Market Newsdesk

Conference Call and Live Audio Webcast Scheduled for Wednesday, May 12, 2021, 5:00 p.m. ET

CyberArk Announces Strong First Quarter 2021 Results

Total Revenue of $113 Million

Subscription Revenue of $25 Million Increased 180% Year-over-Year

Strong Annual Recurring Revenue (ARR) of $288 Million Grew 41% Year-over-Year

Cash Flow Provided by Operating Activities of $34 Million

NEWTON, Mass. & PETACH TIKVA, Israel–(BUSINESS WIRE)–CyberArk (NASDAQ: CYBR), the global leader in Identity Security, today announced strong financial results for the first quarter ended March 31, 2021.

“With our strong first quarter performance and accelerating business momentum, 2021 is off to a great start,” said Udi Mokady, CyberArk Chairman and CEO. “In early January, we formally kicked off our active transition to a recurring revenue model, and the execution of our strategy exceeded our expectations. We were thrilled with the faster than 40 percent growth in our Annual Recurring Revenue (ARR), greater than 250 percent growth in ARR related to SaaS and on-premises subscription contracts, the 180 percent increase in subscription revenue, and that subscription revenue represented 22 percent of total revenue for the quarter. The robust demand environment, particularly for our SaaS solutions, and execution of our strategy is further demonstrated by the fact that we exceeded the high end of our revenue guidance while also having a greater than expected mix of subscription bookings of 51 percent in the first quarter. The strong start to the year positions us well to execute on our subscription transition timeline, accelerate growth across our identity security portfolio, deliver profitability and increase shareholder returns.”

Financial Highlights for the First Quarter Ended March 31, 2021

Revenue⁽¹⁾:

• Subscription revenue was $24.7 million in the first quarter of 2021, up 180 percent year over year.
• Perpetual license revenue was $26.7 million in the first quarter of 2021.
• Maintenance and professional services revenue was $61.3 million in the first quarter of 2021.
• Total revenue was $112.8 million in the first quarter of 2021.

Operating Income (Loss):

• GAAP operating loss was $(15.3) million and Non-GAAP operating income was $5.4 million in the first quarter of 2021.

Net Income (Loss):

• GAAP net loss was $(15.2) million, or $(0.39) per basic and diluted share, in the first quarter of 2021. Non-GAAP net income was $3.8 million, or $0.09 per diluted share, in the first quarter of 2021.

(1)

New Financial Disclosures: Beginning in the first quarter of 2021, CyberArk is revising the presentation of its lines of revenue and cost of revenue. The Company believes that the revised categories for revenue and cost of revenue as presented on the income statement align with how management evaluates the business. In addition, this disclosure will increase transparency into the Company’s business and shift toward recurring revenues, providing investors with more visibility into the subscription transition program. Historical information by quarter for fiscal years 2020 and 2019, which has been retroactively reclassified to reflect the new lines of revenue and cost of revenue, can be found in the PowerPoint presentation posted to CyberArk’s investor relations website. The new revenue lines consist of (a) Subscription revenue, which represents SaaS and on-premises subscription revenue including the license portion of on-premises subscription revenue and the ratable maintenance component of on-premises subscription revenue (b) Perpetual license revenue and (c) Maintenance and professional services revenue, which represents the maintenance component related to perpetual license sales and professional services revenue.

The tables at the end of this press release include a reconciliation of the following non-GAAP financial measures to their most directly comparable GAAP financial measures: non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and free cash flow. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Balance Sheet and Net Cash Provided by Operating Activities:

• As of March 31, 2021, CyberArk had $1.2 billion in cash, cash equivalents, marketable securities and short-term deposits. This compares with $1.2 billion in cash, cash equivalents, marketable securities and short-term deposits as of March 31, 2020.
• As of March 31, 2021, total deferred revenue was $259.7 million, a 23 percent increase from $210.7 million at March 31, 2020.
• During the first quarter of 2021, the Company generated $34.0 million in net cash provided by operating activities, compared to $33.8 million in the first quarter of 2020.

Annual Recurring Revenue (ARR):

• Annual Recurring Revenue (ARR) was $288 million, an increase of 41 percent from $205 million at March 31, 2020.

Business Outlook

Based on information available as of May 5, 2021, CyberArk is issuing guidance for the second quarter and updating its guidance for full year 2021 as indicated below.

Second Quarter 2021:

• Total revenue between $111.0 million and $119.0 million.
• Non-GAAP operating income (loss) is expected to be in the range of an operating loss of $(3.5) million to operating income of $3.5 million.
• Non-GAAP net income (loss) per share is expected to be in the range of a net loss of $(0.11) per basic and diluted share to net income of $0.06 per diluted share.
  • Assumes 39.6 million weighted average basic and diluted shares and 40.7 million weighted average diluted shares.

Full Year 2021:

• Total revenue is expected to be in the range of $484.0 million to $496.0 million.
• Non-GAAP operating income is expected to be in the range of $20.0 million to $30.0 million.
• Non-GAAP net income per share is expected to be in the range of $0.39 to $0.64 per diluted share.
  • Assumes 40.9 million weighted average diluted shares.

Conference Call Information

In conjunction with this announcement, CyberArk will host a conference call on Wednesday, May 5, 2021 at 8:30 a.m. Eastern Time (ET) to discuss the Company’s first quarter financial results and its business outlook. To access this call, dial +1 (833) 968-2251 (U.S.) or +1 (778) 560-2670 (international). The conference ID is 7887845. Additionally, a live webcast of the conference call will be available via the “Investor Relations” section of the company’s website at www.cyberark.com.

Following the conference call, a replay will be available for one week at +1 (800) 585-8367 (U.S.) or (416) 621-4642 (international). The replay pass code is 7887845. An archived webcast of the conference call will also be available in the “Investor Relations” section of the company’s website at www.cyberark.com.

About CyberArk

CyberArk (NASDAQ: CYBR) is the global leader in Identity Security. Centered on privileged access management, CyberArk provides the most comprehensive security offering for any identity – human or machine – across business applications, distributed workforces, hybrid cloud workloads and throughout the DevOps lifecycle. The world’s leading organizations trust CyberArk to help secure their most critical assets. To learn more about CyberArk, visit https://www.cyberark.com, read the CyberArk blogs or follow on Twitter via @CyberArk, LinkedIn or Facebook.

Copyright © 2021 CyberArk Software. All Rights Reserved.All other brand names, product names, or trademarks belong to their respective holders.

Key Performance Indicators and Non-GAAP Financial Measures

Annual Recurring Revenue (ARR)

• Annual Recurring Revenue (ARR) is defined as the annualized value of active SaaS, subscription or term-based license and maintenance contracts related to perpetual licenses in effect at the end of the reported period.

Non-GAAP Financial Measures

CyberArk believes that the use of non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and free cash flow is helpful to our investors. These financial measures are not measures of the Company’s financial performance under U.S. GAAP and should not be considered as alternatives to gross profit, operating income (loss), net income (loss) or net cash provided by operating activities or any other performance measures derived in accordance with GAAP.

• Non-GAAP gross profit is calculated as GAAP gross profit excluding share-based compensation expense and amortization of intangible assets related to acquisitions.
• Non-GAAP operating income is calculated as GAAP operating income (loss) excluding share-based compensation expense, acquisition related expenses and amortization of intangible assets related to acquisitions.
• Non-GAAP net income is calculated as GAAP net income (loss) excluding share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, amortization of debt discount and issuance costs and the tax effect of non-GAAP adjustments.
• Free cash flow is calculated as net cash provided by operating activities less purchase of property and equipment.

The Company believes that providing non-GAAP financial measures that are adjusted by, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance cost, the tax effect of the non-GAAP adjustments and purchase of property and equipment allows for more meaningful comparisons of its period to period operating results. Share-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in the Company’s business and an important part of the compensation provided to its employees. Share based compensation expense has varying available valuation methodologies, subjective assumptions and a variety of equity instruments that can impact a company’s non-cash expense. The Company believes that expenses related to its acquisitions, amortization of intangible assets related to acquisitions and non-cash interest expense related to the amortization of debt discount and issuance costs do not reflect the performance of its core business and impact period-to-period comparability. The Company believes free cash flow is a liquidity measure that, after the purchase of property and equipment, provides useful information about the amount of cash generated by the business.

Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures as they exclude expenses that may have a material impact on the Company’s reported financial results. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. CyberArk urges investors to review the reconciliation of its non-GAAP financial measures to the comparable U.S. GAAP financial measures included below, and not to rely on any single financial measure to evaluate its business.

Guidance for non-GAAP financial measures excludes, as applicable, share-based compensation expense, acquisition related expenses, amortization of intangible assets related to acquisitions, non-cash interest expense related to the amortization of debt discount and issuance costs and the tax effect of the non-GAAP adjustments. A reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures is not available on a forward-looking basis due to the uncertainty regarding, and the potential variability and significance of, the amounts of share-based compensation expense, amortization of intangible assets related to acquisitions, and the non-recurring expenses that are excluded from the guidance. Accordingly, a reconciliation of the non-GAAP financial measures guidance to the corresponding GAAP measures for future periods is not available without unreasonable effort.

Cautionary Language Concerning Forward-Looking Statements

This release contains forward-looking statements, which express the current beliefs and expectations of CyberArk’s (the “Company”) management. In some cases, forward-looking statements may be identified by terminology such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential” or the negative of these terms or other similar expressions. Such statements involve a number of known and unknown risks and uncertainties that could cause the Company’s future results, performance or achievements to differ significantly from the results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to: the duration and scope of the COVID-19 pandemic and the impact of the pandemic and actions taken in response, on global and regional economies and economic activity and the resulting impact on the demand for the Company’s solutions and on its expected revenue growth rates and costs; the Company’s ability to adjust its operations in response to impacts from the COVID-19 pandemic; difficulties predicting future financial results, including due to impacts from the COVID-19 pandemic; the Company’s plan to begin actively transitioning its business to a recurring revenue model in 2021; and the Company’s ability to complete the transition in the time frame expected; the Company’s ability to meet financial and operating targets during the transition period and after the transition is complete; changes to the drivers of the Company’s growth and our ability to adapt our solutions to IT security market demands; the Company’s ability to sell into existing and new industry verticals; the Company’s sales cycles and multiple licensing models may cause results to fluctuate; the Company’s ability to sell into existing customers; potential changes in the Company’s operating and net profit margins and the Company’s revenue growth rate; the Company’s ability to successfully find, complete, fully integrate and achieve the expected benefits of future acquisitions, including the Company’s ability to integrate and achieve the expected benefits of Idaptive; real or perceived shortcomings, defects or vulnerabilities in the Company’s solutions or internal network systems; the Company’s ability to hire, retain and motivate qualified personnel; the Company’s ability to expand its channel partnerships across existing and new geographies; the Company’s ability to further diversify its product deployments and licensing options; and other factors discussed under the heading “Risk Factors” in the Company’s most recent annual report on Form 20-F filed with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

CYBERARK SOFTWARE LTD.
Consolidated Statements of Operations
U.S. dollars in thousands (except per share data)
(Unaudited)
		Three Months Ended
		March 31,
			2020				2021
Revenues:
Subcription		$	8,824			$	24,727
Perpetual license			43,774				26,694
Maintenance and professional services			54,228				61,341
Total revenues			106,826				112,762
Cost of revenues:
Subcription			1,940				5,210
Perpetual license			1,345				1,004
Maintenance and professional services			13,800				14,718
Total cost of revenues			17,085				20,932
Gross profit			89,741				91,830
Operating expenses:
Research and development			21,285				29,737
Sales and marketing			51,196				61,440
General and administrative			14,689				15,999
Total operating expenses			87,170				107,176
Operating income (loss)			2,571				(15,346	)
Financial expense, net			(736	)			(2,906	)
Income (loss) before taxes on income			1,835				(18,252	)
Tax benefit			551				3,057
Net income (loss)		$	2,386			$	(15,195	)
Basic net income (loss) per ordinary share		$	0.06			$	(0.39	)
Diluted net income (loss) per ordinary share		$	0.06			$	(0.39	)
Shares used in computing net income (loss)
per ordinary shares, basic			38,222,867				39,175,052
Shares used in computing net income (loss)
per ordinary shares, diluted			39,309,750				39,175,052

CYBERARK SOFTWARE LTD.
Consolidated Balance Sheets
U.S. dollars in thousands
(Unaudited)
		December 31,			March 31,
		2020			2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	499,992		$	515,178
Short-term bank deposits			256,143			251,362
Marketable securities			196,856			211,803
Trade receivables			93,128			66,716
Prepaid expenses and other current assets			15,312			20,987
Total current assets			1,061,431			1,066,046
LONG-TERM ASSETS:
Marketable securities			202,190			205,534
Property and equipment, net			18,537			18,816
Intangible assets, net			23,676			22,224
Goodwill			123,717			123,717
Other long-term assets			99,992			96,669
Deferred tax asset			32,809			39,169
Total long-term assets			500,921			506,129
TOTAL ASSETS		$	1,562,352		$	1,572,175
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables		$	8,250		$	5,928
Employees and payroll accruals			52,169			41,205
Accrued expenses and other current liabilities			24,915			22,847
Deferred revenues			161,679			175,819
Total current liabilities			247,013			245,799
LONG-TERM LIABILITIES:
Convertible senior notes, net			502,302			506,692
Deferred revenues			80,829			83,863
Other long-term liabilities			24,920			23,022
Total long-term liabilities			608,051			613,577
TOTAL LIABILITIES			855,064			859,376
SHAREHOLDERS’ EQUITY:
Ordinary shares of NIS 0.01 par value			101			102
Additional paid-in capital			481,992			505,463
Accumulated other comprehensive income			4,175			1,409
Retained earnings			221,020			205,825
Total shareholders’ equity			707,288			712,799
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,562,352		$	1,572,175

CYBERARK SOFTWARE LTD.
Consolidated Statements of Cash Flows
U.S. dollars in thousands
(Unaudited)
		Three Months Ended
		March 31,
			2020				2021
Cash flows from operating activities:
Net income (loss)		$	2,386			$	(15,195	)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization			2,479				3,370
Amortization of premium and accretion of discount on marketable securities, net			(80	)			1,789
Share-based compensation			16,308				19,297
Deferred income taxes, net			(2,516	)			(5,121	)
Decrease in trade receivables			20,983				26,412
Amortization of debt discount and issuance costs			4,240				4,390
Decrease (increase ) in prepaid expenses and other current and long-term assets			(8,160	)			444
Increase (decrease) in trade payables			421				(1,783	)
Increase in short-term and long-term deferred revenues			20,298				17,174
Decrease in employees and payroll accruals			(14,162	)			(12,312	)
Decrease in accrued expenses and other current and long-term liabilities			(8,371	)			(4,490	)
Net cash provided by operating activities			33,826				33,975
Cash flows from investing activities:
Investment in short and long term deposits			(12,527	)			(1,313	)
Investment in marketable securities			(44,921	)			(71,137	)
Proceeds from maturities of marketable securities			41,246				49,957
Purchase of property and equipment			(1,327	)			(2,665	)
Net cash used in investing activities			(17,529	)			(25,158	)
Cash flows from financing activities:
Proceeds from (payment of) withholding tax related to employee stock plans			(799	)			1,411
Proceeds from exercise of stock options			4,806				4,961
Net cash provided by financing activities			4,007				6,372
Increase in cash, cash equivalents and restricted cash			20,304				15,189
Cash, cash equivalents and restricted cash at the beginning of the period		$	792,413			$	500,044
Cash, cash equivalents and restricted cash at the end of the period		$	812,717			$	515,233

