Market Newsdesk

May 4, 2021 7:05 am

MIC Reports First Quarter 2021 Financial And Operational Results

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

– 2021 earnings guidance raised

– Processes for sale of remaining businesses progressing

PR Newswire

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

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

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

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

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

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

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

Update on Sales Processes

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

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

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

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

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

First Quarter 2021 Segment Results

Atlantic Aviation

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

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

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

MIC Hawaii

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

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

Corporate and Other

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

2021 Guidance Revision

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

Segment	Adjusted EBITDA Excluding Non-Cash Items Range ($ millions)
Atlantic Aviation	245 – 260
MIC Hawaii	35 – 45
Corporate and Other	(15)

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

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

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

Balance Sheet Strength and Financial Flexibility

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

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

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

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

Summary Financial Information

	Quarter Ended March 31,				Change Favorable/ (Unfavorable)
	2021		2020		$	%
	($ In Thousands, Except Share and Per Share Data) (Unaudited)
GAAP Metrics
Continuing Operations
Net income (loss)	$	13,797	$	(6,988)	20,785	NM
Net income (loss) per share attributable to MIC	0.15		(0.08)		0.23	NM
Cash provided by operating activities	39,993		51,540		(11,547)	(22)
Discontinued Operations
Net income	$	—	$	18,215	(18,215)	(100)
Net income per share attributable to MIC	—		0.21		(0.21)	(100)
Cash provided by operating activities	—		48,688		(48,688)	(100)
Weighted average number of shares outstanding: basic	87,411,455		86,686,972		724,483	1
MIC Non-GAAP Metrics
EBITDA excluding non-cash items – continuing operations	$	72,650	$	64,464	8,186	13
Investment and acquisition/disposition costs	4,279		11,107		(6,828)	(61)
Adjusted EBITDA excluding non – cash items–continuing operations	$	76,929	$	75,571	1,358	2
Cash interest	$	(13,055)	$	(18,570)	5,515	30
Cash taxes	(3,209)		(4,820)		1,611	33
Maintenance capital expenditures	(3,664)		(5,714)		2,050	36
Adjusted Free Cash Flow – continuing operations	$	57,001	$	46,467	10,534	23
EBITDA excluding non-cash items – discontinued operations	$	—	$	77,647	(77,647)	(100)
Cash interest	—		(9,769)		9,769	100
Cash taxes	—		(2,107)		2,107	100
Maintenance capital expenditures	—		(5,615)		5,615	100
Free Cash Flow – discontinued operations	$	—	$	60,156	(60,156)	(100)
Adjusted Free Cash Flow – consolidated	$	57,001	$	106,623	(49,622)	(47)


NM — Not meaningful.

Conference Call and Webcast

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

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

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

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

About MIC

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

Use of Non-GAAP Measures

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

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

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

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

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

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

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

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

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

Classification of Maintenance Capital Expenditures and Growth Capital Expenditures

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

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

Forward-Looking Statements

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

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

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

MACQUARIE INFRASTRUCTURE CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS ($ in Thousands, Except Share Data)

	March 31, 2021		December 31, 2020
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	529,639	$	1,828,063
Restricted cash	11,349		11,157
Accounts receivable, net of allowance for doubtful accounts	53,802		46,862
Inventories	16,933		16,551
Prepaid expenses	10,180		8,326
Other current assets	10,306		9,197
Total current assets	632,209		1,920,156
Property, equipment, land and leasehold improvements, net	849,670		854,200
Operating lease assets, net	323,948		322,892
Goodwill	617,072		616,939
Intangible assets, net	449,299		457,587
Other noncurrent assets	7,040		6,865
Total assets	$	2,879,238	$	4,178,639
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Due to Manager-related party	$	2,106	$	1,203
Accounts payable	30,310		30,470
Accrued expenses	40,583		46,112
Current portion of long-term debt	117,021		11,310
Dividend payable	—		960,981
Operating lease liabilities – current	17,032		17,157
Income taxes payable	133,768		132,113
Other current liabilities	22,270		22,861
Total current liabilities	363,090		1,222,207
Long-term debt, net of current portion	1,103,924		1,554,359
Deferred income taxes	125,220		126,858
Operating lease liabilities – noncurrent	312,927		311,597
Other noncurrent liabilities	67,308		70,312
Total liabilities	1,972,469		3,285,333
Commitments and contingencies	—		—
Stockholders’ equity⁽¹⁾:
Common Stock ($0.001 par value; 500,000,000 authorized; 87,505,452 shares issued and outstanding on March 31, 2021 and 87,361,929 shares issued and outstanding on December 31, 2020)	$	88	$	87
Additional paid in capital	170,678		177,975
Accumulated other comprehensive loss	(6,175)		(6,175)
Retained earnings	733,291		713,129
Total stockholders’ equity	897,882		885,016
Noncontrolling interests	8,887		8,290
Total equity	906,769		893,306
Total liabilities and equity	$	2,879,238	$	4,178,639


