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SciPlay Reports First Quarter 2023 Results

SciPlay Reports First Quarter 2023 Results

Achieved Record Revenue with Growth of 18% Year-Over-Year Resulting in Strong Cash Flows

Continuing to Outpace the Social Casino Market

Completed $60 Million(1) of Share Purchase Authorization Returning Capital to Shareholders; Board Authorizes New $60 Million Share Repurchase Program

LAS VEGAS–(BUSINESS WIRE)–SciPlay Corporation (NASDAQ: SCPL) (“SciPlay” or the “Company”) today reported results for the first quarter ended March 31, 2023.

SciPlay entered 2023 with strong momentum and continued to outpace the social casino market and gained share. Revenue grew 18% year-over-year, achieving another quarterly record primarily due to increased social casino payer engagement and record high average monthly paying users, all translating to strong cash flows. The increases in Net income and AEBITDA(2) outpaced Revenue growth at 31% and 21%, respectively. We also returned $60 million of capital to shareholdersthrough the repurchase of our shares of Class A common stock, since the initiation of the program on May 9, 2022 and through May 9, 2023, completing the share purchase program authorization.

Josh Wilson, Chief Executive Officer of SciPlay, commented, “SciPlay continued its industry-leading performance in the first quarter of 2023, outpacing the social casino market for the fifth consecutive quarter. We continue to benefit from the investments that we’ve made in key growth drivers of our business and into the development of proprietary tools and systems. Our strong operating platform and industry-best team’s innovation are providing our players with engaging entertainment experiences, resulting in more payers and increasing monetization per player. We are off to a great start in the first quarter and look forward to continuing on our path of sustainable and profitable growth.”

Daniel O’Quinn, Interim Chief Financial Officer of SciPlay, added, “SciPlay posted strong financial results in the first quarter of 2023, reflecting progress on our key objectives: delivering great entertainment experiences to our players, investing in our game franchises, growing market share in social casino and prudently allocating capital. We are pleased to report the completion of our $60 million share repurchase program in about one year’s time. Our Board has approved a new $60 million share repurchase authorization, which we will implement in a similar manner as the recently completed program.”

(1) This amount is as of May 9, 2023.

(2) The financial measure “AEBITDA” is a non-GAAP financial measure defined below under “Non-GAAP Financial Measures” and is reconciled to the most directly comparable GAAP measure in the accompanying supplemental tables at the end of this release.

SUMMARY RESULTS

 

Three Months Ended

($ in millions)

March 31,

 

2023

 

2022

Revenue

$

186.4

 

 

$

158.0

 

Net income

 

41.8

 

 

 

32.0

 

Net income margin

 

22.4

%

 

 

20.3

%

Net cash provided by operating activities

 

41.7

 

 

 

36.6

 

Capital expenditures

 

3.8

 

 

 

2.0

 

 

 

 

 

Non-GAAP Financial Measures(1)

 

 

 

Adjusted EBITDA (“AEBITDA”)

$

53.5

 

 

$

44.2

 

AEBITDA margin

 

28.7

%

 

 

28.0

%

 

 

 

 

 

As of March 31,

 

As of December 31,

Balance Sheet Measures

2023

 

2022

Cash and cash equivalents

$

357.5

 

 

$

330.1

 

Available liquidity(2)

 

507.5

 

 

 

480.1

 

 

 

 

 

(1) The financial measures “AEBITDA” and “AEBITDA margin” are non-GAAP financial measures defined below under “Non-GAAP Financial Measures” and are reconciled to the most directly comparable GAAP measures in the accompanying supplemental tables at the end of this release.

(2) Available liquidity is calculated as cash and cash equivalents plus the undrawn capacity on our revolver.

Key Performance Indicators

(in millions, except Average Revenue Per Daily Active Users (“ARPDAU”), Average Monthly Revenue Per Paying User (“AMRPPU”), Average Monthly Paying Users (“MPUs”) and percentages; KPIs include only in-app purchases)

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

Increase /

 

2023

 

2022

 

(Decrease)

Mobile Penetration

91%

 

90%

 

1.0pp

Average Monthly Active Users

6.1

 

6.3

 

(0.2)

Average Daily Active Users

2.3

 

2.3

 

—

ARPDAU

$0.89

 

$0.74

 

$0.15

Average MPUs (in thousands)

625

 

560

 

65

AMRPPU

$97.43

 

$92.45

 

$4.98

Payer Conversion Rate

10.3%

 

8.9%

 

1.4pp

pp = percentage points.

First Quarter 2023 Financial Highlights

  • Revenue growth was 18% year-over-year to $186.4 million, a new quarterly record, primarily due to increased social casino payer engagement and record high average monthly paying users.
  • Net income growth was 31% year-over-year to $41.8 million compared to $32.0 million in the prior year period, primarily due to the increase in revenue. Net income margin was 22.4% for the quarter, increasing by 2.1 percentage points year-over-year.
  • AEBITDA, a non-GAAP financial measure defined at the end of this release, grew 21% to $53.5 million compared to $44.2 million in the prior year period. The increase in AEBITDA was primarily due to higher revenue. AEBITDA margin, a non-GAAP financial measure defined at the end of this release, was 28.7% for the quarter, increasing by 0.7 percentage points year-over-year.
  • Net cash provided by operating activities was $41.7 million, a $5.1 million increase over the prior year period, primarily due to an increase in revenue, partially offset by an unfavorable change in working capital due to the timing of payments from our platform providers.
  • Cash and cash equivalents increased by $27.4 million to $357.5 million from the fourth quarter of 2022. Total available liquidity, which includes our undrawn revolver, was $507.5 million.
  • Returned $60.0 million of capital to shareholders through the repurchase of approximately 4.1 million shares of Class A common stock since the initiation of the program on May 9, 2022 and through May 9, 2023, completing the share purchase program authorization. Our Board has approved a new $60.0 million share repurchase authorization, which we will implement in a manner similar to the implementation of the recently completed program.

First Quarter Key Performance Highlights

  • Jackpot Party Casino®achieved its third consecutive quarterly record revenue.
  • Quick Hit Slots®achieved its fifth consecutive quarterly record revenue.
  • Payer conversion rate increased by 1.4 percentage points from the prior year period to 10.3% due to consistent payer interaction with the games by our players as a result of our continually enhancing player analytics and the introduction of new content and features into our games.
  • Average Monthly Paying Users (MPU) increased to 625 thousand compared to 560 thousand in the prior year period, a new record.
  • Average Monthly Revenue Per Paying User (AMRPPU) was $97.43, maintaining elevated levels with twelve consecutive quarters above $90.
  • Average Revenue Per Daily Active User (ARPDAU) was up 20% to a record $0.89, compared to $0.74 in the prior year period.

About SciPlay

SciPlay Corporation (NASDAQ: SCPL) is a leading developer and publisher of digital games on mobile and web platforms. SciPlay currently offers social casino games Jackpot Party® Casino, Gold Fish® Casino, Quick Hit® Slots, 88 Fortunes® Slots, MONOPOLY® Slots, and Hot Shot Casino®, casual games Bingo Showdown®, Solitaire Pets™Adventure, and Backgammon Live and a variety of hyper-casual games such as Rob Master 3D™, Deep Clean Inc.™ and Oh God™. All of SciPlay’s games are offered and played on multiple platforms, including Apple, Google, Facebook, and Amazon. In addition to developing original games, SciPlay has access to a library of more than 1,500 real-world slot and table games provided by Light & Wonder, Inc. and its Subsidiaries. For more information, please visit https://www.SciPlay.com.

You can access our filings with the Securities Exchange Commission (“SEC”) through the SEC website at www.sec.gov or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at http://investors.sciplay.com/, and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC’s Regulation Fair Disclosure (Reg FD). The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this or any other document, and shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended.

All ® and © notices signify marks registered in the United States by SciPlay Games, LLC and/or LNW Gaming, Inc., and or their respective affiliates.

© 2023 SciPlay Corporation. All Rights Reserved.

Forward-Looking Statements

Throughout this press release, we make “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,” “anticipate,” “target,” “should,” “could,” “potential,” “opportunity,” “goal,” or similar terminology. These statements are based upon management’s current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors, including, among other things:

  • the effects of the COVID-19 pandemic and any resulting social, political, economic and financial complications;

  • our ability to attract and retain players;

  • expectations of growth in total consumer spending on social gaming, including social casino gaming;

  • our reliance on third-party platforms and our ability to track data on those platforms;

  • our ability to continue to launch and enhance games that attract and retain a significant number of paying players;

  • our ability to expand in international markets;

  • our reliance on a small percentage of our players for nearly all of our revenue;

  • our ability to adapt to, and offer games that keep pace with, changing technology and evolving industry standards;

  • competition;

  • our dependence on the optional purchases of coins, chips and bingo cards (collectively referred to as “coins, chips and cards”) to supplement the availability of periodically offered free coins, chips and cards;

  • our ability to access additional financing and restrictions and covenants in debt agreements, including those that could result in acceleration of the maturity of our indebtedness;

  • the discontinuation or replacement of the London Interbank Offer Rate, which may adversely affect interest rates;

  • fluctuations in our results due to seasonality and other factors;

  • dependence on skilled employees with creative and technical backgrounds;

  • U.S. and international economic and industry conditions, including increases in benchmark interest rates and the effects of inflation;

  • public perception of our response to environmental, social and governance issues;

  • changes in, or the elimination of, our share repurchase program;

  • our ability to use the intellectual property rights of Light & Wonder, Inc. (“Light & Wonder”, “L&W” and “Parent”) and other third parties, including the third-party intellectual property rights licensed to Light & Wonder, under our intellectual property license agreement with our Parent;

  • protection of our proprietary information and intellectual property, inability to license third-party intellectual property and the intellectual property rights of others;

  • security and integrity of our games and systems;

  • security breaches, cyber-attacks or other privacy or data security incidents, challenges or disruptions;

  • reliance on or failures in information technology and other systems;

  • loss of revenue due to unauthorized methods of playing our games;

  • the impact of legal and regulatory restrictions on our business, including significant opposition in some jurisdictions to interactive social gaming, including social casino gaming, and how such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casino gaming specifically, and how this could result in a prohibition on interactive social gaming or social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations;

  • laws and government regulations, both foreign and domestic, including those relating to our Parent and to data privacy and security, including with respect to the collection, storage, use, transmission, sharing and protection of personal information and other consumer data, and those laws and regulations that affect companies conducting business on the internet, including ours;

  • the continuing evolution of the scope of data privacy and security regulations, and our belief that the adoption of increasingly restrictive regulations in this area is likely within the U.S. and other jurisdictions;

  • risks related to foreign operations, including the complexity of foreign laws, regulations and markets; the uncertainty of enforcement of remedies in foreign jurisdictions; the effect of currency exchange rate fluctuations; the impact of foreign labor laws and disputes; the ability to attract and retain key personnel in foreign jurisdictions; the economic, tax and regulatory policies of local governments; and compliance with applicable anti-money laundering, anti-bribery and anti-corruption laws;

  • influence of certain stockholders, including decisions that may conflict with the interests of other stockholders;

  • our ability to achieve some or all of the anticipated benefits of being a standalone public company;

  • our dependence on distributions from SciPlay Parent Company, LLC to pay our taxes and expenses, including substantial payments we will be required to make under the Tax Receivable Agreement (the “TRA”);

  • failure to establish and maintain adequate internal control over financial reporting;

  • stock price volatility;

  • litigation and other liabilities relating to our business, including litigation and liabilities relating to consumer protection, gambling-related matters, employee matters, alleged service and system malfunctions, alleged intellectual property infringement and claims relating to our contracts, licenses and strategic investments;

  • our ability to complete acquisitions and integrate businesses successfully;

  • our ability to pursue and execute new business initiatives;

  • our expectations of future growth that will place significant demands on our management and operations;

  • natural events and health crises that disrupt our operations or those of our providers or suppliers;

  • changes in tax laws or tax rulings, or the examination of our tax positions;

  • levels of insurance coverage against claims; and

  • our dependence on certain key providers.

Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated in forward-looking statements is included from time to time in our filings with the SEC, including the Company’s current reports on Form 8-K, quarterly reports on Form 10-Q and annual reports on Form 10-K, including the latest annual report filed with the SEC on March 1, 2023 (“2022 Form 10-K”) (including under the headings “Forward Looking Statements” and “Risk Factors”). Forward-looking statements speak only as of the date they are made and, except for our ongoing obligations under the U.S. federal securities laws, we undertake no and expressly disclaim any obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.

This press release may contain references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently verified by us and we do not make any representation as to the accuracy of that information. In general, we believe there is less publicly available information concerning international social gaming industries than the same industries in the U.S. Some data is also based on our good faith estimates, which are derived from our review of internal surveys or data, as well as the independent sources referenced above. Assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described under “Risk Factors” in Part II, Item 1A of our Quarterly Reports on Form 10-Q and Part I, Item 1A “Risk Factors” in our 2022 Form 10-K. These and other factors could cause future performance to differ materially from our assumptions and estimates.

Due to rounding, certain numbers presented herein may not precisely recalculate.

SCIPLAY CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, in millions, except per share amounts)

 

 

 

 

 

Three Months Ended

 

March 31,

 

2023

 

2022

Revenue

$

186.4

 

$

158.0

 

Operating expenses:

 

 

 

Cost of revenue(1)

 

57.7

 

 

 

48.2

 

Sales and marketing(1)

 

46.9

 

 

 

40.0

 

General and administrative(1)

 

22.1

 

 

 

16.7

 

Research and development(1)

 

12.7

 

 

 

11.5

 

Depreciation and amortization

 

5.9

 

 

 

4.7

 

Restructuring and other

 

1.4

 

 

 

2.2

 

Operating income

 

39.7

 

 

 

34.7

 

Other income (expense), net

 

6.0

 

 

 

(0.5

)

Net income before income taxes

 

45.7

 

 

 

34.2

 

Income tax expense

 

3.9

 

 

 

2.2

 

Net income

 

41.8

 

 

 

32.0

 

Less: Net income attributable to the noncontrolling interest

 

36.3

 

 

 

27.6

 

Net income attributable to SciPlay

$

5.5

 

 

$

4.4

 

 

 

 

 

Basic and diluted net income attributable to SciPlay per share:

 

 

 

Basic

$

0.25

 

 

$

0.18

 

Diluted

$

0.24

 

 

$

0.18

 

 

 

 

 

Weighted average number of shares of Class A common stock used in per share calculation:

 

 

 

Basic shares

 

22.0

 

 

 

24.6

 

Diluted shares

 

23.0

 

 

 

24.8

 

 

 

 

 

(1) Excludes depreciation and amortization.

SCIPLAY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions, except par value)

 

 

 

 

 

As of

 

March 31, 2023

 

December 31, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

357.5

 

$

330.1

Accounts receivable, net

 

64.2

 

 

 

51.0

 

Prepaid expenses and other current assets

 

7.3

 

 

 

8.0

 

Total current assets

 

429.0

 

 

 

389.1

 

Property and equipment, net

 

3.6

 

 

 

3.0

 

Operating lease right-of-use assets

 

4.2

 

 

 

4.8

 

Goodwill

 

216.1

 

 

 

217.6

 

Intangible assets and software, net

 

79.6

 

 

 

74.8

 

Deferred income taxes

 

72.3

 

 

 

74.5

 

Other assets

 

1.7

 

 

 

1.9

 

Total assets

$

806.5

 

 

$

765.7

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

20.7

 

 

$

18.4

 

Accrued liabilities

 

37.9

 

 

 

35.2

 

Due to affiliate

 

4.0

 

 

 

3.8

 

Total current liabilities

 

62.6

 

 

 

57.4

 

Operating lease liabilities

 

2.4

 

 

 

3.1

 

Liabilities under TRA

 

60.2

 

 

 

60.2

 

Other long-term liabilities

 

26.0

 

 

 

29.4

 

Total stockholders’ equity(1)

 

655.3

 

 

 

615.6

 

Total liabilities and stockholders’ equity

$

806.5

 

 

$

765.7

 

 

 

 

 

(1) Includes $540.6 million and $506.4 million in noncontrolling interest as of March 31, 2023 and December 31, 2022, respectively.

