Market Newsdesk

May 9, 2023 6:42 pm

Virtus Investment Partners Reports Preliminary April 30, 2023 Assets Under Management

Virtus Investment Partners Reports Preliminary April 30, 2023 Assets Under Management

HARTFORD, Conn.–(BUSINESS WIRE)–
Virtus Investment Partners, Inc. (NASDAQ: VRTS) today reported preliminary assets under management of $162.2 billion as of April 30, 2023. In addition, the company provided services to $2.6 billion of other fee-earning assets, which are not included in assets under management.

Assets Under Management (unaudited)
($ in millions)

By Product Type:	April 30, 2023 (1)		March 31, 2023
Open-End Funds (2)	$	56,187	$	53,865
Closed-End Funds		10,399		10,358
Retail Separate Accounts		37,300		37,397
Institutional Accounts (3)		58,329		53,229
Total	$	162,215	$	154,849

(1)		Includes $7.8 billion of assets under management related to the April 1, 2023 acquisition of AlphaSimplex Group, LLC
(2)		Represents assets under management of U.S. retail funds, global funds, exchange traded funds, and variable insurance funds
(3)		Represents assets under management of institutional separate and commingled accounts including structured products

About Virtus Investment Partners, Inc.

Virtus Investment Partners (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment management products and services from our affiliated managers, each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006191/en/

Sean Rourke

(860) 263-4709

[email protected]

KEYWORDS: Connecticut United States North America

INDUSTRY KEYWORDS: Asset Management Professional Services Finance

MEDIA:

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May 9, 2023 6:42 pm

Dutch Bros Inc. Reports First Quarter 2023 Financial Results

Dutch Bros Inc. Reports First Quarter 2023 Financial Results

Record 45 New Systemwide Shop Openings in Q1 2023

Quarterly Revenue Increased Nearly 30% to $197.3 million

Reaffirms 2023 Guidance

GRANTS PASS, Ore.–(BUSINESS WIRE)–
Dutch Bros Inc. (NYSE: BROS; “Dutch Bros” or the “Company”) one of the fastest-growing brands in the food service and restaurant industry in the United States by location count, today reported financial results for the first quarter ended March 31, 2023.

Joth Ricci, Chief Executive Officer of Dutch Bros, stated, “In Q1, we opened a record 45 shops system-wide and grew revenue almost 30%. We also saw meaningful margin expansion, driven by significant improvements in labor efficiency and G&A leverage. We doubled down in our pursuit of more profitable growth and delivered strong company-operated shop margins. I’m proud of how our teams responded quickly and decisively to the economic climate, demonstrated by their focused effort on accelerating profitability as we grow our shop footprint.”

He continued, “During the quarter, we were encouraged by our customers’ responses to our traffic-driving initiatives, including our “Fill-a-Tray” promotion, which resulted in the largest single sales day in Dutch Bros recorded history. We will continue to utilize innovative strategies to generate traffic demand and build momentum.”

He concluded, “Our new shops are highly efficient, mature quickly, and continue to demonstrate predictable and attractive margin profiles. The class of shops opened in 2019, 2020, and 2021 have already achieved our 30% contribution margin target, and the class of 2022 is maturing in line with our margin expectations. We are hitting these targets as we continue entering new trade zones across the country. This performance gives us confidence in Dutch Bros growth strategy – both in the near-term and beyond.”

First Quarter 2023 Highlights

Opened 45 new shops, 42 of which were company-operated, across 9 states. All of these new shops continue to be led by existing or newly-promoted regional operators.
Total revenues grew 29.6% to $197.3 million as compared to $152.2 million in the same period of 2022.
System same shop sales² declined (2.0)%, inclusive of the impact of our fortressing strategy, which results in sales being transferred from existing shops to new ones, as compared to the same period in 2022. Company-operated same shop sales declined (3.5)%, inclusive of the impact of our fortressing strategy, as compared to the same period of 2022.
Company-operated shop revenues increased 33.0% to $173.2 million, as compared to $130.2 million in the same period of 2022.
Company-operated shop gross profit was $28.9 million as compared to $16.6 million in the same period of 2022. In the first quarter of 2023, company-operated shop gross margin, which includes 190bps of pre-opening expenses improved to 16.7%, a year-over-year increase of 390bps.
Company-operated shop contribution¹, a non-GAAP financial measure, grew 76.1% to $41.9 million as compared to $23.8 million in the same period of 2022. In the first quarter of 2023, company-operated shop contribution margin, which includes 190bps of pre-opening expense, improved to 24.2%, a year-over-year increase of 590 bps.
Selling, general, and administrative expenses were $46.0 million (23.3% of revenue) as compared to $45.2 million (29.7% of revenue) in the same period of 2022.
Adjusted selling, general, and administrative expenses^1,a non-GAAP financial measure, were $36.7 million (18.6% of revenue) as compared to $31.7 million (20.8% of revenue) in the same period of 2022.
Net loss was $9.4 million as compared to $16.3 million in the same period of 2022.
Adjusted EBITDA¹, a non-GAAP financial measure, grew 147.2% to $23.9 million as compared to $9.7 million in the same period of 2022.
Adjusted net loss¹, a non-GAAP financial measure, was $0.5 million as compared to $2.5 million in the same period of 2022.
Net loss per share of Class A and Class D common stock – diluted was $0.07 as compared to net loss per share of $0.10 in the same period of 2022.
Adjusted net loss per fully exchanged share of diluted common stock¹, a non-GAAP financial measure, was $0.00 as compared to $0.02 in the same period of 2022.

Outlook

Dutch Bros is reaffirming the following full-year 2023 outlook:

Total system shop openings in 2023 are expected to be at least 150, of which at least 130 shops will be company-operated.
Total revenues are projected to be between $950 million and $1 billion.
Same shop sales²growth is estimated to be in the low single digits. At this point we have no plans to take additional pricing action in 2023. We expect low-single digits growth from pricing to roll-over into 2023 from pricing action taken in 2022.
Adjusted EBITDA³ is estimated to be approximately $125 million. This includes approximately $8 million we elected to make in labor investments related to wage increases in federal minimum wage markets and approximately $11 million in mandated wage increases in markets that do not adhere to the federal minimum wage standard.
Capital expenditures are estimated to be in the range of $225 million to $250 million, which includes approximately $15 million to $20 million in spending in 2023 for our new roasting facility projected to open in 2024.

_________________
¹		Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.
²		Same shop sales is defined in the section “Select Financial Metrics”.
³		We have not reconciled guidance for Adjusted EBITDA to the corresponding GAAP financial measure because we do not provide guidance for the various reconciling items. We are unable to provide guidance for these reconciling items because we cannot determine their probable significance, as certain items are outside of our control and cannot be reasonably predicted due to the fact that these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measure is not available without unreasonable effort.

Conference Call and Webcast Today

Joth Ricci, Chief Executive Officer, and Charles Jemley, Chief Financial Officer, will host a conference call and webcast today at 5:00 p.m. Eastern Time (ET) to discuss financial results for the first quarter ended March 31, 2023.

Event: First Quarter 2023 Conference Call and Webcast

Date: Tuesday, May 9, 2023

Time: 5:00 p.m. ET

Dial In: 1-201-493-6779

Webcast: https://investors.dutchbros.com under “Events & Presentations”.

The webcast will be archived shortly after the conference call has concluded. We will also publish earnings presentation slides related to these financial results on our website https://investors.dutchbros.com under “Events & Presentations”.

About Dutch Bros Inc.

Dutch Bros Inc. (NYSE: BROS) is a high growth operator and franchisor of drive-thru shops that focus on serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE. Founded in 1992 by brothers Dane and Travis Boersma, Dutch Bros began with a double-head espresso machine and a pushcart in Grants Pass, Oregon. While espresso-based beverages are still at the core of what we do, Dutch Bros now offers a wide variety of unique, customizable cold and hot beverages that delight a broad array of customers. We believe Dutch Bros is more than just the products we serve—we are dedicated to making a massive difference in the lives of our employees, customers and communities. This combination of hand-crafted and high-quality beverages, our unique drive-thru experience and our community-driven, people-first culture has allowed us to successfully open new shops and continue to share the “Dutch Luv” at 716 locations across 14 states as of March 31, 2023.

To learn more about Dutch Bros, visit www.dutchbros.com, follow Dutch Bros Coffee on Instagram, Facebook, Twitter, and TikTok, and download the Dutch Bros app to earn points and score rewards!

Dutch Bros, our Windmill logo, Dutch Bros. Blue Rebel, and our other registered and common law trade names, trademarks and service marks are the property of Dutch Bros Inc. All other trademarks, trade names and service marks appearing in this Earnings Release are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Earnings Release may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

Forward-Looking Statements

In addition to historical information, this release contains a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, information concerning Dutch Bros’ possible or assumed future results of operations, including guidance for 2023, new shop openings, business strategies, and potential growth opportunities. These statements are based on Dutch Bros’ current expectations and beliefs, as well as a number of assumptions concerning future events. When used in this press release, the words “estimates,” “projected,” “expects,” “should,” “guidance,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Dutch Bros’ control that could cause actual results to differ materially from the results discussed in the forward-looking statements, including those related to general economic conditions, commodity inflation, increased labor costs, disruptions in our supply chain, ability to hire and retain employees, and other risks, including those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 27, 2023, and in our future reports to be filed with the SEC, including our Quarterly Report on Form 10-Q for the period ended March 31, 2023. Forward-looking statements contained in this press release are made as of this date, and Dutch Bros undertakes no duty to update such information except as required under applicable law.

DUTCH BROS INC.
Condensed Consolidated Statements of Operations

	Three Months Ended March 31,
(in thousands, except per share amounts; unaudited)	2023			2022
REVENUES
Company-operated shops	$	173,164		$	130,187
Franchising and other		24,103			21,969
Total revenues		197,267			152,156

COSTS AND EXPENSES
Cost of sales		151,523			121,167
Selling, general and administrative		45,976			45,214
Total costs and expenses		197,499			166,381

LOSS FROM OPERATIONS		(232	)		(14,225	)

OTHER EXPENSE
Interest expense, net		(7,886	)		(2,489	)
Other income		1,307			221
Total other expense		(6,579	)		(2,268	)

LOSS BEFORE INCOME TAXES		(6,811	)		(16,493	)
Income tax expense (benefit)		2,580			(214	)
NET LOSS	$	(9,391	)	$	(16,279	)
Less: Net loss attributable to non-controlling interests		(5,549	)		(11,332	)
NET LOSS ATTRIBUTABLE TO DUTCH BROS INC.	$	(3,842	)	$	(4,947	)
Net loss per share of Class A and Class D common stock:
Basic	$	(0.07	)	$	(0.10	)
Diluted	$	(0.07	)	$	(0.10	)
Weighted-average shares of Class A and Class D common stock outstanding:
Basic		56,664			48,059
Diluted		56,664			48,059

DUTCH BROS INC.
Segment Financials

	Three Months Ended March 31,
(in thousands; unaudited)	2023			2022
Revenues:
Company-operated shops	$	173,164		$	130,187
Franchising and other		24,103			21,969
Total revenues		197,267			152,156
Cost of Sales:
Company-operated shops		144,292			113,548
Franchising and other		7,231			7,619
Total cost of sales		151,523			121,167
Segment gross profit:
Company-operated shops		28,872			16,639
Franchising and other		16,872			14,350
Total gross profit		45,744			30,989
Depreciation and amortization:
Company-operated shops		13,001			7,140
Franchising and other		1,361			1,342
All other		417			700
Total depreciation and amortization		14,779			9,182
Segment contribution:
Company-operated shops		41,873			23,779
Franchising and other		18,233			15,692
Total segment contribution		60,106			39,471
Selling, general and administrative		(45,976	)		(45,214	)
Interest expense, net		(7,886	)		(2,489	)
Other income		1,307			221
Loss before income taxes	$	(6,811	)	$	(16,493	)

DUTCH BROS INC.
Company-Operated Shop Results

	Three Months Ended March 31,
	2023		2022
(in thousands; unaudited)	$	%	$	%
Company-operated shops revenue	173,164	100.0	130,187	100.0

Beverage, food and packaging costs	48,952	28.3	35,622	27.4
Labor costs	48,549	28.0	41,761	32.0
Occupancy and other costs	30,559	17.6	23,003	17.7
Pre-opening costs	3,231	1.9	6,022	4.6
Depreciation and amortization	13,001	7.5	7,140	5.5
Company-operated shop costs and expenses	144,292	83.3	113,548	87.2

Company-operated shops gross profit	28,872	16.7	16,639	12.8
Company-operated shops contribution ¹	41,873	24.2	23,779	18.3

_________________
¹		Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

DUTCH BROS INC.
Summary Cash Flows Data

	Three Months Ended March 31,
(in thousands; unaudited)	2023			2022
Net cash provided by (used in) operating activities	$	3,077		$	(756	)
Net cash used in investing activities		(43,043	)		(46,021	)
Net cash provided by financing activities		34,084			55,025
Net increase (decrease) in cash and cash equivalents	$	(5,882	)	$	8,248
Cash and cash equivalents at beginning of period		20,178			18,506
Cash and cash equivalents at end of period	$	14,296		$	26,754

DUTCH BROS INC.
Condensed Consolidated Balance Sheets

(in thousands; unaudited)	March 31, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	14,296		$	20,178
Accounts receivable, net		8,778			11,966
Inventories, net		43,957			39,229
Prepaid expenses and other current assets		14,283			10,949
Total current assets		81,314			82,322
Property and equipment, net		402,841			365,468
Finance lease right-of-use assets, net		288,560			247,943
Operating lease right-of-use assets, net		174,673			169,302
Intangibles, net		7,893			8,804
Goodwill		21,629			21,629
Deferred income tax assets, net		286,385			288,765
Other long-term assets		1,670			2,127
Total assets	$	1,264,965		$	1,186,360
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	24,092		$	21,270
Accrued liabilities		28,363			27,452
Other current liabilities		7,299			7,860
Deferred revenue		21,815			25,335
Line of credit		150,978			110,865
Current portion of finance lease liabilities		8,129			7,971
Current portion of operating lease liabilities		9,536			9,317
Current portion of long-term debt		2,611			2,609
Total current liabilities		252,823			212,679
Deferred revenue, net of current portion		6,104			6,119
Tax receivable agreements liability, net of current portion		219,629			220,923
Finance lease liabilities, net of current portion		275,639			237,130
Operating lease liabilities, net of current portion		166,345			161,228
Long-term debt, net of current portion		95,714			96,297
Other long-term liabilities		8			8
Total liabilities		1,016,262			934,384
Equity:
Common stock		2			2
Additional paid in capital		148,873			145,613
Accumulated other comprehensive income		590			813
Accumulated deficit		(21,152	)		(17,310	)
Total stockholders’ equity attributable to Dutch Bros Inc.		128,313			129,118
Non-controlling interests		120,390			122,858
Total equity		248,703			251,976
Total liabilities and equity	$	1,264,965		$	1,186,360

DUTCH BROS INC.
Select Financial Metrics

	Three Months Ended March 31,
(in thousands, except number of shops data; unaudited)	2023			2022
Shop count, beginning of period
Company-operated		396			271
Franchised		275			267
		671			538
Company-operated new openings		42			34
Franchised new openings		3			—
Acquisition of franchise shops		—			5
Shop count, end of period
Company-operated		438			310
Franchised		278			262
Total shop count		716			572

Systemwide AUV ¹	$	1,916		$	1,892
Company-operated shops AUV ¹	$	1,879		$	1,829

Systemwide same shop sales ^{2, 3}		(2.0	) %		6.0	%
Company-operated same shop sales ²		(3.5	) %		5.1	%

Systemwide sales ³	$	302,782		$	254,565
Company-operated operating weeks ⁴		5,322			3,764
Franchising and other operating weeks ⁴		3,546			3,363
Dutch Rewards member registrations ⁵		494			489

	Three Months Ended March 31,
	2023				2022
(in thousands; unaudited)	$		%		$		%
Company-operated shop revenues	173,164		100.0		130,187		100.0
Company-operated gross profit	28,872		16.7		16,639		12.8
Company-operated shop contribution ⁶	41,873		24.2		23,779		18.3
Selling, general, and administrative expenses	45,976		23.3		45,214		29.7
Adjusted selling, general, and administrative expenses ⁶	36,656		18.6		31,680		20.8
Net loss	(9,391	)	(4.8	)	(16,279	)	(10.7	)
Adjusted EBITDA ⁶	23,880		12.1		9,662		6.4

___________
¹		AUVs are determined based on the net sales for any trailing twelve-month period for systemwide and company-operated shops that have been open a minimum of 15 months. AUVs are calculated by dividing the systemwide and company-operated shop net sales by the total number of systemwide and company-operated shops, respectively. Management uses this metric as an indicator of shop growth and future expectations of mature locations.

