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Coterra Energy Recommends Stockholders Reject “Mini-Tender” Offer by TRC Capital Investment Corporation

Coterra Energy Recommends Stockholders Reject “Mini-Tender” Offer by TRC Capital Investment Corporation

HOUSTON–(BUSINESS WIRE)–Coterra Energy Inc. (NYSE: CTRA) (“Coterra”) today announced that it has received notice of an unsolicited “mini-tender” offer by TRC Capital Investment Corporation (“TRC Capital”) to purchase up to 4,000,000 shares of Coterra’s common stock, or approximately 0.5% of Coterra’s outstanding shares, at an offer price of $25.50 per share. TRC Capital’s offer price of $25.50 per share is approximately 4.5% lower than the $26.71 closing price of Coterra’s common stock on the NYSE on July 21, 2023.

Coterra does not endorse TRC Capital’s unsolicited mini-tender offer and recommends that stockholders do not tender their shares in response to TRC Capital’s offer because the offer is at a price that is significantly below the current market value of Coterra’s common stock. Coterra urges stockholders who have not responded to TRC Capital’s mini-tender offer to take no action. Any stockholders who tender (or have already tendered) their shares may withdraw them at any time prior to the expiration of the offer, currently scheduled for 12:01 a.m., New York City time, on August 22, 2023, by providing written notice in accordance with the TRC Capital mini-tender offer documents. Stockholders are encouraged to carefully review the “Withdrawal Rights” section of the TRC Capital mini-tender offer documents.

Coterra is not affiliated or associated in any way with TRC Capital, its mini-tender offer or its mini-tender offer documents. TRC Capital has made similar unsolicited mini-tender offers for stock of other public companies. Mini-tender offers, like TRC Capital’s, seek less than five percent of a company’s outstanding common stock, thereby avoiding many disclosure and procedural requirements of the U.S. Securities and Exchange Commission (“SEC”) that apply to offers for more than five percent of a company’s outstanding common stock. As a result, mini-tender offers do not provide investors with the same level of protections as provided by larger tender offers under U.S. securities laws. Also, as noted in the TRC Capital mini-tender offer documents, TRC Capital is not generally subject to the information filing requirements of the Securities Exchange Act of 1934, as amended, and is not generally required to file reports, proxy statements and other information with the SEC relating to its business, financial condition and otherwise.

The SEC has issued cautionary guidance to investors regarding mini-tender offers at https://www.sec.gov/reportspubs/investor-publications/investorpubsminitendhtm.html. Consistent with the cautionary guidance from the SEC, Coterra urges investors to obtain a current market quotation for their shares, consult with their broker or financial advisor, and exercise caution with respect to TRC Capital’s offer.

Coterra encourages brokers and dealers, as well as other market participants, to review the SEC’s letter regarding broker-dealer mini-tender offer dissemination and disclosure at https://sec.gov/divisions/marketreg/minitenders/sia072401.htm and National Association of Securities Dealers, Inc. Notice to Members 99-53, issued July 1999, regarding guidance to members forwarding mini-tender offers to their customers, which can be found at https://finra.org/sites/default/files/NoticeDocument/p004221.pdf.

Coterra requests that a copy of this press release be included in all distributions of materials relating to TRC Capital’s mini-tender offer for Coterra’s common stock.

About Coterra Energy

Coterra is a premier exploration and production company based in Houston, Texas with focused operations in the Permian Basin, Marcellus Shale, and Anadarko Basin. We strive to be a leading energy producer, delivering sustainable returns through the efficient and responsible development of our diversified asset base. Learn more about us at www.coterra.com.

Investor Contacts

Daniel Guffey – Vice President of Finance, Planning & Analysis and Investor Relations

281.589.4875

Hannah Stuckey – Investor Relations Manager

281.589.4983

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: Energy Other Energy Oil/Gas

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Recursion Launches Valence Labs at ICML with a Commitment to Open Science Including $1 Million in Academic Scholarships

Valence Labs is Recursion’s new machine learning research center that aims to promote open science and academic research. $1 million will be committed to advancing the next generation of academic machine learning research through scholarships and fellowships.

SALT LAKE CITY, July 26, 2023 (GLOBE NEWSWIRE) — Recursion (NASDAQ: RXRX), a leading clinical stage TechBio company decoding biology to industrialize drug discovery, today launched Valence Labs at the International Conference on Machine Learning (ICML). Valence Labs will serve as a machine learning research laboratory focused on developing the next generation of cutting-edge methods and models for drug discovery and consists of the emerging ML research teams at Recursion and the team at Valence Discovery, which Recursion recently acquired.

“We believe there is a generational opportunity—enabled by the unprecedented combination of Recursion’s scale, computing power, and industrialized data generation capabilities unconstrained by one-off, rate-limiting, manual experimentation—to rewrite the rules of therapeutic discovery,” said Dan Cohen, President of Valence Labs. “We’re building future-forward tools, models and benchmarks that we believe will set the standard for machine learning research across the rapidly growing techbio industry, while fostering community through open science and academic research.”

At its launch event, Valence Labs committed to investing up to $1 million in academic-oriented initiatives to develop talent in machine learning research. This will include Valence Scholarships to support the pursuit of more academic research at the intersection of artificial intelligence and biology, and Valence Fellows for outstanding students with a track record of community engagement and/or publication in the field of machine learning for drug discovery, who will receive larger financial support and access to Valence Labs resources to enable their research.

“Recursion believes in the power of open-science initiatives and wants to invest in rising talent and academic collaborations. We are also committed to upholding our legacy of contributing significant datasets and tools for research purposes,” said Chris Gibson, Ph.D., Co-founder and CEO of Recursion. “We believe Valence Labs can serve as a beacon and gathering place for the research community, becoming a magnet for incredible talent who will contribute to groundbreaking discoveries and harness computation to radically improve lives.”

About Valence Labs

Valence Labs, formerly Valence Discovery, is a company harnessing computation to radically improve lives. With roots at Mila and mentorship from Yoshua Bengio, the company is dedicated to advancing deep learning in drug discovery, delivering impactful research and transformative technology, and embracing open-source and open-science knowledge sharing with the machine learning community.

Having bested industry giants in machine learning competitions and after gaining a deeper understanding of drug discovery intricacies, they teamed up with Recursion to combine Valence’s models with Recursion’s fit-for-purpose datasets to make better predictions and choose better experiments with a lower failure rate, at greater speed, and at a lesser cost.  Combining the intellectual freedom of academia with the resources and stability of industry, Valence Labs takes a long-term view on technology development: acting boldly, leaning into risks, embracing failure, and ultimately trading incremental improvements for the breakthrough advances they hope will redefine the field. Learn more at www.ValenceLabs.com, or connect on Twitter and LinkedIn.

About Recursion


Recursion
 (NASDAQ: RXRX) is a clinical stage TechBio company leading the space by decoding biology to industrialize drug discovery. Enabling its mission is the Recursion OS, a platform built across diverse technologies that continuously expands one of the world’s largest proprietary biological and chemical datasets. Recursion leverages sophisticated machine-learning algorithms to distill from its dataset a collection of trillions of searchable relationships across biology and chemistry unconstrained by human bias. By commanding massive experimental scale — up to millions of wet lab experiments weekly — and massive computational scale — owning and operating one of the most powerful supercomputers in the world, Recursion is uniting technology, biology, and chemistry to advance the future of medicine.

Recursion is headquartered in Salt Lake City, where it is a founding member of BioHive, the Utah life sciences industry collective. Recursion also has offices in Toronto, Montréal and the San Francisco Bay Area. Learn more at www.Recursion.com, or connect on Twitter and LinkedIn.

Forward-Looking Statements

This document contains information that includes or is based upon “forward-looking statements” within the meaning of the Securities Litigation Reform Act of 1995, including, without limitation, those regarding early and late stage discovery, preclinical, and clinical programs; licenses and collaborations; prospective products and their potential future indications and market opportunities; the Recursion OS and other technologies; business and financial plans and performance; and all other statements that are not historical facts. Forward-looking statements may or may not include identifying words such as “plan,” “will,” “expect,” “anticipate,” “intend,” “believe,” “potential,” “continue,” and similar terms. These statements are subject to known or unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements, including but not limited to: challenges inherent in pharmaceutical research and development, including the timing and results of preclinical and clinical programs, where the risk of failure is high and failure can occur at any stage prior to or after regulatory approval due to lack of sufficient efficacy, safety considerations, or other factors; our ability to leverage and enhance our drug discovery platform; our ability to obtain financing for development activities and other corporate purposes; the success of our collaboration activities; our ability to obtain regulatory approval of, and ultimately commercialize, drug candidates; our ability to obtain, maintain, and enforce intellectual property protections; cyberattacks or other disruptions to our technology systems; our ability to attract, motivate, and retain key employees and manage our growth; and other risks and uncertainties such as those described under the heading “Risk Factors” in our filings with the U.S. Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-Q and our Annual Report on Form 10-K. All forward-looking statements are based on management’s current estimates, projections, and assumptions, and Recursion undertakes no obligation to correct or update any such statements, whether as a result of new information, future developments, or otherwise, except to the extent required by applicable law.



Media Contact
[email protected]

Investor Contact
[email protected]

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Analog Devices Invests More Than $1 Billion in Semiconductor Facility Expansion in Oregon

Analog Devices Invests More Than $1 Billion in Semiconductor Facility Expansion in Oregon

WILMINGTON, Mass. & BEAVERTON, Ore.–(BUSINESS WIRE)–
Analog Devices, Inc. (Nasdaq: ADI), a global semiconductor leader, today celebrated its more than $1 billion investment to expand its semiconductor wafer fab in Beaverton, Oregon. The Beaverton site, built in 1978, is ADI’s largest wafer fabrication facility by volume and serves customers in critical industries, such as industrial, automotive, communications, consumer, and healthcare.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230726603504/en/

Ribbon-cutting ceremony to celebrate ADI's more than $1 billion investment to expand its semiconductor wafer fab in Beaverton, Oregon. Pictured left to right: Vincent Roche, ADI’s CEO and Chair and Vivek Jain, ADI's Executive Vice President, Global Operations & Technology. (Photo: Business Wire)

Ribbon-cutting ceremony to celebrate ADI’s more than $1 billion investment to expand its semiconductor wafer fab in Beaverton, Oregon. Pictured left to right: Vincent Roche, ADI’s CEO and Chair and Vivek Jain, ADI’s Executive Vice President, Global Operations & Technology. (Photo: Business Wire)

The facility investment expands cleanroom space to about 118,000 sq-ft and nearly doubles internal manufacturing of products running on the 180-nanometer technology node and above. It is also expected to create hundreds of new, long-term employment opportunities, a significant increase to ADI’s current roughly 950 employees in Oregon.

More than 10% of the total investment is for new, state-of-the-art fab tools intended to increase overall efficiency and utilize chemistries that are more environmentally friendly. Despite nearly doubling production output, the facility is targeting to reduce absolute greenhouse gas emissions by approximately 75% and water usage per production unit by approximately 50%.

“By expanding ADI’s Beaverton facility, we are increasing our production capacity in critical industries, boosting domestic manufacturing in line with the vision of the CHIPS Act, and enhancing the global resiliency of ADI’s hybrid manufacturing model,” said Vincent Roche, ADI’s CEO and Chair. “While our investment in Beaverton will facilitate these goals, they will be achieved through the incredible dedication and talent of ADI’s existing workforce and further tapping into Oregon’s strong talent pool.”

Commenting on the announcement, U.S. Senator Ron Wyden of Oregon said, “Today’s good news from Analog Devices marks a significant step to ensure Oregon is taking full advantage of the federal CHIPS Act I worked to pass into law. This announcement strengthens a signature industry in Oregon by solidifying semiconductors’ place in the Silicon Forest and beyond, creating statewide impact with new good-paying jobs in Beaverton and rippling out to benefit the entire state economy.”