SCIPLAY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)

 

 

 

 

 

Three Months Ended

 

March 31,

 

2023

 

2022

Net cash provided by operating activities

$

41.7

 

 

$

36.6

 

Net cash used in investing activities

 

(3.8

)

 

 

(108.2

)

Net cash used in financing activities

 

(10.2

)

 

 

(0.7

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(0.3

)

 

 

(0.1

)

Increase (decrease) in cash, cash equivalents and restricted cash

 

27.4

 

 

 

(72.4

)

Cash, cash equivalents and restricted cash, beginning of period

 

330.1

 

 

 

364.4

 

Cash, cash equivalents and restricted cash, end of period

$

357.5

 

 

$

292.0

 

 

 

 

 

Supplemental cash flow information:

 

 

 

Cash paid for income taxes

$

0.4

 

 

$

0.5

 

 

 

 

 

Supplemental non-cash transactions:

 

 

 

Non-cash additions to intangible assets related to license agreements

$

7.1

 

 

$

—

 

SCIPLAY CORPORATION

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SCIPLAY TO AEBITDA

(Unaudited, in millions)

 

 

 

 

 

Three Months Ended

 

March 31,

 

2023

 

2022

Net income attributable to SciPlay

$

5.5

 

 

$

4.4

 

Net income attributable to noncontrolling interest

 

36.3

 

 

 

27.6

 

Net income

 

41.8

 

 

 

32.0

 

Restructuring and other(1)

 

1.4

 

 

 

2.2

 

Depreciation and amortization

 

5.9

 

 

 

4.7

 

Income tax expense

 

3.9

 

 

 

2.2

 

Stock-based compensation

 

6.5

 

 

 

2.6

 

Other (income) expense, net

 

(6.0

)

 

 

0.5

 

AEBITDA

$

53.5

 

 

$

44.2

 

Revenue

$

186.4

 

 

$

158.0

 

Net income margin (Net income/Revenue)

 

22.4

%

 

 

20.3

%

AEBITDA margin (AEBITDA/Revenue)

 

28.7

%

 

 

28.0

%

 

 

 

 

(1) Refer to AEBITDA definition for a description of items included in restructuring and other.

RECONCILIATION OF NET INCOME MARGIN

TO AEBITDA MARGIN

 

 

 

 

 

Three Months Ended

 

March 31,

 

2023

 

2022

Net income margin (Net income/Revenue)

22.4

%

 

20.3

%

Restructuring and other

0.7

%

 

1.4

%

Depreciation and amortization

3.2

%

 

3.0

%

Income tax expense

2.1

%

 

1.4

%

Stock-based compensation

3.5

%

 

1.6

%

Other (income) expense, net

(3.2

)%

 

0.3

%

AEBITDA margin (AEBITDA/Revenue)

28.7

%

 

28.0

%

Non-GAAP Financial Measures

Adjusted EBITDA, or AEBITDA, as used herein, is a non-GAAP financial measure that is presented as supplemental disclosure and is reconciled to net income attributable to SciPlay as the most directly comparable GAAP measure as set forth in the above table. We define AEBITDA to include net income attributable to SciPlay before: (1) net income attributable to noncontrolling interest; (2) interest expense; (3) income tax expense; (4) depreciation and amortization; (5) restructuring and other, which includes charges or expenses attributable to: (a) employee severance; (b) management changes; (c) restructuring and integration; (d) M&A and other, which includes: (i) M&A transaction costs; (ii) purchase accounting adjustments (including contingent acquisition consideration); (iii) unusual items (including legal settlements related to major litigation) and (iv) other non-cash items; and (e) cost-savings initiatives; (6) stock-based compensation; (7) loss or gain on debt financing transactions; and (8) other expense or income including foreign currency (gains) and losses. We also use AEBITDA margin, a non-GAAP measure, which we calculate as AEBITDA as a percentage of revenue.

Our management uses AEBITDA and AEBITDA margin to, among other things: (i) monitor and evaluate the performance of our business operations; (ii) facilitate our management’s internal comparisons of our historical operating performance and (iii) analyze and evaluate financial and strategic planning decisions regarding future operating investments and operating budgets. In addition, our management uses AEBITDA and AEBITDA margin to facilitate management’s external comparisons of our results to the historical operating performance of other companies that may have different capital structures and debt levels. Our management believes that AEBITDA and AEBITDA margin are useful as they provide investors with information regarding our financial condition and operating performance that is an integral part of our management’s reporting and planning processes. In particular, our management believes that AEBITDA is helpful because this non-GAAP financial measure eliminates the effects of restructuring, transaction, integration or other items that management believes have less bearing on our ongoing underlying operating performance. Management believes AEBITDA margin is useful as it provides investors with information regarding the underlying operating performance and margin generated by our business operations.

Media Relations

Andrea Schneider +1 917-769-6060

Director, Global Communications

[email protected]

Investor Relations

Robert Weiner +1 904-495-8227

Vice President, Investor Relations

[email protected]

KEYWORDS: Nevada United States North America

INDUSTRY KEYWORDS: Technology Electronic Games Casino/Gaming Entertainment Online Communications Mobile Entertainment Software Internet Social Media

MEDIA:

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ESCO Reports Second Quarter Fiscal 2023 Results

– Q2 GAAP EPS $0.69 – Adjusted EPS $0.76 – Q2 Sales increase 12% to $229 Million – $252 Million in Q2 Orders – Book-to-bill of 1.10x –

St. Louis, May 09, 2023 (GLOBE NEWSWIRE) — ESCO Technologies Inc. (NYSE: ESE) (ESCO, or the Company) today reported its operating results for the second quarter ended March 31, 2023 (Q2 2023).


Operating Highlight


s

  • Q2 2023 GAAP EPS increased 8 percent to $0.69 per share compared to $0.64 per share in Q2 2022.   Q2 2023 Adjusted EPS increased 17 percent to $0.76 per share compared to $0.65 per share in Q2 2022.
  • Q2 2023 Sales increased $24.2 million (11.8 percent) to $229.1 million compared to $204.9 million in Q2 2022.
  • Q2 2023 Entered Orders increased $15.1 million (6 percent) over the prior year period to $251.6 million (book-to-bill of 1.10x), resulting in record ending backlog of $741 million.
  • Net cash used by operating activities was $5 million YTD 2023, as cash flow was negatively impacted by higher working capital requirements, with higher accounts receivable being driven by increased sales and higher inventory related to timing and supply chain issues.  
  • Net debt (total borrowings less cash on hand) was $113 million, resulting in a 0.86x leverage ratio and $582 million in liquidity at March 31, 2023.

Bryan Sayler, Chief Executive Officer and President, commented, “Q2 was another solid quarter operationally, as ESCO delivered double-digit revenue growth, expanded operating margins, and achieved 17 percent adjusted earnings per share growth.   It has been an exciting time for me to step into the CEO role. The business has clear momentum and secular growth drivers that should carry us through this year and beyond. We continue to see exciting developments across our aerospace and defense portfolio, with commercial aerospace, military aerospace and Navy customers driving high levels of business activity. We also see growth drivers continue to solidify in the utility and renewable energy markets, which makes us feel good about the long-term prospects for our Utility Solutions Group. Our Test business had a slightly down quarter but serves a variety of strong end markets and offers broad capabilities that give us confidence in its long-term outlook. It is an exciting time to be at ESCO and I look forward to working with leadership across the company as we move our businesses forward.     

“Entered orders remained strong in the quarter, with solid growth in commercial aerospace and renewables.   All three segments had book-to-bills above 1.0 and for the second consecutive quarter, we achieved record ending backlog at $741 million.

“Our teams across the company continue to do an excellent job driving growth and delivering solid operating results while navigating challenges related to inflation, supply chain constraints and labor shortages. Even with our strong performance year-to-date, we are still managing some past-due backlog challenges driven by these factors. I’d like to personally thank all of our employees for their dedication, persistence, and tremendous efforts. Their commitment is key to our solid results.”


Segment Performance

A
erospace
&
D
efense (A&D)

  • Sales increased $14.2 million (17 percent) to $99.0 million in Q2 2023 from $84.8 million in Q2 2022. Sales growth was driven by commercial aerospace, which increased $8.1 million (27 percent) to $38.2 million in the quarter. In addition, defense aerospace and Navy also delivered solid sales growth.  
  • Q2 2023 EBIT increased $4.5 million to $18.8 million from $14.3 million in Q2 2022. Adjusted EBIT increased $5.1 million (35.2 percent) in Q2 2023 to $19.6 million (19.8 percent margin) from $14.5 million (17.1 percent margin) in Q2 2022.
  • Entered Orders increased $17 million (18 percent) to $112 million in Q2 2023 compared to $95 million in Q2 2022.   The orders strength was driven by commercial OEM build rate increases, market share gains at Mayday, a large aftermarket order at PTI, and $7 million in acquired backlog related to CMT. A&D’s book-to-bill of 1.13x in the quarter resulted in record ending backlog of $435 million.

U
tility Solutions Group (USG)

  • Sales increased $15.0 million (23 percent) to $79.2 million in Q2 2023 from $64.2 million in Q2 2022. Doble’s sales increased by $10.5 million (19 percent) driven by a strong quarter for condition monitoring products, services, and high voltage test equipment at Phenix.   NRG sales increased $4.5 million (47 percent) on continued strength in the renewables end-market.
  • EBIT increased $2.8 million in Q2 2023 to $14.1 million from $11.3 million in Q2 2022. There were no adjustments to Q2 2023 EBIT of $14.1 million (17.8 percent margin), which also increased $2.8 million from Q2 2022 Adjusted EBIT of $11.3 million (17.7 percent margin). Margins were unfavorably impacted by product mix and increased event costs as trade show activity continued to normalize post-COVID.
  • Entered Orders decreased $2 million (2 percent) to $85 million in Q2 2023. The decrease in orders was primarily driven by an $8 million (11 percent) decrease at Doble related to the timing of a large multi-year DUC contract renewal in the prior year Q2. Order strength continues across the Doble portfolio, highlighted by significant condition monitoring orders. NRG orders increased by $6 million (54 percent) related to continuing strength in both wind and solar, and with significant orders by solar resource monitoring (SRM) customers in the U.S. and Europe. USG’s book-to-bill of 1.07x in the quarter resulted in an ending backlog of $143 million, which is up $26 million compared to prior year.

Test

  • Sales decreased $4.9 million (9 percent) to $51.0 million in Q2 2023 from $55.9 million in Q2 2022, with sales increases in Europe more than offset by declines in the U.S. and Asia. There were disruptions in test and measurement project execution in China related to re-opening of the economy after prior zero-COVID policies.
  • EBIT decreased $1.3 million in Q2 2023 to $7.2 million (14.2 percent margin) from $8.5 million (15.2 percent margin) in Q2 2022 related to lower volume in China. There were no adjustments in either year for the Test segment.  
  • Entered Orders decreased $0.1 million to $55.3 million in Q2 2023 compared to $55.4 million in Q2 2022. Despite the slight decrease in orders, it was a solid orders quarter for Test with a book-to-bill of 1.09x, which resulted in an ending backlog of $163 million.


Share Repurchase Program


During Q2 2023, the Company repurchased approximately 81,000 shares for $7.1 million. $8.1 million was paid in the quarter related to the Q2 shares purchased and included $1.0 million related to December purchases that settled in January. Year-to-date, the company has repurchased approximately 138,000 shares for $12.2 million.


Dividend


Payment


The next quarterly cash dividend of $0.08 per share will be paid on July 19, 2023 to stockholders of record on July 5, 2023.


Business


Outlook –


202


3


The strength of our first half results gives us added confidence in our ability to deliver solid revenue and earnings growth in 2023 and we are again increasing our earnings guidance. We now expect current year adjusted EPS in the range of $3.55 to $3.65 (11 to 14 percent growth). This is based on sales in a range of $930 to $950 million (8 to 11 percent annual growth). Consistent with prior years, revenues and Adjusted EPS are expected to grow sequentially throughout the year. Our expectation is for Q3 Adjusted EPS to be in the range of $0.96 to $1.01 per share (8 to 13 percent growth).


Board of Directors


Effective June 30, 2023, and consistent with the succession plan previously announced, Vic Richey will retire from his roles as a director of the Company, the Executive Chair of the Board, and an employee of the Company. Related to this change, independent director Robert Phillippy has been appointed to serve as Chair of the Board. James Stolze will remain a director but has resigned his position as Lead Director. In addition, given that the role of Board Chair will be held by an independent director, the position of Lead Director has been eliminated by the Board. Patrick Dewar has been appointed to serve as Chair of the Audit and Finance Committee.   All of the foregoing changes are effective June 30, 2023.


C


onference Call


The Company will host a conference call today, May 9, at 4:00 p.m. Central Time, to discuss the Company’s Q2 2023 results. A live audio webcast and an accompanying slide presentation will be available on ESCO’s investor website at https://investor.escotechnologies.com. For those unable to participate, a webcast replay will be available after the call on ESCO’s investor website.


F


orward-Looking Statements


Statements in this press release regarding Management’s expectations for fiscal 2023, the effects of continuing inflationary pressures, higher interest rates, pressures related to supply chain performance and labor shortages, our guidance for 2023 including revenues, revenue growth, Adjusted EPS, Adjusted EBIT and Adjusted EBITDA margin; the effects of acquisitions, and any other statements which are not strictly historical, are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. securities laws.

Investors are cautioned that such statements are only predictions and speak only as of the date of this release, and the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company’s operations and business environment including but not limited to those described in Item 1A, “Risk Factors”, of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2022; the availability and acceptance of viable COVID-19 vaccines by enough of the U.S. and world’s population to curtail the pandemic; the continuing impact of the COVID-19 pandemic and the effects of known or unknown COVID-19 variants including labor shortages, facility closures, shelter in place policies or quarantines, material shortages, transportation delays, termination or delays of Company contracts, and the inability of our suppliers or customers to perform; the impacts of natural disasters on the Company’s operations and those of the Company’s customers and suppliers; the timing and content of future contract awards or customer orders; the appropriation, allocation and availability of Government funds; the termination for convenience of Government and other customer contracts or orders; weakening of economic conditions in served markets; the success of the Company’s competitors; changes in customer demands or customer insolvencies; competition; intellectual property rights; technical difficulties; the success of the Company’s acquisition efforts; delivery delays or defaults by customers; performance issues with key customers, suppliers and subcontractors; changes in the costs and availability of certain raw materials; labor disputes; changes in U.S. tax laws and regulations; other changes in laws and regulations including but not limited to changes in accounting standards and foreign taxation; changes in interest rates; costs relating to environmental matters arising from current or former facilities; uncertainty regarding the ultimate resolution of current disputes, claims, litigation or arbitration; and the integration of recently acquired businesses.


