Market Newsdesk

February 28, 2023 7:03 am

TELA Bio to Announce Fourth Quarter and Full Year 2022 Financial Results

MALVERN, Pa., Feb. 28, 2023 (GLOBE NEWSWIRE) — TELA Bio, Inc. (“TELA Bio”) (NASDAQ: TELA), a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient’s own anatomy, today announced that the company will report fourth quarter and full year 2022 financial results on Tuesday, March 21, 2023. TELA Bio’s management will host a conference call and webcast at 4:30 p.m. ET that day to discuss the financial results and provide a corporate update.

Conference Call and Webcast Details

Investors interested in listening to the conference call should register online. Participants are required to register a day in advance or at minimum 15 minutes before the start of the call. A replay of the webcast can be accessed via the Events & Presentations page of the investor section of TELA’s website.

About TELA Bio, Inc.

TELA Bio, Inc. (NASDAQ: TELA) is a commercial-stage medical technology company focused on providing innovative technologies that optimize clinical outcomes by prioritizing the preservation and restoration of the patient’s own anatomy. The Company is committed to providing surgeons with advanced, economically effective soft-tissue reconstruction solutions that leverage the patient’s natural healing response while minimizing long-term exposure to permanent synthetic materials. For more information, visit www.telabio.com.

Caution Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend” or similar expressions, or statements regarding intent, belief, or current expectations are forward-looking statements and reflect the current beliefs of TELA Bio’s management. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements. These risks and uncertainties are described more fully in the “Risk Factors” section and elsewhere in our filings with the Securities and Exchange Commission and available at www.sec.gov, including in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Any forward-looking statements that we make in this announcement speak only as of the date of this press release, and TELA Bio assumes no obligation to update forward-looking statements whether as a result of new information, future events or otherwise after the date of this press release, except as required under applicable law.

Investor Contact

Greg Chodaczek
332-895-3230
[email protected]

February 28, 2023 7:03 am

Carrols Restaurant Group, Inc. Reports Financial Results for the Fourth Quarter and Full Year 2022

SYRACUSE, N.Y., Feb. 28, 2023 (GLOBE NEWSWIRE) — Carrols Restaurant Group, Inc. (“Carrols” or the “Company”) (Nasdaq: TAST), the largest BURGER KING® franchisee in the United States, today reported its financial results for the fourth quarter and full year ended January 1, 2023.

Highlights for the Fourth Quarter of
2022
versus the Fourth Quarter of
2021
include:

Total restaurant sales increased 7.0% to $445.1 million in the fourth quarter of 2022 compared to $416.1 million in the fourth quarter of 2021;
Comparable restaurant sales for the Company’s Burger King® restaurants increased 6.2%;
Comparable restaurant sales for the Company’s Popeyes® restaurants increased 9.2%;
Adjusted EBITDA⁽¹⁾ totaled $25.4 million compared to $13.9 million in the prior year quarter;
Adjusted Restaurant-Level EBITDA⁽¹⁾ totaled $46.9 million compared to $34.2 million in the prior year quarter;
Net Loss was $19.1 million, or $0.38 per diluted share, compared to Net Loss of $16.4 million, or $0.33 per diluted share, in the prior year quarter;
Adjusted Net Loss⁽¹⁾was $2.5 million, or $0.05 per diluted share, compared to Adjusted Net Loss of $7.5 million, or $0.15 per diluted share, in the prior year quarter; and
Free Cash Flow⁽²⁾of $14.5 million compared to $8.8 million in the prior year quarter.

Highlights for the Full Year
2022
versus the Full Year
2021
include:

Total restaurant sales increased 4.7% to $1,730.4 million in the full year of 2022 compared to $1,652.4 million in the full year of 2021;
Comparable restaurant sales for the Company’s Burger King® restaurants increased 3.9%;
Comparable restaurant sales for the Company’s Popeyes® restaurants increased 4.9%;
Adjusted EBITDA⁽¹⁾totaled $62.5 million compared to $81.6 million in the prior year;
Adjusted Restaurant-Level EBITDA⁽¹⁾ totaled $141.9 million compared to $157.0 million in the prior year;
Net Loss was $75.6 million, or $1.49 per diluted share, compared to Net Loss of $43.0 million, or $0.86 per diluted share, in the prior year;
Adjusted Net Loss⁽¹⁾was $35.7 million or $0.70 per diluted share, compared to Adjusted Net Loss of $21.3 million, or $0.43 per diluted share, in the prior year; and
Free Cash Flow⁽²⁾ of a use of $16.4 million in the full year of 2022 compared to $22.9 million generated in the prior year.

⁽¹⁾
Adjusted EBITDA, Adjusted Restaurant-Level EBITDA and Adjusted Net Income (Loss) are non-GAAP financial measures. Refer to the definitions and reconciliation of these measures to net income (loss) or to income (loss) from operations in the tables at the end of this release.

⁽²⁾
Free Cash flow is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure in the tables at the end of this release.

Management Commentary

Anthony E. Hull, Interim President and Chief Executive Officer of Carrols, commented, “We are pleased with our strong top-line momentum during the fourth quarter, with comparable sales growth of 6.2% at our Burger King restaurants and 9.2% at our Popeyes restaurants. The initiatives we began implementing in 2022 to strengthen our restaurant operations contributed to both sequential and year-over-year restaurant margin expansion. We also achieved continued improvement in our guest experience, as demonstrated by gains in our customer satisfaction scores of approximately 25% at our Burger King restaurants.”

Hull concluded, “As we look into 2023, we are excited by the trends we are seeing, both on the top-line and with input costs, and believe we are on track to deliver continued gradual margin improvement over time. We are also encouraged by Burger King’s “Reclaim the Flame” plan to increase sales and drive franchisee profitability. Our balance sheet continues to provide us with significant liquidity, a long runway with respect to debt maturities, and stable and manageable debt service obligations. Overall, we believe that the operational improvements we continue to make, combined with the potential positive impacts from Burger King’s multi-faceted plan to strengthen the brand, put us in a strong position heading into 2023.”

Fourth Quarter
2022
Financial Results

Total restaurant sales were $445.1 million in the fourth quarter of 2022, compared to $416.1 million in the fourth quarter of 2021, both of which were a 13-week period.

Comparable restaurant sales for the Company’s Burger King restaurants increased 6.2% compared to a 7.4% increase in the prior year quarter.

Restaurant sales for the Company’s Popeyes restaurants, which represented 4.9% of total restaurant sales in the fourth quarter of 2022, increased on a comparable restaurant sales basis by 9.2% compared to 1.0% in the fourth quarter of 2021.

Adjusted Restaurant-Level EBITDA⁽¹⁾ was $46.9 million in the fourth quarter of 2022 compared to $34.2 million in the prior year period. Adjusted Restaurant-Level EBITDA margin improved to 10.5% of restaurant sales from 8.2% in the fourth quarter of 2022, reflecting improved margins on food, beverage and packaging costs given moderation in commodity cost inflation as well as leverage on wage and related expenses from higher average checks.

General and administrative expenses increased to $22.7 million in the fourth quarter of 2022 from $22.4 million in the prior year period including stock compensation expense of $1.1 million and $1.7 million, respectively.

Adjusted EBITDA⁽¹⁾ was $25.4 million in the fourth quarter of 2022 compared to $13.9 million in the fourth quarter of 2021. Adjusted EBITDA margin increased to 5.7% of total restaurant sales from 3.3% due to the factors discussed above.

Income from operations was $2.8 million in the fourth quarter of 2022 compared to loss from operations of $10.0 million in the prior year quarter.

Interest expense increased to $7.9 million in the fourth quarter of 2022 from $7.4 million in the fourth quarter of 2021.

Net Loss was $19.1 million in the fourth quarter of 2022, or $0.38 per diluted share, compared to a Net Loss of $16.4 million, or $0.33 per diluted share, in the prior year quarter. Net Loss in the fourth quarter of 2022 included, among other items, $2.0 million of impairment and other lease charges and a $14.9 million increase in the valuation allowance for deferred taxes. Net Loss in the fourth quarter of 2021 included, among other items, a $1.1 million gain related to the sale of certain litigation claims.

Adjusted Net Loss⁽¹⁾ was $2.5 million, or $0.05 per diluted share in the fourth quarter of 2022, compared to an Adjusted Net Loss of $7.5 million, or $0.15 per diluted share, in the prior year quarter.

Balance Sheet Update

The Company ended the fourth quarter of 2022 with cash and cash equivalents of $18.4 million, and long-term debt (including current portion) and finance lease liabilities of $493.0 million. There were $12.5 million in revolving credit borrowings outstanding and $9.6 million of letters of credit issued under the Company’s $215.0 million revolving credit facility, leaving $192.9 million of availability as of January 1, 2023. Including the cash balance, the Company had $211.3 million of available liquidity at the end of the fourth quarter of 2022.

Conference Call Today

Anthony E. Hull, Interim President and Chief Executive Officer, and Gretta Miles, Controller and Assistant Treasurer, will host a conference call to discuss fourth quarter and full year 2022 financial results at 8:30 a.m. (ET) today.

The conference call can be accessed live over the telephone by dialing 201-493-6779. A replay will be available three hours after the call and can be accessed by dialing 412-317-6671; the passcode is 13735441. The replay will be available until Tuesday, March 7, 2023. Investors and interested parties may listen to a webcast of the conference call by visiting the Investor Relations page of the Company’s website located at www.carrols.com. The press release and related presentation slides will be accessible via the same website page prior to the scheduled call.

About the Company

Carrols is one of the largest restaurant franchisees in North America. It is the largest BURGER KING® franchisee in the United States, currently operating 1,022 BURGER KING® restaurants in 23 states as well as 65 POPEYES® restaurants in seven states. Carrols has operated BURGER KING® restaurants since 1976 and POPEYES® restaurants since 2019. For more information, please visit the Company’s website at www.carrols.com.

Forward-Looking Statements

Except for the historical information contained in this news release, the matters addressed are forward-looking statements. Forward-looking statements, written, oral or otherwise made, represent Carrols’ expectation or belief concerning future events. Without limiting the foregoing, these statements are often identified by the words “may”, “might”, “believes”, “thinks”, “anticipates”, “plans”, “expects”, “intends” or similar expressions. In addition, expressions of our strategies, intentions, plans or guidance are also forward-looking statements. Such statements reflect management’s current views with respect to future events and are subject to risks and uncertainties, both known and unknown. You are cautioned not to place undue reliance on these forward-looking statements as there are important factors that could cause actual results to differ materially from those in forward-looking statements, many of which are beyond our control. Investors are referred to the full discussion of risks and uncertainties as included in Carrols’ filings with the Securities and Exchange Commission.

Investor Relations:
Jeff Priester
332-242-4370
[email protected]

Carrols Restaurant Group, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
	(unaudited)
	Three Months Ended (a)						Twelve Months Ended (a)
	January 1, 2023			January 2, 2022			January 1, 2023			January 2, 2022
Restaurant sales	$	445,058		$	416,133		$	1,730,440		$	1,652,370
Costs and expenses:
Food, beverage and packaging costs		132,994			128,368			534,238			499,685
Restaurant wages and related expenses		145,431			141,392			585,204			549,933
Restaurant rent expense		31,994			31,206			125,481			122,662
Other restaurant operating expenses		69,881			64,494			274,557			257,774
Advertising expense		17,943			16,506			69,389			65,433
General and administrative expenses (b) (c)		22,656			22,384			88,072			83,660
Depreciation and amortization		19,171			19,667			78,068			80,798
Impairment and other lease charges		2,009			3,189			21,877			4,470
Other expense (income), net (d)		183			(1,075	)		(926	)		(1,186	)
Total costs and expenses		442,262			426,131			1,775,960			1,663,229
Income (loss) from operations		2,796			(9,998	)		(45,520	)		(10,859	)
Interest expense		7,873			7,399			30,841			28,791
Loss on extinguishment of debt		—			—			—			8,538
Loss before income taxes		(5,077	)		(17,397	)		(76,361	)		(48,188	)
Provision (benefit) for income taxes		14,053			(997	)		(789	)		(5,159	)
Net loss	$	(19,130	)	$	(16,400	)	$	(75,572	)	$	(43,029	)

Basic and diluted net loss per share (e)(f)	$	(0.38	)	$	(0.33	)	$	(1.49	)	$	(0.86	)
Basic and Diluted weighted average common shares outstanding		50,807			49,928			50,718			49,899

^{(a) The Company uses a 52 or 53 week fiscal year that ends on the Sunday closest to December 31. The three and twelve months ended January 1, 2023 and January 2, 2022 included thirteen and fifty-two weeks, respectively.}

^{(b) General and administrative expenses include certain executive transition, litigation and other professional expenses of $0.4 million for the three months ended January 2, 2022, and $3.8 million and $1.7 million for the twelve months ended January 1, 2023 and January 2, 2022, respectively.}

^{(c) General and administrative expenses include stock-based compensation expense of $1.1 million and $1.7 million for the three months ended January 1, 2023 and January 2, 2022, respectively, and $4.9 million and $6.2 million for the twelve months ended January 1, 2023 and January 2, 2022, respectively.}

^{(d) Other expense (income), net, for the three months ended January 1, 2023 included a loss on disposal of assets of $0.2 million. Other expense (income), net, for the twelve months ended January 1, 2023, included loss on sale leaseback transactions of $0.4 million, a loss on disposal of assets of $1.2 million and a gain from a settlement with a vendor of $2.5 million. Other expense (income), net, for the three months ended January 2, 2022, included a gain of $1.1 million from the sale of a litigation claim during the period, insurance recoveries from previous property damage at our restaurants of $0.2 million and a loss on disposal of assets of $0.3 million. Other expense (income), net, for the twelve months ended January 2, 2022, included a $1.1 million gain from the sale of a litigation claim during the period, a gain from insurance recoveries of $1.3 million related to property damage at two of the Company’s restaurants and a loss on disposal of assets of $1.2 million.}

^{(e) Basic net loss per share was computed without attributing any loss to preferred stock and non-vested restricted shares as losses are not allocated to participating securities under the two-class method.}

^{(f) Diluted net loss per share was computed including shares issuable for convertible preferred stock and non-vested restricted shares unless their effect would have been anti-dilutive for the periods presented.}

Carrols Restaurant Group, Inc.

Supplemental Information

The following table sets forth certain unaudited supplemental financial and other data for the periods indicated (in thousands, except number of restaurants, percentages and average weekly sales per restaurant):

	(unaudited)
	Three Months Ended						Twelve Months Ended
	January 1, 2023			January 2, 2022			January 1, 2023			January 2, 2022
Revenue:
Burger King restaurant sales	$	423,285		$	395,976		$	1,642,725		$	1,568,431
Popeyes restaurant sales		21,773			20,157			87,715			83,939
Total revenue	$	445,058		$	416,133		$	1,730,440		$	1,652,370
Change in Comparable Burger King Restaurant Sales (a)		6.2	%		7.4	%		3.9	%		9.1	%
Change in Comparable Popeyes Restaurant Sales (a)		9.2	%		1.0	%		4.9	%	(1.9		)%

Average Weekly Sales per Burger King Restaurant (b)	$	31,858		$	29,812		$	30,870		$	29,687
Average Weekly Sales per Popeyes Restaurant (b)	$	26,107		$	24,119		$	26,036		$	24,983

Adjusted Restaurant-Level EBITDA (c)	$	46,934		$	34,183		$	141,863		$	156,958
Adjusted Restaurant-Level EBITDA margin (c)		10.5	%		8.2	%		8.2	%		9.5	%

Adjusted EBITDA (c)	$	25,383		$	13,853		$	62,470		$	81,608
Adjusted EBITDA margin (c)		5.7	%		3.3	%		3.6	%		4.9	%

Adjusted Net Loss (c)	$	(2,485	)	$	(7,457	)	$	(35,743	)	$	(21,278	)
Adjusted Diluted Net Loss per share (c)	$	(0.05	)	$	(0.15	)	$	(0.70	)	$	(0.43	)

Number of Burger King restaurants:
Restaurants at beginning of period		1,022			1,027			1,026			1,009
New restaurants (including offsets)		2			1			6			4
Restaurants acquired		—			—			—			19
Restaurants closed (including offsets)		(2	)		(2	)		(10	)		(6	)
Restaurants at end of period		1,022			1,026			1,022			1,026
Average Number of operating Burger King restaurants:		1,022.0			1,021.7			1,023.4			1,016.0

Number of Popeyes restaurants:
Restaurants at beginning and end of period		65			65			65			65
Average Number of operating Popeyes restaurants:		64.2			64.3			64.8			64.6

^{(a) Restaurants are generally included in comparable restaurant sales 12 months after their acquisition. Sales from newly developed restaurants are included in comparable restaurant sales after they have been open for 15 months. The calculation of changes in comparable restaurant sales is based on a comparison to the comparable thirteen or fifty-two week period.}

^{(b) Average weekly sales per restaurant are derived by dividing restaurant sales for the thirteen or fifty-two week period by the average number of restaurants operating during such period.}

^{(c) EBITDA, Adjusted Restaurant-Level EBITDA, Adjusted Restaurant-Level EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Loss and Adjusted Diluted Net Loss per share are non-GAAP financial measures and may not necessarily be comparable to other similarly titled captions of other companies due to differences in methods of calculation. Refer to the Company’s reconciliation of net loss to EBITDA, Adjusted EBITDA, Adjusted Net Loss and to the Company’s reconciliation of loss from operations to Adjusted Restaurant-Level EBITDA for further detail. Both Adjusted EBITDA margin and Adjusted Restaurant-Level EBITDA margin are calculated as a percentage of restaurant sales. Adjusted Diluted Net Loss per share is calculated based on Adjusted Net Loss and reflects the dilutive impact of shares, where applicable.}

Carrols Restaurant Group, Inc.
Reconciliation of Non-GAAP Measures
(In thousands, except per share amounts)

	(unaudited)
	Three Months Ended (a)						Twelve Months Ended (a)
	January 1, 2023			January 2, 2022			January 1, 2023			January 2, 2022
Reconciliation of EBITDA and Adjusted EBITDA: (b)
Net loss	$	(19,130	)	$	(16,400	)	$	(75,572	)	$	(43,029	)
Provision (benefit) for income taxes		14,053			(997	)		(789	)		(5,159	)
Interest expense		7,873			7,399			30,841			28,791
Depreciation and amortization		19,171			19,667			78,068			80,798
EBITDA		21,967			9,669			32,548			61,401
Impairment and other lease charges		2,009			3,189			21,877			4,470
Acquisition costs (c)		—			(2	)		—			398
Pre-opening costs (d)		119			16			292			75
Executive transition, litigation and other professional expenses (e)		20			363			3,777			1,678
Other expense (income), net (f)(g)		183			(1,075	)		(926	)		(1,186	)
Stock-based compensation expense		1,085			1,693			4,902			6,234
Loss on extinguishment of debt		—			—			—			8,538
Adjusted EBITDA	$	25,383		$	13,853		$	62,470		$	81,608

Reconciliation of Adjusted Restaurant-Level EBITDA: (a)
Income (loss) from operations	$	2,796		$	(9,998	)	$	(45,520	)	$	(10,859	)
Add:
General and administrative expenses		22,656			22,384			88,072			83,660
Pre-opening costs (d)		119			16			292			75
Depreciation and amortization		19,171			19,667			78,068			80,798
Impairment and other lease charges		2,009			3,189			21,877			4,470
Other expense (income), net (f)(g)		183			(1,075	)		(926	)		(1,186	)
Adjusted Restaurant-Level EBITDA	$	46,934		$	34,183		$	141,863		$	156,958

Reconciliation of Adjusted Net Loss: (b)
Net loss	$	(19,130	)	$	(16,400	)	$	(75,572	)	$	(43,029	)
Add:
Impairment and other lease charges		2,009			3,189			21,877			4,470
Acquisition costs (c)		—			(2	)		—			398
Pre-opening costs (d)		119			16			292			75
Executive transition, litigation and other professional expenses (e)		20			363			3,777			1,678
Other expense (income), net (f)(g)		183			(1,075	)		(926	)		(1,186	)
Loss on extinguishment of debt		—			—			—			8,538
Income tax effect on above adjustments (h)		(583	)		(623	)		(6,256	)		(3,494	)
Valuation allowance for deferred taxes (i)		14,897			7,075			21,065			11,272
Adjusted Net Loss	$	(2,485	)	$	(7,457	)	$	(35,743	)	$	(21,278	)
Adjusted diluted net loss per share (j)	$	(0.05	)	$	(0.15	)	$	(0.70	)	$	(0.43	)
Adjusted diluted weighted average common shares outstanding		50,807			49,928			50,718			49,899

^{(b) Within this press release, we make reference to EBITDA, Adjusted EBITDA, Adjusted Restaurant-Level EBITDA and Adjusted Net Loss which are non-GAAP financial measures. EBITDA represents net loss before income taxes, interest expense and depreciation and amortization. Adjusted EBITDA represents EBITDA as adjusted to exclude impairment and other lease charges, acquisition costs, stock-based compensation expense, restaurant pre-opening costs, non-recurring litigation and other professional expenses, loss on extinguishment of debt and other income and expense. Adjusted Restaurant-Level EBITDA represents loss from operations as adjusted to exclude general and administrative expenses, restaurant pre-opening costs, depreciation and amortization, impairment and other lease charges and other income and expense. Adjusted Net Loss represents net loss as adjusted, net of tax, to exclude impairment and other lease charges, acquisition costs, restaurant pre-opening costs, non-recurring litigation and other professional expenses, other income and expense, loss on extinguishment of debt and deferred tax valuation allowance changes.}

^{Adjusted EBITDA, Adjusted Restaurant-Level EBITDA and Adjusted Net Loss are presented because the Company believes that they provide a more meaningful comparison than EBITDA and net loss of its core business operating results, as well as with those of other similar companies. Additionally, Adjusted Restaurant-Level EBITDA is presented because it excludes restaurant pre-opening costs, other income and expense, and the impact of general and administrative expenses, which primarily represents salaries and expenses for corporate and administrative functions that support the development and operations of our restaurants as well as legal, auditing and other professional fees. Although these costs are not directly related to restaurant-level operations, these expenses are necessary for the profitability of our restaurants. Management believes that Adjusted EBITDA, Adjusted Restaurant-Level EBITDA and Adjusted Net Loss, when viewed with the Company’s results of operations in accordance with U.S. GAAP and the accompanying reconciliations in the table above, provide useful information about operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of the Company’s core business without regard to potential distortions. Additionally, management believes that Adjusted EBITDA and Adjusted Restaurant-Level EBITDA permit investors to gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced.}

^{However, EBITDA, Adjusted EBITDA, Adjusted Restaurant-Level EBITDA and Adjusted Net Loss are not measures of financial performance or liquidity under U.S. GAAP and, accordingly, should not be considered as alternatives to net loss from operations or cash flow from operating activities as indicators of operating performance or liquidity. Also, these measures may not be comparable to similarly titled captions of other companies. The tables above provide reconciliations between net loss and EBITDA, Adjusted EBITDA and Adjusted Net Loss and between loss from operations and Adjusted Restaurant-Level EBITDA.}

^{(c) Acquisition costs for the three and twelve months ended January 2, 2022 mostly include integration, travel, legal and professional fees incurred in connection with restaurants acquired during the second quarter of 2021, which were included in general and administrative expenses.}

^{(d) Pre-opening costs for the three and twelve months ended January 1, 2023 and January 2, 2022 include training, labor and occupancy costs incurred during the construction of new restaurants.}

^{(e) Executive transition, litigation and other professional expenses for the three and twelve months ended January 1, 2023 and January 2, 2022 include executive search and transition costs, costs pertaining to an ongoing lawsuit with one of the Company’s former vendors and other non-recurring professional service expenses.}

^{(f) Other expense (income), net, for the three months ended January 1, 2023 included a loss on disposal of assets of $0.2 million. Other expense (income), net, for the twelve months ended January 1, 2023, included loss on sale leaseback transactions of $0.4 million, a loss on disposal of assets of $1.2 million and a gain from a settlement with a vendor of $2.5 million.}

^{(g) Other expense (income), net, for the three months ended January 2, 2022, included a gain of $1.1 million from the sale of a litigation claim during the period, insurance recoveries from previous property damage at our restaurants of $0.2 million and a loss on disposal of assets of $0.3 million. Other expense (income), net, for the twelve months ended January 2, 2022, included a $1.1 million gain from the sale of a litigation claim during the period, a gain from insurance recoveries of $1.3 million related to property damage at two of the Company’s restaurants and a loss on disposal of assets of $1.2 million.}

^{(h) The income tax effect related to the adjustments to Adjusted Net Loss during the periods presented was calculated using an incremental income tax rate of 25.0% for the three and twelve months ended January 1, 2023 and January 2, 2022, respectively.}

^{(i) Reflects the removal of the income tax provision recorded to increase the valuation allowance on our net deferred income tax assets during the three and twelve months ended January 1, 2023 and January 2, 2022, respectively.}

^{(j) Adjusted diluted net loss per share is calculated based on Adjusted Net Loss and the dilutive weighted average common shares outstanding for the respective periods, where applicable.}

Carrols Restaurant Group, Inc.
Reconciliation of Non-GAAP Measures
(In thousands, except per share amounts)

	(unaudited)
	Three Months Ended (a)						Twelve Months Ended (a)
	January 1, 2023			January 2, 2022			January 1, 2023			January 2, 2022
Reconciliation of Free Cash Flow: (b)
Net cash provided by operating activities	$	22,946		$	20,644		$	20,804		$	70,871
Net cash used for investing activities		(8,479	)		(11,876	)		(37,245	)		(58,579	)
Net cash paid for acquisitions, net of related sale-leasebacks		—			—			—			10,633
Total Free Cash Flow	$	14,467		$	8,768		$	(16,441	)	$	22,925

