Market Newsdesk

May 5, 2021 4:38 pm

Lannett Announces Fiscal 2021 Third-Quarter Financial Results

Q3 Business and Financial Highlights:

– Net Sales Were $112 Million

– Adjusted Gross Margin, Adjusted Profitability Better than Expected

– Cash Significantly Increased to More Than $80 Million

– Full-Year Adjusted Top- and Bottom-Line Guidance Reiterated

– Added Another Large, Durable Asset to Pipeline, Biosimilar Insulin Aspart

Post Quarter End:

– Completed Re-financing Transaction

— Retired Outstanding Term B Loan Balance of ~$540 Million

— Improves Cash Flow Significantly

— Extended Debt Maturity to 2026 at Fixed Interest Rates

– Submitted ANDA for Generic ADVAIR DISKUS®

PR Newswire

PHILADELPHIA, May 5, 2021 /PRNewswire/ — Lannett Company, Inc. (NYSE: LCI) today reported financial results for its fiscal 2021 third quarter ended March 31, 2021.

“In recent months, we have significantly advanced a number of strategic initiatives,” said Tim Crew, chief executive officer of Lannett. “In April, we successfully completed a transaction to refinance our debt, using the proceeds to retire the outstanding Term Loan B balance of approximately $540 million that was set to mature in November of next year. As a result, we have extended the maturity of our debt to 2026 from 2022, which is after several high-value pipeline assets are expected to be commercialized. Moreover, we improved our free cash flow, by approximately $50 million in the first year alone, which we plan to use, in part, to support our growth initiatives.

“We were pleased with our fiscal 2021 third quarter financial results. While net sales were slightly lower than our expectations, adjusted gross margin, adjusted EBITDA and adjusted earnings per share were higher than we anticipated. Selling, general and administrative expenses were lower compared with the same quarter last year. Moreover, we ended the quarter with more than $80 million in cash, up from approximately $34 million at December 31, 2020.

“Looking ahead, we expect to launch a number of products in the coming months, and we continue to advance our durable, large market opportunity assets. Last month we announced the submission of an Abbreviated New Drug Application (ANDA) for generic ADVAIR DISKUS^®, an inhalation drug device combination product. Also, the pivotal clinical trial has been initiated for generic Flovent Diskus^®, another key respiratory product in our pipeline. And, last but not least, in the third quarter we added to our pipeline another potentially large and durable biosimilar asset, fast acting insulin aspart.”

For the fiscal 2021 third quarter on a GAAP basis, net sales were $112.4 million compared with $144.4 million for the third quarter of fiscal 2020. Gross profit was $26.5 million, or 24% of net sales, compared with $41.7 million, or 29% of net sales. During last year’s third quarter, the company recorded non-cash, asset impairment charges of $14.0 million, related to the write-down of the value of a product license agreement. Net loss was $7.1 million, or $0.18 per share, compared with $16.6 million, or $0.43 per share, for the third quarter of fiscal 2020.

For the fiscal 2021 third quarter reported on a Non-GAAP basis, net sales were $112.4 million compared with $144.4 million for the third quarter of fiscal 2020. Adjusted gross profit was $30.4 million, or 27% of net sales, compared with $52.3 million, or 36% of net sales, for the prior-year third quarter. Adjusted interest expense decreased to $9.8 million compared with $12.7 million for the second quarter of fiscal 2020. Adjusted net income was $1.0 million, or $0.02 per diluted share, compared with $11.7 million, or $0.27 per diluted share, for the fiscal 2020 third quarter. Adjusted EBITDA for the fiscal 2021 third quarter was $17.0 million.

Guidance for Fiscal 2021

Based on its current outlook and recent financing, the company revised guidance for fiscal year 2021, with the primary change related to interest expense, and is as follows:

	GAAP	Adjusted*
Net sales	$480 million to $500 million, unchanged	$480 million to $500 million, unchanged
Gross margin %	Approximately 14% to 16%, unchanged	Approximately 24% to 26%, unchanged
R&D expense	$26 million to $28 million, unchanged	$26 million to $28 million, unchanged
SG&A expense	$62 million to $64 million, up from $58 million to $60 million	$52 million to $54 million, unchanged
Restructuring expense	$4 million, unchanged	$–
Asset impairment charges	$198 million, unchanged	$–
Interest and other	Approximately $71 million, up from $53 million to $54 million	Approximately $44 million, up from $41 million to $42 million
Effective tax rate	Approximately 27% to 28%	N/A
Income tax expense/(benefit)	N/A	$1 million to ($1 million)
Adjusted EBITDA	N/A	$75 million to $85 million, unchanged
Capital expenditures	$10 million to $15 million, unchanged	$10 million to $15 million, unchanged
*A reconciliation of Adjusted amounts to most directly comparable GAAP amounts can be found in the attached financial tables.

Conference Call Information and Forward-Looking Statements

Later today, the company will host a conference call at 4:30 p.m. ET to review its results of operations for its fiscal 2021 third quarter ended March 31, 2021. The conference call will be available to interested parties by dialing 888-895-5479 from the U.S. or Canada, or 847-619-6250 from international locations, passcode 50156994. The call will be broadcast via the Internet at www.lannett.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.

Discussion during the conference call may include forward-looking statements regarding such topics as, but not limited to, the company’s financial status and performance, regulatory and operational developments, and any comments the company may make about its future plans or prospects in response to questions from participants on the conference call.

Use of Non-GAAP Financial Measures

This news release contains references to Non-GAAP financial measures, including Adjusted EBITDA, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance. The Company’s management believes that the presentation of Non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor’s overall understanding of the financial results for the Company’s core business. Additionally, it provides a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. The Company also believes that including Adjusted EBITDA is appropriate to provide additional information to investors. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP.

Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included with this release.

Non-GAAP financial measures exclude, among others, the effects of (1) amortization of purchased intangibles and other purchase accounting entries, (2) restructuring expenses, (3) non-cash interest expense, as well as (4) certain other items considered unusual or non-recurring in nature.

ADVAIR DISKUS^® and Flovent^® Diskus^® are registered trademarks of GlaxoSmithKline.

About Lannett Company, Inc.:

Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications – see financial schedule below for net sales by medical indication. For more information, visit the company’s website at www.lannett.com.

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Any such statements, including, but not limited to, successfully commercializing recently introduced products and launching and successfully commercializing additional products in fiscal 2021, achieving cost savings from the recently announced restructuring and cost savings plan, the potential material impact of COVID-19 on future financial results, and achieving the financial metrics stated in the company’s revised guidance for fiscal 2021, whether expressed or implied, are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated due to a number of factors which include, but are not limited to, the difficulty in predicting the timing or outcome of FDA or other regulatory approvals or actions, the ability to successfully commercialize products upon approval, including acquired products, and Lannett’s estimated or anticipated future financial results, future inventory levels, future competition or pricing, future levels of operating expenses, product development efforts or performance, and other risk factors discussed in the company’s Form 10-K and other documents filed with the Securities and Exchange Commission from time to time. These forward-looking statements represent the company’s judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.

FINANCIAL SCHEDULES FOLLOW

LANNETT COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
	(Unaudited)
	March 31, 2021	June 30, 2020

ASSETS
Current assets:
Cash and cash equivalents	$ 81,290	$ 144,329
Accounts receivable, net	114,691	125,688
Inventories	113,074	142,867
Income taxes receivable	40,043	14,419
Assets held for sale	2,678	2,678
Other current assets	18,135	13,227
Total current assets	369,911	443,208
Property, plant and equipment, net	168,844	179,518
Intangible assets, net	160,138	374,735
Operating lease right-of-use asset	10,762	9,343
Deferred tax assets	138,019	117,890
Other assets	14,696	11,861
TOTAL ASSETS	$ 862,370	$ 1,136,555


LIABILITIES
Current liabilities:
Accounts payable	$ 32,605	$ 32,535
Accrued expenses	4,025	14,962
Accrued payroll and payroll-related expenses	9,758	16,304
Rebates payable	31,848	38,175
Royalties payable	14,541	20,863
Restructuring liability	42	27
Current operating lease liabilities	2,040	1,097
Short-term borrowings and current portion of long-term debt	–	88,189
Other current liabilities	2,270	2,713
Total current liabilities	97,129	214,865
Long-term debt, net	610,698	592,940
Long-term operating lease liabilities	11,306	9,844
Other liabilities	19,187	16,010
TOTAL LIABILITIES	738,320	833,659

STOCKHOLDERS’ EQUITY
Common stock ($0.001 par value, 100,000,000 shares authorized; 40,872,485 and 39,963,127 shares issued; 39,539,798 and 38,798,787 shares outstanding at March 31, 2021 and June 30, 2020, respectively)	41	40
Additional paid-in capital	328,911	321,164
Accumulated deficit	(186,880)	(1,291)
Accumulated other comprehensive loss	(603)	(627)
Treasury stock (1,332,687 and 1,164,340 shares at March 31, 2021 and June 30, 2020, respectively)	(17,419)	(16,390)
Total stockholders’ equity	124,050	302,896
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 862,370	$ 1,136,555

LANNETT COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except share and per share data)

	Three months ended		Nine months ended
	March 31,		March 31,
	2021	2020	2021	2020

Net sales	$ 112,370	$ 144,372	$ 372,769	$ 407,824
Cost of sales	82,063	94,380	298,738	258,699
Amortization of intangibles	3,851	8,316	21,097	23,497
Gross profit	26,456	41,676	52,934	125,628
Operating expenses:
Research and development expenses	5,973	7,441	18,156	23,287
Selling, general and administrative expenses	17,636	22,147	46,502	60,876
Restructuring expenses	–	191	4,043	1,771
Asset impairment charges	–	13,989	198,000	15,607
Total operating expenses	23,609	43,768	266,701	101,541
Operating income (loss)	2,847	(2,092)	(213,767)	24,087
Other income (loss):
Loss on extinguishment of debt	–	–	–	(2,145)
Investment income	80	393	168	1,552
Interest expense	(12,631)	(16,177)	(40,613)	(52,163)
Other	18	(380)	23	(181)
Total other loss	(12,533)	(16,164)	(40,422)	(52,937)
Loss before income tax	(9,686)	(18,256)	(254,189)	(28,850)
Income tax benefit	(2,544)	(1,664)	(68,600)	(5,185)
Net loss	$ (7,142)	$ (16,592)	$ (185,589)	$ (23,665)

Loss per common share:
Basic	$ (0.18)	$ (0.43)	$ (4.72)	$ (0.61)
Diluted (1)	$ (0.18)	$ (0.43)	$ (4.72)	$ (0.61)

Weighted average common shares outstanding:
Basic	39,511,296	38,707,049	39,340,670	38,539,850
Diluted (1)	39,511,296	38,707,049	39,340,670	38,539,850

(1) Effective with the 4.5% Senior Convertible Note issued on September 27, 2019, the diluted earnings per share was calculated based on the “if-converted” method.

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

(In thousands, except percentages, share and per share data)

Three months ended March 31, 2021

Net sales

Cost of sales

Amortization of intangibles

Gross Profit

Gross Margin %

R&D expenses

SG&A expenses

Operating income

Other loss

Income (loss) before income tax

Income tax benefit

Net income (loss)

Diluted earnings (loss) per share (g)

GAAP Reported

$ 112,370

$ 82,063

$ 3,851

$ 26,456

24%

$ 5,973

$ 17,636

$ 2,847

$ (12,533)

$ (9,686)

$ (2,544)

$ (7,142)

$ (0.18)

Adjustments:

Amortization of intangibles (a)

–

(3,851)

3,851

–

3,851

–

3,851

–

3,851

Cody API business (b)

–

(91)

–

(18)

109

–

109

–

109

Depreciation on capitalized software costs (c)

–

(1,051)

1,051

–

1,051

–

1,051

Non-cash interest (d)

–

2,823

–

2,823

Other (e)

–

(2,191)

2,191

–

2,191

–

2,191

Tax adjustments (f)

–

1,923

(1,923)

Non-GAAP Adjusted

$ 112,370

$ 81,972

$ –

$ 30,398

27%

$ 5,973

$ 14,376

$ 10,049

$ (9,710)

$ 339

$ (621)

$ 960

$ 0.02

(a)

To exclude amortization of purchased intangible assets primarily related to the acquisition of KUPI

(b)

To exclude the operating results of the ceased Cody API business

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(d)

To exclude non-cash interest expense associated with debt issuance costs

(e)

To primarily exclude the reimbursement of legal costs associated with a distribution agreement

(f)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates

(g)

The weighted average share number for the three months ended March 31, 2021 is 39,511,296 for GAAP and 41,051,998 for the non-GAAP earnings (loss) per share calculations

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

(In thousands, except percentages, share and per share data)

Three months ended March 31, 2020

Net sales

Cost of sales

Amortization of intangibles

Gross Profit

Gross Margin %

R&D expense

SG&A expense

Restructuring expenses

Asset impairment charges

Operating income (loss)

Other loss

Income (loss) before income tax

Income tax expense (benefit)

Net income (loss)

Diluted earnings (loss) per share (j)

GAAP Reported

$ 144,372

$ 94,380

$ 8,316

$ 41,676

29%

$ 7,441

$ 22,147

$ 191

13,989

$ (2,092)

$ (16,164)

$ (18,256)

$ (1,664)

$ (16,592)

$ (0.43)

Adjustments:

Amortization of intangibles (a)

–

(8,316)

8,316

–

8,316

–

8,316

–

8,316

Cody API business (b)

–

(983)

–

983

(47)

(58)

–

1,088

–

1,088

–

1,088

Depreciation on capitalized software costs (c)

–

(1,058)

–

1,058

–

1,058

–

1,058

Decommissioning of Philadelphia sites (d)

–

(192)

–

192

–

192

–

192

–

192

Branded prescription drug fee (e)

–

(2,957)

–

2,957

–

2,957

–

2,957

Restructuring expenses (f)

–

(191)

–

191

–

191

–

191

Asset impairment charge (g)

–

(13,989)

13,989

–

13,989

–

13,989

Non-cash interest (h)

–

3,430

–

3,430

Other (i)

–

(1,168)

–

1,168

(29)

(354)

–

1,551

357

1,908

–

1,908

Tax adjustments (j)

–

4,832

(4,832)

Non-GAAP Adjusted

$ 144,372

$ 92,037

$ –

$ 52,335

36%

$ 7,365

$ 17,720

$ –

$ 27,250

$ (12,377)

$ 14,873

$ 3,168

$ 11,705

$ 0.27

(a)

To exclude amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc.

(b)

To exclude the operating results of the ceased Cody API business

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(d)

To exclude the costs related to the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites, including costs to transfer products to other locations

(e)

To exclude the federally mandated branded prescription drug fee related to Levothyroxine, a product the Company no longer sells

(f)

To exclude expenses associated with the Cody API Restructuring Plan

(g)

To exclude an impairment charge associated with an agreement to distribute Methylphenidate AB

(h)

To exclude non-cash interest expense associated with debt issuance costs

(i)

To exclude costs primarily related to the write-down of property, plant and equipment as well as COVID-19 special recognition payments

(j)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates

(k)

The weighted average share number for the three months ended March 31, 2020 is 38,707,049 for GAAP and 46,132,471 for the non-GAAP earnings (loss) per share calculations. Effective with the 4.5% Senior Convertible Note issued on September 27, 2019, the diluted earnings per share was calculated based on the “if-converted” method.

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)

(In thousands, except percentages, share and per share data)

Nine months ended March 31, 2021

Net sales

Cost of sales

Amortization of intangibles

Gross Profit

Gross Margin %

R&D expenses

SG&A expenses

Restructuring expenses

Asset impairment charges

Operating income (loss)

Other loss

Income (loss) before income tax

Income tax expense (benefit)

Net income (loss)

Diluted earnings (loss) per share (k)

GAAP Reported

$ 372,769

$ 298,738

$ 21,097

$ 52,934

14%

$ 18,156

$ 46,502

$ 4,043

$ 198,000

$ (213,767)

$ (40,422)

$ (254,189)

$ (68,600)

$ (185,589)

$ (4.72)

Adjustments:

Amortization of intangibles (a)

–

(21,097)

21,097

–

21,097

–

21,097

–

21,097

Cody API business (b)

–

(249)

–

249

(5)

(473)

–

727

–

727

–

727

Depreciation on capitalized software costs (c)

–

(3,153)

–

3,153

–

3,153

–

3,153

Restructuring expenses (d)

–

(4,043)

–

4,043

–

4,043

–

4,043

Asset impairment charges (e)

–

(198,000)

198,000

–

198,000

–

198,000

Write-downs for excess and obsolete inventory (f)

–

(16,623)

–

16,623

–

16,623

–

16,623

–

16,623

Distribution agreement renewal costs (g)

–

(4,966)

–

4,966

–

4,966

–

4,966

–

4,966

Non-cash interest (h)

–

9,073

–

9,073

Other (i)

–

(3,695)

–

3,695

–

3,695

–

3,695

Tax adjustments (j)

–

69,376

(69,376)

Non-GAAP Adjusted

$ 372,769

$ 276,900

$ –

$ 95,869

26%

$ 18,151

$ 39,181

$ –

$ 38,537

$ (31,349)

$ 7,188

$ 776

$ 6,412

$ 0.16

(a)

To exclude amortization of purchased intangible assets primarily related to the acquisition of KUPI

(b)

To exclude the operating results of the ceased Cody API business

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(d)

To exclude expenses associated with the 2020 Restructuring Plan

(e)

To exclude asset impairment charges primarily related to the KUPI product rights intangible assets

(f)

To exclude write-downs for excess and obsolete inventory related to the discontinuance of certain product lines

(g)

To exclude the consideration recorded to renew the Company’s distribution agreement with Recro Gainesville LLC

(h)

To exclude non-cash interest expense associated with debt issuance costs

(i)

To primarily exclude the reimbursement of legal costs associated with a distribution agreement

(j)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates

(k)

The weighted average share number for the nine months ended March 31, 2021 is 39,340,670 for GAAP and 40,933,946 for the non-GAAP earnings (loss) per share calculations

LANNETT COMPANY, INC.

RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED INFORMATION

(In thousands, except percentages, share and per share data)

Nine months ended March 31, 2020

Net sales

Cost of sales

Amortization of intangibles

Gross Profit

Gross Margin %

R&D expense

SG&A expense

Restructuring expenses

Asset impairment charges

Operating income

Other loss

Income (loss) before income tax

Income tax expense (benefit)

Net income (loss)

Diluted earnings (loss) per share (l)

GAAP Reported

$ 407,824

$ 258,699

$ 23,497

$ 125,628

31%

$ 23,287

$ 60,876

$ 1,771

$ 15,607

$ 24,087

$ (52,937)

$ (28,850)

$ (5,185)

$ (23,665)

$ (0.61)

Adjustments:

Amortization of intangibles (a)

–

(23,497)

23,497

–

23,497

–

23,497

–

23,497

Cody API business (b)

–

(2,911)

–

2,911

(552)

(433)

–

3,896

–

3,896

–

3,896

Depreciation on capitalized software costs (c)

–

(3,175)

–

3,175

–

3,175

–

3,175

Decommissioning of Philadelphia sites (d)

–

(1,484)

–

1,484

–

1,484

–

1,484

–

1,484

Branded prescription drug fee (e)

–

(2,957)

–

2,957

–

2,957

–

2,957

Restructuring expenses (f)

–

(1,771)

–

1,771

–

1,771

–

1,771

Asset impairment charges (g)

–

(15,607)

15,607

–

15,607

–

15,607

Non-cash interest (h)

–

11,001

–

11,001

Loss on extinguishment of debt (i)

–

2,145

–

2,145

Other (j)

–

(1,585)

–

1,585

(29)

(2,578)

–

4,192

4,213

–

4,213

Tax adjustments (k)

–

13,942

(13,942)

Non-GAAP Adjusted

$ 407,824

$ 252,719

$ –

$ 155,105

38%

$ 22,706

$ 51,733

$ –

$ 80,666

$ (39,770)

$ 40,896

$ 8,757

$ 32,139

$ 0.76

(a)

To exclude amortization of purchased intangible assets primarily related to the acquisitions of KUPI and Silarx Pharmaceuticals, Inc.

(b)

To exclude the operating results of the ceased Cody API business

(c)

To exclude depreciation on previously capitalized software integration costs associated with the KUPI acquisition

(d)

To exclude the costs related to the decommissioning and shutdown of the Philadelphia manufacturing and distribution sites, including costs to transfer products to other locations

(e)

To exclude the federally mandated branded prescription drug fee related to Levothyroxine, a product the Company no longer sells

(f)

To exclude expenses associated with the Cody API Restructuring Plan

(g)

To exclude impairment charges primarily associated with an agreement to distribute Methylphenidate AB

(h)

To exclude non-cash interest expense associated with debt issuance costs

(i)

To exclude the loss on extinguishment of debt primarily related to the partial repayment of the outstanding Term Loan A balance

(j)

To primarily exclude accrued separation costs related to the Company’s former Chief Financial Officer, COVID-19 special recognition payments, as well as legal settlements, partially offset by gains on sales of assets previously held for sale

(k)

To exclude the tax effect of the pre-tax adjustments included above at applicable tax rates

(l)

The weighted average share number for the nine months ended March 31, 2020 is 38,539,850 for GAAP and 44,248,722 for the non-GAAP earnings (loss) per share calculations. Effective with the 4.5% Senior Convertible Note issued on September 27, 2019, the diluted earnings per share was calculated based on the “if-converted” method.

	LANNETT COMPANY, INC.
	RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
	($ in thousands)

		Three months ended
		March 31, 2021

	Net loss	$ (7,142)

	Interest expense	12,631
	Depreciation and amortization	9,628
	Income tax benefit	(2,544)
	EBITDA	12,573

	Share-based compensation	1,863
	Inventory write-down	399
	Investment income	(80)
	Other non-operating loss	(18)
	Other(a)	2,300
	Adjusted EBITDA (Non-GAAP)	$ 17,037

(a)	To primarily exclude the reimbursement of legal costs associated with a distribution agreement, as well as the operating results of the ceased Cody API business

LANNETT COMPANY, INC.
RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED INFORMATION (UNAUDITED)
($ in millions)

	Fiscal Year 2021 Guidance
				Non-GAAP
	GAAP	Adjustments		Adjusted

Net sales	$480 – $500	–		$480 – $500
Gross margin percentage	approx. 14% to 16%	10%	(a)	approx. 24% to 26%
R&D expense	$26 – $28	–		$26 – $28
SG&A expense	$62 – $64	($10)	(b)	$52 – $54
Restructuring expense	$4	($4)	(c)	–
Asset impairment charges	$198	($198)	(d)	–
Interest and other	approx. $71	($27)	(e)	approx. $44
Effective tax rate	approx. 27% to 28%	–		N/A
Income tax expense (benefit)	N/A	–		$1 – $(1)	(f)
Adjusted EBITDA	N/A	N/A		$75 – $85
Capital expenditures	$10 – $15	–		$10 – $15


(a) The adjustment primarily reflects amortization of purchased intangible assets related to the acquisition of Kremers Urban Pharmaceuticals, Inc. (“KUPI”), write-downs for excess and obsolete inventory related to the discontinuance of certain product lines, and consideration recorded to renew the Company’s distribution agreement with Recro Gainesville LLC
(b) The adjustment primarily excludes depreciation on previously capitalized software integration costs associated with the KUPI acquisition and the reimbursement of legal costs associated with a distribution agreement
(c) To exclude expenses associated with the 2020 Restructuring Plan
(d) To exclude asset impairment charges primarily related to the KUPI product rights intangible assets
(e) The adjustment primarily reflects non-cash interest expense associated with debt issuance costs and the anticipated loss on extinguishment of debt related to the refinancing of the Term Loan B in April 2021.
(f) The non-GAAP adjusted effective income tax rate was replaced with the dollar amount of income tax expense (benefit) to provide additional clarity around the anticipated expense (benefit) for Fiscal 2021. The non-GAAP adjusted income tax expense (benefit) reflects the impact of tax credits and deductions related to expected annual pre-tax income (loss) as well as the impact of the CARES Act, which allows the Company to carryback the expected taxable loss into a prior fiscal year, where the statutory tax rate was 35%.

