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Superior Reports First Quarter 2021 Financial Results

Superior Reports First Quarter 2021 Financial Results

Portfolio accelerating growth above market;

Strong execution driving profitability 

First Quarter 2021 Financial Highlights:

  • Net sales of $358M; Value-Added Sales Adj. for FX1 of $198M, a 17%2 increase YoY
  • Portfolio delivered 11% Content per Wheel1 growth; growth over market of 19%2
  • Net income of $13M
  • Adjusted EBITDA1 increased 39% YoY to $55M; margin expanded 330 bps3
  • Funded debt decreased to $630M and Net Debt1 to $477M
  • Cash from operations of $18M; Free Cash Flow1 of $3M

SOUTHFIELD, Mich.–(BUSINESS WIRE)–Superior Industries International, Inc. (“Superior” or the “Company”) (NYSE:SUP), one of the world’s leading light vehicle aluminum wheel suppliers for OEMs and the European aftermarket, today reported financial results for the first quarter ended March 31, 2021.

($ in millions, units in thousands) Three Months

1Q 2021

1Q 2020
Units
North America

 

2,453

 

2,219

Europe

 

2,062

 

2,088

Global

 

4,515

 

4,307
 
Net Sales
North America

$

192.0

$

155.6

Europe

 

166.2

 

145.5

Global

$

358.2

$

301.1
 
Value-Added Sales (1)
North America

$

101.7

$

79.9

Europe

 

105.6

 

90.2

Global

$

207.3

$

170.1

“Our team delivered impressive results in a rapidly shifting environment as we continued to execute our value creation roadmap and drive profitable growth,” commented Majdi Abulaban, President and Chief Executive Officer of Superior. “We have established a strong foundation with a robust portfolio of differentiated technologies that are advancing Value-Added Sales and growth over market. Further, we generated strong earnings improvement and margin expansion in the face of a volatile production environment and supply chain challenges, including semiconductor shortages, that impacted the automotive industry. This is a testament to the enhanced cost and cash discipline we fostered throughout the business.”

Mr. Abulaban continued, “We remain focused on capitalizing on trends towards electrification, CO2 reduction and vehicle differentiation through our light weighting and premium finishing capabilities, as these technologies will strengthen our position as a growth over market company. I am confident in our ability to continue to generate significant shareholder value throughout 2021 and beyond.”

First Quarter Results

Net sales for the first quarter of 2021 were $358.2 million, compared to net sales of $301.1 million in the prior year period. Value-Added Sales, a non-GAAP financial measure, were $207.3 million for the first quarter of 2021 compared to $170.1 million in the prior year period. Value-Added Sales Adjusted for Foreign Exchange, a non-GAAP financial measure, increased 17%, or 19% above market, which was driven by the ongoing portfolio shift to larger diameter wheels with more premium content. See “Non-GAAP Financial Measures” below and the reconciliation of consolidated net sales to Value-Added Sales and Value-Added Sales Adjusted for Foreign Exchange in this press release.

Gross profit for the first quarter of 2021 was $43.0 million, compared to $23.1 million in the prior year period. The increase in gross profit for the quarter was primarily due to higher sales, year-over-year increased plant utilization due to plant shutdowns in the prior year period, and stronger product mix.

Selling, general, and administrative (“SG&A”) expenses for the first quarter of 2021 were $17.3 million, compared to $12.5 million in the prior year period, which was affected by compensation accruals due to the impact of COVID in 2020.

Operating income for the first quarter of 2021 was $25.7 million, compared to a loss from operations of $183.0 million in the prior year period. The increase is due to higher gross profit, partially offset by higher SG&A, as well as the non-recurring Goodwill and Indefinite-Lived Intangibles non-cash impairment charge of $193.6 million in 2020.

The income tax provision for the first quarter of 2021 was $0.8 million on pre-tax income of $13.9 million. The tax provision for the quarter differs from the statutory rate primarily due to valuation allowances, the release of an uncertain tax position and the mix of earnings among tax jurisdictions.

For the first quarter of 2021, the Company reported net income of $13.1 million, or earnings per diluted share of $0.18. This compares to a net loss of $190.1 million, or loss per diluted share of $7.84, in the first quarter of 2020.

Adjusted EBITDA, a non-GAAP financial measure, was $54.9 million for the first quarter of 2021, or 26.5% of Value-Added Sales, which compares to $39.5 million, or 23.2% of Value-Added Sales in the prior year period. The increase in Adjusted EBITDA was driven by increased volume, stronger product mix, and improved manufacturing performance, partially offset by challenges resulting from the winter storm in February 2021 in the southern United States and in northern Mexico. Additionally, the first quarter of 2020 was partly affected by the onset of plant shutdowns resulting from COVID. See “Non-GAAP Financial Measures” below and the reconciliation of net income to Adjusted EBITDA in this press release.

The Company reported net cash provided by operating activities of $18.2 million in the first quarter of 2021, compared to cash provided by operating activities of $31.3 million during the first quarter of 2020. Operating cash flow in the first quarter of 2021 was affected by higher net working capital due to higher sales and production volumes compared to the prior year period. Free Cash Flow, a non-GAAP financial measure, was $3.0 million for the first quarter, compared to $9.8 million in the prior year period. See “Non-GAAP Financial Measures” below and the reconciliation of cash flow from operations to Free Cash Flow in this press release.

Financial Position

As of March 31, 2021, Superior had funded debt of $630.3 million and Net Debt, a non-GAAP financial measure, of $476.5 million, compared to funded debt of $824.1 million and Net Debt of $541.9 million as of the end of the prior year period. The improvement in Net Debt of $14.2 million compared to year-end 2020 was supported by cash flow generation as described above, and a decrease related to Superior’s Euro-denominated debt as the Euro weakened relative to the US Dollar. See “Non-GAAP Financial Measures” below and the reconciliation of funded debt to Net Debt in this press release.

2021 Outlook

The Company reconfirmed its Full Year 2021 guidance. Based on IHS’ latest forecast and management’s estimates for 2021, Superior assumes industry production in North America and Europe to increase year-over-year in 2021 by 20% and 10%, respectively. Based on this outlook for industry production and Superior’s portfolio, the Company’s full year 2021 outlook is as follows:

FY 2021
 

Unit Shipments

 

16.9 – 17.7 million

Net Sales

 

$1.30 – $1.37 billion

Value-Added Sales

 

$740 – $780 million

Adjusted EBITDA

 

$160 – $180 million

Cash Flow from Operations

 

$110 – $130 million

Capital Expenditures

 

Approximately $75 million

“We had a strong start to the year, in part due to richer product mix as OEMs generally shifted production schedules to more premium vehicles in response to the shortage of semiconductors. As we look to the remainder of 2021 and the uncertainties associated with possible OEM supply chain disruption, especially the availability of semiconductors, we believe it prudent to maintain our full year 2021 outlook pending resolution of these uncertainties. We do, however, remain confident in our ability to continue to generate profitable growth as we execute our long-term strategic priorities,” commented Tim Trenary, Executive Vice President and Chief Financial Officer of Superior.

Value-Added Sales and Adjusted EBITDA are non-GAAP measures, as defined below. In reliance on the safe harbor provided under section 10(e) or Regulation S-K, Superior has not quantitatively reconciled from net income, the most comparable GAAP measure, to Adjusted EBITDA presented in the 2021 outlook, as Superior is unable to quantify certain amounts included in net income without unreasonable efforts and due to the inherent uncertainty regarding such variables. Superior also believes that such reconciliation would imply a degree of precision that could potentially be confusing or misleading to investors. However, the magnitude of these amounts may be significant.

Conference Call

Superior will host a conference call beginning at 8:30 AM ET on Wednesday, May 5, 2021. The conference call may be accessed by dialing 800-700-1722 for participants in the U.S./Canada or +1 334-323-0501 for participants outside the U.S./Canada using the required conference ID 2810355. The live conference call can also be accessed by logging into the Company’s website at www.supind.com or by clicking this link: earnings call webcast. A replay of the webcast will be available on the Company’s website immediately following the conclusion of the call.

During the conference call, the Company’s management plans to review operating results and discuss financial and operating matters. In addition, management may disclose material information in response to questions posed by participants during the call.

About Superior Industries

Superior is one of the world’s leading aluminum wheel suppliers. Superior’s team collaborates with customers to design, engineer, and manufacture a wide variety of innovative and high-quality products utilizing the latest lightweighting and finishing technologies. Superior serves the European aftermarket with the brands ATS®, RIAL®, ALUTEC®, and ANZIO®. Headquartered in Southfield, Michigan, Superior is listed on the New York Stock Exchange. For more information, please visit www.supind.com.

Non-GAAP Financial Measures

In addition to the results reported in accordance with GAAP included throughout this earnings release, this release refers to the following non-GAAP measures:

“Adjusted EBITDA,” defined as earnings before interest income and expense, income taxes, depreciation, amortization, restructuring charges and other closure costs, impairments of long-lived assets and investments, changes in fair value of redeemable preferred stock embedded derivative, acquisition and integration and other related costs, certain hiring and separation related costs, proxy contest fees, gains associated with early debt extinguishment and accounts receivable factoring fees. “Value-Added Sales,” defined as net sales less the value of aluminum and services provided by outsourced service providers that are included in net sales. “Value-Added Sales Adjusted for Foreign Exchange,” defined as Value-Added Sales adjusted for the impact of foreign exchange translation. “Content per Wheel,” defined as Value-Added Sales Adjusted for FX on a per unit (wheel) shipment basis. “Free Cash Flow,” defined as the net cash from operations, investing activities, and non-debt components of financing activities. “Net Debt,” defined as total funded debt less cash and cash equivalents.

For reconciliations of these non-GAAP measures to the most directly comparable GAAP measure, see the attached supplemental data pages. Management believes these non-GAAP measures are useful to management and may be useful to investors in their analysis of Superior’s financial position and results of operations. Further, management uses these non-GAAP financial measures for planning and forecasting purposes. This non-GAAP financial information is provided as additional information for investors and is not in accordance with or an alternative to GAAP and may be different from similar measures used by other companies.

Forward-Looking Statements

This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts and can generally be identified by the use of future dates or words such as “assumes”, “may,” “should,” “could,” “will,” “expects,” “expected,” “seeks to,” “anticipates,” “plans,” “believes,” “estimates,” “intends,” “outlook,” “guidance,” “predicts,” “projects,” “potential” or “continue,” or the negative of such terms and other comparable terminology. These statements also include, but are not limited to, the 2021 outlook included herein, Superior’s strategic and operational initiatives, product mix and overall cost improvement and are based on current expectations, estimates, and projections about Superior’s business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, risks, and uncertainties discussed in Superior’s Securities and Exchange Commission filings and reports, including Superior’s current Annual Report on Form 10-K, and other reports from time to time filed with the Securities and Exchange Commission. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this press release. Such forward-looking statements speak only as of the date on which they are made, and Superior does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

 
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in Millions, Except Per Share Amounts)
 
Three Months

1Q 2021

1Q 2020
Net Sales

$

358.2

 

$

301.1

 

Cost of Sales

 

315.2

 

 

278.0

 

Gross Profit

$

43.0

 

$

23.1

 

 
SG&A Expenses

 

17.3

 

 

12.5

 

Impairment of Goodwill and Indefinite-Lived Intangibles

 

–

 

 

193.6

 

Income (Loss) From Operations

$

25.7

 

$

(183.0

)

 
Interest Expense, net

 

(10.3

)

 

(11.9

)

Other (Expense) Income, net

 

(1.5

)

 

1.3

 

Income (Loss) Before Income Taxes

$

13.9

 

$

(193.5

)

 
Income Tax Benefit (Provision)

 

(0.8

)

 

3.5

 

Net Income (Loss)

$

13.1

 

$

(190.1

)

 
Earnings (Loss) Per Share:
Basic

$

0.19

 

$

(7.84

)

Diluted

$

0.18

 

$

(7.84

)

 
Weighted Average and Equivalent Shares
Outstanding for EPS (in Thousands):
Basic

 

25,707

 

 

25,243

 

Diluted

 

26,687

 

 

25,243

 

 
 
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(Dollars in Millions)
 
3/31/2021 12/30/2020
Current Assets

$

429.0

 

$

383.7

 

Property, Plant and Equipment, net

 

496.7

 

 

522.1

 

Intangibles and Other Assets

 

184.1

 

 

203.6

 

Total Assets

$

1,109.8

 

$

1,109.3

 

 
Current Liabilities

$

257.8

 

$

231.1

 

Long-Term Liabilities

 

706.4

 

 

718.6

 

Redeemable Preferred Shares

 

184.3

 

 

179.4

 

European Non-controlling Redeemable Equity

 

1.6

 

 

1.7

 

Shareholders’ Equity (Deficit)

 

(40.3

)

 

(21.5

)

Total Liabilities and Shareholders’ Equity (Deficit)

$

1,109.8

 

$

1,109.3

 

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in Millions)
 
Three Months

1Q 2021

1Q 2020
Net Income (Loss)

$

13.1

 

$

(190.1

)

Depreciation and Amortization

 

25.4

 

 

24.4

 

Income tax, Non-cash changes

 

(2.8

)

 

(5.8

)

Impairments of Goodwill and Indefinite-Lived Intangibles

 

–

 

 

193.6

 

Stock-based Compensation

 

1.8

 

 

(0.7

)

Amortization of Debt Issuance Costs

 

0.9

 

 

1.4

 

Other Non-cash items

 

(4.5

)

 

(3.6

)

Changes in Operating Assets and Liabilities:
Accounts Receivable

 

(37.0

)

 

(0.4

)

Inventories

 

(14.7

)

 

(5.2

)

Other Assets and Liabilities

 

13.9

 

 

2.9

 

Accounts Payable

 

21.3

 

 

16.9

 

Income Taxes

 

0.8

 

 

(2.1

)

Cash Flow Provided By Operating Activities

$

18.2

 

$

31.3

 

 
Capital Expenditures

 

(10.5

)

 

(13.9

)

Proceeds from Sale of Property, Plant and Equipment

 

–

 

 

–

 

Net Cash Used In Investing Activities

$

(10.5

)

$

(13.9

)

 
Proceeds from the Issuance of Long-term Debt

 

1.7

 

 

11.7

 

Debt Repayment

 

(0.8

)

 

(22.6

)

Proceeds from Borrowings on Revolving Credit Facility

 

–

 

 

213.8

 

Repayments of Borrowings on Revolving Credit Facility

 

–

 

 

(6.0

)

Cash Dividends

 

(3.4

)

 

(3.4

)

Purchase of Non-controlling Redeemable Shares

 

–

 

 

(4.2

)

Payments Related to Tax Withholdings for Stock-Based Compensation

 

(1.3

)

 

–

 

Finance Lease Payments

 

(0.3

)

 

(0.3

)

Cash Flow (Used In) Provided By Financing Activities

$

(4.2

)

$

189.0

 

 
Effect of Exchange Rate on Cash

 

(2.1

)

 

(2.3

)

Net Change in Cash

$

1.4

 

$

204.2

 

 
Cash – Beginning

 

152.4

 

 

77.9

 

Cash – Ending

$

153.8

 

$

282.2

 

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Earnings Per Share Calculation (Unaudited)
(Dollars, except per share, and Shares in Millions)
 
Three Months

1Q 2021

1Q 2020
Basic EPS Calculation(1)
Net Income (Loss)

$

13.1

 

$

(190.1

)

Less: Accretion of Preferred Stock

 

(4.9

)

 

(4.4

)

Less: Redeemable Preferred Stock Dividends

 

(3.4

)

 

(3.5

)

Numerator

$

4.8

 

$

(198.0

)

 
Denominator: Weighted Avg. Shares Outstanding

 

25.7

 

 

25.2

 

 
Basic Earnings (Loss) Per Share

$

0.19

 

$

(7.84

)

 
Diluted EPS Calculation(1)
Net Income (Loss)

$

13.1

 

$

(190.1

)

Less: Accretion of Preferred Stock

 

(4.9

)

 

(4.4

)

Less: Redeemable Preferred Stock Dividends

 

(3.4

)

 

(3.5

)

Numerator

$

4.8

 

$

(198.0

)

 
Weighted Avg. Shares Outstanding-Basic

 

25.7

 

 

25.2

 

Dilutive Stock Options and Restricted Stock Units

 

1.0

 

 

–

 

Denominator: Weighted Avg. Shares Outstanding

 

26.7

 

 

25.2

 

 
Diluted Earnings (Loss) Per Share

$

0.18

 

$

(7.84

)

(1) Basic earnings per share is computed by dividing net income (loss), after deducting preferred dividends and accretion and European non-controlling redeemable equity dividends, by the weighted average number of common shares outstanding. For purposes of calculating diluted earnings per share, the weighted average shares outstanding includes the dilutive effect of outstanding stock options and time and performance based restricted stock units under the treasury stock method. The redeemable preferred shares are not included in the diluted earnings per share because the conversion would be anti-dilutive for the periods ended March 31, 2021 and 2020.
SUPERIOR INDUSTRIES INTERNATIONAL, INC.
Non-GAAP Financial Measures (Unaudited)
(Dollars in Millions, except per wheel, and Units in Thousands)
 
Value-Added Sales; Value-Added Sales Adjusted for FX; and
Content per Wheel
Three Months

1Q 2021

1Q 2020
Net Sales

$

358.2

 

$

301.1

 

Less: Aluminum Value and Outside Service Provider Costs

 

(150.9

)

 

(131.0

)

Value-Added Sales

$

207.3

 

$

170.1

 

Impact of FX on Value-Added Sales

 

(8.9

)

 

–

 

Value-Added Sales Adjusted for FX

$

198.4

 

$

170.1

 

Wheels Shipped

 

4,515

 

 

4,307

 

Content per Wheel

$

43.94

 

$

39.49

 

 
Adjusted EBITDA Three Months

 

1Q 2021

 

 

1Q 2020

 

Net Income (Loss)

$

13.1

 

$

(190.1

)

Adjusting Items:
– Interest Expense, net

 

10.3

 

 

11.9

 

– Income Tax Provision (Benefit)

 

0.8

 

 

(3.5

)

– Depreciation

 

18.7

 

 

18.3

 

– Amortization

 

6.7

 

 

6.1

 

– Acquisition, Integration, and Other Related Cost

 

4.8

 

 

3.0

 

– Factoring Fees

 

0.5

 

 

0.2

 

– Impairment of Goodwill and Indefinite-Lived Intangibles

 

–

 

 

193.6

 

$

41.8

 

$

229.6

 

Adjusted EBITDA

$

54.9

 

$

39.5

 

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

Non-GAAP Financial Measures (Unaudited)

(Dollars in Millions)
 
Free Cash Flow Three Months

1Q 2021

1Q 2020
Cash Flow Provided By Operating Activities

$

18.2

 

$

31.3

 

Net Cash Used In Investing Activities

 

(10.5

)

 

(13.9

)

Less: Cash Payments for Non-debt Financing Activities

 

(4.7

)

 

(7.6

)

Free Cash Flow

$

3.0

 

$

9.8

 

Net Debt
3/31/2021 12/30/2020
Long Term Debt (less current portion)

$

623.8

 

$

637.1

 

Short Term Debt

 

6.5

 

 

6.1

 

Total Debt

 

630.3

 

 

643.2

 

Less: Cash and Cash Equivalents

 

(153.8

)

 

(152.4

)

Net Debt

$

476.5

 

$

490.8

 

Outlook for Full Year 2021 Value-Added Sales Outlook Range
Net Sales Outlook

$

1,300.0

 

 

$

1,370.0

 

Less: Aluminum Value and Outside Service Provider Costs

 

(560.0

)

  

 

(590.0

)

Value-Added Sales Outlook

$

740.0

 

 

$

780.0

 

 

Superior Investor Relations

Clemens Denks

(248) 234-7104

[email protected]

KEYWORDS: United States North America Michigan

INDUSTRY KEYWORDS: Other Manufacturing Aftermarket Automotive Engineering Tires & Rubber Automotive Manufacturing General Automotive Manufacturing

MEDIA:

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ADMA Biologics to Report First Quarter 2021 Financial Results on May 12, 2021

Conference Call Scheduled for May 12, 2021 at 4:30 p.m. ET

RAMSEY, N.J. and BOCA RATON, Fla., May 05, 2021 (GLOBE NEWSWIRE) — ADMA Biologics, Inc. (Nasdaq: ADMA) (“ADMA”), an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty plasma-derived biologics, today announced that it will report financial results for the first quarter ended March 31, 2021 on Wednesday, May 12, 2021 after the U.S. financial markets close. ADMA’s management team will host a live conference call and audio webcast on that date at 4:30 p.m. ET to discuss its financial results and other company updates.

