Market Newsdesk

April 21, 2021 4:13 pm

Qualtrics Reports First Quarter 2021 Financial Results

– Q1 2021 Total Revenue of $238.6M, up 36% Year-over-year

– Q1 2021 Subscription Revenue of $186.9M, up 46% Year-over-year

– Total Remaining Performance Obligations[1] of $1,196.2M, up 77% Year-over-year

– Next 12 Months Remaining Performance Obligations of $677.0M, up 53% Year-over-year

PR Newswire

PROVO, Utah and SEATTLE, April 21, 2021 /PRNewswire/ — Qualtrics (NASDAQ: XM), the world’s No. 1 Experience Management (XM) provider and creator of the XM category, today announced financial results for the first quarter ended March 31, 2021.

“Q1 was an outstanding quarter for Qualtrics, and a powerful start to our fiscal year,” said Qualtrics CEO Zig Serafin. “Organizations around the world are in the middle of an important transformation—an experience transformation—and Qualtrics has never been more relevant or impactful.”

First Quarter 2021 Financial Highlights:

Revenue: Total revenue for the first quarter was $238.6 million, up from $176.1 million one year ago, an increase of 36% year-over-year. Subscription revenue for the first quarter was $186.9 million, up from $128.3 million one year ago, an increase of 46% year-over-year.
Operating Income (Loss) and Margin: First quarter operating loss was $(196.6) million, compared to $(36.9) million one year ago. Non-GAAP operating income (see discussion of non-GAAP operating income (loss) and margin measures below) was $6.8 million, compared to non-GAAP operating loss of $(24.1) million one year ago. For the first quarter, GAAP operating margin was (82)% and non-GAAP operating margin was 3%.
Net Income (Loss) and Net Income (Loss) Per Share: First quarter net loss was $(199.9) million, or $(0.41) per share, compared to $(44.8) million, or $(0.11) per share in the first quarter of fiscal year 2020. Non-GAAP net income (see discussion of the non-GAAP net income (loss) measure below) for the first quarter was $5.3 million, or $0.01 per share, compared to non-GAAP net loss of $(31.9) million, or $(0.08) per share in the first quarter of fiscal year 2020.
Cash and Cash Equivalents: Total cash and cash equivalents as of March 31, 2021 was $586.5 million.

Financial Outlook:

Qualtrics is providing guidance for its second quarter ending June 30, 2021 as follows:

Total revenue between $240 and $242 million.
Subscription revenue between $190 and $192 million.
Non-GAAP operating margin between (1)% and 0%.
Non-GAAP net loss per share between $(0.03) and $(0.01) assuming 515 million weighted shares outstanding.

Qualtrics is updating its guidance for its full year ending December 31, 2021 as follows:

Total revenue between $980 and $984 million.
Subscription revenue between $768 and $772 million.
Non-GAAP operating margin between (3)% and (2)%.
Non-GAAP net loss per share between $(0.13) and $(0.11) assuming 512 million weighted shares outstanding.

The guidance provided above are forward-looking statements and actual results may differ materially. Refer to the “Forward-Looking Statements” safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), and non-GAAP net income (loss) per share are non-GAAP financial measures. Additional information on Qualtrics’ reported results, including a reconciliation of the non-GAAP financial measures to their most comparable GAAP measures, is included in the financial tables below. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to Qualtrics’ results computed in accordance with GAAP.

A supplemental financial presentation and other information can be accessed through Qualtrics’ investor relations website at https://www.qualtrics.com/investors/.

Qualtrics Earnings Call
Qualtrics plans to host a conference call today to review its fiscal first quarter 2021 financial results and to discuss its financial outlook. The call is scheduled to begin at 3:00 p.m. MT/5:00 p.m. ET. Investors are invited to join the webcast by visiting: https://qualtrics.com/investors/events. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days.

About Qualtrics
Qualtrics, the leader in customer experience and creator of the Experience Management (XM) category, is changing the way organizations manage and improve the four core experiences of business, customer, employee, product, and brand. Over 13,500 organizations around the world are using Qualtrics to listen, understand, and take action on experience data (X-data™) the beliefs, emotions, and intentions that tell you why things are happening, and what to do about it. The Qualtrics XM Platform™ is a system of action that helps businesses attract customers who stay longer and buy more, engage employees who build a positive culture, develop breakthrough products people love, and build a brand people are passionate about. To learn more, please visit qualtrics.com.

Forward-Looking Statements
This press release contains express and implied “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the second quarter of 2021 and full year 2021, Qualtrics’ growth strategy and business aspirations, its market position, and the continued impact of COVID-19 on its business and operations. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “target,” “explore,” “continue,” or the negative of these terms, and similar expressions intended to identify forward-looking statements. By their nature, these statements are subject to numerous uncertainties and risks, including factors beyond our control, that could cause actual results, performance, or achievement to differ materially and adversely from those anticipated or implied in the statements, including: our future financial performance, including our revenue, cost of revenue, gross profit, operating expenses, ability to generate positive cash flow, and ability to be profitable; our ability to grow at or near historical growth rates; anticipated technology trends, such as the use of and demand for experience management software; our ability to attract and retain customers to use our products; our ability to respond to and overcome challenges brought by the COVID-19 pandemic; our ability to attract enterprises and international organizations as customers for our products; our ability to expand our network with content consulting partners, delivery partners, and technology partners; the evolution of technology affecting our products and markets; our ability to introduce new products and enhance existing products and to compete effectively with competitors; our ability to successfully enter into new markets and manage our international expansion; the attraction and retention of qualified employees and key personnel; our ability to effectively manage our growth and future expenses and maintain our corporate culture; our anticipated investments in sales and marketing and research and development; our ability to maintain, protect, and enhance our intellectual property rights; our ability to successfully defend litigation brought against us; our ability to maintain data privacy and data security; the sufficiency of our cash and cash equivalents to meet our liquidity needs; our ability to comply with modified or new laws and regulations applying to our business; and our reduced ability to leverage resources at SAP as an independent company from SAP. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are and/or will be included under the caption “Risk Factors” and elsewhere in Qualtrics’ Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent public filings. Forward-looking statements speak only as of the date the statements are made and are based on information available to Qualtrics at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. Qualtrics assumes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as required by law.

Non-GAAP Financial Measures
To supplement our financial results, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly-titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP measures to assist investors in seeing our financial performance using a management view, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. You should consider non-GAAP results alongside other financial performance measures and results presented in accordance with GAAP. In addition, in evaluating non-GAAP results, you should be aware that in the future we will incur expenses such as those that are the subject of adjustments in deriving non-GAAP results and you should not infer from our non-GAAP results that our future results will not be affected by these expenses or any unusual or non-recurring items.

Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss), non-GAAP net income (loss) per share, free cash flow, free cash flow margin: We define these non-GAAP financial measures as the respective GAAP measures, excluding equity and cash settled stock-based compensation expenses, amortization of acquired intangible assets, and the tax impact of the non-GAAP adjustments. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business and to facilitate comparison of our results to those of peer companies and over multiple periods.

Investor Relations:

Steven Wu

Head of FP&A and Investor Relations
[email protected]

Public Relations:

Gina Sheibley

Chief Communications Officer
[email protected]

Qualtrics International Inc.
Consolidated Balance Sheets
(Unaudited, in thousands, except share and par value)

	As of March 31, 2021		As of December 31, 2020

Assets
Current assets:
Cash and cash equivalents……………………………………………………………………………………….	$	586,536	$	203,891
Accounts receivable, net of allowance………………………………………………………………………..	258,838		296,148
Deferred contract acquisition costs, net……………………………………………………………………..	45,108		43,429
Prepaid expenses and other current assets……………………………………………………………….	46,572		48,130
Total current assets………………………………………………………………………………………………………..	937,054		591,598
Non-current assets:
Property and equipment, net…………………………………………………………………………………………..	119,263		116,120
Right-of-use assets from operating leases………………………………………………………………………	190,697		195,372
Goodwill………………………………………………………………………………………………………………………..	6,709		6,709
Other intangible assets, net……………………………………………………………………………………………	3,596		3,959
Deferred contract acquisition costs, net of current portion………………………………………………	115,381		115,837
Deferred tax assets…………………………………………………………………………………………………………	260		92
Other assets…………………………………………………………………………………………………………………..	16,582		9,368
Total assets……………………………………………………………………………………………………………………	$	1,389,542	$	1,039,055

Liabilities and deficit
Current liabilities:
Lease liabilities………………………………………………………………………………………………………….	$	12,677	$	7,125
Accounts payable………………………………………………………………………………………………………	20,416		30,452
Accrued liabilities………………………………………………………………………………………………………	197,891		225,046
Liability-classified, stock-based awards……………………………………………………………………..	5,310		209,286
Deferred revenue……………………………………………………………………………………………………….	492,654		495,638
Total current liabilities…………………………………………………………………………………………………….	728,948		967,547
Non-current liabilities:
Lease liabilities, net of current portion…………………………………………………………………………….	230,167		235,620
Liability-classified, stock-based awards, net of current portion………………………………………..	2,360		76,627
Deferred revenue, net of current portion………………………………………………………………………….	4,253		5,477
Note payable………………………………………………………………………………………………………………….	501,181		—
Deferred tax liabilities……………………………………………………………………………………………………..	5,358		5,970
Other liabilities……………………………………………………………………………………………………………….	16,661		16,716
Total liabilities………………………………………………………………………………………………………………..	$	1,488,928	$	1,307,957
Commitments and contingencies
Equity (deficit)
Preferred stock, par value $0.0001 per share; authorized 100,000,000 shares; no shares outstanding…………………………………………………………………………………………………………………	—		—
Class A common stock, par value $0.0001 per share; authorized 2,000,000,000 shares; issued and outstanding 89,281,956 and 6,000,000 shares as of March 31, 2021 and December 31, 2020………………………………………………………………………………………………………	9		1
Class B common stock, par value $0.0001 per share; authorized 1,000,000,000 shares; issued and outstanding 423,170,610 and 423,170,610 as of March 31, 2021 and December 31, 2020………………………………………………………………………………………………………	42		42
Additional paid in capital……………………………………………………………………………………………….	1,497,779		1,126,631
Accumulated other comprehensive income…………………………………………………………………….	1,405		3,191
Accumulated deficit………………………………………………………………………………………………………..	(1,598,621)		(1,398,767)
Total deficit…………………………………………………………………………………………………………………….	(99,386)		(268,902)
Total liabilities and deficit……………………………………………………………………………………………….	$	1,389,542	$	1,039,055

Qualtrics International Inc.
Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)

	Three Months Ended March 31,
	2021		2020
Revenue:
Subscription………………………………………………………………………………………………………….	$	186,896	$	128,265
Professional services and other…………………………………………………………………………….	51,747		47,799
Total revenue……………………………………………………………………………………………………………..	238,643		176,064
Cost of revenue:
Subscription………………………………………………………………………………………………………….	20,370		13,716
Professional services and other…………………………………………………………………………….	41,411		34,208
Total cost of revenue………………………………………………………………………………………………….	61,781		47,924
Gross profit……………………………………………………………………………………………………………….	176,862		128,140
Operating expenses:
Research and development…………………………………………………………………………………..	62,806		35,489
Sales and marketing……………………………………………………………………………………………..	136,181		107,095
General and administrative……………………………………………………………………………………	174,449		22,487
Total operating expenses…………………………………………………………………………………………..	373,436		165,071
Operating loss…………………………………………………………………………………………………………..	(196,574)		(36,931)
Other non-operating income (expense), net………………………………………………………….	(1,740)		485
Loss before income taxes…………………………………………………………………………………………..	(198,314)		(36,446)
Provision for income taxes……………………………………………………………………………………	1,540		8,389
Net loss……………………………………………………………………………………………………………………..	$	(199,854)	$	(44,835)

Net loss per share attributable to common stockholder, basic……………………………………..	$	(0.41)	$	(0.11)
Weighted-average Class A and Class B shares used in computing net loss per share attributable to common stockholder, basic…………………………………………………………………..	482,260,465		423,170,610

Operating expenses includes:

Stock-based compensation expense as follows:

	Three Months Ended March 31,
in thousands	2021		2020
Cost of subscription revenue…………………………………………………………………………………	$	2,624	$	169
Cost of professional services and other revenue……………………………………………………	4,430		89
Research and development…………………………………………………………………………………..	21,332		1,964
Sales and marketing……………………………………………………………………………………………..	22,777		3,783
General and administrative……………………………………………………………………………………	151,836		6,497
Total stock-based compensation expense, including cash settled^(a)……………………….	$	202,999	$	12,502

(a)

As a result of the SAP Acquisition, our stock-based compensation expense reflects the recognition of both equity-classified awards and liability-classified awards. Liability-classified awards are settled in cash in accordance with SAP’s employee equity compensation programs. Our stock-based compensation expense for the three months ended March 31, 2021 consisted of $203.0 million of liability-classified and equity-classified awards. During the three months ended March 31, 2021 awards of $72.0 million were settled in cash. Our stock-based compensation expense for the three months ended March 31, 2020 consisted of $12.5 million of liability-classified awards. During the three months ended March 31, 2020 awards of $98.3 million were settled in cash. Liability-classified awards are recorded according to mark-to-market accounting.

