Market Newsdesk

April 28, 2021 4:33 pm

Arcutis to Present at the 2021 Truist Securities Life Sciences Summit

WESTLAKE VILLAGE, Calif., April 28, 2021 (GLOBE NEWSWIRE) — Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT), a late-stage biopharmaceutical company focused on developing and commercializing treatments for unmet needs in immune-mediated dermatological diseases and conditions, or immuno-dermatology, today announced that Arcutis management will participate in a virtual fireside chat during the 2021 Truist Securities Life Sciences Summit taking place May 4-5, 2021.

Details for the presentation are as follows:
        2021 Truist Securities Life Sciences Summit
        Fireside Chat Date: Wednesday, May 5, 2021
        Fireside Chat Time: 1:00 p.m. ET

The presentation will be webcast and may be accessed at the “Events & Presentations” section of the Company’s website at https://investors.arcutis.com/events-and-presentations. Arcutis will maintain an archived replay of the webcast on its website for 30 days after the conference.

About Arcutis – Bioscience, applied to the skin.

Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT) is a late-stage biopharmaceutical company focused on developing and commercializing treatments for unmet needs in immune-mediated dermatological diseases and conditions, or immuno-dermatology. The company is leveraging recent advances in immunology and inflammation to develop differentiated therapies against biologically validated targets to solve persistent treatment challenges in serious diseases of the skin. Arcutis’ robust pipeline includes four novel drug candidates currently in development for a range of inflammatory dermatological conditions. The company’s lead product candidate, topical roflumilast, has the potential to revitalize the standard of care for plaque psoriasis, atopic dermatitis, scalp psoriasis, and seborrheic dermatitis. For more information, visit https://www.arcutis.com or follow the company on LinkedIn and Twitter.

Investors and Media:

Heather Rowe Armstrong
Vice President, Investor Relations & Corporate Communications
[email protected]
805-418-5006, Ext. 740

April 28, 2021 4:33 pm

Coeur Reports First Quarter 2021 Results

Coeur Reports First Quarter 2021 Results

Reaffirms Full-Year 2021 Guidance

CHICAGO–(BUSINESS WIRE)–
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported first quarter 2021 financial results, including revenue of $202.1 million, cash flow from operating activities of $(4.4) million and GAAP net income from continuing operations of $2.1 million, or $0.01 per share. On an adjusted basis¹, the Company reported EBITDA of $65.9 million, cash flow from operating activities before changes in working capital of $41.6 million and net income from continuing operations of $13.9 million, or $0.06 per share.

The Company also reaffirmed its full-year 2021 production guidance of 322,500 – 367,500 ounces of gold and 9.7 – 12.2 million ounces of silver. Additionally, full-year cost, exploration and capital expenditure guidance was reaffirmed.

Key Highlights

Higher margins helped drive a stronger start to the year – Coeur’s first quarter results reflect a strong start to the year led by solid production and higher prices. Notably, quarterly revenue, operating cash flow before changes in working capital¹ and adjusted EBITDA¹ increased 17%, 38% and 42% year-over-year, respectively
Solid gold production and unit costs – The Company’s gold production of 85,225 ounces exceeded expectations for the quarter, tracking well towards its full-year guidance range. Additionally, all of the Company’s site-level gold unit costs were either below or within their full-year guidance ranges
Further enhanced liquidity and balance sheet – Coeur successfully refinanced its 5.875% senior notes due 2024 with 5.125% senior notes due 2029, capturing a lower interest rate, extending the maturity and opportunistically upsizing the offering. The Company also extended the maturity of its senior secured revolving credit facility (“RCF”) from October 2022 to March 2025. Together, these efforts improved Coeur’s liquidity profile and bolstered its balance sheet, helping to enhance financial flexibility ahead of a period of planned capital intensity
Commenced major construction on Rochester expansion – The Company began major construction on the Plan of Operations Amendment 11 (“POA 11”) expansion at its Rochester mine. Overall project progress was approximately 20% complete at the end of the first quarter. Key elements of the project timeline remain on schedule and are expected to be largely completed by late next year
Encouraging results from aggressive investment in exploration – Following its successful program in 2020, Coeur began the year with the largest exploration campaign in Company history. The Company invested approximately $14.9 million ($9.7 million expensed and $5.2 million capitalized) in exploration during the quarter, drilling roughly 250,500 feet (76,375 meters) across all sites. Drilling activities at Silvertip and Crown ramped up significantly during the quarter, while Coeur’s other sites continued to advance their resource expansion and infill programs

“Our first quarter results were in-line with our expectations driven by strong gold production performance across our portfolio of assets, which led to double digit year-over-year increases in quarterly revenue, adjusted EBITDA¹ and operating cash flow before changes in working capital¹,” said Mitchell J. Krebs, President and Chief Executive Officer. “Additionally, we achieved an important milestone by commencing major construction on the expansion of our Rochester mine in Nevada. The project remains on track and is expected to be largely completed by late next year, helping to drive an anticipated step change in production and cash flow.”

Mr. Krebs continued, “We took advantage of the low interest rate environment in March to opportunistically refinance our senior notes and extend the maturity of our RCF, which fortified our financial flexibility as we head into a phase of significant planned capital investment this year and next. On the exploration front, we are seeing early encouraging results as we execute on the largest drilling campaign in Company history. By following our strategy, adhering to our capital allocation framework, and executing our near-, medium- and long-term objectives, we are confident in our ability to maximize cash flow, returns and net asset value for our stockholders.”

Financial and Operating Highlights (Unaudited)

*(Amounts in millions, except per share amounts, gold/silver ounces produced & sold, and per-ounce metrics)*	1Q 2021			4Q 2020		3Q 2020		2Q 2020			1Q 2020
Gold Sales	$	138.3		$	162.0	$	167.1	$	127.9		$	127.6
Silver Sales	$	63.8		$	66.4	$	62.6	$	26.3		$	44.9
Consolidated Revenue	$	202.1		$	228.3	$	229.7	$	154.2		$	173.2
Costs Applicable to Sales²	$	108.1		$	118.6	$	112.8	$	90.0		$	118.9
General and Administrative Expenses	$	11.6		$	8.4	$	7.8	$	8.6		$	8.9
Net Income (Loss)	$	2.1		$	11.9	$	26.9	$	(1.2	)	$	(11.9	)
Net Income (Loss) Per Share	$	0.01		$	0.05	$	0.11	$	(0.01	)	$	(0.05	)
Adjusted Net Income (Loss)¹	$	13.9		$	19.1	$	38.2	$	2.6		$	(0.9	)
Adjusted Net Income (Loss)¹Per Share	$	0.06		$	0.08	$	0.16	$	0.01		$	—
Weighted Average Shares Outstanding	244.5			244.3		243.8		240.9			240.3
EBITDA¹	$	49.7		$	76.7	$	77.3	$	35.3		$	25.5
Adjusted EBITDA¹	$	65.9		$	84.0	$	90.8	$	42.2		$	46.5
Cash Flow from Operating Activities	$	(4.4	)	$	67.3	$	79.5	$	9.9		$	(8.0	)
Capital Expenditures	$	59.4		$	37.4	$	23.0	$	16.7		$	22.2
Free Cash Flow¹	$	(63.8	)	$	29.8	$	56.5	$	(6.7	)	$	(30.2	)
Cash, Equivalents & Short-Term Investments	$	154.1		$	92.8	$	77.1	$	70.9		$	52.9
Total Debt³	$	412.1		$	275.5	$	301.1	$	348.6		$	343.1
Average Realized Price Per Ounce – Gold	$	1,664		$	1,663	$	1,754	$	1,641		$	1,490
Average Realized Price Per Ounce – Silver	$	26.19		$	24.21	$	24.15	$	16.25		$	16.63
Gold Ounces Produced	85,225			96,377		95,995		78,229			85,077
Silver Ounces Produced	2.4			2.8		2.6		1.6			2.7
Gold Ounces Sold	83,112			97,400		95,283		77,933			85,635
Silver Ounces Sold	2.4			2.7		2.6		1.6			2.7

Financial Results

First quarter 2021 revenue totaled $202.1 million compared to $228.3 million in the prior period and $173.2 million in the first quarter of 2020. The Company produced 85,225 and 2.4 million ounces of gold and silver, respectively, during the quarter. Metal sales totaled 83,112 ounces of gold and 2.4 million ounces of silver.

Average realized gold and silver prices for the quarter were $1,664 and $26.19 per ounce, respectively, compared to $1,663 and $24.21 per ounce in the prior period. Gold and silver sales accounted for 68% and 32% of quarterly revenue, respectively. The Company’s U.S. operations accounted for approximately 60% of first quarter revenue, relatively consistent with the prior period.

Costs applicable to sales² decreased 9% quarter-over-quarter to $108.1 million, largely due to lower production in the period as well as a non-cash adjustment at Rochester in the prior quarter. General and administrative expenses for the quarter totaled $11.6 million compared to $8.4 million in the prior period, reflecting higher employee-related expenses including increased costs related to annual incentive payments.

Coeur invested approximately $14.9 million ($9.7 million expensed and $5.2 million capitalized) in exploration during the quarter, compared to roughly $14.5 million ($11.6 million expensed and $2.9 million capitalized) in the fourth quarter of 2020. Slightly higher exploration investment was driven by a greater allocation to capitalized infill drilling quarter-over-quarter. See the “Operations” and “Exploration” sections for additional detail on the Company’s exploration activities.

Operating costs related to COVID-19 mitigation and response efforts totaled $3.0 million during the first quarter, compared to $5.1 million in the prior period. These costs were primarily driven by employee-related expenses at Kensington and Palmarejo, and are included in “Pre-development, reclamation, and other expenses” on the Company’s income statement. Coeur continues to implement and maintain rigorous health and safety protocols across its operations and in surrounding communities aimed at limiting the exposure and transmission of COVID-19 while minimizing business interruptions.

Coeur recorded an income tax expense of $12.8 million during the first quarter. Cash income and mining taxes paid during the period totaled approximately $26.7 million, including the annual payment of the Mexican mining royalty tax of $9.6 million.

Quarterly operating cash flow totaled $(4.4) million compared to $67.3 million in the prior period, largely driven by lower metal sales, higher cash taxes and unfavorable changes in working capital. Changes in working capital during the quarter were $(45.9) million, compared to $8.8 million in the prior period, reflecting the timing of Mexican tax payments as well as the build-up of inventories primarily related to leach pads. First quarter operating cash flow also includes a cash outflow of $7.9 million associated with the Company’s prepayment agreement at Kensington. Coeur expects the remaining $7.1 million cash outflow under the arrangement to occur in the second quarter.

Capital expenditures during the first quarter were $59.4 million compared to $37.4 million in the prior period, reflecting increased investment across the Company’s portfolio. Investment related to the POA 11 expansion at Rochester totaled $28.1 million during the quarter, compared to $14.8 million in the fourth quarter of 2020. Sustaining and development capital expenditures accounted for approximately 43% and 57%, respectively, of the Company’s total capital investment during the quarter.

Balance Sheet Update

Coeur continued to prudently manage its balance sheet during the first quarter of 2021. The Company successfully refinanced $230.0 million in aggregate principal outstanding of its 5.875% senior notes due 2024 with $375.0 million of 5.125% senior notes due 2029. The Company also extended the maturity of its $300.0 million RCF from October 2022 to March 2025. Together, these initiatives strengthened Coeur’s financial flexibility ahead of the next two years of expected capital intensity. Coeur ended the quarter with total debt³ of $412.1 million and cash and cash equivalents of $154.1 million.

Hedging Update

The Company did not execute any additional zero-cost collar (“ZCC”) hedges during the first quarter. Coeur’s hedging strategy remains focused on supporting cash flow generation during the POA 11 expansion project at Rochester, which the Company expects to fund with a combination of cash on hand, internally generated cash flow and debt capacity.

Coeur previously completed its gold hedging program for 2021 and will proactively monitor market conditions to potentially layer in additional ZCC hedges on up to 50% of expected gold production in 2022. The Company’s silver price exposure remains unhedged. An overview of the hedges currently implemented is outlined below:

	2021	2022
Gold Ounces Hedged	119,025	126,000
Avg. Ceiling ($/oz)	$1,877	$2,030
Avg. Floor ($/oz)	$1,600	$1,626

Rochester Expansion

Coeur began major construction activities on the POA 11 expansion project at Rochester in January 2021, including excavation of areas for the Merrill-Crowe process plant and crusher corridor. Project-specific offices and supporting infrastructure have been completed and are operational. At the end of the first quarter, Coeur and SNC-Lavalin (engineering, procurement and project management contractor) substantially completed detailed design work for the expansion project, and almost all of the equipment procurement and service arrangements have been committed. The Company had over $300.0 million of capital committed to the expansion project, including 72 executed contracts valued at approximately $290.0 million as of March 31, 2021. Overall project progress was approximately 20% complete at the end of the quarter.

Over the coming quarters, Coeur expects to remain focused on safely delivering the project with placement of over-liner material for the Stage VI leach pad, mobilization of a cement batch plant, construction of a new high-voltage power line and initiation of electrical substation upgrades planned mid-year. Additionally, structural steel erection for the crusher corridor is expected to begin in early 2022.

Key elements of the project timeline remain on schedule and are highlighted below:

	Expected Start Date	Target Completion Date
Leach Pad (Incl. Ancillary Facilities)	2H 2020 ✓	Mid-2022
Merrill-Crowe Process Plant	1H 2021 ✓	YE 2022
Crushing Circuit	1H 2021 ✓	YE 2022
Supporting Infrastructure	2H 2020 ✓	Mid-2022

Operations

First quarter 2021 highlights for each of the Company’s operations are provided below.

Palmarejo, Mexico

*(Dollars in millions, except per ounce amounts)*	1Q 2021	4Q 2020	3Q 2020	2Q 2020	1Q 2020
Tons milled	484,390	509,848	492,474	269,641	479,562
Average gold grade (oz/t)	0.06	0.08	0.07	0.07	0.07
Average silver grade (oz/t)	4.07	4.30	4.37	4.46	4.69
Average recovery rate – Au	95.7%	88.9%	91.3%	86.0%	91.6%
Average recovery rate – Ag	81.3%	81.3%	82.8%	72.2%	81.5%
Gold ounces produced	28,605	34,511	29,296	15,223	31,578
Silver ounces produced (000’s)	1,603	1,783	1,784	867	1,835
Gold ounces sold	25,687	35,359	27,252	16,924	31,287
Silver ounces sold (000’s)	1,638	1,767	1,765	875	1,895
Average realized price per gold ounce	$1,462	$1,395	$1,446	$1,399	$1,331
Average realized price per silver ounce	$26.12	$24.45	$23.98	$16.35	$17.25
Metal sales	$80.3	$92.5	$81.8	$38.0	$74.3
Costs applicable to sales²	$34.0	$36.1	$34.3	$18.8	$36.0
Adjusted CAS^{per AuOz¹}	$621	$542	$602	$686	$645
Adjusted CAS^{per AgOz¹}	$10.98	$9.61	$10.06	$8.13	$8.37
Exploration expense	$1.7	$2.6	$2.0	$0.9	$1.5
Cash flow from operating activities	$13.2	$43.2	$49.7	$(3.5)	$28.9
Sustaining capital expenditures (excludes capital lease payments)	$10.0	$9.0	$4.9	$4.5	$7.1
Development capital expenditures	$—	$(0.1)	$0.1	$—	$—
Total capital expenditures	$10.0	$8.9	$5.0	$4.5	$7.1
Free cash flow¹	$3.2	$34.3	$44.7	$(8.0)	$21.8

Operational

First quarter gold and silver production totaled 28,605 and 1.6 million ounces, respectively, compared to 34,511 and 1.8 million ounces in the prior period and 31,578 and 1.8 million ounces in the first quarter of 2020
Gold and silver production was impacted by a 5% decrease in mill throughput quarter-over-quarter, driven by a change in mine sequencing due to geotechnically-challenging conditions as well as lower average grades. First quarter recovery rates benefited from a drawdown of in-circuit inventory

Financial

First quarter adjusted CAS¹ for gold and silver on a co-product basis increased 15% and 14% to $621 and $10.98 per ounce, respectively, compared to the prior quarter, largely driven by a decrease in average grades
Capital expenditures increased 12% quarter-over-quarter to $10.0 million, reflecting higher planned mine development and equipment purchases
Free cash flow¹ in the first quarter totaled $3.2 million compared to $34.3 million in the prior period, driven by the payment of cash income and mining taxes totaling $25.1 million as well as lower metal sales quarter-over-quarter

Exploration

Exploration investment for the first quarter totaled approximately $3.0 million ($1.7 million expensed and $1.3 million capitalized), compared to roughly $3.7 million ($2.6 million expensed and $1.1 million capitalized) in the prior period
Up to seven surface and underground core rigs were active during the quarter following the success of both expansion and infill drilling during late 2020. A total of approximately 54,200 feet (16,525 meters) were drilled during the period, including 16,800 feet (5,125 meters) of expansion and 37,400 feet (11,400 meters) of infill
Infill drilling during the quarter focused on specific zones within the Independencia and Guadalupe deposits. Surface rigs targeted areas of the Hidalgo and La Patria zones as well as the northern portion of the Independencia zone, while underground rigs focused on the southern portion of the Independencia zone
Expansion drilling focused on the Hidalgo, North Independencia and Bavisa North/Ojito zones, located to the north of the Independencia deposit
Expansion and greenfield target generation is expected to continue moving north and east from the Independencia and Guadalupe deposits
In parallel, a new initiative to evaluate, target and drill the Guazapares district (located east of the Palmarejo district) was launched with the expectation of drilling to begin in the second half of the year
Coeur plans to maintain seven active drill rigs at Palmarejo, ramping up as needed later in the year

Other

Approximately 34% (8,738 ounces) of Palmarejo’s gold sales in the first quarter were sold under its gold stream agreement at a price of $800 per ounce

Guidance

Full-year 2021 production is expected to be 100,000 – 110,000 ounces of gold and 6.5 – 7.8 million ounces of silver
CAS¹ are expected to be $710 – $810 per gold ounce and $11.00 – $12.00 per silver ounce
Capital expenditures are expected to be approximately $40 – $45 million

Rochester, Nevada

*(Dollars in millions, except per ounce amounts)*	1Q 2021	4Q 2020	3Q 2020	2Q 2020	1Q 2020
Ore tons placed	3,240,917	4,000,889	4,523,767	3,743,331	3,428,578
Average silver grade (oz/t)	0.45	0.53	0.49	0.51	0.57
Average gold grade (oz/t)	0.003	0.002	0.002	0.002	0.002
Silver ounces produced (000’s)	774	1,020	740	728	687
Gold ounces produced	6,904	9,590	6,462	5,159	5,936
Silver ounces sold (000’s)	771	912	786	724	632
Gold ounces sold	6,934	8,672	6,834	5,278	5,473
Average realized price per silver ounce	$26.34	$24.35	$24.49	$16.11	$16.99
Average realized price per gold ounce	$1,794	$1,825	$1,882	$1,702	$1,583
Metal sales	$32.8	$38.2	$32.1	$20.6	$19.4
Costs applicable to sales²	$24.0	$31.7	$19.1	$18.3	$17.0
Adjusted CAS^{per AgOz¹}	$19.07	$20.18	$14.98	$13.75	$14.38
Adjusted CAS^{per AuOz¹}	$1,300	$1,537	$1,148	$1,481	$1,359
Exploration expense	$0.5	$0.8	$0.5	$1.8	$0.2
Cash flow from operating activities	$(8.7)	$4.7	$2.1	$(5.6)	$(9.3)
Sustaining capital expenditures (excludes capital lease payments)	$2.0	$2.9	$2.5	$1.5	$0.1
Development capital expenditures	$28.2	$13.9	$7.3	$4.3	$5.0
Total capital expenditures	$30.2	$16.8	$9.8	$5.8	$5.1
Free cash flow¹	$(38.9)	$(12.1)	$(7.7)	$(11.4)	$(14.4)

Operational

Silver and gold production during the quarter totaled 0.8 million and 6,904 ounces, respectively, compared to 1.0 million and 9,590 ounces in the fourth quarter of 2020. Year-over-year silver and gold production increased 13% and 16%, respectively
Coeur crushed approximately 30,200 tons per day during the first quarter compared to roughly 34,000 tons per day in the fourth quarter of 2020. Additionally, the Company supplemented placement rates in the quarter by stacking approximately 524,400 tons of run-of-mine material compared to just over 877,000 tons in the prior period
The Company encountered a new, softer ore type that required changes to crush size and throughput rates to help manage the amount of fine particles, with the ultimate goal of improving leachability and recoveries on the Stage IV leach pad
Lower production during the quarter was primarily driven by (i) reduced leaching rates on material placed in the prior period as a result of additional fine particles, (ii) the placement of material on deeper portions of the Stage IV leach pad, (iii) lower average silver grade consistent with the mine plan, and (iv) lower placement rates. Approximately 65,000 ounces of silver were held as work-in-process inventory at the end of the period and are expected to be recovered in the second quarter
The Company is executing the swap out of the secondary crushing unit during the month of April and plans to complete the fourth phase of its inter-lift liner strategy around mid-year. Both projects are aimed at de-risking the execution of POA 11 and further improving recovery rates on the Stage IV leach pad

Financial

First quarter adjusted CAS¹ for silver and gold on a co-product basis decreased 6% and 15% quarter-over-quarter, respectively, to $19.07 and $1,300 per ounce, primarily driven by a non-cash adjustment of approximately $7.2 million in the prior period related to a change in the Company’s recovery rate assumption on the Stage IV leach pad as well as lower production levels and fewer ounces sold during the quarter
Capital expenditures increased 80% quarter-over-quarter to $30.2 million, largely due to the commencement of major construction on the POA 11 expansion project
Free cash flow¹ in the first quarter totaled $(38.9) million, compared to $(12.1) million in the prior period, largely driven by higher capital expenditures and lower metal sales

Exploration

Quarterly exploration investment totaled approximately $0.7 million ($0.5 million expensed and $0.2 million capitalized), compared to roughly $1.2 million ($0.8 million expensed and $0.4 million capitalized) in the prior period
One reverse circulation rig continued drilling the northern portion of East Rochester as well as North Rochester and East Packard during the quarter. A total of approximately 8,900 feet (2,700 meters) were drilled during the period, primarily focused on resource expansion
The Company believes there is significant potential for resource growth both north and south of East Rochester and at North Rochester. Coeur continues to receive assay results that were not included in the updated technical report filed in December 2020, and expects to incorporate these results in its year-end 2021 reserves and resources
For the remainder of the year, Coeur plans to ramp up exploration activities at Rochester with at least three rigs focusing on infill drilling in the Rochester and Packard pits as well as expansion drilling at North Rochester, the southern portion of East Rochester and East Packard. Separately, Coeur also plans to mobilize two rigs towards the end of the second quarter to conduct infill drilling at the Lincoln Hill zone and expansion drilling at the Gold Ridge zone, both located immediately west of Rochester

Guidance

Full-year 2021 production is expected to be 3.2 – 4.4 million ounces of silver and 22,500 – 32,500 ounces of gold
CAS¹ in 2021 are expected to be $15.00 – $17.00 per silver ounce and $1,180 – $1,330 per gold ounce
Capital expenditures are expected to be approximately $155 – $195 million

