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The First Bancorp Reports Record First Quarter Earnings

DAMARISCOTTA, Maine–(BUSINESS WIRE)–
The First Bancorp (Nasdaq: FNLC), parent company of First National Bank, today announced operating results for the three months ended March 31, 2021. Unaudited net income was $8.9 million, up $2.4 million or 37.4% from the $6.5 million reported for the three months ended March 31, 2020. Earnings per common share for the period on a fully diluted basis were up $0.21 to $0.81 per share, an increase of 35.0% from the prior year.

“I’m very pleased to report that The First Bancorp kicked off 2021 with its strongest ever earnings quarter”, commented Tony C. McKim, the Company’s President and Chief Executive Officer. “Net Income of $8.9 million for the first quarter increased $2.4 million from the same period a year ago, and $2.0 million from the fourth quarter of 2020. Strong performances from all of our business lines led to year-over-year and quarter-over-quarter gains in both net interest income and non-interest income. Net interest income before loan loss provision increased $955,000 or 6.4% from the first quarter of 2020, and $194,000 or 1.2% from the fourth quarter of 2020. Non-interest revenue before securities gains increased $1.7 million, or 49.3% from the prior year, and $663,000 or 14.7% from the preceding quarter. Earnings were achieved without the benefit resulting from reversal of credit loss reserves; loan growth led to a loan loss provision of $525,000 for the quarter.”

“The extraordinary efforts of our entire team through the COVID-19 pandemic are shown in the Company’s first quarter results”, continued Mr. McKim. “Growth in net interest income is attributable to the tremendous work of our lending and deposit gathering teams who significantly grew the base of earning assets and attracted low-cost, local deposits to not only fund growth but to also lessen our dependence on wholesale funding. In the first quarter, loan balances were up $40.0 million, an annualized growth rate of 11%, and low-cost deposits were up $68.1 million. The outstanding contribution of our operational support teams in bolstering this growth also deserves to be mentioned. The increase in non-interest income was driven primarily by continued strong mortgage banking results, along with increased revenues from wealth management and debit card activity. Revenue growth was achieved while also maintaining an excellent efficiency ratio of 45.52% for the quarter, down from 58.12% for the same period a year ago, and from 50.00% in the fourth quarter of 2020.”

With regard to the Company’s ongoing response to the pandemic, Mr. McKim remarked, “we continue to support our customers and communities in addressing the impact of COVID-19. In 2020 First National Bank granted over 1,700 Paycheck Protection Program (PPP) loans with more than $97 million disbursed to Maine small businesses. As of March 31, 2021 more than 80% of these balances have been forgiven per program guidelines. To date in 2021, the Bank has granted an additional $50 million in PPP loans to over 1,100 eligible borrowers at an average loan size of less than $45,000. Over the past year we have worked with more than 1,150 borrowers economically impacted by the virus, to modify or defer loan payments during this crisis. We have also continued to support our communities, particularly our most vulnerable residents, an example being the donation of $16,500 to 28 food pantries during the first quarter. The Bank’s branch lobbies re-opened on January 19th after operating drive-up only for a few weeks during the holiday outbreaks, and approximately 20% of our staff continue to work remotely.”

FIRST QUARTER 2021 FINANCIAL HIGHLIGHTS

• Net income of $8.9 million is a new quarterly earnings record for the Company
• Pre-tax, Pre-Provision net income (non-GAAP) increased 39.5% compared to the first quarter of 2020 and 15.8% compared to the fourth quarter of 2020
• Total assets increased $75.6 million in the first quarter to $2.44 billion
• Low-cost deposits grew $68.1 million in the first quarter to $1.14 billion
• Annualized loan growth of 11.0% and annualized low-cost deposit growth of 25.7%
• No release of credit loss reserves
• Tangible Book Value increased to $17.96 per share, up from $17.60 at December 31, 2020 and $16.97 at March 31, 2020.

FINANCIAL CONDITION

Total assets at March 31, 2021 were $2.44 billion, up $75.6 million in the first quarter and up $300.5 million from a year ago. Earning assets increased $86.8 million during the quarter and have increased $300.2 million year-over-year. Loan balances increased $40.0 million in the first quarter, an annualized growth rate of 11.0%, while investment balances remained essentially flat. Within the loan portfolio, commercial loans increased $37.2 million in the first quarter, municipal loans increased $5.7 million, and residential loans increased $1.4 million; home equity line of credit balances decreased $2.5 million. Excluding PPP, loans increased $37.5 million in the first quarter, an annualized growth rate of 10.7%. PPP loans totaled $62.7 million as of March 31, 2021.

Total deposits at March 31, 2021 were $1.95 billion, up $108.9 million during the quarter, and up $308.9 million or 18.8% from March 31, 2020. Aided by federal stimulus payments, low-cost deposits increased $68.1 million in the first quarter. Certificate of Deposit balances were up $28.7 million for the quarter, while wholesale borrowings decreased by $32.4 million.

The Company’s capital position remained strong as of March 31, 2021, with an estimated total risk-based capital ratio of 14.90%, and an estimated leverage capital ratio of 8.54%. The total capital ratio compares to 14.82% as of December 31, 2020 and 15.08% as of March 31, 2020. The leverage capital ratio compares to 8.49% as of December 31, 2020 and 8.78% as of March 31, 2020.

ASSET QUALITY & PROVISION FOR LOAN LOSSES

Asset quality continues to trend positively. As of March 31, 2021, the ratio of non-performing assets to total assets was 0.30%, down slightly from 0.32% at December 31, 2020, and improved from 0.49% at March 31, 2020. Net charge-offs for the quarter were an annualized 0.05% of total loans, down from the 0.10% of total loans experienced in 2020. Past due loans were 0.37% of total loans as of March 31, 2021, down from 0.57% of total loans at December 31, 2020, and 1.62% as of March 31, 2020.