In addition, the Beaverton facility will host the Semiconductor Advanced Manufacturing University (SAMU), a workforce development training center that will offer eight-week courses to train groups of around 25 students each on semiconductor equipment maintenance. A key driver of ADI’s efforts with the training center is providing training opportunities to many diverse groups within the local community, including U.S. military veterans, people re-entering the workforce, and existing ADI factory operators, to learn semiconductor manufacturing fundamentals and other curriculum to advance their professional development.

ADI’s hybrid manufacturing model is a broad network of internal factories and external partners. This model enables effective management of ADI operations through economic cycles, enhances the resiliency of its global supply chain, and better serves its customer needs. To improve ADI-owned operations, the company has increased capital investment to a high single-digit percent of revenue in fiscal year 2022 and to date in fiscal year 2023 from its historical precedent of around four percent. These manufacturing investments span the globe, including in the states of Washington and Massachusetts, as well as in Ireland, Thailand, Malaysia, and the Philippines.

About Analog Devices, Inc.

Analog Devices, Inc. (NASDAQ: ADI) is a global semiconductor leader that bridges the physical and digital worlds to enable breakthroughs at the Intelligent Edge. ADI combines analog, digital, and software technologies into solutions that help drive advancements in digitized factories, mobility, and digital healthcare, combat climate change, and reliably connect humans and the world. With revenue of more than $12 billion in FY22 and approximately 25,000 people globally working alongside 125,000 global customers, ADI ensures today’s innovators stay Ahead of What’s Possible. Learn more at www.analog.com and on LinkedIn and Twitter.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “anticipates,” “expects,” “intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” “will,” “would,” “should,” “could,” “strives,” “projects,” “designed,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In addition, statements that refer to job creation; production capacity increases, timing of project completion, business strategy and plans; the potential impact of the expansion; and other characterizations of future events or circumstances are forward-looking statements. For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to our filings with the Securities and Exchange Commission, including the risk factors contained in our most recent Annual Report on Form 10-K. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement.

All trademarks and registered trademarks are the property of their respective owners.

(ADI-WEB)

Ferda Millan

Global PR and External Communications

Analog Devices

[email protected]

Michael Lucarelli

Vice President, Investor Relations and FP&A

Analog Devices

[email protected]

KEYWORDS: Oregon Massachusetts United States North America

INDUSTRY KEYWORDS: Semiconductor Hardware Other Technology Technology Software

MEDIA:

Logo
Logo
Photo
Photo
Ribbon-cutting ceremony to celebrate ADI’s more than $1 billion investment to expand its semiconductor wafer fab in Beaverton, Oregon. Pictured left to right: Vincent Roche, ADI’s CEO and Chair and Vivek Jain, ADI’s Executive Vice President, Global Operations & Technology. (Photo: Business Wire)
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RTX CORP. INVESTOR ALERT: Kaplan Fox Investigates Potential Securities Fraud at RTX Corporation

NEW YORK, July 26, 2023 (GLOBE NEWSWIRE) — Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating claims on behalf of investors of RTX Corp. f/k/a Raytheon Technologies Corp. (“RTX” or the “Company”) (NYSE: RTX). Click Here to Join Investigation.

If you would like to discuss our investigation, please contact us by emailing [email protected] or by calling (646) 315-9003, or click here.

On July 25, 2023, RTX issued a press release reporting its Q2 2023 results. The press release included an update on its Pratt & Whitney fleet. The Company stated, “Pratt & Whitney has determined that a rare condition in powdered metal used to manufacture certain engine parts will require accelerated fleet inspection.” Additionally, the Company stated that “[a]s a result, the business anticipates that a significant portion of the PW1100G-JM engine fleet, which powers the A320neo, will require accelerated removals and inspections within the next nine to twelve months, including approximately 200 accelerated removals by mid-September of this year.”

Also, on July 25, during the conference call that followed, the Company disclosed that “[t]his was an issue that we first uncovered back in 2020,” and that as the inspections ramp up the issue is expected to reduce free cash flow by $500 million compared to the Company’s prior outlook.

Following this news, the price of RTX’s stock fell by $9.19 per share, or 10.22%, to close at $87.10 on July 25, 2023 on heavy trading volume.

WHY CONTACT KAPLAN FOX – Kaplan Fox is a leading national law firm focusing on complex litigation with offices in New York, Oakland, Los Angeles, Chicago and New Jersey. With over 50 years of experience in securities litigation, Kaplan Fox offers the professional experience and track record that clients demand. Through prosecuting cases on the federal and state levels, Kaplan Fox has successfully shaped the law through winning many important decisions on behalf of our clients. For more information about Kaplan Fox & Kilsheimer LLP, you may visit our website at www.kaplanfox.com.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

If you have any questions about this investigation, please contact:

Pamela Mayer
KAPLAN FOX & KILSHEIMER LLP
800 Third Avenue, 38th Floor
New York, New York 10022
(646) 315-9003
E-mail: [email protected]

Laurence D. King
KAPLAN FOX & KILSHEIMER LLP
1999 Harrison Street, Suite 1560
Oakland, California 94612
(415) 772-4704
Fax:  (415) 772-4707
E-mail: [email protected]



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The Beachbody Company, Inc. Announces Amendments to its Term Loan to Align with Building a Profitable and Sustainable Business

The Beachbody Company, Inc. Announces Amendments to its Term Loan to Align with Building a Profitable and Sustainable Business

EL SEGUNDO, Calif.–(BUSINESS WIRE)–
The Beachbody Company, Inc. (NYSE: BODY) (“BODi” or the “Company”), a leading subscription health and wellness company, today announced that it has amended certain financial covenants (and other terms) of its $50 million term loan with Blue Torch Capital.

“We felt it was appropriate to amend the terms of our revenue covenant with Blue Torch Capital to better align the loan with our profit and free cash flow objectives. The amendments reduce the revenue minimum to quarterly revenue of $100 million for each quarter through March 31, 2024, then to $120 million for each quarter thereafter. These changes reflect the Company’s focus on becoming cashflow positive”, said Carl Daikeler, BODi’s Co-Founder and CEO.

“Our new business model is driven by our turnaround plan, which is about maximizing profitability and cash-generation from our multiple revenue streams versus growth at all costs. We are committed to creating a revenue mix with higher profitability channels that produce increases in cash as a priority. The Blue Torch team has been great to work with while amending the terms of our agreement to reflect their support of these objectives,” said Mark Goldston, BODi’s Executive Chairman.

“Given our existing cash position and progress over the past 6 quarters, we agreed to prepay $15 million of the term loan’s principal and increase the minimum liquidity amount to $20 million through March 31, 2024, and then to $25 million thereafter,” said Marc Suidan, BODi’s CFO. “We believe the net result is a very positive development. The amendments align with building a profitable and sustainable business and provide us with the flexibility to put our turnaround plan into place to focus on cash generation.”

About BODi and The Beachbody Company, Inc.

Known as Beachbody for 24 years with innovations such as P90X, Insanity, 21 Day Fix and Shakeology, BODi is headquartered in Southern California. BODi is the leader in the category of Health Esteem, which combines digital fitness, nutrition, and mindset content with exceptional supplements and a supportive community of millions of people supporting each other to live a great life while they pursue their health and weight loss goals. The Beachbody Company, Inc. is the parent company of BODi. For more information, please visit TheBeachbodyCompany.com.

Forward-Looking Statements

This press release of The Beachbody Company, Inc. (“we,” “us,” “our,” and similar terms) contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are statements other than statements of historical facts and statements in future tense. These statements include but are not limited to, statements regarding our future performance and our market opportunity, including expected financial results, our business strategy, our plans, and our objectives and future operations.

Forward-looking statements are based upon various estimates and assumptions, as well as information known to us as of the date hereof, and are subject to risks and uncertainties. Accordingly, actual results could differ materially due to a variety of factors, including: our ability to effectively compete in the fitness and nutrition industries; our ability to successfully drive growth in our existing operations; our ability to successfully acquire and integrate new operations; our reliance on a few key products; our ability to manage costs with our existing and future operations; market conditions and global and economic factors beyond our control; intense competition and competitive pressures from other companies worldwide in the industries in which we operate; litigation; and the ability to adequately protect our intellectual property rights. You can identify these statements by the use of terminology such as “believe”, “plan”, “expect”, “will”, “should,” “could”, “estimate”, “anticipate,” “becoming” or similar forward-looking terms. You should not rely on these forward-looking statements as they involve risks and uncertainties that may cause actual results to vary materially from the forward-looking statements. For more information regarding the risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements, as well as risks relating to our business in general, we refer you to the “Risk Factors” section of our Securities and Exchange Commission (“SEC”) filings, including those risks and uncertainties included in our Annual Report on Form 10-K filed with the SEC on March 16, 2023 and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, which are available on the Investor Relations page of our website at https://investors.thebeachbodycompany.com and on the SEC website at www.sec.gov.

All forward-looking statements contained herein are based on information available to us as of the date hereof and you should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this press release or to conform these statements to actual results or revised expectations, except as required by law. Undue reliance should not be placed on forward-looking statements.

Investor Relations

ICR, Inc.

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: General Health Health Fitness & Nutrition

MEDIA:

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Integra LifeSciences Reports Second Quarter 2023 Financial Results

PRINCETON, N.J., July 26, 2023 (GLOBE NEWSWIRE) — Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, today reported financial results for the second quarter ending June 30, 2023.

Second Quarter 2023 Highlights

  • Second quarter revenues of $381.3 million declined 4.2% on a reported basis and declined 2.7% on an organic basis compared to the prior year.
  • Second quarter GAAP earnings per diluted share of $0.05, compared to $0.54 in the prior year; adjusted earnings per diluted share of $0.71, compared to $0.82 in the prior year
  • Appointed Lea Daniels Knight as executive vice president and CFO

Share repurchase and 2023 guidance

  • Planning a $125 million share repurchase in the third quarter
  • Updating full-year 2023 revenue and adjusted earnings per share guidance with a range of $1.548 billion to $1.560 billion and $3.10 to $3.18 respectively, reflecting the impact of the Boston recall and the solid performance of the underlying business

“The strong organic growth of our Codman Specialty Surgical segment and several product lines in our Tissue Technologies business demonstrate the resilience of our diversified portfolio of leading brands and technologies and strong market recovery. Excluding the impact of the Boston recall, we delivered solid, mid-single digit organic growth from the underlying business,” said Jan De Witte, Integra LifeSciences’ president and chief executive officer. “We are confident in our plans for the CereLink relaunch and the restart of our Boston manufacturing facility, and we continue to advance our implant-based breast reconstruction (IBBR) PMA strategy.”

Second Quarter 2023 Consolidated Performance

Total reported revenues of $381.3 million declined 4.2% on a reported basis and declined 2.7% on an organic basis compared to the prior year.

The Company reported GAAP gross margin of 54.3%, compared to 62.7% in the second quarter of 2022. Adjusted gross margin was 67.6%, compared to 68.0% in the prior year.

Adjusted EBITDA for the second quarter of 2023 was $88.8 million, or 23.3% of revenue, compared to $102.8 million, or 25.8% of revenue, in the prior year.

The Company reported GAAP net income of $4.2 million, or $0.05 per diluted share, in the second quarter of 2023, compared to a GAAP net income of $44.8 million, or $0.54 per diluted share, in the prior year.

Adjusted net income for the second quarter of 2023 was $57.4 million, or $0.71 per diluted share, compared to $68.3 million, or $0.82 per diluted share, in the prior year.