Kensington, Alaska

*(Dollars in millions, except per ounce amounts)*	1Q 2021	4Q 2020	3Q 2020	2Q 2020	1Q 2020
Tons milled	170,358	179,636	163,276	170,478	162,341
Average gold grade (oz/t)	0.19	0.20	0.18	0.21	0.21
Average recovery rate	93.2%	93.0%	93.7%	92.0%	93.5%
Gold ounces produced	30,681	32,990	26,797	33,058	32,022
Gold ounces sold	31,595	31,830	27,815	32,367	32,781
Average realized price per gold ounce, gross	$1,754	$1,837	$1,917	$1,762	$1,603
Treatment and refining charges per gold ounce	$30	$37	$35	$57	$27
Average realized price per gold ounce, net	$1,724	$1,800	$1,882	$1,705	$1,576
Metal sales	$54.5	$57.2	$52.4	$55.2	$51.7
Costs applicable to sales²	$31.4	$29.3	$31.5	$30.4	$30.5
Adjusted CAS per AuOz¹	$989	$919	$1,128	$934	$928
Prepayment, working capital cash flow	$(7.9)	$5.1	$(5.1)	$7.0	$(7.0)
Exploration expense	$1.1	$0.8	$3.4	$2.6	$1.8
Cash flow from operating activities	$11.0	$31.0	$9.1	$27.8	$11.9
Sustaining capital expenditures (excludes capital lease payments)	$7.2	$5.8	$5.3	$3.9	$4.8
Development capital expenditures	$—	$—	$—	$—	$—
Total capital expenditures	$7.2	$5.8	$5.3	$3.9	$4.8
Free cash flow¹	$3.8	$25.2	$3.8	$23.9	$7.1

Operational

Gold production in the first quarter totaled 30,681 ounces, compared to 32,990 ounces in the prior period and 32,022 ounces in the first quarter of 2020
Relatively lower production during the quarter was driven by a decrease in mill throughput from additional planned mill maintenance as well as slightly lower average grade as the Company developed ore headings and increased stope drilling capacity
Jualin accounted for approximately 17% of Kensington’s first quarter production, slightly lower than the prior period of roughly 19%, due to a focus on ore development

Financial

Adjusted CAS¹ increased 8% quarter-over-quarter to $989 per ounce, largely driven by lower average grade as well as higher fuel costs and additional planned mill maintenance
Capital expenditures increased 24% quarter-over-quarter to $7.2 million, primarily due to the timing of payments related to projects in the prior period
Free cash flow¹ in the first quarter totaled $3.8 million, including cash outflow of $7.9 million associated with the Company’s prepayment agreement at Kensington. Excluding the effect of the prepayment, free cash flow¹ totaled approximately $11.7 million in the first quarter

Exploration

Exploration investment in the first quarter totaled approximately $2.1 million ($1.1 million expensed and $1.0 million capitalized), compared to $2.2 million ($0.8 million expensed and $1.4 million capitalized) in the prior quarter
Two underground core rigs were active during the quarter, drilling from the Elmira development drift established in 2020. A total of approximately 34,700 feet (10,575 meters) were drilled during the period, including 15,900 feet (4,850 meters) of expansion drilling and 18,800 feet (5,725 meters) of infill drilling
Infill drilling during the quarter was primarily focused on the Elmira vein, while also occasionally testing the Johnson vein which the Company considers a resource expansion target
The two underground rigs are expected to remain active for most of the year, continuing to target the Elmira and Johnson veins. The Company plans to add an additional rig during the second half of 2021 to drill resource expansion targets from surface

Guidance

Production in 2021 is expected to be 115,000 – 130,000 ounces of gold
CAS¹ in 2021 are expected to be $1,010 – $1,110 per gold ounce
Capital expenditures are expected to be approximately $23 – $30 million

Wharf, South Dakota

*(Dollars in millions, except per ounce amounts)*	1Q 2021	4Q 2020	3Q 2020	2Q 2020	1Q 2020
Ore tons placed	1,114,043	1,047,647	1,315,542	1,401,237	946,449
Average gold grade (oz/t)	0.030	0.024	0.025	0.032	0.025
Gold ounces produced	19,035	19,286	33,440	24,789	15,541
Silver ounces produced (000’s)	26	33	42	25	15
Gold ounces sold	18,896	21,539	33,382	23,364	16,094
Silver ounces sold (000’s)	26	35	41	23	15
Average realized price per gold ounce	$1,791	$1,835	$1,872	$1,715	$1,592
Metal sales	$34.5	$40.3	$63.5	$40.5	$25.9
Costs applicable to sales²	$18.7	$21.4	$27.9	$22.5	$17.8
Adjusted CAS per AuOz¹	$952	$954	$804	$804	$1,090
Exploration expense	$0.1	$0.3	$0.5	$0.1	$—
Cash flow from operating activities	$7.8	$14.1	$39.1	$19.1	$2.6
Sustaining capital expenditures (excludes capital lease payments)	$0.4	$1.2	$0.5	$0.3	$0.4
Development capital expenditures	$1.1	$—	$—	$—	$—
Total capital expenditures	$1.5	$1.2	$0.5	$0.3	$0.4
Free cash flow¹	$6.3	$12.9	$38.6	$18.8	$2.2

Operational

Gold production remained relatively consistent quarter-over-quarter at 19,035 ounces, largely due to the timing of ounces placed on the leach pads. Year-over-year gold production increased 22%
Notably, tons placed and average gold grade increased 6% and 25% quarter-over-quarter, respectively. Higher placement rates reflect favorable weather conditions, better crusher maintenance planning and enhanced operational strategies

Financial

Adjusted CAS¹ on a by-product basis remained relatively consistent quarter-over-quarter at $952 per ounce
First quarter capital expenditures totaled $1.5 million compared to $1.2 million in the prior period, reflecting a ramp up in infill drilling
Free cash flow¹ was $6.3 million in the first quarter compared to $12.9 million in the fourth quarter of 2020, largely driven by lower metal sales

Exploration

Exploration investment in the first quarter totaled approximately $1.2 million ($0.1 million expensed and $1.1 million capitalized), compared to roughly $0.3 million (substantially all expensed) in the prior period
A total of approximately 38,600 feet (11,775 meters) were drilled during the period using one reverse circulation rig, focusing on infill targets at the Portland Ridge – Boston claim group (located on the southern edge of the operation)
Coeur is in the process of evaluating 2020 drill assays, surface mapping and geochemistry results, and planning its next steps regarding Richmond Hill. The Company has an exclusive option agreement with two subsidiaries of Barrick Gold Corporation to acquire the project that expires in September 2021
Once infill drilling at Portland Ridge is completed, expected around mid-year, Coeur plans to shift its focus to the Flossie area, west of Portland Ridge, and the Juno area, located on the north side of Wharf

Guidance

Gold production in 2021 is expected to be 85,000 – 95,000 ounces
CAS¹ in 2021 are expected to be $960 – $1,060 per gold ounce
Capital expenditures are expected to be approximately $5 – $8 million

Silvertip, British Columbia

*(Dollars in millions)*	1Q 2021	4Q 2020	3Q 2020	2Q 2020	1Q 2020
Metal sales	$—	$—	$—	$—	$1.9
Costs applicable to sales²	$—	$—	$—	$—	$17.7
Exploration expense	$2.9	$5.1	$3.9	$2.9	$0.3
Cash flow from operating activities	$(7.5)	$(8.2)	$(8.2)	$(14.9)	$(27.1)
Sustaining capital expenditures (excludes capital lease payments)	$5.7	$(0.5)	$(1.8)	$1.9	$4.6
Development capital expenditures	$4.7	$5.0	$3.9	$—	$—
Total capital expenditures	$10.4	$4.5	$2.1	$1.9	$4.6
Free cash flow¹	$(17.9)	$(12.7)	$(10.3)	$(16.8)	$(31.7)

Mining and processing activities were temporarily suspended at Silvertip on February 19, 2020 (unrelated to COVID-19)

Operational

Coeur continued advancing Silvertip’s revised 1,750 tonnes per day flowsheet through a more comprehensive engineering and design phase, with detailed design approaching 30% completion and exploration results demonstrating the potential for mine life extensions with continued drilling
Technical work remains focused on (i) advancing engineering to de-risk capital estimates, (ii) increasing confidence in the expected concentrate qualities from all of the existing zones of the ore body with confirmatory metallurgical testing, and (iii) enhancing schedule certainty with respect to a potential restart
The Company plans to release an updated mine plan and economic analysis for Silvertip at the end of the year, including additional exploration results as well as information regarding the anticipated benefits of the revised 1,750 tonnes per day flowsheet which will be reflected in a technical report that is expected to be filed in early 2022

Financial

Coeur did not realize any temporary suspension costs related to the ramp-down of active mining and processing activities during the quarter as the Company began allocating these expenses to Silvertip’s ongoing carrying costs
Ongoing carrying costs in the first quarter were $6.9 million, compared to $4.7 million in the fourth quarter of 2020. Temporary suspension costs totaled $1.1 million in the prior period
Capital expenditures during the first quarter totaled $10.4 million compared to $4.5 million in the prior period, reflecting work related to the potential restart and expansion of the project as well as the ramp up of infill drilling. Free cash flow¹ for the quarter totaled $(17.9) million

Exploration

Exploration investment in the first quarter totaled approximately $4.5 million ($2.9 million expensed and $1.6 million capitalized), compared to roughly $5.1 million (substantially all expensed) in the prior period
The Company had up to six active core rigs during the quarter, ramping up from three rigs at the end of 2020. A total of approximately 80,600 feet (24,575 meters) were drilled during the period, including 47,200 feet (14,375 meters) of expansion drilling and 33,400 feet (10,200 meters) of infill drilling
Infill and expansion drilling (both from surface and underground) focused on the 65 Zone, Discovery East, Discovery North and Camp Creek zones
During the coming months, surface drilling is expected to continue with three active rigs targeting the Camp Creek, Discovery North and Discovery East zones
Underground drilling is planned to ramp up to two rigs, focusing on expansion and infill drilling in the 65 Zone as well as the Central, Discovery South and Camp Creek zones
The latest underground drill results suggest the 65 Zone has high-grade mineralization that connects the Silver Creek zone with the Discovery South zone, representing potential for significant resource growth at Silvertip

Guidance

2021 capital expenditures are expected to total $35 – $45 million

Exploration

During the first quarter, the Company drilled roughly 250,500 feet (76,375 meters) at a total investment of approximately $14.9 million ($9.7 million expensed and $5.2 million capitalized), compared to roughly 181,800 feet (55,400 meters) at a total investment of approximately $14.5 million ($11.6 million expensed and $2.9 million capitalized) in the prior period. The increase in exploration activity was largely driven by a ramp up of drilling at Silvertip and Crown as well as the continuation of expansion and infill programs across the rest of the Company’s portfolio.

In addition to Coeur’s mine sites, up to five drill rigs were active at the Crown exploration property in southern Nevada during the first quarter. Up to four reverse circulation rigs drilled expansion holes at Daisy, SNA and C-Horst, while one diamond core rig was active at Secret Pass and C-Horst to better characterize metallurgy and geologic domains. The Company drilled approximately 33,500 feet (10,225 meters) in the quarter, compared to approximately 13,100 feet (4,000 meters) in the prior period.

For the remainder of 2021, Coeur plans to continue the same pace of resource expansion drilling within its recently received 300-acre disturbance permit at Crown. The Company also expects to receive an amended disturbance permit to begin expanding C-Horst to the south. In parallel, exploration activities are scheduled to begin in the second quarter at Sterling, focusing on infill drilling at the main Sterling deposit and expansion drilling at the Diamond Queen zone.

2021 Production Guidance

	Gold	Silver
	(oz)	(K oz)
Palmarejo	100,000 – 110,000	6,500 – 7,750
Rochester	22,500 – 32,500	3,200 – 4,400
Kensington	115,000 – 130,000	—
Wharf	85,000 – 95,000	—
Total	322,500 – 367,500	9,700 – 12,150

2021 Costs Applicable to Sales Guidance

	Gold	Silver
	($/oz)	($/oz)
Palmarejo (co-product)	$710 – $810	$11.00 – $12.00
Rochester (co-product)	$1,180 – $1,330	$15.00 – $17.00
Kensington	$1,010 – $1,110	—
Wharf (by-product)	$960 – $1,060	—

2021 Capital, Exploration and G&A Guidance

					($M)
Capital Expenditures, Sustaining					$80 – $100
Capital Expenditures, Development					$180 – $225
Exploration, Expensed					$46 – $51
Exploration, Capitalized					$17 – $21
General & Administrative Expenses					$37 – $41

Note: The Company’s guidance figures assume $1,850/oz gold and $24.00/oz silver as well as CAD of 1.27 and MXN of 19.50. Guidance figures exclude the impact of any metal sales or foreign exchange hedges.

Financial Results and Conference Call

Coeur will host a conference call to discuss its first quarter 2021 financial results on April 29, 2021 at 11:00 a.m. Eastern Time.

Dial-In Numbers:		(855) 560-2581 (U.S.)
		(855) 669-9657 (Canada)
		(412) 542-4166 (International)
Conference ID:		Coeur Mining

Hosting the call will be Mitchell J. Krebs, President and Chief Executive Officer of Coeur, who will be joined by Thomas S. Whelan, Senior Vice President and Chief Financial Officer, Michael “Mick” Routledge, Senior Vice President and Chief Operating Officer, and other members of management. A replay of the call will be available through May 6, 2021.

Replay numbers:		(877) 344-7529 (U.S.)
		(855) 669-9658 (Canada)
		(412) 317-0088 (International)
Conference ID:		101 53 291

About Coeur

Coeur Mining, Inc. is a U.S.-based, well-diversified, growing precious metals producer with five wholly-owned operations: the Palmarejo gold-silver complex in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska, the Wharf gold mine in South Dakota, and the Silvertip silver-zinc-lead mine in British Columbia. In addition, the Company has interests in several precious metals exploration projects throughout North America.

Cautionary Statements

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding strategy, value, cash flow, capital allocation and investment, returns, net asset values, exploration and development efforts and plans, expectations regarding the potential expansion and restart at Silvertip (including technical report timing), expectations regarding the Rochester POA 11 expansion project, hedging strategies, anticipated production, costs and expenses, COVID-19 mitigation efforts, and operations at Palmarejo, Rochester, Wharf, Kensington and Silvertip. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Coeur’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the risk that anticipated production, cost and expense levels are not attained, the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically-related conditions), changes in the market prices of gold, silver, zinc and lead and a sustained lower price or higher treatment and refining charge environment, the uncertainties inherent in Coeur’s production, exploratory and developmental activities, including risks relating to permitting and regulatory delays (including the impact of government shutdowns), ground conditions and, grade variability, any future labor disputes or work stoppages (involving the Company and its subsidiaries or third parties), the uncertainties inherent in the estimation of mineral reserves, changes that could result from Coeur’s future acquisition of new mining properties or businesses, the loss of access or insolvency of any third-party refiner or smelter to which Coeur markets its production, the potential effects of the COVID-19 pandemic, including impacts to the availability of our workforce, continued access to financing sources, government orders that may require temporary suspension of operations at one or more of our sites and effects on our suppliers or the refiners and smelters to whom the Company markets its production and on the communities where we operate, the effects of environmental and other governmental regulations and government shut-downs, the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, Coeur’s ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, as well as other uncertainties and risk factors set out in filings made from time to time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur’s most recent reports on Form 10-K and Form 10-Q. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coeur undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Coeur, its financial or operating results or its securities. This does not constitute an offer of any securities for sale.

Christopher Pascoe, Coeur’s Director, Technical Services and a qualified person under Canadian National Instrument 43-101, approved the scientific and technical information concerning Coeur’s mineral projects in this news release. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, Canadian investors should refer to the Technical Reports for each of Coeur’s properties, including the recently-filed Technical Report for Rochester, as filed on SEDAR at www.sedar.com.

Non-U.S. GAAP Measures

We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted net income (loss), operating cash flow before changes in working capital and adjusted costs applicable to sales per ounce (gold and silver) or pound (zinc or lead). We believe that these adjusted measures provide meaningful information to assist management, investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of, or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. We believe EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted net income (loss) and adjusted costs applicable to sales per ounce (gold and silver) and pound (zinc and lead) are important measures in assessing the Company’s overall financial performance. For additional explanation regarding our use of non-U.S. GAAP financial measures, please refer to our Form 10-K for the year ended December 31, 2020 and our Form 10-Q for the quarter ended March 31, 2021.

Notes

1. EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted net income (loss), operating cash flow before changes in working capital and adjusted costs applicable to sales per ounce (gold and silver) or pound (lead and zinc) are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Free cash flow is defined as cash flow from operating activities less capital expenditures. Please see table in Appendix for the calculation of consolidated free cash flow.

2. Excludes amortization.

3. Includes capital leases. Net of debt issuance costs and premium received.

Average Spot Prices

	1Q 2021		4Q 2020		3Q 2020		2Q 2020		1Q 2020
Average Gold Spot Price Per Ounce	$	1,794	$	1,874	$	1,908	$	1,711	$	1,583
Average Silver Spot Price Per Ounce	$	26.26	$	24.39	$	24.26	$	16.38	$	16.90
Average Zinc Spot Price Per Pound	$	1.25	$	1.19	$	1.06	$	0.89	$	0.96
Average Lead Spot Price Per Pound	$	0.91	$	0.86	$	0.85	$	0.76	$	0.84

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	March 31, 2021		December 31, 2020
ASSETS	In thousands, except share data
CURRENT ASSETS
Cash and cash equivalents	$	154,066	$	92,794
Receivables	22,606		23,484
Inventory	53,591		51,210
Ore on leach pads	78,689		74,866
Prepaid expenses and other	27,274		27,254
	336,226		269,608
NON-CURRENT ASSETS
Property, plant and equipment, net	248,237		230,139
Mining properties, net	739,559		716,790
Ore on leach pads	87,723		81,963
Restricted assets	9,266		9,492
Equity securities	8,209		12,943
Receivables	25,605		26,447
Other	60,590		56,595
TOTAL ASSETS	$	1,515,415	$	1,403,977
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	96,715	$	90,577
Accrued liabilities and other	62,682		119,158
Debt	21,404		22,074
Reclamation	2,299		2,299
	183,100		234,108
NON-CURRENT LIABILITIES
Debt	390,721		253,427
Reclamation	139,112		136,975
Deferred tax liabilities	34,577		34,202
Other long-term liabilities	47,399		51,786
	611,809		476,390
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share; authorized 300,000,000 shares, 243,469,002 issued and outstanding at March 31, 2021 and 243,751,283 at December 31, 2020	2,435		2,438
Additional paid-in capital	3,610,631		3,610,297
Accumulated other comprehensive income (loss)	13,500		(11,136)
Accumulated deficit	(2,906,060)		(2,908,120)
	720,506		693,479
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,515,415	$	1,403,977

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

	Three Months Ended March 31,
	2021			2020
	In thousands, except share data
Revenue	$	202,117		$	173,167
COSTS AND EXPENSES
Costs applicable to sales⁽¹⁾	108,147			118,917
Amortization	29,937			36,162
General and administrative	11,554			8,920
Exploration	9,666			6,386
Pre-development, reclamation, and other	13,712			6,555
Total costs and expenses	173,016			176,940
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishment	(9,173		)	—
Fair value adjustments, net	(3,799		)	(8,819		)
Interest expense, net of capitalized interest	(4,910		)	(5,128		)
Other, net	3,627			1,881
Total other income (expense), net	(14,255		)	(12,066		)
Income (loss) before income and mining taxes	14,846			(15,839		)
Income and mining tax (expense) benefit	(12,786		)	3,939
NET INCOME (LOSS)	$	2,060		$	(11,900	)
OTHER COMPREHENSIVE INCOME (LOSS):
Change in fair value of derivative contracts designated as cash flow hedges, net of tax of $0 and $22 for the three months ended March 31, 2021 and 2020, respectively.	27,357			206
Reclassification adjustments for realized (gain) loss on cash flow hedges	(2,721		)	—
Other comprehensive income (loss)	24,636			206
COMPREHENSIVE INCOME (LOSS)	$	26,696		$	(11,694	)

NET INCOME (LOSS) PER SHARE
Basic income (loss) per share:
Basic	$	0.01		$	(0.05	)

Diluted	$	0.01		$	(0.05	)

(1) Excludes amortization.