The provision for loan losses totaled $525,000 in the first quarter of 2021, compared with $400,000 for the same period in 2020. The Company continues to view it prudent to consider the uncertainties brought about by COVID-19 and the potential impact to borrowers in its provision analysis. The allowance for loan losses stood at 1.09% of total loans as of March 31, 2021, down slightly from the 1.10% of total loans at December 31, 2020, and up from 0.88% of loans at March 31, 2020. If PPP loan balances are excluded, the allowance as of March 31, 2021 would stand at 1.14% of total loans.

As of March 31, 2021, the Bank had 197 loans totaling $50.6 million and representing 3.3% of the total portfolio that were in an active modification for interest-only payments or deferred payments in conformance with inter-agency guidance issued in March 2020, the CARES Act of March 2020, or the Supplemental Appropriations Act passed in December 2020. Modified loans were down from $62.2 million or 4.2% of total loans as of December 31, 2020. Of the $50.6 million that remained in modification, commercial loans comprised $32.0 million; $25.1 million of these commercial loan balances are scheduled to exit modification in the second quarter of 2021. The remaining $18.6 million is comprised of residential mortgage or other retail credit, with $14.9 million scheduled to exit modification in the second quarter of 2021.

OPERATING RESULTS

Net Income for the three months ended March 31, 2021 was $8.9 million, up $2.4 million or 37.4% from the three months ended March 31, 2020. The Company’s Return on Average Assets of 1.54% for the quarter was up from the 1.24% posted during first quarter of 2020. On a Pre-Tax, Pre-Provision (non-GAAP) basis, the first quarter 2021 Return on Assets was 1.95%, up from 1.56% the prior year. Return on Average Tangible Common Equity was improved year-over-year, at 18.34% for the first quarter of 2021, up from 13.95% for the first quarter of 2020. The Company’s Efficiency Ratio (non-GAAP) was 45.52% in the first quarter of 2021, down from 50.00% in the immediately preceding quarter and from 58.12% in the first quarter of 2020.

Contributing factors to the Company’s operating results in the three months ended March 31, 2021 included:

• Earning asset growth spurred a $955,000 increase in net interest income from the first quarter of 2020, an increase of 6.4%.
• Net interest margin for the first quarter of 2021 was 2.99%, down from 3.12% for the same period in 2020.
• Non-interest income before securities gains was $5.2 million for the three months ended March 31, 2021, up $1.7 million or 49.3% from the three months ended March 31, 2020, and $663,000 or 14.7% from the fourth quarter of 2020.
  • Mortgage banking revenue increased $1.5 million or 290.3% year-over-year, and $684,000 or 53.3% from the immediately preceding quarter, based on strong gain on sale results and partial release of impairment reserve for mortgage servicing rights;
  • Revenue increased $171,000 or 19.1% year-over-year, and $117,000 or 12.3% from the preceding quarter at First National Wealth Management, the Bank’s trust and investment management division;
  • Debit card revenue increased $244,000 or 24.2% from the first quarter of 2020, contributing to an increase in other operating income of $316,000, or 21.2%.
• Non-interest expense for the three months ended March 31, 2021 was $9.9 million, down $1.2 million or 10.6% from the three months ended March 31, 2020.
  • Employee salary and benefit expenses increased a modest 2.0% from the first quarter of 2020;
  • Furniture & Equipment expense increased 8.9% from the first quarter of 2020 reflecting technology investments over the past year;
  • Other Operating Expenses decreased $1.4 million versus prior year; costs associated with restructuring certain interest rate swap positions were recognized in the first quarter of 2020.

As mentioned previously, the Bank had $62.7 million in PPP loan balances as of March 31, 2021, comprised of the remaining 319 loans totaling $17.6 million originated in 2020 (PPP1) and 955 loans totaling $45.1 million originated in 2021 (PPP2). The Company received $3.8 million in associated origination fees from PPP1; to date, $3.4 million of these fees have been recognized in interest income, including $1.2 million in the first quarter of 2021. The Company expects to recognize most of the remaining $362,000 in PPP1 fees in the second quarter of 2021. Under PPP2, the Company has received $3.2 million in associated origination fees as of March 31, 2021 of which $84,000 was recognized in the first quarter of 2021.

DIVIDEND

On March 25, 2021 the Company’s Board of Directors declared a first quarter dividend of $0.31 per share. The first quarter dividend represents a payout to shareholders of 37.8% of earnings per share for the period, and was paid on April 16, 2021 to shareholders of record as of April 6, 2021.

ABOUT THE FIRST BANCORP

The First Bancorp, the parent company of First National Bank, is based in Damariscotta, Maine. Founded in 1864, First National Bank is a full-service community bank with $2.4 billion in assets. The Bank provides a complete array of commercial and retail banking services through seventeen locations in mid-coast and eastern Maine. First National Wealth Management, a division of the Bank, provides investment management and trust services to individuals, businesses, and municipalities. More information about The First Bancorp, First National Bank and First National Wealth Management may be found at www.thefirst.com.

