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Grow Capital Inc (GRWC) Continues Steady Growth Despite The Pandemic: Issues Management Update To Shareholders

Company Intends To Continue M & A Activity In FinTech Sector; To Increase Assets And Resulting Revenues; Company Also Engages Experienced Public Relations Firm to Widen Visibility

PR Newswire

HENDERSON, Nev., May 4, 2021 /PRNewswire/ — Grow Capital, Inc (OTCQB: GRWC) is a publicly-traded software, technology and financial services holding company that identifies, acquires and incubates promising companies in the financial technology sector (“FinTech”), and provides its shareholders access to investment opportunities in small and medium-sized businesses that are uniquely positioned for rapid growth, today released an update to shareholders detailing the milestones that the Company and it’s subsidiaries achieved in this past year.

Terry Kennedy, CEO of Grow Capital Inc. said: “This past year the Company took a number of actions to evolve and fully disengage from business operations of former management in order to  create a solid foundation from which to build out the new vision for the Company. These milestones have reimagined the Company’s path, substantially increased revenues through an aggressive approach to acquisitions and have enabled the Company to pursue further growth opportunities…… all for the benefit of our shareholders.”

Kennedy continued: “As a result we’ve seen an impressive increase in our reported revenues quarter over quarter,” said Kennedy. “I attribute this achievement to adhering to our model of staying in our niche and expanding and investing in our companies so we can further corner the space where financial planning and technology meet.”

In 2020 we further focused on building  infrastructure, size and increasing revenue  for our two key operating subsidiaries: PERA (Public Employee Retirement Assistance, LLC) and Bombshell Technologies, Inc.

PERA is a third-party marketing organization that facilitates meetings between state-licensed representatives and public employees who have individual retirement related questions.  PERA currently works with employees of school districts, colleges, universities, and other public institutions nationwide. Every state licensed representative is appointed with one or more of the institution’s approved vendors.

PERA is the driving force behind connecting retirement planning professionals and public employees who want help during school and government building closures. PERA serves major insurance and financial service companies and will expand its client base through this new ownership.

PERA has over 5,000 trusted advisors in its network to help public employees and has successfully set nearly half a million appointments for its clients since its inception.

“PERA was the second fintech acquisition for GRWC as we execute our long-term plan,”  added Kennedy. “PERA has been increasingly impactful in the public employee sector of financial and retirement planning during COVID 19 as everyone is working from home and only taking online meetings. PERA’s optimized use of technology has helped employees achieve their goals of getting retirement ready and has kept agents in business. PERA has proven itself to be invaluable to the financial services industry and fits perfectly into our FinTech group.”

Bombshell Technologies, a wholly owned subsidiary of the Company,  is a premier software development service provider with a focus on the financial services sector. Bombshell Technologies provides software to various financial services organizations and with a rapid growth strategy consisting of innovative industry-specific solutions for sales teams and management.

Bombshell Technologies has operations in both Nevada and Louisiana. Bombshell Technologies provides software to several massive financial services organizations and leads the way on innovative industry-specific solutions for sales teams and management.

Bombshell’s current software suite delivers customized back office compliance, sophisticated multi-pay commission processing, and a revolutionized new client application submission system, along with digital engagement marketing services centric to financial services. 

“Bombshell’s team and business model is ripe for growth,” said Chairman of GRWC, James Olson, at the time of the original acquisition of Bombshell in 2019. “We are now formally a FinTech holding company, following the exact plan we’ve outlined, demonstrating to stakeholders that our Board follows through on its plans and commitments.”

CEO Terry Kennedy added: “We’re proud of connecting hard working public employees to retirement planning and financial service specialists so they can get the services they need to better prepare for their future. This pandemic proved that during crisis, Americans give more thought to their own futures – a fact that’s proven profitable for PERA. Bombshell Technologies is also reporting an increase in activity adding three new clients this year, as well as new employees and an updated billing system.  I expect to see Bombshell continue to become a highly trusted technology company servicing financial services professionals and providing software to empower companies in the financial planning space.”

He concluded: “During the pandemic we’ve strategically avoided generating press releases in respect to the world wide pandemic that rocked families, sent the stock market into an unpredictable frenzy and required our nation’s attention, but now that the worst is hopefully behind us, we are committed to communicating our progress with our stakeholders.  Shareholders should stay tuned for further press releases, as our operating plan continues to unfold.

In that light, the Company has recently retained a highly regarded investor relations firm, OTC PR Group headed by Douglas Baker. His team will help us share the many exciting things we have accomplished to date, and that we and that we have on the horizon in order to broaden the Company’s investor base, market presence and visibility on social and digital media and communicate GRWC’s message and vision to a wider audience as the Company expands its operations and achievements throughout 2021.

The Company recently filed an 8K regarding this, which can be seen at: https://www.otcmarkets.com/filing/html?id=14886218&guid=pO-nUnzRuvAyyth  

To be added to the distribution list please email [email protected] with “GRWC” in the subject line.

Forward Looking Statements Disclaimer: This release may contain statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond Grow Capital, Inc’s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such forward -looking statements include the words “vision,” “seek”, “grow”, “plan” and other expressions of a forward-looking nature. More information about the potential factors that could affect the business and financial results is and will be included in Grow Capital, Inc’s filings with the OTC Markets, Securities and Exchange Commission and/or posted on the company’s website.

 

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SOURCE Grow Capital, Inc

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Lilly Outlines Robust Plans to Strengthen ESG Commitments Across the Globe

– Environmental, Social and Governance (ESG) goals focus on key topics including access and affordability, diversity and inclusion, racial justice and the environment

– New ESG portal, esg.lilly.com, launched today as a comprehensive source for Lilly sustainability information

PR Newswire

INDIANAPOLIS, May 4, 2021 /PRNewswire/ — Eli Lilly and Company (NYSE: LLY) will outline its newly updated Environmental, Social and Governance (ESG) strategy, highlighting its commitments in key areas during the company’s Sustainability Webcast today at 10:30 am ET. In addition, Lilly has launched a new comprehensive resource to provide transparency around the company’s ESG goals and progress at esg.lilly.com.

“As Lilly celebrates its 145th anniversary in a moment when we’ve all been challenged in unimaginable ways, we are reflecting on our long history of developing life-changing medicines for patients and making meaningful contributions to our world. Sustainability, which flows directly from our purpose and core values, is integral to everything we do at Lilly and we are keenly aware that how we work is just as important as what we do,” said David A. Ricks, Lilly Chairman and Chief Executive Officer. “While this focus is not new, we are redoubling our efforts—increasing our investment in sustainability, setting new goals and communicating our progress in new ways to all of our stakeholders who want to learn more.”

Lilly’s focus areas for ESG include access and affordability, diversity and inclusion, community engagement, employee well-being, human rights, patient safety, climate, waste, water, product stewardship, corporate governance, business ethics and supply chain management. Lilly is also adopting standard ESG reporting frameworks from the Sustainability Accounting Standards Board and the Taskforce on Climate-Related Financial Disclosures. Highlights of Lilly’s ESG commitments include:

Access and Affordability

  • Improving access to quality health care for 30 million people globally living in limited resource settings annually by 2030 through the Lilly 30×30 initiative
  • Implementing solutions to improve accessibility and affordability in the U.S. for patients who depend on Lilly’s medicines, including steps that make anyone, regardless of insurance status, eligible to obtain their monthly prescription of Lilly insulin for $35

Diversity and Inclusion

  • Ensuring female representation at Lilly, with women comprising 50% of Lilly’s global workforce at the end of 2020 and continuing to increase the number of women in management roles globally
  • Increasing the current representation of Black Americans in Lilly’s U.S. workforce from approximately 10% to 13%
  • Doubling the company’s annualized spend with African American suppliers and vendors over the next two years

Racial Justice

  • Making a $30 million commitment to the Unseen Capital Health Fund LP to help support minority-owned, early-stage health care companies
  • Signing the Indy Racial Equity Pledge along with a coalition of leading corporate and civic organizations across Central Indiana
  • Lilly Foundation pledging $25 million and Lilly committing to 25,000 volunteer hours over five years to combat racial inequality

Environment (by 2030)

  • Climate goals enhancing our commitment to renewable electricity and achieving carbon neutrality
  • Waste goals aimed at achieving zero waste to landfill with a focus on reducing plastic waste and increasing recycling
  • Water goals that preserve this precious resource in water stressed areas and protect our waterways from harmful discharges

“Lilly has a proud history of sustainability, but today, more than ever, we believe performance in these areas is central to our overall success,” said Lilly’s newly appointed Senior Advisor for ESG strategy, Jim Greffet. “Greater transparency is a mandate for all businesses and we are excited to implement standard ESG frameworks to report on our progress.”

More information about Lilly’s ESG strategy and progress is available at esg.lilly.com.

About Eli Lilly and Company  
Lilly is a global health care leader that unites caring with discovery to create medicines that make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and volunteerism. To learn more about Lilly, please visit us at www.lilly.com and www.lilly.com/news. I-LLY

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) about Lilly’s ESG efforts, plans, and objectives, and reflects Lilly’s current beliefs and expectations. There can be no assurance that Lilly will be successful in reaching the goals discussed above or in its other ESG communications. For additional information about the factors that could cause actual results to differ materially from forward-looking statements, see Lilly’s Form 10-K and Form 10-Q filings with the United States Securities and Exchange Commission. Except as required by law, Lilly undertakes no duty to update forward-looking statements to reflect events after the date of this release.

Refer to:

Molly McCully; [email protected]; 317-478-5423 (Media)

Kevin Hern; [email protected]; 317-277-1838 (Investors)

Jim Greffet; [email protected]; 317-277-0032 (ESG)

 

 

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SOURCE Eli Lilly and Company

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Broadridge Reports Third Quarter Fiscal Year 2021 Results

— Raising Guidance for FY21 Revenue and Adjusted EPS Growth

— Recurring Revenue Grew 8%

— Operating Income was $239 million and Adjusted Operating Income Grew 8% to $284 million

— Diluted EPS was $1.40 and Adjusted EPS Increased 5% to $1.76

PR Newswire

NEW YORK, May 4, 2021 /PRNewswire/ — Broadridge Financial Solutions, Inc. (NYSE: BR) today reported financial results for the third quarter and nine months ended March 31, 2021 of its fiscal year 2021. Results compared with the same period last year were as follows:  


Summary Financial Results


Third Quarter


Nine Months


Dollars in millions, except per share data



2021


2020



Change



2021


2020



Change

Recurring fee revenues


$900

$835


8%


$2,267

$2,106


8%

Total revenues


$1,390

$1,250


11%


$3,462

$3,167


9%

Operating income


239

226


6%


397

326


22%


Operating income margin



17.2%


18.1%



11.5%


10.3%

Adjusted Operating income – Non-GAAP


284

262


8%


553

460


20%


Adjusted Operating income margin – Non-
GAAP



20.4%


21.0%



16.0%


14.5%

Diluted EPS


$1.40

$1.43


(2)%


$2.44

$1.99


23%

Adjusted EPS – Non-GAAP


$1.76

$1.67


5%


$3.47

$2.88


20%

Closed sales


$46

$44


3%


$124

$127


(2)%

“Broadridge delivered strong third quarter results, including 8% recurring revenue growth and 8% Adjusted Operating income growth,” said Tim Gokey, Broadridge’s Chief Executive Officer.

“Our results continue to be propelled by powerful long-term trends including increased digitization, mutualization, and the democratization of investing.  As a result, we continue to invest in our products and technology platforms. These investments, along with the pending acquisition of Itiviti, will further strengthen our ability to drive increased value to our clients and growth to our shareholders,” Mr. Gokey continued. 

“Based on our strong performance, we are raising our top- and bottom-line growth guidance for fiscal year 2021 and now expect recurring revenue growth of 8-10% and Adjusted EPS growth of 11-13%.  Looking beyond fiscal year 2021, Broadridge is well-positioned for continued growth, and we remain confident in our ability to deliver at the higher end of our three-year growth objectives,” Mr. Gokey concluded.


Fiscal Year 2021 Financial Guidance

 


FY’21 Guidance


Updates / Changes

Recurring revenue growth

8 – 10%


Raised from higher end of 3-6%

Total revenue growth

8 – 10%


Raised from higher end of 1-4%

Adjusted Operating income margin – Non-GAAP

~18%


No change

Adjusted earnings per share growth – Non-GAAP

11 – 13%


Raised from higher end of 6-10%

Closed sales

$190 – 235M


No change

 


Financial Results for the Third Quarter Fiscal Year 2021 compared to Third Quarter Fiscal Year 2020

  • Total revenues increased 11% to $1,390 million from $1,250 million in the prior year period.
    • Recurring fee revenues increased 8% to $900 million from $835 million. The increase was primarily driven by growth from onboarding of new business and internal growth. Internal growth of 3pts was driven by ICS.
    • Event-driven fee revenues increased $35 million, or 89%, to $74 million, due to increased mutual fund proxy activity, contests and other communications.
    • Distribution revenues increased $37 million, or 9%, to $449 million, driven by an increase in the volume of event-driven communications.
  • Operating income was $239 million, an increase of $13 million, or 6%. Operating income margin decreased to 17.2% compared to 18.1% for the prior year period.
    • Adjusted Operating income was $284 million, an increase of $22 million, or 8%. Adjusted Operating income margin decreased to 20.4%, compared to 21.0% for the prior year period. The increase in Operating income and Adjusted Operating income was driven by an increase in recurring and event-driven revenues, which more than offset the impact of higher spending on growth initiatives.
  • Interest expense, net was $12 million, a decrease of $4 million, driven by lower average interest rates on borrowings and lower average debt outstanding.
  • The effective tax rate was 23.9% compared to 20.7% in the prior year period. The increase in the effective tax rate was driven by the reduced impact of discrete tax items relative to pre-tax income in the current period compared to the prior year period.
  • Net earnings decreased 1% to $165 million and Adjusted Net earnings increased 7% to $208 million.
    • Diluted earnings per share decreased 2% to $1.40, compared to $1.43 in the prior year period and Adjusted earnings per share increased 5% to $1.76, compared to $1.67 in the prior year period.

Segment and Other Results for the Third Quarter Fiscal Year 2021 compared to Third Quarter Fiscal Year 2020

Investor Communication Solutions (“ICS”)

  • ICS total revenues were $1,109 million, an increase of $129 million, or 13%.
    • Recurring fee revenues increased $57 million, or 11%, to $586 million. The increase was primarily attributable to revenues from net new business (5pts) and internal growth (5pts). Internal growth benefited from higher volume of equity proxy, mutual fund, and exchange-traded fund communications partially offset by lower interest rates on cash balances we hold for retirement accounts. Acquisitions also contributed 1pt to growth.
    • Event-driven fee revenues increased $35 million, or 89%, to $74 million, due to increased mutual fund proxy and equity proxy contest activity.
    • Distribution revenues increased $37 million, or 9%, to $449 million primarily from an increase in the volume of event-driven communications.
  • ICS earnings before income taxes were $219 million, an increase of $60 million, or 38%, primarily due to the increase in Recurring fee revenues and event-driven fee revenues. Pre-tax margins increased to 19.7% from 16.2%.

Global Technology and Operations (“GTO”)

  • GTO Recurring fee revenues were $314 million, an increase of $8 million, or 3%, driven by net new business. Internal growth was impacted by higher equity trading volumes offset by lower license sales.
  • GTO earnings before income taxes were $62 million, a decrease of $6 million, or 8%, compared to $67 million in the prior year period. The earnings decrease was driven by higher expenses related to client conversions and spending on growth initiatives. Pre-tax margins decreased to 19.7% from 22.1%.

Other

  • Other Loss before income tax increased to $67 million from $18 million in the prior year period. The increased loss was primarily due to (i) higher acquisition-related costs associated with the pending acquisition of Itiviti Holding AB (“Itiviti”), (ii) higher performance-based compensation expense, and (iii) spend on growth and other initiatives.


Financial Results for the Nine Months Fiscal Year 2021 compared to the Nine Months Fiscal Year 2020

  • Total revenues increased 9% to $3,462 million from $3,167 million in the prior year period.
    • Recurring fee revenues increased 8% to $2,267 million from $2,106 million. The increase in Recurring fee revenues was driven primarily by growth from onboarding of new business, internal growth and the impact of acquisitions. Internal growth of 2pts was driven by higher (i) ICS volume of equity proxy, mutual fund, and exchange-traded fund communications, and (ii) GTO, primarily higher equity trade volumes, partially offset by (iii) lower interest rates on cash balances we hold for retirement accounts and lower customer communication volumes.
    • Event-driven fee revenues increased $54 million, or 49%, to $164 million, due to increased mutual fund proxy and other communications.
    • Distribution revenues increased $84 million, or 8%, to $1,126 million, driven by an increase in the volume of regulatory and customer communications.
  • Operating income was $397 million, an increase of $71 million, or 22%. Operating income margin increased to 11.5% from 10.3% in the prior year period.
    • Adjusted Operating income was $553 million, an increase of $93 million, or 20%. Adjusted Operating income margin increased to 16.0%, compared to 14.5% for the prior year period.
    • The increase in Operating income and Adjusted Operating income was due to the impact of higher Recurring fee revenues and higher event-driven fee revenues.
  • Interest expense, net was $37 million, a decrease of $6 million, from lower average interest rates on borrowings.
  • The effective tax rate was 20.2% compared to 18.3% in the prior year period. The increase in the effective tax rate was driven by higher pre-tax earnings, which reduced the impact of discrete tax items. Excess tax benefits attributable to stock-based compensation were $15 million in the current year period, compared to $10 million in the comparable prior year period.
  • Net earnings increased 23% to $287 million and Adjusted Net earnings increased 21% to $408 million.
    • Diluted earnings per share increased 23% to $2.44, compared to $1.99 in the prior year period and Adjusted earnings per share increased 20% to $3.47, compared to $2.88 in the prior year period.
    • The increases in Diluted earnings per share and Adjusted earnings per share were primarily due to the increase in Recurring fee revenues and higher event-driven fee revenues.

Segment and Other Results for the Nine Months Fiscal Year 2021 compared to the Nine Months Fiscal Year 2020

ICS

  • ICS total revenues were $2,646 million, an increase of $248 million, or 10%.
    • Recurring fee revenues increased $110 million, or 9%, to $1,356 million. The increase was attributable to revenues from net new business (5pts) internal growth (2pts) and acquisitions (2pts). Internal growth benefited from higher volume of equity proxy, mutual fund and exchange-traded fund communications, partially offset by lower interest rates on cash balances we hold for retirement accounts and lower customer communication volumes.
    • Event-driven fee revenues increased $54 million, or 49%, to $164 million, primarily from increased mutual fund proxy and other communications.
    • Distribution revenues increased $84 million, or 8%, to $1,126 million driven by an increase in the volume of regulatory and customer communications.
  • ICS earnings before income taxes were $314 million, an increase of $110 million, or 54%, primarily due to the increase in Recurring fee revenues and event-driven fee revenues. Pre-tax margins increased to 11.9% from 8.5%.