	At 1/1/2023			At 1/2/2022
Long-term debt and finance lease liabilities (c)	$	492,951		$	478,181
Cash and cash equivalents		18,364			29,151
Net Debt (d)		474,587			449,030
Senior Secured Net Debt (e)		174,587			149,030
Total Net Debt Leverage Ratio (f)	7.14		x		5.02	x
Senior Secured Net Debt Leverage Ratio (g)	2.63		x		1.67	x

^{(a) The Company uses a 52 or 53 week fiscal year that ends on the Sunday closest to December 31. The three and twelve months ended January 1, 2023 and January 2, 2022 both included thirteen and fifty-two weeks, respectively.}

^{(b) Free Cash Flow is a non-GAAP financial measure and may not necessarily be comparable to other similarly titled captions of other companies due to differences in methods of calculation. Free Cash Flow is defined as cash provided by operating activities less cash used for investing activities, adjusted to add back net cash paid for acquisitions (excluding proceeds from acquisition-related sale-leaseback transactions completed in the third quarter of 2021). Management believes that Free Cash Flow, when viewed with the Company’s results of operations in accordance with U.S. GAAP and the accompanying reconciliations in the table above, provides useful information about the Company’s cash flow for liquidity purposes and to service the Company’s debt. However, Free Cash Flow is not a measure of liquidity under U.S GAAP, and, accordingly should not be considered as an alternative to the Company’s consolidated statements of cash flows and net cash provided by operating activities, net cash used for investing activities and net cash provided by financing activities as indicators of liquidity or cash flow. Free Cash Flow for the three months ended January 1, 2023 and January 2, 2022 is derived from the Company’s consolidated statements of cash flows for the respective twelve month periods to be presented in the Company’s Consolidated Financial Statements in its Form 10-K for the period ended January 1, 2023 and the Company’s consolidated statements of cash flows for the previously reported nine month periods ended October 2, 2022 and October 3, 2021 contained in the Company’s Form 10-Q for the period ended October 2, 2022.}

^{(c) Long-term debt and finance lease liabilities (including current portion and excluding deferred financing costs and original issue discount) at January 1, 2023 included $167,625 of outstanding term B loans and $12,500 of outstanding revolving borrowings under the Company’s senior credit facilities, $300,000 of 5.875% Senior Notes due 2029 and $12,826 of finance lease liabilities. Long-term debt and finance lease liabilities (including current portion and excluding deferred financing costs and original issue discount) at January 2, 2022 included $171,875 of term B loans, $300,000 of 5.875% Senior Notes due 2029 and $6,306 of finance lease liabilities.}

^{(d) Net Debt represents total long-term debt and finance lease liabilities less cash and cash equivalents.}

^{(e) Senior Secured Net Debt represents total net debt less the $300 million of unsecured 5.875% Senior Notes, due 2029.}

^{(f) Total Net Debt Leverage Ratio represents the Company’s Total Net Debt Leverage Ratio as calculated in accordance with its senior credit facility for each period presented.}

^{(g) Senior Secured Net Debt Leverage Ratio represents the Company’s Net Debt Leverage Ratio as calculated in accordance with its senior credit facility for each period presented.}

February 28, 2023 7:03 am

Nexstar Media Group Reports Record Fourth Quarter Net Revenue of $1.49 Billion and Fiscal Year 2022 Net Revenue of $5.21 Billion

Nexstar Media Group Reports Record Fourth Quarter Net Revenue of $1.49 Billion and Fiscal Year 2022 Net Revenue of $5.21 Billion

Q4 Consolidated Net Revenue Drives Operating Income of $294.0 Million, Net Income of $178.1 Million, Consolidated Adjusted EBITDA of $598.2 Million and Attributable Free Cash Flow of $422.1 Million

Excluding The CW Network, LLC Q4 Adjusted EBITDA of $661.8 Million and Free Cash Flow of $458.1 Million

All-Time High Quarterly and Full Year Return of Capital to Shareholders of $293.3 Million and $1.02 Billion, Respectively

Issues Average Annual Attributable Free Cash Flow Guidance for the 2023/2024 Cycle of $1.25 Billion

IRVING, Texas–(BUSINESS WIRE)–
Nexstar Media Group, Inc. (NASDAQ: NXST) (“Nexstar” or “the Company”) today reported financial results for the fourth quarter ended December 31, 2022 as summarized below:

Summary 2022 Fourth Quarter and Full Year Highlights

NEXSTAR – CONSOLIDATED⁽¹⁾

Three Months Ended December 31,

Years Ended December 31,

($ in millions)

2022

2021

Change

2022

2021

Change

Core Advertising Revenue

$477.5

$493.7

(3.3

)

$1,718.3

$1,761.7

(2.5

)

Political Advertising Revenue

265.9

18.9

+1,306.9

505.6

45.2

+1,018.6

Total Television Advertising Revenue

$743.4

$512.6

+45.0

$2,223.9

$1,806.9

+23.1

Distribution Revenue

615.6

615.9

–

2,571.3

2,472.9

+4.0

Digital Revenue

112.0

101.7

+10.1

364.6

322.6

+13.0

Other Revenue

15.7

15.6

+0.6

51.2

46.0

+11.3

Net Revenue

$1,486.7

$1,245.8

+19.3

$5,211.0

$4,648.4

+12.1

Income from Operations

$294.0

$324.7

(9.5

)

$1,312.1

$1,175.4

+11.6

Net Income

$178.1

$262.2

(32.1

)

$943.5

$830.4

+13.6

Adjusted EBITDA⁽²⁾

$598.2

$499.3

+19.8

$2,222.8

$1,904.6

+16.7

Adjusted EBITDA Margin⁽³⁾

40.2

40.1

42.7

41.0

Attributable Free Cash Flow⁽²⁾

$422.1

$330.2

+27.8

$1,501.8

$1,251.2

+20.0

NEXSTAR – EXCLUDING THE CW NETWORK, LLC (“Nexstar, Ex-The CW”)⁽¹⁾

Net Revenue

$1,424.5

$1,245.8

+14.3

$5,148.8

$4,648.4

+10.8

Adjusted EBITDA⁽²⁾

$661.8

$499.3

+32.5

$2,286.4

$1,904.6

+20.0

Adjusted EBITDA Margin⁽³⁾

46.5

40.1

44.4

41.0

Free Cash Flow⁽²⁾

$458.1

$330.2

+38.7

$1,537.8

$1,251.2

+22.9

_____________________

(1)		On September 30, 2022, Nexstar completed its acquisition of a 75% ownership interest in The CW Network, LLC (“The CW”). Nexstar – Consolidated refers to all of the Company’s operations while Nexstar, Ex-The CW refers to the Consolidated results without The CW operations (and eliminations). Management believes this presentation to be useful to investors as an indicator of our assets’ operating performance as we are undertaking initiatives to improve the profitability of The CW. See the “Definitions and Disclosures Regarding Non-GAAP Financial Information” section of this press release for more information.
(2)		Definitions and disclosures regarding non-GAAP financial information including reconciliations are included at the end of the press release. Beginning in the fourth quarter of 2022, Nexstar defined Adjusted EBITDA and Free Cash Flow as metrics excluding transaction and one-time expenses. As such, Adjusted EBITDA Before Transaction and Other One-Time Expenses and Free Cash Flow Before Transaction and Other One-Time Expenses descriptions are no longer presented.
(3)		Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net revenue.

CEO Comment

Perry Sook, Nexstar’s Chairman and Chief Executive Officer, commented, “2022 was a monumental year for Nexstar as we generated $5.2 billion of revenue as well as record levels of Adjusted EBITDA and free cash flow. We returned approximately 68% of our 2022 attributable free cash flow, or a record $1.02 billion, to our shareholders in the form of share repurchases and dividends. Our ability to deliver record results and excellent shareholder returns – including being one of the best performing media and entertainment stocks in 2022 — underscores the benefits of our unique scale, the strength of our operating model and our ability to consistently generate substantial free cash flow.

“Our strong financial results are a referendum on the power of the broadcast model and its ability to deliver audiences at scale and strong levels of free cash flow. Our portfolio of local and national media assets provide nationwide reach on par with other broadcast networks and local activation at a greater scale than any other broadcast network owner, creating a differentiated and attractive value proposition for advertisers, brands and content owners in an increasingly fragmented marketplace. We are focused on the continued expansion of our capabilities and leveraging our linear, digital, mobile and streaming assets in new ways to deliver new levels of monetization, growth and shareholder returns.

“Looking ahead, 2023 will benefit from the 2022 renegotiation of our distribution contracts representing more than half of our subscribers, and 2024 will benefit from presidential election year political advertising and additional distribution contract renewals. For the 2023/2024 cycle, we expect to generate pro forma average annual attributable free cash flow of approximately $1.25 billion, inclusive of $90 million of attributable losses and associated tax benefit from The CW. Our strong free cash flow enables us to not only increase the percentage of capital returned to shareholders in the form of dividends but also continue to opportunistically repurchase shares, as well as reduce debt and pursue other strategic opportunities to further enhance shareholder value.”

Fourth Quarter and Full Year 2022 Operational Highlights

Marked new financial milestones, delivering full year revenue in excess of $5.0 billion for the first time, as well as full year adjusted EBITDA and attributable free cash flow in excess of $2.2 billion and $1.5 billion, respectively.
Delivered all-time high quarterly and full year return of capital to shareholders of $293.3 million and $1.02 billion, respectively.
Generated record non-presidential year political advertising revenue of $505.6 million, just $2.0 million shy of 2020 presidential election year levels.
Successfully renewed distribution agreements with over half of our subscriber base on terms favorable to the Company, enabling Nexstar to deliver continued annual distribution revenue growth.
Extended our network affiliation agreements with ABC.
Closed our previously announced acquisition of a 75% ownership interest in The CW Network (for no consideration) and immediately began implementing our operating plan, including appointing key personnel, reducing overhead costs and adding new programming.
Appointed experienced sales and advertising executive Michael Strober to the newly created position of Executive Vice President and Chief Revenue Officer, responsible for leading the execution of a new advertising sales and go-to-market strategy for the Company to accelerate the monetization of Nexstar’s platform with a focus on the national advertising opportunity which is double the size of the local advertising market that Nexstar has historically predominantly served.
Expanded programming, added key journalists and editorial content at NewsNation, America’s fastest growing cable news network and the only cable news network to see double digit growth in total viewers in 2022.
Launched The Hill TV FAST channel, building upon The Hill’s success as an essential, agenda-setting read for lawmakers, policymakers and influential digital consumers from Capitol Hill to Main Street, as well as CTV/OTT apps for NewsNation available on a variety of platforms.
Led the industry in deployment of ATSC 3.0, or NEXTGEN TV, in markets reaching approximately 35% of U.S. TV households.
Completed the $3.05 billion refinancing of the Company’s senior secured term loans and revolving credit facilities reducing annual cash interest expense by approximately $10.0 million while extending maturities.
Eliminated the Company’s Class B and Class C Common Stock classes, facilitating Nexstar’s addition to the S&P 400 Index.
Announced that the Board of Directors voted to recommend that shareholders approve an amendment to Nexstar’s corporate charter to declassify the Board of Directors, at the Company’s 2023 Annual Meeting of Shareholders.

Fourth Quarter 2022 Financial Highlights

Record fourth quarter net revenue of $1.49 billion increased 19.3% from the prior year quarter.
- Revenue growth was driven by strong political advertising revenue and the impact of the acquisition of The CW, partially offset by a decline in core television advertising due primarily to softness in the national advertising market. Excluding The CW, fourth quarter net revenue increased 14.3% from the prior year quarter.
- 50% of Nexstar’s fourth quarter net revenue was generated by distribution, digital and other revenue sources.
Fourth quarter core television advertising revenue of $477.5 million decreased 3.3% year-over-year, reflecting a softer national advertising market and political inventory displacement.
- Offsetting the rate of core television advertising revenue decline was the inclusion of The CW and a more stable local advertising market, aided by new local television advertising incentive program revenue of $37 million which was flat to prior year’s results reflecting strong political ad spending.
Fourth quarter political advertising revenue of $265.9 million increased 1,306.9% year-over-year.
- The increase reflects strong mid-term election spending, led by spending in Nevada, California, Illinois, Ohio and Pennsylvania, among others.
Fourth quarter distribution revenue of approximately $616 million was flat versus prior year.
- Fourth quarter distribution revenue was impacted by MVPD subscriber attrition and negotiations with MVPDs in connection with new distribution agreements which resulted in the temporary removal of Nexstar and partner stations from certain MVPDs in the quarter as well as a dispute settlement.
- Offsetting these impacts were increases in distribution revenue from the inclusion of affiliation fees related to The CW as well as growth in virtual MVPD revenue, MVPD rate resets and contractual annual rate escalators.
Record fourth quarter digital revenue increased 10.1% year-over-year to approximately $112 million.
- Revenue growth was driven by contributions from The CW and year-over-year increases in Nexstar’s local digital advertising revenue and agency services business, partially offset by weakness in national advertising and ecommerce.
On a consolidated basis, fourth quarter adjusted EBITDA increased 19.8% to $598.2 million, representing a 40.2% margin, and fourth quarter attributable free cash flow increased 27.8% to $422.1 million.
- Growth in Adjusted EBITDA was primarily attributable to increased revenue net of related variable expenses and continued operational focus on controlling fixed expense growth, partially offset by our attributable interest in the losses associated with The CW.
Excluding The CW, fourth quarter adjusted EBITDA increased 32.5% to $661.8 million, representing a 46.5% margin, and fourth quarter free cash flow increased 38.7% to $458.1 million, amounting to 69.2% of Adjusted EBITDA.
In the fourth quarter of 2022, the Company used cash flow from operations to:
- Return $293.3 million to shareholders through the repurchase of 1,485,631 shares of Nexstar’s common stock at an average price of approximately $174.60 per share for a total cost of $259.4 million, and quarterly cash dividend payments of $33.9 million, and
- Reduce debt by approximately $231.7 million.
The Company closed on the sale of its remaining Chicago real estate for net proceeds of approximately $156 million.

Full Year 2022 Financial Highlights

Record full year net revenue of $5.21 billion increased 12.1% over the prior year.
- Top-line growth was driven primarily by year-over-year increases in political advertising, the inclusion of The CW and The Hill, which was acquired in the third quarter of 2021.
- Excluding The CW, full year net revenue increased 10.8% over the prior year.
Full year core television advertising revenue of $1.72 billion decreased 2.5% versus the prior year, reflecting a softer national advertising market, the benefit of the Olympics in 2021, and political inventory displacement, partially offset by the inclusion of The CW.
Record full year distribution revenue of $2.6 billion increased 4% over the prior year.
- The increase reflects the renewal of distribution agreements in 2021 on improved terms and annual rate escalators, the inclusion of affiliation fees associated with The CW as well as growth in virtual MVPD revenue offset by the fourth quarter impacts related to certain distribution negotiations and traditional MVPD subscriber attrition.
Record full year digital revenue of $364.6 million increased 13% over the prior year.
- Revenue growth was driven by year-over-year increases in Nexstar’s core digital advertising revenue and agency services business, combined with contributions from The Hill and The CW, partially offset by weakness in national advertising and ecommerce.
On a consolidated basis, record full year adjusted EBITDA increased 16.7% to $2.22 billion, representing a 42.7% margin, and record full year attributable free cash flow increased 20.0% to $1.50 billion.
Excluding The CW, record full year adjusted EBITDA increased 20.0% to $2.29 billion, representing a 44.4% margin, and record full year free cash flow increased 22.9% to $1.54 billion, representing 67.3% of Adjusted EBITDA.
For the full year, Nexstar used cash from operations to:
- Return $1.02 billion to shareholders, representing a 56.2% increase over 2021 full year levels, through the repurchase of $880.7 million of Nexstar’s common stock and cash dividends of $142.2 million, and
- Reduce debt by $477.6 million.
As of December 31, 2022, Nexstar had 36.8 million shares of common stock outstanding and approximately $1.26 billion available under its share repurchase authorization.

Debt and Leverage Review

The consolidated debt of Nexstar and Mission Broadcasting, Inc., an independently owned variable interest entity, at December 31, 2022 was $6.95 billion, including senior secured debt of $4.24 billion.
The Company calculates its leverage ratios in accordance with the terms of its credit agreements which ratios only include Nexstar, excluding The CW Network’s operations.
- The Company’s first lien net leverage ratio at December 31, 2022 was 1.77x compared to a covenant of 4.25x.
- The Company’s total net leverage ratio at December 31, 2022 was 2.93x.

The table below summarizes the Company’s debt obligations (net of financing costs, discounts and/or premiums).

($ in millions)	December 31, 2022	December 31, 2021
Revolving Credit Facilities	$61.5	$61.5
First Lien Term Loans	4,179.1	4,571.5
5.625% Senior Unsecured Notes due 2027	1,718.0	1,790.2
4.75% Senior Unsecured Notes due 2028	992.9	991.9
Total Outstanding Debt	$6,951.5	$7,415.1

Unrestricted Cash	$204.1	$190.9

Fourth Quarter Conference Call

Nexstar will host a conference call at 10:00 a.m. ET today. Senior management will discuss the financial results and host a question-and-answer session. The dial in number for the audio conference call is +1 877-407-9208 or +1 201-493-6784, conference ID 13735877 (domestic and international callers). Participants can also listen to a live webcast of the call through the “Events and Presentations” section under “Investor Relations” on Nexstar’s website at nexstar.tv. A webcast replay will be available for 90 days following the live event at nexstar.tv.

Definitions and Disclosures Regarding non-GAAP Financial Information

Nexstar Media Inc., a wholly-owned subsidiary of the Company, acquired a 75% ownership interest in The CW on September 30, 2022 and designated The CW as an “Unrestricted Subsidiary” as permitted under the terms of its debt agreements. The financial results for The CW are included in the financial presentation herein from that date forward. The financial results of The CW, the Company’s only Unrestricted Subsidiary, and associated eliminations are excluded from the calculation of the Company’s leverage ratio for purposes of compliance with its financial covenant.

Beginning in the fourth quarter of 2022, Nexstar defined Adjusted EBITDA and Free Cash Flow as metrics excluding transaction and one-time expenses. As such, Adjusted EBITDA Before Transaction and Other One-Time Expenses and Free Cash Flow Before Transaction and Other One-Time Expenses descriptions are no longer presented.

Adjusted EBITDA is calculated as net income, plus interest expense (net), loss on extinguishment of debt, income tax expense (benefit), depreciation and amortization expense (excluding amortization of broadcast rights for The CW), (gain) loss on asset disposal, transaction and other one-time expenses, impairment charges, (income) loss from equity method investments, distributions from equity method investments and other expense (income), minus reimbursement from the FCC related to station repack and broadcast rights payments (excluding broadcast rights payments for The CW). We consider Adjusted EBITDA to be an indicator of our assets’ operating performance and a measure of our ability to service debt. It is also used by management to identify the cash available for strategic acquisitions and investments, maintain capital assets and fund ongoing operations and working capital needs. We also believe that Adjusted EBITDA is useful to investors and lenders as a measure of valuation and ability to service debt.

Adjusted EBITDA for Nexstar – Excluding The CW Network, LLC is calculated as Consolidated Adjusted EBITDA, less the Adjusted EBITDA of The CW and Eliminations.

Free cash flow is calculated as net income, plus interest expense (net), loss on extinguishment of debt, income tax expense (benefit), depreciation and amortization expense (excluding amortization of broadcast rights for The CW), (gain) loss on asset disposal, stock-based compensation expense, transaction and other one-time expenses, impairment charges, (income) loss from equity method investments, distributions from equity method investments and other expense (income), minus payments for broadcast rights (excluding broadcast rights payments for The CW), cash interest expense, capital expenditures, proceeds from disposals of property and equipment, and operating cash income tax payments. We consider Free Cash Flow to be an indicator of our assets’ operating performance. In addition, this measure is useful to investors because it is frequently used by industry analysts, investors and lenders as a measure of valuation for broadcast companies, although their definitions of Free Cash Flow may differ from our definition.

Attributable Free Cash Flow is calculated as Consolidated Free Cash Flow, less free cash flow of The CW attributable to its noncontrolling interests.

Free Cash Flow for Nexstar – Excluding The CW Network, LLC is calculated as Consolidated Free Cash Flow, less the free cash flow of The CW and Eliminations.

For a reconciliation of these non-GAAP financial measurements to the GAAP financial results cited in this news announcement, please see the supplemental tables at the end of this release.

With respect to our forward-looking guidance, no reconciliation between a non-GAAP measure to the closest corresponding GAAP measure is included in this release because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. We believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. In particular, a reconciliation of forward-looking Free Cash Flow to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures. For example, the definition of Free Cash Flow excludes stock-based compensation expenses specific to equity compensation awards that are directly impacted by unpredictable fluctuations in our stock price. In addition, the definition of Free Cash Flow excludes the impact of non-recurring or unusual items such as impairment charges, transaction-related costs and gains or losses on sales of assets which are unpredictable. We expect the variability of these items to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

About Nexstar Media Group, Inc.

Nexstar Media Group, Inc. (NASDAQ: NXST) is a leading diversified media company that produces and distributes engaging local and national news, sports and entertainment content across television, streaming and digital platforms, including nearly 300,000 hours of original video content each year. Nexstar owns America’s largest local broadcasting group comprised of top network affiliates, with 200 owned or partner stations in 116 U.S. markets reaching 212 million people. Nexstar’s national television properties include The CW, America’s fifth major broadcast network, NewsNation, America’s fastest-growing national news and entertainment cable network reaching 70 million television homes, popular entertainment multicast networks Antenna TV and Rewind TV, and a 31.3% ownership stake in TV Food Network. The Company’s portfolio of digital assets, including The Hill and BestReviews, are collectively a Top 10 U.S. digital news and information property. In addition to delivering exceptional content and service to our communities, Nexstar provides premium multiplatform and video-on-demand advertising opportunities at scale for businesses and brands seeking to leverage the strong consumer engagement of our compelling content offering. For more information, please visit nexstar.tv.

Forward-Looking Statements

This communication includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements include information preceded by, followed by, or that includes the words “guidance,” “believes,” “expects,” “anticipates,” “could,” or similar expressions. For these statements, Nexstar claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this communication, concerning, among other things, future financial performance, including changes in net revenue, cash flow and operating expenses, involve risks and uncertainties, and are subject to change based on various important factors, including the impact of changes in national and regional economies, the ability to service and refinance our outstanding debt, successful integration of business acquisitions (including achievement of synergies and cost reductions), pricing fluctuations in local and national advertising, future regulatory actions and conditions in the television stations’ operating areas, competition from others in the broadcast television markets, volatility in programming costs, the effects of governmental regulation of broadcasting, industry consolidation, technological developments and major world news events. Nexstar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this communication might not occur. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details on factors that could affect these expectations, please see Nexstar’s other filings with the Securities and Exchange Commission.