Amortization of acquired intangible assets as follows:

	Three Months Ended March 31,
in thousands	2021		2020
Cost of subscription revenue…………………………………………………………………………………	$	266	$	266
Sales and marketing………………………………………………………………………………………………	51		51
General and administrative……………………………………………………………………………………	47		47
Total amortization of acquired intangible assets……………………………………………………..	$	364	$	364

Qualtrics International Inc.
Consolidated Statements of Cash Flows
(Unaudited, in thousands)

	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities
Net loss……………………………………………………………………………………………………………………..	$	(199,854)	$	(44,835)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization……………………………………………………………………………………	7,572		6,028
Loss on disposal of property and equipment……………………………………………………………..	129		—
Reduction of right-of-use assets from operating leases………………………………………………	5,704		3,981
Stock-based compensation expense, including cash settled………………………………………	202,999		12,502
Amortization of deferred contract acquisition costs…………………………………………………….	11,213		6,747
Deferred income taxes……………………………………………………………………………………………….	(554)		160
Changes in assets and liabilities:
Accounts receivable, net………………………………………………………………………………………..	37,072		48,817
Prepaid expenses and other current assets……………………………………………………………	(1,138)		(8,984)
Deferred contract acquisitions costs……………………………………………………………………..	(13,519)		(30,384)
Other assets………………………………………………………………………………………………………….	(7,415)		(3,082)
Lease liabilities……………………………………………………………………………………………………..	(743)		(2,459)
Accounts payable………………………………………………………………………………………………….	(10,855)		(975)
Accrued liabilities………………………………………………………………………………………………….	(25,731)		(10,714)
Deferred revenue…………………………………………………………………………………………………..	(4,208)		(14,568)
Other liabilities………………………………………………………………………………………………………	1,240		4,278
Settlement of stock-based payments liabilities…………………………………………………………….	(71,997)		(98,268)
Net cash flows used in operating activities…………………………………………………………………	(70,085)		(131,756)

Cash flows from investing activities
Purchases of property and equipment………………………………………………………………………..	(11,149)		(9,073)
Net cash flows used in investing activities………………………………………………………………….	(11,149)		(9,073)

Cash flows from financing activities
Proceeds from capital contributions from SAP…………………………………………………………….	115,000		145,000
Proceeds from issuance of class A common stock, net of underwriting discounts and commissions……………………………………………………………………………………………………………..	2,244,322		—
Payment of costs related to initial public offering………………………………………………………..	(2,557)		—
Repayment of promissory note…………………………………………………………………………………..	(1,892,280)		—
Net cash flows provided by financing activities…………………………………………………………..	464,485		145,000

Effect of changes in exchange rates on cash and cash equivalents…………………………….	(606)		1,780
Net increase (decrease) in cash and cash equivalents………………………………………………..	382,645		5,951
Cash and cash equivalents at the beginning of the period………………………………………….	203,891		42,467
Cash and cash equivalents at the end of the period……………………………………………………	$	586,536	$	48,418

Qualtrics International Inc.
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited, in thousands)

Non-GAAP Gross Profit and Margin

	Three Months Ended March 31,
	2021			2020
	(In thousands)
GAAP gross profit…………………………………………………………………………………………………………………………….	$	176,862		$	128,140
Add: Stock-based compensation expense, including cash settled⁽¹⁾………………………………………………………………………………………………………………………..	7,054			258
Add: Amortization of acquired intangible assets…………………………………………………………………………………………………………………………..	266			266
Non-GAAP gross profit…………………………………………………………………………………………………………………………….	$	184,182		$	128,664
Non-GAAP gross margin………………………………………………………………………………………………………………………….	77		%	73		%

We calculate non-GAAP gross profit, as GAAP gross profit excluding equity and cash settled stock-based compensation expense allocated to cost of revenue and amortization of acquired intangible assets allocated to cost of revenue. Non-GAAP gross margin is calculated as non-GAAP gross profit divided by total revenue.

Non-GAAP Operating Income (Loss) and Margin

	Three Months Ended March 31,
	2021			2020
	(In thousands)
GAAP operating loss………………………………………………………………………………………………………………………………	$	(196,574)		$	(36,931)
Add: Stock-based compensation expense, including cash settled⁽¹⁾………………………………………………………………………………………………………………………..	202,999			12,502
Add: Amortization of acquired intangible assets…………………………………………………………………………………………………………………………..	364			364
Non-GAAP operating income (loss)……………………………………………………………………………………………………………………………	$	6,789		$	(24,065)
Non-GAAP operating margin………………………………………………………………………………………………………………………….	3		%	(14)		%

We calculate non-GAAP operating income (loss), as GAAP operating loss excluding equity and cash settled stock-based compensation expense and amortization of acquired intangible assets. Non-GAAP operating margin is calculated as non-GAAP operating loss divided by total revenue.

Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share

	Three Months Ended March 31,
	2021		2020
	(In thousands, except share and per share data)
GAAP net loss………………………………………………………………………………………………………………..	$	(199,854)	$	(44,835)
Add: Stock-based compensation expense, including cash settled⁽¹⁾………………………………..	202,999		12,502
Add: Amortization of acquired intangible assets………………………………………………………………	364		364
Add: Tax impact of the non-GAAP adjustments……………………………………………………………….	1,763		119
Non-GAAP net income (loss)………………………………………………………………………………………….	$	5,272	$	(31,850)

Weighted-average Class A and Class B shares used in computing non-GAAP net income (loss) per share attributable to common stockholder, basic and diluted……………………………	482,260,465		423,170,610
Non-GAAP net income (loss) per share attributable to common stockholder, basic and diluted……………………………………………………………………………………………………………………………	$	0.01	$	(0.08)

We calculate non-GAAP net income (loss) as GAAP net loss excluding equity and cash settled stock-based compensation expense, amortization of acquired intangible assets, and the tax impact of the non-GAAP adjustments. Non-GAAP net income (loss) per share is calculated as non-GAAP net income (loss) divided by the weighted-average Class A and Class B shares attributable to common stockholders.

Free Cash Flow and Margin

	Three Months Ended March 31,
	2021			2020
	(In thousands)
Net cash used in operating activities……………………………………………………………………………………………………………………….	$	(70,085)		$	(131,756)
Less: Capital expenditures…………………………………………………………………………………………………………………	(11,149)			(9,073)
Free cash flow………………………………………………………………………………………………………………………………	(81,234)			(140,829)
Free cash flow margin………………………………………………………………………………………………………………………….	(34)		%	(80)		%

We calculate free cash flow as net cash provided by operating activities less capital expenditures. Free cash flow margin is calculated as free cash flow divided by total revenue. We incurred significant cash outflows in connection with the settlement of liability-classified, stock-based awards in accordance with SAP’s employee equity compensation programs. Our free cash flow for the three months ended March 31, 2021 and 2020 includes $72.0 million and $98.3 million, respectively, in cash outflows related to the settlement of liability-classified, stock-based awards.

(1)

Our stock-based compensation expense reflects the recognition of both equity-classified awards and liability-classified awards. Liability-classified awards are settled in cash in accordance with SAP’s employee equity compensation programs. Liability-classified awards are recorded according to mark-to-market accounting. On January 28, 2021, the Company completed a voluntary exchange offer pursuant to which 5.4 million cash-settled legacy RSAs, RSUs, and options (Qualtrics Rights) and 1.3 million cash-settled SAP restricted stock unit (RSU) awards were exchanged into 12.8 million equity-settled Qualtrics RSU awards, representing 93% of the outstanding Qualtrics Rights and SAP RSU awards.

1	Remaining performance obligations represent all contracted future revenue that has not yet been recognized, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods.

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SOURCE Qualtrics

April 21, 2021 4:13 pm

Chipotle Announces First Quarter 2021 Results

Comparable Restaurant Sales Accelerate To 17.2%; Restaurant Level Margins Expand To 22.3%

PR Newswire

NEWPORT BEACH, Calif., April 21, 2021 /PRNewswire/ — Chipotle Mexican Grill, Inc. (NYSE: CMG) today reported financial results for its first quarter ended March 31, 2021.

First quarter highlights, year over year:

Revenue increased 23.4% to $1.7 billion
Comparable restaurant sales increased 17.2%
Digital sales grew 133.9% and accounted for 50.1% of sales
Restaurant level operating margin was 22.3%, an increase of 470 basis points
Diluted earnings per share was $4.45, net of a $0.91 after-tax impact from expenses related to the 2018 performance share (“PSU”) modification to account for the unplanned effects of COVID-19, restaurant asset impairment and closure costs, as well as corporate restructuring, a 64.8% increase from $2.70. Adjusted diluted earnings per share excluding these charges was $5.36, a 74.0% increase from $3.08¹
Opened 40 new restaurants and closed 5 restaurants

¹ Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures. Reconciliations to GAAP measures and further information are set forth in the table at the end of this press release.

“Chipotle is off to a great start in 2021 thanks to our employees and their incredible level of collaboration and tireless dedication,” said Brian Niccol, Chairman and CEO, Chipotle. “As vaccines roll out and we get closer to moving past this pandemic, I believe Chipotle is well positioned for growth. I’m excited about our future as we remain focused on innovating in culinary, leading in food with integrity, and providing convenient access inside our restaurants and through our expanding digital ecosystem.”

COVID-19 and Liquidity Update:

The health and well-being of our employees and guests continues to be our top priority. Beyond the investments made in our people, restaurants, and supply chain, we are closely following the recommendations of the CDC and local health departments and have implemented social distancing, wearing face masks, a tamper evident packaging seal for all digital orders, as well as creating the steward role to sanitize high-traffic areas. Collectively, these efforts give our employees and guests confidence that Chipotle remains steadfast in our commitment to keep them safe as we continue to increase capacity for in-restaurant dining.

As of March 31, 2021, Chipotle continues to maintain a strong financial position with nearly $1.2 billion in cash, investments and restricted cash, and no debt. We also have access to a recently refinanced $500 million untapped credit facility with which to continue to navigate this crisis. Our financial strength gives us the opportunity to make on-going strategic investments in our people, business, and communities, which we believe will benefit us for years to come.

Results for the three months ended March 31, 2021:

Revenue in the first quarter was $1.7 billion, an increase of 23.4% compared to the first quarter of 2020 and includes a 17.2% increase in comparable restaurant sales. We believe several new menu items, effective marketing, and on-going strength in digital sales, as well as a tailwind from government stimulus payments to consumers contributed to first quarter revenue growth. For Q2, we expect our comparable restaurant sales to be in the range of high twenties to 30% with quesadilla incidence normalizing, and lower marketing investment.

Digital sales grew 133.9% year over year to $869.8 million and represented 50.1% of sales. A little more than half of the digital sales were from order ahead transactions as guests increasingly appreciate both the value and convenience offered by this channel, as well as the added convenience of more Chipotlanes.

We opened 40 new restaurants during the first quarter and closed five restaurants, bringing the total restaurant count to 2,803. During the quarter, 26 of the 40 new restaurants included a Chipotlane. These formats continue to perform very well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins, and returns.

Food, beverage and packaging costs in the first quarter were 30.0% of revenue, a decrease of 280 basis points compared to the first quarter of 2020. The decrease was primarily due to the benefit of menu price increases, and to a lesser extent, a mix shift towards higher margin proteins and lower waste. These decreases were partially offset by costs associated with cauliflower rice and fewer sales of high margin beverages.

Restaurant level operating margin was 22.3%, an increase from 17.6% in the first quarter of 2020. The improvement was driven primarily by leverage from the comparable restaurant sales increase and menu price increases, partially offset by increased delivery expense and wage inflation.

General and administrative expenses for the first quarter were $155.1 million on a GAAP basis, or $129.2 million on a non-GAAP basis, excluding $24.4 million for a modification to 2018 performance shares to account for the unplanned effects of COVID-19 and $1.6 million of transformation expenses. GAAP and non-GAAP general and administrative expenses for the first quarter of 2021 also include underlying general and administrative expenses totaling $89.0 million, $29.7 million of non-cash stock compensation, and $10.2 million related to higher bonus accruals as well as payroll taxes on equity vesting and stock option exercises.

The GAAP effective income tax rate for the first quarter was 20.2%, which is lower than our expected effective income tax rate for the full year 2021, primarily due to elevated excess tax benefits related to option exercises and equity vesting in the first quarter. On a non-GAAP basis, the 2021 first quarter effective tax rate was 18.5%.

Net income for the first quarter was $127.1 million, or $4.45 per diluted share, an increase from $76.4 million, or $2.70 per diluted share, in the first quarter of 2020. Excluding the impact of PSU modifications, restaurant asset impairment and closure costs, and corporate restructuring expenses, adjusted net income was $153.1 million and adjusted diluted earnings per share was $5.36.