LANNETT COMPANY, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
($ in millions)

	Fiscal Year 2021 Guidance
	Low	High

Net loss	$ (214.7)	$ (205.2)

Interest expense	71.0	71.0
Depreciation and amortization	55.0	55.0
Income taxes	(79.3)	(79.8)
EBITDA	(168.0)	(159.0)

Share-based compensation	9.0	9.0
Inventory write-down	27.0	28.0
Asset impairment charges	198.0	198.0
Restructuring expenses	4.0	4.0
Distribution agreement renewal costs	5.0	5.0
Adjusted EBITDA (Non-GAAP)	$ 75.0	$ 85.0

LANNETT COMPANY, INC.
NET SALES BY MEDICAL INDICATION

	Three months ended		Nine months ended
($ in thousands)	March 31,		March 31,
Medical Indication	2021	2020	2021	2020
Analgesic	$ 3,836	$ 2,811	$ 10,528	$ 6,806
Anti-Psychosis	11,678	27,858	38,023	78,588
Cardiovascular	16,573	21,746	52,623	67,325
Central Nervous System	24,509	18,566	71,648	57,154
Endocrinology	6,822	–	19,551	–
Gastrointestinal	16,817	20,745	52,492	56,020
Infectious Disease	10,610	21,749	55,586	51,722
Migraine	5,169	12,886	20,942	32,907
Respiratory/Allergy/Cough/Cold	2,548	2,966	6,241	8,747
Urinary	1,566	1,149	4,385	2,817
Other	8,617	8,051	24,661	27,847
Contract Manufacturing revenue	3,625	5,845	16,089	17,891
Net Sales	$ 112,370	$ 144,372	$ 372,769	$ 407,824

Contact:	Robert Jaffe
	Robert Jaffe Co., LLC
	(424) 288-4098

View original content to download multimedia:http://www.prnewswire.com/news-releases/lannett-announces-fiscal-2021-third-quarter-financial-results-301284942.html

SOURCE Lannett Company, Inc.

May 5, 2021 4:38 pm

Albemarle Reports First Quarter Sales Growth of 12%

PR Newswire

CHARLOTTE, N.C., May 5, 2021 /PRNewswire/ — Albemarle Corporation (NYSE: ALB) today announced its results for the first quarter ended March 31, 2021.

First Quarter 2021 Highlights

(Unless otherwise stated, all percent changes are based on year-over-year comparisons)

Net income of $95.7 million, or $0.84 per diluted share; Adjusted diluted EPS of $1.10, an increase of 10%
Net sales of $829.3 million, an increase of 12%
Adjusted EBITDA of $230.1 million an increase of 17%
Full year 2021 guidance unchanged
Entered into a definitive agreement to sell the Fine Chemistry Services business to W. R. Grace & Co. for proceeds of approximately $570 million
Completed $1.5 billion public equity offering to accelerate profitable growth; reduced debt, providing financial flexibility to execute strategy
Signed the U.N. Global Compact, aligning our sustainability efforts with those of the international business community

“We were pleased with our performance this quarter, achieving a 17% year-over-year increase in adjusted EBITDA, driven by strong sales from our Lithium and Bromine businesses,” said Albemarle CEO Kent Masters. “We successfully and safely managed through the impact of the U.S. Gulf Coast winter storm on our Bromine and Catalysts businesses. As we look to expand our earnings potential, we continue to focus on execution of our growth strategy and are in the final stages of two lithium projects which will double our conversion capacity to approximately 175,000 metric tons. Additionally, we expect to start approving Wave 3 expansion projects during the second quarter.”

Outlook

Albemarle continues to expect its full year 2021 operating performance to improve modestly relative to full year 2020, assuming continued recovery from the global economic downturn. While the total company guidance has not changed, from a GBU perspective, the outlook for our Lithium business has improved and for our Catalysts business our expectations are lower, while the outlook for our Bromine business is unchanged.

	FY 2021 Guidance
Net sales	$3.2 – $3.3 billion
Adjusted EBITDA	$810 – $860 million
Adjusted EBITDA Margin	25% – 26%
Adjusted Diluted EPS	$3.25 – $3.65
Net Cash from Operations	$475 – $575 million
Capital Expenditures	$850 – $950 million

COVID-19 Response

Albemarle’s cross-functional Global Response Team continues to meet regularly to address employee health and safety and operational challenges. Our priority is always the health and well-being of our employees, customers, and communities. Our focus has shifted from managing an immediate global crisis to building in the flexibility needed to adjust for regional differences and changing conditions.

First Quarter Results

In millions, except per share amounts	Q1 2021		Q1 2020		$ Change		% Change
Net sales	$	829.3	$	738.8	$	90.4	12.2	%
Net income attributable to Albemarle Corporation	$	95.7	$	107.2	$	(11.5)	(10.8)	%
Adjusted EBITDA^(a)	$	230.1	$	196.4	$	33.7	17.2	%
Diluted earnings per share	$	0.84	$	1.01	$	(0.17)	(16.8)	%
Non-operating pension and OPEB items^(a)	(0.04)		(0.02)
Non-recurring and other unusual items^(a)	0.29		0.01
Adjusted diluted earnings per share^(b)	$	1.10	$	1.00	$	0.10	10.0	%


(a)	See Non-GAAP Reconciliations for further details.
(b)	Totals may not add due to rounding.

Net sales of $829.3 million increased by $90.4 million compared to the prior year quarter, primarily driven by increased sales across all three core business segments as discussed below.

Adjusted EBITDA of $230.1 million increased by $33.7 million from the prior year quarter benefiting from several Lithium customers that accelerated orders under long-term agreements, as well as favorable volume and customer mix in our Bromine business, partially offset by the impact of the U.S. Gulf Coast winter storm to the Bromine and Catalysts businesses. Net income attributable to Albemarle of $95.7 million decreased by $11.5 million from the prior year primarily due to higher one-time interest and financing costs related to our recent equity offering and debt tender.

The effective income tax rate for Q1 2021 was 17.9% compared to 16.0% in the same period in 2020. On an adjusted basis, the effective income tax rates were 17.5% and 16.7% for the first quarter of 2021 and 2020, respectively. The difference is largely due to discrete tax expense recorded in Q1 2021 for an out-of-period adjustment.

Business Segment Results

Lithium

In millions	Q1 2021		Q1 2020		$ Change		% Change
Net Sales	$	279.0	$	236.8	$	42.2	17.8	%
Adjusted EBITDA	$	106.4	$	78.6	$	27.8	35.4	%

Lithium net sales of $279.0 million increased $42.2 million primarily driven by higher volumes, as some customers accelerated orders under long-term agreements, offset by lower average pricing for carbonate and technical grade. Adjusted EBITDA of $106.4 million increased $27.8 million primarily due to increased net sales. Strong Q1 2021 margins reflect sales of lower cost 2020 inventories.

Current Trends:
FY 2021 volumes are expected to be higher year-over-year due to North American plant restarts, productivity improvements, and tolling. Average realized pricing is expected to increase sequentially but remain flat compared to 2020. We expect higher costs related to project start-ups, partially offset by productivity improvements.

Bromine Specialties

In millions	Q1 2021		Q1 2020		$ Change		% Change
Net Sales	$	280.4	$	231.6	$	48.9	21.1	%
Adjusted EBITDA	$	94.6	$	83.3	$	11.4	13.7	%

Bromine net sales of $280.4 million increased $48.9 million driven by demand for products across the portfolio and a favorable customer mix. Adjusted EBITDA of $94.6 million increased $11.4 million due to increased net sales and was partially offset by a $6.4 million impact from the U.S. Gulf Coast winter storm. Cost savings initiatives and pricing helped offset raw materials cost increases.

Current Trends:
We continue to expect FY 2021 results to be modestly higher than the previous year due to continued economic recovery and improvements in certain end markets, including electronics, and building and construction, along with on-going cost savings initiatives and pricing. The winter storm in the U.S. Gulf Coast during Q1 led to lost production at the Magnolia, Arkansas site, which is expected to impact sales and adjusted EBITDA in mid-2021.

Catalysts

In millions	Q1 2021		Q1 2020		$ Change		% Change
Net Sales	$	220.2	$	207.2	$	13.0	6.3	%
Adjusted EBITDA	$	25.4	$	47.5	$	(22.0)	(46.4)	%

Catalysts net sales of $220.2 million increased $13.0 million owing to higher volumes compared to the previous year. Hydroprocessing Catalysts (HPC) volumes increased due to timing of shipments offset by lower Fluid Catalytic Cracking (FCC) volumes related to the impact of the winter storm on our customers’ requirements. Adjusted EBITDA of $25.4 million declined $22.0 million as a result of a $26.2 million cost impact from the U.S. Gulf Coast winter storm on two of our Houston-based plants and lower prices, slightly offset by cost savings initiatives. First quarter 2020 results were overstated by $11.7 million due to incorrect cost of goods sold for inventory values which were corrected the following quarter.

Current Trends:
We expect 2021 adjusted EBITDA to be lower year-over-year due to the impact of the winter storm, FCC order delays, product mix, and the previously disclosed change in order patterns from a large North American customer.

All Other

In millions	Q1 2021		Q1 2020		$ Change		% Change
Net Sales	$	49.6	$	63.2	$	(13.6)	(21.5)	%
Adjusted EBITDA	$	21.5	$	22.8	$	(1.3)	(5.9)	%

Other operations represents our FCS business. FCS net sales of $49.6 million declined $13.6 million and adjusted EBITDA of $21.5 million declined $1.3 million. The FCS business tends to be contract driven and can vary quarter-to-quarter.

On February 25, 2021, we signed a definitive agreement to sell the FCS business to W. R. Grace & Co. for proceeds of approximately $570 million. The transaction is expected to close in the second quarter of 2021.

Balance Sheet and Liquidity

As of March 31, 2021, Albemarle had estimated liquidity of approximately $2.2 billion, including $569.9 million of cash and equivalents, the full $1.0 billion available under our revolver, $500.0 million remaining under our delayed draw term loan and $131.2 million on other available credit lines. Total debt was $2.0 billion, representing net debt to adjusted EBITDA of approximately 1.7 times. The recently completed $1.5 billion debt repayment supports our financial flexibility to accelerate growth and maintain an Investment Grade credit rating.

Cash Flow and Capital Deployment

Cash from operations for the three months ended March 31, 2021, of $157.9 million increased $2.9 million versus the prior year as higher revenues in each of our reportable segments more than offset working capital outflows in 2021. Capital expenditures of $179.7 million decreased by approximately $35.0 million versus the prior year as the company nears completion of its Wave 2 Lithium expansion projects.

Our primary capital allocation priorities are to grow profitably, fund our dividend, and maintain our financial flexibility and our Investment Grade credit rating.

In February, the board declared a quarterly dividend of $0.39 per share, an increase over the quarterly dividend paid in 2020. This is our 27th consecutive year of dividend increase.

Our share repurchase authorization remains in place; however, there are no near-term plans to execute share buybacks. We have discontinued efforts to sell our PCS business and will continue to operate this business within our portfolio.

Earnings Call

Date:	Thursday, May 6, 2021
Time:	9:00 AM Eastern time
Dial-in (U.S.):	844-347-1034
Dial-in (International):	209-905-5910
Passcode:	9167449

The company’s earnings presentation and supporting material are available on Albemarle’s website at https://investors.albemarle.com.

About Albemarle

Albemarle Corporation (NYSE: ALB), headquartered in Charlotte, N.C., is a global specialty chemicals company with leading positions in lithium, bromine and refining catalysts. We think beyond business-as-usual to power the potential of companies in many of the world’s largest and most critical industries, such as energy, electronics, and transportation. We actively pursue a sustainable approach to managing our diverse global footprint of world-class resources. In conjunction with our highly experienced and talented global teams, our deep-seated values, and our collaborative customer relationships, we create value-added and performance-based solutions that enable a safer and more sustainable future.

We regularly post information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, non-GAAP reconciliations, SEC filings and other information regarding our company, its businesses and the markets it serves.

Forward-Looking Statements

Some of the information presented in this press release, the conference call and discussions that follow, including, without limitation, information related to product development, production capacity, committed volumes, market trends, pricing, financial flexibility, expected growth, anticipated return on opportunities, earnings and demand for our products, input costs, productivity improvements, surcharges, tax rates, stock repurchases, dividends, cash flow generation, costs and cost synergies, capital projects, future acquisition and divestiture transactions, economic trends, outlook and all other information relating to matters that are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from the views expressed. Factors that could cause actual results to differ materially from the outlook expressed or implied in any forward-looking statement include, without limitation: changes in economic and business conditions; changes in financial and operating performance of our major customers and industries and markets served by us; the timing of orders received from customers; the gain or loss of significant customers; competition from other manufacturers; changes in the demand for our products or the end-user markets in which our products are sold; limitations or prohibitions on the manufacture and sale of our products; availability of raw materials; increases in the cost of raw materials and energy, and our ability to pass through such increases to our customers; changes in our markets in general; fluctuations in foreign currencies; changes in laws and government regulation impacting our operations or our products; the occurrence of regulatory actions, proceedings, claims or litigation; the occurrence of cyber-security breaches, terrorist attacks, industrial accidents, natural disasters or climate change; hazards associated with chemicals manufacturing; the inability to maintain current levels of product or premises liability insurance or the denial of such coverage; political unrest affecting the global economy, including adverse effects from terrorism or hostilities; political instability affecting our manufacturing operations or joint ventures; changes in accounting standards; the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs; changes in the jurisdictional mix of our earnings and changes in tax laws and rates; changes in monetary policies, inflation or interest rates that may impact our ability to raise capital or increase our cost of funds, impact the performance of our pension fund investments and increase our pension expense and funding obligations; volatility and uncertainties in the debt and equity markets; technology or intellectual property infringement, including cyber-security breaches, and other innovation risks; decisions we may make in the future; the ability to successfully execute, operate and integrate acquisitions and divestitures; uncertainties as to the duration and impact of the coronavirus (COVID-19) pandemic; and the other factors detailed from time to time in the reports we file with the SEC, including those described under “Risk Factors” in our most recent Annual Report on Form 10-K any subsequently filed Quarterly Reports on Form 10-Q. These forward-looking statements speak only as of the date of this press release. We assume no obligation to provide any revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.

Albemarle Corporation and Subsidiaries
Consolidated Statements of Income
(In Thousands Except Per Share Amounts) (Unaudited)

	Three Months Ended
	March 31,
	2021		2020
Net sales	$	829,291	$	738,845
Cost of goods sold	565,604		496,827
Gross profit	263,687		242,018
Selling, general and administrative expenses	93,187		101,877
Research and development expenses	14,636		16,097
Operating profit	155,864		124,044
Interest and financing expenses	(43,882)		(16,885)
Other income, net	11,312		8,314
Income before income taxes and equity in net income of unconsolidated investments	123,294		115,473
Income tax expense	22,107		18,442
Income before equity in net income of unconsolidated investments	101,187		97,031
Equity in net income of unconsolidated investments (net of tax)	16,511		26,604
Net income	117,698		123,635
Net income attributable to noncontrolling interests	(22,021)		(16,431)
Net income attributable to Albemarle Corporation	$	95,677	$	107,204
Basic earnings per share	$	0.85	$	1.01
Diluted earnings per share	$	0.84	$	1.01

Weighted-average common shares outstanding – basic	112,592		106,227
Weighted-average common shares outstanding – diluted	113,330		106,512

Albemarle Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In Thousands) (Unaudited)

	March 31,		December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	569,859	$	746,724
Trade accounts receivable	532,964		530,838
Other accounts receivable	60,558		61,958
Inventories	685,779		750,237
Other current assets	93,844		116,427
Assets held for sale	66,390		—
Total current assets	2,009,394		2,206,184
Property, plant and equipment	7,433,593		7,427,641
Less accumulated depreciation and amortization	2,043,264		2,073,016
Net property, plant and equipment	5,390,329		5,354,625
Investments	663,448		656,244
Noncurrent assets held for sale	50,683		—
Other assets	212,258		219,268
Goodwill	1,629,169		1,665,520
Other intangibles, net of amortization	335,021		349,105
Total assets	$	10,290,302	$	10,450,946
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	492,532	$	483,221
Accrued expenses	378,973		440,763
Current portion of long-term debt	616		804,677
Dividends payable	45,327		40,937
Liabilities held for sale	4,068		—
Income taxes payable	31,740		32,251
Total current liabilities	953,256		1,801,849
Long-term debt	2,030,032		2,767,381
Postretirement benefits	47,817		48,075
Pension benefits	316,652		340,818
Other noncurrent liabilities	619,309		629,377
Deferred income taxes	380,683		394,852
Commitments and contingencies
Equity:
Albemarle Corporation shareholders’ equity:
Common stock	1,167		1,069
Additional paid-in capital	2,889,923		1,438,038
Accumulated other comprehensive loss	(350,114)		(326,132)
Retained earnings	3,205,408		3,155,252
Total Albemarle Corporation shareholders’ equity	5,746,384		4,268,227
Noncontrolling interests	196,169		200,367
Total equity	5,942,553		4,468,594
Total liabilities and equity	$	10,290,302	$	10,450,946

Albemarle Corporation and Subsidiaries
Selected Consolidated Cash Flow Data
(In Thousands) (Unaudited)

	Three Months Ended March 31,
	2021		2020
Cash and cash equivalents at beginning of year	$	746,724	$	613,110
Cash flows from operating activities:
Net income	117,698		123,635
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization	62,260		53,694
Stock-based compensation and other	2,560		2,501
Equity in net income of unconsolidated investments (net of tax)	(16,511)		(26,604)
Dividends received from unconsolidated investments and nonmarketable securities	4,950		—
Pension and postretirement benefit	(4,226)		(1,719)
Pension and postretirement contributions	(15,329)		(6,113)
Unrealized gain on investments in marketable securities	(1,762)		(627)
Loss on early extinguishment of debt	27,798		—
Deferred income taxes	(19,384)		4,790
Working capital changes	(49,185)		17,730
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL	43,223		36,723
Other, net	5,857		(48,956)
Net cash provided by operating activities	157,949		155,054
Cash flows from investing activities:
Acquisitions, net of cash acquired	—		(22,572)
Capital expenditures	(179,683)		(214,529)
Sales of marketable securities, net	5,245		2,589
Investments in equity and other corporate investments	(286)		(356)
Net cash used in investing activities	(174,724)		(234,868)
Cash flows from financing activities:
Proceeds from issuance of common stock	1,453,888		—
Repayments of long-term debt and credit agreements	(1,174,980)		—
Proceeds from borrowings of credit agreements	—		250,000
Other debt repayments, net	(325,159)		(151,872)
Fees related to early extinguishment of debt	(23,719)		—
Dividends paid to shareholders	(41,130)		(38,982)
Dividends paid to noncontrolling interests	(26,219)		(14,286)
Proceeds from exercise of stock options	1,183		10,195
Withholding taxes paid on stock-based compensation award distributions	(6,860)		(3,825)
Other	(253)		(214)
Net cash (used in) provided by financing activities	(143,249)		51,016
Net effect of foreign exchange on cash and cash equivalents	(16,841)		(31,084)
Decrease in cash and cash equivalents	(176,865)		(59,882)
Cash and cash equivalents at end of period	$	569,859	$	553,228

Albemarle Corporation and Subsidiaries
Consolidated Summary of Segment Results
(In Thousands) (Unaudited)

	Three Months Ended
	March 31,
	2021		2020
Net sales:
Lithium	$	278,976	$	236,818
Bromine Specialties	280,447		231,592
Catalysts	220,243		207,207
All Other	49,625		63,228
Total net sales	$	829,291	$	738,845

Adjusted EBITDA:
Lithium	$	106,436	$	78,637
Bromine Specialties	94,640		83,262
Catalysts	25,427		47,470
All Other	21,479		22,824
Corporate	(17,928)		(35,828)
Total adjusted EBITDA	$	230,054	$	196,365

See accompanying non-GAAP reconciliations below.

Additional Information

It should be noted that adjusted net income attributable to Albemarle Corporation, adjusted diluted earnings per share, non-operating pension and OPEB items per diluted share, non-recurring and other unusual items per diluted share, adjusted effective income tax rates, EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin are financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States, or GAAP. These non-GAAP measures should not be considered as alternatives to Net income attributable to Albemarle Corporation (“earnings”). These measures are presented here to provide additional useful measurements to review our operations, provide transparency to investors and enable period-to-period comparability of financial performance. The Company’s chief operating decision maker uses these measures to assess the ongoing performance of the Company and its segments, as well as for business and enterprise planning purposes.

A description of other non-GAAP financial measures that we use to evaluate our operations and financial performance, and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found on the following pages of this press release, which is also is available on Albemarle’s website at https://investors.albemarle.com. The Company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the Company is unable to estimate significant non-recurring or unusual items without unreasonable effort. The amounts and timing of these items are uncertain and could be material to the Company’s results calculated in accordance with GAAP.

ALBEMARLE CORPORATION AND SUBSIDIARIES

Non-GAAP Reconciliations

(Unaudited)

See below for a reconciliation of adjusted net income attributable to Albemarle Corporation, EBITDA and adjusted EBITDA, the non-GAAP financial measures, to Net income attributable to Albemarle Corporation (“earnings”), the most directly comparable financial measure calculated and reported in accordance with GAAP. Adjusted earnings is defined as earnings before the non-recurring, other unusual and non-operating pension and other post-employment benefit (OPEB) items as listed below. The non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges and other significant non-recurring items. EBITDA is defined as earnings before interest and financing expenses, income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA and the non-recurring, other unusual and non-operating pension and OPEB items as listed below.

	Three Months Ended
	March 31,
In thousands, except percentages and per share amounts	2021			2020
Net income attributable to Albemarle Corporation	$	95,677		$	107,204
Add back:
Non-operating pension and OPEB items (net of tax)	(4,267)			(2,311)
Non-recurring and other unusual items (net of tax)	32,761			1,493
Adjusted net income attributable to Albemarle Corporation	$	124,171		$	106,386

Adjusted diluted earnings per share	$	1.10		$	1.00

Weighted-average common shares outstanding – diluted	113,330			106,512

Net income attributable to Albemarle Corporation	$	95,677		$	107,204
Add back:
Interest and financing expenses	43,882			16,885
Income tax expense	22,107			18,442
Depreciation and amortization	62,260			53,694
EBITDA	223,926			196,225
Non-operating pension and OPEB items	(5,465)			(2,908)
Non-recurring and other unusual items	11,593			3,048
Adjusted EBITDA	$	230,054		$	196,365

Net sales	$	829,291		$	738,845
EBITDA margin	27.0		%	26.6		%
Adjusted EBITDA margin	27.7		%	26.6		%

See below for a reconciliation of adjusted EBITDA on a segment basis, the non-GAAP financial measure, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP (in thousands, except percentages).