²		Same shop sales reflects the change in year-over-year sales for the comparable shop base, which we define as shops open for 15 complete months or longer. Management uses this metric as an indicator of shop growth and future expansion strategy. The number of shops included in the systemwide and company-operated comparable bases for the respective periods are presented in the following table.

	Three Months Ended March 31,
	2023	2022
Systemwide shop base	503	414
Company-operated shop base	246	173

³		Systemwide sales and systemwide same shop sales are operating measures that include sales at company-operated shops and sales at franchised shops during the comparable periods presented. Franchise sales represent sales at all franchise shops and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and advertising fund contributions are calculated based on a percentage of franchise sales. As these metrics include sales reported to us by our non-consolidated franchise partners, these metrics should be considered as a supplement to, not a substitute for, our results as reported under GAAP. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.

⁴		Company-operated and franchise shops operating weeks are calculated based on the number operating days for the shop base and dividing by 7. Our shop base is defined as shops opened as of the end date of the periods presented. The operating weeks calculations reflect re-acquired franchises through 2022. Management uses these metrics as indicators of our system’s overall financial health, growth and future expansion prospects.

⁵		Dutch Rewards is our digitally-based rewards program available exclusively through the Dutch Rewards app. Management uses this metric as an indicator of customer loyalty adoption of our Dutch Rewards app and future promotional plans.

⁶		Reconciliation of GAAP to non-GAAP results is provided in the section “Non-GAAP Financial Measures”.

Non-GAAP Financial Measures

In addition to disclosing financial results in accordance with U.S. GAAP, this release contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance.

Our non-GAAP financial measures reflect adjustments based on one or more of the following items, as well as the related income tax effects where applicable. Income tax effects have been calculated based on the combined total non-GAAP adjustments using our total effective tax rate. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the financial results calculated in accordance with U.S. GAAP and reconciliations from these results should be carefully evaluated.

Company-operated shop contribution (in dollars and as a percentage of revenue)

Definition and/or calculation

Company-operated segment gross profit, before company-operated shop depreciation and amortization. Company-operated shop contribution in dollars (as defined), taken as a percentage of company-operated shop revenue.

Usefulness to management and investors

This non-GAAP measure is used by our management in making performance decisions without the impact of non-cash depreciation and amortization charges. This is a standard metric used across the industry by our investors.

EBITDA, Adjusted EBITDA (in dollars and as a percentage of revenue)

EBITDA — definition and/or calculation

Net loss before interest expense (net of interest income), income tax expense (benefit), and depreciation and amortization expense.

Adjusted EBITDA — definition and/or calculation

Defined as EBITDA (as defined above), excluding equity-based compensation, COVID-19: “Thank You” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, and (gain) loss on the remeasurement of the liability related to the TRAs.

Usefulness to management and investors

These non-GAAP measures are supplemental operating performance measures we believe facilitate comparisons to historical performance and competitors’ operating results. We believe these non-GAAP measures presented provide investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because they exclude items that may not be indicative of our ongoing operating performance.

Adjusted selling, general, and administrative (in dollars and as a percentage of revenue)

Definition and/or calculation

Selling, general, and administrative expenses, excluding equity-based compensation expense, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, and executive transitions costs.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe the non-GAAP measure presented provides investors with a supplemental view of our operating performance that facilitates analysis and comparisons of our ongoing business operations because it excludes items that may not be indicative of our ongoing operating performance.

Adjusted net loss

Definition and/or calculation

Net loss, excluding equity-based compensation expense, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, (gain) loss on the remeasurement of the liability related to the TRAs, and income tax effects of items excluded from net loss.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. We believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Adjusted fully exchanged weighted-average shares of diluted common stock outstanding

Definition and/or calculation

Weighted-average shares of Class A and Class D common stock outstanding – basic with addition of dilutive impacts of RSAs and RSUs, as well as the assumed exchange of the weighted-average shares of Class B and Class C common stock.

Usefulness to management and investors

This non-GAAP measure is used a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By adding in the assumed full exchange of all of our outstanding Class B and Class C common stock, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Adjusted net loss per fully exchanged share of diluted common stock

Definition and/or calculation

Net loss per share of Class A and Class D common stock – diluted, excluding per share impacts of equity-based compensation expense, COVID-19: “thank you” pay and catastrophic leave expenses, COVID-19: prepaid costs not utilized, costs incurred for company-wide milestone events, executives transition costs, income tax effects of items excluded from net loss, and removal of per share impacts of controlling and non-controlling interests.

Usefulness to management and investors

This non-GAAP measure is used as a supplemental measure of operating performance that we believe is useful to evaluate our performance period over period and relative to our competitors. By assuming the full exchange of all of our outstanding Class B and Class C common stock and related net loss adjustments, we believe this measure facilitates a better comparison with other companies that have different organizational and tax structures, as well as comparisons period over period.

Non-GAAP adjustments

Below are the definitions of the non-GAAP adjustments that are used in the calculation of our non-GAAP measures, as described above.

Equity-based compensation

Non-cash expenses related to the grant and vesting of stock awards, restricted stock awards and restricted stock units in Dutch Bros PubCo¹ and/or Profit Interest Units in Dutch Bros OpCo² to certain eligible employees.

COVID-19: “thank you” pay and catastrophic leave

Costs related to two separate programs established to support employees during the COVID-19 pandemic. We implemented an hourly wage supplement program for shop employees who continued to work while their state or county was under a stay at home order or similar lockdown requirement. This program lasted in various markets until April 2021. We also established a catastrophic leave policy that provided paid leave to employees who were required to quarantine due to in-shop exposures and could not work their regular hours. All COVID-19-related protocols, including catastrophic leave, will remain in effect until the end of the COVID-19 pandemic as determined by the appropriate government agency.

COVID-19: Prepaid costs not utilized

Costs related to the write-off of previously prepaid expenses for the development of a virtual corporate engagement platform built in response to the health restrictions of the COVID-19 pandemic. The platform was developed as a substitute for in person engagement practices used pre-pandemic. The platform has been determined ineffective, particularly as we shift back to in-person events with the easing of restrictions related to the COVID-19 pandemic.

Milestone events

Costs incurred for company-wide events to celebrate 30 years of serving high QUALITY, hand-crafted beverages with unparalleled SPEED and superior SERVICE to our customers.

Executives transition costs

Employee severance and related benefit costs, as well as sign-on bonus(es) for several executive level transitions occurring in 2022 and 2023.

TRAs remeasurements

(Gain) loss impacts on condensed consolidated statements of operations related to adjustments of our TRAs liabilities.

Dilutive effects of RSAs and RSUs

Addition of incremental shares of RSAs and RSUs calculated under the treasury stock method, when they are dilutive for the calculation of weighted-average shares on a non-GAAP and GAAP basis.

Assumed exchange of weighted-average Class B and Class C shares of common stock

Weighted-average shares of Class B and C common stock that are assumed to be exchanged for Class A common stock.

Removal of allocation for controlling and non-controlling interests

Removal of the net loss allocation to controlling and non-controlling interests to align the numerator of the net loss per share to the denominator, which assumes the full exchange of shares of Class B and Class C common stock.

___________
¹		Dutch Bros PubCo refers to Dutch Bros Inc., a Delaware corporation, of which its Class A common stock is publicly traded on the New York Stock Exchange under the symbol “BROS”.
²		Dutch Bros OpCo refers to Dutch Mafia, LLC, a Delaware limited liability company, and a direct subsidiary of Dutch Bros Inc.

Supplemental Reconciliations of GAAP Actuals to Non-GAAP Actuals

Following are the reconciliations of the most comparable GAAP financial measure to non-GAAP financial measure. These non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP, and the reconciliations from U.S. GAAP to Non-GAAP actuals should be carefully evaluated. Please refer to “Explanation of Non-GAAP Financial Measures” in this release for a detailed explanation of the adjustments made to the comparable U.S. GAAP measures, the ways management uses the non-GAAP measures, and the reasons why management believes the non-GAAP measures provide useful information for investors.

	Three Months Ended March 31,
	2023		2022
(in thousands; unaudited)	$	%	$	%
Company-operated shop gross profit	28,872	16.7	16,639	12.8
Depreciation and amortization	13,001	7.5	7,140	5.5
Company-operated shop contribution	41,873	24.2	23,779	18.3

	Three Months Ended March 31,
	2023				2022
(in thousands; unaudited)	$		%		$		%
Net loss	(9,391	)	(4.8	)	(16,279	)	(10.7	)
Depreciation and amortization	14,779		7.5		9,182		6.0
Interest expense, net	7,886		4.0		2,489		1.6
Income tax expense (benefit)	2,580		1.3		(214	)	(0.1	)
EBITDA	15,854		8.0		(4,822	)	(3.2	)
Equity-based compensation	9,170		4.6		9,900		6.5
COVID-19: “thank you pay” and catastrophic leave	—		—		950		0.7
COVID-19: prepaid costs not utilized	—		—		1,200		0.8
Milestone events	—		—		2,434		1.6
Executives transition costs	150		0.1		—		—
TRAs remeasurements	(1,294	)	(0.6	)	—		—
Adjusted EBITDA	23,880		12.1		9,662		6.4

	Three Months Ended March 31,
	2023				2022
(in thousands; unaudited)	$		%		$		%
Selling, general, and administrative ¹	45,976		23.3		45,214		29.7
Equity-based compensation	(9,170	)	(4.6	)	(9,900	)	(6.5	)
COVID-19: prepaid costs not utilized	—		—		(1,200	)	(0.8	)
Milestone events	—		—		(2,434	)	(1.6	)
Executives transition costs	(150	)	(0.1	)	—		—
Adjusted selling, general, and administrative	36,656		18.6		31,680		20.8

	Three Months Ended March 31,
(in thousands; unaudited)	2023			2022
Net loss	$	(9,391	)	$	(16,279	)
Equity-based compensation		9,170			9,900
COVID-19: “thank you pay” and catastrophic leave		—			950
COVID-19: prepaid costs not utilized		—			1,200
Milestone events		—			2,434
Executives transition costs		150			—
TRAs remeasurements		(1,294	)		—
Income tax effects		830			(721	)
Adjusted net loss	$	(535	)	$	(2,516	)

_________________
¹		Selling, general, and administrative expenses include depreciation and amortization.

	Three Months Ended March 31,
(in thousands, except per share amounts; unaudited)	2023			2022
Weighted-average shares of Class A and Class D common stock outstanding – diluted		56,664			48,059
Dilutive effects of RSAs and RSUs ¹		—			—
Assumed exchange of weighted-average Class B and Class C shares of common stock		105,756			112,861
Adjusted fully exchanged weighted-average shares of common stock outstanding – diluted		162,420			160,920

Net loss per share of Class A and Class D common stock – diluted	$	(0.07	)	$	(0.10	)
Controlling and non-controlling interest adjustments		0.01			(0.02	)
Equity-based compensation		0.06			0.06
COVID-19: “thank you pay” and catastrophic leave		—			0.01
COVID-19: prepaid costs not utilized		—			0.01
Milestone events		—			0.02
Executives transition costs		—			—
TRAs remeasurements		(0.01	)		—
Income tax effects		0.01			—
Adjusted net loss per fully exchanged share of diluted common stock	$	—		$	(0.02	)

_________________
¹		No impact as the RSAs and RSUs were anti-dilutive for the periods presented.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509005914/en/

For Investor Relations inquiries:

Raphael Gross

ICR

(203) 682-8253

[email protected]

For Media Relations inquiries:

Jessica Liddell

ICR

(203) 682-8208

[email protected]

KEYWORDS: Oregon United States North America

INDUSTRY KEYWORDS: Retail Restaurant/Bar Food/Beverage

MEDIA:

May 9, 2023 6:41 pm

Rogers Expanding Power Substrate Capacity in China to Meet Growing EV and Renewable Energy Demand

Rogers Expanding Power Substrate Capacity in China to Meet Growing EV and Renewable Energy Demand

CHANDLER, Arizona–(BUSINESS WIRE)–
Rogers Corporation (NYSE:ROG) (“Rogers”), announced its plan to build a new factory in China to manufacture its curamik® AMB (Active Metal Brazed) and DBC (Direct Bonded Copper) substrates to meet significant demand growth. The first phase of the expansion is slated for completion in 2025. This follows last year’s investment in expanding the company’s curamik® factory in Eschenbach, Germany.

“To better support our global customers and meet the growing demand for power substrates used in electric and hybrid electric vehicles (EV/HEV) and renewable energy applications, we are planning to build a new state-of-the-art factory in China. Upon completion, this new factory will help shorten lead times and deepen technical collaborations with customers in Asia,” said Jeff Tsao, Advanced Electronic Solutions (AES) Vice President and General Manager. “We have been a trusted partner to leading power module suppliers for decades, delivering efficient and reliable power semiconductor substrates, and today’s announcement further strengthens that position.”

This latest investment continues Rogers’ manufacturing strategy of positioning capacity to serve its global customer base. The company continues to focus on supporting growth opportunities across its markets with ongoing initiatives to drive capacity throughput improvements at existing facilities and make measured investments in new capacity. The expansion plan will be discussed in the company’s Q2 2023 earnings conference call, and any further developments will be communicated at that time. Rogers continues to expect capital expenditures for full-year 2023 to be in the range of $65 to $75 million.

About Rogers Corporation

Rogers Corporation (NYSE:ROG) is a global leader in engineered materials to power, protect and connect our world. Rogers delivers innovative solutions to help our customers solve their toughest material challenges. Rogers’ advanced electronic and elastomeric materials are used in applications for EV/HEV, automotive safety and radar systems, mobile devices, renewable energy, wireless infrastructure, energy-efficient motor drives, industrial equipment and more. Headquartered in Chandler, Arizona, Rogers operates manufacturing facilities in the United States, Asia and Europe, with sales offices worldwide. For more information, visit www.rogerscorp.com.