CYBERARK SOFTWARE LTD.
Reconciliation of GAAP Measures to Non-GAAP Measures
U.S. dollars in thousands (except per share data)
(Unaudited)
Reconciliation of Net cash provided by operating activities to Free cash flow:
		Three Months Ended
		March 31,
			2020				2021
Net cash provided by operating activities		$	33,826			$	33,975
Less:
Purchase of property and equipment			(1,327	)			(2,665	)
Free cash flow		$	32,499			$	31,310
GAAP net cash used in investing activities			(17,529	)			(25,158	)
GAAP net cash provided by financing activities			4,007				6,372
Reconciliation of Gross Profit to Non-GAAP Gross Profit:
		Three Months Ended
		March 31,
			2020				2021
Gross profit		$	89,741			$	91,830
Plus:
Share-based compensation (1)			1,803				2,395
Amortization of share-based compensation capitalized in software development costs (3)			–				47
Amortization of intangible assets (2)			936				1,278
Non-GAAP gross profit		$	92,480			$	95,550
Reconciliation of Operating Income (Loss) to Non-GAAP Operating Income:
		Three Months Ended
		March 31,
			2020				2021
Operating income (loss)		$	2,571			$	(15,346	)
Plus:
Share-based compensation (1)			16,308				19,297
Amortization of share-based compensation capitalized in software development costs (3)			–				47
Amortization of intangible assets (2)			1,049				1,452
Acquisition related expenses			1,610				–
Non-GAAP operating income		$	21,538			$	5,450
Reconciliation of Net Income (loss) to Non-GAAP Net Income:
		Three Months Ended
		March 31,
			2020				2021
Net income (loss)		$	2,386			$	(15,195	)
Plus:
Share-based compensation (1)			16,308				19,297
Amortization of share-based compensation capitalized in software development costs (3)			–				47
Amortization of intangible assets (2)			1,049				1,452
Acquisition related expenses			1,610				–
Amortization of debt discount and issuance costs			4,240				4,390
Taxes on income related to non-GAAP adjustments			(6,012	)			(6,159	)
Non-GAAP net income		$	19,581			$	3,832
Non-GAAP net income per share
Basic		$	0.51			$	0.10
Diluted		$	0.50			$	0.09
Weighted average number of shares
Basic			38,222,867				39,175,052
Diluted			39,309,750				40,491,989
(1) Share-based Compensation :
		Three Months Ended
		March 31,
			2020				2021
Cost of revenues – Subscription		$	100			$	254
Cost of revenues – Perpetual license			36				54
Cost of revenues – Maintenance and Professional services			1,667				2,087
Research and development			3,021				4,350
Sales and marketing			6,400				7,498
General and administrative			5,084				5,054
Total share-based compensation		$	16,308			$	19,297
(2) Amortization of intangible assets :
		Three Months Ended
		March 31,
			2020				2021
Cost of revenues – Subscription		$	541			$	1,089
Cost of revenues – Perpetual license			395				189
Sales and marketing			113				174
Total amortization of intangible assets		$	1,049			$	1,452
(3) Classified as Cost of revenues – Subscription.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005535/en/

Investor Contact:

Erica Smith

CyberArk

Phone: +1 617-558-2132

[email protected]

Media Contact:

Liz Campbell

CyberArk

Phone: +1-617-558-2191

[email protected]

KEYWORDS: United States North America Israel Middle East Massachusetts

INDUSTRY KEYWORDS: Networks Security Data Management Technology Software

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Kala Pharmaceuticals Reports First Quarter 2021 Financial Results and Provides Corporate Update

— Achieved $3.3 Million in Net Revenue in First Quarter —

— Launched EYSUVIS® and Expanded Commercial Coverage to More than 69 Million Commercial Lives —

— New Credit Facility Provides up to $125M —

— Cash Runway Projected for at Least Two Years —

— Conference Call and Webcast at 8:00 a.m. ET —

WATERTOWN, Mass.–(BUSINESS WIRE)–
Kala Pharmaceuticals, Inc. (NASDAQ:KALA), a biopharmaceutical company focused on the discovery, development and commercialization of innovative therapies for diseases of the eye, today reported financial results for the first quarter ended March 31, 2021 and provided a corporate update.

“We are early in the launch of EYSUVIS and encouraged by our progress to establish the product as the first and only prescription therapy specifically for the short-term treatment of dry eye disease. We have secured market access for approximately 43 percent of all commercial lives and are pleased with the early launch metrics and feedback from eye care professionals who view EYSUVIS as a first-line treatment option for a range of patients suffering from dry eye flares,” said Mark Iwicki, Chairman, President and Chief Executive Officer of Kala Pharmaceuticals. “The new credit facility announced today helps extend our projected cash runway to at least two years, strengthening our financial position to invest across our business as we build on early EYSUVIS momentum, continue to promote INVELTYS and advance our pipeline of new chemical entities targeted to address front and back of the eye diseases.”

First Quarter and Recent Business Highlights:

EYSUVIS® (loteprednol etabonate ophthalmic suspension) 0.25%: EYSUVIS became commercially available in January 2021 as the first and only FDA-approved medicine for the short-term (up to two weeks) treatment of the signs and symptoms of dry eye disease. Data from Symphony Health and the EYSUVIS patient hub indicate that more than 11,600 EYSUVIS prescriptions were filled between early January 2021 and April 23, 2021. Data also indicates that more than 2,000 unique prescribers have written prescriptions for EYSUVIS for the same time period. Kala currently has a sales force of 91 ophthalmic sales professionals. Kala plans to expand this sales force to approximately 105 by the start of the third quarter of 2021, with a subsequent expansion to 125 expected by year-end, pending continued growth in payer coverage and the status of the COVID-19 pandemic.

To date, Kala has secured coverage for more than 69 million commercial lives, which represents approximately 43 percent of all commercially insured lives. In February 2021, EYSUVIS was added to Express Scripts’ National Preferred, Basic and High Performance Formularies and, effective May 15, 2021, EYSUVIS will be added to the Cigna commercial formulary. Kala continues to engage in contract discussions with other commercial health plans and expects to further expand formulary coverage in the coming months.

INVELTYS® (loteprednol etabonate ophthalmic suspension) 1%: Approximately 37,000 INVELTYS prescriptions were reported by Symphony Health in the first quarter of 2021, compared to 41,000 prescriptions reported in the fourth quarter of 2020. Kala continues to believe that INVELTYS prescriptions and revenues will grow over time. However, the Company is unable to project the specific timing or quantify the specific potential impact on future revenues given the continued uncertainty around the impact and duration of the COVID-19 pandemic on elective procedures, which includes ocular surgeries.

Development-Stage Pipeline: Kala is progressing a pipeline of preclinical development programs targeted to address front and back of the eye diseases. These programs, all of which are new chemical entities (NCEs), include selective glucocorticoid receptor modulators (SEGRMs), which are a novel class of therapies designed to modify the downstream activity of the glucocorticoid receptor to exhibit the anti-inflammatory and immunomodulatory properties of corticosteroids while potentially avoiding the typical safety concerns of steroids; and a receptor Tyrosine Kinase Inhibitor program (rTKI) for the treatment of retinal diseases, including wet age-related macular degeneration (wet AMD).​ Kala owns all intellectual property and worldwide rights to these pipeline candidates.

New Credit Facility: On May 4, 2021, Kala entered into an agreement with Oxford Finance that provides it with a credit facility totaling up to $125 million and replaces the previous $75 million facility. The new credit facility includes an initial $80 million tranche that was funded immediately and Kala has two additional tranches available upon meeting certain revenue targets. Under the agreement, Kala will begin principal payments in December 2024 at the earliest, which is more than two years beyond Kala’s previous credit facility. Additional information regarding the new credit facility is available in the Form 8-K filed by Kala this morning.

Morgan Stanley & Co. LLC acted as the sole placement agent on the transaction.

Financial Results:

The financial results below contain both GAAP and non-GAAP financial measures. The non-GAAP financial measures exclude stock-based compensation expense and non-cash interest expense and depreciation and amortization. See “Non-GAAP Financial Measures” below; for a full reconciliation of Kala’s GAAP to non-GAAP financial measures, please refer to the tables at the end of this press release.