	Lithium		Bromine Specialties		Catalysts		Reportable Segments Total		All Other		Corporate		Consolidated Total		% of Net Sales
Three months ended March 31, 2021
Net income (loss) attributable to Albemarle Corporation	$	74,630	$	82,113	$	12,916	$	169,659	$	20,016	$	(93,998)	$	95,677	11.5	%
Depreciation and amortization	31,806		12,527		12,511		56,844		1,463		3,953		62,260		7.5	%
Non-recurring and other unusual items	—		—		—		—		—		11,593		11,593		1.4	%
Interest and financing expenses	—		—		—		—		—		43,882		43,882		5.3	%
Income tax expense	—		—		—		—		—		22,107		22,107		2.7	%
Non-operating pension and OPEB items	—		—		—		—		—		(5,465)		(5,465)		(0.7)	%
Adjusted EBITDA	$	106,436	$	94,640	$	25,427	$	226,503	$	21,479	$	(17,928)	$	230,054	27.7	%

Three months ended March 31, 2020
Net income (loss) attributable to Albemarle Corporation	$	53,240	$	71,665	$	34,892	$	159,797	$	20,846	$	(73,439)	$	107,204	14.5	%
Depreciation and amortization	25,397		11,597		12,578		49,572		1,978		2,144		53,694		7.2	%
Non-recurring and other unusual items	—		—		—		—		—		3,048		3,048		0.4	%
Interest and financing expenses	—		—		—		—		—		16,885		16,885		2.3	%
Income tax expense	—		—		—		—		—		18,442		18,442		2.5	%
Non-operating pension and OPEB items	—		—		—		—		—		(2,908)		(2,908)		(0.4)	%
Adjusted EBITDA	$	78,637	$	83,262	$	47,470	$	209,369	$	22,824	$	(35,828)	$	196,365	26.6	%

Non-operating pension and OPEB items, consisting of mark-to-market actuarial gains/losses, settlements/curtailments, interest cost and expected return on assets, are not allocated to our operating segments and are included in the Corporate category. In addition, we believe that these components of pension cost are mainly driven by market performance, and we manage these separately from the operational performance of our businesses. In accordance with GAAP, these non-operating pension and OPEB items are included in Other (expenses) income, net. Non-operating pension and OPEB items were as follows (in thousands):

	Three Months Ended
	March 31,
	2021		2020
Interest cost	$	5,428	$	7,155
Expected return on assets	(10,893)		(10,063)
Total	$	(5,465)	$	(2,908)

In addition to the non-operating pension and OPEB items disclosed above, we have identified certain other items and excluded them from our adjusted net income calculation for the periods presented. A listing of these items, as well as a detailed description of each follows below (per diluted share):

	Three Months Ended
	March 31,
	2021		2020
Restructuring and other⁽¹⁾	$	—	$	0.01
Acquisition and integration related costs⁽²⁾	0.02		0.02
Loss on early extinguishment of debt⁽³⁾	0.20		—
Other⁽⁴⁾	0.06		(0.01)
Discrete tax items⁽⁵⁾	0.01		(0.01)
Total non-recurring and other unusual items	$	0.29	$	0.01

(1)	In 2020, we recorded severance expenses as part of business reorganization plans, impacting each of our businesses and Corporate, primarily in the U.S., Germany and with our Jordanian joint venture partner. During the three months ended March 31, 2020, we recorded severance expenses in Cost of goods sold, Selling, general and administrative expenses and Net income attributable to noncontrolling interest of $0.7 million, $1.5 million and a $0.3 million gain ($1.5 million after income taxes, or $0.01 per share), respectively. The balance of unpaid severance is recorded in Accrued expenses and is expected to primarily be paid through 2021.

(2)	Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses for the three months ended March 31, 2021 and 2020 of $2.2 million and $3.0 million ($1.7 million and $2.3 million after income taxes, or $0.02 per share in each case), respectively.

(3)	Included in Interest and financing expenses for the three-month period ended March 31, 2021 is a loss on early extinguishment of debt of $27.8 million ($23.0 million after income taxes, or $0.20 per share), representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of $1.5 billion in debt using the proceeds from the issuance of common stock.

(4)	Other adjustments for the three months ended March 31, 2021 included amounts recorded in:
	•	Selling, general and administrative expenses – $5.5 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements.
	•	Other income, net – $3.9 million of expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.
	After income taxes, these charges totaled $7.1 million, or $0.06 per share.

	Other adjustments for the three months ended March 31, 2020 included amounts recorded in:
	•	Other expenses, net – $2.6 million gain resulting from the settlement of a legal matter related to a business sold, partially offset by a $0.8 million loss resulting from the adjustment of indemnifications related to previously disposed businesses.
	After income taxes, these net gains totaled $1.2 million, or $0.01 per share.

(5)	Included in Income tax expense for the three months ended March 31, 2021 are discrete net tax expenses of $1.0 million, or $0.01 per share. This net expense is primarily related to an out-of-period adjustment regarding an overstated deferred tax liability for the three-month period ended December 31, 2017, offset by a benefit due to the release of a foreign valuation allowance and excess tax benefits realized from stock-based compensation arrangements.

	Included in Income tax expense for the three months ended March 31, 2020 are discrete net tax benefits of $1.1 million, or $0.01 per share. This net benefit is primarily related to excess tax benefits realized from stock-based compensation arrangements.

See below for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reported in accordance with GAAP (in thousands, except percentages).

	Income before income taxes and equity in net income of unconsolidated investments		Income tax expense		Effective income tax rate
Three months ended March 31, 2021
As reported	$	123,294	$	22,107	17.9	%
Non-recurring, other unusual and non-operating pension and OPEB items	33,926		5,432
As adjusted	$	157,220	$	27,539	17.5	%

Three months ended March 31, 2020
As reported	$	115,473	$	18,442	16.0	%
Non-recurring, other unusual and non-operating pension and OPEB items	461		958
As adjusted	$	115,934	$	19,400	16.7	%

View original content to download multimedia:http://www.prnewswire.com/news-releases/albemarle-reports-first-quarter-sales-growth-of-12-301284863.html

SOURCE Albemarle Corporation

May 5, 2021 4:38 pm

Aaron’s Directors Declare Cash Dividend

PR Newswire

ATLANTA, May 5, 2021 /PRNewswire/ — The Aaron’s Company, Inc. (NYSE: AAN), a leading technology-enabled omnichannel provider of lease-to-own and purchase solutions, today announced that its Board of Directors has declared a regular quarterly cash dividend of $0.10 per share and declared such dividend payable July 6, 2021 to shareholders of record as of the close of business on June 17, 2021.

About Aaron’s
Headquartered in Atlanta, The Aaron’s Company, Inc. (NYSE: AAN), is a leading technology-enabled omnichannel provider of lease-to-own and purchase solutions. Aaron’s engages in the sales and lease ownership and specialty retailing of furniture, consumer electronics, appliances and accessories through its approximately 1,300 Company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform, Aarons.com. For more information, visit investor.aarons.com or Aarons.com.

View original content to download multimedia:http://www.prnewswire.com/news-releases/aarons-directors-declare-cash-dividend-301284711.html

SOURCE The Aaron’s Company, Inc.

May 5, 2021 4:38 pm

American Finance Trust Announces First Quarter 2021 Results

PR Newswire

NEW YORK, May 5, 2021 /PRNewswire/ — American Finance Trust, Inc. (Nasdaq: AFIN) (“AFIN” or the “Company”), a real estate investment trust focused on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution related commercial real estate properties in the U.S., announced today its financial and operating results for the first quarter ended March 31, 2021.

First Quarter 2021 and Subsequent Event Highlights

Revenue grew 6.2% to $79.2 million from $74.6 million for the first quarter 2020
Net loss attributable to common stockholders was $9.4 million as compared to $9.2 million for the first quarter 2020
Cash net operating income (“NOI”) grew 6.9% to $63.1 million from $59.0 million for the first quarter 2020
Funds from Operations (“FFO”) of $22.6 million, or $0.21 per diluted share compared to $23.7 million, or $0.22 per diluted share, for the first quarter 2020
Adjusted Funds from Operations (“AFFO”) grew to $25.5 million or $0.24 per share from $25.2 million, or $0.23 per diluted share, in the prior year first quarter
Dividends of $23.0 million or $0.21 per share
Collected approximately 100% of original cash rent in first quarter 2021, including 100% in single tenant portfolio, 99% in the multi-tenant portfolio, and 100% among the top 20 tenants^1,2
Portfolio Occupancy of 94.9%, up from 93.9% in fourth quarter 2020
Multi-tenant Executed Occupancy³ and Leasing Pipeline⁴ are expected to add $1.6 million of annual rent and 122,000 square feet to the portfolio over time as executed leases commence
Executed Occupancy and Leasing Pipeline are expected to increase multi-tenant occupancy to 88.2% over time, exceeding Executed Occupancy of 87.3% reported as of March 31, 2020, assuming no other changes
Total year-to-date closed and pipeline acquisitions of $72 million⁵ with a cash capitalization rate⁶ of 7.2% and a weighted average capitalization rate⁷ of 8.2%
High quality portfolio with 61% of tenants in single-tenant portfolio⁸ and 70% of the top 20 tenants portfolio-wide rated as investment grade or implied investment grade⁹
Annual rent escalators¹⁰ with a weighted-average of 1.3% per year provide contractually embedded rent growth
Improved balance sheet year-over-year, with weighted average interest rate of 3.8%, down from 4.2%, weighted-average debt maturity of 4.5 years up from 3.5 years and 82.6% of debt fixed-rate compared to 73.2% a year ago

“As the economy continues to recover, we are off to a strong start in 2021. We continue to grow and optimize our intentionally constructed portfolio of single-tenant and multi-tenant assets focused on necessity-retail properties,” said Michel Weil, CEO of AFIN. “We have maintained the strength of our portfolio the past year and our performance metrics are returning to or have exceeded pre-pandemic levels, including portfolio occupancy, Cash NOI, and per-share AFFO. Our balance sheet, with a lower weighted-average interest rate and longer weighted-average remaining debt maturity than a year ago, is optimized to support our approach to growing the portfolio through high-quality, accretive acquisitions. Supplemented by increased leasing activity, we believe AFIN is well positioned to continue delivering strong results that will generate value creation for our shareholders.”

Financial Results

	Three Months Ended March 31,
(In thousands, except per share data)	2021		2020
Revenue from tenants	$	79,187	$	74,564

Net loss attributable to common stockholders	$	(9,411)	$	(9,153)
Net loss per common share ^(a)	$	(0.09)	$	(0.08)

FFO attributable to common stockholders	$	22,571	$	23,690
FFO per common share ^(a)	$	0.21	$	0.22

AFFO attributable to common stockholders	$	25,535	$	25,237
AFFO per common share ^(a)	$	0.24	$	0.23


(a)	All per share data based on 108,436,571 and 108,364,082 diluted weighted-average shares outstanding for the three months ended March 31, 2021 and 2020, respectively.

Real Estate Portfolio

The Company’s portfolio consisted of 925 net lease properties located in 46 states and the District of Columbia and comprised 19.7 million rentable square feet as of March 31, 2021. Portfolio metrics include:

94.9% leased, with 8.7 years remaining weighted-average lease term¹¹
77.6% of leases have weighted-average contractual rent increases of 1.3% based on annualized straight-line rent
61% of single-tenant portfolio and 31% of multi-tenant anchor tenants annualized straight-line rent derived from investment grade or implied investment grade tenants
80% retail properties, 11% distribution properties and 9% office properties (based on an annualized straight-line rent)
71% of the retail portfolio focused on either service¹²or experiential retail¹³giving the Company strong alignment with “e-commerce resistant” real estate

Property Acquisitions

During the three months ended March 31, 2021, the Company acquired seven properties for an aggregate contract purchase price of $36.9 million at a weighted average capitalization rate of 8.8%.

Capital Structure and Liquidity Resources

As of March 31, 2021 the Company had a total borrowing capacity under the credit facility of $415.1 million based on the value of the borrowing base under the credit facility, and, of this amount, $280.9 million was outstanding under the credit facility as of March 31, 2021 and $134.3 million remained available for future borrowings. As of March 31, 2021, the Company had $84.2 million of cash and cash equivalents. The Company’s net debt¹⁴ to gross asset value¹⁵ was 40.4%, with net debt of $1.7 billion.

The Company’s percentage of fixed rate debt was 82.6% as of March 31, 2021. The Company’s total combined debt had a weighted-average interest rate cost of 3.8%¹⁶, resulting in an interest coverage ratio of 3.0 times¹⁷.

Rent Collection Update

First Quarter of 2021

For the first quarter of 2021, AFIN collected approximately 100% of the original cash rents that were due across the portfolio, including 100% of the original cash rent payable from the top 20 tenants in the portfolio (based on the total of first quarter original cash rent due across our portfolio) and 100% of the original cash rent payable in the single tenant portfolio and 99% of the original cash rent payable in the multi-tenant portfolio. Cash rent collected includes both contractual rents and deferred rents paid during the period.¹

Footnotes/Definitions

¹	We calculate “original cash rent collections” by comparing original cash rent due under our lease agreements to the total amount of rent collected during the period, which includes both original cash rent due and payments of amounts deferred from prior periods. Eliminating the impact of deferred rent paid, we collected 99% of original cash rent due in the single-tenant portfolio, 95% of original cash rent due in the multi-tenant portfolio, 98% of original cash rent due in the total portfolio. Top 20 tenants based on first quarter 2021 cash rent due. This information may not be indicative of future periods.
²	The impact of the COVID-19 pandemic on the Company’s future results of operations and liquidity will depend on the overall length and severity of the COVID-19 pandemic, which management is unable to predict.
³	Includes occupancy, measured by the percentage of square footage of which the tenant has taken possession of divided by the respective total rentable square feet, as of April 30, 2021 as well as all leases fully executed by both parties as of April 30, 2031 where the tenant has yet to take possession as of such date. There are eight additional leases executed as of March 31, 2021 where rent commences over time between the second quarter of 2021 and the first quarter of 2022 totaling approximately 96,000 square feet.
⁴	Includes (i) all leases fully executed by both parties as of April 30, 2021, but after March 31, 2021 and (ii) all leases under negotiation with an executed non-binding letter of intent (“LOI”) by both parties as of April 30, 2021. This represents two executed leases where rent commences over time between the third quarter of 2021 and the fourth quarter of 2021 totaling approximately 11,000 square feet and two LOIs totaling 21,000 square feet, net of one lease termination for 5,000 square feet after March 31, 2021. There can be no assurance that LOIs will lead to definitive leases that will commence on their current terms, or at all. Leasing pipeline should not be considered an indication of future performance.
⁵	Represents the contract purchase price and excludes acquisition costs which are capitalized per GAAP. For the three months ended March 31, 2021, capitalized acquisition costs were $0.3 million. Includes pending acquisitions with contract purchase price of $35.1 million that are subject to conditions and may not be completed on their currently contemplated terms, or at all.
⁶	Cash capitalization rate is a rate of return on a real estate investment property based on the expected, annualized cash rental income during the first year of ownership that the property will generate under its existing lease or leases. Cash capitalization rate is calculated by dividing this annualized cash rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) by the purchase price of the property. excluding acquisition costs. The weighted-average cash capitalization rate is based upon square feet.
⁷	Capitalization rate is a rate of return on a real estate investment property based on the expected, annualized straight-line rental income that the property will generate under its existing lease or leases. Capitalization rate is calculated by dividing the annualized straight-lined rental income the property will generate (before debt service and depreciation and after fixed costs and variable costs) by the purchase price of the property, excluding acquisition costs. The weighted-average capitalization rate is based upon square feet.
⁸	Percentage of single-tenant portfolio tenants based on annualized straight-line rent as of March 31, 2021.
⁹	As used herein, investment grade includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. The term “parent” for these purposes includes any entity, including any governmental entity, owning more than 50% of the voting stock in a tenant. Ratings information is as of March 31, 2021. Based on annualized straight-line rent as of March 31, 2021, single-tenant portfolio tenants are 49.6% actual investment grade rated and 11.0% implied investment grade rate. Anchor tenants in the multi-tenant portfolio are 21.4% actual investment grade rated and 9.3% implied investment grade rated.
¹⁰	Contractual rent increases include fixed percent or actual increases, or CPI-indexed increases.
¹¹	The weighted-average is based on annualized straight-line rent as of March 31, 2021.
¹²	Service retail is defined as single-tenant retail properties leased to tenants in the retail banking, restaurant, grocery, pharmacy, gas/convenience, healthcare, and auto services sectors
¹³	Experiential retail is defined as multi-tenant properties leased to tenants in the restaurant, discount retail, entertainment, salon/beauty, and grocery sectors, among others.
¹⁴	Total debt of $1.8 billion less cash and cash equivalents of $84.2 million as of March 31, 2021. Excludes the effect of deferred financing costs, net, mortgage premiums, net and includes the effect of cash and cash equivalents.
¹⁵	Defined as the carrying value of total assets plus accumulated depreciation and amortization as of March 31, 2021.
¹⁶	Weighted based on the outstanding principal balance of the debt.
¹⁷	The interest coverage ratio is calculated by dividing adjusted EBITDA by cash paid for interest (interest expense less amortization of deferred financing costs, net, and change in accrued interest and amortization of mortgage premiums on borrowings) for the quarter ended March 31, 2021.

Webcast and Conference Call

AFIN will host a webcast and call on May 6, 2021 at 11:00 a.m. ET to discuss its financial and operating results. This webcast will be broadcast live over the Internet and can be accessed by all interested parties through the AFIN website, www.americanfinancetrust.com, in the “Investor Relations” section.

Dial-in instructions for the conference call and the replay are outlined below.

To listen to the live call, please go to AFIN’s “Investor Relations” section of the website at least 15 minutes prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the AFIN website at www.americanfinancetrust.com.

Live Call
Dial-In (Toll Free): 1-855-327-6837
International Dial-In: 1-631-891-4304

Conference Replay*
Domestic Dial-In (Toll Free): 1-844-512-2921
International Dial-In: 1-412-317-6671
Conference Number: 10014349
*Available from 2:00 p.m. ET on May 6, 2021 through August 6, 2021.

About American Finance Trust, Inc.

American Finance Trust, Inc. (Nasdaq: AFIN) is a publicly traded real estate investment trust listed on the Nasdaq focused on acquiring and managing a diversified portfolio of primarily service-oriented and traditional retail and distribution related commercial real estate properties in the U.S. Additional information about AFIN can be found on its website at www.americanfinancetrust.com.

Supplemental Schedules

The Company will file supplemental information packages with the Securities and Exchange Commission (the “SEC”) to provide additional disclosure and financial information. Once posted, the supplemental package can be found under the “Presentations” tab in the Investor Relations section of AFIN’s website at www.americanfinancetrust.com and on the SEC website at www.sec.gov.

Important Notice

The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “may,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company, the Company’s tenants and the global economy and financial markets and that any potential future acquisition is subject to market conditions and capital availability and may not be identified or completed on favorable terms, or at all, as well as those risks and uncertainties set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 25, 2021 and all other filings with the SEC after that date, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Further, forward looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.

Accounting Treatment of Rent Deferrals/Abatements

The majority of the concessions granted to the Company’s tenants as a result of the COVID-19 pandemic are rent deferrals or temporary rent abatements with the original lease term unchanged and collection of deferred rent deemed probable. The Company’s revenue recognition policy requires that it must be probable that the Company will collect virtually all of the lease payments due and does not provide for partial reserves, or the ability to assume partial recovery. In light of the COVID-19 pandemic, the FASB and SEC agreed that for leases where the total lease cash flows will remain substantially the same or less than those after the COVID-19 related effects, companies may choose to forgo the evaluation of the enforceable rights and obligations of the original lease contract as a practical expedient and account for rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. As a result, rental revenue used to calculate Net Income and NAREIT FFO has not been, and the Company does not expect it to be, significantly impacted by these types of deferrals. In addition, since the Company currently believes that these deferral amounts are collectable, they have been excluded from the increase in straight-line rent for AFFO purposes the amounts recognized under GAAP relating to these types of rent deferrals. Conversely, for abatements where contractual rent has been reduced, the reduction in revenue is reflected over the remaining lease term for accounting purposes but represents a permanent reduction in revenue and the Company has, accordingly, reduced its AFFO.

Contacts:

Investors and Media:
Email: [email protected]
Phone: (866) 902-0063

American Finance Trust, Inc.
Consolidated Balance Sheets
(In thousands. except share and per share data)

	March 31, 2021		December 31, 2020
	(Unaudited)
ASSETS
Real estate investments, at cost:
Land	$	726,599	$	723,316
Buildings, fixtures and improvements	2,862,046		2,830,508
Acquired intangible lease assets	453,220		454,245
Total real estate investments, at cost	4,041,865		4,008,069
Less: accumulated depreciation and amortization	(666,683)		(639,367)
Total real estate investments, net	3,375,182		3,368,702
Cash and cash equivalents	84,214		102,860
Restricted cash	14,314		10,537
Deposits for real estate acquisitions	187		137
Derivative assets, at fair vale	2,361		—
Deferred costs, net	17,926		16,663
Straight-line rent receivable	68,378		66,581
Operating lease right-of-use assets	18,422		18,546
Prepaid expenses and other assets (including $758 and $1,939 due from related parties as of March 31, 2021 and December 31, 2020, respectively)	24,634		23,941
Total assets	$	3,605,618	$	3,607,967

LIABILITIES AND STOCKHOLDERS’ EQUITY
Mortgage notes payable, net	$	1,491,968	$	1,490,798
Credit facility	280,857		280,857
Below market lease liabilities, net	77,109		78,674
Accounts payable and accrued expenses (including $1,788 and $273 due to related parties as of March 31, 2021 and December 31, 2020, respectively)	30,296		25,210
Operating lease liabilities	19,226		19,237
Derivative liabilities, at fair value	—		123
Deferred rent and other liabilities	11,171		9,794
Dividends payable	5,892		3,675
Total liabilities	1,916,519		1,908,368

7.50% Series A cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 12,796,000 and 8,796,000 shares authorized, 7,933,711 and 7,842,008 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	79		79
7.375% Series C cumulative redeemable perpetual preferred stock, $0.01 par value, liquidation preference $25.00 per share, 11,536,000 and 3,680,000 shares authorized, 4,099,801 and 3,535,700 issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	41		35
Common stock, $0.01 par value per share, 300,000,000 shares authorized, 108,872,337 and 108,837,209 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	1,089		1,088
Additional paid-in capital	2,740,648		2,723,678
Accumulated other comprehensive income (loss)	2,361		(123)
Distributions in excess of accumulated earnings	(1,088,559)		(1,055,680)
Total stockholders’ equity	1,655,659		1,669,077
Non-controlling interests	33,440		30,522
Total equity	1,689,099		1,699,599
Total liabilities and equity	$	3,605,618	$	3,607,967

American Finance Trust, Inc.
Consolidated Statements of Operations (Unaudited)
(In thousands, except share and per share data)

	Three Months Ended March 31,
	2021		2020
Revenue from tenants	$	79,187	$	74,564

Operating expenses:
Asset management fees to related party	7,321		6,905
Property operating expense	13,439		12,282
Acquisition, transaction and other costs ^[1]	42		452
Equity-based compensation ^[2]	4,347		3,211
General and administrative	6,449		5,328
Depreciation and amortization	32,319		34,335
Total operating expenses	63,917		62,513
Operating income before gain on sale of real estate investments	15,270		12,051
Gain on sale of real estate investments	286		1,440
Operating income	15,556		13,491
Other (expense) income:
Interest expense	(19,334)		(19,106)
Other income	24		72
Total other expense, net	(19,310)		(19,034)
Net loss	(3,754)		(5,543)
Net loss attributable to non-controlling interests	6		9
Allocation for preferred stock	(5,663)		(3,619)
Net loss attributable to common stockholders	$	(9,411)	$	(9,153)

Basic and Diluted Net Loss Per Share:
Net loss per share attributable to common stockholders — Basic and Diluted	$	(0.09)	$	(0.08)
Weighted-average shares outstanding — Basic and Diluted	108,436,571		108,364,082


[1]	For the three months ended March 31, 2020, includes litigation costs related to AFIN’s 2017 merger with American Realty Capital – Retail Centers of America, Inc. (the “Merger”) of $0.3 million. Litigation costs related to the Merger incurred in the three months ended March 31, 2021 were not significant.
[2]	For the three months ended March 31, 2021 and 2020, includes expense related to the Company’s restricted common shares of $1.4 million and $0.2 million, respectively.

American Finance Trust, Inc.
Quarterly Reconciliation of Non-GAAP Measures (Unaudited)
(In thousands)

	Three Months Ended March 31,
	2021		2020
Adjusted EBITDA
Net loss	$	(3,754)	$	(5,543)
Depreciation and amortization	32,319		34,335
Interest expense	19,334		19,106
Acquisition, transaction and other costs ^[1]	42		452
Equity-based compensation ^[2]	4,347		3,211
Gain on sale of real estate investments	(286)		(1,440)
Other income	(24)		(72)
Adjusted EBITDA	51,978		50,049
Asset management fees to related party	7,321		6,905
General and administrative	6,449		5,328
NOI	65,748		62,282
Amortization of market lease and other intangibles, net	(935)		(992)
Straight-line rent	(1,727)		(2,265)
Cash NOI	$	63,086	$	59,025

Cash Paid for Interest:
Interest expense	$	19,334	$	19,106
Amortization of deferred financing costs, net and change in accrued interest	(2,469)		(1,712)
Amortization of mortgage discounts and premiums on borrowings	321		560
Total cash paid for interest	$	17,186	$	17,954


[1]	For the three months ended March 31, 2020 includes litigation costs related to the Merger of $0.3 million. Litigation costs related to the Merger incurred in the three months ended March 31, 2021 were not significant.
[2]	For the three months ended March 31, 2021 and 2020, includes expense related to the Company’s restricted common shares of $1.4 million and $0.2 million, respectively.