Second Quarter 2023 Segment Performance

Codman Specialty Surgical (
~71%
of Revenues)

  • Total revenues were $271.0 million, representing reported growth of 5.1% and organic growth of 6.3% compared to the second quarter of 2022, due to high single-digit growth in Advanced Energy driven by CUSA capital and disposables; mid-single-digit growth in CSF management driven by Certas® Plus valves; mid-single-digit growth in Dural Access and Repair driven by Mayfield® and DuraGen®; low single-digit decline in Neuro Monitoring driven by CereLink and low double-digit growth in Instruments.

Tissue Technologies
(~29% of Revenues
)

  • Total revenues were $110.2 million, representing reported decline of 21.2% and organic decline of 19.7% compared to the second quarter of 2022, due to the impact of the lost revenue and return provision for the Boston recall which was partially offset by double digit growth from MicroMatrix®, Cytal®, MediHoney® and nerve franchise.

Key Products and Business Highlights

  • Positive global demand performance across the portfolio
  • Expect to restart manufacturing at the Boston facility late Q4’23 and resume commercial distribution in mid- to late Q2’24   
  • Relaunch of CereLink® expected late Q3’23 in international markets and late Q4’23 in the US
  • Advancing IBBR PMA strategy
    • Submitted clinical PMA amendment for SurgiMend®   
    • Completed enrollment In DuraSorb® Monofilament Mesh U.S. investigational device exemption study
  • Expanded global DuraGen® portfolio with approvals in China and Japan
  • Launched CUSA Lap Tip in Japan, Canada, South Africa and Israel
  • Positive clinical and economic outcomes for Codman® Bactiseal® EVD Catheter from real-world evidence study in Europe
  • Opened Dr. Richard E. Caruso Center of Innovation and Learning in Plainsboro, New Jersey

Balance Sheet, Cash Flow and Capital Allocation

The Company generated cash flow from operations of $28.3 million in the quarter. Total balance sheet debt and net debt at the end of the quarter were $1.44 billion and $1.13 billion, respectively, and the consolidated total leverage ratio was 2.6x.

As of quarter end, the Company had total liquidity of approximately $1.61 billion, including $309.2 million in cash and the remainder available under the revolving credit facility.

Share Repurchase Program

The Company is planning for a $125 million share repurchase during the third quarter under an authorization of the Company’s board of directors.

2023 Outlook

For the full year 2023, the Company is updating its revenue and adjusted EPS expectations to $1.548 to $1.560 billion and $3.10 to $3.18, respectively. The revenue range represents reported growth of -0.6% to 0.2%, with organic growth of 0.3% to 1.1% and reflects the full year impact of the Boston recall and the solid performance of the underlying business.

For the third quarter 2023, the Company expects reported revenues in the range of $386 million to $390 million, representing reported growth of 0.2% to 1.3% and organic growth of 0.3% to 1.3%. Adjusted earnings per diluted share are expected to be in the range of $0.76 to $0.80, including the impact of the Boston recall.

The Company’s guidance for the third quarter and full-year organic sales growth excludes acquisitions and divestitures, the effects of foreign currency and the year-over-year change in revenue from discontinued products. Organic growth excludes sales from the divestiture of the Company’s traditional wound care (TWC) business as of September 1, 2022, and sales from the acquisition of Surgical Innovation Associates, Inc. (SIA) through December 1, 2023. Adjusted earnings per share guidance reflects the impact of the divestiture of the TWC business, the SIA acquisition and the impact of foreign currency.

Conference Call and Presentation Available Online

Integra has scheduled a conference call for 8:30 a.m. ET on Thursday, July 27, 2023, to discuss second quarter 2023 financial results and forward-looking financial guidance. The conference call will be hosted by Integra’s senior management team and will be open to all listeners. Additional forward-looking information may be discussed in a question-and-answer session following the call. Integra’s management team will reference a presentation during the conference call, which can be found on the Investor section of the website at investor.integralife.com.

A live webcast will be available on the Investors section of the Company’s website at investor.integralife.com. For those planning to participate on the call, register here to receive dial-in details and an individual pin. While not required, joining 10 minutes before the event starts is recommended. A webcast replay of the conference call will be available on the Investors section of the Company’s website following the call. 

About Integra

At Integra LifeSciences, we are driven by our purpose of restoring patients’ lives. We innovate treatment pathways to advance patient outcomes and set new standards of surgical, neurologic and regenerative care. We offer a comprehensive portfolio of high quality, leadership brands that include AmnioExcel®, Aurora®, Bactiseal®, BioD™, CerebroFlo®, CereLink® Certas® Plus, Codman®, CUSA®, Cytal®, DuraGen®, DuraSeal®, DuraSorb®, Gentrix®, ICP Express®, Integra®, Licox®, MAYFIELD®, MediHoney®, MicroFrance®, MicroMatrix®, NeuraGen®, NeuraWrap™, PriMatrix®, SurgiMend®, TCC-EZ® and VersaTru®. For the latest news and information about Integra and its products, please visit www.integralife.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties and reflect the Company’s judgment as of the date of this release. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. Some of these forward-looking statements may contain words like “will,” “believe,” “may,” “could,” “would,” “might,” “possible,” “should,” “expect,” “intend,” “forecast,” “guidance,” “plan,” “anticipate,” “target,” or “continue,” the negative of these words, other terms of similar meaning or they may use future dates. Forward-looking statements contained in this news release include, but are not limited to, statements concerning future financial performance, including projections for revenues, expected revenue growth (both reported and organic), GAAP and adjusted net income, GAAP and adjusted earnings per diluted share, non-GAAP adjustments such as divestiture, acquisition and integration-related charges, intangible asset amortization, structural optimization charges, EU Medical Device Regulation-related charges, charges related to the voluntary global recall of all products manufactured at the Company’s facility in Boston, Massachusetts, and income tax expense (benefit) related to non-GAAP adjustments and other items, expectations and plans with respect to strategic initiatives and product development, expectations concerning the resumption of manufacturing at the Company’s Boston, Massachusetts facility, and statements related to the repurchase of the Company’s common stock, including the timing of any purchases under the Company’s authorized stock repurchase program. It is important to note that the Company’s goals and expectations are not predictions of actual performance. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from predicted or expected results. Such risks and uncertainties include, but are not limited, to the following: the ongoing and possible future effects of global challenges, including macroeconomic uncertainties, inflation, supply chain disruptions, trade regulation and tariffs, other economic disruptions and U.S. and global recession concerns, on the Company’s customers and on the Company’s business, financial condition, results of operations and cash flows; the Company’s ability to execute its operating plan effectively; the Company’s ability to successfully integrate acquired businesses; the Company’s ability to achieve sales growth in a timely fashion; the Company’s ability to manufacture and ship sufficient quantities of its products to meet its customers’ demands; the ability of third-party suppliers to supply us with raw materials and finished products; the scope, duration and effect of additional U.S. and international governmental, regulatory, fiscal, monetary and public health responses to the COVID-19 pandemic and any future public health crises; global macroeconomic and political conditions, including the war in Ukraine; the Company’s ability to manage its direct sales channels effectively; the sales performance of third-party distributors on whom the Company relies to generate revenue for certain products and geographic regions; the Company’s ability to access and maintain relationships with customers of acquired entities and businesses; physicians’ willingness to adopt and third-party payors’ willingness to provide or maintain reimbursement for the Company’s recently launched, planned and existing products; initiatives launched by the Company’s competitors; downward pricing pressures from customers; the Company’s ability to secure regulatory approval for products in development; the Company’s ability to remediate quality systems violations; fluctuations in hospitals’ spending for capital equipment; the Company’s ability to comply with and obtain approvals for products of human origin and comply with regulations regarding products containing materials derived from animal sources; difficulties in controlling expenses, including costs to procure and manufacture our products; the impact of changes in management or staff levels; the impact of goodwill and intangible asset impairment charges if future operating results of acquired businesses are significantly less than the results anticipated at the time of the acquisitions, the Company’s ability to leverage its existing selling organizations and administrative infrastructure; the Company’s ability to increase product sales and gross margins, and control non-product costs; the Company’s ability to achieve anticipated growth rates, margins and scale and execute its strategy generally; the amount and timing of divestiture, acquisition and integration-related costs; the geographic distribution of where the Company generates its taxable income; new U.S. and foreign government laws and regulations, and changes in existing laws, regulations and enforcement guidance, which affect areas of our operations including, but not limited to, those affecting the health care industry, including the EU Medical Devices Regulation; fluctuations in foreign currency exchange rates; the amount of our bank borrowings outstanding and other factors influencing liquidity; the Company’s ability to commence any share repurchase activity, including within the anticipated timeframe; potential negative impacts resulting from environmental, social and governance matters; and the economic, competitive, governmental, technological, and other risk factors and uncertainties identified under the heading “Risk Factors” included in Item 1A of Integra’s Annual Report on Form 10-K for the year ended December 31, 2022 and information contained in subsequent filings with the Securities and Exchange Commission.

These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise.

Discussion of Adjusted Financial Measures

In addition to our GAAP results, we provide certain non-GAAP measures, including organic revenues, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted net income, adjusted earnings per diluted share, free cash flow, adjusted free cash flow conversion, and net debt.   Organic revenues consist of total revenues excluding the effects of currency exchange rates, revenues from current-period acquisitions and product divestitures and discontinuances. Adjusted EBITDA consists of GAAP net income excluding: (i) depreciation and amortization; (ii) other income (expense); (iii) interest income and expense; (iv) income tax expense (benefit); and (v) those operating expenses also excluded from adjusted net income.   The measure of adjusted net income consists of GAAP net income, excluding: (i) structural optimization charges; (ii) divestiture, acquisition and integration-related charges; (iii) EU Medical Device Regulation-related charges; (iv) charges related to the voluntary global recall of products manufactured at the Company’s Boston, Massachusetts facility; (v) intangible asset amortization expense; and (vi) income tax impact from adjustments. The adjusted earnings per diluted share measure is calculated by dividing adjusted net income attributable to diluted shares by diluted weighted average shares outstanding.   The measure of free cash flow consists of GAAP net cash provided by operating activities less purchases of property and equipment. The adjusted free cash flow conversion measure is calculated by dividing free cash flow by adjusted net income. The measure of net debt consists of GAAP total debt (excluding deferred financing costs) less cash and cash equivalents.

Reconciliations of GAAP revenues to organic revenues, GAAP net income to adjusted EBITDA, and adjusted net income, GAAP total debt to net debt and GAAP earnings per diluted share to adjusted earnings per diluted share all for the quarter ended June 30, 2023 and 2022, and the free cash flow and adjusted free cash flow conversion for the quarter ended June 30, 2023 and 2022, appear in the financial tables in this release.

The Company believes that the presentation of organic revenues and the other non-GAAP measures provide important supplemental information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations.   For further information regarding why Integra believes that these non-GAAP financial measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the Company’s Current Report on Form 8-K regarding this earnings press release filed today with the Securities and Exchange Commission. This Current Report on Form 8-K is available on the SEC’s website at www.sec.gov or on our website at www.integralife.com.