Safe Harbor Statement

Statements included in this release that are not a description of historical facts are forward-looking statements. Words or phrases such as “believe,” “may,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,” “should,” “would” or similar expressions are intended to identify forward-looking statements, and are based on Rogers’ current beliefs and expectations. This release contains forward-looking statements regarding our plans, objectives, outlook, goals, strategies, future events, future net sales or performance, capital expenditures, future restructuring, plans or intentions relating to expansions, business trends and other information that is not historical information. All forward-looking statements are based upon information available to us on the date of this release and are subject to risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to differ materially from those indicated by the forward-looking statements. Other risks and uncertainties that could cause such results to differ include: the duration and impacts of the novel coronavirus global pandemic and efforts to contain its transmission and distribute vaccines, including the effect of these factors on our business, suppliers, customers, end users and economic conditions generally; continuing disruptions to global supply chains and our ability, or the ability of our suppliers, to obtain necessary product components; failure to capitalize on, volatility within, or other adverse changes with respect to the Company’s growth drivers, including advanced mobility and advanced connectivity, such as delays in adoption or implementation of new technologies; uncertain business, economic and political conditions in the United States (U.S.) and abroad, particularly in China, South Korea, Germany, the United Kingdom, Hungary and Belgium, where we maintain significant manufacturing, sales or administrative operations; the trade policy dynamics between the U.S. and China reflected in trade agreement negotiations and the imposition of tariffs and other trade restrictions, including trade restrictions on Huawei Technologies Co., Ltd. (Huawei); fluctuations in foreign currency exchange rates; our ability to develop innovative products and the extent to which our products are incorporated into end-user products and systems and the extent to which end-user products and systems incorporating our products achieve commercial success; the ability and willingness of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely and cost-effective manner; intense global competition affecting both our existing products and products currently under development; business interruptions due to catastrophes or other similar events, such as natural disasters, war, including the ongoing conflict between Russia and Ukraine, terrorism or public health crises; the impact of sanctions, export controls and other foreign asset or investment restrictions; failure to realize, or delays in the realization of anticipated benefits of acquisitions and divestitures due to, among other things, the existence of unknown liabilities or difficulty integrating acquired businesses; our ability to attract and retain management and skilled technical personnel; our ability to protect our proprietary technology from infringement by third parties and/or allegations that our technology infringes third party rights; changes in effective tax rates or tax laws and regulations in the jurisdictions in which we operate; failure to comply with financial and restrictive covenants in our credit agreement or restrictions on our operational and financial flexibility due to such covenants; the outcome of ongoing and future litigation, including our asbestos-related product liability litigation or risks arising from the terminated DuPont Merger; changes in environmental laws and regulations applicable to our business; and disruptions in, or breaches of, our information technology systems. Should any risks and uncertainties develop into actual events, these developments could have a material adverse effect on the Company. For additional information about the risks, uncertainties and other factors that may affect our business, please see our most recent annual report on Form 10-K and any subsequent reports filed with the Securities and Exchange Commission, including quarterly reports on Form 10-Q. Rogers Corporation assumes no responsibility to update any forward-looking statements contained herein except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006092/en/

Media Contact:

Amy Kweder

Director, Corporate Communications

Phone: 480.203.0058

Email: [email protected]

Investor Contact:

Steve Haymore

Director, Investor Relations

Phone: 480.917.6026

Email: [email protected]

KEYWORDS: Arizona United States North America

INDUSTRY KEYWORDS: EV/Electric Vehicles Automotive Technology Manufacturing Semiconductor Green Technology Alternative Vehicles/Fuels Alternative Energy Environment Energy Engineering

MEDIA:

Logo

May 9, 2023 6:41 pm

Electronic Arts Reports Q4 and FY23 Results

Electronic Arts Reports Q4 and FY23 Results

Record Q4 net bookings driven by all-time high EA SPORTS FIFA franchise performance;

Company carries strong momentum into brand launch of EA SPORTS FC

REDWOOD CITY, Calif.–(BUSINESS WIRE)–Electronic Arts Inc. (NASDAQ: EA) today announced preliminary financial results for its fourth quarter and fiscal year ended March 31, 2023.

“EA delivered a strong Q4 with record net bookings, up 11 percent year-over-year, demonstrating the strength of our business. Our teams continue to create high quality entertainment, fueled by amazing games and deeply engaging live services,” said Andrew Wilson, CEO of Electronic Arts. “We’re excited to continue our momentum, including the highly anticipated launch of EA SPORTS FC later this year.”

“Record live services performance and increased engagement, particularly from our EA SPORTS FIFA franchise, drove better-than-expected Q4 net bookings, capping a strong finish to the fiscal year,” said Chris Suh, CFO. “Looking ahead, our teams remain disciplined in prioritizing the player experience as we continue to focus our investments on long-term growth.”

Selected Operating Highlights and Metrics¹

Net bookings² for Q4 was $1.946 billion, up 11% year-over-year (up 15% in constant currency).
Live services and othernet bookings for Q4 was $1.622 billion, a record for the quarter, up 9% year-over-year (up 13% in constant currency) and represented 83% of total net bookings.
The EA SPORTS FIFA franchise Q4 net bookings grew 31% year-over-year (up 37% in constant currency).
In the six months since launch, EA SPORTS FIFA 23 has surpassed life-time sales of EA SPORTS FIFA 22, becoming the most successful launch in franchise history.
Apex Legends delivered net bookings growth in Q4 year-over-year at constant currency, driven by a successful Season 16 with peak weekly active users up over 20% from the previous season.
Life-to-date, The Sims 4 player network has grown to more than 70 million worldwide.

Selected Financial Highlights and Metrics

Net revenue was $1.874 billion for the quarter and $7.426 billion for the fiscal year.
Net cash provided by operating activities was $617 million for the quarter and $1.550 billion for the fiscal year.
EA repurchased 2.7 million shares for $325 million during the quarter, bringing the total for the fiscal year to 10.4 million shares for $1.295 billion.

Dividend

EA has declared a quarterly cash dividend of $0.19 per share of the Company’s common stock. The dividend is payable on June 21, 2023 to shareholders of record as of the close of business on May 31, 2023.

Quarterly Financial Highlights


	Three Months Ended
	March 31,
	2023		2022
(in $ millions, except per share amounts)
Full game	372		438
Live services and other	1,502		1,387
Total net revenue	1,874		1,825

Net income (loss)	(12	)	225
Diluted earnings (loss) per share	(0.04	)	0.80

Operating cash flow	617		444

Value of shares repurchased	325		325
Number of shares repurchased	2.7		2.5

Cash dividend paid	52		48

The following GAAP-based financial data^3,4 and tax rate of 19% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results:

	Three Months Ended March 31, 2023
	GAAP-Based Financial Data
(in $ millions)	Statement of Operations	Acquisition- related expenses		Change in deferred net revenue (online- enabled games)	Restructuring and related charges		Stock-based compensation
Total net revenue	1,874	–		72	–		–
Cost of revenue	448	(25	)	–	–		(2	)
Gross profit	1,426	25		72	–		2
Total operating expenses	1,251	(26	)	–	(155	)	(140	)
Operating income	175	51		72	155		142
Interest and other income (expense), net	6	–		–	–		–
Income before provision for income taxes	181	51		72	155		142
Number of shares used in computation:
Diluted	274

Fiscal Year Financial Highlights


	Twelve Months Ended
	March 31,
	2023	2022
(in $ millions)
Full game	1,937	1,993
Live services and other	5,489	4,998
Total net revenue	7,426	6,991

Net income	802	789
Diluted earnings per share	2.88	2.76

Operating cash flow	1,550	1,899

Value of shares repurchased	1,295	1,300
Number of shares repurchased	10.4	9.5

Cash dividend paid	210	193

The following GAAP-based financial data^3,4 and a tax rate of 19% was used internally by company management to adjust its GAAP results in order to assess EA’s operating results.



	Twelve Months Ended March 31, 2023
	GAAP-Based Financial Data
(in $ millions)	Statement of Operations		Acquisition- related expenses		Change in deferred net revenue (online- enabled games)		Restructuring and related charges		Stock-based compensation
Total net revenue	7,426		–		(85	)	–		–
Cost of revenue	1,792		(120	)	–		–		(7	)
Gross profit	5,634		120		(85	)	–		7
Total operating expenses	4,302		(158	)	–		(155	)	(541	)
Operating income	1,332		278		(85	)	155		548
Interest and other income (expense), net	(6	)	–		–		–		–
Income before provision for income taxes	1,326		278		(85	)	155		548
Number of shares used in computation:
Diluted	278

Operating Metric

The following is a calculation of our total net bookings² for the periods presented:

	Three Months Ended			Twelve Months Ended
	March 31,			March 31,
	2023	2022		2023		2022
(in $ millions)
Total net revenue	1,874	1,825		7,426		6,991
Change in deferred net revenue (online-enabled games)	72	(74	)	(85	)	524
Total net bookings	1,946	1,751		7,341		7,515

Business Outlook as of May 9, 2023

Fiscal Year 2024 Expectations – Ending March 31, 2024

Financial metrics:

Net revenue is expected to be approximately $7.300 billion to $7.700 billion.
- No change in deferred net revenue (online-enabled games) is expected.
Net income is expected to be approximately $915 million to $1.055 billion.
Diluted earnings per share is expected to be approximately $3.30 to $3.81.
Operating cash flow is expected to be approximately $1.700 billion to $1.850 billion.
The Company estimates a share count of 277 million for purposes of calculating fiscal year 2024 diluted earnings per share.

Operational metric:

Net bookings² is expected to be approximately $7.300 billion to $7.700 billion.

In addition, the following outlook for GAAP-based financial data^3,4 and long-term tax rate of 19% are used internally by EA to adjust GAAP expectations to assess EA’s operating results and plan for future periods:

Twelve Months Ending March 31, 2024

GAAP-Based Financial Data*

GAAP
Guidance
Range

Acquisition-
related
expenses

Change in
deferred net
revenue (online-
enabled games)

Restructuring
and related
charges

Stock-based
compensation

(in $ millions)

Total net revenue

7,300 to 7,700

–

Cost of revenue

1,670 to 1,750

(65

)

–

)

Operating expense

4,295 to 4,415

(95

)

–

(25

)

(635

)

Income before provision for income taxes

1,346 to 1,551

160

–

640

Net income

915 to 1,055

Number of shares used in computation:

Diluted shares

277

* The mid-point of the range has been used for purposes of presenting the reconciling items.

First Quarter Fiscal Year 2024 Expectations – Ending June 30, 2023

Financial metrics:

Net revenue is expected to be approximately $1.825 billion to $1.925 billion.
- Change in deferred net revenue (online-enabled games) is expected to be approximately ($325) million.

Net income is expected to be approximately $271 million to $316 million.
Diluted earnings per share is expected to be approximately $0.98 to $1.14.
The Company estimates a share count of 277 million for purposes of calculating first quarter fiscal 2024 diluted earnings per share.

Operational metric:

Net bookings² is expected to be approximately $1.500 billion to $1.600 billion.

Three Months Ending June 30, 2023

GAAP-Based Financial Data*

GAAP
Guidance
Range

Acquisition-
related
expenses

Change in
deferred net
revenue (online-
enabled games)

Restructuring
and related
charges

Stock-based
compensation

(in $ millions)

Total net revenue

1,825 to 1,925

–

(325

)

–

Cost of revenue

350 to 370

(20

)

–

Operating expense

1,065 to 1,085

(25

)

–

(20

)

(140

)

Income before provision for income taxes

410 to 479

(325

)

140

Net income

271 to 316

Number of shares used in computation:

Diluted shares

277

* The mid-point of the range has been used for purposes of presenting the reconciling items.

Conference Call and Supporting Documents

Electronic Arts will host a conference call on May 9, 2023 at 2:00 pm PT (5:00 pm ET) to review its results for the fourth fiscal quarter and fiscal year ended March 31, 2023 and its outlook for the future. During the course of the call, Electronic Arts may disclose material developments affecting its business and/or financial performance. Listeners may access the conference call live through the following dial-in number (888) 330-2446 (domestic) or (240) 789-2732 (international), using the conference code 5939891 or via webcast at EA’s IR Website at http://ir.ea.com.

EA has posted a slide presentation with a financial model of EA’s historical results and guidance on EA’s IR Website. EA will also post the prepared remarks and a transcript from the conference call on EA’s IR Website.

A dial-in replay of the conference call will be available until May 24, 2023 at (800) 770-2030 (domestic) or (647) 362-9199 (international) using pin code 5939891. An audio webcast replay of the conference call will be available for one year on EA’s IR Website.

Forward-Looking Statements

Some statements set forth in this release, including the information relating to EA’s expectations under the heading “Business Outlook as of May 9, 2023” and other information regarding EA’s expectations contain forward-looking statements that are subject to change. Statements including words such as “anticipate,” “believe,” “expect,” “intend,” “estimate,” “plan,” “predict,” “seek,” “goal,” “will,” “may,” “likely,” “should,” “could” (and the negative of any of these terms), “future” and similar expressions also identify forward-looking statements. These forward-looking statements are not guarantees of future performance and reflect management’s current expectations. Our actual results could differ materially from those discussed in the forward-looking statements.

Some of the factors which could cause the Company’s results to differ materially from its expectations include the following: sales of the Company’s products and services; the Company’s ability to develop and support digital products and services, including managing online security and privacy; outages of our products, services and technological infrastructure; the Company’s ability to manage expenses; the competition in the interactive entertainment industry; governmental regulations; the effectiveness of the Company’s sales and marketing programs; timely development and release of the Company’s products and services; the Company’s ability to realize the anticipated benefits of, and integrate, acquisitions; the consumer demand for, and the availability of an adequate supply of console hardware units; the Company’s ability to predict consumer preferences among competing platforms; the Company’s ability to develop and implement new technology; foreign currency exchange rate fluctuations; economic and geopolitical conditions; changes in our tax rates or tax laws; and other factors described in Part II, Item 1A of Electronic Arts’ latest Quarterly Report on Form 10-Q under the heading “Risk Factors”, as well as in other documents we have filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

These forward-looking statements are current as of May 9, 2023. Electronic Arts assumes no obligation to revise or update any forward-looking statement for any reason, except as required by law. In addition, the preliminary financial results set forth in this release are estimates based on information currently available to Electronic Arts.

While Electronic Arts believes these estimates are meaningful, they could differ from the actual amounts that Electronic Arts ultimately reports in its Annual Report on Form 10-K for the fiscal year ended March 31, 2023. Electronic Arts assumes no obligation and does not intend to update these estimates prior to filing its Form 10-K for the fiscal year ended March 31, 2023.

About Electronic Arts

Electronic Arts (NASDAQ: EA) is a global leader in digital interactive entertainment. The Company develops and delivers games, content and online services for Internet-connected consoles, mobile devices and personal computers.

In fiscal year 2023, EA posted GAAP net revenue of approximately $7.4 billion. Headquartered in Redwood City, California, EA is recognized for a portfolio of critically acclaimed, high-quality brands such as EA SPORTS™ FC, Battlefield™, Apex Legends™, The Sims™, Madden NFL, Need for Speed™, Titanfall™, Plants vs. Zombies™ and F1^®. More information about EA is available at www.ea.com/news.

EA SPORTS, Battlefield, Need for Speed, Apex Legends, The Sims, Titanfall and Plants vs. Zombies are trademarks of Electronic Arts Inc. STAR WARS © & TM 2015 Lucasfilm Ltd. All rights reserved. John Madden, NFL, FIFA and F1 are the property of their respective owners and used with permission.

¹For more information on constant currency, please refer to the earnings slides available on EA’s IR Website.

²Net bookings is defined as the net amount of products and services sold digitally or sold-in physically in the period. Net bookings is calculated by adding total net revenue to the change in deferred net revenue for online-enabled games.

³For more information about the nature of the GAAP-based financial data, please refer to EA’s Form 10-K for the fiscal year ended March 31, 2022.

⁴ On March 29, 2023, EA announced a restructuring plan focused on prioritizing investments aligned with the Company’s growth opportunities and optimizing its real estate portfolio.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
(in $ millions, except per share data)

	Three Months Ended March 31,				Twelve Months Ended March 31,
	Three Months Ended March 31,				Twelve Months Ended March 31,
	2023		2022		2023		2022
Net revenue	1,874		1,825		7,426		6,991
Cost of revenue	448		419		1,792		1,859
Gross profit	1,426		1,406		5,634		5,132
Operating expenses:
Research and development	635		579		2,328		2,186
Marketing and sales	255		245		978		961
General and administrative	224		165		727		673
Amortization and impairment of intangibles	26		52		158		183
Restructuring	111		—		111		—
Total operating expenses	1,251		1,041		4,302		4,003
Operating income	175		365		1,332		1,129
Interest and other income (expense), net	6		(9	)	(6	)	(48	)
Income before provision for income taxes	181		356		1,326		1,081
Provision for income taxes	193		131		524		292
Net income (loss)	(12	)	225		802		789
Earnings (loss) per share
Basic	(0.04	)	0.80		2.90		2.78
Diluted	(0.04	)	0.80		2.88		2.76
Number of shares used in computation
Basic	274		281		277		284
Diluted	274		283		278		286

Results (in $ millions, except per share data)

The following table reports the variance of the actuals versus our guidance provided on January 31, 2023 for the three months ended March 31, 2023 plus a comparison to the actuals for the three months ended March 31, 2022.