To access the conference call, please dial (855) 884-8773 (local) or (615) 622-8043 (international) at least 10 minutes prior to the start time and refer to conference ID 1063675. A live audio webcast of the call will be available under “Events & Webcasts” in the investor section of the Company’s website, https://ir.admabiologics.com/events-webcasts. An archived webcast will be available on the Company’s website approximately two hours after the event.

About ADMA Biologics, Inc. (ADMA)

ADMA Biologics is an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty plasma-derived biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases. ADMA currently manufactures and markets three United States Food and Drug Administration (FDA)-approved plasma-derived biologics for the treatment of immune deficiencies and the prevention of certain infectious diseases: ASCENIV™ (immune globulin intravenous, human – slra 10% liquid) for the treatment of primary humoral immunodeficiency (PI); BIVIGAM® (immune globulin intravenous, human) for the treatment of PI; and NABI-HB® (hepatitis B immune globulin, human) to provide enhanced immunity against the hepatitis B virus. ADMA manufactures its immune globulin products at its FDA-licensed plasma fractionation and purification facility located in Boca Raton, Florida. Through its ADMA Bio Centers subsidiary, ADMA also operates as an FDA-approved source plasma collector in the U.S., which provides a portion of its blood plasma for the manufacture of its products. ADMA’s mission is to manufacture, market and develop specialty plasma-derived, human immune globulins targeted to niche patient populations for the treatment and prevention of certain infectious diseases and management of immune compromised patient populations who suffer from an underlying immune deficiency, or who may be immune compromised for other medical reasons. ADMA has received U.S. Patents: 9,107,906, 9,714,283, 9,815,886, 9,969,793 and 10,259,865 related to certain aspects of its products and product candidates. For more information, please visit www.admabiologics.com.

COMPANY CONTACT:

Skyler Bloom

Director, Investor Relations and Corporate Strategy | 201-478-5552 | [email protected]

INVESTOR RELATIONS CONTACT:

Sam Martin

Managing Director, Argot Partners | 212-600-1902 | [email protected]



Posted on

Bruker Reports First Quarter 2021 Financial Results

Bruker Reports First Quarter 2021 Financial Results

  • Q1 2021 revenue growth of 30.8% year-over-year, organic revenue growth of 23.8%
  • Q1 2021 GAAP EPS of $0.37; non-GAAP EPS of $0.44, compared to $0.14 in Q1 2020
  • Raising fiscal year 2021 outlook on strong demand for the Company’s high-performance life science tools, scientific instruments and diagnostic solutions

BILLERICA, Mass.–(BUSINESS WIRE)–Bruker Corporation (Nasdaq: BRKR) today announced financial results for its first quarter ended March 31, 2021.

First Quarter 2021 Financial Results

Bruker’s revenues for the first quarter of 2021 were $554.7 million, an increase of 30.8% compared to $424.0 million in the first quarter of 2020. In the first quarter of 2021, on an organic basis, Bruker’s revenues grew 23.8% year-over-year. Foreign currency translation had a positive effect of 6.2% and growth from acquisitions added 0.8%.

First quarter 2021 Bruker Scientific Instruments (BSI) revenues of $506.2 million increased 32.7% compared to the first quarter of 2020, including organic revenue growth of 25.6%. The revenue growth reflected strong demand for Bruker’s high performance life science tools, scientific instruments and diagnostic solutions, with greater than 20% year-over-year organic revenue increases in all three Bruker Scientific Instruments (BSI) groups. First quarter 2021 Bruker Energy & Supercon Technologies (BEST) revenues of $52.4 million increased 13.4% compared to the first quarter of 2020, including an organic revenue increase, net of intercompany eliminations, of 7.1%.

First quarter 2021 GAAP operating income was $89.1 million, compared to $16.4 million in the first quarter of 2020, representing GAAP operating margins of 16.1% and 3.9%, respectively. Non-GAAP operating income in the first quarter of 2021 was $102.2 million, compared to $32.2 million in the first quarter of 2020. Bruker’s first quarter 2021 non-GAAP operating margin was 18.4%, compared to 7.6% in the first quarter of 2020.

First quarter 2021 GAAP diluted earnings per share (EPS) were $0.37, compared to $0.07 in the first quarter of 2020. First quarter 2021 non-GAAP diluted EPS were $0.44, compared to $0.14 in the first quarter of 2020. The year-over-year increases in the Company’s GAAP and non-GAAP operating income, operating margins and EPS were due to the higher revenues, improved gross margins and favorable operating expense leverage.

A reconciliation of non-GAAP to GAAP financial measures is provided in the tables accompanying this press release.

Frank H. Laukien, President and CEO of Bruker, commented: “Bruker had an excellent start to 2021, with strong year-over-year revenue growth and remarkable operating performance improvements. During the quarter, we experienced strong revenue growth for our Project Accelerate products and solutions, particularly for proteomics and biopharma solutions, as well as for our core scientific instruments from strengthening academic, applied, industrial and semiconductor markets.”

Dr. Laukien continued: “With robust Scientific Instruments order trends in the first quarter, we are raising our full year 2021 revenue growth, operating margin and earnings outlook. We believe Bruker is now well positioned for a strong year, as we invest in our very large Project Accelerate 2.0 opportunities in proteomics, spatial biology and diagnostics, as well as in operational excellence and productivity throughout Bruker.”

Fiscal Year 2021 (FY 2021) Financial Outlook

Bruker is increasing its FY 2021 revenue growth, operating margin expansion and EPS outlook to reflect strong demand for its high-performance life science tools, scientific instruments and diagnostic solutions.

For FY 2021, Bruker now expects, in comparison to FY 2020:

  • organic revenue growth of approximately 11% to 13%, an increase of 4% compared to prior guidance,
  • a foreign currency revenue tailwind of approximately 3%,
  • reported revenue growth of approximately 14% to 16%,
  • non-GAAP operating margin expansion of 210 bps to 250 bps, an increase of 60 bps compared to prior guidance. This compares to non-GAAP operating margin of 16.0% in FY 2020 and includes accelerated R&D investments of approximately 10% of revenue as well as a foreign currency headwind of approximately 50 basis points,
  • non-GAAP EPS of $1.82 to $1.87, an increase of $0.10 compared to prior guidance, and representing a year-over-year increase of 35% to 39%.

Bruker’s revenue growth, non-GAAP operating margin expansion and non-GAAP EPS guidance for FY 2021 are based on foreign exchange rates as of April 30, 2021.

For the Company’s outlook for FY 2021 non-GAAP operating margin and non-GAAP EPS, we are not able to provide without unreasonable effort the most directly comparable GAAP financial measures, or reconciliations to such GAAP financial measures on a forward-looking basis. Please see “Use of Non-GAAP Financial Measures” below for a description of items excluded from our expected non-GAAP operating margin and non-GAAP EPS.

Quarterly Earnings Call

Bruker will host a conference call and webcast to discuss its financial results, business outlook, and related corporate and financial matters today, May 5, 2021 at 8:30 a.m. Eastern Daylight Time. To listen to the webcast, investors can go to https://ir.bruker.com and click on the “Q1 2021 Earnings Webcast” hyperlink. A slide presentation that will be referenced during the webcast will be posted to our Investor Relations website shortly before the webcast begins. Investors can also listen to the earnings webcast via telephone by dialing 1-888-437-2685 (US toll free) or +1-412-317-6702 (international) and referencing “Bruker’s First Quarter 2021 Earnings Conference Call”. A telephone replay of the conference call will be available by dialing 1-877-344-7529 (US toll free) or +1-412-317-0088 (international) and entering conference number 10154422. The replay will be available beginning one hour after the end of the conference call through June 5, 2021.

About Bruker Corporation (Nasdaq: BRKR)

Bruker is enabling scientists to make breakthrough discoveries and develop new applications that improve the quality of human life. Bruker’s high performance scientific instruments and high value analytical and diagnostic solutions enable scientists to explore life and materials at molecular, cellular and microscopic levels. In close cooperation with our customers, Bruker is enabling innovation, improved productivity and customer success in life science molecular and cell biology research, in applied and pharma applications, in microscopy and nanoanalysis, as well as in industrial applications. Bruker offers differentiated, high-value life science and diagnostics systems and solutions in preclinical imaging, clinical phenomics research, proteomics and multiomics, spatial and single-cell biology, functional structural and condensate biology, as well as in clinical microbiology and molecular diagnostics. For more information, please visit: www.bruker.com.

Use of Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP), we use the following non-GAAP financial measures: non-GAAP gross profit; non-GAAP gross profit margin; non-GAAP operating income; non-GAAP operating profit; non-GAAP operating margin; non-GAAP SG&A expense; non-GAAP profit before tax; non-GAAP tax rate; non-GAAP net income and non-GAAP diluted earnings per share. These non-GAAP measures exclude costs related to restructuring actions, acquisition and related integration expenses, amortization of acquired intangible assets and other non-operational costs.

We also may refer to organic revenue growth or decline and free cash flow, which are also non-GAAP financial measures. We define the term organic revenue as GAAP revenue excluding the effect of changes in foreign currency translation rates and the effect of acquisitions and divestitures, and believe it is a useful measure to evaluate our continuing business. We define free cash flow as net cash provided by operating activities less additions to property, plant, and equipment. We believe free cash flow is a useful measure to evaluate our business because it indicates the amount of cash generated after additions to property, plant, and equipment that is available for, among other things, acquisitions, investments in our business, repayment of debt and return of capital to shareholders.

The presentation of these non-GAAP financial measures is not intended to be a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP and may be different from non-GAAP financial measures used by other companies, and therefore, may not be comparable among companies. We believe these non-GAAP financial measures provide meaningful supplemental information regarding our performance. However, we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included in the accompanying tables, and not to rely on any single financial measure to evaluate our business. Specifically, management believes that the non-GAAP measures mentioned above provide relevant and useful information which is widely used by analysts, investors and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance.

We use these non-GAAP financial measures to evaluate our period-over-period operating performance because our management believes this provides a more comparable measure of our continuing business by adjusting for certain items that are not reflective of the underlying performance of our business. These measures may also be useful to investors in evaluating the underlying operating performance of our business and forecasting future results. We regularly use these non-GAAP financial measures internally to understand, manage, and evaluate our business results and make operating decisions. We also measure our employees and compensate them, in part, based on certain non-GAAP measures and use this information for our planning and forecasting activities.

Additional information relating to the non-GAAP financial measures used in this press release and reconciliations to the most directly comparable GAAP financial measures are provided in the tables accompanying this press release following our GAAP financial statements.

With respect to our outlook for 2021 non-GAAP operating margin, non-GAAP EPS and non-GAAP tax rate, we are not providing the most directly comparable GAAP financial measures or corresponding reconciliations to such GAAP financial measures on a forward-looking basis, because we are unable to predict with reasonable certainty certain items that may affect such measures calculated and presented in accordance with GAAP without unreasonable effort. Our expected non-GAAP operating margin, tax rate and EPS ranges exclude primarily the future impact of restructuring actions, unusual gains and losses, acquisition-related expenses and purchase accounting fair value adjustments. These reconciling items are uncertain, depend on various factors outside our management’s control and could significantly impact, either individually or in the aggregate, our future period operating margins, EPS and tax rate calculated and presented in accordance with GAAP.

Forward Looking Statements

Any statements contained in this press release which do not describe historical facts may 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, including statements regarding our fiscal year 2021 financial outlook, including our outlook for revenue growth, foreign currency impact, non-GAAP operating margin, non-GAAP EPS and non-GAAP tax rate; management’s expectations for future financial and operational performance and business outlook; the impact of the COVID-19 pandemic; future economic conditions; the market demand for our products; the impact of Project Accelerate; and statements found under the “Use of Non-GAAP Financial Measures” section of this release. Any forward-looking statements contained herein are based on current expectations, but are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including, but not limited to, risks and uncertainties relating to the length and severity of the COVID-19 pandemic, the impact of the pandemic on global economic conditions and the length and severity of any resulting recession, the availability and adoption of vaccines, continued volatility in the capital markets, risks in the supply chain, including for semiconductor chips, the integration and assumption of liabilities of businesses we have acquired or may acquire in the future, the impact of changes in law, including changes in tax rates, fluctuations in foreign currency exchange rates, our ability to successfully implement our restructuring initiatives and other cost reduction initiatives, changing technologies, product development and market acceptance of our products, the success of our R&D investment initiatives, the cost and pricing of our products, manufacturing, competition, loss of key personnel, dependence on collaborative partners, key suppliers and contract manufacturers, capital spending and government funding policies, changes in governmental regulations, international trade disputes, the use and protection of intellectual property rights, litigation, and other risk factors discussed from time to time in our filings with the Securities and Exchange Commission, or SEC. These and other factors are identified and described in more detail in our filings with the SEC, including, without limitation, our annual report on Form 10-K for the year ended December 31, 2020, as may be updated by our quarterly reports on Form 10-Q. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law.

-tables follow-

 

Bruker Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions)

​

​

​

​

​

​

​

​

 

March 31,

2021

 

December 31,

2020

ASSETS

​

​

​

​

​

​

Current assets:

​

​

​

​

​

​

Cash and cash equivalents

​

$

696.8

​

$

681.8

Short-term investments

​

​

50.0

​

​

50.0

Accounts receivable, net

​

​

326.0

​

 

335.3

Inventories

​

​

700.7

​

 

692.3

Other current assets

​

​

172.7

​

 

165.6

Total current assets

​

 

1,946.2

​

 

1,925.0

​

​

​

​

​

​

​

Property, plant and equipment, net

​

 

384.1

​

 

395.5

Goodwill, intangible assets, net and other long-term assets

​

 

704.6

​

 

728.5

Total assets

​

$

3,034.9

​

$

3,049.0

LIABILITIES AND SHAREHOLDERS’ EQUITY

​

​

​

​

​

​

Current liabilities:

​

​

​

​

​

​

Current portion of long-term debt

​

$

108.4

​

$

2.2

Accounts payable

​

​

152.3

​

 

134.6

Customer advances

​

​

182.2

​

 

189.2

Other current liabilities

​

​

500.6

​

 

465.9

Total current liabilities

​

 

943.5

​

 

791.9

 

 

 

 

 

 

 

Long-term debt

​

​

715.8

​

 

842.3

Other long-term liabilities

​

​

393.9

​

 

440.5

 

 

 

 

 

 

 

Total shareholders’ equity

​

 

981.7

​

 

974.3

Total liabilities and shareholders’ equity

​

$

3,034.9

​

$

3,049.0

​

 

Bruker Corporation

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

​

​

 

 

​

​​

​

​Three Months Ended

March 31,

​

2021

 

2020

Revenue

$​

554.7

 

$

424.0​

Cost of revenue

​

276.0

 

 

231.7​

Gross profit

​

278.7

 

 

192.3​

​

​

​

 

​

​​

Operating expenses:

​

 

​

​​

Selling, general and administrative

​

131.8

 

 

121.2​

Research and development

​

54.8

 

 

48.5​

Other charges, net

​

3.0

 

 

6.2​

Total operating expenses

​

189.6

 

 

175.9​

Operating income

​

89.1

 

 

16.4​

​

​

 

​

​​

Interest and other income (expense), net

​

(3.8)

 

 

(2.9)​

Income before income taxes and noncontrolling interest in consolidated subsidiaries

​

85.3

 

 

13.5​

Income tax provision

​

27.5

 

 

2.9​

Consolidated net income

​

57.8

 

 

10.6​

Net income attributable to noncontrolling interest in consolidated subsidiaries

​

1.1

 

 

0.1​

Net income attributable to Bruker Corporation

$​

56.7

 

$

10.5​

Net income per common share attributable to Bruker Corporation shareholders:

​

 

​

​​

Basic

$​

0.37

 

$

0.07​

Diluted

$​

0.37

 

$

0.07​

​

​

 

​

​​

Weighted average common shares outstanding:

​

 

​

​​

Basic

​

151.8

 

​

154.2​

Diluted

 

153.2

 

 

155.4

 

 

Bruker Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

​

​Three Months Ended

March 31,

​

2021

2020

Cash flows from operating activities:

​

 

​

​​

Consolidated net income

$​

57.8

$

10.6​

Adjustments to reconcile consolidated net income to cash flows from operating activities:

​

​

​

​​

Depreciation and amortization

​

22.3

​

19.0​

Stock-based compensation expense

​

3.8

​

3.3​

Deferred income taxes

​

4.9

​

1.1​

Other non-cash expenses, net

​

4.9

​

11.7​

Changes in operating assets and liabilities, net of acquisitions:

​

​

​

​​

Accounts receivable

​

0.8

​

29.5​

Inventories

​

(41.6)

​

(61.0)​

Accounts payable and accrued expenses

​

33.2

​

19.1​

Income taxes payable, net

​

12.4

​

(15.0)​

Deferred revenue

​

14.1

​

20.6​

Customer advances

​

2.5

​

16.5​

Other changes in operating assets and liabilities, net

​

(17.1)

​

(20.4)​

Net cash provided by operating activities

​

98.0

 

35.0​

Cash flows from investing activities:

​

​

​

​​

Purchases of short-term investments

​

—

​

(50.0)​

Cash paid for acquisitions, net of cash acquired

​

(4.0)

 

(22.0)​

Purchases of property, plant and equipment

​

(24.7)

 

(30.5)​

Proceeds from sales of property, plant and equipment

​

1.2

 

—​

Net proceeds from cross-currency swap agreements

 

3.5

 

1.9

Net cash used in investing activities

​

(24.0)

 

(100.6)​

Cash flows from financing activities:

​

​

​

​​

Repayments of revolving lines of credit

​

—

​

197.5​

Proceeds (repayment) of other debt, net

​

(0.1)