The First Bancorp
Consolidated Balance Sheets (Unaudited)
In thousands of dollars, except per share data	March 31, 2021				December 31, 2020				March 31, 2020
Assets
Cash and due from banks	$	20,029			$	26,212			$	21,117
Interest-bearing deposits in other banks	104,602				56,151				6,047
Securities available for sale	294,537				313,376				312,928
Securities to be held to maturity	385,352				365,613				341,592
Restricted equity securities, at cost	10,105				10,545				9,994
Loans held for sale	3,522				5,855				561
Loans	1,516,772				1,476,761				1,344,208
Less allowance for loan losses	16,594				16,253				11,858
Net loans	1,500,178				1,460,508				1,332,350
Accrued interest receivable	10,847				9,298				9,648
Premises and equipment	29,985				27,251				21,156
Other real estate owned	401				908				316
Goodwill	30,646				30,646				29,805
Other assets	46,664				54,873				50,882
Total assets	$	2,436,868			$	2,361,236			$	2,136,396
Liabilities
Demand deposits	$	275,898			$	250,219			$	153,477
NOW deposits	541,684				520,385				382,307
Money market deposits	175,887				163,819				161,184
Savings deposits	325,758				304,603				236,706
Certificates of deposit	230,290				246,875				274,621
Certificates $100,000 to $250,000	343,805				295,672				364,530
Certificates $250,000 and over	60,235				63,038				71,787
Total deposits	1,953,557				1,844,611				1,644,612
Borrowed funds	229,648				262,038				248,040
Other liabilities	25,479				30,861				28,487
Total Liabilities	2,208,684				2,137,510				1,921,139
Shareholders’ equity
Common stock	110				110				109
Additional paid-in capital	65,755				65,285				64,277
Retained earnings	163,659				158,359				147,904
Net unrealized gain on securities available for sale	219				5,009				7,890
Net unrealized loss on securities transferred from available for sale to held to maturity	(124		)		(133		)		(174		)
Net unrealized loss on cash flow hedging derivative instruments	(1,463		)		(4,932		)		(4,773		)
Net unrealized gain on postretirement costs	28				28				24
Total shareholders’ equity	228,184				223,726				215,257
Total liabilities & shareholders’ equity	$	2,436,868			$	2,361,236			$	2,136,396
Common Stock
Number of shares authorized	18,000,000				18,000,000				18,000,000
Number of shares issued and outstanding	10,983,258				10,950,289				10,921,206
Book value per common share	$	20.78			$	20.43			$	19.71
Tangible book value per common share	$	17.96			$	17.60			$	16.97

The First Bancorp
Consolidated Statements of Income (Unaudited)
	For the three months ended March 31,
In thousands of dollars, except per share data	2021			2020
Interest income
Interest and fees on loans	$	15,119		$	15,856
Interest on deposits with other banks	12			74
Interest and dividends on investments	3,822			4,764
Total interest income	18,953			20,694
Interest expense
Interest on deposits	2,198			5,186
Interest on borrowed funds	882			590
Total interest expense	3,080			5,776
Net interest income	15,873			14,918
Provision for loan losses	525			400
Net interest income after provision for loan losses	15,348			14,518
Non-interest income
Investment management and fiduciary income	1,065			894
Service charges on deposit accounts	337			577
Net securities gains	119			752
Mortgage origination and servicing income	1,967			504
Other operating income	1,810			1,494
Total non-interest income	5,298			4,221
Non-interest expense
Salaries and employee benefits	5,123			5,025
Occupancy expense	753			713
Furniture and equipment expense	1,215			1,116
FDIC insurance premiums	199			173
Amortization of identified intangibles	17			11
Other operating expense	2,567			4,005
Total non-interest expense	9,874			11,043
Income before income taxes	10,772			7,696
Applicable income taxes	1,850			1,201
Net Income	$	8,922		$	6,495
Basic earnings per share	$	0.82		$	0.60
Diluted earnings per share	$	0.81		$	0.60

The First Bancorp
Selected Financial Data (Unaudited)
	As of and for the three months ended March 31,
Dollars in thousands, except for per share amounts	2021			2020
Summary of Operations
Interest Income	$	18,953		$	20,694
Interest Expense	3,080			5,776
Net Interest Income	15,873			14,918
Provision for Loan Losses	525			400
Non-Interest Income	5,298			4,221
Non-Interest Expense	9,874			11,043
Net Income	8,922			6,495
Per Common Share Data
Basic Earnings per Share	$	0.82		$	0.60
Diluted Earnings per Share	0.81			0.60
Cash Dividends Declared	0.31			0.30
Book Value per Common Share	20.78			19.71
Tangible Book Value per Common Share	17.96			16.97
Market Value	29.19			22.00
Financial Ratios
Return on Average Equity (a)	15.85		%	12.03		%
Return on Average Tangible Common Equity (a)	18.34		%	13.95		%
Return on Average Assets (a)	1.54		%	1.24		%
Average Equity to Average Assets	9.70		%	10.3		%
Average Tangible Equity to Average Assets	8.38		%	8.88		%
Net Interest Margin Tax-Equivalent (a)	2.99		%	3.12		%
Dividend Payout Ratio	37.80		%	50.00		%
Allowance for Loan Losses/Total Loans	1.09		%	0.88		%
Non-Performing Loans to Total Loans	0.46		%	0.75		%
Non-Performing Assets to Total Assets	0.30		%	0.49		%
Efficiency Ratio	45.52		%	58.12		%
At Period End
Total Assets	$	2,436,868		$	2,136,396
Total Loans	1,516,772			1,344,208
Total Investment Securities	689,994			664,514
Total Deposits	1,953,557			1,644,612
Total Shareholders’ Equity	228,184			215,257
(a) Annualized using a 365-day basis for 2021 and a 366-day basis for 2020.

Use of Non-GAAP Financial Measures

Certain information in this release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non-GAAP” measures in its analysis of the Company’s performance (including for purposes of determining the compensation of certain executive officers and other Company employees) and believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods and with other financial institutions, as well as demonstrating the effects of significant gains and charges in the current period, in light of the disclosure practices employed by many other publicly-traded financial institutions. The Company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. Management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Company’s underlying performance. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

In several places net interest income is calculated on a fully tax-equivalent basis. Specifically included in interest income was tax-exempt interest income from certain investment securities and loans. An amount equal to the tax benefit derived from this tax-exempt income has been added back to the interest income total which, as adjusted, increased net interest income accordingly. Management believes the disclosure of tax-equivalent net interest income information improves the clarity of financial analysis, and is particularly useful to investors in understanding and evaluating the changes and trends in the Company’s results of operations. Other financial institutions commonly present net interest income on a tax-equivalent basis. This adjustment is considered helpful in the comparison of one financial institution’s net interest income to that of another institution, as each will have a different proportion of tax-exempt interest from its earning assets. Moreover, net interest income is a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average earning assets. For purposes of this measure as well, other financial institutions generally use tax-equivalent net interest income to provide a better basis of comparison from institution to institution. The Company follows these practices.