Investor Relations Contact
:

Chris Ward
(609) 772-7736
[email protected]

Media Contact:

Laurene Isip
(609) 208-8121
[email protected]

 
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
  Three Months Ended June 30,
    2023       2022  
Total revenues, net   381,267     $ 397,815  
               
Costs and expenses:      
Cost of goods sold   174,241       148,404  
Research and development   26,588       25,589  
Selling, general and administrative   164,908       160,651  
Intangible asset amortization   3,026       3,304  
Total costs and expenses   368,763       337,948  
       
Operating income   12,504       59,867  
       
Interest income   3,939       1,965  
Interest expense   (12,464 )     (12,236 )
Gain from sale of business   —       —  
Other income, net   (155 )     1,979  
Income before income taxes   3,824       51,575  
Income tax expense   (360 )     6,787  
Net income $ 4,184     $ 44,788  
       
Net income per share:      
Diluted net income per share $ 0.05     $ 0.54  
       
Weighted average common shares outstanding for diluted net income per share   81,151       83,622  
               

The following table presents revenues disaggregated by the major sources for the three months ended June 30, 2023 and 2022 (amounts in thousands):

  Three Months Ended June 30,
    2023     2022   Change
Neurosurgery   205,803     200,295   2.7 %
Instruments   65,227     57,568   13.3 %
Total Codman Specialty Surgical   271,030     257,863   5.1 %
       
Wound Reconstruction and Care   91,118     104,894   (13.1 )%
Private Label   19,119     35,058   (45.5 )%
Total Tissue Technologies   110,237     139,952   (21.2 )%
Total reported revenues   381,267     397,815   (4.2 )%
       
Impact of changes in currency exchange rates   1,704     —    
Less contribution of revenues from acquisitions   (2,390 )   —    
Less contribution of revenues from divested products   (23 )   (6,371 )  
Less contribution of revenues from discontinued products   (1,622 )   (2,047 )  
Total organic revenues(1) $ 378,936   $ 389,397   (2.7 )%
       
Boston Revenue impact $ 7,374   $ (23,281 )  
Total organic revenues(1) excl. Boston $ 386,310   $ 366,116   5.5 %
                 

(1) Organic revenues have been adjusted to exclude foreign currency (current period), acquisitions and to account for divested and discontinued products.

Items included in GAAP net income and location where each item is recorded are as follows:

(In thousands)

Three Months Ended June 30, 2023

Item Total Amount COGS(a) SG&A(b) R&D(c) Amort (d) OI&E(e) Tax(f)
Acquisition, divestiture and integration-related charges 3,448   1,085 2,707 (218 ) — (127 ) —  
Structural Optimization charges 4,794   3,152 1,675 (33 ) — —   —  
EU Medical Device Regulation charges 9,278   859 3,956 4,463   — —   —  
Boston Recall 28,051   28,051 — —   — —   —  
Intangible asset amortization expense 20,636   17,610 — —   3,026 —   —  
Estimated income tax impact from above adjustments and other items (12,974 ) — — —   — —   (12,974 )
Depreciation expense 9,977   — — —   — —   —  
               

a) COGS – Cost of goods sold
b) SG&A – Selling, general and administrative
c) R&D – Research & development
d) Amort. – Intangible asset amortization
e) OI&E – Other income & expense
f) Tax – Income tax expense (benefit)

Items included in GAAP net income and location where each item is recorded are as follows:

(In thousands)

Three Months Ended June 30, 2022

Item Total Amount COGS(a) SG&A(b) R&D(c) Amort.(d) OI&E(e) Tax(f)
Acquisition, divestiture and integration-related charges (6,284 ) (108 ) (3,925 ) (1,059 ) — (1,192 ) —  
Structural Optimization charges 8,173   4,052   4,048   72   — —   —  
EU Medical Device Regulation charges 10,249   1,186   2,538   6,525   — —   —  
Intangible asset amortization expense 19,378   16,074   —   —   3,304 —   —  
Estimated income tax impact from above adjustments and other items (7,968 ) —   —   —   — —   (7,968 )
Depreciation expense 10,216   —   —   —   — —   —  

a) COGS – Cost of goods sold
b) SG&A – Selling, general and administrative
c) R&D – Research & development
d) Amort. – Intangible asset amortization
e) OI&E – Other income & expense
f) Tax – Income tax expense (benefit)

 
RECONCILIATION OF NON-GAAP ADJUSTMENTS – GAAP NET INCOME TO ADJUSTED EBITDA
(UNAUDITED)
(In thousands)
 
  Three Months Ended June 30,
    2023       2022  
       
GAAP net income   4,184       44,788  
Non-GAAP adjustments:      
Depreciation and intangible asset amortization expense   30,612       29,594  
Other (income) expense, net   282       (787 )
Interest expense, net   8,525       10,271  
Income tax expense (benefit)   (360 )     6,787  
Structural optimization charges   4,794       8,173  
EU Medical Device Regulation charges   9,278       10,249  
Acquisition, divestiture and integration-related charges   3,448       (6,284 )
Boston Recall   28,051       —  
Total of non-GAAP adjustments   84,630       58,003  
Adjusted EBITDA $ 88,814     $ 102,791  
       

RECONCILIATION OF NON-GAAP ADJUSTMENTS – GAAP NET INCOME TO MEASURES OF ADJUSTED NET
INCOME AND ADJUSTED EARNINGS PER SHARE
(UNAUDITED)
(In thousands, except per share amounts)
 
  Three Months Ended June 30,
    2023       2022  
       
GAAP net income   4,184       44,788  
Non-GAAP adjustments:      
Structural optimization charges   4,794       8,173  
Acquisition, divestiture and integration-related charges   3,448       (6,284 )
EU Medical Device Regulation charges   9,278       10,249  
Boston Recall   28,051       —  
Intangible asset amortization expense   20,636       19,378  
Estimated income tax impact from adjustments and other items   (12,974 )     (7,968 )
Total of non-GAAP adjustments   53,233       23,548  
Adjusted net income $ 57,417     $ 68,336  
       
Adjusted diluted net income per share $ 0.71     $ 0.82  
Weighted average common shares outstanding for diluted net income per share   81,151       83,622  
               

CONDENSED BALANCE SHEET DATA
(UNAUDITED)
(In thousands)
  June 30,
2023		   December 31,
2022
       
Cash and cash equivalents $ 309,192   $ 456,661
Trade accounts receivable, net   258,663     263,465
Inventories, net   354,293     324,583
       
Current and long-term borrowing under senior credit facility   769,460     771,274
Borrowings under securitization facility   90,800     104,700
Long-term convertible securities   568,798     567,341
       
       
Stockholders’ equity $ 1,683,160   $ 1,804,403
       

CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In thousands)
  Six Months Ended June 30,
    2023       2022  
       
Net cash provided by operating activities $ 54,435     $ 110,822  
Net cash used in investing activities   (29,252 )     (18,565 )
Net cash used by financing activities   (173,376 )     (146,612 )
Effect of exchange rate changes on cash and cash equivalents   724       (11,941 )
       
Net decrease in cash and cash equivalents $ (147,469 )   $ (66,296 )
       

RECONCILIATION OF NON-GAAP ADJUSTMENTS – GAAP OPERATING CASH FLOW TO
MEASURES OF FREE CASH FLOW AND ADJUSTED FREE CASH FLOW CONVERSION
(UNAUDITED)
(In thousands)
 
  Three Months Ended June 30,
    2023     2022  
Net cash provided by operating activities   28,278   $ 66,484  
     
     
Purchases of property and equipment   (15,646 ) $ (9,405 )
Free cash flow   12,632     57,079  
     
Adjusted net income(1) $ 57,417   $ 68,335  
Adjusted free cash flow conversion   22.0 %   83.5 %
     
     
     
  Twelve Months Ended June 30,
    2023     2022  
Net cash provided by operating activities   208,079   $ 262,887  
     
Purchases of property and equipment   (52,963 )   (53,444 )
Free cash flow   155,116     209,443  
     
Adjusted net income(1)   268,667   $ 275,548  
Adjusted free cash flow conversion   57.7 %   76.0 %
     

(1) Adjusted net income for quarters ended June 30, 2023 and 2022 are reconciled above. Adjusted net income for remaining quarters in the trailing twelve months calculation have been previously reconciled and are publicly available in the Quarterly Earnings Call Presentations on our website at investor.integralife.com under Events & Presentations.

The Company calculates adjusted free cash flow conversion by dividing its free cash flow by adjusted net income. The Company believes this measure is useful in evaluating the significance of the cash special charges in its adjusted earnings measures.

RECONCILIATION OF NON-GAAP ADJUSTMENTS – NET DEBT CALCULATION
(UNAUDITED)
(In thousands)  
  June 30,
2023		 December 31,
2022
Short-term borrowings under senior credit facility $ 4,844   $ 38,125  
Long-term borrowings under senior credit facility   764,616     733,149  
Borrowings under securitization facility   90,800     104,700  
Long-term convertible securities   568,798     567,341  
Deferred financing costs netted in the above   11,742     11,385  
Cash & Cash Equivalents   (309,192 )   (456,661 )
Net Debt $ 1,131,608   $ 998,039  
     

 



Posted on

Churchill Downs to Renovate Jockey Club Suites

$14 Million Project will Debut for the 150th Kentucky Derby in May 2024

LOUISVILLE, Ky., July 26, 2023 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (“CDI” or the “Company”) (Nasdaq: CHDN) announced today a renovation project that will update and refresh the Jockey Club Suites at Churchill Downs Racetrack (“Churchill Downs” or the “Racetrack”). The $14 million renovation will modernize what is considered one of the original luxury and full-service hospitality experiences at the legendary Racetrack. The project is scheduled to be completed in advance of the 150th Kentucky Derby in May 2024.

The renovation plans will enhance all aspects of the 61 suites, common spaces, dining rooms and restrooms located on the fourth, fifth, and sixth floors in a tower directly adjacent to the historic Twin Spires along the homestretch at Churchill Downs. Originally constructed in 2004, the Jockey Club Suites seat approximately 2,500 guests which, in addition to private suites, includes the Triple Crown Ballroom, Grand Foyer, Derby and Oaks meeting rooms and the new Triple Crown Balcony and also serves as a premium rentable space for special events throughout the year.

“The Jockey Club Suites are a core premium hospitality product,” said Mike Anderson, President of Churchill Downs. “This renovation project will ensure existing and future suite holders are provided the entertainment experience Churchill Downs is known for and our guests have come to expect for Kentucky Derby Week and all other racing events.”

About Churchill Downs Incorporated

Churchill Downs Incorporated (NASDAQ: CHDN) has been creating extraordinary entertainment experiences for nearly 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. www.churchilldownsincorporated.com

About Churchill Downs Racetrack

Churchill Downs Racetrack (“CDRT”), the world’s most legendary racetrack, has been the home of The Kentucky Derby, the longest continually-held annual sporting event in the United States, since 1875. Located in Louisville, CDRT features a series of themed race days during Derby Week, including the Kentucky Oaks, and conducts Thoroughbred horse racing during three race meets in Spring, September and Fall. CDRT is located on 175 acres and has a one-mile dirt track, a 7/8-mile turf track, a stabling area and provides seating for approximately 60,000 guests. The saddling paddock and the stable area has barns sufficient to accommodate 1,400 horses and a 114-room dormitory for backstretch personnel. CDRT also has a year-round simulcast wagering facility. www.ChurchillDowns.com

This news release contains various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” and similar words or similar expressions (or negative versions of such words or expressions).

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of the novel coronavirus (COVID-19) pandemic, including the emergence of variant strains, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation the competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires Sports and Casino business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigations; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.

We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Contact: Philip Forbis
(502) 394-1094
[email protected]		 Media Contact: Tonya Abeln
(502) 386-1742
[email protected]



Posted on

Helix Reports Second Quarter 2023 Results

Helix Reports Second Quarter 2023 Results

HOUSTON–(BUSINESS WIRE)–
Helix Energy Solutions Group, Inc. (“Helix”) (NYSE: HLX) reported net income of $7.1 million, or $0.05 per diluted share, for the second quarter 2023 compared to a net loss of $5.2 million, or $(0.03) per diluted share, for the first quarter 2023 and a net loss of $29.7 million, or $(0.20) per diluted share, for the second quarter 2022. Helix reported adjusted EBITDA1 of $71.3 million for the second quarter 2023 compared to $35.1 million for the first quarter 2023 and $16.8 million for the second quarter 2022.