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended March 31,
	2021			2020
	In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	2,060		$	(11,900	)
Adjustments:
Amortization	29,937			36,162
Accretion	2,905			2,847
Deferred taxes	124			(5,487		)
Loss on debt extinguishment	9,173			—
Fair value adjustments, net	3,799			8,819
Stock-based compensation	4,256			2,013
Gain on modification of right of use lease	—			(4,051		)
Write-downs	—			10,381
Deferred revenue recognition	(8,346		)	(7,548		)
Other	(2,328		)	(1,092		)
Changes in operating assets and liabilities:
Receivables	999			(813		)
Prepaid expenses and other current assets	(655		)	(346		)
Inventory and ore on leach pads	(17,486		)	(21,925		)
Accounts payable and accrued liabilities	(28,797		)	(15,051		)
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(4,359		)	(7,991		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(59,424		)	(22,208		)
Proceeds from the sale of assets	4,588			4,506
Sale of investments	935			—
Other	(17		)	(17		)
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(53,918		)	(17,719		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes and bank borrowings, net of issuance costs	367,493			50,000
Payments on debt, finance leases, and associated costs	(243,967		)	(5,901		)
Silvertip contingent consideration	—			(18,750		)
Other	(3,925		)	(1,973		)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	119,601			23,376
Effect of exchange rate changes on cash and cash equivalents	(51		)	(626		)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	61,273			(2,960		)
Cash, cash equivalents and restricted cash at beginning of period	94,170			57,018
Cash, cash equivalents and restricted cash at end of period	$	155,443		$	54,058

Adjusted EBITDA Reconciliation

(Dollars in thousands except per share amounts)	LTM 1Q 2021			1Q2021			4Q 2020			3Q 2020			2Q 2020			1Q 2020
Net income (loss)	$	39,587		$	2,060		$	11,880		$	26,856		$	(1,209	)	$	(11,900	)
Interest expense, net of capitalized interest	20,490			4,910			4,719			5,096			5,765			5,128
Income tax provision (benefit)	53,770			12,786			25,027			13,113			2,844			(3,939		)
Amortization	125,162			29,937			35,133			32,216			27,876			36,162
EBITDA	239,009			49,693			76,759			77,281			35,276			25,451
Fair value adjustments, net	(12,621		)	3,799			(4,110		)	(2,243		)	(10,067		)	8,819
Foreign exchange (gain) loss	2,942			773			1,581			599			(11		)	76
Asset retirement obligation accretion	11,812			2,905			3,031			2,968			2,908			2,847
Inventory adjustments and write-downs	1,241			572			105			(230		)	793			476
(Gain) loss on sale of assets and securities	(1,195		)	(4,053		)	391			2,476			(9		)	(374		)
Loss on debt extinguishment	9,172			9,172			—			—			—			—
Silvertip inventory write-down	3,336			—			—			1,232			2,104			10,381
Silvertip temporary suspension costs	3,655			—			1,092			838			1,725			3,509
Silvertip lease modification	—			—			—			—			—			(4,051		)
Silvertip gain on contingent consideration	—			—			—			—			—			(955		)
COVID-19 costs	18,288			3,005			5,138			4,037			6,108			272
Novation	3,819			—			—			3,819			—			—
Wharf inventory write-down	3,323			—			—			—			3,323			—
Adjusted EBITDA	$	282,781		$	65,866		$	83,987		$	90,777		$	42,150		$	46,451
Revenue	$	814,411		$	202,117		$	228,317		$	229,728		$	154,249		$	173,167
Adjusted EBITDA Margin	35		%	33		%	37		%	40		%	27		%	27		%

Adjusted Net Income (Loss) Reconciliation

(Dollars in thousands except per share amounts)	1Q2021			4Q 2020			3Q 2020			2Q 2020			1Q 2020
Net income (loss)	$	2,060		$	11,880		$	26,856		$	(1,209	)	$	(11,900	)
Fair value adjustments, net	3,799			(4,110		)	(2,243		)	(10,067		)	8,819
Foreign exchange loss (gain)	(43		)	4,692			1,233			626			(6,620		)
(Gain) loss on sale of assets and securities	(4,053		)	391			2,476			(9		)	(374		)
Loss on debt extinguishment	9,172			—			—			—			—
Silvertip inventory write-down	—			—			1,232			2,104			10,381
Silvertip temporary suspension costs	—			1,092			838			1,725			3,509
Silvertip lease modification	—			—			—			—			(4,051		)
Silvertip gain on contingent consideration	—			—			—			—			(955		)
COVID-19 costs	3,005			5,138			4,037			6,108			272
Novation	—			—			3,819			—			—
Wharf inventory write-down	—			—			—			3,323			—
Adjusted net income (loss)	$	13,940		$	19,083		$	38,248		$	2,601		$	(919	)

Adjusted net income (loss) per share – Basic	$	0.06		$	0.08		$	0.16		$	0.01		$	0.00
Adjusted net income (loss) per share – Diluted	$	0.06		$	0.08		$	0.16		$	0.01		$	0.00

Consolidated Free Cash Flow Reconciliation

(Dollars in thousands)	1Q2021			4Q 2020		3Q 2020		2Q 2020			1Q 2020
Cash flow from operations	$	(4,359	)	$	67,289	$	79,464	$	9,947		$	(7,991	)
Capital expenditures	59,424			37,393		22,996		16,682			22,208
Free cash flow	$	(63,783	)	$	29,896	$	56,468	$	(6,735	)	$	(30,199	)

Consolidated Operating Cash Flow
Before Changes in Working Capital Reconciliation

(Dollars in thousands)	1Q2021			4Q 2020			3Q 2020			2Q 2020			1Q 2020
Cash provided by (used in) operating activities	$	(4,359	)	$	67,289		$	79,464		$	9,947		$	(7,991	)
Changes in operating assets and liabilities:
Receivables	(999		)	5,617			1,497			1,536			813
Prepaid expenses and other	655			1,435			1,921			(1,081		)	346
Inventories	17,486			1,491			3,066			8,056			21,925
Accounts payable and accrued liabilities	28,797			(17,331		)	(28,570		)	(2,047		)	15,051
Operating cash flow before changes in working capital	$	41,580		$	58,501		$	57,378		$	16,411		$	30,144

Reconciliation of Costs Applicable to Sales
for Quarter Ended March 31 2021

In thousands (except metal sales, per ounce or per pound amounts)	Palmarejo			Rochester			Kensington			Wharf			Silvertip			Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	43,047		$	27,610		$	44,839		$	21,207		$	1,086		$	137,789
Amortization	(9,059		)	(3,577		)	(13,445		)	(2,475		)	(1,086		)	(29,642		)
Costs applicable to sales	$	33,988		$	24,033		$	31,394		$	18,732		$	—		$	108,147
Inventory Adjustments	(57		)	(313		)	(151		)	(52		)	—			(573		)
By-product credit	—			—			—			(700		)	—			(700		)
Adjusted costs applicable to sales	$	33,931		$	23,720		$	31,243		$	17,980		$	—		$	106,874

Metal Sales
Gold ounces	25,687			6,934			31,595			18,896						83,112
Silver ounces	1,637,695			771,354			—			26,455			—			2,435,504
Zinc pounds													—			—
Lead pounds													—			—

Revenue Split
Gold	47		%	38		%	100		%	100		%
Silver	53		%	62		%							—		%
Zinc													—		%
Lead													—		%

Adjusted costs applicable to sales
Gold ($/oz)	$	621		$	1,300		$	989		$	952
Silver ($/oz)	$	10.98		$	19.07								$	—
Zinc ($/lb)													$	—
Lead ($/lb)													$	—

Reconciliation of Costs Applicable to Sales
for Three Months Ended December 31 2020

In thousands (except metal sales, per ounce or per pound amounts)	Palmarejo			Rochester			Kensington			Wharf			Silvertip			Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	48,672		$	36,828		$	42,486		$	24,300		$	—		$	152,286
Amortization	(12,516		)	(5,112		)	(13,179		)	(2,848		)	—			(33,655		)
Costs applicable to sales	$	36,156		$	31,716		$	29,307		$	21,452		$	—		$	118,631
Inventory Adjustments	(24		)	24			(56		)	(49		)	—			(105		)
By-product credit	—			—			—			(864		)	—			(864		)
Adjusted costs applicable to sales	$	36,132		$	31,740		$	29,251		$	20,539		$	—		$	117,662

Metal Sales
Gold ounces	35,359			8,672			31,830			21,539						97,400
Silver ounces	1,766,714			912,335						35,794			—			2,714,843
Zinc pounds													—			—
Lead pounds													—			—

Revenue Split
Gold	53		%	42		%	100		%	100		%
Silver	47		%	58		%							—		%
Zinc													—		%
Lead													—		%

Adjusted costs applicable to sales
Gold ($/oz)	$	542		$	1,537		$	919		$	954
Silver ($/oz)	$	9.61		$	20.18								$	—
Zinc ($/lb)													$	—
Lead ($/lb)													$	—

Reconciliation of Costs Applicable to Sales
for Three Months Ended September 30, 2020

In thousands (except metal sales, per ounce or per pound amounts)	Palmarejo			Rochester			Kensington			Wharf			Silvertip			Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	46,163		$	22,382		$	43,053		$	31,887		$	1,185		$	144,670
Amortization	(11,912		)	(3,278		)	(11,523		)	(4,000		)	(1,185		)	(31,898		)
Costs applicable to sales	$	34,251		$	19,104		$	31,530		$	27,887		$	—		$	112,772
Inventory Adjustments	(100		)	517			(141		)	(46		)	—			230
By-product credit	—			—			—			(1,007		)	—			(1,007		)
Adjusted costs applicable to sales	$	34,151		$	19,621		$	31,389		$	26,834		$	—		$	111,995

Metal Sales
Gold ounces	27,252			6,834			27,815			33,382						95,283
Silver ounces	1,765,371			785,887						40,521			—			2,591,779
Zinc pounds													—			—
Lead pounds													—			—

Revenue Split
Gold	48		%	40		%	100		%	100		%
Silver	52		%	60		%							—		%
Zinc													—		%
Lead													—		%

Adjusted costs applicable to sales
Gold ($/oz)	$	602		$	1,148		$	1,128		$	804
Silver ($/oz)	$	10.06		$	14.98								$	—
Zinc ($/lb)													$	—
Lead ($/lb)													$	—

Reconciliation of Costs Applicable to Sales
for Three Months Ended June 30, 2020

In thousands (except metal sales, per ounce or per pound amounts)	Palmarejo			Rochester			Kensington			Wharf			Silvertip			Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	26,095		$	21,348		$	43,235		$	25,653		$	1,231		$	117,562
Amortization	(7,270		)	(3,012		)	(12,853		)	(3,181		)	(1,231		)	(27,547		)
Costs applicable to sales	$	18,825		$	18,336		$	30,382		$	22,472		$	—		$	90,015
Inventory Adjustments	(106		)	(566		)	(139		)	(3,304		)	—			(4,115		)
By-product credit	—			—			—			(385		)	—			(385		)
Adjusted costs applicable to sales	$	18,719		$	17,770		$	30,243		$	18,783		$	—		$	85,515

Metal Sales
Gold ounces	16,924			5,278			32,367			23,364						77,933
Silver ounces	874,642			723,679						22,707			—			1,621,028
Zinc pounds													—			—
Lead pounds													—			—

Revenue Split
Gold	62		%	44		%	100		%	100		%
Silver	38		%	56		%							—		%
Zinc													—		%
Lead													—		%

Adjusted costs applicable to sales
Gold ($/oz)	$	686		$	1,481		$	934		$	804
Silver ($/oz)	$	8.13		$	13.75								$	—
Zinc ($/lb)													$	—
Lead ($/lb)													$	—

Reconciliation of Costs Applicable to Sales
for Three Months Ended March 31, 2020

In thousands (except metal sales, per ounce or per pound amounts)	Palmarejo			Rochester			Kensington			Wharf			Silvertip			Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	49,149		$	19,860		$	42,429		$	20,267		$	23,002		$	154,707
Amortization	(13,175		)	(2,904		)	(11,922		)	(2,444		)	(5,345		)	(35,790		)
Costs applicable to sales	$	35,974		$	16,956		$	30,507		$	17,823		$	17,657		$	118,917
Inventory Adjustments	73			(422		)	(101		)	(25		)	(10,381		)	(10,856		)
By-product credit	—			—			—			(248		)	—			(248		)
Adjusted costs applicable to sales	$	36,047		$	16,534		$	30,406		$	17,550		$	7,276		$	107,813

Metal Sales
Gold ounces	31,287			5,473			32,781			16,094						85,635
Silver ounces	1,894,789			632,237						14,768			158,984			2,700,778
Zinc pounds													3,203,446			3,203,446
Lead pounds													2,453,485			2,453,485

Revenue Split
Gold	56		%	45		%	100		%	100		%
Silver	44		%	55		%							26		%
Zinc													48		%
Lead													26		%

Adjusted costs applicable to sales
Gold ($/oz)	$	645		$	1,359		$	928		$	1,090
Silver ($/oz)	$	8.37		$	14.38								$	11.79
Zinc ($/lb)													$	1.12
Lead ($/lb)													$	0.74

Reconciliation of Costs Applicable to Sales for 2021 Guidance

In thousands (except metal sales, per ounce or per pound amounts)	Palmarejo			Rochester			Kensington			Wharf
Costs applicable to sales, including amortization (U.S. GAAP)	$	196,255		$	105,557		$	188,349		$	99,746
Amortization	(39,208		)	(15,899		)	(59,756		)	(11,524		)
Costs applicable to sales	$	157,047		$	89,658		$	128,593		$	88,222
By-product credit	—			—			—			(2,255		)
Adjusted costs applicable to sales	$	157,047		$	89,658		$	128,593		$	85,967

Metal Sales
Gold ounces	107,900			27,200			127,000			89,000
Silver ounces	7,128,000			3,807,000						93,000

Revenue Split
Gold	49%			36%			100%			100%
Silver	51%			64%			—			—

Adjusted costs applicable to sales
Gold ($/oz)	$710 – $810			$1,180 – $1,330			$1,010 – $1,110			$960 – $1,060
Silver ($/oz)	$11.00 – $12.00			$15.00 – $17.00

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428005998/en/

Coeur Mining, Inc.

104 S. Michigan Avenue, Suite 900

Chicago, IL 60603

Attention: Paul DePartout, Director, Investor Relations

Phone: (312) 489-5800

www.coeur.com

KEYWORDS: Mexico Australia/Oceania United States Canada Central America North America Australia Illinois Alaska Idaho South Dakota Nevada Colorado

INDUSTRY KEYWORDS: Mining/Minerals Natural Resources

MEDIA:

Logo

April 28, 2021 4:33 pm

Murphy USA Inc. Reports First Quarter 2021 Results

EL DORADO, Ark., April 28, 2021 (GLOBE NEWSWIRE) — Murphy USA Inc. (NYSE: MUSA), a leading marketer of retail motor fuel products and convenience merchandise, today announced financial results for the three months ended March 31, 2021.

Key Highlights:

Net income was $55.3 million, or $2.01 per diluted share, in Q1 2021 compared to net income of $89.3 million, or $2.92 per diluted share, in Q1 2020. All amounts reported for Q1 2021 include the consolidated results of our wholly-owned subsidiary, Quick Chek Corporation (“QuickChek”) from January 29, 2021
Total fuel contribution (retail fuel margin plus product supply and wholesale (“PS&W”) results including RINs) for Q1 2021 was 22.5 cpg, no change from the prior year period
Total retail gallons decreased 4.2% in Q1 2021 compared to Q1 2020, while volumes on a same store sales (“SSS”) basis decreased 10.1%
Merchandise contribution dollars increased 38.1% to $148.4 million compared to the prior-year quarter, on average unit margins of 17.8% in the current quarter, driven in part by our acquisition of QuickChek
During Q1 2021, the QuickChek acquisition increased the store count by 156 and the Company opened 1 new Murphy Express store. There are 2 new Murphy Express sites, 12 raze-and-rebuild Murphy USA sites, and 4 QuickChek sites currently under construction
Updated debt structure in conjunction with the QuickChek acquisition, including $500 million in new 3.75% senior notes due 2031, and a new Credit Agreement that replaced the prior ABL facility and term loan and consists of a $350 million cash flow revolving credit facility and a $400 million senior unsecured term loan
Common shares repurchased during the first quarter of 2021 were approximately 0.4 million for $50.0 million at an average price of $125.67 per share

“The new year started off with tremendous momentum as first quarter results underscore the strength of our core business alongside the realities of our industry post-COVID 19,” said President and CEO Andrew Clyde. “Fuel margins showed remarkable resilience as product prices rose approximately 55 cents during the quarter and continued to demonstrate the higher breakeven economics of independent retailers. As we lap the initial impact of COVID-19, we are maintaining market share in critical categories like fuel and tobacco while generating higher growth from the core non-tobacco business. During the quarter we also kicked off our 100-day integration plan with QuickChek and continue to be impressed by both the operational expertise of the QuickChek team and the full opportunity set for synergy capture. We remain fully confident in our ability to achieve previously stated goals and deliver future earnings growth in line with our long-term value creation potential.”

Consolidated Results

	Three Months Ended March 31,
Key Operating Metrics	2021		2020
Net income (loss) ($ Millions)	$	55.3	$	89.3
Earnings per share (diluted)	$	2.01	$	2.92
Adjusted EBITDA ($ Millions)	$	154.8	$	170.7

Net income and Adjusted EBITDA for Q1 2021 were lower when compared to Q1 2020, primarily due to decreased all-in fuel contribution, higher station operating expenses, and increased interest expense, partially offset by higher merchandise sales and margin.

Fuel

	Three Months Ended March 31,
Key Operating Metrics	2021		2020
Total retail fuel contribution ($ Millions)	$	156.9	$	283.0
Total PS&W contribution ($ Millions)	3.7		(61.5		)
RINs and other (included in Other operating revenues on Consolidated Income Statement) ($ Millions)	66.7		15.5
Total fuel contribution ($ Millions)	$	227.3	$	237.0
Retail fuel volume – chain (Million gal)	1,009.1		1,053.7
Retail fuel volume – per site (K gal APSM)¹	215.1		236.2
Retail fuel volume – per site (K gal SSS)²	212.9		232.6
Total fuel contribution (including retail, PS&W and RINs) (cpg)	22.5		22.5
Retail fuel margin (cpg)	15.5		26.9
PS&W including RINs contribution (cpg)	7.0		(4.4		)

¹Average Per Store Month (“APSM”) metric includes all stores open through the date of calculation
²2020 amounts not revised for 2021 raze-and-rebuild activity

Total fuel contribution dollars decreased 4.1%, or $9.7 million, in Q1 of 2021 compared to Q1 of 2020. 2021 Q1 retail fuel margins of 15.5 cpg were 42.4% lower than Q1 2020. Lower retail fuel volumes and rising fuel price environment in the current period created an overall decrease in total retail fuel contribution dollars of $126.1 million to $156.9 million, but was partially offset by the net benefits in PS&W, including RINs. Retail fuel volumes were lower during the quarter compared to prior year volumes due to the effects of weather related impacts in February and the decrease in the overall traffic volumes due to COVID-19 impacts, which were partially offset by the inclusion of QuickChek fuel volumes. Revenues from sales of RINs increased $51.2 million when compared to Q1 2020 due primarily to higher per RINs prices received in Q1 2021, offsetting negative spot-to-rack margins.

Merchandise

	Three Months Ended March 31,
Key Operating Metrics	2021			2020
Total merchandise contribution ($ Millions)	$	148.4		$	107.5
Total merchandise sales ($ Millions)	$	833.2		$	687.5
Total merchandise sales ($K SSS)^1,2	$	161.3		$	153.8
Merchandise unit margin (%)	17.8		%	15.6		%
Tobacco contribution ($K SSS)^1,2	$	15.6		$	15.5
Non-tobacco contribution ($K SSS)^1,2	$	9.8		$	9.0
Total merchandise contribution ($K SSS)^1,2	$	25.4		$	24.5

¹2020 amounts not revised for 2021 raze-and-rebuild activity
²Includes site-level discounts for Murphy Drive Reward (“MDR”) redemptions and excludes change in value of unredeemed MDR points

Total merchandise contribution increased 38.1% to $148.4 million in Q1 2021 from $107.5 million reported in Q1 2020, due to improved sales volumes and the inclusion of QuickChek in 2021 results. Total merchandise contribution dollars on a SSS basis in Q1 2021 increased 3.7% when compared to Q1 2020. Tobacco contribution increased 2.0% on a SSS basis due to higher unit volumes which generated higher sales dollars and margin during the current period. Non-tobacco contribution improved 6.5% on a SSS basis, when compared to Q1 in the prior-year. The increase in merchandise contribution reflects the impact of the QuickChek acquisition combined with increases in beverage and general merchandise categories.

Other Areas

	Three Months Ended March 31,
Key Operating Metrics	2021		2020
Total station and other operating expense ($ Millions)	$	177.1	$	135.1
Station OPEX excluding credit card fees and rent ($K APSM)	$	25.3	$	20.1
Total SG&A cost ($ Millions)	$	44.3	$	39.2

Station OPEX excluding payment fees and rent were $32.6 million higher over the same period of 2020. This was primarily attributable to the inclusion of the QuickChek stores, which have higher station operating costs due to their larger format stores with greater food and beverage offerings and other related store costs. Total SG&A costs were $5.1 million higher in Q1 2021 when compared to 2020, primarily due to the inclusion of QuickChek.

Station Openings

Murphy USA opened 1 new retail location and acquired 156 QuickChek locations in Q1 2021, bringing the store count to 1,660. This total consists of 1,151 Murphy USA sites, 353 Murphy Express sites, and 156 QuickChek sites. A total of 18 Murphy USA stores are currently under construction which includes 2 new Murphy Express retail locations, 12 Murphy USA kiosks undergoing raze-and-rebuild that will return to operation as 1400 sq. ft. stores, and 4 QuickChek sites. We expect to end the year with more than 1,700 stores in operation.

Financial Resources

	As of March 31,
Key Financial Metrics	2021		2020
Cash and cash equivalents ($ Millions)	$	304.1	$	200.3
Long-term debt, including capital lease obligations ($ Millions)	$	1,796.8	$	987.4

Cash balances as of March 31, 2021 totaled $304.1 million. Long-term debt consisted of approximately $492 million in carrying value of 3.75% senior notes due in 2031, $494 million in carrying value of 4.75% senior notes due in 2029, $297 million in carrying value of 5.625% senior notes due in 2027 and $386 million of term debt. The acquisition of QuickChek included certain leases treated as finance leases, which increased long-term debt by $126 million at March 31, 2021. The cash flow revolving facility was undrawn as of March 31, 2021.

	Three Months Ended March 31,
Key Financial Metric	2021	2020
Average shares outstanding (diluted) (in thousands)	27,488	30,541

At March 31, 2021, the Company had common shares outstanding of 26,924,264. Common shares repurchased during the current quarter under the $500 million share repurchase program approved in November 2020 were approximately 0.4 million for $50.0 million, with approximately $325.0 million remaining in the plan at March 31, 2021. The effective income tax rate for Q1 2021 was 24.6% compared to 23.9% in Q1 2020.

The Company paid a quarterly dividend of $0.25 per share, or $1.00 per share on an annualized basis, on March 4, 2021, for a total cash payment of $6.8 million.

Earnings Call Information

The Company will host a conference call on April 29, 2021 at 10:00 a.m. Central Time to discuss first quarter 2021 results. The conference call number is 1 (833) 968-2218 and the conference number is 7780259. The earnings and investor related materials, including reconciliations of any non-GAAP financial measures to GAAP financial measures and any other applicable disclosures, will be available on that same day on the investor section of the Murphy USA website (http://ir.corporate.murphyusa.com). Approximately one hour after the conclusion of the conference, the webcast will be available for replay. Shortly thereafter, a transcript will be available.

Source: Murphy USA Inc. (NYSE: MUSA)

Forward-Looking Statements

Certain statements in this news release contain or may suggest “forward-looking” information (as defined in the Private Securities Litigation Reform Act of 1995) that involve risk and uncertainties, including, but not limited to our M&A activity, anticipated store openings, fuel margins, merchandise margins, sales of RINs, trends in our operations, dividends, and share repurchases. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual future results may differ materially from historical results or current expectations depending upon factors including, but not limited to: The Company’s ability to realize projected synergies from the acquisition of QuickChek and successfully expand our food and beverage offerings; our ability to continue to maintain a good business relationship with Walmart; successful execution of our growth strategy, including our ability to realize the anticipated benefits from such growth initiatives, and the timely completion of construction associated with our newly planned stores which may be impacted by the financial health of third parties; our ability to effectively manage our inventory, disruptions in our supply chain and our ability to control costs; the impact of severe weather events, such as hurricanes, floods and earthquakes; the impact of a global health pandemic, such as COVID-19, including the impact on the Company’s fuel volumes if the gradual recoveries experienced throughout 2020 stall or reverse as a result of any resurgence in COVID-19 infection rates and government reaction in response thereof; the impact of any systems failures, cybersecurity and/or security breaches, including any security breach that results in theft, transfer or unauthorized disclosure of customer, employee or company information or our compliance with information security and privacy laws and regulations in the event of such an incident; successful execution of our information technology strategy; future tobacco or e-cigarette legislation and any other efforts that make purchasing tobacco products more costly or difficult could hurt our revenues and impact gross margins; changes to the Company’s capital allocation, including the timing, declaration, amount and payment of any future dividends or levels of the Company’s share repurchases, or management of operating cash; the market price of the Company’s stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company’s cash flows from operations, and general economic conditions; compliance with debt covenants; availability and cost of credit; and changes in interest rates. Our SEC reports, including our most recent annual Report on Form10-K and quarterly report on Form 10-Q, contain other information on these and other factors that could affect our financial results and cause actual results to differ materially from any forward-looking information we may provide. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances.

