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KORU Medical Systems Announces 2021 First Quarter Financial Results

KORU Medical Systems Announces 2021 First Quarter Financial Results

CHESTER, N.Y.–(BUSINESS WIRE)–Repro Med Systems, Inc. dba KORU Medical Systems (NASDAQ: KRMD) (“KORU Medical” or the “Company”), a leading medical technology company focused on the development, manufacturing, and commercialization of innovative and easy-to-use specialty infusion solutions that improve quality of life for patients, today reported financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Summary:

  • Announced Linda Tharby, med-tech veteran, as President and CEO, effective April 12, 2021
  • Recorded solid net revenue of $5.4 million; robust sequential quarterly growth
  • Gross margin of 59.5%
  • Recorded a net loss of $1.3 million, including leadership change expenses totaling $1.3 million

“I am very excited and grateful for the opportunity to lead KORU Medical in its mission to improve the quality of life of home infusion patients around the globe,” said Linda Tharby, KORU Medical’s new CEO. “KORU Medical has built a leading market position in a growing home infusion space with its Freedom Integrated Infusion System. I look forward to working with our team in accelerating our growth potential, delivering innovation to our customers, and creating value for shareholders.”

“In the first quarter of 2021, we faced difficult year-over-year quarterly revenue comparisons, which included several one-time purchases and a current year COVID-19 impact on new patient starts. I am encouraged by our strong sequential quarterly growth and increasing new pump placements, indicating newly diagnosed SCIg patients returning to pre-COVID levels.”

First Quarter 2021 Financial Results

Net sales were $5.4 million for the three months ending March 31, 2021, a 14% decrease from $6.3 million in the same period of 2020, with strong sequential quarterly growth. The decrease was due principally to lower novel therapies sales compared to last year due to a non-recurring clinical trial, lower domestic core pump volume primarily due to ordering patterns, and a one-time pharmaceutical customer pump purchase in the prior year. Domestic core business also reflected a slowdown in the growth of new patient starts for SCIg therapy, as the COVID-19 pandemic continued to delay provider visits and new diagnoses.

International revenues were $1.0 million, flat with prior year.

Gross margin was 59.5% for the first quarter of 2021, roughly equivalent to the same period in 2020.

Total operating expenses for the first quarter of 2021 were $5.4 million, compared to $3.2 million for the same period in 2020. The $2.2 million increase was due principally to expenses of $1.3 million related to leadership changes, which included non-cash equity charges, as well as costs of $0.6 million associated with new hires in the second half of last year to support commercialization, business development, and medical affairs for the Company’s novel therapies initiatives.

Net loss for the first quarter of 2021 was $1.3 million, or $(0.03) per diluted share, compared to a net gain of $0.4 million, or $0.01 per diluted share for the same period of 2020. Net loss for the first quarter of 2021 included $1.3 million of recent leadership change expenses, as noted above. On a non-GAAP basis, adjusted diluted earnings per share was $0.00 compared to $0.02 in the same period of 2020.

Non-GAAP adjusted EBITDA for the first quarter of 2021 was $(0.4) million, compared to $1.3 million in the first quarter of 2020.

About KORU Medical Systems

KORU Medical Systems develops, manufactures, and commercializes innovative and easy-to-use specialty infusion solutions that improve quality of life for patients around the world. The FREEDOM Syringe Infusion System currently includes the FREEDOM60® and FreedomEdge® Syringe Infusion Drivers, Precision Flow Rate Tubing™ and HIgH-Flo Subcutaneous Safety Needle Sets™. These devices are used for infusions administered in the home and alternate care settings. For more information, please visit www.korumedical.com.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. All statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by words such as “may,” “look forward” and “confidence.” Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, uncertainties associated with the shift to increased healthcare delivery in the home, new patient diagnoses, customer ordering patterns and COVID-19, and those risks and uncertainties included under the captions “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, which is on file with the SEC and is available on our website at www.korumedical.com/investors and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of March 31, 2021. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.

 

REPRO MED SYSTEMS, INC.

BALANCE SHEETS

(UNAUDITED)
 

 

 

March 31,

December 31,

 

 

2021

2020

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

26,774,720

 

$

27,315,286

 

Accounts receivable less allowance for doubtful accounts of $24,469 for March 31, 2021, and December 31, 2020, respectively

 

 

3,561,341

 

 

2,572,954

 

Inventory

 

 

8,058,824

 

 

6,829,772

 

Prepaid expenses

 

 

690,325

 

 

807,780

 

TOTAL CURRENT ASSETS

 

 

39,085,210

 

 

37,525,792

 

Property and equipment, net

 

 

1,154,368

 

 

1,167,623

 

Intangible assets, net of accumulated amortization of $214,969 and $199,899 at March 31, 2021 and December 31, 2020, respectively

 

 

844,309

 

 

843,587

 

Operating lease right-of-use assets

 

 

201,598

 

 

236,846

 

Deferred income tax assets, net

 

 

1,068,485

 

 

125,274

 

Other assets

 

 

19,812

 

 

19,812

 

TOTAL ASSETS

 

$

42,373,782

 

$

39,918,934

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable

 

$

1,915,523

 

$

624,920

 

Accrued expenses

 

 

1,755,800

 

 

2,610,413

 

Accrued payroll and related taxes

 

 

715,899

 

 

287,130

 

Finance lease liability – current

 

 

1,843

 

 

2,646

 

Operating lease liability – current

 

 

141,869

 

 

141,293

 

TOTAL CURRENT LIABILITIES

 

 

4,530,934

 

 

3,666,402

 

Operating lease liability, net of current portion

 

 

59,729

 

 

95,553

 

TOTAL LIABILITIES

 

 

4,590,663

 

 

3,761,955

 

Commitments and contingencies (Refer to Note 3)

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Common stock, $0.01 par value, 75,000,000 shares authorized, 47,896,061 and 46,680,119 shares issued; 44,475,559 and 43,259,617 shares outstanding at March 31, 2021, and December 31, 2020, respectively

 

 

478,960

 

 

466,801

 

Additional paid-in capital

 

 

38,771,105

 

 

35,880,986

 

Treasury stock, 3,420,502 shares and 3,420,502 shares at March 31, 2021 and December 31, 2020, respectively, at cost

 

 

(3,843,562

)

 

(3,843,562

)

Retained earnings

 

 

2,376,616

 

 

3,652,754

 

TOTAL STOCKHOLDERS’ EQUITY

 

 

37,783,119

 

 

36,156,979

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

42,373,782

 

$

39,918,934

 

 

REPRO MED SYSTEMS, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

For the

Three Months Ended

 

 

March 31,

 

 

2021

2020

 

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

$

5,430,951

 

$

6,330,009

 

Cost of goods sold

 

 

2,199,097

 

 

2,541,799

 

Gross Profit

 

 

3,231,854

 

 

3,788,210

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

Selling, general and administrative

 

 

4,992,829

 

 

2,862,138

 

Research and development

 

 

336,841

 

 

256,025

 

Depreciation and amortization

 

 

115,473

 

 

87,224

 

Total Operating Expenses

 

 

5,445,143

 

 

3,205,387

 

 

 

 

 

 

 

 

 

Net Operating (Loss)/Profit

 

 

(2,213,289

)

 

582,823

 

 

 

 

 

 

 

 

 

Non-Operating (Expense)/Income

 

 

 

 

 

 

 

Loss on currency exchange

 

 

(15,717

)

 

(10,497

)

Gain on disposal of fixed asset

 

 

736

 

 

—

 

Interest income, net

 

 

9,771

 

 

19,030

 

TOTAL OTHER (EXPENSE)/INCOME

 

 

(5,210

)

 

8,533

 

 

 

 

 

 

 

 

 

(LOSS)/INCOME BEFORE TAXES

 

 

(2,218,499

)

 

591,356

 

 

 

 

 

 

 

 

 

Income Tax Benefit/(Expense)

 

 

942,361

 

 

(141,928

)

 

 

 

 

 

 

 

 

NET (LOSS)/INCOME

 

$

(1,276,138

)

$

449,428

 

 

 

 

 

 

 

 

 

NET (LOSS)/INCOME PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.03

)

$

0.01

 

Diluted

 

$

(0.03

)

$

0.01

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

43,960,936

 

 

39,675,107

 

Diluted

 

 

43,960,936

 

 

39,874,989

 

 

REPRO MED SYSTEMS, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

 

 

 

 

 

For the

Three Months Ended

 

 

March 31,

 

 

2021

2020

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net (Loss)/Income

 

$

(1,276,138

)

$

449,428

 

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

 

 

 

 

 

Stock-based compensation expense

 

 

734,184

 

 

360,968

 

Depreciation and amortization

 

 

115,473

 

 

87,224

 

Deferred income taxes

 

 

(943,211

)

 

(63,203

)

Gain on disposal of fixed assets

 

 

(736

)

 

—

 

Changes in operating assets and liabilities:

 

 

 

 

 

Increase in accounts receivable

 

 

(988,387

)

 

(185,160

)

Increase in inventory

 

 

(1,229,052

)

 

(700,539

)

Decrease/(Increase) in prepaid expenses and other assets

 

 

117,455

 

 

(156,288

)

Increase in accounts payable

 

 

1,290,603

 

 

524,398

 

Increase in accrued payroll and related taxes

 

 

428,769

 

 

39,571

 

Decrease in accrued expenses

 

 

(854,613

)

 

(408,294

)

Increase in accrued tax liability

 

 

—

 

 

205,131

 

NET CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES

 

 

(2,605,653

)

 

153,236

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Purchases of property and equipment

 

 

(95,477

)

 

(99,591

)

Proceeds from disposal of property and equipment

 

 

9,065

 

 

—

 

Purchases of intangible assets

 

 

(15,792

)

 

(80,547

)

NET CASH USED IN INVESTING ACTIVITIES

 

 

(102,204

)

 

(180,138

)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Borrowings from indebtedness

 

 

—

 

 

1,500,000

 

Proceeds from issuance of equity

 

 

1,230,000

 

 

85,500

 

Common stock issuance as settlement for litigation

 

 

938,094

 

 

—

 

Payments on finance lease liability

 

 

(803

)

 

(1,848

)

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

2,167,291

 

 

1,583,652

 

 

 

 

 

 

 

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(540,566

)

 

1,556,750

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

27,315,286

 

 

5,870,929

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

26,774,720

 

$

7,427,679

 

 

 

 

 

 

 

Supplemental Information

 

 

 

 

 

Cash paid during the periods for:

 

 

 

 

 

Interest

 

$

28

 

$

87

 

Income Taxes

 

$

850

 

$

—

 

 

 

 

 

 

 

Schedule of Non-Cash Operating, Investing and Financing Activities:

 

 

 

 

 

Issuance of common stock as compensation

 

$

56,250

 

$

60,002

 

Issuance of common stock as settlement for litigation

 

$

938,094

 

$

—

 

 

REPRO MED SYSTEMS, INC.

SUPPLEMENTAL INFORMATION

(UNAUDITED)

 

 

Three Months Ended

Reconciliation of Reported Diluted EPS to

 

March 31,

Non-GAAP Adjusted Diluted EPS:

 

2021

2020

Reported Diluted Earnings Per Share

 

$

(0.03

)

$

0.01

 

Reorganization Charges

 

 

0.02

 

 

—

 

Discontinued Product Expense

 

 

—

 

 

—

 

Litigation Expenses

 

 

—

 

 

—

 

Manufacturing Initiative Expenses

 

 

—

 

 

0.01

 

Reorganization Stock-based Compensation Expense

 

 

0.01

 

 

—

 

Tax (Expense) adjustment

 

 

—

 

 

—

 

Non-GAAP Adjusted Diluted Earnings Per Share

 

$

0.00

 

$

0.02

 

 

 

 

 

 

 

 

 

Three Months Ended

Reconciliation of GAAP Net (Loss)/Income

 

March 31,

to Non-GAAP Adjusted EBITDA:

 

2021

 

2020

GAAP Net (Loss)/Income

 

$

(1,276,138

)

$

449,428

 

Tax (Benefit)/Expense

 

 

(942,361

)

 

141,928

 

Depreciation/Amortization

 

 

115,473

 

 

87,224

 

Interest Income, Net

 

 

(9,771

)

 

(19,030

)

Reorganization Charges

 

 

969,274

 

 

—

 

Discontinued Product Expense

 

 

—

 

 

109,558

 

Litigation Expenses

 

 

—

 

 

99,158

 

Manufacturing Initiative Expenses

 

 

51,723

 

 

109,803

 

Stock-based Compensation Expense

 

 

734,184

 

 

360,968

 

Non-GAAP Adjusted EBITDA

 

$

(357,616

)

$

1,339,037

 

Reorganization Charges. We have excluded the effect of reorganization charges in calculating our non-GAAP measures. We incurred significant expenses in connection with the departure and replacement of our chief executive officer and the recruiting of two new board members, which we would not have otherwise incurred in periods presented as part of our continuing operations.

Discontinued Product Expense. We have excluded the effect of expenses related to a discontinued product line in calculating our non-GAAP measures. We expected to retire our Res-Q-Vac product line towards the end of 2020, but due to the failure of equipment used to manufacture the product, the discontinuation and resulting expense was accelerated into the first quarter of 2020 which we would not have otherwise incurred in periods presented as part of our continuing operations. We did not incur any related expense in 2021.

Litigation. We have excluded litigation expenses in calculating our non-GAAP measures. Litigation expenses in 2020 included professional fees associated with our litigation with EMED, which discontinued as a result of the settlement on May 20, 2020.

Manufacturing Initiative Expenses. We have excluded the effect of expenses related to creating manufacturing efficiencies, in calculating our non-GAAP measures. We incurred expenses in connection with these initiatives which we would not have otherwise incurred in periods presented as part of our continuing operations. We expect to incur related expenses for the next nine to fifteen months.

Stock-based Compensation Expense. We have excluded the effect of stock-based compensation expense in calculating our non-GAAP measures. We record non-cash compensation expense related to grants of options for executives, employees and consultants, and grants of restricted shares to our board of directors. Depending upon the size, timing and the terms of the grants, the non-cash compensation expense may vary significantly but will recur in future periods. Adjusted EBITDA for the three months ended March 31, 2021 included stock-based compensation expense of $0.4 million related to the departure and replacement of our chief executive officer. This expense is included in Reorganization Stock-based Compensation Expense in calculating Adjusted Diluted EPS.

Investor Contact:

Greg Chodaczek

347-620-7010

[email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: General Health Medical Devices Health Pharmaceutical Medical Supplies

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The LGL Group Reports First Quarter 2021 Results

The LGL Group Reports First Quarter 2021 Results

ORLANDO, Fla.–(BUSINESS WIRE)–
The LGL Group, Inc. (NYSE American: LGL) (the “Company” or “LGL”), announced its financial results for the three months ended March 31, 2021.

  • Revenues of $6.5 million declined (24.2%) compared to Q1 2020 revenues of $8.6 million
  • Operating loss of $60,000 versus income of $0.7 million for the prior year period
  • Diluted net income of $0.01 per share compared to $0.04 per share for the prior year quarter
  • Adjusted EBITDA for Q1 2021 was $0.2 million compared to $0.7 million for Q1 2020
  • Backlog was $20.4 million versus $19.8 million at December 31, 2020 and $22.6 million at March 31, 2020

The Company’s President and Chief Executive Officer, Mike Ferrantino, said, “Although we continue to feel the effects of COVID-19 on our businesses, the prospects for LGL are strong and I am privileged to have the opportunity to begin leading LGL this month, an exciting time from both an investment and operating prospective.”

Commenting on the Company’s Q1 2021 results, Bill Drafts, President and Chief Executive Officer of LGL’s main operating unit, MtronPTI, stated, “We are committed to streamlining our operations and implementing high-payback capital improvements as we manage the impact of COVID-19 on our customers, suppliers and employees. We are confident MtronPTI will emerge a stronger, more efficient company as business conditions improve.”

Financial Results Review

Revenues were $6.5 million versus $8.6 million for the first quarter of 2020, a decrease of $2.1 million, or 24.2%. Revenues were significantly impacted by the decline in the avionics market and the delay of orders from certain customers experiencing semiconductor component shortages. The comparison also reflects the pre-COVID-19 conditions in all markets during the first quarter of 2020. The backlog was $20.4 million versus $19.8 million last quarter and $22.6 million for first quarter 2020. Quarterly bookings have been improving sequentially over the last few quarters but remain substantially below pre-COVID-19 levels. Improvement in new avionics bookings started this quarter, but deliveries are not being scheduled until early next year.