​

0.9​

Proceeds from issuance of common stock, net

​

1.1

​

0.6​

Payment of contingent consideration

​

(0.4)

​

(0.3)​

Payment of dividends to common stockholders

​

(6.1)

​

(6.2)​

Purchase of common stock

​

(32.6)

​

—​

Cash payments to noncontrolling interests

​

—

​

(1.2)​

Net cash (used in) provided by financing activities

​

(38.1)

​

191.3​

Effect of exchange rate changes on cash, cash equivalents and restricted cash

​

(20.9)

​

(8.7)​

Net change in cash, cash equivalents and restricted cash

​

15.0

​

117.0​

Cash, cash equivalents and restricted cash at beginning of period

​

685.4

​

681.9​

Cash, cash equivalents and restricted cash at end of period

$​

700.4

$

798.9​

Bruker Corporation

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(unaudited and in millions, except per share data)
 

Reconciliation of Non-GAAP Operating Income, Non-GAAP Profit Before Tax, Non-GAAP Net Income and Non-GAAP Earnings Per Share
 

​

Three Months Ended March 31,

​

2021

 

2020

GAAP operating income

$

89.1

​

$

16.4

Non-GAAP adjustments:

 

 

 

 

 

Restructuring costs

 

2.4

​

 

2.3

Acquisition-related costs​

​

0.9

​

​

(1.1)

Purchased intangible amortization

​

9.0

​

 

8.7

Other costs

 

0.8

​

 

5.9

Total non-GAAP adjustments

$

13.1

​

$

15.8

Non-GAAP operating income

$

102.2

​

$

32.2

Non-GAAP operating margin

 

18.4%

​

 

7.6%

 

 

 

 

 

 

Non-GAAP interest & other expense, net​

​

(3.8)​

​

​

(2.9)​

Non-GAAP profit before tax

 

98.4

​

 

29.3

 

 

 

 

 

 

Non-GAAP income tax provision

 

(30.6)

​

 

(7.0)

Non-GAAP tax rate

 

31.1%

​

 

23.9%

 

 

 

 

 

 

Minority interest

 

(1.1)

​

 

(0.1)

Non-GAAP net income attributable to Bruker

 

66.7

 

 

22.2

 

 

 

 

 

 

Weighted average shares outstanding (diluted)

 

153.2

 

 

155.4

 

 

 

 

 

 

Non-GAAP earnings per share

$

0.44

 

$

0.14

 

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
 

​

Three Months Ended

March 31,

​

2021

2020

GAAP gross profit

278.7

 

192.3

Non-GAAP adjustments:

 

 

 

Restructuring

1.1

 

0.8

Purchased intangible amortization​

​4.5

 

4.9

Other costs

—

 

0.1

Total non-GAAP adjustments​

​5.6

 

5.8

Non-GAAP gross profit​

284.3

 

198.1

Non-GAAP gross margin

51.3%

 

46.7%

Reconciliation of GAAP Selling, General and Administrative (SG&A) Expenses to Non-GAAP SG&A Expenses

 

​

Three Months Ended

March 31,

​

2021

 

2020

GAAP SG&A expenses

$

131.8

 

$

121.2

Non-GAAP adjustments:

 

 

 

 

 

Purchased intangible amortization

 

(4.5)

 

 

(3.8)

Non-GAAP SG&A expenses

$

127.3

 

$

117.4

 

Bruker Corporation

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES – Continued

(unaudited and in millions, except per share data)
 

Reconciliation of GAAP Tax Rate to Non-GAAP Tax Rate
 

​

Three Months Ended

March 31,

​

2021

 

2020

GAAP tax rate

32.2%

 

21.5%

Non-GAAP adjustments:

 

 

 

Tax impact of non-GAAP adjustments

(0.4%)

 

(0.2%)

Other discrete items

(0.7%)

 

2.6%

Total non-GAAP adjustments​​

(1.1%)​

 

​2.4%

Non-GAAP tax rate​

31.1%​

 

23.9%

 

Reconciliation of GAAP Earnings Per Share to Non-GAAP Earnings Per Share (Diluted)
 

​

Three Months Ended

March 31,

​

2021

 

2020

GAAP earnings per share (diluted)

$

0.37

 

$

0.07

Non-GAAP adjustments:

 

 

 

 

 

Restructuring costs

 

0.02

 

 

0.01

Acquisition-related costs

 

0.01

 

 

(0.01)

Purchased intangible amortization

 

0.06

 

 

0.06

Other costs

 

0.01

 

 

0.04

Income tax rate differential

 

(0.03)

 

 

(0.03)

Total non-GAAP adjustments

 

0.07

 

 

0.07

Non-GAAP earnings per share (diluted)

$

0.44

 

$

0.14

 

Reconciliation of GAAP Operating Cash Flow to Non-GAAP Free Cash Flow
 

​

Three Months Ended

March 31,

​

2021

 

2020

GAAP operating cash flow

$

98.0

 

$

35.0

Non-GAAP adjustments:

 

 

 

 

 

Purchases of property, plant and equipment

 

(24.7)

 

 

(30.5)

Non-GAAP Free Cash Flow

$

73.3

 

$

4.5

 

Days Inventory Outstanding is calculated as follows: GAAP average inventory balance divided by (GAAP revenue less non-GAAP gross profit (defined above))

Days Payable Outstanding is calculated as follows: GAAP average accounts payable balance divided by (GAAP revenue less non-GAAP gross profit (defined above) plus the change in GAAP inventory balance)

Days Sales Outstanding is calculated as follows: GAAP average accounts receivable balance divided by GAAP revenue

 

Bruker Corporation

REVENUE

(unaudited and in millions)
 

​

Three Months Ended

March 31,

​

2021

 

2020

Revenue by Group:

 

 

 

 

 

Bruker BioSpin

$

159.4

 

$

120.9

Bruker CALID

 

192.4

 

 

140.5

Bruker Nano

 

154.4

 

 

120.1

BEST

 

52.4

 

 

46.2

Eliminations

 

(3.9)

 

 

(3.7)

Total revenue

$

554.7

 

$

424.0

 

​

Three Months Ended

March 31,

​

2021

 

2020

Revenue by End Customer Geography:

 

 

 

 

 

United States

$

119.0

 

$

109.4

Europe

 

219.9

 

 

144.9

Asia Pacific

 

180.5

 

 

137.2

Other

 

35.3

 

 

32.5

Total revenue

$

554.7

 

$

424.0

 

 

 

 

 

 

Reconciliation of GAAP Reported Revenue Growth to Organic Revenue Growth
 

​

Three Months Ended

March 31,

​

2021

 

2020

 

Total Bruker

GAAP revenue as of prior comparable period

$

424.0

 

$

461.4

Non-GAAP adjustments:

​

​

 

 

​

Acquisitions and divestitures

​

3.2

 

 

4.3

Organic

​

100.7

 

 

(36.2)

Currency

​

26.8

 

 

(5.5)

Total non-GAAP adjustments

​

130.7​

 

 

(37.4)​

Revenue

$​

554.7

 

$

424.0

Revenue growth

​

30.8%

 

 

(8.1%)

Organic revenue growth

 

23.8%

 

 

(7.9%)

​

​

Three Months Ended March 31,

​

 

2021

 

2020

 

 

Bruker Scientific Instruments (1)

GAAP revenue as of prior comparable period

 

​

$

381.5

 

$

416.8

Non-GAAP adjustments:

 

​

​

​

 

 

​

Acquisitions and divestitures

 

​

​

3.2

 

 

3.3

Organic

 

​

​

97.7

 

 

(34.3)

Currency

 

​

​

23.8

 

 

(4.3)

Total non-GAAP adjustments

 

​

​

124.7 ​

 

 

(35.3) ​

Revenue

 

​

$​

506.2

 

$

381.5

Revenue growth

​

​

​

32.7%

 

 

(8.5%)

Organic revenue growth

 

 

 

25.6%

 

 

(8.2%)

(1) Bruker Scientific Instruments (BSI) revenue reflects the sum of the BSI Life Science and BSI Nano Segments as presented in our 2020 Form 10-K.

 

Bruker Corporation

REVENUE – Continued

(unaudited and in millions)

 

Reconciliation of GAAP Reported Revenue Growth to Organic Revenue Growth
 

 

​

Three Months Ended March 31,

​

 

2021

 

2020

 

 

BEST, net of Intercompany Eliminations

GAAP revenue as of prior comparable period

​

$

42.5

 

$

44.6

Non-GAAP adjustments:

​

​

​

 

 

​

Acquisitions and divestitures

​

​

—

 

 

1.0

Organic

​

​

3.0

 

 

(1.9)

Currency

​

​

3.0

 

 

(1.2)

Total non-GAAP adjustments

​

​

6.0​

 

 

(2.1)​

Revenue

​

$​

48.5

 

$

42.5

Revenue growth

​​

​

14.1%

 

 

(4.7%)

Organic revenue growth

 

 

7.1%

 

 

(4.3%)

 

Miroslava Minkova

Senior Director, Investor Relations & Corporate Development

Bruker Corporation

T: +1 (978) 663–3660, ext. 1479

E: [email protected]

KEYWORDS: Massachusetts United States North America

INDUSTRY KEYWORDS: Health Medical Devices Clinical Trials Research Science Pharmaceutical Biotechnology

MEDIA:

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EyePoint Pharmaceuticals Reports First Quarter 2021 Financial Results and Highlights Recent Corporate Developments

 

– EYP-1901 DAVIO study for the potential treatment of wet AMD dosed first patient in January; study remains on track for initial data in Q4 2021;

-Completed $115.1 million follow-on financing in February 2021;

-Net product revenues of $6.8 million versus $4.7 million in Q1 2020, a 45% increase;

-Asia partner Ocumension Therapeutics new drug application (NDA) accepted for review by the National Medical Products Administration (NMPA) for OT-401 (YUTIQ)

 – Management to host a conference call and webcast today at 8:30 AM ET –

WATERTOWN, Mass., May 05, 2021 (GLOBE NEWSWIRE) — EyePoint Pharmaceuticals, Inc. (NASDAQ: EYPT), a pharmaceutical company committed to developing and commercializing therapeutics to help improve the lives of patients with serious eye disorders, today announced financial results for the first quarter ended March 31, 2021 and highlighted recent corporate developments.

“This quarter was a productive one for EyePoint, as we continued to execute on our plan to advance our exciting pipeline of ocular products that have the potential to disrupt current treatment paradigms,” said Nancy Lurker, Chief Executive Officer of EyePoint Pharmaceuticals. “We are very pleased to have initiated the Phase 1 DAVIO clinical trial in patients with wet-age macular degeneration (wet AMD) in January and this trial remains on track for interim data in the fourth quarter of this year.” Ms. Lurker continued, “We were also very pleased to complete a $115.1 million follow-on financing during the first quarter positioning us to advance and expand our pipeline efficiently and purposefully, including plans to expand EYP-1901 into clinical trials in diabetic retinopathy (DR) and retinal vein occlusion (RVO). “On the commercial front, we had a solid first quarter, which historically is weak due to co-pay and coinsurance annual resets, beating 4Q2020 and 45% above 1Q2020 net product revenues. We also are very pleased with our DEXYCU® co-promotion partnership with ImprimisRx and the product demand it is now generating.”

Corporate Update

  • In February 2021, the Company completed an upsized underwritten public offering with gross proceeds of $115.1 million.
  • In April 2021, Asia partner Ocumension Therapeutics announced that the new drug application (NDA) for OT-401 (YUTIQ) has been accepted by the National Medical Products Administration of the People’s Republic of China (NMPA). OT-401 (YUTIQ) is the first ophthalmic drug of the Company whose NDA has been accepted by the NMPA, and is also the first sustained-release micro-insert submitted for NDA in mainland China that has a controlled release rate for up to 36 months. It is also the first time the NMPA has accepted the NDA based on real world study data.

Commercial Performance in First Quarter 2021

  • Net product revenue for YUTIQ and DEXYCU was $3.0 million and $3.8 million, respectively.
  • Customer demand of approximately 400 units of YUTIQ and approximately 7,000 units for DEXYCU.
  • DEXYCU commercial partner, ImprimisRx®, continues to provide momentum and revenue generation through their experienced cataract surgery field force, materially contributing to Q1 customer demand.

R&D Highlights

  • In January, the first patient was dosed in the Phase 1 DAVIO study of EYP-1901 as a potential twice-yearly sustained delivery anti-VEGF treatment for wet AMD and the Company expects to report initial data in the fourth quarter of 2021. EYP-1901 leverages a bioerodible formulation of the Company’s proprietary Durasert® drug delivery technology platform that has been used in four FDA-approved products, including EyePoint’s YUTIQ for chronic non-infectious uveitis affecting the posterior segment of the eye.
  • Investigator studies of DEXYCU will be presented in two separate poster sessions at the Association for Research in Vision and Ophthalmology (ARVO) Annual meeting on May 5, 2021.

Review of Results for the First Quarter ended March 31, 2021

For the first quarter ended March 31, 2021, total net revenue was $7.3 million compared to $7.5 million for the quarter ended March 31, 2020. Net product revenue for the first quarter was $6.8 million, compared to net product revenues for the first quarter ended March 31, 2020 of $4.7 million.

Net revenue from royalties and collaborations for the first quarter ended March 31, 2021 totaled $0.5 million compared to $2.8 million in the corresponding period in 2020.

Operating expenses for the first quarter ended March 31, 2021 totaled $18.3 million versus $18.9 million in the prior year period. This decrease was primarily due to a $2.4 million decrease in sales and marketing expense offset by a $0.8 million increase in G&A expense, a $0.6 million increase in R&D expense and a $0.4 million increase in cost of sales. Non-operating expense, net, totaled $1.3 million and net loss was $12.3 million, or ($0.50) per share, compared to a net loss of $13.2 million, or ($1.14) per share, for the prior year period.

Cash and cash equivalents at March 31, 2021 totaled $138.6 million compared to $44.9 million at December 31, 2020.

Financial Outlook

We expect the cash on hand at March 31, 2021 and expected net cash inflows from our product sales will enable us to fund our current and planned operations through the end of 2022.

Conference Call Information

EyePoint will host a conference call today, at 8:30 AM ET to discuss the results for the first quarter of 2021 ended March 31, 2021 and recent operational developments. To access the conference call, please dial (877-303-5828) from the U.S. and Canada or (631)-813-4828 (international) at least 10 minutes prior to the start time and refer to conference ID 1261618. A live webcast will be available on the Investor Relations section of the corporate website at http://www.eyepointpharma.com. A replay of the webcast will also be available on the corporate website.

About EYP-1901

EYP-1901 is a potential twice-yearly sustained delivery intravitreal anti-VEGF treatment for wet age-related macular degeneration. EYP-1901 leverages a bioerodible formulation of EyePoint’s proprietary Durasert® sustained release technology with vorolanib, a tyrosine kinase inhibitor. Vorolanib provided clear efficacy signals in two prior human trials in wet AMD as an orally delivered therapy with no significant ocular adverse events. EYP-1901 is currently in a Phase 1 clinical trial initially targeting treatment of wet AMD, with the potential for additional indications in diabetic retinopathy and retinal vein occlusion.

About EyePoint Pharmaceuticals, Inc. (Nasdaq:EYPT) is a pharmaceutical company committed to developing and commercializing innovative therapeutics to help improve the lives of patients with serious eye disorders. The Company’s pipeline leverages its proprietary Durasert® technology for sustained intraocular drug delivery including EYP-1901, a potential twice-yearly sustained delivery intravitreal anti-VEGF treatment initially targeting wet age-related macular degeneration. The Company has two commercial products: YUTIQ®, for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye, and DEXYCU®, for the treatment of postoperative inflammation following ocular surgery. EyePoint Pharmaceuticals is headquartered in Watertown, Massachusetts. To learn more about the Company, please visit www.eyepointpharma.com and connect on Twitter and LinkedIn.

SAFE HARBOR STATEMENTS UNDER THE PRIVATE SECURITIES LITIGATION ACT OF 1995: To the extent any statements made in this press release deal with information that is not historical, these are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding the anticipated use of proceeds for the proposed offering and other statements identified by words such as “will,” “potential,” “could,” “can,” “believe,” “intends,” “continue,” “plans,” “expects,” “anticipates,” “estimates,” “may,” other words of similar meaning or the use of future dates. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Uncertainties and risks may cause EyePoint’s actual results to be materially different than those expressed in or implied by EyePoint’s forward-looking statements. For EyePoint, this includes the continued impact of the COVID-19 pandemic on EyePoint’s business, the medical community and the global economy and the impact of general business and economic conditions, our expectations regarding the timing and clinical development of our product candidates, including EYP-1901; and the potential for EYP-1901 as a novel twice-yearly treatment for serious eye diseases, including wet age-related macular degeneration, diabetic retinopathy and retinal vein occlusion; the effectiveness and timeliness of clinical trials, and the usefulness of the data; the timeliness of regulatory approvals; our ability to achieve profitable operations and access to needed capital; fluctuations in our operating results; our ability to successfully produce sufficient commercial quantities of YUTIQ and DEXYCU and to successfully commercialize YUTIQ and DEXYCU in the U.S.; our ability to sustain and enhance an effective commercial infrastructure and enter into and maintain commercial agreements for YUTIQ and DEXYCU; the development of our YUTIQ line extension shorter-duration treatment for non-infectious uveitis affecting the posterior segment of the eye; the success of current and future license agreements, including our agreements with Ocumension Therapeutics and Equinox Science; termination or breach of current license agreements, including our agreements with Ocumension Therapeutics and Equinox Science; our dependence on contract research organizations, co-promotion partners, and other outside vendors and service providers; effects of competition and other developments affecting sales of products; market acceptance of products; effects of guidelines, recommendations and studies; protection of intellectual property and avoiding intellectual property infringement; retention of key personnel; product liability; industry consolidation; compliance with environmental laws; manufacturing risks; risks and costs of international business operations; volatility of stock price; possible dilution; absence of dividends; and other factors described in our filings with the Securities and Exchange Commission. We cannot guarantee that the results and other expectations expressed, anticipated or implied in any forward-looking statement will be realized. A variety of factors, including these risks, could cause our actual results and other expectations to differ materially from the anticipated results or other expectations expressed, anticipated or implied in our forward-looking statements. Should known or unknown risks materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected in the forward-looking statements. You should bear this in mind as you consider any forward-looking statements. Our forward-looking statements speak only as of the dates on which they are made. We do not undertake any obligation to publicly update or revise our forward-looking statements even if experience or future changes makes it clear that any projected results expressed or implied in such statements will not be realized.