GTO

  • GTO Recurring fee revenues were $912 million, an increase of $52 million, or 6%. The increase was attributable to the combination of organic growth (5pts) and revenues from acquisitions (1pt). Organic growth benefited from higher equity trading volumes and onboarding of new clients.
  • GTO earnings before income taxes were $192 million, an increase of $19 million, or 11%, compared to $173 million in the prior year period. The earnings increase was driven by higher organic revenues. Expense growth was driven by (i) spend on growth initiatives, (ii) onboarding of new business and (iii) recent acquisitions, which more than offset (iv) a decline in other expenses. Pre-tax margins increased to 21.1% from 20.1%.

Other

  • Other Loss before income tax increased 49% to $159 million from $107 million in the prior year period. The increased loss before income taxes was primarily due to (i) costs associated with the Company’s real estate realignment initiative, including lease exit and impairment charges and other facility exit costs of $33 million, (ii) higher performance-based compensation expense, (iii) higher acquisition-related costs associated with the pending Itiviti acquisition, and (iv) certain expenses associated with the Covid-19 pandemic, partially offset by (v) charges associated with the IBM Private Cloud Agreement that occurred in the prior year period.

Pending Acquisition of Itiviti

In March 2021, the Company signed a definitive agreement to acquire 100% of the equity shares of Itiviti.  The total purchase price is approximately $2.5 billion in cash, subject to normal closing adjustments.  The acquisition is subject to customary closing conditions and regulatory approval and is expected to close in the fourth quarter of fiscal year 2021.  The results of operations of the acquired business will be included in the results of operations of the Global Technology and Operations segment.

Earnings Conference Call

An analyst conference call will be held today, May 4, 2021 at 8:30 a.m. ET. A live webcast of the call will be available to the public on a listen-only basis. To listen to the live event and access the slide presentation, visit Broadridge’s Investor Relations website at www.broadridge-ir.com prior to the start of the webcast. To listen to the call, investors may also dial 1-877-328-2502 within the United States and international callers may dial 1-412-317-5419.

A replay of the webcast will be available and can be accessed in the same manner as the live webcast at the Broadridge Investor Relations site. Through May 18, 2021, the recording will also be available by dialing 1-877-344-7529 passcode: 10155380 within the United States or 1-412-317-0088 passcode: 10155380 for international callers.

Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures 

The Company’s results in this press release are presented in accordance with U.S. GAAP except where otherwise noted. In certain circumstances, results have been presented that are not generally accepted accounting principles measures (“Non-GAAP”). These Non-GAAP measures are Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share, and Free cash flow. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results.

The Company believes our Non-GAAP financial measures help investors understand how management plans, measures and evaluates the Company’s business performance. Management believes that Non-GAAP measures provide consistency in its financial reporting and facilitates investors’ understanding of the Company’s operating results and trends by providing an additional basis for comparison. Management uses these Non-GAAP financial measures to, among other things, evaluate our ongoing operations, and for internal planning and forecasting purposes. In addition, and as a consequence of the importance of these Non-GAAP financial measures in managing our business, the Company’s Compensation Committee of the Board of Directors incorporates Non-GAAP financial measures in the evaluation process for determining management compensation.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Earnings and Adjusted Earnings Per Share

These Non-GAAP measures reflect Operating income, Operating income margin, Net earnings, and Diluted earnings per share, each as adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items the exclusion of which management believes provides insight regarding our ongoing operating performance. Depending on the period presented, these adjusted measures exclude the impact of certain of the following items: (i) Amortization of Acquired Intangibles and Purchased Intellectual Property, (ii) Acquisition and Integration Costs, (iii) IBM Private Cloud Charges, (iv) Real Estate Realignment and Covid-19 Related Expenses, (v) Investment Gain, (vi) Software Charge and (vii) Loss on Acquisition-Related Financial Instrument. Amortization of Acquired Intangibles and Purchased Intellectual Property represents non-cash amortization expenses associated with the Company’s acquisition activities. Acquisition and Integration Costs represent certain transaction and integration costs associated with the Company’s acquisition activities. IBM Private Cloud Charges represent a charge on the hardware assets transferred to IBM and other charges related to the IBM Private Cloud Agreement. Real Estate Realignment and Covid-19 Related Expenses represent costs associated with the Company’s real estate realignment initiative, including lease exit and impairment charges and other facility exit costs, as well as certain expenses associated with the Covid-19 pandemic. The Covid-19 Related Expenses are direct expenses incurred by the Company to protect the health and safety of Broadridge associates, including the cost of personal protective equipment, enhanced cleaning measures in our facilities and other safety related expenses. Investment Gain represents a non-operating, non-cash gain on a privately held investment. Software Charge represents a charge related to an internal use software product that is no longer expected to be used.  Loss on Acquisition-Related Financial Instrument represents a non-operating loss on a financial instrument designed to minimize the Company’s foreign exchange risk associated with the pending acquisition of Itiviti.

We exclude Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Covid-19 Related Expenses, the Investment Gain, the Software Charge and the Loss on Acquisition-Related Financial Instrument from our Adjusted Operating income (as applicable) and other adjusted earnings measures because excluding such information provides us with an understanding of the results from the primary operations of our business and enhances comparability across fiscal reporting periods, as these items are not reflective of our underlying operations or performance. We also exclude the impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, as these non-cash amounts are significantly impacted by the timing and size of individual acquisitions and do not factor into the Company’s capital allocation decisions, management compensation metrics or multi-year objectives. Furthermore, management believes that this adjustment enables better comparison of our results as Amortization of Acquired Intangibles and Purchased Intellectual Property will not recur in future periods once such intangible assets have been fully amortized. Although we exclude Amortization of Acquired Intangibles and Purchased Intellectual Property from our adjusted earnings measures, our management believes that it is important for investors to understand that these intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.

Free Cash Flow

In addition to the Non-GAAP financial measures discussed above, we provide Free cash flow information because we consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated that could be used for dividends, share repurchases, strategic acquisitions, other investments, as well as debt servicing. Free cash flow is a Non-GAAP financial measure and is defined by the Company as Net cash flows provided by operating activities plus Proceeds from asset sales, less Capital expenditures as well as Software purchases and capitalized internal use software.

Reconciliations of such Non-GAAP measures to the most directly comparable financial measures presented in accordance with GAAP can be found in the tables that are part of this press release.

Forward-Looking Statements

This press release and other written or oral statements made from time to time by representatives of Broadridge may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature, and which may be identified by the use of words such as “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be” and other words of similar meaning, are forward-looking statements. In particular, information appearing in the “Fiscal Year 2021 Financial Guidance” section and statements about our three-year objectives are forward-looking statements.

These statements are based on management’s expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. These risks and uncertainties include those risk factors described and discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended June 30, 2020 (the “2020 Annual Report”), as they may be updated in any future reports filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this press release and are expressly qualified in their entirety by reference to the factors discussed in the 2020 Annual Report.

These risks include:

  • the potential impact and effects of the Covid-19 pandemic (“Covid-19”) on the business of Broadridge, Broadridge’s results of operations and financial performance, any measures Broadridge has and may take in response to Covid-19 and any expectations Broadridge may have with respect thereto;
  • the success of Broadridge in retaining and selling additional services to its existing clients and in obtaining new clients;
  • Broadridge’s reliance on a relatively small number of clients, the continued financial health of those clients, and the continued use by such clients of Broadridge’s services with favorable pricing terms;
  • a material security breach or cybersecurity attack affecting the information of Broadridge’s clients;
  • changes in laws and regulations affecting Broadridge’s clients or the services provided by Broadridge;
  • declines in participation and activity in the securities markets;
  • the failure of Broadridge’s key service providers to provide the anticipated levels of service;
  • a disaster or other significant slowdown or failure of Broadridge’s systems or error in the performance of Broadridge’s services;
  • overall market and economic conditions and their impact on the securities markets;
  • Broadridge’s failure to keep pace with changes in technology and the demands of its clients;
  • Broadridge’s ability to attract and retain key personnel;
  • the impact of new acquisitions and divestitures; and
  • competitive conditions.

Factors related to the Itiviti acquisition (as defined below) discussed in this press release that could cause actual results to differ materially from those contemplated by the forward-looking statements include:

  • uncertainties as to the timing to consummate the acquisition of Itiviti (the “Itiviti Acquisition”);
  • the risk that a condition to closing the Itiviti Acquisition may not be satisfied or that the Itiviti Acquisition may not be consummated;
  • the risk that regulatory approvals are not obtained or are obtained subject to conditions that are not anticipated by the parties;
  • potential litigation relating to the Itiviti Acquisition that could be instituted;
  • the effects of disruption to Broadridge’s or the Itiviti Holding AB and its subsidiaries’ respective businesses;
  • the impact of transaction costs;
  • Broadridge’s ability to achieve the benefits from the Itiviti Acquisition;
  • Broadridge’s ability to effectively integrate the acquired operations into its own operations;
  • the ability of Broadridge to retain and hire key Itiviti Holding AB and its subsidiaries’ personnel;
  • the effects of any unknown liabilities;
  • the diversion of management time on transaction-related issues; and
  • the risk that a condition to funding under our committed financing with respect to the Itiviti Acquisition may not be satisfied and our failure to obtain any replacement financing necessary to complete the Itiviti Acquisition.

Broadridge disclaims any obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.

About Broadridge

Broadridge Financial Solutions (NYSE: BR), a global Fintech leader with over $4.5 billion in revenues, provides the critical infrastructure that powers investing, corporate governance and communications to enable better financial lives. We deliver technology-driven solutions to banks, broker-dealers, asset and wealth managers and public companies. Broadridge’s infrastructure serves as a global communications hub enabling corporate governance by linking thousands of public companies and mutual funds to tens of millions of individual and institutional investors around the world. In addition, Broadridge’s technology and operations platforms underpin the daily trading of on average more than U.S. $10 trillion of equities, fixed income and other securities globally. A certified Great Place to Work®, Broadridge is a part of the S&P 500® Index, employing over 12,000 associates in 17 countries.

For more information about Broadridge, please visit www.broadridge.com.

Contact Information 


Investors:


Media:

W. Edings Thibault                                           

Gregg Rosenberg

(516) 472-5129

(212) 918-6966

 


Condensed Consolidated Statements of Earnings


(Unaudited)


In millions, except per share amounts


Three Months Ended 


 March 31,


Nine Months Ended 


March 31,


2021


2020


2021


2020

Revenues

$

1,389.8

$

1,249.9

$

3,462.1

$

3,167.1

Operating expenses:

      Cost of revenues

960.5

872.5

2,554.1

2,380.9

      Selling, general and administrative expenses

190.0

151.1

510.8

460.1

      Total operating expenses

1,150.6

1,023.7

3,064.8

2,841.0

Operating income

239.2

226.3

397.3

326.1

Interest expense, net

(11.8)

(16.2)

(37.3)

(43.2)

Other non-operating income (expenses), net

(10.6)

0.4

(0.1)

1.8

Earnings before income taxes

216.9

210.5

359.8

284.8

Provision for income taxes

51.9

43.6

72.7

52.0

Net earnings

$

165.0

$

166.8

$

287.1

$

232.8

Basic earnings per share

$

1.42

$

1.46

$

2.48

$

2.03

Diluted earnings per share

$

1.40

$

1.43

$

2.44

$

1.99

Weighted-average shares outstanding:

      Basic

115.8

114.6

115.6

114.6

      Diluted

118.0

117.0

117.7

117.1


Amounts may not sum due to rounding.

 

 


Condensed Consolidated Balance Sheets


(Unaudited)


In millions, except per share amounts


March 31,

2021


June 30,

2020


Assets

Current assets:

Cash and cash equivalents

$

355.8

$

476.6

Accounts receivable, net of allowance for doubtful accounts of
$8.2 and $9.8, respectively

871.0

711.3

Other current assets

151.8

140.1

Total current assets

1,378.6

1,328.0

Property, plant and equipment, net

167.2

161.6

Goodwill

1,723.3

1,674.5

Intangible assets, net

546.8

583.8

Other non-current assets

1,370.9

1,141.9

Total assets

$

5,186.8

$

4,889.8


Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of long-term debt

$

—

$

399.9

Payables and accrued expenses

876.1

829.9

Contract liabilities

126.5

111.2

Total current liabilities

1,002.6

1,341.0

Long-term debt

1,737.7

1,387.6

Deferred taxes

157.4

126.8

Contract liabilities

187.7

175.4

Other non-current liabilities

511.9

512.4

Total liabilities

3,597.4

3,543.2

Commitments and contingencies

Stockholders’ equity:

Preferred stock: Authorized, 25.0 shares; issued and outstanding,
none

—

—

Common stock, $0.01 par value: Authorized, 650.0 shares;
issued, 154.5 and 154.5 shares, respectively; outstanding,
115.9 and 115.1 shares, respectively

1.6

1.6

Additional paid-in capital

1,241.2

1,178.5

Retained earnings

2,390.2

2,302.6

Treasury stock, at cost: 38.6 and 39.3 shares, respectively

(2,019.6)

(2,035.7)

Accumulated other comprehensive loss

(24.1)

(100.4)

Total stockholders’ equity

1,589.3

1,346.5

Total liabilities and stockholders’ equity

$

5,186.8

$

4,889.8


Amounts may not sum due to rounding.

 

 


Condensed Consolidated Statements of Cash Flows


(Unaudited)


Dollars in millions

 


Nine Months Ended
March 31,


2021


2020


Cash Flows From Operating Activities

Net earnings

$

287.1

$

232.8

Adjustments to reconcile net earnings to net cash flows provided by operating
activities:

Depreciation and amortization

47.6

56.5

Amortization of acquired intangibles and purchased intellectual property

96.8

90.9

Amortization of other assets

83.1

76.0

Write-down of long-lived assets and related charges

34.7

32.1

Stock-based compensation expense

46.4

47.6

Deferred income taxes

24.2

9.7

Other

(36.5)

(16.0)

Changes in operating assets and liabilities, net of assets and liabilities acquired:

Current assets and liabilities:

Increase in Accounts receivable, net

(138.3)

(142.7)

Increase in Other current assets

(21.7)

(21.7)

Increase (decrease) in Payables and accrued expenses

1.6

(22.7)

Increase in Contract liabilities

12.7

18.2

Non-current assets and liabilities:

Increase in Other non-current assets

(317.6)

(244.7)

Increase in Other non-current liabilities

69.3

39.6

Net cash flows provided by operating activities

189.5

155.6


Cash Flows From Investing Activities

Capital expenditures

(41.5)

(48.5)

Software purchases and capitalized internal use software

(29.7)

(25.0)

Proceeds from asset sales

18.0

—

Acquisitions, net of cash acquired

—

(339.1)

Other investing activities

(11.8)

(15.3)

Net cash flows used in investing activities

(65.0)

(427.9)


Cash Flows From Financing Activities

Debt proceeds

725.0

1,575.3

Debt repayments

(780.6)

(960.6)

Dividends paid

(195.1)

(179.2)

Purchases of Treasury stock

(1.0)

(50.5)

Proceeds from exercise of stock options

33.9

26.4

Other financing activities

(37.3)

(9.8)

Net cash flows provided by (used in) financing activities

(255.1)

401.6

Effect of exchange rate changes on Cash and cash equivalents

9.7

(0.4)

Net change in Cash and cash equivalents

(120.8)

128.9

Cash and cash equivalents, beginning of period

476.6

273.2

Cash and cash equivalents, end of period

$

355.8

$

402.1


Amounts may not sum due to rounding.

 

 


Segment Results


(Unaudited)


In millions


Three Months Ended 


March 31,


Nine Months Ended 


 March 31,


2021


2020


2021


2020


Revenues

Investor Communication Solutions

$

1,109.3

$

980.2

$

2,646.0

$

2,398.4

Global Technology and Operations

313.5

305.5

911.9

860.3

Foreign currency exchange

(33.1)

(35.8)

(95.8)

(91.6)

Total

$

1,389.8

$

1,249.9

$

3,462.1

$

3,167.1


Earnings (Loss) before Income Taxes

Investor Communication Solutions

$

219.0

$

159.2

$

314.1

$

204.3

Global Technology and Operations

61.7

67.4

192.0

172.9

Other

(66.8)

(17.8)

(159.2)

(107.1)

Foreign currency exchange

2.9

1.6

12.9

14.6

Total

$

216.9

$

210.5

$

359.8

$

284.8

Pre-tax margins:

Investor Communication Solutions

19.7

%

16.2

%

11.9

%

8.5

%

Global Technology and Operations

19.7

%

22.1

%

21.1

%

20.1

%


Amounts may not sum due to rounding.

 

 


Supplemental Reporting Detail – Additional Product Line Reporting


(Unaudited)


In millions


Three Months Ended


March 31,


Nine Months Ended


March 31,


Investor Communication Solutions


2021


2020


Change


2021


2020


Change

Regulatory1

$

289.6

$

241.5

20

%

$

572.9

$

492.2

16

%

Data-driven fund solutions1

89.6

88.9

1

%

261.2

249.3

5

%

Issuer1

44.3

34.6

28

%

82.8

68.1

22

%

Customer communications1

163.0

164.0

(1)

%

438.7

436.1

1

%

         Total ICS Recurring fee revenues

586.5

529.0

11

%

1,355.6

1,245.8

9

%

Equity and other

40.4

22.1

83

%

79.5

54.9

45

%

Mutual funds

33.4

17.0

96

%

85.0

55.3

54

%

         Total ICS Event-driven fee revenues

73.8

39.1

89

%

164.5

110.3

49

%

Distribution revenues

449.1

412.1

9

%

1,126.0

1,042.4

8

%

Total ICS Revenues

$

1,109.3

$

980.2

13

%

$

2,646.0

$

2,398.4

10

%


Global Technology and Operations

Capital markets1

$

167.3

$

169.2

(1)

%

$

499.4

$

479.5

4

%

Wealth and investment management1

146.2

136.2

7

%

412.4

380.8

8

%

         Total GTO Recurring fee revenues

313.5

305.5

3

%

911.9

860.3

6

%

Foreign currency exchange

(33.1)

(35.8)

(8)

%

(95.8)

(91.6)

5

%

         Total Revenues

$

1,389.8

$

1,249.9

11

%

$

3,462.1

$

3,167.1

9

%


Revenues by Type

Recurring fee revenues

$

900.0

$

834.5

8

%

$

2,267.5

$

2,106.1

8

%

Event-driven fee revenues

73.8

39.1

89

%

164.5

110.3

49

%

Distribution revenues

449.1

412.1

9

%

1,126.0

1,042.4

8

%

Foreign currency exchange

(33.1)

(35.8)

(8)

%

(95.8)

(91.6)

5

%

         Total Revenues

$

1,389.8

$

1,249.9

11

%

$

3,462.1

$

3,167.1

9

%


Amounts may not sum due to rounding.