	Three Months Ended March 31,
	2023 Guidance (Mid-Point)				2023 Actuals		2022 Actuals
	2023 Guidance (Mid-Point)		Variance		2023 Actuals		2022 Actuals
Net revenue
Net revenue	1,750		124		1,874		1,825
GAAP-based financial data
Change in deferred net revenue (online-enabled games)¹	(25	)	97		72		(74	)
Cost of revenue
Cost of revenue	405		43		448		419
GAAP-based financial data
Acquisition-related expenses	(25	)	—		(25	)	(45	)
Stock-based compensation	—		(2	)	(2	)	(2	)
Operating expenses
Operating expenses	1,080		171		1,251		1,041
GAAP-based financial data
Acquisition-related expenses	(35	)	9		(26	)	(52	)
Restructuring and related charges	—		(155	)	(155	)	—
Stock-based compensation	(140	)	—		(140	)	(123	)
Income before tax
Income before tax	270		(89	)	181		356
GAAP-based financial data
Acquisition-related expenses	60		(9	)	51		97
Change in deferred net revenue (online-enabled games)¹	(25	)	97		72		(74	)
Restructuring and related charges	—		155		155		—
Stock-based compensation	140		2		142		125
Tax rate used for management reporting	19	%			19	%	18	%
Earnings (loss) per share
Basic	0.13		(0.17	)	(0.04	)	0.80
Diluted	0.13		(0.17	)	(0.04	)	0.80
Number of shares used in computation
Basic	275		(1	)	274		281
Diluted	277		(3	)	274		283
Anti-dilutive shares excluded for loss position²	—		1		1		—

¹The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges. ²Diluted earnings per share reflects the potential dilution from common shares (calculated using the treasury stock method), issuable through stock-based compensation plans. When the company incurs a loss, shares issuable though stock-based compensation plans are excluded from the diluted loss per share calculation as inclusion would be anti-dilutive.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
(in $ millions)

	March 31, 2023		March 31, 2022³
ASSETS
Current assets:
Cash and cash equivalents	2,424		2,732
Short-term investments	343		330
Receivables, net	684		650
Other current assets	518		439
Total current assets	3,969		4,151
Property and equipment, net	549		550
Goodwill	5,380		5,387
Acquisition-related intangibles, net	618		962
Deferred income taxes, net	2,462		2,243
Other assets	481		507
TOTAL ASSETS	13,459		13,800

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	99		101
Accrued and other current liabilities	1,285		1,388
Deferred net revenue (online-enabled games)	1,901		2,024
Total current liabilities	3,285		3,513
Senior notes, net	1,880		1,878
Income tax obligations	607		386
Deferred income taxes, net	1		1
Other liabilities	393		397
Total liabilities	6,166		6,175

Stockholders’ equity:
Common stock	3		3
Retained earnings	7,357		7,607
Accumulated other comprehensive income (loss)	(67	)	15
Total stockholders’ equity	7,293		7,625
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	13,459		13,800

³Derived from audited consolidated financial statements.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
(in $ millions)

	Three Months Ended March 31,				Twelve Months Ended March 31,
	2023		2022		2023		2022
OPERATING ACTIVITIES
Net income (loss)	(12	)	225		802		789
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization, accretion and impairment	173		141		536		486
Stock-based compensation	142		125		548		528
Change in assets and liabilities
Receivables, net	152		313		(34	)	(77	)
Other assets	(50	)	(82	)	(103	)	(157	)
Accounts payable	31		2		10		(7	)
Accrued and other liabilities	106		(14	)	134		169
Deferred income taxes, net	(18	)	(189	)	(221	)	(329	)
Deferred net revenue (online-enabled games)	93		(77	)	(122	)	497
Net cash provided by operating activities	617		444		1,550		1,899

INVESTING ACTIVITIES
Capital expenditures	(47	)	(53	)	(207	)	(188	)
Proceeds from maturities and sales of short-term investments	152		136		395		1,329
Purchase of short-term investments	(142	)	(116	)	(405	)	(554	)
Acquisitions, net of cash acquired	—		—		—		(3,391	)
Net cash used in investing activities	(37	)	(33	)	(217	)	(2,804	)

FINANCING ACTIVITIES
Proceeds from issuance of common stock	33		33		80		77
Cash dividends paid	(52	)	(48	)	(210	)	(193	)
Cash paid to taxing authorities for shares withheld from employees	(14	)	(11	)	(175	)	(204	)
Repurchase and retirement of common stock	(325	)	(325	)	(1,295	)	(1,300	)
Net cash used in financing activities	(358	)	(351	)	(1,600	)	(1,620	)

Effect of foreign exchange on cash and cash equivalents	—		2		(41	)	(3	)
Change in cash and cash equivalents	222		62		(308	)	(2,528	)
Beginning cash and cash equivalents	2,202		2,670		2,732		5,260
Ending cash and cash equivalents	2,424		2,732		2,424		2,732

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions, except per share data)

	Q4		Q1		Q2		Q3		Q4		YOY %
	FY22		FY23		FY23		FY23		FY23		Change
Net revenue
Net revenue	1,825		1,767		1,904		1,881		1,874		3	%
GAAP-based financial data
Change in deferred net revenue (online-enabled games)¹	(74	)	(468	)	(150	)	461		72
Gross profit
Gross profit	1,406		1,453		1,442		1,313		1,426		1	%
Gross profit (as a % of net revenue)	77	%	82	%	76	%	70	%	76	%
GAAP-based financial data
Acquisition-related expenses	45		30		39		26		25
Change in deferred net revenue (online-enabled games)¹	(74	)	(468	)	(150	)	461		72
Stock-based compensation	2		2		1		2		2
Operating income
Operating income	365		441		427		289		175		*(52*	%)
Operating income (as a % of net revenue)	20	%	25	%	22	%	15	%	9	%
GAAP-based financial data
Acquisition-related expenses	97		69		82		76		51
Change in deferred net revenue (online-enabled games)¹	(74	)	(468	)	(150	)	461		72
Restructuring and related charges	—		—		—		—		155
Stock-based compensation	125		125		140		141		142
Net income (loss)
Net income (loss)	225		311		299		204		(12	)	*(105*	%)
Net income (loss) (as a % of net revenue)	12	%	18	%	16	%	11	%	(1	%)
GAAP-based financial data
Acquisition-related expenses	97		69		82		76		51
Change in deferred net revenue (online-enabled games)¹	(74	)	(468	)	(150	)	461		72
Restructuring and related charges	—		—		—		—		155
Stock-based compensation	125		125		140		141		142
Tax rate used for management reporting	18	%	19	%	19	%	19	%	19	%
Diluted earnings (loss) per share	0.80		1.11		1.07		0.73		(0.04	)	*(105*	%)
Number of shares used in computation
Basic	281		279		278		276		274
Diluted	283		281		279		278		274
Anti-dilutive shares excluded for loss position²	—		—		—		—		1

¹The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges. ²Diluted earnings per share reflects the potential dilution from common shares (calculated using the treasury stock method), issuable through stock-based compensation plans. When the company incurs a loss, shares issuable though stock-based compensation plans are excluded from the diluted loss per share calculation as inclusion would be anti-dilutive.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)

	Q4		Q1		Q2		Q3		Q4		YOY %
	FY22		FY23		FY23		FY23		FY23		Change
QUARTERLY NET REVENUE PRESENTATIONS
Net revenue by composition
Full game downloads	312		237		328		423		274		(12	%)
Packaged goods	126		104		274		199		98		(22	%)
Full game	438		341		602		622		372		(15	%)
Live services and other	1,387		1,426		1,302		1,259		1,502		8	%
Total net revenue	1,825		1,767		1,904		1,881		1,874		3	%
Full game	24	%	19	%	32	%	33	%	20	%
Live services and other	76	%	81	%	68	%	67	%	80	%
*Total net revenue %*	*100*	%	*100*	%	*100*	%	*100*	%	*100*	%
GAAP-based financial data
Full game downloads	(103	)	(111	)	17		45		(24	)
Packaged goods	(68	)	(65	)	16		20		(24	)
Full game	(171	)	(176	)	33		65		(48	)
Live services and other	97		(292	)	(183	)	396		120
Total change in deferred net revenue (online-enabled games) by composition¹	(74	)	(468	)	(150	)	461		72

Net revenue by platform
Console	1,092		1,042		1,161		1,152		1,088		—
PC & Other	420		402		423		435		469		12	%
Mobile	313		323		320		294		317		1	%
Total net revenue	1,825		1,767		1,904		1,881		1,874		3	%
GAAP-based financial data
Console	(86	)	(405	)	(134	)	423		11
PC & Other	3		(54	)	8		29		47
Mobile	9		(9	)	(24	)	9		14
Total change in deferred net revenue (online-enabled games) by platform¹	(74	)	(468	)	(150	)	461		72

¹The change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of cash flows does not necessarily equal the change in deferred net revenue (online-enabled games) in the unaudited condensed consolidated statements of operations primarily due to the impact of unrecognized gains/losses on cash flow hedges.

ELECTRONIC ARTS INC. AND SUBSIDIARIES
Unaudited Supplemental Financial Information and Business Metrics
(in $ millions)

	Q4	Q1		Q2		Q3	Q4	YOY %
	FY22	FY23		FY23		FY23	FY23	Change
CASH FLOW DATA
Operating cash flow	444	(78	)	(112	)	1,123	617	39	%
Operating cash flow – TTM	1,899	1,964		1,788		1,377	1,550	(18	%)
Capital expenditures	53	59		53		48	47	(11	%)
Capital expenditures – TTM	188	203		213		213	207	10	%
Repurchase and retirement of common stock	325	320		325		325	325	—
Cash dividends paid	48	53		53		52	52	8	%
DEPRECIATION
Depreciation expense	42	44		45		46	58	38	%
BALANCE SHEET DATA
Cash and cash equivalents	2,732	2,082		1,539		2,202	2,424
Short-term investments	330	334		335		351	343
Cash and cash equivalents, and short-term investments	3,062	2,416		1,874		2,553	2,767	(10	%)
Receivables, net	650	579		919		836	684	5	%
STOCK-BASED COMPENSATION
Cost of revenue	2	2		1		2	2
Research and development	84	81		95		95	96
Marketing and sales	13	13		16		15	15
General and administrative	26	29		28		29	29
Total stock-based compensation	125	125		140		141	142
RESTRUCTURING AND RELATED CHARGES
Restructuring	—	—		—		—	111
Office space reductions	—	—		—		—	44
Total restructuring and related charges	—	—		—		—	155

Category: Company News

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509005975/en/

Stuart Canfield

SVP, Finance & Investor Relations

650-628-7750

[email protected]

Erin Rheaume

Director, Financial Communications

650-628-7978

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Entertainment Consumer Electronics Technology Mobile Entertainment Software Electronic Games

MEDIA:

Logo

May 9, 2023 6:40 pm

TransAct Technologies Reports Preliminary First Quarter 2023 Financial Results

TransAct Technologies Reports Preliminary First Quarter 2023 Financial Results

2023 First Quarter Net Sales of $22.3 Million, up 130% on a Year-Over-Year Basis

Casino and Gaming Sales of $15.8 Million, up 232% on a Year-Over-Year Basis

FST Sales of $3.5 Million, up 62% on a Year-Over-Year Basis

HAMDEN, Conn.–(BUSINESS WIRE)–
TransAct Technologies Incorporated (Nasdaq: TACT) (“TransAct” or the “Company”), a global leader in software-driven technology and printing solutions for high-growth markets, today reported preliminary results for the first quarter ended March 31, 2023. The Company also announced that John M. Dillon, who was appointed as Chief Executive Officer on April 4, 2023, will continue in the role indefinitely and is no longer serving in an interim capacity.

“We are pleased with our results this quarter, and after a little over a month as Chief Executive Officer of TransAct, I believe there is strong potential for the entire company. Our first quarter results demonstrated the strength of TransAct’s market presence in casino and gaming, and some green shoots of momentum in our FST business,” said John Dillon, Chief Executive Officer of TransAct. “I am equally impressed by the caliber of professionals here at TransAct who I am working with and getting to know better every day, many of whom have been contributing to the success of TransAct for years now. I am looking forward to all we can achieve together and firmly believe that we can set the company up for consistent, long-term sustainable growth.”

First Quarter 2023 Financial Highlights

Net Sales: Net sales for the first quarter of 2023 were $22.3 million, up 130% compared to $9.7 million for the first quarter of 2022.
FST Recurring Revenue: FST recurring revenue for the first quarter of 2023 was $2.3 million, up 49% compared to $1.6 million for the first quarter of 2022.
Gross Profit: Gross profit for the first quarter of 2023 was $12.3 million, resulting in gross margin of 55.0%, compared to gross profit of $2.6 million for the first quarter of 2022, which resulted in a 26.4% gross margin.
Operating income (loss): Operating income for the first quarter of 2023 was $3.8 million, compared to operating loss of $(5.6) million for the first quarter of 2022.
Net income (loss): Net income for the first quarter of 2023 was $3.1 million, or $0.31 net income per diluted share, based on 10.0 million weighted average common shares outstanding. Net loss for the comparable 2022 period was $(4.4) million, or $(0.44) net loss per diluted share, based on 9.9 million weighted average common shares outstanding.
EBITDA: EBITDA was $4.2 million for the first quarter of 2023, compared to EBITDA loss of $(5.4) million for the first quarter of 2022.
Adjusted EBITDA: Adjusted EBITDA was $4.5 million for the first quarter of 2023, compared to adjusted EBITDA loss of $(5.1) million for the first quarter of 2022.

2023 Financial Outlook

Total Net Sales: The Company currently expects total net sales of between $71.5-73.5 million.
Total Adjusted EBITDA: The Company currently expects total adjusted EBITDA of between $6.5 -$7.5 million.

Our outlook for non-GAAP adjusted EBITDA is presented only on a non-GAAP basis because not all of the information necessary for a quantitative reconciliation of this forward-looking non-GAAP financial measure to the most directly comparable GAAP financial measure is available without unreasonable effort, primarily due to uncertainties relating to the occurrence or amount of these adjustments that may arise in the future. If one or more of the currently unavailable items is applicable, some items could be material, individually or in the aggregate, to GAAP reported results.

2023 First Quarter Conference Call and Webcast

TransAct is hosting a conference call and webcast today, May 9, 2023, beginning at 4:30 p.m. ET to discuss the Company’s preliminary first quarter 2023 results and other matters. Both the call and the webcast are open to the general public. The conference call number is 877-704-4453 and the conference ID number is 13737812 (domestic or international). Please call ten minutes prior to the presentation to ensure that you are connected.

Interested parties may also access the conference call live on the Internet at www.transact-tech.com (select “Investor Relations” followed by “Events & Presentations”). Approximately two hours after the call has concluded, an archived version of the webcast will be available for replay at the same location.

Change in Accounting Principle

Effective April 1, 2022, TransAct changed its method of inventory valuation from standard costing which approximates first-in first-out “FIFO” to the average costing methodology. The Company believes this method is preferable because it reflects a better measurement estimate of inventory cost as the Company does not perform intensive manufacturing of its finished products which are therefore better measured under average cost. Comparative financial statements of prior periods have been adjusted to apply the new method retrospectively and are labeled “As Adjusted” in the Condensed Consolidated Statements of Operations attached to this release.

Non-GAAP Financial Measures

TransAct is providing certain non-GAAP financial measures because the Company believes that these measures are helpful to investors and others in assessing the ongoing nature of what the Company’s management views as TransAct’s core operations. EBITDA and adjusted EBITDA provide the Company with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes. The Company believes that these non-GAAP financial measures provide relevant and useful information to an investor evaluating the Company’s operating performance because these measures are: (i) widely used by investors to measure a company’s operating performance without regard to items that do not reflect the Company’s ongoing operations and are excluded from the calculation of such measure; (ii) used as financial measurements by lenders and other parties to evaluate creditworthiness; and (iii) used by the Company’s management for various purposes including strategic planning and forecasting and assessing financial performance. The presentation of this non-GAAP information is not considered superior to or a substitute for, and should be read in conjunction with, the financial information prepared in accordance with GAAP.

EBITDA is defined as net income (loss) before net interest expense, income taxes, depreciation, and amortization. A reconciliation of EBITDA to net income (loss), the most comparable GAAP financial measure, can be found attached to this release.