American Finance Trust, Inc.
Quarterly Reconciliation of Non-GAAP Measures (Unaudited)
(In thousands)

	Three Months Ended March 31,
	2021		2020
Net loss attributable to common stockholders (in accordance with GAAP)	$	(9,411)	$	(9,153)
Depreciation and amortization	32,319		34,335
Gain on sale of real estate investments	(286)		(1,440)
Proportionate share of adjustments for non-controlling interest to arrive at FFO	(51)		(52)
FFO attributable to common stockholders	22,571		23,690
Acquisition, transaction and other costs ^[1]	42		452
Litigation cost reimbursements related to the Merger ^[2]	—		(9)
Legal fees and expenses — COVID-19 lease disputes^[3]	69		—
Amortization of market lease and other intangibles, net	(935)		(992)
Straight-line rent	(1,727)		(2,265)
Straight-line rent (rent deferral agreements) ^[4]	(975)		—
Amortization of mortgage premiums on borrowings	(321)		(560)
Equity-based compensation ^[5]	4,347		3,211
Amortization of deferred financing costs, net and change in accrued interest	2,469		1,712
Proportionate share of adjustments for non-controlling interest to arrive at AFFO	(5)		(2)
AFFO attributable to common stockholders	$	25,535	$	25,237


[1]	Primarily includes prepayment costs incurred in connection with early debt extinguishment as well as litigation costs related to the Merger.
[2]	Included in “Other income” in the Company’s consolidated statement of operations and comprehensive loss.
[3]	Reflects legal costs incurred related to disputes with tenants due to store closures or other challenges resulting from COVID-19. The tenants involved in these disputes had not recently defaulted on their rent and, prior to the second and third quarters of 2020, had recently exhibited a pattern of regular payment. Based on the tenants involved in these matters, their history of rent payments, and the impact of the pandemic on current economic conditions, the Company views these costs as COVID-19-related and separable from our ordinary general and administrative expenses related to tenant defaults. The Company engaged counsel in connection with these issues separate and distinct from counsel the Company typically engages for tenant defaults. The amount reflects what the the Company believes to be only those incremental legal costs above what the Company typically incurs for tenant-related dispute issues. The Company may continue to incur these COVID-19 related legal costs in the future.
[4]	Represents the amount of deferred rent pursuant to lease negotiations which qualify for FASB relief for which rent was deferred but not reduced. These amounts are included in the straight-line rent receivable on the Company’s consolidated balance sheet but are considered to be earned revenue attributed to the current period for purposes of AFFO as they are expected to be collected. For rent abatements (including those qualified for FASB relief), where contractual rent has been reduced, the reduction in revenue is reflected over the remaining lease term for accounting purposes but represents a permanent reduction in revenue and the Company has, accordingly reduced its AFFO.
[5]	Includes expense related to the amortization of the Company’s restricted common shares and LTIP Units related to its multi-year outperformance agreement for all periods presented.

Non-GAAP Financial Measures

This release discusses the non-GAAP financial measures we use to evaluate our performance, including Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Net Operating Income (“NOI”) and Cash Net Operating Income (“Cash NOI”). While NOI is a property-level measure, AFFO is based on our total performance and therefore reflects the impact of other items not specifically associated with NOI such as, interest expense, general and administrative expenses and operating fees to related parties. Additionally, NOI as defined herein, does not reflect an adjustment for straight-line rent but AFFO does. A description of these non-GAAP measures and reconciliations to the most directly comparable GAAP measure, which is net income, is provided below. Adjustments for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling interest to arrive at FFO, AFFO and NOI attributable to stockholders.

Caution on Use of Non-GAAP Measures

FFO, AFFO, Adjusted EBITDA, NOI and Cash NOI should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures.

Other REITs may not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, definition (as we do), or may interpret the current NAREIT definition differently than we do, or may calculate AFFO differently than we do. Consequently, our presentation of FFO and AFFO may not be comparable to other similarly titled measures presented by other REITs.

We consider FFO and AFFO useful indicators of our performance. Because FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gains or losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO and AFFO presentations facilitate comparisons of operating performance between periods and between other REITs in our peer group.

As a result, we believe that the use of FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our performance, including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. However, FFO and AFFO are not indicative of cash available to fund ongoing cash needs, including the ability to pay cash dividends. Investors are cautioned that FFO and AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as they exclude certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred.

Funds from Operations and Adjusted Funds from Operations

Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, the NAREIT, an industry trade group, has promulgated a performance measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP.

We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper and approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gains and losses from sales of certain real estate assets, gain and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for consolidated partially-owned entities (including our Operating Partnership) and equity in earnings of unconsolidated affiliates are made to arrive at our proportionate share of FFO attributable to our stockholders. Our FFO calculation complies with NAREIT’s definition.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

Adjusted Funds from Operations

In calculating AFFO, we start with FFO, then we exclude certain income or expense items from AFFO that we consider to be more reflective of investing activities, such as non-cash income and expense items and the income and expense effects of other activities that are not a fundamental attribute of our day to day operating business plan, such as amounts related to litigation arising out of the Merger. These amounts include legal costs incurred as a result of the litigation, portions of which have been and may in the future be reimbursed under insurance policies maintained by us. Insurance reimbursements are deducted from AFFO in the period of reimbursement. We believe that excluding the litigation costs and subsequent insurance reimbursements related to litigation arising out of the Merger helps to provide a better understanding of the operating performance of our business. Other income and expense items also include early extinguishment of debt and unrealized gains and losses, which may not ultimately be realized, such as gains or losses on derivative instruments and gains and losses on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent, vesting and conversion of the Class B Units and share-based compensation related to restricted shares and the 2018 OPP from AFFO, we believe we provide useful information regarding those income and expense items which have a direct impact on our ongoing operating performance.

In calculating AFFO, we exclude certain expenses which under GAAP are characterized as operating expenses in determining operating net income (loss). All paid and accrued merger, acquisition and transaction related fees and certain other expenses negatively impact our operating performance during the period in which expenses are incurred or properties are acquired will also have negative effects on returns to investors but are not reflective of our on-going performance. In addition, legal fees and expense associated with COVID-19-related lease disputes involving certain tenants negatively impact our operating performance but are not reflective of our on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income (loss). In addition, as discussed above, we view gains and losses from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used to better assess the sustainability of our ongoing operating performance without the impact of transactions or other items that are not related to the ongoing performance of our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to pay dividends.

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income and Cash Net Operating Income.

We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for acquisition and transaction-related expenses, other non-cash items such as the vesting and conversion of the Class B Units, expense related to our multi-year outperformance agreement with the Advisor and including our pro-rata share from unconsolidated joint ventures, is an appropriate measure of our ability to incur and service debt. Adjusted EBITDA should not be considered as an alternative to cash flows from operating activities, as a measure of our liquidity or as an alternative to net income as an indicator of our operating activities. Other REITs may calculate Adjusted EBITDA differently and our calculation should not be compared to that of other REITs.

NOI is a non-GAAP financial measure used by us to evaluate the operating performance of our real estate. NOI is equal to total revenues, excluding contingent purchase price consideration, less property operating and maintenance expense. NOI excludes all other items of expense and income included in the financial statements in calculating net income (loss). We believe NOI provides useful and relevant information because it reflects only those income and expense items that are incurred at the property level and presents such items on an unleveraged basis. We use NOI to assess and compare property level performance and to make decisions concerning the operations of the properties. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating expenses and acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income (loss). NOI excludes certain items included in calculating net income (loss) in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or our ability to pay dividends.

Cash NOI, is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define Cash NOI as NOI excluding amortization of above/below market lease intangibles and straight-line adjustments that are included in GAAP lease revenues. We believe that Cash NOI is a helpful measure that both investors and management can use to evaluate the current financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Cash NOI should not be considered as an alternative to net income, as an indication of our financial performance, or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present Cash NOI may not be directly comparable to the way other REITs present Cash NOI.

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SOURCE American Finance Trust, Inc.

May 5, 2021 4:38 pm

DHI Group Reports First Quarter 2021 Financial Results

PR Newswire

CENTENNIAL, Colo., May 5, 2021 /PRNewswire/ — DHI Group, Inc. (NYSE:DHX) (“DHI” or the “Company”) today announced the following financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Financial Results

Total revenues were $32.6 million, down 2% sequentially and down 11% year over year.
Dice revenues were $19.1 million, down 2% sequentially and down 15% year over year.
ClearanceJobs revenues were $7.6 million, equal to the fourth quarter of 2020 and up 11% year over year.
eFinancialCareers revenues were $6.0 million, down 4% sequentially and down 18% year over year (down 22% excluding impact of foreign exchange).
Net income was $2.7 million, which was positively impacted by $1.7 million comprised of an unrealized gain on an equity security and discrete tax items, partially offset by disposition and other charges, net of tax, compared to a net loss of $6.6 million in the year ago quarter, which was negatively impacted by $8.3 million in impairment and other charges, net of tax, and discrete tax items.
Earnings per diluted share was $0.05, compared to a loss of $0.13 in the year ago quarter. Adjusted earnings per diluted share¹ for the quarter was $0.02 vs. $0.03 last year.
Cash flow from operations was $6.4 million, compared to $2.9 million in the year-ago quarter.
Adjusted EBITDA¹ was $7.3 million, an Adjusted EBITDA margin¹ of 22%, compared to $7.5 million and 21% in the year-ago quarter.
Cash was $7.3 million and net debt¹ was $12.7 million at quarter end.

¹See “Notes Regarding the Use of Non-GAAP Financial Measures” later in this press release.

Commenting on the quarter, Art Zeile, President and CEO of DHI Group, Inc., said:

“I am pleased to report another strong bookings quarter with our three new business teams handily exceeding their average monthly booking levels from a year ago. This includes our Dice Commercial Accounts team, which represents our largest opportunity for revenue growth. Additionally, our Dice revenue renewal rate continued to strengthen in the first quarter and came in at 82 percent, up from 75 percent in the prior quarter. With enterprises focusing on tech-enabling their business models, Dice is poised to benefit from the increase in hiring. Our confidence in the economic expansion underway and our sales teams’ strong performance over the past two quarters, led us to hire more sales reps in the first quarter. We also initiated a new client branding campaign in trial across multiple channels with the tagline ‘Where Tech Connects’. Now that we’ve created the industry-leading online marketplace for matching companies with the highest quality tech professionals, we believe we can capitalize on the millions of new technologist jobs expected over the next five years.”

Product Highlights

Below are the key product highlights delivered during the first quarter:

Dice

Dice Marketplace launched during the first quarter and is a comprehensive and flexible platform through which recruiters and candidates can rapidly and confidently search, match and communicate in real-time. The three major components of the marketplace are recruiter profiles, an enhanced candidate profile that focuses deeply on exposing tech skills, and in-platform instant messaging to make career connections. To date, over 60,000 messages have been sent between recruiters and candidates. Roughly one-third of the messages have been initiated by candidates, showing great engagement by both sides of the Dice community.

ClearanceJobs

CJ Meetings solves one of the most challenging aspects of the recruiter workflow: aligning schedules. This past quarter, CJ released CJ Meeting Integration, which allows recruiters and candidates to synchronize their Google or Outlook calendars to efficiently schedule telephone calls, video calls, or in-platform chats. Recruiters need only spend a few minutes setting their desired calendar parameters and send a scheduling link to candidates. No other competitor has this capability.
CJ Video is the ability to deliver video messaging for both recruiters and candidates. The new video capability can also be used in profile status updates, group broadcasts and company profiles. Videos are hosted and streamed in-platform from CJ.

Business Outlook

“We expect the strong bookings performance we’ve had over the past two quarters to manifest itself in year over year total revenue growth beginning in the second half of 2021,” commented Kevin Bostick, CFO of DHI Group, Inc. “We will continue to operate the business to Adjusted EBITDA margins¹ in the 20% range as we invest in our long-term revenue growth plan.”

¹See “Notes Regarding the Use of Non-GAAP Financial Measures” later in this press release.

Conference Call Information

Art Zeile, President and Chief Executive Officer, and Kevin Bostick, Chief Financial Officer, will host a conference call today, May 5, 2021, at 5:00 p.m. Eastern Time to discuss the Company’s financial results and recent developments.

The call can be accessed by dialing 844-890-1790 (in the U.S.) or +1-412-380-7407 (outside the U.S.). Please ask to be placed into the DHI Group, Inc. call. A live webcast of the call will simultaneously be available through the Investor Relations section of the Company’s website, https://www.dhigroupinc.com, and available for replay after the call ends.

About DHI Group, Inc.

DHI Group, Inc (NYSE: DHX) is a provider of software products, online tools and services to deliver career marketplaces to candidates and employers globally. DHI’s three brands—Dice, ClearanceJobs and eFinancialCareers— enable recruiters and hiring managers to efficiently search, match and connect with highly skilled technologists in specialized fields, particularly technology, those with active government security clearances and in financial services. Professionals find ideal employment opportunities, relevant job advice and personalized data to best manage their whole technologist life. For 30 years, we have leveraged the latest technology to foster career connections in multiple markets including North America, Europe, the Middle East and the Asia Pacific region. Find out more at www.dhigroupinc.com.

Investor Contact

Todd Kehrli or Jim Byers
MKR Investor Relations, Inc.
212-448-4181
[email protected]

Media Contact

Rachel Ceccarelli

VP of Engagement
212-448-8288
[email protected]

Notes Regarding the Use of Non-GAAP Financial Measures

The Company has provided certain non-GAAP financial information as additional information for its operating results. These measures are not in accordance with, or an alternative for, measures in accordance with generally accepted accounting principles in the United States (“GAAP”) and may be different from similarly titled non-GAAP measures reported by other companies. The Company believes that its presentation of non-GAAP measures, such as Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Diluted Earnings Per Share, and Net Debt provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. In addition, the Company’s management uses these measures for reviewing the financial results of the Company and for budgeting and planning purposes. The non-GAAP measures apply to consolidated results or other measures as shown within this document. The Company has provided required reconciliations to the most comparable GAAP measures elsewhere in the document.

Adjusted Diluted Earnings Per Share

Adjusted Diluted Earnings Per Share is a non-GAAP metric and performance measure that is useful to investors and management in understanding our ongoing operations and in the analysis of operating trends. Adjusted Diluted Earnings Per Share is computed as diluted earnings per share plus or minus the impacts of certain non-cash and other items, including non-cash impairments, costs related to reorganizing the Company, including severance and related costs, gains or losses on the sale of businesses, disposition costs, unrealized gains on equity securities, and discrete tax items.

Adjusted Diluted Earnings Per Share is not a measurement of our financial performance under GAAP and should not be considered as an alternative to diluted earnings per share, net income, or any other performance measures derived in accordance with GAAP as a measure of our profitability.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics used by management to measure operating performance. Management uses Adjusted EBITDA as a performance measure for internal monitoring and planning, including preparation of annual budgets, analyzing investment decisions and evaluating profitability and performance comparisons between us and our competitors. The Company also uses this measure to calculate amounts of performance based compensation under the senior management incentive bonus program. Adjusted EBITDA represents net income plus (to the extent deducted in calculating such net income) interest expense, income tax expense, depreciation and amortization, non-cash stock based compensation, losses resulting from certain dispositions outside the ordinary course of business including prior negative operating results of those divested businesses, certain writeoffs in connection with indebtedness, impairment charges with respect to long-lived assets, expenses incurred in connection with an equity offering or any other offering of securities by the Company, extraordinary or non-recurring non-cash expenses or losses, transaction costs in connection with the credit agreement, deferred revenues written off in connection with acquisition purchase accounting adjustments, writeoff of non-cash stock based compensation expense, severance and retention costs related to dispositions and reorganizations of the Company, losses related to legal claims and fees that are unusual in nature or infrequent, minus (to the extent included in calculating such net income) non-cash income or gains, interest income, business interruption insurance proceeds, and any income or gain resulting from certain dispositions outside the ordinary course of business, including prior positive operating results of those divested businesses, and gains related to legal claims that are unusual in nature or infrequent.

We also consider Adjusted EBITDA, as defined above, to be an important indicator to investors because it provides information related to our ability to provide cash flows to meet future debt service, capital expenditures and working capital requirements and to fund future growth. We present Adjusted EBITDA as a supplemental performance measure because we believe that this measure provides our board of directors, management and investors with additional information to measure our performance, provide comparisons from period to period and company to company by excluding potential differences caused by variations in capital structures (affecting interest expense) and tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses), and to estimate our value.

Adjusted EBITDA Margin is computed as Adjusted EBITDA divided by Revenues.

Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of our financial performance under GAAP and should not be considered as an alternative to revenue, net income, operating income, cash provided by operating activities, or any other performance measures derived in accordance with GAAP as a measure of our profitability.

Net Debt

Net Debt is defined as total principal outstanding on our debt less cash and cash equivalents. We consider Net Debt to be an important measure of liquidity and indicator of our ability to meet ongoing obligations. We also use Net Debt, among other measures, in evaluating our choices for capital deployment. Net Debt presented herein is a non-GAAP measure and may not be comparable to similarly titled measures used by other companies.

Forward-Looking Statements

This press release and oral statements made from time to time by our representatives contain forward-looking statements. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include, without limitation, information concerning our possible or assumed future results of operations. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to execute our tech-focused strategy, competition from existing and future competitors in the highly competitive markets in which we operate, failure to adapt our business model to keep pace with rapid changes in the recruiting and career services business, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, cyclicality or downturns in the economy or industries we serve, the impact of the coronavirus COVID-19 outbreak on our operations and financial results, the uncertainty in respect of the regulation of data protection and data privacy, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, failure to successfully identify or integrate acquisitions, U.S. and foreign government regulation of the Internet and taxation, our ability to borrow funds under our revolving credit facility or refinance our indebtedness and restrictions on our current and future operations under such indebtedness. These factors and others are discussed in more detail in the Company’s filings with the Securities and Exchange Commission, all of which are available on the Investors page of our website at www.dhigroupinc.com, including the Company’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings under the headings “Risk Factors,” “Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should keep in mind that any forward-looking statement made by the Company or its representatives herein, or elsewhere, speaks only as of the date on which it is made. New risks and uncertainties come up from time to time, and it is impossible to predict these events or how they may affect us. We have no obligation to update any forward-looking statements after the date hereof, except as required by federal securities laws.

DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)

		Three Months Ended March 31,
		2021		2020

Revenues		$	32,633	$	36,633

Operating expenses:
Cost of revenues		4,310		4,176
Product development		4,184		4,165
Sales and marketing		12,045		14,538
General and administrative		7,500		8,551
Depreciation		4,096		3,253
Impairment of intangible assets		—		7,200
	Total operating expenses	32,135		41,883
Operating income (loss)		498		(5,250)
Interest expense and other		(193)		(183)
Impairment of equity investment		—		(2,002)
Unrealized gain on equity security		2,513		—
Income (loss) before income taxes		2,818		(7,435)
Income tax expense (benefit)		147		(885)
Net income (loss)		$	2,671	$	(6,550)

Basic earnings (loss) per share		$	0.06	$	(0.13)
Diluted earnings (loss) per share		$	0.05	$	(0.13)

Weighted average basic shares outstanding		46,993		49,134
Weighted average diluted shares outstanding		48,606		49,134

DHI GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

	Three Months Ended March 31,
	2021		2020
Cash flows from (used in) operating activities:
Net income (loss)	$	2,671	$	(6,550)
Adjustments to reconcile net income to net cash flows from (used in) operating activities:
Depreciation	4,096		3,253
Deferred income taxes	(304)		(1,262)
Amortization of deferred financing costs	37		37
Stock based compensation	1,758		1,796
Impairment of intangible assets	—		7,200
Impairment of equity investment	—		2,002
Unrealized gain on equity security	(2,513)		—
Change in accrual for unrecognized tax benefits	59		(81)
Changes in operating assets and liabilities:
Accounts receivable	(3,345)		(2,111)
Prepaid expenses and other assets	629		42
Capitalized contract costs	(794)		859
Accounts payable and accrued expenses	(6,270)		(6,768)
Income taxes receivable/payable	1,127		154
Deferred revenue	9,351		4,382
Other, net	(78)		(20)
Net cash flows from operating activities	6,424		2,933
Cash flows used in investing activities:
Purchases of fixed assets	(3,703)		(4,288)
Net cash flows used in investing activities	(3,703)		(4,288)
Cash flows from (used in) financing activities:
Payments on long-term debt	(5,000)		(2,000)
Proceeds from long-term debt	5,000		29,000
Payments under stock repurchase plan	(1,669)		(1,643)
Purchase of treasury stock related to vested restricted and performance stock units	(1,343)		(1,348)
Net cash flows from (used in) financing activities	(3,012)		24,009
Effect of exchange rate changes	(30)		(212)
Net change in cash and cash equivalents for the period	(321)		22,442
Cash and cash equivalents, beginning of period	7,640		5,381
Cash and cash equivalents, end of period	$	7,319	$	27,823

DHI GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)

ASSETS			March 31, 2021		December 31, 2020
Current assets
	Cash and cash equivalents		$	7,319	$	7,640
	Accounts receivable, net		23,645		20,298
	Income taxes receivable		595		1,044
	Equity security		2,513		—
	Prepaid and other current assets		3,768		4,503
		Total current assets	37,840		33,485
Fixed assets, net			24,114		24,544
Acquired intangible assets			23,800		23,800
Capitalized contract costs			8,519		7,734
Goodwill			133,684		133,353
Deferred income taxes			—		19
Operating lease right-of-use assets			15,600		16,405
Other assets			1,750		1,647
		Total assets	$	245,307	$	240,987


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
	Accounts payable and accrued expenses		$	13,007	$	19,426
	Operating lease liabilities		3,411		3,410
	Deferred revenue		51,762		42,426
	Income taxes payable		799		123
		Total current liabilities	68,979		65,385
Long-term debt, net			19,619		19,583
Deferred income taxes			9,613		9,936
Deferred revenue			1,038		1,068
Accrual for unrecognized tax benefits			1,414		1,347
Operating lease liabilities			12,889		13,704
Other long-term liabilities			2,325		2,394
		Total liabilities	115,877		113,417
		Total stockholders’ equity	129,430		127,570
		Total liabilities and stockholders’ equity	$	245,307	$	240,987

Supplemental Information and Non-GAAP Reconciliations

On the pages that follow, the Company has provided certain supplemental information that we believe will assist the reader in assessing our business operations and performance, including certain non-GAAP financial information and required reconciliations to the most comparable GAAP measure. A statement of operations and statement of cash flows for the three month period ended March 31, 2021 and 2020 and balance sheets as of March 31, 2021 and December 31, 2020 are provided elsewhere in this press release.

DHI GROUP, INC.
NON-GAAP SUPPLEMENTAL DATA
(Unaudited)
(in thousands)

	Revenue
	Q1 2021		Q1 2020		Change	$ Fx Impact¹
Dice	$	19,051	$	22,485	(15)%	$	—
ClearanceJobs	7,625		6,900		11%	—
eFinancialCareers	5,957		7,248		(18)%	328
Total Revenues	$	32,633	$	36,633	(11)%	$	328

Net Income (loss)²	$	2,671	$	(6,550)
Diluted earnings (loss) per share	$	0.05	$	(0.13)
Adjusted diluted earnings per share	$	0.02	$	0.03
Adjusted EBITDA	$	7,269	$	7,517
Adjusted EBITDA Margin		22%		21%

(1) Foreign exchange impact is calculated by determining the increase (decrease) in current period revenues where current period revenues are translated using prior period exchange rates.

(2) For the three months ended March 31, 2021, the Company recorded an unrealized gain on an equity security and disposition, severance and related costs, all net of tax, and discrete tax items that positively impacted net income $1.7 million. For the three months ended March 31, 2020, the Company recorded impairment and other charges, net of tax, and discrete tax items that negatively impacted net income $8.3 million.