During the quarter, our Board of Directors approved the investment of up to an additional $100 million, exclusive of commissions, to repurchase shares of our common stock, subject to market conditions. Including this repurchase authorization, approximately $153.8 million was available as of March 31, 2021. The repurchase authorization may be modified, suspended, or discontinued at any time. We restarted the buyback program in late February and repurchased $61.2 million of stock at an average price of $1,425 during the first quarter.

More information will be available in our Quarterly Report on Form 10-Q, which will be filed with the SEC by the end of April.

Outlook

For 2021, management is anticipating the following:

Given on-going uncertainty surrounding the future impact of COVID-19 on the broader US economy and any specific impact to our company, we are not providing fiscal 2021 comparable restaurant sales growth guidance
Around 200 new restaurant openings, which assumes minimal construction and permit delays related to COVID-19
An estimated effective full year tax rate between 25% and 27%

Definitions

The following definitions apply to these terms as used throughout this release:

Comparable restaurant sales, or sales comps, and comparable restaurant transactions, represent the change in period-over-period total revenue or transactions for restaurants in operation for at least 13 full calendar months.
Average restaurant sales refer to the average trailing 12-month food and beverage revenue for restaurants in operation for at least 12 full calendar months.
Restaurant level operating margin represents total revenue less direct restaurant operating costs, expressed as a percent of total revenue.
Digital sales represent food and beverage revenue generated through the Chipotle website, Chipotle app or third-party delivery aggregators. Digital sales exclude revenue deferrals associated with Chipotle Rewards.

Conference Call Details

Chipotle will host a conference call to discuss first quarter 2021 financial results on Wednesday, April 21, 2021, at 4:30 PM Eastern time.

The conference call can be accessed live over the phone by dialing 1-888-317-6003 or for international callers by dialing 1-412-317-6061 and use code: 5215022. The call will be webcast live from the company’s website on the investor relations page at ir.chipotle.com/events. An archived webcast will be available approximately one hour after the end of the call.

About Chipotle

Chipotle Mexican Grill, Inc. (NYSE: CMG) is cultivating a better world by serving responsibly sourced, classically-cooked, real food with wholesome ingredients without artificial colors, flavors or preservatives. Chipotle had over 2,800 restaurants as of March 31, 2021, in the United States, Canada, the United Kingdom, France and Germany and is the only restaurant company of its size that owns and operates all its restaurants. With over 97,000 employees passionate about providing a great guest experience, Chipotle is a longtime leader and innovator in the food industry. Chipotle is committed to making its food more accessible to everyone while continuing to be a brand with a demonstrated purpose as it leads the way in digital, technology and sustainable business practices. Steve Ells, founder and former executive chairman, first opened Chipotle with a single restaurant in Denver, Colorado in 1993. For more information or to place an order online, visit WWW.CHIPOTLE.COM.

Forward-Looking Statements

Certain statements in this press release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about our future cash flow, new restaurant development plans and future long-term prospects. We use words such as “anticipate”, “believe”, “could”, “should”, “may”, “approximately”, “estimate”, “expect”, “potential”, “intend”, “project”, “target”, and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this press release are based on currently available operating, financial and competitive information available to us as of the date of this release and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements, including but not limited to: the ongoing adverse effect of the novel coronavirus (COVID-19) pandemic on our guest traffic, restaurant sales and operating costs as a result of actions we have taken in response to the coronavirus, including closing some restaurants, ending dine in service at some restaurants while continuing to offer only takeout and/or delivery, modifying work hours at some restaurants, extending enhanced benefits to employees working during and/or impacted by the coronavirus, increasing compensation for restaurant employees, purchasing masks, gloves and additional sanitation supplies and services and delaying the construction of new restaurant openings; risks that the impact of the coronavirus pandemic will continue for a long duration and may require a more drastic response, such as closing all or most restaurants; risks of food safety and food-borne illnesses and other health concerns about our food; risks associated with our reliance on certain information technology systems and potential failures or interruptions; privacy and cyber security risks related to our acceptance of electronic payments or electronic processing of confidential customer or employee information; the impact of competition, including from sources outside the restaurant industry; the increasingly competitive labor market and our ability to attract and retain qualified employees; the impact of federal, state or local government regulations relating to our employees, employment practices, restaurant design and construction, and the sale of food or alcoholic beverages; our ability to achieve our planned growth, such as the availability of suitable new restaurant sites; increases in ingredient and other operating costs due to our Food With Integrity philosophy, tariffs or trade restrictions and supply shortages; the uncertainty of our ability to achieve expected levels of comparable restaurant sales due to factors such as changes in consumers’ perceptions of our brand, including as a result of actual or rumored food safety concerns or other negative publicity, decreased overall consumer spending (including but not limited to the increase in unemployment caused by the coronavirus pandemic), or the inability to increase menu prices or realize the benefits of menu price increases; risks associated with our increased focus on our digital business, including risks arising from our reliance on third party delivery services, which are heightened during the pendency of government restrictions on dine in restaurant services as a result of the coronavirus pandemic; risks relating to litigation, including possible governmental actions related to food safety incidents and potential class action litigation regarding employment laws, advertising claims or other matters; and other risk factors described from time to time in our SEC reports, including our annual report on Form 10-K and quarterly reports on Form 10-Q, all of which are available on the investor relations page of our website at ir.Chipotle.com.


CHIPOTLE MEXICAN GRILL, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands, except per share data) (unaudited)

	Three months ended March 31,
	2021				2020
Food and beverage revenue	$	1,715,990	98.5	%	$	1,402,117	99.4	%
Delivery service revenue		25,585	1.5			8,655	0.6
Total revenue		1,741,575	100.0			1,410,772	100.0
Restaurant operating costs (exclusive of depreciation and amortization shown separately below):
Food, beverage and packaging		522,671	30.0			462,299	32.8
Labor		433,669	24.9			393,565	27.9
Occupancy		101,769	5.8			95,279	6.8
Other operating costs		294,710	16.9			210,762	14.9
General and administrative expenses		155,103	8.9			106,470	7.5
Depreciation and amortization		63,122	3.6			58,374	4.1
Pre-opening costs		3,421	0.2			3,566	0.3
Impairment, closure costs, and asset disposals		5,668	0.3			9,336	0.7
Total operating expenses		1,580,133	90.7			1,339,651	95.0
Income from operations		161,442	9.3			71,121	5.0
Interest and other income (expense), net		(2,168)	(0.1)			2,743	0.2
Income before income taxes		159,274	9.1			73,864	5.2
Benefit/(provision) for income taxes		(32,173)	(1.8)			2,524	0.2
Net income	$	127,101	7.3	%	$	76,388	5.4	%
Earnings per share:
Basic	$	4.52			$	2.75
Diluted	$	4.45			$	2.70
Weighted-average common shares outstanding:
Basic		28,125				27,792
Diluted		28,582				28,323
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	$	(263)			$	(1,841)
Comprehensive income	$	126,838			$	74,547



CHIPOTLE MEXICAN GRILL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)

	March 31,		December 31,
	2021		2020
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	694,776	$	607,987
Accounts receivable, net		68,449		104,500
Inventory		24,304		26,445
Prepaid expenses and other current assets		61,615		54,906
Income tax receivable		244,122		282,783
Investments		363,585		343,616
Total current assets		1,456,851		1,420,237
Leasehold improvements, property and equipment, net		1,613,670		1,584,311
Long-term investments		110,928		102,328
Restricted cash		27,863		27,849
Operating lease assets		2,858,345		2,767,185
Other assets		59,463		59,047
Goodwill		21,939		21,939
Total assets	$	6,149,059	$	5,982,896
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	147,417	$	121,990
Accrued payroll and benefits		221,677		203,054
Accrued liabilities		145,627		164,649
Unearned revenue		110,197		127,750
Current operating lease liabilities		209,086		204,756
Total current liabilities		834,004		822,199
Long-term operating lease liabilities		3,040,176		2,952,296
Deferred income tax liabilities		135,929		149,422
Other liabilities		41,419		38,844
Total liabilities		4,051,528		3,962,761
Shareholders’ equity:
Preferred stock, $0.01 par value, 600,000 shares authorized, no shares issued as of March 31, 2021 and December 31, 2020, respectively		–		–
Common stock, $0.01 par value, 230,000 shares authorized, 36,936 and 36,704 shares issued as of March 31, 2021 and December 31, 2020, respectively		369		367
Additional paid-in capital		1,606,501		1,549,909
Treasury stock, at cost, 8,777 and 8,703 common shares as of March 31, 2021 and December 31, 2020, respectively		(2,908,111)		(2,802,075)
Accumulated other comprehensive loss		(4,492)		(4,229)
Retained earnings		3,403,264		3,276,163
Total shareholders’ equity		2,097,531		2,020,135
Total liabilities and shareholders’ equity	$	6,149,059	$	5,982,896



CHIPOTLE MEXICAN GRILL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)

	Three months ended
	March 31,
	2021		2020
Operating activities
Net income	$	127,101	$	76,388
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		63,122		58,374
Amortization of operating lease assets		49,269		42,961
Deferred income tax provision		(13,482)		27,343
Impairment, closure costs, and asset disposals		4,937		8,805
Provision for credit losses		(275)		(90)
Stock-based compensation expense		55,390		17,395
Other		2,180		707
Changes in operating assets and liabilities:
Accounts receivable		32,175		25,967
Inventory		2,148		2,734
Prepaid expenses and other current assets		(8,756)		(4,158)
Other assets		(186)		(5,133)
Accounts payable		19,446		20,245
Accrued payroll and benefits		18,188		5,839
Accrued liabilities		(17,869)		(9,389)
Unearned revenue		(15,606)		(15,924)
Income tax payable/receivable		38,640		(29,179)
Operating lease liabilities		(50,902)		(40,918)
Other long-term liabilities		453		104
Net cash provided by operating activities		305,973		182,071
Investing activities
Purchases of leasehold improvements, property and equipment		(86,619)		(77,653)
Purchases of investments		(90,477)		(80,746)
Maturities of investments		60,593		99,037
Net cash used in investing activities		(116,503)		(59,362)
Financing activities
Acquisition of treasury stock		(57,229)		(54,401)
Tax withholding on stock-based compensation awards		(44,810)		(47,630)
Other financing activities		(221)		(69)
Net cash used in financing activities		(102,260)		(102,100)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(407)		(819)
Net change in cash, cash equivalents, and restricted cash		86,803		19,790
Cash, cash equivalents, and restricted cash at beginning of period		635,836		508,481
Cash, cash equivalents, and restricted cash at end of period	$	722,639	$	528,271
Supplemental disclosures of cash flow information
Income taxes paid (refunded)	$	6,909	$	(14)
Purchases of leasehold improvements, property, and equipment accrued in accounts payable and accrued liabilities	$	54,868	$	33,757
Acquisition of treasury stock accrued in accounts payable and accrued liabilities	$	3,997	$	–


CHIPOTLE MEXICAN GRILL, INC. SUPPLEMENTAL FINANCIAL AND OTHER DATA (dollars in millions) (unaudited)

	For the three months ended
	Mar. 31,		Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
	2021		2020		2020		2020		2020
Number of restaurants opened		40		61		44		37		19
Restaurant closures		(5)		(1)		(3)		(3)		(2)
Restaurant relocations		–		(2)		–		(3)		(1)
Number of restaurants at end of period		2,803		2,768		2,710		2,669		2,638
Average restaurant sales⁽¹⁾	$	2,313	$	2,223	$	2,199	$	2,161	$	2,217
Average restaurant sales, excluding delivery MPI⁽²⁾	$	2,273	$	2,200	$	2,192	$	2,161	$	2,217
Comparable restaurant sales increase (decrease)		17.2%		5.7%		8.3%		(9.8%)		3.3%

(1) Beginning in Q3 2020, we revised the definition of average restaurant sales to exclude delivery service revenues (refer to Definitions section above). We made this
change to more closely align with how management views the business and given the increase in the delivery business. Average restaurant sales in all comparative
periods presented has been updated to conform with the new definition. Average restaurant sales is a trailing 12-month measure.

(2) In Q3 2020, we began implementing delivery menu-price increases (“MPI”) to partially offset the increased cost of delivery. “Average restaurant sales, excluding
delivery MPI” represents average restaurant sales, as defined above, adjusted to remove the impact of delivery menu price increases. This is intended to illustrate our
underlying food and beverage sales per restaurant.