– Cash Position: As of March 31, 2021, Kala had cash, cash equivalents and short-term investments of $156.0 million, compared to $153.5 million as of December 31, 2020. This increase primarily reflects net proceeds of $34.7 million received from sales of common stock under Kala’s at-the-market (ATM) offering program in the three months ended March 31, 2021, partially offset by cash used in operations. Kala anticipates that its cash resources as of March 31, 2021, together with anticipated revenue from EYSUVIS and INVELTYS, will enable it to fund its operations for at least two years.

First Quarter 2021 Financial Results

– Net Product Revenues: For the quarter ended March 31, 2021, Kala reported net product revenues of $3.3 million, consisting of $1.63 million of net revenue from INVELTYS sales and $1.64 million of net revenue from EYSUVIS sales, compared to $1.1 million from INVELTYS sales for the same period in 2020.

– Cost of Product Revenues: For the quarter ended March 31, 2021, cost of product revenues was $0.8 million, compared to $0.4 million for the same period in 2020. The increase was primarily due to units of EYSUVIS sold as well as the increase in total INVELTYS units sold during the three months ended March 31, 2021 compared to the three months ended March 31, 2020. Non-GAAP cost of product revenues was $0.7 million for the quarter ended March 31, 2021, compared to $0.3 million for the same period in 2020.

– SG&A Expenses: For the quarter ended March 31, 2021, selling, general and administrative (SG&A) expenses were $27.7 million, compared to $15.4 million for the same period in 2020. The increase was primarily due to an increase in costs as a result of the launch of EYSUVIS, including expansion of the sales force, and stock-based compensation costs. Non-GAAP SG&A expenses were $23.8 million for the quarter ended March 31, 2021, compared to $13.5 million for the same period in 2020.

– R&D Expenses: For the quarter ended March 31, 2021, research and development (R&D) expenses were $3.1 million, compared to $5.4 million for the same period in 2020. The decrease was primarily due to a decrease in external spend on STRIDE 3, Kala’s Phase 3 clinical trial of EYSUVIS. Non-GAAP R&D expenses were $2.1 million for the quarter ended March 31, 2021, compared to $4.6 million for the same period in 2020.

– Operating Loss: For the quarter ended March 31, 2021, loss from operations was $28.3 million, compared to $20.1 million for the same period in 2020. Non-GAAP operating loss was $23.4 million for the quarter ended March 31, 2021, compared to $17.4 million for the same period in 2020.

– Net Loss: For the quarter ended March 31, 2021, net loss was $30.4 million, or $0.49 per share, compared to a net loss of $22.0 million, or $0.54 per share, for the same period in 2020. Non-GAAP net loss was $25.2 million for the quarter ended March 31, 2021, compared to $19.0 million for the same period in 2020. The weighted average number of shares used to calculate net loss per share was 61.7 million for the quarter ended March 31, 2021, and 40.8 million for the quarter ended March 31, 2020.

Conference Call Information:

Kala will host a live conference call and webcast today, May 5, 2021 at 8:00 a.m. ET to review its first quarter 2021 financial results. To access the conference call, please dial 866-300-4091 (domestic callers) or 703-736-7433 (international callers) five minutes prior to the start of the call and provide the conference ID: 2777865.

To access a subsequent archived recording of the call, please visit the “Investors & Media” section on the Kala website at http://kalarx.com.

Non-GAAP Financial Measures:

In this press release, the financial results of Kala are provided in accordance with accounting principles generally accepted in the United States (GAAP) and using certain non-GAAP financial measures. The items included in GAAP presentations but excluded for purposes of determining non-GAAP financial measures for the periods presented in the press release are stock-based compensation expense, non-cash interest expense and depreciation and amortization. Management believes this non-GAAP information is useful for investors, taken in conjunction with Kala’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Kala’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures, please refer to the table at the end of this press release.

About EYSUVIS:

EYSUVIS (loteprednol etabonate ophthalmic suspension) 0.25% is approved for the short-term (up to two weeks) treatment of the signs and symptoms of dry eye disease. EYSUVIS utilizes Kala’s AMPPLIFY® mucus-penetrating particle (MPP) Drug Delivery Technology to enhance penetration of loteprednol etabonate (LE) into target tissue of the ocular surface. In preclinical studies, the AMPPLIFY Drug Delivery Technology increased delivery of LE into target ocular tissues more than three-fold compared to an active LE comparator by facilitating penetration through the tear film mucins. EYSUVIS was approved by the FDA on October 26, 2020. Kala believes that EYSUVIS’ broad mechanism of action, rapid onset of relief of both signs and symptoms, favorable tolerability and safety profile and the potential to be complementary to existing therapies, offer a differentiated product profile for the short-term treatment of dry eye disease, including the management of dry eye flares.

EYSUVIS, as with other ophthalmic corticosteroids, is contraindicated in most viral diseases of the cornea and conjunctiva including epithelial herpes simplex keratitis (dendritic keratitis), vaccinia, and varicella, and also in mycobacterial infection of the eye and fungal diseases of ocular structures. The initial prescription and each renewal of the medication order should be made by a physician only after examination of the patient with the aid of magnification, such as slit lamp biomicroscopy, and, where appropriate, fluorescein staining. Prolonged use of corticosteroids may result in glaucoma with damage to the optic nerve, as well as defects in visual acuity and fields of vision. Corticosteroids should be used with caution in the presence of glaucoma. Renewal of the medication order should be made by a physician only after examination of the patient and evaluation of the IOP. Use of corticosteroids may result in posterior subcapsular cataract formation. Use of corticosteroids may suppress the host response and thus increase the hazard of secondary ocular infections. In acute purulent conditions, corticosteroids may mask infection or enhance existing infection. Use of a corticosteroid medication in the treatment of patients with a history of herpes simplex requires great caution. Use of ocular corticosteroids may prolong the course and may exacerbate the severity of many viral infections of the eye (including herpes simplex). Fungal infections of the cornea are particularly prone to develop coincidentally with long-term local corticosteroid application. Fungus invasion must be considered in any persistent corneal ulceration where a corticosteroid has been used or is in use. The most common adverse drug reaction following the use of EYSUVIS for two weeks was instillation site pain, which was reported in 5% of patients.

Please see full Prescribing Information at www.eysuvis.com

About INVELTYS:

INVELTYS (loteprednol etabonate ophthalmic suspension) 1% is a twice-a-day corticosteroid for the treatment of post-operative inflammation and pain following ocular surgery. INVELTYS utilizes Kala’s proprietary AMPPLIFY mucus-penetrating particle (MPP) Drug Delivery Technology to enhance penetration of loteprednol etabonate (LE) into target tissues of the eye. In preclinical studies, the AMPPLIFY Drug Delivery Technology increased delivery of LE into target ocular tissues more than three-fold compared to an active LE comparator by facilitating penetration through the tear film mucins. INVELTYS was approved by the FDA on August 22, 2018. Kala believes INVELTYS has a favorable profile for the treatment of inflammation and pain following ocular surgery, due to its twice-a-day dosing regimen.

INVELTYS, as with other ophthalmic corticosteroids, is contraindicated in most viral diseases of the cornea and conjunctiva including epithelial herpes simplex keratitis (dendritic keratitis), vaccinia, and varicella, and also in mycobacterial infection of the eye and fungal diseases of ocular structures. A prolonged use of corticosteroids may result in glaucoma with damage to the optic nerve, defects in visual acuity and fields of vision. If this product is used for 10 days or longer, IOP should be monitored. Use of corticosteroids may result in posterior subcapsular cataract formation. Use of steroids after cataract surgery may delay healing and increase the incidence of bleb formation. In those diseases causing thinning of the cornea or sclera, perforations have been known to occur with the use of topical steroids. The initial prescription and renewal of the medication order should be made by a physician only after examination of the patient with the aid of magnification such as slit lamp biomicroscopy and, where appropriate, fluorescein staining. Prolonged use of corticosteroids may suppress the host response and thus increase the hazard of secondary ocular infections. In acute purulent conditions, steroids may mask infection or enhance existing infection. Use of a corticosteroid medication in the treatment of patients with a history of herpes simplex requires great caution. Use of ocular steroids may prolong the course and may exacerbate the severity of many viral infections of the eye (including herpes simplex). Fungal infections of the cornea are particularly prone to develop coincidentally with long-term local steroid application. Fungus invasion must be considered in any persistent corneal ulceration where a steroid has been used or is in use. In clinical trials, the most common adverse drug reactions were eye pain (1%) and posterior capsular opacification (1%). These reactions may have been the consequence of the surgical procedure.