DHI GROUP, INC.
NON-GAAP SUPPLEMENTAL DATA (CONTINUED)
(Unaudited)
(dollars in thousands, except earnings per share data)


Reconciliation of Diluted Earnings (Loss) per Share to Adjusted Diluted Earnings per Share:	Three Months Ended March 31,
	2021		2020
Diluted earnings (loss) per share¹	$	0.05	$	(0.13)
Impairment of intangible assets and equity investment, net of tax	—		0.15
Disposition, severance, and related costs, net of tax	0.01		0.01
Unrealized gain on equity security	(0.04)		—
Discrete tax items	(0.01)		—
Other²	0.01		—
Adjusted diluted earnings per share³	$	0.02	$	0.03

(1) For the three month periods ended March 31, 2021 and 2020, diluted earnings per share utilized weighted average shares of 48.6 million and 49.1 million, respectively.
(2) Adjusts, as applicable, for the share impact of common stock equivalents, where dilutive.
(3) For the three month periods ended March 31, 2021 and 2020, adjusted diluted earnings per share utilized weighted average shares of 48.6 million and 50.7 million, respectively.

Reconciliation of Debt to Net Debt:	March 31, 2021		December 31, 2020
Long term debt, net	$	19,619	$	19,583
Add: Deferred financing costs, net	381		417
Principal debt outstanding	20,000		20,000
Less: Cash and cash equivalents	7,319		7,640
Net Debt	$	12,681	$	12,360

Summary of Deferred Revenue and Backlog:	March 31, 2021		December 31, 2020
Deferred Revenue	$	52,800	$	43,494
Contractual commitments not invoiced	31,243		32,830
Backlog⁴	$	84,043	$	76,324

(4) Backlog consists of deferred revenue plus customer contractual commitments not invoiced representing the value of future services to be rendered under committed contracts.

DHI GROUP, INC.
NON-GAAP SUPPLEMENTAL DATA (CONTINUED)
(Unaudited)
(dollars in thousands, except per customer data)


		For the three months ended March 31,
		2021		2020
Reconciliation of Net Income (loss) to Adjusted EBITDA:
Net income (loss)		$	2,671	$	(6,550)
	Interest expense	191		179
	Income tax expense (benefit)	147		(885)
	Depreciation	4,096		3,253
	Non-cash stock based compensation	1,758		1,796
	Impairment of intangible assets	—		7,200
	Impairment of equity investment	—		2,002
	Unrealized gain on equity security	(2,513)		—
	Disposition costs	602		—
	Severance and related costs	315		518
	Other	2		4
Adjusted EBITDA		$	7,269	$	7,517

Reconciliation of Operating Cash Flows to Adjusted EBITDA:
Net cash provided by operating activities		$	6,424	$	2,933
	Interest expense	191		179
	Amortization of deferred financing costs	(37)		(37)
	Income tax expense (benefit)	147		(885)
	Deferred income taxes	304		1,262
	Change in accrual for unrecognized tax benefits	(59)		81
	Change in accounts receivable	3,345		2,111
	Change in deferred revenue	(9,351)		(4,382)
	Disposition costs	602		—
	Severance and related costs	315		518
	Changes in working capital and other	5,388		5,737
Adjusted EBITDA		$	7,269	$	7,517

Dice Recruitment Package Customers
Beginning of period		5,150		6,000
End of period		5,200		5,850

Average for the period (1)		5,050		5,900

Dice Average Monthly Revenue per Recruitment Package Customer (2)		$	1,128	$	1,153

(1) Reflects the daily average of recruitment package customers during the period.
(2) Reflects the simple average of each period presented.

View original content:http://www.prnewswire.com/news-releases/dhi-group-reports-first-quarter-2021-financial-results-301284767.html

SOURCE DHI Group, Inc.

May 5, 2021 4:37 pm

Ready Capital Corporation Announces Final Results of Tender Offer

PR Newswire

NEW YORK, May 5, 2021 /PRNewswire/ — Ready Capital Corporation (NYSE: RC) (“Ready Capital” or the “Company“) announced today the final results of its tender offer for all outstanding shares of its 6.25% Series C Cumulative Convertible Preferred Stock, $0.0001 par value per share (the “Series C Preferred Stock“), which expired at 5:00 p.m.New York City time on April 30, 2021. Based on the final count by the paying agent for the tender offer, 445,065 shares of Series C Preferred Stock were properly tendered and not withdrawn. Ready Capital has accepted for purchase all tendered shares of Series C Preferred Stock at a price of $25.14323 per share (which represents 100% of the $25.00 liquidation preference, plus accrued and unpaid dividends to, but not including, the purchase date) for a total cost of approximately $11.2 million. These shares represent approximately fifty-seven percent of the shares of Series C Preferred Stock outstanding.

The paying agent will promptly issue payment for the shares of Series C Preferred Stock validly tendered and accepted for purchase in the tender offer.

American Stock Transfer & Trust Company, LLC is the paying agent and D.F. King & Co. Inc. is the information agent for the tender offer.

About Ready Capital Corporation

Ready Capital Corporation (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, finances and services small to medium balance commercial loans. Ready Capital specializes in loans backed by commercial real estate, including agency multifamily, investor and bridge as well as SBA 7(a) business loans. Headquartered in New York, New York, Ready Capital employs over 500 lending professionals nationwide. The company is externally managed and advised by Waterfall Asset Management, LLC.

Contact

Investor Relations
Ready Capital Corporation
(212) 257-4666
[email protected]

View original content:http://www.prnewswire.com/news-releases/ready-capital-corporation-announces-final-results-of-tender-offer-301284772.html

SOURCE Ready Capital Corporation

May 5, 2021 4:37 pm

Wilden Releases New Equalizer Surge Dampeners – Integrated SD Series (ISD) Available in Metal

PR Newswire

DOWNERS GROVE, Ill., May 5, 2021 /PRNewswire/ — Wilden, part of PSG, a Dover (NYSE: DOV) company, and a worldwide leader in specialty pumps, today announced the release of its new Equalizer® Surge Dampeners – Integrated SD Series (ISD) bolted metal option. Installed at the pump’s discharge, Wilden ISD Series dampeners have been specifically engineered to reduce fluid pressure and flow fluctuations for a smoother discharge flow. This function protects system equipment and helps extend the life of Wilden air-operated double-diaphragm (AODD) pumps, including by decreasing noise and increasing efficiency.

“Wilden ISD Series dampeners offer a tremendous benefit to end-users because they have been specially designed to minimize vibration and control pipe hammer. This is a critical consideration when trying to protect system piping and downstream instrumentation,” said Erik Solfelt, Diaphragm Pump Product Director, Wilden. “A welcomed addition to our innovative line of pump accessories, these new metal surge dampeners provide users with a simple, reliable and efficient solution for otherwise challenging applications.”

The new ISD Series stainless steel metal dampeners are available in 25 mm (1″), 38 mm (1-1/2″) and 51 mm (2″) sizes. The bolted-construction design and PTFE, Buna backed, integral piston diaphragms offer maximum process fluid containment. This makes them an ideal solution for a wide range of applications, including, but not limited to, oil and gas, paint and coatings, and chemical.

For more information about Wilden and its line of surge dampeners, please visit wildenpump.com. Wilden is a product brand within PSG, a Dover company. For more information on PSG, please visit psgdover.com.

About

Wilden Pump and Engineering Company:

Jim Wilden revolutionized the pumping industry when he invented the air-operated double-diaphragm (AODD) pump in 1955. Since that time, Wilden Pump and Engineering Company has been at the forefront of bringing AODD technology into the future by building its extensive infrastructure, knowledge base and intellectual capital. Wilden offers a comprehensive line of safe, reliable and energy-efficient AODD pumps – including the Pro-Flo® SHIFT Series, Pro-Flo Series and Specialty Series – for critical pumping applications in the general industrial, paints and coatings, oil and gas, chemical process, water and wastewater, hygienic, mining, ceramics, and military and marine markets. Additionally, Wilden offers the largest selection of AODD diaphragms in the world to ensure your unique application demands are fully met. Headquartered in Grand Terrace, CA, USA, Wilden is part of PSG, a Dover company. To learn more about Wilden, please visit wildenpump.com.

About PSG:

PSG is a global pump and dispensing solution expert and leading manufacturer of pumps, systems and related flow-control technology for the safe and efficient transfer of critical and valuable fluids and materials. Headquartered in Oakbrook Terrace, IL, USA, PSG is comprised of several world-class brands, including Abaque^™, All-Flo, Almatec^®, Blackmer^®, Ebsray^®, EnviroGear^®, Griswold^®, Hydro Systems, Mouvex^®, Neptune^™, Quattroflow^™ and Wilden^®. PSG products are manufactured on three continents – North America, Europe and Asia – in state-of-the-art facilities that practice lean manufacturing and are ISO-certified. PSG is part of the Pumps and Process Solutions segment of Dover Corporation. For additional information on PSG, please visit psgdover.com. PSG: Where Innovation Flows.

About Dover:

Dover is a diversified global manufacturer and solutions provider with annual revenue of approximately $7 billion. We deliver innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Fueling Solutions, Imaging & Identification, Pumps & Process Solutions and Refrigeration & Food Equipment. Dover combines global scale, operational agility, world-class engineering capability and customer intimacy to lead the markets we serve. Recognized for our entrepreneurial approach for over 60 years, our team of approximately 24,000 employees takes an ownership mindset, collaborating with customers to redefine what’s possible. Headquartered in Downers Grove, Illinois, Dover trades on the New York Stock Exchange under “DOV.” Additional information is available at dovercorporation.com. 

PSG Contact:

Christine Nunez

(909) 422-1774
[email protected]

Dover Media Contact:
Adrian Sakowicz, VP, Communications
(630) 743-5039
[email protected]     

Dover Investor Contact:
Andrey Galiuk, VP, Corporate Development and Investor Relations   
(630) 743-5131   
[email protected]

View original content to download multimedia:http://www.prnewswire.com/news-releases/wilden-releases-new-equalizer-surge-dampeners–integrated-sd-series-isd-available-in-metal-301284604.html

SOURCE Dover

May 5, 2021 4:37 pm

Tanger Reports First Quarter Results

Collected 95% of First Quarter Rents

April Domestic Traffic Exceeds 2019

PR Newswire

GREENSBORO, N.C., May 5, 2021 /PRNewswire/ — Tanger Factory Outlet Centers, Inc. (NYSE: SKT), a leading owner and operator of open-air outlet centers, today reported financial results and operating metrics for the first quarter of 2021.

“We are pleased that traffic to our domestic open-air centers reached 97% of 2019 levels during the first quarter of 2021, and exceeded 2019 levels in April. These strong results clearly reflect the attraction of our centers, their dominant market locations and the value proposition that we offer to both our retailer partners and shoppers,” said Stephen Yalof, President and Chief Executive Officer. “As we further evolve Tanger’s core strategies – the leasing, operations and marketing of our outlet centers, we are empowering our team as we rebuild occupancy, drive leasing and curate our tenant mix to maximize shopper frequency and dwell time and attract new shoppers to Tanger Outlet Centers. We are also accelerating our digital transformation efforts to meet the customer where they are, and our outlets continue to demonstrate their importance as a vital component of an omnichannel strategy.”

“Beyond all these exciting initiatives, we remain committed to maintaining a strong balance sheet. During the first quarter of 2021, we opportunistically generated nearly $130 million in net proceeds from the issuance of equity, and year to date, we have reduced debt by $175 million, creating additional financial flexibility. As we move forward, we are confident that executing these operational and growth initiatives will create long-term shareholder value,” he added.

First Quarter Results

Net income available to common shareholders was $0.04 per share, or $3.9 million, compared to net loss available to common shareholders of $0.30 per share, or $27.4 million, for the prior year period. The prior year period was impacted by a $45.7 million, or $0.47 per share, non-cash impairment charge.
Funds From Operations (“FFO”) available to common shareholders was $0.38 per share, or $38.2 million, compared to $0.50 per share, or $48.7 million, for the prior year period.
Core Funds From Operations (“Core FFO”) available to common shareholders was $0.40 per share, or $40.6 million, compared to $0.50 per share, or $48.7 million, for the prior year period. Core FFO for the first quarter of 2021 excludes general and administrative expense of $2.4 million, or $0.02 per share, for compensation costs related to a voluntary retirement plan and other executive severance costs, which the Company does not consider indicative of its ongoing operating performance.

FFO and Core FFO are widely accepted supplemental non-GAAP financial measures used in the real estate industry to measure and compare the operating performance of real estate companies. Complete reconciliations containing adjustments from GAAP net income (loss) to FFO and Core FFO, if applicable, are included in this release. Per share amounts for net income (loss), FFO and Core FFO are on a diluted basis.

Operating Metrics

The Company’s key portfolio results were as follows:

Consolidated portfolio occupancy rate was 91.7% on March 31, 2021, compared to 91.9% on December 31, 2020 and 94.3% on March 31, 2020
Blended average rental rates decreased 2.8% on a straight-line basis and 8.5% on a cash basis for all renewals and re-tenanted leases that commenced during the trailing twelve months ended March 31, 2021
Lease termination fees totaled $0.7 million for the first quarter of 2021 compared to $0.2 million for the first quarter of 2020
Same center net operating income (“Same Center NOI”) for the consolidated portfolio decreased to $65.0 million for the first quarter of 2021 from $70.7 million for the first quarter of 2020, largely due to the impact of the COVID-19 pandemic

Same Center NOI is a supplemental non-GAAP financial measure of operating performance. A complete definition of Same Center NOI and a reconciliation to the nearest comparable GAAP measure is included in this release.

Leasing Activity

Total commenced leases for the trailing twelve months ended March 31, 2021 that were renewed or re-leased for all terms included 280 leases, totaling over 1.4 million square feet.

As of March 31, 2021, Tanger had lease renewals executed or in process for 51.8% of the space in the consolidated portfolio scheduled to expire during 2021 compared to 62.7% of the space scheduled to expire during 2020 that was executed or in process as of March 31, 2020.

Tanger recaptured approximately 61,000 square feet within its consolidated portfolio during the first quarter of 2021 related to bankruptcies and brand-wide restructurings by retailers, compared to approximately 332,000 square feet during the first quarter of 2020.

Dividend

In April 2021, the Company’s Board of Directors declared a cash dividend of $0.1775 per share, payable May 14, 2021 to holders of record on April 30, 2021.

Rent Collections Update

Collections of contractual fixed rents billed of $85.6 million in the first quarter of 2021 were approximately 95%. Given that collection rates have normalized, the Company does not intend to provide further collection updates of rents billed in future quarters.

As of April 30, 2021, contractual fixed rents billed during 2020 that were deferred or under negotiation as a direct result of the COVID-19 pandemic and remain outstanding totaled $3.7 million and $2.9 million, respectively. Through April 30, 2021, the Company had collected 96% of 2020 deferred rents due to be repaid in the first quarter of 2021 and 83% of total 2020 rents deferred until 2021, and as a result, the Company recorded a $1.6 million reversal of rental revenue reserves during the first quarter related to prior period rents that were previously deferred. As of March 31, 2021, remaining rental revenue reserves totaled $2.6 million, or 39% of the total remaining 2020 rents deferred or under negotiation.

Balance Sheet and Liquidity

During the first quarter of 2021, Tanger raised $128.7 million in net proceeds from issuance of 6.9 million common shares under its at-the-market equity offering (“ATM”) program at a weighted average price of $19.02 per share. As previously announced, Tanger paid down $25 million of borrowings under its $350 million unsecured term loan on March 11, 2021. Additionally, on April 30, 2021, Tanger’s operating partnership, Tanger Properties Limited Partnership, completed the partial early redemption of $150 million aggregate principal amount of its 3.875% senior notes due December 2023 (the “Notes”) for $163.0 million in cash, which included a make-whole premium of $13.0 million. Subsequent to the redemption, $100 million aggregate principal amount of the Notes remains outstanding. Other than the Company’s unsecured lines of credit, which mature in October of 2021 and may be extended for one additional year, Tanger has no significant debt maturities until December 2023.

As of March 31, 2021:

Weighted average interest rate was 3.3% and weighted average term to maturity of outstanding consolidated debt, including extension options, was approximately 4.2 years
Approximately 93% of the Company’s consolidated square footage was unencumbered by mortgages
Interest coverage ratio (calculated as Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) divided by interest expense) was 3.7 times for the first quarter of 2021 and 3.2 times for the trailing twelve months ended March 31, 2021
Total outstanding floating rate debt was approximately $76 million, representing approximately 5% of total consolidated debt outstanding and 2% of total enterprise value
Funds Available for Distribution (“FAD”) payout ratio was 42% for the first quarter of 2021

Adjusted EBITDA and FAD are supplemental non-GAAP financial measures of operating performance. Definitions of Adjusted EBITDA and FAD and reconciliations to the nearest comparable GAAP measures are included in this release.

Guidance for 2021

Based on the Company’s internal budgeting process and its view on current market conditions, management currently believes the Company’s net income and FFO per share for 2021 will be as follows:

For the year ended December 31, 2021:
	Low Range		High Range
Estimated diluted net income per share	$	0.13	$	0.23
Depreciation and amortization of real estate assets – consolidated and the Company’s share of unconsolidated joint ventures	1.14		1.14
Loss on sale of joint venture property, including foreign currency effect ⁽¹⁾	0.04		0.04
Estimated diluted FFO per share	$	1.31	$	1.41
Costs related to early extinguishment of debt	0.14		0.14
Compensation related to voluntary retirement plan and other executive severance	0.02		0.02
Estimated diluted Core FFO per share	$	1.47	$	1.57


⁽¹⁾	Includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.

Tanger’s estimates reflect the following key assumptions:

A $9 million to $10 million, or $0.09 to $0.10 per share, decrease in lease termination fees, to approximately $2 million to $3 million, from $12 million in 2020
Additional store closures and lease adjustments related to recent tenant bankruptcy filings and restructuring announcements
No further domestic government-mandated retail shutdowns
Annual general and administrative expense of between $59 million and $62 million, including $2.4 million of compensation related to a voluntary retirement plan and other executive severance incurred during the first quarter of 2021. The year-over-year growth in general and administrative expense reflects the full-year impact of two senior executive positions created during 2020, as well as Tanger’s continued investments in its core strategies of reshaping operations, accelerating leasing and enhancing marketing through digital transformation
Combined annual recurring capital expenditures and second generation tenant allowances of approximately $40 million to $45 million
Does not include the impact of the sale of any outparcels, additional properties or joint venture interests, or the acquisition of any properties or joint venture partner interests

First Quarter 2021 Conference Call

Tanger will host a conference call to discuss its first quarter 2021 results for analysts, investors and other interested parties on Thursday, May 6, 2021, at 8:30 a.m. Eastern Time. To access the conference call, listeners should dial 1-844-492-3729 and request to join the Tanger Factory Outlets Centers, Inc. SKT Call. Alternatively, a live audio webcast of this call will be available to the public on Tanger’s Investor Relations website, investors.tangeroutlets.com. A telephone replay of the call will be available from May 6, 2021 at 11:30 a.m. through May 20, 2021 at 11:59 p.m. by dialing 1-877-344-7529, replay access code # 10153248. An online archive of the webcast will also be available through May 20, 2021.

About Tanger Factory Outlet Centers, Inc.

Tanger Factory Outlet Centers, Inc. (NYSE: SKT) is a leading operator of upscale open-air outlet centers that owns, or has an ownership interest in, a portfolio of 36 centers. Tanger’s operating properties are located in 20 states and in Canada, totaling approximately 13.6 million square feet, leased to over 2,500 stores operated by more than 500 different brand name companies. The Company has more than 40 years of experience in the outlet industry and is a publicly-traded REIT. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission (“SEC”) that includes a supplemental information package for the quarter ended March 31, 2021. For more information on Tanger Outlet Centers, call 1-800-4TANGER or visit the Company’s website at www.tangeroutlets.com.

Safe Harbor Statement

This news release contains certain 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. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “will,” “forecast” or similar expressions, and include the Company’s expectations regarding the impact of the COVID-19 pandemic on the Company’s business, financial results and financial condition, future financial results and assumptions underlying that guidance, expectations regarding rent collections, the financial condition of the Company’s tenants, its leasing strategy and value proposition to retailers, occupancy and rent concessions, uses of capital, liquidity, dividend payments and cash flows.

You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other important factors which are, in some cases, beyond our control and which could materially affect our actual results, performance or achievements. Important factors which may cause actual results to differ materially from current expectations include, but are not limited to: risks related to the impact of the COVID-19 pandemic on our tenants and on our business, financial condition, liquidity, results of operations and compliance with debt covenants; our inability to develop new outlet centers or expand existing outlet centers successfully; risks related to the economic performance and market value of our outlet centers; the relative illiquidity of real property investments; impairment charges affecting our properties; our dispositions of assets may not achieve anticipated results; competition for the acquisition and development of outlet centers, and our inability to complete outlet centers we have identified; environmental regulations affecting our business; risks associated with possible terrorist activity or other acts or threats of violence and threats to public safety; our dependence on rental income from real property; our dependence on the results of operations of our retailers and their bankruptcy, early termination or closing could adversely affect us; the fact that certain of our properties are subject to ownership interests held by third parties, whose interests may conflict with ours; risks related to climate change; risks related to uninsured losses; the risk that consumer, travel, shopping and spending habits may change; risks associated with our Canadian investments; risks associated with attracting and retaining key personnel; risks associated with debt financing; risks associated with our guarantees of debt for, or other support we may provide to, joint venture properties; the effectiveness of our interest rate hedging arrangements; uncertainty relating to the potential phasing out of LIBOR; our potential failure to qualify as a REIT; our legal obligation to make distributions to our shareholders; legislative or regulatory actions that could adversely affect our shareholders, including the recent changes in the U.S. federal income taxation of U.S. businesses; our dependence on distributions from the Operating Partnership to meet our financial obligations, including dividends; the risk of a cyber-attack or an act of cyber-terrorism and other important factors set forth under Item 1A – “Risk Factors” in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2020, as may be updated or supplemented in the Company’s Quarterly Reports on Form 10-Q and the Company’s other filings with the SEC. Accordingly, there is no assurance that the Company’s expectations will be realized. The Company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to refer to any further disclosures the Company makes or related subjects in the Company’s Current Reports on Form 8-K that the Company files with the SEC.

Investor Contact Information		Media Contact Information

Cyndi Holt	Jim Williams	Quentin Pell
SVP, Finance and Investor Relations	EVP & CFO	SVP, Business Operations
336-834-6892	336-834-6800	336-834-6827
[email protected]	[email protected]	[email protected]

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited)

	Three months ended
	March 31,
	2021		2020
Revenues:
Rental revenues	$	97,467	$	108,558
Management, leasing and other services	1,372		1,443
Other revenues	1,855		1,632
Total revenues	100,694		111,633
Expenses:
Property operating	35,311		38,627
General and administrative	16,793		12,584
Impairment charges	—		45,675
Depreciation and amortization	28,150		29,417
Total expenses	80,254		126,303
Other income (expense):
Interest expense	(14,362)		(15,196)
Other income (expense) ⁽¹⁾	(3,505)		220
Total other income (expense)	(17,867)		(14,976)
Income (loss) before equity in earnings of unconsolidated joint ventures	2,573		(29,646)
Equity in earnings of unconsolidated joint ventures	1,769		1,527
Net income (loss)	4,342		(28,119)
Noncontrolling interests in Operating Partnership	(209)		1,427
Noncontrolling interests in other consolidated partnerships	—		(190)
Net income (loss) attributable to Tanger Factory Outlet Centers, Inc.	4,133		(26,882)
Allocation of earnings to participating securities	(207)		(516)
Net income (loss) available to common shareholders of Tanger Factory Outlet Centers, Inc.	$	3,926	$	(27,398)

Basic earnings per common share:
Net income (loss)	$	0.04	$	(0.30)

Diluted earnings per common share:
Net income (loss)	$	0.04	$	(0.30)


(1)	The three months ended March 31, 2021 includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (Unaudited)

	March 31,		December 31,
	2021		2020
Assets
Rental property:
Land	$	265,714	$	265,968
Buildings, improvements and fixtures	2,519,214		2,527,404
	2,784,928		2,793,372
Accumulated depreciation	(1,078,999)		(1,054,993)
Total rental property, net	1,705,929		1,738,379
Cash and cash equivalents	201,721		84,832
Investments in unconsolidated joint ventures	89,482		94,579
Deferred lease costs and other intangibles, net	81,807		84,960
Operating lease right-of-use assets	81,222		81,499
Prepaids and other assets	99,260		105,282
Total assets	$	2,259,421	$	2,189,531

Liabilities and Equity
Liabilities
Debt:
Senior, unsecured notes, net	$	1,141,074	$	1,140,576
Unsecured term loan, net	322,753		347,370
Mortgages payable, net	78,933		79,940
Unsecured lines of credit	—		—
Total debt	1,542,760		1,567,886
Accounts payable and accrued expenses	68,084		88,253
Operating lease liabilities	89,870		90,105
Other liabilities	75,693		84,404
Total liabilities	1,776,407		1,830,648
Commitments and contingencies
Equity
Tanger Factory Outlet Centers, Inc.:
Common shares, $0.01 par value, 300,000,000 shares authorized, 100,794,577 and 93,569,801 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	1,008		936
Paid in capital	913,236		787,143
Accumulated distributions in excess of net income	(432,895)		(420,104)
Accumulated other comprehensive loss	(20,268)		(26,585)
Equity attributable to Tanger Factory Outlet Centers, Inc.	461,081		341,390
Equity attributable to noncontrolling interests:
Noncontrolling interests in Operating Partnership	21,933		17,493
Noncontrolling interests in other consolidated partnerships	—		—
Total equity	483,014		358,883
Total liabilities and equity	$	2,259,421	$	2,189,531

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES CENTER INFORMATION (Unaudited)

	March 31,
	2021		2020
Gross leasable area open at end of period (in thousands):
Consolidated	11,456		12,044
Partially owned – unconsolidated	2,113		2,212
Total ⁽¹⁾	13,569		14,257

Outlet centers in operation at end of period:
Consolidated	30		32
Partially owned – unconsolidated	6		7
Total	36		39

Occupancy at end of period:
Consolidated	91.7	%	94.3	%
Partially owned – unconsolidated	95.3	%	96.0	%
Total	92.3	%	94.6	%

Total states operated in at end of period	20		20


(1)	Due to rounding, numbers may not add up precisely to the totals provided.