The following table provides a reconciliation of tax-equivalent financial information to the Company’s consolidated financial statements, which have been prepared in accordance with GAAP. A 21.0% tax rate was used in both 2021 and 2020.

	For the three months ended
In thousands of dollars	March 31, 2021			March 31, 2020
Net interest income as presented	$	15,873		$	14,918
Effect of tax-exempt income	597			572
Net interest income, tax equivalent	$	16,470		$	15,490

The Company presents its efficiency ratio using non-GAAP information which is most commonly used by financial institutions. The GAAP-based efficiency ratio is non-interest expenses divided by net interest income plus non-interest income from the Consolidated Statements of Income. The non-GAAP efficiency ratio excludes securities losses and other-than-temporary impairment charges from non-interest expenses, excludes securities gains from non-interest income, and adds the tax-equivalent adjustment to net interest income.

The following table provides a reconciliation between the GAAP and non-GAAP efficiency ratio:

	For the three months ended
In thousands of dollars	March 31, 2021			March 31, 2020
Non-interest expense, as presented	$	9,874		$	11,043
Net interest income, as presented	15,873			14,918
Effect of tax-exempt interest income	597			572
Non-interest income, as presented	5,298			4,221
Effect of non-interest tax-exempt income	41			41
Net securities gains	(119		)	(752		)
Adjusted net interest income plus non-interest income	$	21,690		$	19,000
Non-GAAP efficiency ratio	45.52		%	58.12		%
GAAP efficiency ratio	46.64		%	57.70		%

The Company presents certain information based upon average tangible common equity instead of total average shareholders’ equity. The difference between these two measures is the Company’s intangible assets, specifically goodwill from prior acquisitions. Management, banking regulators and many stock analysts use the tangible common equity ratio and the tangible book value per common share in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, typically stemming from the use of the purchase accounting method in accounting for mergers and acquisitions. The following table provides a reconciliation of average tangible common equity to the Company’s consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles:

	For the three months ended
In thousands of dollars	March 31, 2021				March 31, 2020
Average shareholders’ equity as presented	$	228,276			$	217,130
Less intangible assets	(30,989		)		(29,931		)
Tangible average shareholders’ equity	$	197,287			$	187,199

To provide period-to-period comparison of operating results prior to consideration of credit loss provision and income taxes, the non-GAAP measure of Pre-Tax, Pre-Provision Net Income is presented. The following table provides a reconciliation to Net Income:

	For the three months ended
In thousands of dollars	March 31, 2021			March 31, 2020
Net Income, as presented	$	8,922		$	6,495
Add: provision for loan losses	525			400
Add: income taxes	1,850			1,201
Pre-Tax, pre-provision net income	$	11,297		$	8,096

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially, as discussed in the Company’s filings with the Securities and Exchange Commission.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005927/en/

Richard M. Elder

The First Bancorp’s Treasurer & Chief Financial Officer

207.563.3195

KEYWORDS: United States North America Maine

INDUSTRY KEYWORDS: Banking Professional Services Finance

MEDIA:

Posted on April 21, 2021 4:18 pm

Primerica Schedules First Quarter 2021 Financial Results Webcast

Primerica Schedules First Quarter 2021 Financial Results Webcast

DULUTH, Ga.–(BUSINESS WIRE)–
Primerica, Inc. (NYSE:PRI) announced today that it will hold a webcast on Thursday, May 6, 2021 at 10:00 a.m. Eastern to discuss the Company’s results for the quarter ended March 31, 2021, as well as other business-related matters, including future expectations. A news release announcing the quarter’s results will be distributed on Wednesday, May 5, 2021, after the close of the market.

The earnings news release, financial supplement and live webcast will be available on the Primerica Investors website at https://investors.primerica.com. A replay of the call will be available for approximately 30 days.

About Primerica, Inc.

Primerica, Inc., headquartered in Duluth, GA, is a leading provider of financial services to middle-income households in North America. Independent licensed representatives educate Primerica clients about how to better prepare for a more secure financial future by assessing their needs and providing appropriate solutions through term life insurance, which we underwrite, and mutual funds, annuities and other financial products, which we distribute primarily on behalf of third parties. We insured approximately 5.5 million lives and had over 2.6 million client investment accounts at December 31, 2020. Primerica, through its insurance company subsidiaries, was the #2 issuer of Term Life insurance coverage in North America in 2020. Primerica stock is included in the S&P MidCap 400 and the Russell 1000 stock indices and is traded on The New York Stock Exchange under the symbol “PRI”.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005831/en/

Investor Contact:

Nicole Russell

470-564-6663

Email: [email protected]

Media Contact:

Keith Hancock

470-564-6328

Email: [email protected]

KEYWORDS: Georgia United States North America

INDUSTRY KEYWORDS: Professional Services Insurance Finance

MEDIA:

Logo

Caesarstone Announces Date for First Quarter 2021 Results

MP MENASHE, Israel–(BUSINESS WIRE)–
Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today announced that it will release its earnings results for the first quarter ended March 31, 2021 on Wednesday, May 5, 2021 before the market opens.