Gross margins were 32.7% compared to 34.3% for the prior year quarter. Gross margins were impacted by the temporary onshoring of production to our U.S. factories after last year’s COVID-19 shutdown of India and lower avionics volume at our Yankton plant, resulting in increased production costs. Cost saving measures have been taken, but certain costs continue to be incurred to preserve manufacturing capabilities in both our India and Yankton plants.

Operating loss was $60,000 compared to income of $0.7 million for the first quarter of 2020 largely reflecting the reduced revenue and, to a lesser degree, lower margins.

Diluted earnings per share were $0.01 per share compared to $0.04 per share in the first quarter of 2020. Weighted average shares outstanding at March 31, 2021 were 5.4 million versus 5.1 million at March 31, 2020.

Quarterly adjusted EBITDA, a non-GAAP measure, was $0.2 million in the first quarter of 2021 versus $0.7 million in the first quarter of 2020. (See GAAP reconciliation in the Appendix.)

Balance Sheet

The Company’s strong balance sheet reflects a net cash position including marketable securities of $24.6 million at March 31, 2021 compared to $24.1 million at December 31, 2020. The Company continues to explore growth organically and through diversified merger and acquisitions and believes the relationship with the SPAC has enhanced its strategic profile in this context.

The Company’s investment in the Sponsor of the SPAC, LGL Systems Acquisition Corp. (NYSE-DFNS), is expected to realize value for shareholders. In March 2021, DFNS announced it signed a business combination agreement with IronNet Cybersecurity, Inc. (“IronNet”), an innovative leader transforming cybersecurity through Collective Defense. The combined company will be renamed “IronNet Cybersecurity, Inc.” and will be listed on the NYSE American and trade under the ticker symbol “IRNT”. The Company subscribed to a $2.7 million investment into the Sponsor in March 2021 which it funded in May. The investment will be part of the Sponsor syndication of $5.66 million organized to participate in a $125 million private placement (“PIPE”) purchase of 12,500.000 shares of DFNS Class A common stock.

About The LGL Group, Inc.

The LGL Group, Inc., through its two principal subsidiaries MtronPTI and PTF, designs, manufactures and markets highly-engineered electronic components used to control the frequency or timing of signals in electronic circuits, and designs high performance frequency and time reference standards that form the basis for timing and synchronization in various applications.

Headquartered in Orlando, Florida, the Company has additional design and manufacturing facilities in Yankton, South Dakota, Wakefield, Massachusetts and Noida, India, with local sales offices in Hong Kong and Austin, Texas.

For more information on the Company and its products and services, contact James Tivy at The LGL Group, Inc., 2525 Shader Rd., Orlando, Florida 32804, (407) 298-2000, or visit www.lglgroup.com and www.mtronpti.com.

Caution Concerning Forward Looking Statements

This press release may contain forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21 E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. These forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to us and our current plans or expectations and are subject to a number of uncertainties and risks that could significantly affect current plans, anticipated actions and our future financial condition and results. Certain of these risks and uncertainties are described in greater detail in our filings with the Securities and Exchange Commission. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

THE LGL GROUP, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

 

(Dollars in Thousands, Except Share and Per Share Amounts)

 

 

 

For the Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

REVENUES

 

$

6,536

 

 

$

8,618

 

Costs and expenses:

 

 

 

 

 

 

 

 

Manufacturing cost of sales

 

 

4,401

 

 

 

5,662

 

Engineering, selling and administrative

 

 

2,195

 

 

 

2,296

 

OPERATING (LOSS) INCOME

 

 

(60

)

 

 

660

 

Total other income (expense), net

 

 

93

 

 

 

(423

)

INCOME BEFORE INCOME TAXES

 

 

33

 

 

 

237

 

Income tax expense

 

 

6

 

 

 

54

 

NET INCOME

 

$

27

 

 

$

183

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares used in basic EPS calculation

 

 

5,272,204

 

 

 

5,052,184

 

BASIC NET INCOME PER COMMON SHARE

 

$

0.01

 

 

$

0.04

 

Weighted average number of shares used in diluted EPS calculation

 

 

5,350,571

 

 

 

5,097,879

 

DILUTED NET INCOME PER COMMON SHARE

 

$

0.01

 

 

$

0.04

 

THE LGL GROUP, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

 

(Dollars in Thousands)

 

 

 

March 31, 2021

 

 

December 31, 2020

 

ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

18,678

 

 

$

18,331

 

Marketable securities

 

 

5,918

 

 

 

5,791

 

Accounts receivable, net

 

 

3,913

 

 

 

4,122

 

Inventories, net

 

 

5,339

 

 

 

5,280

 

Prepaid expenses and other current assets

 

 

365

 

 

 

257

 

Total Current Assets

 

 

34,213

 

 

 

33,781

 

Property, plant, and equipment, net

 

 

2,725

 

 

 

2,785

 

Right-of-use lease assets

 

 

396

 

 

 

422

 

Equity investment in unconsolidated subsidiary

 

 

5,721

 

*

 

3,072

 

Intangible assets, net

 

 

308

 

 

 

327

 

Deferred income taxes, net

 

 

3,023

 

 

 

3,052

 

Other assets

 

 

64

 

 

 

16

 

Total Assets

 

$

46,450

 

 

$

43,455

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Total Current Liabilities

 

 

6,308

 

*

 

3,397

 

Total Long-Term Liabilities

 

 

272

 

 

 

293

 

Total Liabilities

 

 

6,580

 

 

 

3,690

 

Total Stockholders’ Equity

 

 

39,870

 

 

 

39,765

 

Total Liabilities and Stockholders’ Equity

 

$

46,450

 

 

$

43,455

 

 

 

 

 

 

 

 

 

 

* Includes $2.7 million subscription agreement with Sponsor for PIPE

Reconciliations of GAAP to Non-GAAP Measures

To supplement our consolidated financial statements presented on a GAAP (generally accepted accounting principles) basis, the Company uses certain non-GAAP measures, including Adjusted EBITDA, which we define as net income adjusted to exclude depreciation and amortization expense, interest income (expense), provision (benefit) for income taxes, stock-based compensation expense, investment income and other items we believe are discrete events which have a significant impact on comparable GAAP measures and could distort an evaluation of our normal operating performance. These adjustments to our GAAP results are made with the intent of providing both management and investors a more complete understanding of the underlying operational results and trends and our marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net earnings or diluted earnings per share prepared in accordance with generally accepted accounting principles in the United States.

Reconciliation of GAAP Net Income Before Income Taxes to Non-GAAP Adjusted EBITDA:

 

 

For the Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

(000’s, except share and per share amounts)

 

 

 

 

 

 

 

 

Net income before income taxes

 

$

33

 

 

$

237

 

Interest expense, net

 

 

3

 

 

 

—

 

Depreciation and amortization

 

 

134

 

 

 

135

 

Non-cash stock compensation

 

 

78

 

 

 

10

 

Investment (income) loss

 

 

(127

)

 

 

293

 

Loss on equity investment in unconsolidated subsidiary

 

 

76

 

 

 

39

 

Adjusted EBITDA

 

$

197

 

 

$

714

 

 

 

 

 

 

 

 

 

 

Basic per share information:

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

5,272,204

 

 

 

5,052,184

 

Adjusted EBITDA per share

 

$

0.04

 

 

$

0.14

 

 

 

 

 

 

 

 

 

 

Diluted per share information:

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

5,350,571

 

 

 

5,097,879

 

Adjusted EBITDA per share

 

$

0.04

 

 

$

0.14

 

 

James Tivy

The LGL Group, Inc.

[email protected]

(407) 298-2000

KEYWORDS: Florida United States North America

INDUSTRY KEYWORDS: Semiconductor Engineering Technology Other Technology Manufacturing Other Manufacturing

MEDIA:

Posted on

Green Thumb Industries Reports First Quarter 2021 Results

CHICAGO and VANCOUVER, British Columbia, May 12, 2021 (GLOBE NEWSWIRE) — Green Thumb Industries Inc. (“Green Thumb,” or the “Company”) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of Rise™ Dispensaries, today reported its financial results for the first quarter ended March 31, 2021. Financial results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and all currency is in U.S. dollars.

Highlights for the quarter ended March 31, 2021:

  • Revenue increased 9.7% sequentially and 89.5% year-over-year to $194.4 million
  • Third consecutive quarter of positive GAAP net income, delivering $10.4 million or $0.05 per basic and diluted share.
  • Adjusted Operating EBITDA grew 9.0% sequentially and 179.3% year-over-year to $71.4 million or 36.7% of revenue.
  • Fifth consecutive quarter of positive cash flow from operations, delivering $39.7 million.
  • In February 2021, the Company raised approximately $156.0 million through direct public sales of approximately 4.7 million shares in the Company’s U.S. initial public offering of securities (the “U.S. IPO”).
  • On April 30, 2021, subsequent to quarter end, Green Thumb raised $216.7 million in senior secured debt at 7%. The Company intends to use the proceeds to retire its existing $105.5 million senior secured debt (at 12%) and for general working capital and to support various growth initiatives.
  • On May 3, 2021, subsequent to quarter end, the Company announced the signing of an agreement for its strategic expansion into Virginia and acquisition of Dharma Pharmaceuticals, LLC (“Dharma”), the holder of one of five vertical licenses in Virginia, which includes an operating production facility with one retail location and the opportunity to open up to five additional retail locations in the state.

See definition and reconciliation of non-GAAP measures elsewhere in this release.

Management Commentary  

“2021 is off to a strong start. In the first quarter, we delivered year-over-year revenue growth of 90%, reported adjusted operating EBITDA growth of 179%, and recorded our third sequential quarter of positive net income. Our business continues to scale as the demand for cannabis swells across the country, and our team continues to rise to the occasion for our patients and customers,” said Green Thumb Chairman, Founder and Chief Executive Officer Ben Kovler.

“We are excited to expand our east coast footprint by signing an agreement to enter the Virginia cannabis market. This follows the recent sweep of adult use legalization measures across Virginia, New York and New Jersey where we see material untapped market potential. Our recent debt financing at industry leading rates positions us to capitalize on the opportunities ahead. A strong balance sheet, supported by a low cost of capital, is key to staying ahead in this fast-paced new industry. As the green wave continues to gain momentum, it is more important than ever to maintain our focus on strong execution and high-value capital allocation.  This is the best way for us to build long-term sustainable value for all of our stakeholders,” said Kovler.

First Quarter Financial Overview

Total revenue for the first quarter 2021 was $194.4 million, up 9.7% sequentially and up 89.5% from $102.6 million in the prior year period. Revenue growth was primarily driven by increased scale in the Consumer Packaged Goods and Retail businesses, especially in Illinois and Pennsylvania. Overall performance was driven by expanded distribution of Green Thumb’s branded products, 13 new store openings and increased traffic in the Company’s 56 open and operating retail stores.

In the first quarter of 2021, Green Thumb generated revenue from all 12 of its markets: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania. The Company continued to invest in the expansion of its cultivation and manufacturing capabilities in Illinois, Maryland, Massachusetts, New Jersey, Ohio and Pennsylvania.

Gross profit for the first quarter 2021 was $110.9 million or 57.0% of revenue compared to $53.0 million or 51.6% of revenue for the comparable period. Gross margin performance was driven by increased scale in the Consumer Packaged Goods and Retail businesses.

Total selling, general and administrative expenses for the first quarter were $59.3 million or 30.5% of revenue, compared to $45.4 million or 44.3% of revenue for the first quarter 2020. Improved operating costs as a percentage of revenue reflected increased operating leverage in the Company’s Consumer Packaged Goods and Retail businesses.

Total other expense was $9.2 million for the first quarter 2021, primarily reflecting warrant expense and interest associated with its senior secured notes.

Net income attributable to the Company for the first quarter 2021 was $10.4 million or $0.05 per basic and diluted share, compared to a net loss of $4.2 million, or a loss of $0.02 per basic and diluted share in the prior year.

EBITDA for the first quarter 2021 was $66.5 million or 34.2% of revenue compared to $20.3 million or 19.7% of revenue for the same period in the prior year. Adjusted Operating EBITDA for the first quarter 2021, which excluded non-cash stock-based compensation of $4.0 million, was $71.4 million or 36.7% of revenue as compared to $25.5 million or 24.9% of revenue for the first quarter 2020. The significant improvement in EBITDA and Adjusted Operating EBITDA largely reflected revenue growth and increased scale-driven operating leverage from both the Consumer Packaged Goods and Retail businesses. For additional information on these non-GAAP financial measures, see below under “Non-GAAP Financial Information.”

Balance Sheet and Liquidity

As of March 31, 2021, current assets were $381.0 million, including cash and cash equivalents of $275.9 million. Total debt outstanding was $100.1 million.

Total basic and diluted weighted average shares outstanding for the three months ended March 31, 2021 were 216,210,429 shares and 221,616,157 shares, respectively.

Capital Markets & Financing

In February 2021, in the Company’s U.S. IPO, the Company raised approximately $156.0 million through direct public sales of approximately 4.7 million shares registered with the U.S. Securities and Exchange Commission (“SEC”). The offering was made pursuant to the Form S-1 Registration Statement, declared effective by the SEC on February 8, 2021, and completed on a “self-underwritten, best efforts” basis.

On April 30, 2021, subsequent to quarter end, the Company closed a $216.7 million senior secured non-brokered private placement financing through the issuance of senior secured notes. The Company intends to use the proceeds to retire the Company’s existing $105.5 million senior secured debt and for general working capital and various growth initiatives.

Expansion of Consumer Packaged Goods Business

  • As of March 31, 2021, Green Thumb’s family of consumer brands are produced, distributed, and available in retail locations in twelve states: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania.
  • Consumer Packaged Goods gross revenue grew 7.7% sequentially, driven primarily by expanded scale in production and distribution of branded products.
  • Green Thumb continued the expansion of its product offerings, entering the beverage category through a partnership with Cann, the leading cannabis-infused beverage brand. In April, the Company launched sales of Cann in Illinois and plans to expand distribution to other markets later this year.

Retail Business Development

  • Green Thumb’s first quarter revenue included sales from 56 retail stores across eleven states: California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania.
  • Comparable sales growth (stores opened at least 12 months) was 35.0% on a base of 40 stores, driven primarily by increased transactions. Sequential comparable sales were up 2.0% on a base of 48 stores.
  • Retail revenue increased 7.6% sequentially, driven by increased foot traffic in established stores and new store openings.
  • During the first quarter, and subsequent to quarter end, Green Thumb expanded its retail service in:
    • Pennsylvania: Opened Rise™ Erie Peach on February 3, 2021 and Rise™ Meadville on March 31, 2021. First day profits for Erie Peach were donated to 412 Food Rescue and Community Shelter Services, whose mission is to provide services and shelter to homeless and those at risk of being homeless. First day profits for Meadville were donated to Women’s Services, which strives to meet people’s needs in crisis due to domestic violence, sexual violence or homelessness.
    • California: Expanded the Company’s retail footprint into California with the opening of Essence Pasadena on March 10, 2021. First day profits were contributed to the Pasadena Chamber of Commerce Foundation with funds earmarked for the organization’s Minority Small Business Initiative, which offers support to minority and women-owned businesses.
    • New Jersey: Opened Rise™ Paramus, the second store in the state, on March 15, 2021. First day profits were donated to the Paramus Children’s Health Foundation, which provides financial support to families of children who suffer from a severe illness or injury. 
    • Illinois: Opened Rise™ Lake in the Hills, the ninth store in Illinois, on March 31, 2021. First day profits went to Habitat for Humanity of McHenry County, which is part of a global nonprofit housing organization.

Other Developments

On May 3, 2021, subsequent to quarter end, the Company announced the signing of an agreement for its strategic expansion into Virginia through the acquisition of Dharma. As one of only five licensees in the Virginia medical cannabis market, Dharma is licensed to grow, process and retail cannabis directly to patients. The acquisition includes a production facility and retail dispensary in Abingdon, Virginia. Following the closing of the acquisition, Green Thumb will have the opportunity to open five additional retail locations in the Commonwealth. Completion of the acquisition is subject to customary regulatory approvals and is expected to close in the second half of 2021.

On April 7, 2021, subsequent to quarter end, Swati Mylavarapu joined Green Thumb’s Board of Directors and will serve on the Compensation Committee. Mylavarapu brings nearly a decade of experience investing, advising and building mission-driven technology companies. Since 2017, Mylavarapu has served as Founder and Managing Partner of Incite.org, a hybrid incubator and investment fund that combines venture capital, philanthropy, and civic advocacy to accelerate bold ideas and solve some of the world’s most pressing challenges. From 2015 to 2017, she was an investment partner at venture capital firm Kleiner Perkins Caufield & Byers. Prior to that, Mylavarapu built the early international efforts for Square, the financial services and digital payments company. She also served as National Investment Chair for Transportation Secretary Pete Buttigieg’s 2019-2020 Presidential bid.