Adjusted EBITDA is defined as net income (loss) before net interest expense, income taxes, depreciation and amortization and is adjusted for share-based compensation. The Company adjusts EBITDA for share-based compensation because the Company considers share-based compensation to be a non-cash expense similar to depreciation and amortization. A reconciliation of adjusted EBITDA to net income (loss), the most comparable GAAP financial measure, can be found attached to this release.

About TransAct Technologies Incorporated

TransAct Technologies Incorporated is a global leader in developing and selling software-driven technology and printing solutions for high-growth markets including food service, casino and gaming, and POS automation. The Company’s solutions are designed from the ground up based on customer requirements and are sold under the BOHA!™, AccuDate™, EPICENTRAL®, Epic® and Ithaca® brands. TransAct has sold over 3.7 million printers, terminals and other hardware devices around the world and is committed to providing world-class service, spare parts, and accessories to support its installed product base. Through the TransAct Services Group, the Company also provides customers with a complete range of supplies and consumable items both online at http://www.transactsupplies.com and through its direct sales team. TransAct is headquartered in Hamden, CT. For more information, please visit http://www.transact-tech.com or call (203) 859-6800.

Cautionary Statement Regarding Preliminary Financial Information

The Company has prepared the preliminary financial information set forth below on a materially consistent basis with its historical financial information and in good faith based upon its internal reporting as of and for the three months ended March 31, 2023. This financial information is preliminary and is thus inherently uncertain and subject to change as the Company finalizes its financial results and related review for the three months ended March 31, 2023. During the course of the preparation of the Company’s consolidated financial statements and related notes as of and for the three months ended March 31, 2023, the Company may identify items that could cause its final reported results to be materially different from the preliminary financial information set forth above. As a result, there can be no assurance that the Company’s final results for this period will not differ from the preliminary financial information.

This preliminary financial information should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. In addition, this preliminary financial information is not necessarily indicative of the results to be achieved for any future period.

Forward-Looking Statements

Certain statements included in this press release may be forward-looking statements. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent current views about possible future events and are often identified by the use of forward-looking terminology, such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “project”, “plan”, “design” or “continue”, or the negative thereof, or other similar words. Forward-looking statements are subject to certain risks, uncertainties and assumptions. In the event that one or more of such risks or uncertainties materialize, or one or more underlying assumptions prove incorrect, actual results may differ materially from those expressed or implied by the forward-looking statements. Important factors and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following: the adverse effects of current economic conditions, whether due to the COVID-19 pandemic or otherwise, on our business, operations, financial condition, results of operations and capital resources, difficulties or delays in manufacturing or delivery of inventory or other supply chain disruptions, inflation and the Russia/Ukraine conflict, an inability of our customers to make payments on time or at all, diversion of management attention, a possible future reduction in the value of goodwill or other intangible assets, inadequate manufacturing capacity or a shortfall or excess of inventory as a result of difficulty in predicting manufacturing requirements due to volatile economic conditions, price increases or decreased availability of component parts or raw materials, exchange rate fluctuations, volatility of and decreases in trading prices of our common stock and the availability of needed financing on acceptable terms or at all; our ability to successfully develop new products that garner customer acceptance and generate sales, both domestically and internationally, in the face of substantial competition; our reliance on an unrelated third party to develop, maintain and host certain web-based food service application software and develop and maintain selected components of our downloadable software applications pursuant to a non-exclusive license agreement, and the risk that interruptions in our relationship with that third party could materially impair our ability to provide services to our food service technology customers on a timely basis or at all and could require substantial expenditures to find or develop alternative software products; our ability to successfully transition our business into the food service technology market; risks associated with potential future acquisitions; general economic conditions; our dependence on contract manufacturers for the assembly of a large portion of our products in Asia; our dependence on significant suppliers; our ability to recruit and retain quality employees as the Company grows; our dependence on third parties for sales outside the United States; our dependence on technology licenses from third parties; marketplace acceptance of new products; risks associated with foreign operations; the availability of third-party components at reasonable prices; price wars, supply chain disruptions or other significant pricing pressures affecting the Company’s products in the United States or abroad; increased product costs or reduced customer demand for our products due to changes in U.S. policy that may result in trade wars or tariffs; our ability to protect intellectual property; and other risk factors detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and other reports filed with the Securities and Exchange Commission. Actual results may differ materially from those discussed in, or implied by, the forward-looking statements. We caution readers not to place undue reliance on forward-looking statements, which speak only as of the date of this release. We undertake no obligation to publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors, except where we are expressly required to do so by applicable law.

– Financial tables follow –

TRANSACT TECHNOLOGIES INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Preliminary and Unaudited)

	Three months ended March 31,
	2023	2022 As Adjusted
	(In thousands, except per share data)

Net sales	$22,270	$9,702
Cost of sales	10,015	7,136
Gross profit	12,255	2,566

Operating expenses:
Engineering, design and product development	2,269	2,283
Selling and marketing	2,757	2,683
General and administrative	3,416	3,204
	8,442	8,170
Operating income (loss)	3,813	(5,604)

Interest and other income (expense):
Interest, net	(66)	(64)
Other, net	21	(35)
	(45)	(99)

Income (loss) before income taxes	3,768	(5,703)
Income tax expense (benefit)	629	(1,355)
Net income (loss)	$3,139	$(4,348)

Net income (loss) per common share:
Basic	$0.32	$(0.44)
Diluted	$0.31	$(0.44)

Shares used in per share calculation:
Basic	9,930	9,886
Diluted	10,043	9,886

SUPPLEMENTAL INFORMATION – SALES BY MARKET: (Preliminary and Unaudited)

	Three months ended March 31,
	2023	2022
	(In thousands)

Food service technology	$3,458	$2,130
POS automation	1,797	1,300
Casino and gaming	15,811	4,762
TransAct Services Group	1,204	1,510
Total net sales	$22,270	$9,702

TRANSACT TECHNOLOGIES INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Preliminary and Unaudited)

	March 31,	December 31,
	2023	2022
Assets:	(In thousands)
Current assets:
Cash and cash equivalents	$6,644	$7,946
Accounts receivable, net	17,022	13,927
Employee retention credit receivable	–	1,500
Inventories	12,296	12,028
Other current assets	1,004	724
Total current assets	36,966	36,125

Fixed assets, net	2,882	2,781
Right-of-use asset	2,274	2,488
Goodwill	2,621	2,621
Deferred tax assets	6,828	7,327
Intangible assets, net	204	242
Other assets	225	248
	15,034	15,707
Total assets	$52,000	$51,832

Liabilities and Shareholders’ Equity:
Current liabilities:
Current portion of revolving loan payable	$2,250	$2,250
Accounts payable	$4,574	7,395
Accrued liabilities	4,061	4,077
Lease liability	891	875
Deferred revenue	1,205	1,329
Total current liabilities	12,981	15,926

Deferred revenue, net of current portion	148	143
Lease liability, net of current portion	1,449	1,683
Other liabilities	226	218
	1,823	2,044
Total liabilities	14,804	17,970

Shareholders’ equity:
Common stock	140	139
Additional paid-in capital	56,474	56,282
Retained earnings	12,769	9,630
Accumulated other comprehensive loss, net of tax	(77)	(79)
Treasury stock, at cost	(32,110)	(32,110)
Total shareholders’ equity	37,196	33,862
Total liabilities and shareholders’ equity	$52,000	$51,832

TRANSACT TECHNOLOGIES INCORPORATED RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA NON-GAAP FINANCIAL MEASURES (Preliminary and Unaudited)

	Three Months Ended
	March 31,
	2023	2022 As Adjusted
	(In thousands)

Net income (loss)	$3,139	$(4,348)

Interest expense, net	66	64
Income tax provision (benefit)	629	(1,355)
Depreciation and amortization	352	228

EBITDA	4,186	(5,411)

Share-based compensation expense	278	296

Adjusted EBITDA	$4,464	$(5,115)

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006111/en/

Investor Contact:

Ryan Gardella

ICR, Inc.

[email protected]

KEYWORDS: Connecticut United States North America

INDUSTRY KEYWORDS: Entertainment Technology Other Technology Software Networks Hardware Casino/Gaming

MEDIA:

May 9, 2023 6:40 pm

AerSale Reports First Quarter 2023 Results

AerSale Reports First Quarter 2023 Results

First Quarter 2023 Highlights

Revenue and earnings reflect the pacing of flight equipment sales.
Revenue of $78.3 million versus $122.8 million in the prior year period.
GAAP net income of $5 thousand versus $17.2 million in the prior year period.
Adjusted Net Income¹ of $3.3 million versus $22.2 million in the prior year period.
Adjusted EBITDA¹ of $5.0 million versus $29.9 million in the prior year period.
Flight equipment sales consisted of two aircraft, one airframe, and one engine.
On track to convert 11 additional 757 aircraft to freighters by third parties.
Eight converted aircraft are anticipated to become available for sale or lease in 2023.
Reaffirms 2023 guidance: expects revenue in the range of $460 – $490 million and adjusted EBITDA in the range of $70 – $80 million, which excludes any potential AerAware sales².

CORAL GABLES, Fla.–(BUSINESS WIRE)–
AerSale Corporation (Nasdaq: ASLE) (the “Company”) today reported results for the first quarter ended March 31, 2023. The Company’s revenue for the first quarter of 2023 was $78.3 million compared to $122.8 million in the first quarter of 2022. Revenue for the first quarter of 2023 included $27.7 million of flight equipment sales compared to $75.9 million of flight equipment sales in the prior-year period. Flight equipment sales in the first quarter of 2023 consisted of two cargo aircraft (a 737 and 757), one airframe, and one engine compared to six aircraft and four engines, which included five Boeing 757s, in the first quarter of 2022. Lower sales were mainly on account of the pacing of flight equipment sales, which tend to occur at irregular intervals throughout the year. As a reminder to investors, the Company’s revenues are likely to fluctuate from quarter-to-quarter and year-to-year based on flight equipment sales and therefore, progress should be monitored based on asset purchases and related sales.

Nicolas Finazzo, AerSale’s Chief Executive Officer, commented, “Our first quarter results were in-line with our internal forecast and expectations for the year. As we have noted in the past, the timing of flight equipment sales can cause substantial fluctuations in year-over-year comparisons, which was pronounced in the first quarter of 2023. Our whole asset program is a critical and important component of our end-to-end solution, which we believe offers an attractive ROI. I am pleased to note that our feedstock acquisitions have been strong year-to-date, which positions us well to deliver on our full-year commitments as we convert this equipment in the second half of 2023.”

Asset Management Solutions (“Asset Management”) revenue declined to $48.4 million during the first quarter of 2023 compared to $74.5 million in the first quarter of 2022, as a consequence of the pacing of flight equipment sales mentioned above. Used Serviceable Material (“USM”) revenue was roughly the same level as the prior year quarter, while expected reductions in the number of aircraft in the lease portfolio drove lower lease revenue. Excluding flight equipment sales, Asset Management revenue would have been $20.7 million in the first quarter of 2023 compared to $22.6 million in the prior year period.

TechOps revenue decreased 38.3% to $29.8 million in the first quarter of 2023 from $48.3 million in the prior year period. The decline is primarily from a non-recurring sale of a Boeing 737NG in the first quarter of 2022, which was highly modified for a US governmental agency and previously used for AerAware flight testing, partially offset by better performance from AerSale’s Goodyear on-airport maintenance, repair and overhaul (MRO) facility as a result of additional capacity dedicated to customer aircraft.

GAAP net income was $5 thousand in the first quarter of 2023, compared to $17.2 million in the first quarter of 2022. AerSale recognized a mark-to-market adjustment expense of $0.3 million related to the private warrant liability, $2.7 million of stock-based compensation expenses within payroll expenses, and $0.4 million in facility relocation costs during the first quarter of 2023. In the first quarter of 2022, the mark-to-market adjustment expense related to the private warrant liability was $1.2 million and stock-based compensation expenses were $3.8 million. Excluding these non-cash and unusual items adjusted for tax, Adjusted Net Income was $3.3 million in the first quarter of 2023 compared to Adjusted Net Income of $22.2 million in the first quarter of 2022.

Diluted earnings per share was $0.00 for the first quarter of 2023 and $0.32 in the first quarter of 2022. Adjusted for the non-cash and unusual items noted above, adjusted diluted earnings per share was $0.07 for the first quarter of 2023 compared to adjusted diluted earnings per share of $0.41 in the first quarter of 2022.

Adjusted EBITDA in the first quarter of 2023 was $5.0 million versus $29.9 million in the first quarter of 2022. Lower adjusted EBITDA was primarily due to the decrease in flight equipment sales, which generally have higher margins.

Cash used in operating activities was $62.4 million, mainly due to continued investment in the 757 passenger to freighter (P2F) conversion program, and cash invested to increase inventory available for sale. AerSale ended the quarter with $87.7 million in cash and has an undrawn $150 million credit facility.

Update on AerAware

The Company has been testing its Enhanced Flight Vision System “AerAware” on two aircraft since August 2020 in order to obtain FAA approval to commercialize this product and be issued a Supplemental Type Certificate (“STC”). The FAA required, among other things, that AerSale prove this system through FAA-observed flight tests, with the FAA scheduling five sets of flight tests beginning in February 2023. The Company successfully completed the first four sets of flight tests from February through the end of April, the most important of which proved that the enhanced flight vision capability met the criteria set out by both the Company and the FAA for certification. AerSale is currently working diligently to schedule the fifth test flight, which, once executed will complete the flight testing aspect of the certification process.

Regarding AerAware, Finazzo added: “The FAA approval process is lengthy and exhaustive to ensure public safety, which is underscored by the excellent safety record of US commercial aviation. Through this process we have continually improved the system, resulting in safety and quality advancements that lead us to believe we have a system superior to anything available on the commercial market today. Further, given the advanced technology we are bringing to the market, combined with the substantial investment of time and resources to obtain an STC, we believe we will be in an excellent position to become the leader in the category. To that end, after demonstrating to the FAA how the system worked in low visibility conditions, we received positive feedback on the low visibility function of our enhanced flight vision system. We are excited to be near completion considering all the progress we have made with the FAA and the interest we have received from multiple potential customers.”

First Quarter 2023 Results of Operations

AerSale reported revenue of $78.3 million in the first quarter of 2023, which included $27.7 million of flight equipment sales comprising two cargo aircraft, one airframe, and one engine. The Company’s revenue for the first quarter of 2022 was $122.8 million and included $75.9 million of flight equipment sales consisting of six aircraft and four engines. Excluding Flight Equipment sales, revenue in the first quarter of 2023 increased to $50.6 million, from $46.9 million in 2022. Investors should note that the first and second quarters of 2022 experienced record flight equipment sales of $75.9 million and $92.5 million, respectively. Flight equipment sales may significantly vary quarter-to-quarter and AerSale believes full-year analysis, rather than year-over-year quarterly comparisons is a better measure of the Company’s progress.

Asset Management revenue declined 35.0% to $48.4 million in the first quarter of 2023 on account of lower flight equipment sales. USM parts sales were close to the year-ago quarter levels, but are expected to pick up due to improved demand and increased availability of feedstock. Aircraft leasing revenue declined to zero by the end of the first quarter as the Company’s last leased aircraft, a 737-400 cargo aircraft, was sold during the quarter, eliminating any risk from aircraft leasing at this time. Excluding flight equipment sales, Asset Management revenue would have been $20.7 million in the first quarter of 2023 versus $22.6 million in the prior year period.

TechOps revenue declined 38.3% to $29.8 million in the first quarter of 2023 from $48.3 million in the year-ago period. This is driven by the prior year sale of a Boeing 737NG, which was highly modified for a US governmental agency and previously used for AerAware flight testing, partially offset by additional capacity dedicated to customer aircraft at the Company’s Goodyear on-airport MRO facility. As previously mentioned, AerSale sub-contracted third-party providers at the beginning of the fourth quarter of 2022 to perform 12 757 P2F conversions initially planned to be completed at its Goodyear facility, enabling the Company to increase capacity for third-party services in order to meet increased customer demand.

Gross margin was 31.2% in the first quarter of 2023 versus 38.0% in the year ago period mostly on account of the sales mix that comprised fewer higher margin flight equipment sales.