Investors:

Christina Tartaglia
SternIR
Direct: 212-698-8700
[email protected]

Media:

Green Room Public Relations
Caren Begun
Green Room Communications
Direct: (201) 396-8551 
[email protected]   

 

EYEPOINT PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

  Three Months Ended

March 31, 		 
  2021     2020  
Revenues:              
Product sales, net $ 6,802     $ 4,687  
License and collaboration agreements   341       2,020  
Royalty income   180       782  
Total revenues   7,323       7,489  
Operating expenses:              
Cost of sales, excluding amortization of acquired
intangible assets		   1,390       980  
Research and development   5,479       4,853  
Sales and marketing   5,659       8,125  
General and administrative   5,115       4,360  
Amortization of acquired intangible assets   615       615  
Total operating expenses   18,258       18,933  
Loss from operations   (10,935 )     (11,444 )
Other income (expense):              
Interest and other income, net   1       54  
Interest expense   (1,346 )     (1,784 )
Total other expense, net   (1,345 )     (1,730 )
Net loss $ (12,280 )   $ (13,174 )
Net loss per common share – basic and diluted $ (0.50 )   $ (1.14 )
Weighted average common shares outstanding –
basic and diluted		   24,735       11,553  
   
   

EYEPOINT PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

  March 31,     December 31,  
  2021     2020  
Assets              
Current assets:              
Cash and cash equivalents $ 138,579     $ 44,909  
Accounts and other receivables, net   12,332       9,453  
Prepaid expenses and other current assets   2,856       3,419  
Inventory   5,586       5,337  
Total current assets   159,353       63,118  
Operating lease right-of-use assets   2,484       2,610  
Intangible assets, net   24,594       25,209  
Other assets   709       780  
Total assets $ 187,140     $ 91,717  
Liabilities and stockholders’ equity              
Current liabilities:              
Accounts payable and accrued expenses $ 11,770     $ 13,256  
Deferred Revenue   973       945  
Other current liabilities   698       687  
Total current liabilities   13,441       14,888  
Long-term debt   38,124       37,977  
Deferred revenue – noncurrent   15,349       15,616  
Operating lease liabilities – noncurrent   2,172       2,330  
Other long-term liabilities   2,347       2,365  
Total liabilities   71,433       73,176  
Stockholders’ equity:              
Capital   637,826       528,380  
Accumulated deficit   (522,960 )     (510,680 )
Accumulated other comprehensive income   841       841  
Total stockholders’ equity   115,707       18,541  
Total liabilities and stockholders’ equity $ 187,140     $ 91,717  

 



Posted on

Stingray to Release its Full Year Fiscal 2021 Results

MONTREAL, May 05, 2021 (GLOBE NEWSWIRE) — Stingray Group Inc. (TSX: RAY.A; RAY.B) will release its financial results for the fourth quarter and fiscal year ended March 31, 2021, on Wednesday, June 2, 2021, after the market closes. Management will hold a conference call to discuss the financial results the next day, Thursday, June 3, 2021, at 10:00 a.m. Eastern Time.

Details of the Conference Call

Via the internet at www.stingray.com

Via telephone: (877) 223-4471 or (647) 788-4922

Conference Call Rebroadcast

A rebroadcast of the conference call will be available two hours after its broadcast, and until midnight, July 3, 2021, by dialing (800) 585-8367 or (416) 621-4642 and entering passcode 6594453.

About Stingray

Montreal-based Stingray (TSX: RAY.A; RAY.B) is a leading global music, media, and technology company with over 1,200 employees worldwide. Stingray is a premium provider of curated direct-to-consumer and B2B services, including audio television channels, over 100 radio stations, SVOD content, 4K UHD television channels, FAST channels, karaoke products, digital signage, in-store music, and music apps, which have been downloaded over 160 million times. Stingray reaches 400 million subscribers (or users) in 160 countries. For more information: www.stingray.com.

Contact information:

Mathieu Peloquin
Senior Vice-President, Marketing and Communications
Stingray Digital Group Inc.
(514) 664-1244, ext. 2362
[email protected]



Posted on

HydraFacial and Vesper Healthcare Announce Closing of Business Combination, Combined Company Will be Known as The Beauty Health Company

HydraFacial and Vesper Healthcare Announce Closing of Business Combination, Combined Company Will be Known as The Beauty Health Company

The Beauty Health Company will be listed on the Nasdaq Capital Market under the ticker “SKIN”

MIAMI BEACH, Fla. & LONG BEACH, Calif.–(BUSINESS WIRE)–
Vesper Healthcare Acquisition Corp (“Vesper Healthcare”), a publicly traded special purpose acquisition company, and The HydraFacial® Company (“HydraFacial”), a global category-creating beauty health company, today announced the closing of their previously announced business combination. The combined company will be known as The Beauty Health Company (“BeautyHealth” or the “Company”). The business combination was approved by Vesper Healthcare’s stockholders on April 29, 2021, with approximately 96% of the votes cast in favor of the transaction. Prior to the business combination, HydraFacial was owned by two leading healthcare industry private equity firms, Linden Capital Partners (“Linden”), who will continue to be the largest shareholder in the Company, and DW Healthcare Partners IV, LP (“DW Healthcare Partners”), who will continue to have a significant stake in the Company. As a result of the business combination, HydraFacial is now a wholly owned subsidiary of BeautyHealth. Beginning May 6, 2021, BeautyHealth’s shares will trade on the Nasdaq Capital Market under the ticker symbol “SKIN.”

BeautyHealth will be led by HydraFacial’s senior management team, including Chief Executive Officer Clint Carnell and Chief Financial Officer Liyuan Woo. Brent Saunders, CEO and co-founder of Vesper Healthcare, will serve as Executive Chairman.

The combined company will leverage the deep expertise of its management team to expand and accelerate growth in the emerging category of beauty health. The enhanced capital structure will allow BeautyHealth to make appropriate investments in innovation, geographic expansion, and important strategic acquisitions.

Clint Carnell, BeautyHealth CEO, stated: “Today marks an important milestone and an exciting moment for our Company as we enter the public markets. With HydraFacial, we transformed into a category-creating beauty health company. As BeautyHealth, we intend to continue our global expansion and bring additional innovative products to market. The added resources from this transaction will allow us to expand HydraFacial’s footprint in the large and growing beauty health category, as well as drive growth in the U.S. and internationally. Our accomplished team has been further strengthened by the combination with the Vesper Healthcare team, and we could not be more pleased to partner with Brent. I look forward to our next chapter and expect this combination will provide us with the resources and expertise to deliver sustained long-term growth.”

“We are pleased to close the business combination with HydraFacial and unveil the formation of The Beauty Health Company,” said Brent Saunders, BeautyHealth Executive Chairman. “HydraFacial is an impressive category-creating product in an attractive and growing market and provides the perfect platform to achieve our goal of building a premier company in beauty health. We anticipate more opportunities ahead and are excited about the potential to create a valuable, industry-leading, global company in beauty health.”

Brian Miller, Managing Partner at Linden, Kam Shah, Partner at Linden, and Doug Schillinger, Managing Director at DW Healthcare Partners, added, “We are proud of the growth HydraFacial has achieved since we acquired the company in 2016, and we are excited to participate in the newly formed BeautyHealth’s future success.”

Advisors

Goldman Sachs & Co. LLC acted as an exclusive financial advisor and private placement agent and Wachtell, Lipton, Rosen & Katz served as legal advisor to Vesper Healthcare. Jefferies LLC acted as Lead Financial Advisor, Piper Sandler served as Financial Advisor and Kirkland & Ellis LLP acted as legal advisor to HydraFacial.

About The Beauty Health Company

BeautyHealth is a category-creating beauty health company focused on bringing innovative products to market. Our flagship brand HydraFacial is a non-invasive, and approachable beauty health platform and ecosystem with a powerful community of estheticians, consumers and partners, bridging medical and consumer retail to democratize and personalize skin care solutions for the masses. Leading the charge in beauty health as a category-creator, HydraFacial uses a unique delivery system to cleanse, extract, and hydrate with their patented hydradermabrasion technology and super serums that are made with nourishing ingredients, providing an immediate outcome and creating an instantly gratifying glow in just three steps and 30 minutes. HydraFacial® and Perk™ products are available in over 87 countries with over 16,000 delivery systems globally and millions of treatments performed each year. For more information, visit the brand on LinkedIn, Facebook, Instagram, or at HydraFacial.com. For more information, please visit at https://investors.beautyhealth.com/.

About Vesper Healthcare Acquisition Corp.

Vesper Healthcare Acquisition Corp. was a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, with the intention to focus its search on companies in the pharmaceutical and healthcare sectors.

About Linden Capital Partners

Linden Capital Partners is a Chicago-based private equity firm focused exclusively on the healthcare industry. Founded in 2004, Linden is one of the country’s largest dedicated healthcare private equity firms. Linden’s strategy is based upon three elements: (i) healthcare specialization, (ii) integrated private equity and operating expertise, and (iii) its differentiated human capital program. Linden invests in middle market platforms in the medical products, specialty distribution, pharmaceutical, and services segments of healthcare. Since its founding, Linden has invested more than $2.5 billion in healthcare companies and has raised over $3 billion of commitments, augmented by capital provided by the firm’s limited partners for larger transactions. For more information, please visit www.lindenllc.com.

About DW Healthcare Partners

DW Healthcare Partners is a private equity firm focused exclusively on the healthcare industry. The firm manages over $1.43 billion in aggregate capital commitments and invests in leading healthcare companies with proven management teams. DW Healthcare Partners is led by seasoned healthcare executives with more than 120 years of combined industry experience. The firm provides the capital, strategic guidance, and acquisition expertise to help mid-stage companies realize their growth potential. For more information, please visit: www.dwhp.com

Forward-Looking Statements

Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside The Beauty Health Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important factors, among others, that may affect actual results or outcomes include the inability to recognize the anticipated benefits of the Business Combination; costs related to the Business Combination; the inability to maintain the listing of The Beauty Health Company’s shares on Nasdaq; The Beauty Health Company’s ability to manage growth; The Beauty Health Company’s ability to execute its business plan and meet its projections; potential litigation involving The Beauty Health Company; changes in applicable laws or regulations; the possibility that The Beauty Health Company may be adversely affected by other economic, business, and/or competitive factors; and the impact of the continuing COVID-19 pandemic on the Company’s business. The Beauty Health Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

ICR, Inc.

Investors: Dawn Francfort

Email: [email protected]

Press: Alecia Pulman

Email: [email protected]

KEYWORDS: California Florida United States North America

INDUSTRY KEYWORDS: Cosmetics Retail Health Other Health Alternative Energy Energy

MEDIA:

Posted on

Evoqua Water Technologies Reports Second Quarter 2021 Results

Evoqua Water Technologies Reports Second Quarter 2021 Results

Second Quarter 2021 Financial Highlights:

  • Revenue of $346.6 million, declined 1.5% compared to the prior year period
  • Net income of $5.1 million, declined 35.4% compared to the prior year period; diluted earnings per share of $0.04
  • Adjusted EBITDA of $58.0 million, increased 2.3% compared to the prior year period
  • Operating cash flow of $63.1 million year to date, increased $24.2 million compared to the prior year period

PITTSBURGH–(BUSINESS WIRE)–
Evoqua Water Technologies (NYSE:AQUA), an industry leader in mission-critical water treatment solutions, today reported results for its second quarter ended March 31, 2021.

Revenue for the second quarter of fiscal 2021 was $346.6 million, compared to $351.7 million in the prior year period, a decrease of 1.5%, or $5.1 million. Organic revenue declined 3.5%, or $12.3 million, as compared to the prior year period, mostly related to the pandemic’s continued impact on volume, as well as the timing of completion of certain large projects in the prior year, partially offset by an increase in revenue from acquisitions of 0.6%, or $2.0 million. The decline in revenue was also partially offset by a favorable change in foreign currency translation of 1.5% or $5.2 million. Net income for the quarter was $5.1 million, resulting in diluted earnings per share (“EPS”) of $0.04, as compared to net income of $7.9 million and diluted EPS of $0.06 in the prior year period. The decline in net income of 35.4% as compared to the prior year period was primarily related to an increase in tax expense of $2.7 million. Adjusted EBITDA for the quarter was $58.0 million as compared to $56.7 million in the prior year period, an increase of 2.3%. See the “Use of Non-GAAP Measures” section below for additional information regarding adjusted EBITDA and organic revenue.

“I am pleased with the overall results delivered in the quarter. Our team has performed very well operationally and financially over the past year, highlighting the resiliency of our business and the essential nature of the work we perform. Near term visibility continues to remain uncertain due to COVID-19, but we feel very well positioned for profitable growth,” said Mr. Ron Keating, Evoqua’s CEO.

Mr. Keating stated, “We have been driving our sales efforts to cultivate our large and growing opportunity pipeline while also focusing on operational execution, and this quarter we reported year-over-year increases in many key financial metrics. We recently completed our third acquisition in the last eight months, acquiring Water Consulting Specialists, and we welcome them to the Evoqua family. We also completed a debt refinancing that reduced our weighted average cost of debt, increased our borrowing capacity, and extended our maturities. Through this transaction we used $100 million of cash to reduce our term loan, representing another strategic action taken to strengthen our balance sheet.”

“Market segments remain mixed in capital and maintenance spending as near-term demand remains uncertain. With a growing backlog, we are focused on converting our robust opportunity pipeline and our existing order book as customers are willing to reopen or invest. With our current visibility, we are projecting a full-year outlook for revenue to be in the range of $1.43 billion to $1.47 billion and adjusted EBITDA to be in the range of $240 million to $255 million. Additionally, for the third quarter, we expect revenues to be between $350 million and $365 million and adjusted EBITDA to be in the range of $60 million to $64 million,” commented Mr. Keating.

Second Quarter Segment Results

Evoqua has two reportable operating segments – Integrated Solutions and Services and Applied Product Technologies. The results of our segments for the second quarter are as follows:

Integrated Solutions and Services

Segment revenue decreased by $13.7 million, or 5.8%, to $224.2 million in the second quarter of fiscal 2021 as compared to the prior year period.

  • Capital revenue declined $14.0 million as compared to the prior year period, primarily related to the timing of projects in the microelectronics end market, which was partially offset by new projects across a variety of end markets.
  • Service and aftermarket revenue increased $0.3 million, including contributions from recent acquisitions.

Operating profit decreased by $5.9 million, or 16.1%, to $30.8 million in the second quarter of fiscal 2021 as compared to $36.7 million in the prior year period.

  • Segment profitability decreased by $7.5 million as compared to the prior year period due to lower revenue volume and less favorable mix driven primarily by reductions and delays in customer capital spending and lower productivity related to enhanced safety protocols as a result of the COVID-19 pandemic, as well as increased allocation of corporate expenses. These declines were partially offset by additional price realization in the current period.
  • Decreases in travel and discretionary spending of $3.1 million positively impacted segment profitability, partially offset by $0.4 million of higher employee expenses.
  • Higher restructuring and other non-recurring costs reduced operating profit by $1.2 million.
  • Depreciation expense was $0.1 million lower as compared to the prior year period.

Segment adjusted EBITDA decreased by $4.8 million, or 8.9%, to $49.3 million in the second quarter of fiscal 2021 as compared to the prior year period. The decline in segment adjusted EBITDA resulted from the same factors that impacted operating profit, other than the change in depreciation and amortization, and also excludes restructuring and other non-recurring activity recognized in the period. See the “Use of Non-GAAP Measures” section below for a reconciliation of adjusted EBITDA to segment operating profit, its most directly comparable financial measure presented in accordance with GAAP.

Applied Product Technologies

Segment revenue increased by $8.6 million, or 7.6%, to $122.4 million in the second quarter of fiscal 2021 as compared to the prior year period.

  • Revenue increased by $10.0 million in the Asia Pacific region as compared to the prior year period, resulting from growth across multiple product lines. This volume increase was partially offset by revenue declines across multiple product lines in both the Americas and EMEA regions of $5.0 million and $1.1 million, respectively, mainly due to continued customer site access challenges and delays.
  • Foreign currency translation increased revenue by $4.7 million as compared to the prior year period.

Operating profit decreased by $5.7 million, or 23.9%, to $18.1 million for the second quarter of fiscal 2021 as compared to $23.8 million in the prior year period.

  • The decline in segment profitability was primarily driven by other income of $9.0 million in the prior year period related to the net working capital settlement on the sale of the Memcor product line.
  • Organic revenue volume, favorable product mix and price which offset inflation, as well as improvement in operational efficiencies and cost containment measures, increased operating profit by a total of $3.0 million as compared to the prior year period.
  • Favorable foreign currency translation increased operating profit by $1.0 million as compared to the prior year period.
  • Higher restructuring and other non-recurring costs and employee related expenses reduced operating profit by $0.7 million as compared to the prior year period. The change in depreciation expense as compared to the prior year was immaterial.

Segment adjusted EBITDA increased by $3.6 million, or 16.6%, to $25.3 million in the second quarter of fiscal 2021 as compared to the prior year period. The change in segment adjusted EBITDA was driven by the same factors that impacted segment operating profit, other than the change in depreciation and amortization, and also excludes restructuring and other non-recurring activity, including the $9.0 million gain recognized in the prior year period related to the divestiture of the Memcor product line. See the “Use of Non-GAAP Measures” section below for a reconciliation of adjusted EBITDA to segment operating profit, its most directly comparable financial measure presented in accordance with GAAP.

Second Quarter Earnings Call and Webcast

The Company will hold its second quarter fiscal 2021 earnings conference call Wednesday, May 5, 2021, at 10:00 a.m. E.T. The live audio webcast and presentation slides for the call will be accessible via Evoqua’s Investor Relations website, http://aqua.evoqua.com/.

Conference telephone number:

US Participant Dial-in: (866) 690-2108

International Participant Dial-in: (918) 398-8081

Conference ID: 5539696

The link to the webcast replay as well as the presentation slides will also be posted on Evoqua’s Investor Relations website.

US Replay: (855) 859-2056

International Replay: (404) 537-3406

Replay available: Beginning 1:00 p.m. E.T. on May 5 until 11:59 p.m. on May 19, 2021

Conference ID: 5539696

About Evoqua Water Technologies

Evoqua Water Technologies is a leading provider of mission critical water and wastewater treatment solutions, offering a broad portfolio of products, services and expertise to support industrial, municipal and recreational customers who value water. Evoqua has worked to protect water, the environment and its employees for more than 100 years, earning a reputation for quality, safety and reliability around the world. Headquartered in Pittsburgh, Pennsylvania, the company operates in more than 160 locations across ten countries. Serving more than 38,000 customers and 200,000 installations worldwide, our employees are united by a common purpose: Transforming Water. Enriching Life.