Investor Contact:

Christian Pikul (870) 875-7683
Vice President, Investor Relations and Financial Planning and Analysis
[email protected]

Murphy USA Inc.

Consolidated Statements of Income

(Unaudited)


	Three Months Ended March 31,
(Millions of dollars, except share and per share amounts)	2021			2020
Operating Revenues
Petroleum product sales (a)	$	2,635.8		$	2,480.2
Merchandise sales	833.2			687.5
Other operating revenues	68.1			17.1
Total operating revenues	3,537.1			3,184.8

Operating Expenses
Petroleum product cost of goods sold (a)	2,476.1			2,259.8
Merchandise cost of goods sold	684.8			580.0
Station and other operating expenses	177.1			135.1
Depreciation and amortization	51.0			39.4
Selling, general and administrative	44.3			39.2
Accretion of asset retirement obligations	0.6			0.6
Acquisition related costs	8.8			—
Total operating expenses	3,442.7			3,054.1

Gain (loss) on sale of assets	0.2			0.1
Income (loss) from operations	94.6			130.8

Other income (expense)
Interest income	—			0.8
Interest expense	(21.3		)	(13.3		)
Other nonoperating income (expense)	—			(1.0		)
Total other income (expense)	(21.3		)	(13.5		)
Income (loss) before income taxes	73.3			117.3
Income tax expense (benefit)	18.0			28.0
Net Income	$	55.3		$	89.3

Basic and Diluted Earnings Per Common Share
Basic	$	2.04		$	2.95
Diluted	$	2.01		$	2.92
Weighted-average Common shares outstanding (in thousands):
Basic	27,131			30,235
Diluted	27,488			30,541
Supplemental information:
(a) Includes excise taxes of:	$	469.6		$	473.5

Murphy USA Inc.

Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

(Millions of dollars)	Three Months Ended March 31,
	2021			2020
Net income	$	55.3		$	89.3

Other comprehensive income (loss), net of tax
Interest rate swap:
Realized gain (loss)	(0.1		)	0.1
Unrealized gain (loss)	0.1			(3.6		)
Reclassifications:
Realized (gain) loss reclassified to interest expense	0.1			(0.1		)
Amortization of unrealized (gain) loss to interest expense	0.2			—
	0.3			(3.6		)
Deferred income tax (benefit) expense	0.1			(0.9		)
Other comprehensive income (loss)	0.2			(2.7		)
Comprehensive income (loss)	$	55.5		$	86.6

Murphy USA Inc.

Segment Operating Results

(Unaudited)


(Millions of dollars, except revenue per same store sales (in thousands) and store counts)	Three Months Ended March 31,
Marketing Segment	2021			2020

Operating Revenues
Petroleum product sales	$	2,635.8		$	2,480.2
Merchandise sales	833.2			687.5
Other operating revenues	68.1			17.0
Total operating revenues	3,537.1			3,184.7

Operating expenses
Petroleum products cost of goods sold	2,476.1			2,259.8
Merchandise cost of goods sold	684.8			580.0
Station and other operating expenses	177.1			135.1
Depreciation and amortization	46.9			35.9
Selling, general and administrative	44.3			39.2
Accretion of asset retirement obligations	0.6			0.6
Total operating expenses	3,429.8			3,050.6
Gain (loss) on sale of assets	0.1			0.1
Income (loss) from operations	107.4			134.2

Other income (expense)
Interest expense	(1.5		)	—
Total other income (expense)	(1.5		)	—

Income (loss) before income taxes	105.9			134.2
Income tax expense (benefit)	25.5			33.3
Income (loss) from operations	$	80.4		$	100.9

Total tobacco sales revenue same store sales^1,2	$	114.9		$	112.3
Total non-tobacco sales revenue same store sales^1,2	46.4			41.5
Total merchandise sales revenue same store sales^1,2	$	161.3		$	153.8
¹2020 amounts not revised for 2021 raze-and-rebuild activity
²Includes site-level discounts for Murphy Drive Reward (“MDR”) redemptions and excludes change in value of unredeemed MDR points

Store count at end of period	1,660			1,491
Total store months during the period	4,833			4,461

Same store sales information compared to APSM metrics

	Variance from prior year period
	Three months ended
	March 31, 2021
	SSS ¹		APSM ²
Fuel gallons per month	(10.1	)%	(8.9	)%

Merchandise sales	4.3	%	11.9	%
Tobacco sales	2.2	%	1.3	%
Non tobacco sales	9.9	%	40.5	%

Merchandise margin	3.7	%	27.5	%
Tobacco margin	2.0	%	2.9	%
Non tobacco margin	6.5	%	69.0	%
¹Includes site-level discounts for MDR redemptions and excludes change in value of unredeemed MDR points
²Includes all MDR activity

Notes

Average Per Store Month (APSM) metric includes all stores open through the date of the calculation, including stores acquired during the period.

Same store sales (SSS) metric includes aggregated individual store results for all stores open throughout both periods presented. For all periods presented, the store must have been open for the entire calendar year to be included in the comparison. Remodeled stores that remained open or were closed for just a very brief time (less than a month) during the period being compared remain in the same store sales calculation. If a store is replaced either at the same location (raze-and-rebuild) or relocated to a new location, it will be excluded from the calculation during the period it is out of service. Newly constructed sites do not enter the calculation until they are open for each full calendar year for the periods being compared (open by January 1, 2020 for the sites being compared in the 2021 versus 2020 comparison). Acquired stores are not included in the calculation of same store sales for the first 12 months after the acquisition. When prior period same store sales volumes or sales are presented, they have not been revised for current year activity for raze-and-rebuilds and asset dispositions.

QuickChek uses a weekly retail calendar where each quarter has 13 weeks and its historical fiscal year end was the Friday nearest to October 31. For the Q1 2021 period, the results provided include the period from January 29, 2021 to April 2, 2021. The impact of the 2 additional days are immaterial to the overall consolidated results.

Murphy USA Inc.

Consolidated Balance Sheets


(Millions of dollars, except share amounts)	March 31, 2021			December 31, 2020
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	304.1		$	163.6
Accounts receivable—trade, less allowance for doubtful accounts of $0.1 in 2021 and 2020	182.1			168.8
Inventories	283.0			279.1
Prepaid expenses and other current assets	24.2			13.7
Total current assets	793.4			625.2
Property, plant and equipment, at cost less accumulated depreciation and amortization of $1,233.6 in 2021 and $1,191.4 in 2020	2,301.4			1,867.6
Operating lease right of use assets, net*	395.6			147.7
Intangible assets, net of amortization*	141.3			34.6
Goodwill	336.4			—
Other assets*	12.5			10.6
Total assets	$	3,980.6		$	2,685.7
Liabilities and Stockholders’ Equity
Current liabilities
Current maturities of long-term debt	$	13.2		$	51.2
Trade accounts payable and accrued liabilities	638.4			471.1
Income taxes payable	23.4			8.8
Total current liabilities	675.0			531.1

Long-term debt, including capitalized lease obligations	1,796.8			951.2
Deferred income taxes	281.4			218.4
Asset retirement obligations	36.7			35.1
Non current operating lease liabilities*	382.3			142.5
Deferred credits and other liabilities*	27.8			23.3
Total liabilities	3,200.0			1,901.6
Stockholders’ Equity
Preferred Stock, par $0.01 (authorized 20,000,000 shares,
none outstanding)	—			—
Common Stock, par $0.01 (authorized 200,000,000 shares,
46,767,164 shares issued at 2021 and 2020, respectively)	0.5			0.5
Treasury stock (19,842,900 and 19,518,551 shares held at
2021 and 2020, respectively)	(1,535.3		)	(1,490.9		)
Additional paid in capital (APIC)	525.6			533.3
Retained earnings	1,791.5			1,743.1
Accumulated other comprehensive income (loss) (AOCI)	(1.7		)	(1.9		)
Total stockholders’ equity	780.6			784.1
Total liabilities and stockholders’ equity	$	3,980.6		$	2,685.7
*Prior year amounts have been revised to conform with the current period presentation

Murphy USA Inc.

Consolidated Statement of Cash Flows

(Unaudited)


	Three Months Ended March 31,
(Millions of dollars)	2021			2020
Operating Activities
Net income	$	55.3		$	89.3
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	51.0			39.4
Deferred and noncurrent income tax charges (benefits)	3.7			5.9
Accretion of asset retirement obligations	0.6			0.6
Pretax (gains) losses from sale of assets	(0.2		)	(0.1		)
Net (increase) decrease in noncash operating working capital	108.0			(25.7		)
Other operating activities – net	11.4			4.3
Net cash provided by operating activities	229.8			113.7
Investing Activities
Property additions	(53.6		)	(46.6		)
Payments for acquisition, net of cash acquired	(642.1		)	—
Proceeds from sale of assets	0.3			0.2
Other investing activities – net	(0.9		)	(0.8		)
Net cash required by investing activities	(696.3		)	(47.2		)
Financing Activities
Purchase of treasury stock	(50.0		)	(140.6		)
Dividends paid	(6.8		)	—
Borrowings of debt	892.8			—
Repayments of debt	(214.4		)	(0.3		)
Debt issuance costs	(8.8		)	—
Amounts related to share-based compensation	(5.8		)	(5.6		)
Net cash provided (required) by financing activities	607.0			(146.5		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	140.5			(80.0		)
Cash, cash equivalents, and restricted cash at beginning of period	163.6			280.3
Cash, cash equivalents, and restricted cash at end of period	$	304.1		$	200.3

Supplemental Disclosure Regarding Non-GAAP Financial Information

The following table sets forth the Company’s EBITDA and Adjusted EBITDA for the three months ended March 31, 2021 and 2020. EBITDA means net income (loss) plus net interest expense, plus income tax expense, depreciation and amortization, and Adjusted EBITDA adds back (i) other non-cash items (e.g., impairment of properties and accretion of asset retirement obligations) and (ii) other items that management does not consider to be meaningful in assessing our operating performance (e.g., (income) from discontinued operations, net settlement proceeds, (gain) loss on sale of assets, loss on early debt extinguishment, transaction and integration costs related to acquisitions, and other non-operating (income) expense). EBITDA and Adjusted EBITDA are not measures that are prepared in accordance with U.S. generally accepted accounting principles (GAAP).

We use Adjusted EBITDA in our operational and financial decision-making, believing that the measure is useful to eliminate certain items in order to focus on what we deem to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. Adjusted EBITDA is also used by many of our investors, research analysts, investment bankers, and lenders to assess our operating performance. We believe that the presentation of Adjusted EBITDA provides useful information to investors because it allows understanding of a key measure that we evaluate internally when making operating and strategic decisions, preparing our annual plan, and evaluating our overall performance. However, non-GAAP measures are not a substitute for GAAP disclosures, and EBITDA and Adjusted EBITDA may be prepared differently by us than by other companies using similarly titled non-GAAP measures.

The reconciliation of net income (loss) to EBITDA and Adjusted EBITDA is as follows:


	Three Months Ended March 31,
(Millions of dollars)	2021			2020

Net income	$	55.3		$	89.3

Income tax expense (benefit)	18.0			28.0
Interest expense, net of interest income	21.3			12.5
Depreciation and amortization	51.0			39.4
EBITDA	$	145.6		$	169.2

Accretion of asset retirement obligations	0.6			0.6
(Gain) loss on sale of assets	(0.2		)	(0.1		)
Acquisition related costs	8.8			—
Other nonoperating (income) expense	—			1.0
Adjusted EBITDA	$	154.8		$	170.7

April 28, 2021 4:33 pm

Butterfield Reports First Quarter 2021 Results

Butterfield Reports First Quarter 2021 Results

Financial highlights for the first quarter of 2021:

Net income and core net income¹ of $41.6 million, or $0.83 per share
Return on average common equity of 17.5%, and return on average tangible common equity¹ of 19.3%
Credit reserve release of $1.5 million due to improved post-pandemic growth forecast
Board declares dividend for the quarter ended March 31, 2021 of $0.44 per share

HAMILTON, Bermuda–(BUSINESS WIRE)–
The Bank of N.T. Butterfield & Son Limited (“Butterfield” or the “Bank”) (BSX: NTB.BH; NYSE: NTB) today announced financial results for the first quarter ended March 31, 2021.

Net income and core net income¹ for the three months ended March 31, 2021 were $41.6 million, or $0.83 per diluted common share, compared to net income of $40.3 million, or $0.77 per diluted common share, for the three months ended March 31, 2020 and core net income¹ of $40.8 million, or $0.78 per diluted common share, for the three months ended March 31, 2020.

The core return on average tangible common equity¹ for the three months ended March 31, 2021 was 19.3%, compared to core return on average tangible common equity¹ 18.6% for the three months ended March 31, 2020. The efficiency ratio for the three months ended March 31, 2021 was 64.8% compared with 64.1% for the three months ended March 31, 2020 and compared with the core efficiency ratio¹ of 63.8% for the three months ended March 31, 2020.

Michael Collins, Butterfield’s Chairman and Chief Executive Officer, commented, “The first quarter of 2021 was a positive start to the year, with solid non-interest income, favorable expense trends, continued focus on capital management, and a constructive interest rate outlook. We continue to target top quartile risk adjusted returns, while maintaining a strong return and credit risk profile.

“As our core markets begin to recover, we remain confident that our strong risk discipline and underwriting expertise has reduced the residual risk of credit losses. We continue to actively communicate with our clients, responding quickly to instances of payment difficulties and working with clients to find a way forward.

“We are responsible stewards of capital, and balance regulatory requirements with growth opportunities and shareholder returns. Our capital management philosophy continues to emphasize a sustainable quarterly cash dividend, organic growth, potential inorganic growth, as well as share repurchases. We target a through-cycle dividend payout ratio of 50%, with flexibility around share buy-backs, depending on market conditions and potential M&A opportunities.”

Net interest income (“NII”) for the first quarter of 2021 was $74.9 million, a decrease of $0.7 million compared with NII of $75.6 million in the previous quarter and down $12.7 million from $87.6 million in the first quarter of 2020. NII in the first quarter of 2021 was lower compared to the first quarter of 2020 due to a decrease in market interest rates and accelerated prepayments in the US agency mortgage backed investment portfolio, which resulted in reinvestment at lower rates. Compared to the fourth quarter of 2020, NII was down marginally due to these lower cash yields, as well as the significant mortgage backed securities pay downs.

Net interest margin (“NIM”) for the first quarter of 2021 was 2.09%, a decrease of 16 basis points from 2.25% in the previous quarter and down 54 basis points from 2.63% in the first quarter of 2020, was primarily due to historically high average levels of cash and customer deposits during the entire first quarter compared to the previous quarter and first quarter of 2020.

Non-interest income was stable at $47.6 million for the first quarter of 2021, compared with $47.8 million in the previous quarter and $47.6 million earned in the first quarter of 2020. The first quarter of 2021 had lower banking revenues due to the seasonal strength of card service fees in the comparative fourth quarter of 2020, which traditionally benefits from the year-end holiday shopping season.

Credit reserve releases totaled $1.5 million for the first quarter of 2021 versus a release of $2.4 million in the previous quarter and a provision increase of $5.2 million during the first quarter of 2020. The reserve release is the result of continued improvements in economic growth forecasts that contribute to lower future expected credit losses.

Non-interest expenses were $80.9 million in the first quarter of 2021, compared to $83.2 million in the previous quarter and $88.1 million in the first quarter of 2020 and compared with core non-interest expenses¹ of $82.4 million in the previous quarter and $87.6 million in the first quarter of 2020. Non-interest expenses were lower in the first quarter of 2021 compared to the prior quarter and the first quarter of 2020 primarily due to lower salaries and benefits costs following restructuring initiatives announced in the second half of 2020, slightly offset by higher indirect taxes.

Period end deposit balances increased slightly to $13.4 billion from $13.3 billion as at December 31, 2020. The elevated deposit balances are expected to moderate in 2021 as depositors activate saved funds as expected economic activity improves.

The Bank continued its balanced capital return policy. The Board again declared a quarterly dividend of $0.44 per common share to be paid on May 26, 2021 to shareholders of record on May 12, 2021. During the first quarter of 2021, Butterfield also repurchased 0.1 million common shares under the Bank’s current 2.0 million common share repurchase plan authorization.

The current total regulatory capital ratio as at March 31, 2021 was 20.0% as calculated under Basel III, compared to 19.8% as at December 31, 2020. Both of these ratios are significantly above the Basel III regulatory requirements applicable to the Bank.

(1)

See table “Reconciliation of US GAAP Results to Core Earnings” below for reconciliation of US GAAP results to non- GAAP measures.

ANALYSIS AND DISCUSSION OF FIRST QUARTER RESULTS

Income statement	Three months ended (Unaudited)
(in $ millions)	March 31, 2021		December 31, 2020		March 31, 2020
Non-interest income	47.6		47.8		47.6
Net interest income before provision for credit losses	74.9		75.6		87.6
Total net revenue before provision for credit losses and other gains (losses)	122.5		123.3		135.2
Provision for credit recoveries (losses)	1.5		2.4		(5.2	)
Total other gains (losses)	(0.8	)	(0.4	)	(0.6	)
Total net revenue	123.3		125.3		129.4
Non-interest expenses	(80.9	)	(83.2	)	(88.1	)
Total net income before taxes	42.4		42.1		41.3
Income tax benefit (expense)	(0.7	)	(0.1	)	(1.0	)
Net income	41.6		42.1		40.3

Net earnings per share
Basic	0.84		0.85		0.77
Diluted	0.83		0.84		0.77

Per diluted share impact of other non-core items ¹	—		0.02		0.01
Core earnings per share on a fully diluted basis ¹	0.83		0.86		0.78

Adjusted weighted average number of participating shares on a fully diluted basis^{(in thousands of shares)}	49,894		49,809		52,406

Key financial ratios
Return on common equity	17.5	%	16.9	%	16.6	%
Core return on average tangible common equity ¹	19.3	%	19.0	%	18.6	%
Return on average assets	1.1	%	1.2	%	1.2	%
Net interest margin	2.09	%	2.25	%	2.63	%
Core efficiency ratio ¹	64.8	%	65.6	%	63.8	%

(1)

See table “Reconciliation of US GAAP Results to Core Earnings” below for reconciliation of US GAAP results to non-GAAP measures.

Balance Sheet	As at
(in $ millions)	March 31, 2021		December 31, 2020
Cash due from banks	2,582		3,290
Securities purchased under agreements to resell	175		197
Short-term investments	1,061		823
Investments in securities	5,426		4,863
Loans, net of allowance for credit losses	5,149		5,161
Premises, equipment and computer software, net of accumulated depreciation	146		151
Goodwill and intangibles, net	92		93
Accrued interest and other assets	174		162
Total assets	14,805		14,739

Total deposits	13,361		13,250
Accrued interest and other liabilities	335		335
Long-term debt	172		171
Total liabilities	13,868		13,757
Common shareholders’ equity	936		982
Total shareholders’ equity	936		982
Total liabilities and shareholders’ equity	14,805		14,739

Key Balance Sheet Ratios:	March 31, 2021		December 31, 2020
Common equity tier 1 capital ratio¹	16.4	%	16.1	%
Tier 1 capital ratio¹	16.4	%	16.1	%
Total capital ratio¹	20.0	%	19.8	%
Leverage ratio¹	5.4	%	5.3	%
Risk-Weighted Assets (in $ millions)	5,105		5,069
Risk-Weighted Assets / total assets	34.5	%	34.4	%
Tangible common equity ratio	5.7	%	6.1	%
Book value per common share (in $)	18.84		19.88
Tangible book value per share (in $)	17.00		18.00
Non-accrual loans/gross loans	1.4	%	1.4	%
Non-performing assets/total assets	0.7	%	0.6	%
Total coverage ratio	45.0	%	47.0	%

(1)		In accordance with regulatory capital guidance, the Bank has elected to make use of transitional arrangements which allow the deferral of the January 1, 2020
		Current Expected Credit Loss (“CECL”) impact of $7.8 million on its regulatory capital over a period of 5 years.

QUARTER ENDED MARCH 31, 2021 COMPARED WITH THE QUARTER ENDED DECEMBER 31, 2020

Net Income

Net income for the quarter ended March 31, 2021 was $41.6 million, down $0.5 million from $42.1 million in the prior quarter.

The $0.5 million decrease in net income in the quarter ended March 31, 2021 over the previous quarter was due principally to the following:

$2.5 million decrease in staff-related expenses driven by reduced headcount related to the phased cost restructure program in 2020 as well as the related costs recognized in the previous quarter;
$0.9 million decrease in recoveries for credit losses driven by a lower incremental improvement in macroeconomic forecasts impacting future expected credit loss estimates;
$0.2 million decrease in non-interest income is mainly due to a $2.2 million decrease in banking income due to reduced card services income in the fourth quarter, which was offset by a $1.9 million increase in foreign exchange revenue driven by higher transactional volumes and a $0.6 million increase in asset management and custody fee revenue; and
$1.0 million decrease in net interest income and total gains (losses).

Non-Core Items¹

There were no non-core expenses, gains or losses during the first quarter of 2021. Management does not believe that comparative period expenses, gains or losses identified as non-core are indicative of the results of operations of the Bank in the ordinary course of business.

(1)

See table “Reconciliation of US GAAP Results to Core Earnings” below for reconciliation of US GAAP results to non-GAAP measures.

BALANCE SHEET COMMENTARY AT MARCH 31, 2021 COMPARED WITH DECEMBER 31, 2020

Total Assets

Total assets of the Bank were $14.8 billion at March 31, 2021, an increase of $0.1 billion from December 31, 2020. The Bank maintained a highly liquid position at March 31, 2021, with its $9.2 billion of cash and demand deposits with banks, reverse repurchase agreements and liquid investments representing 62.4% of total assets, compared with 62.2% at December 31, 2020.

Loans Receivable

The loan portfolio totaled $5.1 billion at March 31, 2021, which was comparatively flat against December 31, 2020 balances. Bermuda and Cayman saw modest growth in their commercial loan and residential mortgage portfolios, respectively, which was offset by the early repayment of a large commercial facility in the Channel Islands and UK segment.

Allowance for credit losses at March 31, 2021 totaled $31.6 million, a decrease of $2.5 million from $34.1 million balance in December 31, 2020. The movement was due primarily to property market sales which had previously been provisioned for and improving macro-economic forecasts which drive forward-looking expected losses.

The loan portfolio represented 34.8% of total assets at March 31, 2021 (December 31, 2020: 35.0%), while loans as a percentage of total deposits decreased to 38.5% at March 31, 2021 from 38.9% at December 31, 2020. The decrease in both ratios are due principally to an increase in customer deposits at March 31, 2021 due to corporate deposit increases in Cayman and the Channel Islands, and partially offset by expected corporate deposit decreases in Bermuda.

As of March 31, 2021, the Bank had gross non-accrual loans of $70.2 million, representing 1.4% of total gross loans, a decrease of $2.3 million from the $72.5 million, or 1.4%, of total loans at December 31, 2020. The decrease in non-accrual loans was driven by the payoffs of residential mortgages in Bermuda.

Other real estate owned (“OREO”) remained constant at $4.1 million at March 31, 2021.