For the six months ended June 30, 2023, Helix reported net income of $1.9 million, or $0.01 per diluted share, compared to a net loss of $71.7 million, or $(0.47) per diluted share, for the six months ended June 30, 2022. Adjusted EBITDA for the six months ended June 30, 2023 was $106.4 million compared to $19.3 million for the six months ended June 30, 2022. The table below summarizes our results of operations:

Summary of Results

($ in thousands, except per share amounts, unaudited)
 
Three Months Ended Six Months Ended
6/30/2023 6/30/2022 3/31/2023 6/30/2023 6/30/2022
Revenues

$

308,817

 

$

162,612

 

$

250,084

 

$

558,901

 

$

312,737

 
Gross Profit (Loss)

$

55,349

 

$

(1,354

)

$

15,184

 

$

70,533

 

$

(19,963

)

 

18

%

 

(1

)%

 

6

%

 

13

%

 

(6

)%
Net Income (Loss)

$

7,100

 

$

(29,699

)

$

(5,165

)

$

1,935

 

$

(71,730

)
Diluted Earnings (Loss) Per Share

$

0.05

 

$

(0.20

)

$

(0.03

)

$

0.01

 

$

(0.47

)
Adjusted EBITDA1

$

71,292

 

$

16,759

 

$

35,094

 

$

106,386

 

$

19,285

 
Cash and Cash Equivalents2

$

182,651

 

$

260,595

 

$

166,674

 

$

182,651

 

$

260,595

 
Net Debt1

$

78,317

 

$

4,010

 

$

91,278

 

$

78,317

 

$

4,010

 
Cash Flows from Operating Activities

$

31,501

 

$

(5,841

)

$

(5,392

)

$

26,109

 

$

(23,254

)
Free Cash Flow1

$

30,246

 

$

(7,405

)

$

(11,692

)

$

18,554

 

$

(25,441

)
 

1 Adjusted EBITDA, Net Debt and Free Cash Flow are non-GAAP measures; see reconciliations below

2 Excludes restricted cash of $2.5 million as of 3/31/23 and 6/30/22

Owen Kratz, President and Chief Executive Officer of Helix, stated, “The offshore energy services markets continue to improve with the oil and gas and the renewables markets driving increased activity globally and across all our business segments. Our second quarter results improved sequentially, as we benefitted from the seasonal pick-up in activity in our Robotics and Shallow Water Abandonment segments and strong utilization in our Well Intervention segment with the Q7000 commencing operations in the Asia Pacific region. Our Robotics segment benefited from strong vessel and trenching activity, with trenching projects in the quarter performed in Europe, the U.S. east coast and Asia Pacific. With improved global activity, the Robotics segment achieved its highest quarterly revenues since 2015. In our Shallow Water Abandonment segment, Helix Alliance operations improved with the commencement of seasonal activity of the Epic Hedron heavy lift barge. Given our overall strong performance during the second quarter and the strength in our outlook for the second half of the year, we increased our guidance for 2023. Additionally, we amended our ABL facility, increasing our facility size by $20 million, and continued to buy back shares under our share repurchase program.”

Segment Information, Operational and Financial Highlights

($ in thousands, unaudited)
 
Three Months Ended Six Months Ended
6/30/2023 6/30/2022 3/31/2023 6/30/2023 6/30/2022
Revenues:
Well Intervention

$

154,221

 

$

106,291

 

$

142,438

 

$

296,659

 

$

212,658

 
Robotics

 

70,050

 

 

49,850

 

 

49,222

 

 

119,272

 

 

87,201

 
Shallow Water Abandonment1

 

76,306

 

 

–

 

 

49,381

 

 

125,687

 

 

–

 
Production Facilities

 

23,128

 

 

17,678

 

 

20,905

 

 

44,033

 

 

35,972

 
Intercompany Eliminations

 

(14,888

)

 

(11,207

)

 

(11,862

)

 

(26,750

)

 

(23,094

)
Total

$

308,817

 

$

162,612

 

$

250,084

 

$

558,901

 

$

312,737

 
 
Income (Loss) from Operations:
Well Intervention

$

3,380

 

$

(22,548

)

$

(8,143

)

$

(4,763

)

$

(54,306

)
Robotics

 

17,467

 

 

9,666

 

 

5,094

 

 

22,561

 

 

11,146

 
Shallow Water Abandonment1

 

19,762

 

 

–

 

 

6,822

 

 

26,584

 

 

–

 
Production Facilities

 

7,774

 

 

6,045

 

 

5,157

 

 

12,931

 

 

11,896

 
Change in Fair Value of Contingent Consideration

 

(10,828

)

 

–

 

 

(3,992

)

 

(14,820

)

 

–

 
Corporate / Other / Eliminations

 

(17,350

)

 

(12,139

)

 

(13,241

)

 

(30,591

)

 

(20,689

)
Total

$

20,205

 

$

(18,976

)

$

(8,303

)

$

11,902

 

$

(51,953

)
1 Shallow Water Abandonment includes the results of Helix Alliance beginning July 1, 2022, the date of acquisition

Segment Results

Well Intervention

Well Intervention revenues increased $11.8 million, or 8%, during the second quarter 2023 compared to the prior quarter. Our second quarter 2023 revenues increased primarily due to higher revenue on the Q7000, as well as higher utilization on the Q5000 and the North Sea vessels following their completion of scheduled regulatory inspections and maintenance during the first quarter. The revenue increases were offset in part by lower utilization on the Q4000, which commenced its regulatory dry dock during the quarter. During the second quarter 2023, the Q7000 recognized revenues over approximately 27 days following its paid transit and mobilization to New Zealand. During the prior quarter, the Q7000 recognized no revenue as it had 53 days of dry dock and 37 days of paid transit and mobilization to New Zealand for which all revenues were deferred. Overall Well Intervention vessel utilization increased to 84% during the second quarter 2023 compared to 80% during the prior quarter. Well Intervention generated operating income of $3.4 million during the second quarter 2023 compared to operating losses of $8.1 million during the prior quarter. The improvement in operating results was primarily due to higher revenues during the second quarter.

Well Intervention revenues increased $47.9 million, or 45%, during the second quarter 2023 compared to the second quarter 2022. The increase was primarily due to higher revenues in the North Sea, Brazil and on the Q7000, offset in part by lower utilization on the Q4000 during the second quarter 2023. North Sea revenues improved during the second quarter 2023 with stronger utilization and rates compared to the second quarter 2022, and revenues in Brazil increased primarily due to higher rates as both vessels commenced long-term contracts with improved day rates at the end of 2022. During the second quarter 2023, the Q7000 recognized revenues over approximately 27 days following its paid transit and mobilization to New Zealand, compared to the second quarter 2022 when the vessel had only 2 days of utilization before conducting scheduled regulatory maintenance during the remainder of the quarter. The second quarter 2023 revenue increases were offset in part by lower utilization on the Q4000, which commenced its regulatory dry dock during the second quarter 2023. Overall Well Intervention vessel utilization increased to 84% during the second quarter 2023 compared to 67% during the second quarter 2022. Well Intervention generated operating income of $3.4 million during the second quarter 2023 compared to operating losses of $22.5 million during the second quarter 2022. The improvement in operating results was primarily due to higher revenues during 2023.

Robotics

Robotics revenues increased $20.8 million, or 42%, during the second quarter 2023 compared to the prior quarter. The increase in revenues was due to higher utilization and rates on ROVs, trenchers and vessels during the second quarter 2023 compared to the prior quarter. Chartered vessel activity increased to 435 days compared to 295 days, and vessel utilization increased to 96% during the second quarter 2023 compared to 91% during the prior quarter. Vessel days included 113 spot vessel days during the second quarter 2023 compared to 13 spot vessel days during the prior quarter. ROV and trencher utilization increased to 58% during the second quarter 2023 compared to 56% during the prior quarter. Integrated vessel trenching days increased to 194 days during the second quarter 2023 compared to 66 days during the prior quarter. Trenching activity during the second quarter also included 58 days of utilization of the i-Plough as a stand-alone trencher performing site clearance on a third-party vessel compared to 90 days during the prior quarter. The IROV boulder grab, included in ROV utilization, had 83 days of utilization during the second quarter 2023 performing seabed clearance operations on the U.S. east coast compared to no utilization during the prior quarter. Robotics operating income increased $12.4 million during the second quarter 2023 compared to the prior quarter due to higher revenues.

Robotics revenues increased $20.2 million, or 41%, during the second quarter 2023 compared to the second quarter 2022. The increase in revenues was primarily due to higher utilization and rates on ROVs, trenchers and vessels during the second quarter 2023 compared to the second quarter 2022. Chartered vessel days and utilization increased to 435 days and 96%, respectively, during the second quarter 2023 compared to 370 days and 94%, respectively, during the second quarter 2022. Vessel days included 113 spot vessel days during the second quarter 2023 compared to 116 spot vessel days during the second quarter 2022. ROV and trencher utilization increased to 58% during the second quarter 2023 compared to 53% during the second quarter 2022. The second quarter 2023 included 194 days of integrated vessel trenching compared to 81 days of integrated vessel trenching during the second quarter 2022. The second quarter 2023 included 58 days of stand-alone trencher activities on the i-Plough trencher and 83 days of utilization on the IROV boulder grab, both of which were acquired subsequent to the second quarter 2022. Robotics operating income increased $7.8 million during the second quarter 2023 compared to the second quarter 2022 primarily due to higher revenues.

Shallow Water Abandonment

Shallow Water Abandonment revenues increased $26.9 million, or 55%, during the second quarter 2023 compared to the previous quarter. The increase in revenues reflected higher seasonal activity, with increases in vessel and system utilization including high utilization on the Epic Hedron. Overall vessel utilization was 78% during the second quarter 2023 compared to 58% during the prior quarter. Plug and Abandonment and Coiled Tubing systems achieved 1,554 days of utilization, or 81%, during the second quarter 2023 compared to 1,277 days of utilization, or 68%, during the prior quarter. The Epic Hedron heavy lift barge commenced seasonal operations and achieved 72 days of utilization, or 79%, during the second quarter 2023 compared to 13 days, or 14%, during the prior quarter. Shallow Water Abandonment operating income increased $12.9 million during the second quarter 2023 compared to the prior quarter primarily due to higher revenue during the second quarter.

Production Facilities

Production Facilities revenues increased $2.2 million, or 11%, during the second quarter 2023 compared to the prior quarter due to higher oil and gas production on the Thunder Hawk wells, which were shut-in for planned maintenance during the prior quarter. Production Facilities operating income increased $2.6 million during the second quarter 2023 compared to the prior quarter due to higher revenues.

Production Facilities revenues increased $5.5 million, or 31%, during the second quarter 2023 compared to the second quarter 2022 primarily due to higher oil and gas production with the contribution from our interest in the Thunder Hawk field, which was acquired during the third quarter 2022. The increase in revenue was offset in part by lower commodity prices realized on the Droshky wells during the second quarter 2023 compared to the second quarter 2022. Production Facilities operating income increased $1.7 million during the second quarter 2023 due primarily to higher revenues.

Selling, General and Administrative and Other

Share Repurchases

Cash flows during the second quarter 2023 included $5.1 million for repurchases of 750,000 Helix common shares pursuant to our share repurchase program, an average purchase price of $6.77 per share. Year-to-date cash flows include $10.1 million for repurchases of 1,410,000 Helix common shares, an average purchase price of $7.13 per share.

Selling, General and Administrative

Selling, general and administrative expenses were $24.0 million, or 7.8% of revenue, during the second quarter 2023 compared to $19.6 million, or 7.8% of revenue, during the prior quarter. The increase during the second quarter was primarily due to higher compensation costs compared to the prior quarter.

Acquisition and Integration Costs

Acquisition and integration costs were $0.3 million during the second quarter 2023 compared to $0.2 million during the prior quarter and included primarily financial and operational integration costs related to our acquisition of the Alliance group of companies, which closed on July 1, 2022.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration related to our acquisition of Alliance was $10.8 million during the second quarter 2023 and reflects an increase in the fair value of the estimated earn-out payable in 2024.