Non-GAAP Financial Measures


The financial measures EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS are presented in this press release. The Company defines “EBIT” as earnings before interest and taxes, “EBITDA” as earnings before interest, taxes, depreciation and amortization, “Adjusted EBIT” and “Adjusted EBITDA” as excluding the net impact of the items described in the attached Reconciliation of Non-GAAP Financial Measures, and “Adjusted EPS” as GAAP earnings per share (EPS) excluding the net impact of the items described and reconciled in the attached Reconciliation of Non-GAAP Financial Measures.

EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS are not recognized in accordance with U.S. generally accepted accounting principles (GAAP). However, Management believes EBIT, Adjusted EBIT, EBITDA and Adjusted EBITDA are useful in assessing the operational profitability of the Company’s business segments because they exclude interest, taxes, depreciation and amortization, which are generally accounted for across the entire Company on a consolidated basis. EBIT and EBITDA are also measures used by Management in determining resource allocations within the Company as well as incentive compensation. The presentation of EBIT, Adjusted EBIT, EBITDA, Adjusted EBITDA and Adjusted EPS provides important supplemental information to investors by facilitating comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. The use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.


About ESCO Technologies


ESCO is a global provider of highly engineered products and solutions serving diverse end-markets. It manufactures filtration and fluid control products for the aviation, Navy, space, and process markets worldwide and composite-based products and solutions for Navy, defense, and industrial customers. ESCO is the industry leader in RF shielding and EMC test products; and provides diagnostic instruments, software and services to industrial power users and the electric utility and renewable energy industries. Headquartered in St. Louis, Missouri, ESCO and its subsidiaries have offices and manufacturing facilities worldwide. For more information on ESCO and its subsidiaries, visit the Company’s website at www.escotechnologies.com.
   
   

   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES  
Condensed Consolidated Statements of Operations (Unaudited)  
(Dollars in thousands, except per share amounts)  
    
          Three Months
Ended
March 31, 2023		   Three Months
Ended
March 31, 2022		  
                 
Net Sales $ 229,136   204,928    
Cost and Expenses:          
  Cost of sales   142,296   128,375    
  Selling, general and administrative expenses   53,877   47,959    
  Amortization of intangible assets   7,030   6,510    
  Interest expense   2,269   1,020    
  Other expenses (income), net   314   (604 )  
    Total costs and expenses   205,786   183,260    
                 
Earnings before income taxes   23,350   21,668    
Income tax expense   5,472   5,085    
                 
    Net earnings $ 17,878   16,583    
                 
      Diluted – GAAP $ 0.69   0.64    
                 
      Diluted – As Adjusted Basis $ 0.76 (1 ) 0.65   (2 )
                 
      Diluted average common shares O/S:   25,895   26,045    
                 
(1 ) Q2 2023 Adjusted EPS excludes $0.07 per share of after-tax charges consisting of $0.04 of executive management transition costs at Corporate, $0.02 of CMT acquisition inventory step-up charges and $0.01 of restructuring charges within the A&D segment.
                 
(2 ) Q2 2022 Adjusted EPS excludes $0.01 per share of after-tax charges associated with the NEco acquisition inventory step-up charge and Corporate acquisition related costs.

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES  
Condensed Consolidated Statements of Operations (Unaudited)  
(Dollars in thousands, except per share amounts)  
    
          Six Months
Ended
March 31, 2023		   Six Months
Ended
March 31, 2022		  
                 
Net Sales $ 434,637   381,938    
Cost and Expenses:          
  Cost of sales   268,679   236,680    
  Selling, general and administrative expenses   105,179   94,594    
  Amortization of intangible assets   13,891   12,977    
  Interest expense   3,927   1,753    
  Other expenses (income), net   712   (571 )  
    Total costs and expenses   392,388   345,433    
                 
Earnings before income taxes   42,249   36,505    
Income tax expense   9,644   8,398    
                 
    Net earnings $ 32,605   28,107    
                 
      Diluted – GAAP $ 1.26   1.08    
                 
      Diluted – As Adjusted Basis $ 1.36 (1 ) 1.11   (2 )
                 
      Diluted average common shares O/S:   25,919   26,098    
                 
(1 ) YTD Q2 2023 Adjusted EPS excludes $0.10 per share of after-tax charges consisting of $0.06 of executive management transition costs at Corporate, $0.02 of CMT acquisition inventory step-up charges and $0.02 of restructuring charges within the A&D segment.
                 
(2 ) YTD Q2 2022 Adjusted EPS excludes $0.03 per share of after-tax charges associated with the Altanova & NEco acquisition inventory step-up charges and Corporate acquisition related costs.

    
    

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
   
        GAAP   As Adjusted  
        Q2 2023   Q2 2022   Q2 2023   Q2 2022  
Net Sales                  
  Aerospace & Defense $ 98,982     84,821     98,982     84,821    
  USG   79,161     64,191     79,161     64,191    
  Test   50,993     55,916     50,993     55,916    
    Totals $ 229,136     204,928     229,136     204,928    
                       
EBIT                    
  Aerospace & Defense $ 18,795     14,349     19,595     14,489    
  USG   14,061     11,314     14,061     11,331    
  Test   7,226     8,494     7,226     8,494    
  Corporate   (14,463 )   (11,469 )   (12,963 )   (11,344 )  
    Consolidated EBIT   25,619     22,688     27,919     22,970    
    Less: Interest expense   (2,269 )   (1,020 )   (2,269 )   (1,020 )  
    Less: Income tax expense (5,472 )   (5,085 )   (6,001 )   (5,150 )  
    Net earnings $ 17,878     16,583     19,649     16,800    
                          
Note 1: Adjusted net earnings were $19.6 million in Q2 2023 which excludes $0.07 per share of after-tax charges consisting of $0.04 of executive management transition costs at Corporate, $0.02 of CMT acquisition inventory step-up charges and $0.01 of restructuring charges within the A&D segment.
                       
Note 2: Adjusted net earnings were $16.8 million in Q2 2022 which excludes $0.01 per share of after-tax charges associated with the NEco acquisition inventory step-up charge and Corporate acquisition related costs.
                       
EBITDA Reconciliation to Net earnings:       Q2 2023   Q2 2022  
        Q2 2023   Q2 2022   – As Adjusted   – As Adjusted  
Consolidated EBITDA $ 38,162     34,808     40,462     35,090    
Less: Depr & Amort   (12,543 )   (12,120 )   (12,543 )   (12,120 )  
Consolidated EBIT   25,619     22,688     27,919     22,970    
Less: Interest expense   (2,269 )   (1,020 )   (2,269 )   (1,020 )  
Less: Income tax expense   (5,472 )   (5,085 )   (6,001 )   (5,150 )  
Net earnings $ 17,878     16,583     19,649     16,800    
                       

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Business Segment Information (Unaudited)
(Dollars in thousands)
   
        GAAP   As Adjusted  
        YTD Q2 2023   YTD Q2 2022   YTD Q2 2023   YTD Q2 2022  
Net Sales                  
  Aerospace & Defense $ 181,965     155,065     181,965     155,065    
  USG   150,206     127,676     150,206     127,676    
  Test   102,466     99,197     102,466     99,197    
    Totals $ 434,637     381,938     434,637     381,938    
                       
EBIT                    
  Aerospace & Defense $ 31,331     24,304     32,330     24,639    
  USG   30,192     24,705     30,192     25,172    
  Test   12,637     12,459     12,637     12,459    
  Corporate   (27,984 )   (23,210 )   (25,691 )   (22,905 )  
    Consolidated EBIT   46,176     38,258     49,468     39,365    
    Less: Interest expense   (3,927 )   (1,753 )   (3,927 )   (1,753 )  
    Less: Income tax expense (9,644 )   (8,398 )   (10,401 )   (8,653 )  
    Net earnings $ 32,605     28,107     35,140     28,959    
                          
Note 1: Adjusted net earnings were $35.1 million in YTD 2023 which excludes $0.10 per share of after-tax charges consisting of $0.06 of executive management transition costs at Corporate, $0.02 of CMT acquisition inventory step-up charges and $0.02 of restructuring charges within the A&D segment.
                       
Note 2: Adjusted net earnings were $29.0 million in YTD Q2 2022 which excludes $0.03 per share of after-tax charges associated with the Altanova & NEco acquisition inventory step-up charges and Corporate acquisition related costs.
                       
EBITDA Reconciliation to Net earnings:       YTD Q2 2023   YTD Q2 2022  
        YTD Q2 2023   YTD Q2 2022   – As Adjusted   – As Adjusted  
Consolidated EBITDA $ 71,086     62,550     74,378     63,657    
Less: Depr & Amort   (24,910 )   (24,292 )   (24,910 )   (24,292 )  
Consolidated EBIT   46,176     38,258     49,468     39,365    
Less: Interest expense   (3,927 )   (1,753 )   (3,927 )   (1,753 )  
Less: Income tax expense   (9,644 )   (8,398 )   (10,401 )   (8,653 )  
Net earnings $ 32,605     28,107     35,140     28,959    
                       

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
   
        March 31,
2023		   September 30,
2022
             
Assets          
  Cash and cash equivalents $ 48,221   97,724
  Accounts receivable, net   180,817   164,645
  Contract assets   128,205   125,154
  Inventories   185,753   162,403
  Other current assets   27,144   22,696
    Total current assets   570,140   572,622
  Property, plant and equipment, net   154,020   155,973
  Intangible assets, net   401,717   394,464
  Goodwill   505,194   492,709
  Operating lease assets   41,418   29,150
  Other assets   10,113   9,538
      $ 1,682,602   1,654,456
             
Liabilities and Shareholders’ Equity        
  Current maturities of long-term debt $ 20,000   20,000
  Accounts payable   79,619   78,746
  Contract liabilities   119,970   125,009
  Other current liabilities   77,466   94,374
    Total current liabilities   297,055   318,129
  Deferred tax liabilities   81,150   82,023
  Non-current operating lease liabilities   37,657   24,853
  Other liabilities   44,945   48,294
  Long-term debt   141,000   133,000
  Shareholders’ equity   1,080,795   1,048,157
      $ 1,682,602   1,654,456

   
    

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in thousands)
       
    Six Months
Ended
March 31, 2023		   Six Months
Ended
March 31, 2022
Cash flows from operating activities:        
Net earnings $ 32,605     28,107  
Adjustments to reconcile net earnings to net cash        
(used) provided by operating activities:        
Depreciation and amortization   24,910     24,292  
Stock compensation expense   5,309     3,428  
Changes in assets and liabilities   (67,140 )   (41,451 )
Effect of deferred taxes   (1,145 )   8,627  
Net cash (used) provided by operating activities   (5,461 )   23,003  
         
Cash flows from investing activities:        
Acquisition of business, net of cash acquired   (17,901 )   (15,592 )
Capital expenditures   (10,305 )   (20,715 )
Additions to capitalized software   (5,918 )   (4,727 )
Net cash used by investing activities   (34,124 )   (41,034 )
         
Cash flows from financing activities:        
Proceeds from long-term debt   68,000     88,000  
Principal payments on long-term debt and short-term borrowings   (60,000 )   (46,000 )
Dividends paid   (4,128 )   (4,150 )
Purchases of common stock into treasury   (12,217 )   (17,878 )
Other   (2,374 )   (2,719 )
Net cash (used) provided by financing activities   (10,719 )   17,253  
         
Effect of exchange rate changes on cash and cash equivalents   801     (1,130 )
         
Net decrease in cash and cash equivalents   (49,503 )   (1,908 )
Cash and cash equivalents, beginning of period   97,724     56,232  
Cash and cash equivalents, end of period $ 48,221     54,324  

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Other Selected Financial Data (Unaudited)
(Dollars in thousands)
   
Backlog And Entered Orders – Q2 2023   Aerospace & Defense   USG   Test   Total
  Beginning Backlog – 1/1/23 $ 422,551     137,286     158,584     718,421  
  Entered Orders   111,677     84,571     55,328     251,576  
  Sales     (98,982 )   (79,161 )   (50,993 )   (229,136 )
  Ending Backlog – 3/31/23 $ 435,246     142,696     162,919     740,861  
                     
                     
                     
Backlog And Entered Orders – YTD Q2 2023   Aerospace & Defense   USG   Test   Total
  Beginning Backlog – 10/1/22 $ 408,269     128,156     158,597     695,022  
  Entered Orders   208,942     164,746     106,788     480,476  
  Sales     (181,965 )   (150,206 )   (102,466 )   (434,637 )
  Ending Backlog – 3/31/23 $ 435,246     142,696     162,919     740,861  

   
   

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures (Unaudited)
   
EPS – Adjusted Basis Reconciliation – Q2 2023          
  EPS – GAAP Basis – Q2 2023 $ 0.69      
  Adjustments (defined below)   0.07      
  EPS – As Adjusted Basis – Q2 2023 $ 0.76      
             
  Adjustments exclude $0.07 per share consisting of executive management transition costs
  at Corporate, CMT acquisition inventory step-up charges and restructuring charges within
  the A&D segment in the second quarter of 2023.          
  The $0.07 of EPS adjustments per share consists of $2.3M of pre-tax charges  
  offset by $529K of tax benefit for net impact of $1,771K.          
             
EPS – Adjusted Basis Reconciliation – Q2 2022          
  EPS – GAAP Basis – Q2 2022 $ 0.64      
  Adjustments (defined below)   0.01      
  EPS – As Adjusted Basis – Q2 2022 $ 0.65      
             
  Adjustments exclude $0.01 per share consisting of NEco acquisition inventory  
  step-up charges and Corporate related acquisition costs in the second quarter of 2022.
  The $0.01 of EPS adjustments per share consists of $282K of pre-tax charges  
  offset by $65K of tax benefit for net impact of $217K.          
             
EPS – Adjusted Basis Reconciliation – YTD Q2 2023          
  EPS – GAAP Basis – YTD Q2 2023 $ 1.26      
  Adjustments (defined below)   0.10      
  EPS – As Adjusted Basis – YTD Q2 2023 $ 1.36      
             
  Adjustments exclude $0.10 per share consisting of executive management transition costs
  at Corporate, CMT acquisition inventory step-up charges and restructuring charges within
  the A&D segment in the first six months of 2023.          
  The $0.10 of EPS adjustments per share consists of $3,292K of pre-tax charges
  offset by $757K of tax benefit for net impact of $2,535K.          
             
EPS – Adjusted Basis Reconciliation – YTD Q2 2022          
  EPS – GAAP Basis – YTD Q2 2022 $ 1.08      
  Adjustments (defined below)   0.03      
  EPS – As Adjusted Basis – YTD Q2 2022 $ 1.11      
             
  Adjustments exclude $0.03 per share consisting of Altanova & NEco acquisition inventory
  step-up charges and Corporate related acquisition costs in the first six months of 2022.
  The $0.03 of EPS adjustments per share consists of $1,107K of pre-tax charges
  offset by $255K of tax benefit for net impact of $852K.          

       
   
SOURCE ESCO Technologies Inc.
Kate Lowrey, Vice President of Investor Relations, (314) 213-7277



Posted on

PLAYSTUDIOS, Inc. Announces First Quarter Results

PLAYSTUDIOS, Inc. Announces First Quarter Results

First Quarter Revenue of $80.1 million and Net loss of $2.6 million

AEBITDA of $17.8 million, AEBITDA Margins up 930bps from year ago levels

LAS VEGAS–(BUSINESS WIRE)–
PLAYSTUDIOS, Inc. (NASDAQ: MYPS) (“PLAYSTUDIOS” or the “Company”), the developer of the playAWARDS loyalty platform and an award-winning developer of free-to-play mobile and social games, today announced financial results for the first quarter ended March 31, 2023.