Investment in Securities

The investment portfolio was $5.4 billion at March 31, 2021, up $0.6 billion from $4.9 billion in December 31, 2020.

The investment portfolio is made up of high quality assets with 99.9% invested in A-or-better-rated securities. The investment yield decreased to 1.95% during the quarter ended March 31, 2021 from 2.11% during the previous quarter. Total net unrealized gains on the available-for-sale and held-to-maturity portfolios decreased to $68.6 million, compared with total net unrealized gains of $183.2 million at December 31, 2020, as a result of increasing long-term US dollar interest rates.

Deposits

Average deposits were $13.4 billion in the first quarter of 2021, a significant increase of $1.2 billion compared to the previous quarter.

Average Balance Sheet²

	For the three months ended
	March 31, 2021					December 31, 2020					March 31, 2020
(in $ millions)	Average balance ($)	Interest ($)		Average rate (%)		Average balance ($)	Interest ($)		Average rate (%)		Average balance ($)	Interest ($)		Average rate (%)
Assets
Cash due from banks and short-term investments	4,180.1	0.6		0.06		3,539.4	0.6		0.07		3,681.2	9.4		1.03
Investment in securities	5,208.5	25.1		1.95		4,737.9	25.2		2.11		4,503.2	31.2		2.78
Equity securities at fair value	2.0					1.6					2.3
Available-for-sale	2,864.6	11.9		1.69		2,451.3	11.7		1.89		2,319.8	15.0		2.59
Held-to-maturity	2,341.8	13.1		2.27		2,284.9	13.5		2.35		2,181.1	16.2		2.99
Loans	5,161.9	55.6		4.37		5,042.6	56.2		4.42		5,159.8	61.7		4.80
Commercial	1,612.2	18.9		4.75		1,602.4	19.0		4.71		1,792.4	23.2		5.19
Consumer	3,549.7	36.7		4.20		3,440.3	37.1		4.28		3,367.4	38.5		4.59
Interest earning assets	14,550.5	81.2		2.26		13,319.9	81.9		2.44		13,344.1	102.4		3.08
Other assets	371.2					377.5					403.5
Total assets	14,921.8					13,697.5					13,747.6
Liabilities
Deposits	10,538.7	(3.9	)	(0.15	)	9,448.6	(3.7	)	(0.16	)	10,172.2	(12.9	)	(0.51	)
Long-term debt	171.5	(2.4	)	(5.68	)	187.8	(2.6	)	(5.54	)	143.5	(1.9	)	(5.22	)
Interest bearing liabilities	10,710.2	(6.3	)	(0.24	)	9,636.4	(6.4	)	(0.26	)	10,315.7	(14.8	)	(0.58	)
Non-interest bearing current accounts	2,839.9					2,713.6					2,227.3
Other liabilities	294.3					276.2					316.6
Total liabilities	13,844.4					12,626.2					12,859.6
Shareholders’ equity	1,077.4					1,071.3					888.0
Total liabilities and shareholders’ equity	14,921.8					13,697.5					13,747.6
Non-interest-bearing funds net of non-interest earning assets (free balance)	3,840.3					3,683.5					3,028.4
Net interest margin		74.9		2.09			75.6		2.25			87.6		2.63

(2)

Averages are based upon a daily averages for the periods indicated.

Assets Under Administration and Assets Under Management

Total assets under administration for the trust and custody businesses were $105.3 billion and $33.8 billion, respectively, at March 31, 2021, while assets under management were $5.4 billion at March 31, 2021. This compares with $104.1 billion, $32.4 billion and $5.6 billion, respectively, at December 31, 2020.

Reconciliation of US GAAP Results to Core Earnings

The table below shows the reconciliation of net income in accordance with US GAAP to core earnings, a non-GAAP measure, which excludes certain significant items that are included in our US GAAP results of operations. We focus on core net income, which we calculate by adjusting net income to exclude certain income or expense items that are not representative of our business operations, or “non-core”. Core net income includes revenue, gains, losses and expense items incurred in the normal course of business. We believe that expressing earnings and certain other financial measures excluding these non-core items provides a meaningful base for period-to-period comparisons, which management believes will assist investors in analyzing the operating results of the Bank and predicting future performance. We believe that presentation of these non-GAAP financial measures will permit investors to assess the performance of the Bank on the same basis as management.

Core Earnings	Three months ended
(in $ millions except per share amounts)	March 31, 2021		December 31, 2020		March 31, 2020
Net income	41.6		42.1		40.3
Non-core items
Non-core expenses
Early retirement program, voluntary separation, redundancies and other non-core compensation costs	—		0.8		0.4
Business acquisition costs	—		—		0.1
Total non-core expenses	—		0.8		0.5
Total non-core items	—		0.8		0.5
Core net income	41.6		42.9		40.8

Average common equity	966.7		985.4		973.3
Less: average goodwill and intangible assets	(92.4	)	(91.4	)	(94.2	)
Average tangible common equity	874.2		894.0		879.1
Core earnings per share fully diluted	0.83		0.86		0.78
Return on common equity	17.5	%	16.9	%	16.6	%
Core return on average tangible common equity	19.3	%	19.0	%	18.6	%

Shareholders’ equity	936.5		981.9		980.5
Less: goodwill and intangible assets	(91.5	)	(92.8	)	(91.2	)
Tangible common equity	844.9		889.1		889.3
Basic participating shares outstanding (in millions)	49.7		49.4		51.4
Tangible book value per common share	17.00		18.00		17.31

Non-interest expenses	80.9		83.2		88.1
Less: non-core expenses	—		(0.8	)	(0.5	)
Less: amortization of intangibles	(1.5	)	(1.5	)	(1.4	)
Core non-interest expenses before amortization of intangibles	79.4		80.9		86.2
Core revenue before other gains and losses and provision for credit losses	122.5		123.3		135.2
Core efficiency ratio	64.8	%	65.6	%	63.8	%

Conference Call Information:

Butterfield will host a conference call to discuss the Bank’s results on Thursday, April 29, 2021 at 10:00 a.m. Eastern Time. Callers may access the conference call by dialing +1 (844) 855 9501 (toll-free) or +1 (412) 858 4603 (international) ten minutes prior to the start of the call. A live webcast of the conference call, including a slide presentation, will be available in the investor relations section of Butterfield’s website at www.butterfieldgroup.com. A replay of the call will be archived on the Butterfield website thereafter.

About Non-GAAP Financial Measures:

Certain statements in this release involve the use of non-GAAP financial measures. We believe such measures provide useful information to investors that is supplementary to our financial condition, results of operations and cash flows computed in accordance with US GAAP; however, our non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with US GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. See “Reconciliation of US GAAP Results to Core Earnings” for additional information.

Forward-Looking Statements:

Certain of the statements made in this release are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions estimates, intentions, and future performance, including, without limitation, our dividend payout target, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of Butterfield to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements due to a variety of factors, including the impact of the COVID-19 pandemic, the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, worldwide economic conditions and fluctuations of interest rates, a decline in Bermuda’s sovereign credit rating, the successful completion and integration of acquisitions or the realization of the anticipated benefits of such acquisitions in the expected time-frames or at all, success in business retention and obtaining new business and other factors. Forward-looking statements can be identified by words such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “indicate,” “intend,” “may,” “plan,” “point to,” “predict,” “project,” “seek,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact are statements that could be forward-looking statements.

All forward-looking statements in this disclosure are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our SEC reports and filings. Such reports are available upon request from Butterfield, or from the Securities and Exchange Commission (“SEC”), including through the SEC’s website at https://www.sec.gov. Any forward-looking statements made by Butterfield are current views as at the date they are made. Except as otherwise required by law, Butterfield assumes no obligation and does not undertake to review, update, revise or correct any of the forward-looking statements included in this disclosure, whether as a result of new information, future events or other developments. You are cautioned not to place undue reliance on the forward-looking statements made by Butterfield in this disclosure. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, and should only be viewed as historical data.

About Butterfield:

Butterfield is a full-service bank and wealth manager headquartered in Hamilton, Bermuda, providing services to clients from Bermuda, the Cayman Islands, Guernsey and Jersey, where our principal banking operations are located, and The Bahamas, Switzerland, Singapore and the United Kingdom, where we offer specialized financial services. Banking services comprise deposit, cash management and lending solutions for individual, business and institutional clients. Wealth management services are composed of trust, private banking, asset management and custody. In Bermuda, the Cayman Islands and Guernsey, we offer both banking and wealth management. In The Bahamas, Singapore and Switzerland, we offer select wealth management services. In the UK, we offer residential property lending. In Jersey, we offer select banking and wealth management services. Butterfield is publicly traded on the New York Stock Exchange (symbol: NTB) and the Bermuda Stock Exchange (symbol: NTB.BH). Further details on the Butterfield Group can be obtained from our website at: www.butterfieldgroup.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428005977/en/

Investor Relations Contact:

Noah Fields

Investor Relations

The Bank of N.T. Butterfield & Son Limited

Phone: (441) 299 3816

E-mail: [email protected]

Media Relations Contact:

Kevin Dallas

Group Head of Marketing and Communications

The Bank of N.T. Butterfield & Son Limited

Phone: (441) 299 5904

E-mail: [email protected]

KEYWORDS: Bermuda Caribbean

INDUSTRY KEYWORDS: Banking Other Professional Services Professional Services Finance

MEDIA:

April 28, 2021 4:33 pm

Origin Bancorp, Inc. Announces Declaration of Quarterly Cash Dividend

RUSTON, La., April 28, 2021 (GLOBE NEWSWIRE) — Origin Bancorp, Inc. (Nasdaq: OBNK) (“Origin”), the holding company for Origin Bank, today announced that on April 28, 2021, its board of directors declared a quarterly cash dividend of $0.13 per share of its common stock. The cash dividend will be paid on May 31, 2021, to stockholders of record as of the close of business on May 14, 2021.

About Origin Bancorp, Inc.

Origin is a financial holding company headquartered in Ruston, Louisiana. Origin’s wholly owned bank subsidiary, Origin Bank, was founded in 1912. Deeply rooted in Origin’s history is a culture committed to providing personalized, relationship banking to its clients and communities. Origin provides a broad range of financial services to businesses, municipalities, high net worth individuals and retail clients. Origin currently operates 44 banking centers located from Dallas/Fort Worth, Texas across North Louisiana to Central Mississippi, as well as in Houston, Texas. For more information, visit www.origin.bank.

Forward-Looking Statements

When used in filings by Origin Bancorp, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”), in the Company’s press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “anticipates,” “believes,” “estimates,” “expects,” “foresees,” “intends,” “plans,” “projects,” and similar expressions or future or conditional verbs such as “could,” “may,” “might,” “should,” “will,” and “would” or variations of such terms” are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Factors that might cause such a difference include among other things: the expected payment date of its quarterly cash dividend; changes in economic conditions; the duration and impacts of the COVID-19 global pandemic continuing development and distribution of COVID-19 vaccines, as well as other efforts to contain the virus’s transmission, including the effect of these factors and developments on the Company’s business, customers and economic conditions generally; legislative action taken by governmental authorities to address the impact of COVID-19 on the United States economy, including, without limitation, the Coronavirus Aid, Relief and Economic Security Act and any related future economic stimulus legislation; other legislative changes generally; changes in policies by regulatory agencies; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; the Company’s ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company’s market area; competition; changes in management’s business strategies and other factors set forth in the Company’s filings with the SEC.

The Company does not undertake – and specifically declines any obligation – to update or revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Contact Information

Investor Relations
Chris Reigelman
318-497-3177
[email protected]

Media Contact
Ryan Kilpatrick
318-232-7472
[email protected]

April 28, 2021 4:33 pm

Exco Results For Second Quarter Ended March 31, 2021

Sales increased 4% excluding foreign exchange impact
EBITDA growth of 15% to $20.2 million
EBITDA margin of 17.1% compared to 14.7% prior year
EPS of $0.30 compared to $0.24 prior year; a 25% improvement
Quarterly dividend of $0.10 per common share

TORONTO, April 28, 2021 (GLOBE NEWSWIRE) — Exco Technologies Limited (TSX-XTC) today announced results for its second quarter of fiscal 2021 ended March 31, 2021. In addition, Exco announced a quarterly dividend of $0.10 per common share which will be paid on June 30, 2021 to shareholders of record on June 16, 2021. The dividend is an “eligible dividend” in accordance with the Income Tax Act of Canada.

	Three Months Ended March 31				Six Months Ended March 31
(in $ thousands except per share amounts)
		2021		2020		2021		2020
Sales	$ 118,360		$120,244		$ 239,762		$240,667
Net income for the period	$ 11,734		$9,495		$ 22,650		$17,553
Earnings per share: Basic and Diluted – Reported	$ 0.30		$0.24		$ 0.58		$0.44
EBITDA	$ 20,264		$17,642		$ 39,556		$33,024

“Exco’s second quarter results were very strong by almost any measure. Encouragingly we see many opportunities for further gains ahead”, said Darren Kirk, Exco’s President and CEO. “Of course a big thank you goes out to all of our employees for their commitment to working safely through these challenging times.”

Consolidated sales for the second quarter ended March 31, 2021 were $118.4 million compared to $120.2 million in the same quarter last year – a decrease of $1.8 million, or 1%. Excluding foreign exchange rate fluctuations sales increased 4% during the quarter.

The Automotive Solutions segment reported sales of $69.3 million in the second quarter – a decrease of $4.1 million, or 6% from the prior year quarter. Excluding foreign exchange rate movements on Exco’s results, segment revenues were lower by $0.6 million, or 1% during the quarter. After adjusting for the impact of foreign exchange rate movements, the segment continues to perform above IHS vehicle production estimates of negative 5% in North America and negative 1% in Europe in the quarter representing content per vehicle growth. This segment’s sales were favourable when considering the negative impact from the global microchip shortage, continued COVID-19 lockdowns, the Texas snowstorm, and shipping delays from congested ports which reduced vehicle production in the quarter. Segment sales were supported by a number of program launches for both new and existing products and favourable vehicle mix. The segment has received multiple contract wins during the quarter and management continues to see decent quoting activities for new programs across the segment’s various businesses supporting future growth.

The Casting and Extrusion segment reported sales of $49.1 million for the second quarter – an increase of $2.3 million, or 5%, from the same period last year. Excluding the negative impact of foreign exchange movements, the segment’s sales were up 11% and continue to rebound and exceed pre-COVID-19 levels. Segment sales continued the quarterly progression from the low in Q4 F2020 especially in the Extrusion and Castool groups. Extrusion group sales were higher during the quarter as sales at all 6 locations were strong, reflecting high demand for extrusion tools across North and South America across all industry segments. At Castool, the group’s revenues were also higher for the quarter and year-to-date. Demand for Die-Cast consumable tooling has been the primary driver of Castool’s strong sales, but orders for larger capital goods in extrusion end markets increased through the second quarter. The Large Mould group sales were down in the quarter as customers delayed shipping dates on existing programs, however inventories increased in the quarter and new business from current and new customers continues to outpace shipments for this group.

Consolidated net income for the second quarter was $11.7 million or basic and diluted earnings of $0.30 per share compared to $9.5 million or $0.24 per share in the same quarter last year – an increase in net income of 23%. Year-to-date, consolidated net income was $22.7 million or $0.58 per basic share compared to $17.6 million or $0.44 per basic share last year – an increase in net income of 29%. The consolidated effective income tax rate of 22% in the current quarter was the same as the prior year period and the first quarter F2021.

The Automotive Solutions segment reported pre-tax profit of $9.4 million in the second quarter – consistent with the same quarter last year. For the quarter, the segment maintained traditional profitability despite the slight sales decline through continued cost discipline. In addition, new product launches and a favourable sales mix were offset by ramp-up costs for future programs, supply chain challenges, raw material cost inflation, and fluctuations with customer releases caused by uncertainty due to the microchip shortage. Management remains focused on improving the efficiency of its operations and reducing its overall cost structure. Pricing discipline also remains a focus and new program awards include management’s expectations for higher future costs.

The Casting and Extrusion segment reported $7.4 million of pre-tax profit in the second quarter – and increase of $2.9 million or 65% from the prior year quarter. The segment’s profitability improvement was driven by strong efficiency gains in both material and labour usage coupled with greater overhead absorption. This, in turn, reflects our past and ongoing investments in new equipment and processes as part of our various continuous improvement initiatives. Of note, the profitability improvement occurred despite rising input cost inflation, supply chain bottlenecks and current restrictions on travel, which greatly impede management’s ability to operate its various global manufacturing facilities at optimal levels of efficiency.

Consolidated EBITDA for the second quarter totaled $20.2 million compared to $17.6 million in the same quarter last year – an increase of $2.6 million, or 15%. Year-to-date, consolidated EBITDA totaled $39.6 million compared to $33.0 million last year – an increase of $6.6 million, or 20%. For the quarter, EBITDA as a percentage of sales increased to 17.1% compared to 14.7% the prior year driven by an improvement in segment margins in both the Casting & Extrusion segment (22% compared to 17%) and the Automotive Solutions segment (16% compared to 15%).

Operating cash flow before net change in non-cash working capital totaled $17.3 million in the second quarter. After changes in working capital requirements, net cash provided by operating activities amounted to $11.9 million. This cash flow, together with cash on hand was more than sufficient to fund $0.1 million of interest expense, $5.1 million of capital expenditures, and $3.9 million of common dividend payments.

As at March 31, 2021, Exco’s consolidated balance sheet had net cash of $28.4 million. Principal sources of liquidity include generated Free Cash Flow, $37.9 million of balance sheet cash and $40.5 million of unused availability under its $50 million committed credit facility, which matures February 2023. Pursuant to the terms of the credit facility, Exco is required to maintain compliance with certain financial covenants, which the Company was in compliance with as at March 31, 2021.

For further information and prior year comparison please refer to the Company’s Second Quarter Financial Statements in the Investor Relations section posted at www.excocorp.com. Alternatively, please refer to www.sedar.com.

Non-IFRS Measures: In this News Release, reference may be made to EBITDA, EBITDA Margin, Pre-tax Profit and Free Cash Flow which are not measures of financial performance under International Financial Reporting Standards (“IFRS”). Exco calculates EBITDA as earnings before interest, taxes, depreciation, amortization and other expenses and EBITDA Margin as EBITDA divided by sales. Exco calculates Pre-tax Profit as segmented earnings before other income/expense, interest and taxes. Free Cash Flow is calculated as cash provided by operating activities less interest paid less investment in fixed assets net of proceeds of disposal. EBITDA, EBITDA Margin, Pre-tax Profit and Free Cash Flow are used by management, from time to time, to facilitate period-to-period operating comparisons and we believe some investors and analysts use these measures as well when evaluating Exco’s financial performance. These measures, as calculated by Exco, do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other issuers.

Quarterly Conference Call

– April 29, 2021 at 10:00 a.m. (Toronto time):

To access the live audio webcast, please log on to www.excocorp.com, or https://edge.media-server.com/mmc/p/hkbh522a a few minutes before the event. The conference call can also be accessed by dialling toll free at (866) 572-8261 or internationally at (703) 736-7448. The conference ID is 7124339.

For those unable to participate on April 29 2021, an archived version will be available on the Exco website.

				Source:				Exco Technologies Limited (TSX-XTC)
				Contact:				Darren Kirk, President and CEO
				Telephone:				(905) 477-3065 Ext. 7233
				Website:				http://www.excocorp.com

About Exco Technologies Limited:

Exco Technologies Limited is a global supplier of innovative technologies servicing the die-cast, extrusion and automotive industries. Through our 15 strategic locations in 7 countries, we employ approximately 4,800 people and service a diverse and broad customer base.

Notice To Reader: Forward Looking Statements

Information in this document relating to projected growth and financial performance of the Company’s business units, contribution of our start-up business units, contribution of awarded programs yet to be launched, margin performance, financial performance of acquisitions and operating efficiencies are forward-looking statements.

This press release may contain forward-looking information and forward-looking statements within the meaning of applicable securities laws. We use words such as “anticipate”, “plan”, “may”, “will”, “should”, “expect”, “believe”, “estimate” and similar expressions to identify forward-looking information and statements especially with respect to growth and financial performance of the Company’s business units, contribution of our start-up business units, contribution of awarded programs yet to be launched, margin performance, financial performance of acquisitions, liquidity and operating efficiencies are forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements throughout this document and are also cautioned that the foregoing list of important factors is not exhaustive. These forward-looking statements are based on our plans, intentions or expectations which are based on, among other things, the current uncertain global economic impact of the COVID-19 pandemic or similar outbreak of epidemic, pandemic, or contagious diseases that may emerge in the human population, which may have a material effect on how we and our customers operate our businesses and the duration and extent to which this will impact our future operating results, assumptions about the number of automobiles produced in North America and Europe, production mix between passenger cars and trucks, the number of extrusion dies required in North America and South America, the rate of economic growth in North America, Europe and emerging market countries, investment by OEMs in drivetrain architecture and other initiatives intended to reduce fuel consumption and/or the weight of automobiles in response to rising climate risks, raw material prices, economic conditions, currency fluctuations, trade restrictions, our ability to close or otherwise dispose of unprofitable operations in a timely manner, our ability to integrate acquisitions and the rate at which our operations in Brazil, and Mexico achieve sustained profitability. These forward-looking statements include known and unknown risks, uncertainties, assumptions and other factors which may cause actual results or achievements to be materially different from those expressed or implied. The Company will update its disclosure upon publication of each fiscal quarter’s financial results and otherwise disclaims any obligations to update publicly or otherwise revise any such factors or any of the forward-looking information or statements contained herein to reflect subsequent information, events or developments, changes in risk factors or otherwise. For a more extensive discussion of Exco’s risks and uncertainties see the ‘Risks and Uncertainties’ section in our latest Annual Report, Annual Information Form (“AIF”) and other reports and securities filings made by the Company. This information is available at www.sedar.com or www.excocorp.com.

April 28, 2021 4:33 pm

Capstead Mortgage Corporation Announces First Quarter 2021 Results

Capstead Mortgage Corporation Announces First Quarter 2021 Results

DALLAS–(BUSINESS WIRE)–
Capstead Mortgage Corporation (“Capstead” or the “Company”) (NYSE: CMO) today announced financial results for the quarter ended March 31, 2021.

First Quarter 2021 Summary

Recognized GAAP net income of $18.9 million or $0.15 per diluted common share
Generated core earnings of $17.4 million or $0.13 per diluted common share, representing an annualized 7.7% return on common equity capital
Paid a $0.15 dividend per common share for the sixth consecutive quarter
Book value per common share decreased $0.10 to $6.66 per common share
Agency-guaranteed residential adjustable-rate mortgage (ARM) portfolio ended the quarter at $7.4 billion
Leverage ended the quarter at 6.79 times long-term investment capital

First Quarter Earnings and Related Discussion

Capstead reported GAAP net income of $18.9 million or $0.15 per diluted common share for the quarter ended March 31, 2021, compared to $23.3 million or $0.19 per diluted common share for the quarter ended December 31, 2020. The Company reported core earnings of $17.4 million or $0.13 per diluted common share for the quarter ended March 31, 2021. This compares to core earnings of $19.7 million or $0.15 per diluted common share for the quarter ended December 31, 2020. See the “Non-GAAP Financial Measures” section of this release for more information on core earnings.