Green Thumb in the Community

  • First day profits to local charities at each new retail location.
  • Dogwalkers brand expanded its founding program of donating a portion of its pre-roll proceeds to local animal shelter programs with the creation of the ‘Bailey Legacy Fund’ to support animal rescue organizations.
  • Scholarship grants to advance industry diversity through education.
  • Partnership with American Corporate Partners, a veteran’s organization that helps members of the military transition to civilian life.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial measures as defined by the SEC. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included in the financial schedules attached to this press release. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.  

Definitions

EBITDA: Earnings before interest, taxes, other income or expense and depreciation and amortization.

Adjusted Operating EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash stock-based compensation, one-time transaction related expenses, or other non-operating costs.

Conference Call and Webcast

Green Thumb will host a conference call on Wednesday, May 12, 2021 at 5:00 pm ET to discuss its first quarter 2021 financial results for the quarter ended March 31, 2021. The conference call may be accessed by dialing 833-502-0470 (Toll-Free) or 236-714-2182 (International) with conference ID: 6438759. A live audio webcast of the call will also be available on the Investor Relations section of Green Thumb’s website at https://investors.gtigrows.com and will be archived for replay.

About Green Thumb Industries:

Green Thumb, a national cannabis consumer packaged goods company and owner of Rise™ dispensaries, promotes well-being through the power of cannabis while giving back to the communities in which it serves. Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection. The company also owns and operates rapidly growing national retail cannabis stores called Rise™. Headquartered in Chicago, Illinois, Green Thumb has 13 manufacturing facilities, licenses for 97 retail locations and operations across 12 U.S. markets. Established in 2014, Green Thumb employs over 2,400 people and serves thousands of patients and customers each year. The company was named a Best Workplace 2018 by Crain’s Chicago Business and MG Retailer magazine in 2018 and 2019.

Cautionary Note Regarding Forward-Looking Information

This press release contains statements that we believe are, or may be considered to be, “forward-looking statements.” All statements other than statements of historical fact included in this document regarding the prospects of our industry or our prospects, plans, financial position or business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plan,” “forecast,” “continue,” “suggests” or “could” or the negative of these terms or variations of them or similar terms. Furthermore, forward-looking statements may be included in various filings that we make with the SEC), or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These known and unknown risks include, without limitation: cannabis remains illegal under federal law, and enforcement of cannabis laws could change; the Company may be subject to action by the U.S. federal government; state regulation of cannabis is uncertain; the Company may be subject to heightened scrutiny by Canadian regulatory authorities; the Company may face limitations on ownership of cannabis licenses; the Company may become subject to U.S. Food and Drug Administration or the U.S. Bureau of Alcohol, Tobacco Firearms and Explosives regulation; cannabis businesses are subject to applicable anti-money laundering laws and regulations and have restricted access to banking and other financial services; the Company may face difficulties acquiring additional financing; the Company lacks access to U.S. bankruptcy protections; the Company operates in a highly regulated sector and may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where we carry on business; the Company may face difficulties in enforcing its contracts; the Company has limited trademark protection; cannabis businesses are subject to unfavorable tax treatment; cannabis businesses may be subject to civil asset forfeiture; the Company is subject to proceeds of crime statutes; the Company faces exposure to fraudulent or illegal activity; the Company’s use of joint ventures may expose it to risks associated with jointly owned investments; the Company faces risks due to industry immaturity or limited comparable, competitive or established industry best practices; the Company faces risks related to its products; the Company is dependent on the popularity of consumer acceptance of the Company’s brand portfolio; the Company’s business is subject to the risks inherent in agricultural operations; the Company may be adversely impacted by rising or volatile energy costs; the Company faces an inherent risk of product liability or similar claims; the Company’s products may be subject to product recalls; the Company may face unfavorable publicity or consumer perception; the Company may face unfavorable publicity or consumer perception; the Company’s voting control is concentrated; the Company’s capital structure and voting control may cause unpredictability; issuances of substantial amounts of Super Voting Shares, Multiple Voting Shares or Subordinate Voting Shares may result in dilution; and the Company is governed by corporate laws in British Columbia, Canada which in some cases have a different effect on shareholders than the corporate laws in Delaware, United States. Further information on these and other potential factors that could affect the Company’s business and financial condition and the results of operations are included in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and elsewhere in the Company’s filings with the SEC, which are available on the SEC’s website or at https://investors.gtigrows.com. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this document, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this document.

Coronavirus Pandemic

In March 2020, the World Health Organization categorized coronavirus disease 2019 (together with its variants, “COVID-19”) as a pandemic. COVID-19 continues to spread throughout the U.S. and other countries across the world, and the duration and severity of its effects are currently unknown. The Company continues to implement and evaluate actions to strengthen its financial position and support the continuity of its business and operations in the face of this pandemic and other events.
The Company’s condensed consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the periods presented. Such estimates and assumptions affect, among other things, the Company’s goodwill; long-lived assets and intangible assets; operating lease right of use assets and operating lease liabilities; assessment of the annual effective tax rate; valuation of deferred income taxes; the allowance for doubtful accounts; assessment of the Company’s lease and non-lease contract expenses; and measurement of compensation cost for bonus and other compensation plans. While the Company’s revenue, gross profit and operating income were not impacted during first three months of 2021, the uncertain nature of the spread of COVID-19 and the uncertainty of the impact of nationwide vaccine programs, may impact the Company’s business operations for reasons including the potential quarantine of the Company’s employees or those of the Company’s supply chain partners, and the Company’s continued designation as an “essential” business in states where the Company does business that currently or in the future impose restrictions on business operations. The carrying value of the Company’s goodwill and other long-lived assets may change in future periods as the expected impacts from COVID-19 are revised, resulting in further potential impacts to the Company’s financial statements.

The Canadian Securities Exchange does not accept responsibility for the adequacy or accuracy of this release.

Investor Contact: Media Contact:
   
Jennifer Dooley
Chief Strategy Officer
[email protected] 
310-622-8257		 Grace Bondy
Corporate Communications
[email protected]
517-672-8001

Source: Green Thumb Industries

             
             
Green Thumb Industries Inc.
Highlights from Unaudited Consolidated Statements of Operations
For the Three Months Ended March 31, 2021, 2020 and December 31, 2020
(Amounts Expressed in United States Dollars, Except for Share Amounts)
             
             
             
    Three Months Ended
    March 31, 2021   March 31, 2020   December 31, 2020
    (Unaudited)   (Unaudited)   (Unaudited)
                         
Revenues, net of discounts   $ 194,430,584     $ 102,602,602     $ 177,226,522  
Cost of Goods Sold, net     (83,565,084 )     (49,615,188 )     (76,696,427 )
                         
Gross Profit     110,865,500       52,987,414       100,530,095  
                         
Expenses:                        
Selling, General, and Administrative     59,331,251       45,434,757       53,237,812  
                         
Total Expenses     59,331,251       45,434,757       53,237,812  
                         
Income (Loss) From Operations     51,534,249       7,552,657       47,292,283  
                         
Other Income (Expense):                        
Other Income (Expense), net     (5,149,817 )     6,786,110       7,875,180  
Interest Income, net     49,890       88,115       3,745  
Interest Expense, net     (4,123,176 )     (5,041,442 )     (4,430,045 )
                         
Total Other Income (Expense)     (9,223,103 )     1,832,783       3,448,880  
                         
                         
                         
Income (Loss) Before Provision for Income Taxes And Non-Controlling Interest     42,311,146       9,385,440       50,741,163  
                         
Provision For Income Taxes     30,856,178       13,149,000       26,888,755  
                         
Net Income (Loss) Before Non-Controlling Interest     11,454,968       (3,763,560 )     23,852,408  
                         
Net Income Attributable To Non-Controlling Interest     1,086,302       442,704       1,387,601  
                         
Net Income (Loss) Attributable To Green Thumb Industries Inc.   $ 10,368,666     $ (4,206,264 )   $ 22,464,807  
                         
Net Income (Loss) per share – basic   $ 0.05     $ (0.02 )   $ 0.11  
                         
Net Income (Loss) per share – diluted   $ 0.05     $ (0.02 )   $ 0.11  
                         
Weighted average number of shares outstanding – basic     216,210,429       208,468,356       213,249,477  
                         
Weighted average number of shares outstanding – diluted     221,616,157       208,468,356       217,178,771  
                         

Green Thumb Industries Inc.    
Highlights from the Consolidated Balance Sheet    
(Amounts Expressed in United States Dollars)    
     
     
     
    March 31,
    2021
    (Unaudited)
       
Cash and Cash Equivalents   $ 275,898,839
Other Current Assets     105,059,800
Property and Equipment, Net     201,069,010
Right of Use Assets, Net     144,119,418
Intangible Assets, Net     396,014,963
Goodwill     382,697,467
Other Long-term Assets     44,264,525
       
Total Assets   $ 1,549,124,022
       
Total Current Liabilities   $ 108,444,304
Notes Payable, Net of Current Portion and Debt Discount     99,727,557
Lease Liability, Net of Current Portion     150,679,584
Other long-Term Liabilities     87,502,684
Total Equity     1,102,769,893
       
Total Liabilities and Equity   $ 1,549,124,022
     

Green Thumb Industries Inc.
Supplemental Information (Unaudited) Regarding Non-GAAP Financial Measures
For the Three Months Ended March 31, 2021, 2020 and December 31, 2020
(Amounts Expressed in United States Dollars)
 
EBITDA, and Adjusted Operating EBITDA are non-GAAP measures and do not have standardized definitions under GAAP. We define each term as follows:
 
(1) EBITDA is defined as earnings before interest, taxes, other income or expense and depreciation and amortization.
(2) Adjusted Operating EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash stock-based compensation, one-time transaction related expenses, or other non-operating costs.
 
The following information provides reconciliations of the supplemental non-GAAP financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented.
             
    Three Months Ended
Adjusted Operating EBITDA   March 31, 2021   March 31, 2020   December 31, 2020
(Amounts Expressed in United States Dollars)   (Unaudited)   (Unaudited)   (Unaudited)
             
Net Income (Loss) Before Noncontrolling Interest (GAAP)   $ 11,454,968     $ (3,763,560 )   $ 23,852,408  
Interest Income, net     (49,890 )     (88,115 )     (3,745 )
Interest Expense, net     4,123,176       5,041,442       4,430,045  
Income Taxes     30,856,178       13,149,000       26,888,755  
Other (Income) Expense, net     5,149,817       (6,786,110 )     (7,875,180 )
Depreciation and Amortization     14,993,421       12,705,172       14,025,615  
             
             
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) (non-GAAP measure) 		  $ 66,527,670     $ 20,257,829     $ 61,317,898  
             
Stock-based Compensation, Non-Cash     4,030,655       5,073,742       4,127,198  
Acquisition, Transaction, and Other Non-Operating Costs     796,956       213,353       –  
             
Adjusted Operating EBITDA (non-GAAP measure)   $ 71,355,281     $ 25,544,924     $ 65,445,096  
             



Posted on

GrowGeneration Reports Record First Quarter 2021 Financial Results and Raises Full-Year 2021 Guidance

PR Newswire


Record Revenue increased 173% to $90 million; 2021 Revenue Guidance Raised to $450–$470 million

 and Adjusted EBITDA Guidance to $54 to $58 million

  • First Quarter Revenue Increased by 173%, to $90 million
  • Comparable Store Sales for the Quarter Increased 51% from Prior Year
  • Record Earnings of $0.10 Per Share in the Quarter

DENVER, May 12, 2021 /PRNewswire/ – GrowGeneration Corp. (NASDAQ: GRWG), (“GrowGen” or the “Company”), the largest chain of specialty hydroponic and organic garden centers with 53 locations across 12 states, today reported record first quarter 2021 revenues of $90 million, versus $33 million in the same period last year.

The Company also reported record first quarter 2021 GAAP pre-tax net income of approximately $7.7 million, compared to pre-tax net loss of $2.1 million in the same period last year.  Fully diluted earnings per share, inclusive of tax expense, was $0.10 compared to a net loss in the same period last year.

Non-GAAP earnings before interest, taxes, depreciation, amortization and share-based compensation (Adjusted EBITDA) was $11.1 million, compared to $2.4 million in the same period last year.

“The GrowGen team delivered an exceptionally strong start to the year, with same store sales up 51%, demonstrating the hard work of the entire team.  For the year so far, we closed 9 acquisitions, adding 15 hydroponic retail locations, bringing our total store count to 53. The strategies implemented several quarters ago, are now positively impacting margins.  I am proud and encouraged with our 110-basis point increase in gross profit margin and 510-basis point increase in adjusted EBITDA margin. These increases were accomplished despite port delays and supply chain interruptions. In addition, we acquired Char Coir, a line of premium coco-based products and Agron.io, a popular B2B e-commerce website. Both companies are now fully integrated and contributing to both our top and bottom-line numbers.” Darren Lampert, GrowGeneration’s co-founder and CEO stated.  “Based upon our strong performance, we are now raising the financial outlook for the year and expect 2021 revenues to be between $450 million and $470 million, more than double the Company’s sales in 2020.  Further, at these projected sales, adjusted EBITDA guidance for 2021 is now $54 million to $58 million.”

Financial Highlights for First Quarter 2021 Compared to First Quarter 2020

  • Revenues rose 173% to $90.0 million for first quarter 2021, versus $33.0 million, for the same period last year
  • Same-store sales at 22 locations open for the same period in 2020 and 2021 were $43.0 million in first quarter 2021 versus $28.5 million for first quarter 2020, a 51% increase year over year
  • Gross profit margin for first quarter 2021 was 28.2% compared to 27.1% in the same quarter last year, an increase of 110 basis points
  • Income before tax was $7.7 million for the first quarter 2021 versus a loss of $2.1 million for the same period last year
  • Net income was $6.1 million, or $0.10 per share based on fully diluted weighted average share count of 60.3 million
  • Adjusted EBITDA was $11.1 million for first quarter 2021 versus $2.4 million for the same period last year
  • Private-label sales, inclusive of Power Si and Char Coir, were 6.2% of revenue compared to less than 1% for the same period last year
  • E-Commerce revenue was $4.4 million compared to $1.9 million for the same period in 2020, an increase of 126%
  • Cash and short-term securities on March 31, 2021 were $133.1 million, compared $177.9 million at year end December 31, 2020

M&A Activity

The company acquired the following hydroponic equipment and organic garden centers in the First Quarter of 2021:

  • Indoor Garden & Lighting, a two-store chain serving the Seattle and Tacoma, Washington area
  • Grow Depot, a two-store chain in Auburn and Augusta, Maine
  • Grow Warehouse, a four-store chain in Colorado and Oklahoma
  • San Diego Hydroponics & Organics, a four-store chain in San Diego, California
  • 55 Hydroponics, a superstore located in Santa Ana, California
  • Aquarius Hydroponics, located in Springfield, MA
  • Char Coir, an RHP-certified growing medium made from the highest-grade coconut fiber available
  • Agron.io, a B2B e-commerce and marketplace for commercial growers

Expansion Efforts

The Company’s supply chain, spans 900,000 square feet of retail and warehouse space, across existing locations and signed leases in new locations, spanning 13 states.

  • On March 9, 2021, the company announced the addition 52,000 square feet in downtown Los Angeles and 70,000 square feet in Rancho Dominguez, California, that will serve as distribution and fulfillment locations for the Company
  • The Company is in the process of building several additional locations that will serve as fulfillment centers that include 25,000 square feet in Phoenix, Arizona and 58,000 square feet in Medley, Florida. These locations are expected to be opened by summer of 2021
  • In April 2021, the Company acquired Downriver Hydroponics, a Michigan garden center located in Wayne County
  • In April 2021, the Company entered into a lease for a 40,000 sq. ft facility in Jackson, MS, the 13th state of operation
  • In May 2021, the Company announced the building of a sixth Oklahoma location in Ardmore

Subsequent Events

  • On May 10, 2021, the Company hired Dennis Sheldon as Senior Vice President of Global Supply Chain. Mr. Sheldon

is a highly accomplished operations and supply chain executive with over 30 years of global experience. From 2007 to 2017, he was SVP of global supply chain for Crocs, Inc. (Nasdaq: CROX) and most recently from 2018-2020, COO at Pop Sockets, Inc.