Nexstar Media Group, Inc. Consolidated Statements of Operations and Comprehensive Income (in millions, except for share and per share amounts, unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2022			2021			2022			2021
Net revenue	$	1,486.7		$	1,245.8		$	5,211.0		$	4,648.4

Operating expenses (income):
Direct operating expenses		502.1			470.6			2,004.8			1,862.4
Selling, general and administrative expenses, excluding corporate		277.5			236.5			903.5			848.4
Corporate expenses		49.2			43.6			198.4			175.8
Depreciation and amortization expense		231.0			152.3			662.1			588.6
Goodwill and other long-lived asset impairments		132.9			23.0			132.9			23.0
Reimbursement from the FCC related to station repack		–			(1.8	)		(2.8	)		(19.7	)
Other		–			(3.1	)		–			(5.5	)
Total operating expenses		1,192.7			921.1			3,898.9			3,473.0
Income from operations		294.0			324.7			1,312.1			1,175.4
Gain on bargain purchase		1.5			–			55.6			–
Income from equity method investments, net		43.2			46.9			153.4			124.6
Interest expense, net		(103.4	)		(70.2	)		(336.6	)		(282.7	)
Pension and other postretirement plans credit, net		10.4			28.0			43.1			80.9
Other expenses, net		–			(0.6	)		(10.5	)		(4.9	)
Income before income taxes		245.7			328.8			1,217.1			1,093.3
Income tax expense		(67.6	)		(66.6	)		(273.6	)		(262.9	)
Net income		178.1			262.2			943.5			830.4
Net loss attributable to noncontrolling interests		25.2			1.7			27.6			4.1
Net income attributable to Nexstar Media Group, Inc.	$	203.3		$	263.9		$	971.1		$	834.5

Net income per common share attributable to Nexstar Media Group, Inc.:
Basic	$	5.42		$	6.44		$	24.68		$	19.81
Diluted	$	5.30		$	6.19		$	24.16		$	18.98

Weighted average number of common shares outstanding:
Basic (in thousands)		37,523			40,987			39,349			42,133
Diluted (in thousands)		38,320			42,676			40,187			43,982

Net income	$	178.1		$	262.2		$	943.5		$	830.4
Other comprehensive income (loss):
Change in unrecognized amounts included in pension and other postretirement benefit obligations, net of tax benefit (expense) of $39.3 in 2022 and ($36.7) in 2021		(114.4	)		107.1			(114.4	)		107.1
Total comprehensive income		63.7			369.3			829.1			937.5
Total comprehensive loss attributable to noncontrolling interests		25.2			1.7			27.6			4.1
Total comprehensive income attributable to Nexstar Media Group, Inc.	$	88.9		$	371.0		$	856.7		$	941.6

Nexstar Media Group, Inc. Reconciliation of Adjusted EBITDA (Non-GAAP Measure) ($ in millions, unaudited)

	Three Months Ended December 31, 2022												Three Months Ended December 31, 2021
Adjusted EBITDA:	Nexstar, Ex- The CW			The CW			Eliminations and Other			Consolidated			Nexstar, Ex- The CW			The CW		Eliminations and Other		Consolidated
Net income (loss)	$	272.4		$	(94.3	)	$	–		$	178.1		$	262.2		$	–	$	–	$	262.2

Add (Less):
Interest expense (income), net		103.9			(0.5	)		–			103.4			70.2			–		–		70.2
Income tax expense		67.6			–			–			67.6			66.6			–		–		66.6
Depreciation and amortization expense⁽¹⁾		139.7			1.5			–			141.2			152.3			–		–		152.3
Stock-based compensation expense		18.2			–			–			18.2			12.4			–		–		12.4
Loss on asset disposal and operating lease terminations, net		3.4			–			–			3.4			2.7			–		–		2.7
Transaction and other one-time expenses		0.4			29.7			–			30.1			3.2			–		–		3.2
Goodwill and other long-lived asset impairments		132.9			–			–			132.9			23.0			–		–		23.0
Income from equity method investments, net		(43.2	)		–			–			(43.2	)		(46.9	)		–		–		(46.9	)
Distributions from equity method investments		14.8			–			–			14.8			17.1			–		–		17.1
Pension and other postretirement plans credit, net		(10.4	)		–			–			(10.4	)		(28.0	)		–		–		(28.0	)
Other non-cash operating (income) expense		0.1			–			–			0.1			(3.0	)		–		–		(3.0	)
Other non-operating expenses, net		–			–			–			–			0.6			–		–		0.6
Gain on bargain purchase		(1.5	)		–			–			(1.5	)		–			–		–		–
Reimbursement from the FCC related to station repack		–			–			–			–			(1.8	)		–		–		(1.8	)
Payments for broadcast rights⁽¹⁾		(28.7	)		–			–			(28.7	)		(34.4	)		–		–		(34.4	)
Adjusted EBITDA before transaction, one-time and other non-cash items		669.6			(63.6	)		–			606.0			496.2			–		–		496.2
Margin %		47.0	%		(95.8	%)		–			40.8	%		39.8	%		–		–		39.8	%

Less: Transaction and other one-time expenses		(0.4	)		(29.7	)		–			(30.1	)		(3.2	)		–		–		(3.2	)
Adjusted EBITDA before non-cash and other items		669.2			(93.3	)		–			575.9			493.0			–		–		493.0
Margin %		47.0	%		(140.5	%)		–			38.7	%		39.6	%		–		–		39.6	%

Add (Less):
Stock-based compensation expense		(18.2	)		–			–			(18.2	)		(12.4	)		–		–		(12.4	)
Pension and other postretirement plans credit, net⁽²⁾		10.4			–			–			10.4			15.5			–		–		15.5
Transaction and other one-time expenses		0.4			29.7			–			30.1			3.2			–		–		3.2
Adjusted EBITDA	$	661.8		$	(63.6	)	$	–		$	598.2		$	499.3		$	–	$	–	$	499.3
Margin %		46.5	%		(95.8	%)		–			40.2	%		40.1	%		–		–		40.1	%

Net revenue	$	1,424.5		$	66.4		$	(4.2	)	$	1,486.7		$	1,245.8		$	–	$	–	$	1,245.8

	Year Ended December 31, 2022												Year Ended December 31, 2021
Adjusted EBITDA:	Nexstar, Ex- The CW			The CW			Eliminations and Other			Consolidated			Nexstar, Ex- The CW			The CW		Eliminations and Other		Consolidated
Net income (loss)	$	1,037.8		$	(94.3	)	$	–		$	943.5		$	830.4		$	–	$	–	$	830.4

Add (Less):
Interest expense (income), net		337.1			(0.5	)		–			336.6			282.7			–		–		282.7
Income tax expense		273.6			–			–			273.6			262.9			–		–		262.9
Depreciation and amortization expense⁽¹⁾		570.8			1.5			–			572.3			588.6			–		–		588.6
Stock-based compensation expense		61.6			–			–			61.6			46.7			–		–		46.7
Loss (gain) on asset disposal and operating lease terminations, net		3.9			–			–			3.9			(6.2	)		–		–		(6.2	)
Transaction and other one-time expenses		7.2			29.7			–			36.9			7.9			–		–		7.9
Goodwill and other long-lived asset impairments		132.9			–			–			132.9			23.0			–		–		23.0
Income from equity method investments, net		(153.4	)		–			–			(153.4	)		(124.6	)		–		–		(124.6	)
Distributions from equity method investments		249.6			–			–			249.6			239.5			–		–		239.5
Pension and other postretirement plans credit, net		(43.1	)		–			–			(43.1	)		(80.9	)		–		–		(80.9	)
Other non-cash operating (income) expense		0.6			–			–			0.6			(4.9	)		–		–		(4.9	)
Other non-operating expenses, net		10.5			–			–			10.5			4.9			–		–		4.9
Gain on bargain purchase		(55.6	)		–			–			(55.6	)		–			–		–		–
Reimbursement from the FCC related to station repack		(2.8	)		–			–			(2.8	)		(19.7	)		–		–		(19.7	)
Payments for broadcast rights⁽¹⁾		(125.8	)		–			–			(125.8	)		(167.4	)		–		–		(167.4	)
Adjusted EBITDA before transaction, one-time and other non-cash items		2,304.9			(63.6	)		–			2,241.3			1,882.9			–		–		1,882.9
Margin %		44.8	%		(95.8	%)		–			43.0	%		40.5	%		–		–		40.5	%

Less: Transaction and other one-time expenses		(7.2	)		(29.7	)		–			(36.9	)		(7.9	)		–		–		(7.9	)
Adjusted EBITDA before non-cash and other items		2,297.7			(93.3	)		–			2,204.4			1,875.0			–		–		1,875.0
Margin %		44.6	%		(140.5	%)		–			42.3	%		40.3	%		–		–		40.3	%

Add (Less):
Stock-based compensation expense		(61.6	)		–			–			(61.6	)		(46.7	)		–		–		(46.7	)
Pension and other postretirement plans credit, net⁽²⁾		43.1			–			–			43.1			68.4			–		–		68.4
Transaction and other one-time expenses		7.2			29.7			–			36.9			7.9			–		–		7.9
Adjusted EBITDA	$	2,286.4		$	(63.6	)	$	–		$	2,222.8		$	1,904.6		$	–	$	–	$	1,904.6
Margin %		44.4	%		(95.8	%)		–			42.7	%		41.0	%		–		–		41.0	%

Net revenue	$	5,148.8		$	66.4		$	(4.2	)	$	5,211.0		$	4,648.4		$	–	$	–	$	4,648.4

_____________________

(1)		Only the columns including The CW do not adjust for amortization of broadcast rights (already deducted from Net Income) and payments for broadcast rights (i.e. programming payments). Because The CW licenses original programming, the programming payments precede the airing of the content as the content is being produced. Because these licenses are typically only on a season-by-season basis, The CW does not adjust for these timing differences.
(2)		Excludes $12.5 million settlement gain from the purchase of an annuity contract related to certain participants of a qualified pension plan during Q4 2021.

Nexstar Media Group, Inc. Reconciliation of Free Cash Flow (Non-GAAP Measure) ($ in millions, unaudited)

	Three Months Ended December 31, 2022											Three Months Ended December 31, 2021
Free Cash Flow:	Nexstar, Ex- The CW			The CW			Eliminations and Other		Consolidated			Nexstar, Ex -The CW			The CW		Eliminations and Other		Consolidated
Net income (loss)	$	272.4		$	(94.3	)	$	–	$	178.1		$	262.2		$	–	$	–	$	262.2

Add (Less):
Interest expense (income), net		103.9			(0.5	)		–		103.4			70.2			–		–		70.2
Income tax expense		67.6			–			–		67.6			66.6			–		–		66.6
Depreciation and amortization expense⁽¹⁾		139.7			1.5			–		141.2			152.3			–		–		152.3
Stock-based compensation expense		18.2			–			–		18.2			12.4			–		–		12.4
Loss on asset disposal and operating lease terminations, net		3.4			–			–		3.4			2.7			–		–		2.7
Transaction and other one-time expenses		0.4			29.7			–		30.1			3.2			–		–		3.2
Goodwill and other long-lived asset impairments		132.9			–			–		132.9			23.0			–		–		23.0
Income from equity method investments, net		(43.2	)		–			–		(43.2	)		(46.9	)		–		–		(46.9	)
Distributions from equity method investments		14.8			–			–		14.8			17.1			–		–		17.1
Pension and other postretirement plans credit, net		(10.4	)		–			–		(10.4	)		(28.0	)		–		–		(28.0	)
Other non-cash operating (income) expense		0.1			–			–		0.1			(3.0	)		–		–		(3.0	)
Other non-operating expenses, net		–			–			–		–			0.6			–		–		0.6
Gain on bargain purchase		(1.5	)		–			–		(1.5	)		–			–		–		–
Payments for broadcast rights⁽¹⁾		(28.7	)		–			–		(28.7	)		(34.4	)		–		–		(34.4	)
Cash interest (expense) income, net		(100.9	)		0.5			–		(100.4	)		(66.3	)		–		–		(66.3	)
Capital expenditures, excluding station repack and CVR spectrum		(56.0	)		(1.1	)		–		(57.1	)		(42.5	)		–		–		(42.5	)
Capital expenditures related to station repack		–			–			–		–			(3.1	)		–		–		(3.1	)
Proceeds from disposal of assets⁽²⁾		0.3			–			–		0.3			1.0			–		–		1.0
Operating cash income tax (payments) benefit, net⁽³⁾⁽⁴⁾		(65.3	)		–			12.2		(53.1	)		(72.4	)		–		–		(72.4	)

Free cash flow before transaction, one-time and other non-cash items		447.7			(64.2	)		12.2		395.7			314.7			–		–		314.7

Less: Transaction and other one-time expenses		(0.4	)		(29.7	)		–		(30.1	)		(3.2	)		–		–		(3.2	)

Free cash flow before non-cash and other items		447.3			(93.9	)		12.2		365.6			311.5			–		–		311.5

Add: Pension and other postretirement plans credit, net⁽⁵⁾		10.4			–			–		10.4			15.5			–		–		15.5
Transaction and other one-time expenses		0.4			29.7			–		30.1			3.2			–		–		3.2

Free cash flow	$	458.1		$	(64.2	)	$	12.2	$	406.1		$	330.2		$	–	$	–	$	330.2

Less: Free cash flow attributable to noncontrolling interests		–			(16.0	)		–		(16.0	)		–			–		–		–

Attributable free cash flow⁽⁶⁾	$	458.1		$	(48.2	)	$	12.2	$	422.1		$	330.2		$	–	$	–	$	330.2

	Year Ended December 31, 2022											Year Ended December 31, 2021
Free Cash Flow:	Nexstar, Ex- The CW			The CW			Eliminations and Other		Consolidated			Nexstar, Ex- The CW			The CW		Eliminations and Other		Consolidated
Net income (loss)	$	1,037.8		$	(94.3	)	$	–	$	943.5		$	830.4		$	–	$	–	$	830.4

Add (Less):
Interest expense (income), net		337.1			(0.5	)		–		336.6			282.7			–		–		282.7
Income tax expense		273.6			–			–		273.6			262.9			–		–		262.9
Depreciation and amortization expense⁽¹⁾		570.8			1.5			–		572.3			588.6			–		–		588.6
Stock-based compensation expense		61.6			–			–		61.6			46.7			–		–		46.7
Loss (gain) on asset disposal and operating lease terminations, net		3.9			–			–		3.9			(6.2	)		–		–		(6.2	)
Transaction and other one-time expenses		7.2			29.7			–		36.9			7.9			–		–		7.9
Goodwill and other long-lived asset impairments		132.9			–			–		132.9			23.0			–		–		23.0
Income from equity method investments, net		(153.4	)		–			–		(153.4	)		(124.6	)		–		–		(124.6	)
Distributions from equity method investments		249.6			–			–		249.6			239.5			–		–		239.5
Pension and other postretirement plans credit, net		(43.1	)		–			–		(43.1	)		(80.9	)		–		–		(80.9	)
Other non-cash operating (income) expense		0.6			–			–		0.6			(4.9	)		–		–		(4.9	)
Other non-operating expenses, net		10.5			–			–		10.5			4.9			–		–		4.9
Gain on bargain purchase		(55.6	)		–			–		(55.6	)		–			–		–		–
Payments for broadcast rights⁽¹⁾		(125.8	)		–			–		(125.8	)		(167.4	)		–		–		(167.4	)
Cash interest (expense) income, net		(324.1	)		0.5			–		(323.6	)		(267.7	)		–		–		(267.7	)
Capital expenditures, excluding station repack and CVR spectrum		(154.5	)		(1.1	)		–		(155.6	)		(139.8	)		–		–		(139.8	)
Capital expenditures related to station repack		(0.8	)		–			–		(0.8	)		(10.0	)		–		–		(10.0	)
Proceeds from disposal of assets⁽²⁾		0.5			–			–		0.5			17.6			–		–		17.6
Operating cash income tax (payments) benefit, net⁽³⁾⁽⁴⁾		(334.1	)		–			12.2		(321.9	)		(319.9	)		–		–		(319.9	)

Free cash flow before transaction, one-time and other non-cash items		1,494.7			(64.2	)		12.2		1,442.7			1,182.8			–		–		1,182.8

Less: Transaction and other one-time expenses		(7.2	)		(29.7	)		–		(36.9	)		(7.9	)		–		–		(7.9	)

Free cash flow before non-cash and other items		1,487.5			(93.9	)		12.2		1,405.8			1,174.9			–		–		1,174.9

Add: Pension and other postretirement plans credit, net⁽⁵⁾		43.1			–			–		43.1			68.4			–		–		68.4
Transaction and other one-time expenses		7.2			29.7			–		36.9			7.9			–		–		7.9

Free cash flow	$	1,537.8		$	(64.2	)	$	12.2	$	1,485.8		$	1,251.2		$	–	$	–	$	1,251.2

Less: Free cash flow attributable to noncontrolling interests		–			(16.0	)		–		(16.0	)		–			–		–		–

Attributable free cash flow⁽⁶⁾	$	1,537.8		$	(48.2	)	$	12.2	$	1,501.8		$	1,251.2		$	–	$	–	$	1,251.2

_____________________

(1)		Only the columns including The CW do not adjust for amortization of broadcast rights (already deducted from Net Income) and payments for broadcast rights (i.e. programming payments). Because The CW licenses original programming, the programming payments precede the airing of the content as the content is being produced. Because these licenses are typically only on a season-by-season basis, The CW does not adjust for these timing differences.
(2)		Excludes (i) proceeds from the sale of certain real estate property of $193.5 million during Q4 2022 ($199.5 million in total including $3.0 million deposits received each in 2022 and 2021) and (ii) proceeds from the sale of certain real estate property of $40.4 million during Q2 2022 ($45.3 million in total including deposits received in 2022 of $4.4 million).
(3)		Nexstar, Ex-The CW excludes tax payments related to the sale of certain real estate properties of $4.6 million in Q3 2022 and $43.4 million in Q4 2022.
(4)		The estimated cash income tax benefit from The CW’s operating results was included in the elimination and other and consolidated columns, but were excluded from the Nexstar, Ex-The CW columns.
(5)		Excludes $12.5 million settlement gain from the purchase of an annuity contract related to certain participants of a qualified pension plan during Q4 2021.
(6)		The columns including The CW, reflect the Company’s 75% ownership interest in The CW multiplied by The CW’s pre-tax free cash flow; For Nexstar, Ex-The CW column, reflects 100% of the Company’s free cash flow, as defined.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230228005584/en/

Investor:

Thomas E. Carter

President and Chief Operating Officer

Nexstar Media Group, Inc.

972/373-8800

Lee Ann Gliha

Executive Vice President and Chief Financial Officer

Nexstar Media Group, Inc.

972/373-8800

Joseph Jaffoni or Jennifer Neuman

JCIR

212/835-8500 or [email protected]

Media:

Gary Weitman

EVP and Chief Communications Officer

Nexstar Media Group, Inc.

972/373-8800 or [email protected]

KEYWORDS: United States North America Texas

INDUSTRY KEYWORDS: Other Consumer Technology Entertainment Marketing Advertising Communications Audio/Video General Entertainment TV and Radio Consumer

MEDIA:

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February 28, 2023 7:03 am

Bentley Systems Announces Retirement of Founder Keith Bentley and Promotion of Julien Moutte to Chief Technology Officer

Bentley Systems Announces Retirement of Founder Keith Bentley and Promotion of Julien Moutte to Chief Technology Officer

Former CFO David Hollister Retiring as Chief Investment Officer

EXTON, Pa.–(BUSINESS WIRE)–
Bentley Systems, Incorporated (Nasdaq: BSY) (“Bentley Systems” or the “Company”), the infrastructure engineering software company, today announced forthcoming retirements:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230228005605/en/

Keith Bentley, Founder and Chief Technology Officer, Bentley Systems. David Hollister, Chief Investment Officer, Bentley Systems. Julien Moutte, Vice President of Technology, Bentley Systems. Image courtesy of Bentley Systems.

As of April 2023 founder Keith Bentley will step down as Chief Technology Officer to assume the role of Technology Advisor through his anticipated retirement later in the year, and will continue thereafter his service on Bentley Systems’ Board of Directors. His successor as Chief Technology Officer will be Julien Moutte, currently Vice President of Technology; and

David Hollister, currently Chief Investment Officer, will retire as of March 31, 2023. He was succeeded as Chief Financial Officer by Werner Andre at the beginning of 2022.

CEO Greg Bentley said, “It is practically unique for any mature software company to have had, for its lifetime, a chief inventor who has also been its chief evangelist, both for the work of its engineer users and developers. Bentley Systems was founded in 1984 to commercialize Keith Bentley’s software for infrastructure engineering, and Keith’s contributions to the substance and articulation of our work have never slowed down, culminating in our market-leading iTwin Platform for infrastructure digital twins. Keith has been working closely and continuously with Julien Moutte over the past two years. Together they are committed to assuring that iTwin benefits will extend to every one of our application and cloud services users.”

Soon-to-be CTO Julien Moutte joined Bentley Systems as Vice President of Technology in January 2021 from SAP, where he was head of technology for SAP Marketing Cloud. Julien’s technical expertise ranges from cloud operations and high availability platforms to multimedia and mobile. He is an IT entrepreneur and investor and during the past 15 years has launched more than 10 companies in Europe and the United States. Based in Barcelona, Julien is fluent in Spanish, English, and French, and in 1998 graduated in computer science at Université Claude Bernard in Lyon, France. Julien worked in startup ventures, and at SAP, with Bentley Systems’ Chief Operating Officer Nicholas Cumins, to whom he reports.

Julien Moutte said, “Working with a visionary CTO like Keith Bentley is a rare privilege and a humbling experience, which I have enjoyed greatly for the past two years. Our iTwin Platform is uniquely positioned to help us and our users advance infrastructure for a world in dire need. I’m honored to succeed him, privileged to continue benefiting from his wisdom, and as Bentley Systems’ CTO I look forward to furthering his life’s work.”

David Hollister served as Bentley Systems’ CFO between 2007 and 2022. Greg Bentley said, “David Hollister has zealously and adroitly stewarded our financial, portfolio development, and investment activities, and our IPO in 2020 would not have been possible without his drive and orchestration. I am further grateful to David for having nurtured such a capable CFO successor, Werner Andre, who has performed admirably over the past year. It is difficult to imagine David ever ‘taking it easy,’ but along with all his colleagues and Bentley Systems’ external constituencies, I thank and congratulate him upon his retirement!”

Keith Bentley and David Hollister will participate in Bentley Systems’ quarterly operating results presentation on February 28, 2023. To join the live Zoom video webinar of the event, please register through this direct link. Alternatively, the event can be accessed from the Events & Presentations page on Bentley Systems’ Investor Relations website at https://investors.bentley.com. A replay and transcript will be available after the conclusion of the live event on Bentley Systems’ Investor Relations website.

Image 1

Keith Bentley, Founder and Chief Technology Officer, Bentley Systems. Image courtesy of Bentley Systems.

Image 2

David Hollister, Chief Investment Officer, Bentley Systems. Image courtesy of Bentley Systems.

Image 3

Julien Moutte, Vice President of Technology, Bentley Systems. Image courtesy of Bentley Systems.

About Bentley Systems

Bentley Systems (Nasdaq: BSY) is the infrastructure engineering software company. We provide innovative software to advance the world’s infrastructure – sustaining both the global economy and environment. Our industry-leading software solutions are used by professionals, and organizations of every size, for the design, construction, and operations of roads and bridges, rail and transit, water and wastewater, public works and utilities, buildings and campuses, mining, and industrial facilities. Our offerings, powered by the iTwin Platform for infrastructure digital twins, include MicroStation and Bentley Open applications for modeling and simulation, Seequent’s software for geoprofessionals, and Bentley Infrastructure Cloud encompassing ProjectWise for project delivery, SYNCHRO for construction management, and AssetWise for asset operations. Bentley Systems’ 5,000 colleagues generate annual revenues of more than $1 billion in 194 countries.

www.bentley.com

© 2023 Bentley Systems, Incorporated. Bentley, the Bentley logo, AssetWise, Bentley Infrastructure Cloud, iTwin, MicroStation, ProjectWise, Seequent, and SYNCHRO are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. All other brands and product names are trademarks of their respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230228005605/en/

BSY Investor:

Eric Boyer

Investor Relations Officer

[email protected]

KEYWORDS: United States North America Pennsylvania

INDUSTRY KEYWORDS: Software Architecture Networks Internet Electronic Design Automation Data Management Technology Construction & Property Engineering Urban Planning Audio/Video Building Systems Manufacturing

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February 28, 2023 7:03 am

San Diego International Airport Expands Deployment of Identiv’s Comprehensive Velocity Ecosystem to Strengthen Access Control

San Diego International Airport Expands Deployment of Identiv’s Comprehensive Velocity Ecosystem to Strengthen Access Control

Hirsch Velocity access control and Velocity Vision VMS protects travelers by effectively securing the entire airport and new Terminal 9

FREMONT, Calif.–(BUSINESS WIRE)–Identiv, Inc. (NASDAQ: INVE), a global digital security and identification leader in the Internet of Things (IoT), today announced that San Diego International Airport (SAN) has deployed Identiv’s comprehensive, end-to-end access control ecosystem, including Hirsch Velocity Software and its Velocity Vision video management system (VMS) under a single graphical user interface (GUI).

Identiv’s Hirsch Velocity Software and Velocity Vision VMS are integrated as a sub-segment within SAN’s access control and surveillance infrastructure. The unified solution provides total situational awareness on a single pane of glass using real-time intelligence in an open platform. SAN has utilized Identiv’s Hirsch physical access control system (PACS) for more than a decade and deployed Velocity Vision in its first release in 2021.

“This deployment is a significant step towards a more comprehensive and efficient security solution across San Diego International Airport,” said Mike Taylor, Vice President of Global Sales, Identiv. “Velocity Vision has the ability to leverage existing systems, especially with credentialing and vetting, offering a full end-to-end solution that meets all their current and future needs.”

Velocity Vision integrates seamlessly with over 10,000 camera models at an API level and 20,000 when leveraging the ONVIF standard, making it a truly open-platform solution that works with any manufacturer or camera model. A local Identiv Value Added Reseller will install the VMS, enabling SAN to have real-time situational awareness that reduces the learning curve for new equipment operators and provides the information needed to resolve security events in a single visual presentation.

Arick Conley, Senior Systems Support Analyst, Aviation Security and Public Safety at San Diego International Airport, revealed: “We were looking for a complete solution that didn’t require the addition of a third-party application on top of the ACS and VMS environments. The integration of Velocity and the VMS components provided in Velocity Vision will allow us to accomplish this, increasing the effectiveness of our security operations.”

Identiv’s physical access control and video intelligence solutions provide the highest level of security at the lowest overall cost. Robust, feature-rich systems, hardware, and software deliver frictionless access to be managed from anywhere.

For more information on Identiv’s complete end-to-end portfolio, call +1 888.809.8880, contact [email protected], or book a demo today at go.identiv.com/vvsim.

About Identiv

Identiv, Inc. is a global leader in digitally securing the physical world. Identiv’s platform encompasses RFID and NFC, cybersecurity, and the full spectrum of physical access, video, and audio security. Identiv is a publicly traded company, and its common stock is listed on the NASDAQ Stock Market LLC in the U.S. under the symbol “INVE.” For more information, visit identiv.com.

About San Diego International Airport (SAN)

Owned and operated by San Diego County Regional Airport Authority (Airport Authority), San Diego International Airport (SAN) is one of the busiest single-runway commercial service airports in the world and the third-busiest airport in California. SAN contributes nearly $12 billion in economic activity for the region by connecting the world to San Diego and San Diego to the world. In November 2021, the Airport Authority began construction on the New T1 which includes the replacement of the current Terminal 1, improvements to the airfield, improved transportation connectivity to the airport, and a new administration building. The New T1 program’s total project budget is $3.4 billion and is estimated to create between 15,000 to 20,000 construction-related jobs. For more information about the New T1 please visit newt1.com. For more information about SAN please visit san.org.

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KEYWORDS: California United States North America

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February 28, 2023 7:02 am

U.S. Food and Drug Administration Accepts Bristol Myers Squibb’s Supplemental Biologics License Application and European Medicines Agency Validates Application for Opdivo (nivolumab) ….

U.S. Food and Drug Administration Accepts Bristol Myers Squibb’s Supplemental Biologics License Application and European Medicines Agency Validates Application for Opdivo (nivolumab) ….

The applications are based on results from the Phase 3 CheckMate -76K trial, in whichOpdivo demonstrated a statistically significant and clinically meaningful benefit in recurrence-free survival

The U.S. Food and Drug Administration has assigned a target action date of October 13, 2023

PRINCETON, N.J.–(BUSINESS WIRE)–

U.S. Food and Drug Administration Accepts Bristol Myers Squibb’s Supplemental Biologics License Application and European Medicines Agency Validates Application for Opdivo (nivolumab) as an Adjuvant Treatment for Patients with Completely Resected Stage IIB or IIC Melanoma

Bristol Myers Squibb (NYSE: BMY) today announced that the U.S. Food and Drug Administration (FDA) has accepted the supplemental Biologics License Application (sBLA) and the European Medicines Agency (EMA) has validated the Type II Variation Marketing Authorization Application (MAA) for Opdivo® (nivolumab) as monotherapy in the adjuvant setting for the treatment of patients with completely resected stage IIB or IIC melanoma. In the U.S., the FDA has assigned a Prescription Drug User Fee Act (PDUFA) date of October 13, 2023. In Europe, the EMA’s validation of the application confirms the submission is complete and begins the start of the EMA’s centralized review process.