Selling, general and administrative expenses were $25.2 million in the first quarter of 2023 compared to $23.8 million in the first quarter of 2022. AerSale incurred $2.7 million of stock-based compensation expenses in the first quarter of 2023 versus $3.8 million in the first quarter of 2022.

Loss from operations was $0.8 million in the first quarter of 2023 and income from operations was $22.9 million in the first quarter of 2022.

Income tax expense was $0.1 million in the first quarter of 2023 and $4.6 million in the first quarter of 2022.

GAAP net income for the first quarter of 2023 was $5 thousand, compared to $17.2 million in the first quarter of 2022. Adjusted for stock-based compensation, mark-to-market adjustment to the private warrant liability, and facility relocation costs, Adjusted Net Income was $3.3 million in the first quarter of 2023 and $22.2 million in the first quarter of 2022. Diluted earnings per share was $0.00 for the first quarter of 2023 and $0.32 in the first quarter of 2022. Adjusted for the above-mentioned non-cash and unusual items, adjusted diluted earnings per share was $0.07 for the first quarter of 2023 and $0.41 in the first quarter of 2022.

Adjusted EBITDA in the first quarter of 2023 was $5.0 million, compared to $29.9 million in the first quarter of 2022. The reduction in adjusted EBITDA was largely a consequence of lower flight equipment sales, which usually carry higher margins.

Martin Garmendia, AerSale’s Chief Financial Officer, said: “As anticipated, our results for the first quarter of 2023 included significantly lower flight equipment sales compared to the prior year, which adversely impacted our margins. We expect this trend to continue through the second quarter of this year given that the second quarter of 2022 included $92.5 million of higher margin flight equipment sales. The underlying momentum of our other businesses remains strong, and we are confident that they will continue to perform well. We expect a stronger contribution from the 757 P2F program in the second half of 2023 as we execute on our planned flight equipment sales.”

2023 Guidance

AerSale still expects to generate revenue of $460 – $490 million and adjusted EBITDA of $70 – $80 million in 2023. This guidance reflects the Company’s expected flight equipment sales during the year and anticipated volume in its ongoing operations. Guidance for 2023 does not reflect potential sales of AerAware as the product is in its final stages of approval and will be updated once the STC is issued and the Company can assess initial order and delivery schedules.

Conference Call Information

The Company will host a conference call today, May 9, 2023, at 4:30 pm Eastern Time to discuss these results. A live webcast will also be available at https://ir.aersale.com/news-events/events. Participants may access the call at 1-888-886-7786, international callers may use 1-416-764-8658, and request to join the AerSale Corporation earnings call.

A telephonic replay will be available shortly after the conclusion of the call and until May 23, 2023. Participants may access the replay at 1-844-512-2921, international callers may use 1-412-317-6671, and enter access code 07342899. An archived replay of the call will also be available on the Investors portion of the AerSale website at https://ir.aersale.com/.

Non-GAAP Financial Measures

This press release includes non-GAAP financial measures, including adjusted EBITDA, adjusted Net Income, and adjusted diluted Earnings per Share. AerSale defines adjusted EBITDA as net income (loss) after giving effect to interest expense, depreciation and amortization, income tax expense (benefit), and other non-recurring or unusual items. Adjusted Net Income is defined as net income (loss) after giving effect to mark-to-market adjustments relating to our Private Warrants, stock-based compensation expense and other non-recurring or unusual items. Adjusted diluted earnings per share also exclude these material non-recurring or unusual items.

AerSale believes these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to AerSale’s financial condition and results of operations. AerSale’s management uses certain of these non-GAAP measures to compare AerSale’s performance to that of prior periods for trend analyses and for budgeting and planning purposes. These non- GAAP measures should not be construed as an alternative to net income or net income margin as an indicator of operating performance or as an alternative to cash flow from operating activities as a measure of liquidity (each as determined in accordance with GAAP).

You should review AerSale’s financial statements, and not rely on any single financial measure to evaluate AerSale’s business. Other companies may calculate adjusted EBITDA, Adjusted Net Income, or Adjusted diluted earnings per share differently, and therefore AerSale’s adjusted EBITDA, adjusted Net Income, or adjusted diluted earnings per share measures may not be directly comparable to similarly titled measures of other companies.

Reconciliations of Net Income, the Company’s closest GAAP measure, to adjusted EBITDA, Adjusted Net Income, and adjusted diluted earnings per share, are outlined in the tables below following the Company’s condensed consolidated financial statements.

First Quarter 2023 Financial Results

AERSALE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except share data)
(Unaudited)

	March 31,		December 31,
	2023		2022
	(Unaudited)

Current assets:
Cash and cash equivalents	$	87,695	$	147,188
Accounts receivable, net of allowance for credit losses of $1,074 as of March 31, 2023 and December 31, 2022		36,269		28,273
Inventory:
Aircraft, airframes, engines, and parts, net		146,408		117,488
Advance vendor payments		29,008		27,585
Deposits, prepaid expenses, and other current assets		27,040		13,022
Total current assets		326,420		333,556
Fixed assets:
Aircraft and engines held for lease, net		33,555		31,288
Property and equipment, net		13,481		12,638
Inventory:
Aircraft, airframes, engines, and parts, net		77,259		66,042
Operating lease right-of-use assets		30,952		31,624
Deferred income taxes		11,215		11,287
Deferred financing costs, net		432		544
Deferred customer incentives and other assets, net		560		628
Goodwill		19,860		19,860
Other intangible assets, net		23,587		24,112
Total assets	$	537,321	$	531,579

Current liabilities:
Accounts payable	$	35,148	$	21,131
Accrued expenses		5,373		8,843
Lessee and customer purchase deposits		9,100		17,085
Current operating lease liabilities		4,600		4,426
Deferred revenue		2,698		1,355
Total current liabilities		56,919		52,840

Long-term lease deposits		152		152
Long-term operating lease liabilities		27,539		28,283
Maintenance deposit payments and other liabilities		75		668
Warrant liability		4,990		4,656
Total liabilities		89,675		86,599
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value. Authorized 200,000,000 shares; issued and outstanding 51,221,386 and 51,189,461 shares as of March 31, 2023 and December 31, 2022, respectively		5		5
Additional paid-in capital		308,802		306,141
Retained earnings		138,839		138,834
Total stockholders’ equity		447,646		444,980
Total liabilities and stockholders’ equity	$	537,321	$	531,579

AERSALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)

	Three Months Ended March 31,
	2023			2022
Revenue:
Products	$	45,495		$	92,368
Leasing		5,622			8,201
Services		27,154			22,237
Total revenue		78,271			122,806
Cost of sales and operating expenses:
Cost of products		31,548			57,928
Cost of leasing		1,123			2,189
Cost of services		21,209			15,986
Total cost of sales		53,880			76,103
Gross profit		24,391			46,703
Selling, general, and administrative expenses		25,224			23,766
(Loss) income from operations		(833	)		22,937
Other income (expenses):
Interest income (expense), net		1,047			(195	)
Other income, net		233			365
Change in fair value of warrant liability		(334	)		(1,234	)
Total other income (expenses)		946			(1,064	)
Income before income tax provision		113			21,873
Income tax expense		(108	)		(4,647	)
Net income	$	5		$	17,226

Earnings per share – basic	$	0.00		$	0.33
Earnings per share – diluted	$	0.00		$	0.32

AERSALE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)

	Three Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net income	$	5		$	17,226
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		2,469			2,865
Amortization of debt issuance costs		39			112
Amortization of operating lease assets		101			–
Inventory reserve		773			(50	)
Provision for credit losses		–			(424	)
Deferred income taxes		72			(775	)
Change in fair value of warrant liability		334			1,234
Share-based compensation		2,731			3,755
Changes in operating assets and liabilities:
Accounts receivable		(7,996	)		(5,527	)
Inventory		(48,983	)		28,174
Deposits, prepaid expenses, and other current assets		(14,019	)		(484	)
Deferred customer incentives and other assets		68			123
Advance vendor payments		(1,423	)		(1,941	)
Accounts payable		14,018			201
Income tax payable		–			4,975
Accrued expenses		(3,396	)		(1,611	)
Deferred revenue		1,343			(538	)
Lessee and customer purchase deposits		(7,985	)		(3,184	)
Other liabilities		(593	)		(1,083	)
Net cash (used in) provided by operating activities		(62,442	)		43,048
Cash flows from investing activities:
Proceeds from sale of assets		4,500			–
Purchase of property and equipment		(1,481	)		(1,637	)
Net cash provided by (used in) investing activities		3,019			(1,637	)
Cash flows from financing activities:
Taxes paid related to net share settlement of equity awards		(70	)		–
Proceeds from the issuance of Employee Stock Purchase Plan shares		–			125
Net cash (used in) provided by financing activities		(70	)		125

(Decrease) increase in cash and cash equivalents		(59,493	)		41,536
Cash and cash equivalents, beginning of period		147,188			130,188
Cash and cash equivalents, end of period	$	87,695		$	171,724

Supplemental disclosure of cash activities
Income tax (refund) payment		(100	)		277
Interest paid		141			141
Supplemental disclosure of noncash investing activities
Reclassification of aircraft and aircraft engines inventory to (from) aircraft and engine held for lease, net		3,573			(17,942	)

AERSALE CORPORATION

Adjusted EBITDA, Net Income and Diluted EPS Reconciliation Table (In ‘000s, except per share data)
(Unaudited)

	Three months ended March 31,
	2023	% of Total Revenue	2022	% of Total Revenue
Reported Net (Loss)/Income	5	0.0%	17,226	14.0%
Addbacks:
Change in FV of Warrant Liability	334	0.4%	1,234	1.0%
Stock Compensation	2,731	3.5%	3,755	3.1%
Facility Relocation Costs	380	0.5%	–	0.0%
Income Tax Effect of Adjusting Items ⁽¹⁾	(109)	(0.1%)	–	0.0%
Adjusted Net (Loss)/Income	3,342	4.2%	22,215	18.1%
Interest Expense	(1,047)	(1.3%)	195	0.2%
Income Tax Expense (Benefit)	108	0.1%	4,647	3.8%
Depreciation and Amortization	2,469	3.2%	2,865	2.3%
Reversal of Income Tax Effect of Adjusting Items ⁽¹⁾	109	0.1%	–	0.0%
Adjusted EBITDA	4,980	6.4%	29,922	24.4%

Reported Basic (loss) earnings per share	0.00		0.33
Addbacks:
Change in fair value of warrant liability	0.01		0.02
Stock-based compensation	0.05		0.07
Facility Relocation Costs	0.01		–
Income Tax Effect of Adjusting Items	(0.00)		–
Adjusted Basic (loss) earnings per share	0.07		0.43

Reported Diluted (loss) earnings per share	0.00		0.32
Addbacks:
Change in FV of warrant liability	0.01		0.02
Stock-based compensation	0.05		0.07
Facility Relocation Costs	0.01		–
Income Tax Effect of Adjusting Items	(0.00)		–
Adjusted Diluted (loss) earnings per share	0.07		0.41

Forward Looking Statements

This press release includes “forward-looking statements”. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this press release may constitute forward-looking statements, and include, but are not limited to, statements regarding our anticipated financial performance, including all statements set forth in the “2023 Guidance” section above such as expectations of revenue in the range of $460 – $490 million and adjusted EBITDA in the range of $70 – $80 million; our expectations that up to twelve aircraft will be converted to freighters by third parties; the anticipation that the 757 P2F conversion program is expected to be a strong contributor to the Company; expectations regarding feedstock, the expected operating capacity of our MRO facilities and demand for such services; potential ROI for the flight equipment program; the anticipated receipt and typical timeline of receipt from the FAA of an STC for our AerAware product; and general expectations regarding the AerAware product including customer interest and anticipated sales. AerSale’s actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” or the negative of these or other similar expressions are intended to identify such forward-looking statements. The forward-looking statements in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. You should carefully consider the foregoing factors and the other risks and uncertainties described in the Risk Factors, and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), and its other filings with the SEC, including its subsequent quarterly reports on Form 10-Q. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.

Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements and we qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

About AerSale

AerSale serves airlines operating large jets manufactured by Boeing, Airbus and McDonnell Douglas and is dedicated to providing integrated aftermarket services and products designed to help aircraft owners and operators to realize significant savings in the operation, maintenance and monetization of their aircraft, engines, and components. AerSale’s offerings include: Aircraft & Component MRO, Aircraft and Engine Sales and Leasing, Used Serviceable Material sales, and internally developed ‘Engineered Solutions’ to enhance aircraft performance and operating economics (e.g. AerSafe™, AerTrak™, and now AerAware™).

For more information about AerSale, please visit our website: www.AerSale.com.

____________________________

¹ Adjusted Net Income and adjusted EBITDA are non-GAAP financial measures. See “Non-GAAP Financial Measures” and “First Quarter 2023 Financial Results – Adjusted EBITDA, Net Income and Diluted EPS Reconciliation Table” for a discussion of why we believe these non-GAAP measures are useful and a detailed reconciliation of these non-GAAP measures to the most directly comparable GAAP (Generally Accepted Accounting Principles) measure.

² A reconciliation of non-GAAP adjusted EBITDA guidance to forecasted net (loss) income, the most directly comparable GAAP measure, has not been provided due to the lack of predictability regarding the various reconciling items such as the provision for income taxes and depreciation and amortization, which are expected to have a material impact on these measures and cannot be reasonably predicted without unreasonable efforts.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006086/en/

Media:

AerSale: Jackie Carlon

(305) 764-200

[email protected]

Investors:

AerSale: [email protected]

KEYWORDS: Florida United States North America

INDUSTRY KEYWORDS: Air Transport Aerospace Manufacturing

MEDIA:

May 9, 2023 6:39 pm

Virgin Galactic Announces First Quarter 2023 Financial Results And Provides Business Update

Virgin Galactic Announces First Quarter 2023 Financial Results And Provides Business Update

First Commercial Flight ‘Galactic 01’ Remains on Track Targeting Late June

Successful Completion of VSS Unity Glide Flight Clears the Path for Spaceflight

Next Spaceflight With Virgin Galactic Crew On Board Scheduled for Late May

ORANGE COUNTY, Calif.–(BUSINESS WIRE)–
Virgin Galactic Holdings, Inc. (NYSE: SPCE) (“Virgin Galactic” or the “Company”) today announced its financial results for the first quarter ended March 31, 2023 and provided a business update.

Michael Colglazier, Chief Executive Officer of Virgin Galactic said, “We are excited to return to space with the ‘Unity 25’ mission planned for the end of May, and we are actively readying for commercial service to begin in late June. Concurrently, we are making steady progress on the development of our Delta Class spaceships, the driver of revenue growth and profitability in the business. Our strong cash position, combined with focused cost discipline and strategic investments in our growth initiatives, will enable our business to scale over the long-term.”

First Quarter 2023 Financial Highlights

Cash position remains strong, with cash, cash equivalents and marketable securities of $874 million as of March 31, 2023.

Net loss of $159 million, compared to a $93 million net loss in the first quarter of 2022, primarily driven by investments related to the development of the future fleet and enhancements for the current fleet.

GAAP selling, general and administrative expenses of $50 million, compared to $37 million in the first quarter of 2022, with the increase primarily driven by non-recurring legal and severance costs. Non-GAAP selling, general and administrative expenses of $40 million in the first quarter of 2023, compared to $30 million in the first quarter of 2022.

GAAP research and development expenses of $110 million, compared to $52 million in the first quarter of 2022, with the increase primarily driven by investments related to the development of the future fleet and enhancements for the current fleet. Non-GAAP research and development expenses of $107 million in the first quarter of 2023, compared to $48 million in the first quarter of 2022.

Adjusted EBITDA totaled $(140) million, compared to $(77) million in the first quarter of 2022, primarily driven by increases in research and development expenses.

Net cash used in operating activities totaled $136 million, compared to $66 million in the first quarter of 2022.

Cash paid for capital expenditures totaled $3 million, compared to $2 million in the first quarter of 2022.

Free cash flow totaled $(139) million, compared to $(68) million in the first quarter of 2022.

Generated $32 million in gross proceeds through the issuance of 5.8 million shares of common stock as part of the Company’s at-the-market offering program announced on August 4, 2022.

Business Updates

Commercial service remains on track for Q2 2023.