NON-GAAP SUPPLEMENTAL MEASURES

Funds From Operations

Funds From Operations (“FFO”) is a widely used measure of the operating performance for real estate companies that supplements net income (loss) determined in accordance with generally accepted accounting principles in the United States (“GAAP”). We determine FFO based on the definition set forth by the National Association of Real Estate Investment Trusts (“NAREIT”), of which we are a member. In December 2018, NAREIT issued “NAREIT Funds From Operations White Paper – 2018 Restatement” which clarifies, where necessary, existing guidance and consolidates alerts and policy bulletins into a single document for ease of use. NAREIT defines FFO as net income (loss) available to the Company’s common shareholders computed in accordance with GAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains or losses from sales of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) after adjustments for unconsolidated partnerships and joint ventures calculated to reflect FFO on the same basis.

FFO is intended to exclude historical cost depreciation of real estate as required by GAAP which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization of real estate assets, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income (loss).

We present FFO because we consider it an important supplemental measure of our operating performance. In addition, a portion of cash bonus compensation to certain members of management is based on our FFO or Core FFO, which is described in the section below. We believe it is useful for investors to have enhanced transparency into how we evaluate our performance and that of our management. In addition, FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is also widely used by us and others in our industry to evaluate and price potential acquisition candidates. We believe that FFO payout ratio, which represents regular distributions to common shareholders and unit holders of the Operating Partnership expressed as a percentage of FFO, is useful to investors because it facilitates the comparison of dividend coverage between REITs. NAREIT has encouraged its member companies to report their FFO as a supplemental, industry-wide standard measure of REIT operating performance.

FFO has significant limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

FFO does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
FFO does not reflect changes in, or cash requirements for, our working capital needs;
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and FFO does not reflect any cash requirements for such replacements; and
Other companies in our industry may calculate FFO differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, FFO should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or our dividend paying capacity. We compensate for these limitations by relying primarily on our GAAP results and using FFO only as a supplemental measure.

Core FFO

If applicable, we present Core Funds From Operations (“”Core FFO”) as a supplemental measure of our performance. We define Core FFO as FFO further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance. These further adjustments are itemized in the table below, if applicable. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Core FFO you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Core FFO should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

We present Core FFO because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we believe it is useful for investors to have enhanced transparency into how we evaluate management’s performance and the effectiveness of our business strategies. We use Core FFO when certain material, unplanned transactions occur as a factor in evaluating management’s performance and to evaluate the effectiveness of our business strategies, and may use Core FFO when determining incentive compensation.

Core FFO has limitations as an analytical tool. Some of these limitations are:

Core FFO does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
Core FFO does not reflect changes in, or cash requirements for, our working capital needs;
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Core FFO does not reflect any cash requirements for such replacements;
Core FFO does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and
Other companies in our industry may calculate Core FFO differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Core FFO should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Core FFO only as a supplemental measure.

Funds Available for Distribution

Funds Available for Distribution (“FAD”) is a non-GAAP financial measure that we define as FFO, excluding corporate depreciation, amortization of finance costs, amortization of net debt discount (premium), amortization of equity-based compensation, straight-line rent amounts, market rent amounts, second generation tenant allowances and lease incentives, recurring capital improvement expenditures, and our share of the items listed above for our unconsolidated joint ventures. Investors, analysts and the Company utilize FAD as an indicator of common dividend potential. The FAD payout ratio, which represents regular distributions to common shareholders and unit holders of the Operating Partnership expressed as a percentage of FAD, facilitates the comparison of dividend coverage between REITs.

We believe that net income (loss) is the most directly comparable GAAP financial measure to FAD. FAD does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions. Other companies in our industry may calculate FAD differently than we do, limiting its usefulness as a comparative measure.

Portfolio Net Operating Income and Same Center Net Operating Income

We present portfolio net operating income (“Portfolio NOI”) and same center net operating income (“Same Center NOI”) as supplemental measures of our operating performance. Portfolio NOI represents our property level net operating income which is defined as total operating revenues less property operating expenses and excludes termination fees and non-cash adjustments including straight-line rent, net above and below market rent amortization, impairment charges and gains or losses on the sale of assets recognized during the periods presented. We define Same Center NOI as Portfolio NOI for the properties that were operational for the entire portion of both comparable reporting periods and which were not acquired, or subject to a material expansion or non-recurring event, such as a natural disaster, during the comparable reporting periods.

We believe Portfolio NOI and Same Center NOI are non-GAAP metrics used by industry analysts, investors and management to measure the operating performance of our properties because they provide performance measures directly related to the revenues and expenses involved in owning and operating real estate assets and provide a perspective not immediately apparent from net income (loss), FFO or Core FFO. Because Same Center NOI excludes properties developed, redeveloped, acquired and sold; as well as non-cash adjustments, gains or losses on the sale of outparcels and termination rents; it highlights operating trends such as occupancy levels, rental rates and operating costs on properties that were operational for both comparable periods. Other REITs may use different methodologies for calculating Portfolio NOI and Same Center NOI, and accordingly, our Portfolio NOI and Same Center NOI may not be comparable to other REITs.

Portfolio NOI and Same Center NOI should not be considered alternatives to net income (loss) or as an indicator of our financial performance since they do not reflect the entire operations of our portfolio, nor do they reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other non-property income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations. Because of these limitations, Portfolio NOI and Same Center NOI should not be viewed in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Portfolio NOI and Same Center NOI only as supplemental measures.

Adjusted EBITDA, EBITDAre and Adjusted EBITDAre

We present Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) as adjusted for items described below (“Adjusted EBITDA”), EBITDA for Real Estate (“EBITDAre”) and Adjusted EBITDAre, all non-GAAP measures, as supplemental measures of our operating performance. Each of these measures is defined as follows:

We define Adjusted EBITDA as net income (loss) available to the Company’s common shareholders computed in accordance with GAAP before interest expense, income taxes (if applicable), depreciation and amortization, gains and losses on sale of operating properties, joint venture properties, outparcels and other assets, gains and losses on change of control, impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate, compensation related to voluntary retirement plan and other executive severance, gains and losses on extinguishment of debt, net and other items that we do not consider indicative of the Company’s ongoing operating performance.

We determine EBITDAre based on the definition set forth by NAREIT, which is defined as net income (loss) available to the Company’s common shareholders computed in accordance with GAAP before interest expense, income taxes (if applicable), depreciation and amortization, gains and losses on sale of operating properties, gains and losses on change of control and impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate and after adjustments to reflect our share of the EBITDAre of unconsolidated joint ventures.

Adjusted EBITDAre is defined as EBITDAre excluding gains and losses on extinguishment of debt, net, compensation related to voluntary retirement plan and other executive severance, gains and losses on sale of outparcels, and other items that that we do not consider indicative of the Company’s ongoing operating performance.

We present Adjusted EBITDA, EBITDAre and Adjusted EBITDAre as we believe they are useful for investors, creditors and rating agencies as they provide additional performance measures that are independent of a Company’s existing capital structure to facilitate the evaluation and comparison of the Company’s operating performance to other REITs and provide a more consistent metric for comparing the operating performance of the Company’s real estate between periods.

Adjusted EBITDA, EBITDAre and Adjusted EBITDAre have significant limitations as analytical tools, including:

They do not reflect our interest expense;
They do not reflect gains or losses on sales of operating properties or impairment write-downs of depreciated property and of investment in unconsolidated joint ventures caused by a decrease in value of depreciated property in the affiliate;
Adjusted EBITDA and Adjusted EBITDAre do not reflect gains and losses on extinguishment of debt and other items that may affect operations; and
Other companies in our industry may calculate these measures differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA, EBITDAre and Adjusted EBITDAre should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA, EBITDAre and Adjusted EBITDAre only as supplemental measures.

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP SUPPLEMENTAL MEASURES (in thousands, except per share) (Unaudited)

Below is a reconciliation of Net Income (Loss) to FFO and Core FFO:

	Three months ended
	March 31,
	2021		2020
Net income (loss)	$	4,342	$	(28,119)
Adjusted for:
Depreciation and amortization of real estate assets – consolidated	27,554		28,801
Depreciation and amortization of real estate assets – unconsolidated joint ventures	2,996		3,018
Impairment charges – consolidated	—		45,675
Loss on sale of joint venture property, including foreign currency effect ⁽¹⁾	3,704		—
FFO	38,596		49,375
FFO attributable to noncontrolling interests in other consolidated partnerships	—		(190)
Allocation of earnings to participating securities	(392)		(516)
FFO available to common shareholders⁽²⁾	$	38,204	$	48,669
As further adjusted for:
Compensation related to voluntary retirement plan and other executive severance ⁽³⁾	2,418		—
Impact of above adjustment to the allocation of earnings to participating securities	(22)		—
Core FFO available to common shareholders ⁽²⁾	$	40,600	$	48,669
FFO available to common shareholders per share – diluted ⁽²⁾	$	0.38	$	0.50
Core FFO available to common shareholders per share – diluted ⁽²⁾	$	0.40	$	0.50

Weighted Average Shares:
Basic weighted average common shares	94,812		92,500
Effect of notional units	288		—
Effect of outstanding options	717		—
Diluted weighted average common shares (for earnings per share computations)	95,817		92,500
Exchangeable operating partnership units	4,794		4,911
Diluted weighted average common shares (for FFO and Core FFO per share computations) ⁽²⁾	100,611		97,411


(1)	Includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.

(2)	Assumes the Class A common limited partnership units of the Operating Partnership held by the noncontrolling interests are exchanged for common shares of the Company. Each Class A common limited partnership unit is exchangeable for one of the Company’s common shares, subject to certain limitations to preserve the Company’s REIT status.

(3)	Includes compensation cost related to a voluntary retirement plan offer that required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021.

Below is a reconciliation of FFO to FAD:

	Three months ended
	March 31,
	2021			2020
FFO available to common shareholders	$	38,204		$	48,669
Adjusted for:
Corporate depreciation excluded above	596			616
Amortization of finance costs	1,173			757
Amortization of net debt discount	127			118
Amortization of equity-based compensation	3,845			3,789
Straight-line rent adjustments	1,043			(1,872)
Market rent adjustments	(213)			362
Second generation tenant allowances and lease incentives	(778)			(5,729)
Capital improvements	(956)			(5,146)
Adjustments from unconsolidated joint ventures	(543)			(32)
FAD available to common shareholders ⁽¹⁾	$	42,498		$	41,532
Dividends per share	$	0.1775		$	0.3550
FFO payout ratio	47		%	71		%
FAD payout ratio	42		%	83		%
Diluted weighted average common shares ⁽¹⁾	100,611			97,411


(1)	Assumes the Class A common limited partnership units of the Operating Partnership held by the noncontrolling interests are exchanged for common shares of the Company. Each Class A common limited partnership unit is exchangeable for one of the Company’s common shares, subject to certain limitations to preserve the Company’s REIT status.

Below is a reconciliation of Net Income (Loss) to Portfolio NOI and Same Center NOI for the consolidated portfolio:

	Three months ended
	March 31,
	2021		2020
Net income (loss)	$	4,342	$	(28,119)
Adjusted to exclude:
Equity in earnings of unconsolidated joint ventures	(1,769)		(1,527)
Interest expense	14,362		15,196
Other (income) expense	3,505		(220)
Impairment charges	—		45,675
Depreciation and amortization	28,150		29,417
Other non-property (income) expenses	(400)		139
Corporate general and administrative expenses	16,770		12,579
Non-cash adjustments ⁽¹⁾	844		(1,502)
Lease termination fees	(673)		(164)
Portfolio NOI	65,131		71,474
Non-same center NOI ⁽²⁾	(83)		(741)
Same Center NOI	$	65,048	$	70,733


(1)	Non-cash items include straight-line rent, above and below market rent amortization, straight-line rent expense on land leases and gains or losses on outparcel sales, as applicable.

(2)	Excluded from Same Center NOI:

	Outlet centers sold:
	Terrell	August 2020
	Jeffersonville	January 2021

Below are reconciliations of Net Income (Loss) to Adjusted EBITDA:

	Three months ended
	March 31,
	2021		2020
Net income (loss)	$	4,342	$	(28,119)
Adjusted to exclude:
Interest expense	14,362		15,196
Depreciation and amortization	28,150		29,417
Impairment charges – consolidated	—		45,675
Loss on sale of joint venture property, including foreign currency effect⁽¹⁾	3,704		—
Compensation related to voluntary retirement plan and other executive severance ⁽²⁾	2,418		—
Adjusted EBITDA	$	52,976	$	62,169


	Twelve months ended
	March 31,		December 31,
	2021		2020
Net loss	$	(5,552)	$	(38,013)
Adjusted to exclude:
Interest expense	62,308		63,142
Depreciation and amortization	115,876		117,143
Impairment charges – consolidated ⁽³⁾	21,551		67,226
Impairment charge – unconsolidated joint ventures	3,091		3,091
Loss on sale of joint venture property, including foreign currency effect⁽¹⁾	3,704		—
Gain on sale of assets	(2,324)		(2,324)
Compensation related to voluntary retirement plan and other executive severance ⁽²⁾	2,991		573
Gain on sale of outparcel – unconsolidated joint ventures	(992)		(992)
Adjusted EBITDA	$	200,653	$	209,846


(1)	Includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.

(2)	Includes compensation cost related to a voluntary retirement plan offer that required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021.

(3)	Includes $1.4 million and $4.0 million for the twelve months ended March 31, 2021 and December 31, 2020, respectively, of impairment loss attributable to the right-of-use asset associated with the ground lease at the Mashantucket (Foxwoods), Connecticut outlet center.

Below are reconciliations of Net Income (Loss) to EBITDAre and Adjusted EBITDAre:

	Three months ended
	March 31,
	2021		2020
Net income (loss)	$	4,342	$	(28,119)
Adjusted to exclude:
Interest expense	14,362		15,196
Depreciation and amortization	28,150		29,417
Impairment charges – consolidated	—		45,675
Loss on sale of joint venture property, including foreign currency effect ⁽¹⁾	3,704		—
Pro-rata share of interest expense – unconsolidated joint ventures	1,472		1,867
Pro-rata share of depreciation and amortization – unconsolidated joint ventures	2,996		3,018
EBITDAre	$	55,026	$	67,054
Compensation related to voluntary retirement plan and other executive severance ⁽²⁾	2,418		—
Adjusted EBITDAre	$	57,444	$	67,054


	Twelve months ended
	March 31,		December 31,
	2021		2020
Net loss	$	(5,552)	$	(38,013)
Adjusted to exclude:
Interest expense	62,308		63,142
Depreciation and amortization	115,876		117,143
Impairment charges – consolidated⁽³⁾	21,551		67,226
Impairment charge – unconsolidated joint ventures	3,091		3,091
Loss on sale of joint venture property, including foreign currency effect ⁽¹⁾	3,704		—
Gain on sale of assets	(2,324)		(2,324)
Pro-rata share of interest expense – unconsolidated joint ventures	6,150		6,545
Pro-rata share of depreciation and amortization – unconsolidated joint ventures	12,002		12,024
EBITDAre	$	216,806	$	228,834
Compensation related to voluntary retirement plan and other executive severance ⁽²⁾	2,991		573
Gain on sale of outparcel – unconsolidated joint ventures	(992)		(992)
Adjusted EBITDAre	$	218,805	$	228,415


(1)	Includes a $3.6 million charge related to the foreign currency effect of the sale of the Saint-Sauveur, Quebec property by the RioCan joint venture in March 2021.

(2)	Includes compensation cost related to a voluntary retirement plan offer that required eligible participants to give notice of acceptance by December 1, 2020 for an effective retirement date of March 31, 2021.

(3)	Includes $1.4 million and $4.0 million for the twelve months ended March 31, 2021 and December 31, 2020, respectively, of impairment loss attributable to the right-of-use asset associated with the ground lease at the Mashantucket (Foxwoods), Connecticut outlet center.

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SOURCE Tanger Factory Outlet Centers, Inc.

May 5, 2021 4:37 pm

Lumen Technologies reports first quarter 2021 results

First Quarter 2021 Highlights

– Reported Net Income of $475 million for the first quarter 2021, compared to reported Net Income of $314 million for the first quarter 2020

– Diluted EPS of $0.44 for the first quarter 2021, compared to $0.29 per share for the first quarter 2020. Excluding Special Items, Diluted EPS of $0.44 per share for the first quarter 2021, compared to $0.35 per share for the first quarter 2020

– Generated Adjusted EBITDA of $2.165 billion for the first quarter 2021, compared to $2.209 billion for the first quarter 2020, excluding Special Items of $8 million and zero, respectively

– Reported Net Cash Provided by Operating Activities of $1.525 billion for the first quarter 2021

– Generated Free Cash Flow of $850 million for the first quarter 2021, compared to $385 million, for the first quarter 2020, excluding cash paid for Special Items of $41 million and $60 million, respectively

– Reiterated Full Year 2021 Financial Outlook Measures

PR Newswire

DENVER, May 5, 2021 /PRNewswire/ — Lumen Technologies, Inc. (NYSE: LUMN) reported results for the first quarter ended March 31, 2021.

“We generated solid Adjusted EBITDA and Free Cash Flow in the first quarter, and we remain on track to achieving our financial targets for the year,” said Jeff Storey, president and CEO of Lumen. “As we continually invest in our platform capabilities and forge valuable strategic partnerships, we remain uniquely positioned to meet our enterprise customers’ evolving needs.”

Total revenue was $5.029 billion for the first quarter 2021, compared to $5.228 billion for the first quarter 2020.

Financial Results

Metric	First Quarter		First Quarter
($ in millions, except per share data)	2021		2020
International and Global Accounts	$	1,013	1,041
Large Enterprise	937		966
Mid-Market Enterprise	716		761
Wholesale	929		969
Business Segment Revenue	3,595		3,737
Mass Markets Segment Revenue	1,434		1,491
Total Revenue	$	5,029	5,228
Cost of Services and Products	2,136		2,235
Selling, General and Administrative Expenses	756		853
Share-based Compensation Expenses	20		69
Adjusted EBITDA⁽¹⁾	2,157		2,209
Adjusted EBITDA, Excluding Special Items⁽¹⁾⁽²⁾	2,165		2,209
Adjusted EBITDA Margin⁽¹⁾	42.9%		42.3%
Adjusted EBITDA Margin, Excluding Special Items⁽¹⁾⁽²⁾	43.1%		42.3%
Net Cash Provided by Operating Activities	1,525		1,299
Capital Expenditures	716		974
Unlevered Cash Flow⁽¹⁾	1,196		706
Unlevered Cash Flow, Excluding Cash Special Items⁽¹⁾⁽³⁾	1,237		766
Free Cash Flow⁽¹⁾	809		325
Free Cash Flow, Excluding Cash Special Items⁽¹⁾⁽³⁾	850		385
Net Income	475		314
Net Income, Excluding Special Items⁽¹⁾⁽⁴⁾	475		374
Net Income per Common Share – Diluted	0.44		0.29
Net Income per Common Share – Diluted, Excluding Special Items⁽¹⁾⁽⁴⁾	0.44		0.35
Weighted Average Shares Outstanding (in millions) – Diluted	1,091.6		1,081.8


⁽¹⁾ See the attached schedules for definitions of non-GAAP metrics, reconciliations to GAAP figures and further explanations of the adjustments referred to in notes 2, 3 and 4.
⁽²⁾ Excludes Special Items in the amounts of (i) $8 million for the first quarter of 2021, (ii) zero for the first quarter of 2020.
⁽³⁾ Excludes cash paid for Special Items of (i) $41 million for the first quarter of 2021, (ii) $60 million for the first quarter of 2020.
⁽⁴⁾ Excludes Special Items in the amounts of (i) zero for the first quarter of 2021, (ii) $60 million for the first quarter of 2020.

Revenue	First Quarter		Fourth Quarter	QoQ Percent	First Quarter	YoY Percent
($ in millions)	2021		2020	Change	2020	Change
By Business Sales Channel
International and Global Accounts	$	1,013	1,033	(2)%	1,041	(3)%
Large Enterprise	937		986	(5)%	966	(3)%
Mid-Market Enterprise	716		716	—%	761	(6)%
Wholesale	929		930	—%	969	(4)%
Business Segment Revenue	3,595		3,665	(2)%	3,737	(4)%
Mass Markets Segment Revenue	1,434		1,460	(2)%	1,491	(4)%
Total Revenue	$	5,029	5,125	(2)%	5,228	(4)%

Cash Flow

Free Cash Flow, excluding Special Items, was $850 million in the first quarter 2021, compared to $385 million in the first quarter 2020.

As of March 31, 2021, Lumen had cash and cash equivalents of $486 million.

2021 Outlook

The company reiterated its full-year 2021 financial outlook detailed below.

2021 Metric⁽¹⁾⁽²⁾	2021 Outlook
Adjusted EBITDA (excluding Special Items)	$8.4 to $8.6 billion
Free Cash Flow (excluding Special Items)⁽³⁾	$2.8 to $3.0 billion
Net Cash Interest	$1.525 to $1.575 billion
GAAP Interest Expense	$1.550 billion
Dividends⁽⁴⁾	$1.1 billion
Capital Expenditures	$3.5 to $3.8 billion
Depreciation and Amortization	$4.2 to $4.4 billion
Share-based Compensation Expenses	~$200 million
Cash Income Taxes	$100 million
Full Year Effective Income Tax Rate	27%


⁽¹⁾ For definitions of non-GAAP metrics and reconciliations to GAAP figures, see the attached schedules and Lumen’s Investor Relations website.
⁽²⁾ Outlook measures in this chart and the accompanying schedules (i) exclude the effects of Special Items, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of May 5, 2021. See “Forward-Looking Statements.”
⁽³⁾ Free Cash Flow outlook does not include any potential discretionary pension fund contribution.
⁽⁴⁾ Dividends is defined as dividends paid as disclosed in the Consolidated Statements of Cash Flows. Assumes payment of dividends at the rate of $1.00 per share per year, based on the number of shares outstanding on March 31, 2021. Payments of all dividends are at the discretion of the Board of Directors.

Investor Call

Lumen’s management will host a conference call at 5 p.m. ET today, May 5, 2021. The conference call will be streamed live over Lumen’s website at ir.lumen.com. Additional information regarding first quarter 2021 results, including the presentation materials management will review during the conference call, will be available on the Investor Relations website prior to the call. If you are unable to join the call via the web, the call can be accessed live at +1 877-283-5145 (U.S. Domestic) or +1 312-281-1201 (International).