COVID-19 Response

The Company continues to be mindful of the COVID-19 pandemic and is thankful for the dedication of health care workers and first responders, as well as the essential workers who are keeping communities running.  As a result of the Company’s first-rate preparedness, all personnel have been working at full capacity and Company management has been inspired by the efforts and dedication of GrowGen’s team as they have worked tirelessly to service all of the customers of the Company and communities.

Conference Call

The company will host a conference call on May 13, 2021 at 9:00AM Eastern Time.  To participate in the call, please dial (888)-390-0605 (domestic). Participants should request the GrowGeneration Earnings Call or provide confirmation code: 30427092.  This call is being webcast and can be accessed on the Investor Relations section of GrowGeneration website at: https://ir.growgeneration.com/news-events/ir-calendar. 

A replay of the webcast will be available approximately two hours after the conclusion of the call and remain available for approximately 90 calendar days.    

About GrowGeneration Corp:

GrowGen owns and operates specialty retail hydroponic and organic gardening centers. Currently, GrowGen has 53 stores, which include 18 locations in California, 8 locations in Colorado, 7 locations in Michigan, 5 locations in Maine, 5 locations in Oklahoma, 2 locations in Nevada, 2 locations in Washington, 2 locations in Oregon, 1 location in Arizona, 1 location in Rhode Island,1 location in Florida, and 1 location in Massachusetts.

GrowGen also operates an online superstore for cultivators at growgeneration.com and B2B ERP platform, agron.io. GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers.

Forward Looking Statements:

This press release may include predictions, estimates or other information that might be considered forward-looking within the meaning of applicable securities laws. While these forward-looking statements represent current judgments, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect opinions only as of the date of this release. Please keep in mind that the company does not have an obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. When used herein, words such as “look forward,” “believe,” “continue,” “building,” or variations of such words and similar expressions are intended to identify forward-looking statements. Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are often discussed in filings made with the United States Securities and Exchange Commission, available at: www.sec.gov, and on the company’s website, at: www.growgeneration.com.

Contacts:

Michael Salaman

[email protected]

John Evans

Investor Relations
415-309-0230
[email protected]

ITEM 1. FINANCIAL STATEMENTS

GROWGENERATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

March 31,
2021

December 31,
2020

(Unaudited)


ASSETS

Current assets:

Cash and cash equivalents

$

92,042

$

177,912

Marketable securities

41,077

–

Accounts receivable, net

4,276

3,901

Notes receivable, current

3,905

2,612

Inventory, net

77,862

54,024

Income taxes receivable

–

655

Prepaids and other current assets

20,338

11,125

Total current assets

239,500

250,229

Property and equipment, net

8,338

6,475

Operating leases right-of-use assets, net

14,389

12,088

Notes receivables, net of current portion

881

1,200

Intangible assets, net

42,771

21,490

Goodwill

101,043

62,951

Other assets

591

301

TOTAL ASSETS

$

407,513

354,734


LIABILITIES & STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

24,965

14,623

Accrued liabilities

1,083

672

Payroll and payroll tax liabilities

2,916

2,655

Customer deposits

9,939

5,155

Sales tax payable

2,374

1,161

Income taxes payable

455

–

Current maturities of lease liability

3,870

3,001

Current portion of long-term debt

83

83

Total current liabilities

45,685

27,350

Deferred tax liability

1,134

750

Operating lease liability, net of current maturities

10,824

9,479

Long-term debt, net of current portion

131

158

Total liabilities

57,774

37,737

Stockholders’ Equity:

Common stock

58

57

Additional paid-in capital

346,176

319,582

Retained earnings (deficit)

3,505

(2,642)

Total stockholders’ equity

349,739

316,997

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

407,513

354,734

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

1
GROWGENERATION CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

For the Three Months
Ended March 31,

2021

2020

Sales

$

90,022

$

32,982

Cost of sales

64,645

24,036

Gross profit

25,377

8,946

Operating expenses:

Store operations

8,182

3,639

Selling, general, and administrative

7,405

7,065

Depreciation and amortization

2,054

359

Total operating expenses

17,641

11,063

Net income (loss) from operations

7,736

(2,117)

Other income (expense):

Miscellaneous (expense) income

(38)

5

Interest income

4

25

Interest expense

(2)

(7)

Total non-operating (expense) income, net

(36)

23

Net income (loss) before taxes

7,700

(2,094)

Provision for income taxes

(1,553)

–

Net income (loss)

$

6,147

$

(2,094)

Net income per share, basic

$

.11

$

(.06)

Net income per share, diluted

$

.10

$

(.06)

Weighted average shares outstanding, basic

58,394

37,823

Weighted average shares outstanding, diluted

60,317

37,823

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Use of Non-GAAP Financial Information

The Company believes that the presentation of results excluding certain items in “Adjusted EBITDA,” such as non-cash equity compensation charges, provides meaningful supplemental information to both management and investors, facilitating the evaluation of performance across reporting periods. The Company uses these non-GAAP measures for internal planning and reporting purposes. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or net income per share prepared in accordance with generally accepted accounting principles.

Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):


Three Months Ended


March 31, 2021


March 31, 2020

(000)

(000)

Net income

$

6,147

$

(2,094)

Income taxes

1,553

–

Interest

2

7

Depreciation and Amortization

2,054

359

EBITDA

9,756

(1,728)

Share based compensation (option compensation, warrant compensation, stock issued for services)

1,327

4,115

Adjusted EBITDA

$

11,083

$

2,387

Adjusted EBITDA per share, basic

$

.19

$

.06

Adjusted EBITDA per share, diluted

$

.18

$

.06

 

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SOURCE GrowGeneration

Posted on

Curis Reports First Quarter 2021 Financial Results

– Abstract with encouraging clinical data from Phase 1/2 study of CA-4948 in acute myeloid leukemia (AML) and high-risk myelodysplastic syndromes (MDS) was released earlier today; additional clinical data to be presented in oral presentation at the European Hematology Association 2021 Virtual Congress (EHA) –

– Phase 1/2 study in AML and MDS expanded to include combinations of CA-4948 plus azacitidine and CA-4948 plus venetoclax –

– Phase 1/2 study in non-Hodgkin lymphoma (NHL) expanded to include combination of CA-4948 plus ibrutinib; dosing was initiated in Q1 –

– Management to host conference call today at 4:30 p.m. ET –

PR Newswire

LEXINGTON, Mass., May 12, 2021 /PRNewswire/ — Curis, Inc. (NASDAQ: CRIS), a biotechnology company focused on the development of innovative therapeutics for the treatment of cancer, today reported its financial results for the first quarter ended March 31, 2021.

“The first quarter of 2021 saw continued momentum for our pipeline of next generation targeted cancer therapies designed to meaningfully improve and extend patients’ lives. We continued to make important progress with CA-4948, our first-in-class, small molecule inhibitor of IRAK4, now in three clinical trials after expanding into one new study earlier this year with the Phase 2 LUCAS IST for patients with lower-risk MDS, as well as expanding our previous Phase 1/2 study in patients with relapsed/refractory (R/R) NHL to include the combination of CA-4948 plus ibrutinib. We were also very pleased to announce that CA-4948 was granted Orphan Drug designation from the U.S. Food and Drug Administration (FDA) for the treatment of AML and MDS, highlighting the unique potential of our IRAK4 program,” said James Dentzer, President and Chief Executive Officer of Curis. “We are especially excited about the AML/MDS data published today in the EHA abstract, and we look forward to providing additional data from this study in the oral presentation at EHA next month.”

Mr. Dentzer added, “We are also pleased with the continuing dose escalation in our ongoing Phase 1 study of CI-8993, our first-in-class monoclonal anti-VISTA antibody for the treatment of patients with R/R solid tumors and look forward to providing initial data from this study later this year.” 

First Quarter 2021 and Recent Operational Highlights

Precision oncology, CA-4948 (IRAK4 Inhibitor; Aurigene collaboration):

  • Today, EHA released the Curis abstract reporting interim data from the ongoing Phase 1/2 study of CA-4948 in patients with R/R AML and MDS. The data are from 15 patients as of February 8, 2021 (the cut-off date) and are consistent with previously announced findings, including marrow blast reductions observed at all tested doses in 8 of 9 (89%) evaluable patients with elevated blast counts at baseline, with 1 patient experiencing a full hematologic recovery complete response, 1 complete remission with incomplete hematologic recovery (CRi) with negative minimal residual disease, and 2 bone marrow complete responses (CRs).
    • All 3 patients presenting with SF3B1 or U2AF1 spliceosome mutations achieved marrow CR or better
    • All patients with objective responses also saw signs of hematologic recovery
    • Updated safety, pharmacodynamic, and efficacy data, as well as data from additional trial participants, will be featured in an oral presentation at EHA on Friday, June 11 at 9:00 am CEST (3:00 am EDT).
  • Curis updated that the 500mg BID dosing regimen in the AML/MDS study has exceeded the maximum tolerated dose according to protocol guidelines. Two patients in the cohort were observed to have dose-limiting toxicities, one of whom had Grade 3 rhabdomyolysis and the other experienced Grade 3 syncope. Both AEs resolved after discontinuation of dosing. Current enrollment is exploring lower dose levels to determine the appropriate recommended phase 2 dose (RP2D).
  • Also today, Curis reported non-clinical data to be presented in a poster at EHA demonstrating synergistic antitumor activity of CA-4948 in combination with azacitidine and venetoclax in leukemia cells, providing supportive rationale for evaluation of the combinations in a clinical setting for AML and MDS patients.
  • The Phase 1/2 study of CA-4948 in AML and MDS was expanded to include both a combination dose escalation and a monotherapy dose expansion:
    • Combination dose escalation, which will start at 200mg BID, will include two cohorts:
      • 1) CA-4948 + azacitidine, for patients with AML or MDS who are naïve to hypomethylating agents (HMA)
      • 2) CA-4948 + venetoclax, for patients with AML or MDS after first line therapy who are naïve to venetoclax
    • Monotherapy dose expansion, which will begin after the RP2D is determined, will include four cohorts:
      • 1) MDS patients, R/R to HMA, with spliceosome mutations
      • 2) MDS patients, R/R to HMA, without spliceosome mutations
      • 3) R/R AML patients with FLT3-ITD mutation
      • 4) R/R AML patients with FLT3 WT
  • In April 2021, Curis announced that the U.S. Food and Drug Administration (FDA) had granted Orphan Drug designation for CA-4948 for the treatment of AML and for treatment of MDS.
  • Also in April, Curis presented updated data on a potentially predictive biomarker demonstrating target engagement in a poster presentation at the American Association for Cancer Research (AACR) Annual Meeting 2021.
  • In February, Curis announced the dosing of the first patient in its Phase 1/2 combination study of CA-4948 plus ibrutinib, for the treatment of patients with R/R NHL or other hematologic malignancies. In preclinical models, CA-4948 demonstrated synergistic anti-cancer activity when combined with a potent BTK inhibitor such as ibrutinib. Curis expects to report initial data from this study in the second half of 2021.
  • Earlier in February, Curis announced the initiation of the investigator-sponsored Phase 2 LUCAS study of CA-4948 for the treatment of anemia in patients with very low, low, or intermediate-risk MDS. The study is expected to start recruitment in the second quarter of 2021.

Immuno-oncology, CI-8993 (anti-VISTA antibody; ImmuNext collaboration):

  • Curis continues to enroll patients in the ongoing Phase 1 dose escalation study of its first-in-class monoclonal anti-VISTA antibody for the treatment of R/R solid tumors and expects to report initial clinical data in the second half of 2021.

Upcoming 2021 Planned Milestones

  • Report additional clinical data at the EHA 2021 Virtual Congress from the Phase 1/2 monotherapy study of CA-4948 in patients with AML and MDS, including patients with spliceosome mutations that result in aberrant splicing of oncogenic IRAK4-L.
  • Initiate dosing in the Phase 1/2 combination study of CA-4948 plus azacitidine and CA-4948 plus venetoclax in patients with R/R AML and MDS.
  • In the second half of 2021, report initial data from the ongoing Phase 1/2 combination study of CA-4948 plus ibrutinib in patients with R/R NHL.
  • In the second half of 2021, report initial data from the ongoing Phase 1 monotherapy study of CI-8993 for the treatment of R/R solid tumors.

First Quarter 2021 Financial Results

For the first quarter of 2021, Curis reported a net loss of $9.9 million or $0.11 per share on both a basic and diluted basis, as compared to a net loss of $9.7 million, or $0.28 per share on both a basic and diluted basis for the same period in 2020.

Revenues for the first quarter of 2021 and 2020 were $2.2 million and $2.7 million, respectively.

Operating expenses for the first quarter of 2021 were $11.0 million, as compared to $11.2 million for the same period in 2020, and comprised the following:

Costs of Royalty Revenues. Costs of royalty revenues, primarily amounts due to third-party university patent licensors in connection with Genentech and Roche’s Erivedge net sales, were $0.1 million for the first quarter of 2021 and 2020.

Research and Development
Expenses. Research and development expenses were $6.8 million for the first quarter of 2021 as compared to $7.5 million for the same period in 2020. The decrease in direct research and development expenses for the quarter is primarily attributable to the upfront license fee expense from our option and license agreement with ImmuNext that occurred during the first quarter of 2020. These costs were partially offset by a $0.3 million increase in employee related costs.

General and Administrative Expenses. General and administrative expenses were $4.1 million for the first quarter of 2021, as compared to $3.6 million for the same period in 2020. The increase in general administrative expense was driven primarily by higher costs for stock-based compensation and professional and consulting services, partially offset by lower legal services costs during the three months ended March 31, 2021.

Other Expense, Net. For the first quarter of 2021 and 2020, net other expense was $1.1 million and $1.2 million, respectively. Net other expense primarily consisted of imputed interest expense related to future royalty payments.

As of March 31, 2021, Curis’s cash, cash equivalents and investments totaled $168.4 million, and there were approximately 91.5 million shares of common stock outstanding. Curis expects that its existing cash, cash equivalents and investments should enable it to maintain its planned operations into 2024.

Conference Call Information 

Curis management will host a conference call today, May 12, 2021, at 4:30 p.m. ET, to discuss these financial results, as well as provide a corporate update.

To access the live conference call, please dial 1-888-346-6389 from the United States or 1-412-317-5252 from other locations, shortly before 4:30 p.m. ET. The conference call can also be accessed on the Curis website at www.curis.com in the Investors section.

About Curis, Inc.

Curis is a biotechnology company focused on the development of innovative therapeutics for the treatment of cancer. In 2015, Curis entered into a collaboration with Aurigene in the areas of immuno-oncology and precision oncology. As part of this collaboration, Curis has exclusive licenses to oral small molecule antagonists of immune checkpoints including the VISTA/PDL1 antagonist CA-170, and the TIM3/PDL1 antagonist CA-327, as well as the IRAK4 kinase inhibitor, CA-4948. CA-4948 is currently undergoing testing in a Phase 1/2 in patients with non-Hodgkin’s lymphoma both as a monotherapy and in combination the with BTK inhibitor ibrutinib. Curis is also evaluating CA-4948 in a Phase 1/2 trial in patients with acute myeloid leukemia and myelodysplastic syndromes, for which it has received Orphan Drug Designation from the U.S. Food and Drug Administration. In addition, Curis is engaged in a collaboration with ImmuNext for development of CI-8993, a monoclonal anti-VISTA antibody, which is currently undergoing testing in a Phase 1 trial in patients with solid tumors. Curis is also party to a collaboration with Genentech, a member of the Roche Group, under which Genentech and Roche are commercializing Erivedge® for the treatment of advanced basal cell carcinoma. For more information, visit Curis’ website at www.curis.com. 

Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including, without limitation, any statements with respect to Curis’s plans, strategies, objectives or financial results; statements concerning product research, development, clinical trials and studies and commercialization plans, timelines, anticipated results or the therapeutic potential of drug candidates including any statements regarding the initiation, progression, expansion, use and potential benefits of CA-4948 in clinical trials as a monotherapy and as a combination therapy, the progression, use and potential benefits of CI-8993, Curis’s plans and timelines to provide preliminary, interim and/or additional data from its ongoing clinical trials, and statements with respect to potential biomarkers; and statements of assumptions underlying any of the foregoing.  Forward-looking statements may contain the words “believes,” “expects,” “anticipates,” “plans,” “intends,” “seeks,” “estimates,” “assumes,” “predicts,” “projects,” “targets,” “will,” “may,” “would,” “could,” “should,” “continue,” “potential,” “focus,” “strategy,” “mission,”  or similar expressions. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other important factors that may cause actual results to be materially different from those indicated by such forward-looking statements. For example, Curis may experience adverse results, delays and/or failures in its drug development programs and may not be able to successfully advance the development of its drug candidates in the time frames it projects, if at all. Curis’s drug candidates may cause unexpected toxicities, fail to demonstrate sufficient safety and efficacy in clinical studies and/or may never achieve the requisite regulatory approvals needed for commercialization. Favorable results seen in preclinical studies and early clinical trials of Curis’s drug candidates may not be replicated in later trials. There can be no guarantee that the collaboration agreements with Aurigene and ImmuNext will continue for their full terms, or the CRADA with NCI, that Curis or its collaborators will each maintain the financial and other resources necessary to continue financing its portion of the research, development and commercialization costs, or that the parties will successfully discover, develop or commercialize drug candidates under the collaboration. Regulatory authorities may determine to delay or restrict Genentech’s and/or Roche’s ability to continue to develop or commercialize Erivedge in BCC. Erivedge may not demonstrate sufficient or any activity to merit its further development in disease indications other than BCC. Competing drugs may be developed that are superior to Erivedge. In connection with its agreement with Oberland Capital, Curis faces risks relating to the transfer and encumbrance of certain royalty and royalty-related payments on commercial sales of Erivedge, including the risk that, in the event of a default by Curis or its wholly-owned subsidiary, Curis could lose all retained rights to future royalty and royalty-related payments, Curis could be required to repurchase such future royalty and royalty-related payments at a price that is a multiple of the payments it has received, and its ability to enter into future arrangements may be inhibited, all of which could have a material adverse effect on its business, financial condition and stock price. Curis will require substantial additional capital to fund its business. If it is not able to obtain sufficient funding, it will be forced to delay, reduce in scope or eliminate some of its research and development programs, including related clinical trials and operating expenses, potentially delaying the time to market for, or preventing the marketing of, any of its product candidates, which could adversely affect its business prospects and its ability to continue operations, and would have a negative impact on its financial condition and its ability to pursue its business strategies. Curis faces substantial competition. Curis and its collaborators face the risk of potential adverse decisions made by the FDA and other regulatory authorities, investigational review boards, and publication review bodies. Curis may not obtain or maintain necessary patent protection and could become involved in expensive and time-consuming patent litigation and interference proceedings. Unstable market and economic conditions, natural disasters, public health crises, political crises and other events outside of Curis’s control could significantly disrupt its operations or the operations of third parties on which Curis depends, and could adversely impact Curis’s operating results and its ability to raise capital. For example, the COVID-19 pandemic may result in closures of third-party facilities, impact enrollment in clinical trials or impact sales of Erivedge by Genentech and/or Roche.  The extent to which the COVID-19 pandemic may impact Curis’s business or operating results is uncertain. Other important factors that may cause or contribute to  actual results being materially different from those indicated by forward-looking statements include the factors set forth under the captions “Risk Factor Summary” and “Risk Factors” in our most recent Form 10-K and Form 10-Q, and the factors that are discussed in other filings that we periodically make with the Securities and Exchange Commission (“SEC”). In addition, any forward-looking statements represent the views of Curis only as of today and should not be relied upon as representing Curis’s views as of any subsequent date. Curis disclaims any intention or obligation to update any of the forward-looking statements after the date of this press release whether as a result of new information, future events or otherwise, except as may be required by law.

 


CURIS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(UNAUDITED)

(In thousands, except share and per share data)


Three Months Ended
March 31,



2021



2020

Revenues, net:

Royalties

$

2,187

$

2,515

Other revenue

—

211

Contra revenue, net

2

(17)

Total revenues, net:

2,189

2,709

Operating expenses:

Costs of royalties

109

125

Research and development

6,757

7,473

General and administrative

4,123

3,593

Total costs and expenses

10,989

11,191

Loss from operations

(8,800)

(8,482)

Interest income

46

50

Imputed interest expense related to the sale of
future royalties

(1,173)

(1,298)

Other income (expense), net

—

21

Total other expense

(1,127)

(1,227)

Net loss

(9,927)

(9,709)

Basic and diluted net loss per common share

$

(0.11)

$

(0.28)

Basic and diluted weighted average common
shares outstanding

91,507,518

34,453,189

 


CURIS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


(UNAUDITED)

(In thousands)



March 31, 2021



December 31, 2020


ASSETS

Cash, cash equivalents and investments

$

168,350

$

183,058

Restricted cash

816

816

Accounts receivable

2,183

3,043

Property and equipment, net

620

663

Operating lease right-of-use asset

6,376

6,578

Goodwill

8,982

8,982

Other assets

3,266

1,218

Total assets

$

190,593

$

204,358


LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable, accrued liabilities and other
liabilities

$

5,491

$

7,791

Operating lease liability

5,490

6,771

Debt obligations

891

891

Liability related to the sale of future royalties, net

56,806

58,235

Total liabilities

68,768

73,688

Total stockholders’ equity

121,915

130,670

Total liabilities and stockholders’ equity

$

190,593

$

204,358

 

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SOURCE Curis, Inc.

Posted on

RealNetworks Announces First Quarter 2021 Financial Results

PR Newswire

SEATTLE, May 12, 2021 /PRNewswire/ — RealNetworks, Inc. (Nasdaq: RNWK), a leader in AI-powered digital media software and solutions, today announced its financial results* for the first quarter ended March 31, 2021.


  • Revenue of $15.9 million, driven by growth in AI-businesses offset by declines in some of the Company’s foundation businesses

  • 160% year-over-year revenue growth for SAFRTM driven by successes in the U.S. Federal market and in global commercial applications

  • Net loss of $(10.6) million; adjusted EBITDA loss of $(3.0) million marking the seventh consecutive quarter of year-over-year improvement; adjusted EBITDA of $(2.4) million excluding Scener

  • Completed public offering of common stock for approximately $20.3 million in net proceeds on April 29, 2021

Management Commentary

“2021 got off to a strong start at Real,” said Rob Glaser, Founder, Chairman, and Chief Executive Officer of RealNetworks. “We continued to progress in our strategic transformation to an AI-based company. Our first AI business, SAFR, grew approximately 160% year-over-year and our second AI business, KONTXT, grew 10% year-over-year. We told our AI story publicly for the first time to investors as part of our recent public offering, and as a result, raised approximately $20.3 million in net proceeds. These additional resources position us well to accelerate our AI efforts.”

First Quarter 2021 Financial Highlights from Continuing Operations

  • Revenue was $15.9 million, down 10% compared to $17.6 million in the prior quarter and down 6% compared to $16.8 million in the prior year period.
  • Revenue from key growth initiatives, SAFR and KONTXT, increased 160% and 10%, respectively, compared to the prior year period. SAFR and KONTXT together grew to represent 29% of total Mobile Services revenue for the first quarter of 2021.
  • Gross profit margin was 77%, unchanged from the prior quarter and up from 76% in the prior year period.
  • Operating expenses increased $10.3 million, or 127%, from the prior quarter and increased $0.9 million, or 5%, from the prior year period. Normalizing for certain one-time and non-cash items, operating expenses increased $1.2 million, or 8%, compared to the prior quarter and decreased $1.5 million, or 8%, from the prior year period. The increase in operating expenses compared to the fourth quarter of 2020 was primarily due to restructuring, fair value adjustments to the contingent consideration liability and higher stock-based compensation expenses.
  • Net loss attributable to RealNetworks was $(10.4) million, or $(0.27) per diluted share, compared to net income of $6.1 million, or $0.16 per diluted share, in the prior quarter and a net loss of $(4.6) million, or $(0.12) per diluted share, in the prior year period. Included in net loss attributable to RealNetworks in the first quarter of 2021 was a loss of $4.3 million from the fair value adjustment to the Company’s interest in MelodyVR stock (now Napster Group PLC (LSE: “NAPS”)) and $3.2 million of restructuring.
  • Adjusted EBITDA was a loss of $(3.0) million compared to a loss of $(0.9) million in the prior quarter and a loss of $(4.4) million in the prior year period. Adjusted EBITDA for the first quarter of 2021 excluding $600,000 of costs related to Scener was a loss of $(2.4) million.
  • At March 31, 2021, the Company had $17.0 million in unrestricted cash and cash equivalents compared to $23.9 million at December 31, 2020 and $19.0 million at March 31, 2020. In April 2021, the Company strengthened its balance sheet with the closing of an underwritten public offering that resulted in net proceeds to the Company of approximately $20.3 million.

Business Outlook

For the second quarter ending June 30, 2021, RealNetworks expects to achieve the following results from continuing operations:

  • Total revenue is expected to be in the range of $14.0 million to $15.5 million.
  • Adjusted EBITDA loss is expected to be in the range of $(6.0) million to $(4.5) million, including Scener expenses of up to $750,000, and in the range of $(5.25) million to $(3.75) million, excluding Scener (which is in the process of being spun out).

As announced as part of the Company’s April 2021 public offering, RealNetworks’ management currently expects 2021 will be an investment year that will position the Company for double-digit revenue growth in 2022 and 2023.

Conference Call and Webcast Information

RealNetworks will host a conference call today to review its results and discuss its performance at approximately 4:30 p.m. ET / 1:30 p.m. PT. Participants may join the conference call by dialing 1-877-451-6152 (United States) or 1-201-389-0879 (International). A telephonic replay of the call will also be available shortly after the completion of the call, until 11:59 pm ET on Wednesday, June 2, 2021, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 13718557.

A live webcast will be available on RealNetworks’ Investor Relations site under the Events & Presentations section at http://investor.realnetworks.com and will be archived online upon completion of the conference call.

About RealNetworks

Building on a rich history of digital media expertise and innovation, RealNetworks has created a new generation of products that employ best-in-class artificial intelligence and machine learning to enhance and secure our daily lives. Real’s portfolio includes SAFR, the world’s premier computer vision platform for live video; KONTXT, an industry leading NLP (Natural Language Processing) platform for text and multi-media analysis; and leveraging its digital media expertise, a mobile games business focused on the large free-to-play segment. For information about all of our products, visit www.realnetworks.com.

About Continuing and Discontinued Operations and Non-GAAP Financial Measures

*This release refers to “continuing” and “discontinued” operations due to the completion of the sale of Napster, RealNetworks’ 84%-owned subsidiary, to MelodyVR Group PLC, which closed on December 30, 2020. Effective as of the August 25, 2020 announcement date, Napster has been treated as a discontinued operation for accounting and disclosure purposes; therefore, unless otherwise noted, results presented in this release relate to the continuing operations of RealNetworks, which exclude Napster.

To supplement RealNetworks’ consolidated financial information presented in accordance with GAAP in this press release, the company also discloses certain non-GAAP financial measures, including adjusted EBITDA and contribution margin by reportable segment, which management believes provide investors with useful information.

In the financial tables of our earnings press release, RealNetworks has included reconciliations of GAAP net income (loss) from continuing operations to adjusted EBITDA and operating income (loss) by reportable segment to contribution margin by reportable segment.

The rationale for management’s use of non-GAAP measures is included in the supplementary materials presented with the quarterly earnings materials.  Please refer to Exhibit 99.2 (“Information Regarding Non-GAAP Financial Measures”) to the company’s report on Form 8-K, which is being submitted today to the SEC.

Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to our current expectations regarding our future growth, profitability, and market position, our financial condition and liquidity, our strategic focus and initiatives, product plans, agreements with partners, and expectations and contingencies relating to the sale of Napster. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements.  These statements reflect our expectations as of today, and actual results may differ materially from the results predicted. Factors that could cause actual results for RealNetworks, on a consolidated basis, to differ from the results predicted include: our ability to realize operating efficiencies, growth and other benefits from the implementation of our growth initiatives and restructuring efforts; cash usage and conservation, and the pursuit of additional funding sources; successful monetization of our products and services; competitive risks; issues with the use of AI; potential outcomes and effects of claims and legal proceedings; risks associated with key customer or strategic relationships and business acquisitions and dispositions; challenges caused by the COVID-19 pandemic; disruptions in the global financial markets; volatility of our stock price; material asset impairment; continued declines in subscription revenue; difficulty recruiting and retaining key personnel; regulatory, tax, accounting, and cross-border risks; and risks related to our governance structure. More information about potential risk factors that could affect our business and financial results is included in RealNetworks’ latest annual report on Form 10-K for year ended December 31, 2020, its quarterly reports on Form 10-Q and in other reports and documents filed by RealNetworks from time to time with the Securities and Exchange Commission. The preparation of our financial statements and forward-looking financial guidance requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, and revenues and expenses during the reported period. Actual results may differ materially from these estimates under different assumptions or conditions. RealNetworks assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.

For More Information:
Investor Relations for RealNetworks
Kimberly Orlando, Addo Investor Relations
310-829-5400
[email protected]
RNWK-F

 


RealNetworks, Inc. and Subsidiaries


Condensed Consolidated Statements of Operations


(Unaudited)


Quarter Ended March 31,


2021


2020


 (in thousands, except per
share data)

 Net revenue

$

15,888

$

16,822

 Cost of revenue

3,679

4,104

           Gross profit

12,209

12,718

 Operating expenses:

       Research and development

6,238

6,606

       Sales and marketing

5,137

6,000

       General and administrative

4,898

5,161

Fair value adjustments to contingent consideration liability

(1,040)

(300)

       Restructuring and other charges

3,171

86

           Total operating expenses

18,404

17,553

 Operating loss

(6,195)

(4,835)

 Other income (expenses):

       Interest expense

(95)

—

       Interest income

13

6

       Loss on equity and other investments, net

(4,272)

—

       Other income, net

104

238

           Total other income (expenses), net

(4,250)

244

Loss from continuing operations before income taxes

(10,445)

(4,591)

 Income tax expense

109

25

Net loss from continuing operations

(10,554)

(4,616)

Net loss from discontinued operations, net of tax

—

(73)

Net loss

(10,554)

(4,689)

Net loss attributable to noncontrolling interests of continuing operations

(106)

(53)

Net income attributable to noncontrolling interests of discontinued operations

—

6

Net loss attributable to RealNetworks

$

(10,448)

$

(4,642)

Net loss from continuing operations attributable to RealNetworks

$

(10,448)

$

(4,563)

Net loss from discontinued operations attributable to RealNetworks

—

(79)

Net loss attributable to RealNetworks

$

(10,448)

$

(4,642)

Net loss per share attributable to RealNetworks- Basic:

       Continuing operations

$

(0.27)

$

(0.12)

       Discontinued operations

—

—

              Net loss per share attributable to RealNetworks- Basic

$

(0.27)

$

(0.12)

Net loss per share attributable to RealNetworks- Diluted:

       Continuing operations

$

(0.27)

$

(0.12)

       Discontinued operations

—

—

              Net loss per share attributable to RealNetworks- Diluted

$

(0.27)

$

(0.12)

 Shares used to compute basic net loss per share

38,502

38,229

 Shares used to compute diluted net loss per share

38,502

38,229

 


RealNetworks, Inc. and Subsidiaries


Condensed Consolidated Balance Sheets


(Unaudited)


March 31,

2021


December 31,

2020


 (in thousands)


ASSETS

 Current assets:

 Cash and cash equivalents

$

17,015

$

23,940

 Trade accounts receivable, net

12,469

10,229

 Deferred costs, current portion

262

196

 Investments

5,693

9,965

 Prepaid expenses and other current assets

3,833

3,480

   Total current assets

39,272

47,810

 Equipment and software

30,313

30,726

 Leasehold improvements

2,745

2,776

 Total equipment, software, and leasehold improvements

33,058

33,502

 Less accumulated depreciation and amortization

31,381

31,631

 Net equipment, software, and leasehold improvements

1,677

1,871

 Operating lease assets

4,771

7,937

 Restricted cash equivalents

1,630

1,630

 Other assets

3,792

4,150

 Deferred costs, non-current portion

71

74

 Deferred tax assets, net

874

909

 Goodwill

17,191

17,375

 Total assets

$

69,278

$

81,756


 LIABILITIES AND SHAREHOLDERS’ EQUITY

 Current liabilities:

 Accounts payable

$

3,448

$

2,750

 Accrued and other current liabilities

15,230

17,850

 Deferred revenue, current portion

2,302

2,122

 Total current liabilities

20,980

22,722

 Deferred revenue, non-current portion

35

45

 Deferred tax liabilities, net

1,101

1,129

 Long-term lease liabilities

6,098

6,837

 Long-term debt

2,902

2,895

 Other long-term liabilities

2,171

2,241

 Total liabilities

33,287

35,869

 Total shareholders’ equity

36,359

46,149

Noncontrolling interests

(368)

(262)

 Total equity

35,991

45,887

 Total liabilities and equity

$

69,278

$

81,756

 


RealNetworks, Inc. and Subsidiaries


Condensed Consolidated Statements of Cash Flows


(Unaudited)