First Quarter Financial Highlights

  • Revenue was $80.1 million during the first quarter of 2023, compared to $70.5 million during the first quarter of 2022.

  • Net loss was $2.6 million during the first quarter of 2023, compared to net loss of $25.2 million during the first quarter of 2022.

  • AEBITDA, a non-GAAP financial measure defined below, was $17.8 million during the first quarter of 2023, compared to $9.1 million during the first quarter of 2022.

Andrew Pascal, Chairman and Chief Executive Officer of PLAYSTUDIOS, commented, “Our momentum exiting 2022 continued as we posted another terrific quarter. Revenue and AEBITDA exceeded year ago and fourth quarter results, continuing to validate our unique strategy and focus on execution. We’ve accomplished this despite numerous industry and economic headwinds that continue to make operating conditions challenging.”

He added, “Of particular note this quarter were our AEBITDA margins which grew 930bps from year ago levels and 700bps from just last quarter. Our margins have been steadily increasing since 2022 and are approaching those of our peers. Reaching these levels is a goal of ours and something we believe can be achieved. I’m particularly encouraged by our progress with our growth portfolio, which includes Tetris, myVEGAS Bingo, MGM Slots Live, and the Brainium suite. Led by Tetris, these products are evolving and gaining footholds with players and partners alike. Our established businesses are also performing as expected. The transition of myKONAMI and myVEGAS Slots to our Tel Aviv studio is progressing smoothly and there are numerous enhancements planned for both games. The implementation and impact of these changes will take time, but I’m hopeful we’ll start seeing the benefits towards year end. The transition of the games was part of our corporate restructuring plan announced last quarter. As a reminder, this plan also included the creation of two distinct operating divisions – playGAMES and playAWARDS – along with a reduction in our overall headcount. Though we are still early in the cycle of these changes, I believe they position us for improved performance in the coming quarters.”

Pascal further noted, “playAWARDS continued to expand its reach with its initial integration into Tetris late this quarter. We remain on track to fully incorporate the playAWARDS loyalty platform into our entire collection of casual games by year end. Attaching our loyalty model to Tetris and the Brainium portfolio will nearly triple its DAU reach and, we believe, demonstrate the “loyalty lift” that can be achieved in any category of gaming.”

He concluded, “Given the recent momentum, we are raising our revenue and AEBITDA guidance for the year. We now estimate we will generate revenue of $305 to $325 million and AEBITDA of $50 to $60 million. At the midpoint, this would suggest year over year revenue growth and AEBITDA growth of 9% and 44%, respectively. It also suggests an AEBITDA margin of 17.5% at the midpoint, 430 basis points higher than 2022 figures. We have continued to buy stock under our previously announced share repurchase program and continue to search for compelling M&A opportunities.”

Recent Business Highlights

  • Successfully launched and implemented our corporate reorganization plan that included the creation of two distinct operating divisions (playGAMES and playAWARDS), movement of myKONAMI and myVEGAS Slots to our Tel Aviv studio, and a significant reduction in the overall levels of our global personnel.

  • Launched playAWARDS on Tetris. The March 31, 2023 introduction coincides with the release of the Tetris Movie on Apple TV. We have seen an increase in organic traffic to Tetris since the launch and remain excited about the game’s momentum. We continue to work towards a full rollout of playAWARDS across our entire casual games portfolio.

  • Continued to repurchase stock in the open market. As of May 8, 2023, we had repurchased an aggregate of 3,764,938 shares of our Class A common stock at an average price of $4.17 per share under our $50 million share repurchase authorization and had approximately $34.3 million remaining capacity.

  • playAWARDS relaunched its partnership with Norwegian Cruise Line and expanded its relationship with Gateway Casinos in the quarter. At quarter end, playAWARDS had over 100 rewards partners with players making purchases of over $27 million in retail value.

Outlook

The Company is increasing its full-year 2023 revenue to be in the range of $305 million to $325 million. This compares to previous guidance of $300.0 million to $320.0 million. In addition, full-year AEBITDA is now expected to be in the range of $50 million to $60 million. This compares to previous guidance of $47.5 million to $52.5 million.

We have not provided the most directly comparable GAAP measure for our AEBITDA outlook because certain items that are part of the projected non-GAAP financial measure are outside of our control or cannot be reasonably estimated without unreasonable effort.

Conference Call Details

PLAYSTUDIOS will host a conference call at 5:00 p.m. Eastern Time today, which will include a brief discussion of the results followed by a question and answer session.

The call will be accessible via the Internet through https://ir.playstudios.com or by calling (866) 405-1203 for domestic callers and (201) 689-8432 for international callers.

A replay of the call will be archived at https://ir.playstudios.com.

About PLAYSTUDIOS, Inc.

PLAYSTUDIOS (Nasdaq: MYPS) creator of the groundbreaking playAWARDS loyalty platform is a publisher and developer of award-winning mobile games, including the iconic Tetris® mobile app, Pop! Slots, myVEGAS Slots, myVEGAS Blackjack, myKONAMI Slots, myVEGAS Bingo, MGM Slots Live, Solitaire, Spider Solitaire and Sudoku. The playAWARDS loyalty platform enables players to earn real-world rewards from a global collection of iconic hospitality, entertainment, and leisure brands. playAWARDS partners include MGM Resorts International, Wolfgang Puck, Norwegian Cruise Line, Resorts World, IHG, Bowlero, Gray Line Tours, and Hippodrome Casino among others. Founded by a team of veteran gaming, hospitality, and technology entrepreneurs, PLAYSTUDIOS apps combine the best elements of popular casual games with compelling real-world benefits. To learn more about PLAYSTUDIOS, visit playstudios.com.

Performance Indicators

We manage our business by regularly reviewing several key operating metrics to track historical performance, identify trends in player activity, and set strategic goals for the future. Our key performance metrics are impacted by several factors that could cause them to fluctuate on a quarterly basis, such as platform providers’ policies, seasonality, player connectivity, and the addition of new content to games. We believe these measures are useful to investors for the same reasons. The key performance indicators may differ from similarly titled measures presented by other companies. For more information on our key performance indicators, please refer to the definitions below and the “Supplemental Data—Key Performance Indicators” section of this press release.

Daily Active Users (“DAU”): DAU is defined as the number of individuals who played a game on a particular day. We track DAU by the player ID, which is assigned for each game installed by an individual. As such, an individual who plays two different PLAYSTUDIOS games on the same day is counted as two DAU while an individual who plays the same PLAYSTUDIOS game on two different devices is counted as one DAU. Brainium tracks DAU by app instance ID, which is assigned to each installation of a game on a particular device. As such, an individual who plays two different Brainium games on the same day is counted as two DAU while an individual who plays the same game on two different devices is counted as two DAU. The term “Average DAU” is defined as the average of the DAU, determined as described above, for each day during the period presented. We use DAU and Average DAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a daily basis.

Monthly Active Users (“MAU”): MAU is defined as the number of individuals who played a game in a particular month. As with DAU, an individual who plays two different PLAYSTUDIOS games in the same month is counted as two MAU while an individual who plays the same game on two different devices is counted as one MAU, and an individual who plays two different Brainium games on the same day is counted as two MAU while an individual who plays the same game on two different devices is counted as two MAU. The term “Average MAU” is defined as the average of the MAU, determined as described above, for each calendar month during the period presented. We use MAU and Average MAU as measures of audience engagement to help us understand the size of the active player base engaged with our games on a monthly basis.

Daily Paying Users (“DPU”): DPU is defined as the number of individuals who made a purchase in a mobile game during a particular day. As with DAU and MAU, we track DPU based on account activity. As such, an individual who makes a purchase on two different games in a particular day is counted as two DPU while an individual who makes purchases in the same game on two different devices is counted as one DPU. The term “Average DPU” is defined as the average of the DPU, determined as described above, for each day during the period presented. We use DPU and Average DPU to help us understand the size of our active player base that makes in-game purchases. This focus directs our strategic goals in setting player acquisition and pricing strategy.

Daily Payer Conversion: Daily Payer Conversion is defined as DPU as a percentage of DAU on a particular day. Daily Player Conversion is also sometimes referred to as “Percentage of Paying Users” or “PPU”. The term “Average Daily Payer Conversion” is defined as the Average DPU divided by the Average DAU for a given period. We use Daily Payer Conversion and Average Daily Payer Conversion to help us understand the monetization of our active players.

Average Daily Revenue Per DAU (“ARPDAU”): ARPDAU is defined for a given period as the average daily revenue per Average DAU, and is calculated as game and advertising revenue for the period, divided by the number of days in the period, divided by the Average DAU during the period. We use ARPDAU as a measure of overall monetization of our active players.

playAWARDS Platform Metrics

Available Rewards: Available Rewards is defined as the monthly average number of unique rewards available in our applications’ rewards stores. A reward appearing in more than one application’s reward store is counted only once. A reward is counted only once irrespective of the inventory available through that reward. For example, one reward for a free night in a hotel room with ten rooms available for such free night is counted as one reward. Available Rewards only include real-world partner rewards and exclude PLAYSTUDIOS digital rewards. We use Available Rewards as a measure of the value and potential impact of the program for an interested player. It is assumed that the greater the variety and breadth of rewards offered, the more likely players will be to ascribe value to the program.

Purchases: Purchases is defined as the total number of rewards purchased for the period identified in which a player exchanges loyalty points for a reward. Purchases are not adjusted for refunds. Purchases only include purchases of real-world partner rewards and exclude any PLAYSTUDIOS digital rewards. The Company does not receive any compensation or revenue from Purchases. We use Purchases as a measure of audience interest and engagement with our playAWARDS platform.

Retail Value of Purchases: Retail Value of Purchases is defined as the cumulative retail value of all rewards listed as Purchases for the period identified. The retail value of each reward listed as Purchases is the retail value as determined by the partner upon creation of the reward. In the case where the retail value of a reward adjusts depending on time of redemption, the average retail value is used. Retail Value of Purchases only include the retail value of real-world partner rewards and exclude the cost of any PLAYSTUDIOS branded merchandise. We use Retail Value of Purchases to help us understand the real-world value of the rewards that are purchased by our players.

Non-GAAP Financial Measures

To provide investors with information in addition to results as determined by GAAP, the Company discloses Adjusted Earnings Before Interest Taxes Depreciation and Amortization (“AEBITDA”) as a non-GAAP measure that management believes provides useful information to investors. This measure is not a financial measure calculated in accordance with GAAP and should not be considered as a substitute for revenue, net income or any other operating performance measure calculated in accordance with GAAP.

We define AEBITDA as net income (loss) before interest, income taxes, depreciation and amortization, restructuring and related costs (consisting primarily of severance and other restructuring related costs), stock-based compensation expense, and other income and expense items (including special infrequent items, foreign currency gains and losses, and other non-cash items). We also present AEBITDA margin, a non-GAAP measure, which we calculate as AEBITDA as a percentage of net revenue.

We believe that the presentation of AEBITDA provides useful information to investors regarding the Company’s results of operations because the measure assists both investors and management in analyzing and benchmarking the performance and value of our business. AEBITDA provides an indicator of performance that is not affected by fluctuations in certain costs or other items. Accordingly, management believes that this measure is useful for comparing general operating performance from period to period, and management relies on this measure for planning and forecasting of future periods. Additionally, this measure allows management to compare results with those of other companies that have different financing and capital structures. However, other companies may define AEBITDA differently, and as a result, our measure of AEBITDA may not be directly comparable to that of other companies. For further information regarding these non-GAAP measures, including the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, please refer to the “Reconciliation of Net Income (Loss) to AEBITDA” section of this press release.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating performance (including statements regarding outlook or guidance), our liquidity and capital resources, the development and release plans of our games, our plans to commercialize the playAWARDS platform as a stand-alone service for use by third parties, our increased capacity and use of personnel in European and Asian studios, and our mergers and acquisition strategy (including our acquisition of Brainium and its expected impact and financial performance), all of which involve risks and uncertainties. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “goal,” “work towards,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology that conveys uncertainty of future events or outcomes. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause actual results to differ materially from statements made in this press release, including our ability to develop and publish our games; risks related to defects, errors, or vulnerabilities in our games and IT infrastructure; our ability to attract new, and retain existing, players of our games; the failure to timely develop and achieve market acceptance of new games and maintain the popularity of our existing games; rapidly evolving technological developments in the gaming market; competition in the industry in which we operate; our financial performance; our ability to execute merger and acquisition transactions; legal and regulatory developments; and general market, political, economic and business conditions. Other potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on March 10, 2023, and in other filings we make with the SEC from time to time. All information provided in this release is based on information available to us as of the date of this press release and any forward-looking statements contained herein are based on assumptions that we believe are reasonable as of this date. Undue reliance should not be placed on the forward-looking statements in this press release, which are inherently uncertain. We undertake no duty to update this information unless required by law.

PLAYSTUDIOS, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited and in thousands, except per share data)
 

​

Three Months Ended March 31,

​

 

2023

 

 

 

2022

 

Net revenue

$

80,123

 

 

$

70,451

 

Operating expenses:

 

 

 

Cost of revenue(1)

 

19,527

 

 

 

21,033

 

Selling and marketing

 

18,066

 

 

 

20,540

 

Research and development

 

17,755

 

 

 

16,981

 

General and administrative

 

11,901

 

 

 

9,691

 

Depreciation and amortization

 

11,033

 

 

 

8,394

 

Restructuring and related

 

4,048

 

 

 

8,655

 

Total operating costs and expenses

 

82,330

 

 

 

85,294

 

Loss from operations

 

(2,207

)

 

 

(14,843

)

Other (expense) income, net:

 

 

 

Change in fair value of warrant liabilities

 

(1,058

)

 

 

(2,716

)

Interest income (expense), net

 

895

 

 

 

(5

)

Other income, net

 

60

 

 

 

187

 

Total other expense, net

 

(103

)

 

 

(2,534

)

Loss before income taxes

 

(2,310

)

 

 

(17,377

)

Income tax expense

 

(260

)

 

 

(7,835

)

Net loss

$

(2,570

)

 

$

(25,212

)

 

 

 

 

Net loss per share attributable to Class A and Class B common stockholders:

 

 

 

Basic

$

(0.02

)

 

$

(0.20

)

Diluted

$

(0.02

)

 

$

(0.20

)

Weighted average shares of common stock outstanding:

 

 

 

Basic

 

132,131

 

 

 

126,337

 

Diluted

 

132,131

 

 

 

126,337

 
 

(1) Amounts exclude depreciation and amortization.