Use of Non-GAAP Financial Measures

This press release contains non-GAAP financial measures, which are adjusted financial measures that are not calculated and presented in accordance with generally accepted accounting principles in the United States, or “GAAP.” These non-GAAP adjusted financial measures are provided as additional information for investors. We believe these non-GAAP adjusted financial measures, which include organic revenue and adjusted EBITDA, are helpful to management and investors in highlighting trends in our operating results and provide greater clarity and comparability period over period to management and our investors regarding the operational impact of long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. The presentation of this additional information is not meant to be considered in isolation or as a substitute for GAAP measures. For definitions of the non-GAAP financial measures used in this press release and reconciliations to the most directly comparable respective GAAP measures, see the “Use of Non-GAAP Measures” section below.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All of these forward-looking statements are based on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, or could affect our share price. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, among other things, general global economic and business conditions, including the impacts of the COVID-19 pandemic and disruptions in global oil markets; our ability to compete successfully in our markets; our ability to execute projects on budget and on schedule; the potential for us to incur liabilities to customers as a result of warranty claims or failure to meet performance guarantees; our ability to meet our customers’ safety standards or the potential for adverse publicity affecting our reputation as a result of incidents such as workplace accidents, mechanical failures, spills, uncontrolled discharges, damage to customer or third-party property or the transmission of contaminants or diseases; our ability to continue to develop or acquire new products, services and solutions and adapt our business to meet the demands of our customers, comply with changes to government regulations and achieve market acceptance with acceptable margins; our ability to implement our growth strategy, including acquisitions and our ability to identify suitable acquisition targets; our ability to operate or integrate any acquired businesses, assets or product lines profitably or otherwise successfully implement our growth strategy; our ability to achieve the expected benefits of our restructuring actions; material and other cost inflation and our ability to mitigate the impact of inflation by increasing selling prices and/or improving our productivity efficiencies; our ability to accurately predict the timing of contract awards; delays in enactment or repeals of environmental laws and regulations; the potential for us to become subject to claims relating to handling, storage, release or disposal of hazardous materials; our ability to retain our senior management and other key personnel; our increasing dependence on the continuous and reliable operation of our information technology systems; risks associated with product defects and unanticipated or improper use of our products; litigation, regulatory or enforcement actions and reputational risk as a result of the nature of our business or our participation in large-scale projects; seasonality of sales and weather conditions; risks related to government customers, including potential challenges to our government contracts or our eligibility to serve government customers; the potential for our contracts with federal, state and local governments to be terminated or adversely modified prior to completion; risks related to foreign, federal, state and local environmental, health and safety laws and regulations and the costs associated therewith; risks associated with international sales and operations, including our operations in the People’s Republic of China; our ability to adequately protect our intellectual property from third-party infringement; risks related to our substantial indebtedness; our need for a significant amount of cash, which depends on many factors beyond our control; and other risks and uncertainties, including those listed under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, as filed with the SEC on November 20, 2020, and in other filings we may make from time to time with the SEC. All statements other than statements of historical fact included in this press release are forward-looking statements, including, but not limited to, expectations for the third quarter and full fiscal year 2021 and statements related to the COVID-19 pandemic, the impact of which remains inherently uncertain. Additionally, any forward-looking statements made in this press release speak only as of the date of this release. We undertake no obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements made herein, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this release.

EVOQUA WATER TECHNOLOGIES CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share amounts)
 

 

Three Months Ended

March 31,

 

Six Months Ended

March 31,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue from product sales and services

$

346,564

 

 

 

$

351,663

 

 

 

$

668,757

 

 

 

$

697,768

 

 

Cost of product sales and services

(240,645

)

 

 

(240,457

)

 

 

(467,493

)

 

 

(480,847

)

 

Gross profit

$

105,919

 

 

 

$

111,206

 

 

 

$

201,264

 

 

 

$

216,921

 

 

General and administrative expense

(52,928

)

 

 

(62,130

)

 

 

(95,211

)

 

 

(107,900

)

 

Sales and marketing expense

(33,830

)

 

 

(33,976

)

 

 

(67,758

)

 

 

(71,990

)

 

Research and development expense

(3,393

)

 

 

(3,189

)

 

 

(6,516

)

 

 

(6,873

)

 

Total operating expenses

$

(90,151

)

 

 

$

(99,295

)

 

 

$

(169,485

)

 

 

$

(186,763

)

 

Other operating income, net

410

 

 

 

9,244

 

 

 

633

 

 

 

60,689

 

 

Income before interest expense and income taxes

$

16,178

 

 

 

$

21,155

 

 

 

$

32,412

 

 

 

$

90,847

 

 

Interest expense

(8,395

)

 

 

(13,252

)

 

 

(17,068

)

 

 

(26,835

)

 

Income before income taxes

$

7,783

 

 

 

$

7,903

 

 

 

$

15,344

 

 

 

$

64,012

 

 

Income tax (expense) benefit

(2,701

)

 

 

7

 

 

 

(3,785

)

 

 

(2,596

)

 

Net income

$

5,082

 

 

 

$

7,910

 

 

 

$

11,559

 

 

 

$

61,416

 

 

Net income attributable to non‑controlling interest

46

 

 

 

98

 

 

 

90

 

 

 

459

 

 

Net income attributable to Evoqua Water Technologies Corp

$

5,036

 

 

 

$

7,812

 

 

 

$

11,469

 

 

 

$

60,957

 

 

Basic income per common share

$

0.04

 

 

 

$

0.07

 

 

 

$

0.10

 

 

 

$

0.52

 

 

Diluted income per common share

$

0.04

 

 

 

$

0.06

 

 

 

$

0.09

 

 

 

$

0.50

 

 

EVOQUA WATER TECHNOLOGIES CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)
 

 

(Unaudited)

 

 

 

March 31,

2021

 

September 30,

2020

ASSETS

 

 

 

Current assets

$

717,132

 

 

 

$

695,712

 

 

Cash and cash equivalents

222,718

 

 

 

193,001

 

 

Receivables, net

227,343

 

 

 

260,479

 

 

Inventories, net

156,787

 

 

 

142,379

 

 

Contract assets

74,801

 

 

 

80,759

 

 

Other current assets

35,483

 

 

 

19,094

 

 

Property, plant, and equipment, net

371,868

 

 

 

364,461

 

 

Goodwill

404,393

 

 

 

397,205

 

 

Intangible assets, net

299,318

 

 

 

309,967

 

 

Operating lease right-of-use assets, net

47,591

 

 

 

45,965

 

 

Other non-current assets

39,497

 

 

 

31,148

 

 

Total assets

$

1,879,799

 

 

 

$

1,844,458

 

 

LIABILITIES AND EQUITY

 

 

 

Current liabilities

$

346,573

 

 

 

$

349,555

 

 

Accounts payable

144,613

 

 

 

153,890

 

 

Current portion of debt, net of deferred financing fees

21,343

 

 

 

14,339

 

 

Contract liabilities

36,894

 

 

 

26,259

 

 

Accrued expenses and other liabilities

134,692

 

 

 

143,389

 

 

Other current liabilities

9,031

 

 

 

11,678

 

 

Non-current liabilities

1,008,341

 

 

 

1,012,840

 

 

Long-term debt, net of deferred financing fees

859,692

 

 

 

861,695

 

 

Obligation under operating leases

39,174

 

 

 

37,796

 

 

Other non-current liabilities

109,475

 

 

 

113,349

 

 

Total liabilities

$

1,354,914

 

 

 

$

1,362,395

 

 

Shareholders’ equity

 

 

 

Common stock, par value $0.01: authorized 1,000,000 shares; issued 121,442 shares, outstanding 119,778 at March 31, 2021; issued 119,486 shares, outstanding 117,291 at September 30, 2020

$

1,215

 

 

 

$

1,189

 

 

Treasury stock: 1,664 shares at March 31, 2021 and 2,195 shares at September 30, 2020

(2,837

)

 

 

(2,837

)

 

Additional paid-in capital

564,034

 

 

 

564,928

 

 

Retained deficit

(51,195

)

 

 

(62,664

)

 

Accumulated other comprehensive income (loss), net of tax

12,009

 

 

 

(20,472

)

 

Total Evoqua Water Technologies Corp. equity

$

523,226

 

 

 

$

480,144

 

 

Non-controlling interest

1,659

 

 

 

1,919

 

 

Total shareholders’ equity

$

524,885

 

 

 

$

482,063

 

 

Total liabilities and shareholders’ equity

$

1,879,799

 

 

 

$

1,844,458

 

 

EVOQUA WATER TECHNOLOGIES CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS (Unaudited)

(In thousands)
 

 

Six Months Ended March 31,

 

2021

 

2020

Operating activities

 

 

 

Net income

$

11,559

 

 

 

$

61,416

 

 

Reconciliation of net income to cash flows provided by operating activities:

 

 

 

Depreciation and amortization

54,607

 

 

 

52,514

 

 

Amortization of deferred financing fees (includes $0 and $1,795 write off of deferred financing fees)

1,044

 

 

 

3,103

 

 

Deferred income taxes

476

 

 

 

(1,209

)

 

Share-based compensation

6,233

 

 

 

5,984

 

 

Loss on sale of property, plant and equipment

807

 

 

 

170

 

 

Loss (gain) on sale of business

191

 

 

 

(68,051

)

 

Foreign currency exchange (gains) losses on intercompany loans and other non-cash items

(3,659

)

 

 

1,514

 

 

Changes in assets and liabilities

(8,200

)

 

 

(16,604

)

 

Net cash provided by operating activities

63,058

 

 

 

38,837

 

 

Investing activities

 

 

 

Purchase of property, plant and equipment

(36,297

)

 

 

(38,759

)

 

Purchase of intangibles

(539

)

 

 

(622

)

 

Proceeds from sale of property, plant and equipment

640

 

 

 

271

 

 

Proceeds from sale of business, net of cash of $0 and $12,117

897

 

 

 

118,894

 

 

Acquisitions

(8,743

)

 

 

(11,164

)

 

Net cash (used in) provided by investing activities

(44,042

)

 

 

68,620

 

 

Financing activities

 

 

 

Issuance of debt, net of deferred issuance costs

13,993

 

 

 

8,212

 

 

Borrowings under credit facility

—

 

 

 

2,597

 

 

Repayment of debt

(10,036

)

 

 

(109,333

)

 

Repayment of finance lease obligation

(6,901

)

 

 

(6,694

)

 

Payment of earn-out related to previous acquisitions

—

 

 

 

(175

)

 

Proceeds from issuance of common stock

13,430

 

 

 

8,333

 

 

Taxes paid related to net share settlements of share-based compensation awards

(1,863

)

 

 

(9,817

)

 

Distribution to non‑controlling interest

(350

)

 

 

(1,450

)

 

Net cash provided by (used in) financing activities

8,273

 

 

 

(108,327

)

 

Effect of exchange rate changes on cash

2,428

 

 

 

(516

)

 

Change in cash and cash equivalents

29,717

 

 

 

(1,386

)

 

Cash and cash equivalents

 

 

 

Beginning of period

193,001

 

 

 

109,881

 

 

End of period

$

222,718

 

 

 

$

108,495

 

 

Use of Non-GAAP Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of the Company’s financial information with additional useful information in evaluating operating performance. We use the non-GAAP financial measures “adjusted EBITDA” and “organic revenue” in evaluating the strength and financial performance of our core business.

Adjusted EBITDA

Adjusted EBITDA is defined as net income (loss) before interest expense, income tax benefit (expense) and depreciation and amortization, adjusted for the impact of certain other items, including restructuring and related business transformation costs, non-cash share-based compensation, transaction costs and other gains, losses and expenses that we believe do not directly reflect our underlying business operations.

Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of our business. We present adjusted EBITDA because we believe it is frequently used by analysts, investors and other interested parties to evaluate and compare operating performance and value companies within our industry. Further, we believe it is helpful in highlighting trends in our operating results and provides greater clarity and comparability period over period to management and our investors regarding the operational impact of long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. In addition, adjusted EBITDA highlights true business performance by removing the impact of certain items that management believes do not directly reflect our underlying operations and provides investors with greater visibility into the ongoing organic drivers of our business performance.

Management uses adjusted EBITDA to supplement GAAP measures of performance as follows:

  • to assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance;
  • in our management incentive compensation, which is based in part on components of adjusted EBITDA;
  • in certain calculations under our senior secured credit facilities, which use components of adjusted EBITDA;
  • to evaluate the effectiveness of our business strategies;
  • to make budgeting decisions; and
  • to compare our performance against that of other peer companies using similar measures.

In addition to the above, our chief operating decision maker uses adjusted EBITDA of each reportable operating segment to evaluate the operating performance of such segments. Adjusted EBITDA on a segment basis is defined as earnings before depreciation and amortization, adjusted for the impact of certain other items that have been reflected at the segment level. Adjusted EBITDA of the reportable operating segments do not include certain charges that are presented within corporate activities. These charges include certain restructuring and other business transformation charges that have been incurred to align and reposition the Company to the current reporting structure, acquisition related costs (including transaction costs and integration costs) and share-based compensation charges.

Adjusted EBITDA should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. The financial results prepared in accordance with GAAP and the reconciliations from these results included below should be carefully evaluated. You are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis. In addition, in evaluating adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of adjusted EBITDA. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. In addition, adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

With respect to our guidance, we have not presented a quantitative reconciliation of the forward-looking non-GAAP financial measure adjusted EBITDA to its most directly comparable GAAP financial measure, net income, because it is impractical to forecast certain items without unreasonable efforts due to the uncertainty and inherent difficulty of predicting the occurrence and financial impact of, and the periods in which, such items, including foreign exchange impact and certain expenses for which we adjust, may be recognized. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.

The following is a reconciliation of our net income to adjusted EBITDA (unaudited):

 

Three Months Ended

March 31,

 

Six Months Ended

March 31,

(In millions)

2021

 

2020

 

 

% Variance

 

2021

 

2020

 

 

% Variance

Net income

$

5.1

 

 

$

7.9

 

 

 

(35.4

)

%

 

$

11.6

 

 

$

61.4

 

 

 

(81.1

)

%

Income tax expense

2.7

 

 

—

 

 

 

**

 

 

3.7

 

 

2.6

 

 

 

42.3

 

%

Interest expense

8.4

 

 

13.3

 

 

 

(36.8

)

%

 

17.1

 

 

26.8

 

 

 

(36.2

)

%

Operating profit

$

16.2

 

 

$

21.2

 

 

 

(23.6

)

%

 

$

32.4

 

 

$

90.8

 

 

 

(64.3

)

%

Depreciation and amortization

27.1

 

 

27.3

 

 

 

(0.7

)

%

 

54.6

 

 

52.5

 

 

 

4.0

 

%

EBITDA

$

43.3

 

 

$

48.5

 

 

 

(10.7

)

%

 

$

87.0

 

 

$

143.3

 

 

 

(39.3

)

%

Restructuring and related business transformation costs (a)

5.4

 

 

6.2

 

 

 

(12.9

)

%

 

7.2

 

 

7.9

 

 

 

(8.9

)

%

Share-based compensation (b)

3.2

 

 

2.3

 

 

 

39.1

 

%

 

6.3

 

 

6.0

 

 

 

5.0

 

%

Transaction costs (c)

0.7

 

 

0.5

 

 

 

40.0

 

%

 

1.3

 

 

0.7

 

 

 

85.7

 

%

Other losses (gains) and expenses (d)

5.4

 

 

(0.8

)

 

 

(775.0

)

%

 

1.0

 

 

(57.6

)

 

 

(101.7

)

%

Adjusted EBITDA

$

58.0

 

 

$

56.7

 

 

 

2.3

 

%

 

$

102.8

 

 

$

100.3

 

 

 

2.5

 

%

** Percentage variance is not meaningful.

(a)  Restructuring and related business transformation costs
  Adjusted EBITDA is calculated prior to considering certain restructuring or business transformation events. These events may occur over extended periods of time, and in some cases it is reasonably possible that they could reoccur in future periods based on reorganizations of the business, cost reduction or productivity improvement needs, or in response to economic conditions. For the periods presented such events include the following:
  (i)  Certain costs and expenses in connection with various restructuring initiatives, including severance and other employee-related costs, relocation and facility consolidation costs and third-party consultant costs to assist with these initiatives. This includes:
    (A) amounts related to the Company’s restructuring initiatives to reduce the cost structure and rationalize location footprint following the sale of the Memcor product line;
    (B)  amounts related to the Company’s transition from a three-segment structure to a two-segment operating model designed to better serve the needs of customers worldwide; and
    (C)  amounts related to various other initiatives implemented to restructure and reorganize our business with the appropriate management team and cost structure.

 

Three Months Ended

March 31,

 

Six Months Ended

March 31,

(In millions)

2021

 

2020

 

2021

 

2020

Post Memcor divestiture restructuring

$

3.0

 

 

$

3.7

 

 

 

$

3.9

 

 

$

3.7

 

Cost of product sales and services (“Cost of sales”)

2.3

 

 

2.9

 

 

 

3.1

 

 

2.9

 

Sales and marketing expense (“S&M expense”)

—

 

 

0.1

 

 

 

0.2

 

 

0.1

 

General and administrative expense (“G&A expense”)

0.3

 

 

0.7

 

 

 

0.3

 

 

0.7

 

Other operating (income) expense

0.4

 

 

—

 

 

 

0.3

 

 

—

 

Two-segment restructuring

$

0.4

 

 

$

0.3

 

 

 

$

0.6

 

 

$

1.3

 

Cost of sales

0.2

 

 

0.3

 

 

 

0.2

 

 

0.6

 

G&A expense

0.2

 

 

0.4

 

 

 

0.4

 

 

0.7

 

Other operating (income) expense

—

 

 

(0.4

)

 

 

—

 

 

—

 

Various other initiatives

$

1.5

 

 

$

0.3

 

 

 

$

1.5

 

 

$

0.5

 

Cost of sales

0.5

 

 

0.3

 

 

 

0.5

 

 

0.4

 

S&M expense

0.1

 

 

—

 

 

 

0.1

 

 

—

 

G&A expense

0.4

 

 

—

 

 

 

0.4

 

 

0.1

 

Other operating (income) expense

0.5

 

 

—

 

 

 

0.5

 

 

—

 

Total(1)

$

4.9

 

 

$

4.3

 

 

 

$

6.0

 

 

$

5.5

 

    (i) 

of which $5.5 million and $5.6 million for the six months ended March 31, 2021 and 2020, respectively, is reflected in restructuring charges in Note 14, “Restructuring and Related Charges,” to our Consolidated Financial Statements to be included in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021.

  (ii)  Legal settlement costs and intellectual property related fees including fees and settlement costs associated with legacy matters, related to product warranty litigation on MEMCOR® products and certain discontinued products. This includes:

 

Three Months Ended

March 31,

 

Six Months Ended

March 31,

(In millions)

2021

 

2020

 

2021

 

2020

Cost of sales

$

0.2

 

 

$

0.1

 

 

$

0.2

 

 

$

0.2

 

G&A expense

0.1

 

 

0.2

 

 

0.2

 

 

0.2

 

Total

$

0.3

 

 

$

0.3

 

 

$

0.4

 

 

$

0.4

 

  (iii) 

Expenses associated with our information technology and functional infrastructure transformation, including activities to optimize information technology systems and functional infrastructure processes. This includes:

 

Three Months Ended

March 31,

 

Six Months Ended

March 31,

(In millions)

2021

 

2020

 

2021

 

2020

Cost of sales

$

0.1

 

 

 

$

—

 

 

$

0.1

 

 

$

0.1

 

G&A expense

(0.1

)

 

 

0.4

 

 

0.1

 

 

0.7

 

Total

$

—

 

 

 

$

0.4

 

 

$

0.2

 

 

$

0.8

 

  (iv) 

Costs associated with the secondary public offering of common stock held by certain shareholders of the Company, as well as costs incurred by us in connection with establishment of our public company compliance structure and processes, including consultant costs. This includes:

 

Three Months Ended

March 31,

 

Six Months Ended

March 31,

(In millions)

2021

 

2020

 

2021

 

2020

G&A expense

$

0.2

 

 

$

1.2

 

 

$

0.6

 

 

$

1.2

 

Total

$

0.2

 

 

$

1.2

 

 

$

0.6

 

 

$

1.2

 

(b)   

Share-based compensation
   

Adjusted EBITDA is calculated prior to considering non-cash share-based compensation expenses related to equity awards. See Note 17, “Share-Based Compensation,” to our Consolidated Financial Statements to be included in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021 for further detail.