Other Income and Expenses

Other expense, net was $5.7 million during the second quarter 2023 compared to other income of $3.4 million during the prior quarter. Other expense, net during the second quarter 2023 includes primarily foreign currency losses of $11.7 million related to the approximate 39% devaluation of the Nigerian naira on our naira cash holdings, which approximated $16.2 million at quarter end. The losses on the naira were offset in part by the approximate 3% strengthening of the British pound primarily on U.S. dollar denominated intercompany debt in our U.K. entities.

Cash Flows

Operating cash flows were $31.5 million during the second quarter 2023 compared to $(5.4) million during the prior quarter and $(5.8) million during the second quarter 2022. The increases in operating cash flows quarter over quarter and year over year were primarily due to higher earnings, offset in part by higher regulatory certification costs for our vessels and systems during the second quarter 2023 compared to the prior quarter and to the second quarter 2022. Cash paid for regulatory recertifications for our vessels and systems, which are included in operating cash flows, were $24.2 million during the second quarter 2023 compared to $17.2 million during the prior quarter and $9.3 million during the second quarter 2022.

Capital expenditures, which are included in investing cash flows, totaled $1.3 million during the second quarter 2023 compared to $6.7 million during the prior quarter and $1.6 million during the second quarter 2022.

Free Cash Flow was $30.2 million during the second quarter 2023 compared to $(11.7) million during the prior quarter and $(7.4) million during the second quarter 2022. The increase in Free Cash Flow quarter over quarter and year over year was due to higher operating cash flows and lower capital expenditures during the first quarter 2023. (Free Cash Flow is a non-GAAP measure. See reconciliation below.)

Financial Condition and Liquidity

Cash and cash equivalents were $182.7 million at June 30, 2023. Available capacity under our ABL facility at June 30, 2023 was $102.5 million, resulting in total liquidity of $285.2 million. At June 30, 2023 we had $261.0 million of long-term debt and Net Debt of $78.3 million. (Net Debt is a non-GAAP measure. See reconciliation below.)

Conference Call Information

Further details are provided in the presentation for Helix’s quarterly teleconference to review its second quarter 2023 results (see the “For the Investor” page of Helix’s website, www.helixesg.com). The teleconference, scheduled for Thursday, July 27, 2023, at 9:00 a.m. Central Time, will be audio webcast live from the “For the Investor” page of Helix’s website. Investors and other interested parties wishing to participate in the teleconference may join by dialing 1-877-224-1468 for participants in the United States and 1-312-546-6631 for international participants. The passcode is “Staffeldt.” A replay of the webcast will be available on the “For the Investor” page of Helix’s website by selecting the “Audio Archives” link beginning approximately two hours after the completion of the event.

About Helix

Helix Energy Solutions Group, Inc., headquartered in Houston, Texas, is an international offshore energy services company that provides specialty services to the offshore energy industry, with a focus on well intervention, robotics and full field decommissioning operations. Our services are centered on a three-legged business model well positioned for a global energy transition by maximizing production of existing oil and gas reserves, supporting renewable energy developments and decommissioning end-of-life oil and gas fields. For more information about Helix, please visit our website at www.helixesg.com.

Non-GAAP Financial Measures

Management evaluates operating performance and financial condition using certain non-GAAP measures, primarily EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt. We define EBITDA as earnings before income taxes, net interest expense, gains or losses on extinguishment of long-term debt, gains and losses on equity investments, net other income or expense, and depreciation and amortization expense. Non-cash impairment losses on goodwill and other long-lived assets are also added back if applicable. To arrive at our measure of Adjusted EBITDA, we exclude the gain or loss on disposition of assets, acquisition and integration costs, the change in fair value of the contingent consideration and the general provision (release) for current expected credit losses, if any. We define Free Cash Flow as cash flows from operating activities less capital expenditures, net of proceeds from sale of assets. Net Debt is calculated as long-term debt including current maturities of long-term debt less cash and cash equivalents and restricted cash.

We use EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt to monitor and facilitate internal evaluation of the performance of our business operations, to facilitate external comparison of our business results to those of others in our industry, to analyze and evaluate financial and strategic planning decisions regarding future investments and acquisitions, to plan and evaluate operating budgets, and in certain cases, to report our results to the holders of our debt as required by our debt covenants. We believe that our measures of EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt provide useful information to the public regarding our operating performance and ability to service debt and fund capital expenditures and may help our investors understand and compare our results to other companies that have different financing, capital and tax structures. Other companies may calculate their measures of EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt differently from the way we do, which may limit their usefulness as comparative measures. EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt should not be considered in isolation or as a substitute for, but instead are supplemental to, income from operations, net income, cash flows from operating activities, or other income or cash flow data prepared in accordance with GAAP. Users of this financial information should consider the types of events and transactions that are excluded from these measures. See reconciliation of the non-GAAP financial information presented in this press release to the most directly comparable financial information presented in accordance with GAAP.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any statements regarding: our plans, strategies and objectives for future operations; visibility and future utilization; energy transition or energy security; any projections of financial items including projections as to guidance and other outlook information; our share repurchase authorization or program; our ability to identify, effect and integrate acquisitions, joint ventures or other transactions, including the integration of the Alliance acquisition; oil price volatility and its effects and results; our protocols and plans; our current work continuing; the spot market; our spending and cost management efforts and our ability to manage changes; future operations expenditures; our ability to enter into, renew and/or perform commercial contracts; developments; our environmental, social and governance (“ESG”) initiatives; future economic conditions or performance; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors that could cause results to differ materially from those in the forward-looking statements, including but not limited to market conditions; results from acquired properties; demand for our services; the performance of contracts by suppliers, customers and partners; actions by governmental and regulatory authorities; operating hazards and delays, which include delays in delivery, chartering or customer acceptance of assets or terms of their acceptance; our ability to secure and realize backlog; the effectiveness of our ESG initiatives and disclosures; human capital management issues; complexities of global political and economic developments; geologic risks; volatility of oil and gas prices and other risks described from time to time in our filings with the Securities and Exchange Commission (“SEC”), including our most recently filed Annual Report on Form 10-K, which are available free of charge on the SEC’s website at www.sec.gov. We assume no obligation and do not intend to update these forward-looking statements, which speak only as of their respective dates, except as required by law.

HELIX ENERGY SOLUTIONS GROUP, INC.
Comparative Condensed Consolidated Statements of Operations
 

Three Months Ended June 30,

 

Six Months Ended June 30,
(in thousands, except per share data)

2023

 

2022

 

2023

 

2022
(unaudited) (unaudited)
 
Net revenues

$

308,817

 

$

162,612

 

$

558,901

 

$

312,737

 
Cost of sales

 

253,468

 

 

163,966

 

 

488,368

 

 

332,700

 
Gross profit (loss)

 

55,349

 

 

(1,354

)

 

70,533

 

 

(19,963

)
Gain on disposition of assets, net

 

–

 

 

–

 

 

367

 

 

–

 
Acquisition and integration costs

 

(309

)

 

(1,587

)

 

(540

)

 

(1,587

)
Change in fair value of contingent consideration

 

(10,828

)

 

–

 

 

(14,820

)

 

–

 
Selling, general and administrative expenses

 

(24,007

)

 

(16,035

)

 

(43,638

)

 

(30,403

)
Income (loss) from operations

 

20,205

 

 

(18,976

)

 

11,902

 

 

(51,953

)
Equity in earnings of investment

 

–

 

 

8,184

 

 

–

 

 

8,184

 
Net interest expense

 

(4,228

)

 

(4,799

)

 

(8,415

)

 

(9,973

)
Other expense, net

 

(5,740

)

 

(13,471

)

 

(2,296

)

 

(17,352

)
Royalty income and other

 

175

 

 

797

 

 

2,038

 

 

2,938

 
Income (loss) before income taxes

 

10,412

 

 

(28,265

)

 

3,229

 

 

(68,156

)
Income tax provision

 

3,312

 

 

1,434

 

 

1,294

 

 

3,574

 
Net income (loss)

$

7,100

 

$

(29,699

)

$

1,935

 

$

(71,730

)
 
Earnings (loss) per share of common stock:
Basic

$

0.05

 

$

(0.20

)

$

0.01

 

$

(0.47

)
Diluted

$

0.05

 

$

(0.20

)

$

0.01

 

$

(0.47

)
 
Weighted average common shares outstanding:
Basic

 

150,791

 

 

151,205

 

 

151,275

 

 

151,174

 
Diluted

 

153,404

 

 

151,205

 

 

153,873

 

 

151,174

 
Comparative Condensed Consolidated Balance Sheets
 
June 30, 2023 Dec. 31, 2022
(in thousands) (unaudited)
 
ASSETS
 
Current Assets:
Cash and cash equivalents

$

182,651

$

186,604
Restricted cash

 

–

 

2,507
Accounts receivable, net

 

253,147

 

212,779
Other current assets

 

76,212

 

58,699
Total Current Assets

 

512,010

 

460,589
 
Property and equipment, net

 

1,608,988

 

1,641,615
Operating lease right-of-use assets

 

177,942

 

197,849
Deferred recertification and dry dock costs, net

 

77,243

 

38,778
Other assets, net

 

47,662

 

50,507
Total Assets

$

2,423,845

$

2,389,338
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable

$

145,937

$

135,267
Accrued liabilities

 

142,609

 

73,574
Current maturities of long-term debt

 

38,499

 

38,200
Current operating lease liabilities

 

55,667

 

50,914
Total Current Liabilities

 

382,712

 

297,955
 
Long-term debt

 

222,469

 

225,875
Operating lease liabilities

 

131,175

 

154,686
Deferred tax liabilities

 

99,864

 

98,883
Other non-current liabilities

 

55,697

 

95,230
Shareholders’ equity

 

1,531,928

 

1,516,709
Total Liabilities and Equity

$

2,423,845

$

2,389,338
Helix Energy Solutions Group, Inc.
Reconciliation of Non-GAAP Measures
 
 
Three Months Ended Six Months Ended
(in thousands, unaudited) 6/30/2023 6/30/2022 3/31/2023 6/30/2023 6/30/2022
 
Reconciliation from Net Income (Loss) to Adjusted EBITDA:
Net income (loss)

$

7,100

 

$

(29,699

)

$

(5,165

)

$

1,935

 

$

(71,730

)
Adjustments:
Income tax provision (benefit)

 

3,312

 

 

1,434

 

 

(2,018

)

 

1,294

 

 

3,574

 
Net interest expense

 

4,228

 

 

4,799

 

 

4,187

 

 

8,415

 

 

9,973

 
Other (income) expense, net

 

5,740

 

 

13,471

 

 

(3,444

)

 

2,296

 

 

17,352

 
Depreciation and amortization

 

39,227

 

 

33,158

 

 

37,537

 

 

76,764

 

 

66,646

 
Gain on equity investment

 

–

 

 

(8,184

)

 

–

 

 

–

 

 

(8,184

)
EBITDA

 

59,607

 

 

14,979

 

 

31,097

 

 

90,704

 

 

17,631

 
Adjustments:
Gain on disposition of assets, net

 

–

 

 

–

 

 

(367

)

 

(367

)

 

–

 
Acquisition and integration costs

 

309

 

 

1,587

 

 

231

 

 

540

 

 

1,587

 
Change in fair value of contingent consideration

 

10,828

 

 

–

 

 

3,992

 

 

14,820

 

 

–

 
General provision for current expected credit losses

 

548

 

 

193

 

 

141

 

 

689

 

 

67

 
Adjusted EBITDA

$

71,292

 

$

16,759

 

$

35,094

 

$

106,386

 

$

19,285

 
 
 
Free Cash Flow:
Cash flows from operating activities

$

31,501

 

$

(5,841

)

$

(5,392

)

$

26,109

 

$

(23,254

)
Less: Capital expenditures, net of proceeds from sale of assets

 

(1,255

)

 

(1,564

)

 

(6,300

)

 

(7,555

)

 

(2,187

)
Free Cash Flow

$

30,246

 

$

(7,405

)

$

(11,692

)

$

18,554

 

$

(25,441

)
 
 
Net Debt:
Long-term debt including current maturities

$

260,968

 

$

267,110

 

$

260,460

 

$

260,968

 

$

267,110

 
Less: Cash and cash equivalents and restricted cash

 

(182,651

)

 

(263,100

)

 

(169,182

)

 

(182,651

)

 

(263,100

)
Net Debt

$

78,317

 

$

4,010

 

$

91,278

 

$

78,317

 

$

4,010

 
 

 

Erik Staffeldt, Executive Vice President and CFO

email: [email protected]

Ph: 281-618-0465

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: Alternative Energy Energy Other Energy Oil/Gas

MEDIA:

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HSBC Bank USA, N.A. and Affiliates Raise Prime and Reference Rate

HSBC Bank USA, N.A. and Affiliates Raise Prime and Reference Rate

NEW YORK–(BUSINESS WIRE)–
HSBC Bank USA, N.A., and its affiliates announced today that they have raised their prime and reference rate to 8.50% from 8.25%, effective tomorrow.