The Company will host a webcast and conference call on the same day at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. The live webcast can be accessed through the Investor Relations section of the Company’s website at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible domestically or internationally, by dialing 1-877-407-4018 and 1-201-689-8471, respectively. The toll-free Israeli number is 1 80 940 6247. Upon dialing in, please request to join the Caesarstone First Quarter 2021 Earnings Conference Call.

To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 or + 1-412-317-6671 (international) and enter pass code 13718692. The replay will be available beginning at 11:30 a.m. ET on Wednesday, May 5, 2021 and will last through 11:59 p.m. ET on Wednesday, May 12, 2021.

About Caesarstone

Caesarstone is a concept and lifestyle-driven company with a customer-centered approach to designing, developing, and producing high-end engineered stone countertops, used in residential and commercial buildings. Our products offer superior aesthetic appeal and perfected functionality through a distinct variety of colors, styles, textures, and finishes used in diverse countertop applications, marked by inherent longevity. Strong commitment to service has fostered growing customer loyalty in over 50 countries where the Caesarstone product collections are available: Classico, Supernatural, Metropolitan and Outdoor. For more information please visit our website: www.caesarstone.com.

Forward-Looking Statements

Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the Company’s plans, objectives and expectations for future operations, including estimations relating to the impact of the COVID-19 pandemic and mitigation measures in connection thereto, expectations of the results of the Company’s business optimization initiative and its projected results of operations. These forward-looking statements are based upon management’s current estimates and projections of future results or trends. Actual results may differ materially from those projected as a result of certain risks and uncertainties, both known or unknown. These factors include, but are not limited to: the impact of the COVID-19 pandemic on end-consumers, the global economy and the Company’s business and results of operations; the ability of the company to realign aspects of its business based on the business optimization initiative, the strength of the home renovation and construction sectors; intense competitive pressures; the outcome of silicosis and other bodily injury claims; regulatory requirements relating to hazards associated with exposure to silica dust; manufacturing of existing products and managing required changes in production and supply chain; economic conditions within any of our key existing markets changes in raw material prices; fluctuations in currency exchange rates; the success of our expansion efforts in the United States; unpredictability of seasonal fluctuations in revenues; disturbances to the Company’s operations or the operations of its suppliers, distributors, customers or other third parties and other factors discussed under the heading “Risk Factors” in our most recent annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005377/en/

Investor Relations:

ICR, Inc. – Rodny Nacier

[email protected]

+1 646 277-1237

KEYWORDS: Israel Middle East

INDUSTRY KEYWORDS: Interior Design Retail Other Retail Other Construction & Property Commercial Building & Real Estate Specialty Construction & Property

MEDIA:

Posted on April 21, 2021 4:16 pm

Xcel Brands, Inc. Announces Fourth Quarter and Fiscal Year 2020 Results

• 
  Fourth quarter net product sales of $2.6 million, rebounding 20% from the third quarter
  
• 
  Fourth quarter net loss of $10.4 million, or ($0.54) per share, on a GAAP basis; net loss of $0.3 million, or ($0.02) per share, on a non-GAAP basis
  
• 
  Adjusted EBITDA of $0.2 million for the fourth quarter; $4.1 million for the fiscal year
  
  

NEW YORK, April 21, 2021 (GLOBE NEWSWIRE) — Xcel Brands, Inc. (NASDAQ: XELB) (“Xcel” or the “Company”), a media and consumer products company, today announced its financial results for the fourth quarter ended December 31, 2020.   

Robert W. D’Loren, Chairman and Chief Executive Officer of Xcel commented, “Our fourth quarter financial results reflect the current economic environment brought about by the COVID-19 pandemic. We are encouraged by the opportunities and growth potential we see in digital live-streaming and our recent acquisition of the LOGO Lori Goldstein brand. We expect growth to accelerate and our operating results to improve across our business in 2021.”

Fourth Quarter 2020 Financial Results

Total revenue was $7.5 million, a decrease of $3.9 million compared to the prior year quarter, primarily driven by a reduction in net product sales of $3.4 million due to the overall slowdown in economic activity related to the ongoing the COVID-19 pandemic. Despite the decrease in revenues and gross profit on an absolute dollar basis, overall gross profit margins increased from 67% in the prior year quarter to 80% in the current quarter.

Net loss attributable to Xcel Brands was approximately $10.4 million, or ($0.54) per diluted share, compared with a net loss of $5.3 million, or ($0.28) per diluted share, for the prior year quarter. The current quarter’s net loss is primarily attributable to a $13 million non-cash impairment charge related to the Judith Ripka Brand trademarks, driven by delays and uncertainty in implementing the brick-and-mortar retail store strategy for a portion of the brand, primarily as a result of the COVID-19 pandemic. After adjusting for certain cash and non-cash items, results on a non-GAAP basis were a net loss of approximately $0.3 million, or ($0.02) per diluted share for the quarter ended December 31, 2020, and net income of approximately $0.9 million, or $0.05 per diluted share, for the quarter ended December 31, 2019. Adjusted EBITDA was approximately $0.2 million and $1.5 million for the current quarter and the prior year quarter, respectively.

Full Year 2020 Financial Results

Total revenue was $29.4 million, a decrease of $12.3 million from prior year, driven by lower licensing revenues and lower product sales of $6.2 million and $6.1 million, respectively. Despite the decrease in revenues and gross profit on an absolute dollar basis, overall gross profit margins increased from 75% in the prior year to 81% in the current year, while gross profit margins from product sales increased from 33% in the prior year to 41% in the current year. As with the quarter’s results, the decrease in revenues was primarily attributable to the COVID-19 pandemic, which included government ordered stay-at-home policies and retail store closures during the second quarter, as well as the continued overall slowdown in economic activity related to the pandemic. Additionally, the decline in licensing revenues also reflected changes in certain of our existing licensing arrangements, including lower guaranteed minimum revenues upon renewal, and changes from guaranteed minimum amounts to sales-based royalties.