1
 In the second quarter of fiscal year 2021, the Company changed its presentation of disaggregated revenue by product line disclosures to reflect internal realignment of the Company’s revenue reporting, specifically as it relates to Recurring fee revenues. Presentation of disaggregated revenue by product line disclosures in prior periods have been changed to conform to the current period presentation.

 

 


Select Operating Metrics


(Unaudited)


Three Months Ended


March 31,


Nine Months Ended
March 31,


In millions


2021


2020


%
Change


2021


2020


%
Change


Closed sales1


$45.6


$44.4


3%


$124.4


$127.1


(2)%



Record Growth


2

Equity proxy

20%

7%

20%

8%

Mutual fund interims

7%

—%

9%

3%


Internal Trade Growth3

12%

26%

16%

5%


Amounts may not sum due to rounding.


1Refer to the “Results of Operations” section of Broadridge’s Form 10-Q for a description of Closed sales and its calculation.


2Stock record growth and interim record growth measure the estimated annual change in total positions eligible for equity proxy materials and mutual fund & ETF interim communications, respectively, for equities and mutual fund position data reported to Broadridge in both the current and prior year periods.


3Internal trade growth represents the estimate change in trade volumes for clients whose contracts are linked to trade volumes and who were on Broadridge’s trading platforms in both the current and prior year periods.

 

 


Reconciliation of Non-GAAP to GAAP Measures


(Unaudited)


In millions, except per share amounts


Three Months Ended 


 March 31,


Nine Months Ended 


 March 31,


2021


2020


2021


2020


Reconciliation of Adjusted Operating Income

Operating income (GAAP)

$

239.2

$

226.3

$

397.3

$

326.1

Adjustments:

Amortization of Acquired Intangibles and Purchased
Intellectual Property

31.9

32.5

96.8

90.9

Acquisition and Integration Costs

9.2

3.0

11.6

9.0

IBM Private Cloud Charges

—

0.2

—

33.6

Real Estate Realignment and Covid-19 Related Expenses

3.3

—

41.1

—

       Software Charge

—

—

6.0

—

Adjusted Operating income (Non-GAAP)

$

283.6

$

262.1

$

552.7

$

459.6

Operating income margin (GAAP)

17.2%

18.1%

11.5%

10.3%

Adjusted Operating income margin (Non-GAAP)

20.4%

21.0%

16.0%

14.5%


Reconciliation of Adjusted Net earnings

Net earnings (GAAP)

$

165.0

$

166.8

$

287.1

$

232.8

Adjustments:

Amortization of Acquired Intangibles and Purchased
Intellectual Property

31.9

32.5

96.8

90.9

Acquisition and Integration Costs

9.2

3.0

11.6

9.0

IBM Private Cloud Charges

—

0.2

—

33.6

Real Estate Realignment and Covid-19 Related Expenses

3.3

—

41.1

—

Investment Gain

—

—

(8.7)

—

Software Charge

—

—

6.0

—

Loss on Acquisition-Related Financial Instrument

9.6

—

9.6

—

     Subtotal of adjustments

54.0

35.8

156.3

133.5

Tax impact of adjustments (a)

(10.9)

(7.6)

(35.0)

(29.0)

Adjusted Net earnings (Non-GAAP)

$

208.1

$

195.0

$

408.4

$

337.3


Reconciliation of Adjusted EPS

Diluted earnings per share (GAAP)

$

1.40

$

1.43

$

2.44

$

1.99

Adjustments:

Amortization of Acquired Intangibles and Purchased
Intellectual Property

0.27

0.28

0.82

0.78

Acquisition and Integration Costs

0.08

0.03

0.10

0.08

IBM Private Cloud Charges

—

—

—

0.29

Real Estate Realignment and Covid-19 Related Expenses

0.03

—

0.35

—

Investment Gain

—

—

(0.07)

—

Software Charge

—

—

0.05

—

Loss on Acquisition-Related Financial Instrument

0.08

—

0.08

—

     Subtotal of adjustments

0.46

0.31

1.33

1.14

Tax impact of adjustments (a)

(0.09)

(0.07)

(0.30)

(0.25)

Adjusted earnings per share (Non-GAAP)

$

1.76

$

1.67

$

3.47

$

2.88

(a) Calculated using the GAAP effective tax rate, adjusted to exclude excess tax benefits associated with stock-based compensation of $1.7 million and $14.6 million for the three and nine months ended March 31, 2021, and $1.9 million and $9.9 million for the three and nine months ended March 31, 2020, respectively. For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis. The tax impact of adjustments also excludes approximately $8.5 million of Acquisition and Integration Costs for the three and nine months ended March 31, 2021, which are not tax-deductible.  For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis.

 


Nine Months Ended 


March 31,


2021


2020


Reconciliation of Free Cash Flow

Net cash flows provided by operating activities (GAAP)

$

189.5

$

155.6

Capital expenditures and Software purchases and capitalized internal use software

(71.2)

(73.5)

Proceeds from asset sales

18.0

—

Free cash flow (Non-GAAP)

$

136.3

$

82.2


Amounts may not sum due to rounding.

 

 


Fiscal Year 2021 Guidance


Reconciliation of Non-GAAP to GAAP Measures


Adjusted Earnings Per Share Growth and Adjusted Operating Income Margin


(Unaudited)

FY21 Adjusted Earnings Per Share Growth Rate (a)

Diluted earnings per share – GAAP

5 – 7% growth

Adjusted earnings per share – Non-GAAP

11 – 13% growth

FY21 Adjusted Operating Income Margin (b)

Operating income margin % – GAAP

~14%

Adjusted Operating income margin % – Non-GAAP

~18%

(a)  Adjusted earnings per share growth (Non-GAAP) is adjusted to exclude the projected impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, Real Estate Realignment and Covid-19 Related Expenses, Investment Gain, Software Charge, and Loss on Acquisition-Related Financial Instrument, and is calculated using diluted shares outstanding. Fiscal year 2021 Non-GAAP Adjusted earnings per share guidance estimates exclude, net of taxes, approximately $1.45 per share.

(b)  Adjusted Operating income margin (Non-GAAP) is adjusted to exclude the projected impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, Real Estate Realignment and Covid-19 Related Expenses, and Software Charge. Fiscal year 2021 Non-GAAP Adjusted Operating income margin guidance estimates excludes approximately $215 million.

               

 

Cision View original content:http://www.prnewswire.com/news-releases/broadridge-reports-third-quarter-fiscal-year-2021-results-301282789.html

SOURCE Broadridge Financial Solutions, Inc.

Posted on

MIC Reports First Quarter 2021 Financial And Operational Results

– Better than expected contributions from Atlantic Aviation and MIC Hawaii driven by increased general aviation flight activity and visitors to Hawaii

– 2021 earnings guidance raised

– Processes for sale of remaining businesses progressing

PR Newswire

NEW YORK, May 4, 2021 /PRNewswire/ — Macquarie Infrastructure Corporation (NYSE: MIC) (the “Company”) today announced its operational and financial results for the first quarter 2021. The results reflect better than expected contributions from Atlantic Aviation driven by increasing general aviation flight activity, and from MIC Hawaii driven by increasing numbers of visitors to Hawaii.

“We are pleased to report improved overall results this quarter. The ongoing recovery in economic activity lifted general aviation flight activity in March above the corresponding 2019 levels in markets served by Atlantic Aviation,” said Christopher Frost, chief executive officer of MIC. “While visitor arrivals in Hawaii have yet to reach 2019 numbers, they are ahead of our expectations and contributing to a recovery in the performance of our MIC Hawaii businesses.”

“On the strength of our financial performance in the first quarter, we are raising our earnings estimates for 2021. We remain confident in our ability to execute on our strategic priorities heading into the second half of the year,” added Frost.

MIC reported net income from continuing operations of $13.8 million compared with a net loss of $7.0 million in the first quarter of 2020. The improvement reflects primarily a reduction in selling, general and administrative expenses and lower interest expense.

The Company recorded Adjusted EBITDA excluding non-cash items from continuing operations of $76.9 million for the quarter, up 2% versus the first quarter of 2020.

MIC generated cash from operating activities of $40.0 million for the quarter, down 22% versus the prior comparable period. The decline primarily reflects a net unfavorable impact to working capital resulting from the reduction in business activity in March 2020 and payment of expenses in the first quarter of 2021 related to the sale of IMTT in December 2020.

The Company recorded Adjusted Free Cash Flow from continuing operations of $57.0 million, up 23% versus the prior comparable period. The increase reflects lower cash interest expense, maintenance capital expenditures and cash taxes together with the increase in Adjusted EBITDA excluding non-cash items versus the first quarter of 2020.

Update on Sales Processes

On October 31, 2019, MIC announced its intention to pursue strategic alternatives for the Company and has since been actively engaged in processes to sell its operating businesses. The Company completed the sale of its International-Matex Tank Terminals business in December 2020.

“The sale processes for our remaining businesses are progressing,” noted Frost. “We are pleased with the level of interest from potential buyers, particularly in our Atlantic Aviation business, and we remain confident in our ability to unlock value for shareholders through sales of both Atlantic Aviation and MIC Hawaii.”

The Company currently expects to sell Atlantic Aviation before the end of 2021. The regulatory approval process associated with a sale of the businesses comprising MIC Hawaii makes it more likely that a sale of that segment occurs in 2022.

To facilitate the tax-efficient sale of Atlantic Aviation prior to a sale of MIC Hawaii, shareholders will be asked to approve a plan of merger that could result in the reorganization of MIC from a corporation to a listed limited liability company treated as a partnership for tax purposes. The Company will seek approval of the plan of merger at a Special Meeting of Shareholders scheduled for May 6, 2021.

In connection with the sales processes, MIC is winding down operations at its shared services center in Plano, Texas. Functions other than those supporting the public company will be allocated to or reconstituted in both of its operating businesses.

First Quarter 2021 Segment Results

Atlantic Aviation

“Atlantic Aviation performed well during the first quarter, driven by the continued improvement in general aviation flight activity. The improvement was supported by strong demand at leisure-oriented destinations that exceeded expectations and increased demand at business-oriented destinations. Flight activity surpassed pre-pandemic levels in regions of the country that have shown consistent strength over the past year, including the Intermountain West and Florida. In addition, the business benefitted from steady growth in tenant hangar rental revenue,” Frost observed.

Atlantic Aviation generated EBITDA excluding non-cash items of $67.3 million in the first quarter of 2021, up 2% versus the first quarter of 2020, but 16% below the $79.8 million recorded in the first quarter of 2019.

As reported by the Federal Aviation Administration, same store general aviation flight activity at airports on which Atlantic Aviation operates increased by 5% in the first quarter compared with the first quarter of 2020 and decreased by 6% versus the first quarter of 2019. Flight activity at these airports was up 3% in March 2021 compared with March 2019.

MIC Hawaii

“The businesses that comprise our MIC Hawaii segment benefitted from a larger than anticipated number of visitors to the islands in the first quarter of the year. While the rate of recovery in visitor arrivals going forward remains uncertain, Hawaii appears to be a beneficiary of a low incidence of COVID-19 and pent-up consumer travel demand. At quarter end, visitor arrivals were approximately 60% below 2020 levels and 67% below 2019 levels, but well higher than those recorded in in the fourth quarter of 2020,” Frost noted.

MIC Hawaii generated EBITDA excluding non-cash items of $13.6 million in the first quarter of 2021, down 11% versus the first quarter in 2020 and down 30% versus the $19.5 million recorded in the first quarter in 2019. Residential gas consumption was flat during the quarter, as expected, while commercial and industrial gas consumption (including by hotels and restaurants) rose with the increase in visitor arrivals. Total gas consumption declined by 18% versus the first quarter in 2020 and 21% versus the first quarter in 2019.

Corporate and Other

MIC’s Corporate and Other segment includes primarily interest expense on holding company level debt, fees payable to the Company’s external manager and public company expenses. Reduced expenditures in the first quarter of 2021, including lower costs incurred in connection with efforts to sell the Company’s operating businesses, resulted in the generation of EBITDA excluding non-cash items of ($8.2) million compared with ($16.7) million the first quarter of 2020.

2021 Guidance Revision

On the strength of the Company’s financial results for the first quarter, MIC management has raised its earnings estimates for 2021.


Segment


Adjusted EBITDA Excluding Non-Cash Items Range ($ millions)

Atlantic Aviation

245 – 260

MIC Hawaii

35 – 45

Corporate and Other

(15)

MIC has raised its 2021 Adjusted EBITDA excluding non-cash items guidance for Atlantic Aviation to between $245 and $260 million from between $220 and $240 million. Based on demand during the first quarter, the Company believes that the rapid rollout of effective COVID-19 vaccines will continue to boost activity at leisure-oriented destinations through the summer. Consistent with prior guidance, the Company assumes that activity at business-oriented destinations, as well as international and event-driven travel, will recover during the second half of the year. Factors that could affect the outcome include, on the upside, an acceleration in the reopening of the economy or sustained leisure demand above historical levels through the remainder of 2021.  The current guidance does not assume a spreading of COVID-19 variants resistant to the current therapies or a resurgence of COVID-19 generally.

The better-than-expected number of visitors to Hawaii during the first quarter supported an upward revision in the Company’s 2021 Adjusted EBITDA excluding non-cash items guidance for its MIC Hawaii segment to between $35 and $45 million from between $30 and $40 million. MIC believes the rapid rollout of effective COVID-19 vaccines and the expected reopening of Hawaii to visitors from around the world will result in gas sales being above those previously anticipated, partially offset by an expected higher wholesale cost of propane and higher operating expenses due to the wind-down of the Company’s shared service center.

MIC revised its 2021 Adjusted EBITDA excluding non-cash items guidance for its Corporate and Other segment to ($15) million down from a previous estimate of ($20) million. The reduction primarily reflects lower professional services costs at the holding company level and the wind-down of the Company’s shared services center in Plano, Texas.

Balance Sheet Strength and Financial Flexibility

MIC reported aggregate leverage of approximately 3.8x net debt/Adjusted EBITDA excluding non-cash items (trailing twelve-month basis) on March 31, 2021. The Company expects its aggregate leverage to be below 3.0x net debt/Adjusted EBITDA at year-end.

The Company conducted a tender offer for any or all of its 2% Convertible Senior Notes due October 2023 during the first quarter. Including open market purchases made after quarter-end, MIC repurchased $364.3 million, or 91%, of the Notes outstanding.

On April 19, 2021, MIC’s Hawaii Gas business fully repaid its $100 million senior secured notes outstanding. The business incurred a $4.7 million ‘make-whole’ payment in connection with the repayment.

The Company continues to forecast deployment of growth capital of between $70 and $80 million in 2021, primarily on projects to which it has previously committed. MIC deployed $11.1 million in the first quarter of the year.

 


Summary Financial Information


Quarter Ended March 31,


Change

Favorable/

(Unfavorable)


2021


2020


$


%

($ In Thousands, Except Share and Per Share Data) (Unaudited)


GAAP Metrics


Continuing Operations

Net income (loss)

$

13,797

$

(6,988)

20,785

NM

Net income (loss) per share attributable to MIC

0.15

(0.08)

0.23

NM

Cash provided by operating activities

39,993

51,540

(11,547)

(22)


Discontinued Operations

Net income

$

—

$

18,215

(18,215)

(100)

Net income per share attributable to MIC

—

0.21

(0.21)

(100)

Cash provided by operating activities

—

48,688

(48,688)

(100)

Weighted average number of shares outstanding: basic

87,411,455

86,686,972

724,483

1


MIC Non-GAAP Metrics

EBITDA excluding non-cash items – continuing operations

$

72,650

$

64,464

8,186

13

Investment and acquisition/disposition costs

4,279

11,107

(6,828)

(61)

Adjusted EBITDA excluding non – cash items–continuing operations

$

76,929

$

75,571

1,358

2

Cash interest

$

(13,055)

$

(18,570)

5,515

30

Cash taxes

(3,209)

(4,820)

1,611

33

Maintenance capital expenditures

(3,664)

(5,714)

2,050

36


Adjusted Free Cash Flow – continuing operations

$

57,001

$

46,467

10,534

23

EBITDA excluding non-cash items – discontinued operations

$

—

$

77,647

(77,647)

(100)

Cash interest

—

(9,769)

9,769

100

Cash taxes

—

(2,107)

2,107

100

Maintenance capital expenditures

—

(5,615)

5,615

100

Free Cash Flow – discontinued operations

$

—

$

60,156

(60,156)

(100)


Adjusted Free Cash Flow – consolidated


$


57,001


$


106,623


(49,622)

(47)

NM — Not meaningful.

Conference Call and Webcast

When: MIC has scheduled a conference call for 8:00 a.m. Eastern Time on Tuesday, May 4, 2021 during which management will review and comment on the first quarter 2021 results.

How: To listen to the conference call dial +1 877-407-2991 or +1 201-389-0925 at least ten minutes prior to the scheduled start time. A webcast of the call will be accessible via the Company’s website at www.macquarie.com/mic. Allow extra time prior to the call to visit the site and download the software needed to listen to the webcast.

Slides: MIC will prepare supplemental materials that will be available for downloading from the Company’s website prior to the call.

Replay: For interested individuals unable to participate in the live conference call, a replay will be available after 2:00 p.m.May 4, 2021 through midnight May 11, 2021, at +1 877-660-6853 or +1 201-612-7415, Passcode: 13718895. An online archive of the webcast will be available on the Company’s website for one year following the call.

About MIC

MIC owns and operates businesses providing basic services to customers in the United States. Its businesses consist of an airport services business, Atlantic Aviation; and entities comprising an energy services, production and distribution segment, MIC Hawaii. For additional information, please visit the MIC website at www.macquarie.com/mic.

Use of Non-GAAP Measures

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow

In addition to MIC’s results under U.S. GAAP, the Company uses the non-GAAP measures EBITDA excluding non-cash items and Free Cash Flow to assess the performance and prospects of its businesses.

MIC measures EBITDA excluding non-cash items as a reflection of its businesses’ ability to effectively manage the volume of products sold or services provided, the operating margin earned on those transactions and the management of operating expenses independent of the capitalization and tax attributes of those businesses. The Company believes investors use EBITDA excluding non-cash items primarily to assess the operating performance of its businesses and to make comparisons with the operating performance of other businesses whose depreciation and amortization expense may vary widely from MIC’s, particularly where acquisitions and other non-operating factors are involved. MIC defines EBITDA excluding non-cash items as net income (loss) or earnings —the most comparable GAAP measure— before interest, taxes, depreciation and amortization and non-cash items including impairments, unrealized derivative gains and losses, adjustments for other non-cash items and pension expense reflected in the statements of operations. Other non-cash expenses, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries. EBITDA excluding non-cash items also excludes base management fees and performance fees, if any, whether paid in cash or stock.