“Melanoma can be a devastating diagnosis, and patients with stage IIB or IIC melanoma tend to be at high risk of disease recurrence. Approximately one third of stage IIB and half of stage IIC patients experience recurrence within five years after surgery,” said Gina Fusaro, PhD, vice president, development program lead, Bristol Myers Squibb. “The data from the CheckMate -76K trial demonstrate the benefit that Opdivo can have for patients with this earlier stage of cancer. We look forward to working with the U.S. Food and Drug Administration and the European Medicines Agency to potentially offer a treatment option to patients with stage IIB or IIC melanoma that could help prevent recurrence.”

The submissions were based on safety and efficacy results from the pivotal Phase 3 CheckMate -76K trial, in which Opdivo demonstrated a statistically significant and clinically meaningful benefit in recurrence-free survival (RFS) versus placebo in patients with completely resected stage IIB or IIC melanoma. The safety profile of Opdivo was consistent with previously reported studies.

Results from CheckMate -76K were presented as late-breaking data during a plenary session at the Society for Melanoma Research (SMR) Annual Meeting in October 2022.

CheckMate -76K is part of BMS’ development program studying Opdivo and Opdivo-based combinations in earlier stages of cancer (adjuvant, neoadjuvant, and peri-operative), which currently spans seven tumor types. To date, Opdivo-based therapies have shown improved efficacy in the neoadjuvant or adjuvant treatment of four tumor types: non-small cell lung cancer (NSCLC), bladder cancer, esophageal/gastroesophageal junction cancer, and melanoma.

Bristol Myers Squibb thanks the patients and investigators involved in the CheckMate -76K trial.

About CheckMate -76K

CheckMate -76K is a randomized Phase 3, double-blind study evaluating adjuvant Opdivo (nivolumab) 480 mg Q4W for up to 12 months versus placebo in patients with completely resected stage IIB/C melanoma.

The primary endpoint of the trial is recurrence-free survival (RFS). Secondary endpoints of the trial include overall survival (OS), distant metastases-free survival (DMFS), progression-free survival on next-line therapy (PFS2), and safety endpoints.

About Melanoma

Melanoma is a form of skin cancer characterized by the uncontrolled growth of pigment-producing cells (melanocytes) located in the skin. Metastatic melanoma is the deadliest form of the disease and occurs when cancer spreads beyond the surface of the skin to other organs. In the United States, approximately 97,610 new diagnoses of melanoma and about 7,990 related deaths are estimated for 2023. Globally, the World Health Organization estimates that by 2035, melanoma incidence will reach 424,102, with 94,308 related deaths. Melanomas can be mostly treatable when caught in very early stages; however, survival rates can decrease as the disease progresses.

Bristol Myers Squibb: Creating a Better Future for People with Cancer

Bristol Myers Squibb is inspired by a single vision — transforming patients’ lives through science. The goal of the company’s cancer research is to deliver medicines that offer each patient a better, healthier life and to make cure a possibility. Building on a legacy across a broad range of cancers that have changed survival expectations for many, Bristol Myers Squibb researchers are exploring new frontiers in personalized medicine, and through innovative digital platforms, are turning data into insights that sharpen their focus. Deep scientific expertise, cutting-edge capabilities and discovery platforms enable the company to look at cancer from every angle. Cancer can have a relentless grasp on many parts of a patient’s life, and Bristol Myers Squibb is committed to taking actions to address all aspects of care, from diagnosis to survivorship. Because as a leader in cancer care, Bristol Myers Squibb is working to empower all people with cancer to have a better future.

About Opdivo

Opdivo is a programmed death-1 (PD-1) immune checkpoint inhibitor that is designed to uniquely harness the body’s own immune system to help restore anti-tumor immune response. By harnessing the body’s own immune system to fight cancer, Opdivo has become an important treatment option across multiple cancers.

Opdivo’s leading global development program is based on Bristol Myers Squibb’s scientific expertise in the field of Immuno-Oncology and includes a broad range of clinical trials across all phases, including Phase 3, in a variety of tumor types. To date, the Opdivo clinical development program has treated more than 35,000 patients. The Opdivo trials have contributed to gaining a deeper understanding of the potential role of biomarkers in patient care, particularly regarding how patients may benefit from Opdivo across the continuum of PD-L1 expression.

In July 2014, Opdivo was the first PD-1 immune checkpoint inhibitor to receive regulatory approval anywhere in the world. Opdivo is currently approved in more than 65 countries, including the United States, the European Union, Japan, and China. In October 2015, the Company’s Opdivo and Yervoy combination regimen was the first Immuno-Oncology combination to receive regulatory approval for the treatment of metastatic melanoma and is currently approved in more than 50 countries, including the United States and the European Union.

INDICATIONS

OPDIVO® (nivolumab), as a single agent, is indicated for the treatment of adult and pediatric patients 12 years of age or older with unresectable or metastatic melanoma.

OPDIVO® (nivolumab), in combination with YERVOY® (ipilimumab), is indicated for the treatment of adult and pediatric patients 12 years of age or older with unresectable or metastatic melanoma.

OPDIVO® (nivolumab) is indicated for the adjuvant treatment of adult and pediatric patients 12 years of age or older with melanoma with involvement of lymph nodes or metastatic disease who have undergone complete resection.

OPDIVO® (nivolumab), in combination with platinum-doublet chemotherapy, is indicated as neoadjuvant treatment of adult patients with resectable (tumors ≥4 cm or node positive) non-small cell lung cancer (NSCLC).

OPDIVO® (nivolumab), in combination with YERVOY® (ipilimumab), is indicated for the first-line treatment of adult patients with metastatic non-small cell lung cancer (NSCLC) whose tumors express PD-L1 (≥1%) as determined by an FDA-approved test, with no EGFR or ALK genomic tumor aberrations.

OPDIVO® (nivolumab), in combination with YERVOY® (ipilimumab) and 2 cycles of platinum-doublet chemotherapy, is indicated for the first-line treatment of adult patients with metastatic or recurrent non-small cell lung cancer (NSCLC), with no EGFR or ALK genomic tumor aberrations.

OPDIVO® (nivolumab) is indicated for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC) with progression on or after platinum-based chemotherapy. Patients with EGFR or ALK genomic tumor aberrations should have disease progression on FDA-approved therapy for these aberrations prior to receiving OPDIVO.

OPDIVO® (nivolumab), in combination with YERVOY® (ipilimumab), is indicated for the first-line treatment of adult patients with unresectable malignant pleural mesothelioma (MPM).

OPDIVO® (nivolumab), in combination with YERVOY® (ipilimumab), is indicated for the first-line treatment of adult patients with intermediate or poor risk advanced renal cell carcinoma (RCC).

OPDIVO® (nivolumab), in combination with cabozantinib, is indicated for the first-line treatment of adult patients with advanced renal cell carcinoma (RCC).

OPDIVO® (nivolumab) is indicated for the treatment of adult patients with advanced renal cell carcinoma (RCC) who have received prior anti-angiogenic therapy.

OPDIVO® (nivolumab) is indicated for the treatment of adult patients with classical Hodgkin lymphoma (cHL) that has relapsed or progressed after autologous hematopoietic stem cell transplantation (HSCT) and brentuximab vedotin or after 3 or more lines of systemic therapy that includes autologous HSCT. This indication is approved under accelerated approval based on overall response rate. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

OPDIVO® (nivolumab) is indicated for the treatment of adult patients with recurrent or metastatic squamous cell carcinoma of the head and neck (SCCHN) with disease progression on or after platinum-based therapy.

OPDIVO® (nivolumab) is indicated for the treatment of adult patients with locally advanced or metastatic urothelial carcinoma who have disease progression during or following platinum-containing chemotherapy or have disease progression within 12 months of neoadjuvant or adjuvant treatment with platinum-containing chemotherapy.

OPDIVO® (nivolumab), as a single agent, is indicated for the adjuvant treatment of adult patients with urothelial carcinoma (UC) who are at high risk of recurrence after undergoing radical resection of UC.

OPDIVO® (nivolumab), as a single agent, is indicated for the treatment of adult and pediatric (12 years and older) patients with microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) metastatic colorectal cancer (CRC) that has progressed following treatment with a fluoropyrimidine, oxaliplatin, and irinotecan. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

OPDIVO® (nivolumab), in combination with YERVOY® (ipilimumab), is indicated for the treatment of adults and pediatric patients 12 years and older with microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) metastatic colorectal cancer (CRC) that has progressed following treatment with a fluoropyrimidine, oxaliplatin, and irinotecan. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

OPDIVO® (nivolumab), in combination with YERVOY® (ipilimumab), is indicated for the treatment of adult patients with hepatocellular carcinoma (HCC) who have been previously treated with sorafenib. This indication is approved under accelerated approval based on overall response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trials.

OPDIVO® (nivolumab) is indicated for the treatment of adult patients with unresectable advanced, recurrent or metastatic esophageal squamous cell carcinoma (ESCC) after prior fluoropyrimidine- and platinum-based chemotherapy.

OPDIVO® (nivolumab) is indicated for the adjuvant treatment of completely resected esophageal or gastroesophageal junction cancer with residual pathologic disease in adult patients who have received neoadjuvant chemoradiotherapy (CRT).

OPDIVO® (nivolumab), in combination with fluoropyrimidine- and platinum-containing chemotherapy, is indicated for the first-line treatment of adult patients with unresectable advanced or metastatic esophageal squamous cell carcinoma (ESCC).

OPDIVO® (nivolumab), in combination with YERVOY® (ipilimumab), is indicated for the first-line treatment of adult patients with unresectable advanced or metastatic esophageal squamous cell carcinoma (ESCC).

OPDIVO® (nivolumab), in combination with fluoropyrimidine- and platinum- containing chemotherapy, is indicated for the treatment of adult patients with advanced or metastatic gastric cancer, gastroesophageal junction cancer, and esophageal adenocarcinoma.

IMPORTANT SAFETY INFORMATION

Severe and Fatal Immune-Mediated Adverse Reactions

Immune-mediated adverse reactions listed herein may not include all possible severe and fatal immune- mediated adverse reactions.

Immune-mediated adverse reactions, which may be severe or fatal, can occur in any organ system or tissue. While immune-mediated adverse reactions usually manifest during treatment, they can also occur after discontinuation of OPDIVO or YERVOY. Early identification and management are essential to ensure safe use of OPDIVO and YERVOY. Monitor for signs and symptoms that may be clinical manifestations of underlying immune-mediated adverse reactions. Evaluate clinical chemistries including liver enzymes, creatinine, adrenocorticotropic hormone (ACTH) level, and thyroid function at baseline and periodically during treatment with OPDIVO and before each dose of YERVOY. In cases of suspected immune-mediated adverse reactions, initiate appropriate workup to exclude alternative etiologies, including infection. Institute medical management promptly, including specialty consultation as appropriate.

Withhold or permanently discontinue OPDIVO and YERVOY depending on severity (please see section 2 Dosage and Administration in the accompanying Full Prescribing Information). In general, if OPDIVO or YERVOY interruption or discontinuation is required, administer systemic corticosteroid therapy (1 to 2 mg/kg/day prednisone or equivalent) until improvement to Grade 1 or less. Upon improvement to Grade 1 or less, initiate corticosteroid taper and continue to taper over at least 1 month. Consider administration of other systemic immunosuppressants in patients whose immune-mediated adverse reactions are not controlled with corticosteroid therapy. Toxicity management guidelines for adverse reactions that do not necessarily require systemic steroids (e.g., endocrinopathies and dermatologic reactions) are discussed below.

Immune-Mediated Pneumonitis

OPDIVO and YERVOY can cause immune-mediated pneumonitis. The incidence of pneumonitis is higher in patients who have received prior thoracic radiation. In patients receiving OPDIVO monotherapy, immune- mediated pneumonitis occurred in 3.1% (61/1994) of patients, including Grade 4 (<0.1%), Grade 3 (0.9%), and Grade 2 (2.1%). In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, immune-mediated pneumonitis occurred in 7% (31/456) of patients, including Grade 4 (0.2%), Grade 3 (2.0%), and Grade 2 (4.4%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, immune-mediated pneumonitis occurred in 3.9% (26/666) of patients, including Grade 3 (1.4%) and Grade 2 (2.6%). In NSCLC patients receiving OPDIVO 3 mg/kg every 2 weeks with YERVOY 1 mg/kg every 6 weeks, immune-mediated pneumonitis occurred in 9% (50/576) of patients, including Grade 4 (0.5%), Grade 3 (3.5%), and Grade 2 (4.0%). Four patients (0.7%) died due to pneumonitis.

In Checkmate 205 and 039, pneumonitis, including interstitial lung disease, occurred in 6.0% (16/266) of patients receiving OPDIVO. Immune-mediated pneumonitis occurred in 4.9% (13/266) of patients receiving OPDIVO, including Grade 3 (n=1) and Grade 2 (n=12).

Immune-Mediated Colitis

OPDIVO and YERVOY can cause immune-mediated colitis, which may be fatal. A common symptom included in the definition of colitis was diarrhea. Cytomegalovirus (CMV) infection/reactivation has been reported in patients with corticosteroid-refractory immune-mediated colitis. In cases of corticosteroid-refractory colitis, consider repeating infectious workup to exclude alternative etiologies. In patients receiving OPDIVO monotherapy, immune-mediated colitis occurred in 2.9% (58/1994) of patients, including Grade 3 (1.7%) and Grade 2 (1%). In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, immune-mediated colitis occurred in 25% (115/456) of patients, including Grade 4 (0.4%), Grade 3 (14%) and Grade 2 (8%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, immune-mediated colitis occurred in 9% (60/666) of patients, including Grade 3 (4.4%) and Grade 2 (3.7%).

Immune-Mediated Hepatitis and Hepatotoxicity

OPDIVO and YERVOY can cause immune-mediated hepatitis. In patients receiving OPDIVO monotherapy, immune-mediated hepatitis occurred in 1.8% (35/1994) of patients, including Grade 4 (0.2%), Grade 3 (1.3%), and Grade 2 (0.4%). In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, immune- mediated hepatitis occurred in 15% (70/456) of patients, including Grade 4 (2.4%), Grade 3 (11%), and Grade 2 (1.8%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, immune-mediated hepatitis occurred in 7% (48/666) of patients, including Grade 4 (1.2%), Grade 3 (4.9%), and Grade 2 (0.4%).

OPDIVO in combination with cabozantinib can cause hepatic toxicity with higher frequencies of Grade 3 and 4 ALT and AST elevations compared to OPDIVO alone. Consider more frequent monitoring of liver enzymes as compared to when the drugs are administered as single agents. In patients receiving OPDIVO and cabozantinib, Grades 3 and 4 increased ALT or AST were seen in 11% of patients.

Immune-Mediated Endocrinopathies

OPDIVO and YERVOY can cause primary or secondary adrenal insufficiency, immune-mediated hypophysitis, immune-mediated thyroid disorders, and Type 1 diabetes mellitus, which can present with diabetic ketoacidosis. Withhold OPDIVO and YERVOY depending on severity (please see section 2 Dosage and Administration in the accompanying Full Prescribing Information). For Grade 2 or higher adrenal insufficiency, initiate symptomatic treatment, including hormone replacement as clinically indicated. Hypophysitis can present with acute symptoms associated with mass effect such as headache, photophobia, or visual field defects. Hypophysitis can cause hypopituitarism; initiate hormone replacement as clinically indicated. Thyroiditis can present with or without endocrinopathy. Hypothyroidism can follow hyperthyroidism; initiate hormone replacement or medical management as clinically indicated. Monitor patients for hyperglycemia or other signs and symptoms of diabetes; initiate treatment with insulin as clinically indicated.

In patients receiving OPDIVO monotherapy, adrenal insufficiency occurred in 1% (20/1994), including Grade 3 (0.4%) and Grade 2 (0.6%). In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, adrenal insufficiency occurred in 8% (35/456), including Grade 4 (0.2%), Grade 3 (2.4%), and Grade 2 (4.2%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, adrenal insufficiency occurred in 7% (48/666) of patients, including Grade 4 (0.3%), Grade 3 (2.5%), and Grade 2 (4.1%). In patients receiving OPDIVO and cabozantinib, adrenal insufficiency occurred in 4.7% (15/320) of patients, including Grade 3 (2.2%) and Grade 2 (1.9%).

In patients receiving OPDIVO monotherapy, hypophysitis occurred in 0.6% (12/1994) of patients, including Grade 3 (0.2%) and Grade 2 (0.3%). In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, hypophysitis occurred in 9% (42/456), including Grade 3 (2.4%) and Grade 2 (6%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, hypophysitis occurred in 4.4% (29/666) of patients, including Grade 4 (0.3%), Grade 3 (2.4%), and Grade 2 (0.9%).

In patients receiving OPDIVO monotherapy, thyroiditis occurred in 0.6% (12/1994) of patients, including Grade 2 (0.2%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, thyroiditis occurred in 2.7% (22/666) of patients, including Grade 3 (4.5%) and Grade 2 (2.2%).

In patients receiving OPDIVO monotherapy, hyperthyroidism occurred in 2.7% (54/1994) of patients, including Grade 3 (<0.1%) and Grade 2 (1.2%). In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, hyperthyroidism occurred in 9% (42/456) of patients, including Grade 3 (0.9%) and Grade 2 (4.2%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, hyperthyroidism occurred in 12% (80/666) of patients, including Grade 3 (0.6%) and Grade 2 (4.5%).

In patients receiving OPDIVO monotherapy, hypothyroidism occurred in 8% (163/1994) of patients, including Grade 3 (0.2%) and Grade 2 (4.8%). In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, hypothyroidism occurred in 20% (91/456) of patients, including Grade 3 (0.4%) and Grade 2 (11%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, hypothyroidism occurred in 18% (122/666) of patients, including Grade 3 (0.6%) and Grade 2 (11%).

In patients receiving OPDIVO monotherapy, diabetes occurred in 0.9% (17/1994) of patients, including Grade 3 (0.4%) and Grade 2 (0.3%), and 2 cases of diabetic ketoacidosis. In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, diabetes occurred in 2.7% (15/666) of patients, including Grade 4 (0.6%), Grade 3 (0.3%), and Grade 2 (0.9%).

Immune-Mediated Nephritis with Renal Dysfunction

OPDIVO and YERVOY can cause immune-mediated nephritis. In patients receiving OPDIVO monotherapy, immune-mediated nephritis and renal dysfunction occurred in 1.2% (23/1994) of patients, including Grade 4 (<0.1%), Grade 3 (0.5%), and Grade 2 (0.6%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, immune-mediated nephritis with renal dysfunction occurred in 4.1% (27/666) of patients, including Grade 4 (0.6%), Grade 3 (1.1%), and Grade 2 (2.2%).

Immune-Mediated Dermatologic Adverse Reactions

OPDIVO can cause immune-mediated rash or dermatitis. Exfoliative dermatitis, including Stevens-Johnson syndrome (SJS), toxic epidermal necrolysis (TEN), and drug rash with eosinophilia and systemic symptoms (DRESS) has occurred with PD-1/PD-L1 blocking antibodies. Topical emollients and/or topical corticosteroids may be adequate to treat mild to moderate nonexfoliative rashes.

YERVOY can cause immune-mediated rash or dermatitis, including bullous and exfoliative dermatitis, SJS, TEN, and DRESS. Topical emollients and/or topical corticosteroids may be adequate to treat mild to moderate non- bullous/exfoliative rashes.

Withhold or permanently discontinue OPDIVO and YERVOY depending on severity (please see section 2 Dosage and Administration in the accompanying Full Prescribing Information).

In patients receiving OPDIVO monotherapy, immune-mediated rash occurred in 9% (171/1994) of patients, including Grade 3 (1.1%) and Grade 2 (2.2%). In patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, immune-mediated rash occurred in 28% (127/456) of patients, including Grade 3 (4.8%) and Grade 2 (10%). In patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, immune-mediated rash occurred in 16% (108/666) of patients, including Grade 3 (3.5%) and Grade 2 (4.2%).

Other Immune-Mediated Adverse Reactions

The following clinically significant immune-mediated adverse reactions occurred at an incidence of <1% (unless otherwise noted) in patients who received OPDIVO monotherapy or OPDIVO in combination with YERVOY or were reported with the use of other PD-1/PD-L1 blocking antibodies. Severe or fatal cases have been reported for some of these adverse reactions: cardiac/vascular: myocarditis, pericarditis, vasculitis; nervous system: meningitis, encephalitis, myelitis and demyelination, myasthenic syndrome/myasthenia gravis (including exacerbation), Guillain-Barré syndrome, nerve paresis, autoimmune neuropathy; ocular: uveitis, iritis, and other ocular inflammatory toxicities can occur; gastrointestinal: pancreatitis to include increases in serum amylase and lipase levels, gastritis, duodenitis; musculoskeletal and connective tissue: myositis/polymyositis, rhabdomyolysis, and associated sequelae including renal failure, arthritis, polymyalgia rheumatica; endocrine: hypoparathyroidism; other (hematologic/immune): hemolytic anemia, aplastic anemia, hemophagocytic lymphohistiocytosis (HLH), systemic inflammatory response syndrome, histiocytic necrotizing lymphadenitis (Kikuchi lymphadenitis), sarcoidosis, immune thrombocytopenic purpura, solid organ transplant rejection.

In addition to the immune-mediated adverse reactions listed above, across clinical trials of YERVOY monotherapy or in combination with OPDIVO, the following clinically significant immune-mediated adverse reactions, some with fatal outcome, occurred in <1% of patients unless otherwise specified: nervous system: autoimmune neuropathy (2%), myasthenic syndrome/myasthenia gravis, motor dysfunction; cardiovascular: angiopathy, temporal arteritis; ocular: blepharitis, episcleritis, orbital myositis, scleritis; gastrointestinal: pancreatitis (1.3%); other (hematologic/immune): conjunctivitis, cytopenias (2.5%), eosinophilia (2.1%), erythema multiforme, hypersensitivity vasculitis, neurosensory hypoacusis, psoriasis.

Some ocular IMAR cases can be associated with retinal detachment. Various grades of visual impairment, including blindness, can occur. If uveitis occurs in combination with other immune-mediated adverse reactions, consider a Vogt-Koyanagi-Harada–like syndrome, which has been observed in patients receiving OPDIVO and YERVOY, as this may require treatment with systemic corticosteroids to reduce the risk of permanent vision loss.

Infusion-Related Reactions

OPDIVO and YERVOY can cause severe infusion-related reactions. Discontinue OPDIVO and YERVOY in patients with severe (Grade 3) or life-threatening (Grade 4) infusion-related reactions. Interrupt or slow the rate of infusion in patients with mild (Grade 1) or moderate (Grade 2) infusion-related reactions. In patients receiving OPDIVO monotherapy as a 60-minute infusion, infusion-related reactions occurred in 6.4% (127/1994) of patients. In a separate trial in which patients received OPDIVO monotherapy as a 60-minute infusion or a 30- minute infusion, infusion-related reactions occurred in 2.2% (8/368) and 2.7% (10/369) of patients, respectively. Additionally, 0.5% (2/368) and 1.4% (5/369) of patients, respectively, experienced adverse reactions within 48 hours of infusion that led to dose delay, permanent discontinuation or withholding of OPDIVO. In melanoma patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, infusion-related reactions occurred in 2.5% (10/407) of patients. In HCC patients receiving OPDIVO 1 mg/kg with YERVOY 3 mg/kg every 3 weeks, infusion-related reactions occurred in 8% (4/49) of patients. In RCC patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, infusion-related reactions occurred in 5.1% (28/547) of patients. In MSI- H/dMMR mCRC patients receiving OPDIVO 3 mg/kg with YERVOY 1 mg/kg every 3 weeks, infusion-related reactions occurred in 4.2% (5/119) of patients. In MPM patients receiving OPDIVO 3 mg/kg every 2 weeks with YERVOY 1 mg/kg every 6 weeks, infusion-related reactions occurred in 12% (37/300) of patients.

Complications of Allogeneic Hematopoietic Stem Cell Transplantation

Fatal and other serious complications can occur in patients who receive allogeneic hematopoietic stem cell transplantation (HSCT) before or after being treated with OPDIVO or YERVOY. Transplant-related complications include hyperacute graft-versus-host-disease (GVHD), acute GVHD, chronic GVHD, hepatic veno-occlusive disease (VOD) after reduced intensity conditioning, and steroid-requiring febrile syndrome (without an identified infectious cause). These complications may occur despite intervening therapy between OPDIVO or YERVOY and allogeneic HSCT.

Follow patients closely for evidence of transplant-related complications and intervene promptly. Consider the benefit versus risks of treatment with OPDIVO and YERVOY prior to or after an allogeneic HSCT.

Embryo-Fetal Toxicity

Based on its mechanism of action and findings from animal studies, OPDIVO and YERVOY can cause fetal harm when administered to a pregnant woman. The effects of YERVOY are likely to be greater during the second and third trimesters of pregnancy. Advise pregnant women of the potential risk to a fetus. Advise females of reproductive potential to use effective contraception during treatment with OPDIVO and YERVOY and for at least 5 months after the last dose.

Increased Mortality in Patients with Multiple Myeloma when OPDIVO is Added to a Thalidomide Analogue and Dexamethasone

In randomized clinical trials in patients with multiple myeloma, the addition of OPDIVO to a thalidomide analogue plus dexamethasone resulted in increased mortality. Treatment of patients with multiple myeloma with a PD-1 or PD-L1 blocking antibody in combination with a thalidomide analogue plus dexamethasone is not recommended outside of controlled clinical trials.

Lactation

There are no data on the presence of OPDIVO or YERVOY in human milk, the effects on the breastfed child, or the effects on milk production. Because of the potential for serious adverse reactions in breastfed children, advise women not to breastfeed during treatment and for 5 months after the last dose.