Net loss attributable to Xcel Brands was approximately $12.9 million, or ($0.68) per diluted share, compared with net loss of $3.4 million, or ($0.18) per diluted share, for the prior year. The current year net loss includes the previously mentioned $13 million impairment charge related to the Judith Ripka Trademarks. The prior year net loss notably included a $2.9 million gain on the reduction of contingent obligations, as well as a $6.2 million impairment charge. After adjusting for certain cash and non-cash items, non-GAAP net income for the year ended December 31, 2020 and 2019 was approximately $1.8 million, or $0.10 per diluted share, and approximately $4.8 million, or $0.25 per diluted share, respectively. Adjusted EBITDA was approximately $4.1 million and $7.1 million for the current year and prior year, respectively.      

See reconciliation tables below for non-GAAP metrics. These non-GAAP metrics may be inconsistent with similar measures presented by other companies and should only be used in conjunction with our results reported according to U.S. generally accepted accounting principles. Any financial measure other than those prepared in accordance with GAAP should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

The Company’s balance sheet at December 31, 2020 remained strong, with stockholders’ equity of approximately $95 million, cash and cash equivalents of approximately $5.0 million, and working capital, exclusive of the current portion of lease obligations, of approximately $7.9 million.

Conference Call and Webcast

The Company will host a conference call with members of the executive management team to discuss these results with additional comments and details at 5:00 p.m. Eastern Time on Wednesday, April 21, 2021. A webcast of the conference call will be available live on the Investor Relations section of Xcel’s website at www.xcelbrands.com. Interested parties unable to access the conference call via the webcast may dial 1-877-407-3982. A replay of the conference call will be available on the Company website for 30 days following the event and can be accessed at 844-512-2921 using replay pin number 13719186.

About Xcel Brands

Xcel Brands, Inc. (NASDAQ:XELB) is a media and consumer products company engaged in the design, production, marketing, wholesale, and direct-to-consumer sales of branded apparel, footwear, accessories, jewelry, home goods and other consumer products, and the acquisition of dynamic consumer lifestyle brands. The company’s brands have generated in excess of $3BB US in retail sales through live streaming on TV. Xcel was founded by Robert W. D’Loren in 2011 with a vision to reimagine shopping, entertainment, and social media as one. Xcel owns the Isaac Mizrahi, Judith Ripka, Halston, LOGO Lori Goldstein and C. Wonder brands, and it owns and manages the Longaberger brand through its controlling interest in Longaberger Licensing LLC, pioneering a ubiquitous sales strategy which includes the promotion and sale of products under its brands through interactive television, brick-and-mortar retail, e-commerce and peer to peer channels. Headquartered in New York City, Xcel Brands is led by an executive team with significant livestream production, merchandising, design, production, marketing, retailing, and licensing experience, and a proven track record of success in elevating branded consumer products companies. With an experienced team of professionals focused on design, production, and digital marketing, Xcel maintains control of product quality and promotion across all of its product categories and distribution channels. Xcel differentiates by design. www.xcelbrands.com

Forward Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical fact contained in this press release, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “ongoing,” “could,” “estimates,” “expects,” “intends,” “may,” “appears,” “suggests,” “future,” “likely,” “goal,” “plans,” “potential,” “projects,” “predicts,” “seeks,” “should,” “would,” “guidance,” “confident” or “will” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements regarding our anticipated revenue, expenses, profitability, strategic plans and capital needs. These statements are based on information available to us on the date hereof and our current expectations, estimates and projections and are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including, without limitation, the risks discussed in the “Risk Factors” section and elsewhere in the Company’s Annual Report on form 10-K for the year ended December 31, 2020 and its other filings with the SEC, which may cause our or our industry’s actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements. You should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

For further information please contact:

Andrew Berger
SM Berger & Company, Inc.
216-464-6400
[email protected]

Xcel Brands, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
		December 31, 2020				December 31, 2019
		(Unaudited)
Assets
Current Assets:
Cash and cash equivalents		$	4,957			$	4,641
Accounts receivable, net			8,889				10,622
Inventory			1,216				899
Prepaid expenses and other current assets			1,085				1,404
Total current assets			16,147				17,566
Property and equipment, net			3,367				3,666
Operating lease right-of-use assets			8,668				9,250
Trademarks and other intangibles, net			93,535				111,095
Restricted cash			1,109				1,109
Other assets			228				505
Total non-current assets			106,907				125,625
Total Assets		$	123,054			$	143,191
Liabilities and Equity
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities		$	4,442			$	4,391
Accrued payroll			973				1,444
Current portion of operating lease obligation			2,101				1,752
Current portion of long-term debt			2,800				2,250
Total current liabilities			10,316				9,837
Long-Term Liabilities:
Long-term portion of operating lease obligation			8,469				9,773
Long-term debt, less current portion			13,838				16,571
Contingent obligation			900				900
Deferred tax liabilities, net			3,052				7,434
Other long-term liabilities			224				224
Total long-term liabilities			26,483				34,902
Total Liabilities			36,799				44,739
Commitments and Contingencies
Equity:
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued and outstanding			–				–
Common stock, $.001 par value, 50,000,000 shares authorized, and 19,260,862 and 18,866,417 shares issued and outstanding at December 31, 2020 and 2019, respectively			19				19
Paid-in capital			102,324				101,736
Accumulated deficit			(16,595	)			(3,659	)
Total Xcel Brands, Inc. stockholders’ equity			85,748				98,096
Noncontrolling interest			507				356
Total Equity			86,255				98,452
Total Liabilities and Equity		$	123,054			$	143,191