The Company’s businesses can be characterized as owners of high-value, long-lived assets capable of generating substantial Free Cash Flow. MIC defines Free Cash Flow as cash from operating activities —the most comparable GAAP measure —less maintenance capital expenditures and adjusted for changes in working capital.

Management uses Free Cash Flow as a measure of its ability to fund acquisitions, invest in growth projects, reduce, or repay indebtedness and/or return capital to shareholders. GAAP metrics such as net income (loss) do not provide MIC management with the same level of visibility into the performance and prospects of the business as a result of: (i) the capital intensive nature of MIC’s businesses and the generation of non-cash depreciation and amortization; (ii) shares issued to the Company’s external manager under the Management Services Agreement, (iii) the Company’s ability to defer all or a portion of current federal income taxes; (iv) non-cash mark-to-market adjustment of the value of derivative instruments; (v) gains (losses) related to the write-off or disposal of assets or liabilities, (vi) non-cash compensation expense incurred in relation to the incentive plans for senior management of the Company’s operating business; and (vii) pension expense. Pension expenses primarily consist of interest expense, expected return on plan assets and amortization of actuarial and performance gains and losses. Any cash contributions to pension plans are reflected as a reduction in Free Cash Flow and are not included in pension expense. Management believes that external consumers of its financial statements, including investors and research analysts, use Free Cash Flow to assess the Company’s ability to fund acquisitions, invest in growth projects, reduce or repay indebtedness, and/or return capital to shareholders.

In its Quarterly Report on Form 10-Q, the Company has disclosed Free Cash Flow on a consolidated basis and for each of its operating segments and MIC Corporate and Other. Management believes that both EBITDA excluding non-cash items and Free Cash Flow support a more complete and accurate understanding of the financial and operating performance of its businesses than would otherwise be achieved using GAAP results alone.

Free Cash Flow does not take into consideration required payments on indebtedness and other fixed obligations or other cash items that are excluded from MIC’s definition of Free Cash Flow. Management notes that Free Cash Flow may be calculated differently by other companies thereby limiting its usefulness as a comparative measure. Free Cash Flow should be used as a supplemental measure to help understand MIC’s financial performance and not in lieu of its financial results reported under GAAP.

See the tables below for a reconciliation of Net Income (loss) to EBITDA excluding non-cash items from continuing operations and a reconciliation of cash provided by operating activities from continuing operations to Free Cash Flow from continuing operations.

With respect to the Company’s guidance for EBITDA and Free Cash Flow in 2021, a reconciliation of EBITDA to net income (loss), the most comparable GAAP measure and a reconciliation of Free Cash Flow to cash from operating activities, the most comparable GAAP measure, are not available without unreasonable effort due to the Company’s limited visibility into and an inability to make accurate projections and estimates of items including management fees, hedging agreements, depreciation and any (benefit) provision for income taxes. These items may vary greatly from year to year and could significantly impact MIC’s results as reported in accordance with GAAP.

Classification of Maintenance Capital Expenditures and Growth Capital Expenditures

MIC categorizes capital expenditures as either maintenance capital expenditures or growth capital expenditures. As neither maintenance capital expenditure nor growth capital expenditure is a GAAP term, the Company has adopted a framework to categorize specific capital expenditures. In broad terms, maintenance capital expenditures primarily maintain MIC’s businesses at current levels of operations, capability, profitability, or cash flow, while growth capital expenditures primarily provide new or enhanced levels of operations, capability, profitability, or cash flow. Management considers various factors in determining whether a specific capital expenditure will be classified as maintenance or growth.

MIC does not bifurcate specific capital expenditures into growth and maintenance components. Each discrete capital expenditure is considered within the above framework and the entire capital expenditure is classified as either maintenance or growth.

Forward-Looking Statements

This press release contains forward-looking statements. MIC may, in some cases, use words such as “project”, “believe”, “anticipate”, “plan”, “expect”, “estimate”, “intend”, “should”, “would”, “could”, “potentially”, or “may” or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such statements include, among others, those concerning expected financial performance and strategic and operational plans, statements regarding potential sales of the Company’s operating businesses (including the Company’s proposed reorganization) and the anticipated uses of any proceeds therefrom, statements regarding the anticipated specific and overall impacts of the COVID-19 pandemic, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Forward-looking statements in this release are subject to a number of risks and uncertainties, some of which are beyond MIC’s control including, among other things: changes in general economic or business conditions; the short and long term impact of the COVID-19 pandemic; its ability to complete the sale of the Company of its businesses of favorable terms, its ability to service, comply with the terms of and refinance debt, successfully integrate and manage acquired businesses, retain or replace qualified employees, complete growth projects, deploy growth capital and manage growth, make and finance future acquisitions, and implement its strategy; the regulatory environment; demographic trends, the political environment, the economy, tourism, construction and transportation costs, air travel, environmental costs and risks; fuel and gas and other commodity costs; its ability to recover increases in costs from customers, cybersecurity risks, work interruptions or other labor stoppages; risks associated with acquisitions or dispositions, litigation risks; reliance on sole or limited source suppliers, risks or conflicts of interests involving its relationship with the Macquarie Group and changes in U.S. federal tax law.

MIC’s actual results, performance, prospects or opportunities could differ materially from those expressed in or implied by the forward-looking statements. Additional risks of which MIC is not currently aware could also cause its actual results to differ. In light of these risks, uncertainties and assumptions, you should not place undue reliance on any forward-looking statements. The forward-looking events discussed in this release may not occur. These forward-looking statements are made as of the date of this release. MIC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

MIC is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of MIC do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of MIC.

 

 


MACQUARIE INFRASTRUCTURE CORPORATION


CONSOLIDATED CONDENSED BALANCE SHEETS

($ in Thousands, Except Share Data)


March 31, 2021


December 31, 2020


ASSETS

(Unaudited)

Current assets:

Cash and cash equivalents

$

529,639

$

1,828,063

Restricted cash

11,349

11,157

Accounts receivable, net of allowance for doubtful accounts

53,802

46,862

Inventories

16,933

16,551

Prepaid expenses

10,180

8,326

Other current assets

10,306

9,197

Total current assets

632,209

1,920,156

Property, equipment, land and leasehold improvements, net

849,670

854,200

Operating lease assets, net

323,948

322,892

Goodwill

617,072

616,939

Intangible assets, net

449,299

457,587

Other noncurrent assets

7,040

6,865

Total assets

$

2,879,238

$

4,178,639


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Due to Manager-related party

$

2,106

$

1,203

Accounts payable

30,310

30,470

Accrued expenses

40,583

46,112

Current portion of long-term debt

117,021

11,310

Dividend payable

—

960,981

Operating lease liabilities – current

17,032

17,157

Income taxes payable

133,768

132,113

Other current liabilities

22,270

22,861

Total current liabilities

363,090

1,222,207

Long-term debt, net of current portion

1,103,924

1,554,359

Deferred income taxes

125,220

126,858

Operating lease liabilities – noncurrent

312,927

311,597

Other noncurrent liabilities

67,308

70,312

Total liabilities

1,972,469

3,285,333

Commitments and contingencies

—

—

Stockholders’ equity(1):

Common Stock ($0.001 par value; 500,000,000 authorized; 87,505,452 shares issued and outstanding
  on March 31, 2021 and 87,361,929 shares issued and outstanding on December 31, 2020)

$

88

$

87

Additional paid in capital

170,678

177,975

Accumulated other comprehensive loss

(6,175)

(6,175)

Retained earnings

733,291

713,129

Total stockholders’ equity

897,882

885,016

Noncontrolling interests

8,887

8,290

Total equity

906,769

893,306

Total liabilities and equity

$

2,879,238

$

4,178,639

(1)

The Company is authorized to issue 100,000,000 shares of preferred stock, par value $0.001 per share authorized. On March 31, 2021 and December 31, 2020, no preferred stocks were issued or outstanding. The Company had 100 shares of special stock, par value $0.001 per share, issued and outstanding to its Manager on March 31, 2021 and December 31, 2020.

 


MACQUARIE INFRASTRUCTURE CORPORATION


CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

($ in Thousands, Except Share and Per Share Data)


Quarter Ended March 31,


2021


2020


Revenue

Service revenue

$

209,604

$

223,997

Product revenue

54,587

60,462

Total revenue

264,191

284,459


Costs and expenses

Cost of services

82,233

94,663

Cost of product sales

34,756

41,934

Selling, general and administrative

77,012

87,583

Fees to Manager – related party

5,552

7,356

Depreciation

19,231

19,526

Amortization of intangibles

8,288

11,005

Total operating expenses 

227,072

262,067


Operating income

37,119

22,392


Other income (expense)

Interest income

161

468

Interest expense(1)

(18,619)

(26,705)

Other income (expense), net

502

(146)

Net income (loss) from continuing operations before income taxes

19,163

(3,991)

Provision for income taxes

(5,366)

(2,997)


Net income (loss) from continuing operations

13,797

(6,988)


Discontinued Operations(2)

Net income from discontinued operations before income taxes

—

24,545

Provision for income taxes

—

(6,330)


Net income from discontinued operations

—

18,215


Net income

13,797

11,227

Net income (loss) from continuing operations

13,797

(6,988)

Less: net income (loss) attributable to noncontrolling interest

597

(75)


Net income (loss) from continuing operations attributable to MIC

13,200

(6,913)

Net income from discontinued operations

—

18,215


Net income from discontinued operations attributable to MIC

—

18,215


Net income attributable to MIC

$

13,200

$

11,302

Basic income (loss) per share from continuing operations attributable to MIC

$

0.15

$

(0.08)

Basic income per share from discontinued operations attributable to MIC

—

0.21

Basic income per share attributable to MIC

$

0.15

$

0.13

Weighted average number of shares outstanding: basic

87,411,455

86,686,972

Diluted income (loss) per share from continuing operations attributable to MIC

$

0.15

$

(0.08)

Diluted income per share from discontinued operations attributable to MIC

—

0.21

Diluted income per share attributable to MIC

$

0.15

$

0.13

Weighted average number of shares outstanding: diluted

87,495,298

86,686,972

(1)

Interest expense includes non-cash gains on derivative instruments of $281,000 and non-cash losses of $4.3 million for the quarter ended March 31, 2021 and 2020, respectively.

(2)

See Note 4, “Discontinued Operations and Dispositions”, in our Notes to Consolidated Condensed Financial Statements in Part I of Form 10-Q for the quarter ended March 31, 2021, for discussions on businesses classified as held for sale.

 


MACQUARIE INFRASTRUCTURE CORPORATION


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

($ in Thousands)


Quarter Ended March 31,


2021


2020


Operating activities

Net income (loss) from continuing operations

$

13,797

$

(6,988)

Adjustments to reconcile net income (loss) to net cash provided by operating activities from continuing operations:

Depreciation

19,231

19,526

Amortization of intangibles

8,288

11,005

Write-off of debt discount and financing cost

4,311

—

Amortization of debt discount and financing costs

1,416

2,634

Adjustments to derivative instruments

(1,458)

7,385

Fees to Manager-related party

5,552

7,356

Deferred taxes

2,157

(1,823)

Other non-cash expense, net

3,046

1,979

Changes in other assets and liabilities, net of acquisitions:

Accounts receivable

(6,921)

17,490

Inventories

(713)

6,354

Prepaid expenses and other current assets

(2,771)

(2,526)

Due to Manager – related party

—

150

Accounts payable and accrued expenses

(4,373)

(14,740)

Income taxes payable

2,484

3,414

Other, net

(4,053)

324

Net cash provided by operating activities from continuing operations

39,993

51,540


Investing activities

Acquisitions of businesses and investments, net of cash, cash equivalents, and restricted cash acquired

—

(13,495)

Purchases of property and equipment

(15,856)

(16,910)

Other, net

17

3

Net cash used in investing activities from continuing operations

(15,839)

(30,402)


Financing activities

Proceeds from long-term debt

—

874,000

Payment of long-term debt

(361,405)

(3,059)

Dividends paid to common stockholders

(960,981)

(86,742)

Net cash (used in) provided by financing activities from continuing operations

(1,322,386)

784,199

Net change in cash, cash equivalents, and restricted cash from continuing operations

(1,298,232)

805,337

 


MACQUARIE INFRASTRUCTURE CORPORATION


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued)
(Unaudited)

($ in Thousands)


Quarter Ended March 31,


2021


2020


Cash flows provided by (used in) discontinued operations:

Net cash provided by operating activities

$

—

$

48,688

Net cash used in investing activities

—

(55,023)

Net cash used in discontinued operations

—

(6,335)

Effect of exchange rate changes on cash and cash equivalents

—

(792)

Net change in cash, cash equivalents, and restricted cash

(1,298,232)

798,210

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

1,839,220

358,565

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

$

540,988

$

1,156,775


Supplemental disclosures of cash flow information:

Non-cash investing and financing activities:

Accrued purchases of property and equipment from continuing operations

$

3,902

$

5,081

Accrued purchases of property and equipment from discontinued operations

—

18,583

   Leased assets obtained in exchange for new operating lease liabilities from
     continuing operations

787

4,886

Taxes paid, net, from continuing operations

660

1,405

Taxes paid, net, from discontinued operations

—

1,410

Interest paid, net, from continuing operations

16,570

17,308

Interest paid, net, from discontinued operations

—

4,026

The following table provides a reconciliation of cash, cash equivalents, and restricted cash from both continuing and discontinued operations reported within the consolidated condensed balance sheets that is presented in the consolidated condensed statements of cash flows:


As of March 31,


2021


2020

Cash and cash equivalents

$

529,639

$

1,131,685

Restricted cash – current

11,349

926

Cash, cash equivalents, and restricted cash included in assets held for sale

—

24,164

Total of cash, cash equivalents, and restricted cash shown in the consolidated condensed statements of cash flows

$

540,988

$

1,156,775

 

 

 


MACQUARIE INFRASTRUCTURE CORPORATION


CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A


Quarter Ended

March 31,


Change

Favorable/(Unfavorable)


2021


2020


$


%

($ In Thousands, Except Share and Per Share Data) (Unaudited)


Revenue

Service revenue

$

209,604

$

223,997

(14,393)

(6)

Product revenue

54,587

60,462

(5,875)

(10)

Total revenue

264,191

284,459

(20,268)

(7)


Costs and expenses

Cost of services

82,233

94,663

12,430

13

Cost of product sales

34,756

41,934

7,178

17

Selling, general and administrative

77,012

87,583

10,571

12

Fees to Manager – related party

5,552

7,356

1,804

25

Depreciation and amortization

27,519

30,531

3,012

10

Total operating expenses 

227,072

262,067

34,995

13


Operating income

37,119

22,392

14,727

66


Other income (expense)

Interest income

161

468

(307)

(66)

Interest expense(1)

(18,619)

(26,705)

8,086

30

Other income (expense), net

502

(146)

648

NM

Net income (loss) from continuing operations before income taxes

19,163

(3,991)

23,154

NM

Provision for income taxes

(5,366)

(2,997)

(2,369)

(79)


Net income (loss) from continuing operations

13,797

(6,988)

20,785

NM


Discontinued Operations

Net income from discontinued operations before income taxes

—

24,545

(24,545)

(100)

Provision for income taxes

—

(6,330)

6,330

100


Net income from discontinued operations

—

18,215

(18,215)

(100)


Net income

13,797

11,227

2,570

23

Net income (loss) from continuing operations

13,797

(6,988)

20,785

NM

Less: net income (loss) attributable to noncontrolling interests

597

(75)

(672)

NM


Net income (loss) from continuing operations attributable to MIC

13,200

(6,913)

20,113

NM

Net income from discontinued operations

—

18,215

(18,215)

(100)


Net income from discontinued operations attributable to MIC

—

18,215

(18,215)

(100)


Net income attributable to MIC

$

13,200

$

11,302

1,898

17

Basic income (loss) per share from continuing operations attributable to MIC

$

0.15

$

(0.08)

0.23

NM

Basic income per share from discontinued operations attributable to MIC

—

0.21

(0.21)

(100)

Basic income per share attributable to MIC

$

0.15

$

0.13

0.02

15

Weighted average number of shares outstanding: basic

87,411,455

86,686,972

724,483

1

NM — Not meaningful.

(1) Interest expense includes non-cash gains on derivative instruments of $281,000 and non-cash losses of $4.3 million for the quarter ended March 31, 2021 and 2020, respectively.

 


MACQUARIE INFRASTRUCTURE CORPORATION


RECONCILIATION OF CONSOLIDATED NET INCOME (LOSS) TO EBITDA EXCLUDING

NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW


Quarter Ended

March 31,


Change

Favorable/(Unfavorable)


2021


2020


$


%

($ In Thousands) (Unaudited)

Net income (loss) from continuing operations

$

13,797

$

(6,988)

Interest expense, net(1)

18,458

26,237

Provision for income taxes

5,366

2,997

Depreciation and amortization

27,519

30,531

Fees to Manager – related party

5,552

7,356

Other non-cash expense, net(2)

1,958

4,331

EBITDA excluding non-cash items – continuing operations

$

72,650

$

64,464

8,186

13

EBITDA excluding non-cash items – continuing operations

$

72,650

$

64,464

Interest expense, net(1)

(18,458)

(26,237)

Non-cash interest expense, net(1)

5,403

7,667

Provision for current income taxes

(3,209)

(4,820)

Changes in working capital

(16,393)

10,466

Cash provided by operating activities – continuing operations

39,993

51,540

Changes in working capital

16,393

(10,466)

Maintenance capital expenditures

(3,664)

(5,714)

Free cash flow – continuing operations

$

52,722

$

35,360

17,362

49

(1)

Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees, and non-cash amortization of debt discount related to our 2.00% Convertible Senior Notes. For the quarter ended March 31, 2021, interest expense also includes non-cash write-offs of deferred financing costs related to the repurchase of our 2.00% Convertible Senior Notes and the cancellation of the holding company revolving credit facility.

(2)

Other non-cash expense, net, includes primarily non-cash mark-to-market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses, and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Other non-cash expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” above for further discussion.

 


MACQUARIE INFRASTRUCTURE CORPORATION


RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA

EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED

BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW



Atlantic Aviation


Quarter Ended

March 31,


Change

Favorable/(Unfavorable)


2021


2020


$


$


$


%

($ In Thousands) (Unaudited)

Service revenue

209,604

223,997

(14,393)

(6)

Cost of services (exclusive of depreciation and
   amortization shown separately below)

82,233

94,663

12,430

13

Gross margin

127,371

129,334

(1,963)

(2)

Selling, general and administrative expenses

61,586

64,140

2,554

4

Depreciation and amortization

23,300

26,579

3,279

12

Operating income

42,485

38,615

3,870

10

Interest expense, net(1)

(10,730)

(18,876)

8,146

43

Other expense, net

(18)

(72)

54

75

Provision for income taxes

(8,596)

(5,479)

(3,117)

(57)

Net income

23,141

14,188

8,953

63



Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:

Net income

23,141

14,188

Interest expense, net(1)

10,730

18,876

Provision for income taxes

8,596

5,479

Depreciation and amortization

23,300

26,579

Other non-cash expense, net(2)

1,569

813

EBITDA excluding non-cash items

67,336

65,935

1,401

2

EBITDA excluding non-cash items

67,336

65,935

Interest expense, net(1)

(10,730)

(18,876)

  Non-cash interest expense, net(1)

943

5,159

Provision for current income taxes

(4,480)

(8,577)

Changes in working capital

1,916

15,667

Cash provided by operating activities

54,985

59,308

Changes in working capital

(1,916)

(15,667)

Maintenance capital expenditures

(2,550)

(3,045)

Free cash flow

50,519

40,596

9,923

24

(1)

Interest expense, net, includes  non-cash adjustments to derivative instruments and non-cash amortization of deferred financing fees.