About HSBC

HSBC USA Inc. (“HUSI”) is a Maryland corporation and its principal business is to act as a holding company for its subsidiaries including HSBC Bank USA, N.A. Through HSBC Bank USA, N.A. and its subsidiaries, HUSI offers a full range of traditional banking products and services to individuals, including high net worth individuals, small businesses, corporations, institutions and governments. HSBC USA Inc. is a wholly-owned subsidiary of HSBC North America Holdings Inc.

HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 62 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, and Middle East and North Africa. With assets of $2,990bn at 31 March 2023, HSBC is one of the world’s largest banking and financial services organisations.

Media enquiries to:


Jack Mullin

External Communications

[email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Banking Professional Services Finance

MEDIA:

Posted on

LifeWallet Announces Fiscal Year and Fourth Quarter 2022 Financial Results

CORAL GABLES, Fla., July 26, 2023 (GLOBE NEWSWIRE) — MSP Recovery, Inc. d/b/a LifeWallet (NASDAQ: LIFW) (“LifeWallet,” or the “Company”), a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery and technology leader, announced it has filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2022. As previously stated, such restatements relate to the reassessment of complex accounting matters based on non-cash adjustments and do not affect the Company’s cash position. The Company continues its strategy, daily operations, and mission to disrupt the antiquated healthcare reimbursement system with data-driven solutions for consumers and industries.

The Company is working expeditiously to file its Form 10-Q for the periods ending March 31, 2023 and June 30, 2023. Subsequently, the company looks forward to holding a conference call to discuss historical events, current status, and futuristic outlook.

As described in our Current Report on Form 8-K filed with the SEC on April 14, 2023, we identified errors in the accounting for the indemnification asset, various intangible assets and rights to cash flows, and consolidation of an entity in connection with our business combination. As a result of these errors, management and the audit committee of our board of directors concluded that our previously issued unaudited condensed consolidated financial statements for the periods ended June 30, 2022 and September 30, 2022 were materially misstated. Accordingly, our unaudited condensed consolidated financial statements for the foregoing periods require restatement and should no longer be relied upon. The financial information that was previously filed or otherwise reported as of and for the periods ended June 30, 2022 and September 30, 2022 is superseded by the information in the Annual Report on Form 10-K. See Note 18 to our consolidated financial statements in the Annual Report on Form 10-K for additional information on the restatement and the related financial information impacts.

In addition, on April 16, 2023, the board of directors of the Company established a special committee to review matters related to the preparation and filing of the Annual Report on Form 10-K, and to address any related issues. At that time, it was decided to postpone the filing of this Annual Report on Form 10-K pending the special committee’s review. On June 13, 2023, the special committee finalized its review. The findings and recommendations of the special committee are set forth in “Part II, Item 9A Controls and Procedures” of the Annual Report on Form 10-K.

Fiscal Year 2022 Major Highlights

  • LifeWallet continued to execute and advance its business strategy as the Paid Value of Potentially Recoverable Claims (“PVPRC”) increased by about $3 billion by year-end for a total of $89.6 billion from inception to the end of 2022. Continued growth of PVPRC reflects strong demand for LifeWallet’s expertise and recovery services from health plans, providers, and self-insured entities. As a result of ongoing recovery efforts, a large portion of the newly acquired claims are incorporated into existing cases.
  • During 2022, the Company recovered or settled $4.8 million in claims recovery income through consolidated and nonconsolidated entities. These recoveries include an accident-related case settlement for $1.75 million with a primary payer with very limited exposure where the average recovery on claims settled exceeded 2x the PVPRC. The Company also settled with a group health plan, recovering $1.15 million on claims that had never been calculated as potentially recoverable and were found through the exercise of due diligence.
  • For the fiscal year 2022, LifeWallet had an operating loss of $331.5 million and an adjusted operating loss excluding non-cash items, of $44.5 million. The Company’s operating loss was driven by two large non-cash expenses, (i) claims amortization expense and (ii) interest expense, both combined represented 87% of our operating loss.
  • Throughout 2022, LifeWallet furthered its litigation and data-matching strategies. The Company continues to make progress in its recovery efforts. Recoveries are dependent on the completion of litigation and the negotiation of settlements, the timing of which can be subject to the risk of delays associated with the litigation and settlement process. However, we continue to make progress in the data matching process associated with those settlement negotiations, whereby primary payer insurers reconcile what they owe as a result of detailed data exchanges.
  • During 2022, the Company entered into a warrant agreement with Brickell Key Investments, LP (“Brickell Key”) that reduced debt by $63 million, resulting in a $40 million reduction in accrued interest annually. By exchanging debt for equity, the Brickell Key transaction demonstrated their continued confidence in the Company.
  • During 2022, LifeWallet developed LifeChain blockchain technology, which is in the process of being implemented for several clients. LifeChain will give payers, providers, and patients the ability to confirm billing and payment integrity while reducing fraud and duplicate or improper payments. LifeChain will also offer healthcare providers invaluable data analysis tailored to their practice, including specialized healthcare analysis based on a provider’s specific needs and connection to different data sources, leading to improved patient care.

Fiscal Year 2022 Financial Highlights

  • Revenue: Total revenue for 2022 was $23.4 million, up 60% from 2021.
  • Operating loss: Operating loss for 2022 was $331 million, compared with $7.1 million for 2021. Adjusted operating loss for 2022 was $44.5 million, excluding non-cash claims amortization expense of $266.9 million and share compensation of $20.1 million.1
  • Net loss: Net loss for 2022 was $402 million and $7.4 million to controlling members, or net loss per share of $0.12 per share, based on 61.8 million weighted average shares outstanding. Adjusted net loss for 2022 was $44.8 million, excluding the non-cash item noted above, add back for non-cash gain on debt extinguishment of $63.4 million, change in fair value of warrant and derivative liabilities of $12.5 million and $121 million of non-cash expenses related to paid in kind interest.1
  • Liquidity: As of December 31, 2022, cash and cash equivalents were $3.7 million. In addition, we announced on March 29, 2023, the Company entered into the Working Capital Credit Agreement consisting of a commitment to fund up to $48 million in proceeds. The Company has potential additional capital resources, which include the Company Common Stock Purchase Agreement, the Investment Capacity Agreement, by and among MSP Recovery and Virage Capital Management, LP., and up to an additional $250 million from the Prudent Sale. While the Investment Capacity Agreement and Prudent Sale are still in effect as of this date, its uncertain if or when the Company would transact on the agreements.

(1) Additional information regarding the non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading “Non-GAAP Financial Measures.” A reconciliation of GAAP to non-GAAP financial measures has also been provided in the financial tables included below.

Recent Updates:

  • LifeWallet also recently announced it successfully renegotiated two material obligations. The Company has extended its payment obligations to Virage Recovery Master LP, an entity managed by Virage Capital Management LP and Nomura Securities International, Inc. The new agreements with Virage and Nomura extended the payment dates for each to September 30, 2024.
  • The Company also entered into three separate transactions, Hazel Holdings I, LLC and Hazel Partners Holdings LLC. The Company secured a credit agreement providing the Company with $48 million worth of working capital, the funding of which is subject to certain milestones. Detailed financials relating to the transactions will be reflected in the Company’s first fiscal quarter 2023 financial statements.

Assigned Recovery Rights Claims Paid and Billed Value

The table below outlines the Company’s growth in claims data received in the most recent periods. The amounts represent data received from current and new assignors:

Select Portfolio Metrics  
As of Year Ended
December 31 		  Nine Months Ended September 30,   Six Months Ended June 30,   Three Months Ended March 31,   Year Ended
December 31 		  Year Ended
December 31 		 

(in billions)
 		2022   2022   2022   2022   2021   2020  
Total Paid Amount $ 374.8   $ 373.3   $ 370.2   $ 366.9   $ 364.4   $ 58.4  
Paid Value of Potentially Recoverable Claims (PVPRC)   89.6     89.2     88.3     87.3     86.6     14.7  
Billed Value of Potentially Recoverable Claims (BVPRC)   377.8     376.1     371.3     367.8     363.2     52.3  
  • Total Paid Amount of owned claims has increased to $374.8 billion, as of December 31, 2022, up $10.4 billion or 3% from $364.4 billion as of December 31, 2021. This figure represents the amounts our clients/assignors have paid for in medical bills (including capitation payments).
  • Paid Value of Potential Recoverable Claims grew to $89.6 billion, as of December 31, 2022, up $3 billion or 3% from $86.6 billion as of December 31, 2021. This figure represents the amounts LifeWallet estimates are potentially recoverable as identified by LifeWallet algorithms.
  • On August 10, 2022, the United States Court of Appeals, Eleventh Circuit held that four-year statute of limitations period for civil actions arising under an Act of Congress enacted after December 1, 1990 applies to certain claims brought under the Medicare Secondary Payer private cause of action, and that the limitations period begins to run on the date that the cause of action accrued. This opinion may render certain Claims held by the Company unrecoverable and may substantially reduce PVPRC and BVPRC as calculated. As our cases were filed at different times and in various jurisdictions, and prior to data matching with a defendant we are not able to accurately calculate the entirety of damages specific to a given defendant, we cannot calculate with certainty the impact of this ruling at this time. Although this opinion is binding only on courts in the Eleventh Circuit, if the application of this statute of limitations as determined by the Eleventh Circuit was applied to all Claims assigned to us, we estimate that the effect would be a reduction of PVPRC by approximately $8.86 billion. As set forth in our Risk Factors, PVPRC is based on a variety of factors. As such, this estimate is subject to change based on the variety of legal claims being litigated and statute of limitations tolling theories that apply.

Recoveries Being Sought by Category:

During 2022, LifeWallet announced a strategy whereby the Company is sending out individual demand letters on identified recoverable claims to responsible payers for prompt payment. The table below outlines specific dollar amounts identified by the Company, broken down by litigation and demand letter type, that it plans to pursue against different responsible parties:

Recoveries Being Sought By Category
  Paid Amount

($ in millions) 		Billed Amounts Sought

($ in millions) 		2022 Recovery

($ in millions) 		Recovery Multiple
ACCIDENT RELATED:        
Data Matching(1) $ 5,046.5 $ 20,361.4 $ 1.9 2.1x
Demand Letters(2)        
1stParty Demands $ 117.6 $ 682.3 $ 0.3 1.8x
3rdParty Demands $ 227.4 $ 1,631.2 $ 0.1 4.4x
Case and Lien Recoveries $ 18.7 $ 75.9 $ 2.2 1.9x
FRAUD & MISCONDUCT CASES:        
Private Lien Resolution Program(3) $ 2.5 $ 12.9 $ 2.4 Un-funneled Recovery
Big Pharma/Product Liability(4) $ 6,219.8 $ 19,434.9 $ 0.5 Un-funneled Recovery
Group Health Plan Recovery(4) $ 2.1 $ 10.9 $ 1.2 Un-funneled Recovery

(1) Data Matching represents potential recovery opportunities the Company has identified via court orders or agreements with primary payers. These represent potential recoveries that LIFW could receive from our settlement discussions or data matching with auto insurance carriers that represent approximately 28% combined market share of the auto industry. 