Xcel Brands, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
		For the Three Months Ended								For the Twelve Months Ended
		December 31,								December 31,
		2020				2019				2020				2019
Revenues
Net licensing revenue		$	4,877			$	5,341			$	20,255			$	26,435
Net sales			2,603				6,015				9,193				15,292
Net revenue			7,480				11,356				29,448				41,727
Cost of goods sold (sales)			1,533				3,723				5,456				10,272
Gross profit			5,947				7,633				23,992				31,455
Operating costs and expenses
Salaries, benefits and employment taxes			3,263				3,796				13,061				15,834
Other design and marketing costs			998				812				3,334				3,164
Other selling, general and administrative expenses			1,540				1,538				6,567				5,552
Costs (recovery of costs) in connection with potential acquisition			52				1,059				(158	)			1,290
Stock-based compensation			70				199				850				976
Depreciation and amortization			1,428				963				5,497				3,902
Government assistance – Paycheck Protection Program			0				–				(1,816	)			–
Asset impairments			13,000				6,200				13,113				6,200
Total operating costs and expenses			20,351				14,567				40,448				36,918
Other income			–				–				46				2,850
Operating loss			(14,404	)			(6,934	)			(16,410	)			(2,613	)
Interest and finance expense
Interest expense and other finance charges			296				317				1,193				1,285
Loss on extinguishment of debt			–				–				–				189
Total interest and finance expense			296				317				1,193				1,474
Loss before income taxes			(14,700	)			(7,251	)			(17,603	)			(4,087	)
Income tax benefit			(4,249	)			(1,922	)			(4,518	)			(642	)
Net loss			(10,451	)			(5,329	)			(13,085	)			(3,445	)
Less: Net loss attributable to noncontrolling interest			(54	)			(19	)			(149	)			(19	)
Net loss attributable to Xcel Brands, Inc. stockholders		$	(10,397	)		$	(5,310	)		$	(12,936	)		$	(3,426	)
Loss per share attributed to Xcel Brands, Inc. common stockholders:
Basic net loss per share:		$	(0.54	)		$	(0.28	)		$	(0.68	)		$	(0.18	)
Diluted net loss per share:		$	(0.54	)		$	(0.28	)		$	(0.68	)		$	(0.18	)
Weighted average number of common shares outstanding:
Basic weighted average common shares outstanding			19,233,633				18,911,760				19,117,460				18,857,657
Diluted weighted average common shares outstanding			19,233,633				18,911,760				19,117,460				18,857,657

Xcel Brands, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
			For the Twelve Months Ended
			December 31,
		2020				2019
Cash flows from operating activities
Net loss		$	(13,085	)		$	(3,445	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense			5,497				3,902
Asset impairment charges			13,113				6,200
Amortization of deferred finance costs			95				146
Stock-based compensation			850				976
Amortization of note discount							16
Allowance for doubtful accounts			1,042				(50	)
Loss on extinguishment of debt			–				189
Deferred income tax benefit			(4,382	)			(705	)
Net gain on sale of assets			(46	)
Gain on reduction of contingent obligation			–				(2,850	)
Changes in operating assets and liabilities:
Accounts receivable			691				438
Inventory			(317	)			1,089
Prepaid expenses and other assets			597				(59	)
Accounts payable, accrued expenses and other current liabilities			(496	)			(1,720	)
Cash paid in excess of rent expense			(374	)			(431	)
Other liabilities			–				(196	)
Net cash provided by operating activities			3,185				3,500
Cash flows from investing activities
Cash consideration for asset acquisition of the Halston Heritage assets			–				(8,830	)
Investment in Longaberger Licensing, LLC			–				(375	)
Net proceeds from sale of assets			46				–
Purchase of property and equipment			(748	)			(1,133	)
Net cash used in investing activities			(702	)			(10,338	)
Cash flows from financing activities
Shares repurchased including vested restricted stock in exchange for withholding taxes			(190	)			(174	)
Cash contribution from non-controlling interest			300
Payment of deferred finance costs			(27	)			(315	)
Proceeds from long-term debt			–				7,500
Payment of long-term debt			(2,250	)			(4,742	)
Net cash (used in) provided by financing activities			(2,167	)			2,269
Net increase (decrease) in cash, cash equivalents, and restricted cash			316				(4,569	)
Cash, cash equivalents, and restricted cash at beginning of period			5,750				10,319
Cash, cash equivalents, and restricted cash at end of period		$	6,066			$	5,750
Reconciliation to amounts on consolidated balance sheets:
Cash and cash equivalents			4,957			$	4,641
Restricted cash			1,109				1,109
Total cash, cash equivalents, and restricted cash		$	6,066			$	5,750
Supplemental disclosure of non-cash activities:
Operating lease right-of-use asset		$	797			$	10,409
Operating lease obligation		$	797			$	13,210
Accrued rent offset to operating lease right-of-use assets		$	–			$	2,801
Settlement of seller note through offset to receivable		$	–			$	600
Settlement of contingent obligation through offset to note receivable		$				$	100
Issuance of common stock in connection with Halston Heritage assets acquisition		$	–			$	1,058
Contingent obligation related to acquisition of Halston Heritage assets at fair value		$	–			$	900
Liability for equity-based bonuses		$	71			$	220
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes		$	58			$	136
Cash paid during the period for interest		$	1,128			$	1,176