(c)   

Transaction related costs

   

Adjusted EBITDA is calculated prior to considering transaction, integration and restructuring costs associated with business combinations because these costs are unique to each transaction and represent costs that were incurred as a result of the transaction decision. Integration and restructuring costs associated with a business combination may occur over several years and include, but are not limited to, consulting fees, legal fees, certain employee-related costs, facility consolidation and product rationalization costs and fair value changes associated with contingent consideration. This includes:

 

Three Months Ended

March 31,

 

Six Months Ended

March 31,

(In millions)

2021

 

2020

 

2021

 

2020

Cost of sales

$

0.1

 

 

$

(0.3

)

 

 

$

0.2

 

 

$

(0.2

)

 

G&A expense

0.6

 

 

0.5

 

 

 

1.1

 

 

0.9

 

 

Other operating (income) expense

—

 

 

0.3

 

 

 

—

 

 

—

 

 

Total

$

0.7

 

 

$

0.5

 

 

 

$

1.3

 

 

$

0.7

 

 

(d)  Other losses, (gains) and expenses
  Adjusted EBITDA is calculated prior to considering certain other significant (gains), losses and expenses. For the periods presented such events include the following:
  (i) 

impact of foreign exchange gains and losses;

  (ii) 

foreign exchange impact related to headquarter allocations;

  (iii) 

net expense reduction related to the remediation of manufacturing defects caused by a third-party vendor for which partial restitution was received;

  (iv) 

charges incurred by the Company related to product rationalization in its electro-chlorination business;

  (v) 

amounts related to the prior year sale of the Memcor product line;

  (vi) 

expenses incurred by the Company as a result of the COVID-19 pandemic, including additional charges for personal protective equipment, increased costs for facility sanitization and one-time payments to certain employees;

  (vii) 

legal fees incurred in excess of amounts covered by the Company’s insurance related to the Securities Litigation and SEC investigation; and

  (viii) 

loss on divestiture of the Lange containment system, geomembrane and geosynthetic liner product line (“Lange Product Line”).

 
  Other losses, (gains) and expenses include the following for the periods presented below:

Three Months Ended March 31, 2021

 

Other Adjustments

(In millions)

(i)

 

(ii)

 

(iii)

 

(iv)

 

(v)

 

(vi)

 

(vii)

 

(viii)

 

Total

Cost of sales

$

—

 

 

$

—

 

 

$

—

 

 

$

0.7

 

 

$

—

 

 

$

0.1

 

 

$

—

 

 

$

—

 

 

$

0.8

 

G&A expense

2.9

 

 

—

 

 

—

 

 

—

 

 

—

 

 

0.1

 

 

1.4

 

 

—

 

 

4.4

 

Other operating (income) expense

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

0.2

 

 

0.2

 

Total

$

2.9

 

 

$

—

 

 

$

—

 

 

$

0.7

 

 

$

—

 

 

$

0.2

 

 

$

1.4

 

 

$

0.2

 

 

$

5.4

 

Three Months Ended March 31, 2020

 

Other Adjustments

(In millions)

(i)

 

(ii)

 

(iii)

 

(iv)

 

(v)

 

(vi)

 

(vii)

 

(viii)

 

Total

Cost of sales

$

0.3

 

 

$

—

 

 

$

(0.1

)

 

 

$

0.2

 

 

$

0.1

 

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

0.5

 

 

G&A expense

7.8

 

 

—

 

 

—

 

 

 

—

 

 

(0.8

)

 

 

—

 

 

—

 

 

—

 

 

7.0

 

 

Other operating (income) expense

—

 

 

—

 

 

—

 

 

 

—

 

 

(8.3

)

 

 

—

 

 

—

 

 

—

 

 

(8.3

)

 

Total

$

8.1

 

 

$

—

 

 

$

(0.1

)

 

 

$

0.2

 

 

$

(9.0

)

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(0.8

)

 

Six Months Ended March 31, 2021

 

Other Adjustments

(In millions)

(i)

 

(ii)

 

(iii)

 

(iv)

 

(v)

 

(vi)

 

(vii)

 

(viii)

 

Total

Cost of sales

$

—

 

 

 

$

—

 

 

$

—

 

 

$

0.9

 

 

$

0.2

 

 

$

0.1

 

 

$

—

 

 

$

—

 

 

$

1.2

 

 

G&A expense

(3.9

)

 

 

—

 

 

—

 

 

—

 

 

—

 

 

0.2

 

 

3.3

 

 

—

 

 

(0.4

)

 

Other operating (income) expense

—

 

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

0.2

 

 

0.2

 

 

Total

$

(3.9

)

 

 

$

—

 

 

$

—

 

 

$

0.9

 

 

$

0.2

 

 

$

0.3

 

 

$

3.3

 

 

$

0.2

 

 

$

1.0

 

 

Six Months Ended March 31, 2020

 

Other Adjustments

(In millions)

(i)

 

(ii)

 

(iii)

 

(iv)

 

(v)

 

(vi)

 

(vii)

 

(viii)

 

Total

Cost of sales

$

(0.1

)

 

 

$

—

 

 

$

0.1

 

 

 

$

0.3

 

 

$

0.2

 

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

0.5

 

 

G&A expense

1.6

 

 

 

0.1

 

 

—

 

 

 

—

 

 

0.1

 

 

 

—

 

 

—

 

 

—

 

 

1.8

 

 

Other operating (income) expense

—

 

 

 

—

 

 

(1.6

)

 

 

—

 

 

(58.3

)

 

 

—

 

 

—

 

 

—

 

 

(59.9

)

 

Total

$

1.5

 

 

 

$

0.1

 

 

$

(1.5

)

 

 

$

0.3

 

 

$

(58.0

)

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(57.6

)

 

Adjusted EBITDA on a segment basis is defined as earnings before interest expense, income tax benefit (expense) and depreciation and amortization, adjusted for the impact of certain other items that have been reflected at the segment level. The following is a reconciliation of our segment operating profit to our segment adjusted EBITDA:

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

2021

 

2020

 

2021

 

2020

(In millions)

Integrated

Solutions

and

Services

 

Applied

Product

Technologies

 

Integrated

Solutions

and

Services

 

Applied

Product

Technologies

 

Integrated

Solutions

and

Services

 

Applied

Product

Technologies

 

Integrated

Solutions

and

Services

 

Applied

Product

Technologies

Operating Profit

$

30.8

 

 

$

18.1

 

 

$

36.7

 

 

$

23.8

 

 

 

$

57.1

 

 

$

31.5

 

 

$

69.8

 

 

$

86.9

 

 

Depreciation and amortization

17.2

 

 

3.6

 

 

17.3

 

 

3.5

 

 

 

34.1

 

 

7.1

 

 

33.0

 

 

7.1

 

 

EBITDA

$

48.0

 

 

$

21.7

 

 

$

54.0

 

 

$

27.3

 

 

 

$

91.2

 

 

$

38.6

 

 

$

102.8

 

 

$

94.0

 

 

Restructuring and related business transformation costs (a)

1.1

 

 

2.9

 

 

0.1

 

 

3.3

 

 

 

1.1

 

 

4.5

 

 

0.1

 

 

4.0

 

 

Transaction costs (b)

—

 

 

—

 

 

—

 

 

—

 

 

 

—

 

 

—

 

 

—

 

 

(1.3

)

 

Other losses (gains) and expenses (c)

0.2

 

 

0.7

 

 

—

 

 

(8.9

)

 

 

0.2

 

 

1.1

 

 

—

 

 

(59.2

)

 

Adjusted EBITDA

$

49.3

 

 

$

25.3

 

 

$

54.1

 

 

$

21.7

 

 

 

$

92.5

 

 

$

44.2

 

 

$

102.9

 

 

$

37.5

 

 

(a)   

Represents costs and expenses in connection with restructuring initiatives distinct to our Applied Product Technologies segment in the three and six months ended March 31, 2021 and 2020, respectively. Such expenses are primarily composed of severance, relocation and facility consolidation costs.

(b)   

Represents costs associated with a change in the current estimate of certain acquisitions achieving their earn-out targets, which resulted in a decrease to the fair valued amount of the earn-out recorded upon acquisition, in the six months ended March 31, 2020, distinct to our Applied Product Technologies segment.

(c)   

Other losses, (gains) and expenses, as discussed above, distinct to our Integrated Solutions and Services (“ISS”) and Applied Product Technologies (“APT”) segments include the following:

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

2021

 

2020

 

2021

 

2020

(In millions)

ISS

 

APT

 

ISS

 

APT

 

ISS

 

APT

 

ISS

 

APT

Trailing costs from the sale of the Memcor product line

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

 

$

—

 

 

$

0.2

 

 

$

—

 

 

$

—

 

 

Net pre-tax benefit on sale of the Memcor product line

—

 

 

—

 

 

—

 

 

(9.0

)

 

 

—

 

 

—

 

 

—

 

 

(58.0

)

 

Remediation of manufacturing defects

—

 

 

—

 

 

—

 

 

(0.1

)

 

 

—

 

 

—

 

 

—

 

 

(1.5

)

 

Product rationalization in electro-chlorination business

—

 

 

0.7

 

 

—

 

 

0.2

 

 

 

—

 

 

0.9

 

 

—

 

 

0.3

 

 

Loss on divestiture of Lange Product Line

0.2

 

 

—

 

 

—

 

 

—

 

 

 

0.2

 

 

—

 

 

—

 

 

—

 

 

Total

$

0.2

 

 

$

0.7

 

 

$

—

 

 

$

(8.9

)

 

 

$

0.2

 

 

$

1.1

 

 

$

—

 

 

$

(59.2

)

 

Organic Revenue

Organic revenue is another metric used by management to evaluate the performance of our business. Organic revenue is defined as revenue excluding the impact of foreign currency translation and inorganic revenue. Inorganic revenue represents the impact from acquisitions and divestitures during the first 12 months following the closing of the acquisition or divestiture. Divestitures include sales of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation. Management believes that reporting organic revenue provides useful information to investors by helping identify underlying growth trends in our core business and facilitating easier comparisons of our revenue performance with prior and future periods and to our peers. We exclude the effect of foreign currency translation from organic sales because foreign currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. We exclude the effect of acquisitions and divestitures because they can obscure underlying business trends and make comparisons of long-term performance difficult between the Company and its peers due to the varying nature, size and number of transactions from period to period.

The following is a reconciliation of total revenue to organic revenue for the three months ended March 31, 2021.

 

Total Revenue

 

Foreign Currency

 

Inorganic Revenue(1)

 

Organic Revenue

 

Three Months

Ended

March 31,

  

%

Variance

 

Three Months

Ended

March 31,

  

%

Variance

 

Three Months

Ended

March 31,

  

%

Variance

 

Three Months

Ended

March 31,

  

%

Variance

(In millions)

2020

  

 

2021

  

 

2020

  

 

2021

  

 

2020

  

 

2021

  

 

2020

  

 

2021

  

Evoqua Water Technologies

$

351.7

 

$

346.6

 

(1.5

)

%

 

n/a

 

$

5.2

 

1.5

%

 

$

0.1

 

$

2.1

 

0.6

%

 

$

351.6

 

$

339.3

 

(3.5

)

%

Integrated Solutions & Services

$

237.9

 

$

224.2

 

(5.8

)

%

 

n/a

 

$

0.5

 

0.2

%

 

$

0.1

 

$

2.1

 

0.8

%

 

$

237.8

 

$

221.6

 

(6.8

)

%

Applied Product Technologies

$

113.8

 

$

122.4

 

7.6

 

%

 

n/a

 

$

4.7

 

4.1

%

 

$

—

 

$

—

 

—

%

 

$

113.8

 

$

117.7

 

3.5

 

%

  (i) 

Includes divestiture of the Lange Product Line on March 1, 2021, acquisition of Aquapure Technologies on September 3, 2020 and acquisition of Ultrapure & Industrial Services on December 17, 2020.

 
Immaterial rounding differences may be present in the tables above.

 

Investors

Dan Brailer

Vice President, Investor Relations

Evoqua Water Technologies

Telephone: 724-720-1605

Email: [email protected]

Media

Sarah Brown

Director of Corporate Communications

Evoqua Water Technologies

Telephone: 506-454-5495

Email: [email protected]

KEYWORDS: United States North America Pennsylvania

INDUSTRY KEYWORDS: Other Natural Resources Environment Other Construction & Property Natural Resources Construction & Property Urban Planning

MEDIA:

Posted on

Akoustis to Attend the 6th Annual Oppenheimer Emerging Growth Conference on May 11, 2021

Charlotte, N.C., May 05, 2021 (GLOBE NEWSWIRE) — Akoustis Technologies, Inc. (NASDAQ: AKTS) (“Akoustis” or the “Company”), an integrated device manufacturer (IDM) of patented bulk acoustic wave (BAW) high-band RF filters for mobile and other wireless applications, announced today that senior management will attend the 6th Annual Oppenheimer Emerging Growth Conference on May 11, 2021.

Meetings will take place virtually given the ongoing call for social distancing due to the Covid-19 pandemic. Investors that would like to schedule a meeting with Akoustis management should contact their Oppenheimer representative or Akoustis’ investor relations at [email protected].

Akoustis is actively delivering volume production of its WiFi 6 tandem filter solutions, shipping multiple 5G small cell XBAW® filter solutions, delivering initial designs of its new 5G mobile filter solutions to multiple customers and is now entering the market with its new WiFi 6E coexistence XBAW® filter solutions.

Given the rapidly growing sales funnel activity as well as ongoing interaction with customers regarding expected ramps in both 5G mobile and WiFi 6E in calendar 2022, the Company plans to increase the annual production capacity at its New York fab by the end of calendar 2021 to approximately 500 million filters per year.

Akoustis currently has 15 commercial XBAW filters in its product catalog, and recently introduced 5.6 GHz and 6.6 GHz WiFi 6E coexistence filter modules, which when qualified, will bring the number of catalog products to 17. Current product catalog filters include a 5.6 GHz WiFi filter, a 5.2 GHz WiFi filter, a 5.5 GHz WiFi-6E filter, a 6.5 GHz WiFi 6E filter, three small cell 5G network infrastructure filters including two Band n77 filters and one Band n79 filter, a 3.8 GHz filter and five S-Band filters for defense phased-array radar applications, a 3.6 GHz filter for the CBRS 5G infrastructure market and a C-Band filter for the unmanned aircraft systems (UAS) market. The Company is also developing several new filters for the sub-7 GHz bands targeting 5G mobile device, network infrastructure, WiFi CPE and defense markets.

About Akoustis Technologies, Inc.

Akoustis® (http://www.akoustis.com/) is a high-tech BAW RF filter solutions company that is pioneering next-generation materials science and MEMS wafer manufacturing to address the market requirements for improved RF filters – targeting higher bandwidth, higher operating frequencies and higher output power compared to incumbent polycrystalline BAW technology deployed today. The Company utilizes its proprietary XBAW® manufacturing process to produce bulk acoustic wave RF filters for mobile and other wireless markets, which facilitate signal acquisition and accelerate band performance between the antenna and digital back end. Superior performance is driven by the significant advances of high-purity, single-crystal and associated piezoelectric materials and the resonator-filter process technology which drives electro-mechanical coupling and translates to wide filter bandwidth. 

Akoustis plans to service the fast growing multi-billion-dollar RF filter market using its integrated device manufacturer (IDM) business model. The Company owns and operates a 120,000 sq. ft. ISO-9001:2015 registered commercial wafer-manufacturing facility located in Canandaigua, NY, which includes a class 100 / class 1000 cleanroom facility – tooled for 150-mm diameter wafers – for the design, development, fabrication and packaging of RF filters, MEMS and other semiconductor devices. Akoustis Technologies, Inc. is headquartered in the Piedmont technology corridor near Charlotte, North Carolina.

Forward-Looking Statements

This document includes “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. These forward-looking statements include, but are not limited to, statements about our estimates, expectations, beliefs, intentions, plans or strategies for the future (including our possible future results of operations, business strategies, competitive position, potential growth opportunities, potential market opportunities and the effects of competition), and the assumptions underlying such statements. Forward-looking statements include all statements that are not historical facts and typically are identified by use of terms such as “may,” “might,” “would,” “will,” “should,” “could,” “project,” “expect,” “plan,” “strategy,” “anticipate,” “attempt,” “develop,” “help,” “believe,” “think,” “estimate,” “predict,” “intend,” “forecast,” “seek,” “potential,” “possible,” “continue,” “future,” and similar words (including the negative of any of the foregoing), although some forward-looking statements are expressed differently. Forward-looking statements are neither historical facts nor assurances of future results, performance, events or circumstances. Instead, these forward-looking statements are based on management’s current beliefs, expectations and assumptions and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those currently anticipated include, without limitation, risks relating to our ability to obtain adequate financing and sustain our status as a going concern; our limited operating history; our inability to generate revenues or achieve profitability;  the results of our research and development activities; our inability to achieve acceptance of our products in the market; the impact of a pandemic or epidemic or a natural disaster, including the COVID-19 pandemic, on our operations, financial condition and the worldwide economy, including its impact on our ability to access the capital markets; general economic conditions, including upturns and downturns in the industry; shortages in supplies needed to manufacture our products, or needed by our customers to manufacture devices incorporating our products; our limited number of patents; failure to obtain, maintain, and enforce our intellectual property rights; our inability to attract and retain qualified personnel; our reliance on third parties to complete certain processes in connection with the manufacture of our products; product quality and defects; existing or increased competition; our ability to successfully manufacture, market and sell products based on our technologies; our ability meet the required specifications of customers and achieve qualification of our products for commercial manufacturing in a timely manner; our ability to successfully scale our New York wafer fabrication facility and related operations while maintaining quality control and assurance and avoiding delays in output; the rate and degree of market acceptance of any of our products; our ability to achieve design wins from current and future customers; contracting with customers and other parties with greater bargaining power and agreeing to terms and conditions that may adversely affect our business; risks related to doing business in foreign countries, including China; any security breaches, cyber-attacks or other disruptions compromising our proprietary information and exposing us to liability; our failure to innovate or adapt to new or emerging technologies; our failure to comply with regulatory requirements; results of any arbitration or litigation that may arise; stock volatility and illiquidity; dilution caused by any future issuance of common stock or securities that are convertible into or exercisable for common stock; our failure to implement our business plans or strategies; and our ability to maintain effective internal control over financial reporting. These and other risks and uncertainties are described in more detail in the Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of the Company’s most recent Annual Report on Form 10-K and in subsequently filed Quarterly Reports on Form 10-Q. Considering these risks, uncertainties and assumptions, the forward-looking statements regarding future events and circumstances discussed in this document may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements included in this document speak only as of the date hereof and, except as required by law, we undertake no obligation to update publicly or privately any forward-looking statements, whether written or oral, for any reason after the date of this document to conform these statements to new information, actual results or to changes in our expectations. 