Please see full Prescribing Information at www.inveltys.com

About Kala Pharmaceuticals:

Kala is a biopharmaceutical company focused on the discovery, development, and commercialization of innovative therapies for diseases of the eye. Kala has applied its AMPPLIFY® mucus-penetrating particle (MPP) Drug Delivery Technology to two ocular therapies, EYSUVIS® (loteprednol etabonate ophthalmic suspension) 0.25% for the short-term (up to two weeks) treatment of signs and symptoms of dry eye disease and INVELTYS® (loteprednol etabonate ophthalmic suspension) 1% for the treatment of post-operative inflammation and pain following ocular surgery. The Company also has a pipeline of pre-clinical development programs targeted to address unmet medical needs, including both front and back of the eye diseases. For more information on Kala, please visit www.kalarx.com.

Forward Looking Statements:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties, including statements regarding the Company building on early EYSUVIS momentum, the Company’s plans to expand its sales force to approximately 105 ophthalmic sales professionals by the start of the third quarter of 2021, with a subsequent expansion to 125 expected by year-end, pending continued growth in payer coverage and the status of the COVID-19 pandemic, the Company’s belief that INVELTYS prescriptions and revenues will grow over time, the Company progressing its pipeline of preclinical development programs targeted to address front and back of the eye diseases, and the Company’s expectations regarding its use of cash, cash runway and anticipated revenues. All statements, other than statements of historical facts, contained in this press release, including statements regarding the Company’s strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements. The words “anticipate,” “believe,” “continue” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company may not actually achieve the plans, intentions or expectations disclosed in its forward-looking statements, and you should not place undue reliance on such forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements as a result of various risks and uncertainties including, but not limited to: the impact of extraordinary external events, such as the current pandemic health event resulting from the novel coronavirus (COVID-19), and their collateral consequences, including disruption of the activities of the Company’s sales force and the market for EYSUVIS and INVELTYS; whether the Company will be able to successfully implement its commercialization plans for EYSUVIS and INVELTYS; whether the market opportunity for EYSUVIS and INVELTYS is consistent with the Company’s expectations and market research; the Company’s ability execute on the commercial launch of EYSUVIS on the timeline expected, or at all, including obtaining Commercial and Medicare Part D payor coverage; whether the Company will be able to generate its projected net product revenue on the timeline expected, or at all; whether the Company’s cash resources will be sufficient to fund the Company’s foreseeable and unforeseeable operating expenses and capital expenditure requirements for the Company’s expected timeline; other matters that could affect the availability or commercial potential of EYSUVIS and INVELTYS; and other important factors, any of which could cause the Company’s actual results to differ from those contained in the forward-looking statements, discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K, most recently filed Quarterly Report on Form 10-Q and other filings the Company makes with the Securities and Exchange Commission. These forward-looking statements represent the Company’s views as of the date of this release and should not be relied upon as representing the Company’s views as of any date subsequent to the date hereof. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

Kala Pharmaceuticals, Inc.
Balance Sheet Data
(in thousands)
(unaudited)
			March 31,				December 31,
			2021				2020
Cash, cash equivalents and short-term investments			$	155,985			$	153,540
Total assets				229,827				221,606
Working capital (1)				159,076				149,154
Long‑term debt, net of discounts				72,521				72,243
Other long‑term liabilities				27,525				27,143
Total stockholders’ equity				109,792				99,995

(1) The Company defines working capital as current assets less current liabilities. See the Company’s consolidated financial statements for further information regarding its current assets and current liabilities.

 

			Three Months Ended
			March 31,
			2021							2020
Product revenues, net			$		3,266					$		1,071
Costs and expenses:
Cost of product revenues						755							354
Selling, general and administrative					27,699							15,408
Research and development					3,126							5,434
Total operating expenses					31,580							21,196
Loss from operations					(28,314		)					(20,125		)
Other income (expense):
Interest income					43							298
Interest expense					(2,141		)					(2,128		)
Net loss					(30,412		)					(21,955		)
Net loss per share attributable to common stockholders—basic and diluted			$		(0.49		)			$		(0.54		)
Weighted average shares outstanding—basic and diluted					61,655,867							40,761,984

 

			Three Months Ended
			March 31,
			2021				2020
Net loss (GAAP)			$	(30,412	)		$	(21,955	)
Add-back: stock-based compensation expense				4,702				2,497
Add-back: non-cash interest				278				253
Add-back: depreciation and amortization				248				230
Non-GAAP net loss			$	(25,184	)		$	(18,975	)
Cost of product revenues (GAAP)			$	755			$	354
Less: stock-based compensation expense				34				20
Less: depreciation and amortization				13				13
Non-GAAP cost of product revenues			$	708			$	321
Selling, general and administrative expenses (GAAP)			$	27,699			$	15,408
Less: stock-based compensation expense				3,702				1,754
Less: depreciation and amortization				181				150
Non-GAAP selling, general and administrative expenses			$	23,816			$	13,504
Research and development expenses (GAAP)			$	3,126			$	5,434
Less: stock-based compensation expense				966				723
Less: depreciation and amortization				54				67
Non-GAAP research and development expenses			$	2,106			$	4,644
Total operating loss (GAAP)			$	(28,314	)		$	(20,125	)
Add-back: stock-based compensation expense				4,702				2,497
Add-back: depreciation and amortization				248				230
Non-GAAP total operating loss			$	(23,364	)		$	(17,398	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005069/en/

Investors:

Niranjan Kameswaran

[email protected]

Hannah Deresiewicz

[email protected]

212-362-1200

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Health Infectious Diseases Other Health Fitness & Nutrition General Health Pharmaceutical Biotechnology

MEDIA:

Posted on May 5, 2021 7:08 am

Cubic and Omaha Metro Transit Launch Contactless Fare Payment Option

Cubic and Omaha Metro Transit Launch Contactless Fare Payment Option

Metro Transit riders in Omaha, Nebraska will soon be able to “explore, pay and go”

SAN DIEGO–(BUSINESS WIRE)–Cubic Corporation (NYSE:CUB) today announced its Cubic Transportation Systems (CTS) business division was awarded a multi-year contract from Omaha Metro Transit to deliver its Umo Pass solution. Umo Pass will empower Omaha Metro Transit riders to seamlessly plan and pay for transit journeys through a single fare payment system.

Umo Pass, a cloud-based, software-as-a-service platform, is built for real-time fare payment processing, allowing riders the convenience to pay through various touchless options, including smart cards, a mobile app, paper tokens (such as QR or bar codes), or even student ID cards. Cash-preferred riders can purchase electronic fare cards at convenient retail locations and reload their cards before use.

“Umo Pass’ innovative fare collection technology will provide Omaha Metro passengers with a simplified way to pay for their transit travel,” said Boris Karsch, senior product director, Umo Pass.

Launching in summer 2021, Omaha Metro Transit riders will be able to download the Umo Mobility app on their smartphones or use their tap cards to start loading fare value. Riders can purchase fares and manage their accounts through multiple options, including ticket vending machines at Omaha Rapid Bus Transit (ORBT) stations and transit centers; online transit account management; and purchasing options at stores and vendors across Omaha.

“Metro is excited to integrate a seamless payment experience into our system and provide our riders with more options to access transit,” said Lauren Cencic, CEO of Metro Transit.

The Umo Pass launch comes after Metro Transit’s recent extension of their current ORBT free fare period. Extended to early summer 2021, ORBT riders can get on board and go without fare payment.