Serious Adverse Reactions

In Checkmate 037, serious adverse reactions occurred in 41% of patients receiving OPDIVO (n=268). Grade 3 and 4 adverse reactions occurred in 42% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse drug reactions reported in 2% to <5% of patients receiving OPDIVO were abdominal pain, hyponatremia, increased aspartate aminotransferase, and increased lipase. In Checkmate 066, serious adverse reactions occurred in 36% of patients receiving OPDIVO (n=206). Grade 3 and 4 adverse reactions occurred in 41% of patients receiving OPDIVO. The most frequent Grade 3 and 4 adverse reactions reported in ≥2% of patients receiving OPDIVO were gamma-glutamyltransferase increase (3.9%) and diarrhea (3.4%). In Checkmate 067, serious adverse reactions (74% and 44%), adverse reactions leading to permanent discontinuation (47% and 18%) or to dosing delays (58% and 36%), and Grade 3 or 4 adverse reactions (72% and 51%) all occurred more frequently in the OPDIVO plus YERVOY arm (n=313) relative to the OPDIVO arm (n=313). The most frequent (≥10%) serious adverse reactions in the OPDIVO plus YERVOY arm and the OPDIVO arm, respectively, were diarrhea (13% and 2.2%), colitis (10% and 1.9%), and pyrexia (10% and 1.0%). In Checkmate 238, serious adverse reactions occurred in 18% of patients receiving OPDIVO (n=452). Grade 3 or 4 adverse reactions occurred in 25% of OPDIVO-treated patients (n=452). The most frequent Grade 3 and 4 adverse reactions reported in ≥2% of OPDIVO-treated patients were diarrhea and increased lipase and amylase. In Checkmate 816, serious adverse reactions occurred in 30% of patients (n=176) who were treated with OPDIVO in combination with platinum-doublet chemotherapy. Serious adverse reactions in >2% included pneumonia and vomiting. No fatal adverse reactions occurred in patients who received OPDIVO in combination with platinum-doublet chemotherapy. In Checkmate 227, serious adverse reactions occurred in 58% of patients (n=576). The most frequent (≥2%) serious adverse reactions were pneumonia, diarrhea/colitis, pneumonitis, hepatitis, pulmonary embolism, adrenal insufficiency, and hypophysitis. Fatal adverse reactions occurred in 1.7% of patients; these included events of pneumonitis (4 patients), myocarditis, acute kidney injury, shock, hyperglycemia, multi-system organ failure, and renal failure. In Checkmate 9LA, serious adverse reactions occurred in 57% of patients (n=358). The most frequent (>2%) serious adverse reactions were pneumonia, diarrhea, febrile neutropenia, anemia, acute kidney injury, musculoskeletal pain, dyspnea, pneumonitis, and respiratory failure. Fatal adverse reactions occurred in 7 (2%) patients, and included hepatic toxicity, acute renal failure, sepsis, pneumonitis, diarrhea with hypokalemia, and massive hemoptysis in the setting of thrombocytopenia. In Checkmate 017 and 057, serious adverse reactions occurred in 46% of patients receiving OPDIVO (n=418). The most frequent serious adverse reactions reported in ≥2% of patients receiving OPDIVO were pneumonia, pulmonary embolism, dyspnea, pyrexia, pleural effusion, pneumonitis, and respiratory failure. In Checkmate 057, fatal adverse reactions occurred; these included events of infection (7 patients, including one case of Pneumocystis jirovecii pneumonia), pulmonary embolism (4 patients), and limbic encephalitis (1 patient). In Checkmate 743, serious adverse reactions occurred in 54% of patients receiving OPDIVO plus YERVOY. The most frequent serious adverse reactions reported in ≥2% of patients were pneumonia, pyrexia, diarrhea, pneumonitis, pleural effusion, dyspnea, acute kidney injury, infusion-related reaction, musculoskeletal pain, and pulmonary embolism. Fatal adverse reactions occurred in 4 (1.3%) patients and included pneumonitis, acute heart failure, sepsis, and encephalitis. In Checkmate 214, serious adverse reactions occurred in 59% of patients receiving OPDIVO plus YERVOY (n=547). The most frequent serious adverse reactions reported in ≥2% of patients were diarrhea, pyrexia, pneumonia, pneumonitis, hypophysitis, acute kidney injury, dyspnea, adrenal insufficiency, and colitis. In Checkmate 9ER, serious adverse reactions occurred in 48% of patients receiving OPDIVO and cabozantinib (n=320). The most frequent serious adverse reactions reported in ≥2% of patients were diarrhea, pneumonia, pneumonitis, pulmonary embolism, urinary tract infection, and hyponatremia. Fatal intestinal perforations occurred in 3 (0.9%) patients. In Checkmate 025, serious adverse reactions occurred in 47% of patients receiving OPDIVO (n=406). The most frequent serious adverse reactions reported in ≥2% of patients were acute kidney injury, pleural effusion, pneumonia, diarrhea, and hypercalcemia. In Checkmate 205 and 039, adverse reactions leading to discontinuation occurred in 7% and dose delays due to adverse reactions occurred in 34% of patients (n=266). Serious adverse reactions occurred in 26% of patients. The most frequent serious adverse reactions reported in ≥1% of patients were pneumonia, infusion- related reaction, pyrexia, colitis or diarrhea, pleural effusion, pneumonitis, and rash. Eleven patients died from causes other than disease progression: 3 from adverse reactions within 30 days of the last OPDIVO dose, 2 from infection 8 to 9 months after completing OPDIVO, and 6 from complications of allogeneic HSCT. In Checkmate 141, serious adverse reactions occurred in 49% of patients receiving OPDIVO (n=236). The most frequent serious adverse reactions reported in ≥2% of patients receiving OPDIVO were pneumonia, dyspnea, respiratory failure, respiratory tract infection, and sepsis. In Checkmate 275, serious adverse reactions occurred in 54% of patients receiving OPDIVO (n=270). The most frequent serious adverse reactions reported in ≥2% of patients receiving OPDIVO were urinary tract infection, sepsis, diarrhea, small intestine obstruction, and general physical health deterioration. In Checkmate 274, serious adverse reactions occurred in 30% of patients receiving OPDIVO (n=351). The most frequent serious adverse reaction reported in ≥2% of patients receiving OPDIVO was urinary tract infection. Fatal adverse reactions occurred in 1% of patients; these included events of pneumonitis (0.6%). In Checkmate 142 in MSI-H/dMMR mCRC patients receiving OPDIVO with YERVOY (n=119), serious adverse reactions occurred in 47% of patients. The most frequent serious adverse reactions reported in ≥2% of patients were colitis/diarrhea, hepatic events, abdominal pain, acute kidney injury, pyrexia, and dehydration. In Checkmate 040, serious adverse reactions occurred in 59% of patients receiving OPDIVO with YERVOY (n=49). Serious adverse reactions reported in ≥4% of patients were pyrexia, diarrhea, anemia, increased AST, adrenal insufficiency, ascites, esophageal varices hemorrhage, hyponatremia, increased blood bilirubin, and pneumonitis. In Attraction-3, serious adverse reactions occurred in 38% of patients receiving OPDIVO (n=209). Serious adverse reactions reported in ≥2% of patients who received OPDIVO were pneumonia, esophageal fistula, interstitial lung disease, and pyrexia. The following fatal adverse reactions occurred in patients who received OPDIVO: interstitial lung disease or pneumonitis (1.4%), pneumonia (1.0%), septic shock (0.5%), esophageal fistula (0.5%), gastrointestinal hemorrhage (0.5%), pulmonary embolism (0.5%), and sudden death (0.5%). In Checkmate 577, serious adverse reactions occurred in 33% of patients receiving OPDIVO (n=532). A serious adverse reaction reported in ≥2% of patients who received OPDIVO was pneumonitis. A fatal reaction of myocardial infarction occurred in one patient who received OPDIVO. In Checkmate 648, serious adverse reactions occurred in 62% of patients receiving OPDIVO in combination with chemotherapy (n=310). The most frequent serious adverse reactions reported in ≥2% of patients who received OPDIVO with chemotherapy were pneumonia (11%), dysphagia (7%), esophageal stenosis (2.9%), acute kidney injury (2.9%), and pyrexia (2.3%). Fatal adverse reactions occurred in 5 (1.6%) patients who received OPDIVO in combination with chemotherapy; these included pneumonitis, pneumatosis intestinalis, pneumonia, and acute kidney injury. In Checkmate 648, serious adverse reactions occurred in 69% of patients receiving OPDIVO in combination with YERVOY (n=322). The most frequent serious adverse reactions reported in ≥2% who received OPDIVO in combination with YERVOY were pneumonia (10%), pyrexia (4.3%), pneumonitis (4.0%), aspiration pneumonia (3.7%), dysphagia (3.7%), hepatic function abnormal (2.8%), decreased appetite (2.8%), adrenal insufficiency (2.5%), and dehydration (2.5%). Fatal adverse reactions occurred in 5 (1.6%) patients who received OPDIVO in combination with YERVOY; these included pneumonitis, interstitial lung disease, pulmonary embolism, and acute respiratory distress syndrome. In Checkmate 649, serious adverse reactions occurred in 52% of patients treated with OPDIVO in combination with chemotherapy (n=782). The most frequent serious adverse reactions reported in ≥2% of patients treated with OPDIVO in combination with chemotherapy were vomiting (3.7%), pneumonia (3.6%), anemia (3.6%), pyrexia (2.8%), diarrhea (2.7%), febrile neutropenia (2.6%), and pneumonitis (2.4%). Fatal adverse reactions occurred in 16 (2.0%) patients who were treated with OPDIVO in combination with chemotherapy; these included pneumonitis (4 patients), febrile neutropenia (2 patients), stroke (2 patients), gastrointestinal toxicity, intestinal mucositis, septic shock, pneumonia, infection, gastrointestinal bleeding, mesenteric vessel thrombosis, and disseminated intravascular coagulation.

Common Adverse Reactions

In Checkmate 037, the most common adverse reaction (≥20%) reported with OPDIVO (n=268) was rash (21%). In Checkmate 066, the most common adverse reactions (≥20%) reported with OPDIVO (n=206) vs dacarbazine (n=205) were fatigue (49% vs 39%), musculoskeletal pain (32% vs 25%), rash (28% vs 12%), and pruritus (23% vs 12%). In Checkmate 067, the most common (≥20%) adverse reactions in the OPDIVO plus YERVOY arm (n=313) were fatigue (62%), diarrhea (54%), rash (53%), nausea (44%), pyrexia (40%), pruritus (39%), musculoskeletal pain (32%), vomiting (31%), decreased appetite (29%), cough (27%), headache (26%), dyspnea (24%), upper respiratory tract infection (23%), arthralgia (21%), and increased transaminases (25%). In Checkmate 067, the most common (≥20%) adverse reactions in the OPDIVO arm (n=313) were fatigue (59%), rash (40%), musculoskeletal pain (42%), diarrhea (36%), nausea (30%), cough (28%), pruritus (27%), upper respiratory tract infection (22%), decreased appetite (22%), headache (22%), constipation (21%), arthralgia (21%), and vomiting (20%). In Checkmate 238, the most common adverse reactions (≥20%) reported in OPDIVO-treated patients (n=452) vs ipilimumab-treated patients (n=453) were fatigue (57% vs 55%), diarrhea (37% vs 55%), rash (35% vs 47%), musculoskeletal pain (32% vs 27%), pruritus (28% vs 37%), headache (23% vs 31%), nausea (23% vs 28%), upper respiratory infection (22% vs 15%), and abdominal pain (21% vs 23%). The most common immune-mediated adverse reactions were rash (16%), diarrhea/colitis (6%), and hepatitis (3%). In Checkmate 816, the most common (>20%) adverse reactions in the OPDIVO plus chemotherapy arm (n=176) were nausea (38%), constipation (34%), fatigue (26%), decreased appetite (20%), and rash (20%). In Checkmate 227, the most common (≥20%) adverse reactions were fatigue (44%), rash (34%), decreased appetite (31%), musculoskeletal pain (27%), diarrhea/colitis (26%), dyspnea (26%), cough (23%), hepatitis (21%), nausea (21%), and pruritus (21%). In Checkmate 9LA, the most common (>20%) adverse reactions were fatigue (49%), musculoskeletal pain (39%), nausea (32%), diarrhea (31%), rash (30%), decreased appetite (28%), constipation (21%), and pruritus (21%). In Checkmate 017 and 057, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=418) were fatigue, musculoskeletal pain, cough, dyspnea, and decreased appetite. In Checkmate 743, the most common adverse reactions (≥20%) in patients receiving OPDIVO plus YERVOY were fatigue (43%), musculoskeletal pain (38%), rash (34%), diarrhea (32%), dyspnea (27%), nausea (24%), decreased appetite (24%), cough (23%), and pruritus (21%). In Checkmate 214, the most common adverse reactions (≥20%) reported in patients treated with OPDIVO plus YERVOY (n=547) were fatigue (58%), rash (39%), diarrhea (38%), musculoskeletal pain (37%), pruritus (33%), nausea (30%), cough (28%), pyrexia (25%), arthralgia (23%), decreased appetite (21%), dyspnea (20%), and vomiting (20%). In Checkmate 9ER, the most common adverse reactions (≥20%) in patients receiving OPDIVO and cabozantinib (n=320) were diarrhea (64%), fatigue (51%), hepatotoxicity (44%), palmar-plantar erythrodysaesthesia syndrome (40%), stomatitis (37%), rash (36%), hypertension (36%), hypothyroidism (34%), musculoskeletal pain (33%), decreased appetite (28%), nausea (27%), dysgeusia (24%), abdominal pain (22%), cough (20%) and upper respiratory tract infection (20%). In Checkmate 025, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=406) vs everolimus (n=397) were fatigue (56% vs 57%), cough (34% vs 38%), nausea (28% vs 29%), rash (28% vs 36%), dyspnea (27% vs 31%), diarrhea (25% vs 32%), constipation (23% vs 18%), decreased appetite (23% vs 30%), back pain (21% vs 16%), and arthralgia (20% vs 14%). In Checkmate 205 and 039, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=266) were upper respiratory tract infection (44%), fatigue (39%), cough (36%), diarrhea (33%), pyrexia (29%), musculoskeletal pain (26%), rash (24%), nausea (20%) and pruritus (20%). In Checkmate 141, the most common adverse reactions (≥10%) in patients receiving OPDIVO (n=236) were cough (14%) and dyspnea (14%) at a higher incidence than investigator’s choice. In Checkmate 275, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=270) were fatigue (46%), musculoskeletal pain (30%), nausea (22%), and decreased appetite (22%). In Checkmate 274, the most common adverse reactions (≥20%) reported in patients receiving OPDIVO (n=351) were rash (36%), fatigue (36%), diarrhea (30%), pruritus (30%), musculoskeletal pain (28%), and urinary tract infection (22%). In Checkmate 142 in MSI-H/dMMR mCRC patients receiving OPDIVO as a single agent (n=74), the most common adverse reactions (≥20%) were fatigue (54%), diarrhea (43%), abdominal pain (34%), nausea (34%), vomiting (28%), musculoskeletal pain (28%), cough (26%), pyrexia (24%), rash (23%), constipation (20%), and upper respiratory tract infection (20%). In Checkmate 142 in MSI-H/dMMR mCRC patients receiving OPDIVO with YERVOY (n=119), the most common adverse reactions (≥20%) were fatigue (49%), diarrhea (45%), pyrexia (36%), musculoskeletal pain (36%), abdominal pain (30%), pruritus (28%), nausea (26%), rash (25%), decreased appetite (20%), and vomiting (20%). In Checkmate 040, the most common adverse reactions (≥20%) in patients receiving OPDIVO with YERVOY (n=49), were rash (53%), pruritus (53%), musculoskeletal pain (41%), diarrhea (39%), cough (37%), decreased appetite (35%), fatigue (27%), pyrexia (27%), abdominal pain (22%), headache (22%), nausea (20%), dizziness (20%), hypothyroidism (20%), and weight decreased (20%). In Attraction-3, the most common adverse reactions (≥20%) in OPDIVO-treated patients (n=209) were rash (22%) and decreased appetite (21%). In Checkmate 577, the most common adverse reactions (≥20%) in patients receiving OPDIVO (n=532) were fatigue (34%), diarrhea (29%), nausea (23%), rash (21%), musculoskeletal pain (21%), and cough (20%). In Checkmate 648, the most common adverse reactions (≥20%) in patients treated with OPDIVO in combination with chemotherapy (n=310) were nausea (65%), decreased appetite (51%), fatigue (47%), constipation (44%), stomatitis (44%), diarrhea (29%), and vomiting (23%). In Checkmate 648, the most common adverse reactions reported in ≥20% of patients treated with OPDIVO in combination with YERVOY were rash (31%), fatigue (28%), pyrexia (23%), nausea (22%), diarrhea (22%), and constipation (20%). In Checkmate 649, the most common adverse reactions (≥20%) in patients treated with OPDIVO in combination with chemotherapy (n=782) were peripheral neuropathy (53%), nausea (48%), fatigue (44%), diarrhea (39%), vomiting (31%), decreased appetite (29%), abdominal pain (27%), constipation (25%), and musculoskeletal pain (20%).

Please see US Full Prescribing Information for OPDIVO and YERVOY.

About the Bristol Myers Squibb and Ono Pharmaceutical Collaboration

In 2011, through a collaboration agreement with Ono Pharmaceutical Co., Bristol Myers Squibb expanded its territorial rights to develop and commercialize Opdivo globally, except in Japan, South Korea and Taiwan, where Ono had retained all rights to the compound at the time. On July 23, 2014, Ono and Bristol Myers Squibb further expanded the companies’ strategic collaboration agreement to jointly develop and commercialize multiple immunotherapies – as single agents and combination regimens – for patients with cancer in Japan, South Korea and Taiwan.

About Bristol Myers Squibb

Bristol Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information about Bristol Myers Squibb, visit us at BMS.com or follow us on LinkedIn, Twitter, YouTube, Facebook and Instagram.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, the research, development and commercialization of pharmaceutical products. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. Such forward-looking statements are based on current expectations and projections about our future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, that are difficult to predict, may be beyond our control and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These risks, assumptions, uncertainties and other factors include, among others, that Opdivo® (nivolumab) may not receive regulatory approval for the additional indication described in this release in the currently anticipated timeline or at all, that any marketing approvals, if granted, may have significant limitations on their use, and, if approved, whether such product candidate for such additional indication described in this release will be commercially successful. No forward-looking statement can be guaranteed. It should also be noted that acceptance of the sBLA by the FDA does not change the standards for FDA approval and that the validation by the EMA of the application does not change the standards for EMA approval. Forward-looking statements in this press release should be evaluated together with the many risks and uncertainties that affect Bristol Myers Squibb’s business and market, particularly those identified in the cautionary statement and risk factors discussion in Bristol Myers Squibb’s Annual Report on Form 10-K for the year ended December 31, 2022, as updated by our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission. The forward-looking statements included in this document are made only as of the date of this document and except as otherwise required by applicable law, Bristol Myers Squibb undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise.

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KEYWORDS: United States North America New Jersey

INDUSTRY KEYWORDS: Oncology FDA Health Clinical Trials Pharmaceutical Biotechnology

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Posted on February 28, 2023 7:02 am
Bristol Myers Squibb to Participate in Cowen’s 43rd Annual Health Care Conference

Bristol Myers Squibb to Participate in Cowen’s 43rd Annual Health Care Conference

NEW YORK–(BUSINESS WIRE)–Bristol Myers Squibb (NYSE: BMY) today announced that the company will take part in a fireside chat at Cowen’s 43rd Annual Health Care Conference on Tuesday, March 7, 2023. Samit Hirawat, M.D., Executive Vice President, Chief Medical Officer, Head of Development, will answer questions about the company at 9:50 a.m. ET.

Investors and the general public are invited to listen to a live webcast of the session at http://investor.bms.com. An archived edition of the session will be available later that day.

About Bristol Myers Squibb

Bristol Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information about Bristol Myers Squibb, visit us at BMS.com or follow us on LinkedIn, Twitter, YouTube, Facebook, and Instagram.

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Posted on February 28, 2023 6:58 am
AutoZone 2nd Quarter Same Store Sales Increase 5.3%; EPS Increases to $24.64

MEMPHIS, Tenn., Feb. 28, 2023 (GLOBE NEWSWIRE) — AutoZone, Inc. (NYSE: AZO) today reported net sales of $3.7 billion for its second quarter (12 weeks) ended February 11, 2023, an increase of 9.5% from the second quarter of fiscal 2022 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 5.3% for the quarter.

“We are proud to report solid same store sales growth on top of last year’s 13.8%. We could not have achieved these results without phenomenal contributions from across the organization. Once again, our AutoZoners’ efforts generated double digit domestic Commercial growth and single digit domestic Retail sales growth. We continue to believe the initiatives we have in place position us well for the remainder of our fiscal year,” said Bill Rhodes, Chairman, President and Chief Executive Officer.

For the quarter, gross profit, as a percentage of sales, was 52.3%, a decrease of 69 basis points versus the prior year. The decrease in gross margin was impacted by a 27 basis point ($10 million) non-cash LIFO charge driven primarily by freight costs. The remaining deleverage was driven by supply chain costs and accelerated growth in our Commercial business. Operating expenses, as a percentage of sales, were 34.1% versus last year at 34.4%.

Operating profit increased 6.9% to $670.0 million. Net income for the quarter increased 1.0% over the same period last year to $476.5 million, while diluted earnings per share increased 10.5% to $24.64 from $22.30 in the year-ago quarter.

Under its share repurchase program, AutoZone repurchased 372 thousand shares of its common stock for $906.0 million during the second quarter, at an average price of $2,434 per share. At the end of the second quarter, the Company had $1.8 billion remaining under its current share repurchase authorization.

The Company’s inventory increased 13.9% over the same period last year, driven by inflation and its growth initiatives. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was negative $227 thousand versus negative $198 thousand last year and negative $249 thousand last quarter.

“We remain committed to providing the best place for our customers to shop while being an exceptional place for our AutoZoners to build their careers. For the remainder of fiscal 2023, we will be laser focused on relentless execution, and we will continue to focus our capital on projects that meet or exceed our return on capital targets. We will take nothing for granted as we will continue to focus on our long-term approach of increasing operating earnings and free cash flows while using our balance sheet effectively,” said Rhodes.

During the quarter ended February 11, 2023, AutoZone opened 30 new stores in the U.S., one in Mexico and five in Brazil. As of February 11, 2023, the Company had 6,226 stores in the U.S., 707 in Mexico and 81 in Brazil for a total store count of 7,014.

AutoZone is the leading retailer and distributor of automotive replacement parts and accessories in the Americas. Each store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. We also have commercial programs in the majority of our stores in Mexico and Brazil. AutoZone also sells the ALLDATA brand automotive diagnostic, repair and shop management software through www.alldata.com. Additionally, we sell automotive hard parts, maintenance items, accessories and non-automotive products through www.autozone.com, and our commercial customers can make purchases through www.autozonepro.com. We also provide product information on our Duralast branded products through www.duralastparts.com. AutoZone does not derive revenue from automotive repair or installation services.

AutoZone will host a conference call this morning, Tuesday, February 28, 2023, beginning at 10:00 a.m. (ET) to discuss its second quarter results. This call is being web cast and can be accessed, along with supporting slides, at AutoZone’s website at www.autozone.com and clicking on Investor Relations. Investors may also listen to the call by dialing (888) 506-0062, passcode AUTOZONE. In addition, a telephone replay will be available by dialing (877) 481-4010, replay passcode 47607 through March 14, 2023.

This release includes certain financial information not derived in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP measures include adjustments to reflect return on invested capital, adjusted debt and adjusted debt to EBITDAR. The Company believes that the presentation of these non-GAAP measures provides information that is useful to investors as it indicates more clearly the Company’s comparative year-to-year operating results, but this information should not be considered a substitute for any measures derived in accordance with GAAP. Management targets the Company’s capital structure in order to maintain its investment grade credit ratings. The Company believes this is important information for the management of its debt levels and share repurchases. We have included a reconciliation of this additional information to the most comparable GAAP measures in the accompanying reconciliation tables.