A telephone replay of the call will be available beginning at 7 p.m. ET on May 5, 2021, and ending Aug. 3, 2021, at 6 p.m. ET. The replay can be accessed by dialing +1 800-633-8284 (U.S. Domestic) or +1 402-977-9140 (International), reservation code 21993540. A webcast replay of the call will also be available on our website beginning at 7 p.m. ET on May 5, 2021, and ending Aug. 3, 2021, at 6 p.m. ET.

About Lumen

Lumen Technologies Inc. (NYSE: LUMN) is guided by our belief that humanity is at its best when technology advances the way we live and work. With approximately 450,000 route fiber miles and serving customers in more than 60 countries, we deliver the fastest, most secure platform for applications and data to help businesses, government and communities deliver amazing experiences.

Learn more about the Lumen network, edge cloud, security, communication and collaboration solutions and our purpose to further human progress through technology at news.lumen.com, LinkedIn: /lumentechnologies, Twitter: @lumentechco, Facebook: /lumentechnologies, Instagram: @lumentechnologies and YouTube: /lumentechnologies. Lumen and Lumen Technologies are registered trademarks of Lumen Technologies LLC in the United States. Lumen Technologies LLC is a wholly-owned affiliate of Lumen Technologies Inc.

Forward-Looking Statements

Except for historical and factual information, the matters set forth in this release and other of our oral or written statements identified by words such as “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends,” “will,” and similar expressions are forward-looking statements as defined by the federal securities laws, and are subject to the “safe harbor” protections thereunder. These forward-looking statements are not guarantees of future results and are based on current expectations only, are inherently speculative, and are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated, projected or implied by us in those statements if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: uncertainties regarding the extent to which COVID-19 health and economic disruptions will continue to impact our business, operations, cash flows and corporate initiatives; the effects of competition from a wide variety of competitive providers, including decreased demand for our more mature service offerings and increased pricing pressures; the effects of new, emerging or competing technologies, including those that could make our products less desirable or obsolete; our ability to attain our key operating imperatives, including simplifying and consolidating our network, simplifying and automating our service support systems, strengthening our relationships with customers and attaining projected cost savings; our ability to safeguard our network, and to avoid the adverse impact of possible security breaches, service outages, system failures, or similar events impacting our network or the availability and quality of our services; the effects of ongoing changes in the regulation of the communications industry, including the outcome of legislative, regulatory or judicial proceedings relating to content liability standards, intercarrier compensation, universal service, broadband deployment, data protection, privacy and net neutrality; our ability to effectively retain and hire key personnel and to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; possible changes in the demand for our products and services, including increased demand for high-speed data transmission services; our ability to successfully maintain the quality and profitability of our existing product and service offerings and to introduce profitable new offerings on a timely and cost-effective basis; our ability to generate cash flows sufficient to fund our financial commitments and objectives, including our capital expenditures, operating costs, debt repayments, dividends, pension contributions and other benefits payments; our ability to successfully and timely implement our operating plans and corporate strategies, including our delevering strategy; changes in our operating plans, corporate strategies, dividend payment plans or other capital allocation plans, whether based upon COVID-19 disruptions, changes in our cash flows, cash requirements, financial performance, financial position, market conditions or otherwise; the impact of any future material acquisitions or divestitures that we may engage in; the negative impact of increases in the costs of our pension, health, post-employment or other benefits, including those caused by changes in markets, interest rates, mortality rates, demographics or regulations; the potential negative impact of customer complaints, government investigations, security breaches or service outages impacting us or our industry; adverse changes in our access to credit markets on favorable terms, whether caused by changes in our financial position, lower credit ratings, unstable markets or otherwise; our ability to meet the terms and conditions of our debt obligations and covenants, including our ability to make transfers of cash in compliance therewith; our ability to maintain favorable relations with our securityholders, key business partners, suppliers, vendors, landlords and financial institutions; our ability to meet evolving environmental, social and governance (“ESG”) expectations and benchmarks, and effectively communicate and implement our ESG strategies; our ability to collect our receivables from, or continue to do business with, financially-troubled customers, including, but not limited to, those adversely impacted by the economic dislocations caused by the COVID-19 pandemic; our ability to use our net operating loss carryforwards in the amounts projected; any adverse developments in legal or regulatory proceedings involving us; changes in tax, pension, healthcare or other laws or regulations, in governmental support programs, or in general government funding levels, including those arising from pending proposals of the Biden Administration to increase infrastructure spending and federal income tax rates; the effects of changes in accounting policies, practices or assumptions, including changes that could potentially require additional future impairment charges; the effects of adverse weather, terrorism, epidemics, pandemics, rioting, societal unrest, or other natural or man-made disasters or disturbances; the potential adverse effects if our internal controls over financial reporting have weaknesses or deficiencies, or otherwise fail to operate as intended; the effects of more general factors such as changes in interest rates, in exchange rates, in operating costs, in public policy, in the views of financial analysts, or in general market, labor, economic or geo-political conditions; and other risks referenced from time to time in our filings with the U.S. Securities and Exchange Commission. You are cautioned not to unduly rely upon our forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise. Furthermore, any information about our intentions contained in any of our forward-looking statements reflects our intentions as of the date of such forward-looking statement, and is based upon, among other things, regulatory, technological, industry, competitive, economic and market conditions, and our related assumptions, as of such date. We may change our intentions, strategies or plans without notice at any time and for any reason.

Reconciliation to GAAP

This release includes certain historical and forward-looking non-GAAP financial measures, including but not limited to Adjusted EBITDA, Free Cash Flow, Unlevered Cash Flow, and adjustments to GAAP and non-GAAP measures to exclude the effect of Special Items. In addition to providing key metrics for management to evaluate the company’s performance, we believe these measurements assist investors in their understanding of period-to-period operating performance and in identifying historical and prospective trends.

Reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the attached financial schedules. Reconciliation of additional non-GAAP historical financial measures that may be discussed during the call described above, along with further descriptions of non-GAAP financial measures, will be available in the Investor Relations portion of the company’s website at ir.lumen.com. Non-GAAP measures are not presented to be replacements or alternatives to the GAAP measures, and investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP. Lumen may present or calculate its non-GAAP measures differently from other companies.

Lumen Technologies, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(UNAUDITED)
($ in millions, except per share amounts; shares in thousands)

		Three months ended March 31,			Increase / (decrease)
		2021		2020	Increase / (decrease)

OPERATING REVENUE		$	5,029	5,228	(4)%

OPERATING EXPENSES
	Cost of services and products	2,136		2,235	(4)%
	Selling, general and administrative	756		853	(11)%
	Depreciation and amortization	1,150		1,160	(1)%
	Total operating expenses	4,042		4,248	(5)%

OPERATING INCOME		987		980	1%

OTHER (EXPENSE) INCOME
	Interest expense	(389)		(449)	(13)%
	Other income (expense), net	34		(98)	(135)%
	Income tax expense	(157)		(119)	32%
NET INCOME		$	475	314	51%
BASIC EARNINGS PER SHARE		$	0.44	0.29	52%
DILUTED EARNINGS PER SHARE		$	0.44	0.29	52%

WEIGHTED AVERAGE SHARES OUTSTANDING
	Basic	1,082,474		1,075,459	1%
	Diluted	1,091,586		1,081,754	1%

DIVIDENDS PER COMMON SHARE		$	0.25	0.25	—%

	Exclude: Special Items⁽¹⁾	$	—	60	(100)%

NET INCOME EXCLUDING SPECIAL ITEMS		$	475	374	27%

DILUTED EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS		$	0.44	0.35	26%


⁽¹⁾ Excludes the Special Items described in the accompanying Non-GAAP Special Items table, net of the income tax effect thereof.
nm – Percentages greater than 200% and comparisons between positive and negative values are considered not meaningful.

Lumen Technologies, Inc.
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2021 AND DECEMBER 31, 2020
(UNAUDITED)
($ in millions)
	March 31, 2021		December 31, 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	486	406
Accounts receivable, less allowance of $162 and $191	1,883		1,962
Other	924		808
Total current assets	3,293		3,176
Property, plant and equipment, net of accumulated depreciation of $32,214 and $31,596	26,091		26,338
GOODWILL AND OTHER ASSETS
Goodwill	18,854		18,870
Other intangible assets, net	7,884		8,219
Other, net	2,706		2,791
Total goodwill and other assets	29,444		29,880
TOTAL ASSETS	$	58,828	59,394
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt	$	3,841	2,427
Accounts payable	1,017		1,134
Accrued expenses and other liabilities
Salaries and benefits	846		1,008
Income and other taxes	346		314
Current operating lease liabilities	387		379
Interest	285		291
Other	307		328
Current portion of deferred revenue	758		753
Total current liabilities	7,787		6,634
LONG-TERM DEBT	27,599		29,410
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes, net	3,471		3,342
Benefit plan obligations, net	4,435		4,556
Other	4,233		4,290
Total deferred credits and other liabilities	12,139		12,188
STOCKHOLDERS’ EQUITY
Common stock	1,106		1,097
Additional paid-in capital	20,598		20,909
Accumulated other comprehensive loss	(2,845)		(2,813)
Accumulated deficit	(7,556)		(8,031)
Total stockholders’ equity	11,303		11,162
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	58,828	59,394

Lumen Technologies, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(UNAUDITED)
($ in millions)

	Three months ended
	March 31, 2021		March 31, 2020
OPERATING ACTIVITIES
Net Income	$	475	314
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,150		1,160
Deferred income taxes	131		105
Provision for uncollectible accounts	27		35
Net (gain) loss on early retirement and modification of debt	(8)		79
Share-based compensation	20		69
Changes in current assets and liabilities, net	(289)		(437)
Retirement benefits	(71)		(25)
Changes in other noncurrent assets and liabilities, net	66		(14)
Other, net	24		13
Net cash provided by operating activities	1,525		1,299
INVESTING ACTIVITIES
Capital expenditures	(716)		(974)
Proceeds from sale of property, plant and equipment and other assets	35		35
Other, net	6		—
Net cash used in investing activities	(675)		(939)
FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt	891		1,237
Payments of long-term debt	(1,176)		(2,488)
Net (payments of) proceeds from revolving line of credit	(150)		1,125
Dividends paid	(294)		(291)
Other, net	(45)		(69)
Net cash used in financing activities	(774)		(486)
Net increase (decrease) in cash, cash equivalents and restricted cash	76		(126)
Cash, cash equivalents and restricted cash at beginning of period	427		1,717
Cash, cash equivalents and restricted cash at end of period	$	503	1,591

Cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	486	1,564
Restricted cash	17		27
Total	$	503	1,591

Lumen Technologies, Inc.
OPERATING METRICS
(UNAUDITED)
(In thousands)

	March 31, 2021	December 31, 2020	March 31, 2020

Operating Metrics
Mass Markets broadband subscribers	4,728	4,767	4,902


	Mass Markets broadband subscribers are customers that purchase broadband connection service through their existing telephone lines, stand-alone telephone lines, or fiber-optic cables. Our methodology for counting our Mass Markets broadband subscribers includes only those lines that we use to provide services to external customers and excludes lines used solely by us and our affiliates. It also excludes unbundled loops and includes stand-alone Mass Markets broadband subscribers. We count lines when we install the service.

Description of Non-GAAP Metrics

Pursuant to Regulation G, the company is hereby providing definitions of non-GAAP financial metrics and reconciliations to the most directly comparable GAAP measures.

The following describes and reconciles those financial measures as reported under accounting principles generally accepted in the United States (GAAP) with those financial measures as adjusted by the items detailed below and presented in the accompanying news release. These calculations are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP. In keeping with its historical financial reporting practices, the company believes that the supplemental presentation of these calculations provides meaningful non-GAAP financial measures to help investors understand and compare business trends among different reporting periods on a consistent basis.

We use the term Special Items as a non-GAAP measure to describe items that impacted a period’s statement of operations for which investors may want to give special consideration due to their magnitude, nature or both. We do not call these items non-recurring because, while some are infrequent, others may recur in future periods.

Adjusted EBITDA ($) is defined as net income (loss) from the Statements of Operations before income tax (expense) benefit, total other income (expense), depreciation and amortization, share-based compensation expense and impairments.

Adjusted EBITDA Margin (%) is defined as Adjusted EBITDA divided by total revenue.

Management believes that Adjusted EBITDA and Adjusted EBITDA Margin are relevant and useful metrics to provide to investors, as they are an important part of Lumen’s internal reporting and are key measures used by Management to evaluate profitability and operating performance of Lumen and to make resource allocation decisions. Management believes such measures are especially important in a capital-intensive industry such as telecommunications. Management also uses Adjusted EBITDA and Adjusted EBITDA Margin (and similarly uses these terms excluding Special Items) to compare Lumen’s performance to that of its competitors and to eliminate certain non-cash and non-operating items in order to consistently measure from period to period its ability to fund capital expenditures, fund growth, service debt and determine bonuses. Adjusted EBITDA excludes non-cash stock compensation expense and impairments because of the non-cash nature of these items. Adjusted EBITDA also excludes interest income, interest expense and income taxes, and in our view constitutes an accrual-based measure that has the effect of excluding period-to-period changes in working capital and shows profitability without regard to the effects of capital or tax structure. Adjusted EBITDA also excludes depreciation and amortization expense because these non-cash expenses primarily reflect the impact of historical capital investments, as opposed to the cash impacts of capital expenditures made in recent periods, which may be evaluated through cash flow measures. Adjusted EBITDA excludes the gain (or loss) on extinguishment and modification of debt and other, net, because these items are not related to the primary operations of Lumen.

There are material limitations to using Adjusted EBITDA as a financial measure, including the difficulty associated with comparing companies that use similar performance measures whose calculations may differ from Lumen’s calculations. Additionally, this financial measure does not include certain significant items such as interest income, interest expense, income taxes, depreciation and amortization, non-cash stock compensation expense, the gain (or loss) on extinguishment and modification of debt and net other income (expense). Adjusted EBITDA and Adjusted EBITDA Margin (either with or without Special Items) should not be considered a substitute for other measures of financial performance reported in accordance with GAAP.

Unlevered Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures, plus cash interest paid and less interest income, all as disclosed in the Statements of Cash Flows or the Statements of Operations. Management believes that Unlevered Cash Flow is a relevant metric to provide to investors, because it reflects the operational performance of Lumen and, measured over time, provides management and investors with a sense of the underlying business’ growth pattern and ability to generate cash. Unlevered Cash Flow excludes cash used for acquisitions and debt service and the impact of exchange rate changes on cash and cash equivalents balances.

There are material limitations to using Unlevered Cash Flow to measure Lumen’s cash performance as it excludes certain material items such as payments on and repurchases of long-term debt, interest income, cash interest expense and cash used to fund acquisitions. Comparisons of Lumen’s Unlevered Cash Flow to that of some of its competitors may be of limited usefulness since Lumen does not currently pay a significant amount of income taxes due to net operating loss carryforwards, and therefore, currently generates higher cash flow than a comparable business that does pay income taxes. Additionally, this financial measure is subject to variability quarter over quarter as a result of the timing of payments related to accounts receivable, accounts payable, payroll and capital expenditures. Unlevered Cash Flow should not be used as a substitute for net change in cash, cash equivalents and restricted cash in the Consolidated Statements of Cash Flows.

Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures as disclosed in the Statements of Cash Flows. Management believes that Free Cash Flow is a relevant metric to provide to investors, as it is an indicator of Lumen’s ability to generate cash to service its debt. Free Cash Flow excludes cash used for acquisitions, principal repayments and the impact of exchange rate changes on cash and cash equivalents balances.

There are material limitations to using Free Cash Flow to measure Lumen’s performance as it excludes certain material items such as principal payments on and repurchases of long-term debt and cash used to fund acquisitions. Comparisons of Lumen’s Free Cash Flow to that of some of its competitors may be of limited usefulness since Lumen does not currently pay a significant amount of income taxes due to net operating loss carryforwards, and therefore, generates higher cash flow than a comparable business that does pay income taxes. Additionally, this financial measure is subject to variability quarter over quarter as a result of the timing of payments related to interest expense, accounts receivable, accounts payable, payroll and capital expenditures. Free Cash Flow should not be used as a substitute for net change in cash, cash equivalents and restricted cash on the Consolidated Statements of Cash Flows.

Lumen Technologies, Inc.
Non-GAAP Special Items
(UNAUDITED)
($ in millions)

	Actual QTD
Special Items Impacting Adjusted EBITDA	1Q21		1Q20
Consumer and other litigation	$	8	—
Severance	—		—
Total Special Items impacting Adjusted EBITDA	$	8	—

	Actual QTD
Special Items Impacting Net Income	1Q21		1Q20
Consumer and other litigation	$	8	—
(Gain) loss on early debt retirement ⁽¹⁾	(8)		79
Severance	—		—
Total Special Items impacting Net Income	—		79
Income tax effect of Special Items⁽²⁾	—		(19)
Total Special Items impacting Net Income, net of tax	$	—	60


⁽¹⁾Gain as a result of $1.1 billion in early debt retirement in Q1 2021. Loss as a result of $2.4 billion in net early debt retirement, debt modification, and debt extinguishment in Q1 2020.
⁽²⁾ Tax effect calculated using the annualized effective statutory tax rate, excluding any non-recurring discrete items, which was 24.5% and 24.4% for the three months ended March 31, 2021 and 2020, respectively.

Lumen Technologies, Inc.
Non-GAAP Cash Flow Reconciliation
(UNAUDITED)
($ in millions)

	Actual QTD
	1Q21		1Q20
Net cash provided by operating activities	$	1,525	1,299
Capital expenditures	(716)		(974)
Free Cash Flow	809		325
Cash interest paid	387		383
Interest income	—		(2)
Unlevered Cash Flow	$	1,196	$	706

Free Cash Flow	$	809	$	325
Add back: Severance	22		34
Add back: Other Special Items ⁽¹⁾	19		26
Free Cash Flow excluding cash Special Items	$	850	$	385

Unlevered Cash Flow	$	1,196	$	706
Add back: Severance	22		34
Add back: Other Special Items⁽¹⁾	19		26
Unlevered Cash Flow excluding cash Special Items	$	1,237	$	766


⁽¹⁾ Refer to Non-GAAP Special Items table for details of the Special Items impacting cash included above.

Lumen Technologies, Inc.
Adjusted EBITDA Non-GAAP Reconciliation
(UNAUDITED)
($ in millions)

	Actual QTD
	1Q21		1Q20
Net income	$	475	314
Income tax expense	157		119
Total other expense, net	355		547
Depreciation and amortization expense	1,150		1,160
Share-based compensation expense	20		69
Adjusted EBITDA	$	2,157	2,209

Add back: Severance	$	—	—
Add back: Other Special Items ⁽¹⁾	8		—
Adjusted EBITDA excluding Special Items	$	2,165	2,209

Total revenue	$	5,029	5,228

Adjusted EBITDA margin	42.9%		42.3%
Adjusted EBITDA margin excluding Special Items	43.1%		42.3%


⁽¹⁾ Refer to Non-GAAP Special Items table for details of the Special Items included above.

Outlook

To enhance the information in our outlook with respect to non-GAAP metrics, we are providing a range for certain GAAP measures that are components of the reconciliation of the non-GAAP metrics. The provision of these ranges is in no way meant to indicate that Lumen is explicitly or implicitly providing an outlook on those GAAP components of the reconciliation. In order to reconcile the non-GAAP financial metric to GAAP, Lumen has to use ranges for the GAAP components that arithmetically add up to the non-GAAP financial metric. While Lumen believes that it has used reasonable assumptions in connection with developing the outlook for its non-GAAP financial metrics, it fully expects that the ranges used for the GAAP components will vary from actual results. We will consider our outlook of non-GAAP financial metrics to be accurate if the specific non-GAAP metric is met or exceeded, even if the GAAP components of the reconciliation are different from those provided in an earlier reconciliation.

Lumen Technologies, Inc.
2021 OUTLOOK ^{(1) (2)}
(UNAUDITED)
($ in millions)

Adjusted EBITDA Outlook
Twelve Months Ended December 31, 2021
	Range
	Low		High
Net income	$	1,625	1,975
Income tax expense	500		800
Total other expense	1,650		1,450
Depreciation and amortization expense	4,400		4,200
Share-based compensation expenses	225		175
Adjusted EBITDA	$	8,400	$	8,600


Free Cash Flow Outlook
Twelve Months Ended December 31, 2021
	Range
	Low		High
Net cash provided by operating activities	$	6,600	6,500
Capital expenditures	(3,800)		(3,500)
Free Cash Flow	$	2,800	3,000

⁽¹⁾ For definitions of non-GAAP metrics and reconciliation to GAAP figures, see the above schedules and Lumen’s Investor Relations website.

⁽²⁾ Outlook measures in this chart (i) exclude the effects of Special Items, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of May 5, 2021. See “Forward-Looking Statements.”

View original content to download multimedia:http://www.prnewswire.com/news-releases/lumen-technologies-reports-first-quarter-2021-results-301284897.html

SOURCE Lumen Technologies

May 5, 2021 4:37 pm

Marriott Vacations Worldwide (“MVW”) Reports First Quarter 2021 Financial Results

PR Newswire

ORLANDO, Fla., May 5, 2021 /PRNewswire/ — Marriott Vacations Worldwide Corporation (NYSE: VAC) today reported first quarter 2021 financial results.

“The past year has reminded us what is really important in life – family, experiences, and togetherness, all the things that travel offers. As a company whose products enable these unique and memorable occasions, it’s been gratifying to see more and more people at our resorts this year, illustrating the desire of our customers to get back on vacation,” said Stephen P. Weisz, chief executive officer. “Our results this quarter are evidence of the continued recovery in our business and the resiliency of our business model. We generated $226 million in contract sales in the first quarter, a 27% sequential increase, and currently expect contract sales to increase to $320 million to $340 million in the second quarter.”

First Quarter 2021 Highlights and Operational Update:

Consolidated Vacation Ownership contract sales totaled $226 million in the first quarter of 2021, with VPG increasing 26% compared to the prior year to $4,644.
Net loss attributable to common shareholders was $28 million, or $0.68 loss per fully diluted share.
Adjusted net loss attributable to common shareholders was $20 million and adjusted fully diluted loss per share was $0.49.
Adjusted EBITDA was $69 million in the first quarter of 2021.
Pro-forma for the acquisition of Welk Resorts, which closed on April 1, the Company had $1.4 billion of liquidity, including unrestricted cash and cash equivalents of $432 million.

First Quarter 2021 Segment Results

Vacation Ownership

Revenues excluding cost reimbursements decreased 30% in the first quarter of 2021 compared to the prior year but increased 14% from the fourth quarter of 2020 as the business continued to recover. Compared to the fourth quarter, revenue from the sale of vacation ownership products, rentals, and management and exchange increased 19%, 29%, and 5%, respectively. Development profit increased 71% and Development profit margin increased approximately 250 basis points on a sequential basis. Excluding the impact of revenue reportability, Adjusted development profit nearly tripled sequentially to $40 million, with Adjusted development profit margin more than doubling to 21%.

Vacation Ownership segment financial results were $44 million in the first quarter of 2021 and segment Adjusted EBITDA was $68 million.

Exchange & Third-Party Management

Revenues excluding cost reimbursements decreased 16% in the first quarter of 2021 compared to the prior year but increased 23% from the fourth quarter. Interval International exchange volumes increased 17% compared to the prior year and increased 27% from the fourth quarter of 2020. Active members declined 3% compared to the end of 2020 to nearly 1.5 million. Average revenue per member increased 14% compared to the prior year and increased 29% from the fourth quarter of 2020 as exchange and getaway rental activity increased.

Exchange & Third-Party Management segment financial results were $21 million in the first quarter of 2021 and segment Adjusted EBITDA was $41 million, with Adjusted EBITDA margin improving approximately 960 basis points year-over-year.

Corporate and Other

General and administrative costs declined $24 million in the first quarter of 2021 compared to the prior year primarily as a result of synergy efforts and lower costs associated with the furlough and reduced work week programs, including salary related costs.

Balance Sheet and Liquidity

On March 31, 2021, cash and cash equivalents totaled $643 million and the Company had $240 million of gross notes receivable that were eligible for securitization.

During the first quarter, the Company issued $575 million of 0.00% Convertible Senior Notes due 2026 with an initial conversion price of $171.01 per share. To reduce the potential dilution to the Company’s earnings per share upon conversion of the Notes, the Company also entered into privately negotiated convertible note and warrant transactions at an initial strike price of $213.76 per share, which represented a premium of 75% over the last reported sale price of the Company’s common stock on January 27, 2021.