($ in thousands)	Three Months Ended								Twelve Months Ended
	December 31,				December 31,				December 31,				December 31,
	2020				2019				2020				2019
	(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Net loss attributable to Xcel Brands, Inc. stockholders	$	(10,397	)			(5,329	)		$	(12,936	)		$	(3,426	)
Amortization of trademarks		1,109				796				4,432				3,105
Non-cash interest and finance expense		–				–				–				16
Stock-based compensation		70				199				850				976
Loss on extinguishment of debt		–				–				–				189
Costs (recovery of costs) in connection with potential acquisition		52				1,059				(158	)			1,290
Certain adjustments to allowance for doubtful accounts		–				–				971				–
Asset impairments		13,000				6,200				13,113				6,200
Gain on sale of assets		–				–				(46	)			–
Gain on reduction of contingent obligation		–				–				–				(2,850	)
Deferred income tax benefit		(4,113	)			(1,985	)			(4,382	)			(705	)
Non-GAAP net income	$	(279	)		$	940			$	1,844			$	4,795
	Three Months Ended								Twelve Months Ended
	December 31,				December 31,				December 31,				December 31,
	2020				2019				2020				2019
	(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Diluted loss per share attributable to Xcel Brands, Inc. stockholders	$	(0.54	)		$	(0.28	)		$	(0.68	)		$	(0.18	)
Amortization of trademarks		0.06				0.04				0.23				0.16
Non-cash interest and finance expense		–				–				–				–
Stock-based compensation		–				0.01				0.04				0.05
Loss on extinguishment of debt		–				–				–				0.01
Costs (recovery of costs) in connection with potential acquisition		–				0.05				(0.01	)			0.07
Certain adjustments to allowance for doubtful accounts		–				–				0.05				–
Asset impairments		0.67				0.33				0.69				0.33
Gain on sale of assets		–				–				–				–
Gain on reduction of contingent obligation		–				–				–				(0.15	)
Deferred income tax benefit		(0.21	)			(0.10	)			(0.22	)			(0.04	)
Non-GAAP diluted EPS	$	(0.02	)		$	0.05			$	0.10			$	0.25
Non-GAAP weighted average diluted shares		19,323,078				18,913,476				19,152,569				18,858,379
($ in thousands)	Three Months Ended								Twelve Months Ended
	December 31,				December 31,				December 31,				December 31,
	2020				2019				2020				2019
	(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Net loss attributable to Xcel Brands, Inc. stockholders	$	(10,397	)		$	(5,310	)		$	(12,936	)		$	(3,426	)
Depreciation and amortization		1,428				963				5,497				3,902
Interest and finance expense		296				317				1,193				1,474
Income tax benefit		(4,249	)			(1,922	)			(4,518	)			(642	)
State and local franchise taxes		21				38				145				197
Stock-based compensation		70				199				850				976
Costs (recovery of costs) in connection with potential acquisition		52				1,059				(158	)			1,290
Certain adjustments to allowance for doubtful accounts		–				–				971				–
Asset impairments		13,000				6,200				13,113				6,200
Gain on sale of assets		–				–				(46	)			–
Gain on reduction of contingent obligation		–				–				–				(2,850	)
Adjusted EBITDA	$	221			$	1,544			$	4,111			$	7,121

Non-GAAP net income and non-GAAP diluted EPS are non-GAAP unaudited terms. We define non-GAAP net income as net income (loss) attributable to Xcel Brands, Inc. stockholders, exclusive of amortization of trademarks, stock-based compensation, non-cash interest and finance expense from discounted debt related to acquired assets, loss on extinguishment of debt, gain on sales of assets, gain on reduction of contingent obligations, costs (recoveries) in connection with potential acquisitions, certain adjustments to allowances for doubtful accounts related to debtors that have filed for bankruptcy protection triggered by the impact of COVID-19, asset impairments, and deferred income taxes. Non-GAAP net income and non-GAAP diluted EPS measures do not include the tax effect of the aforementioned adjusting items, due to the nature of these items and the Company’s tax strategy.

Adjusted EBITDA is a non-GAAP unaudited measure, which we define as net income (loss) attributable to Xcel Brands, Inc. stockholders, before depreciation and amortization, interest and finance expenses (including loss on extinguishment of debt, if any), income taxes, other state and local franchise taxes, stock-based compensation, gain on reduction of contingent obligations, gain on sale of assets, costs (recoveries) in connection with potential acquisitions, asset impairments, and certain adjustments to allowances for doubtful accounts related to debtors that have filed for bankruptcy protection triggered by the impact of COVID-19.

Management uses non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to identify business trends relating to our results of operations. Management believes non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA are also useful because these measures adjust for certain costs and other events that management believes are not representative of our core business operating results, and thus these non-GAAP measures provide supplemental information to assist investors in evaluating our financial results.

Non-GAAP net income for the current year includes adjustments related to allowances for doubtful accounts for account debtors that have filed for bankruptcy protection triggered by the impact of COVID-19. In addition, the Company incurred certain costs during the year which it could have eliminated but elected not to do so in light of $1.8 million of government assistance received through the Paycheck Protection Program under the CARES Act (the “PPP Benefit”). The PPP Benefit was recognized as a reduction to current year expenses for which the program was intended to compensate, in the amount of $1.8 million. Accordingly, the PPP Benefit is not considered a reconciling item for purposes of the computation of non-GAAP net income and Adjusted EBITDA due to the fact that the PPP Benefit represents a cash benefit and is directly related to the Company’s operating expenses incurred. Such treatment is also consistent with the calculation of EBITDA for financial covenant compliance purposes under the Company’s term debt.

Adjusted EBITDA is the measure used to calculate compliance with the EBITDA covenant under the Xcel Term Loan. Non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA should not be considered in isolation or as alternatives to net income, earnings per share, or any other measure of financial performance calculated and presented in accordance with GAAP. Given that non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA are financial measures not deemed to be in accordance with GAAP and are susceptible to varying calculations, our non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including companies in our industry, because other companies may calculate these measures in a different manner than we do. In evaluating non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA, you should be aware that in the future we may or may not incur expenses similar to some of the adjustments in this document. Our presentation of non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA does not imply that our future results will be unaffected by these expenses or any unusual or non-recurring items. When evaluating our performance, you should consider non-GAAP net income, non-GAAP diluted EPS, and Adjusted EBITDA alongside other financial performance measures, including our net income and other GAAP results, and not rely on any single financial measure.