(2) As previously announced June 13th and 27th 2022, MSP initiated billing amounts to primary payers (i.e., property and casualty insurers), giving these parties the opportunity to pay without the need for litigation or extended litigation. 

(3) PLRPs are established to resolve health care liens asserted by private health insurance providers in mass tort settlements. MSPR is actively working with various lien resolution administrators to recover on those owned claims for which manufacturers have already settled other lawsuits and established PLRPs. 

(4) Un-funnel recovery represents a recovery that was not identified in the PVPRC. The majority of the amount recovered in the Private Lien Resolution Program represents recoveries that are un-funneled recoveries.

Data Matching: Data Matching represents potential recovery opportunities the Company has identified via court orders or agreements with primary payers. These represent potential recoveries that LifeWallet could receive from a portion of our settlement discussions with approximately 28% of Auto Insurance industry or via demand letters.

Demand Letters: As previously announced June 13th and 27th 2022, LifeWallet initiated billing amounts to primary payers (i.e., property and casualty insurers) and big pharma, giving these parties the opportunity to pay without the need for litigation or extended litigation. For 2022, our recovery multiple on 1st party & 3rd party demand letters, was 1.8x and 4.4x, respectively.

Private Lien Resolution Programs (“PLRP”): PLRPs are established to resolve health care liens asserted by private health insurance providers in mass tort settlements. LifeWallet is actively working with various lien resolution administrators to recover on those owned claims for which manufacturers have already settled other lawsuits and established PLRPs.

Financial Outlook

Recoveries Guidance: The Company continues to make progress in its recovery efforts, and management continues to believe previously projected recoveries are ultimately collectible.   Recoveries are dependent on the completion of litigation and the negotiation of settlements, which are inherently uncertain and are subject to risk of delay and litigation outcomes.  As a result, the Company will not provide future guidance on recoveries that are dependent on litigation or subrogation process.  

Additional information regarding the non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading “Non-GAAP Financial Measures.” A reconciliation of GAAP to non-GAAP financial measures has also been provided in the financial tables included below.

Quarterly Conference Call

The Company will not host a conference call to review the fourth quarter results for investors and analysts. Instead, the Company will host a call after the Company reports its second quarter results, at which time the Company will review both the 2022 and 2023 first and second quarter results. The date and time will be provided at a later date.

About MSP Recovery

In January 2023 MSP Recovery announced its rebranding to its nationally recognized brand, LifeWallet. The Company will not change its core strategy, and its core business remains the same–-secondary payer reimbursement recoveries. Utilizing the name LifeWallet reflects the diverse recovery opportunities presented by the company’s growing technological innovations and consolidates the Company’s lines of business under the same name, while positioning itself to generate additional revenues that were not predicted at the time of its business combination.

Founded in 2014, LifeWallet has become a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery leader, disrupting the antiquated healthcare reimbursement system with data-driven solutions to secure recoveries against responsible parties. The Company provides the healthcare industry with comprehensive compliance solutions, while innovating technologies to help save lives. For more information, visit:

www.lifewallet.com

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “plan” and “will” or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts, including for example guidance for 2022 portfolio recovery and total gross recoverables. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance or results and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by MSP Recovery herein speaks only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for MSPR to predict or identify all such events or how they may affect it. MSPR has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to, MSPR’s ability to capitalize on its assignment agreements and recover monies that were paid by the assignors; the inherent uncertainty surrounding settlement negotiations and/or litigation, including with respect to both the amount and timing of any such results; the validity of the assignments of claims to MSPR; the ability to successfully expand the scope of MSPR’s claims or obtain new data and claims from MSPR’s existing assignor base or otherwise; MSPR’s ability to innovate and develop new solutions, and whether those solutions will be adopted by MSPR’s existing and potential assignors; negative publicity concerning healthcare data analytics and payment accuracy; and those other factors included in MSPR’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by it with the SEC. These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.



MSP RECOVERY, INC. and Subsidiaries

Consolidated Balance Sheets

    December 31,     December 31,  
(In thousands except per share amounts)   2022     2021  
ASSETS            
Current assets:            
Cash and cash equivalents   $ 3,661     $ 1,664  
Restricted cash     11,420       –  
Accounts receivable     6,195       –  
Affiliate receivable (1)     2,425       4,070  
Prepaid expenses and other current assets (1)     27,656       13,304  
Total current assets     51,357       19,038  
Property, plant and equipment, net     3,432       750  
Intangible assets, net (2)     3,363,156       84,218  
Total assets   $ 3,417,945     $ 104,006  
             
LIABILITIES AND EQUITY            
Current liabilities:            
Accounts payable   $ 8,422     $ 4,609  
Affiliate payable (1)     19,822       45,252  
Commission payable     545       465  
Deferred service fee income     –       249  
Derivative liability     9,613       –  
Warrant liability     5,311       –  
Other current liabilities     72,002       3,489  
Total current liabilities     115,715       54,064  
Guaranty obligation     787,945       –  
Claims financing obligation and notes payable (1)     198,489       106,805  
Loan from related parties (1)     125,759       –  
Interest payable (1)     2,765       94,545  
Total liabilities   $ 1,230,673     $ 255,414  
Commitments and contingencies (Note 13)            
             
Class A common stock subject to possible redemption, 1,129,589 shares at redemption value as of December 31, 2022.     1,807       –  
             
Stockholders’ Equity (Deficit):            
Class A common stock, $0.0001 par value; 5,500,000,000 shares authorized; 74,605,284 issued and outstanding as of December 31, 2022   $ 7     $ –  
Class V common stock, $0.0001 par value; 3,250,000,000 shares authorized; 3,147,979,494 issued and outstanding as of December 31, 2022     315       –  
Additional paid-in capital     136,760       –  
Members’ equity     –       (155,756 )
Accumulated deficit     (29,203 )     –  
Total Stockholders’ Equity (Deficit)   $ 107,879     $ (155,756 )
Non-controlling interest     2,077,586       4,348  
Total equity   $ 2,185,465     $ (151,408 )
Total liabilities and equity   $ 3,417,945     $ 104,006  
  1. As of December 31, 2022 and 2021, the total affiliate receivable, affiliate payable, guaranty obligation and loan from related parties balances are with related parties. In addition, the prepaid expenses and other current assets, Claims financing obligation and notes payable and interest payable includes balances with related parties. See Note 14, Related Party, for further details.
  2. As of December 31, 2022, intangible assets, net included $2.3 billion related to a consolidated VIE. See Note 10, Variable Interest Entities, for further details.

                 The accompanying notes are an integral part of these consolidated financial statements.

MSP RECOVERY, INC. and Subsidiaries

Consolidated Statements of Operations

    Year ended December 31,  
(In thousands except per share amounts)   2022     2021     2020  
Claims recovery income   $ 4,878     $ 126     $ 255  
Claims recovery service income (1)     18,542       14,500       13,632  
Total Claims Recovery   $ 23,420     $ 14,626     $ 13,887  
Operating expenses                  
Cost of claim recoveries (2)     2,054       26       47  
Claims amortization expense     266,929       164       125  
General and administrative (3)     23,959       12,633       14,130  
Professional fees     18,497       8,502       2,211  
Professional fees – legal (4)     43,035       128       468  
Depreciation and amortization     424       343       235  
Total operating expenses     354,898       21,796       17,216  
Operating Loss   $ (331,478 )   $ (7,170 )   $ (3,329 )
Interest expense     (121,011 )     (27,046 )     (20,886 )
Other income (expense), net     63,067       1,139       (51 )
Change in fair value of warrant and derivative liabilities     (12,483 )     —       —  
Net loss before provision for income taxes   $ (401,905 )   $ (33,077 )   $ (24,266 )
Provision for income tax expense     —       —       —  
Net loss   $ (401,905 )   $ (33,077 )   $ (24,266 )
Less: Net (income) loss attributable to non-controlling members     394,488       (16 )     18  
Net loss attributable to controlling members   $ (7,417 )   $ (33,093 )   $ (24,248 )
                   
Basic and diluted weighted average shares outstanding, Class A Common Stock (5)     61,825,105     N/A     N/A  
Basic and diluted net income per share, Class A Common Stock (5)   $ (0.12 )   N/A     N/A  
  1. For the years ended December 31, 2022, 2021 and 2020, Claims recovery service income included $10.6 million, $11.5 million, and $13.1 million, respectively, of Claims recovery service income from VRM MSP. See Note 14, Related Party, for further details.
  2. For the year ended December 31, 2022, cost of Claim recoveries included $405 thousand of related party expenses. This relates to contingent legal expenses earned from Claims recovery income pursuant to legal service agreements with the La Ley con John H. Ruiz P.A., d/b/a MSP Recovery Law Firm (the “Law Firm”). See Note 14, Related Party, for further details. For the years ended December 31, 2021 and 2020, the expenses related to contingent legal expenses were de minimis.
  3. For the year ended December 31, 2022, general and administrative expenses included $400 thousand of related party expenses. For the years ended December 31, 2021 and 2020, the amounts were de minimis. See Note 14, Related Party, for further details.
  4. For the year ended December 31, 2022, professional fees – legal included $29.7 million of related party expenses related to the Law Firm. For the year ended December 31, 2021 and 2020, the amounts were de minimis, respectively, of related party expenses related to the Law Firm. See Note 14, Related Party, for further details.
  5. Earnings per share information has not been presented for periods prior to the Business Combination (as defined in Note 1, Description of Business), as it resulted in values that would not be meaningful to the users of these consolidated financial statements. Refer to Note 16, Net Loss Per Common Share for further information.

        The accompanying notes are an integral part of these consolidated financial statements.



Non-GAAP Financial Measures

MSP RECOVERY, INC. and Subsidiaries

Non-GAAP Reconciliation

     
(In thousands) December 31, 2022  
GAAP Operating Loss $ (331,478 )
Share based compensation   20,055  
Claims amortization expense   266,929  
Adjusted operating loss $ (44,494 )
     
GAAP Net Loss $ (401,905 )
Share based compensation   20,055  
Claims amortization expense   266,929  
Gain on debt extinguishment   (63,367 )
Paid-in-kind Interest   121,011  
Change in fair value of warrant and derivative liabilities   12,483  
Adjusted net loss $ (44,794 )

In addition to the financial measures prepared in accordance with GAAP, this press release also contains Non-GAAP financial measures. We consider “Net loss excluding non-cash and one-time expenses” and “Operating loss excluding non-cash or one-time items” as non-GAAP financial measures and important indicators of performance and useful metrics for management and investors to evaluate our business’s ongoing operating performance on a consistent basis across reporting periods. Net loss excluding non-cash and one-time expenses represents Net loss adjusted for certain non-cash and non-recurring expenses, and Operating loss excluding non-cash or one-time items represents Operating loss adjusted for certain non-cash and non-recurring expenses. These measures provide useful information to investors, and a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these Non-GAAP measures will be included in Management’s Discussion and Analysis in the Form 10-K.

For Investors:

ICR, Inc.
Marc Griffin
[email protected]

For Media:

ICR, Inc.
[email protected]