Contact:

COMPANY:
Tom Sepenzis
Akoustis Technologies
VP of Corporate Development & IR
(980) 689-4961
[email protected]

The Del Mar Consulting Group, Inc.
Robert B. Prag, President
(858) 794-9500
[email protected]

Posted on

Caesarstone Reports First Quarter 2021 Financial Results

Caesarstone Reports First Quarter 2021 Financial Results

– Record First Quarter Revenue Grew 15.4% Over Prior Year to $146.0 Million –

– Per Share Diluted Net Income of $0.41 and Adjusted Diluted EPS of $0.42 –

– Gross Margin Expanded 90 Basis Points to 29.7% –

– Adjusted EBITDA Increased 54.1% to $20.3 Million at a 13.9% Margin –

– Strong Net Cash Position(*) of $105.3 Million at Quarter End –

– Declares Dividend of $0.21 per share –

– Reiterates Outlook for 2021 Revenue and Adjusted EBITDA Growth –

MP MENASHE, Israel–(BUSINESS WIRE)–
Caesarstone Ltd. (NASDAQ: CSTE), a leading developer and manufacturer of high-quality engineered surfaces, today reported financial results for its first quarter ended March 31, 2021.

“We are extremely pleased to produce another consecutive quarter of growth as we continue to successfully execute our strategy to transform Caesarstone into a leading premium, multi-material countertop company,” commented Yuval Dagim, Caesarstone’s Chief Executive Officer. “Our recently completed accretive acquisitions of Omicron and Lioli Ceramica are already contributing to results, helping us to deliver record first quarter revenue. Our collective actions since we announced our Global Growth Acceleration Plan two years ago have allowed us to establish an efficient global operating platform, resulting in our third consecutive quarter of year-on-year EBITDA margin expansion. We are encouraged with the progress we have made integrating Lioli and Omicron and are excited to further realize the unique benefits of each platform as a combined business. As we move forward, we will continue to leverage our innovative go-to-market initiatives, world-class brand and multi-material product offerings to drive additional value for our shareholders.”

(*) Cash position is defined as cash and cash equivalents and short-term bank deposits and long and short-term investment in marketable securities less debt from financial institutions.

First Quarter 2021 Results

Revenue in the first quarter of 2021 grew 15.4% to $146.0 million compared to $126.6 million in the prior year quarter. On a constant currency basis, first quarter revenue was higher by 9.8% year-over-year, due primarily to the contribution of acquisitions.

Gross margin in the first quarter improved to 29.7% compared to 28.8% in the prior year quarter. Adjusted gross margin in the first quarter was 30.1% compared to 28.9% in the prior year quarter. The year-over-year improvement in gross margin mainly reflects better product mix, improved efficiency and more favorable currency exchange rates, partly offset by the impact of higher manufacturing unit costs due to lower fixed cost absorption and lower selling prices.

Operating expenses in the first quarter were $33.3 million, or 22.8% of revenue, compared to $34.1 million, or 27.0% of revenue in the prior year quarter. Excluding legal settlements and loss contingencies, operating expenses were 22.3% of revenue, compared to 24.7% in the prior year quarter, mainly due to higher revenues.

Operating income grew to $10.0 million compared to operating income of $2.3 million in the prior year quarter. The year-over-year growth mainly reflects higher gross margin and lower legal settlements and loss contingencies.

Adjusted EBITDA, which excludes expenses for share-based compensation, legal settlements and loss contingencies and for non-recurring items, grew 54.1% year-over-year to $20.3 million in the first quarter, representing a margin of 13.9%. This compares to adjusted EBITDA of $13.1 million, representing a margin of 10.4%, in the prior year quarter. The year-over-year margin improvement primarily reflects the higher gross margin.

Finance income in the first quarter was $5.3 million compared to finance income of $0.9 million in the prior year quarter. The difference was primarily a result of the favorable impact of foreign currency exchange rates and raw material hedging activity.

Net Income attributable to controlling interest for the first quarter was $14.2 million compared to net income of $2.7 million in the prior year quarter. Net income per share for the first quarter was $0.41 compared to net income per share of $0.08 in the prior year quarter. Adjusted diluted net income per share for the first quarter was $0.42 on 34.5 million shares, compared to adjusted diluted net income per share of $0.13 in the prior year quarter on a similar share count.

Balance Sheet & Liquidity

The Company’s balance sheet as of March 31, 2021 remained strong, including cash, cash equivalents and short-term bank deposits and short and long-term marketable securities of $118.7 million and total debt to financial institutions of $13.4 million.

Dividend

The Company’s dividend policy provides for a quarterly cash dividend of up to 50% of reported net income on a year-to-date basis, less any amount already paid as dividend for the respective period (the “calculated dividend”), subject in each case to approval by the Company’s board of directors. No dividend is paid if it would be less than $0.10 per share. In accordance with the Company’s dividend policy, the board of directors declared a cash dividend of $0.21 per share for the three months ended March 31, 2021. The dividend will be paid on June 1, 2021 to shareholders of record as of May 18, 2021. The dividend payment is subject to withholding tax of 20%.

Outlook

The Company reiterates its expectation for 2021 revenue and Adjusted EBITDA to be higher year-over-year. The company anticipates revenue to grow faster than EBITDA in 2021 mainly due to higher shipping and raw material costs, coupled with a return to more normalized levels of sales and marketing expenses and other investments to support the Company’s growth initiatives. The Company’s outlook includes the investment costs associated with its Global Growth Acceleration Plan. The Company’s outlook also assumes that both pandemic related business restrictions will fade and that the supply environment will improve as the year progresses.

Webcast and Conference Call Details

The Company will host a live webcast and conference call today at 8:30 a.m. ET to discuss the results, followed by a question and answer session for the investment community. The live webcast of the call can be accessed at ir.caesarstone.com. For those unable to access the webcast, the conference call will be accessible by dialing 1-877-407-4018 (domestic) or +1-201-689-8471 (international). The toll-free Israeli number is 1 80 940 6247. Upon dialing in, please request to join the Caesarstone First Quarter Earnings Call.

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

About Caesarstone

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

Non-GAAP Financial Measures

The non-GAAP measures presented by the Company should be considered in addition to, and not as a substitute for, comparable GAAP measures. Reconciliations of GAAP gross profit to adjusted gross profit, GAAP net income (loss) to adjusted net income (loss) and net income (loss) to Adjusted EBITDA are provided in the schedules to this release. To calculate revenues growth rates that exclude the impact of changes in foreign currency exchange rates, the Company converts actual reported results from local currency to U.S. dollars using constant foreign currency exchange rates in the current and comparable period. The Company provides these non-GAAP financial measures because it believes that they present a better measure of the Company’s core business and management uses the non-GAAP measures internally to evaluate the Company’s ongoing performance. Accordingly, the Company believes that they are useful to investors in enhancing an understanding of the Company’s operating performance.

Forward-Looking Statements

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

Caesarstone Ltd. and its subsidiaries
Condensed consolidated balance sheets
 
As of
U.S. dollars in thousands March 31, 2021 December 31, 2020
(Unaudited) (Audited)
ASSETS
 
CURRENT ASSETS:
 
Cash and cash equivalents and short-term bank deposits

$ 99,820

$ 114,248

Short-term available for sale marketable securities

11,697

8,112

Trade receivables, net

84,533

84,822

Other accounts receivable and prepaid expenses

35,425

26,481

Inventories

155,402

152,073

 
Total current assets

386,877

385,736

 
LONG-TERM ASSETS:
 
Severance pay fund

3,766

4,007

Other long-term receivables

3,773

3,837

Deferred tax assets, net

7,763

8,359

Long-term deposits and prepaid expenses

768

1,675

Operating lease right-of-use assets

121,531

123,928

Long-term available for sale marketable securities

7,170

10,926

Property, plant and equipment, net

219,631

222,883

Goodwill and intangible assets, net

58,717

59,570

 
Total long-term assets

423,119

435,185

 
Total assets

$ 809,996

$ 820,921

 
LIABILITIES AND EQUITY
 
CURRENT LIABILITIES:
 
Short-term bank credit

$ 4,403

$ 13,122

Trade payables

59,846

55,063

Related parties and other loans

2,227

2,221

Short term legal settlements and loss contingencies

19,277

31,039

Accrued expenses and other liabilities

54,391

55,570

 
Total current liabilities

140,144

157,015

 
LONG-TERM LIABILITIES:
 
Long-term bank and other loans and financing liability of land from a related party

17,213

20,706

Legal settlements and loss contingencies long-term

21,660

21,910

Deferred tax liabilities, net

6,456

6,943

Long-term lease liabilities

108,743

112,719

Accrued severance pay

5,129

5,303

Long-term warranty provision

1,274

1,274

 
Total long-term liabilities

160,475

168,855

 
REDEEMABLE NON-CONTROLLING INTEREST

7,500

7,701

 
EQUITY:
 
Ordinary shares

371

371

Treasury shares – at cost

(39,430)

(39,430)

Additional paid-in capital

160,651

160,083

Capital fund related to non-controlling interest

(5,587)

(5,587)

Accumulated other comprehensive loss

1,008

1,083

Retained earnings

384,864

370,830

 
Total equity

501,877

487,350

 
Total liabilities and equity

$ 809,996

$ 820,921

 
Caesarstone Ltd. and its subsidiaries
Condensed consolidated statements of income

Three months ended

March 31,
U.S. dollars in thousands (except per share data)

2021

2020
(Unaudited)
 
Revenues

$ 146,032

$ 126,557

Cost of revenues

102,730

90,156

 
Gross profit

43,302

36,401

 
Operating expenses:
Research and development

1,105

780

Marketing and selling

18,276

18,629

General and administrative

13,143

11,867

Legal settlements and loss contingencies, net

740

2,838

 
Total operating expenses

33,264

34,114

 
Operating income

10,038

2,287

Finance income, net

(5,333)

(869)

 
Income before taxes

15,371

3,156

Taxes on income

1,529

478

 
Net income

$ 13,842

$ 2,678

 
Net loss attributable to non-controlling interest

348

–

 
Net income attributable to controlling interest

$ 14,190

$ 2,678

Basic net income per ordinary share (*)

$ 0.41

$ 0.08

Diluted net income per ordinary share (*)

$ 0.41

$ 0.08

Weighted average number of ordinary shares used in computing basic income per ordinary share

34,439,783

34,399,916

Weighted average number of ordinary shares used in computing diluted income per ordinary share

34,489,432

34,448,505

 
  (*) The numerator for the calculation of net income per share for the three months ended March 31, 2021 has been decreased by approximately $0.2 million, to reflect the adjustment to redemption value associated with the redeemable non-controlling interest.
 
Caesarstone Ltd. and its subsidiaries
Selected Condensed consolidated statements of cash flows
 

Three months ended

March 31,
U.S. dollars in thousands

2021

2020
(Unaudited)
Cash flows from operating activities:
 
Net income

$ 13,842

$ 2,678

Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization

8,908

7,115

Share-based compensation expense

567

906

Accrued severance pay, net

69

(86)

Changes in deferred tax, net

101

(1,060)

Capital (gain) loss

(2)

17

Legal settlements and loss contingencies, net

740

2,838

Decrease (increase) in trade receivables

179

(3,075)

Decrease (increase) in other accounts receivable and prepaid expenses

(9,299)

2,268

Increase in inventories

(3,344)

(11,737)

Increase in trade payables

2,987

2,009

Increase (decrease) in warranty provision

(9)

52

Changes in right of use assets

2,328

2,576

Changes in lease liabilities

(3,968)

(515)

Amortization of premium and accretion of discount on marketable securities, net

70

–

Changes in Accrued interest related to Marketable Securities

13

–

Decrease in accrued expenses and other liabilities including related parties

(11,020)

(580)

 
Net cash provided by operating activities

2,162

3,406

 
 
Cash flows from investing activities:
 
Repayment of assumed shareholders loan related to acquisition

(1,966)

–

Purchase of property, plant and equipment

(4,727)

(8,500)

Proceeds from sale of property, plant and equipment

4

8

Investment in marketable securities

78

–

Increase in long term deposits

48

(731)

 
Net cash used in investing activities

(6,563)

(9,223)

 
 
Cash flows from financing activities:
 
Changes in short-term bank credits and long-term loans

(9,704)

(459)

Repayment of a financing leaseback related to Bar-Lev transaction

(323)

(305)

 
Net cash used in financing activities

(10,027)

(764)

 
 
Effect of exchange rate differences on cash and cash equivalents

–

(927)

 
Decrease in cash and cash equivalents and short-term bank deposits

(14,428)

(7,508)

Cash and cash equivalents and short-term bank deposits at beginning of the period

114,248

139,372

 
Cash and cash equivalents and short-term bank deposits at end of the period

$ 99,820

$ 131,864

 
Non – cash investing:
Changes in trade payables balances related to purchase of fixed assets

(158)

(564)

 
Caesarstone Ltd. and its subsidiaries
 

Three months ended

March 31,
U.S. dollars in thousands

2021

2020
(Unaudited)
Reconciliation of Gross profit to Adjusted Gross profit:
Gross profit

$ 43,302

$ 36,401

Share-based compensation expense (a)

105

131

Amortization of assets related to acquisitions

534

–

Adjusted Gross profit (Non-GAAP)

$ 43,941

$ 36,532

(a) Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
Caesarstone Ltd. and its subsidiaries
 

Three months ended

March 31,
U.S. dollars in thousands

2021

2020
(Unaudited)
Reconciliation of Net Income to Adjusted EBITDA:
Net income

$ 13,842

$ 2,678

Finance income, net

(5,333)

(869)

Taxes on income

1,529

478

Depreciation and amortization related to acquisitions

8,908

7,115

Legal settlements and loss contingencies, net (a)

740

2,838

Share-based compensation expense (b)

567

906

 
Adjusted EBITDA (Non-GAAP)

$ 20,253

$ 13,146

(a) Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees.
(b) Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
Caesarstone Ltd. and its subsidiaries
 

Three months ended

March 31,
U.S. dollars in thousands (except per share data)

2021

2020
(Unaudited)
Reconciliation of net income attributable to controlling interest to adjusted net income attributable to controlling interest:
Net income attributable to controlling interest

$ 14,190

$ 2,678

Legal settlements and loss contingencies, net (a)

740

2,838

Amortization of assets related to acquisitions, net of tax

826

–

Share-based compensation expense (b)

567

906

Non cash revaluation of lease liabilities (c)

(1,862)

(1,471)

Total adjustments

271

2,273

Less tax on non-tax adjustments (d)

27

344

Total adjustments after tax

244

1,929

 
Adjusted net income attributable to controlling interest (Non-GAAP)

$ 14,434

$ 4,607

Adjusted diluted EPS (e)

$ 0.42

$ 0.13

 
(a) Consists of legal settlements expenses and loss contingencies, net, related to product liability claims and other adjustments to on-going legal claims, including related legal fees.
(b) Share-based compensation includes expenses related to stock options and restricted stock units granted to employees and directors of the Company.
(c) Exchange rate differences deriving from revaluation of lease contracts in accordance with FASB ASC 842.
(d) Tax adjustments for the three months ended March 31, 2021 and 2020, based on the effective tax rates.
(e) In calculating adjusted diluted (Non-GAAP) EPS for the three months ended March 31, 2021 and 2020, the diluted weighted average number of shares outstanding excludes the effects of share-based compensation expense in accordance with FASB ASC 718.
Caesarstone Ltd. and its subsidiaries
Geographic breakdown of revenues by region
 

Three months ended

March 31,
U.S. dollars in thousands

2021

2020
(Unaudited)
 
USA

$ 70,831

$ 60,055

Canada

17,779

18,558

Latin America

858

506

America’s

89,468

79,119

 
Australia

27,172

22,354

Asia

7,777

2,831

APAC

34,949

25,185

 
EMEA

12,718

11,340

 
Israel

8,897

10,913

 
Total Revenues

$ 146,032

$ 126,557

 
Caesarstone Ltd. and its subsidiaries

Geographic breakdown of revenues by region – Supplemental data
 
Three months ended
U.S. dollars in thousands 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019 6/30/2019 3/30/2019
(Unaudited)
 
USA

$ 70,831

$ 53,618

$ 52,097

$ 41,726

$ 60,055

$ 64,659

$ 64,805

$ 64,590

$ 56,417

Canada

17,779

20,325

19,174

14,435

18,558

20,575

21,881

23,341

20,178

Latin America

858

1,387

124

132

506

735

1,434

1,351

596

America’s

89,468

75,330

71,395

56,293

79,119

85,969

88,120

89,282

77,191

 
Australia

27,172

29,953

27,746

23,534

22,354

26,000

28,642

28,294

25,214

Asia

7,777

7,122

2,881

1,732

2,831

3,932

3,675

3,311

4,596

APAC

34,949

37,075

30,627

25,266

25,185

29,932

32,317

31,605

29,810

 
EMEA

12,718

14,408

11,422

8,031

11,340

9,464

11,719

11,418

10,455

 
Israel

8,897

10,083

10,478

9,447

10,913

8,502

10,683

8,766

10,741

 
Total Revenues

$ 146,032

$ 136,896

$ 123,922

$ 99,037

$ 126,557

$ 133,867

$ 142,839

$ 141,071

$ 128,197

 
 
Year-over-year % change
3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
(Unaudited)
 
USA

17.9%

-17.1%

-19.6%

-35.4%

6.4%

Canada

-4.2%

-1.2%

-12.4%

-38.2%

-8.0%

Latin America

69.6%

88.8%

-91.4%

-90.2%

-15.1%

America’s

13.1%

-12.4%

-19.0%

-36.9%

2.5%

 
Australia

21.6%

15.2%

-3.1%

-16.8%

-11.3%

Asia

174.7%

81.1%

-21.6%

-47.7%

-38.4%

APAC

38.8%

23.9%

-5.2%

-20.1%

-15.5%

 
EMEA

12.2%

52.2%

-2.5%

-29.7%

8.5%

 
Israel

-18.5%

18.6%

-1.9%

7.8%

1.6%

 
Total Revenues

15.4%

2.3%

-13.2%

-29.8%

-1.3%

 
 
Year-over-year % change in constant currency (*)
3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020
(Unaudited)
 
USA

17.9%

-17.1%

-19.6%

-35.4%

6.4%

Canada

-9.6%

-2.4%

-11.7%

-36.0%

-7.1%

Latin America

69.8%

88.7%

-91.3%

-90.2%

-15.2%

America’s

11.8%

-12.7%

-18.8%

-36.4%

2.7%

 
Australia

2.8%

7.9%

-7.1%

-11.5%

-3.3%

Asia

169.5%

80.7%

-21.2%

-45.9%

-37.1%

APAC

21.5%

17.5%

-8.7%

-15.1%

-8.5%

 
EMEA

3.3%

45.8%

-5.9%

-26.9%

11.4%

 
Israel

-24.6%

9.4%

-4.5%

4.5%

-1.5%

 
Total Revenues

9.8%

-0.4%

-14.4%

-28.3%

0.5%

 
(*) Change in revenues at constant currency is calculated so that revenues can be viewed without the impact of fluctuations s in foreign currency exchange rates, thereby facilitating period-to-period comparisons of business performance. Change in revenues adjusted for currency are calculated by translating current period activity in local currency using the comparable prior-year period’s currency conversion rate. Exchange rates used, are the representative exchange rate published by the Bank of Israel for the relevant periods.