Certain statements contained herein constitute forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “seek,” “may,” “could” and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: product demand, due to changes in fuel prices, miles driven or otherwise; energy prices; weather; competition; credit market conditions; cash flows; access to available and feasible financing; future stock repurchases; the impact of recessionary conditions; consumer debt levels; changes in laws or regulations; risks associated with self-insurance; war and the prospect of war, including terrorist activity; the impact of public health issues, such as the ongoing global coronavirus (“COVID-19”) pandemic; inflation; the ability to hire, train and retain qualified employees; construction delays; failure or interruption of our information technology systems; issues relating to the confidentiality, integrity or availability of information, including due to cyber-attacks; historic growth rate sustainability; downgrade of our credit ratings; damage to our reputation; challenges in international markets; origin and raw material costs of suppliers; inventory availability; disruption in our supply chain; impact of tariffs; impact of new accounting standards; and business interruptions. Certain of these risks and uncertainties are discussed in more detail in the “Risk Factors” section contained in Item 1A under Part 1 of the Company’s Annual Report on Form 10-K for the year ended August 27, 2022, and these Risk Factors should be read carefully. Forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ from those contemplated by such forward-looking statements. Events described above and in the “Risk Factors” could materially and adversely affect our business. However, it should be understood that it is not possible to identify or predict all such risks and other factors that could affect these forward-looking statements. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:
Financial: Brian Campbell at (901) 495-7005, [email protected]
Media: David McKinney at (901) 495-7951, [email protected]

AutoZone’s 2nd Quarter Highlights – Fiscal 2023

Condensed Consolidated Statements of Operations

2nd Quarter, FY2023

(in thousands, except per share data)

GAAP Results

12 Weeks Ended 12 Weeks Ended

February 11, 2023 February 12, 2022

Net sales $ 3,690,982 $ 3,369,750

Cost of sales 1,760,979 1,584,524

Gross profit 1,930,003 1,785,226

Operating, SG&A expenses 1,260,026 1,158,466

Operating profit (EBIT) 669,977 626,760

Interest expense, net 65,609 42,471

Income before taxes 604,368 584,289

Income tax expense 127,824 112,534

Net income $ 476,544 $ 471,755

Net income per share:

Basic $ 25.48 $ 23.00

Diluted $ 24.64 $ 22.30

Weighted average shares outstanding:

Basic 18,705 20,513

Diluted 19,337 21,158

Year-To-Date 2nd Quarter, FY2023

(in thousands, except per share data)

GAAP Results

24 Weeks Ended 24 Weeks Ended

February 11, 2023 February 12, 2022

Net sales $ 7,676,049 $ 7,038,653

Cost of sales 3,751,424 3,328,267

Gross profit 3,924,625 3,710,386

Operating, SG&A expenses 2,531,615 2,329,141

Operating profit (EBIT) 1,393,010 1,381,245

Interest expense, net 123,332 85,755

Income before taxes 1,269,678 1,295,490

Income taxes 253,816 268,500

Net income $ 1,015,862 $ 1,026,990

Net income per share:

Basic $ 53.87 $ 49.49

Diluted $ 52.12 $ 48.03

Weighted average shares outstanding:

Basic 18,856 20,750

Diluted 19,491 21,383

Selected Balance Sheet Information

(in thousands)

February 11, 2023 February 12, 2022 August 27, 2022

Cash and cash equivalents $ 301,286 $ 239,423 $ 264,380

Merchandise inventories 5,731,255 5,031,222 5,638,004

Current assets 6,794,805 5,903,770 6,627,984

Property and equipment, net 5,236,129 4,879,079 5,170,419

Operating lease right-of-use assets 2,943,844 2,743,771 2,918,817

Total assets 15,545,142 14,078,473 15,275,043

Accounts payable 7,321,551 6,378,606 7,301,347

Current liabilities 8,614,618 7,684,645 8,588,393

Operating lease liabilities, less current portion 2,854,227 2,641,555 2,837,973

Total debt 7,042,302 5,840,884 6,122,092

Stockholders’ deficit (4,184,170 ) (3,137,477 ) (3,538,913 )

Working capital (1,819,813 ) (1,780,875 ) (1,960,409 )

AutoZone’s 2nd Quarter Highlights – Fiscal 2023

Condensed Consolidated Statements of Operations

Adjusted Debt / EBITDAR

(in thousands, except adjusted debt to EBITDAR ratio) Trailing 4 Quarters

February 11, 2023 February 12, 2022

Net income $ 2,418,476 $ 2,408,925

Add: Interest expense 229,215 188,901

Income tax expense 634,803 630,954

EBIT 3,282,494 3,228,780

Add: Depreciation and amortization 465,905 422,938

Rent expense⁽¹⁾ 394,298 354,410

Share-based expense 82,253 62,672

EBITDAR $ 4,224,950 $ 4,068,800

Debt $ 7,042,302 $ 5,840,884

Financing lease liabilities 290,858 272,719

Add: Rent x 6⁽¹⁾ 2,365,788 2,126,460

Adjusted debt $ 9,698,948 $ 8,240,063

Adjusted debt to EBITDAR 2.3 2.0

Adjusted Return on Invested Capital (ROIC)

(in thousands, except ROIC)

Trailing 4 Quarters

February 11, 2023 February 12, 2022

Net income $ 2,418,476 $ 2,408,925

Adjustments:

Interest expense 229,215 188,901

Rent expense⁽¹⁾ 394,298 354,410

Tax effect⁽²⁾ (129,691 ) (113,008 )

Adjusted after-tax return $ 2,912,298 $ 2,839,228

Average debt⁽³⁾ $ 6,278,213 $ 5,433,252

Average stockholders’ deficit⁽³⁾ (3,617,143 ) (2,069,346 )

Add: Rent x 6⁽¹⁾ 2,365,788 2,126,460

Average financing lease liabilities⁽³⁾ 294,337 255,497

Invested capital $ 5,321,195 $ 5,745,863

Adjusted After-Tax ROIC 54.7 % 49.4 %

⁽¹⁾
The table below outlines the calculation of rent expense and reconciles rent expense to total lease cost, per ASC 842, the most directly comparable GAAP financial measure, for the trailing four quarters ended February 11, 2023 and February 12, 2022

Trailing 4 Quarters

(in thousands) February 11, 2023 February 12, 2022

Total lease cost, per ASC 842, for the trailing four quarters $ 498,970 $ 442,950

Less: Financing lease interest and amortization (77,302 ) (62,607 )

Less: Variable operating lease components, related to insurance and common area maintenance (27,370 ) (25,933 )

Rent expense for the trailing four quarters $ 394,298 $ 354,410

⁽²⁾
Effective tax rate over trailing four quarters ended February 11, 2023 and February 12, 2022 was 20.8%

⁽³⁾
All averages are computed based on trailing five quarter balances

Other Selected Financial Information

(in thousands)

February 11, 2023 February 12, 2022

Cumulative share repurchases ($ since fiscal 1998) $ 31,898,212 $ 28,192,426

Remaining share repurchase authorization ($) 1,751,788 957,574

Cumulative share repurchases (shares since fiscal 1998) 153,273 151,586

Shares outstanding, end of quarter 18,467 19,967

12 Weeks Ended 12 Weeks Ended 24 Weeks Ended 24 Weeks Ended

February 11, 2023 February 12, 2022 February 11, 2023 February 12, 2022

Depreciation and amortization $ 113,711 $ 99,692 $ 222,964 $ 199,282

Cash flow from operations 354,474 361,816 1,148,061 1,139,746

Capital spending 144,837 105,874 259,234 208,143

AutoZone’s 2nd Quarter Highlights – Fiscal 2023

Condensed Consolidated Statements of Operations

Selected Operating Highlights

Store Count & Square Footage

12 Weeks Ended 12 Weeks Ended 24 Weeks Ended 24 Weeks Ended

February 11, 2023 February 12, 2022 February 11, 2023 February 12, 2022

Domestic:

Beginning stores 6,196 6,066 6,168 6,051

Stores opened 30 26 58 41

Stores closed – (1 ) – (1 )

Ending domestic stores 6,226 6,091 6,226 6,091

Relocated stores 1 1 4 4

Stores with commercial programs 5,500 5,233 5,500 5,233

Square footage (in thousands) 41,103 40,037 41,103 40,037

Mexico:

Beginning stores 706 666 703 664

Stores opened 1 3 4 5

Ending Mexico stores 707 669 707 669

Brazil:

Beginning stores 76 53 72 52

Stores opened 5 2 9 3

Ending Brazil stores 81 55 81 55

Total 7,014 6,815 7,014 6,815

Square footage (in thousands) 46,982 45,433 46,982 45,433

Square footage per store 6,698 6,667 6,698 6,667

Sales Statistics

($ in thousands, except sales per average square foot)

12 Weeks Ended 12 Weeks Ended Trailing 4 Quarters Trailing 4 Quarters

Total AutoZone Stores (Domestic, Mexico and Brazil) February 11, 2023 February 12, 2022 February 11, 2023 February 12, 2022

Sales per average store $ 518 $ 486 $ 2,399 $ 2,282

Sales per average square foot $ 77 $ 73 $ 359 $ 343

Total Auto Parts (Domestic, Mexico and Brazil)

Total auto parts sales $ 3,623,110 $ 3,306,223 $ 16,590,483 $ 15,332,148

% Increase vs. LY 9.6% 15.6% 8.2% 16.5%

Domestic Commercial

Total domestic commercial sales $ 954,584 $ 843,889 $ 4,475,546 $ 3,755,003

% Increase vs. LY 13.1% 32.1% 19.2% 30.2%

Average sales per program per week $ 14.5 $ 13.5 $ 16.0 $ 14.0

% Increase vs. LY 7.4% 28.6% 14.3% 26.1%

All Other, including ALLDATA

All other sales $ 67,872 $ 63,527 $ 299,144 $ 271,012

% Increase vs. LY 6.8% 24.3% 10.4% 17.1%

12 Weeks Ended 12 Weeks Ended 24 Weeks Ended 24 Weeks Ended

February 11, 2023 February 12, 2022 February 11, 2023 February 12, 2022

Domestic same store sales 5.3% 13.8% 5.5% 13.7%

Inventory Statistics (Total Stores)

as of as of

February 11, 2023 February 12, 2022

Accounts payable/inventory 127.7% 126.8%

($ in thousands)

Inventory $ 5,731,255 $ 5,031,222

Inventory per store 817 738

Net inventory (net of payables) (1,590,296 ) (1,347,384 )

Net inventory / per store (227 ) (198 )

Trailing 5 Quarters

February 11, 2023 February 12, 2022

Inventory turns 1.5 x 1.6 x

Posted on February 28, 2023 6:58 am
ADT Reports Fourth Quarter and Full Year 2022 Results

Continued strong sequential and year-over-year growth in revenue, up

21%

for full year 2022

versus

prior year

Fourth consecutive quarter of record high customer retention and recurring monthly revenue balance

Improving capital efficiency with record revenue payback

Driving momentum into 2023 with expected continued growth in revenue, earnings and cash flows

BOCA RATON, Fla., Feb. 28, 2023 (GLOBE NEWSWIRE) — ADT Inc. (NYSE: ADT), the most trusted brand in smart home and small business security, today reported results for the fourth quarter and full year of 2022.

Financial highlights for the fourth quarter and full year of 2022 are listed below. Variances are on a year-over-year basis unless otherwise noted.

Fourth Quarter
2022

Total revenue of $1.6 billion, up 19% or 8% excluding Solar, and end-of-period recurring monthly revenue (RMR) of $374 million, up 4%

Record high customer retention with gross customer revenue attrition at a record low of 12.5%

Record revenue payback of 2.1 years

GAAP net income of $151 million, or $0.16 per diluted share, up $209 million

Adjusted net income of $92 million, or $0.10 per diluted share, up $118 million

Adjusted EBITDA of $629 million, up $54 million or 9%

Full Year 2022

Total revenue of $6.4 billion, up 21% or 7% excluding Solar

GAAP net income of $173 million, or $0.19 per diluted share, up $513 million

Adjusted net income of $218 million, or $0.24 per diluted share, up $410 million

Adjusted EBITDA of $2,447 million, up $234 million or 11%

“2022 was a very strong year for ADT. We delivered strong results with top-line growth while setting records in customer retention, recurring monthly revenue balance and revenue payback. Our results reflect the progress ADT is making as we shift from a traditional security company towards an innovative business poised for accelerating growth in new markets,” said ADT President and CEO, Jim DeVries. “We concluded the year with positive momentum in our business, along with launching our partnership with State Farm and advancing our strategic relationship with Google. As we advance into 2023 we are forecasting solid growth in revenue, earnings and free cash flow, continuing our positive trajectory across our businesses and demonstrating progress on our 2025 goals.”

BUSINESS HIGHLIGHTS

Foundation for Growth

Continued growth of RMR – The end-of-period RMR balance was $374 million, representing a 4% increase over the prior year period. Approximately 80% of total Consumer and Small Business (CSB) and Commercial revenue was generated from this durable recurring revenue.

Maintaining record customer retention and revenue payback – With strong customer satisfaction, trailing 12-month gross customer revenue attrition was 12.5%, a 60-basis-point improvement versus the prior year period, and revenue payback ended 2022 at 2.1 years.

Innovative Offerings

ADT+ and ADT Self Setup launch – In early 2023, ADT introduced the new ADT+ app and ADT Self Setup line of DIY smart home security products which seamlessly integrate the security and protection of ADT with the helpful convenience of Google Nest. The ADT+ app was named a CES 2023 Innovation Award Honoree and represents a historic shift in home security. ADT Self Setup enables customers to build and customize the perfect DIY system for their smart home or apartment needs.

Enhanced Google offerings – As part of ADT’s partnership with Google, the Company nationally sells, installs, and services a full suite of Google Nest products, including doorbells, cameras, thermostats, and smart displays. During 2022, the attachment rate for the Nest Doorbell was approximately 50% and Nest cameras are currently realizing a 30% increase in cameras per home, helping drive a 26% increase in residential installation revenue per unit as compared to the prior year period.

State Farm home protection partnership and equity investment – In 2022, ADT announced the closing of a $1.2 billion equity investment by State Farm in conjunction with flagship partnership to reimagine the homeownership experience through innovation and the application of smart home technology to detect and mitigate property losses. Exclusive offers to State Farm policy holders in select markets are expected to launch in the second quarter of 2023. In addition to its equity investment, State Farm committed up to $300 million to fund product and technology innovation, customer growth, and marketing activities in connection with the partnership.

Unrivaled Safety

Keeping employees safe with SoSecure Pro – ADT introduced an all-new enterprise mobile safety app, SoSecure PRO. SoSecure PRO enables companies to enhance workplace safety for employees on site and on the go. The app features innovative safety tools like location sharing, SOS Call/Chat or Video, Safety Timer, and Voice Activation, helping companies to keep their employees safe.

Intelligent autonomous security solutions – EvoGuard by ADT Commercial, unveiled at CES in January, is a new suite of intelligent autonomous guarding solutions and services, currently in development, aimed at helping to cost-effectively enhance corporate security programs, while responding to high turnover rates and ongoing labor shortages in the guarding market.

Premium Experience

ADT Virtual Assistance – The Company completed more than one million Virtual Assistance appointments since the program’s launch in 2021. Nearly 40% of ADT service requests in 2022 were virtual, generating high customer satisfaction at a lower cost to the Company while also reducing the Company’s carbon footprint by eliminating thousands of vehicles trips each day. This program is a meaningful contributor to the Adjusted EBITDA margin expansion in the CSB segment.

Progress on our ESG Journey

Giving back in 2022 – In 2022, ADT realigned its charitable giving and volunteerism to focus on creating safer, smarter and more sustainable communities with donations to Requity, a Baltimore-based nonprofit providing vocational education and workforce development, the American Red Cross for Hurricane Ian disaster relief and Habitat for Humanity. In total, ADT donated $850,000 to charity in 2022.

ADT’s first annual CDP Climate Change Disclosure – ADT achieved a CDP score at the “Awareness” level, in line with the North American regional average, including the commercial and consumer services sector.

2023 FINANCIAL OUTLOOK

The Company is providing the following financial guidance for 2023, with all metrics representing an improvement over 2022 performance:

(in millions)

Total Revenue $6,600 – $6,850

Adjusted EBITDA $2,525 – $2,625

Adjusted EPS $0.30 – $0.40

Adjusted Free Cash Flow
(including interest rate swaps) $600 – $700

Adjusted Free Cash Flow $525 – $625

See Note (1) for an explanation of why the Company is not providing a quantitative reconciliation of its non-GAAP financial outlook to the corresponding GAAP measures.

TOTAL COMPANY RESULTS
⁽²⁾⁽³⁾

(in millions, except revenue payback, attrition, and per share data)
Three Months Ended
December 31, Twelve Months Ended
December 31,

2022 2021 2022 2021

GAAP

Total revenue $ 1,645 $ 1,381 $ 6,395 $ 5,307

Net income (loss) $ 151 $ (58 ) $ 173 $ (341 )

Net cash provided by (used in) operating activities $ 567 $ 494 $ 1,888 $ 1,650

Net cash provided by (used in) investing activities $ (324 ) $ (525 ) $ (1,533 ) $ (1,696 )

Net cash provided by (used in) financing activities $ 71 $ (4 ) $ (15 ) $ (128 )

Net income (loss) per share of Common Stock – diluted $ 0.16 $ (0.07 ) $ 0.19 $ (0.41 )

Net income (loss) per share of Class B Common Stock – diluted $ 0.16 $ (0.07 ) $ 0.19 $ (0.41 )

Other Measures

Adjusted EBITDA $ 629 $ 574 $ 2,447 $ 2,213

Adjusted Free Cash Flow $ 269 $ 176 $ 558 $ 465

Adjusted Net Income (Loss) $ 92 $ (25 ) $ 218 $ (191 )

Adjusted Diluted Net Income (Loss) per share $ 0.10 $ (0.03 ) $ 0.24 $ (0.25 )

Trailing twelve-month revenue payback 2.1 years 2.3 years

Trailing twelve-month gross customer revenue attrition 12.5 % 13.1 %

End of period RMR $ 374 $ 359

SEGMENT RESULTS
⁽³⁾

CSB

Three Months Ended December 31, Twelve Months Ended December 31,

2022 2021 $
Change %
Change 2022 2021 $
Change %
Change

(in millions)

Monitoring and related services $ 1,024 $ 981 $ 43 4 % $ 4,050 $ 3,873 $ 177 5 %

Security installation, product, and other 93 68 25 37 % 329 273 56 21 %

Total CSB revenue $ 1,117 $ 1,049 $ 68 6 % $ 4,379 $ 4,146 $ 233 6 %

Adjusted EBITDA $ 581 $ 553 $ 28 5 % $ 2,315 $ 2,111 $ 204 10 %

Adjusted EBITDA Margin (as a % of Total CSB Revenue) 52 % 53 % 53 % 51 %

Total CSB revenue was $1,117 million for the fourth quarter and $4,379 million for the full year, up 6% versus the prior year for both periods. This performance was driven primarily by an increase in monitoring and related services (M&S) revenue resulting from higher average pricing, subscriber growth initiatives, and improved customer retention.

CSB Adjusted EBITDA increased 5% to $581 million in the fourth quarter and increased 10% to $2,315 million for the full year 2022. These improvements were driven by higher M&S revenue and improved cost performance. The Company’s Virtual Assistance program allowed ADT to reduce service costs for the full year even as the Company achieved an increase in subscribers and RMR.

Commercial

Three Months Ended December 31, Twelve Months Ended December 31,

2022 2021 $
Change %
Change 2022 2021 $
Change %
Change

(in millions)

Monitoring and related services $ 139 $ 122 $ 17 14 % $ 539 $ 474 $ 65 14 %

Security installation, product, and other 189 162 27 17 % 691 639 52 8 %

Total Commercial revenue $ 328 $ 284 $ 44 15 % $ 1,230 $ 1,114 $ 116 10 %

Adjusted EBITDA $ 38 $ 16 $ 22 137 % $ 127 $ 96 $ 31 32 %

Adjusted EBITDA Margin (as a % of Total Commercial Revenue) 12 % 6 % 10 % 9 %

Total Commercial revenue was $328 million for the fourth quarter and $1,230 million for the full year, up 15% and 10%, respectively, versus prior year. Improvements were driven by an increase in product and service prices as well as strong installation and sales performance.

Commercial Adjusted EBITDA increased 137% to $38 million in the fourth quarter and increased 32% to $127 million for the full year 2022. These improvements were driven by higher revenue, which was partially offset by the impact of cost inflation on materials, labor, and fuel.

Solar

Three Months Ended December 31, Twelve Months Ended December 31,

(in millions) 2022 2021 $
Change %
Change 2022 2021 $
Change %
Change

Solar installation, product, and other $ 200 $ 47 $ 153 N/M $ 786 $ 47 $ 739 N/M

Total Solar revenue $ 200 $ 47 $ 153 N/M $ 786 $ 47 $ 739 N/M

Adjusted EBITDA $ 10 $ 6 $ 4 N/M $ 5 $ 6 $ — N/M

Adjusted EBITDA Margin (as a % of Total Solar Revenue) 5 % 12 % 1 % 12 %

Note: Sunpro Solar, now referred to as ADT Solar, was acquired on December 8, 2021. M&S revenue is not applicable to
the Solar segment.

Total Solar revenue for the fourth quarter was $200 million and $786 million for the full year. ADT solar installed over 20,000 systems in 2022, an increase of 18% year over year compared to legacy Sunpro.

Solar Adjusted EBITDA was $10 million for the fourth quarter and $5 million for the full year 2022. Full year Adjusted EBITDA was negatively impacted by installation delays associated with a third-party lender’s insolvency in the second quarter and cost inefficiencies from lower install throughput.

BALANCE SHEET, CASH, AND LIQUIDITY

Net cash provided by operating activities during the fourth quarter of 2022 was $567 million with Adjusted Free Cash Flow of $269 million. For the full year of 2022, net cash provided by operating activities was $1,888 million with Adjusted Free Cash Flow of $558 million, up 14% and 20%, respectively, versus the prior year period. The company returned $127 million to shareholders in dividends during 2022.

At the end of the fourth quarter of 2022, the Company had total debt of $9.8 billion with continued improvements in GAAP and adjusted leverage ratios. The Company ended the year with no outstanding revolver borrowings.

On Feb. 10, 2023, the Company provided a partial redemption notice to pay off $600 million of the $700 million ADT Notes due 2023, using the $600 million Term Loan A facility which the Company expects to draw down on March 15, 2023. The Company expects to redeem the remaining $100 million of the ADT Notes due 2023 with cash on hand on or before maturity in June 2023. The Company has no other significant debt maturities remaining in 2023.

DIVIDEND DECLARATION

Effective Feb. 28, 2023, the Company’s Board of Directors declared a cash dividend of $0.035 per share to holders of the Company’s Common Stock and Class B Common Stock of record as of March 16, 2023. This dividend will be paid on April 4, 2023.

_____________________

(1 ) The Company is not providing a quantitative reconciliation of its 2023 financial outlook for Adjusted EBITDA, Adjusted Diluted Net Income (Loss) per Share (“Adjusted EPS”), Adjusted Free Cash Flow, and Adjusted Free Cash Flow (including interest rate swaps) to net income (loss) and net cash provided by operating activities, which are their respective corresponding GAAP measures, because the Company is unable to reliably predict or estimate these GAAP measures without unreasonable effort due to their dependence on future uncertainties, such as the adjustments or items discussed below under the heading “Non-GAAP Measures.” Additionally, information that is currently not available to the Company could have a potentially unpredictable and potentially significant impact on its future GAAP financial results.

(2 ) All variances are year-over-year unless otherwise noted. Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow (including interest rate swaps), Adjusted Net Income (Loss), Adjusted Diluted Net Income (Loss) per share, and Net Leverage Ratio are non-GAAP measures. Refer to the “Non-GAAP Measures” section for the definitions of these terms and reconciliations to the most comparable GAAP measures. The operating metrics such as Gross Customer Revenue Attrition, Unit Count, RMR, Gross RMR Additions, and Revenue Payback are approximated as there may be variations to reported results in each period due to certain adjustments the Company might make in connection with the integration over several periods of acquired companies that calculated these metrics differently, or otherwise, including periodic reassessments and refinements in the ordinary course of business. These refinements, for example, may include changes due to systems conversion or historical methodology differences in legacy systems.

(3 ) Amounts may not sum due to rounding.

Conference Call

As previously announced, management will host a conference call at 10:00 a.m. ET today to discuss the Company’s fourth quarter and full year 2022 results and lead a question-and-answer session.

Participants may listen to a live webcast through the investor relations website at investor.adt.com. A replay of the webcast will be available on the website within 24 hours of the live event.

Alternatively, participants may listen to the live call by dialing 1-888-660-6144 (domestic) or 1-929-203-0865 (international) and requesting the ADT Fourth Quarter 2022 Earnings Conference Call. An audio replay will be available for two weeks following the call and can be accessed by dialing 1-800-770-2030 (domestic) or 1-647-362-9199 (international) and providing the passcode 5974526.

A slide presentation highlighting the Company’s results will also be available on the Investor Relations section of the Company’s website. From time to time, the Company may use its website as a channel of distribution of material Company information. Financial and other material information regarding the Company is routinely posted on and accessible at investor.adt.com.

About ADT Inc.

ADT provides safe, smart and sustainable solutions for people, homes and businesses. Through innovative products, partnerships and the largest network of smart home, security and rooftop solar professionals in the United States, we empower people to protect and connect what matters most. For more information, visit www.adt.com.

Investor Relations: Media Relations:

[email protected]

Tel: 888-238-8525          [email protected]

Forward-Looking Statements

ADT has made statements in this press release and other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties. All statements, other than statements of historical fact, included in this document are, or could be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to the equity investment by and long term partnership with State Farm and the anticipated impact of these on our business and financial condition, our relationships with other insurance companies, and the market price of our Common Stock; anticipated financial performance, including our ability to achieve our stated guidance metrics and our progress toward our 2025 goals; management’s plans and objectives for future operations; our acquisition of Sunpro Solar, now ADT Solar, and its anticipated impact on our business and financial condition; business prospects; market conditions; our ability to successfully respond to the challenges posed by the COVID-19 Pandemic; our strategic partnership and ongoing relationship with Google; the expected timing of product commercialization with Google or any changes thereto; the expected timing of product commercialization with State Farm or any changes thereto; the successful internal development, commercialization, and timing of our next generation platform and innovative offerings; the successful commercialization of our joint venture with Ford; and other matters. Forward-looking statements can be identified by various words such as “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,” “targets,” “planned,” “projects,” and similar expressions. These forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to management. ADT cautions that these statements are subject to risks and uncertainties, many of which are outside of ADT’s control, and could cause future events or results to be materially different from those stated or implied in this document, including among others, factors relating to the achievement of potential benefits of the equity investment by and long term partnership with State Farm, including as a result of restrictions on, or required prior regulatory approval of, various actions by regulated insurers; risks and uncertainties related to ADT’s ability to successfully generate profitable revenue from new and existing partnerships; ADT’s ability to successfully commercialize any joint products with State Farm or with Google; the Company’s ability to successfully utilize the incremental funding committed by State Farm or Google; risks and uncertainties related to the Company’s ability to successfully integrate and operate the ADT Solar business; the Company’s ability to commercialize its joint venture with Ford; the Company’s ability to continuously and successfully commercialize innovative offerings; the Company’s ability to successfully implement an Environmental, Social, and Governance program across the Company; and risk factors that are described in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the SEC, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. Any forward-looking statement made in this press release speaks only as of the date on which it is made. ADT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.