VSS Unity’s successful glide flight on April 26, 2023, and earlier mated flight with VMS Eve, further validated the enhancements made to the ships during the modification period and cleared them for spaceflight.

On May 8, 2023, the Company announced a planned launch in late May for VSS Unity to return to space carrying Virgin Galactic mission specialists to conduct a final evaluation of the customer experience ahead of commencing commercial service.

Financial Guidance

The following forward-looking statements reflect our expectations for the second quarter and fiscal year 2023 as of May 9, 2023 and are subject to substantial uncertainty. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.”

Forecasted free cash flow for the second quarter of 2023 is expected to be in the range of $(130) million to $(140) million.

Forecasted free cash flow for each of the third and fourth quarter of 2023 is expected to be in the range of $(120) million to $(130) million, as reduction of spend on current vehicles and continued cost discipline enable growth-related investments in our future fleet.

Non-GAAP Financial Measures

In addition to the Company’s results prepared in accordance with generally accepted accounting principles in the United States (GAAP), the Company is also providing certain non-GAAP financial measures. A discussion regarding the use of non-GAAP financial measures and a reconciliation of such measures to the most directly comparable GAAP information is presented later in this press release.

Conference Call Information

Virgin Galactic will host a conference call to discuss the results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today. To access the conference call, parties should dial +1 833 470 1428 or +1 404 975 4839 and enter the conference ID number 028351. The live audio webcast along with supplemental information will be accessible on the Company’s Investor Relations website at https://investors.virgingalactic.com/events-and-presentations/. A recording of the webcast will also be available following the conference call.

About Virgin Galactic Holdings

Virgin Galactic is an aerospace and space travel company, pioneering human spaceflight for private individuals and researchers with its advanced air and space vehicles. It is developing a spaceflight system designed to connect the world to the love, wonder and awe created by space travel and to offer customers a transformative experience. You can find more information at https://www.virgingalactic.com/.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this press release other than statements of historical fact, including, without limitation, statements regarding our spaceflight systems, expected flight schedule, timing of commercial launch, development of our Delta class spaceships and motherships, our objectives for future operations and the Company’s financial forecasts, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “strategy,” “future,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or expressions. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the factors, risks and uncertainties included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (the “SEC”), accessible on the SEC’s website at www.sec.gov and the Investor Relations section of our website at www.virgingalactic.com, which could cause our actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

First Quarter 2023 Financial Results

VIRGIN GALACTIC HOLDINGS, INC. Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited; in thousands, except per share amounts)
	Three Months Ended March 31,
		2023			2022

Revenue	$	392		$	319

Operating expenses:
Customer experience		318			25
Selling, general and administrative		50,365			37,007
Research and development		109,870			51,827
Depreciation and amortization		3,245			2,852
Total operating expenses		163,798			91,711

Operating loss		(163,406	)		(91,392	)

Interest income		7,330			818
Interest expense		(3,211	)		(2,474	)
Other income, net		30			16
Loss before income taxes		(159,257	)		(93,032	)
Income tax expense		128			25
Net loss		(159,385	)		(93,057	)
Other comprehensive income (loss):
Foreign currency translation adjustment		35			(25	)
Unrealized income (loss) on marketable securities		3,101			(5,780	)
Total comprehensive loss	$	(156,249	)	$	(98,862	)

Net loss per share:
Basic and diluted	$	(0.57	)	$	(0.36	)

Weighted-average shares outstanding:
Basic and diluted		278,450			258,288

VIRGIN GALACTIC HOLDINGS, INC. Condensed Consolidated Balance Sheets (Unaudited; in thousands)
	March 31, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	415,682		$	302,291
Restricted cash		40,408			40,336
Marketable securities, short-term		417,923			606,716
Inventories		22,170			24,043
Prepaid expenses and other current assets		23,608			28,228
Total current assets		919,791			1,001,614
Marketable securities, long-term		—			30,392
Property, plant and equipment, net		60,365			53,658
Other non-current assets		53,357			54,274
Total assets	$	1,033,513		$	1,139,938
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	25,597		$	16,326
Accrued liabilities		59,406			61,848
Customer deposits		102,078			102,647
Other current liabilities		3,749			3,232
Total current liabilities		190,830			184,053
Non-current liabilities:
Convertible senior notes, net		416,255			415,720
Other long-term liabilities		59,647			59,942
Total liabilities		666,732			659,715
Stockholders’ Equity
Preferred stock		—			—
Common stock		28			28
Additional paid-in capital		2,154,123			2,111,316
Accumulated deficit		(1,783,180	)		(1,623,795	)
Accumulated other comprehensive loss		(4,190	)		(7,326	)
Total stockholders’ equity		366,781			480,223
Total liabilities and stockholders’ equity	$	1,033,513		$	1,139,938

VIRGIN GALACTIC HOLDINGS, INC. Condensed Consolidated Statements of Cash Flows (Unaudited; in thousands)
	Three Months Ended March 31,
		2023			2022
Cash flows from operating activities:
Net loss	$	(159,385	)	$	(93,057	)
Stock-based compensation		12,976			10,895
Depreciation and amortization		3,245			2,852
Amortization of debt issuance costs		535			403
Other non-cash items		(236	)		86
Change in operating assets and liabilities:
Inventories		1,873			201
Other current and non-current assets		5,721			2,282
Accounts payable and accrued liabilities		(297	)		1,126
Customer deposits		(569	)		9,228
Other current and long-term liabilities		68			(67	)
Net cash used in operating activities		(136,069	)		(66,051	)
Cash flows from investing activities:
Capital expenditures		(2,767	)		(1,773	)
Purchases of marketable securities		(83,287	)		(204,898	)
Proceeds from maturities and calls of marketable securities		305,791			—
Net cash provided by (used in) investing activities		219,737			(206,671	)
Cash flows from financing activities:
Payments of finance lease obligations		(59	)		(34	)
Proceeds from convertible senior notes		—			425,000
Debt issuance costs		—			(11,248	)
Purchase of capped call		—			(52,318	)
Proceeds from issuance of common stock		32,044			—
Proceeds from issuance of common stock pursuant to stock options exercised		—			49
Withholding taxes paid on behalf of employees on net settled stock-based awards		(1,870	)		(1,932	)
Transaction costs related to issuance of common stock		(320	)		—
Net cash provided by financing activities		29,795			359,517
Net increase in cash, cash equivalents and restricted cash		113,463			86,795
Cash, cash equivalents and restricted cash at beginning of period		342,627			550,030
Cash, cash equivalents and restricted cash at end of period	$	456,090		$	636,825

Cash and cash equivalents	$	415,682		$	601,464
Restricted cash		40,408			35,361
Cash, cash equivalents and restricted cash	$	456,090		$	636,825

Use of Non-GAAP Financial Measures

This press release references certain financial measures that are not prepared in accordance with generally accepted accounting principles in the United States (GAAP), including Adjusted EBITDA, non-GAAP selling, general and administrative expenses, non-GAAP research and development expenses and free cash flow. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization, stock-based compensation, and certain other items the Company believes are not indicative of its core operating performance. The Company defines non-GAAP selling, general and administrative expenses as selling, general and administrative expenses other than stock-based compensation and non-GAAP research and development expenses as research and development expenses other than stock-based compensation. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. None of these non-GAAP financial measures is a substitute for or superior to measures prepared in accordance with GAAP and should not be considered as an alternative to any other measures derived in accordance with GAAP.

The Company believes that presenting these non-GAAP financial measures provides useful supplemental information to investors about the Company in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by its management in financial and operational-decision making. However, there are a number of limitations related to the use of non-GAAP measures and their nearest GAAP equivalents. For example, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore any non-GAAP measures the Company uses may not be directly comparable to similarly titled measures of other companies.

A reconciliation of net loss to Adjusted EBITDA for the three months ended March 31, 2023 and 2022 is set forth below (in thousands):

	Three Months Ended March 31,
		2023			2022
Net loss	$	(159,385	)	$	(93,057	)
Interest expense		3,211			2,474
Income tax expense		128			25
Depreciation and amortization		3,245			2,852
Stock-based compensation		12,976			10,895
Adjusted EBITDA	$	(139,825	)	$	(76,811	)

A reconciliation of selling, general and administrative expenses to non-GAAP selling, general and administrative expenses for the three months ended March 31, 2023 and 2022 is set forth below (in thousands):

	Three Months Ended March, 31,
		2023		2022
Selling, general and administrative expenses	$	50,365	$	37,007
Stock-based compensation		9,960		7,277
Non-GAAP selling, general and administrative expenses	$	40,405	$	29,730

A reconciliation of research and development expenses to non-GAAP research and development expenses for the three months ended March 31, 2023 and 2022 is set forth below (in thousands):

	Three Months Ended March, 31,
		2023		2022
Research and development expenses	$	109,870	$	51,827
Stock-based compensation		3,016		3,618
Non-GAAP research and development expenses	$	106,854	$	48,209

The following table reconciles net cash used in operating activities to free cash flow for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March, 31,
		2023			2022
Net cash used in operating activities	$	(136,069	)	$	(66,051	)
Capital expenditures		(2,767	)		(1,773	)
Free cash flow	$	(138,836	)	$	(67,824	)

The following table reconciles forecasted net cash used in operating activities to forecasted free cash flow for the second quarter of 2023 (in thousands):

		Forecasted Range
Net cash used in operating activities		$(120,000) – $(127,000)
Capital expenditures		(10,000) – (13,000)
Free cash flow		$(130,000) – $(140,000)

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006094/en/

For media inquiries:

Aleanna Crane – Vice President, Communications

[email protected]

575-800-4422

For investor inquiries:

Eric Cerny – Vice President, Investor Relations

[email protected]

949.774.7637

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Research Other Travel Transportation Technology Travel Other Transport Satellite Science Air Transport Logistics/Supply Chain Management Other Science

MEDIA:

May 9, 2023 6:37 pm

Vacasa Announces First Quarter 2023 Financial Results

Vacasa Announces First Quarter 2023 Financial Results

PORTLAND, Ore.–(BUSINESS WIRE)–
Vacasa, Inc. (Nasdaq: VCSA), North America’s leading vacation rental management platform, today announced its financial results for the quarter ended March 31, 2023. A shareholder letter containing the results can be found on the Company’s website at investors.vacasa.com.

Vacasa will host a conference call at 2:00 p.m. PT / 5:00 p.m. ET today to discuss the first quarter 2023 financial results and provide a business update. A link to the live webcast and supplemental information will be made available on Vacasa’s Investor Relations website at investors.vacasa.com. A replay of the webcast will be available for one year beginning approximately two hours after the close of the call.

About Vacasa

Vacasa is the leading vacation rental management platform in North America, transforming the vacation rental experience by integrating purpose-built technology with expert local and national teams. Homeowners enjoy earning significant incremental income on one of their most valuable assets, delivered by the company’s unmatched technology that is designed to adjust rates in real time to maximize revenue. Guests can relax comfortably in Vacasa’s 40,000+ homes across more than 500 destinations in the United States, Belize, Canada, Costa Rica, and Mexico, knowing that 24/7 support is just a phone call away. In addition to enabling guests to search, discover and book its properties on Vacasa.com and the Vacasa Guest App, Vacasa provides valuable, professionally managed inventory to top channel partners, including Airbnb, Booking.com and Vrbo.

For more information, visit https://investors.vacasa.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509005575/en/

Investor Relations Contact

[email protected]

Press Contact

[email protected]

KEYWORDS: Oregon United States North America

INDUSTRY KEYWORDS: Software Technology Internet

MEDIA:

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May 9, 2023 6:35 pm

Vacasa Appoints Bruce Schuman as New Chief Financial Officer

Vacasa Appoints Bruce Schuman as New Chief Financial Officer

PORTLAND, Ore.–(BUSINESS WIRE)–
Vacasa, Inc. (Nasdaq: VCSA), North America’s leading vacation rental management platform, today announced the appointment of Bruce Schuman as Chief Financial Officer, effective June 1, 2023. Schuman will succeed Jamie Cohen, who is stepping down to pursue other opportunities. To facilitate an orderly succession and transition, Cohen will remain available for transition consultation services with the company through October 1, 2023. The transition was not the result of any disagreements between Cohen and Vacasa.

Schuman joins Vacasa with nearly 30 years of financial leadership experience within the technology sector. Most recently, Schuman served as the CFO of Kiavi, Inc., one of the nation’s largest technology-driven real estate lenders. Prior to Kiavi, Schuman spent more than 25 years at Intel Corporation, where he served as the financial lead for various business units, including, most recently, as the VP and CFO of Intel Capital.

“I’m thrilled to welcome Bruce to Vacasa,” said Rob Greyber, CEO of Vacasa. “Bruce has successfully led financial functions at one of the world’s most transformative technology companies and has also helped growth businesses develop financial and operating rigor as they scaled. Bruce will round out a leadership team at Vacasa focused on driving profitable growth, improving customer-centric execution and unlocking Vacasa’s long-term potential.”

“I am excited to join Vacasa, a company with enormous potential to further transform the vacation rental industry,” said Schuman. “I’ve seen first-hand how technology can simplify and elevate customer experiences and am looking forward to working with Rob and the talented executive team as we continue to bring technology-enabled hospitality and service to Vacasa’s homeowners and guests.”

Cohen has served as Vacasa’s CFO since joining the company in March of 2021, building out its core finance functions and overseeing its business combination with TPG Pace Solutions Corp. that resulted in Vacasa becoming a publicly traded company.

“I want to thank Jamie for her hard work over the last couple of years and the valuable role she has played during her time with the company, especially in leading Vacasa into the public markets. It has been a pleasure having her on the team, and I wish her only the best in her future endeavors,” said Jeff Parks, Chairman of Vacasa’s board of directors.

About Vacasa

For more information, visit https://www.vacasa.com/press.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509005573/en/

[email protected]

KEYWORDS: Oregon United States North America

INDUSTRY KEYWORDS: Internet Lodging Technology Travel Software

MEDIA:

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May 9, 2023 6:35 pm

LiveVox Announces First Quarter 2023 Financial Results

LiveVox Announces First Quarter 2023 Financial Results

First quarter total revenue year-over-year growth of 14.9% to $36.9 million

First quarter ARR of $143.0 million up 13.8% year-over-year

First quarter GAAP net loss of $8.5 million

First quarter positive adjusted EBITDA of $0.8 million

SAN FRANCISCO–(BUSINESS WIRE)–
LiveVox Holdings, Inc. (“LiveVox” or the “Company”) (NASDAQ: LVOX), a leading global enterprise cloud communications company, today announced financial results for its first quarter ended March 31, 2023.

“I’m pleased to announce a record quarter with both revenue and adjusted EBITDA coming in ahead of our expectations,” said John DiLullo, Chief Executive Officer of LiveVox. “This was a fantastic start to the year and a testament to the execution and determination of the LiveVox team, the loyalty of our customers, and the value of our cloud-based contact center solutions.”

First Quarter 2023 Financial Highlights

Revenue: Total revenue was $36.9 million for the first quarter of 2023, up 14.9% compared to $32.1 million for the first quarter of 2022.
Gross Profit and Gross Margin: Gross profit was $23.6 million for the first quarter of 2023, up 27.9% compared to $18.5 million for the first quarter of 2022; Gross margin was 64.0% for the first quarter of 2023, compared to 57.5% for the first quarter of 2022.
Non-GAAP Gross Profit* and Non-GAAP Gross Margin*: Non-GAAP gross profit was $25.2 million for the first quarter of 2023, up 30.0% compared to $19.4 million for the first quarter of 2022; Non-GAAP gross margin was 68.3% for the first quarter of 2023, compared to 60.4% for the first quarter of 2022.
Net loss: Net loss was $8.5 million for the first quarter of 2023, compared to net loss of $13.0 million for the first quarter of 2022.
Adjusted EBITDA*: Adjusted EBITDA was $0.8 million for the first quarter of 2023, compared to Adjusted EBITDA loss of $8.3 million for the first quarter of 2022.

* 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.

Business Outlook

In determining the financial guidance to provide to investors, the Company considered its recent business trends and financial results, current growth plans, strategic initiatives and global economic outlook. LiveVox emphasizes that the guidance provided is subject to various important cautionary factors referenced in the section entitled “Forward-Looking Statements” below.