PLAYSTUDIOS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except par value amounts)
 

​

March 31,

2023

 

December 31,

2022

ASSETS

​

 

​

Current assets:

​

 

​

Cash and cash equivalents

$

127,484

 

 

$

134,000

 

Receivables

 

33,353

 

 

 

27,016

 

Prepaid expenses and other current assets

 

12,238

 

 

 

14,963

 

Total current assets

 

173,075

 

 

 

175,979

 

Property and equipment, net

 

17,345

 

 

 

17,532

 

Operating lease right-of-use assets

 

14,395

 

 

 

15,562

 

Intangibles assets and internal-use software, net

 

78,818

 

 

 

77,231

 

Goodwill

 

47,133

 

 

 

47,133

 

Deferred income taxes

 

16,208

 

 

 

13,969

 

Other long-term assets

 

4,658

 

 

 

4,603

 

Total non-current assets

 

178,557

 

 

 

176,030

 

Total assets

$

351,632

 

 

$

352,009

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

 

3,412

 

 

 

4,425

 

Warrant liabilities

 

4,740

 

 

 

3,682

 

Operating lease liabilities, current

 

4,506

 

 

 

4,571

 

Accrued liabilities

 

22,941

 

 

 

21,473

 

Total current liabilities

 

35,599

 

 

 

34,151

 

Minimum guarantee liability

 

1,500

 

 

 

1,500

 

Operating lease liability, noncurrent

 

10,574

 

 

 

11,660

 

Other long-term liabilities

 

2,240

 

 

 

2,385

 

Total non-current liabilities

 

14,314

 

 

 

15,545

 

Total liabilities

$

49,913

 

 

$

49,696

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.0001 par value (100,000 shares authorized, no shares issued and outstanding as of March 31, 2023 and December 31, 2022)

 

—

 

 

 

—

 

Class A common stock, $0.0001 par value (2,000,000 shares authorized, 118,867 and 116,756 shares issued, and 116,447 and 115,635 shares outstanding as of March 31, 2023 and December 31, 2022, respectively)

 

11

 

 

 

11

 

Class B common stock, $0.0001 par value (25,000 shares authorized, 16,457 and 16,457 shares issued and outstanding as of March 31, 2023 and December 31, 2022.

 

2

 

 

 

2

 

Additional paid-in capital

 

297,662

 

 

 

290,337

 

Retained earnings

 

14,186

 

 

 

16,756

 

Accumulated other comprehensive income

 

(94

)

 

 

(151

)

Treasury stock, at cost, 2,420 and 1,166 shares at March 31, 2023 and December 31, 2022, respectively

 

(10,048

)

 

 

(4,642

)

Total stockholders’ equity

 

301,719

 

 

 

302,313

 

Total liabilities and stockholders’ equity

$

351,632

 

 

$

352,009

 

PLAYSTUDIOS, INC.

RECONCILIATION OF NET LOSS TO AEBITDA

(Unaudited and in thousands, except percentages)
 

The following table sets forth the reconciliation of AEBITDA and AEBITDA margin, which we calculate as AEBITDA as a percentage of net revenue, to net loss and net loss margin, the most directly comparable GAAP measures.
 

​

Three Months Ended March 31,

​

 

2023

 

 

 

2022

 

Net loss

$

(2,570

)

 

$

(25,212

)

Depreciation & amortization

 

11,033

 

 

 

8,394

 

Income tax expense

 

260

 

 

 

7,835

 

Stock-based compensation expense

 

4,853

 

 

 

6,868

 

Change in fair value of warrant liability

 

1,058

 

 

 

2,716

 

Change in fair value of contingent considerations

 

(53

)

 

 

—

 

Restructuring and related(1)

 

4,048

 

 

 

8,655

 

Other, net(2)

 

(864

)

 

 

(182

)

AEBITDA

 

17,765

 

 

 

9,074

 

 

 

 

 

GAAP revenue

 

80,123

 

 

 

70,451

 

 

 

 

 

Margin as a % of revenue

​

 

​

Net loss margin

 

(3.2

)%

 

 

(35.8

)%

AEBITDA margin

 

22.2

%

 

 

12.9

%

(1)

Amounts reported during the three months ended March 31, 2023 relate to the internal reorganization including severance-related costs, and fees related to evaluating various merger and acquisition opportunities. Amounts reported during the three months ended March 31, 2022 consist of fees related to evaluating various merger and acquisition opportunities, severance-related costs, and a non-cash impairment charge related to the suspension of Kingdom Boss development.

(2)

Amounts reported in “Other, net” include interest expense, interest income, gains/losses from equity investments, foreign currency gains/losses, and non-cash gains/losses on the disposal of assets.

PLAYSTUDIOS, INC.

SUPPLEMENTAL DATA – KEY PERFORMANCE INDICATORS

(Unaudited and in thousands, except percentages and ARPDAU)
 

​

Three Months Ended March 31,

​

​

​

​

​

 

2023

 

 

 

2022

 

​

Change

​

% Change

Average DAU

 

3,565

 

 

 

1,555

 

 

 

2,010

 

 

129.3

%

Average MAU

 

13,082

 

 

 

6,913

 

 

 

6,169

 

 

89.2

%

Average DPU

 

28

 

 

 

31

 

 

 

(3

)

 

(9.7

)%

Average Daily Payer Conversion

 

0.8

%

 

 

2.0

%

 

 

(1.2

)pp

 

(60.0

)%

ARPDAU (in dollars)

$

0.24

 

 

$

0.50

 

 

$

(0.26

)

 

(52.0

)%

pp = percentage points

​

​

​

​

​

​

​

PLAYSTUDIOS, INC.

SUPPLEMENTAL DATA – PLAYAWARDS PLATFORM METRICS

(Unaudited and in thousands, except available rewards)
 

​

Three Months Ended March 31,

​

​

​

​

​

 

2023

 

 

2022

​

Change

​

% Change

Available Rewards (in units)

 

534

 

 

521

 

 

13

 

 

2.5

%

Purchases (in units)

 

440

 

 

592

 

 

(152

)

 

(25.7

%)

Retail Value of Purchases (in dollars)

$

27,340

 

$

33,704

 

$

(6,364

)

 

(18.9

%)

 

PLAYSTUDIOS CONTACTS

Investor Relations

Samir Jain, CFA

[email protected]

(917) 224-1058

Media Relations

BerlinRosen

[email protected]

KEYWORDS: Nevada United States North America

INDUSTRY KEYWORDS: Technology Electronic Games Online Casino/Gaming Mobile Entertainment General Entertainment Entertainment Apps/Applications Software Audio/Video Internet

MEDIA:

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Kodak Reports First-Quarter 2023 Financial Results

Kodak Reports First-Quarter 2023 Financial Results

ROCHESTER, N.Y.–(BUSINESS WIRE)–
Eastman Kodak Company (NYSE: KODK) today reported financial results for the first quarter 2023.

First-quarter 2023 highlights include:

  • Consolidated revenues of $278 million, compared with $290 million for Q1 2022, a decrease of $12 million or 4 percent (decreased by $2 million on a constant currency basis, or 1 percent)

  • Gross profit of $50 million, compared to $33 million for Q1 2022, an increase of $17 million or 52 percent

  • Gross profit percentage of 18 percent, compared with 11 percent for Q1 2022, an increase of 7 percentage points

  • GAAP net income of $33 million, compared with net loss of $3 million for Q1 2022, an increase of $36 million

  • Operational EBITDA of $9 million, compared with negative $7 million for Q1 2022, an increase of $16 million

  • A quarter-end cash balance of $225 million, compared with $217 million on December 31, 2022, an increase of $8 million in the first quarter of 2023, compared with a decrease of $53 million in the first quarter of 2022

“Kodak continued to make progress in the first quarter, generating cash and increasing our gross profit year over year in the face of significant headwinds,” said Jim Continenza, Kodak’s Executive Chairman and CEO. “These improvements didn’t just happen. They are the result of a wide range of actions we have taken over the last four years to put us on a path to sustainable growth and profitability. We are continuing to invest in four long-term growth initiatives in our Advanced Materials and Chemicals group, and we are starting to see contributions from that business. We have invested in a significant infrastructure upgrade, including expanded implementation of Salesforce and SAP, that has made us materially better in terms of efficiency. We have successfully introduced two groundbreaking inkjet presses and KODACHROME Inks, the gold standard for color. And, most importantly, we continue to execute on our go-to-market strategy, staying close to our customers and developing solutions that address their challenges and create new opportunities. We put our customers first because we know we only win when our customers win.”

For the quarter ended March 31, 2023, revenues were $278 million, a decline of $12 million or 4 percent compared to the same period in 2022. Adjusting for the unfavorable impact of foreign exchange of $10 million, revenues decreased by $2 million, or 1 percent compared to the prior year.

GAAP net income was $33 million for the quarter, compared with negative $3 million in Q1 2022, an increase of $36 million. Operational EBITDA for the first quarter 2023 was $9 million, compared with negative $7 million in the prior-year period, an increase of $16 million. The increase was primarily driven by improved profitability related to pricing passthrough and improved operational efficiency, partially offset by continued global cost increases.

Kodak ended the first quarter of 2023 with a cash balance of $225 million, an increase of $8 million from December 31, 2022, compared with a decrease of $53 million in the first quarter of 2022. The increase was primarily driven by improved performance in working capital, improved profitability from operations, proceeds from insurance reimbursement and a refund from a governmental authority in a location outside the U.S.

“Kodak got off to a strong start in the first quarter, increasing our cash balance from $217 million to $225 million and increasing our gross profit by 52 percent year over year while continuing to invest in both product innovation and our long-term growth initiatives,” said David Bullwinkle, Kodak’s CFO. “Our ability to make these improvements despite continuing challenges of inflation and supply chain disruptions reflects the positive impact of changes we have made as part of our strategic plan to drive operational efficiency and smart revenue.”

Revenue and Operational EBITDA by Reportable Segment Q1 2023 vs. Q1 2022
         
($ millions)        
         
Q1 2023 Actuals   Print   Advanced
Materials &
Chemicals		   Brand   Total
Revenue  

$

209

 

  

$

61

 

  

$

4

  

$

274

 
Operational EBITDA *  

$

6

 

  

$

–

 

  

$

3

  

$

9

 
         
Q1 2022 Actuals   Print   Advanced
Materials &
Chemicals		   Brand   Total
Revenue  

$

228

 

  

$

54

 

  

$

4

  

$

286

 
Operational EBITDA *  

$

(7

)

  

$

(3

)

  

$

3

  

$

(7

)
         
Q1 2023 vs. Q1 2022 Actuals
B/(W)		   Print   Advanced
Materials &
Chemicals		   Brand   Total
Revenue  

$

(19

)

  

$

7

 

  

$

–

  

$

(12

)
Operational EBITDA *  

$

13

 

  

$

3

 

  

$

–

  

$

16

 
         
Q1 2023 Actuals on constant currency **vs. Q1 2022 Actuals
B/(W)		   Print   Advanced
Materials &
Chemicals		   Brand   Total
Revenue  

$

(10

)

  

$

8

 

  

$

–

  

$

(2

)
Operational EBITDA*  

$

13

 

  

$

4

 

  

$

–

  

$

17

 

* Total Operational EBITDA is a non-GAAP financial measure. The reconciliation between GAAP and non-GAAP measures is provided in Appendix A of this press release.

** The impact of foreign exchange represents the foreign exchange impact using average foreign exchange rates for the three months ended March 31, 2022, rather than the actual average exchange rates in effect for the three months ended March 31, 2023.

Effective February 2023 Kodak changed its organizational structure. The Traditional Printing segment and the Digital Printing segment were combined into one segment, named the Print segment. No changes were made to Kodak’s other segments. Eastman Business Park segment is not a reportable segment and is excluded from the table above.

About Kodak

Kodak (NYSE: KODK) is a leading global manufacturer focused on commercial print and advanced materials & chemicals. With 79,000 worldwide patents earned over 130 years of R&D, we believe in the power of technology and science to enhance what the world sees and creates. Our innovative, award-winning products, combined with our customer-first approach, make us the partner of choice for commercial printers worldwide. Kodak is committed to environmental stewardship, including industry leadership in developing sustainable solutions for print. For additional information on Kodak, visit us at kodak.com, or follow us on Twitter @Kodak and LinkedIn.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include statements concerning Kodak’s plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, liquidity, investments, financing needs and business trends and other information that is not historical information. When used in this press release, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “predicts,” “forecasts,” “strategy,” “continues,” “goals,” “targets” or future or conditional verbs, such as “will,” “should,” “could,” or “may,” and similar words and expressions, as well as statements that do not relate strictly to historical or current facts, are intended to identify forward-looking statements. All forward-looking statements, including management’s examination of historical operating trends and data, are based upon Kodak’s current expectations and assumptions. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or those expressed in or implied by such forward-looking statements.

Important factors that could cause actual events or results to differ materially from the forward-looking statements include, among others, the risks and uncertainties described in more detail in Kodak’s Annual Report on Form 10-K for the year ended December 31, 2022 under the headings “Business,” “Risk Factors,” “Legal Proceedings,” and/or “Management’s Discussion and Analysis of Financial Condition and Results of Operations–Liquidity and Capital Resources,” in the corresponding sections of Kodak’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and in other filings Kodak makes with the U.S. Securities and Exchange Commission from time to time, as well as the following: continued sufficient availability of borrowings and letters of credit under Kodak’s asset based credit facility and letter of credit facility, Kodak’s ability to obtain additional or alternate financing if and as needed, Kodak’s continued ability to manage world-wide cash through inter-company loans, distributions and other mechanisms, and Kodak’s ability to provide or facilitate financing for its customers; Kodak’s ability to improve and sustain its operating structure, cash flow, profitability and other financial results; Kodak’s ability to achieve strategic objectives, cash forecasts, financial projections, and projected growth; Kodak’s ability to achieve the financial and operational results contained in its business plans; Kodak’s ability to comply with the covenants in its various credit facilities; Kodak’s ability to fund continued investments, capital needs, collateral requirements and restructuring payments and service its debt and Series B Preferred Stock and Series C Preferred Stock; changes in foreign currency exchange rates, commodity prices, interest rates and tariff rates; the impact of the global economic environment, including inflationary pressures, medical epidemics such as the COVID-19 pandemic, geopolitical issues such as the war in Ukraine, and Kodak’s ability to effectively mitigate the associated increased costs of aluminum and other raw materials, energy, labor, shipping, delays in shipment and production times, and fluctuations in demand; the performance by third parties of their obligations to supply products, components or services to Kodak and Kodak’s ability to address supply chain disruptions and continue to obtain raw materials and components available from single or limited sources of supply, which may be adversely affected by the COVID-19 pandemic and the war in Ukraine; Kodak’s ability to effectively anticipate technology and industry trends and develop and market new products, solutions and technologies, including products based on its technology and expertise that relate to industries in which it does not currently conduct material business; Kodak’s ability to effectively compete with large, well-financed industry participants; Kodak’s ability to effect strategic transactions, such as investments, acquisitions, strategic alliances, divestitures and similar transactions, or to achieve the benefits sought to be achieved from such strategic transactions; Kodak’s ability to discontinue, sell or spin-off certain non-core businesses or operations, or otherwise monetize assets; the impact of the investigations, litigation and claims arising out of the circumstances surrounding the announcement on July 28, 2020, by the U.S. International Development Finance Corporation of the signing of a non‐binding letter of interest to provide a subsidiary of Kodak with a potential loan to support the launch of an initiative for the manufacture of pharmaceutical ingredients for essential generic drugs; and the potential impact of force majeure events, cyber‐attacks or other data security incidents that could disrupt or otherwise harm Kodak’s operations.

Future events and other factors may cause Kodak’s actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to Kodak or persons acting on its behalf apply only as of the date of this press release and are expressly qualified in their entirety by the cautionary statements included or referenced in this press release. Kodak undertakes no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by law.

APPENDICES

In this first quarter 2023 financial results news release, reference is made to the following non-GAAP financial measures:

  • Operational EBITDA; and

  • Revenues and Operational EBITDA on a constant currency basis.