(2)

Other non-cash expense, net, includes primarily non-cash compensation expense incurred in relation to incentive plans and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Other non-cash expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” above for further discussion.

 



MIC Hawaii


Quarter Ended

March 31,


Change

Favorable/(Unfavorable)


2021


2020


$


$


$


%

($ In Thousands) (Unaudited)

Product revenue

54,587

60,462

(5,875)

(10)

Cost of product sales (exclusive of depreciation and amortization shown separately below)

34,756

41,934

7,178

17

Gross margin

19,831

18,528

1,303

7

Selling, general and administrative expenses

5,677

6,322

645

10

Depreciation and amortization

3,748

3,624

(124)

(3)

Operating income

10,406

8,582

1,824

21

Interest expense, net(1)

(1,304)

(2,775)

1,471

53

Other expense, net

(336)

(112)

(224)

(200)

Provision for income taxes

(2,367)

(1,775)

(592)

(33)

Net income

6,399

3,920

2,479

63

Less: net income (loss) attributable to noncontrolling interests

597

(75)

(672)

NM

Net income attributable to MIC

5,802

3,995

1,807

45



Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:

Net income

6,399

3,920

Interest expense, net(1)

1,304

2,775

Provision for income taxes

2,367

1,775

Depreciation and amortization

3,748

3,624

Other non-cash (income) expense, net(2)

(256)

3,113

EBITDA excluding non-cash items

13,562

15,207

(1,645)

(11)

EBITDA excluding non-cash items

13,562

15,207

Interest expense, net(1)

(1,304)

(2,775)

Non-cash interest (income) expense, net(1)

(231)

1,003

Provision for current income taxes

(1,516)

(2,123)

Changes in working capital

(1,696)

(5,086)

Cash provided by operating activities

8,815

6,226

Changes in working capital

1,696

5,086

Maintenance capital expenditures

(1,114)

(2,669)

Free cash flow

9,397

8,643

754

9

NM — Not meaningful.

(1)

Interest expense, net, includes non-cash adjustments to derivative instruments related to interest rate swaps and non-cash amortization of deferred financing fees.

(2)

Other non-cash (income) expense, net, includes primarily non-cash mark-to-market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to incentive plans, and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Other non-cash (income) expense, net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See “Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” above for further discussion.

 



Corporate and Other


Quarter Ended

March 31,


Change

Favorable/(Unfavorable)


2021


2020


$


$


$


%

($ In Millions) (Unaudited)

Selling, general and administrative expenses

9,749

17,121

7,372

43

Fees to Manager – related party

5,552

7,356

1,804

25

Depreciation and amortization

471

328

(143)

(44)

Operating loss

(15,772)

(24,805)

9,033

36

Interest expense, net(1)

(6,424)

(4,586)

(1,838)

(40)

Other income, net

856

38

818

NM

Benefit for income taxes

5,597

4,257

1,340

31

Net loss

(15,743)

(25,096)

9,353

37



Reconciliation of net loss to EBITDA excluding non-cash items  and a reconciliation of cash used in  operating activities to Free Cash Flow:

Net loss

(15,743)

(25,096)

Interest expense, net(1)

6,424

4,586

Benefit for income taxes

(5,597)

(4,257)

Fees to Manager – related party

5,552

7,356

Depreciation and amortization

471

328

Other non-cash expense, net(2)

645

405

EBITDA excluding non-cash items

(8,248)

(16,678)

8,430

51

EBITDA excluding non-cash items

(8,248)

(16,678)

Interest expense, net(1)

(6,424)

(4,586)

Non-cash interest expense, net(1)

4,691

1,505

Benefit for current income taxes

2,787

5,880

Changes in working capital

(16,613)

(115)

Cash used in operating activities

(23,807)

(13,994)

Changes in working capital

16,613

115

Free cash flow

(7,194)

(13,879)

6,685

48

NM — Not meaningful.

(1)

Interest expense, net, includes, non-cash amortization of deferred financing fees, and non-cash amortization of debt discount related to our 2.00% Convertible Senior Notes. For the quarter ended March 31, 2021, interest expense also includes non-cash write-offs of deferred financing costs related to the repurchase of our 2.00% Convertible Senior Notes and the cancellation of the holding company revolving credit facility.

(2)

Other non-cash expense, net, includes primarily non-cash adjustments related to non-cash compensation expense incurred in relation to incentive plans and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. See “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” above for further discussion.

 


MACQUARIE INFRASTRUCTURE CORPORATION


RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING

NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW


For the Quarter Ended March 31, 2021


Atlantic

Aviation


MIC

Hawaii


Corporate

and Other


Total Continuing

Operations


Discontinued Operations


Total

($ in Thousands) (Unaudited)

Net income (loss)

23,141

6,399

(15,743)

13,797

—


13,797

Interest expense, net(1)

10,730

1,304

6,424

18,458

—


18,458

Provision (benefit) for income taxes

8,596

2,367

(5,597)

5,366

—


5,366

Depreciation and amortization

23,300

3,748

471

27,519

—


27,519

Fees to Manager – related party

—

—

5,552

5,552

—


5,552

Other non-cash expense (income), net(2)

1,569

(256)

645

1,958

—


1,958

EBITDA excluding non-cash items

67,336

13,562

(8,248)

72,650

—


72,650

EBITDA excluding non-cash items

67,336

13,562

(8,248)

72,650

—


72,650

Interest expense, net(1)

(10,730)

(1,304)

(6,424)

(18,458)

—


(18,458)

Non-cash interest expense (income), net(1)

943

(231)

4,691

5,403

—


5,403

(Provision) benefit for current income taxes

(4,480)

(1,516)

2,787

(3,209)

—


(3,209)

Changes in working capital

1,916

(1,696)

(16,613)

(16,393)

—


(16,393)

Cash provided by (used in) operating activities

54,985

8,815

(23,807)

39,993

—


39,993

Changes in working capital

(1,916)

1,696

16,613

16,393

—


16,393

Maintenance capital expenditures

(2,550)

(1,114)

—

(3,664)

—


(3,664)

Free Cash Flow

50,519

9,397

(7,194)

52,722

—


52,722


For the Quarter Ended March 31, 2020


Atlantic

Aviation


MIC

Hawaii


Corporate

and Other


Total Continuing

Operations


Discontinued Operations


Total

($ in Thousands) (Unaudited)

Net income (loss)

14,188

3,920

(25,096)

(6,988)

18,215


11,227

Interest expense, net(1)

18,876

2,775

4,586

26,237

15,299


41,536

Provision (benefit) for income taxes

5,479

1,775

(4,257)

2,997

6,330


9,327

Depreciation and amortization

26,579

3,624

328

30,531

34,480


65,011

Fees to Manager – related party

—

—

7,356

7,356

—


7,356

Other non-cash expense, net(2)

813

3,113

405

4,331

3,323


7,654

EBITDA excluding non-cash items

65,935

15,207

(16,678)

64,464

77,647


142,111

EBITDA excluding non-cash items

65,935

15,207

(16,678)

64,464

77,647


142,111

Interest expense, net(1)

(18,876)

(2,775)

(4,586)

(26,237)

(15,299)


(41,536)

  Non-cash interest expense, net(1)

5,159

1,003

1,505

7,667

5,530


13,197

(Provision) benefit for current income taxes

(8,577)

(2,123)

5,880

(4,820)

(2,107)


(6,927)

Changes in working capital

15,667

(5,086)

(115)

10,466

(17,083)


(6,617)

Cash provided by (used in) operating activities

59,308

6,226

(13,994)

51,540

48,688


100,228

Changes in working capital

(15,667)

5,086

115

(10,466)

17,083


6,617

Maintenance capital expenditures

(3,045)

(2,669)

—

(5,714)

(5,615)


(11,329)

Free Cash Flow

40,596

8,643

(13,879)

35,360

60,156


95,516

(1)

Interest expense, net, includes adjustments to derivative instruments, non-cash amortization of deferred financing fees, and non-cash amortization of debt discount related to our 2.00% Convertible Senior Notes. For the quarter ended March 31, 2021, interest expense also includes non-cash write-offs of deferred financing costs related to the repurchase of our 2.00% Convertible Senior Notes and the cancellation of the holding company revolving credit facility.

(2)

Other non-cash expense (income), net, includes primarily non-cash mark-to-market adjustment of the value of the commodity hedge contracts, non-cash compensation expense incurred in relation to the incentive plans for senior management of our operating businesses, and non-cash gains (losses) related to the write-off or disposal of assets or liabilities. Other non-cash expense (income), net, excludes the adjustment to bad debt expense related to the specific reserve component, net of recoveries, for which this adjustment is reported in working capital in the above table. See “Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) excluding non-cash items and Free Cash Flow” above for further discussion.

 

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SOURCE Macquarie Infrastructure Corporation

Posted on

PYC Therapeutics Announces Two Poster Presentations at Association for Research in Vision and Opthalmology (ARVO) 2021 Annual Meeting

PYC’s PPMO Technology Demonstrates Strong Potential to Overcome Critical Delivery Challenges and Reach Deepest Layers of Retina in Patient-Derived Models

Modulation of Gene Expression to Upregulate PRPF31 and Rescue Retinitis Pigmentosa Type 11 Disease Phenotypes Achieved in Patient-Derived Models

PR Newswire

NEW YORK and PERTH, Australia, May 4, 2021 /PRNewswire/ — PYC Therapeutics (ASX: PYC), a biotechnology company developing a new generation of precision RNA therapeutics to change the lives of patients with inherited diseases, today announced the Company has been invited to present two poster presentations at the Association for Research in Vision and Opthalmology (ARVO) 2021 Annual Meeting, taking place virtually May 1–7, 2021.

“The world’s foremost eye and vision researchers gather at ARVO to discuss innovative science that holds potential to more effectively treat patients. Our team is honored to share these important data with the medical and scientific community as we advance three development candidates focused on inherited ocular diseases, including our lead drug candidate VP-001 for the treatment of retinitis pigmentosa type 11 (RP11),” said Professor Sue Fletcher, Chief Scientific Officer of PYC Therapeutics. “We are pleased to highlight preclinical data demonstrating the ability of PYC’s technology to overcome major RNA therapeutic delivery challenges and reach the deepest layers of the retina, as well as show enhanced target gene expression and functional rescue. Our results also continue to demonstrate promising safety, efficacy and tolerability performance, building a strong rationale for clinical investigation.” 

PYC Therapeutics’ Poster Presentations at ARVO 2021:

  • “RNA therapeutics in the treatment of retinal disease – delivering the potential”
    • Poster #: 3545248
    • Session Date/Time: May 3, 2021 from 11:15 a.m. to 1:00 p.m. ET
    • Session Title: Drug Delivery and Gene Therapy
    • Lead Author: Professor Sue Fletcher, PhD
    • Key Highlights:
      • PYC’s lead cell-penetrating peptide (CPP) conjugation to a reporter antisense oligomer (AO) and evaluation in healthy subject and patient-derived retinal pigmented epithelium showed efficient cargo delivery and target engagement and 6-fold lower cytotoxicity than the competitor cell penetrating peptide (CPP).
      • In vivo studies show that the lead CPP traffics the AO through the vitreous, delivering the cargo to the neural retina and retinal pigment epithelium, with no evidence of retinal damage, resulting in enhanced reporter exon skipping.
  • “Modulation of CNOT3 expression using antisense oligomers to treat retinitis pigmentosa 11”
    • Poster #: 3541690
    • Session Date/Time: May 3, 2021 from 11:15 a.m. to 1.00 p.m. ET
    • Session Title: Drug Delivery and Gene Therapy
    • Lead Author: Janya Grainok, MSc, PYC Ocular program Group Leader
    • Key Highlights:
      • Modulating expression levels of CNOT3, a negative regulator of PRPF31, enhanced PRPF31 protein levels and can reverse the cellular disease phenotype in RP11 patient-derived cell models.
      • Antisense oligonucleotides (AOs) are effective modulators of CNOT3 expression and function with the ability to increase PRPF31 transcription from the unaffected allele to an expected therapeutic level.

These poster presentations can be accessed by conference attendees on the ARVO 2021 Annual Meeting website, or on PYC’s website under “Our Pipeline.”

About PYC Therapeutics
PYC Therapeutics (ASX: PYC) is a development-stage biotechnology company pioneering a new generation of RNA therapeutics that utilize PYC’s proprietary library of naturally derived cell penetrating peptides to overcome the major challenges of current genetic medicines. PYC believes its PPMO (Peptide conjugated Phosphorodiamidate Morpholino Oligomer) technology enables a safer and more effective RNA therapeutic to address the underlying drivers of a range of genetic diseases for which no treatment solutions exist today. The Company is leveraging its leading-edge science to develop a pipeline of novel therapies including three preclinical stage programs focused on inherited eye diseases and preclinical discovery efforts focused on neurodegenerative diseases. PYC’s discovery and laboratory operations are located in Australia, and the Company recently launched an expansion into the U.S. for its preclinical, clinical, regulatory and corporate operations.  For more information, visit pyctx.com, or follow us on LinkedIn and Twitter.

Forward looking statements

Any forward-looking statements in this ASX announcement have been prepared on the basis of a number of assumptions which may prove incorrect and the current intentions, plans, expectations and beliefs about future events are subject to risks, uncertainties and other factors, many of which are outside the Company’s control. Important factors that could cause actual results to differ materially from assumptions or expectations expressed or implied in this ASX announcement include known and unknown risks. Because actual results could differ materially to assumptions made and the Company’s current intentions, plans, expectations and beliefs about the future, you are urged to view all forward-looking statements contained in this ASX announcement with caution.  The Company undertakes no obligation to publicly update any forward-looking statement whether as a result of new information, future events or otherwise.

CONTACTS: 

INVESTORS
Deborah Elson/Matthew DeYong
Argot Partners
[email protected]  
[email protected]  

MEDIA
Leo Vartorella
Argot Partners
[email protected]

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SOURCE PYC Therapeutics

Posted on

Virtu Announces First Quarter 2021 Results

Authorizes Additional $300 Million Share Repurchase

NEW YORK, May 04, 2021 (GLOBE NEWSWIRE) — Virtu Financial, Inc. (NASDAQ: VIRT), a leading provider of financial services and products that leverages cutting edge technology to deliver innovative, transparent trading solutions to its clients and liquidity to the global markets, today reported results for the first quarter ended March 31, 2021.

First Quarter 2021:

  • Net income of $409.2 million; record Normalized Adjusted Net Income1 of $401.6 million
  • Basic earnings per share of $1.91 and diluted earnings per share of $1.89; Normalized Adjusted EPS1 of $2.04
  • Record total revenues of $1,012.6 million; Trading income, net, of $812.7 million; Adjusted Net Trading Income1 of $728.0 million
  • Adjusted EBITDA1 of $564.7 million; record Adjusted EBITDA Margin1 of 77.6%

“Our remarkable quarter was highlighted by record performance in Virtu Execution Services and robust results in our market making business, which combined to generate a record 77.6% Adjusted EBITDA Margin in the first quarter,” said Douglas Cifu, CEO of Virtu Financial. “These results are consistent with our impressive performance in the first half of 2020 and reflect both the success of our organic growth initiatives and the new level of market activity as driven by continued secular trends in the marketplace. To reflect this performance, and consistent with our long-term strategy of delivering value to our shareholders, our Board of Directors has authorized an additional $300 million in share repurchases.”

The Virtu Financial, Inc. Board of Directors declared a quarterly cash dividend of $0.24 per share. This dividend is payable on June 15, 2021 to shareholders of record as of June 1, 2021.

Note 1: Non-GAAP financial measures. Please see “Non-GAAP Financial Measures and Other Items” for more information.

Financial Results

First Quarter 2021:

Total revenues increased 1.2% to $1,012.6 million for this quarter, driven by higher trading volumes in U.S. equities despite lower volatility, compared to $1,000.6 million for the same period in 2020, at the onset of the COVID-19 pandemic. Trading income, net, increased 1.3% to $812.7 million for this quarter, compared to $802.5 million for the same period in 2020. Net income totaled $409.2 million for this quarter, compared to net income of $388.2 million in the prior year quarter.

Basic earnings per share for this quarter was $1.91 and diluted earnings per share was $1.89, compared to a basic and diluted earnings per share of $1.80 for the same period in 2020.

Adjusted Net Trading Income decreased 7.2% to $728.0 million for this quarter, compared to $784.5 million for the same period in 2020. Adjusted EBITDA decreased 0.9% to $564.7 million for this quarter, compared to $569.7 million for the same period in 2020.

Normalized Adjusted Net Income, removing one-time integration costs and non-cash items, increased 0.3% to $401.6 million for this quarter, compared to $400.3 million for the same period in 2020.

Assuming all non-controlling interests had been exchanged for common stock, and the Company’s Normalized Adjusted Net Income before income taxes was subject to corporation taxes, Normalized Adjusted EPS was $2.04 for this quarter, compared to $2.05 for the same period in 2020.

Operating Segment Information

The Company has two operating segments: Market Making and Execution Services; and one non-operating segment: Corporate.

Market Making principally consists of market making in the cash, futures and options markets across global equities, options, fixed income, currencies and commodities. As a market maker, the Company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker dealers, banks and institutions.

Execution Services comprises agency-based trading and trading venues, offering execution services in global equities, options, futures and fixed income on behalf of institutions, banks and broker dealers. The Company also provides proprietary technology and infrastructure, workflow technology, and trading analytics services to select third parties. 

Corporate contains the Company’s investments, principally in strategic trading-related opportunities, and maintains corporate overhead expenses.

The following tables show the trading income, net, total revenues and Adjusted Net Trading Income by segment for the three months ended March 31, 2021 and 2020.