The Company had $4.4 billion in debt outstanding, net of unamortized debt issuance costs, at the end of the first quarter of 2021. This debt included $3.0 billion of corporate debt, after repaying $100 million of its outstanding term loan during the first quarter, and $1.4 billion of non-recourse debt related to its securitized notes receivable.

Subsequent to the end of the quarter, the Company used $246 million to finance and consummate the acquisition of Welk Resorts, repay certain outstanding Welk Resorts debt and pay transaction expenses and other fees in connection with the transaction. Pro-forma for the acquisition, the Company had unrestricted cash of $432 million and gross notes receivable of $345 million that were eligible for securitization.

Non-GAAP Financial Information

Non-GAAP financial measures, such as Adjusted net loss attributable to common shareholders, Adjusted EBITDA, Adjusted fully diluted loss per share, Adjusted development profit, Adjusted development profit margin, and other adjusted financial measures, are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow.

First Quarter 2021 Financial Results Conference Call

The Company will hold a conference call on May 6, 2021 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company’s website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website.

About Marriott Vacations Worldwide Corporation

Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products and services. The Company has nearly 120 resorts and over 700,000 Owners and Members in a diverse portfolio that includes seven vacation ownership brands. It also includes exchange networks and membership programs comprised of nearly 3,200 resorts in over 90 nations and over 1.7 million members, as well as management of more than 160 other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International, Inc. and Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com.

Note on forward-looking statements

This press release and accompanying schedules contain “forward-looking statements” within the meaning of federal securities laws, including statements about expectations for contract sales in the second quarter, future operating results, estimates, and assumptions, and similar statements concerning anticipated future events and expectations that are not historical facts. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including, without limitation, conditions beyond our control such as the length and severity of the current COVID-19 pandemic and its effect on our operations, its short and longer-term impacts on the demand for travel and consumer confidence, and the availability and distribution of effective vaccines; the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines become widely available; the Company’s ability to manage and reduce expenditures in a low revenue environment; volatility in the economy and the credit markets, changes in supply and demand for vacation ownership products, competitive conditions, the availability of additional financing when and if required, and other matters disclosed under the heading “Risk Factors” contained in the Company’s most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) and in subsequent SEC filings, any of which could cause actual results to differ materially from those expressed in or implied in this press release. These statements are made as of the date of issuance and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Financial Schedules Follow

MARRIOTT VACATIONS WORLDWIDE CORPORATION FINANCIAL SCHEDULES QUARTER 1, 2021

TABLE OF CONTENTS

Summary Financial Information and Adjusted EBITDA by Segment	A-1
Consolidated Statements of Income	A-2
Revenues and Profit by Segment	A-3
Adjusted Net Income Attributable to Common Shareholders and Adjusted Earnings Per Share – Diluted	A-5
Adjusted EBITDA	A-6
Consolidated Contract Sales to Adjusted Development Profit	A-7
Vacation Ownership Segment Adjusted EBITDA	A-8
Exchange & Third-Party Management Segment Adjusted EBITDA	A-9
Consolidated Balance Sheets	A-10
Consolidated Statements of Cash Flows	A-11
Quarterly Operating Metrics	A-12
Non-GAAP Financial Measures	A-13

A-1

MARRIOTT VACATIONS WORLDWIDE CORPORATION SUMMARY FINANCIAL INFORMATION (In millions, except VPG, tours, total active members, average revenue per member and per share amounts) (Unaudited)

	Three Months Ended				Change %
	March 31, 2021		March 31, 2020		Change %
Key Measures
Total consolidated contract sales	$	226	$	306	(26%)
VPG	$	4,644	$	3,680	26%
Tours	45,871		79,131		(42%)
Total active members (000’s)⁽¹⁾	1,479		1,636		(10%)
Average revenue per member⁽¹⁾	$	47.13	$	41.37	14%

GAAP Measures
Revenues	$	759	$	1,010	(25%)
Loss before income taxes and noncontrolling interests	$	(36)	$	(163)	78%
Net loss attributable to common shareholders	$	(28)	$	(106)	73%
Loss per share – diluted	$	(0.68)	$	(2.56)	(73%)

Non-GAAP Measures **
Adjusted EBITDA	$	69	$	138	(50%)
Adjusted pretax (loss) income	$	(23)	$	83	(129%)
Adjusted net (loss) income attributable to common shareholders	$	(20)	$	89	(123%)
Adjusted (loss) earnings per share – diluted	$	(0.49)	$	2.15	(123%)

⁽¹⁾ Includes members at the end of each period for the Interval International exchange network only.

ADJUSTED EBITDA BY SEGMENT

			Three Months Ended
			March 31, 2021		March 31, 2020
Vacation Ownership			$	68	$	147
Exchange & Third-Party Management			41		41
Segment adjusted EBITDA**			109		188
General and administrative			(39)		(51)
Consolidated property owners’ associations			(1)		1
Adjusted EBITDA**			$	69	$	138

** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-2

MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share amounts) (Unaudited)

	Three Months Ended
	March 31, 2021		March 31, 2020
REVENUES
Sale of vacation ownership products	$	163	$	258
Management and exchange	193		227
Rental	89		135
Financing	59		72
Cost reimbursements	255		318
TOTAL REVENUES	759		1,010
EXPENSES
Cost of vacation ownership products	40		60
Marketing and sales	109		170
Management and exchange	117		151
Rental	82		98
Financing	21		38
General and administrative	46		70
Depreciation and amortization	41		32
Litigation charges	3		2
Royalty fee	25		26
Impairment	—		95
Cost reimbursements	255		318
TOTAL EXPENSES	739		1,060
Gains (losses) and other income (expense), net	6		(56)
Interest expense	(43)		(33)
Transaction costs	(19)		(24)
LOSS BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	(36)		(163)
Benefit from income taxes	11		58
NET LOSS	(25)		(105)
Net income attributable to noncontrolling interests	(3)		(1)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(28)	$	(106)

LOSS PER SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS
Basic	$	(0.68)	$	(2.56)
Diluted	$	(0.68)	$	(2.56)

NOTE: Loss per share – Basic and Loss per share – Diluted are calculated using whole dollars.

A-3

MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions) (Unaudited)

REVENUES AND PROFIT BY SEGMENT for the three months ended March 31, 2021

	Reportable Segment				Corporate and Other		Total
	Vacation Ownership		Exchange & Third-Party Management
REVENUES
Sales of vacation ownership products	$	163	$	—	$	—	$	163
Management and exchange⁽¹⁾
Ancillary revenues	28		—		—		28
Management fee revenues	38		5		(6)		37
Exchange and other services revenues	28		55		45		128
Management and exchange	94		60		39		193
Rental⁽¹⁾	77		12		—		89
Financing	59		—		—		59
Cost reimbursements⁽¹⁾	268		14		(27)		255
TOTAL REVENUES	$	661	$	86	$	12	$	759

PROFIT
Development⁽²⁾	$	14	$	—	$	—	$	14
Management and exchange⁽¹⁾	59		29		(12)		76
Rental⁽¹⁾	(19)		12		14		7
Financing	38		—		—		38
TOTAL PROFIT	92		41		2		135

OTHER
General and administrative	—		—		(46)		(46)
Depreciation and amortization	(19)		(20)		(2)		(41)
Litigation charges	(3)		—		—		(3)
Restructuring	(1)		—		1		—
Royalty fee	(25)		—		—		(25)
Gains and other income, net	—		—		6		6
Interest expense	—		—		(43)		(43)
Transaction costs	—		—		(19)		(19)
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	44		21		(101)		(36)
Benefit from income taxes	—		—		11		11
NET INCOME (LOSS)	44		21		(90)		(25)
Net income attributable to noncontrolling interests⁽¹⁾	—		—		(3)		(3)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	44	$	21	$	(93)	$	(28)

⁽¹⁾ Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, which represents the portion related to individual or third-party vacation ownership interest (“VOI”) owners.
⁽²⁾ The company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the company now refers to this financial measure as Development profit. While the calculation remains unchanged, the company believes the revised term better depicts the financial results being presented.

A-4

MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions) (Unaudited)

REVENUES AND PROFIT BY SEGMENT for the three months ended March 31, 2020

	Reportable Segment				Corporate and Other		Total
	Vacation Ownership		Exchange & Third-Party Management
REVENUES
Sales of vacation ownership products	$	258	$	—	$	—	$	258
Management and exchange⁽¹⁾
Ancillary revenues	46		1		—		47
Management fee revenues	38		10		(4)		44
Exchange and other services revenues	28		61		47		136
Management and exchange	112		72		43		227
Rental⁽¹⁾	122		13		—		135
Financing	71		1		—		72
Cost reimbursements⁽¹⁾	345		21		(48)		318
TOTAL REVENUES	$	908	$	107	$	(5)	$	1,010

PROFIT
Development⁽²⁾	$	28	$	—	$	—	$	28
Management and exchange⁽¹⁾	56		32		(12)		76
Rental⁽¹⁾	15		8		14		37
Financing⁽³⁾	34		—		—		34
TOTAL PROFIT	133		40		2		175

OTHER
General and administrative	—		—		(70)		(70)
Depreciation and amortization	(21)		(9)		(2)		(32)
Litigation charges	(2)		—		—		(2)
Royalty fee	(26)		—		—		(26)
Impairment	(4)		(91)		—		(95)
Gains (losses) and other income (expense), net	1		1		(58)		(56)
Interest expense	—		—		(33)		(33)
Transaction costs	(3)		—		(21)		(24)
INCOME (LOSS) BEFORE INCOME TAXES AND NONCONTROLLING INTERESTS	78		(59)		(182)		(163)
Benefit from income taxes	—		—		58		58
NET INCOME (LOSS)	78		(59)		(124)		(105)
Net income attributable to noncontrolling interests⁽¹⁾	—		—		(1)		(1)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	78	$	(59)	$	(125)	$	(106)

⁽¹⁾ Amounts included in Corporate and other represent the impact of the consolidation of certain owners’ associations under the relevant accounting guidance, which represents the portion related to individual or third-party vacation ownership interest (“VOI”) owners.
⁽²⁾ The company previously used the term Development margin to refer to revenues from the Sale of vacation ownership products less the Cost of vacation ownership products and marketing and sales costs. Beginning in the first quarter of 2021, the company now refers to this financial measure as Development profit. While the calculation remains unchanged, the company believes the revised term better depicts the financial results being presented.
⁽³⁾ Includes a $10 million impact related to increased bad debt expense recorded in the first quarter of 2020 related to the COVID-19 pandemic.

A-5

MARRIOTT VACATIONS WORLDWIDE CORPORATION (In millions, except per share amounts) (Unaudited)

ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS AND ADJUSTED EARNINGS PER SHARE – DILUTED

	Three Months Ended
	March 31, 2021		March 31, 2020
Net loss attributable to common shareholders	$	(28)	$	(106)
Benefit from income taxes	(11)		(58)
Loss before income taxes attributable to common shareholders	(39)		(164)
Certain items:⁽¹⁾
Litigation charges	3		2
(Gains) losses and other (income) expense, net	(6)		56
Transaction costs	19		24
Impairment charges	—		95
Purchase price adjustments⁽²⁾	—		16
Other	—		54
Adjusted pretax (loss) income **	(23)		83
Benefit from income taxes	3		6
Adjusted net (loss) income attributable to common shareholders**	$	(20)	$	89
Diluted shares	41.4		41.5
Adjusted (loss) earnings per share – Diluted **	$	(0.49)	$	2.15

** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.
⁽¹⁾ See further details on A-6.
⁽²⁾ Includes certain items included in depreciation and amortization.

A-6

MARRIOTT VACATIONS WORLDWIDE CORPORATION ADJUSTED EBITDA (In millions) (Unaudited)

	Three Months Ended
	March 31, 2021		March 31, 2020
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(28)	$	(106)
Interest expense	43		33
Benefit from income taxes	(11)		(58)
Depreciation and amortization	41		32
Share-based compensation	8		4
Certain items before income taxes:
Litigation charges	3		2
(Gains) losses and other (income) expense, net:
Various tax related matters	—		27
Foreign currency translation	(4)		32
Other	(2)		(3)
Transaction costs	19		24
Impairment charges	—		95
Purchase price adjustments	—		2
COVID-19 related adjustments:
Sales reserve adjustment, net	—		37
Accrual for health and welfare costs for furloughed associates	—		11
Other	—		6
ADJUSTED EBITDA**	$	69	$	138

** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-7

MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED CONTRACT SALES TO ADJUSTED DEVELOPMENT PROFIT (In millions) (Unaudited)

	Three Months Ended
	March 31, 2021		March 31, 2020
Consolidated contract sales	$	226	$	306
Less resales contract sales	(5)		(7)
Consolidated contract sales, net of resales	221		299
Plus:
Settlement revenue	5		6
Resales revenue	2		4
Revenue recognition adjustments:
Reportability	(36)		34
Sales reserve	(14)		(71)
Other⁽¹⁾	(15)		(14)
Sale of vacation ownership products	163		258
Less:
Cost of vacation ownership products	(40)		(60)
Marketing and sales	(109)		(170)
Development Profit	14		28
Revenue recognition reportability adjustment	26		(23)
Other⁽²⁾	—		29
Adjusted development profit **	$	40	$	34
Development profit margin⁽³⁾	8.4%		10.7%
Adjusted development profit margin⁽³⁾	20.5%		12.6%

⁽¹⁾ Adjustment for sales incentives that will not be recognized as Sale of vacation ownership products revenue and other adjustments to Sale of vacation ownership products revenue.

⁽²⁾Includes sales reserve charge related to the COVID-19 pandemic and purchase price adjustments for the first quarter of 2020.

⁽³⁾ Development profit margin represents Development profit divided by Sale of vacation ownership products. Adjusted development profit margin represents Adjusted development profit divided by Sale of vacation ownership products revenue after adjusting for revenue reportability and other charges.

A-8

MARRIOTT VACATIONS WORLDWIDE CORPORATION VACATION OWNERSHIP SEGMENT ADJUSTED EBITDA (In millions) (Unaudited)

	Three Months Ended
	March 31, 2021		March 31, 2020
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	44	$	78
Depreciation and amortization	19		21
Share-based compensation expense	1		1
Certain items:
Litigation charges	3		2
Gains and other income, net:
Foreign currency translation	—		(1)
Impairment charges	—		4
Purchase price adjustments	—		2
Effects of COVID-19:
Sales reserve adjustment, net	—		37
Restructuring	1		—
Other	—		3
SEGMENT ADJUSTED EBITDA **	$	68	$	147

** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-9

MARRIOTT VACATIONS WORLDWIDE CORPORATION EXCHANGE & THIRD-PARTY MANAGEMENT SEGMENT ADJUSTED EBITDA (In millions) (Unaudited)

	Three Months Ended
	March 31, 2021		March 31, 2020
SEGMENT FINANCIAL RESULTS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	21	$	(59)
Depreciation and amortization	20		9
Share-based compensation expense	—		1
Certain items:
Gains and other income, net:
Foreign currency translation	—		2
Other	—		(3)
Impairment charges	—		91
SEGMENT ADJUSTED EBITDA **	$	41	$	41

** Denotes non-GAAP financial measures. Please see “Non-GAAP Financial Measures” for additional information about our reasons for providing these alternative financial measures and limitations on their use.

A-10

MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except share and per share data)

	Unaudited
	March 31, 2021		December 31, 2020
ASSETS
Cash and cash equivalents	$	643	$	524
Restricted cash (including $73 and $68 from VIEs, respectively)	535		468
Accounts receivable, net (including $10 and $11 from VIEs, respectively)	219		276
Vacation ownership notes receivable, net (including $1,338 and $1,493 from VIEs, respectively)	1,769		1,840
Inventory	785		759
Property and equipment, net	887		791
Goodwill	2,817		2,817
Intangibles, net	938		952
Other (including $56 and $54 from VIEs, respectively)	594		471
TOTAL ASSETS	$	9,187	$	8,898

LIABILITIES AND EQUITY
Accounts payable	$	159	$	209
Advance deposits	167		147
Accrued liabilities (including $1 and $1 from VIEs, respectively)	345		349
Deferred revenue	524		488
Payroll and benefits liability	188		157
Deferred compensation liability	124		127
Securitized debt, net (including $1,446 and $1,604 from VIEs, respectively)	1,431		1,588
Debt, net	3,025		2,680
Other	200		197
Deferred taxes	286		274
TOTAL LIABILITIES	6,449		6,216
Contingencies and Commitments (Note 11)
Preferred stock — $0.01 par value; 2,000,000 shares authorized; none issued or outstanding	—		—
Common stock — $0.01 par value; 100,000,000 shares authorized; 75,454,906 and 75,279,061 shares issued, respectively	1		1
Treasury stock — at cost; 34,182,278 and 34,184,813 shares, respectively	(1,334)		(1,334)
Additional paid-in capital	3,843		3,760
Accumulated other comprehensive loss	(45)		(48)
Retained earnings	244		272
TOTAL MVW SHAREHOLDERS’ EQUITY	2,709		2,651
Noncontrolling interests	29		31
TOTAL EQUITY	2,738		2,682
TOTAL LIABILITIES AND EQUITY	$	9,187	$	8,898

The abbreviation VIEs above means Variable Interest Entities.

A-11

MARRIOTT VACATIONS WORLDWIDE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)

	Three Months Ended
	March 31, 2021		March 31, 2020
OPERATING ACTIVITIES
Net loss	$	(25)	$	(105)
Adjustments to reconcile net loss to net cash, cash equivalents and restricted cash used by operating activities:
Depreciation and amortization of intangibles	41		32
Amortization of debt discount and issuance costs	11		5
Vacation ownership notes receivable reserve	14		71
Share-based compensation	8		3
Impairment charges	—		95
Deferred income taxes	15		(10)
Net change in assets and liabilities:
Accounts receivable	51		45
Vacation ownership notes receivable originations	(108)		(174)
Vacation ownership notes receivable collections	165		174
Inventory	(26)		(8)
Purchase of vacation ownership units for future transfer to inventory	(99)		(61)
Other assets	(138)		(83)
Accounts payable, advance deposits and accrued liabilities	(30)		(184)
Deferred revenue	102		107
Payroll and benefit liabilities	31		(20)
Deferred compensation liability	(2)		(7)
Other liabilities	5		(7)
Deconsolidation of certain Consolidated Property Owners’ Associations	(71)		—
Other, net	(4)		5
Net cash, cash equivalents and restricted cash used in operating activities	(60)		(122)
INVESTING ACTIVITIES
Capital expenditures for property and equipment (excluding inventory)	(7)		(17)
Purchase of company owned life insurance	(1)		(4)
Net cash, cash equivalents and restricted cash used in investing activities	(8)		(21)
FINANCING ACTIVITIES
Borrowings from securitization transactions	—		202
Repayment of debt related to securitization transactions	(159)		(148)
Proceeds from debt	561		666
Repayments of debt	(100)		(102)
Purchase of convertible note hedges	(100)		—
Proceeds from issuance of warrants	70		—
Finance lease payment	—		(9)
Debt issuance costs	(2)		—
Repurchase of common stock	—		(82)
Payment of dividends	—		(45)
Payment of withholding taxes on vesting of restricted stock units	(15)		(14)
Net cash, cash equivalents and restricted cash provided by financing activities	255		468
Effect of changes in exchange rates on cash, cash equivalents and restricted cash	(1)		(6)
Change in cash, cash equivalents and restricted cash	186		319
Cash, cash equivalents and restricted cash, beginning of period	992		701
Cash, cash equivalents and restricted cash, end of period	$	1,178	$	1,020

A-12

MARRIOTT VACATIONS WORLDWIDE CORPORATION QUARTERLY OPERATING METRICS (Contract sales in millions)

	Year	Quarter Ended								Full Year
	Year	March 31		June 30		September 30		December 31		Full Year
Vacation Ownership
Consolidated Contract Sales
	2021	$	226
	2020	$	306	$	30	$	140	$	178	$	654
	2019	$	354	$	386	$	390	$	394	$	1,524

VPG
	2021	$	4,644
	2020	$	3,680	$	3,717	$	3,904	$	3,826	$	3,767
	2019	$	3,350	$	3,299	$	3,461	$	3,499	$	3,403

Tours
	2021	45,871
	2020	79,131		6,216		33,170		44,161		162,678
	2019	99,957		111,241		107,401		108,272		426,871

Exchange & Third-Party Management
Total active members (000’s)⁽¹⁾	2021	1,479
	2020	1,636		1,571		1,536		1,518		1,518
	2019	1,694		1,691		1,701		1,670		1,670

Average revenue per member⁽¹⁾	2021	$	47.13
	2020	$	41.37	$	30.17	$	36.76	$	36.62	$	144.97
	2019	$	46.24	$	43.23	$	40.89	$	38.38	$	168.73

⁽¹⁾ Includes members at the end of each period for the Interval International exchange network only.

A-13

MARRIOTT VACATIONS WORLDWIDE CORPORATION

NON-GAAP FINANCIAL MEASURES

In our press release and schedules, and on the related conference call, we report certain financial measures that are not prescribed by GAAP. We discuss our reasons for reporting these non-GAAP financial measures below, and the financial schedules included herein reconcile the most directly comparable GAAP financial measure to each non-GAAP financial measure that we report (identified by a double asterisk (“**”) on the preceding pages). Although we evaluate and present these non-GAAP financial measures for the reasons described below, please be aware that these non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for revenues, net income or loss attributable to common shareholders, earnings or loss per share or any other comparable operating measure prescribed by GAAP. In addition, other companies in our industry may calculate these non-GAAP financial measures differently than we do or may not calculate them at all, limiting their usefulness as comparative measures.

Certain Items Excluded from Adjusted Net Income or Loss Attributable to Common Shareholders, Adjusted EBITDA, Adjusted Development Profit and Adjusted Development Profit Margin.

We evaluate non-GAAP financial measures, including Adjusted pretax income or loss, Adjusted net income or loss attributable to common shareholders, Adjusted EBITDA, Adjusted development profit and Adjusted development profit margin, that exclude certain items in the three months ended March 31, 2021 and March 31, 2020, and believe these measures provide useful information to investors because these non-GAAP financial measures allow for period-over-period comparisons of our on-going core operations before the impact of these items. These non-GAAP financial measures also facilitate the comparison of results from our on-going core operations before these items with results from other vacation ownership companies.

Adjusted Development Profit (Adjusted Sale of Vacation Ownership Products Net of Expenses) and Adjusted Development Profit Margin.

We evaluate Adjusted development profit (Adjusted sale of vacation ownership products, net of expenses) and Adjusted development profit margin as indicators of operating performance. Adjusted development profit and Adjusted development profit margin adjust Sale of vacation ownership products revenues for the impact of revenue reportability, includes corresponding adjustments to Cost of vacation ownership products associated with the change in revenues from the Sale of vacation ownership products, and may include adjustments for certain items as itemized on A-6, as necessary. We evaluate Adjusted development profit and Adjusted development profit margin and believe it provides useful information to investors because it allows for period-over-period comparisons of our on-going core operations before the impact of revenue reportability and certain items to our Development profit and Development profit margin.

Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA

EBITDA, a financial measure that is not prescribed by GAAP, is defined as earnings, or net income or loss attributable to common shareholders, before interest expense (excluding consumer financing interest expense associated with term loan securitization transactions), income taxes, depreciation and amortization. Adjusted EBITDA reflects additional adjustments for certain items, as itemized in the discussion of Adjusted EBITDA in the preceding pages, and excludes share-based compensation expense to address considerable variability among companies in recording compensation expense because companies use share-based payment awards differently, both in the type and quantity of awards granted. For purposes of our EBITDA and Adjusted EBITDA calculations, we do not adjust for consumer financing interest expense associated with term loan securitization transactions because we consider it to be an operating expense of our business. We consider Adjusted EBITDA to be an indicator of operating performance, which we use to measure our ability to service debt, fund capital expenditures and expand our business. We also use Adjusted EBITDA, as do analysts, lenders, investors and others, because this measure excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA and Adjusted EBITDA also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies. We believe Adjusted EBITDA is useful as an indicator of operating performance because it allows for period-over-period comparisons of our on-going core operations before the impact of the excluded items. Adjusted EBITDA also facilitates comparison by us, analysts, investors, and others, of results from our on-going core operations before the impact of these items with results from other vacation companies.

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