CHIPOTLE MEXICAN GRILL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

The following provides a reconciliation of non-GAAP financial measures presented in the text above to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Adjusted net income is net income excluding expenses related to restaurant asset impairment, corporate restructuring, stock-based compensation modification expense, and certain other costs. Adjusted general and administrative expense is general and administrative expense excluding transformation expenses, stock-based compensation modification expense, and certain other costs. The non-GAAP effective tax rate is the effective tax rate adjusted to reflect the tax effect of non-GAAP adjustments. We present these non-GAAP measures in order to facilitate meaningful evaluation of our operating performance across periods. These adjustments are intended to provide greater transparency of underlying performance and to allow investors to evaluate our business on the same basis as our management, which uses these non-GAAP measures in evaluating the company’s performance. Our adjusted net income, adjusted diluted earnings per share, and adjusted general and administrative expenses measures may not be comparable to other companies’ adjusted measures. These adjustments are not necessarily indicative of what our actual financial performance would have been during the periods presented and should be viewed in addition to, and not as an alternative to, our results prepared in accordance with GAAP. Further details regarding these adjustments are included in the tables below.



	Three months ended
	March 31,
	2021		2020
Net income	$	127,101	$	76,388
Non-GAAP adjustments:
Restaurant costs:
Operating lease asset impairment and other restaurant costs⁽¹⁾		2,299		6,154
Duplicate rent expense⁽²⁾		56		106
Corporate Restructuring:
Operating lease asset impairment and other office closure costs⁽³⁾		332		–
Duplicate rent expense⁽²⁾		1,344		951
Employee related restructuring costs⁽⁴⁾		153		389
Stock-based compensation modification expense⁽⁵⁾		24,366		1,353
Other adjustments⁽⁶⁾		–		3,840
Total non-GAAP adjustments	$	28,550	$	12,793
Tax effect of non-GAAP adjustments above		(2,518)		(2,024)
After tax impact of non-GAAP adjustments	$	26,032	$	10,769
Adjusted net income	$	153,133	$	87,157

Diluted weighted-average number of common shares outstanding		28,582		28,323
Diluted earnings per share	$	4.45	$	2.70
Adjusted diluted earnings per share	$	5.36	$	3.08

(1) Operating lease asset impairment charges, and other expenses for restaurants due to underperformance.
(2) Duplicate rent expense for the corporate headquarter relocation and office consolidation announced in May 2018 and rent expense for closed restaurants announced in June 2018.
(3) Asset impairment charges and other closure expenses for the corporate headquarter relocation and office consolidation announced in May 2018.
(4) Costs for recruitment, relocation costs, third party and other employee-related costs.
(5) For the three months ended March 31, 2021, stock-based compensation consists of a modification to 2018 performance shares. For the three months ended March 31, 2020, stock-based compensation consists of stock modification charges associated with the departure of our former Executive Chairman primarily related to his 2017 agreement.
(6) For the three months ended March 31, 2020, other adjustments consists of severance associated with the departure of our former Executive Chairman primarily related to his 2017 agreement.


CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in thousands) (unaudited) Adjusted General and Administrative Expenses

	Three months ended
	March 31,
	2021		2020
General and administrative expenses	$	155,103	$	106,470
Non-GAAP adjustments:
Transformation expenses⁽¹⁾		(1,553)		(1,446)
Stock-based compensation modification expense⁽²⁾		(24,366)		(1,353)
Other adjustments⁽³⁾		–		(3,840)
Total non-GAAP adjustments	$	(25,919)	$	(6,639)
Adjusted general and administrative expenses	$	129,184	$	99,831

(1) For the three months ended March 31, 2021, transformation expenses include duplicate rent expense for office and restaurant
closures announced in June 2018 due to the corporate restructuring and underperformance of $1,400 and employee related
restructuring costs of $153.

(2) For the three months ended March 31, 2021, stock-based compensation consists of a modification to 2018 performance shares. For
the three months ended March 31, 2020, stock-based compensation consists of stock modification charges associated with the
departure of our former Executive Chairman primarily related to his 2017 agreement.

(3) For the three months ended March 31, 2020, other adjustments consists of severance associated with the departure of our former
Executive Chairman primarily related to his 2017 agreement.

CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (unaudited) Non-GAAP Effective Tax Rate

	Three months ended
	March 31,
	2021		2020
Effective income tax rate	20.2	%	(3.4)	%
Tax effect of non-GAAP adjustments	(1.7)		2.8
Adjusted income tax rate	18.5	%	(0.6)	%

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SOURCE Chipotle Mexican Grill

April 21, 2021 4:13 pm

Spirit Airlines Reports First Quarter 2021 Results

PR Newswire

MIRAMAR, Fla., April 21, 2021 /PRNewswire/ — Spirit Airlines, Inc. (NYSE: SAVE) today reported first quarter 2021 financial results.

Ended the first quarter 2021 with $1.9 billion of unrestricted cash, cash equivalents, short-term investment securities and liquidity available under the Company’s revolving credit facility

	First Quarter 2021 As Reported Adjusted	First Quarter 2020 As Reported Adjusted
	(GAAP) (non-GAAP)¹	(GAAP) (non-GAAP)¹
Total Operating Revenues	$461.3 million $461.3 million	$771.1 million $771.1 million
EBITDA	$(28.2) million $(199.7) million	$8.0 million $8.0 million
EBITDA Margin	(6.1)% (43.3)%	1.0% 1.0%
Pre-tax Income (Loss)	$(138.2) million $(307.9) million	$(74.6) million $(74.6) million
Net Income (Loss)	$(112.3) million $(242.5) million	$(27.8) million $(58.9) million
Diluted Earnings (Loss) Per Share	$(1.15) $(2.48)	$(0.41) $(0.86)

“We were very pleased to see how well both our domestic and international network performed as demand strengthened in the last few weeks of the quarter. This strength, along with improvement in forward bookings, drove positive cash from operations for the full first quarter 2021 even when excluding the payroll support program funds received. Assuming these trends continue, we believe we can achieve a positive Adjusted EBITDA margin for the full year 2021,” said Ted Christie, Spirit’s President and Chief Executive Officer. “While acknowledging that the recovery is still in progress and may not be linear, we continue to believe we will be among the first U.S. carriers to reach sustained profitability.”

COVID-19
Since its initial onset in early 2020, the impact of the COVID-19 pandemic has evolved and continues to be fluid. Therefore, the Company’s financial and operational outlook remains subject to change. The Company continues to monitor the impact of the pandemic on its operations and financial condition, and to adjust its mitigation and operational strategies, accordingly, in order to protect the long-term sustainability and growth of the Company. Spirit has implemented measures for the safety of its Guests and Team Members as well as to mitigate the impact of COVID-19 on its financial position and operations. Please see the Company’s Quarterly Report on Form 10-Q for the period ending March 31, 2021 for additional disclosures regarding these measures.

Capacity and Operations
Load factor for the first quarter 2021 was 72.1 percent on a year-over-year capacity decrease of 26.9 percent. During the first quarter 2021, the U.S. government implemented negative COVID-19 testing requirements for all inbound international travelers entering the United States. About 12 percent of Spirit’s first quarter 2021 capacity was negatively impacted by this new regulation.

Spirit continued to deliver strong operational results during the first quarter 2021. As measured by the DOT, first quarter 2021 Completion Factor² was 98.6 percent and on-time performance² was 85.3 percent.

Revenue Performance
Total operating revenues for the first quarter 2021 were $461.3 million, a decrease of 40.2 percent year over year as a result of continued negative impacts to demand for air travel due to the COVID-19 pandemic. Early in the first quarter 2021, the Company experienced another setback in demand as the new international testing requirements were implemented and some states increased jurisdictional restrictions following spikes in COVID-19 case counts. However, in March 2021, as the vaccine rollout gained traction and jurisdictional restrictions eased, domestic and international demand rebounded strongly.

For the first quarter 2021, total revenue per passenger flight segment (“Segment”) decreased 16.4 percent year over year to $84.27. Fare revenue per Segment decreased 24.2 percent to $31.84 while non-ticket revenue per Segment decreased 10.8 percent to $52.43³. As has been the case since the start of the COVID-19 pandemic, non-ticket revenue per segment for the first quarter 2021 was impacted by the suspension or reduction of certain booking-related fees; however, as the quarter progressed and domestic and international demand strengthened, average non-ticket revenue per segment improved to above $55.00 for most of March 2021.

Cost Performance
For the first quarter 2021, total GAAP operating expenses decreased 32.0 percent year over year to $563.8 million, primarily due to the grant component of the funding received through the payroll support program (further discussed below). Adjusted operating expenses for the first quarter 2021 decreased 11.5 percent year over year to $733.5 million⁴. The decrease in adjusted operating expenses was primarily driven by reductions in various flight-volume related expenses compared to the first quarter last year, such as fuel, ground handling and distribution. These decreases were partially offset by higher aircraft rent and higher depreciation and amortization. Additionally, despite the significant decrease in flight operations compared to the first quarter last year, some variable expenses increased. Salaries, wages and benefits increased marginally due to increased costs related to Team Member benefits, primarily driven by a higher volume of health insurance claims, and landing fees and other rents also increased year over year due to rate increases at various airports Spirit serves and decreases in signatory adjustment credits.

“Our first quarter 2021 Adjusted EBITDA margin of negative 43.3 percent was better than we initially expected due to both revenue and non-fuel operating expense coming in at the better end of our range. Since the beginning of March 2021, demand trends have been progressively improving. Assuming these trends continue, we estimate our second quarter 2021 Adjusted EBITDA margin will be between negative 5 percent to breakeven, assuming a fuel price per gallon of $1.95,” said Scott Haralson, Spirit’s Chief Financial Officer. “With our industry-leading low cost structure, we remain confident that the strength of our business model will allow us to fully capitalize on the growth potential ahead of us and drive sustainable, long-term value for our shareholders.”

Fleet
Spirit took delivery of two new A320neo aircraft during the first quarter 2021, financed through direct operating leases, and purchased two A319ceo aircraft off lease. The Company ended the quarter with 159 aircraft in its fleet.

Liquidity and Capital Deployment
Spirit ended first quarter 2021 with unrestricted cash, cash equivalents, short-term investment securities and liquidity available under the Company’s revolving credit facility of $1.9 billion.

Total capital expenditures for the first quarter 2021 were approximately $92 million, primarily related to pre-delivery deposits associated with future aircraft deliveries and the purchase of two A319 aircraft off lease.

On March 12, 2021, the Company entered into the First Amendment to Credit and Guaranty Agreement (the “First Amendment”), amending its existing Senior Secured Revolving Credit Facility. The First Amendment increases the existing lending commitments by $60 million, for total lending commitments of $240 million, and extends the maturity date from March 30, 2022 to March 30, 2024. The additional $60 million remained undrawn as of March 31, 2021.

On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law. This new legislation extended the payroll support program of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) through March 31, 2021 (“PSP2”). On January 15, 2021, the Company entered into an agreement with the United States Department of the Treasury (“Treasury”) in connection with the PSP2 funding. During the first quarter of 2021, the Company received a total of $184.5 million through the PSP2, used exclusively to pay for salaries, wages and benefits for the Company’s Team Members through March 31, 2021. Of that amount, a total of $25.3 million is in the form of a low-interest, 10-year loan. Also, in connection with its participation in the PSP2, the Company issued warrants to the Treasury to purchase up to 103,761 shares of the Company’s common stock at a strike price of $24.42 per share (the closing price of the shares of the Company’s common stock on December 24, 2020). The remaining amount of $156.5 million, net of related costs, is in the form of a grant and was recognized within special credits on the Company’s condensed consolidated statements of operations during the first quarter 2021.

The American Rescue Plan Act of 2021 (“ARP”) was enacted on March 11, 2021, authorizing Treasury to provide additional assistance to passenger air carriers that received financial assistance under PSP2 (“PSP3”). Under the ARP, Treasury will provide up to $14 billion to fund the PSP3 for employees of passenger air carriers. In April 2021, the Company was notified that, subject to final execution of an agreement with Treasury, it will receive approximately $197.9 million under the PSP3 and an additional $27.7 million under the PSP2. The PSP3 extends certain restrictions imposed on participating airlines, including the restriction to refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2021.

Diluted Share Count
The Company elected to early adopt ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” effective January 1, 2021. Per ASU No. 2020-06, if the Company records a net profit, it will use the “If-Converted Method” for its convertible debt. The dilutive impact from the convertible debt under the “If-Converted Method” based on the convertible debt outstanding as of March 31, 2021 would have been 13.7 million shares had the Company recorded a net profit. The Company anticipates it will continue to use the Treasury Stock Method for the dilutive impact related to outstanding warrants.

Forward Looking Guidance

The second quarter and full year 2021 guidance items provided below are based on the Company’s current estimates, and are not a guarantee of future performance. There could be significant risks and uncertainties that could cause actual results to differ materially, including the risk factors discussed in the Company’s reports on file with the Securities and Exchange Commission. Spirit undertakes no duty to update any forward-looking statements or estimates.