Omaha Metro Transit will utilize the Umo Pass platform on 170 ORBT, fixed route and paratransit vehicles, as well as ticket vending machines. Metro Transit’s first rapid transit line surpassed 130,000 rides since its launch in November 2020, averaging 1,200 rides on weekdays. ORBT serves the central corridor of Dodge Street between Omaha’s Old Market entertainment district and Westroads Mall.

To learn more, please visit www.ometro.com.

About Cubic Corporation

Cubic is a technology-driven, market-leading provider of integrated solutions that increase situational understanding for transportation, defense C4ISR and training customers worldwide to decrease urban congestion and improve the militaries’ effectiveness and operational readiness. Our teams innovate to make a positive difference in people’s lives. We simplify their daily journeys. We promote mission success and safety for those who serve their nation. For more information about Cubic, please visit www.cubic.com or on Twitter @CubicCorp.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005337/en/

Media Contact

Lauren Jochum

Cubic Transportation Systems

PH: +1 865.466.3860

[email protected]

KEYWORDS: United States North America California Nebraska

INDUSTRY KEYWORDS: Public Transport Rail Transport Other Transport

MEDIA:

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The New York Times Company Reports 2021 First-Quarter Results

NEW YORK–(BUSINESS WIRE)–
The New York Times Company (NYSE: NYT) announced today first-quarter 2021 diluted earnings per share from continuing operations of $.24 compared with $.20 in the same period of 2020. Adjusted diluted earnings per share from continuing operations (defined below) was $.26 in the first quarter of 2021 compared with $.17 in the first quarter of 2020.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210505005545/en/

Operating profit increased to $51.7 million in the first quarter of 2021 from $27.3 million in the same period of 2020 and adjusted operating profit (defined below) increased to $68.1 million from $44.3 million in the prior year, as higher digital-only subscription revenues and, to a lesser extent, higher digital advertising revenues more than offset lower print advertising, print subscription and other revenues.

Meredith Kopit Levien, president and chief executive officer, The New York Times Company, said, “The Times finished the first quarter with more than 7.8 million paid subscriptions across our digital and print products, more than 100 million registered users, and an average weekly audience of 76 million readers. That foundation, plus our unmatched journalistic breadth and a market of at least 100 million people who are expected to pay for English-language journalism, grounds our conviction that we can substantially and profitably scale paid subscriptions over time.

“We recorded a significant improvement in profitability in the first quarter, thanks to the size and strength of our current digital subscription base and an improvement in digital advertising. Total digital subscription revenue grew by 38 percent and we added 301,000 net new digital subscriptions across News, Cooking, Games and Audm, with 167,000 net new digital News subscriptions.

“The fundamental drivers of our business — audience, registered readers, and subscriber engagement — are stronger than in 2019 and position us well for long-term growth. In February and March, our audiences declined from their historic highs last year, and we saw fewer net subscription additions in the latter part of the quarter. We expect moderated growth to continue through the second quarter, traditionally our softest of the year. With lower forecasted second quarter performance, we now expect annual total net subscription additions to be in the range of our 2019 performance, which, prior to 2020, was our best year for net additions.

“We’ve made a sizable and sustained investment in our journalistic engine — an engine that powers the largest and most successful digital subscription business in journalism. While we don’t know which storylines will drive the next big news cycle, we do know that the size of our newsroom, its range of expertise, and our continued investment in meeting more needs position us to capture that demand, whatever its source.”

Comparisons

Unless otherwise noted, all comparisons are for the first quarter of 2021 to the first quarter of 2020.

For comparability, certain prior-year amounts have been reclassified to conform with the current period presentation.

This release presents certain non-GAAP financial measures, including diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and special items (or adjusted diluted earnings per share from continuing operations); operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit); and operating costs before depreciation, amortization, severance and multiemployer pension plan withdrawal costs (or adjusted operating costs). Refer to Reconciliation of Non-GAAP Information in the exhibits for a discussion of management’s reasons for the presentation of these non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures.

There were no special items in the first quarter of 2021.

First-quarter 2020 results included the following special item:

• A $10.1 million gain ($7.4 million or $0.04 per share after tax) related to a non-marketable equity investment transaction. The gain is included in Interest income and other, net in our Condensed Consolidated Statement of Operations.

Results from Continuing Operations

Revenues

Total revenues for the first quarter of 2021 increased 6.6 percent to $473.0 million from $443.6 million in the first quarter of 2020. Subscription revenues increased 15.3 percent to $329.1 million, advertising revenues decreased 8.5 percent to $97.1 million and other revenues decreased 10.0 percent to $46.8 million.

Subscription revenues in the first quarter of 2021 rose primarily due to growth in the number of subscriptions to the Company’s digital-only products, which include our news product and our Games, Cooking and Audm products, as well as a benefit from subscriptions graduating to higher prices from introductory promotional pricing. Revenue from digital-only products increased 38.1 percent, to $179.6 million. Print subscription revenues decreased 3.8 percent to $149.5 million, largely due to lower single-copy and bulk sales revenue, while revenue from our domestic home delivery subscription products grew 0.5 percent.

The Company ended the first quarter of 2021 with approximately 7,816,000 subscriptions across its print and digital products. Paid digital-only subscriptions totaled approximately 6,991,000, a net increase of 301,000 subscriptions compared with the end of the fourth quarter of 2020 and a net increase of 1,990,000 subscriptions compared with the end of the first quarter of 2020. Of the 301,000 total net additions, 167,000 came from the Company’s digital news product, while 134,000 came from the Company’s Cooking, Games and Audm products.

First-quarter 2021 digital advertising revenue increased 16.3 percent, while print advertising revenue decreased 31.6 percent. Digital advertising revenue was $59.5 million, or 61.3 percent of total Company advertising revenues, compared with $51.2 million, or 48.2 percent, in the first quarter of 2020. Digital advertising revenue increased primarily as a result of higher direct-sold advertising, including traditional display and podcasts, as well as the impact of the comparison to weak digital advertising revenues in the first quarter of 2020 caused by reduced advertiser spending during the start of the Covid-19 pandemic. Print advertising revenue decreased, primarily in the entertainment, travel and luxury categories, reflecting continued reduced spending on print advertising by businesses negatively impacted by the Covid-19 pandemic, which further accelerated secular trends.

Other revenues decreased 10.0 percent in the first quarter, primarily as a result of fewer television episodes as well as lower revenues from live events, commercial printing and building rental income. These declines were partially offset by higher Wirecutter affiliate referral revenues.

Operating Costs

Total operating costs increased 1.2 percent in the first quarter of 2021 to $421.4 million compared with $416.3 million in the first quarter of 2020, while adjusted operating costs increased 1.4 percent to $404.9 million from $399.3 million in the first quarter of 2020, in each case as a result of the factors discussed below.

Cost of revenue increased 3.1 percent to $251.0 million compared with $243.5 million in the first quarter of 2020, largely due to growth in the number of employees in the newsroom, Games, Cooking and audio; costs in connection with audio content; a higher incentive compensation accrual; and higher subscriber servicing and digital content delivery costs. This cost growth was partially offset by lower print production and distribution costs, lower content creation costs as a result of fewer television episodes and lower travel and entertainment costs (due largely to the Covid-19 pandemic).

Sales and marketing costs decreased 18.5 percent to $60.2 million compared with $73.8 million in the first quarter of 2020, due to lower subscription-related media expenses and advertising sales costs. Media expenses, a component of sales and marketing costs that represents the cost to promote our subscription business, decreased 20.9 percent to $35.9 million in the first quarter of 2021 from $45.4 million in 2020.

Product development costs increased 25.6 percent to $38.9 million compared with $31.0 million in the first quarter of 2020, largely due to growth in the number of digital product development employees in connection with digital subscription strategic initiatives as well as a higher incentive compensation accrual.

General and administrative costs increased 7.0 percent to $56.6 million compared with $52.9 million in the first quarter of 2020, largely due to a higher incentive compensation accrual and growth in the number of employees.

Other Data

Interest Income and Other, net

Interest income and other, net in the first quarter of 2021 was $1.5 million compared with $13.9 million in the first quarter of 2020. The decrease was primarily attributable to a gain of $10.1 million from a non-marketable equity investment included in the first quarter of 2020.