Three Months Ended March 31,


2021


2020


 (in thousands)

Cash flows from operating activities:

Net loss from continuing operations

$

(10,554)

$

(4,616)

Adjustment to reconcile net loss from continuing operations to net cash used in operating
activities:

Depreciation and amortization

204

280

Stock-based compensation

836

380

Loss on equity and other investments, net

4,272

—

Loss on impairment of operating lease assets

2,461

—

Foreign currency gain

(103)

(210)

Fair value adjustments to contingent consideration liability

(1,040)

(300)

Net change in certain operating assets and liabilities

(3,052)

(1,457)

Net cash used in operating activities – continuing operations

(6,976)

(5,923)

Net cash provided in operating activities – discontinued operations

—

1,299

Net cash used in operating activities

(6,976)

(4,624)

Cash flows from investing activities:

Purchases of equipment, software, and leasehold improvements

(56)

(80)

Net cash used in investing activities – continuing operations

(56)

(80)

Net cash used in investing activities – discontinued operations

—

(14)

Net cash used in investing activities

(56)

(94)

Cash flows from financing activities:

Proceeds from issuance of common stock (stock options)

468

—

Proceeds from issuance of preferred stock

—

10,000

Tax payments from shares withheld upon vesting of restricted stock

(110)

—

Net cash provided by financing activities – continuing operations

358

10,000

Net cash used in financing activities – discontinued operations

—

(2,404)

Net cash provided by financing activities

358

7,596

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

(251)

(637)

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

(6,925)

2,241

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

25,570

22,179

Cash, cash equivalents, and restricted cash, end of period

18,645

24,420

Less: Cash, cash equivalents and restricted cash from discontinued operations

—

8,025

Cash, cash equivalents, and restricted cash from continuing operations, end of period

$

18,645

$

16,395

 


RealNetworks, Inc. and Subsidiaries


Supplemental Financial Information


(Unaudited)


2021


2020


Q1


 Q4


 Q3


 Q2


 Q1


 (in thousands)


Net Revenue by Segment

Consumer Media (A)

$

3,309

$

3,384

$

2,543

$

3,159

$

3,495

Mobile Services (B)

5,980

7,338

6,400

6,461

6,690

Games (C)

6,599

6,879

7,611

7,465

6,637


     Total net revenue

$

15,888

$

17,601

$

16,554

$

17,085

$

16,822


Net Revenue by Product


Consumer Media

– Software License (D)

$

1,875

$

1,593

$

642

$

1,702

$

2,020

– Subscription Services (E)

818

867

892

898

929

– Product Sales (F)

438

625

193

261

222

– Advertising & Other (G)

178

299

816

298

324


Mobile Services

– Software License (H)

1,391

2,376

931

972

831

– Subscription Services (I)

4,589

4,962

5,469

5,489

5,859


Games

– Subscription Services (J)

2,528

2,589

2,705

2,730

2,770

– Product Sales (K)

3,163

3,315

3,874

3,712

2,978

– Advertising & Other (L)

908

975

1,032

1,023

889


     Total net revenue

$

15,888

$

17,601

$

16,554

$

17,085

$

16,822


Net Revenue by Geography

United States

$

9,932

$

10,893

$

11,855

$

10,742

$

10,214

Rest of world

5,956

6,708

4,699

6,343

6,608


     Total net revenue

$

15,888

$

17,601

$

16,554

$

17,085

$

16,822


Net Revenue by Segment

(A) The Consumer Media segment primarily includes revenue from the licensing of our portfolio of video codec technologies. Also included is RealPlayer and related products, such as the distribution of third-party software products, advertising on RealPlayer websites, sales of RealPlayer Plus software to consumers, and consumer subscriptions such as RealPlayer Plus and SuperPass.

(B) The Mobile Services segment primarily includes revenue from SaaS services and sales of professional services provided to mobile carriers.

(C) The Games segment primarily includes revenue from player purchases of in-game virtual goods within our free-to-play games, mobile and PC games, online games subscription services, and advertising on games sites and social network sites.


Net Revenue by Product

(D) Software licensing revenue within Consumer Media includes revenues from licenses of our video codec technologies.

(E) Subscriptions revenue within Consumer Media includes revenue from subscriptions such as our RealPlayer Plus and SuperPass offerings.

(F) Product sales within Consumer Media includes sales of RealPlayer Plus software to consumers.

(G) Advertising & other revenue within Consumer Media includes distribution of third-party software products and advertising on RealPlayer websites.

(H) Software license revenue within Mobile Services includes revenue from our integrated RealTimes platform and our facial recognition platform, SAFR.

(I) Subscription services revenue within Mobile Services includes revenue from our messaging products, including Metcalf intercarrier messaging services and Kontxt, as well as ringback tones and related professional services provided to mobile carriers.

(J) Subscription services revenue within Games includes revenue from online games subscriptions.

(K) Product sales revenue within Games includes revenue from player purchases of in-game virtual goods, retail and wholesale games-related revenue, sales of mobile games.

(L) Advertising & other revenue within Games includes advertising on games sites and social network sites.

 


RealNetworks, Inc. and Subsidiaries


Segment Results of Operations and Reconciliation to non-GAAP Contribution Margin


(Unaudited)


2021


2020


Q1


Q4


Q1


 (in thousands)


Consumer Media

Net revenue

$

3,309

$

3,384

$

3,495

Cost of revenue

478

550

611

Gross profit

2,831

2,834

2,884

Gross margin

86

%

84

%

83

%

Operating expenses

2,201

2,135

2,458

Operating income (loss), a GAAP measure

$

630

$

699

$

426

Depreciation and amortization

16

17

13

Contribution margin, a non-GAAP measure

$

646

$

716

$

439


Mobile Services

Net revenue

$

5,980

$

7,338

$

6,690

Cost of revenue

1,492

1,736

1,696

Gross profit

4,488

5,602

4,994

Gross margin

75

%

76

%

75

%

Operating expenses

6,145

5,940

7,588

Operating income (loss), a GAAP measure

$

(1,657)

$

(338)

$

(2,594)

Depreciation and amortization

84

130

98

Contribution margin, a non-GAAP measure

$

(1,573)

$

(208)

$

(2,496)


Games

Net revenue

$

6,599

$

6,879

$

6,637

Cost of revenue

1,705

1,744

1,794

Gross profit

4,894

5,135

4,843

Gross margin

74

%

75

%

73

%

Operating expenses

5,098

4,885

4,923

Operating income (loss), a GAAP measure

$

(204)

$

250

$

(80)

Depreciation and amortization

76

72

138

Contribution margin, a non-GAAP measure

$

(128)

$

322

$

58


Corporate

Cost of revenue

$

4

$

6

$

3

Gross profit

(4)

(6)

(3)

Gross margin

N/A

N/A

N/A

Operating expenses

4,960

(4,843)

2,584

Operating income (loss), a GAAP measure

$

(4,964)

$

4,837

$

(2,587)

Other expense, net

104

(227)

238

Foreign currency (gain) loss

(103)

305

(210)

Depreciation and amortization

28

28

31

Fair value adjustments to contingent consideration liability

(1,040)

(8,400)

(300)

Restructuring and other charges

3,171

1,432

86

Stock-based compensation

836

327

380

Contribution margin, a non-GAAP measure

$

(1,968)

$

(1,698)

$

(2,362)

 


RealNetworks, Inc. and Subsidiaries


Reconciliation of Net income (loss) from continuing operations to adjusted EBITDA, a non-GAAP measure


(Unaudited)


2021


2020


 Q1


 Q4


 Q1


(in thousands)


Reconciliation of GAAP Net income (loss) from continuing operations to adjusted EBITDA:

Net income (loss) from continuing operations

$

(10,554)

$

5,972

$

(4,616)

Income tax expense (benefit)

109

(551)

25

Interest expense

95

8

—

Interest income

(13)

(7)

(6)

(Gain) loss on equity and other investments, net

4,272

(201)

—

Foreign currency (gain) loss

(103)

305

(210)

Depreciation and amortization

204

247

280

Fair value adjustments to contingent consideration liability

(1,040)

(8,400)

(300)

Restructuring and other charges

3,171

1,432

86

Stock-based compensation

836

327

380

   Adjusted EBITDA, a non-GAAP measure

$

(3,023)

$

(868)

$

(4,361)

 

 

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SOURCE RealNetworks, Inc.

Posted on

Amdocs Limited Reports Second Quarter Fiscal 2021 Results; Quarterly Revenue of $1.05 Billion, Exceeding Midpoint of Guidance


Raises Outlook for Accelerated Revenue


and Earnings


per Share


Growth in F


iscal 2021


Solidifies Cloud Domain Leadership with Acquisition of Sourced Group

Second
Quarter Fiscal
20
2
1
Highlights

  • Revenue of $1,049 million, above the midpoint of the $1,015-$1,055 million guidance range; revenue included a negative impact from foreign currency movements of approximately $1 million compared to our guidance assumptions
  • Record managed services revenue of $635 million, equivalent to approximately 61% of total revenue
  • GAAP diluted EPS of $0.91, at the midpoint of the $0.87-$0.95 guidance range
  • Non-GAAP diluted EPS of $1.13, above the midpoint of the $1.09-$1.15 guidance range
  • GAAP operating income of $149 million; GAAP operating margin of 14.2%
  • Non-GAAP operating income of $185 million; increased non-GAAP operating margin of 17.6%
  • Returned record quarterly cash amount of $403 million to shareholders through share repurchases and quarterly cash dividends, including net proceeds received from the divestiture of OpenMarket
  • Quarterly free cash flow of $70 million, comprised of cash flow from operations of $120 million, less $49 million in net capital expenditures and other(1)
  • Normalized free cash flow of $133 million(1)
  • Twelve-month backlog of $3.54 billion up approximately $50 million sequentially; on a pro forma(2) basis, record twelve-month backlog was up 9.3% as compared to last year’s second fiscal quarter
  • The board of directors approved a quarterly cash dividend of $0.36 per share to be paid on July 23, 2021

ST. LOUIS, May 12, 2021 (GLOBE NEWSWIRE) — Amdocs Limited (NASDAQ: DOX) today reported operating results for the three months ended March 31, 2021.

“I am pleased to report strong results for the second fiscal quarter. Revenue was well above the midpoint of guidance and driven by our best-ever quarter in North America on a pro forma(2) basis where we are seeing healthy activity levels at AT&T, T-Mobile and various other customers across the region. At the operating level, we maintained our focus on consistent project delivery, which translated to healthy cash collections and robust free cash flow generation. Additionally, we returned a record cash amount of more than $400 million to shareholders this quarter, including the net proceeds received from the divesture of OpenMarket, as we had committed to previously,” said Shuky Sheffer, president and chief executive officer of Amdocs Management Limited.

Sheffer continued, “Accelerating the communications industry’s journey to the cloud is core to Amdocs’ future growth and this quarter we took some important steps to further solidify our leadership in this domain. We are today pleased to announce the acquisition of Sourced Group, a leading global technology consultancy specializing in large-scale cloud transformations for sophisticated, high-end enterprise customers in different industries such as communications, financial services and others. Sourced’s proven cloud migration platform, deployment framework and trusted design process, alongside its deep partnerships with Amazon Web Services, Microsoft Azure and Google Cloud Platform, complement our portfolio of cloud-native products and services and further expands and diversifies our customer base.”

Sheffer concluded, “I am pleased to report an improved outlook for revenue and earnings per share growth for the full fiscal year 2021, mainly driven by our expectation for a stronger second half. Our confidence is based on the visibility of our 12-month backlog, which is up more than 9% from a year ago on a pro forma(2) basis. Moreover, we are focused on maintaining our recent sales momentum by executing our growth strategy which we believe is well-aligned with our customer’s multi-year investments in digital modernization, 5G, cloud migration, and next-generation OSS platforms.”

Revenue

Revenue for the second fiscal quarter ended March 31, 2021 was $1,049 million, which on a pro forma basis(2) was up 5.7% in constant currency as compared to last year’s second fiscal quarter. Revenue was down $37 million as reported from the first fiscal quarter of 2021, mainly reflecting the divestiture of OpenMarket on December 31, 2020. Revenue was up 0.1% as reported and down 1.4% in constant currency as compared to last year’s second fiscal quarter. Revenue for the second fiscal quarter of 2021 includes a positive impact from foreign currency movements of approximately $3.3 million relative to the first quarter of fiscal 2021. Revenue was above the midpoint of Amdocs’ guidance, and included negative impact from foreign currency movements of approximately $1 million compared to our guidance assumptions and contributions from recently completed acquisitions of less than $2 million which was not included in our guidance assumptions. Revenue for the second fiscal quarter of 2021 includes record managed services revenue of $635 million, up 5.1% as compared to last year’s second fiscal quarter and equivalent to approximately 61% of total revenue.

Net Income and Earnings Per Share

The Company’s GAAP net income for the second quarter of fiscal 2021 was $119.1 million, or $0.91 per diluted share, compared to GAAP net income of $127.0 million, or $0.94 per diluted share, in the prior fiscal year’s second quarter. Net income on a non-GAAP basis was $148.1 million, or $1.13 per diluted share, compared to non-GAAP net income of $145.7 million, or $1.08 per diluted share, in the second quarter of fiscal 2020. Non-GAAP net income excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, equity-based compensation expenses, and other, net of related tax effects, in the second quarter of fiscal 2021 as well as in the second quarter of fiscal 2020.

For further details of reconciliation of selected financial metrics from GAAP to Non-GAAP, please refer to the tables below.

Returning Cash to Shareholders


  • Quarterly Cash Dividend Program


    :
    On May 12, 2021, the Board approved the Company’s next quarterly cash dividend payment of $0.36 per share and set June 30, 2021 as the record date for determining the shareholders entitled to receive the dividend, which will be payable on July 23, 2021.

  • Share Repurchase Activity:
    Repurchased a record $360 million of ordinary shares during the second quarter of fiscal 2021, including the return of the net proceeds from the divestiture of OpenMarket. The board of directors has approved a share repurchase plan authorizing the repurchase of up to $1 billion of ordinary shares at the company’s discretion; this plan has no expiration date and is in addition to the current authorization, which, as of March 31, 2021, provided for up to $228 million of remaining repurchase authorization. Between the two authorizations, we have up to $1.228 billion of remaining repurchase authority.

Twelve-month Backlo
g

Twelve-month backlog, which includes anticipated revenue related to contracts, estimated revenue from managed services contracts, letters of intent, maintenance and estimated on-going support activities, was $3.54 billion (excluding OpenMarket) at the end of the second quarter of fiscal 2021. On a pro forma(2) basis, twelve-month backlog was up approximately 9.3% as compared to last year’s second fiscal quarter.

Third
Quarter
Fiscal
2021
Outlook

  • Revenue of approximately $1,040-$1,080 million, assuming approximately $3 million sequential negative impact from foreign currency fluctuations as compared to the second quarter of fiscal 2021 and contributions from recently completed acquisitions
  • GAAP diluted EPS of approximately $0.91-$0.99. The impact of recent acquisitions on GAAP diluted EPS will not be known until after Amdocs completes the purchase price allocation
  • Non-GAAP diluted EPS of approximately $1.14-$1.20, excluding amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, and approximately $0.08-$0.10 per share of equity-based compensation expense, net of related tax effects.

Full Year Fiscal
2021
Outlook

  • Full year fiscal 2021 revenue guidance reflects the divestiture of OpenMarket as of December 31, 2020 and incorporates an expected positive impact from foreign currency fluctuations of about 1.0% year-over-year as compared with a positive impact of about 1.2% year-over-year previously and a positive contribution from recently completed acquisitions of about 0.5%
  • Expects pro forma(2) revenue growth of 5.0%-8.0% year-over-year on a constant currency basis as compared with 3.5%-7.5% year-over-year on a constant currency basis previously
  • Expects revenue growth of 1.0%-4.0% year-over-year on a reported basis as compared with (0.3)% -3.7% year-over-year previously
  • Expects revenue growth of 0.0%-3.0% year-over-year on a constant currency basis as compared with (1.5)% -2.5% year-over-year previously
  • Expects GAAP diluted earnings per share growth of roughly 39.0%-44.0% year-over-year, including gain, net of tax, from divestiture of OpenMarket, as compared with 37.5%-44.5% year-over-year previously. The impact of recent acquisitions on GAAP diluted EPS will not be known until after Amdocs completes the purchase price allocation
  • Expects non-GAAP diluted earnings per share growth of roughly 6.0%-9.0% year-over-year as compared with 4.0%-8.0% year-over-year previously, excluding amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, approximately $0.32-$0.36 per share of equity-based compensation expense, and gain from divestiture of OpenMarket, net of related tax effects. The impact of recent acquisitions on Amdocs’ non-GAAP diluted earnings per share is expected to be neutral in the full fiscal year 2021
  • Expects pro forma(2) non-GAAP diluted earnings per share growth of roughly 7.5%-10.5% year-over-year as compared with 5.5%-9.5% year-over-year previously, excluding amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, approximately $0.32-$0.36 per share of equity-based compensation expense, and gain from divestiture of OpenMarket, net of related tax effects
  • Expects free cash flow of approximately $620 million, comprised of cash flow from operations, less net capital expenditures and other, as compared with $600 million previously
  • Expects normalized free cash flow of approximately $820 million as compared with $800 million previously; normalized free cash flow excludes expected capital expenditure of $140 million related to the new campus development in Israel, $40 million of capital gains tax in relation to the divestiture of OpenMarket, and other items

Our third fiscal quarter 2021 and full year fiscal 2021 outlook takes into consideration the Company’s current expectations regarding macro and industry specific risks and various uncertainties and certain assumptions that we will discuss on our earnings conference call.However, we note thatmarket dynamics continue to shift rapidly and wecannot predict all possible outcomes, including those resulting from the COVID-19 pandemic, which has created, and continues to create, a significant amount of uncertainty, or from current and potential customer consolidation or their other strategic corporate activities.