ADT INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(Unaudited)

Three Months Ended December 31, Twelve Months Ended December 31,

2022 2021 $ Change % Change 2022 2021 $ Change % Change

Revenue:

Monitoring and related services $ 1,163 $ 1,103 $ 59 5 % $ 4,589 $ 4,348 $ 242 6 %

Security installation, product, and other 283 231 52 23 % 1,020 912 108 12 %

Solar installation, product, and other 200 47 153 N/M 786 47 739 N/M

Total revenue 1,645 1,381 264 19 % 6,395 5,307 1,088 21 %

Cost of revenue
(exclusive of depreciation and amortization shown separately below):

Monitoring and related services 231 231 — — % 918 913 5 1 %

Security installation, product, and other 178 150 28 19 % 620 602 18 3 %

Solar installation, product, and other 119 35 84 N/M 502 35 467 N/M

Total cost of revenue 528 415 113 27 % 2,040 1,550 490 32 %

Selling, general, and administrative expenses 480 445 35 8 % 1,930 1,789 141 8 %

Depreciation and intangible asset amortization 412 491 (79 ) (16 )% 1,694 1,915 (221 ) (12 )%

Merger, restructuring, integration, and other 19 19 — — % 22 38 (16 ) (41 )%

Goodwill impairment — — — — % 149 — 149 N/M

Operating income (loss) 206 10 196 N/M 560 15 545 N/M

Interest expense, net (147 ) (110 ) (37 ) 34 % (265 ) (458 ) 192 (42 )%

Loss on extinguishment of debt — — — — % — (37 ) 37 N/M

Other income (expense) 96 3 92 N/M (58 ) 8 (66 ) N/M

Income (loss) before income taxes and equity in net earnings (losses) of equity method investee 155 (96 ) 251 N/M 237 (471 ) 709 N/M

Income tax benefit (expense) (1 ) 38 (39 ) N/M (60 ) 130 (191 ) N/M

Income (loss) before equity in net earnings (losses) of equity method investee 154 (58 ) 211 N/M 177 (341 ) 518 N/M

Equity in net earnings (losses) of equity method investee (2 ) — (2 ) N/M (5 ) — (5 ) N/M

Net income (loss) $ 151 $ (58 ) $ 209 N/M $ 173 $ (341 ) $ 513 N/M

Net income (loss) per share – basic:

Common Stock $ 0.17 $ (0.07 ) $ 0.19 $ (0.41 )

Class B Common Stock $ 0.17 $ (0.07 ) $ 0.19 $ (0.41 )

Weighted-average shares outstanding – basic:

Common Stock 851 787 848 771

Class B Common Stock 55 55 55 55

Net income (loss) per share – diluted:

Common Stock $ 0.16 $ (0.07 ) $ 0.19 $ (0.41 )

Class B Common Stock $ 0.16 $ (0.07 ) $ 0.19 $ (0.41 )

Weighted-average shares outstanding – diluted:

Common Stock 922 787 915 771

Class B Common Stock 55 55 55 55

Note: amounts may not sum due to rounding

ADT INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

(Unaudited)

December 31, 2022 December 31, 2021

Assets

Current assets:

Cash and cash equivalents $ 257 $ 24

Restricted cash and restricted cash equivalents 116 9

Accounts receivable, net 597 442

Inventories, net 329 277

Work-in-progress 81 71

Prepaid expenses and other current assets 341 169

Total current assets 1,722 993

Property and equipment, net 376 364

Subscriber system assets, net 3,061 2,868

Intangible assets, net 5,092 5,413

Goodwill 5,819 5,943

Deferred subscriber acquisition costs, net 1,080 850

Other assets 724 463

Total assets $ 17,873 $ 16,894

Liabilities and stockholders’ equity

Current liabilities:

Current maturities of long-term debt $ 872 $ 118

Accounts payable 487 475

Deferred revenue 403 374

Accrued expenses and other current liabilities 900 737

Total current liabilities 2,661 1,703

Long-term debt 8,957 9,575

Deferred subscriber acquisition revenue 1,645 1,199

Deferred tax liabilities 905 867

Other liabilities 272 301

Total liabilities 14,440 13,646

Total stockholders’ equity 3,433 3,249

Total liabilities and stockholders’ equity $ 17,873 $ 16,894

Note: amounts may not sum due to rounding

ADT INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT
S OF CASH FLOWS

(in millions)

(Unaudited)

Three Months Ended December 31, Twelve Months Ended December 31,

2022 2021 2022 2021

Cash flows from operating activities:

Net income (loss) $ 151 $ (58 ) $ 173 $ (341 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and intangible asset amortization 412 491 1,694 1,915

Amortization of deferred subscriber acquisition costs 45 35 163 126

Amortization of deferred subscriber acquisition revenue (68 ) (49 ) (244 ) (172 )

Share-based compensation expense 17 15 67 61

Deferred income taxes (17 ) (37 ) 31 (139 )

Provision for losses on receivables and inventory 45 9 114 38

Loss on extinguishment of debt — — — 37

Goodwill, intangible, and other asset impairments 4 1 155 19

Unrealized (gain) loss on interest rate swap contracts 11 (42 ) (302 ) (158 )

Change in fair value of other financial instruments (94 ) — 63 —

Other non-cash items, net 22 49 124 149

Changes in operating assets and liabilities, net of effects of acquisitions:

Deferred subscriber acquisition costs (89 ) (89 ) (394 ) (324 )

Deferred subscriber acquisition revenue 73 75 329 277

Other, net 56 95 (85 ) 161

Net cash provided by (used in) operating activities 567 494 1,888 1,650

Cash flows from investing activities:

Dealer generated customer accounts and bulk account purchases (121 ) (163 ) (622 ) (675 )

Subscriber system asset expenditures (162 ) (176 ) (735 ) (695 )

Purchases of property and equipment (41 ) (42 ) (177 ) (168 )

Acquisition of businesses, net of cash acquired — (147 ) (13 ) (164 )

Proceeds from sale of business, net of cash sold — 2 27 2

Other investing, net — — (13 ) 4

Net cash provided by (used in) investing activities (324 ) (525 ) (1,533 ) (1,696 )

Cash flows from financing activities:

Proceeds from issuance of common stock, net of expenses 1,180 — 1,180 —

Proceeds from long-term borrowings 70 185 550 1,196

Proceeds from receivables facility 65 136 277 254

Proceeds from opportunity fund 101 — 101 —

Repurchases of common stock (1,200 ) — (1,200 ) —

Repayment of long-term borrowings, including call premiums (77 ) (167 ) (605 ) (1,219 )

Repayment of receivables facility (40 ) (102 ) (121 ) (130 )

Dividends on common stock (32 ) (29 ) (127 ) (116 )

Payments on finance leases (11 ) (10 ) (45 ) (32 )

Payments on interest rate swaps 8 (14 ) (19 ) (56 )

Other financing, net 8 (3 ) (5 ) (24 )

Net cash provided by (used in) financing activities 71 (4 ) (15 ) (128 )

Cash and cash equivalents and restricted cash and restricted cash equivalents:

Net increase (decrease) during the period 314 (35 ) 340 (174 )

Beginning balance 60 68 33 208

Ending balance $ 374 $ 33 $ 374 $ 33

Note: amounts may not sum due to rounding

ADT INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(in millions)

(Unaudited)

Revenue by Segment

Three Months Ended December 31, Twelve Months Ended December 31,

(in millions) 2022 2021 2022 2021

CSB:

Monitoring and related services $ 1,024 $ 981 $ 4,050 $ 3,873

Security installation, product, and other 93 68 329 273

Total CSB $ 1,117 $ 1,049 $ 4,379 $ 4,146

Commercial:

Monitoring and related services $ 139 $ 122 $ 539 $ 474

Security installation, product, and other 189 162 691 639

Total Commercial $ 328 $ 284 $ 1,230 $ 1,114

Solar:

Solar installation, product, and other $ 200 $ 47 $ 786 $ 47

Total Solar $ 200 $ 47 $ 786 $ 47

Total Revenue $ 1,645 $ 1,381 $ 6,395 $ 5,307

Adjusted EBITDA by Segment

Three Months Ended December 31, Twelve Months Ended December 31,

(in millions) 2022 2021 2022 2021

CSB $ 581 $ 553 $ 2,315 $ 2,111

Commercial 38 16 127 96

Solar 10 6 5 6

Total $ 629 $ 574 $ 2,447 $ 2,213

Adjusted EBITDA Margin by Segment

Three Months Ended December 31, Twelve Months Ended December 31,

2022 2021 2022 2021

CSB (as a % of Total CSB Revenue) 52 % 53 % 53 % 51 %

Commercial (as a % of Total Commercial Revenue) 12 % 6 % 10 % 9 %

Solar (as a % of Total Solar Revenue) 5 % 12 % 1 % 12 %

Note: amounts may not sum due to rounding

ADT INC. AND SUBSIDIARIES

NON-GAAP MEASURES

ADT sometimes uses information (“non-GAAP financial measures”) that is derived from the consolidated financial statements, but that is not presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”). Under SEC rules, non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.

The following information includes definitions of our non-GAAP financial measures used in this release, reasons our management believes these measures are useful to investors regarding our financial condition and results of operations, additional purposes, if any, for which our management uses the non-GAAP financial measures, and limitations to using these non-GAAP financial measures, as well as reconciliations of these non-GAAP financial measures to the most comparable GAAP measures. Each non-GAAP financial measure is presented following the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure. The limitations of non-GAAP financial measures are best addressed by considering these measures in conjunction with the appropriate GAAP measures. In addition, computations of these non-GAAP measures may not be comparable to other similarly titled measures reported by other companies.

With regard to our financial guidance for 2023, the Company is not providing a quantitative reconciliation for forward-looking Adjusted EBITDA and Adjusted EPS to net income (loss), and Adjusted Free Cash Flow and Adjusted Free Cash Flow (including interest rate swaps) to net cash provided by operating activities, which are the most directly comparable respective GAAP measures. These GAAP measures cannot be reliably predicted or estimated without unreasonable effort due to their dependence on future uncertainties, such as the adjustment of items used in the following reconciliations. Additionally, information about other adjusting items that is currently not available to the Company could have a potentially unpredictable and potentially significant impact on its future GAAP financial results.

Adjusted EBITDA, Adjusted EBITDA Margin, and Reconciliation to GAAP Net Income or Loss

We believe the presentation of Adjusted EBITDA provides useful information to investors about our operating profitability adjusted for certain non-cash items, non-routine items that we do not expect to continue at the same level in the future, as well as other items that are not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures.

We define Adjusted EBITDA as net income or loss adjusted for (i) interest; (ii) taxes; (iii) depreciation and amortization, including depreciation of subscriber system assets and other fixed assets and amortization of dealer and other intangible assets; (iv) amortization of deferred costs and deferred revenue associated with subscriber acquisitions; (v) share-based compensation expense; (vi) merger, restructuring, integration, and other; (vii) losses on extinguishment of debt; (viii) radio conversion costs net of any related incremental revenue earned; and (ix) other income/gain or expense/loss items such as changes in fair value of certain financial instruments, impairment charges, financing and consent fees, or acquisition-related adjustments.

There are material limitations to using Adjusted EBITDA as it does not reflect certain significant items which directly affect our net income or loss (the most comparable GAAP measure).

The Adjusted EBITDA discussion above is also applicable to Adjusted EBITDA margin, which is calculated as Adjusted EBITDA as a percentage of total revenue.

Three Months Ended December 31, Twelve Months Ended December 31,

(in millions) 2022 2021 2022 2021

Net income (loss) $ 151 $ (58 ) $ 173 $ (341 )

Interest expense, net 147 110 265 458

Income tax expense (benefit) 1 (38 ) 60 (130 )

Depreciation and intangible asset amortization 412 491 1,694 1,915

Amortization of deferred subscriber acquisition costs 45 35 163 126

Amortization of deferred subscriber acquisition revenue (68 ) (49 ) (244 ) (172 )

Share-based compensation expense 17 15 67 61

Merger, restructuring, integration and other 19 19 22 38

Goodwill impairment⁽¹⁾ — — 149 —

Loss on extinguishment of debt — — — 37

Change in fair value of other financial instruments⁽²⁾ (94 ) — 63 —

Radio conversion costs, net⁽³⁾ (3 ) 40 3 211

Acquisition-related adjustments⁽⁴⁾ (1 ) 12 35 13

Other, net⁽⁵⁾ 3 (2 ) (4 ) (3 )

Adjusted EBITDA $ 629 $ 574 $ 2,447 $ 2,213

Net income (loss) to total revenue ratio 9 % (4)
% 3 % (6)
%

Adjusted EBITDA Margin

(as percentage of Total Revenue) 38 % 42 % 38 % 42 %

Note: amounts may not sum due to rounding

_______________________

(1) Represents a goodwill impairment charge related to the Solar reporting unit in Q3 2022.
(2) In connection with the State Farm investment, amounts represent the change in fair value of a contingent forward purchase contract related to the tender offer during 2022.
(3) Represents net costs associated with replacing cellular technology used in many of our security systems pursuant to a replacement program.
(4) Primarily represents amortization of the customer backlog intangible asset during Q4 2021 and Q1 2022 related to the ADT Solar Acquisition.
(5) During the twelve months ended December 31, 2022, primarily represents the gain on sale of a business.

Free Cash Flow, Adjusted Free Cash Flow, Adjusted Free Cash Flow including interest rate swaps, and Reconciliation to GAAP Net Cash Flows from Operating Activities

We define Free Cash Flow as cash flows from operating activities less cash outlays related to capital expenditures. We define capital expenditures to include accounts purchased through our network of authorized dealers or third parties outside of our authorized dealer network, subscriber system asset expenditures, and purchases of property and equipment. These items are subtracted from cash flows from operating activities because they represent long-term investments that are required for normal business activities.

We define Adjusted Free Cash Flow as Free Cash Flow adjusted for net cash flows related to (i) net proceeds from our consumer receivables facility; (ii) financing and consent fees; (iii) restructuring and integration; (iv) integration-related capital expenditures; (v) radio conversion costs net of any related incremental revenue collected; and (vi) other payments or receipts that may mask our operating results or business trends. Adjusted Free Cash Flow including interest rate swaps reflects Adjusted Free Cash Flow plus net cash settlements on interest rate swaps presented within net cash provided by (used in) financing activities.

We believe the presentations of these non-GAAP measures are appropriate to provide investors with useful information about our ability to repay debt, make other investments, and pay dividends. We believe the presentation of Adjusted Free Cash Flow is also a useful measure of our cash flow attributable to our normal business activities, inclusive of the net cash flows associated with the acquisition of subscribers, as well as our ability to repay other debt, make other investments, and pay dividends. Further, Adjusted Free Cash Flow including interest rate swaps is a useful measure of Adjusted Free Cash Flow inclusive of all cash interest.

There are material limitations to using these non-GAAP measures. These non-GAAP measures adjust for cash items that are ultimately within management’s discretion to direct, and therefore, may imply that there is less or more cash available than the most comparable GAAP measure. These non-GAAP measures are not intended to represent residual cash flow for discretionary expenditures since debt repayment requirements and other non-discretionary expenditures are not deducted.

Three Months Ended December 31, Twelve Months Ended December 31,

(in millions) 2022 2021 2022 2021

Net cash provided by (used in) operating activities $ 567 $ 494 $ 1,888 $ 1,650

Net cash provided by (used in) investing activities $ (324 ) $ (525 ) $ (1,533 ) $ (1,696 )

Net cash provided by (used in) financing activities $ 71 $ (4 ) $ (15 ) $ (128 )

Net cash provided by (used in) operating activities $ 567 $ 494 $ 1,888 $ 1,650

Dealer generated customer accounts and bulk account purchases (121 ) (163 ) (622 ) (675 )

Subscriber system asset expenditures (162 ) (176 ) (735 ) (695 )

Purchases of property and equipment (41 ) (42 ) (177 ) (168 )

Free Cash Flow 243 114 355 112

Net proceeds from receivables facility 25 33 156 123

Financing and consent fees — — — 4

Restructuring and integration payments⁽¹⁾ 4 2 17 11

Integration-related capital expenditures — 1 1 10

Radio conversion costs, net⁽²⁾ (6 ) 25 4 198

Other, net⁽³⁾ 3 — 24 7

Adjusted Free Cash Flow $ 269 $ 176 $ 558 $ 465

Interest rate swaps presented within financing activities⁽⁴⁾ 8 (14 ) (19 ) (56 )

Adjusted Free Cash Flow including interest rate swaps $ 277 $ 162 $ 539 $ 409

Note: amounts may not sum due to rounding

_______________________
(1) During the twelve months ended December 31, 2022, primarily represents CSB restructuring costs and ADT Solar integration costs.
(2) Represents net costs associated with replacing cellular technology used in many of our security systems pursuant to a replacement program.
(3) During the twelve months ended December 31, 2022, primarily represents $16 million of acquisition costs related to the ADT Solar acquisition.
(4) Includes net settlements related to interest rate swaps with an other-than-insignificant financing element at inception, which is presented within net cash provided by (used in) financing activities.

Adjusted Net Income (Loss), Adjusted Diluted Net Income (Loss) per Share, and Reconciliations to GAAP Net Income (Loss) and GAAP Diluted Net Income (Loss) per Share

We define Adjusted Net Income (Loss) as net income (loss) adjusted for (i) merger, restructuring, integration, and other; (ii) losses on extinguishment of debt; (iii) radio conversion costs net of any related incremental revenue earned; (iv) share-based compensation expense; (v) unrealized gains and losses on interest rate swap contracts not designated as hedges; (vi) other income/gain or expense/loss items such as changes in fair value of certain financial instruments, impairment charges, financing and consent fees, or acquisition-related adjustments; and (vii) the impact these adjusted items have on taxes.

Adjusted Diluted Net Income (Loss) per share is Adjusted Net Income (Loss) divided by diluted weighted-average shares outstanding of common stock. In periods of GAAP net loss, diluted weighted-average shares outstanding of common stock does not include the assumed conversion of Class B Common Stock and other potential shares, such as share-based compensation awards, to shares of Common Stock as the results would be anti-dilutive.

We believe Adjusted Net Income (Loss) and Adjusted Diluted Net Income (Loss) per share are benchmarks used by analysts and investors who follow the industry for comparison of its performance with other companies in the industry, although our measures may not be directly comparable to similar measures reported by other companies.

There are material limitations to using these measures, as they do not reflect certain significant items which directly affect our net income (loss) and related per share amounts (the most comparable GAAP measures).

During the third quarter of 2021, Net Income (Loss) before special items was renamed Adjusted Net Income (Loss), and Diluted Net Income (Loss) per share before special items was renamed Adjusted Diluted Net Income (Loss) per share. There has been no change to the calculation of these measures.

Three Months Ended December 31, Twelve Months Ended December 31,

(in millions, except per share data) 2022 2021 2022 2021

Net income (loss) $ 151 $ (58 ) $ 173 $ (341 )

Merger, restructuring, integration, and other 19 19 22 38

Goodwill impairment⁽¹⁾ — — 149 —

Loss on extinguishment of debt — — — 37

Change in fair value of other financial instruments⁽²⁾ (94 ) — 63 —

Radio conversion costs, net⁽³⁾ (3 ) 40 3 211

Share-based compensation expense 17 15 67 61

Unrealized (gain) loss on interest rate swaps⁽⁴⁾ 11 (42 ) (302 ) (158 )

Acquisition-related adjustments⁽⁵⁾ (1 ) 12 35 13

Other, net 3 (2 ) (4 ) (3 )

Tax impact on adjustments (11 ) (9 ) 11 (50 )

Adjusted Net Income (Loss) $ 92 $ (25 ) $ 218 $ (191 )

Weighted-average shares outstanding – diluted
⁽⁶⁾
:

Common Stock 922 787 915 771

Class B Common Stock 55 55 55 55

Net income (loss) per share – diluted:

Common Stock $ 0.16 $ (0.07 ) $ 0.19 $ (0.41 )

Class B Common Stock $ 0.16 $ (0.07 ) $ 0.19 $ (0.41 )

Adjusted Diluted Net Income (Loss) per share
⁽⁷⁾ $ 0.10 $ (0.03 ) $ 0.24 $ (0.25 )

Note: amounts may not sum due to rounding.

_______________________
(1) Represents a goodwill impairment charge related to the Solar reporting unit in Q3 2022.
(2) In connection with the State Farm investment, amounts represent the change in fair value of a contingent forward purchase contract related to the tender offer during 2022.
(3) Represents net costs associated with replacing cellular technology used in many of our security systems pursuant to a replacement program.
(4) Represents the change in the fair value of interest rate swaps not designated as cash flow hedges.
(5) Primarily represents amortization of the customer backlog intangible asset during Q4 2021 and Q1 2022 related to the ADT Solar Acquisition.
(6) Refer to the Company’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K for further discussion regarding the computation of diluted weighted-average shares outstanding of common stock.
(7) Calculated as Adjusted Net Income (Loss) divided by diluted weighted-average shares outstanding of Common Stock.

Leverage Rati

os and Reconciliation to GAAP Debt to Net Income (Loss) Leverage Ratio

Net Leverage Ratio is calculated as the ratio of net debt to last twelve months (“LTM”) Adjusted EBITDA. Net debt is calculated as total debt excluding the Receivables Facility, including capital leases, minus cash and cash equivalents. Refer to the discussion on Adjusted EBITDA for descriptions of the differences between Adjusted EBITDA and net income (loss), which is the most comparable GAAP measure. We believe Net Leverage Ratio is a useful measure of the Company’s credit position and progress towards leverage targets. There are material limitations to using Net Leverage Ratio as the Company may not always be able to use cash to repay debt on a dollar-for-dollar basis.

Debt to Net Income (Loss) Leverage Ratio:

(in millions) December 31, 2022 December 31, 2021

Total debt (book value) $ 9,829 $ 9,693

LTM net income (loss) $ 173 $ (341 )

Debt to net income (loss) leverage ratio 56.9x (28.4x )

Net debt and Net Leverage Ratio:

(in millions) December 31, 2022 December 31, 2021

Revolver $ — $ 25

First lien term loan 2,730 2,758

First lien notes 5,550 5,550

Receivables facility 355 199

Finance leases 95 93

Other 2 5

Total first lien debt $ 8,732 $ 8,630

Second lien notes 1,300 1,300

Total debt
⁽¹⁾ $ 10,032 $ 9,930

Less:

Cash and cash equivalents (257 ) (24 )

Receivables Facility (355 ) (199 )

Net debt $ 9,420 $ 9,706

LTM Adjusted EBITDA $ 2,447 $ 2,213

Net leverage ratio
⁽²⁾ 3.9x 4.4x

Note: amounts may not sum due to rounding

_______________________

(1) Debt instruments are stated at face value.
(2) Beginning Q4 2021, net leverage ratio excludes the Receivables Facility.

Posted on February 28, 2023 6:58 am
Warby Parker Announces Fourth Quarter and Full Year 2022 Results

Warby Parker Announces Fourth Quarter and Full Year 2022 Results

2022 net revenue increased 10.6% to $598.1 million

Average revenue per customer increased 6.9% year over year to $263

NEW YORK–(BUSINESS WIRE)–
Warby Parker Inc. (NYSE: WRBY) (the “Company”), a direct-to-consumer lifestyle brand focused on vision for all, today announced financial results for the fourth quarter and full year ended December 31, 2022.

“Our team’s accomplishments in 2022, Warby Parker’s first full year as a public company, reflect our commitment to growing sustainably while taking market share, delivering remarkable customer experiences, and creating impact,” said Co-Founder and Co-CEO Neil Blumenthal. “In the face of economic uncertainty and a depressed consumer environment, we delivered strong Q4 results and aim to bring that same momentum, powered by rigorous discipline, into 2023.”

“As we enter a new year, our team continues to focus on aspects of our business within our control, taking decisive action, and delivering on our value proposition while positioning our brand to continue to outpace industry growth. We’re committed to expanding profitability while making strategic investments in areas of the business that will drive brand awareness and create even more value for our millions of customers,” added Co-Founder and Co-CEO Dave Gilboa.

Fourth Quarter and Full Year 2022 Highlights

Full year net revenue increased $57.3 million, or 10.6%, to $598.1 million compared to full year 2021.

Fourth quarter net revenue increased $13.6 million, or 10.2%, to $146.5 million compared to fourth quarter 2021.

Active Customers increased 3.6% to 2.28 million year over year.

Average Revenue per Customer increased 6.9% year over year to $263.

Q4 2022 GAAP net loss of $20.3 million, a decrease of $25.7 million from the fourth quarter of 2021.

Q4 2022 adjusted EBITDA⁽¹⁾of $8.6 million and an adjusted EBITDA margin⁽¹⁾ of 5.8%, an increase of $15.0 million and 10.6 points from the fourth quarter of 2021.

Second half of 2022 adjusted EBITDA margin⁽¹⁾ of 6.9%, a 4.7 point improvement over 2.2% in the first half of 2022.

Opened 40 new stores during the year, ending 2022 with 200 stores.

Contact lens revenue increased to 7.2% of our business in 2022, up from 4.3% in 2021.

Eye exam revenue increased to 2.9% of our business in 2022, up from 1.7% in 2021.

Fourth Quarter 2022 Financial Results

For the fourth quarter of 2022, compared to the fourth quarter of 2021:

Net revenue increased $13.6 million, or 10.2%, to $146.5 million.

Active Customers increased by 78,000, or 3.6%, to 2.28 million.

Gross profit increased 5.8% to $80.7 million.

Gross margin was 55.1% compared to 57.4% in the prior year. The decline in gross margin was primarily driven by an increase in salary and benefit costs associated with optometrists as we scale our eye exam offering across our fleet, to 150 exam locations, up from 102 in the prior year period, the impact of the growth in the Company’s store count driving higher store occupancy and depreciation costs, and the increased penetration of contact lenses, which carry lower gross margins than eyeglasses, reflecting Warby Parker’s strategy to grow its contact lens offering. This was partially offset by leverage from the Company’s in-house optical laboratory network and the scaling of higher margin progressive lenses.