Kodak believes that these non-GAAP measures represent important internal measures of performance. Accordingly, where they are provided, it is to give investors the same financial data management uses with the belief that this information will assist the investment community in properly assessing the underlying performance of Kodak, its financial condition, results of operations and cash flow.

Kodak’s segment measure of profit and loss is an adjusted earnings before interest, taxes, depreciation and amortization (“Operational EBITDA”). Operational EBITDA represents the income (loss) from continuing operations excluding the provision for income taxes; non-service cost components of pension and OPEB income; depreciation and amortization expense; restructuring costs and other; stock-based compensation expense; consulting and other costs; idle costs; other operating expense, net; interest expense; and other income (charges), net.

The change in revenues and Operational EBITDA on a constant currency basis, as presented in this financial results news release, is calculated by using average foreign exchange rates for the three months ended March 31, 2022, rather than the actual average exchange rates in effect for the three months ended March 31, 2023.

The following table reconciles the most directly comparable GAAP measure of Net Income (Loss) to Operational EBITDA and Operational EBITDA on a constant currency basis for the three months ended March 31, 2023 and 2022, respectively:

(in millions)
Q1 2023 Q1 2022 $ Change
Net Income (Loss)

$

33

 

$

(3

)

$

36

 
Depreciation and amortization

 

8

 

 

7

 

 

1

 
Restructuring costs and other (3)

 

1

 

 

–

 

 

1

 
Stock based compensation

 

4

 

 

2

 

 

2

 
Consulting and other costs (1)

 

(10

)

 

2

 

 

(12

)
Idle costs (2)

 

–

 

 

1

 

 

(1

)
Other operating expense, net

 

1

 

 

–

 

 

1

 
Interest expense (3)

 

11

 

 

9

 

 

2

 
Pension income excluding service cost component (3)

 

(40

)

 

(30

)

 

(10

)
Other (income) charges, net (3)

 

(7

)

 

3

 

 

(10

)
Provision for income taxes (3)

 

8

 

 

2

 

 

6

 
Operational EBITDA

$

9

 

$

(7

)

$

16

 
Impact of foreign exchange (4)

 

1

 

 

1

 
Operational EBITDA on a constant currency basis

$

10

 

$

(7

)

$

17

 

Footnote Explanations:

(1)

Consulting and other costs are primarily professional services and internal costs associated with certain corporate strategic initiatives, investigations and litigation. Consulting and other costs include $10 million of income in the three months ended March 31, 2023 representing insurance reimbursement of legal costs previously paid by the Company associated with investigations and litigation matters.
(2)

Consists of third-party costs such as security, maintenance, and utilities required to maintain land and buildings in certain locations not used in any Kodak operations and the costs, net of any rental income received, of underutilized portions of certain properties.
(3)

As reported in the Consolidated Statement of Operations.
(4)

The impact of foreign exchange is calculated by using average foreign exchange rates for the three months ended March 31, 2022, rather than the actual average exchange rates in effect for the three months ended March 31, 2023.

A. FINANCIAL STATEMENTS

EASTMAN KODAK COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
 
(in millions) Three Months Ended
March 31,

2023

2022
Revenues
Sales

$

224

 

$

234

 
Services

 

54

 

 

56

 
Total revenues

 

278

 

 

290

 
Cost of revenues
Sales

 

192

 

 

220

 
Services

 

36

 

 

37

 
Total cost of revenues

 

228

 

 

257

 
Gross profit

 

50

 

 

33

 
Selling, general and administrative expenses

 

34

 

 

43

 
Research and development costs

 

9

 

 

9

 
Restructuring costs and other

 

1

 

 

—

 
Other operating expense

 

1

 

 

—

 
Earnings (loss) from operations before interest expense, pension income excluding service cost component, other (income) charges, net and income taxes

 

5

 

 

(19

)
Interest expense

 

11

 

 

9

 
Pension income excluding service cost component

 

(40

)

 

(30

)
Other (income) charges, net

 

(7

)

 

3

 
Earnings (loss) from operations before income taxes

 

41

 

 

(1

)
Provision for income taxes

 

8

 

 

2

 
NET EARNINGS (LOSS)

$

33

 

$

(3

)

The notes accompanying the financial statements contained in the Company’s first quarter 2023 Form 10-Q are an integral part of these consolidated financial statements.

EASTMAN KODAK COMPANY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited)
 
(in millions) March 31, December 31,

2023

2022
ASSETS
Cash and cash equivalents

$

225

 

$

217

 
Trade receivables, net of allowances of $8 and $7, respectively

 

167

 

 

177

 
Inventories, net

 

251

 

 

237

 
Other current assets

 

42

 

 

48

 
Current assets held for sale

 

2

 

 

2

 
Total current assets

 

687

 

 

681

 
Property, plant and equipment, net of accumulated depreciation of $457 and $450, respectively

 

153

 

 

154

 
Goodwill

 

12

 

 

12

 
Intangible assets, net

 

27

 

 

28

 
Operating lease right-of-use assets

 

38

 

 

39

 
Restricted cash

 

62

 

 

62

 
Pension and other postretirement assets

 

1,266

 

 

1,233

 
Other long-term assets

 

77

 

 

76

 
TOTAL ASSETS

$

2,322

 

$

2,285

 
 
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY
Accounts payable, trade

$

139

 

$

134

 
Short-term borrowings and current portion of long-term debt

 

1

 

 

1

 
Current portion of operating leases

 

15

 

 

15

 
Other current liabilities

 

140

 

 

143

 
Total current liabilities

 

295

 

 

293

 
Long-term debt, net of current portion

 

320

 

 

316

 
Pension and other postretirement liabilities

 

232

 

 

230

 
Operating leases, net of current portion

 

29

 

 

31

 
Other long-term liabilities

 

173

 

 

171

 
Total liabilities

 

1,049

 

 

1,041

 
 
Commitments and Contingencies (Note 6)
 
Redeemable, convertible preferred stock, no par value, $100 per share liquidation preference

 

205

 

 

203

 
 
Equity
Common stock, $0.01 par value

 

–

 

 

—

 
Additional paid in capital

 

1,161

 

 

1,160

 
Treasury stock, at cost

 

(11

)

 

(11

)
Accumulated deficit

 

(537

)

 

(570

)
Accumulated other comprehensive income

 

455

 

 

462

 
Total shareholders’ equity

 

1,068

 

 

1,041

 
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY

$

2,322

 

$

2,285

 

The notes accompanying the financial statements contained in the Company’s first quarter 2023 Form 10-Q are an integral part of these consolidated financial statements.

EASTMAN KODAK COMPANY
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)
 
Three Months Ended March 31,
(in millions)

2023

2022
Cash flows from operating activities:
Net earnings (loss)

$

33

 

$

(3

)
Adjustments to reconcile to net cash provided by (used in) operating activities:
Depreciation and amortization

 

8

 

 

7

 
Pension income

 

(36

)

 

(26

)
Change in fair value of the Preferred Stock and Convertible
Notes embedded derivatives

 

1

 

 

3

 
Non-cash changes in workers’ compensation and other
employee benefit reserves

 

1

 

 

(4

)
Stock based compensation

 

4

 

 

2

 
Decrease (increase in trade receivables)

 

12

 

 

(9

)
Decrease (increase) in miscellaneous receivables

 

7

 

 

(1

)
Increase in inventories

 

(13

)

 

(32

)
Increase in trade accounts payable

 

3

 

 

31

 
Decrease in liabilities excluding borrowings and trade payables

 

(13

)

 

(13

)
Other items, net

 

7

 

 

2

 
Total adjustments

 

(19

)

 

(40

)
Net cash provided by (used in) operating activities

 

14

 

 

(43

)
 
Cash flows from investing activities:
Additions to properties

 

(5

)

 

(5

)
Net cash used in investing activities

 

(5

)

 

(5

)
 
Cash flows from financing activities:
Preferred stock cash dividend payments

 

(1

)

 

(1

)
Net cash used in financing activities

 

(1

)

 

(1

)
Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

—

 

 

—

 
Net increase (decrease) in cash, cash equivalents and restricted cash

 

8

 

 

(49

)
Cash, cash equivalents and restricted cash, beginning of period

 

286

 

 

423

 
Cash, cash equivalents and restricted cash, end of period

$

294

 

$

374

 

The notes accompanying the financial statements contained in the Company’s first quarter 2023 Form 10-Q are an integral part of these consolidated financial statements.

Media Contact:

Kurt Jaeckel, Kodak, +1 585-490-8646, [email protected]

Investor Contact:

Anthony Redding, Kodak, +1 585-726-3506, [email protected]

KEYWORDS: New York United States North America

INDUSTRY KEYWORDS: Other Manufacturing Technology Chemicals/Plastics Other Technology Photography Manufacturing Audio/Video Hardware Consumer Electronics

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ON24 Announces First Quarter 2023 Financial Results

ON24 Announces First Quarter 2023 Financial Results

  • On track to achieve Q2 2023 profitability target
  • ARR of $149.2 million on our Core Platform
  • First quarter total revenue of $43.1 million
  • Expanded capital return program to $125 million; cash dividend of $1.09 per share
  • Added three new board members: Cynthia Paul, Ron Mitchell and Teresa Anania

SAN FRANCISCO–(BUSINESS WIRE)–
ON24 (NYSE: ONTF), a leading sales and marketing platform for B2B digital engagement, today announced financial results for the first quarter ended March 31, 2023.

“I am pleased with our first quarter results and the progress we have made accelerating our path to profitability. We are on track to reach break-even non-GAAP EPS by Q2 and are now targeting break-even non-GAAP EBITDA by Q4 2023, with continued improvement in the quarters ahead,” said Sharat Sharan, co-founder and CEO of ON24. “While many marketing budgets are facing temporary economic pressure, resulting in greater deal scrutiny and softness in our key customer verticals which has impacted our near-term top-line, we believe we are well positioned to capture market share and are confident in our ability to deliver profitable growth.”

First Quarter 2023 Financial Highlights

  • Core Platform ARR of $149.2 million as of March 31, 2023, a decrease of 4% year-over-year.
  • Total ARR of $155.6 million as of March 31, 2023, a decrease of 7% year-over-year.
  • Revenue:
    • Revenue from our Core Platform, including services, was $41.2 million, a decrease of 7% year-over-year.

    • Total revenue was $43.1 million, a decrease of 11% year-over-year.

  • GAAP Operating Loss was $19.9 million, compared to GAAP operating loss of $15.2 million in the first quarter of 2022.
  • Non-GAAP Operating Loss was $4.2 million, compared to non-GAAP operating loss of $5.7 million in the first quarter of 2022.
  • GAAP Net Loss was $17.6 million, or $(0.37) per diluted share, compared to GAAP net loss of $15.5 million, or $(0.32) per diluted share in the first quarter of 2022.
  • Non-GAAP Net Loss was $1.8 million, or $(0.04) per diluted share, compared to a non-GAAP net loss of $6.0 million, or $(0.13) per diluted share in the first quarter of 2022.
  • Cash Flow: Net cash used in operating activities was $4.2 million, compared to $6.8 million used in operating activities in the first quarter of 2022. Free cash flow was negative $4.3 million for the quarter, compared to negative $7.8 million in the first quarter of 2022.
  • Cash, Cash Equivalents and Marketable Securities totaled $315.7 million as of March 31, 2023.

For more information regarding non-GAAP operating income (loss), non-GAAP net income (loss) and free cash flows, see the section titled “Non-GAAP Financial Measures” below. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure, see the tables at the end of this press release.

Recent Business Highlights:

  • Strong enterprise customer tenure with our top 25 customers expanding Core Platform ARR at an aggregate rate of over 5X over 5 years.

  • Continued adoption of multiple products with Q1 2023 ASP for new customers increasing YoY to its highest level in the last 4 quarters.

  • Introduced two key generative AI capabilities, Smart Text for automated content creation and Key Moments for enhanced reporting, to help our customers improve revenue results with less resources.

  • Achieved industry recognition as a differentiated digital engagement platform based on excellent customer satisfaction ratings, earning the third consecutive “Top-Rated Award” by TrustRadius and winning the “Appealie Awards” that represents excellence in customer success for the marketing category.

  • Announced that the annual ON24 global user conference, The ON24 Experience 2023, will be held virtually on June 13 – 15, where our latest platform innovations and customer success stories will be showcased.

Financial Outlook

For the second quarter of 2023, ON24 expects:

  • Core Platform Revenue, including services, to be in the range of $39.5 million to $40.5 million.

  • Total revenue of $41.1 million to $42.1 million.

  • Non-GAAP operating loss of $2.4 million to $1.8 million.

  • Non-GAAP net income per share of $0.00 per share, or break-even EPS, using approximately 50.5 million diluted shares outstanding.

    • Restructuring charge of $1.5 million to $2.3 million, excluded from the Non-GAAP amounts above.

    • Charge for underutilized real estate of $1.3 million to $1.5 million, excluded from the Non-GAAP amounts above.

For the full year 2023, ON24 now expects:

  • Core Platform Revenue, including services, to be in the range of $156.5 million to $159.5 million.

  • Total revenue of $162.0 million to $165.0 million.

  • Non-GAAP operating loss of $10.5 million to $8.0 million.

  • Non-GAAP net loss per share of $(0.07) to net income of $0.00 per share using approximately 45.1 million basic and diluted shares outstanding and 49.7 million diluted shares outstanding, respectively.

Conference Call Information

ON24 will host a conference call and live webcast for analysts and investors today at 2:00 p.m. Pacific Time. Parties in the United States can access the call by dialing (877) 497-9071 or +1 (201) 689-8727.

A webcast and management’s prepared remarks for today’s call will be accessible on ON24’s investor relations website at investors.on24.com. Approximately one hour after completion of the live call, an archived version of the webcast will be available on the Company’s investor relations website.

Definitions of Certain Key Business Metrics

Core Platform: The ON24 Core Platform products include:

ON24 Elite: live, interactive webinar experience that engages prospective customers in real-time and can be made available in an on-demand format.

ON24 Breakouts: live breakout room experience that facilitates networking, collaboration and interactivity between users.

ON24 Forums: live, interactive experience that facilitates video-to-video interaction between presenters and audiences.

ON24 Go Live: live, interactive video event experience that enables presenters and attendees to engage face-to-face in real-time and can also be made available in an on-demand format.

ON24 Engagement Hub: always-on, rich multimedia content experience that prospective customers can engage anytime, anywhere.

ON24 Target: personalize and curate, rich landing page experience that engages specific segments of prospective customers to drive desired action.

Annual Recurring Revenue (“ARR”): ARR is calculated as the sum of the annualized value of our subscription contracts as of the measurement date, including existing customers with expired contracts that we expect to be renewed. Our ARR amounts exclude professional services, overages from subscription customers and Legacy revenue.

Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the United States, or “GAAP”, we consider our non-GAAP operating income (loss), non-GAAP net income (loss) and free cash flow in evaluating our operating performance. We define non-GAAP operating income (loss) as net income (loss) excluding, interest expense, other (income) expense, net, income tax, stock-based compensation, amortization of acquired intangible assets, shareholder activism related costs, restructuring costs, charges for underutilized real estate, and certain other costs. We define non-GAAP net income (loss) as net income (loss) excluding stock-based compensation, amortization of acquired intangible assets, shareholder activism related costs, restructuring costs, charges for underutilized real estate, and certain other costs. We define free cash flow as net cash provided by (used in) operating activities, less purchases of property and equipment.