Conference Call Details

Amdocs will host a conference call on May 12, 2021 at 5:00 p.m. Eastern Time to discuss the Company’s second quarter of fiscal 2021 results. To participate, please dial +1 (844) 513-7152, or +1 (508) 637-5600 outside the United States, approximately 15 minutes before the call and enter passcode 3504547. The call will also be carried live on the Internet via the Amdocs website, www.amdocs.com.

Non-GAAP Financial Measures

This release includes non-GAAP diluted earnings per share and other non-GAAP financial measures, including free cash flow and normalized free cash flow, non-GAAP cost of revenue, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP interest and other expenses, net, non-GAAP income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted earnings per share growth. These non-GAAP measures exclude the following items:         

  • amortization of purchased intangible assets and other acquisition-related costs;
  • changes in certain acquisition-related liabilities measured at fair value;
  • non-recurring and unusual charges or benefits (such as a gain from divestiture of OpenMarket);
  • equity-based compensation expense;
  • other; and
  • tax effects related to the above.

Free cash flow equals cash generated by operating activities less net capital expenditures and other. Normalized free cash flow, a measure of our operating performance, is further adjusted to exclude net capital expenditures related to the new campus development, payments for non-recurring and unusual charges (such as capital gains tax in relation to the divestiture of OpenMarket), and payments of acquisition related liabilities. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Amdocs believes that non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with Amdocs’ results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Amdocs’ results of operations in conjunction with the corresponding GAAP measures.

Amdocs believes that the presentation of non-GAAP diluted earnings per share and other financial measures, including free cash flow and normalized free cash flow, non-GAAP cost of revenue, non-GAAP research and development, non-GAAP selling, general and administrative, non-GAAP operating income, non-GAAP operating margin, non-GAAP interest and other expenses, net, non-GAAP income taxes, non-GAAP effective tax rate, non-GAAP net income and non-GAAP diluted earnings per share growth when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations, as well as the net amount of cash generated by its business operations after taking into account capital spending required to maintain or expand the business.

For its internal budgeting process and in monitoring the results of the business, Amdocs’ management uses financial statements that do not include amortization of purchased intangible assets and other acquisition-related costs,changes in certain acquisition-related liabilitiesmeasured at fair value, non-recurring and unusual charges or benefits, equity-based compensation expense, other and related tax effects. Amdocs’ management also uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Amdocs. In addition, Amdocs believes that significant groups of investors exclude these items in reviewing its results and those of its competitors, because the amounts of the items between companies can vary greatly depending on the assumptions used by an individual company in determining the amounts of the items.

Amdocs further believes that, where the adjustments used in calculating non-GAAP diluted earnings per share are based on specific, identified amounts that impact different line items in the Consolidated Statements of Income (including cost of revenue, research and development, selling, general and administrative, operating income, interest and other expenses, net, income taxes and net income), it is useful to investors to understand how these specific line items in the Consolidated Statements of Income are affected by these adjustments. Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

Supporting Resources

About Amdocs

Amdocs’ purpose is to enrich lives and progress society, using creativity and technology to build a better connected world. Amdocs and its 27,000 employees partner with the leading players in the communications and media industry, enabling next-generation experiences in 85 countries. Our cloud-native, open and dynamic portfolio of digital solutions, platforms and services brings greater choice, faster time to market and flexibility, to better meet the evolving needs of our customers as they drive growth, transform and take their business to the cloud. Listed on the NASDAQ Global Select Market, Amdocs had revenue of $4.2 billion in fiscal 2020.

For more information, visit Amdocs at www.amdocs.com.

This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs’ growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, the duration and severity of the COVID-19 pandemic, and its impact on the global economy, Amdocs’ ability to grow in the business markets that it serves, Amdocs’ ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company’s products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, Amdocs specifically disclaims any obligation to do so. These and other risks are discussed at greater length in Amdocs’ filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2020 filed on December 14, 2020 and our Form 6-K furnished for the first quarter of fiscal 2021 on February 16, 2021.

Contact:
Matthew Smith
Head of Investor Relations
Amdocs
314-212-8328
E-mail: [email protected]

 
 AMDOCS LIMITED

Consolidated Statements of Income
(In thousands, except per share data)
 
    Three months ended   Six months ended
    March 31,   March 31,
    2021

(a)
 		  2020   2021

(a)
 		  2020
                 
Revenue   $ 1,048,734     $ 1,047,933     $ 2,135,077     $ 2,089,890  
                 
Operating expenses:                
Cost of revenue     685,515       683,970       1,414,231       1,370,282  
Research and development     75,154       68,795       150,823       136,106  
Selling, general and administrative     116,951       119,108       238,839       242,575  
Amortization of purchased intangible assets and other     21,870       19,348       41,740       40,638  
      899,490       891,221       1,845,633       1,789,601  
Operating income     149,244       156,712       289,444       300,289  
                 
Interest and other expense, net     (3,542 )     (2,290 )     (10,032 )     (2,642 )
Gain from sale of a business     –       –       226,410       –  
Income before income taxes     145,702       154,422       505,822       297,647  
                 
Income taxes     26,635       27,384       87,123       54,677  
Net income   $ 119,067     $ 127,038     $ 418,699     $ 242,970  
Basic earnings per share   $ 0.92     $ 0.95     $ 3.21     $ 1.81  
Diluted earnings per share   $ 0.91     $ 0.94     $ 3.19     $ 1.80  
Basic weighted average number of shares outstanding     129,774       134,288       130,457       134,443  
Diluted weighted average number of shares outstanding     130,696       135,059       131,147       135,339  
Cash dividends declared per share   $ 0.36     $ 0.3275     $ 0.6875     $ 0.6125  
                 

 
AMDOCS LIMITED

Selected Financial Metrics

(In thousands, except per share data)
 
    Three months ended   Six months ended
    March 31,   March 31,
    2021

(a)
 		  2020   2021

(a)
 		  2020
                 
Revenue   $ 1,048,734   $ 1,047,933   $ 2,135,077   $ 2,089,890
                 
Non-GAAP operating income     184,883     180,524     372,864     358,464
                 
Non-GAAP net income     148,095     145,689     301,067     289,844
                 
Non-GAAP diluted earnings per share   $ 1.13   $ 1.08   $ 2.30   $ 2.14
                 
Diluted weighted average number of shares outstanding     130,696     135,059     131,147     135,339

Free Cash Flows and Normalized Free Cash Flow

(In thousands)
 
    Three months ended   Six months ended
    March 31,   March 31,
      2021       2020       2021       2020  
                   
Net Cash Provided by Operating Activities(a)   $ 119,736     $ 102,868     $ 536,221     $ 266,776  
                   
Purchases of property and equipment, net (c)     (49,245 )     (46,170 )     (99,310 )     (104,705 )
                   
Free Cash Flow     70,491       56,698       436,911       162,071  
                   
Tax payment on sale of business(b)     25,190       –       25,190       –  
                   
Payments of acquisition related liabilities     13,234       1,750       13,234       1,750  
                   
Payments for previously expensed restructuring charges     –       129       –       1,645  
                   
Net capital expenditures related to the new campus development     24,221       17,355       42,555       31,292  
                   
Normalized Free Cash Flow   $ 133,136     $ 75,932     $ 517,890     $ 196,758  
                                 

(a) Since January 1, 2021, OpenMarket results are not included in the Consolidated Statements of Income given its divestiture.
(b) Tax payment related to capital gain from divesture of OpenMarket, which was completed on December 31, 2020.
(c) The amounts under “Purchase of property and equipment, net” include proceeds from sale of property and equipment of $136 and $82 for the six months ended March 31, 2021 and 2020, respectively.

 
AMDOCS LIMITED

Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP

(
In
thousands)
 
  Three months ended
March 31, 2021

(a)
    Reconciliation items


 		       
  GAAP


 		  Amortization
of purchased
intangible
assets and
other


 		    Equity based
compensation
expense





 		  Changes in
certain
acquisitions
related liabilities
measured at fair
value


 		  Other   Tax
effect





  Non-GAAP
Operating expenses:              
Cost of revenue $ 685,515     $ –     $ (5,582 )   $ (394 )   $ –     $ –     $ 679,539  
Research and development   75,154       –       (1,012 )     –       –       –       74,142  
Selling, general and administrative   116,951       –       (6,781 )     –       –       –       110,170  
Amortization of purchased intangible assets and other   21,870       (21,870 )     –       –       –       –       –  
                                                       
Total operating expenses   899,490       (21,870 )     (13,375 )     (394 )     –       –       863,851  
                                                       
Operating income   149,244       21,870       13,375       394       –       –       184,883  
                                                       
Interest and other expense, net   (3,542 )     –       –       –       (375 )     –       (3,917 )
                                                       
Income taxes   26,635       –       –       –       –       6,236       32,871  
                                                       
Net income $ 119,067     $ 21,870     $ 13,375     $ 394     $ (375 )   $ (6,236 )   $ 148,095  
                                                       

  Three months ended
  March 31, 2020
        Reconciliation items
      
  GAAP


 		  Amortization of
purchased
intangible
assets and
other
   Equity based
compensation
expense





 		  Changes in certain
acquisitions related
liabilities measured at
fair value


 		  Tax
effect





    Non-GAAP
Operating expenses:                                            
Cost of revenue $ 683,970   $ –     $ (4,693 )   $ 6,284     $ –     $ 685,561  
Research and development   68,795     –       (723 )     –       –       68,072  
Selling, general and administrative   119,108     –       (5,332 )     –       –       113,776  
Amortization of purchased intangible assets and other   19,348     (19,348 )     –       –       –       –  
Total operating expenses   891,221     (19,348 )     (10,748 )     6,284       –       867,409  
                                             
Operating income   156,712     19,348       10,748       (6,284 )     –       180,524  
                                             
Income taxes   27,384     –       –       –       5,161       32,545  
                                             
Net income $ 127,038   $ 19,348     $ 10,748     $ (6,284 )   $ (5,161 )   $ 145,689  

 
AMDOCS LIMITED

Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP

(In thousands)
 
  Six months ended
March 31, 2021

(a)
          Reconciliation items


 		     
  GAAP


 		    Amortization
of
purchased
intangible
assets and
other
   Equity based
compensation
expense





 		  Changes in certain
acquisitions related
liabilities measured
at fair value


 		  Gain from
sale of a
business





 		  Other


 		  Tax
effect



  Non-GAAP
Operating expenses:                                                            
Cost of revenue $ 1,414,231     $ –     $ (10,523 )   $ (15,728 )   $ –     $ –   $ –     $ 1,387,980  
Research and development   150,823       –       (1,844 )     –       –       –     –       148,979  
Selling, general and administrative   238,839       –       (13,585 )     –       –       –     –       225,254  
Amortization of purchased intangible assets and other   41,740       (41,740 )     –       –       –       –     –       –  
Total operating expenses   1,845,633       (41,740 )     (25,952 )     (15,728 )     –       –     –       1,762,213  
                                                             
Operating income   289,444       41,740       25,952       15,728       –       –     –       372,864  
                                                             
Interest and other expense, net   (10,032 )     –       –       –       –       824     –       (9,208 )
                                                             
Gain from sale of a business   226,410       –       –       –       (226,410 )     –     –       –  
                                                             
Income taxes   87,123       –       –       –       –       –     (24,534 )     62,589  
                                                             
Net income $ 418,699     $ 41,740     $ 25,952     $ 15,728     $ (226,410 )   $ 824   $ 24,534     $ 301,067  
                                                             

  Six months ended
  March 31, 2020
        Reconciliation items


 		   
  GAAP


 		  Amortization
of
purchased
intangible
assets and
other



   Equity based
compensation
expense





 		  Changes in certain
acquisitions related
liabilities measured
at fair value


 		  Tax
effect





  Non-GAAP
Operating expenses:                                          
Cost of revenue $ 1,370,282   $ –     $ (10,039 )   $ 3,972     $ –     $ 1,364,215
Research and development   136,106     –       (1,526 )     –       –       134,580
Selling, general and administrative   242,575     –       (9,944 )     –       –       232,631
Amortization of purchased intangible assets and other   40,638     (40,638 )     –       –       –       –
Total operating expenses   1,789,601     (40,638 )     (21,509 )     3,972       –       1,731,426
                                           
Operating income   300,289     40,638       21,509       (3,972 )     –       358,464
                                           
Income taxes   54,677     –       –       –       11,301       65,978
                                           
Net income $ 242,970   $ 40,638     $ 21,509     $ (3,972 )   $ (11,301 )   $ 289,844

 
AMDOCS LIMITED

Condensed Consolidated Balance Sheets

(In thousands)
 
  As of
  March 31,
2021
 		  September 30,
2020
       
ASSETS      
       
Current assets      
Cash and cash equivalents $ 968,988   $  983,188
Short-term interest-bearing investments   194,684     752
Accounts receivable, net, including unbilled of $172,301 and $175,548, respectively   907,017     861,033
Prepaid expenses and other current assets   227,560     229,604
Total current assets   2,298,249     2,074,577
       
Property and equipment, net   640,253     607,951
Lease assets   266,719     295,494
Goodwill and other intangible assets, net   2,883,646     2,874,979
Other noncurrent assets   513,219     488,620
Total assets $ 6,602,086   $ 6,341,621
       
LIABILITIES AND SHAREHOLDERS’ EQUITY      
       
Current liabilities      
Accounts payable, accruals and other $ 961,670   $ 930,259
Short-term financing arrangement   100,000     100,000
Lease liabilities   58,794     59,100
Deferred revenue   219,199     126,841
Total current liabilities   1,339,663     1,216,200
Lease liabilities   209,276     230,076
Long-term debt, net of unamortized debt issuance costs   644,276     644,023
Other noncurrent liabilities   762,133     586,167
Total Amdocs Limited Shareholders’ equity   3,604,229     3,622,646
Noncontrolling interests   42,509     42,509
Total equity   3,646,738     3,665,155
Total liabilities and equity $ 6,602,086   $ 6,341,621
       

 
AMDOCS LIMITED

Consolidated Statements of Cash Flows

(In thousands)
 
    Six months ended
 March 31,
    2021   2020
         
Cash Flow from Operating Activities:                
Net income(a)   $ 418,699     $ 242,970  
Reconciliation of net income to net cash provided by operating activities:                
Depreciation and amortization     101,298       98,107  
Amortization of debt issuance costs     272       –  
Equity-based compensation expense     25,952       21,509  
Gain from sale of a business     (226,410 )     –  
Deferred income taxes     (27,778 )     9,150  
Loss from short-term interest-bearing investments     221       –  
Net changes in operating assets and liabilities, net of amounts acquired:                
Accounts receivable, net     (108,799 )     19,957  
Prepaid expenses and other current assets     (11,906 )     (22,637 )
Other noncurrent assets     (10,763 )     (1,653 )
Lease assets and liabilities, net     7,522       (11,947 )
Accounts payable, accrued expenses and accrued personnel     76,427       (96,647 )
Deferred revenue     226,904       17,616  
Income taxes payable, net     41,629       7,853  
Other noncurrent liabilities     22,953       (17,502 )
Net cash provided by operating activities     536,221       266,776  
                 
Cash Flow from Investing Activities:                
Purchase of property and equipment, net (c)     (99,310 )     (104,705 )
Proceeds from sale of short-term interest-bearing investments     4,258       –  
Purchase of short-term interest-bearing investments     (200,088 )     –  
Net cash paid for business and intangible assets acquisitions     (87,600 )     –  
Net cash received from sale of a business     290,789       –  
Other     562       (3,273 )
Net cash used in investing activities     (91,389 )     (107,978 )
                 
Cash Flow from Financing Activities:                
Borrowings under financing arrangements     –       350,000  
Repurchase of shares     (450,074 )     (210,048 )
Proceeds from employee stock options exercises     78,438       70,639  
Payments of dividends     (85,934 )     (76,770 )
Payment of contingent consideration from a business acquisition     (1,462 )     (1,411 )
Other     –       (238 )
Net cash (used in) provided by financing activities     (459,032 )     132,172  
                 
Net (decrease) increase in cash and cash equivalents     (14,200 )     290,970  
Cash and cash equivalents at beginning of period     983,188       471,632  
Cash and cash equivalents at end of period   $ 968,988     $ 762,602  

 
AMDOCS LIMITED

Supplementary Information

(
In
millions)
 
 
    Three months ended
    March 31,   December 31,


 		  September 30,   June 30,   March 31,
2021

(a)
 		2020


 		2020 2020 2020
North America   $ 679.1   $ 703.4   $ 681.6   $ 685.9   $ 691.3
Europe     148.8     171.6     165.3     145.4     148.3
Rest of the World     220.8     211.3     206.0     194.9     208.3
Total Revenue   $ 1,048.7   $ 1,086.3   $ 1,052.9   $ 1,026.2   $ 1,047.9
                     
                     
    Three months ended
    March 31,   December 31,
 		  September 30,   June 30,   March 31,
2021 2020


 		2020 2020 2020
Managed Services Revenue   $ 634.6   $ 623.7   $ 610.5   $ 604.5   $ 604.0
                     
                     
    As of
    March 31,   December 31, 


 		  September 30,   June 30,   March 31,
2021

(d)
 		2020(d)


 		2020 2020 2020
12-Month Backlog   $ 3,540   $ 3,490   $ 3,620   $ 3,480   $ 3,460
                               

(d) Excludes OpenMarket  



Posted on

FOMO CORP. BOOSTS PURGE VIRUS TEAM TO DRIVE GROWTH

Chicago IL, May 12, 2021 (GLOBE NEWSWIRE) — FOMO CORP. (https://www.fomoworldwide.com/ – US OTC: FOMC) today announces two senior appointments for Purge Virus, LLC (https://purgevirus.com/) to bolster its marketing and communications capabilities and to aggressively pursue the burgeoning clean-tech market.