Yields on the Company’s portfolio of agency-guaranteed residential ARM securities averaged 1.38% during the first quarter of 2021, a decrease of 17 basis points from 1.55% reported for the fourth quarter of 2020. Yields declined due primarily to lower coupon interest rates on existing loans that reset lower based on prevailing interest rates as well as higher yield adjustments for investment premium amortization due to changes in lifetime prepayment estimates. Mortgage prepayment rates decreased during the quarter to an average annualized constant prepayment rate (“CPR”) of 37.12%, compared to 38.67% CPR in the prior quarter. Portfolio leverage decreased to 6.79 to one at March 31, 2021 compared to 7.26 to one at December 31, 2020.

The following table illustrates the progression of Capstead’s portfolio of residential mortgage investments for the quarter ended March 31, 2021 (dollars in thousands):

Residential mortgage investments, December 31, 2020	$	7,937,552
Portfolio acquisitions (principal amount)		387,830
Investment premiums on acquisitions		16,394
Portfolio runoff (principal amount)		(893,995	)
Investment premium amortization		(20,887	)
Decrease in net unrealized gains on securities classified as available-for-sale		(21,483	)
Residential mortgage investments, March 31, 2021	$	7,405,411
Decrease in residential mortgage investments during the period	$	(532,141	)

Rates on Capstead’s secured borrowings, after adjusting for hedging activities, averaged 17 basis points lower at 0.20% during the first quarter of 2021, compared to 0.37% for the prior quarter. Borrowing rates before hedging activities averaged 0.20% during the first quarter, a decline of three basis points from the prior quarter. Secured borrowings ended the quarter at $6.81 billion.

Notional amounts of secured borrowings-related interest rate swap agreements averaged $2.99 billion during the first quarter of 2021 with fixed swap rates averaging 0.04%, 33 basis points lower than the prior quarter. At March 31, 2021, the Company held $3.22 billion notional amount of secured borrowings-related interest rate swaps with fixed rates averaging 0.06%, an increase of $250 million in notional amount and two basis points in rate from swaps held on December 31, 2020. The Company’s duration gap, a measure of interest rate risk, decreased from approximately three and one-half months at December 31^st to three and one-quarter months at March 31, 2021 – see page 10 for further information.

Capstead operates a highly efficient, internally-managed investment platform, particularly compared to other mortgage REITs, and has a competitive cost structure relative to a wide variety of high yielding investment vehicles. Operating costs expressed as an annualized percentage of long-term investment capital averaged 1.43% for the quarter ended March 31, 2021. As an annualized percentage of total assets, operating costs averaged 0.18% during this period.

Book Value per Common Share

Book value per share as of March 31, 2021 was $6.66, a decrease of $0.10 for the quarter primarily reflecting $0.22 in portfolio-related declines in value and $0.05 in declines related to capital activity, partially offset by $0.17 in derivative-related increases. Capstead’s investment strategy attempts to mitigate risks to book value by focusing on investments in agency-guaranteed residential mortgage pass-through securities, which are considered to have little, if any, credit risk and are collateralized by ARM loans with interest rates that reset periodically to more current levels. Because of these characteristics, the fair value of the Company’s portfolio is expected to be less vulnerable to significant pricing declines caused by credit concerns or rising interest rates compared to leveraged portfolios containing a significant amount of non-agency-guaranteed securities or agency-guaranteed securities backed by longer-duration fixed-rate loans. Fair value is impacted by market conditions, including changes in interest rates and the availability of financing at reasonable rates and leverage levels.

Management Remarks

Commenting on current operating and market conditions, Phillip A. Reinsch, President and Chief Executive Officer, said, “Our first quarter results were impacted by our choice to not invest all of our available capital at what we view as unacceptably low projected risk-adjusted returns. As a consequence, we did not replace all of our portfolio runoff for the second consecutive quarter during a period of continued high mortgage prepayments, leading to lower portfolio and leverage levels and lower earnings. This has increased our flexibility to take advantage of more compelling opportunities should they arise as the year unfolds.

“Now that the transition from LIBOR- to SOFR-based ARM production is largely complete and with the pronounced steepening in the yield curve through higher longer term interest rates year-to-date, we are seeing sizable increases in new ARM production. This bodes well for investment opportunities going forward. However, there remains strong demand for agency-guaranteed ARM securities which could continue to limit our reinvestment opportunities.

“We see mortgage prepayment rates peaking as the second quarter progresses due in large part to increases in prevailing fixed-rate mortgage rates of nearly 50 basis points since year-end leading to lower portfolio runoff in the coming quarters. If longer-term interest rates continue increasing in the coming quarters, further declines in prepayments can be expected. Meanwhile, short-term interest rates have remained at historical lows, with one-month LIBOR declining three basis points to 11 basis points during the quarter and two-year U.S. Treasury rates only increasing about 4 basis points since year end, indicative of market expectations for little change in borrowing rates for some time to come.

“Book value declined by only 1.4% during the first quarter despite continued high portfolio runoff and a significant increase in longer-term interest rates, with the ten-year U.S. Treasury rate increasing a surprising 82 basis points during the quarter. This comparatively modest decline in book value was due in large part to strong demand for agency-guaranteed ARM securities, fairly stable yields on the shorter end of the yield curve and increases in value of interest rate swaps held for hedging purposes.

“Since quarter-end, pricing levels for agency-guaranteed ARM securities have been fairly stable relative to a further rise in longer-term interest rates while April portfolio runoff reached 43.7% CPR. As of April 23^rd, our last internal measurement date, book value per share was lower by approximately $0.03, primarily due to continued high portfolio runoff in April.

Non-GAAP Financial Measures

Management believes the presentation of core earnings and core earnings per common share, both non-GAAP financial measures, when analyzed in conjunction with the Company’s GAAP operating results, allows investors to more effectively evaluate the Company’s performance and provides investors management’s view of the Company’s economic performance.

Management also believes that presenting financing spreads on residential mortgage investments, a non-GAAP financial measure, provides important information for evaluating the performance of the Company’s portfolio, as opposed to total financing spreads, because this non-GAAP measure speaks specifically to the performance of the Company’s investment portfolio. See the “Reconciliation of GAAP Measures to Non-GAAP Measures” section of this release.

Earnings Conference Call Details

An earnings conference call and live audio webcast will be hosted Thursday, April 29, 2021 at 10:00 a.m. ET. The conference call may be accessed by dialing toll free (877) 505-6547 in the U.S., (855) 669-9657 for Canada, or (412) 902-6660 for international callers. A live webcast of the conference call can be accessed via the investor relations section of the Company’s website at www.capstead.com and an archive of the webcast will be available up to the date of our next earnings press release. An audio replay can be accessed one hour after the end of the conference call, also up to the date of our next earnings press release, by dialing toll free (877) 344-7529 in the U.S., (855) 669-9658 for Canada, or (412) 317-0088 for international callers and entering conference number 10155050.

About Capstead

Capstead is a self-managed real estate investment trust, or REIT, for federal income tax purposes. The Company earns income from investing in a leveraged portfolio of residential adjustable-rate mortgage pass-through securities, referred to as ARM securities, issued and guaranteed by government-sponsored enterprises, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae.

Statement Concerning Forward-looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words “believe,” “anticipate,” “expect,” “estimate,” “intend,” “will be,” “will likely continue,” “will likely result,” or words or phrases of similar meaning. Actual results could differ materially from those projected in these forward-looking statements due to a variety of factors, including without limitation, fluctuations in interest rates, the availability of suitable qualifying investments, changes in mortgage prepayments, the availability and terms of financing, changes in market conditions as a result of federal corporate and individual tax law changes, changes in legislation or regulation affecting the mortgage and banking industries or Fannie Mae, Freddie Mac or Ginnie Mae securities, the availability of new investment capital, the liquidity of secondary markets and funding markets, our ability to maintain our qualification as a REIT for U.S. federal tax purposes, our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended, and other changes in general economic conditions. These and other applicable uncertainties, factors and risks are described more fully in the Company’s filings with the U.S. Securities and Exchange Commission.

Forward-looking statements speak only as of the date the statement is made and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, readers of this document are cautioned not to place undue reliance on any forward-looking statements included herein.

CAPSTEAD MORTGAGE CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except ratios, pledged and per share amounts)

March 31, 2021

December 31, 2020

(unaudited)

Assets

Residential mortgage investments ($7.16 and $7.71 billion pledged at March 31, 2021 and December 31, 2020, respectively)

$

7,405,411

$

7,937,552

Cash collateral receivable from derivative counterparties

61,796

74,411

Derivatives at fair value

151

–

Cash and cash equivalents

259,233

257,180

Receivables and other assets

143,295

136,107

$

7,869,886

$

8,405,250

Liabilities

Secured borrowings

$

6,805,061

$

7,319,083

Derivatives at fair value

27,223

41,484

Unsecured borrowings

98,519

98,493

Common stock dividend payable

15,173

15,281

Accounts payable and accrued expenses

20,217

20,746

6,966,193

7,495,087

Stockholders’ equity

Preferred stock – $0.10 par value; 100,000 shares authorized: 7.50% Cumulative Redeemable Preferred Stock, Series E, 10,329 shares issued and outstanding ($258,226 aggregate liquidation preference) at March 31, 2021 and December 31, 2020

250,946

250,946

Common stock – $0.01 par value; 250,000 shares authorized: 96,848 and 96,481 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

968

965

Paid-in capital

1,269,021

1,268,439

Accumulated deficit

(651,551

)

(651,071

)

Accumulated other comprehensive income

34,309

40,884

903,693

910,163

$

7,869,886

$

8,405,250

Long-term investment capital (consists of stockholders’ equity and unsecured borrowings) (unaudited)

$

1,002,212

$

1,008,656

Portfolio leverage (secured borrowings divided by long-term investment capital) (unaudited)

6.79:1

7.26:1

Book value per common share (based on shares of common stock outstanding and calculated using preferred stock liquidation preferences) (unaudited)

$

6.66

$

6.76

CAPSTEAD MORTGAGE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

Quarter Ended

March 31

2021

2020

Interest income

Residential mortgage investments

$

26,165

$

69,207

Other

13

403

26,178

69,610

Interest expense

Secured borrowings

(4,172

)

(45,256

)

Unsecured borrowings

(1,891

)

(1,900

)

(6,063

)

(47,156

)

20,115

22,454

Other (expense) income

Gain (loss) on derivative instruments (net)

2,382

(155,739

)

Loss on sale of investments (net)

–

(67,820

)

Compensation-related expense

(2,092

)

(2,204

)

Other general and administrative expense

(1,465

)

(1,202

)

Miscellaneous other revenue (expense)

2

(142

)

(1,173

)

(227,107

)

Net income (loss)

18,942

(204,653

)

Less preferred stock dividends

(4,842

)

(4,842

)

Net income (loss) to common stockholders

$

14,100

$

(209,495

)

Basic and diluted net income (loss) per common share

$

0.15

$

(2.21

)

Weighted average common shares outstanding

Basic

95,894

94,897

Diluted

96,230

94,897

Cash dividends declared per share

Common

$

0.15

$

0.15

Series E preferred

0.47

0.47

CAPSTEAD MORTGAGE CORPORATION

QUARTERLY STATEMENTS OF OPERATIONS AND SELECT OPERATING STATISTICS

(in thousands, except per share amounts, percentages annualized, unaudited)

2021

2020

Q1

Q4

Q3

Q2

Q1

Quarterly Statements of Operations:

Interest income

Residential mortgage investments

$

26,165

$

31,372

$

37,571

$

48,111

$

69,207

Other

13

17

26

28

403

26,178

31,389

37,597

48,139

69,610

Interest expense

Secured borrowings

(4,172

)

(4,787

)

(4,809

)

(13,039

)

(45,256

)

Unsecured borrowings

(1,891

)

(1,910

)

(1,910

)

(1,900

)

(1,900

)

(6,063

)

(6,697

)

(6,719

)

(14,939

)

(47,156

)

20,115

24,692

30,878

33,200

22,454

Other (expense) income

Gain (loss) on derivative instruments (net)

2,382

1,630

1,510

(6,948

)

(155,739

)

Loss on sale of investments (net)

–

–

–

–

(67,820

)

Compensation-related expense

(2,092

)

(1,759

)

(1,985

)

(2,330

)

(2,204

)

Other general and administrative expense

(1,465

)

(1,269

)

(1,321

)

(1,219

)

(1,202

)

Miscellaneous other revenue (expense)

2

–

–

1

(142

)

(1,173

)

(1,398

)

(1,796

)

(10,496

)

(227,107

)

Net income (loss)

$

18,942

$

23,294

$

29,082

$

22,704

$

(204,653

)

Net income (loss) per diluted common share

$

0.15

$

0.19

$

0.25

$

0.19

$

(2.21

)

Average diluted common shares outstanding

96,230

96,088

96,024

95,887

94,897

Core earnings

$

17,360

$

19,667

$

19,868

$

21,917

$

19,811

Core earnings per diluted common share

0.13

0.15

0.16

0.18

0.16

Select Operating and Performance Statistics:

Common dividends declared per share

0.15

0.15

0.15

0.15

0.15

Book value per common share

6.66

6.76

6.80

6.79

6.07

Average portfolio outstanding (cost basis)

7,578,943

8,073,304

8,119,230

8,255,393

11,122,713

Average secured borrowings

6,884,328

7,407,784

7,447,333

7,646,755

10,336,879

Average long-term investment capital (“LTIC”)

1,010,317

1,015,854

1,018,407

987,792

1,124,307

Constant prepayment rate (“CPR”)

37.12

%

38.67

%

39.97

%

32.89

%

26.71

%

Total financing spreads

1.01

1.19

1.47

1.52

0.66

Yields on residential mortgage investments

1.38

1.55

1.85

2.33

2.49

Secured borrowing rates ^(a)

0.20

0.37

0.67

1.09

1.72

Financing spreads on residential mortgage investments

1.18

1.19

1.18

1.25

0.77

Operating costs as a percentage of LTIC

1.43

1.19

1.29

1.45

1.22

Quarterly economic return (change in book value plus dividends)

0.74

1.62

2.36

14.33

(27.84

)

Return on common equity capital ^(b)

7.68

8.85

8.94

10.76

7.77

(a)

Secured borrowing rates exclude the effects of amortization of the net unrealized gains (losses) included in Accumulated other comprehensive income (“AOCI”) on de-designated derivative instruments and include net interest cash flows on non-designated derivative instruments to better compare the components of financing spreads on residential mortgage investments. See “Reconciliation of GAAP Measures to Non-GAAP Measures” for details on the impact of non-designated derivative instruments.

(b)

Calculated using core earnings less preferred dividends on an annualized basis over average common equity for the period.

CAPSTEAD MORTGAGE CORPORATION

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(in thousands, percentages annualized, unaudited)

The Company defines core earnings as GAAP net income (loss) excluding (a) unrealized (gain) loss on derivative instruments, (b) realized loss (gain) on termination of derivative instruments, (c) amortization of unrealized (gain) loss of derivative instruments held at the time of de-designation, and (d) realized loss (gain) on securities. The following reconciles GAAP net income (loss) and net income (loss) per diluted common share to core earnings and core earnings per common share:

2021

2020

Q1

Q4

Q3

Q2

Q1

Amount

Per

Share

Amount

Per

Share

Amount

Per

Share

Amount

Per

Share

Amount

Per

Share

Net income (loss)

$

18,942

$

0.15

$

23,294

$

0.19

$

29,082

$

0.25

$

22,704

$

0.19

$

(204,653

)

$

(2.21

)

Unrealized (gain) loss on non-designated derivative instruments

(2,228

)

(0.02

)

(25,989

)

(0.27

)

(35,419

)

(0.37

)

(2,229

)

(0.02

)

56,182

0.59

Realized loss on termination of non-designated derivative instruments

–

–

21,870

0.23

26,187

0.28

1,320

0.01

100,565

1.06

Amortization of net unrealized loss (gain) on de-designated derivative instruments

646

0.00

492

0.00

18

0.00

122

0.00

(103

)

(0.00

)

Realized loss on sale of investments

–

–

–

–

–

–

–

–

67,820

0.72

Core earnings

$

17,360

$

0.13

$

19,667

$

0.15

$

19,868

$

0.16

$

21,917

$

0.18

$

19,811

$

0.16

The following reconciles total financing spreads to financing spreads on residential mortgage investments:

2021

2020

Q1

Q4

Q3

Q2

Q1

Total financing spreads

1.01

%

1.19

%

1.47

%

1.52

%

0.66

%

Impact of yields on other interest-earning assets*

0.02

0.02

0.03

0.04

0.02

Impact of borrowing rates on other interest-paying liabilities*

0.11

0.10

0.10

0.09

0.05

Impact of amortization of unrealized gain, net of unrealized losses on de-designated derivative instruments

0.04

0.01

0.00

0.01

0.00

Impact of net cash flows on non-designated derivative instruments

0.00

(0.13

)

(0.42

)

(0.41

)

0.04

Financing spreads on residential mortgage investments

1.18

1.19

1.18

1.25

0.77

*

Other interest-earning assets consist primarily of overnight investments and cash collateral receivable from secured borrowing and derivative counterparties. Other interest-paying liabilities consist of unsecured borrowings and, at times, may consist of cash collateral payable to derivative counterparties.

CAPSTEAD MORTGAGE CORPORATION

FAIR VALUE AND SWAP MATURITY DISCLOSURES

(in thousands, unaudited)

March 31, 2021

December 31,

2020

Unpaid

Principal

Balance

Investment

Premiums

Basis or

Notional

Amount

Fair

Value

Unrealized

Gains

(Losses)

Unrealized

Gains

(Losses)

Residential mortgage investments classified as available-for-sale ^(a)

Fannie Mae/Freddie Mac securities

Current-reset ARMs

$

2,702,419

$

113,226

$

2,815,645

$

2,829,573

$

13,928

$

14,550

Longer-to-reset ARMs

3,836,173

136,789

3,972,962

4,013,791

40,829

59,968

Ginnie Mae securities

Current-reset ARMs

152,850

4,631

157,481

158,856

1,375

1,541

Longer-to-reset ARMs

384,767

11,488

396,255

403,191

6,936

8,492

$

7,076,209

$

266,134

$

7,342,343

$

7,405,411

$

63,068

$

84,551

Derivative instruments ^(b)

Interest rate swap agreements

Secured borrowings-related

$

3,224,500

$

4,041

$

(1,536

)

$

(2,182

)

Unsecured borrowings-related

100,000

(27,223

)

(27,223

)

(41,484

)

(a)

Capstead segregates its residential ARM securities based on the average length of time until the loans underlying each security reset to more current rates (less than 18 months for “current-reset” ARM securities, and 18 months or greater for “longer-to-reset” ARM securities).

(b)

The following reflects Capstead’s secured borrowings-related swap positions, sorted by quarter of swap contract expiration. Average fixed rates reflect related fixed-rate payment requirements.

Period of Contract Expiration

Swap Notional

Amounts

Average

Fixed Rates

Second quarter 2022

$

400,000

0.02%

Third quarter 2022

1,200,000

0.01

Fourth quarter 2022

900,000

0.07

First quarter 2023

50,000

0.13

Third quarter 2023

100,000

0.03

Fourth quarter 2023

374,500

0.09

First quarter 2024

150,000

0.28

Second quarter 2024

50,000

0.34

$

3,224,500

After consideration of secured borrowings-related derivative instruments, Capstead’s residential mortgage investments and secured borrowings had durations as of March 31, 2021 of approximately 13 months and 9¾ months, respectively, for a net duration gap of approximately 3¼ months. Duration is a measure of market price sensitivity to changes in interest rates. A shorter duration generally indicates less interest rate risk.

CAPSTEAD MORTGAGE CORPORATION

RESIDENTIAL ARM SECURITIES PORTFOLIO STATISTICS

(as of March 31, 2021)

(in thousands, unaudited)

ARM Type

Amortized

Cost Basis ^(a)

Net

WAC ^(b)

Fully

Indexed

WAC ^(b)

Average

Net

Margins ^(b)

Average

Periodic

Caps ^(b)

Average

Lifetime

Caps ^(b)

Months

To

Roll ^(c)

Current-reset ARMs

Fannie Mae Agency Securities

$

2,097,018

2.29

%

1.91

%

1.65

%

2.88

%

6.97

%

6.8

Freddie Mac Agency Securities

718,627

2.52

2.01

1.74

2.14

6.11

8.2

Ginnie Mae Agency Securities

157,481

2.47

1.59

1.51

1.09

6.05

6.2

(40% of total)

2,973,126

2.35

1.92

1.66

2.61

6.71

7.1

Longer-to-reset ARMs

Fannie Mae Agency Securities

2,027,618

2.84

1.92

1.60

4.33

5.04

56.1

Freddie Mac Agency Securities

1,945,344

2.58

1.95

1.65

4.28

5.03

58.7

Ginnie Mae Agency Securities

396,255

3.56

1.57

1.50

1.00

5.00

34.9

(60% of total)

4,369,217

2.79

1.90

1.61

4.01

5.03

55.4

$

7,342,343

2.61

1.91

1.63

3.44

5.71

35.9

Gross WAC (rate paid by borrowers)^(d)

3.25

(a)

Amortized cost basis represents the Company’s investment (unpaid principal balance plus unamortized investment premiums) before unrealized gains and losses. At March 31, 2021, the ratio of amortized cost basis to unpaid principal balance for the Company’s ARM holdings was 103.76.

(b)

Net WAC, or weighted average coupon, is the weighted average interest rate of the mortgage loans underlying the indicated investments, net of servicing and other fees as of the indicated date. Net WAC is expressed as a percentage calculated on an annualized basis on the unpaid principal balances of the mortgage loans underlying these investments. As such, it is similar to the cash yield on the portfolio which is calculated using amortized cost basis. Fully indexed WAC represents the weighted average coupon upon one or more resets using interest rate indices and net margins as of the indicated date. Average net margins represent the weighted average levels over the underlying indices that the portfolio can adjust to upon reset, usually subject to initial, periodic and/or lifetime caps on the amount of such adjustments during any single interest rate adjustment period and over the contractual term of the underlying loans. ARM securities with initial fixed-rate periods of five years or longer typically have either 200 or 500 basis point initial caps with 200 basis point periodic caps. Additionally, certain ARM securities held by the Company are subject only to lifetime caps or are not subject to a cap. For presentation purposes, average periodic caps in the table above reflect initial caps until after an ARM security has reached its initial reset date and lifetime caps, less the current net WAC, for ARM securities subject only to lifetime caps. At quarter-end, 73% of current-reset ARMs were subject to periodic caps averaging 1.91%; 19% were subject to initial caps averaging 3.14%; and 8% were subject to lifetime caps averaging 7.92%.

(c)

Months-to-roll is a measure of the average length of time until the loans underlying each security reset to more current rates. After consideration of any applicable initial fixed-rate periods, at March 31, 2021 approximately 90%, 5% and 3% of the Company’s ARM securities were backed by mortgage loans that reset annually, semi-annually and monthly, respectively, while approximately 2% reset every five years. Approximately 81% of the Company’s current-reset ARM securities have reached an initial coupon reset date. Approximately 17% of the Company’s current-reset ARM securities are scheduled to reset in rate within three months, 38% are scheduled to reset in rate between four and six months, and 31% are scheduled to reset in rate between seven and 12 months.