Total revenues by segment

(in thousands, unaudited)

    Three Months Ended March 31, 2021   Three Months Ended March 31, 2020
    Market
Making 		  Execution
Services 		  Corporate   Total   Market
Making 		  Execution
Services 		  Corporate   Total
Trading income, net   $ 801,281     $ 11,462     $ —     $ 812,743     $ 802,663     $ (197 )   $ —     $ 802,466  
Commissions, net and technology services   14,130     177,519     —     191,649     769     169,975     —     170,744  
Interest and dividends income   6,901     96     —     6,997     26,433     83     —     26,516  
Other, net   1,412     162     (391 )   1,183     721     3     171     895  
Total Revenues   $ 823,724     $ 189,239     $ (391 )   $ 1,012,572     $ 830,586     $ 169,864     $ 171     $ 1,000,621  

Reconciliation of trading income, net to Adjusted Net Trading Income by operating segment

(in thousands, unaudited)

    Three Months Ended March 31, 2021   Three Months Ended March 31, 2020
    Market
Making 		  Execution
Services 		  Corporate   Total   Market
Making 		  Execution
Services 		  Corporate   Total
Trading income, net   $ 801,281     $ 11,462     $ —     $ 812,743     $ 802,663     $ (197 )   $ —     $ 802,466  
Commissions, net and technology services   14,130     177,519     —     191,649     769     169,975     —     170,744  
Interest and dividends income   6,901     96     —     6,997     26,433     83     —     26,516  
Brokerage, exchange, clearance fees and payments for order flow, net   (223,195 )   (36,137 )   —     (259,332 )   (136,604 )   (37,214 )   —     (173,818 )
Interest and dividends expense   (23,994 )   (34 )   —     (24,028 )   (40,986 )   (454 )   —     (41,440 )
Adjusted Net Trading Income   $ 575,123     $ 152,906     $ —     $ 728,029     $ 652,275     $ 132,193     $ —     $ 784,468  

Financial Condition

As of March 31, 2021, Virtu had $1,021.8 million in cash, cash equivalents and restricted cash, and total long-term debt outstanding in an aggregate principal amount of $1,666.7 million.

Expansion of Share Repurchase Program

In May 2021, the Virtu Financial, Inc. Board of Directors approved the expansion of the share repurchase program, increasing the total amount authorized by $300 million to $470 million and extending the duration of the program through May 4, 2022. Since inception of the program in November 2020, the Company repurchased approximately 5.4 million shares of Class A Common Stock and Virtu Financial Units for approximately $151.1 million.

The Company has approximately $319 million remaining capacity for future purchases of shares of Class A Common Stock and Virtu Financial Units under the program.

Earnings Conference Call Information

Virtu Financial will host a conference call to review its first quarter 2021 financial performance today, May 4th, at 8:30 a.m. ET. Members of the public may listen to the conference call through an audio webcast through the Investor Relations section of the firm’s website ir.virtu.com/investor-relations.

Website Information

We routinely post important information for investors on the Investor Relations section of our website, ir.virtu.com/investor-relations and also from time to time may use social media channels, including our Twitter account (twitter.com/virtufinancial) and our LinkedIn account (linkedin.com/company/virtu-financial), as an additional means of disclosing public information to investors, the media and others interested in us. It is possible that certain information we post on our website and on social media could be deemed to be material information, and we encourage investors, the media and others interested in us to review the business and financial information we post on our website and on the social media channels identified above, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website and our social media channels is not incorporated by reference into, and is not a part of, this document.

Non-GAAP Financial Measures and Other Items

To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), we use the following non-GAAP measures of financial performance:

  • “Adjusted Net Trading Income”, which is the amount of revenue we generate from our market making activities, or trading income, net, plus commissions, net and technology services, plus interest and dividends income and expense, net, less direct costs associated with those revenues, including brokerage, exchange, clearance fees and payments for order flow, net. Management believes that this measurement is useful for comparing general operating performance from period to period. Although we use Adjusted Net Trading Income as a financial measure to assess the performance of our business, the use of Adjusted Net Trading Income is limited because it does not include certain material costs that are necessary to operate our business. Our presentation of Adjusted Net Trading Income should not be construed as an indication that our future results will be unaffected by revenues or expenses that are not directly associated with our market making activities.
  • “EBITDA”, which measures our operating performance by adjusting Net Income to exclude financing interest expense on our long-term borrowings, debt issue cost related to debt refinancing, prepayment, and commitment fees, depreciation and amortization, amortization of purchased intangibles and acquired capitalized software, and income tax expense, and “Adjusted EBITDA”, which measures our operating performance by further adjusting EBITDA to exclude severance, transaction advisory fees and expenses, termination of office leases, charges related to share based compensation and other expenses, which includes reserves for legal matters, COVID-19 one-time costs and donations and Other net, and “Adjusted EBITDA Margin”, which compares Adjusted EBITDA to Adjusted Net Trading Income.
  • “Normalized Adjusted Net Income”, “Normalized Adjusted Net Income before income taxes”, “Normalized provision for income taxes”, and “Normalized Adjusted EPS”, which we calculate by adjusting Net Income to exclude certain items and other non-cash items, assuming that all vested and unvested non-voting common interest units in Virtu Financial LLC have been exchanged for shares of our Class A common stock, and applying an effective tax rate, which was approximately 24%.
  • “Adjusted Operating Expenses”, which we calculate by adjusting total operating expenses to exclude severance, share based compensation, reserves for legal matters, termination of office leases, connectivity early termination and write-down of assets.

Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, and Normalized Adjusted EPS and Adjusted Operating Expenses are non-GAAP financial measures used by management in evaluating operating performance and in making strategic decisions. Additional information provided regarding the breakdown of Total Adjusted Net Trading Income by category is also a non-GAAP financial measure but is not used by the Company in evaluating operating performance and in making strategic decisions. In addition, these non-GAAP financial measures or similar non-GAAP measures are used by research analysts, investment bankers and lenders to assess our operating performance. Management believes that the presentation of Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS provide useful information to investors regarding our results of operations because they assist both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS provide indicators of general economic performance that are not affected by fluctuations in certain costs or other items. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period. Furthermore, our credit agreement contains tests based on metrics similar to Adjusted EBITDA. Other companies may define Adjusted Net Trading Income, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS differently, and as a result our measures of Adjusted Net Trading Income, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS may not be directly comparable to those of other companies. Although we use these non-GAAP financial measures as financial measures to assess the performance of our business, such use is limited because they do not include certain material costs necessary to operate our business.

Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS should be considered in addition to, and not as a substitute for, Net Income in accordance with U.S. GAAP as a measure of performance. Our presentation of Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes and Normalized Adjusted EPS should not be construed as an indication that our future results will be unaffected by unusual or nonrecurring items. Adjusted Net Trading Income, Normalized Adjusted Net Income, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted EPS and our EBITDA-based measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

  • they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
  • our EBITDA-based measures do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and our EBITDA-based measures do not reflect any cash requirement for such replacements or improvements;
  • they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
  • they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations; and
  • they do not reflect limitations on our costs related to transferring earnings from our subsidiaries to us.

Because of these limitations, Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS are not intended as alternatives to Net Income as indicators of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. These U.S. GAAP measurements include Net Income, cash flows from operations and cash flow data. See below a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure.

Virtu Financial, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

    Three Months Ended

March 31,
(in thousands, except share and per share data)   2021   2020
         
Revenues:        
Trading income, net   $ 812,743     $ 802,466  
Interest and dividends income   6,997     26,516  
Commissions, net and technology services   191,649     170,744  
Other, net   1,183     895  
Total revenues   1,012,572     1,000,621  
         
Operating Expenses:        
Brokerage, exchange, clearance fees and payments for order flow, net   259,332     173,818  
Communication and data processing   51,690     55,027  
Employee compensation and payroll taxes   104,771     170,358  
Interest and dividends expense   24,028     41,440  
Operations and administrative   25,655     27,130  
Depreciation and amortization   16,778     17,360  
Amortization of purchased intangibles and acquired capitalized software   18,077     18,958  
Termination of office leases   1,221     276  
Debt issue cost related to debt refinancing, prepayment and commitment fees   1,755     4,171  
Transaction advisory fees and expenses   (14 )   188  
Financing interest expense on long-term borrowings   19,492     25,670  
Total operating expenses   522,785     534,396  
         
Income before income taxes and noncontrolling interest   489,787     466,225  
Provision for income taxes   80,555     77,987  
Net income   $ 409,232     $ 388,238  
         
Noncontrolling interest   (169,827 )   (167,169 )
         
Net income available for common stockholders   $ 239,405     $ 221,069  
         
Earnings per share:        
Basic   $ 1.91     $ 1.80  
Diluted   $ 1.89     $ 1.80  
         
Weighted average common shares outstanding        
Basic   122,062,555     119,757,158  
Diluted   123,389,238     119,788,475  
         
Comprehensive income:        
Net income   $ 409,232     $ 388,238  
Other comprehensive income        
Foreign exchange translation adjustment, net of taxes   (3,676 )   (10,396 )
Net change in unrealized cash flow hedges gains (losses), net of taxes   21,906     (55,602 )
Comprehensive income   $ 427,462     $ 322,240  
Less: Comprehensive income attributable to noncontrolling interest   (177,616 )   (138,523 )
Comprehensive income available for common stockholders   $ 249,846     $ 183,717  



Virtu Financial, Inc. and Subsidiaries

Reconciliation to Non-GAAP Operating Data (Unaudited)

The following tables reconcile Condensed Consolidated Statements of Comprehensive Income to arrive at Adjusted Net Trading Income, EBITDA, Adjusted EBITDA, and selected Operating Margins.

    Three Months Ended

March 31,
(in thousands, except percentages)   2021   2020
         
Reconciliation of Trading income, net to Adjusted Net Trading Income        
Trading income, net   $ 812,743     $ 802,466  
Commissions, net and technology services   191,649     170,744  
Interest and dividends income   6,997     26,516  
Brokerage, exchange, clearance fees and payments for order flow, net   (259,332 )   (173,818 )
Interest and dividends expense   (24,028 )   (41,440 )
Adjusted Net Trading Income   $ 728,029     $ 784,468  
         
Reconciliation of Net Income to EBITDA and Adjusted EBITDA        
Net income (loss)   409,232     388,238  
Financing interest expense on long-term borrowings   19,492     25,670  
Debt issue cost related to debt refinancing, prepayment and commitment fees   1,755     4,171  
Depreciation and amortization   16,778     17,360  
Amortization of purchased intangibles and acquired capitalized software   18,077     18,958  
Provision for income taxes   80,555     77,987  
EBITDA   $ 545,889     $ 532,384  
         
Severance   2,020     4,200  
Transaction advisory fees and expenses   (14 )   188  
Termination of office leases   1,221     276  
Other   2,831     6,910  
Share based compensation   12,778     25,744  
Adjusted EBITDA   $ 564,725     $ 569,702  
         
Selected Operating Margins        
Net Income Margin (1)   56.2 %   49.5 %
EBITDA Margin (2)   75.0 %   67.9 %
Adjusted EBITDA Margin (3)   77.6 %   72.6 %
         
1 Calculated by dividing net income by Adjusted Net Trading Income.        
2 Calculated by dividing EBITDA by Adjusted Net Trading Income.        
3 Calculated by dividing Adjusted EBITDA by Adjusted Net Trading Income.        



Virtu Financial, Inc. and Subsidiaries

Reconciliation to Non-GAAP Operating Data (Unaudited)

(Continued)

The following tables reconcile Condensed Consolidated Statements of Comprehensive Income to arrive at Normalized Adjusted Net Income before income taxes, Normalized provision for income taxes, Normalized Adjusted Net Income and Normalized Adjusted EPS.

    Three Months Ended

March 31,
(in thousands, except share and per share data)   2021   2020
         
Reconciliation of Net Income to Normalized Adjusted Net Income        
Net income   $ 409,232     $ 388,238  
Provision for income taxes   80,555     77,987  
Income before income taxes and noncontrolling interest   $ 489,787     $ 466,225  
Amortization of purchased intangibles and acquired capitalized software   18,077     18,958  
Debt issue cost related to debt refinancing, prepayment and commitment fees   1,755     4,171  
Severance   2,020     4,200  
Transaction advisory fees and expenses   (14 )   188  
Termination of office leases   1,221     276  
Other   2,831     6,910  
Share based compensation   12,778     25,744  
Normalized Adjusted Net Income before income taxes   $ 528,455     $ 526,672  
Normalized provision for income taxes (1)   126,829     126,401  
Normalized Adjusted Net Income   $ 401,626     $ 400,271  
         
Weighted Average Adjusted shares outstanding (2)   196,950,931     195,016,686  
         
Normalized Adjusted EPS   $ 2.04     $ 2.05  
         
(1) Reflects U.S. federal, state, and local income tax rate applicable to corporations of approximately 24% for 2021 and 24% for 2020.
(2) Assumes that (1) holders of all vested and unvested non-vesting Virtu Financial Units (together with corresponding shares of the Company’s Class C common stock, par value $0.00001 per share (the “Class C Common Stock”)) have exercised their right to exchange such Virtu Financial Units for shares of Class A Common Stock on a one-for-one basis, (2) holders of all Virtu Financial Units (together with corresponding shares of the Company’s Class D common stock, par value $0.00001 per share (the “Class D Common Stock”)) have exercised their right to exchange such Virtu Financial Units for shares of the Company’s Class B common stock, par value $0.00001 per share (the “Class B Common Stock”) on a one-for-one basis, and subsequently exercised their right to convert the shares of Class B Common Stock into shares of Class A Common Stock on a one-for-one basis. Includes additional shares from dilutive impact of options, restricted stock units and restricted stock awards outstanding under the Amended and Restated 2015 Management Incentive Plan and the Amended and Restated ITG 2007 Equity Plan during the three months ended March 31, 2021 and 2020 as well as warrants issued in connection with the Founder Member Loan during the three months ended March 31, 2020.



Virtu Financial, Inc. and Subsidiaries

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data)   March 31,

2021 		  December 31,

2020
         
Assets        
Cash and cash equivalents   $ 899,041     $ 889,559  
Cash and securities segregated under regulations and other   122,792     117,446  
Securities borrowed   1,384,134     1,425,016  
Securities purchased under agreements to resell   36,071     22,866  
Receivables from broker-dealers and clearing organizations   1,656,347     1,684,006  
Receivables from customers   515,519     214,478  
Trading assets, at fair value   3,906,041     3,115,731  
Property, equipment and capitalized software, net   109,697     113,590  
Operating lease right-of-use assets   252,027     268,864  
Goodwill   1,148,926     1,148,926  
Intangibles (net of accumulated amortization)   436,422     454,499  
Deferred taxes   183,035     193,070  
Other assets   240,580     317,747  
Total assets   10,890,632     9,965,798  
         
Liabilities and equity        
Liabilities        
Short-term borrowings, net   240,444     64,686  
Securities loaned   1,191,615     948,256  
Securities sold under agreements to repurchase   410,164     461,235  
Payables to broker-dealers and clearing organizations   1,079,808     876,446  
Payables to customers   347,184     118,826  
Trading liabilities, at fair value   2,984,733     2,923,708  
Tax receivable agreement obligations   271,165     271,165  
Accounts payable and accrued expenses and other liabilities   386,328     491,818  
Operating lease liabilities   298,890     315,340  
Long-term borrowings, net   1,636,221     1,639,280  
Total liabilities   8,846,552     8,110,760  
         
Total equity   2,044,080     1,855,038  
         
Total liabilities and equity   $ 10,890,632     $ 9,965,798  
         
    As of March 31, 2021
Ownership of Virtu Financial LLC Interests:   Interests   %
Virtu Financial, Inc. – Class A Common Stock and Restricted Stock Units   124,807,253     64.0 %
Non-controlling Interests (Virtu Financial LLC)   70,226,922     36.0 %
Total Virtu Financial LLC Interests   195,034,175     100.0 %

About Virtu Financial, Inc.

Virtu is a leading financial services firm that leverages cutting-edge technology to provide execution services and data, analytics and connectivity products to its clients and deliver liquidity to the global markets. Leveraging its global market making expertise and infrastructure, Virtu provides a robust product suite including offerings in execution, liquidity sourcing, analytics and broker-neutral, multi-dealer platforms in workflow technology. Virtu’s product offerings allow clients to trade on hundreds of venues across 50+ countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income and myriad other commodities.  In addition, Virtu’s integrated, multi-asset analytics platform provides a range of pre and post-trade services, data products and compliance tools that clients rely upon to invest, trade and manage risk across global markets.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding Virtu Financial, Inc.’s (“Virtu’s”, the “Company’s” or “our”) business that are not historical facts are forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, and if the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. Forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties, some or all of which are not predictable or within Virtu’s control, that could cause actual performance or results to differ materially from those expressed in the statements. Those risks and uncertainties include, without limitation: risks relating to the COVID-19 pandemic, including the possible effects of the economic conditions worldwide resulting from the COVID-19 pandemic and governmental and other responses thereto; fluctuations in trading volume and volatilities in the markets in which we operate; the ability of our trading counterparties and various clearing houses to perform their obligations to us; the performance and reliability of our customized trading platform; the risk of material trading losses from our market making activities; swings in valuations in securities or other instruments in which we hold positions; increasing competition and consolidation in our industry; the risk that cash flow from our operations and other available sources of liquidity will not be sufficient to fund our various ongoing obligations, including operating expenses, short-term funding requirements, margin requirements, capital expenditures, debt service and dividend payments; regulatory and legal uncertainties and potential changes associated with our industry, particularly in light of increased attention from media, regulators and lawmakers to market structure and related issues; potential adverse results from legal or regulatory proceedings; our ability to remain technologically competitive and to ensure that the technology we utilize is not vulnerable to security risks, hacking and cyber-attacks; risks associated with third party software and technology infrastructure. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in forward-looking statements, see Virtu’s Securities and Exchange Commission filings, including but not limited to Virtu’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.

CONTACT

Investor & Media Relations
Andrew Smith
[email protected] 



Posted on

Acuant Announces the Acquisition of Hello Soda to Strengthen Its Trusted Identity Platform and Global Position in Digital Identity

The acquisition follows the company’s best quarter in history with record revenue

LOS ANGELES, May 04, 2021 (GLOBE NEWSWIRE) — Acuant, the global trusted identity platform for fraud prevention and AML compliance, today announced the completion of the acquisition of Hello Soda as part of their continued investment and commitment to innovative technology. Hello Soda is a global provider of identity verification and KYC solutions headquartered in the UK with focus on the European and Asian markets. Along with the company’s deep expertise in eMoney and gaming, with customers including VirginBet, Klarna and Paysafe, the union will bring together powerful technology and data science capabilities that are key to unlocking trust in digital identities.

“Our goal has always been to power trust for all, a vision we share with Hello Soda whom we are excited to welcome to the Acuant family,” said Yossi Zekri President and CEO of Acuant. “This is truly the most exhilarating time in our company’s history, coinciding with the disruption of traditional financial markets, the rapid digitalization of the world and the need for business and governments to help safeguard identity more than ever before. Adding Hello Soda to our Trusted Identity Platform will reach more people today and position us even stronger for the future of digital identity.”