	Second Quarter 2021
Capacity – Available Seat Miles (ASMs) (% Change vs. 2Q19)⁽¹⁾	Down 5.5%
Adjusted Operating Expenses ($Millions)⁽²⁾	$885 to $895
Adjusted EBITDA Margin (%)⁽²⁾	(5)% to Breakeven
Fuel Cost per Gallon ($)⁽³⁾	$1.95
Effective Tax Rate⁽²⁾	22%
	Full Year 2021
Total Capital Expenditures ($Millions)⁽⁴⁾
Pre-delivery deposits, net of refunds	$120
Other capital expenditures	$100 to $130


(1)	The Company expects that air travel demand will continue to gradually recover in 2021 and continues to closely monitor demand and will make adjustments to the flight schedule as appropriate. However, the situation continues to be fluid and actual capacity adjustments may be different than what the Company currently expects.
(2)	Excludes special items which may include loss on disposal of assets, special charges and credits, and other items which are not estimable at this time.
(3)	Includes fuel taxes and into-plane fuel cost.
(4)	Total Capital Expenditures assumes all new aircraft deliveries are either delivered under direct leases or financed through Sale/Leaseback transactions. The estimate for other capital expenditures includes the purchase of two aircraft off-lease as well as other aircraft parts, including one spare engine and other spare parts. During the first quarter 2021, the Company accelerated six aircraft deliveries to 2023 from 2025/2026, driving higher net pre-delivery deposits in 2021 than previously expected.

First Quarter 2021 Highlights

In January 2021, Spirit launched its redesigned Free Spirit® Loyalty Program with extended points expiration, additional benefits based on status and other changes. In addition, the new Spirit Saver$ Club®, formerly known as the $9 Fare Club™, expanded on existing fare discounts by providing savings on seats, shortcut boarding and security, and other options designed to make it the best value in the sky
During first quarter 2021, Spirit announced new service to Louisville, Kentucky; Milwaukee, Wisconsin; Pensacola, Florida; St. Louis, Missouri; and Puerto Vallarta, Mexico. In addition, the Company announced it is expanding its operations out of New York and Los Angeles, the two largest U.S. leisure destinations
Spirit was one of only three U.S. airlines listed on FORTUNE’s 2021 list of World’s Most Admired® Companies
Spirit was awarded Platinum status by the Airline Passenger Experience Association (APEX) Health Safety initiative powered by SimpliFlying for the airline’s efforts in ensuring the highest standards of cleanliness and sanitization. The rating was the highest of any low-fare carrier in the world, and the certification recognizes Spirit for going above and beyond the required and truly investing in health and safety for Guests and Team Members

Conference Call/Webcast Detail
Spirit will conduct a conference call to discuss these results tomorrow, April 22, 2021, at 10:00 a.m. Eastern US Time. A live audio webcast of the conference call will be available to the public on a listen-only basis at http://ir.spirit.com. An archive of the webcast will be available under “Events & Presentations” for 60 days.

About Spirit Airlines
Spirit Airlines (NYSE: SAVE) is committed to delivering the best value in the sky. We are the leader in providing customizable travel options starting with an unbundled fare. This allows our Guests to pay only for the options they choose — like bags, seat assignments and refreshments — something we call À La Smarte. We make it possible for our Guests to venture further and discover more than ever before. Our Fit Fleet® is one of the youngest and most fuel-efficient in the U.S. We serve destinations throughout the U.S., Latin America and the Caribbean and are dedicated to giving back and improving those communities. Come save with us at spirit.com. At Spirit Airlines, we go. We go for you. Investors are encouraged to read the Company’s periodic and current reports filed with or furnished to the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, for additional information regarding the Company.

End Notes

(1)	See “Reconciliation of Adjusted EBITDA to EBITDA” and “Reconciliation of Adjusted Net Income, Adjusted Pre-tax Income, and Adjusted Operating Income to GAAP Net Income” tables below for more details.
(2)	Based on preliminary data using DOT methodology for on-time performance (A:14) and completion factor.
(3)	See “Calculation of Total Non-Ticket Revenue per Passenger Flight Segment” table below for more details.
(4)	See “Reconciliation of Adjusted Operating Expenses to GAAP Operating Expenses” table below for more details.

Forward Looking Statements
Forward-Looking Statements in this report and certain oral statements made from time to time by representatives of the Company contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act) which are subject to the “safe harbor” created by those sections. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. All statements other than statements of historical facts are “forward-looking statements” for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “potential,” and similar expressions intended to identify forward-looking statements. Forward-looking statements include, without limitation, guidance for 2021 and statements regarding the Company’s intentions and expectations regarding revenues, cash burn, capacity and passenger demand, additional financing, capital spending, operating costs and expenses, taxes, EBITDA, EBITDA margin, hiring, aircraft deliveries and stakeholders, vendors and government support, as well as statements regarding the Company’s remediation of its material weakness. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward- looking statements. Factors include, among others, the extent of the impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition, and the extent of the impact of the COVID-19 pandemic on overall demand for air travel, restrictions on the Company’s business by accepting financing under the CARES Act and other related legislation, the competitive environment in our industry, our ability to keep costs low and the impact of worldwide economic conditions, including the impact of economic cycles or downturns on customer travel behavior, and other factors, as described in the Company’s filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as supplemented in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2021. Furthermore, such forward-looking statements speak only as of the date of this release. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Risks or uncertainties (i) that are not currently known to us, (ii) that we currently deem to be immaterial, or (iii) that could apply to any company, could also materially adversely affect our business, financial condition, or future results. Additional information concerning certain factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K.

SPIRIT AIRLINES, INC. Condensed Consolidated Statements of Operations (unaudited, in thousands, except per-share amounts)

	Three Months Ended March 31,		Percent
	2021	2020	Change
Operating revenues:
Passenger	$ 450,335	$ 753,550	(40.2)
Other	10,944	17,531	(37.6)
Total operating revenues	461,279	771,081	(40.2)

Operating expenses:
Salaries, wages and benefits	245,692	240,480	2.2
Aircraft fuel	142,930	213,208	(33.0)
Depreciation and amortization ⁽¹⁾	74,312	65,991	12.6
Landing fees and other rents	72,108	67,121	7.4
Aircraft rent ⁽²⁾	54,782	45,146	21.3
Maintenance, materials and repairs	29,903	34,076	(12.2)
Distribution	23,642	33,743	(29.9)
Loss on disposal of assets	1,117	—	NM
Special credits	(176,938)	—	NM
Other operating	96,261	129,308	(25.6)
Total operating expenses	563,809	829,073	(32.0)

Operating income (loss)	(102,530)	(57,992)	76.8

Other (income) expense:
Interest expense	44,806	23,878	87.6
Capitalized interest	(4,732)	(3,664)	29.1
Interest income	(4,371)	(3,593)	21.7
Other (income) expense	(52)	(19)	NM
Total other (income) expense	35,651	16,602	114.7

Income (loss) before income taxes	(138,181)	(74,594)	85.2
Provision (benefit) for income taxes	(25,860)	(46,766)	(44.7)

Net income (loss)	$ (112,321)	$ (27,828)	303.6
Basic earnings (loss) per share	$ (1.15)	$ (0.41)	180.5
Diluted earnings (loss) per share	$ (1.15)	$ (0.41)	180.5

Weighted-average shares, basic	97,775	68,521	42.7
Weighted-average shares, diluted	97,775	68,521	42.7


NM: “Not Meaningful”

(1)	Includes accelerated depreciation amounts. See Special Items table for more details.
(2)	Includes supplemental rent adjustments. See Special Items table for more details.

SPIRIT AIRLINES, INC. Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited, in thousands)

	Three Months Ended March 31,
	2021	2020
Net income (loss)	$ (112,321)	$ (27,828)
Unrealized gain on short-term investment securities and cash and cash equivalents, net of deferred taxes of $2 and $54	7	185
Interest rate derivative loss reclassified into earnings, net of taxes of $13 and $24	45	41
Other comprehensive income (loss)	$ 52	$ 226
Comprehensive income (loss)	$ (112,269)	$ (27,602)

SPIRIT AIRLINES, INC. Selected Operating Statistics (unaudited)

	Three Months Ended March 31,
Operating Statistics	2021	2020	Change
Available seat miles (ASMs) (thousands)	7,976,158	10,913,934	(26.9)	%
Revenue passenger miles (RPMs) (thousands)	5,747,555	7,948,963	(27.7)	%
Load factor (%)	72.1	72.8	(0.7)	pts
Passenger flight segments (thousands)	5,474	7,653	(28.5)	%
Block hours	107,855	157,847	(31.7)	%
Departures	40,002	58,174	(31.2)	%
Total operating revenue per ASM (TRASM) (cents)	5.78	7.07	(18.2)	%
Average yield (cents)	8.03	9.70	(17.2)	%
Fare revenue per passenger flight segment ($)	31.84	42.00	(24.2)	%
Non-ticket revenue per passenger flight segment ($)	52.43	58.75	(10.8)	%
Total revenue per passenger flight segment ($)	84.27	100.75	(16.4)	%
CASM (cents)	7.07	7.60	(7.0)	%
Adjusted CASM (cents) (1)	9.20	7.60	21.1	%
Adjusted CASM ex-fuel (cents) (2)	7.40	5.64	31.2	%
Fuel gallons consumed (thousands)	80,546	117,944	(31.7)	%
Average fuel cost per gallon ($)	1.77	1.81	(2.2)	%
Aircraft at end of period	159	151	5.3	%
Average daily aircraft utilization (hours)	7.6	11.8	(35.6)	%
Average stage length (miles)	1,040	1,021	1.9	%


(1)	Excludes operating special items.
(2)	Excludes fuel expense and operating special items.

The Company is providing a reconciliation of GAAP financial information to non-GAAP financial information as it believes that non-GAAP financial measures provide management and investors the ability to measure the performance of the Company on a consistent basis. These non-GAAP financial measures have limitations as analytical tools. Because of these limitations, determinations of the Company’s operating performance excluding unrealized gains and losses or special items should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. These non-GAAP financial measures may be presented on a different basis than other companies using similarly titled non-GAAP financial measures.

Calculation of Total Non-Ticket Revenue per Passenger Flight Segment (unaudited)

	Three Months Ended March 31,
(in thousands, except per-segment data)	2021	2020
Operating revenues
Fare	$ 174,287	$ 321,447
Non-fare	276,048	432,103
Total passenger revenues	450,335	753,550
Other revenues	10,944	17,531
Total operating revenues	$ 461,279	$ 771,081

Non-ticket revenues (1)	$ 286,992	$ 449,634

Passenger segments	5,474	7,653

Non-ticket revenue per passenger flight segment ($)	$ 52.43	$ 58.75


(1)	Non-ticket revenues equals the sum of non-fare passenger revenues and other revenues.

Special Items (unaudited)

	Three Months Ended March 31,
(in thousands)	2021	2020
Operating special items include the following:
Supplemental rent adjustments (1)	$ 4,321	$ —
Accelerated depreciation (2)	1,789	—
Loss on disposal of assets (3)	1,117	—
Operating special credits (4)	(176,938)	—
Total operating special items	$ (169,711)	$ —


(1)	Includes amounts related to supplemental rent adjustments related to the accrual of lease return costs for two aircraft purchased off lease, partially offset by the release of an accrual related to an engine lease modification.
(2)	Includes amounts related to the accelerated depreciation on current aircraft seats related to the plan to retrofit 36 aircraft with new Acro6 seats, expected to be completed in the remainder of 2021.
(3)	Includes amounts related to the sale of auxiliary power units and the disposal of excess and obsolete inventory.
(4)	Special credits consisted of $156.5 million related to the grant component of the PSP2 agreement with the Treasury and $21.3 million related to the CARES Act Employee Retention credit; partially offset by $0.8 million recorded in connection with the rehire of Team Members previously terminated under the Company’s involuntary employee separation program but which were rehired in compliance with the restrictions mandated by the Company’s participation in the PSP2 program.

Reconciliation of Adjusted Operating Expenses to GAAP Operating Expenses (unaudited)

	Three Months Ended March 31,
(in thousands, except CASM data in cents)	2021	2020
Total operating expenses, as reported	$ 563,809	$ 829,073
Less: operating special items expense (credit)	(169,711)	—
Adjusted operating expenses, non-GAAP (1)	733,520	829,073
Less: Aircraft fuel expense	142,930	213,208
Adjusted operating expenses excluding fuel, non-GAAP (2)	$ 590,590	$ 615,865

Available seat miles	7,976,158	10,913,934

CASM (cents)	7.07	7.60
Adjusted CASM (cents) (1)	9.20	7.60
Adjusted CASM ex-fuel (cents) (2)	7.40	5.64


(1)	Excludes operating special items.
(2)	Excludes operating special items and aircraft fuel expense.