Income Taxes

The Company had an income tax expense of $9.5 million in the first quarter of 2021 compared with an income tax expense of $6.0 million in the first quarter of 2020. The effective income tax rate was 18.7% in the first quarter of 2021 and 15.5% in the first quarter of 2020. The Company received a tax benefit in both periods from stock price appreciation on stock-based awards that settled in the quarters, resulting in a lower than statutory tax rate.

Liquidity

As of March 28, 2021, the Company had cash and marketable securities of $890.7 million, an increase of $8.7 million from $882.0 million as of December 27, 2020.

The Company has a $250.0 million revolving line of credit through 2024. As of March 28, 2021, there were no outstanding borrowings under the credit facility, and the Company did not have other outstanding debt.

Capital Expenditures

Capital expenditures totaled approximately $7 million in the first quarter of 2021 compared with approximately $12 million in the first quarter of 2020. Expenditures in the first quarter of 2021 were primarily driven by improvements at our headquarters building and at our College Point, N.Y., printing and distribution facility, and investments in technology. Capital expenditures decreased in 2021 as the build-out of additional office space in Long Island City, N.Y., was completed in 2020.

Outlook

Total subscription revenues in the second quarter of 2021 are expected to increase approximately 15 percent compared with the second quarter of 2020, with digital-only subscription revenue expected to increase approximately 30 percent.

Total advertising revenues in the second quarter of 2021 are expected to increase approximately 55 percent to 60 percent compared with the second quarter of 2020, with digital advertising revenue expected to increase approximately 70 percent to 75 percent mainly as a result of the impact of the comparison to weak revenues in the first quarter of 2020 caused by reduced advertiser spending during the start of the Covid-19 pandemic.

Other revenues in the second quarter of 2021 are expected to increase in the low single-digits compared with the second quarter of 2020.

Operating costs and adjusted operating costs in the second quarter of 2021 are expected to increase in the mid- to high-teens compared with the second quarter of 2020 as the Company continues to invest in the drivers of digital subscription growth.

The Company expects the following on a pre-tax basis in 2021:

• Depreciation and amortization: approximately $60 million,
• Interest income and other, net: $4 million to $6 million, and
• Capital expenditures: approximately $50 million.

Conference Call Information

The Company’s first-quarter 2021 earnings conference call will be held on Thursday, May 5, at 8:00 a.m. E.T.

Participants can pre-register for the telephone conference at dpregister.com/sreg/10154498/e678e2fb92, which will generate dial-in instructions allowing participants to bypass an operator at the time of the call. Alternatively, to access the call without pre-registration, dial 844-413-3940 (in the U.S.) or 412-858-5208 (international callers). Online listeners can link to the live webcast at investors.nytco.com.

An archive of the webcast will be available beginning about two hours after the call at investors.nytco.com. The archive will be available for approximately three months. An audio replay will be available at 877-344-7529 (in the U.S.) and 412-317-0088 (international callers) beginning approximately two hours after the call until 11:59 p.m. E.T. on Thursday, May 20. The replay access code is 10150641.

The New York Times Company is a trusted source of quality, independent journalism whose mission is to seek the truth and help people understand the world. With more than 7 million subscriptions across a diverse array of print and digital products — from news to cooking to games — The Times has evolved from a local and regional news leader into a diversified media company with curious readers, listeners and viewers around the globe. Follow news about the company at NYTCo.com.

Except for the historical information contained herein, the matters discussed in this press release are 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. Terms such as “aim,” “anticipate,” “believe,” “confidence,” “contemplate,” “continue,” “conviction,” “could,” “drive,” “estimate,” “expect,” “forecast,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “objective,” “opportunity,” “optimistic,” “outlook,” “plan,” “position,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” or similar statements or variations of such words and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are based upon our current expectations, estimates and assumptions and involve risks and uncertainties that change over time; actual results could differ materially from those predicted by such forward-looking statements. These risks and uncertainties include, but are not limited to: the impact of the Covid-19 pandemic; significant competition in all aspects of our business; our ability to improve and scale our technical infrastructure and respond and adapt to changes in technology and consumer behavior; our ability to continue to retain and grow our subscriber base; numerous factors that affect our advertising revenues, including economic conditions, market dynamics, audience fragmentation, evolving digital advertising trends and the evolution of our strategy; damage to our brand or reputation; economic, geopolitical and other risks associated with the international scope of our business and foreign operations; our ability to attract and maintain a highly skilled and diverse workforce; adverse results from litigation or governmental investigations; the risks and challenges associated with investments we make in new and existing products and services; risks associated with acquisitions, divestitures, investments and other transactions; the effects of the fixed cost nature of significant portions of our expenses; the effects of the size and volatility of our pension plan obligations; liabilities that may result from our participation in multiemployer pension plans; the impact of labor negotiations and agreements; increases in the price of newsprint or significant disruptions in our newsprint supply chain or newspaper printing and distribution channels; security breaches and other network and information systems disruptions; our ability to comply with laws and regulations, including with respect to privacy, data protection and consumer marketing practices; payment processing risk; defects, delays or interruptions in the cloud-based hosting services we utilize; our ability to protect our intellectual property; claims of intellectual property infringement that we have been, and may be in the future, be subject to; the effects of restrictions on our operations as a result of the terms of our credit facility; our future access to capital markets and other financing options; and the concentration of control of our company due to our dual-class capital structure.

More information regarding these risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 27, 2020, and subsequent filings. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

This press release can be downloaded from www.nytco.com

Exhibits:		Condensed Consolidated Statements of Operations
		Footnotes
		Reconciliation of Non-GAAP Information

THE NEW YORK TIMES COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share data)
	First Quarter
	2021				2020				% Change
Revenues
Subscription(a)	$	329,084			$	285,434			15.3%
Advertising(b)	97,116				106,137				(8.5)%
Other(c)	46,845				52,065				(10.0)%
Total revenues	473,045				443,636				6.6%
Operating costs
Cost of revenue (excluding depreciation and amortization) (d)	250,997				243,484				3.1%
Sales and marketing (d)	60,153				73,784				(18.5)%
Product development (d)	38,943				31,002				25.6%
General and administrative	56,577				52,861				7.0%
Depreciation and amortization	14,717				15,185				(3.1)%
Total operating costs	421,387				416,316				1.2%
Operating profit	51,658				27,320				89.1%
Other components of net periodic benefit costs	2,599				2,314				12.3%
Interest income and other, net(e)	1,511				13,854				(89.1)%
Income from continuing operations before income taxes	50,570				38,860				30.1%
Income tax expense	9,461				6,006				57.5%
Net income	41,109				32,854				25.1%
Net income attributable to The New York Times Company common stockholders	$	41,109			$	32,854			25.1%
Average number of common shares outstanding:
Basic	167,647				166,549				0.7%
Diluted	168,165				167,845				0.2%
Basic earnings per share attributable to The New York Times Company common stockholders	$	0.25			$	0.20			25.0%
Diluted earnings per share attributable to The New York Times Company common stockholders	$	0.24			$	0.20			20.0%
Dividends declared per share	$	0.07			$	0.06			16.7%
See footnotes pages for additional information.

THE NEW YORK TIMES COMPANY
FOOTNOTES
(Amounts in thousands)
(a)	The following table summarizes digital and print subscription revenues for the first quarters of 2021 and 2020:
					First Quarter
					2021				2020				% Change
	Digital-only subscription revenues:
	News product subscription revenues(1)				$	161,287			$	118,958			35.6%
	Other product subscription revenues(2)				18,312				11,052				65.7%
	Subtotal digital-only subscription revenues				179,599				130,010				38.1%
	Print subscription revenues:
	Domestic home delivery subscription revenues(3)				134,395				133,736				0.5%
	Single-copy, NYT International and other subscription revenues(4)				15,090				21,688				(30.4)%
	Subtotal print subscription revenues				149,485				155,424				(3.8)%
	Total subscription revenues				$	329,084			$	285,434			15.3%

	(1)		Includes revenues from subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Games and Cooking products are also included in this category.
	(2)		Includes revenues from standalone subscriptions to the Company’s Games, Cooking and Audm products.
	(3)		Includes free access to some of the Company’s digital products.
	(4)		NYT International is the international edition of our print newspaper.