Hello Soda’s foundation in advanced analytics has driven its success in developing and delivering to market, a suite of solutions that leverage digital data sources and capabilities for the purpose of KYC and AML. With a strong focus on ensuring businesses receive actionable insight, Hello Soda’s technology utilizes proprietary analytics, matching algorithms and data science modelling to provide configurable and composite scoring, enabling businesses to make trusted decisions from the point of onboarding to enhanced due diligence (EDD) and continuous monitoring. Their leading dark web solution mitigates the risk of impersonation fraud by searching over 600 million records on the dark web for a customer’s information and provides an extra level of security by searching and monitoring customer PII against compromised data. Its innovative and multilingual platform has enabled Hello Soda to become a market leader in automated identity solutions, currently verifying identities in over 180 countries.

“We could not be happier to join Acuant, bringing our talent, technology, network and expertise to strengthen all we have accomplished and to take our mutual vision further as a team,” stated James Blake, Founder and CEO of Hello Soda. “Our combined technology will serve us well in our joint mission to democratize trust and provide solutions to reach every sector of the global population, allowing every individual to conduct trusted transactions when and where they wish.”


Acuant Experiences Record Growth


The acquisition comes on the heels of Acuant’s best quarter in company history and groundbreaking accomplishments:

Robust Growth: In Q1 2021, Acuant saw record revenue with over 30% growth YOY and ARR up over 60%, compliance revenue (with the acquisition of IdentityMind AML solutions in 2020) also grew over 170% YOY; adding several key new hires, total headcount grew over 30% YOY; the company welcoming dozens of new partners (including Refinitiv, Unisys, CoreSE and albo) and had noticeable business spikes in healthcare and cryptocurrency verticals.

Patented Technology: This quarter, Acuant was awarded Patent # 10,931,461 and 10,965,668
the USPTO both for system and methods relating to digital identity verification (adding to patent
10,872,338); the company also celebrated hitting over 450M digital identities being created with their patented eDNA®).

Enhanced Global Coverage & Technology Partners: Along with the industry’s largest ID library (6k+ templates), Acuant has expanded its leading third-party data ecosystem to expand offerings and increase global coverage for verification to reaching more of the world’s population without physical IDs and/or smart devices.

Industry Leadership: Acuant has joined the Digital ID and Authentication Council of Canada (DIACC), Open Identity Exchange (OIX) and The Investing and Savings Alliance (TISA) to expand its membership of working groups such as the Document Security Alliance (DSA) and Association of Document Validation Professionals (ADVP), among others, and continues to meet INCITS, ICAO, NIST and ISO standards, and is in on track for FedRAMP certification in 2021. The Company continues to be the gold standard with PCI, SOC 2 and ISO 27001 certifications and is on track for FedRAMP certification in 2021. Acuant works to meet with INCITS, ICAO and NIST standards and puts privacy first and puts consumers in control of their identity (see their latest with Microsoft in Verifiable Credentials).

About Acuant

Acuant’s Trusted Identity Platform is at the forefront of enabling businesses and governments to transact with trust in an ever-increasing digital world, facilitating the creation, ownership and ability to verify your identity and making that accessible to the entire global population. With industry leading identity verification, regulatory compliance (AML/KYC) and digital identity solutions powered by AI and human assisted machine learning, Acuant delivers unparalleled results and operational efficiency. Omnichannel deployment delivers seamless customer experiences to fight fraud, increase conversions and establish trust in seconds from anywhere in the world. Completing more than 1.5 billion transactions in over 200 countries and territories, Acuant powers trust in every major industry.

Media Contact
Malini Gujral
[email protected]

A photo and video accompanying this announcement are available at https://www.globenewswire.com/NewsRoom/AttachmentNg/4f14afdf-3ac0-454d-9269-7ca5904419b9 and https://www.globenewswire.com/NewsRoom/AttachmentNg/87361de9-068c-4f71-bd69-9f6c02c2aa2e



Posted on

Exterran Corporation Announces First Quarter 2021 Results

Executing on $200 Million Exterran Water Solutions Contract Signed During the Quarter

Raising Full Year Adjusted EBITDA Guidance to $150-160 million

Capital Structure Strategy Review Underway to Drive Near-Term and Long-Term Success

HOUSTON, May 04, 2021 (GLOBE NEWSWIRE) —  Exterran Corporation (NYSE: EXTN) (“Exterran” or the “Company”) today reported first quarter financial results.

Andrew Way, Exterran’s President and Chief Executive Officer commented:

“I am proud of our team’s continued strong project execution, and safe and efficient work, throughout the first quarter. As previously announced, our Exterran Water Solutions (EWS) business was awarded a significant contract, worth approximately $200 million, that is accelerating the Company’s transition to a sustainable energy industrial business.

We are also encouraged by the improving macro environment. Global commercial activity continues to increase, and we are now tracking more than $2 billion of potential projects for our gas related business and over $1.5 billion of potential projects for our Water business over the next several years.

Based on our strong backlog and increased commercial activity, we are raising the low end of our full year 2021 guidance for adjusted EBITDA to $150 from $140 million, with an updated guidance range of $150-$160 million. We expect Exterran’s adjusted EBITDA to grow at a compounded rate of at least 15%, over the next two years, resulting in adjusted EBITDA of more than $200 million in 2023. We are excited about the strong momentum of our core business, as well as the EWS business’ bright prospects for continued growth and value creation.

Lastly, given increasing number of attractive projects in both our gas and water segments, we have embarked on a comprehensive review of our capital structure to insure that we can take advantage of these opportunities.”

Results from continuing operations improved sequentially with the net loss from continuing operations of $29.0 million, or $0.88 per share, on revenue of $136.2 million for the first quarter of 2021. This compares to net loss from continuing operations of $33.9 million, or $1.03 per share, on revenue of $151.7 million for the fourth quarter of 2020 and net loss from continuing operations of $16.1 million, or $0.49 per share, on revenue of $160.8 million for the first quarter of 2020. Net loss was $29.9 million for the first quarter of 2021, as compared to net loss of $33.4 million for the fourth quarter of 2020 and net loss of $18.3 million for the first quarter of 2020. EBITDA, as adjusted, was $33.1 million for the first quarter of 2021, as compared to $38.8 million for the fourth quarter of 2020 and $34.2 million for the first quarter of 2020. Loss before taxes was $21.5 million as compared to loss before taxes of $24.5 million for the fourth quarter of 2020 and loss before taxes of $6.7 million for the first quarter of 2020.

Selling, general and administrative expenses were $32.6 million in the first quarter of 2021, as compared with $28.4 million in the fourth quarter of 2020 and $33.6 million in the first quarter of 2020.


Contract Operations Segment


Contract operations revenue in the first quarter of 2021 was $81.0 million, a 4% decrease from fourth quarter of 2020 revenue of $84.0 million and a 15% decrease from first quarter of 2020 revenue of $94.8 million.

Contract operations adjusted gross margin in the first quarter of 2021 was $57.7 million, a 1% decrease from the fourth quarter of 2020 adjusted gross margin of $58.4 million and 9% decrease from the first quarter of 2020 adjusted gross margin of $63.3 million. Adjusted gross margin percentage in the first quarter of 2021 was 71%, as compared with 69% in the fourth quarter of 2020 and 67% in the first quarter of 2020.

Revenue declined sequentially primarily due to timing of projects, while adjusted margins improved due a continued focus on productivity.


Aftermarket Services Segment


Aftermarket services revenue in the first quarter of 2021 was $25.1 million, a 16% decrease from fourth quarter of 2020 revenue of $29.9 million and a 10% decrease from first quarter of 2020 revenue of $27.9 million.

Aftermarket services adjusted gross margin in the first quarter of 2021 was $5.1 million, an 8% decrease from the fourth quarter of 2020 adjusted gross margin of $5.5 million and a 24% decrease from the first quarter of 2020 adjusted gross margin of $6.7 million. Adjusted gross margin percentage in the first quarter of 2021 was 20%, as compared with 18% in the fourth quarter of 2020 and 24% in the first quarter of 2020.

Revenue declined sequentially primarily due to normal first quarter seasonality, while adjusted margin rate improved due to mix.


Product Sales Segment


Product sales revenue in the first quarter of 2021 was $30.0 million, a 21% decrease from fourth quarter of 2020 revenue of $37.8 million, and a 21% decrease from first quarter of 2020 revenue of $38.1 million.

Product sales adjusted gross margin in the first quarter of 2021 was $4.5 million, a decrease from the fourth quarter of 2020 adjusted gross margin of $5.3 million and an increase as compared to the first quarter of 2020 adjusted gross margin of $(0.8) million. Adjusted gross margin percentage in the first quarter of 2021 was 15%, as compared with 14% in the fourth quarter of 2020 and (2)% in the first quarter of 2020.

Revenue decreased sequentially driven by lower planned execution of backlog. Adjusted margin increased for the quarter due to improved mix of business.

Product sales backlog was $445.1 million at March 31, 2021, as compared to $465.3 million at December 31, 2020 and $578.2 million at March 31, 2020. Product sales bookings for the first quarter of 2021 were $9.7 million, resulting in a book-to-bill ratio of 32%. This compares to bookings of $6.0 million for the fourth quarter of 2020 and bookings of $444.8 million for the first quarter of 2020.

Conference Call Information

The Company will host a conference call at 8:00 a.m. Central Time on Tuesday, May 4, 2021. The call can be accessed from the Company’s website at www.exterran.com or by telephone at 877-524-8416. For those who cannot listen to the live call, a telephonic replay will be available through May 11, 2021 and may be accessed by calling 877-660-6853 and using the pass code 13718860. A presentation will also be posted on the Company’s website prior to the conference call.


About Exterran Corporation


Exterran Corporation (NYSE: EXTN) is a global systems and process company offering solutions in the oil, gas, water and power markets. We are a leader in natural gas processing and treatment and compression products and services, providing critical midstream infrastructure solutions to customers throughout the world. Exterran Corporation is headquartered in Houston, Texas and operates in approximately 25 countries.


For more information, contact:


Blake Hancock, Vice President of Investor Relations, at 281-854-3043
Or visit www.exterran.com 


Non-GAAP and Other Financial Information


Adjusted gross margin is defined as revenue less cost of sales (excluding depreciation and amortization expense). Adjusted gross margin percentage is defined as gross margin divided by revenue. The Company evaluates the performance of its segments based on gross margin for each segment.

EBITDA, as adjusted, a non-GAAP measure, is defined as net income (loss) excluding income (loss) from discontinued operations (net of tax), cumulative effect of accounting changes (net of tax), income taxes, interest expense (including debt extinguishment costs), depreciation and amortization expense, impairment charges, restructuring and other charges, non-cash gains or losses from foreign currency exchange rate changes recorded on intercompany obligations, expensed acquisition costs, gain on extinguishment of debt and other items.

Adjusted net income (loss) from continuing operations and diluted adjusted net income (loss) from continuing operations per common share, non-GAAP measures, are defined as net income (loss) and earnings per share, excluding the impact of income (loss) from discontinued operations (net of tax), cumulative effect of accounting changes (net of tax), impairment charges (net of tax), restructuring and other charges (net of tax), gain on extinguishment of debt, the effect of income tax adjustments that are outside of the Company’s anticipated effective tax rates and other items.

See tables below for additional information concerning non-GAAP financial information, including a reconciliation of the non-GAAP financial information presented in this press release to the most directly comparable financial information presented in accordance with GAAP. Non-GAAP financial information supplements should be read together with, and are not an alternative or substitute for, the Company’s financial results reported in accordance with GAAP. Because non-GAAP financial information is not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.


Forward-Looking Statements


All statements in this release (and oral statements made regarding the subjects of this release) other than historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These statements may include words such as “guidance,” “anticipate,” “estimate,” “expect,” “forecast,” “project,” “plan,” “intend,” “believe,” “confident,” “may,” “should,” “can have,” “likely,” “future” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Examples of forward-looking information in this release include, but are not limited to: Exterran’s financial and operational strategies and ability to successfully effect those strategies; Exterran’s expectations regarding future economic and market conditions; the expected impact of COVID-19 and oil price declines on Exterran’s business; Exterran’s financial and operational outlook and ability to fulfill that outlook; demand for Exterran’s products and services and growth opportunities for those products and services; and statements regarding industry activity levels and infrastructure build-out opportunities.

These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside Exterran’s control, which could cause actual results to differ materially from such statements. As a result, any such forward-looking statements are not guarantees of future performance or results. While Exterran believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: conditions in the oil and natural gas industry, including a sustained imbalance in the level of supply or demand for oil or natural gas or a sustained low price of oil or natural gas, which could depress or reduce the demand or pricing for Exterran’s natural gas compression and oil and natural gas production and processing equipment and services; reduced profit margins or the loss of market share resulting from competition or the introduction of competing technologies by other companies; economic or political conditions in the countries in which Exterran does business, including civil developments such as uprisings, riots, terrorism, kidnappings, violence associated with drug cartels, legislative changes and the expropriation, confiscation or nationalization of property without fair compensation; risks associated with natural disasters, pandemics and other public health crisis, and other catastrophic events outside of Exterran’s control, including the continued spread and impact of, and the response to, the COVID-19 pandemic; changes in currency exchange rates, including the risk of currency devaluations by foreign governments, and restrictions on currency repatriation; risks associated with cyber-based attacks or network security breaches; changes in international trade relationships, including the imposition of trade restrictions or tariffs relating to any materials or products (such as aluminum and steel) used in the operation of Exterran’s business; risks associated with Exterran’s operations, such as equipment defects, equipment malfunctions, environmental discharges and natural disasters; the risk that counterparties will not perform their obligations under their contracts with Exterran or other changes that could impact Exterran’s ability to recover its fixed asset investment; the financial condition of Exterran’s customers; Exterran’s ability to timely and cost-effectively obtain components necessary to conduct its business; employment and workforce factors, including Exterran’s ability to hire, train and retain key employees; Exterran’s ability to implement its business and financial objectives, including: (i) winning profitable new business, (ii) timely and cost-effective execution of projects, (iii) enhancing or maintaining Exterran’s asset utilization, particularly with respect to its fleet of compressors and other assets, (iv) integrating acquired businesses, (v) generating sufficient cash to satisfy Exterran’s operating needs, existing capital commitments and other contractual cash obligations, including Exterran’s debt obligations, and (vi) accessing the financial markets at an acceptable cost; Exterran’s ability to accurately estimate its costs and time required under its fixed price contracts; liability related to the use of Exterran’s products and services; changes in governmental safety, health, environmental or other regulations, which could require Exterran to make significant expenditures; and Exterran’s level of indebtedness and ability to fund its business.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in Exterran’s Annual Report on Form 10-K for the year ended December 31, 2020, and other filings with the Securities and Exchange Commission available on the Securities and Exchange Commission’s website www.sec.gov. A discussion of these risks is expressly incorporated by reference into this release. Except as required by law, Exterran expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

EXTERRAN CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
             
    Three Months Ended
    March 31, 2021   December 31, 2020   March 31, 2020
Revenues:            
Contract operations   $ 81,014     $ 84,011     $ 94,788  
Aftermarket services   25,120     29,909     27,909  
Product sales   30,030     37,779     38,097  
    136,164     151,699     160,794  
Costs and expenses:            
Cost of sales (excluding depreciation and amortization expense):            
Contract operations   23,344     25,628     31,460  
Aftermarket services   20,012     24,379     21,181  
Product sales   25,573     32,517     38,931  
Selling, general and administrative   32,631     28,357     33,560  
Depreciation and amortization   42,499     44,156     31,951  
Impairments   —     9,953     —  
Restructuring and other charges   624     —     207  
Interest expense   9,964     9,603     9,953  
Gain on extinguishment of debt   —     (147 )   —  
Other (income) expense, net   3,061     1,758     294  
    157,708     176,204     167,537  
Loss before income taxes   (21,544 )   (24,505 )   (6,743 )
Provision for income taxes   7,456     9,433     9,330  
Loss from continuing operations   (29,000 )   (33,938 )   (16,073 )
Income (loss) from discontinued operations, net of tax   (873 )   561     (2,231 )
Net loss   $ (29,873 )   $ (33,377 )   $ (18,304 )
             
Basic and diluted net loss per common share:            
Loss from continuing operations per common share   $ (0.88 )   $ (1.03 )   $ (0.49 )
Income (loss) from discontinued operations per common share   (0.03 )   0.01     (0.07 )
Net loss per common share   $ (0.91 )   $ (1.02 )   $ (0.56 )
             
Weighted average common shares outstanding used in net loss per common share:            
Basic and diluted   32,950     32,832     32,653  

 

During the fourth quarter of 2020, we completed the sale of our U.S. compression fabrication business and it is now reflected as discontinued operations in our financial statements for all periods presented.

EXTERRAN CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
       
  March 31, 2021   December 31, 2020
ASSETS      
       
Current assets:      
Cash and cash equivalents $ 42,575     $ 40,318  
Restricted cash 4,078     3,410  
Accounts receivable, net 188,401     198,028  
Inventory 107,533     109,837  
Contract assets 32,301     32,642  
Other current assets 21,907     19,810  
Current assets associated with discontinued operations 25,955     25,325  
Total current assets 422,750     429,370  
Property, plant and equipment, net 695,164     733,222  
Long-term contract assets 19,324     33,563  
Operating lease right of use assets 24,180     25,428  
Deferred income taxes 6,824     8,866  
Intangible and other assets, net 77,157     71,436  
Long-term assets associated with discontinued operations 1,608     1,606  
Total assets $ 1,247,007     $ 1,303,491  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
       
Current liabilities:      
Accounts payable, trade $ 52,288     $ 60,078  
Accrued liabilities 108,548     94,404  
Contract liabilities 97,753     100,123  
Current operating lease liabilities 6,228     6,340  
Current liabilities associated with discontinued operations 7,016     13,707  
Total current liabilities 271,833     274,652  
Long-term debt 569,766     562,325  
Deferred income taxes 1,073     1,014  
Long-term contract liabilities 65,580     80,499  
Long-term operating lease liabilities 28,826     29,868  
Other long-term liabilities 44,162     57,159  
Long-term liabilities associated with discontinued operations 1,062     2,142  
Total liabilities 982,302     1,007,659  
Total stockholders’ equity 264,705     295,832  
Total liabilities and stockholders’ equity $ 1,247,007     $ 1,303,491  

 

During the fourth quarter of 2020, we completed the sale of our U.S. compression fabrication business and it is now reflected as discontinued operations in our financial statements for all periods presented.