Reconciliation of Adjusted EBITDA to EBITDA (unaudited)

	Three Months Ended March 31,
(in thousands)	2021	2020
Net income (loss), as reported	$ (112,321)	$ (27,828)
Add: Provision (benefit) for income taxes	(25,860)	(46,766)
Add: Total other (income) expense	35,651	16,602
Add: Depreciation and amortization (1)	74,312	65,991
EBITDA	(28,218)	7,999
EBITDA margin	(6.1)%	1.0 %
Add: Special items expense (credit) (2)	(169,711)	—
Less: Accelerated depreciation (2)	1,789	—
Adjusted EBITDA, non-GAAP (3)	$ (199,718)	$ 7,999
Adjusted EBITDA margin, non-GAAP (3)	(43.3)%	1.0 %

Total operating revenues	$ 461,279	$ 771,081


(1)	Includes accelerated depreciation amounts. See Special Items table for more details.
(2)	See “Special Items” for more details.
(3)	Excludes operating special items.

Reconciliation of Adjusted Net Income, Adjusted Pre-Tax Income, and Adjusted Operating Income to GAAP Net Income (unaudited)

	Three Months Ended March 31,
(in thousands, except per-share data)	2021	2020
Net income (loss), as reported	$ (112,321)	$ (27,828)
Add: Provision (benefit) for income taxes	(25,860)	(46,766)
Income (loss) before income taxes, as reported	(138,181)	(74,594)
Pre-tax margin	(30.0)%	(9.7)%
Add: special items expense (credit) (1)	(169,711)	—
Adjusted income (loss) before income taxes, non-GAAP (2)	(307,892)	(74,594)
Adjusted pre-tax margin, non-GAAP (2)	(66.7)%	(9.7)%
Add: Total other (income) expense	35,651	16,602
Adjusted operating income (loss), non-GAAP (2)	(272,241)	(57,992)
Adjusted operating margin, non-GAAP (2)	(59.0)%	(7.5)%

Provision (benefit) for income taxes (3)	(65,377)	(15,670)
Adjusted net income (loss), non-GAAP (2)	$ (242,515)	$ (58,924)

Weighted-average shares, diluted	97,775	68,521

Adjusted net income (loss) per share, diluted (2)	$ (2.48)	$ (0.86)

Total operating revenues	$ 461,279	$ 771,081

(1) See “Special Items” for more details. (2) Excludes operating special items. (3) 2020 amounts exclude the discrete tax benefit of $31.1 million recorded in first quarter 2020.

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SOURCE Spirit Airlines, Inc.

April 21, 2021 4:13 pm

HubSpot Announces Date of First Quarter 2021 Financial Results Release

PR Newswire

CAMBRIDGE, Mass., April 21, 2021 /PRNewswire/ — HubSpot, the customer relationship management (CRM) platform for scaling companies, announced today that it will report its first quarter 2021 financial results after the U.S. financial markets close on Wednesday, May 5, 2021.

In conjunction with this report, HubSpot will host a conference call on Wednesday, May 5, 2021, at 4:30 p.m. Eastern Time (ET) to discuss the company’s first quarter 2021 financial results and its business outlook. Participants who wish to dial into the conference call please use this dial in registration link or visit HubSpot’s Investor Relations website at ir.hubspot.com. After registering, a confirmation email will be sent, including dial-in details and a unique code for entry. We recommend registering a day in advance, or at minimum ten minutes prior to the start of the call. Participants who wish to register for the conference call webcast please use this link .

Following the conference call, a replay will be available at (800) 585-8367 (domestic) or (416) 621-4642 (international). The replay passcode is 7299990. An archived webcast of this conference call will also be available on HubSpot’s Investor Relations website at ir.hubspot.com.

About HubSpot
HubSpot (NYSE: HUBS) is a leading customer relationship management (CRM) platform that provides software and support to help companies grow better. The platform includes marketing, sales, service, operations, and website management products that start free and scale to meet our customers’ needs at any stage of growth. Today, more than 100,000 customers across more than 120 countries use HubSpot’s powerful and easy-to-use tools and integrations to attract, engage, and delight customers. Learn more at www.hubspot.com.

View original content to download multimedia:http://www.prnewswire.com/news-releases/hubspot-announces-date-of-first-quarter-2021-financial-results-release-301273937.html

SOURCE HubSpot

April 21, 2021 4:13 pm

Bright Horizons Family Solutions Announces Date of First Quarter 2021 Earnings Release and Conference Call

Bright Horizons Family Solutions Announces Date of First Quarter 2021 Earnings Release and Conference Call

NEWTON, Mass.–(BUSINESS WIRE)–
Bright Horizons Family Solutions® Inc. (NYSE: BFAM) will release results for the quarter ended March 31, 2021 on Wednesday, May 5, 2021, after the stock market closes. Following the release, the Company will host a telephone conference call with investors and analysts at 5:00 p.m. ET to discuss the first quarter 2021, the Company’s updated business outlook, its strategy and results.

Interested parties are invited to listen to the conference call by dialing 1-866-269-4260, or for international callers, 1-323-347-3277, and asking for the Bright Horizons Family Solutions conference call, moderated by Chief Executive Officer Stephen Kramer. Replays of the entire call will be available through May 26, 2021, at 1-844-512-2921, or for international callers, 1-412-317-6671, conference ID #3920830.

The first quarter 2021 earnings release and a link to the audio webcast of the conference call will be available through the Investor Relations section of the Company’s web site, www.brighthorizons.com.

About Bright Horizons Family Solutions Inc.

Bright Horizons® is a leading global provider of high-quality child care and early education, back-up care, and workplace education services. For more than 30 years, we have partnered with employers to support workforces by providing services that help working families and employees thrive personally and professionally. We operate approximately 1,000 child care centers in the United States, the United Kingdom, the Netherlands, and India, and serve more than 1,300 of the world’s leading organizations. Bright Horizons’ child care centers, back-up child and elder care, and workforce education programs, including tuition program management, education advising, and student loan repayment, help employees succeed at each life and career stage. For more information, go to www.brighthorizons.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421006012/en/

Investors:

Elizabeth Boland

Chief Financial Officer – Bright Horizons

[email protected]

617-673-8125

Michael Flanagan

Senior Director of Investor Relations – Bright Horizons

[email protected]

617-673-8720

Media:

Ilene Serpa

Vice President – Communications – Bright Horizons

[email protected]

617-673-8044

KEYWORDS: Massachusetts United States North America

INDUSTRY KEYWORDS: Children Family Consumer

MEDIA:

Logo

April 21, 2021 4:13 pm

Kornit Digital Announces Date for First Quarter 2021 Financial Results Conference Call

ROSH HA’AYIN, Israel, April 21, 2021 (GLOBE NEWSWIRE) — Kornit Digital (Nasdaq: KRNT), a company that develops, manufactures and markets industrial digital printing technologies for the textile industry, today announced that it will release its earnings results for the first quarter ended March 31, 2021 on Tuesday, May 11, 2021 before the market opens. Management will host a conference call and webcast to discuss the Company’s financial results on Tuesday, May 11^th at 8:30 am ET.

Kornit Digital First Quarter 2021 Financial Results Conference Call

When: Tuesday, May 11, 2021
Time: 8:30 am ET
Conference ID: 13719064
Live Call: 1-877-407-0792 (US/Canada Toll-Free), 1-201-689-8263 (International) or 1 809 406 247 (Israeli Toll-Free)
Replay ID: 13719064
Replay: 1-844-512-2921 (US/Canada Toll-Free) or 1-412-317-6671 (International)
(The replay will be available approximately two hours after the completion of the live call until 11:59 pm ET on May 25, 2021)

A live webcast of this conference call will be available on the “Investor Relations” page of the company’s website (https://ir.kornit.com/), and a replay will be archived on the website.

About Kornit Digital

Kornit Digital Ltd. (NASDAQ: KRNT) develops, manufactures and markets industrial digital printing technologies for the garment, apparel and textile industries. Kornit delivers complete solutions, including digital printing systems, inks, consumables, software and after-sales support. Leading the digital direct-to-garment printing market with its exclusive eco-friendly NeoPigment printing process, Kornit caters directly to the changing needs of the textile printing value chain. Kornit’s technology enables innovative business models based on web-to-print, on-demand and mass customization concepts. With its immense experience in the direct-to-garment market, Kornit also offers a revolutionary approach to the roll-to-roll textile printing industry: digitally printing with a single ink set onto multiple types of fabric with no additional finishing processes. Founded in 2002, Kornit Digital is a global company, headquartered in Israel with offices in the USA, Europe and Asia Pacific, and serves customers in more than 100 countries worldwide.

Press release

Kornit Digital
480 South Dean Street
Englewood, NJ 07631, USA
Tel: 201.608.5750
www.kornit.com

Investor contact

Monica Gould
The Blueshirt Group
[email protected]
212-871-3927

April 21, 2021 4:13 pm

Kessler Topaz Meltzer & Check, LLP Announces Investor Securities Fraud Class Action Lawsuit Filed Against Canoo Inc. – GOEV

RADNOR, Pa., April 21, 2021 (GLOBE NEWSWIRE) — The law firm of Kessler Topaz Meltzer & Check, LLP reminds investors that a securities fraud class action lawsuit has been filed in the United States District Court for the Central District of California against Canoo Inc. (NASDAQ: GOEV; GOEVW) (“Canoo”) f/k/a Hennessy Capital Acquisition Corp. IV (NASDAQ: HCAC; HCACW; HCACU) (“Hennessy Capital”) on behalf of those who purchased or acquired Canoo securities between August 18, 2020 and March 29, 2021, inclusive (the “Class Period”).

Investor Deadline Reminder: Investors who purchased or acquired Canoo securities

during the Class Period may,

no later than June 1, 2021

, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or Adrienne Bell, Esq. (484) 270-1435; toll free at (844) 887-9500; via e-mail at

[email protected]; orclick https://www.ktmc.com/canoo-class-action-lawsuit?utm_source=PR&utm_medium=Link&utm_campaign=Canoo

Canoo Holdings Ltd. (“Canoo Holdings”) was an electric vehicle (“EV”) company that touted a “unique business model that defies traditional ownership to put customers first.” On or about December 21, 2020, Canoo Holdings became a public entity via merger with Hennessy Capital, with the surviving entity named Canoo (the “Merger”).

The Class Period commences on August 18, 2020, when Hennessy Capital and Canoo Holdings issued a joint press release announcing the Merger. In its press release, Canoo Holdings touted its engineering services line and the Hyundai partnership for the co-development of a future EV platform.

On March 29, 2021, after the market closed, Canoo held a conference call in connection with its fourth quarter 2020 financial results which were released the same day. During the call, defendant, Tony Aquila, a director of Canoo since the closing of the Merger, revealed that Canoo would no longer focus on its engineering services line. The same day, Canoo also announced that Paul Balciunas, who served as the Chief Financial Officer of Canoo following the close of the Merger, had resigned, effective April 2, 2021. Following this news, Canoo’s stock price fell $2.50, or 21.19%, to close at $9.30 per share on March 30, 2021.

The complaint alleges that, throughout the Class Period, the defendants failed to disclose to investors that: (1) Canoo had decreased its focus on its plan to sell vehicles to consumers through a subscription model; (2) Canoo would deemphasize its engineering services business; (3) contrary to prior statements, Canoo did not have partnerships with original equipment manufacturers and no longer engaged in the previously announced partnership with Hyundai; and (4) as a result of the foregoing, the defendants’ positive statements about Canoo’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

Canoo investors may, no later than June 1, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.

Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.

CONTACT:

Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)
[email protected]

April 21, 2021 4:13 pm

Graco Reports Record First Quarter Results

Graco Reports Record First Quarter Results

Sales Growth in All Segments and Regions

MINNEAPOLIS–(BUSINESS WIRE)–
Graco Inc. (NYSE: GGG) today announced results for the first quarter ended March 26, 2021.

Summary

$ in millions except per share amounts

	Three Months Ended
	Mar 26, 2021		Mar 27, 2020		% Change
Net Sales	$	454.1	$	373.6	22	%
Operating Earnings	128.3		89.8		43	%
Net Earnings	105.7		72.8		45	%
Diluted Net Earnings per Common Share	$	0.61	$	0.42	45	%

Adjusted (non-GAAP): ⁽¹⁾
Net Earnings, adjusted	$	101.6	$	65.0	56	%
Diluted Net Earnings per Common Share, adjusted	$	0.58	$	0.38	53	%

(1)

Excludes impacts of excess tax benefits from stock option exercises. See Financial Results Adjusted for Comparability below for a reconciliation of adjusted non-GAAP financial measures to GAAP.

Net sales increased by 22 percent, with double-digit percentage growth in all regions and in the Industrial and Contractor segments. Favorable currency translation contributed 4 percentage points of sales growth.
Gross profit margin rate was more than 1 percentage point higher than the first quarter last year. Changes in currency translation rates accounted for over half of the increase.
Operating expense leverage for the quarter remained strong. Total operating expenses increased 9 percent primarily due to increases in sales and earnings-based expenses.
The effective income tax rate for the quarter increased 5 percentage points primarily due to a decrease in excess tax benefits related to stock option exercises.

“I am pleased with Graco’s performance in the first quarter, where we achieved organic, constant currency growth in every region and reportable segment,” said Patrick J. McHale, Graco’s President and CEO. “We are continuing to see strong performance from our Contractor segment and improving demand in both our Industrial and Process groups. Our manufacturing and purchasing teams performed well to meet the increase in demand in spite of external supply chain challenges.”