We use non-GAAP operating income (loss) and non-GAAP net income (loss) to evaluate our ongoing operations and for internal planning and forecasting purposes, and we use free cash flow to measure and evaluate cash generated through normal business operations. We believe non-GAAP operating income (loss) and non-GAAP net income (loss) may be helpful to investors because they provide consistency and comparability with past financial performance. We believe free cash flow may be helpful to investors because it reflects that some purchases of property and equipment are necessary to support ongoing operations, while providing a measure of cash available to acquire customers, expand within existing customers and otherwise pursue our business strategies.

However, these non-GAAP financial measures are each presented for supplemental informational purposes only, have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Non-GAAP financial measures have no standardized meanings prescribed by GAAP and are not prepared under a comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measure as a tool for comparison.

Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measure are included in the tables at the end of this press release.

Forward-Looking Statements

This document contains “forward-looking statements” under applicable securities laws. Such statements can be identified by words such as: “outlook,” “expect,” “convert,” “believe,” “plan,” “future,” “may,” “should,” “will,” and similar references to future periods. Forward-looking statements include express or implied statements regarding our expected financial and operating results, the execution of our capital return program, the size of our market opportunity, the success of our new products and capabilities, the impact of the COVID-19 pandemic on the way people do business, and other statements regarding our ability to achieve our business strategies, growth, or other future events or conditions. Such statements are based on our current beliefs, expectations, and assumptions about future events or conditions, which are subject to inherent risks and uncertainties, including our ability to attract new customers and expand sales to existing customers, decline in our growth rate; fluctuation in our performance, our history of net losses and expected increases in our expenses; competition and technological development in our markets and any decline in demand for our solutions; our ability to expand our sales and marketing capabilities and otherwise manage our growth; the impact of the COVID-19 pandemic; disruptions or other issues with our technology or third-party services; compliance with data privacy, import and export controls, customs, sanctions and other laws and regulations; intellectual property matters; and matters relating to our common stock, along with the other risks and uncertainties discussed in the filings we make from time to time with the Securities and Exchange Commission. Actual results may differ materially from those indicated in forward-looking statements, and you should not place undue reliance on them. All statements herein are based only on information currently available to us and speak only as of the date hereof. Except as required by law, we undertake no obligation to update any such statement.

About ON24

ON24 is on a mission to re-imagine how companies engage, understand and build relationships with their audience in a digital world. Through our leading sales and marketing platform for digital engagement, businesses use our portfolio of webinar, virtual event and content experiences to drive engagement and generate first-party data, delivering revenue growth across the enterprise – from demand generation to customer success to partner enablement.

ON24 powers digital engagement for industry-leading customers worldwide, including 3 of the 5 largest global technology companies, 3 of the 6 largest US banks, 3 of the 5 largest global healthcare companies, and 3 of the 5 largest global industrial manufacturers, enabling organizations to reach millions of professionals a month for billions of engagement minutes per year with all the first-party data being captured, generated and integrated from one place. ON24 is headquartered in San Francisco with global offices in North America, EMEA, and APAC. For more information, visit www.ON24.com.

© 2023 ON24, Inc. All rights reserved. ON24 and the ON24 logo are trademarks owned by ON24, Inc., and are registered in the United States Patent and Trademark Office and in other countries.

ON24, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)
 

 

March 31, 2023

 

December 31, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

100,777

 

 

$

26,996

 

Marketable securities

 

214,908

 

 

 

301,125

 

Accounts receivable, net

 

33,451

 

 

 

43,757

 

Deferred contract acquisition costs, current

 

12,571

 

 

 

13,136

 

Prepaid expenses and other current assets

 

8,431

 

 

 

6,281

 

Total current assets

 

370,138

 

 

 

391,295

 

Property and equipment, net

 

5,957

 

 

 

7,212

 

Operating right-of-use assets

 

5,119

 

 

 

5,606

 

Intangible asset, net

 

1,711

 

 

 

1,979

 

Deferred contract acquisition costs, non-current

 

17,991

 

 

 

17,773

 

Other long-term assets

 

1,486

 

 

 

1,608

 

Total assets

$

402,402

 

 

$

425,473

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

3,187

 

 

$

4,611

 

Accrued and other current liabilities

 

17,322

 

 

 

18,465

 

Deferred revenue

 

81,166

 

 

 

83,453

 

Finance lease liabilities, current

 

1,245

 

 

 

1,554

 

Operating lease liabilities, current

 

2,644

 

 

 

2,648

 

Total current liabilities

 

105,564

 

 

 

110,731

 

Operating lease liabilities, non-current

 

4,389

 

 

 

5,040

 

Other long-term liabilities

 

1,513

 

 

 

1,741

 

Total liabilities

 

111,466

 

 

 

117,512

 

Stockholders’ equity

 

 

 

Common stock

 

5

 

 

 

5

 

Additional paid-in capital

 

562,151

 

 

 

562,555

 

Accumulated deficit

 

(271,317

)

 

 

(253,727

)

Accumulated other comprehensive income (loss)

 

97

 

 

 

(872

)

Total stockholders’ equity

 

290,936

 

 

 

307,961

 

Total liabilities and stockholders’ equity

$

402,402

 

 

$

425,473

 

ON24, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(Unaudited)
 

 

Three Months Ended March 31,

 

2023

 

2022

Revenue:

 

 

 

Subscription and other platform

$

39,364

 

 

$

43,477

 

Professional services

 

3,699

 

 

 

5,015

 

Total revenue

 

43,063

 

 

 

48,492

 

Cost of revenue:

 

 

 

Subscription and other platform(1)(4)

 

9,889

 

 

 

9,602

 

Professional services(1)(4)

 

3,317

 

 

 

3,342

 

Total cost of revenue

 

13,206

 

 

 

12,944

 

Gross profit

 

29,857

 

 

 

35,548

 

Operating expenses:

 

 

 

Sales and marketing(1)(3)

 

24,417

 

 

 

29,193

 

Research and development(1)(2)(4)

 

11,099

 

 

 

10,644

 

General and administrative(1)(3)(4)

 

14,278

 

 

 

10,877

 

Total operating expenses

 

49,794

 

 

 

50,714

 

Loss from operations

 

(19,937

)

 

 

(15,166

)

Interest expense

 

29

 

 

 

54

 

Other (income) expense, net

 

(2,572

)

 

 

177

 

Loss before provision for income taxes

 

(17,394

)

 

 

(15,397

)

Provision for income taxes

 

196

 

 

 

82

 

Net loss

 

(17,590

)

 

 

(15,479

)

Net loss per share:

 

 

 

Basic and diluted

$

(0.37

)

 

$

(0.32

)

Weighted-average shares used in computing net loss per share:

 

 

 

Basic and diluted

 

47,304,983

 

 

 

47,631,813

 
(1) Includes stock-based compensation as follows:
 

Three Months Ended March 31,

2023

 

2022
Cost of revenue

 

 

 
Subscription and other platform

$

785

 

$

868
Professional services

 

152

 

 

 

174

 
Total cost of revenue

 

937

 

 

 

1,042

 
Sales and marketing

 

3,057

 

 

 

3,692

 
Research and development

 

2,021

 

 

 

1,981

 
General and administrative

 

4,106

 

 

 

2,792

 
Total stock-based compensation expense

$

10,121

 

 

$

9,507

 

(2)

Research and development expense for the three months ended March 31, 2023 includes amortization of acquired intangible asset of $142 thousand in connection with the Vibbio acquisition in April 2022.

(3)

General and administrative expense for the three months ended March 31, 2023 includes fees related to shareholder activism of $2,446 thousand.

(4)

Includes restructuring costs, which primarily represent severance and related expense due to restructuring activities, as follows.

 

Three Months Ended March 31,

 

2023

 

2022

Cost of revenue

 

 

 

Subscription and other platform

$

785

 

$

—

Professional services

 

54

 

 

 

—

 

Total cost of revenue

 

839

 

 

 

—

 

Sales and marketing

 

1,211

 

 

 

—

 

Research and development

 

773

 

 

 

—

 

General and administrative

 

230

 

 

 

—

 

Total restructuring costs

$

3,053

 

 

$

—

 

ON24, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)
 

 

Three Months Ended March 31,

 

2023

 

2022

Cash flows from operating activities:

 

 

 

Net loss

$

(17,590

)

 

$

(15,479

)

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

 

 

 

Depreciation and amortization

 

1,417

 

 

 

1,207

 

Stock-based compensation expense

 

10,121

 

 

 

9,507

 

Amortization of deferred contract acquisition cost

 

3,893

 

 

 

4,067

 

Provision for allowance for doubtful accounts and billing reserve

 

901

 

 

 

260

 

Non-cash lease expense

 

497

 

 

 

519

 

Other

 

(1,698

)

 

 

254

 

Change in operating assets and liabilities:

 

 

 

Accounts receivable

 

9,405

 

 

 

3,779

 

Deferred contract acquisition cost

 

(3,546

)

 

 

(3,627

)

Prepaid expenses and other assets

 

(2,069

)

 

 

(3,555

)

Accounts payable

 

(1,353

)

 

 

1,742

 

Accrued liabilities

 

(1,089

)

 

 

(752

)

Deferred revenue

 

(2,287

)

 

 

(4,098

)

Other non-current liabilities

 

(769

)

 

 

(594

)

Net cash used in operating activities

 

(4,167

)

 

 

(6,770

)

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(178

)

 

 

(984

)

Purchase of marketable securities

 

(119,591

)

 

 

(60,271

)

Proceeds from maturities of marketable securities

 

199,210

 

 

 

14,708

 

Proceeds from sale of marketable securities

 

9,321

 

 

 

—

 

Net cash provided by (used in) investing activities

 

88,762

 

 

 

(46,547

)

Cash flows from financing activities:

 

 

 

Proceeds from exercise of stock options

 

255

 

 

 

1,157

 

Payment of tax withholding obligations related to net share settlements on equity awards

 

—

 

 

 

(1,756

)

Payment for repurchase of common stock

 

(10,720

)

 

 

(13,074

)

Repayment of equipment loans

 

(71

)

 

 

(66

)

Repayment of finance lease obligations

 

(411

)

 

 

(417

)

Net cash used in financing activities

 

(10,947

)

 

 

(14,156

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

130

 

 

 

27

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

73,778

 

 

 

(67,446

)

Cash, cash equivalents and restricted cash, beginning of period

 

27,169

 

 

 

165,043

 

Cash, cash equivalents and restricted cash, end of period

$

100,947

 

 

$

97,597

 

ON24, INC.

Reconciliation of GAAP to Non-GAAP Results

(in thousands, except share and per share data)

(Unaudited)
 

Reconciliation of gross profit and gross margin
 

 

Three Months Ended March 31,

 

2023

 

2022

GAAP gross profit

$

29,857

 

 

$

35,548

 

Add:

 

 

 

Stock-based compensation

 

937

 

 

 

1,042

 

Restructuring costs

 

839

 

 

 

—

 

Non-GAAP gross profit

$

31,633

 

 

$

36,590

 

GAAP gross margin

 

69

%

 

 

73

%

Non-GAAP gross margin

 

73

%

 

 

75

%

Reconciliation of operating expenses
 

 

Three Months Ended March 31,

 

2023

 

2022

GAAP sales and marketing

$

24,417

 

 

$

29,193

 

Less:

 

 

 

Stock-based compensation

 

(3,057

)

 

 

(3,692

)

Restructuring costs

 

(1,211

)

 

 

—

 

Non-GAAP sales and marketing

$

20,149

 

 

$

25,501

 

 

 

 

 

GAAP research and development

$

11,099

 

 

$

10,644

 

Less:

 

 

 

Stock-based compensation

 

(2,021

)

 

 

(1,981

)

Restructuring costs

 

(773

)

 

 

—

 

Amortization of acquired intangible asset

 

(142

)

 

 

—

 

Non-GAAP research and development

$

8,163

 

 

$

8,663

 

 

 

 

 

GAAP General and administrative

$

14,278

 

 

$

10,877

 

Less:

 

 

 

Stock-based compensation

 

(4,106

)

 

 

(2,792

)

Restructuring costs

 

(230

)

 

 

—

 

Fees related to shareholder activism

 

(2,446

)

 

 

—

 

Non-GAAP General and administrative

$

7,496

 

 

$

8,085

 

ON24, INC.

Reconciliation of GAAP to Non-GAAP Results

(in thousands, except share and per share data)

(Unaudited)
 

Reconciliation of net loss to non-GAAP operating loss
 

 

Three Months Ended March 31,

 

2023

2022

Net loss

$

(17,590

)

$

(15,479

)

Add:

 

 

Interest expense

 

29

 

 

54

 

Other (income) expense, net

 

(2,572

)

 

177

 

Provision for income taxes

 

196

 

 

82

 

Stock-based compensation

 

10,121

 

 

9,507

 

Amortization of acquired intangible asset

 

142

 

 

—

 

Restructuring costs

 

3,053

 

 

—

 

Fees related to shareholder activism

 

2,446

 

 

—

 

Non-GAAP operating (loss) income

$

(4,175

)

$

(5,659

)

Reconciliation of net loss to non-GAAP net loss
 

 

Three Months Ended March 31,

 

2023

 

2022

Net loss

$

(17,590

)

 

$

(15,479

)

Add:

 

 

 

Stock-based compensation

 

10,121

 

 

 

9,507

 

Amortization of acquired intangible asset

 

142

 

 

 

—

 

Restructuring costs

 

3,053

 

 

 

—

 

Fees related to shareholder activism

 

2,446

 

 

 

—

 

Non-GAAP net loss

$

(1,828

)

 

$

(5,972

)

Reconciliation of GAAP to Non-GAAP basic and diluted net loss per share
 

 

Three Months Ended March 31,

 

2023

 

2022

GAAP basic and diluted net loss per share:

 

 

 

Net loss

$

(17,590

)

 

$

(15,479

)

Weighted average common stock outstanding, basic and diluted

 

47,304,983

 

 

 

47,631,813

 

Net loss per share, basic and diluted

$

(0.37

)

 

$

(0.32

)

 

Three Months Ended March 31,

 

2023

 

2022

Non-GAAP basic and diluted net loss per share:

 

 

 

Net loss

$

(17,590

)

 

$

(15,479

)

Add:

 

 

 

Stock-based compensation

 

10,121

 

 

 

9,507

 

Amortization of acquired intangible asset

 

142

 

 

 

—

 

Restructuring costs

 

3,053

 

 

 

—

 

Fees related to shareholder activism

 

2,446

 

 

 

—

 

Non-GAAP net loss

$

(1,828

)

 

$

(5,972

)

Non-GAAP weighted-average common stock outstanding, basic and diluted

 

47,304,983

 

 

 

47,631,813

 

Non-GAAP net loss per share, basic and diluted

$

(0.04

)

 

$

(0.13

)

ON24, INC.

Reconciliation of GAAP to Non-GAAP Results

(in thousands)

(Unaudited)
 

Reconciliation of GAAP Cash Flow from Operating Activities to Free Cash Flow
 

 

Three Months Ended March 31,

 

2023

 

2022

Net cash used in operating activities:

$

(4,167

)

 

$

(6,770

)

Less: Purchases of property and equipment

 

(178

)

 

 

(984

)

Free cash flow

$

(4,345

)

 

$

(7,754

)

ON24, INC.

