			2022			2023			2022
NET SALES
Retail	$	247,208		$	213,128		$	729,187		$	682,102
Foodservice		217,727			190,366			638,679			541,875
Total Net Sales	$	464,935		$	403,494		$	1,367,866		$	1,223,977

OPERATING INCOME (LOSS)
Retail	$	36,943		$	22,213		$	129,195		$	119,997
Foodservice		22,405			18,556			81,030			52,690
Nonallocated Restructuring and Impairment Charges		—			(22,723	)		—			(23,749	)
Corporate Expenses		(29,940	)		(25,663	)		(80,192	)		(70,738	)
Total Operating Income (Loss)	$	29,408		$	(7,617	)	$	130,033		$	78,200


LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)

	March 31, 2023		June 30, 2022
ASSETS
Current assets:
Cash and equivalents	$	82,861	$	60,283
Receivables		130,506		135,496
Inventories		154,753		144,702
Other current assets		23,440		11,300
Total current assets		391,560		351,781
Net property, plant and equipment		485,038		451,368
Other assets		281,159		287,225
Total assets	$	1,157,757	$	1,090,374

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	138,450	$	114,972
Accrued liabilities		58,001		50,613
Total current liabilities		196,451		165,585
Noncurrent liabilities and deferred income taxes		88,122		80,102
Shareholders’ equity		873,184		844,687
Total liabilities and shareholders’ equity	$	1,157,757	$	1,090,374

View source version on businesswire.com: https://www.businesswire.com/news/home/20230503005796/en/

Dale N. Ganobsik

Vice President, Corporate Finance and Investor Relations

Lancaster Colony Corporation

Phone: 614/224-7141

Email: [email protected]

KEYWORDS: Ohio United States North America

INDUSTRY KEYWORDS: Packaging Retail Manufacturing Supermarket Specialty Other Manufacturing Food/Beverage

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