Consolidated Results

Net sales for the quarter increased 22 percent from the comparable period last year (18 percent at consistent translation rates). Sales increased 18 percent in the Americas, 25 percent in EMEA (17 percent at consistent translation rates) and 30 percent in Asia Pacific (22 percent at consistent translation rates). Changes in currency translation rates increased worldwide sales by $11 million for the quarter (4 percentage points).

Gross profit margin rate for the quarter increased by 1 percentage point from the comparable period last year. Favorable changes in currency translation rates, realized pricing and higher production volume were partially offset by the unfavorable effects of material costs and product and channel mix.

Total operating expenses for the quarter increased $10 million (9 percentage points) mostly due to increases in sales and earnings-based expenses and product development spending.

Other non-operating expenses decreased $5 million for the quarter mostly due to favorable market valuation changes on investments held to fund certain retirement benefits liabilities.

The effective income tax rate for the first quarter was 16 percent, up 5 percentage points from the comparable period last year, primarily due to a decrease in excess tax benefits related to stock option exercises.

Segment Results

Management assesses performance of segments by reference to operating earnings excluding unallocated corporate expenses. For a reconciliation of segment operating earnings to consolidated operating earnings, refer to the segment information table included in the financial statement section of this release. Certain measurements of segment operations are summarized below:

	Three Months
	Industrial			Process			Contractor
Net Sales (in millions)	$	184.7		$	91.4		$	178.0
Percentage change from last year
Sales	16		%	6		%	38		%
Operating earnings	30		%	20		%	68		%
Operating earnings as a percentage of sales
2021	35		%	24		%	27		%
2020	32		%	21		%	22		%

Components of net sales change by geographic region for the Industrial segment were as follows:

	Three Months
	Volume and Price	Acquisitions and Divestitures	Currency	Total
Americas	8%	0%	0%	8%
EMEA	14%	0%	9%	23%
Asia Pacific	19%	0%	7%	26%
Consolidated	12%	0%	4%	16%

Increased activity in worldwide manufacturing facilities contributed to Industrial segment sales growth in the first quarter. Changes in currency translation rates, realized pricing, higher production volume and expense leverage drove the first quarter operating margin rate 3 percentage points higher than last year.

Components of net sales change by geographic region for the Process segment were as follows:

	Three Months
	Volume and Price	Acquisitions and Divestitures	Currency	Total
Americas	2%	1%	0%	3%
EMEA	(3)%	(7)%	4%	(6)%
Asia Pacific	38%	(15)%	7%	30%
Consolidated	7%	(3)%	2%	6%

The Process segment had organic sales growth in most applications for the quarter. Favorable changes in currency translation rates and the impact of divested operations combined to increase the first quarter operating margin rate.

Components of net sales change by geographic region for the Contractor segment were as follows:

	Three Months
	Volume and Price	Acquisitions and Divestitures	Currency	Total
Americas	34%	0%	0%	34%
EMEA	38%	0%	12%	50%
Asia Pacific	36%	0%	10%	46%
Consolidated	35%	0%	3%	38%

Contractor segment sales increased by double-digit percentages in all regions. Operating margin rates for this segment increased 5 percentage points driven by higher sales and favorable expense leverage, partially offset by unfavorable product and channel mix.

Outlook

“Improvement in our end markets and our incoming order rates bode well for continued success in the second quarter, ” said McHale. “However, we are cautious on the longer term outlook as uncertainty remains in the overall demand environment. We will continue to execute on our core growth strategies.”

Financial Results Adjusted for Comparability

Excluding the impact of excess tax benefits related to stock option exercises presents a more consistent basis for comparison of financial results. A calculation of the non-GAAP measurements of adjusted income taxes, effective income tax rates, net earnings and diluted earnings per share follows (in millions except per share amounts):

	Three Months Ended
	Mar 26, 2021			Mar 27, 2020

Earnings before income taxes	$	125.7		$	82.1

Income taxes, as reported	$	20.0		$	9.3
Excess tax benefit from option exercises	4.1			7.8
Income taxes, adjusted	$	24.1		$	17.1

Effective income tax rate
As reported	15.9		%	11.3		%
Adjusted	19.2		%	20.8		%

Net Earnings, as reported	$	105.7		$	72.8
Excess tax benefit from option exercises	(4.1)			(7.8)
Net Earnings, adjusted	$	101.6		$	65.0

Weighted Average Diluted Shares	173.8			172.6
Diluted Earnings per Share
As reported	$	0.61		$	0.42
Adjusted	$	0.58		$	0.38

Cautionary Statement Regarding Forward-Looking Statements

The Company desires to take advantage of the “safe harbor” provisions regarding forward-looking statements of the Private Securities Litigation Reform Act of 1995 and is filing this Cautionary Statement in order to do so. From time to time various forms filed by our Company with the Securities and Exchange Commission, including our Form 10-K, Form 10-Qs and Form 8-Ks, and other disclosures, including our overview report, press releases, earnings releases, analyst briefings, conference calls and other written documents or oral statements released by our Company, may contain forward-looking statements. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” and similar expressions, and reflect our Company’s expectations concerning the future. All forecasts and projections are forward-looking statements. Forward-looking statements are based upon currently available information, but various risks and uncertainties may cause our Company’s actual results to differ materially from those expressed in these statements. The Company undertakes no obligation to update these statements in light of new information or future events.

Future results could differ materially from those expressed due to the impact of changes in various factors. These risk factors include, but are not limited to: the impact of the COVID-19 pandemic on our business; economic conditions in the United States and other major world economies; our Company’s growth strategies, which include making acquisitions, investing in new products, expanding geographically and targeting new industries; changes in currency translation rates; the ability to meet our customers’ needs and changes in product demand; supply interruptions or delays; security breaches; new entrants who copy our products or infringe on our intellectual property; risks incident to conducting business internationally; catastrophic events; changes in laws and regulations; compliance with anti-corruption and trade laws; changes in tax rates or the adoption of new tax legislation; the possibility of asset impairments if acquired businesses do not meet performance expectations; political instability; results of and costs associated with litigation, administrative proceedings and regulatory reviews incident to our business; our ability to attract, develop and retain qualified personnel; the possibility of decline in purchases from a few large customers of the Contractor segment, variations in activity in the construction, automotive, mining and oil and natural gas industries, and the impact of declines in interest rates, asset values and investment returns on pension costs and required pension contributions. Please refer to Item 1A of our Annual Report on Form 10-K for fiscal year 2020 (and most recent Form 10-Q) for a more comprehensive discussion of these and other risk factors. These reports are available on the Company’s website at www.graco.com and the Securities and Exchange Commission’s website at www.sec.gov. Shareholders, potential investors and other readers are urged to consider these factors in evaluating forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

Investors should realize that factors other than those identified above and in Item 1A might prove important to the Company’s future results. It is not possible for management to identify each and every factor that may have an impact on the Company’s operations in the future as new factors can develop from time to time.

Conference Call

Graco management will hold a conference call, including slides via webcast, with analysts and institutional investors on Thursday, April 22, 2021, at 11 a.m. ET, 10 a.m. CT, to discuss Graco’s first quarter results.

A real-time listen-only webcast of the conference call will be broadcast by Nasdaq. Individuals can access the call and view the slides on the Company’s website at www.graco.com. Listeners should go to the website at least 15 minutes prior to the live conference call to install any necessary audio software.

For those unable to listen to the live event, a replay will be available soon after the conference call at Graco’s website, or by telephone beginning at approximately 2 p.m. ET on Thursday, April 22, 2021, by dialing 855-859-2056, Conference ID # 6165727, if calling within the U.S. or Canada. The dial-in number for international participants is 404-537-3406, with the same Conference ID #. The replay by telephone will be available through 2 p.m. ET on Thursday, April 29, 2021.

About Graco

Graco Inc. supplies technology and expertise for the management of fluids and coatings in both industrial and commercial applications. It designs, manufactures and markets systems and equipment to move, measure, control, dispense and spray fluid and powder materials. A recognized leader in its specialties, Minneapolis-based Graco serves customers around the world in the manufacturing, processing, construction and maintenance industries. For additional information about Graco Inc., please visit us at www.graco.com.

GRACO INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In thousands except per share amounts)

	Three Months Ended
	Mar 26, 2021		Mar 27, 2020
Net Sales	$	454,129	$	373,567
Cost of products sold	206,795		174,936
Gross Profit	247,334		198,631
Product development	19,571		17,081
Selling, marketing and distribution	62,228		57,388
General and administrative	37,249		34,350
Operating Earnings	128,286		89,812
Interest expense	2,428		2,486
Other expense, net	121		5,223
Earnings Before Income Taxes	125,737		82,103
Income taxes	20,050		9,285
Net Earnings	$	105,687	$	72,818
Net Earnings per Common Share
Basic	$	0.63	$	0.43
Diluted	$	0.61	$	0.42
Weighted Average Number of Shares
Basic	168,948		167,977
Diluted	173,848		172,642

SEGMENT INFORMATION (Unaudited) (In thousands)

	Three Months Ended
	Mar 26, 2021			Mar 27, 2020
Net Sales
Industrial	$	184,732		$	158,684
Process	91,373			86,078
Contractor	178,024			128,805
Total	$	454,129		$	373,567
Operating Earnings
Industrial	$	65,243		$	50,233
Process	21,733			18,111
Contractor	48,166			28,630
Unallocated corporate (expense)	(6,856		)	(7,162		)
Total	$	128,286		$	89,812

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005987/en/

Financial Contact: Mark Sheahan, 612-623-6656

Media Contact: Charlotte Boyd, 612-623-6153

[email protected]

KEYWORDS: United States North America Minnesota

INDUSTRY KEYWORDS: Chemicals/Plastics Manufacturing

MEDIA:

Logo

April 21, 2021 4:13 pm

John B. Sanfilippo & Son, Inc. 3rd Quarter Fiscal 2021 Operating Results Conference Call

Elgin, IL, April 21, 2021 (GLOBE NEWSWIRE) — John B. Sanfilippo & Son, Inc. (NASDAQ: JBSS), a major processor and distributor of snack and recipe nut products, will hold its quarterly conference call to discuss its third quarter fiscal 2021 operating results on Thursday, April 29, 2021 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). Third quarter fiscal 2021 results are expected to be released after the market closes on Wednesday, April 28, 2021.

The dial-in numbers for this call are 1-844-536-5471 from the U.S. or 1-614-999-9317 internationally and enter the participant passcode of 8276508.

This call is being webcast by Intrado Digital Media and can be accessed at John B. Sanfilippo & Son, Inc.’s Web site at www.jbssinc.com.

John B. Sanfilippo & Son, Inc. is a processor, packager, marketer and distributor of nut and dried fruit based products that are sold under a variety of private brands and under the Company’s Fisher®, Orchard Valley Harvest®,Squirrel Brand®, Southern Style Nuts® and Sunshine Country® brand names.

Michael J. Valentine
Chief Financial Officer
847-214-4509

Frank Pellegrino
Executive Vice President of Finance and Administration
847-214-4138

April 21, 2021 4:13 pm

RLI Reports First Quarter 2021 Results

RLI Reports First Quarter 2021 Results

PEORIA, Ill.–(BUSINESS WIRE)–
RLI Corp. (NYSE: RLI) – RLI Corp. reported first quarter 2021 net earnings of $73.0 million ($1.60 per share), compared to a net loss of $61.3 million (-$1.36 per share) for the first quarter of 2020. Operating earnings⁽¹⁾ for the first quarter of 2021 were $39.6 million ($0.87 per share), compared to $29.8 million ($0.66 per share) for the same period in 2020.

	First Quarter
Earnings Per Diluted Share	2021		2020
Net earnings (loss)	$	1.60	$	(1.36	)
Operating earnings ⁽¹⁾	$	0.87	$	0.66

(1) See discussion below: Non-GAAP and Performance Measures.

Highlights for the quarter included:

Underwriting income⁽¹⁾ of $29.9 million on a combined ratio⁽¹⁾ of 86.9.
Gross premiums written increased 20%, up 10% when adjusting for the return of premium to transportation customers impacted by the pandemic in 2020.
Net favorable development in prior years’ loss reserves, resulting in a $31.4 million net increase in underwriting income.
Losses from winter storms, resulting in a $13.6 million net decrease in underwriting income.
Book value per share of $25.55, an increase of 2% (inclusive of dividends) from year-end 2020.

“We are proud to report excellent first quarter results,” said RLI Corp. Chairman and CEO Jonathan E. Michael. “Despite an active winter storm season, we achieved an 87 combined ratio while continuing to find growth opportunities across our portfolio. Premium volume was up over last year in all three segments, primarily driven by rate increases and expanded distribution. Looking ahead, we will continue to build on our 25 consecutive years of underwriting profitability and focus on growing book value, which is possible through the dedication of our employee owners.”