(d)

Gross WAC is the weighted average interest rate of the mortgage loans underlying the indicated investments, including servicing and other fees paid by borrowers, as of the indicated balance sheet date.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428006064/en/

Lindsey Crabbe

(214) 874-2339

KEYWORDS: Texas United States North America

INDUSTRY KEYWORDS: Other Construction & Property Residential Building & Real Estate Construction & Property REIT

MEDIA:

Posted on April 28, 2021 4:33 pm
First US Bancshares, Inc. Announces Expansion of Share Repurchase Program

BIRMINGHAM, AL, April 28, 2021 (GLOBE NEWSWIRE) — First US Bancshares, Inc. (Nasdaq: FUSB) (the “Company”), a Delaware corporation based in Birmingham, Alabama, announced today that its Board of Directors has expanded the Company’s existing share repurchase program. The Company has repurchased 587,824 shares of its common stock to date and 54,961 shares remain available for repurchase, and the Board of Directors authorized the Company to repurchase an additional 1,000,000 shares under the repurchase program. The Board of Directors also extended the expiration of the repurchase program from December 31, 2021 to December 31, 2022. The share repurchase program was originally approved by the Company’s Board of Directors on January 19, 2006. The Company most recently repurchased shares pursuant to the program during the first quarter of 2020.

Share repurchases under the repurchase program may be made through open market transactions, through privately negotiated transactions or otherwise at times and in such amounts as management deems appropriate, subject to applicable regulatory requirements. Open market purchases may be executed through a pre-arranged repurchase plan that operates in accordance with the guidelines specified under Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The repurchase program does not obligate the Company to acquire any particular number of shares and may be suspended at any time at the Company’s discretion.

About First US Bancshares, Inc.

First US Bancshares, Inc. is a bank holding company that operates banking offices in Alabama, Tennessee and Virginia through First US Bank (the “Bank”). In addition, the Company’s operations include Acceptance Loan Company, Inc., a consumer loan company (“ALC”), and FUSB Reinsurance, Inc., an underwriter of credit life and credit accident and health insurance policies sold to the Bank’s and ALC’s consumer loan customers. The Company files periodic reports with the U.S. Securities and Exchange Commission (the “SEC”). Copies of its filings may be obtained through the SEC’s website at www.sec.gov or at www.firstusbank.com. More information about the Company and the Bank may be obtained at www.firstusbank.com. The Company’s stock is traded on the Nasdaq Capital Market under the symbol “FUSB.”

Forward-Looking Statements

This press release contains forward-looking statements, as defined by federal securities laws. Statements contained in this press release that are not historical facts are forward-looking statements. These statements may address issues that involve significant risks, uncertainties,
estimates
and assumptions made by management. The Company undertakes no obligation to update these statements following the date of this press release, except as required by law. In addition, the Company, through its senior management, may make from
time to time
forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates reflecting the best judgment of the Company’s senior management based upon current information and involve
a number of
risks and uncertainties. Certain factors that could affect the accuracy of such forward-looking statements are identified in the public filings made by the Company with the SEC, and forward-looking statements contained in this press release or in other public statements of the Company or its senior management should be considered
in light of
those factors. Specifically, with respect to statements relating to the sufficiency of the allowance for loan and lease losses, loan demand, cash flows, interest costs, growth and earnings potential, expansion and the Company’s positioning to handle the challenges presented by COVID-19, these factors include, but are not limited to, the rate of growth (or lack thereof) in the economy generally and in the Bank’s and ALC’s service areas; market conditions and investment returns; changes in interest rates; the impact of the current COVID-19 pandemic on the Company’s business, the Company’s customers, the communities that the Company serves and the United States economy, including the impact of actions taken by governmental authorities to try to contain the virus
and protect against it, through vaccinations and otherwise,
or address the impact of the virus on the United States economy (including, without limitation, the Coronavirus Aid, Relief and Economic Security
(CARES)
Act and subsequent federal legislation) and the resulting effect on the Company’s operations, liquidity and capital position and on the financial condition of the Company’s borrowers and other customers; the pending discontinuation of LIBOR as an interest rate benchmark; the availability of quality loans in the Bank’s and ALC’s service areas; the relative strength and weakness in the consumer and commercial credit sectors and in the real estate markets; collateral values; cybersecurity threats;
and risks related to the Paycheck Protection Program. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.

Contact: Thomas S. Elley 205-582-1200

Posted on April 28, 2021 4:33 pm
HNI Corporation Reports Earnings for First Quarter Fiscal Year 2021

HNI Corporation Reports Earnings for First Quarter Fiscal Year 2021

MUSCATINE, Iowa–(BUSINESS WIRE)–HNI Corporation (NYSE: HNI) today announced sales for the first quarter ended April 3, 2021 of $484.3 million and net income of $15.0 million. GAAP net income (loss) per diluted share was $0.34, compared to $(0.56) in the prior year. Non-GAAP net income per diluted share was $0.36, compared to $0.21 in the prior year. GAAP to non-GAAP reconciliations follow the financial statements in this release.

First Quarter Highlights

Strong results in Residential Building Products: First quarter 2021 revenue grew 39 percent on a year-over-year basis, and operating margin expanded 600 basis points from prior-year, pre-COVID levels. This fueled a greater than 90 percent year-over-year increase in segment operating profit to a first quarter record of $39.8 million.

Signs of improvement in Workplace Furnishings: First quarter 2021 revenue was down approximately 12 percent from the first quarter of 2020, on an organic basis. This rate of decline was the lowest since the beginning of the pandemic.

Strong incremental margins: Non-GAAP consolidated operating income increased 67 percent year-over-year (or $9.4 million) to $23.3 million on two percent organic revenue growth (or $6.8 million). This equated to a 60 percent incremental operating margin, which was primarily driven by volume leverage in the Residential Building Products segment and solid cost control in the Workplace Furnishings segment, as both segments benefited from the Corporation’s annual cost savings initiatives and cost actions taken last year to combat pandemic pressures.

High-quality balance sheet: Quarter-ending debt levels were $176 million, essentially unchanged from last quarter and down from $230 million at the end of the first quarter of last year. The gross leverage ratio at the end of the first quarter of 2021 was approximately 0.9x, slightly improved from last quarter and last year. Cash totaled $94 million as of the end of the first quarter of 2021, more than double the $35 million reported in the first quarter of 2020.

“This quarter, our members again demonstrated much of what is unique about HNI. We delivered substantial profit improvement, highlighted by strong revenue growth and expanded profitability in Residential Building Products. Although the pandemic continues to negatively impact demand in Workplace Furnishings, particularly in the contract market, we benefited from our reset cost structure and improving top-line performance in our brands focused on small to mid-sized customers. Overall, the first quarter shows the power of our diversified revenue streams, our ability to react quickly to changing market dynamics, and our overall operational capability,” stated Jeff Lorenger, Chairman, President, and Chief Executive Officer.

HNI Corporation – Financial Performance

(Dollars in millions, except per share data)

Three Months Ended

April 3,

2021

March 28,

2020

Change

GAAP

Net Sales

$484.3

$468.7

3.3

%

Gross Profit %

37.2

%

37.6

%

-40

bps

SG&A %

32.5

%

35.6

%

-310

bps

Impairment Charges %

—

%

7.0

%

Operating Income (Loss)

$22.6

($23.7

)

195.2

%

Operating Income (Loss) %

4.7

%

(5.1

%)

980

bps

Effective Tax Rate

28.0

%

6.4

%

Net Income (Loss) %

3.1

%

(5.1

%)

820

bps

EPS – diluted

$0.34

($0.56

)

160.7

%

Non-GAAP

Gross Profit %

37.2

%

37.6

%

-40

bps

Operating Income

$23.3

$13.9

67.3

%

Operating Income %

4.8

%

3.0

%

180

bps

EPS – diluted

$0.36

$0.21

71.4

%

First Quarter Summary Comments

Consolidated net sales increased 3.3 percent from the prior-year quarter to $484.3 million. On an organic basis, sales increased 1.5 percent year-over-year. The acquisition of Design Public Group (“DPG”) in the fourth quarter of 2020 increased year-over-year sales by $6.4 million, and the acquisition of residential building products distributors in 2020 and 2021 increased year-over-year sales by $2.4 million. A reconciliation of organic sales, a non-GAAP measure, follows the financial statements in this release.

Gross profit margin decreased 40 basis points compared to the prior-year quarter. This decrease was primarily driven by lower Workplace Furnishings volume and unfavorable price-cost, partially offset by improved net productivity and higher Residential Building Products volume.

Selling and administrative expenses as a percent of sales decreased 310 basis points compared to prior-year quarter. The decrease was driven by lower core SG&A, higher Residential Building Products volume, and freight and distribution productivity, partially offset by lower Workplace Furnishings volume and higher variable compensation. Included in current year quarter SG&A was $0.7 million of one-time costs from exiting Workplace Furnishings showrooms, driven by conditions related to the COVID-19 pandemic. The prior-year quarter included $5.0 million of one-time costs incurred as the result of the COVID-19 pandemic (of which $1.6 million was recorded as a corporate charge).

The Corporation recorded charges of $32.7 million in the prior-year quarter related to the impairment of goodwill and intangible assets.

Non-GAAP net income per diluted share was $0.36 compared to $0.21 in the prior-year quarter. The $0.15 increase was due to higher Residential Building Products volume, lower core SG&A, and improved net productivity, partially offset by lower Workplace Furnishings volume, unfavorable price-cost, and higher variable compensation.

First Quarter Orders

Orders in the Workplace Furnishings segment declined 10 percent year-over-year. Within the segment, orders to small to mid-sized customers were down less than the segment overall and improved through the quarter. Demand in the contract market remained soft with orders down over 20 percent. eCommerce and international both generated positive order growth.

Normalized orders in the Residential Building Products segment increased 40 percent compared to the prior-year quarter. Remodel-retrofit activity and orders tied to new construction were both strong throughout the quarter.

Workplace Furnishings – Financial Performance

(Dollars in millions)

Three Months Ended

April 3,

2021

March 28,

2020

Change

GAAP

Net Sales

$302.7

$338.4

(10.5

%)

Operating Loss

($3.1

)

($33.2

)

90.8

%

Operating Loss %

(1.0

%)

(9.8

%)

880

bps

Non-GAAP

Operating Profit (Loss)

($2.4

)

$2.8

(183.3

%)

Operating Profit (Loss) %

(0.8

%)

0.8

%

-160

bps

Workplace Furnishings net sales decreased 10.5 percent from the prior-year quarter to $302.7 million. On an organic basis, sales decreased 12.4 percent year-over-year. The acquisition of DPG in the fourth quarter of 2020 increased sales by $6.4 million compared to the prior-year quarter.

Workplace Furnishings GAAP operating profit margin increased 880 basis points versus the prior-year quarter. On a non-GAAP basis, segment operating margin decreased 160 basis points year-over-year driven by lower volume and unfavorable price-cost, partially offset by net productivity and lower core SG&A spend.

The Workplace Furnishings segment recorded $0.7 million of one-time costs in the current year quarter from exiting showrooms. The prior-year quarter included $32.7 million of charges related to the impairment of goodwill and intangible assets, as well as $3.4 million of one-time costs incurred as the result of the COVID-19 pandemic.

Residential Building Products – Financial Performance

(Dollars in millions)

Three Months Ended

April 3,

2021

March 28,

2020

Change

GAAP

Net Sales

$181.5

$130.3

39.3

%

Operating Profit

$39.8

$20.7

92.8

%

Operating Profit %

21.9

%

15.9

%

600

bps

Non-GAAP

Operating Profit

$39.8

$20.7

92.8

%

Operating Profit %

21.9

%

15.9

%

600

bps

Residential Building Products net sales increased 39.3 percent from the prior-year quarter to $181.5 million. On an organic basis, sales increased 37.4 percent year-over-year. The impact of building products distributors acquired in 2020 and 2021 increased sales $2.4 million compared to the prior-year quarter.

Residential Building Products operating profit margin expanded 600 basis points, primarily driven by strong volume growth and SG&A leverage, partially offset by unfavorable price-cost and higher variable compensation.

Concluding Remarks

“As we look to the rest of the year, we are increasingly optimistic. We expect our strength in Residential Building Products to continue and see evidence our HNI-specific strategies are gaining momentum for the long-term. In Workplace Furnishings, we see improving conditions and expect revenue growth as we progress through the remainder of the year. Signs of improvement are strongest in our businesses focused on small to mid-sized customers, where we have a strong competitive position. Our opportunities to grow profits will improve as we move into the back half of the year.

I continue to be extremely proud of our HNI members. As we move into the next stage of the recovery, we do so as a stronger company—well positioned to grow revenue, expand margins, and generate cash flow,” Mr. Lorenger concluded.

Second Quarter 2021 Outlook

Residential Building Products revenue: Recent order trends, housing construction activity, and expected benefits tied to multiple growth initiatives, combine to suggest growth rates in the low-30 percent range compared to the prior-year quarter.

Workplace Furnishings revenue: Improving order trends driven by small to mid-sized customers, public sector activity, and a low prior year comparable suggest a growth rate, including acquisition impacts, in the low-teens on a year-over-year basis.

Profitability drivers: Despite inflationary pressures, investments, and the return of temporary cost actions taken in the prior year, the Corporation expects the benefit of higher volume and net productivity to generate modest year-over-year profit growth, on a non-GAAP basis.

Conference Call

HNI Corporation will host a conference call on Thursday, April 29, 2021 at 10:00 a.m. (Central) to discuss first quarter fiscal year 2021 results. To participate, call 1-833-522-0258 – conference ID number 7988133. A live webcast of the call will be available on HNI Corporation’s website at http://www.hnicorp.com (under Investors – News Releases & Events). A replay of the webcast will also be made available at that website address. An audio replay of the call will be available until Thursday, May 6, 2021, 10:59 p.m. (Central) by dialing 1-800-585-8367 or 416-621-4642 – Conference ID number 7988133.

About HNI Corporation

HNI Corporation (NYSE: HNI) is a manufacturer of workplace furnishings and residential building products, operating under two segments. The Workplace Furnishings segment is a leading global designer and provider of commercial furnishings, going to market under multiple unique brands. The Residential Building Products segment is the nation’s leading manufacturer and marketer of hearth products, which include a full array of gas, electric, wood, and pellet-burning fireplaces, inserts, stoves, facings, and accessories. More information can be found on the Corporation’s website at www.hnicorp.com.

Forward-Looking Statements

This release contains “forward-looking” statements based on current expectations regarding future plans, events, outlook, objectives, financial performance, expectations for sales growth, and earnings per diluted share (GAAP and non-GAAP), including statements regarding the expected effects on our business, financial condition and results of operations from the COVID-19 pandemic. Forward-looking statements can be identified by words including “expect,” “believe,” “anticipate,” “estimate,” “may,” “will,” “would,” “could,” “confident”, or other similar words, phrases, or expressions. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Corporation’s actual future results and performance to differ materially from expected results. These risks include but are not limited to: the duration and scope of the COVID-19 pandemic, and its effect on people and the economy; the levels of office furniture needs and housing starts; overall demand for the Corporation’s products; general economic and market conditions in the United States and internationally; industry and competitive conditions; the consolidation and concentration of the Corporation’s customers; the Corporation’s reliance on its network of independent dealers; change in trade policy; changes in raw material, component, or commodity pricing; market acceptance and demand for the Corporation’s new products; changing legal, regulatory, environmental, and healthcare conditions; the risks associated with international operations; the potential impact of product defects; the various restrictions on the Corporation’s financing activities; an inability to protect the Corporation’s intellectual property; impacts of tax legislation; and force majeure events outside the Corporation’s control. A description of these risks and additional risks can be found in the Corporation’s annual and quarterly reports filed with the Securities and Exchange Commission on Forms 10-K and 10-Q. The Corporation assumes no obligation to update, amend, or clarify forward-looking statements, except as required by applicable law.

HNI Corporation and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(In thousands, except per share data)

(Unaudited)

Three Months Ended

April 3,

2021

March 28,

2020

Net sales

$

484,293

$

468,704

Cost of sales

304,347

292,686

Gross profit

179,946

176,018

Selling and administrative expenses

157,346

167,085

Impairment charges

—

32,661

Operating income (loss)

22,600

(23,728

)

Interest expense, net

1,755

1,811

Income (loss) before income taxes

20,845

(25,539

)

Income taxes

5,827

(1,643

)

Net income (loss)

15,018

(23,896

)

Less: Net loss attributable to non-controlling interest

(1

)

(1

)

Net income (loss) attributable to HNI Corporation

$

15,019

$

(23,895

)

Average number of common shares outstanding – basic

43,163

42,628

Net income (loss) attributable to HNI Corporation per common share – basic

$

0.35

$

(0.56

)

Average number of common shares outstanding – diluted

43,584

42,628

Net income (loss) attributable to HNI Corporation per common share – diluted

$

0.34

$

(0.56

)

Foreign currency translation adjustments

$

(132

)

$

(600

)

Change in unrealized gains (losses) on marketable securities, net of tax

(100

)

59

Change in derivative financial instruments, net of tax

263

(2,216

)

Other comprehensive income (loss), net of tax

31

(2,757

)

Comprehensive income (loss)

15,049

(26,653

)

Less: Comprehensive loss attributable to non-controlling interest

(1

)

(1

)

Comprehensive income (loss) attributable to HNI Corporation

$

15,050

$

(26,652

)

HNI Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

April 3,

2021

January 2,

2021

Assets

Current Assets:

Cash and cash equivalents

$

94,281

$

116,120

Short-term investments

1,776

1,687

Receivables

198,039

207,971

Allowance for doubtful accounts

(4,904

)

(5,514

)

Inventories

154,176

137,811

Prepaid expenses and other current assets

42,204

37,660

Total Current Assets

485,572

495,735

Property, Plant, and Equipment:

Land and land improvements

29,989

29,691

Buildings

294,760

293,708

Machinery and equipment

580,398

578,643

Construction in progress

20,460

17,750

925,607

919,792

Less accumulated depreciation

562,717

553,835

Net Property, Plant, and Equipment

362,890

365,957

Right-of-use Finance Leases

10,119

6,095

Right-of-use Operating Leases

66,897

70,219

Goodwill and Other Intangible Assets

455,486

458,896

Other Assets

24,617

21,130

Total Assets

$

1,405,581

$

1,418,032

Liabilities and Equity

Current Liabilities:

Accounts payable and accrued expenses

$

367,072

$

413,638

Current maturities of long-term debt

1,261

841

Current maturities of other long-term obligations

3,731

2,990

Current lease obligations – Finance

2,398

1,589

Current lease obligations – Operating

20,195

19,970

Total Current Liabilities

394,657

439,028

Long-Term Debt

174,545

174,524

Long-Term Lease Obligations – Finance

7,677

4,516

Long-Term Lease Obligations – Operating

50,222

53,249

Other Long-Term Liabilities

84,895

81,264

Deferred Income Taxes

75,824

74,706

Equity:

HNI Corporation shareholders’ equity

617,436

590,419

Non-controlling interest

325

326

Total Equity

617,761

590,745

Total Liabilities and Equity

$

1,405,581

$

1,418,032

HNI Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three Months Ended

April 3,

2021

March 28,

2020

Net Cash Flows From (To) Operating Activities:

Net income (loss)

$

15,018

$

(23,896

)

Non-cash items included in net income:

Depreciation and amortization

20,463

19,487

Other post-retirement and post-employment benefits

332

364

Stock-based compensation

5,220

4,358

Reduction in carrying amount of right-of-use assets

6,537

5,599

Deferred income taxes

1,076

12,258

Impairment of goodwill and intangible assets

—

32,661

Other – net

1,315

(2,252

)

Net increase (decrease) in operating assets and liabilities

(51,436

)

(81,573

)

Increase (decrease) in other liabilities

3,159

(312

)

Net cash flows from (to) operating activities

1,684

(33,306

)

Net Cash Flows From (To) Investing Activities:

Capital expenditures

(16,197

)

(8,488

)

Proceeds from sale of property, plant, and equipment

48

49

Acquisition spending, net of cash acquired

(1,408

)

(9,321

)

Capitalized software

(2,767

)

(4,671

)

Purchase of investments

(598

)

(1,456

)

Sales or maturities of investments

515

996

Net cash flows from (to) investing activities

(20,407

)

(22,891

)

Net Cash Flows From (To) Financing Activities:

Payments of long-term debt

(118

)

(15,000

)

Proceeds from long-term debt

547

70,129

Dividends paid

(13,234

)

(13,033

)

Purchase of HNI Corporation common stock

—

(5,839

)

Proceeds from sales of HNI Corporation common stock

13,030

722

Other – net

(3,341

)

2,558

Net cash flows from (to) financing activities

(3,116

)

39,537

Net increase (decrease) in cash and cash equivalents

(21,839

)

(16,660

)

Cash and cash equivalents at beginning of period

116,120

52,073

Cash and cash equivalents at end of period

$

94,281

$

35,413

HNI Corporation and Subsidiaries

Reportable Segment Data

(In thousands)

(Unaudited)

Three Months Ended

April 3,

2021

March 28,

2020

Net Sales:

Workplace furnishings

$

302,748

$

338,386

Residential building products

181,545

130,318

Total

$

484,293

$

468,704

Income (Loss) Before Income Taxes:

Workplace furnishings

$

(3,071

)

$

(33,231

)

Residential building products

39,849

20,671

General corporate

(14,178

)

(11,168

)

Operating Income

22,600

(23,728

)

Interest expense, net

1,755

1,811

Total

$

20,845

$

(25,539

)

Depreciation and Amortization Expense:

Workplace furnishings

$

11,984

$

11,332

Residential building products

2,410

2,306

General corporate

6,069

5,849

Total

$

20,463

$

19,487

Capital Expenditures (including capitalized software):

Workplace furnishings

$

10,487

$

7,101

Residential building products

4,710

2,973

General corporate

3,767

3,085

Total

$

18,964

$

13,159

As of

April 3,

2021

As of

January 2,

2021

Identifiable Assets:

Workplace furnishings

$

757,753

$

762,780

Residential building products

390,520

381,550

General corporate

257,308

273,702

Total

$

1,405,581

$

1,418,032

Non-GAAP Financial Measures

This earnings release includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to HNI’s financial statements as prepared in accordance with GAAP are included below and throughout this earnings release. This information gives investors additional insights into HNI’s financial performance and operations. While HNI’s management believes the non-GAAP financial measures are useful in evaluating HNI’s operations, this information should be considered supplemental and not in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.

To supplement condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, this earnings release uses the following non-GAAP financial measures: organic sales, gross profit, operating income (loss), operating profit (loss), income taxes, net income (loss), and net income (loss) per diluted share (i.e., EPS). These measures are adjusted from the comparable GAAP measures to exclude the impacts of the selected items as summarized in the table below. Generally, non-GAAP EPS is calculated using HNI’s overall effective tax rate for the year, as this rate is reflective of the tax applicable to most non-GAAP adjustments.