Revenue

(in thousands)

(Unaudited)
 

 

Three Months Ended March 31,

 

2023

 

2022

Core Platform

 

 

 

Subscription and other platform

$

37,811

 

$

40,070

Professional services

 

3,395

 

 

 

4,437

 

Total core platform revenue

$

41,206

 

 

$

44,507

 

 

 

 

 

Virtual Conference

 

 

 

Subscription and other platform

$

1,553

 

 

$

3,407

 

Professional services

 

304

 

 

 

578

 

Total virtual conference revenue

$

1,857

 

 

$

3,985

 

 

 

 

 

Revenue

 

 

 

Subscription and other platform

$

39,364

 

 

$

43,477

 

Professional services

 

3,699

 

 

 

5,015

 

Total revenue

$

43,063

 

 

$

48,492

 

 

Media Contact:

Tessa Barron

[email protected]

Investor Contact:

Lauren Sloane, The Blueshirt Group for ON24

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Data Management Technology Audio/Video Telecommunications Software Internet

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Ooma Schedules Release of First Quarter Fiscal 2024 Results

Ooma Schedules Release of First Quarter Fiscal 2024 Results

SUNNYVALE, Calif.–(BUSINESS WIRE)–Ooma, Inc. (NYSE: OOMA), a smart communications platform for businesses and consumers, plans to release its financial results for the first quarter ended April 30, 2023 after the market closes on Tuesday, May 23, 2023.

The company will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time on May 23, 2023. The news release with the financial results will be accessible from the company’s website prior to the conference call.

Parties in the United States and Canada can access the call by dialing +1 (888) 550-5744, using conference ID 4726540. International parties can access the call by dialing +1 (646) 960-0223, using conference ID 4726540.

The webcast will be accessible on the Events and Presentations page of Ooma’s investor relations website, https://investors.ooma.com, for a period of at least one year. A telephonic replay of the conference call will be available from approximately two hours after the call is completed or about 8:00 p.m. Eastern time on May 23, 2023 until 11:59 p.m. Eastern time Tuesday, May 30, 2023. To access the replay, parties in the United States and Canada should call +1 (800) 770-2030. International parties should call +1 (647) 362-9199.

About Ooma, Inc.

Ooma (NYSE: OOMA) creates powerful connected experiences for businesses and consumers, delivered from its smart cloud-based SaaS platform. For businesses of all sizes, Ooma provides advanced voice and collaboration features including messaging, intelligent virtual attendants, and video conferencing to help them run more efficiently. For consumers, Ooma’s residential phone service provides PureVoice HD voice quality, advanced functionality and integration with mobile devices. Learn more at www.ooma.com or www.ooma.ca in Canada.

INVESTOR CONTACT:

Matthew S. Robison

Director of IR and Corporate Development

Ooma, Inc.

[email protected]

(650) 300-1480

MEDIA CONTACT:

Mike Langberg

Director of Corporate Communications

Ooma, Inc.

[email protected]

(650) 566-6693

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: VoIP Technology Carriers and Services Telecommunications Software

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XAI Octagon Floating Rate & Alternative Income Term Trust Will Host Q1 2023 Quarterly Webinar on May 25, 2023

XAI Octagon Floating Rate & Alternative Income Term Trust Will Host Q1 2023 Quarterly Webinar on May 25, 2023

CHICAGO–(BUSINESS WIRE)–
XAI Octagon Floating Rate & Alternative Income Term Trust (NYSE: XFLT) (the “Trust”) today announced that it plans to host the Trust’s Quarterly Webinar on May 25, 2023 at 12:00 pm (Eastern Time). Kimberly Flynn, Managing Director at XA Investments (“XAI”) will moderate the Q&A style webinar with Steven Perry, Vice President at XAI, and Gretchen Lam, Senior Portfolio Manager at Octagon Credit Investors.

TO JOIN VIA WEB: Please go to the Knowledge Bank section of xainvestments.com or click here to find the online registration link.

TO USE YOUR TELEPHONE: After joining via web, if you prefer to use your phone for audio, you must select that option and call in using a number below, based on your current location.

Dial: (312) 626-6799 or (267) 831-0333 or (646) 558-8656 or (213) 338-8477 or (720) 928-9299

Webinar ID: 895 6979 9331

Passcode: 777339

REPLAY: A replay of the webinar will be available in the Knowledge Bank section of xainvestments.com or through the same registration link previously used.

The investment objective of the Trust is to seek attractive total return with an emphasis on income generation across multiple stages of the credit cycle. The Trust seeks to achieve its investment objective by investing in a dynamically managed portfolio of opportunities primarily within the private credit markets. Under normal market conditions, the Trust will invest at least 80% of its Managed Assets in floating rate credit instruments and other structured credit investments. There can be no assurance that the Trust will achieve its investment objective.

The Trust’s common shares are traded on the New York Stock Exchange under the symbol “XFLT,” and the Trust’s 6.50% Series 2026 Term Preferred Shares are traded on the New York Stock Exchange under the symbol “XFLTPRA.”

About XA Investments

XA Investments LLC (“XAI”) serves as the Trust’s investment adviser. XAI is a Chicago-based firm founded by XMS Capital Partners in April, 2016. In addition to investment advisory services, the firm also provides investment fund structuring and consulting services focused on registered closed-end funds to meet institutional client needs. XAI offers custom product build and consulting services, including development and market research, sales, marketing, fund management and administration. XAI believes that the investing public can benefit from new vehicles to access a broad range of alternative investment strategies and managers. XAI provides individual investors with access to institutional-caliber alternative managers. For more information, please visit www.xainvestments.com.

About XMS Capital Partners

XMS Capital Partners, LLC, established in 2006, is a global, independent, financial services firm providing M&A, corporate advisory and asset management services to clients. It has offices in Chicago, Boston and London. For more information, please visit www.xmscapital.com.

About Octagon Credit Investors

Octagon Credit Investors, LLC (“Octagon”) serves as the Trust’s investment sub-adviser. Octagon is a 25+ year old, $34.6B below-investment grade corporate credit investment adviser focused on leveraged loan, high yield bond and structured credit (CLO debt and equity) investments. Through fundamental credit analysis and active portfolio management, Octagon’s investment team identifies attractive relative value opportunities across below-investment grade asset classes, sectors and issuers. Octagon’s investment philosophy and methodology encourage and rely upon dynamic internal communication to manage portfolio risk. Over its history, the firm has applied a disciplined, repeatable and scalable approach in its effort to generate attractive risk-adjusted returns for its investors. For more information, please visit www.octagoncredit.com.

XAI does not provide tax advice; please consult a professional tax advisor regarding your specific tax situation. Income may be subject to state and local taxes, as well as the federal alternative minimum tax.

Investors should consider the investment objectives and policies, risk considerations, charges and expenses of the Trust carefully before investing. For more information on the Trust, please visit the Trust’s webpage at www.xainvestments.com.

This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.

 

NOT FDIC INSURED

 

NO BANK GUARANTEE

 

MAY LOSE VALUE

Foreside Fund Services, LLC – Distributor

Steven Perry, Vice President

XA Investments LLC

Phone: 312-374-6933

Email: [email protected]

www.xainvestments.com

KEYWORDS: Illinois United States North America

INDUSTRY KEYWORDS: Consulting Asset Management Professional Services Finance

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Cummins Inc. Declares Quarterly Common Stock Dividend

Cummins Inc. Declares Quarterly Common Stock Dividend

COLUMBUS, Ind.–(BUSINESS WIRE)–
The Board of Directors of Cummins Inc. (NYSE: CMI) today declared a quarterly common stock cash dividend of 1.57 dollars per share, payable on June 1, 2023, to shareholders of record on May 19, 2023.

About Cummins Inc.

Cummins Inc., a global power leader, is a corporation of complementary business segments that design, manufacture, distribute and service a broad portfolio of power solutions. The company’s products range from diesel, natural gas, electric and hybrid powertrains and powertrain-related components including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems, automated transmissions, axles, drivelines, brakes, suspension systems, electric power generation systems, batteries, electrified power systems, electric powertrains, hydrogen production and fuel cell products. Headquartered in Columbus, Indiana (U.S.), since its founding in 1919, Cummins employs approximately 73,600 people committed to powering a more prosperous world through three global corporate responsibility priorities critical to healthy communities: education, environment and equality of opportunity. Cummins serves its customers online, through a network of company-owned and independent distributor locations, and through thousands of dealer locations worldwide and earned about $2.2 billion on sales of $28.1 billion in 2022. See how Cummins is powering a world that’s always on by accessing news releases and more information at https://www.cummins.com/always-on.

Forward-looking disclosure statement

Information provided in this release that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our forecasts, guidance, preliminary results, expectations, hopes, beliefs and intentions on strategies regarding the future. These forward-looking statements include, without limitation, statements relating to our plans and expectations for our revenues and EBITDA. Our actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to: any adverse results of our internal review into our emissions certification process and compliance with emission standards; increased scrutiny from regulatory agencies, as well as unpredictability in the adoption, implementation and enforcement of emission standards around the world; changes in international, national and regional trade laws, regulations and policies; changes in taxation; global legal and ethical compliance costs and risks; evolving environmental and climate change legislation and regulatory initiatives; future bans or limitations on the use of diesel-powered products; failure to successfully integrate and / or failure to fully realize all of the anticipated benefits of the acquisition of Meritor, Inc.; raw material, transportation and labor price fluctuations and supply shortages; any adverse effects of the conflict between Russia and Ukraine and the global response (including government bans or restrictions on doing business in Russia); aligning our capacity and production with our demand; the actions of, and income from, joint ventures and other investees that we do not directly control; large truck manufacturers’ and original equipment manufacturers’ customers discontinuing outsourcing their engine supply needs or experiencing financial distress, or change in control; product recalls; variability in material and commodity costs; the development of new technologies that reduce demand for our current products and services; lower than expected acceptance of new or existing products or services; product liability claims; our sales mix of products; failure to complete, adverse results from or failure to realize the expected benefits of the separation of our filtration business; our plan to reposition our portfolio of product offerings through exploration of strategic acquisitions and divestitures and related uncertainties of entering such transactions; increasing interest rates; challenging markets for talent and ability to attract, develop and retain key personnel; climate change, global warming, more stringent climate change regulations, accords, mitigation efforts, greenhouse gas (GHG) regulations or other legislation designed to address climate change; exposure to potential security breaches or other disruptions to our information technology environment and data security; political, economic and other risks from operations in numerous countries including political, economic and social uncertainty and the evolving globalization of our business; competitor activity; increasing competition, including increased global competition among our customers in emerging markets; failure to meet environmental, social and governance (ESG) expectations or standards, or achieve our ESG goals; labor relations or work stoppages; foreign currency exchange rate changes; the performance of our pension plan assets and volatility of discount rates; the price and availability of energy; continued availability of financing, financial instruments and financial resources in the amounts, at the times and on the terms required to support our future business; and other risks detailed from time to time in our SEC filings, including particularly in the Risk Factors section of our 2022 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available at http://www.sec.gov or at http://www.cummins.com in the Investor Relations section of our website.

Jon Mills

Director, External Communications

317-658-4540

[email protected]

KEYWORDS: Indiana United States North America

INDUSTRY KEYWORDS: Energy Other Energy Other Manufacturing Manufacturing

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Liberty Media Corporation to Hold Virtual Annual Meeting of Stockholders

Liberty Media Corporation to Hold Virtual Annual Meeting of Stockholders

ENGLEWOOD, Colo.–(BUSINESS WIRE)–
Liberty Media Corporation (“Liberty Media”) (Nasdaq: LSXMA, LSXMB, LSXMK, FWONA, FWONK, BATRA, BATRK) will be holding its virtual Annual Meeting of Stockholders on Tuesday, June 6, 2023 at 8:00 a.m. M.T. Stockholders of record as of the record date will be able to listen, vote and submit questions pertaining to the annual meeting by logging in at www.virtualshareholdermeeting.com/LMC2023. The record date for the meeting is 5:00 p.m., New York City time, on April 10, 2023. Stockholders will need the 16-digit control number that is printed in the box marked by the arrow on the stockholder’s proxy card or Notice of Internet Availability of Proxy Materials for the Liberty Media meeting to enter the virtual annual meeting website. A technical support number will become available at the virtual meeting link 10 minutes prior to the scheduled meeting time.

In addition, access to the meeting will be available on the Liberty Media website. All interested persons should visit https://www.libertymedia.com/investors/news-events/ir-calendar to access the webcast. An archive of the webcast will also be available on this website after appropriate filings have been made with the SEC.

About Liberty Media Corporation

Liberty Media Corporation operates and owns interests in a broad range of media, communications and entertainment businesses. Those businesses are attributed to three tracking stock groups: the Liberty SiriusXM Group, the Braves Group and the Formula One Group. The businesses and assets attributed to the Liberty SiriusXM Group (NASDAQ: LSXMA, LSXMB, LSXMK) include Liberty Media Corporation’s interests in SiriusXM and Live Nation Entertainment. The businesses and assets attributed to the Braves Group (NASDAQ: BATRA, BATRK) include Liberty Media Corporation’s subsidiary Braves Holdings, LLC. The businesses and assets attributed to the Formula One Group (NASDAQ: FWONA, FWONK) consist of all of Liberty Media Corporation’s businesses and assets other than those attributed to the Liberty SiriusXM Group and the Braves Group, including its subsidiary Formula 1 and other minority investments.

Liberty Media Corporation

Shane Kleinstein, 720-875-5432

KEYWORDS: Colorado United States North America

INDUSTRY KEYWORDS: Entertainment Communications Sports TV and Radio Events/Concerts Motor Sports Other Communications

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Liberty Broadband Corporation to Hold Virtual Annual Meeting of Stockholders

Liberty Broadband Corporation to Hold Virtual Annual Meeting of Stockholders

ENGLEWOOD, Colo.–(BUSINESS WIRE)–
Liberty Broadband Corporation (“Liberty Broadband”) (Nasdaq: LBRDA, LBRDK, LBRDP) will be holding its virtual Annual Meeting of Stockholders on Tuesday, June 6, 2023 at 8:30 a.m. M.T. Stockholders of record as of the record date will be able to listen, vote and submit questions pertaining to the annual meeting by logging in at www.virtualshareholdermeeting.com/LBRD2023. The record date for the meeting is 5:00 p.m., New York City time, on April 10, 2023. Stockholders will need the 16-digit control number that is printed in the box marked by the arrow on the stockholder’s proxy card or Notice of Internet Availability of Proxy Materials for the Liberty Broadband meeting to enter the virtual annual meeting website. A technical support number will become available at the virtual meeting link 10 minutes prior to the scheduled meeting time.

In addition, access to the meeting will be available on the Liberty Broadband website. All interested persons should visit https://www.libertybroadband.com/investors/news-events/ir-calendar to access the webcast. An archive of the webcast will also be available on this website after appropriate filings have been made with the SEC.

About Liberty Broadband Corporation

Liberty Broadband Corporation (Nasdaq: LBRDA, LBRDK, LBRDP) operates and owns interests in a broad range of communications businesses. Liberty Broadband’s principal assets consist of its interest in Charter Communications and its subsidiary GCI. GCI is Alaska’s largest communications provider, providing data, wireless, video, voice and managed services to consumer and business customers throughout Alaska and nationwide. GCI has delivered services over the past 40 years to some of the most remote communities and in some of the most challenging conditions in North America.

Liberty Broadband Corporation

Shane Kleinstein, 720-875-5432

KEYWORDS: Colorado United States North America

INDUSTRY KEYWORDS: Networks Internet Mobile/Wireless Technology Telecommunications

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