Underwriting Income

RLI achieved $29.9 million of underwriting income in the first quarter of 2021 on an 86.9 combined ratio, compared to $17.2 million on a 92.0 combined ratio in 2020.

Results for both years include net favorable development in prior years’ loss reserves, which totaled $31.4 million and $12.9 million for 2021 and 2020, respectively.

The following table highlights underwriting income and combined ratios by segment.

Underwriting Income (Loss)⁽¹⁾							Combined Ratio⁽¹⁾
(in millions)	2021			2020				2021		2020
Casualty	$	24.9		$	(1.3	)	Casualty		83.3		100.9
Property		(1.0	)		9.9		Property		101.9		77.7
Surety		6.0			8.6		Surety		78.5		68.9
Total	$	29.9		$	17.2		Total		86.9		92.0

(1) See discussion below: Non-GAAP and Performance Measures.

Other Income

Net investment income for the quarter decreased 7.6% to $16.4 million, compared to the same period in 2020. The investment portfolio’s total return was 0.2% for the quarter.

RLI’s comprehensive earnings were $28.3 million for the quarter ($0.62 per share), compared to a comprehensive loss of $74.3 million (-$1.65 per share) for the same quarter in 2020. In addition to net earnings, comprehensive earnings (loss) included after-tax unrealized gains/(losses) from the fixed income portfolio.

Equity in earnings of Maui Jim, Inc., a producer of premium sunglasses, was $3.7 million for the quarter. Equity in earnings of Prime Holdings Insurance Services, Inc., a specialty insurance company, was $3.7 million. Comparatively, for the first quarter of 2020, equity in earnings of unconsolidated investees from Maui Jim and Prime was $2.6 million and $1.9 million, respectively.

Dividends Paid in the First Quarter of 2021

On March 19, 2021, the company paid a regular quarterly dividend of $0.24 per share, the same amount as the prior quarter. RLI’s cumulative dividends total more than $495 million paid over the last five years.

Non-GAAP and Performance Measures

Management has included certain non-generally accepted accounting principles (non-GAAP) financial measures in presenting the company’s results. Management believes that these non-GAAP measures further explain the company’s results of operations and allow for a more complete understanding of the underlying trends in the company’s business. These measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (GAAP). In addition, our definitions of these items may not be comparable to the definitions used by other companies.

Operating earnings and earnings per share (EPS) from operations consist of our GAAP net earnings adjusted by the net realized gains/(losses), net unrealized gains/(losses) on equity securities and taxes related thereto. Net earnings and net earnings per share are the GAAP financial measures that are most directly comparable to operating earnings and EPS from operations. A reconciliation of the operating earnings and EPS from operations to the comparable GAAP financial measures is included in the 2021 financial highlights below.

Underwriting income or profit represents the pretax profitability of our insurance operations and is derived by subtracting loss and settlement expenses, policy acquisition costs and insurance operating expenses from net premium earned, which are all GAAP financial measures. The combined ratio, which is derived from components of underwriting income, is a performance measure commonly used by property and casualty insurance companies and is calculated as the sum of loss and settlement expenses, policy acquisition costs and insurance operating expenses, divided by net premiums earned, which are all GAAP measures.

Other News

At 10 a.m. central daylight time (CDT) tomorrow, April 22, 2021, RLI management will hold a conference call to discuss quarterly results with insurance industry analysts. Interested parties may listen to the discussion through the Internet at https://edge.media-server.com/mmc/p/32ig7qpn.

Except for historical information, this news release may include forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) including, without limitation, statements reflecting our current expectations about the future performance of our company or our business segments or about future market conditions. These statements are subject to certain risk factors that could cause actual results to differ materially. Various risk factors that could affect future results are listed in the company’s filings with the Securities and Exchange Commission, including the Form 10-K Annual Report for the year ended December 31, 2020.

About RLI

RLI Corp. (NYSE: RLI) is a specialty insurer serving niche property, casualty and surety markets. The company provides deep underwriting expertise and superior service to commercial and personal lines customers nationwide. RLI’s products are offered through its insurance subsidiaries – RLI Insurance Company, Mt. Hawley Insurance Company and Contractors Bonding and Insurance Company. All of RLI’s insurance subsidiaries are rated A+ (Superior) by AM Best Company. RLI has paid and increased regular dividends for 45 consecutive years and delivered underwriting profits for 25 consecutive years. To learn more about RLI, visit www.rlicorp.com.

Supplemental disclosure regarding the earnings impact of specific items:

		Reserve Development and Catastrophe Losses, Net of Reinsurance
		Three Months Ended March 31,
(Dollars in thousands, except per share amounts)		2021			2020
Net favorable development in casualty prior years’ reserves		$	28.2		$	6.4
Net favorable development in property prior years’ reserves		$	6.1		$	4.8
Net favorable development in surety prior years’ reserves		$	2.8		$	4.0

Net incurred losses related to:
	2021 storms	$	(16.0	)	$	–
	2020 and prior events	$	–		$	(0.5	)

			Operating Earnings Per Share
			Three Months Ended March 31,
			2021			2020
Operating Earnings Per Share⁽¹⁾			$	0.87		$	0.66

Specific items included in operating earnings per share:^{(2) (3)}
	Net favorable development in casualty prior years’ reserves		$	0.44		$	0.12
	Net favorable development in property prior years’ reserves		$	0.08		$	0.05
	Net favorable development in surety prior years’ reserves		$	0.03		$	0.06

	Net incurred losses related to:
		2021 storms	$	(0.24	)	$	–
		2020 and prior events	$	–		$	(0.01	)

(1)	See discussion above: Non-GAAP and Performance Measures.
(2)	Includes incentive and profit sharing-related impacts which affected policy acquisition, insurance operating and general corporate expenses.
(3)	Reserve development reflects changes from previously estimated losses.

RLI CORP 2021 FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts)

	Three Months Ended March 31,
SUMMARIZED INCOME STATEMENT DATA:		2021				2020			% Change
Net premiums earned	$	228,595			$	215,582				6.0		%
Net investment income		16,424				17,778				(7.6	)	%
Net realized gains		14,150				15,152				(6.6	)	%
Net unrealized gains (losses) on equity securities		28,162				(130,395	)		NM
Consolidated revenue	$	287,331			$	118,117				143.3		%
Loss and settlement expenses		104,892				111,021				(5.5	)	%
Policy acquisition costs		74,990				72,941				2.8		%
Insurance operating expenses		18,796				14,381				30.7		%
Interest expense on debt		1,901				1,897				0.2		%
General corporate expenses		3,342				1,755				90.4		%
Total expenses	$	203,921			$	201,995				1.0		%
Equity in earnings of unconsolidated investees		6,424				4,514				42.3		%
Earnings (loss) before income taxes	$	89,834			$	(79,364	)		NM
Income tax expense (benefit)		16,822				(18,097	)		NM
Net earnings (loss)	$	73,012			$	(61,267	)		NM

Other comprehensive earnings (loss), net of tax		(44,747	)			(13,031	)			243.4		%
Comprehensive earnings (loss)	$	28,265			$	(74,298	)		NM

Operating earnings⁽¹⁾:
Net earnings (loss)	$	73,012			$	(61,267	)		NM
Less:
Realized gains		(14,150	)			(15,152	)			(6.6	)	%
Income tax on realized gains		2,972				3,182				(6.6	)	%
Unrealized (gains) losses on equity securities		(28,162	)			130,395			NM
Income tax on unrealized gains (losses) on equity securities		5,914				(27,383	)		NM
Operating earnings	$	39,586			$	29,775				33.0		%

Return on Equity:
Net earnings (trailing four quarters)	27.2			%		6.8		%
Comprehensive earnings (trailing four quarters)	29.5			%	9.4			%

Per Share Data:
Diluted:
Weighted average shares outstanding (in 000’s)		45,674				44,920

Net earnings (loss) per share	$	1.60			$	(1.36	)		NM
Less:
Realized gains		(0.31	)			(0.34	)			(8.8	)	%
Income tax on realized gains		0.07				0.07				0.0		%
Unrealized (gains) losses on equity securities		(0.62	)			2.90			NM
Income tax on unrealized gains (losses) on equity securities		0.13				(0.61	)		NM
EPS from operations⁽¹⁾	$	0.87			$	0.66				31.8		%

Comprehensive earnings (loss) per share	$	0.62			$	(1.65	)		NM

Cash dividends per share – ordinary	$	0.24			$	0.23				4.3		%

Net Cash Flow provided by (used in) Operations	$	60,287			$	(5,767	)		NM

(1) See discussion above: Non-GAAP and Performance Measures.
NM = Not Meaningful

RLI CORP 2021 FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in thousands, except per share amounts)

	March 31,		December 31,
		2021		2020	% Change
SUMMARIZED BALANCE SHEET DATA:
Fixed income, at fair value	$	2,175,869	$	2,196,626		(0.9	)	%
(amortized cost – $2,096,852 at 3/31/21)
(amortized cost – $2,061,467 at 12/31/20)
Equity securities, at fair value		555,209		524,006		6.0		%
(cost – $298,926 at 3/31/21)
(cost – $293,190 at 12/31/20)
Other invested assets		50,413		54,232		(7.0	)	%
Cash and cash equivalents		94,935		62,217		52.6		%
Total investments and cash	$	2,876,426	$	2,837,081		1.4		%

Premiums and reinsurance balances receivable		149,736		174,628		(14.3	)	%
Ceded unearned premiums		111,071		113,488		(2.1	)	%
Reinsurance balances recoverable on unpaid losses		454,921		443,729		2.5		%
Deferred policy acquisition costs		92,595		88,425		4.7		%
Property and equipment		50,470		51,406		(1.8	)	%
Investment in unconsolidated investees		134,314		128,382		4.6		%
Goodwill and intangibles		53,617		53,719		(0.2	)	%
Other assets		49,290		47,627		3.5		%
Total assets	$	3,972,440	$	3,938,485		0.9		%

Unpaid losses and settlement expenses	$	1,795,275	$	1,750,049		2.6		%
Unearned premiums		590,364		586,386		0.7		%
Reinsurance balances payable		26,560		42,265		(37.2	)	%
Funds held		85,572		81,747		4.7		%
Income taxes – deferred		74,624		80,235		(7.0	)	%
Bonds payable, long-term debt		149,536		149,489		0.0		%
Accrued expenses		45,784		75,925		(39.7	)	%
Other liabilities		49,939		36,411		37.2		%
Total liabilities	$	2,817,654	$	2,802,507		0.5		%
Shareholders’ equity		1,154,786		1,135,978		1.7		%
Total liabilities & shareholders’ equity	$	3,972,440	$	3,938,485		0.9		%

OTHER DATA:
Common shares outstanding (in 000’s)		45,203		45,143

Book value per share	$	25.55	$	25.16		1.6		%
Closing stock price per share	$	111.57	$	104.15		7.1		%

Statutory surplus	$	1,187,640	$	1,121,592		5.9		%

RLI CORP 2021 FINANCIAL HIGHLIGHTS UNDERWRITING SEGMENT DATA (Unaudited) (Dollars in thousands, except per share amounts)

Three Months Ended March 31,
					GAAP						GAAP					GAAP					GAAP
		Casualty			Ratios			Property			Ratios			Surety		Ratios			Total		Ratios
	2021

Gross premiums written		$	188,896					$	74,537					$	31,462				$	294,895
Net premiums written			148,891						55,986						30,112					234,989
Net premiums earned			148,770						51,642						28,183					228,595
Net loss & settlement expenses			70,247			47.2	%		31,637			61.3	%		3,008		10.7	%		104,892		45.9	%
Net operating expenses			53,656			36.1	%		21,010			40.6	%		19,120		67.8	%		93,786		41.0	%
Underwriting income (loss)⁽¹⁾		$	24,867			83.3	%	$	(1,005	)		101.9	%	$	6,055		78.5	%	$	29,917		86.9	%

2020

Gross premiums written		$	159,236					$	56,721					$	29,875				$	245,832
Net premiums written			127,177						41,427						28,499					197,103
Net premiums earned			143,420						44,348						27,814					215,582
Net loss & settlement expenses			94,265			65.7	%		15,971			36.0	%		785		2.8	%		111,021		51.5	%
Net operating expenses			50,478			35.2	%		18,469			41.7	%		18,375		66.1	%		87,322		40.5	%
Underwriting income (loss)⁽¹⁾		$	(1,323	)		100.9	%	$	9,908			77.7	%	$	8,654		68.9	%	$	17,239		92.0	%

(1)	See discussion above: Non-GAAP and Performance Measures.

Category: Earnings Release

View source version on businesswire.com: https://www.businesswire.com/news/home/20210421005882/en/

Aaron Diefenthaler

Vice President, Chief Investment Officer & Treasurer

309-693-5846

[email protected]

KEYWORDS: United States North America Illinois

INDUSTRY KEYWORDS: Insurance Professional Services

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