 

Investor Relations:

ICR, Inc. – Rodny Nacier

[email protected]

+1 646 277-1237

KEYWORDS: Israel Middle East

INDUSTRY KEYWORDS: Interior Design Engineering Residential Building & Real Estate Manufacturing Commercial Building & Real Estate Construction & Property

MEDIA:

Posted on

Astec Reports First Quarter 2021 Results

First Quarter 2021 Highlights (all comparisons are made to the prior year first quarter):

  • Net Sales decreased 1.5% to $284.4 million
  • Gross Profit Margin of 24.1% decreased 130 bps
  • Net Income decreased 57.8% to $8.7 million; Adjusted Net Income of $9.3 million decreased 57.9% from $22.1 million
  • Diluted EPS of $0.38 compared to $0.91; Adjusted EPS of $0.41 decreased from $0.97, which included $0.42 NOL tax benefit from CARES Act in prior year

CHATTANOOGA, Tenn., May 05, 2021 (GLOBE NEWSWIRE) — Astec Industries, Inc. (Nasdaq: ASTE) announced today its financial results for the first quarter of 2021.

First quarter of 2021 net sales of $284.4 million decreased 1.5% compared to $288.8 million for the first quarter of 2020. Domestic sales decreased $8.2 million or 3.5% due mainly to a used inventory reduction initiative in the first quarter of 2020. The sale of used inventory decreased $4.8 million or 55.8% in the first quarter versus last year. International sales increased $3.8 million or 6.9%.

Backlog as of March 31, 2021 of $420.8 million increased $175.4 million, or 71.5% compared to the backlog of $245.4 million a year ago. Domestic backlog increased by 74.4% to $322.9 million while international backlog increased by 62.6% to $97.9 million.

Operating profit of $9.8 million in the first quarter of 2021 decreased 35.1% compared to operating profit of $15.1 million in the first quarter 2020. First quarter of 2021 adjusted operating income of $10.5 million, decreased 39.0% compared to $17.2 million a year ago. Adjusted operating margin of 3.7% decreased 230 basis points from 6.0% in first quarter 2020 due to unfavorable product mix in Infrastructure Solutions and under absorption in Materials Solutions. Unfavorable product mix was driven by certain international product sales with lower than normal margins as compared to domestic sales, primarily due to logistics costs. Efforts to build our global supply chain are expected to improve the international margins as we grow this part of the business. The under absorption was primarily related to the movement of production from our Mequon site to other Astec sites. Operating expenses were relatively flat at $58.7 million on a year over year basis. A $3.6 million increase in dues and subscriptions, primarily technology related, was partially offset by a $1.9 million COVID-related reduction in travel expenses.

The income tax rate for the quarter was 9.4% and the adjusted income tax rate was 9.7%. The low income tax rate was primarily due to benefits from the booking of stock compensation and state tax deductions associated with management fee allocations.

Net income of $8.7 million decreased 57.8% compared to the prior year quarter, while diluted EPS decreased to $0.38, or 58.2%. Adjusted net income of $9.3 million decreased 57.9% compared to the prior year period, while Adjusted EPS of $0.41 decreased 57.7% compared to $0.97 for the first quarter of 2020.

Adjusted EBITDA of $18.0 million decreased 24.1% compared to $23.7 million a year ago. Adjusted EBITDA margin of 6.3% decreased 190 basis points from 8.2% in first quarter of 2020 largely driven by strategic sales, lower factory absorption and investments in technology.

“The sale of new equipment and parts were up slightly for the quarter, however those increases were offset by a year-over-year decline in used equipment sales. In the prior year, we executed our plan to reduce used inventory,” said Barry Ruffalo, CEO of Astec. “During the fourth quarter of 2020 we began the process of moving the manufacturing of our Mequon site products to other Astec sites. This temporarily impacted our ability to get some products and parts through our facilities. The decision to relocate these products is in line with our long-term strategy to Simplify, Focus and Grow the business to unlock stakeholder value.” Mr. Ruffalo went on to say, “We appear to be in the early stages of a positive economic cycle supported by investment in global infrastructure. Many of our customers have projects on their books for the rest of 2021 and some into 2022. As a result, we are pleased with the significant increase in our backlog.”

COVID-19 Continuity and Business Operations Update

Our top priority continues to be protecting our employees and their families, our customers and suppliers and our operations from any adverse impacts by taking precautionary measures as directed by health authorities and local governments. Business operations have been fully operational during the first quarter of 2021.

We continue to execute on COVID-19 measures in order to ensure the health and well-being of our employees, their families and communities in which we operate, while continuing to serve our customers’ critical needs.

Closure of Tacoma Facility – In January 2021, we announced plans to close our Tacoma facility in order to simplify and consolidate operations. We expect the Tacoma facility to cease operations in the fourth quarter of 2021. Manufacturing and marketing of Tacoma product lines are expected to be transferred to other Astec facilities in late 2021.

Highway Funding – Federal funding provides a significant portion of all highway, street, roadway and parking construction in the United States. We believe federal funding influences the purchasing decisions of our customers, who are typically more amenable to making capital equipment purchases with long-term federal legislation in place. Federal transportation funding under the Fixing America’s Surface Transportation Act (“FAST Act”), which was set to expire on September 30, 2020, was temporarily extended for one year through September 30, 2021. We believe a multi-year highway program (such as the FAST Act) will have the greatest positive impact on the road construction industry and allow our customers to plan and execute longer term projects.

Supply Chain – We have experienced only minor interruptions to our supply chain however we are not immune to supply chain disruptions caused by the recent surge in world demand. We are closely monitoring our supply chain and are ready to take proactive actions as needed to mitigate any potential disruptions. We have increased the frequency of communications with our suppliers and customers to ensure business continuity as well as anticipate and prepare for any new developments.

Steel – Steel is a major component of our equipment. Steel prices began increasing in the latter part of 2020. We have experienced further increases in steel pricing entering 2021 and anticipate continued increases throughout 2021. We continue to utilize strategies that include forward-looking contracts and advanced steel purchases to ensure supply and minimize the impact of price volatility.

“In 2020, we continued to execute our plan to transform our company despite the headwinds of the COVID-19 pandemic. Thus far in 2021, we have experienced a ramp up in demand, accompanied by commodity inflation and a tight labor market. We continued to position our business to adjust to these evolving market dynamics, while continuing to execute our transformation strategy. The effort put in by the team over the last 20 months to build a strong foundation throughout our company will pay dividends to our customers, employees and shareholders over the long run. While we are still in the early innings of our transformation, we are pleased that we drove change at a good pace in an effort to place ourselves in the best position to leverage what we earn from the market. We remain excited about our future and continue to see near-term and long-term opportunities in the Rock-to-Road value chain we serve,” said Mr. Ruffalo.

Investor Conference Call and Webcast

Astec will conduct a conference call and live webcast today, May 5, 2021, at 10:00 A.M. Eastern Time, to review its first quarter 2021 results as well as current business conditions. The number to call for this interactive teleconference is (877) 407-9210 (at least 10 minutes prior to the scheduled time for the call). International callers should dial (201) 689-8049. You may also access a live webcast of the call by visiting www.webcaster4.com/Webcast/Page/2146/40763. You will need to give your name and company affiliation and reference Astec Industries. An archived webcast will be available for 90 days at www.astecindustries.com. The supplemental presentation slides are available on the Astec Industries, Inc. website by visiting https://www.astecindustries.com/investor-relations/analyst-information/presentations.html.

A replay of the conference call will be available through May 19, 2021 by dialing (877) 481-4010 or (919) 882-2331 for international callers, Conference ID # 40763. A transcript of the conference call will be made available under the Investor Relations section of the Astec Industries, Inc. website within five business days after the call.

About Astec

Astec, (www.astecindustries.com), is a manufacturer of specialized equipment for asphalt road building, aggregate processing and concrete production. Astec’s manufacturing operations are divided into two primary business segments: Infrastructure Solutions that includes road building, asphalt and concrete plants, thermal and storage solutions; and Materials Solutions that include our aggregate processing and mining equipment.

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995

This News Release contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the United States and global economies. Statements in News Release that are not historical are hereby identified as “forward-looking statements” and may be indicated by words or phrases such as “anticipates,” “supports,” “plans,” “projects,” “expects,” “believes,” “should,” “would,” “could,” “hope,” “forecast,” “management is of the opinion,” use of the future tense and similar words or phrases. These forward-looking statements are based largely on management’s expectations, which are subject to a number of known and unknown risks, uncertainties and other factors discussed and described in our most recent Annual Report on Form 10-K, including those risks described in Part I, Item 1A. Risk Factors thereof, and in other reports filed subsequently by us with the Securities and Exchange Commission, which may cause actual results, financial or otherwise, to be materially different from those anticipated, expressed or implied by the forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements to reflect future events or circumstances, except as required by law.

Non-GAAP Financial Measures

In an effort to provide investors with additional information regarding the Company’s results, the Company refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures which management believes provides useful information to investors. These non-GAAP financial measures have no standardized meaning prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures for other companies. Management of the Company does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. Nonetheless, this non-GAAP information can be useful in understanding the Company’s operating results and the performance of its core business. Management of the Company uses both GAAP and non-GAAP financial measures to establish internal budgets and targets and to evaluate the Company’s financial performance against such budgets and targets. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is included in the appendix to this News Release.

For Additional Information Contact:

Steve Anderson 
Senior Vice President of Administration and Investor Relations
Phone: (423) 899-5898 
Fax: (423) 899-4456 
E-mail: [email protected]

Astec Industries Inc.

Condensed Consolidated Statements of Operations

(In millions, except shares in thousands and per share amounts; unaudited)

  Three Months Ended March 31,
  2021   2020
Net sales $ 284.4     $ 288.8  
Cost of sales 215.9     215.4  
Gross profit 68.5     73.4  
       
Operating expenses:      
Selling, general, administrative and engineering 58.0     56.2  
Restructuring, impairment and other asset charges, net 0.7     2.1  
Total operating expenses 58.7     58.3  
Operating income 9.8     15.1  
       
Other income:      
Interest expense (0.2 )   —  
Other income, net of expenses —     0.2  
Income from operations before income taxes 9.6     15.3  
Income tax provision (benefit) 0.9     (5.1 )
Net income 8.7     20.4  
Net loss attributable to noncontrolling interest —     0.2  
Net income attributable to controlling interest $ 8.7     $ 20.6  
       
Earnings per common share      
Basic $ 0.38     $ 0.91  
Diluted 0.38     0.91  
       
Weighted average shares outstanding      
Basic 22,633     22,545  
Diluted 22,875     22,713  
       
Diluted EPS $ 0.38     $ 0.91  
Facility closures and reduction in force 0.03     0.05  
Asset impairment —     0.07  
Gain on sale of property, equipment and business, net —     (0.03 )
Income taxes —     (0.03 )
Adjusted EPS $ 0.41     $ 0.97  



Astec Industries Inc.

Segment Net Sales and Profits

(In millions; unaudited)

  Three Months Ended March 31,
  Infrastructure

Solutions 		  Materials Solutions   Corporate   Total
               
2021 Net sales $ 201.5     $ 82.9     $ —     $ 284.4  
2020 Net sales 202.6     86.2     —     288.8  
Change $ (1.1 )   (3.3 )   —     (4.4 )
Change % (0.5 )%   (3.8 )%   — %   (1.5 )%
               
2021 Gross profit 48.5     20.0     —     68.5  
2021 Gross profit % 24.1 %   24.1 %   — %   24.1 %
2020 Gross profit 52.3     21.0     0.1     73.4  
2020 Gross profit % 25.8 %   24.4 %   N/M     25.4 %
Change $ (3.8 )   (1.0 )   (0.1 )   (4.9 )
               
2021 Profit / (loss) 21.0     6.5     (18.8 )   8.7  
2020 Profit / (loss) 17.2     6.0     (2.9 )   20.3  
Change $ 3.8     0.5     (15.9 )   (11.6 )
Change % 22.1 %   8.3 %   (548.3 )%   (57.1 )%

N/M = Not Meaningful

Segment net sales are reported net of intersegment sales. Segment gross profit is net of profit on intersegment sales. A reconciliation of total segment profits to the Company’s net income attributable to controlling interest is as follows (in millions; unaudited):

  Three Months Ended March 31,
  2021   2020   Change $
Total profit for all segments $ 8.7     $ 20.3     $ (11.6 )
Recapture of intersegment profit —     0.1     (0.1 )
Net loss attributable to noncontrolling interest —     0.2     (0.2 )
Net income attributable to controlling interest $ 8.7     $ 20.6     $ (11.9 )



Astec Industries Inc.

Condensed Consolidated Balance Sheets

(In millions; unaudited)

  March 31, 2021   December 31, 2020
Assets      
Current assets:      
Cash and cash equivalents $ 164.6     $ 158.6  
Investments 7.0     4.3  
Trade receivables and contract assets, net 141.2     115.9  
Inventories, net 244.2     249.7  
Other current assets 35.0     37.3  
Total current assets 592.0     565.8  
Property, plant and equipment, net 169.6     172.8  
Other long-term assets 106.7     109.6  
Total assets $ 868.3     $ 848.2  
       
Liabilities      
Current liabilities:      
Accounts payable $ 68.1     $ 52.7  
Other current liabilities 117.0     117.6  
Total current liabilities 185.1     170.3  
Long-term debt 0.3     0.4  
Other long-term liabilities 35.9     34.5  
Total equity 647.0     643.0  
Total liabilities and equity $ 868.3     $ 848.2  



Astec Industries Inc.

Condensed Consolidated Statements of Cash Flows

(In millions; unaudited)

  Three Months Ended March 31,
  2021   2020
Cash flows from operating activities:      
Net income $ 8.7     $ 20.4  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation 5.0     5.2  
Amortization 2.6     1.1  
Provision for credit losses 0.3     0.6  
Provision for warranties 2.7     2.7  
Deferred compensation expense (benefit) 0.7     (0.3 )
Share-based compensation 1.4     1.1  
Deferred tax provision 0.8     13.5  
Gain on disposition of property and equipment (0.1 )   (0.6 )
Asset impairment charges —     1.6  
Distributions to SERP participants (0.3 )   (0.1 )
Change in operating assets and liabilities, excluding the effects of acquisitions:      
Purchase of trading securities, net (1.4 )   (0.4 )
Receivables and other contract assets (26.4 )   (16.6 )
Inventories 5.0     (0.3 )
Prepaid expenses 0.7     3.3  
Other assets (1.2 )   (0.8 )
Accounts payable 15.8     7.8  
Accrued loss reserves 0.1     —  
Accrued payroll and related expenses 2.6     (4.6 )
Other accrued liabilities (0.3 )   (0.7 )
Accrued product warranty (2.1 )   (2.1 )
Customer deposits (0.9 )   (5.2 )
Income taxes payable/prepaid 0.9     (18.5 )
Other —     (1.7 )
Net cash provided by operating activities 14.6     5.4  
Cash flows from investing activities:      
Acquisitions, net of cash acquired 0.1     —  
Overpayment returned on prior sale of subsidiary (1.1 )   —  
Expenditures for property and equipment (3.3 )   (5.8 )
Proceeds from sale of property and equipment 1.4     1.9  
Purchase of investments, net (0.1 )   (0.2 )
Net cash used by investing activities (3.0 )   (4.1 )
Cash flows from financing activities:      
Payment of dividends (2.5 )   (2.5 )
Borrowings under bank loans 2.0     —  
Repayment of bank loans (2.3 )   (0.7 )
Sale of Company stock by SERP, net 0.2     —  
Withholding tax paid upon vesting of share-based compensation awards (3.0 )   (0.5 )
Net cash used by financing activities (5.6 )   (3.7 )
Effect of exchange rates on cash —     (2.6 )
Increase (decrease) in cash and cash equivalents 6.0     (5.0 )
Cash and cash equivalents, beginning of period 158.6     48.9  
Cash and cash equivalents, end of period $ 164.6     $ 43.9  



Appendix

1Q 2021 GAAP to Non-GAAP Reconciliation Table
  As Reported (GAAP)   Restructuring, Impairment, and Other Charges, Net   As Adjusted (Non-GAAP)
Consolidated          
Net sales $ 284.4     $ —     $ 284.4  
GP 68.5     —     68.5  
GP% 24.1 %       24.1 %
Operating income 9.8     0.7     10.5  
Income taxes 0.9     0.1     1.0  
Net income attributable to controlling interest 8.7     0.6     9.3  
Diluted EPS 0.38     0.03     0.41  
           
Infrastructure Solutions          
Net sales 201.5     —     201.5  
GP 48.5     —     48.5  
GP% 24.1 %       24.1 %
           
Materials Solutions          
Net sales 82.9     —     82.9  
GP 20.0     —     20.0  
GP% 24.1 %       24.1 %



1Q 2020 GAAP to Non-GAAP Reconciliation Table
  As Reported (GAAP)   Restructuring, Impairment, and Other Charges, Net   As Adjusted (Non-GAAP)
Consolidated          
Net sales $ 288.8     $ —     $ 288.8  
GP 73.4     —     73.4  
GP% 25.4 %       25.4 %
Operating income 15.1     2.1     17.2  
Income taxes -5.1     0.6     -4.5  
Net income attributable to controlling interest 20.6     1.5     22.1  
Diluted EPS 0.91     0.06     0.97  
           
Infrastructure Solutions          
Net sales 202.6     —     202.6  
GP 52.3     —     52.3  
GP% 25.8 %       25.8 %
           
Materials Solutions          
Net sales 86.2     —     86.2  
GP 21.0     —     21.0  
GP% 24.4 %       24.4 %

Astec Industries Inc.

GAAP vs Non-GAAP Adjusted EPS Reconciliations

(In millions, except per share amounts; unaudited)

  Three Months Ended March 31,
  2021   2020
Net income attributable to controlling interest $ 8.7     $ 20.6  
Adjustments:      
Facility closures and reduction in force 0.8     1.1  
Asset impairment —     1.6  
Gain on sale of property, equipment and business, net (0.1 )   (0.6 )
Income taxes (0.1 )   (0.6 )
Adjusted net income attributable to controlling interest $ 9.3     $ 22.1  
       
Diluted EPS $ 0.38     $ 0.91  
Adjustments:      
Facility closures and reduction in force 0.03     0.05  
Asset impairment —     0.07  
Gain on sale of property, equipment and business, net —     (0.03 )
Income taxes —     (0.03 )
Adjusted EPS $ 0.41     $ 0.97  



Astec Industries Inc.

EBITDA and Adjusted EBITDA Reconciliations

(In millions; unaudited)

  Three Months Ended March 31,
  2021   2020
Net sales $ 284.4     $ 288.8  
       
Net income attributable to controlling interest $ 8.7     $ 20.6  
Interest expense (income), net 0.1     (0.2 )
Depreciation and amortization 7.6     6.3  
Provision (benefit) from income taxes 0.9     (5.1 )
EBITDA 17.3     21.6  
EBITDA margin 6.1 %   7.5 %
       
Adjustments:      
Facility closures and reduction in force 0.8     1.1  
Asset impairment —     1.6  
Gain on sale of property, equipment and business, net (0.1 )   (0.6 )
Adjusted EBITDA $ 18.0     $ 23.7  
Adjusted EBITDA margin 6.3 %   8.2 %