	The following table summarizes digital and print subscriptions as of the end of the first quarters of 2021 and 2020:
					First Quarter
					2021			2020			% Change
	Digital-only subscriptions:
	News product subscriptions(1)				5,257			3,897			34.9%
	Other product subscriptions(2)				1,734			1,104			57.1%
	Subtotal digital-only subscriptions				6,991			5,001			39.8%
	Print subscriptions				825			840			(1.8)%
	Total subscriptions				7,816			5,841			33.8%

	(1)		Includes subscriptions to the Company’s news product. News product subscription packages that include access to the Company’s Games and Cooking products are also included in this category.
	(2)		Includes standalone subscriptions to the Company’s Games, Cooking and Audm products.

THE NEW YORK TIMES COMPANY
FOOTNOTES
(Amounts in thousands)
(b)	The following table summarizes digital and print advertising revenues for the first quarters of 2021 and 2020:
			First Quarter
			2021				2020				% Change
	Advertising revenues:
	Digital		$	59,496			$	51,158			16.3%
	Print		37,620				54,979				(31.6)%
	Total advertising		$	97,116			$	106,137			(8.5)%
(c)	Other revenues primarily consist of revenues from licensing, Wirecutter affiliate referrals, the leasing of floors in the Company headquarters, commercial printing, retail commerce, television and film and our live events business.
(d)	The Company reclassified certain expenses in the prior quarter to conform with the current period presentation.
(e)	In the first quarter of 2020, the Company recorded a $10.1 million gain ($7.4 million or $.04 per share after tax) related to a non-marketable equity investment transaction.

THE NEW YORK TIMES COMPANY

RECONCILIATION OF NON-GAAP INFORMATION

In this release, the Company has referred to non-GAAP financial information with respect to diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and special items (or adjusted diluted earnings per share from continuing operations); operating profit before depreciation, amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit); and operating costs before depreciation, amortization, severance and multiemployer pension withdrawal costs (or adjusted operating costs). The Company has included these non-GAAP financial measures because management reviews them on a regular basis and uses them to evaluate and manage the performance of the Company’s operations. Management believes that, for the reasons outlined below, these non-GAAP financial measures provide useful information to investors as a supplement to reported diluted earnings/(loss) per share from continuing operations, operating profit/(loss) and operating costs. However, these measures should be evaluated only in conjunction with the comparable GAAP financial measures and should not be viewed as alternative or superior measures of GAAP results.

Adjusted diluted earnings per share provides useful information in evaluating the Company’s period-to-period performance because it eliminates items that the Company does not consider to be indicative of earnings from ongoing operating activities. Adjusted operating profit is useful in evaluating the ongoing performance of the Company’s business as it excludes the significant non-cash impact of depreciation and amortization as well as items not indicative of ongoing operating activities. Total operating costs include depreciation, amortization, severance and multiemployer pension plan withdrawal costs. Total operating costs excluding these items provide investors with helpful supplemental information on the Company’s underlying operating costs that is used by management in its financial and operational decision-making.

Management considers special items, which may include impairment charges, pension settlement charges and other items that arise from time to time, to be outside the ordinary course of our operations. Management believes that excluding these items provides a better understanding of the underlying trends in the Company’s operating performance and allows more accurate comparisons of the Company’s operating results to historical performance. In addition, management excludes severance costs, which may fluctuate significantly from quarter to quarter, because it believes these costs do not necessarily reflect expected future operating costs and do not contribute to a meaningful comparison of the Company’s operating results to historical performance.

Non-operating retirement costs include (i) interest cost, expected return on plan assets, amortization of actuarial gains and loss components and amortization of prior service credits of single-employer pension expense, (ii) interest cost, amortization of actuarial gains and loss components and amortization of prior service credits of retirement medical expense and (iii) all multiemployer pension plan withdrawal costs. These non-operating retirement costs are primarily tied to financial market performance including changes in market interest rates and investment performance. Management considers non-operating retirement costs to be outside the performance of the business and believes that presenting adjusted diluted earnings per share from continuing operations excluding non-operating retirement costs and presenting adjusted operating results excluding multiemployer pension plan withdrawal costs, in addition to the Company’s GAAP diluted earnings per share from continuing operations and GAAP operating results, provide increased transparency and a better understanding of the underlying trends in the Company’s operating business performance.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are set out in the tables below.

THE NEW YORK TIMES COMPANY
RECONCILIATION OF NON-GAAP INFORMATION
(Dollars in thousands, except per share data)
Reconciliation of diluted earnings per share from continuing operations excluding severance, non-operating retirement costs and special items (or adjusted diluted earnings per share from continuing operations)
		First Quarter
		2021				2020				% Change
Diluted earnings per share from continuing operations		$	0.24			$	0.20			20.0%
Add:
Non-operating retirement costs:
Multiemployer pension plan withdrawal costs		0.01				0.01				—
Other components of net periodic benefit costs		0.02				0.01				*
Special items:
Gain from non-marketable equity security		—				(0.06)				—
Income tax expense of adjustments		(0.01)				0.01				*
Adjusted diluted earnings per share from continuing operations(1)		$	0.26			$	0.17			52.9%
(1) Amounts may not add due to rounding.
* Represents a change equal to or in excess of 100% or not meaningful.
Reconciliation of operating profit before depreciation and amortization, severance, multiemployer pension plan withdrawal costs and special items (or adjusted operating profit)
		First Quarter
		2021				2020				% Change
Operating profit		$	51,658			$	27,320			89.1%
Add:
Depreciation and amortization		14,717				15,185				(3.1)%
Severance		406				370				9.7%
Multiemployer pension plan withdrawal costs		1,326				1,423				(6.8)%
Adjusted operating profit		$	68,107			$	44,298			53.7%
Reconciliation of operating costs before depreciation & amortization, severance and multiemployer pension plan withdrawal costs (or adjusted operating costs)
		First Quarter
		2021				2020				% Change
Operating costs		$	421,387			$	416,316			1.2%
Less:
Depreciation & amortization		14,717				15,185				(3.1)%
Severance		406				370				9.7%
Multiemployer pension plan withdrawal costs		1,326				1,423				(6.8)%
Adjusted operating costs		$	404,938			$	399,338			1.4%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210505005545/en/

For Media: Danielle Rhoades Ha, 212-556-8719; [email protected]

For Investors: Harlan Toplitzky, 212-556-7775; [email protected]

KEYWORDS: United States North America New York

INDUSTRY KEYWORDS: Communications Other Communications Publishing

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We believe that the significant growth over the last several years in subscriptions to The Times’s products demonstrates the success of our “subscription-first” strategy and the willingness of our readers to pay for high-quality journalism. The following charts illustrate the growth in net digital-only subscription additions and corresponding subscription revenues as well as the relative stability of our print domestic home delivery subscription products since the launch of the digital pay model in 2011. (1) Amounts may not add due to rounding. (2) Print domestic home delivery subscriptions include free access to some of our digital products. (3) Print Other includes single-copy, NYT International and other subscription revenues. Note: Revenues for 2012 and 2017 include the impact of an additional week. (Graphic: Business Wire)

Photo

We believe that the significant growth over the last several years in subscriptions to The Times’s products demonstrates the success of our “subscription-first” strategy and the willingness of our readers to pay for high-quality journalism. The following charts illustrate the growth in net digital-only subscription additions and corresponding subscription revenues as well as the relative stability of our print domestic home delivery subscription products since the launch of the digital pay model in 2011. (1) Amounts may not add due to rounding. (2) Print domestic home delivery subscriptions include free access to some of our digital products. (3) Print Other includes single-copy, NYT International and other subscription revenues. Note: Revenues for 2012 and 2017 include the impact of an additional week. (Graphic: Business Wire)