Charlie Szoradi


,


Founder


of Purge Virus, LLC,


Appointed


Its


Chief Technology Officer

Effective today, Charlie Szoradi will assume the position of Chief Technology Officer (CTO) for Purge Virus, LLC. Szoradi is an architect and building intelligence executive with more than 28 years of experience in sustainability and cost-savings for retrofits and new construction. He is a LEED AP (Leadership in Energy and Environmental Design – Accredited Professional), a Certified Building Performance Institute (BPI) Energy Auditor, a member of the Energy and Sustainability Committee for the Society of American Military Engineers, and the Leadership Council Chairman of the American LED Alliance. In 2009, he was elected to the Board of the Sustainable Business Network and selected as a member of the Green Economy Task Force. He earned his Bachelor of Science in architecture from the University of Virginia and his Masters from the University of Pennsylvania.

As Purge Virus’ CTO, Szoradi will identify key partnerships and potential acquisitions and communicate the value proposition of Purge Virus and its closely-aligned assets, Independence LED (ILED) and Energy Intelligence Center (EIC), also owned by FOMO CORP. Szoradi will focus on using Clean Technology to save clients money by making buildings smarter, healthier, and more energy efficient for partners, customers, and the public.

Szoradi commented: “I was excited to create Purge Virus, LLC (https://purgevirus.com) during the COVID-19 pandemic to help residential and commercial clients achieve a clean indoor environment. I am now pleased to accept the position of CTO of Purge Virus to help expand our marketing and communication efforts as we seek to enhance our ‘clean-tech’ portfolio.”


John Conklin Appointed


Chief Executive Operating Officer of


Purge Virus, LLC

Also, effective today, John Conklin will assume the position of Chief Executive Operating Officer (CEOO) of Purge Virus, LLC and Managing Director of the assets of ILED (https://independenceled.com) and EIC (https://energyintelligencecenter.com). He will also serve as a member of the FOMO CORP. Advisory Board. John is currently Managing Partner of New Venture Development, LLC, a strategy consulting firm. Under his leadership, New Venture Development has focused on new business, new venture, and product development that assists entrepreneurs, start-ups, and small to mid-sized companies identify and take advantage of business, product, and market opportunities to create rewarding businesses and disruptive products. Business development activities extend across different departments, including project management, product management, and vendor management. Networking, negotiations, partnerships, and cost-savings efforts are also involved. All of these different departments and activities are driven by and aligned with the business development goals.

John graduated summa cum laude from the Rochester Institute of Technology with a Bachelor of Science degree and is a candidate for a Master of Science degree specializing in facility management, product development, and sustainability. He was inducted into an International Honor Society and the National Society of Leadership and Success.

As CEOO of Purge Virus, LLC, Conklin will deploy his leadership skills to advance the business development goals of the above three entities and leverage their synergies to further develop the Company, expand opportunities, enter into additional technology and product collaborations and partnerships, establish contracts and administrative functions of the Company, and drive sales.

“I look forward to working with the executive and advisors of the parent company, FOMO CORP., and everyone at Purge Virus, Independence LED, and the Energy Intelligence Center. Now is the time to extend the outreach of these companies’ products, services, and capabilities. In the upcoming months, my focus will be on expanding the business and partnerships, strengthening relationships, and increasing sales,” stated John Conklin, Purge Virus, CEOO. “I’m excited to be working with Charlie Szoradi in areas of sustainability and cost-savings for retrofits and new construction, and Tom Cleary as the National Sales Director and his team in commercial real estate and investment sales. As a member of the FOMO CORP. Advisory Board, I’ll be focused on assisting the Company leaders in reaching partnership, financial, and strategic goals.”


FOMO


CEO


Commentary

Vik Grover, FOMO CEO, stated: “I am delighted to announce these two critical appointments and am confident Charlie and John will succeed in helping Purge Virus, ILED, and EIC attract new customers and drive sales, which in turn will provide value to our shareholders. COVID-19 and other pathogens are not going away and may require a lifetime of boosters and variant shots. Smart buildings with efficient LED lighting with UV disinfection and energy management are the future and in the sweet spot of the Biden Administration’s plans. I predict a change in the construction code in the United States that will at some point mandate disinfection technology deployment in major buildings/venues and government locations nationwide and state-by-state. Our owned and targeted ecosystem companies are seeing weekly increases in their sales funnels which positions FOMO’s clean tech strategy for success.”

About FOMO CORP.

FOMO CORP. (www.fomoworldwide.com) is a publicly traded company focused on business incubation and acceleration. The Company invests in and advises emerging companies aligned with a growth mandate. FOMO is developing direct investment and affiliations – majority- and minority-owned as well as in joint venture formats – that afford targets access to the public markets for expansion capital as well as spin-out options to become their own stand-alone public companies.

Forward Looking Statements:

Statements in this press release about our future expectations, including without limitation, the likelihood that FOMO CORP. will be able to meet minimum sales expectations, be successful and profitable in the market, bring significant value to FOMO CORP.’s stockholders, and leverage capital markets to execute its growth strategy, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties and are subject to change at any time, and our actual results could differ materially from expected results. The Company undertakes no obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this statement or to reflect the occurrence of unanticipated events, except as required by law. FOMO’s business strategy described in this press release is subject to innumerable risks, most significantly, whether the Company is successful in securing adequate financing. No information in this press release should be construed in any form shape or manner as an indication of the Company’s future revenues, financial condition, or stock price.

Contacts:

Wayman Baker, PhD
EVP Corporate Development and Investor Relations
FOMO CORP.
630-286-9560
[email protected]
https://www.fomoworldwide.com/

Dwain Schenck
Media Contact
203-223-5230 
[email protected]
www.schenckstrategies.com

Follow us on social media:

– LINKEDIN:

https://www.linkedin.com/company/fomo-corp

.

– TWITTER:

https://twitter.com/FOMO_CORP

– FACEBOOK:

https://www.facebook.com/FOMOCORP



Posted on

Micron Technology Announces Upcoming Investor Events

BOISE, Idaho, May 12, 2021 (GLOBE NEWSWIRE) — Micron Technology, Inc. (Nasdaq: MU), today announced its participation in the following investor events:

  • Chief Financial Officer David Zinsner will engage in a fireside chat at the Barclays Americas Select Franchise Conference. The event will be webcast live on Wednesday, May 19, at 9:00 a.m. Mountain time.
  • Chief Executive Officer Sanjay Mehrotra will take part in a fireside chat at the J.P. Morgan Global Technology, Media and Communications Conference. The event will be webcast live on Tuesday, May 25, at 9:00 a.m. Mountain time.

Live webcasts and subsequent replays of presentations can be accessed from Micron’s Investor Relations website at investors.micron.com.

About Micron Technology, Inc.

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience. To learn more about Micron Technology, Inc. (Nasdaq: MU), visit micron.com.

© 2021 Micron Technology, Inc. All rights reserved. Information, products, and/or specifications are subject to change without notice. Micron, the Micron logo, and all other Micron trademarks are the property of Micron Technology, Inc. All other trademarks are the property of their respective owners.

Micron Media Relations Contact

Erica Pompen
Micron Technology, Inc.
+1 (408) 834-1873
[email protected]

Micron Investor Relations Contact
Farhan Ahmad
Micron Technology, Inc.
+1 (408) 834-1927
[email protected]



Posted on

Science Translational Medicine Article Shows Galera’s Selective Dismutase Mimetic Synergizes with Radiotherapy to Ablate Tumors

Describes mechanism which sensitizes cancer cells to radiotherapy

Supports recent results showing a near doubling of median overall survival observed in patients with pancreatic cancer by combining Galera’s dismutase mimetic with radiation therapy

MALVERN, Pa., May 12, 2021 (GLOBE NEWSWIRE) — Galera Therapeutics, Inc. (Nasdaq: GRTX), a clinical-stage biopharmaceutical company focused on developing and commercializing a pipeline of novel, proprietary therapeutics that have the potential to transform radiotherapy in cancer, today announced that Science Translational Medicine has published a foundational preclinical article describing the synergy of avasopasem manganese, one of the Company’s selective dismutase mimetics, with high fraction dose radiotherapy, such as stereotactic body radiation therapy (SBRT) or stereotactic ablative radiotherapy (SAbR), in killing tumors. The research, a collaboration between scientists at University of Texas Southwestern, University of Iowa and Galera, is part of the basis for two ongoing clinical trials with the Company’s dismutase mimetics in combination with SBRT in pancreatic cancer and lung cancer. Galera recently reported clinical results from its placebo-controlled Phase 1/2 pilot trial, showing that the combination of its selective dismutase mimetic with SBRT nearly doubled the median overall survival of patients with locally advanced pancreatic cancer (LAPC).

“We are gratified to have these results published in Science Translational Medicine describing the strong scientific rationale which underpin the promising clinical data seen in our pancreatic cancer trial,” said Mel Sorensen, M.D., President and CEO of Galera. “We thank our research collaborators who have helped us lay out the novel scientific basis for this potentially groundbreaking therapy for patients.”

The publication, “Avasopasem manganese synergizes with hypofractionated radiation to ablate tumors through the generation of hydrogen peroxide,” reports from preclinical cell and tumor models that the selective dismutase mimetic — by converting superoxide produced as a byproduct of radiotherapy into hydrogen peroxide — increased cancer cell killing with radiation. The synergy between the mimetic and radiotherapy increased with larger daily doses (“fractions”) of radiation. Moreover, in the range of fraction sizes typical of SBRT, the combination ablated many of the tumors. In addition, as previously published, the authors report that by removing the superoxide, the dismutase mimetics protected normal cells from radiation toxicity. These two separate benefits of the dismutase mimetics with radiotherapy act through the differential responses to superoxide and hydrogen peroxide by normal cells and cancer cells and are at the core of Galera’s clinical programs.

Consistent with today’s publication, Galera recently reported updated clinical results from a randomized, placebo-controlled Phase 1/2 pilot trial in which a near doubling of median overall survival was observed in patients with LAPC treated with a dismutase mimetic combined with SBRT versus placebo plus SBRT. Final results from this trial are expected in the second half of 2021. Building on the pilot trial, the Company expects to open the randomized Phase 2b GRECO-2 trial of GC4711, its second dismutase mimetic product candidate, in combination with SBRT in patients with LAPC in the first half of this year. Galera’s Phase 1/2 GRECO-1 trial of GC4711 is ongoing, testing its dismutase mimetic in combination with SBRT for patients with non-small cell lung cancer.

About Galera Therapeutics

Galera Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing and commercializing a pipeline of novel, proprietary therapeutic candidates that have the potential to transform radiotherapy in cancer. Galera’s lead product candidate is avasopasem manganese (GC4419, also referred to as avasopasem), a selective small molecule dismutase mimetic initially being developed for the reduction of radiation-induced severe oral mucositis (SOM). Avasopasem is being studied in the Phase 3 ROMAN trial to assess its ability to reduce the incidence and severity of SOM induced by radiotherapy in patients with locally advanced head and neck cancer (HNC), its lead indication. It is also being studied in the EUSOM Phase 2a multi-center trial in Europe assessing the safety of avasopasem in patients with HNC undergoing standard-of-care radiotherapy, the AESOP Phase 2a trial to assess its ability to reduce the incidence of esophagitis induced by radiotherapy in patients with lung cancer, and a Phase 2 trial in hospitalized patients who are critically ill with COVID-19. A pilot Phase 1/2 trial of avasopasem in combination with stereotactic body radiation therapy (SBRT) in patients with locally advanced pancreatic cancer (LAPC) has completed enrollment and reported updated results, with follow-up ongoing. The FDA granted Fast Track and Breakthrough Therapy designations to avasopasem for the reduction of SOM induced by radiotherapy, with or without systemic therapy. Galera’s second dismutase mimetic product candidate, GC4711, is being developed specifically to augment the anti-cancer efficacy of SBRT, and is currently being studied in the GRECO-1 Phase 1/2 trial in combination with SBRT in patients with non-small cell lung cancer. Galera also intends to initiate the GRECO-2 Phase 2b trial of GC4711 in combination with SBRT in patients with LAPC. Galera is headquartered in Malvern, PA. For more information, please visit www.galeratx.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding: expectations surrounding our growth and the continued advancement of our product pipeline, including plans for the commercial launch of avasopasem; the potential, safety, efficacy, and regulatory and clinical development of Galera’s product candidates; and plans and timing for the commencement of and the release of data from Galera’s clinical trials. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause Galera’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: Galera’s limited operating history; anticipating continued losses for the foreseeable future; needing substantial funding and the ability to raise capital; Galera’s dependence on avasopasem manganese (GC4419); uncertainties inherent in the conduct of clinical trials; difficulties or delays enrolling patients in clinical trials; the FDA’s acceptance of data from clinical trials outside the United States; undesirable side effects from Galera’s product candidates; risks relating to the regulatory approval process; failure to capitalize on more profitable product candidates or indications; ability to receive Breakthrough Therapy Designation or Fast Track Designation for product candidates; failure to obtain regulatory approval of product candidates in the United States or other jurisdictions; ongoing regulatory obligations and continued regulatory review; risks related to commercialization; risks related to competition; ability to retain key employees and manage growth; risks related to intellectual property; inability to maintain collaborations or the failure of these collaborations; Galera’s reliance on third parties; the possibility of system failures or security breaches; liability related to the privacy of health information obtained from clinical trials and product liability lawsuits; unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives; environmental, health and safety laws and regulations; the impact of the COVID-19 pandemic on Galera’s business and operations, including preclinical studies and clinical trials, and general economic conditions; risks related to ownership of Galera’s common stock; and significant costs as a result of operating as a public company. These and other important factors discussed under the caption “Risk Factors” in Galera’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the U.S. Securities and Exchange Commission (SEC) and Galera’s other filings with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any forward-looking statements speak only as of the date of this press release and are based on information available to Galera as of the date of this release, and Galera assumes no obligation to, and does not intend to, update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contacts:

Christopher Degnan
Galera Therapeutics, Inc.
610-725-1500
[email protected]

William Windham
Solebury Trout
646-378-2946
[email protected]

Media Contact:

Zara Lockshin
Solebury Trout
646-378-2960
[email protected]