EXTERRAN CORPORATION
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except percentages)
             
    Three Months Ended
    March 31, 2021   December 31, 2020   March 31, 2020
Revenues:            
Contract operations   $ 81,014     $ 84,011     $ 94,788    
Aftermarket services   25,120     29,909     27,909    
Product sales   30,030     37,779     38,097    
    $ 136,164     $ 151,699     $ 160,794    
             
Segment Adjusted Gross margin:            
Contract operations   $ 57,670     $ 58,383     $ 63,328    
Aftermarket services   5,108     5,530     6,728    
Product sales   4,457     5,262     (834 )  
Total Adjusted Gross margin   $ 67,235     $ 69,175     $ 69,222    
             
Segment Adjusted Gross margin percentage:            
Contract operations   71 %   69 %   67   %
Aftermarket services   20 %   18 %   24   %
Product sales   15 %   14 %   (2 ) %
             
Selling, general and administrative   $ 32,631     $ 28,357     $ 33,560    
% of revenue   24 %   19 %   21   %
             
EBITDA, as adjusted   $ 33,054     $ 38,762     $ 34,247    
% of revenue   24 %   26 %   21   %
             
Capital expenditures   $ 7,199     $ 9,759     $ 16,807    
             
Revenue by Geographical Regions:            
North America   $ 6,325     $ 12,977     $ 8,976    
Latin America   60,618     64,497     76,797    
Middle East and Africa   57,179     48,315     55,713    
Asia Pacific   12,042     25,910     19,308    
Total revenues   $ 136,164     $ 151,699     $ 160,794    
             
    As of
    March 31, 2021   December 31, 2020   March 31, 2020
Contract Operations Backlog:            
Contract operations services   $ 1,227,654     $ 1,100,929     $ 1,352,627    
             
Product Sales Backlog:            
Compression equipment   $ 12,562     $ 10,218     $ 72,637    
Processing and treating equipment   403,718     425,292     465,535    
Other product sales   28,781     29,835     40,066    
Total product sales backlog   $ 445,061     $ 465,345     $ 578,238    
                           

 

Compression Equipment backlog includes sales to international customers. During the fourth quarter of 2020, we completed the sale of our U.S. compression fabrication business and it is now reflected as discontinued operations in our financial statements for all periods presented.

EXTERRAN CORPORATION
UNAUDITED NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
             
    Three Months Ended
    March 31, 2021   December 31, 2020   March 31, 2020
Non-GAAP Financial Information—Reconciliation of total gross margin to Total adjusted gross margin:            
Revenues   $ 136,164     $ 151,699     $ 160,794  
Cost of sales (excluding depreciation and amortization expense)   68,929     82,524     91,572  
Depreciation and amortization(1)   40,835     42,618     30,446  
Total gross margin   26,400     26,557     38,776  
Depreciation and amortization(1)   40,835     42,618     30,446  
Total adjusted gross margin (2)   $ 67,235     $ 69,175     $ 69,222  
             
Non-GAAP Financial Information—Reconciliation of Net loss to EBITDA, as adjusted:            
Net loss   $ (29,873 )   $ (33,377 )   $ (18,304 )
(Income) loss from discontinued operations, net of tax   873     (561 )   2,231  
Depreciation and amortization   42,499     44,156     31,951  
Impairments   —     9,953     —  
Restructuring and other charges   624     —     207  
Interest expense   9,964     9,603     9,953  
Gain on extinguishment of debt   —     (147 )   —  
(Gain) loss on currency exchange rate remeasurement of intercompany balances   1,511     (298 )   (1,121 )
Provision for income taxes   7,456     9,433     9,330  
EBITDA, as adjusted (3)   $ 33,054     $ 38,762     $ 34,247  
             
Non-GAAP Financial Information—Reconciliation of Net loss to Adjusted net loss from continuing operations:            
Net loss   $ (29,873 )   $ (33,377 )   $ (18,304 )
(Income) loss from discontinued operations, net of tax   873     (561 )   2,231  
Loss from continuing operations   (29,000 )   (33,938 )   (16,073 )
Adjustment for items:            
Impairments   —     9,953     —  
Restructuring and other charges   624     —     207  
Gain on extinguishment of debt   —     (147 )   —  
Tax impact of adjustments (4)   —     (98 )   —  
Adjusted net loss from continuing operations (5)   $ (28,376 )   $ (24,230 )   $ (15,866 )
             
Diluted loss from continuing operations per common share   $ (0.88 )   $ (1.03 )   $ (0.49 )
Adjustment for items, after-tax, per diluted common share   0.02     0.29     —  
Diluted adjusted net loss from continuing operations per common share (5) (6)   $ (0.86 )   $ (0.74 )   $ (0.49 )
                         

 

During the fourth quarter of 2020, we completed the sale of our U.S. compression fabrication business and it is now reflected as discontinued operations in our financial statements for all periods presented.

(1) Represents the portion only attributable to cost of sales.
             
(2) Management evaluates the performance of each of the Company’s segments based on adjusted gross margin. Total adjusted gross margin, a non-GAAP measure, is included as a supplemental disclosure because it is a primary measure used by our management to evaluate the results of revenue and cost of sales (excluding depreciation and amortization expense), which are key components of our operations. Management believes total adjusted gross margin is important supplemental information for investors because it focuses on the current performance of our operations and excludes the impact of the prior historical costs of the assets acquired or constructed that are utilized in those operations, the indirect costs associated with our SG&A activities, the impact of our financing methods, restructuring and other charges, gain on extinguishment of debt and income taxes. In addition, the inclusion of depreciation and amortization expense may not accurately reflect the costs required to maintain and replenish the operational usage of our assets and therefore may not portray the costs from current operating activity.
 
(3) Management believes EBITDA, as adjusted, is an important measure of operating performance because it allows management, investors and others to evaluate and compare our core operating results from period to period by removing the impact of our capital structure (interest expense from outstanding debt), asset base (depreciation and amortization), our subsidiaries’ capital structure (non-cash gains or losses from foreign currency exchange rate changes on intercompany obligations), tax consequences, impairment charges, restructuring and other charges, expensed acquisition costs, gain on extinguishment of debt and other items. Management uses EBITDA, as adjusted, as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, the Company’s compensation committee has used EBITDA, as adjusted, in evaluating the performance of the Company and management and in evaluating certain components of executive compensation, including performance-based annual incentive programs.
             
(4) The tax impacts of adjustments were based on the Company’s statutory tax rates applicable to each item in the appropriate taxing jurisdictions. Using statutory tax rates for presentation of the non-GAAP measures allows a consistent basis for investors to understand financial performance of the Company across historical periods. The overall effective tax rate on adjustments was impacted by the inability to recognize tax benefits from charges in jurisdictions that are in cumulative-loss positions.
             
(5) Management believes adjusted net income (loss) from continuing operations and diluted adjusted net income (loss) from continuing operations per common share provides useful information to investors because it allows management, investors and others to evaluate and compare our core operating results from period to period by removing the impact of impairment charges, restructuring and other charges, expensed acquisition costs, gain on extinguishment of debt and other items not appropriately reflective of our core business.
             
(6) Diluted adjusted net income (loss) from continuing operations per common share, was computed using the two-class method to determine the net income (loss) per share for each class of common stock and participating security (certain of our restricted stock and restricted stock units) according to participation rights in undistributed earnings.

 



Posted on

Wedge Supports Hyper-Growth Journey with New Funding

GRAND RAPIDS, Mich., May 04, 2021 (GLOBE NEWSWIRE) — Wedge, the modern recruiting platform turning video screening into a competitive advantage, today announced $1.6M in additional funding with participation from new and existing investors.

The funding is well-timed as industry analysts predict that the U.S. is entering one of the hottest job markets in a decade. With projections already well ahead of Dow Jones estimates, the competition for talent is escalating as certain sectors experience extreme shortages, making the ability to source, recruit and hire workers quickly a critical differentiator.

Wedge co-founder and CEO Matt Baxter said, “By helping meet the challenges of remote hiring, Wedge has become an essential solution for many companies. Since our initial raise, we’ve seen rapid momentum, including 600 percent growth year over year, and with this infusion, we plan to build on that, adding to our own team and introducing additional product enhancements while supporting the recruiting needs of today’s leading employers.”

Investor Steve Lowisz, CEO of Qualigence International, commented, “Traditional hiring methods simply don’t meet the demands of modern recruiting. Wedge understands the pain points on all sides, and provides a solution that streamlines the process, increases communication and strengthens the experience. As a result, Wedge is redefining what video interviewing is and how it gets used.”

Since Wedge’s $1M seed funding announcement in July 2020, the company has launched a redesigned candidate experience to help prioritize transparency, communication and preparation during the screening and interviewing process. Wedge has also expanded its partner program and made several key additions to its team, including HR tech expert Theo Rokos as president, and Emma Roque, as vice president of Customer Success.

Rokos was co-founder and CEO of GreenJobInterview, a video interviewing pioneer, and most recently served as Chief Revenue Officer at Job.com. Roque comes to Wedge from the insurance and employee benefits space, having worked closely with HR teams for the last two years at HNI. Bringing deep industry insights, Rokos and Roque have assumed these newly created roles to help build the future of video screening.

Roque shared, “As companies navigate the return to work and anticipated hiring surge, employers need HR technologies that optimize and automate critical functions. Wedge is helping to lead the way while delivering the best possible experience for candidates and employers. It’s an exciting moment for the company, and I’m thrilled to bring new ideas and strategies to Wedge’s next chapter.”

As such, to accelerate growth plans and continue to make hiring faster and easier, Wedge intends to use this funding to enhance customer support, product development and operations. To learn more about the solution, visit https://www.wedgehr.com/product.

About Wedge

Built for the demands of modern recruiting, Wedge is the video screening solution that helps companies make authentic connections with candidates – anytime, anywhere, any device. With custom interview options, world-class support and simple pricing combined with leading ATS integrations, Wedge serves as a stress-free filter to identify top talent. For more information, visit wedgehr.com.



Note to editors: Trademarks and registered trademarks referenced herein remain the property of their respective owners.

Media Contact:
Kate Achille
The Devon Group
[email protected]

Posted on

CN Proposal Continues to Garner Positive Momentum

More than 700 customers, suppliers, elected officials and other stakeholders have sent 

letters

 of support for CN since it made its proposal

MONTREAL, May 04, 2021 (GLOBE NEWSWIRE) — CN (TSX: CNR, NYSE: CNI) today announced that it has continued to receive support from customers, suppliers, elected officials and other stakeholders for its proposed combination with Kansas City Southern (NYSE: KSU) (“KCS”).

100 additional letters have been sent to CN and filed with the Surface Transportation Board (“STB”) in favor of CN’s proposed combination with KCS, bringing the total number of support letters CN has received to more than 700. Of note, 66 of the letters filed with the STB explicitly support CN’s proposed combination with KCS, and 34 of the letters specifically ask the Board to approve CN’s use of a voting trust. CN will continue to communicate and engage with its customers and various stakeholders as it works towards an agreed transaction with KCS.

A full copy of the CN’s letter filed with the STB appears below:

  In the two weeks since Canadian National Railway Company (“CN”) publicly announced its proposal for a combination with Kansas City Southern (“KCS”), over 700 stakeholders have submitted letters publicly expressing their support for the proposed transaction. In this filing, CN adds 100 letters to the 620 support statements that were filed last week in CN-4, CN-9, and CN-10.1 
     
  66 of these letters explicitly support the proposed combination of KCS and CN, for reasons that echo the 620 letters that CN has previously submitted. Customers are responding to the pro-competitive benefits of a transaction that would provide better service options, promote growth, and create a seamless, integrated North American railway that can compete head-to-head with trucks for north-south movements.
     
  34 of the enclosed letters specifically focus on CN’s request that the Board approve its voting trust agreement, and ask the Board to approve that proposed voting trust. Many voting trust letters are from stakeholders who support the ultimate transaction. Others are from customers who are still evaluating the proposed combination, but who wholeheartedly support CN’s use of a voting trust. For example, the Chemours Company does not yet take a position on an ultimate CN-KCS combination, but it “unequivocally supports approval of CN’s voting trust” and urges the Board to grant CN’s request for simultaneous review of CP’s and CN’s voting trusts to “ensure a level playing field.”2
     
  CN looks forward to continued conversations with our customers and other interested parties about the proposed CN-KCS combination and why it presents the best solution for the continued growth, development and prosperity of the North American economy.
     
    Respectfully submitted,
     
  Sean Finn /s/ Raymond A. Atkins                 
  Olivier Chouc Raymond A. Atkins
  CN Terence M. Hynes
  935 de La Gauchetière Street West,  Matthew J. Warren
  16th Floor  Sidley Austin LLP
  Montreal, QC H3B 2M9 1501 K Street, N.W.
  CANADA Washington, DC 20005
    (202) 736-8000
  Kathryn J. Gainey [email protected]
  CN  
  601 Pennsylvania Ave, NW  
  Suite 500, North Building  
  Washington, DC 20004  
  [email protected]  
     
  Counsel for Canadian National Railway Company, Grand Trunk Corporation, and CN’s Rail Operating Subsidiaries
     
  Dated: May 3, 2021  

For more information about CN’s superior proposal to combine with KCS, please visit www.ConnectedContinent.com.

1 See Initial Submission of 409 Statements Supporting Proposed Transaction, CN-4, Canadian National Ry. Co.—Control—Kansas City So. et al., Fin. Docket No. 36514 (filed Apr. 26, 2021); Submission of Port and Terminal Operators’ Statements Supporting Proposed Transaction, CN-9, Canadian National Ry. Co.—Control—Kansas City So. et al., Fin. Docket No. 36514 (filed Apr. 29, 2021); Submission of 200 Statements Supporting Proposed Transaction, CN-10, Canadian National Ry. Co.—Control—Kansas City So. et al., Fin. Docket No. 36514 (filed Apr. 29, 2021).
2See Letter of Kevin Acker on behalf of The Chemours Company, infra at pdf pages 160-161.

About CN

CN is a world-class transportation leader and trade-enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. As the only railroad connecting Canada’s Eastern and Western coasts with the U.S. South through a 19,500-mile rail network, CN and its affiliates have been contributing to community prosperity and sustainable trade since 1919. CN is committed to programs supporting social responsibility and environmental stewardship.

Forward Looking Statements

Certain statements included in this news release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws, including statements based on management’s assessment and assumptions and publicly available information with respect to KCS, regarding the proposed transaction between CN and KCS, the expected benefits of the proposed transaction and future opportunities for the combined company. By their nature, forward-looking statements involve risks, uncertainties and assumptions. CN cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Forward-looking statements may be identified by the use of terminology such as “believes,” “expects,” “anticipates,” “assumes,” “outlook,” “plans,” “targets,” or other similar words.

Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors which may cause actual results, performance or achievements of CN, or the combined company, to be materially different from the outlook or any future results, performance or achievements implied by such statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements. Important risk factors that could affect the forward-looking statements in this news release include, but are not limited to: the outcome of any possible transaction between CN and KCS, including the possibility that a transaction will not be agreed to or that the terms of any definitive agreement will be materially different from those described; uncertainties as to whether KCS will cooperate with CN regarding the proposed transaction; the parties’ ability to consummate the proposed transaction; the conditions to the completion of the proposed transaction; that the regulatory approvals required for the proposed transaction may not be obtained on the terms expected or on the anticipated schedule or at all; CN’s indebtedness, including the substantial indebtedness CN expects to incur and assume in connection with the proposed transaction and the need to generate sufficient cash flows to service and repay such debt; CN’s ability to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the possibility that CN may be unable to achieve expected synergies and operating efficiencies within the expected time-frames or at all and to successfully integrate KCS’ operations with those of CN; that such integration may be more difficult, time-consuming or costly than expected; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the proposed transaction or the public announcement of the proposed transaction; the retention of certain key employees of KCS may be difficult; the duration and effects of the COVID-19 pandemic, general economic and business conditions, particularly in the context of the COVID-19 pandemic; industry competition; inflation, currency and interest rate fluctuations; changes in fuel prices; legislative and/or regulatory developments; compliance with environmental laws and regulations; actions by regulators; the adverse impact of any termination or revocation by the Mexican government of KCS de México, S.A. de C.V.’s Concession; increases in maintenance and operating costs; security threats; reliance on technology and related cybersecurity risk; trade restrictions or other changes to international trade arrangements; transportation of hazardous materials; various events which could disrupt operations, including illegal blockades of rail networks, and natural events such as severe weather, droughts, fires, floods and earthquakes; climate change; labor negotiations and disruptions; environmental claims; uncertainties of investigations, proceedings or other types of claims and litigation; risks and liabilities arising from derailments; timing and completion of capital programs; and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should also be made to Management’s Discussion and Analysis in CN’s annual and interim reports, Annual Information Form and Form 40-F, filed with Canadian and U.S. securities regulators and available on CN’s website, for a description of major risk factors relating to CN.

Forward-looking statements reflect information as of the date on which they are made. CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement.

No Offer or Solicitation

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information and Where to Find It

This news release relates to a proposal which CN has made for an acquisition of KCS. In furtherance of this proposal and subject to future developments, CN (and, if a negotiated transaction is agreed, KCS) may file one or more registration statements, proxy statements, tender offer statements or other documents with the U.S. Securities and Exchange Commission (“SEC”) or applicable securities regulators in Canada. This news release is not a substitute for any proxy statement, registration statement, tender offer statement, prospectus or other document CN and/or KCS may file with the SEC or applicable securities regulators in Canada in connection with the proposed transactions.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT(S), TENDER OFFER STATEMENT, PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC OR APPLICABLE SECURITIES REGULATORS IN CANADA CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CN, KCS AND THE PROPOSED TRANSACTIONS.   Any definitive proxy statement(s), registration statement or prospectus(es) and other documents filed by CN and KCS (if and when available) will be mailed to stockholders of CN and/or KCS, as applicable. Investors and security holders will be able to obtain copies of these documents (if and when available) and other documents filed with the SEC and applicable securities regulators in Canada by CN free of charge through at www.sec.gov and www.sedar.com. Copies of the documents filed by CN (if and when available) will also be made available free of charge by accessing CN’s website at www.CN.ca.

Participants

This news release is neither a solicitation of a proxy nor a substitute for any proxy statement or other filings that may be made with the SEC and applicable securities regulators in Canada. Nonetheless, CN and its directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transactions. Information about CN’s executive officers and directors is available in its 2021 Management Information Circular, dated March 9, 2021, as well as its 2020 Annual Report on Form 40-F filed with the SEC on February 1, 2021, in each case available on its website at www.CN.ca/investors/ and at www.sec.gov and www.sedar.com. Additional information regarding the interests of such potential participants will be included in one or more registration statements, proxy statements, tender offer statements or other documents filed with the SEC and applicable securities regulators in Canada if and when they become available. These documents (if and when available) may be obtained free of charge from the SEC’s website at www.sec.gov and www.sedar.com, as applicable.


Contacts:


Media
Investment Community
Canada Paul Butcher
Mathieu Gaudreault Vice-President
CN Media Relations & Public Affairs Investor Relations
(514) 249-4735 (514) 399-0052
[email protected] [email protected]
   
Longview Communications & Public Affairs  
Martin Cej   
(403) 512-5730   
[email protected]  
   
United States  
Brunswick Group  
Jonathan Doorley / Rebecca Kral  
(917) 459-0419 / (917) 818-9002  
[email protected]  
rkral@bruns
wickgroup.com