Selling, general and administrative expenses (“SG&A”) decreased $19.8 million to $102.4 million, or 69.9% of revenue, primarily driven by lower marketing costs, as we have reduced our online advertising spend and are leveraging our expanding retail footprint to drive brand awareness, and lower stock-based compensation costs, which represented 13.6% of revenue compared to 24.6% in Q4 2021. Adjusted SG&A⁽¹⁾ decreased from 67.3% to 55.6% of revenue.

GAAP net loss decreased $25.7 million to $20.3 million, primarily as a result of the decrease in SG&A described above.

Adjusted EBITDA⁽¹⁾ increased $15.0 million to $8.6 million.

Adjusted EBITDA margin⁽¹⁾ increased 10.6 points to 5.8%.

Full Year 2022 Financial Results

For the full year 2022, compared to the full year 2021:

Net revenue increased $57.3 million, or 10.6%, to $598.1 million.

Active Customers increased by 78,000, or 3.6%, to 2.28 million.

Gross profit increased 7.3% to $341.1 million.

Gross margin was 57.0% compared to 58.8% in the prior year. The decline in gross margin was primarily driven by the increased penetration of contact lenses which are sold at a lower margin than glasses, reflecting Warby Parker’s strategy to grow its contact lens offering, increases in store occupancy costs as a percent of revenue primarily due to increased depreciation and rent expense as we grew our store base to 200 stores, and an increase in salary and benefit costs associated with optometrists as we scale our eye exam offering across our fleet, to 150 exam locations, up from 102 in the prior year period. This was partially offset by the scaling of higher margin progressive lenses and leverage from the Company’s in-house optical laboratory network.

SG&A decreased $9.1 million to $452.3 million, or 75.6% of revenue, primarily driven by a decrease in stock-based compensation and related payroll taxes and professional costs incurred in 2021 related to the Company’s direct listing. Adjusted SG&A⁽¹⁾ increased $32.5 million to $348.5 million primarily driven by higher compensation costs, primarily from growth in our retail workforce, increased insurance costs related to operating as a public company, and increased depreciation and amortization costs, mainly related to capitalized software and office build-outs. These decreases were partially offset by a reduction in marketing expenses and Home Try-On program costs. Adjusted SG&A remained flat as a percent of revenue.

GAAP net loss decreased $33.9 million to $110.4 million, primarily as a result of the increase in gross profit and the decrease in SG&A described above.

Adjusted EBITDA⁽¹⁾ increased $2.3 million to $27.2 million.

Adjusted EBITDA margin⁽¹⁾ of 4.5% was flat as compared to 2021, however, the second half of 2022 adjusted EBITDA margin⁽¹⁾ was 6.9%, a 4.7 point improvement over 2.2% in the first half of 2022.

Balance Sheet Highlights

Warby Parker ended 2022 with $208.6 million in cash and cash equivalents.

2023 Outlook

For the full year 2023, Warby Parker is providing the following guidance:

Net revenue of $645 to $660 million, representing growth of 8% to 10% versus full year 2022.

Adjusted EBITDA⁽¹⁾ of approximately $51.5 million, or adjusted EBITDA margin⁽¹⁾ of approximately 7.9%.

40 new store openings bringing the total projected store count at year end to approximately 240.

“We are pleased with our strong fourth quarter performance, in particular the profitability expansion we were able to achieve with an adjusted EBITDA margin of 2.2% in the first half of 2022 up to 6.9% in the second half despite economic headwinds,” said Chief Financial Officer Steve Miller. “Our 2023 outlook reflects our team’s commitment to maintaining discipline across the topline and bottomline while continuing to invest in our omnichannel business model, for example by opening 40 new stores. As we work to capture greater market share while providing vision for all, we’re as committed as ever to delivering value to shareholders,” said Chief Financial Officer Steve Miller.

The guidance and forward-looking statements made in this press release and on our conference call are based on management’s expectations as of the date of this press release.

⁽¹⁾ Please see the reconciliation of non-GAAP financial measures to the most comparable GAAP financial measure in the section titled “Non-GAAP Financial Measures” below.

Webcast and Conference Call

A conference call to discuss Warby Parker’s fourth quarter and full year 2022 results, as well as first quarter and full year 2023 outlook, is scheduled for 8:00 a.m. ET today. To participate, please dial 844-200-6205 from the U.S. or 929-526-1599 from international locations. The conference passcode is 045225. A live webcast of the conference call will be available on the investors section of the Company’s website at investors.warbyparker.com where presentation materials will also be posted prior to the conference call. A replay will be made available online approximately two hours following the live call for a period of 90 days.

Forward-Looking Statements

This press release and the related conference call, webcast and presentation contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, including expectations regarding achieving profitability, delivering stakeholder value, growing market share, and our GAAP and non-GAAP guidance for the quarter ending March 31, 2023 and year ending December 31, 2023; expectations regarding the number of new store openings during the year ending December 31, 2023; management’s plans, priorities, initiatives and strategies; and expectations regarding growth of our business. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantiﬁed. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all.

Forward-looking statements are based on information available at the time those statements are made and are based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management as of that time with respect to future events. These statements are subject to risks and uncertainties, many of which involve factors or circumstances that are beyond our control, that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. These risks and uncertainties include our ability to manage our future growth effectively; our expectations regarding cost of goods sold, gross margin, channel mix, customer mix, and selling, general, and administrative expenses; planned new retail stores in 2023 and going forward; an overall decline in the health of the economy and other factors impacting consumer spending, such as recessionary conditions, inflation and government instability; increases in component and shipping costs and changes in supply chain; our ability to compete successfully; our ability to manage our inventory balances and shrinkage; our ability to engage our existing customers and obtain new customers; the growth of our brand awareness; the effects of the ongoing COVID-19 pandemic or a future outbreak of disease or similar public health concern; the effects of seasonal trends on our results of operations; our ability to stay in compliance with extensive laws and regulations that apply to our business and operations; our ability to adequately maintain and protect our intellectual property and proprietary rights; our reliance on third parties for our products, operation and infrastructure; our duties related to being a public benefit corporation; the ability of our Co-Founders and Co-CEOs to exercise significant influence over all matters submitted to stockholders for approval; the effect of our multi-class structure on the trading price of our Class A common stock; and the increased expenses associated with being a public company. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the Company’s expectations is included in our most recent reports filed with the SEC on Form 10-K and Form 10-Q. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.

Additional information regarding these and other factors that could affect the Company’s results is included in the Company’s SEC filings, which may be obtained by visiting the SEC’s website at www.sec.gov. Information contained on, or that is referenced or can be accessed through, our website does not constitute part of this document and inclusions of any website addresses herein are inactive textual references only.

Glossary

Active Customer is defined as a unique customer that has made at least one purchase of any product or service in the preceding 12-month period.

Average Revenue per Customer is defined as net revenue for a given period divided by the number of Active Customers as of the end of that same period.

Non-GAAP Financial Measures

We use adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted cost of goods sold (“adjusted COGS”), adjusted gross profit, and adjusted selling, general, and administrative expenses (“adjusted SG&A”) as important indicators of our operating performance. Collectively, we refer to these non-GAAP financial measures as our “Non-GAAP Measures.” The Non-GAAP Measures, when taken collectively with our GAAP results, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results.

Adjusted EBITDA is defined as net income (loss) before interest and other income, taxes, and depreciation and amortization as further adjusted for asset impairment costs, stock-based compensation expense and related employer payroll taxes, amortization of cloud-based software implementation costs, non-cash charitable donations, and non-recurring costs such as restructuring costs, major system implementation costs, and direct listing or other transaction costs. Adjusted EBITDA margin is defined as adjusted EBITDA divided by net revenue.

Adjusted net income (loss) is defined as net income (loss) adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, and non-recurring costs such as restructuring costs, major system implementation costs, and direct listing or other transaction costs, and as further adjusted for estimated income tax on such adjusted items.

Adjusted earnings (loss) per share is defined as adjusted net income (loss) divided by adjusted weighted average shares outstanding.

Adjusted COGS is defined as cost of goods sold adjusted for stock-based compensation expense and related employer payroll taxes.

Adjusted gross profit is defined as net revenue minus adjusted COGS.

Adjusted SG&A is defined as SG&A adjusted for stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, and non-recurring costs such as restructuring costs, major system implementation costs, and direct listing or other transaction costs.

The Non-GAAP Measures are presented for supplemental informational purposes only. A reconciliation of historical GAAP to Non-GAAP financial information is included under “Selected Financial Information” below.

We have not reconciled our adjusted EBITDA margin guidance to GAAP net income (loss) margin, or net margin, or adjusted EBITDA guidance to GAAP net income (loss) because we do not provide guidance for GAAP net margin or GAAP net income (loss) due to the uncertainty and potential variability of stock-based compensation and taxes, which are reconciling items between GAAP net margin and adjusted EBITDA margin and GAAP net income (loss) and adjusted EBITDA, respectively. Because such items cannot be reasonably provided without unreasonable efforts, we are unable to provide a reconciliation of the adjusted EBITDA margin guidance to GAAP net margin and adjusted EBITDA guidance to GAAP net income (loss). However, such items could have a significant impact on GAAP net margin and GAAP net income (loss).

About Warby Parker

Warby Parker (NYSE: WRBY) was founded in 2010 with a mission to inspire and impact the world with vision, purpose, and style–without charging a premium for it. Headquartered in New York City, the co-founder-led lifestyle brand pioneers ideas, designs products, and develops technologies that help people see, from designer-quality prescription glasses (starting at $95) and contacts, to eye exams and vision tests available online and in its 200 retail stores across the U.S. and Canada.

Warby Parker aims to demonstrate that businesses can scale, do well, and do good in the world. Ultimately, the brand believes in vision for all, which is why for every pair of glasses or sunglasses sold, they distribute a pair to someone in need through their Buy a Pair, Give a Pair program. To date, Warby Parker has worked alongside its nonprofit partners to distribute more than 10 million glasses to people in need.

Selected Financial Information

Warby Parker Inc. and Subsidiaries

Consolidated Balance Sheets (Unaudited)

(Amounts in thousands, except share data)

December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$

208,585

$

256,416

Accounts receivable, net

1,435

992

Inventory

68,848

57,095

Prepaid expenses and other current assets

15,700

13,477

Total current assets

294,568

327,980

Property and equipment, net

138,628

112,195

Right-of-use lease assets

127,014

—

Other assets

8,497

471

Total assets

$

568,707

$

440,646

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

20,791

$

30,890

Accrued expenses

58,222

60,840

Deferred revenue

25,628

22,073

Current lease liabilities

22,546

—

Other current liabilities

2,370

4,301

Total current liabilities

129,557

118,104

Deferred rent

—

36,544

Non-current lease liabilities

150,832

—

Other liabilities

1,672

—

Total liabilities

282,061

154,648

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.0001 par value; Class A: 750,000,000 shares authorized at December 31, 2022 and 2021, 96,115,202 and 94,901,623 shares issued and outstanding as of December 31, 2022 and 2021, respectively; Class B: 150,000,000 shares authorized at December 31, 2022 and 2021, 19,223,572 and 18,719,184 shares issued and outstanding as of December 31, 2022 and 2021, respectively, convertible to Class A on a one-to-one basis

12

11

Additional paid-in capital

890,915

779,212

Accumulated deficit

(603,634

)

(493,241

)

Accumulated other comprehensive income

(647

)

16

Total stockholders’ equity

286,646

285,998

Total liabilities and stockholders’ equity

$

568,707

$

440,646

Warby Parker Inc. and Subsidiaries

Consolidated Statements of Operations (Unaudited)

(Amounts in thousands, except share and per share data)

Three Months Ended December 31,

Year Ended December 31,

2022

2021

2020

2022

2021

2020

Net revenue

$

146,493

$

132,892

$

112,837

$

598,112

$

540,798

$

393,719

Cost of goods sold

65,842

56,641

47,659

257,050

223,049

161,784

Gross profit

80,651

76,251

65,178

341,062

317,749

231,935

Selling, general, and administrative expenses

102,361

122,146

70,295

452,265

461,410

287,567

Loss from operations

(21,710

)

(45,895

)

(5,117

)

(111,203

)

(143,661

)

(55,632

)

Interest and other (loss) income, net

1,382

105

529

1,307

(347

)

(97

)

Loss before income taxes

(20,328

)

(45,790

)

(4,588

)

(109,896

)

(144,008

)

(55,729

)

Provision for income taxes

(77

)

112

(287

)

497

263

190

Net loss

$

(20,251

)

$

(45,902

)

$

(4,301

)

$

(110,393

)

$

(144,271

)

$

(55,919

)

Deemed dividend upon redemption of redeemable convertible preferred stock

$

—

$

—

$

—

$

—

$

(13,137

)

$

—

Net loss attributable to common stockholders

$

(20,251

)

$

(45,902

)

$

(4,301

)

$

(110,393

)

$

(157,408

)

$

(55,919

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.18

)

$

(0.41

)

$

(0.08

)

$

(0.96

)

$

(2.21

)

$

(1.05

)

Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted

115,713,915

112,501,252

53,671,842

114,942,019

71,249,257

53,033,936

Warby Parker Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

(Amounts in thousands)

Year Ended December 31,

2022

2021

2020

Cash flows from operating activities

Net loss

$

(110,393

)

$

(144,271

)

$

(55,919

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

31,864

21,551

17,763

Stock-based compensation

98,032

107,148

44,913

Non-cash charitable contribution

3,770

7,757

—

Asset impairment charges

1,647

317

614

Change in operating assets and liabilities:

Accounts receivable, net

(451

)

(392

)

517

Inventory

(11,794

)

(18,624

)

(10,020

)

Prepaid expenses and other assets

(10,287

)

(6,887

)

(67

)

Accounts payable

(7,943

)

(11,114

)

5,898

Accrued expenses

2,748

9,486

16,604

Deferred revenue

3,583

(4,478

)

7,288

Other current liabilities

537

579

763

Deferred rent

—

8,547

2,149

Right-of-use lease assets and current and non-current lease liabilities

7,385

—

—

Other liabilities

1,672

(1,613

)

2,255

Net cash provided by (used in) operating activities

10,370

(31,994

)

32,758

Cash flows from investing activities

Purchases of property and equipment

(60,181

)

(48,513

)

(20,070

)

Net cash used in investing activities

(60,181

)

(48,513

)

(20,070

)

Cash flows from financing activities

Proceeds from stock option and warrant exercises

456

20,035

1,330

Employee tax withholding remitted in connection with exercise or release of equity awards

—

(2,532

)

Proceeds from repayment of related party loans

91

31,612

945

Proceeds from shares issued in connection with ESPP

2,744

—

—

Repurchase of stock

—

(8,085

)

—

Issuance of Series F redeemable convertible preferred stock, net of issuance costs

—

—

124,717

Issuance of Series G redeemable convertible preferred stock, net of issuance costs

—

—

118,944

Payment for Tender Offer

—

(18,031

)

—

Borrowings from Credit Facility

—

—

30,900

Repayment of Credit Facility

—

—

(30,900

)

Net cash provided by financing activities

3,291

22,999

245,936

Effect of exchange rates on cash

(1,311

)

(161

)

37

Net (decrease) increase in cash and cash equivalents

(47,831

)

(57,669

)

258,661

Cash and cash equivalents

Beginning of year

256,416

314,085

55,424

End of year

$

208,585

$

256,416

$

314,085

Supplemental disclosures

Cash paid for income taxes

$

536

$

356

$

230

Cash paid for interest

184

150

466

Cash paid for amounts included in the measurement of lease liabilities

29,647

—

—

Non-cash investing and financing activities:

Purchases of property and equipment included in accounts payable and accrued expenses

3,968

4,158

3,150

Related party loans issued in connection with stock option exercises

$

—

$

13,827

$

—

Warby Parker Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table reconciles adjusted EBITDA and adjusted EBITDA margin to the most directly comparable GAAP measure, which is net loss:

Three Months Ended December 31,

Year Ended December 31,

2022

2021

2022

2021

(unaudited, in thousands)

(unaudited, in thousands)

Net loss

$

(20,251

)

$

(45,902

)

$

(110,393

)

$

(144,271

)

Adjusted to exclude the following:

Interest and other loss, net

(1,382

)

(105

)

(1,307

)

347

Provision for income taxes

(77

)

112

497

263

Depreciation and amortization expense

8,919

6,371

31,864

21,643

Asset impairment charges

138

180

1,647

317

Stock-based compensation expense⁽¹⁾

20,052

32,945

98,655

110,543

Non-cash charitable donations⁽²⁾

500

—

3,770

7,757

Transaction costs⁽³⁾

—

—

—

28,262

Amortization of cloud-based software implementation costs⁽⁴⁾

151

—

247

—

ERP implementation costs⁽⁵⁾

518

—

687

—

Restructuring costs⁽⁶⁾

—

—

1,535

—

Adjusted EBITDA

$

8,568

$

(6,399

)

$

27,202

$

24,861

Adjusted EBITDA margin

5.8

%

(4.8

)%

4.5

%

4.6

%

(1)

Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, vesting of awards including the satisfaction of performance conditions, and the impact of repurchases of awards from employees. For the three and twelve months ended December 31, 2022, the amount includes $0.2 million and $0.6 million of employer payroll costs, respectively, associated with releases of RSUs and option exercises. For the three and twelve months ended December 31, 2021, the amount includes $1.8 million and $3.4 million of employer payroll costs, respectively, associated with releases of RSUs and option exercises.

(2)

Represents charitable expense recorded in connection with the donation of 178,572 shares of Series A common stock in August 2021 and 178,572 shares of Class A common stock in May 2022 to the Warby Parker Impact Foundation, and a donation of 34,528 shares of Class A common stock to third-party charitable donor advised funds.

(3)

Represents (i) costs directly attributable to the preparation for our Direct Listing and (ii) expenses incurred in connection with the cash tender offer completed in June 2021.

(4)

Represents the amortization of costs capitalized in connection with the implementation of cloud-based software.

(5)

Represents internal and external non-capitalized costs related to the implementation of our new Enterprise Resource Planning (“ERP”) system which is expected to be live in 2023.

(6)

Represents employee severance and related costs for our restructuring plan that was executed in August 2022.

Warby Parker Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table reconciles adjusted EBITDA and adjusted EBITDA margin to the most directly comparable GAAP measure, which is net loss:

Six Months Ended

June 30, 2022

December 31, 2022

(unaudited, in thousands)

Net loss

$

(66,299

)

$

(44,094

)

Adjusted to exclude the following:

Interest and other loss, net

(108

)

(1,199

)

Provision for income taxes

586

(89

)

Depreciation and amortization expense

14,605

17,259

Asset impairment charges

412

1,235

Stock-based compensation expense⁽¹⁾

54,244

44,411

Non-cash charitable donations⁽²⁾

3,270

500

Amortization of cloud-based software implementation costs⁽³⁾

—

247

ERP implementation costs⁽⁴⁾

—

687

Restructuring costs⁽⁵⁾

—

1,535

Adjusted EBITDA

$

6,710

$

20,492

Adjusted EBITDA margin

2.2

%

6.9

%

(1)

Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, vesting of awards including the satisfaction of performance conditions, and the impact of repurchases of awards from employees. For both the six months ended June 30, 2022 and December 31, 2022, the amount includes $0.3 million of employer payroll costs associated with releases of RSUs and option exercises.

(2)

Represents charitable expense recorded in connection with the donation of 178,572 shares of Class A common stock in May 2022 to the Warby Parker Impact Foundation, and a donation of 34,528 shares of Class A common stock to third-party charitable donor advised funds.

(3)

Represents the amortization of costs capitalized in connection with the implementation of cloud-based software.

(4)

Represents internal and external non-capitalized costs related to the implementation of our new Enterprise Resource Planning (“ERP”) system which is expected to be live in 2023.

(5)

Represents employee severance and related costs for our restructuring plan that was executed in August 2022.

Warby Parker Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table presents our non-GAAP, or adjusted, financial measures for the periods presented as a percentage of revenue. Each cost and operating expense is adjusted for transaction costs, stock-based compensation expense and related employer payroll taxes, non-cash charitable donations, ERP implementation costs, and restructuring costs.

Reported

Adjusted

Reported

Adjusted

Three Months Ended

December 31,

Three Months Ended

December 31,

Year Ended

December 31,

Year Ended

December 31,

2022

2021

2022

2021

2022

2021

2022

2021

(unaudited, in millions)

(unaudited, in millions)

(unaudited, in millions)

(unaudited, in millions)

Cost of goods sold

$

65.8

$

56.6

$

65.6

$

56.4

$

257.1

$

223.0

$

256.1

$

221.9

% of Revenue

44.9

%

42.6

%

44.8

%

42.5

%

43.0

%

41.2

%

42.8

%

41.0

%

Gross profit

$

80.7

$

76.3

$

80.8

$

76.5

$

341.1

$

317.7

$

342.0

$

318.9

% of Revenue

55.1

%

57.4

%

55.2

%

57.5

%

57.0

%

58.8

%

57.2

%

59.0

%

Selling, general, and administrative expenses

$

102.4

$

122.1

$

81.5

$

89.4

$

452.3

$

461.4

$

348.5

$

316.0

% of Revenue

69.9

%

91.9

%

55.6

%

67.3

%

75.6

%

85.3

%

58.3

%

58.4

%

Net (loss) income

$

(20.3

)

$

(45.9

)

$

0.5

$

(9.0

)

$

(110.4

)

$

(144.3

)

$

(3.7

)

$

1.8

% of Revenue

(13.8

)%

(34.5

)%

0.4

%

(6.8

)%

(18.5

)%

(26.7

)%

(0.6

)%

0.3

%

* Numbers in the table above may not foot due to rounding.

Warby Parker Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

The following table reflects a reconciliation of each non-GAAP, or adjusted, financial measure to its most directly comparable financial measure prepared in accordance with GAAP:

Three Months Ended December 31,

Year Ended

December 31,

2022

2021

2022

2021

(unaudited, in thousands)

(unaudited, in thousands)

Cost of goods sold

$

65,842

$

56,641

$

257,050

$

223,049

Adjusted to exclude the following:

Stock-based compensation expense⁽¹⁾

195

223

905

1,145

Adjusted cost of goods sold

$

65,647

$

56,418

$

256,145

$

221,904

Gross profit

$

80,651

$

76,251

$

341,062

$

317,749

Adjusted to exclude the following:

Stock-based compensation expense⁽¹⁾

195

223

905

1,145

Adjusted gross profit

$

80,846

$

76,474

$

341,967

$

318,894

Selling, general, and administrative expenses

$

102,361

$

122,146

$

452,265

$

461,410

Adjusted to exclude the following:

Stock-based compensation expense⁽¹⁾

19,857

32,723

97,750

109,398

Non-cash charitable donations⁽²⁾

500

—

3,770

7,757

Transaction costs⁽³⁾

—

—

—

28,262

ERP implementation costs⁽⁴⁾

518

—

687

—

Restructuring costs⁽⁵⁾

—

—

1,535

—

Adjusted selling, general, and administrative expenses

$

81,486

$

89,423

$

348,523

$

315,993

Net loss

$

(20,251

)

$

(45,902

)

$

(110,393

)

$

(144,271

)

Provision for income taxes

(77

)

112

497

263

Loss before income taxes

(20,328

)

(45,790

)

(109,896

)

(144,008

)

Adjusted to exclude the following:

Stock-based compensation expense⁽¹⁾

20,052

32,945

98,655

110,543

Non-cash charitable donations⁽²⁾

500

—

3,770

7,757

Transaction costs⁽³⁾

—

—

—

28,262

ERP implementation costs⁽⁴⁾

518

—

687

—

Restructuring costs⁽⁵⁾

—

—

1,535

—

Adjusted provision for income taxes⁽⁶⁾

(219

)

3,846

1,546

(765

)

Adjusted net income (loss)

$

523

$

(8,999

)

$

(3,703

)

$

1,789

Deemed dividend upon redemption of redeemable convertible preferred stock

—

—

—

(13,137

)

Adjusted net income (loss) attributable to common stock

$

523

$

(8,999

)

$

(3,703

)

$

(11,348

)

Adjusted weighted average shares – diluted

116,614,309

112,501,252

114,942,019

71,249,257

Adjusted diluted loss per share

$

—

$

(0.08

)

$

(0.03

)

$

(0.16

)

(1)

Represents expenses related to the Company’s equity-based compensation programs and related employer payroll taxes, which may vary significantly from period to period depending upon various factors including the timing, number, and the valuation of awards granted, vesting of awards including the satisfaction of performance conditions, and the impact of repurchases of awards from employees. For the three and twelve months ended December 31, 2022, the amount includes $0.2 million and $0.6 million of employer payroll costs, respectively, associated with releases of RSUs and option exercises. For the three and twelve months ended December 31, 2021, the amount includes $1.8 million and $3.4 million of employer payroll costs, respectively, associated with releases of RSUs and option exercises.

(2)

Represents charitable expense recorded in connection with the donation of 178,572 shares of Series A common stock in August 2021 and 178,572 shares of Class A common stock in May 2022 to the Warby Parker Impact Foundation, and a donation of 34,528 shares of Class A common stock to third-party charitable donor advised funds.

(3)

Represents (i) costs directly attributable to the preparation for our Direct Listing and (ii) expenses incurred in connection with the cash tender offer completed in June 2021.

(4)

Represents internal and external non-capitalized costs related to the implementation of our new ERP system which is expected to be live in 2023.

(5)

Represents employee severance and related costs for our restructuring plan that was executed in August 2022.

(6)

The adjusted provision for income taxes is based on long-term estimated annual effective tax rates of 29.46% in 2022 and 29.94% in 2021. The Company may adjust its adjusted tax rate as additional information becomes available or events occur which may materially affect this rate, including impacts from the rapidly evolving global tax environment, significant changes in our geographic mix, merger and acquisition activity, or changes in our business outlook.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230227006007/en/

Investor Relations:

Brendon Frey, ICR

[email protected]

Media:

Lena Griffin

[email protected]

KEYWORDS: New York United States North America

INDUSTRY KEYWORDS: Fashion Lifestyle Retail Health Consumer Optical

MEDIA:

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