As such, LiveVox is providing guidance for its second quarter and full year 2023 as follows:

Second Quarter of 2023 Guidance:
- Total revenue is expected to be in the range of $34 million to $35 million, representing growth of 3% to 6% year-over-year.
- Adjusted EBITDA is expected to be in the range of $0.0 million to $0.5 million.
Full Year 2023 Guidance:
- Total revenue is still expected to be in the range of $143 million to $148 million, representing growth of 5% to 9% year-over-year.
- Adjusted EBITDA is now expected to be in the range of $4 million to $7 million.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of the future costs and expenses for which the Company adjusts, such as depreciation and amortization, long-term equity incentive bonus and stock-based compensation expense, interest income or expense, change in the fair value of warrant liability, other income or expense, benefit from or provision for income taxes and restructuring cost, the effect of which may be significant. Annualized Recurring Revenue (“ARR”) is calculated as the sum of the most recent quarter of (i) recurring subscription amounts and (ii) platform usage charges for all customers, multiplied by four.

Quarterly Conference Call

LiveVox will host a conference call today at 4:30 p.m. Eastern Time to review the Company’s financial results for its first quarter ended March 31, 2023. To access this call, dial 844-825-9789 for the U.S. or Canada, or 412-317-5180 for callers outside the U.S. or Canada using passcode 5236861. A live webcast of the conference call will be accessible from the Investor Relations section of LiveVox’s website, and a recording will be archived. An audio replay of this conference call will also be available through 11:59 p.m. Eastern Time , May 23, 2023, by dialing 844-512-2921 for the U.S. or Canada or 412-317-6671 for callers outside the U.S. or Canada with access code 10177487.

About LiveVox

LiveVox (Nasdaq: LVOX) is a proven cloud CCaaS platform that helps business leaders redefine customer engagement and transform their contact center’s performance. Decision-makers use LiveVox to improve customer experience, boost agent productivity, empower their managers, and enhance their system orchestration capabilities. Everything needed to deliver game-changing results can be seamlessly integrated and configured to maximize your success: Omnichannel Communications, AI, a Contact Center CRM, and Workforce Engagement Management tools. For more than 20 years, clients of all sizes and industries have trusted LiveVox’s scalable and reliable cloud platform to power billions of omnichannel interactions every year. LiveVox is headquartered in San Francisco, with international offices in Medellin, Colombia and Bangalore, India. To stay up to date with everything LiveVox, follow us at @LiveVox or visit http://livevox.com.

Forward-Looking Statements

Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “should,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, the quotations of management, statements relating to expected bookings, expected revenue and annual recurring revenue from contracts, growth expectations, and future financial results, including guidance for the 2023 second quarter and full fiscal year. These statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside LiveVox’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and speak only as of the date of this presentation. LiveVox assumes no obligation to update or revise any such forward-looking statements except as required by law.

Important factors, among others, that may affect actual results or outcomes include risks or liabilities assumed as a result of our ability to meet financial and operating guidance, ability to achieve financial targets, and successfully manage capital expenditures; risks related to the high level of competition in the cloud contact center industry and the intense competition and competitive pressures from other companies in the industry in which the Company operates; risks related to the Company’s reliance on information systems and the ability to properly maintain the confidentiality and integrity of data; risks related to the occurrence of cyber incidents or a deficiency in cybersecurity protocols; risks related to the ability to obtain third-party software licenses for use in or with the Company’s products; general economic and business conditions, including but not limited to challenges associated with a tight labor market, inflationary pressures, volatility in foreign exchange rates, supply chain constraints, recessionary fears, and impacts from the invasion of Ukraine by Russia; the impact of COVID-19 on LiveVox’s business; risks related to our intellectual property rights, risks related to our ability to secure additional financing on favorable terms, or at all, to meet our capital needs; increased taxes and surcharges (including Universal Service Fund, whether labeled a “tax,” “surcharge,” or other designation) on our products which may increase our customers’ cost of using our products and/or increase our costs and reduce our profit margins to the extent the costs are not passed through to our customers, and our potential liability for past sales and other taxes, surcharges and fees; changes in government regulation applicable to the collections industry or any failure of us or our customers to comply with existing regulations; changes in base interest rates and significant market volatility on the Company’s business, the Company’s industry and the global economy; the Company’s ability to successfully manage its recent leadership transition; as well as those factors described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in the Company’s most recent filings with the Securities and Exchange Commission (“SEC”), including the Company’s most recently filed reports on Form 10-K and Form 10-Q and subsequent filings.

The information contained in this press release is summary information that is intended to be considered in the context of LiveVox’s SEC filings and other public announcements that LiveVox may make, by press release or otherwise, from time to time. LiveVox also uses its website to distribute company information, including performance information, and such information may be deemed material. Accordingly, investors should monitor LiveVox’s website (http://www.livevox.com). LiveVox undertakes no duty or obligation to publicly update or revise the forward-looking statements or other information contained in this presentation. These materials contain information about LiveVox and its affiliates and certain of their respective personnel and affiliates, information about their respective historical performance and general information about the market. You should not view information related to the past performance of LiveVox or information about the market, as indicative of future results, the achievement of which cannot be assured.


Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except per share data)


	For the three months ended March 31,
	2023			2022
Revenue	$	36,866		$	32,093
Cost of revenue		13,262			13,632
Gross profit		23,604			18,461
Operating expenses
Sales and marketing expense		13,480			14,652
General and administrative expense		9,171			7,468
Research and development expense		7,983			8,490
Total operating expenses		30,634			30,610
Loss from operations		(7,030	)		(12,149	)
Interest expense, net		1,096			750
Change in the fair value of warrant liability		(67	)		(392	)
Other income, net		(70	)		(64	)
Total other expense, net		959			294
Pre-tax loss		(7,989	)		(12,443	)
Provision for income taxes		480			544
Net loss	$	(8,469	)	$	(12,987	)
Comprehensive loss
Net loss	$	(8,469	)	$	(12,987	)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment		66			(49	)
Net unrealized gain (loss) on marketable securities		427			(888	)
Total other comprehensive income (loss), net of tax		493			(937	)
Comprehensive loss	$	(7,976	)	$	(13,924	)
Net loss per share
Net loss per share—basic and diluted	$	(0.09	)	$	(0.14	)
Weighted average shares outstanding—basic and diluted		92,842			91,478


Consolidated Balance Sheets (In thousands, except per share data)


	As of
	March 31, 2023			December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	19,266		$	20,742
Marketable securities—available for sale debt securities, current (amortized cost of $44,702 and $49,593 as of March 31, 2023 and December 31, 2022, respectively)		43,718			48,182
Accounts receivable, net of allowance of credit losses of $1,868 and $1,459 as of March 31, 2023 and December 31, 2022, respectively		21,000			21,447
Deferred sales commissions, current		3,375			3,171
Prepaid expenses and other current assets		5,966			5,211
Total current assets		93,325			98,753
Property and equipment, net		2,405			2,618
Goodwill		47,481			47,481
Intangible assets, net		15,854			16,655
Operating lease right-of-use assets		4,069			4,920
Deposits and other		320			371
Deferred sales commissions, net of current		7,728			7,356
Deferred tax asset, net		23			1
Total assets	$	171,205		$	178,155

LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,892		$	5,987
Accrued expenses		11,296			12,399
Deferred revenue, current		1,456			1,318
Term loan, current		1,122			982
Operating lease liabilities, current		1,500			1,655
Finance lease liabilities, current		5			11
Total current liabilities		21,271			22,352
Line of credit		320			—
Deferred revenue, net of current		395			338
Term loan, net of current		53,041			53,585
Operating lease liabilities, net of current		3,416			3,649
Warrant liability		566			633
Other long-term liabilities		363			363
Total liabilities		79,372			80,920

Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value per share; 25,000 shares authorized and none issued and outstanding as of March 31, 2023 and December 31, 2022.		—			—
Common stock, $0.0001 par value per share; 500,000 shares authorized and 92,937 shares issued and outstanding as of March 31, 2023; 500,000 shares authorized and 92,729 shares issued and outstanding as of December 31, 2022.		9			9
Additional paid-in capital		267,493			264,919
Accumulated other comprehensive loss		(1,703	)		(2,196	)
Accumulated deficit		(173,966	)		(165,497	)
Total stockholders’ equity		91,833			97,235
Total liabilities & stockholders’ equity	$	171,205		$	178,155


Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands)


	For the three months ended March 31,
	2023			2022
Operating activities:
Net loss	$	(8,469	)	$	(12,987	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		243			274
Amortization of identified intangible assets		800			1,073
Amortization of deferred loan origination costs		36			27
Amortization of deferred sales commissions		845			740
Non-cash lease expense		349			453
Stock-based compensation expense		2,649			2,479
Credit loss expense		413			33
Loss on disposition or impairment of asset		509			—
Deferred income tax benefit		(22	)		(78	)
Net realized loss on sale of marketable securities		50			10
Amortization of premium paid on marketable securities		46			131
Change in the fair value of the warrant liability		(67	)		(392	)
Changes in assets and liabilities
Accounts receivable		34			655
Other assets		(702	)		(19	)
Deferred sales commissions		(1,420	)		(695	)
Accounts payable		(95	)		(2,134	)
Accrued expenses		(662	)		(3,716	)
Deferred revenue		195			(16	)
Operating lease liabilities		(389	)		(464	)
Net cash used in operating activities		(5,657	)		(14,626	)
Investing activities:
Purchases of property and equipment		(9	)		(536	)
Purchases of marketable securities		(8,600	)		(1,477	)
Proceeds from sale of marketable securities		7,604			1,515
Proceeds from maturities and principal paydowns of marketable securities		5,791			242
Net cash provided by (used in) investing activities		4,786			(256	)
Financing activities:
Repayments on loan payable		(140	)		(140	)
Proceeds from drawdown on line of credit		320			—
Debt issuance costs		(299	)		—
Repayments on finance lease obligations		(7	)		(6	)
Payments of employees’ withholding taxes on net share settlement of share-based awards		(294	)		—
Principal payments under the structured payable arrangement		(441	)		—
Net transfer from LiveVox TopCo		219			—
Net cash used in financing activities		(642	)		(146	)
Effect of foreign currency translation		37			(97	)
Net decrease in cash, cash equivalents and restricted cash		(1,476	)		(15,125	)
Cash, cash equivalents, and restricted cash beginning of period		20,742			47,317
Cash, cash equivalents, and restricted cash end of period	$	19,266		$	32,192

	For the three months ended March 31,
	2023			2022
Supplemental disclosure of cash flow information:
Interest paid	$	1,300		$	801
Income taxes paid		47			56
Supplemental schedule of noncash investing activities:
Net unrealized loss (gain) on marketable securities	$	(427	)	$	888

Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets (dollars in thousands):

	As of March 31,
	2023		2022
Cash and cash equivalents	$	19,266	$	32,092
Restricted cash, current		—		100
Total cash, cash equivalents and restricted cash	$	19,266	$	32,192

Non-GAAP Financial Measures

Management uses non-GAAP financial measures to evaluate operating performance. We believe non-GAAP financial measures provide useful information to investors and others to understand and evaluate our operating results in the same manner as our management and board of directors and allows for better comparison of financial results among our competitors.

There are material limitations associated with the use of non-GAAP financial measures since they exclude significant expenses and income that are required by GAAP to be recorded in our financial statements. The definitions of our non-GAAP measures may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may utilize metrics that are not similar to ours. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.

Adjusted EBITDA

We monitor Adjusted EBITDA, a non-generally accepted accounting principle (“Non-GAAP”) financial measure, to analyze our financial results and believe that it is useful to investors, as a supplement to U.S. GAAP measures, in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. We believe that Adjusted EBITDA helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expenses that we exclude from Adjusted EBITDA. Furthermore, we use this measure to establish budgets and operational goals for managing our business and evaluating our performance. We also believe that Adjusted EBITDA provides an additional tool for investors to use in comparing our recurring core business operating results over multiple periods with other companies in our industry. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP, and our calculation of Adjusted EBITDA may differ from that of other companies in our industry. We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of our consolidated financial statements in accordance with U.S. GAAP and reconciliation of Adjusted EBITDA to the most directly comparable U.S. GAAP measure, net loss. We calculate Adjusted EBITDA as net loss before (i) depreciation and amortization, (ii) long-term equity incentive bonus, (iii) stock-based compensation expense, (iv) interest income or expense, net, (v) change in the fair value of warrant liability, (vi) other income or expense, net, (vii) benefit from or provision for income taxes, and (viii) other items that do not directly affect what we consider to be our core operating performance.

Non-GAAP Gross Profit and Non-GAAP Gross Margin Percentage

U.S. GAAP defines gross profit as revenue less cost of revenue. Cost of revenue includes all expenses associated with our various product offerings. We define Non-GAAP gross profit as gross profit after adding back the following items: (i) depreciation and amortization; (ii) long-term equity incentive bonus and stock-based compensation expense; and (iii) restructuring cost. We add back depreciation and amortization, long-term equity incentive bonus and stock-based compensation expense, and restructuring cost because they are one-time or non-cash items. We eliminate the impact of these one-time or non-cash items because we do not consider them indicative of our core operating performance. Their exclusion facilitates comparisons of our operating performance on a period-to-period basis. Therefore, we believe showing Non-GAAP gross margin to remove the impact of these one-time or non-cash expenses is helpful to investors in assessing our gross profit and gross margin performance in a way that is similar to how management assesses our performance. We calculate Non-GAAP gross margin percentage by dividing Non-GAAP gross profit by revenue, expressed as a percentage of revenue.

Management uses Non-GAAP gross profit and Non-GAAP gross margin percentage to evaluate operating performance and to determine resource allocation among our various product offerings. We believe Non-GAAP gross profit and Non-GAAP gross margin percentage provide useful information to investors and others to understand and evaluate our operating results in the same manner as our management and board of directors and allows for better comparison of financial results among our competitors. Non-GAAP gross profit and Non-GAAP gross margin percentage may not be comparable to similarly titled measures of other companies because other companies may not calculate Non-GAAP gross profit and Non-GAAP gross margin percentage or similarly titled measures in the same manner as we do.

Please see tables below for a reconciliation of non-GAAP measures to the most directly comparable GAAP measures for the periods presented.


GAAP Net Loss to Adjusted EBITDA (Unaudited) (Dollars in thousands)


	Three Months Ended March 31,
	2023			2022
Net loss	$	(8,469	)	$	(12,987	)
Non-GAAP adjustments:
Depreciation and amortization		1,043			1,347
Long-term equity incentive bonus and stock-based compensation expense		2,649			2,479
Interest expense, net		1,096			750
Change in the fair value of warrant liability		(67	)		(392	)
Other income, net		(70	)		(64	)
Acquisition and financing related fee and expense		—			10
Provision for income taxes		480			544
Restructuring cost		3,569			—
Other non-recurring expenses		594			—
Adjusted EBITDA	$	825		$	(8,313	)


GAAP Gross Profit to Non-GAAP Gross Profit (Unaudited) (Dollars in thousands)


	Three Months Ended March 31,
	2023			2022
Gross profit	$	23,604		$	18,461
Depreciation and amortization		308			609
Long-term equity incentive bonus and stock-based compensation expense		108			312
Restructuring cost		1,175			—
Non-GAAP gross profit	$	25,195		$	19,382

Gross margin %		64.0	%		57.5	%
Non-GAAP gross margin %		68.3	%		60.4	%

There were no long-term equity incentive bonus during the periods presented. Stock-based compensation expenses included in our results of operations for the three months ended March 31, 2023 and 2022 are as follows (dollars in thousands):

	Three Months Ended March 31, (unaudited)
	2023		2022
Cost of revenue	$	108	$	312
Sales and marketing expense		319		607
General and administrative expense		1,377		660
Research and development expense		845		900
Total stock-based compensation expenses	$	2,649	$	2,479

View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006131/en/

Investor Contacts:

Alexis Waadt

[email protected]

Ryan Gardella

[email protected]

Press Contacts:

Nick Bandy

[email protected]

Katie Creaser

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Software Technology Networks Data Management

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