The sales adjustments to arrive at the non-GAAP organic sales information included in this earnings release excludes the impact of acquiring DPG and residential building products distributors. The transactions excluded for purposes of our other non-GAAP financial information included in this earnings release include non-recurring costs related to the COVID-19 pandemic, and prior year impairments of goodwill and intangible assets.

HNI Corporation Reconciliation

(Dollars in millions)

Three Months Ended

April 3, 2021

March 28, 2020

Workplace

Furnishings

Residential

Building

Products

Total

Workplace

Furnishings

Residential

Building

Products

Total

Sales as reported (GAAP)

$

302.7

$

181.5

$

484.3

$

338.4

$

130.3

$

468.7

% change from PY

(10.5

%)

39.3

%

3.3

%

Less: Acquisitions

6.4

2.4

8.8

—

—

—

Organic Sales (non-GAAP)

$

296.4

$

179.1

$

475.5

$

338.4

$

130.3

$

468.7

% change from PY

(12.4

%)

37.4

%

1.5

%

HNI Corporation Reconciliation

(Dollars in millions, except per share data)

Three Months Ended

April 3, 2021

Gross

Profit

Operating

Income

Tax

Net Income

EPS

As reported (GAAP)

$

179.9

$

22.6

$

5.8

$

15.0

$

0.34

% of net sales

37.2

%

4.7

%

3.1

%

Tax %

28.0

%

COVID-19 costs

—

0.7

0.2

0.5

0.01

Results (non-GAAP)

$

179.9

$

23.3

$

6.0

$

15.5

$

0.36

% of net sales

37.2

%

4.8

%

3.2

%

Tax %

28.0

%

HNI Corporation Reconciliation

(Dollars in millions, except per share data)

Three Months Ended

March 28, 2020

Gross

Profit

Operating

Income

(Loss)

Tax

Net Income

(Loss)

EPS

As reported (GAAP)

$

176.0

$

(23.7

)

$

(1.6

)

$

(23.9

)

$

(0.56

)

% of net sales

37.6

%

(5.1

%)

(5.1

%)

Tax %

6.4

%

Impairment charges

—

32.7

4.0

28.7

0.67

COVID-19 costs

—

5.0

0.6

4.4

0.10

Results (non-GAAP)

$

176.0

$

13.9

$

2.9

$

9.2

$

0.21

% of net sales

37.6

%

3.0

%

2.0

%

Tax %

24.1

%

Workplace Furnishings Reconciliation

(Dollars in millions)

Three Months Ended

April 3,

2021

March 28,

2020

Percent Change

Operating loss as reported (GAAP)

$

(3.1

)

$

(33.2

)

90.8

%

% of net sales

(1.0

%)

(9.8

%)

Impairment charges

—

32.7

COVID-19 costs

0.7

3.4

Operating profit (loss) (non-GAAP)

$

(2.4

)

$

2.8

(183.3

%)

% of net sales

(0.8

%)

0.8

%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210428005833/en/

Marshall H. Bridges, Senior Vice President and Chief Financial Officer (563) 272-7400

Matthew S. McCall, Vice President, Investor Relations and Corporate Development (563) 275-8898

KEYWORDS: United States North America Iowa

INDUSTRY KEYWORDS: Other Manufacturing Construction & Property Office Products Specialty Interior Design Manufacturing Building Systems Retail Residential Building & Real Estate

MEDIA:

Logo

Posted on April 28, 2021 4:33 pm
ChampionX Reports First Quarter 2021 Results

Revenue of $684.9 million

Net income attributable to ChampionX of $5.8 million; adjusted net income of $15.6 million

Adjusted EBITDA of $94.2 million

Cash from operating activities of $90.2 million and free cash flow of $64.6 million (9% of revenue)

THE WOODLANDS, Texas, April 28, 2021 (GLOBE NEWSWIRE) — ChampionX Corporation (“ChampionX”) (NASDAQ: CHX) (“the Company”) today announced first quarter of 2021 results. Revenue was $684.9 million, net income attributable to ChampionX was $5.8 million, and adjusted EBITDA was $94.2 million. Income before income taxes margin was 1.0%, and adjusted EBITDA margin was 13.8%. Cash provided by operating activities was $90.2 million, and free cash flow was $64.6 million.

CEO Commentary

“As we approach the one-year anniversary of our transformational merger, we could not be more proud of how well our organization has performed amid the unprecedented short-term energy market imbalances which resulted from the global pandemic. Our employees around the world have remained laser-focused on serving our customers and communities. I am grateful to them for their dedication to our corporate purpose of improving lives,” ChampionX’s President and Chief Executive Officer Sivasankaran “Soma” Somasundaram said.

“During the first quarter of 2021, our team resiliently navigated the challenges of supplying products to our customers while facing unprecedented raw materials supply chain disruptions across the Gulf Coast petrochemical complex resulting from Winter Storm Uri. We delivered adjusted EBITDA of $94 million on revenue of $685 million, which declined 3% sequentially, as growth in our shorter-cycle North American land-oriented businesses was offset by expected seasonality in our international operations.

“We continued to demonstrate our strong positive free cash flow profile generating free cash flow of $65 million, which represented 9% of our revenue during the period. We ended the quarter with $611 million of liquidity, including $260 million of cash and $351 million of available capacity on our revolver. We repaid $7 million of debt during the quarter. We remain committed to further reduction of leverage through debt repayment this year. We have provided notice to the holders of our 6.375% Senior Notes due 2026 (the “Notes”) this week that we are redeeming $55 million in principal amount of the Notes on May 7, 2021 at 104.781%, according to the terms on the Notes.

“We continue strong execution on merger integration and remain on track to deliver the full targeted cost synergies of $125 million within 24 months of the merger closing. We exited the first quarter at a $91 million run rate.

“As we look to the second quarter, we expect continued positive momentum in our shorter-cycle North American businesses and a seasonal uptick in our international operations. We anticipate some additional short-term raw materials cost inflation, but with continued volume improvements, pricing realization and cost synergy delivery, we expect meaningful margin rate improvement in the second half, enabling us to exit this year with a higher margin rate than our 2020 exit rate. On a consolidated basis, in the second quarter we expect revenue to be between $700 million and $740 million, driven by our production-oriented businesses, and we expect adjusted EBITDA of $97 million to $105 million.

“As the nascent global economic recovery gains momentum in the second half of this year and beyond, we remain focused on our strategic priorities, disciplined operating model and rigorous capital allocation approach. Our differentiated products and technology, strong free cash flow generation, and enhanced production-focused portfolio, coupled with our strong and motivated team, will enable us to be a long-term winner as the energy industry continues its evolution.”

Production Chemical Technologies

Production Chemical Technologies revenue in the first quarter of 2021 was $412.4 million, a decline of $34.3 million, or 8%, sequentially, due to lower seasonal international volumes and lower sales due to lost oil and gas production from Winter Storm Uri.

Segment operating profit was $30.4 million and adjusted segment EBITDA was $56.0 million. Segment operating profit margin was 7.4%. Adjusted segment EBITDA margin was 13.6%, a decline of 380 basis points, sequentially, due to the aforementioned lower sales volumes, certain raw materials inflation, network supply chain disruptions stemming from shutdowns of Gulf Coast petrochemical complex, and incremental costs to repair and start-up certain ChampionX facilities subsequent to the winter storm.

Production & Automation Technologies

Production & Automation Technologies revenue in the first quarter of 2021 was $166.8 million, an increase of $8.1 million, or 5%, sequentially, due to continued positive demand momentum for our shorter-cycle North American land-oriented product lines.

Revenue from digital products was $23.5 million in the first quarter of 2021, an increase of $1.7 million, or 8%, compared to $21.8 million in the fourth quarter of 2020.

Segment operating profit was $5.4 million, and adjusted segment EBITDA was $35.5 million. Segment operating profit margin was 3.2%. Adjusted segment EBITDA margin was 21.3%, an increase of 280 basis points, sequentially, due to higher sales volumes and favorable product mix.

Drilling Technologies

Drilling Technologies revenue in the first quarter of 2021 was $35.0 million, an increase of $11.4 million, or 48%, sequentially, due to the continued increase in U.S. land drilling activity and customer restocking of polycrystalline diamond cutter inventories.

Segment operating profit was $6.4 million, and adjusted segment EBITDA was $7.3 million. Segment operating profit margin was 18.2%. Adjusted segment EBITDA margin was 20.8%, an increase of 1,010 basis points, sequentially, due to higher volumes.

Reservoir Chemical Technologies

Reservoir Chemical Technologies revenue in the first quarter of 2021 was $29.9 million, a decrease of $1.0 million, or 3%, sequentially, mainly due to delayed U.S. well completions activity during the severe winter storm in February.

Segment operating loss was $3.2 million, and adjusted segment EBITDA was a negative $0.6 million. Segment operating loss margin was 10.8%. Adjusted segment EBITDA margin was (1.9)%, a decrease of 900 basis points, sequentially, due to lower volumes, raw materials inflation, and network supply chain disruptions stemming from Winter Storm Uri.

Other Business Highlights

ChampionX was recognized as the leader in total customer satisfaction in oilfield products for 2021, as well as first in eight specific categories, in a survey conducted by EnergyPoint Research, an independent customer satisfaction research firm.

Production Chemical Technologies secured key customer contract wins in the Permian and Latin America regions.

Reservoir Chemical Technologies experienced continued customer uptake with leading U.S. E&P operators, further advancing our direct sales model.

ChampionX Artificial Lift launched the latest release of its production optimization software, XSPOC 3.1. XSPOC software identifies and diagnoses anomalies in artificially lifted wells, and recommends steps to optimize system performance. XSPOC 3.1 has the added feature of helping operators pinpoint the idle time that allows the well to cycle the fewest number of times without losing production.

ChampionX achieved its first Spotlight continuous condition monitoring purchase order in the Middle East for a non-oil & gas power plant compressor.

During the first quarter of 2021, 73% of Drilling Technologies revenue was generated from products that were less than three years old.

Drilling Technologies received a favorable settlement on a patent infringement case, illustrating the strong intellectual property of our technology portfolio.

Drilling Technologies achieved a trailing 12-month TRIR (Total Recordable Incident Rate) of 0.0.

ChampionX recently announced the completion of an investment in QLM Technology, which has developed a revolutionary quantum gas camera with a unique ability to detect, visualize and quantify emissions of methane, helping organizations to achieve net zero emissions through mitigation of sources.

Conference Call Details

ChampionX Corporation will host a conference call on Thursday, April 29, 2021, to discuss its first quarter 2021 financial results. The call will begin at 10:00 a.m. Eastern Time. Presentation materials that supplement the conference call are available on ChampionX’s website at investors.championx.com.

To listen to the call via a live webcast, please visit ChampionX’s website at investor.championx.com. The call will also be available by dialing 1-888-424-8151 in the United States and Canada or 1-847-585-4422 for international calls. Please call approximately 15 minutes prior to the scheduled start time and reference ChampionX conference call number 7046887.

A replay of the conference call will be available on ChampionX’s website or at ChampionXFirstQuarter2021CallReplay. Enter passcode 50141845.

About Non-GAAP Measures

In addition to financial results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), this news release presents non-GAAP financial measures. Management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted segment EBITDA, adjusted segment EBITDA margin, adjusted net income attributable to ChampionX, and adjusted diluted earnings per share attributable to ChampionX, reflect the core operating results of our businesses and help facilitate comparisons of operating performance across periods. In addition, free cash flow and free cash flow to revenue ratio are used by management to measure our ability to generate positive cash flow for debt reduction and to support our strategic objectives. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the accompanying financial tables.

This press release also contains certain forward-looking non-GAAP financial measures, including adjusted EBITDA. Due to the forward-looking nature of the aforementioned non-GAAP financial measure, management cannot reliably or reasonably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as net income. Accordingly, we are unable to present a quantitative reconciliation of such forward looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Amounts excluded from these non-GAAP measures in future periods could be significant. Management believes the aforementioned non-GAAP financial measures are good tools for internal use and the investment community in evaluating ChampionX’s overall financial performance.

About ChampionX

ChampionX (formerly known as Apergy Corporation) is a global leader in chemistry solutions and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely and efficiently around the world. ChampionX’s products provide efficient functioning throughout the lifecycle of a well with a focus on the production phase of wells. To learn more about ChampionX, visit our website at www.championX.com.

Forward-Looking Statements

This news release contains statements relating to future actions and results, which are “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, ChampionX’s market position and growth opportunities. Forward-looking statements include statements related to ChampionX’s expectations regarding the performance of the business, financial results, liquidity and capital resources of ChampionX. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, changes in economic, competitive, strategic, technological, tax, regulatory or other factors that affect the operations of ChampionX’s businesses. You are encouraged to refer to the documents that ChampionX files from time to time with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” in ChampionX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and in ChampionX’s other filings with the SEC. Readers are cautioned not to place undue reliance on ChampionX’s forward-looking statements. Forward-looking statements speak only as of the day they are made and ChampionX undertakes no obligation to update any forward-looking statement, except as required by applicable law.

Investor Contact: Byron Pope
[email protected]
281-602-0094

Media Contact: John Breed
[email protected]
281-403-5751

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(UNAUDITED)

Three Months Ended

Mar 31, Dec 31, Mar 31,

(in thousands, except per share amounts) 2021 2020 2020

Revenue $ 684,888 $ 706,122 $ 261,434

Cost of goods and services 522,556 539,979 179,095

Gross profit 162,332 166,143 82,339

Selling, general and administrative expense 143,478 132,811 78,143

Goodwill and long-lived asset impairment — — 657,251

Interest expense, net 13,971 15,495 9,039

Other (income) expense, net (1,936 ) (1,170 ) (1,633 )

Income (loss) before income taxes 6,819 19,007 (660,461 )

Provision for (benefit from) income taxes 2,782 11,526 (27,006 )

Net income (loss) 4,037 7,481 (633,455 )

Less: Net income (loss) attributable to noncontrolling interest (1,735 ) 124 273

Net income (loss) attributable to ChampionX $ 5,772 $ 7,357 $ (633,728 )

Earnings (loss) per share attributable to ChampionX:

Basic $ 0.03 $ 0.04 $ (8.18 )

Diluted $ 0.03 $ 0.04 $ (8.18 )

Weighted-average shares outstanding:

Basic 200,580 199,913 77,477

Diluted 207,271 204,825 77,477

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands) March 31, 2021 December 31, 2020

Assets

Cash and cash equivalents $ 259,821 $ 201,421

Receivables, net 528,142 559,545

Inventories, net 435,272 430,112

Prepaid expenses and other current assets 78,019 74,767

Total current assets 1,301,254 1,265,845

Property, plant and equipment, net 833,256 854,536

Goodwill 686,455 680,594

Intangible assets, net 457,275 479,009

Other non-current assets 197,549 195,792

Total assets $ 3,475,789 $ 3,475,776

Liabilities

Current portion of long-term debt $ 26,850 $ 26,850

Accounts payable 333,765 299,666

Other current liabilities 271,820 296,044

Total current liabilities 632,435 622,560

Long-term debt 899,469 905,764

Other long-term liabilities 314,779 334,877

Equity

ChampionX stockholders’ equity 1,644,769 1,625,971

Noncontrolling interest (15,663 ) (13,396 )

Total liabilities and equity $ 3,475,789 $ 3,475,776

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended March 31,

(in thousands) 2021 2020

Cash provided by (used for) operating activities:

Net income (loss) $ 4,037 $ (633,455 )

Depreciation 39,150 16,970

Amortization 21,851 12,862

Goodwill and long-lived asset impairment — 657,251

Receivables 30,019 (6,740 )

Inventories (6,511 ) 6,587

Accounts payable 36,227 3,068

Leased assets (1,138 ) (7,972 )

Other (33,421 ) (19,349 )

Net cash provided by operating activities 90,214 29,222

Cash provided by (used for) investing activities:

Capital expenditures (25,579 ) (7,467 )

Proceeds from sale of fixed assets 912 721

Net cash used for investing activities (24,667 ) (6,746 )

Cash provided by (used for) financing activities:

Repayment of long-term debt (6,701 ) —

Debt issuance costs — (1,284 )

Other 765 (1,860 )

Net cash used for financing activities (5,936 ) (3,144 )

Effect of exchange rate changes on cash and cash equivalents (1,211 ) (986 )

Net increase (decrease) in cash and cash equivalents 58,400 18,346

Cash and cash equivalents at beginning of period 201,421 35,290

Cash and cash equivalents at end of period $ 259,821 $ 53,636

CHAMPIONX CORPORATION

BUSINESS SEGMENT DATA

(UNAUDITED)

Three Months Ended

Mar 31, Dec 31, Mar 31,

(in thousands) 2021 2020 2020

Segment revenue:

Production Chemical Technologies $ 412,371 $ 446,652 $ —

Production & Automation Technologies 166,845 158,777 205,479

Drilling Technologies 34,994 23,568 55,955

Reservoir Chemical Technologies 29,891 30,937 —

Corporate and other 40,787 46,188 —

Total revenue $ 684,888 $ 706,122 $ 261,434

Income (loss) before income taxes:

Segment operating profit (loss):

Production Chemical Technologies $ 30,357 $ 49,200 $ —

Production & Automation Technologies 5,362 (4,724 ) (648,591 )

Drilling Technologies 6,386 153 11,359

Reservoir Chemical Technologies (3,228 ) 432 —

Total segment operating profit (loss) 38,877 45,061 (637,232 )

Corporate and other 18,087 10,559 14,190

Interest expense, net 13,971 15,495 9,039

Income (loss) before income taxes $ 6,819 $ 19,007 $ (660,461 )

Operating profit margin / income (loss) before income taxes margin:

Production Chemical Technologies 7.4 % 11.0 % — %

Production & Automation Technologies 3.2 % (3.0 )% (315.6 )%

Drilling Technologies 18.2 % 0.6 % 20.3 %

Reservoir Chemical Technologies (10.8 )% 1.4 % — %

ChampionX Consolidated 1.0 % 2.7 % (252.6 )%

Adjusted EBITDA

Production Chemical Technologies $ 56,025 $ 77,872 $ —

Production & Automation Technologies 35,512 29,345 40,031

Drilling Technologies 7,292 2,525 15,770

Reservoir Chemical Technologies (558 ) 2,204 —

Corporate and other (4,025 ) (3,301 ) (2,543 )

Adjusted EBITDA $ 94,246 $ 108,645 $ 53,258

Adjusted EBITDA margin

Production Chemical Technologies 13.6 % 17.4 % — %

Production & Automation Technologies 21.3 % 18.5 % 19.5 %

Drilling Technologies 20.8 % 10.7 % 28.2 %

Reservoir Chemical Technologies (1.9 )% 7.1 % — %

ChampionX Consolidated 13.8 % 15.4 % 20.4 %

CHAMPIONX CORPORATION

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

Three Months Ended

Mar 31, Dec 31, Mar 31,

(in thousands) 2021 2020 2020

Net income (loss) attributable to ChampionX $ 5,772 $ 7,357 $ (633,728 )

Pre-tax adjustments:

Acquisition and integration related costs ⁽¹⁾ 12,720 5,854 11,508

Restructuring and other related charges 4,256 4,971 2,766

Intellectual property defense (1,009 ) 478 211

Acquisition-related adjustments⁽²⁾ (3,512 ) (2,878 ) —

Professional fees related to material weakness remediation and impairment analysis ⁽³⁾ — 512 2,744

Separation and supplemental benefit costs — 105 368

Goodwill and long-lived asset impairment ⁽⁴⁾ — — 657,251

Tax impact of adjustments ⁽⁵⁾ (2,616 ) (2,070 ) (39,122 )

Adjusted net income (loss) attributable to ChampionX 15,611 14,329 1,998

Tax impact of adjustments ⁽⁵⁾ 2,616 2,070 39,122

Net income (loss) attributable to noncontrolling interest (1,735 ) 124 273

Depreciation and amortization 61,001 65,101 29,832

Provision for (benefit from) income taxes 2,782 11,526 (27,006 )

Interest expense, net 13,971 15,495 9,039

Adjusted EBITDA $ 94,246 $ 108,645 $ 53,258

Diluted earnings (loss) per share attributable to ChampionX:

Reported $ 0.03 $ 0.04 $ (8.18 )

Adjusted $ 0.08 $ 0.07 $ 0.03

_______________________

(1)  Includes costs primarily related to the Merger of Chemical Technologies of $0.4 million, $0.9 million and $7.9 million for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively. Additionally, we incurred professional fees related to the integration of Chemical Technologies of $12.3 million, $4.9 million and $3.7 million for the three months ended March 31, 2021, December 31, 2020 and March 31, 2020, respectively.
(2)  Includes revenue associated with the amortization of a liability established as part of the Merger, representing unfavorable terms under the Cross Supply Agreement. For the three months ended December 31, 2020, this is offset by incremental expense related to the step-up of inventory value resulting from the purchase accounting entries.
(3)  Includes professional fees related to the remediation of material weaknesses identified during 2019 as well as professional fees incurred in connection with the goodwill impairment charge recognized during the three months ended March 31, 2020.
(4)  Includes charges for goodwill and long-lived asset impairments in our Production & Automation Technologies segment.
(5) We generally tax effect adjustments using a combined federal and state statutory income tax rate. The impairment loss for three months ended March 31, 2020 includes non-taxable goodwill of $560.1 million.

Three Months Ended

Mar 31, Dec 31, Mar 31,

(in thousands) 2021 2020 2020

Diluted earnings (loss) per share attributable to ChampionX $ 0.03 $ 0.04 $ (8.18 )

Per share adjustments:

Acquisition and integration related costs 0.06 0.03 0.15

Restructuring and other related charges 0.02 0.02 0.04

Goodwill and long-lived asset impairment — — 8.48

Acquisition-related adjustments (0.01 ) (0.01 ) —

Professional fees related to material weakness remediation and impairment analysis — — 0.04

Intellectual property defense (0.01 ) — —

Tax impact of adjustments (0.01 ) (0.01 ) (0.50 )

Adjusted diluted earnings (loss) per share attributable to ChampionX $ 0.08 $ 0.07 $ 0.03

Free Cash Flow

Three Months Ended

Mar 31, Dec 31, Mar 31,

(in thousands) 2021 2020 2020

Free Cash Flow

Cash provided by operating activities $ 90,214 $ 120,608 $ 29,222

Less: Capital expenditures (25,579 ) (12,994 ) (7,467 )

Free cash flow $ 64,635 $ 107,614 $ 21,755

Cash From Operating Activities to Revenue Ratio

Cash provided by operating activities $ 90,214 $ 120,608 $ 29,222

Revenue $ 684,888 $ 706,122 $ 261,434

Cash from operating activities to revenue ratio 13 % 17 % 11 %

Free Cash Flow to Revenue Ratio

Free cash flow $ 64,635 $ 107,614 $ 21,755

Revenue $ 684,888 $ 706,122 $ 261,434

Free cash flow to revenue ratio 9 % 15 % 8 %

Free Cash Flow to Adjusted EBITDA Ratio

Free cash flow $ 64,635 $ 107,614 $ 21,755

Adjusted EBITDA $ 94,246 $ 108,645 $ 53,258

Free cash flow to adjusted EBITDA ratio 69 % 99 % 41 %

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