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

MACQUARIE INFRASTRUCTURE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) ($ in Thousands, Except Share and Per Share Data)

	Quarter Ended March 31,
	2021		2020
Revenue
Service revenue	$	209,604	$	223,997
Product revenue	54,587		60,462
Total revenue	264,191		284,459
Costs and expenses
Cost of services	82,233		94,663
Cost of product sales	34,756		41,934
Selling, general and administrative	77,012		87,583
Fees to Manager – related party	5,552		7,356
Depreciation	19,231		19,526
Amortization of intangibles	8,288		11,005
Total operating expenses	227,072		262,067
Operating income	37,119		22,392
Other income (expense)
Interest income	161		468
Interest expense⁽¹⁾	(18,619)		(26,705)
Other income (expense), net	502		(146)
Net income (loss) from continuing operations before income taxes	19,163		(3,991)
Provision for income taxes	(5,366)		(2,997)
Net income (loss) from continuing operations	13,797		(6,988)

Discontinued Operations⁽²⁾
Net income from discontinued operations before income taxes	—		24,545
Provision for income taxes	—		(6,330)
Net income from discontinued operations	—		18,215
Net income	13,797		11,227

Net income (loss) from continuing operations	13,797		(6,988)
Less: net income (loss) attributable to noncontrolling interest	597		(75)
Net income (loss) from continuing operations attributable to MIC	13,200		(6,913)
Net income from discontinued operations	—		18,215
Net income from discontinued operations attributable to MIC	—		18,215
Net income attributable to MIC	$	13,200	$	11,302
Basic income (loss) per share from continuing operations attributable to MIC	$	0.15	$	(0.08)
Basic income per share from discontinued operations attributable to MIC	—		0.21
Basic income per share attributable to MIC	$	0.15	$	0.13
Weighted average number of shares outstanding: basic	87,411,455		86,686,972

Diluted income (loss) per share from continuing operations attributable to MIC	$	0.15	$	(0.08)
Diluted income per share from discontinued operations attributable to MIC	—		0.21
Diluted income per share attributable to MIC	$	0.15	$	0.13
Weighted average number of shares outstanding: diluted	87,495,298		86,686,972


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

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

MACQUARIE INFRASTRUCTURE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) ($ in Thousands)

	Quarter Ended March 31,
	2021		2020
Operating activities
Net income (loss) from continuing operations	$	13,797	$	(6,988)
Adjustments to reconcile net income (loss) to net cash provided by operating activities from continuing operations:
Depreciation	19,231		19,526
Amortization of intangibles	8,288		11,005
Write-off of debt discount and financing cost	4,311		—
Amortization of debt discount and financing costs	1,416		2,634
Adjustments to derivative instruments	(1,458)		7,385
Fees to Manager-related party	5,552		7,356
Deferred taxes	2,157		(1,823)
Other non-cash expense, net	3,046		1,979
Changes in other assets and liabilities, net of acquisitions:
Accounts receivable	(6,921)		17,490
Inventories	(713)		6,354
Prepaid expenses and other current assets	(2,771)		(2,526)
Due to Manager – related party	—		150
Accounts payable and accrued expenses	(4,373)		(14,740)
Income taxes payable	2,484		3,414
Other, net	(4,053)		324
Net cash provided by operating activities from continuing operations	39,993		51,540
Investing activities
Acquisitions of businesses and investments, net of cash, cash equivalents, and restricted cash acquired	—		(13,495)
Purchases of property and equipment	(15,856)		(16,910)
Other, net	17		3
Net cash used in investing activities from continuing operations	(15,839)		(30,402)
Financing activities
Proceeds from long-term debt	—		874,000
Payment of long-term debt	(361,405)		(3,059)
Dividends paid to common stockholders	(960,981)		(86,742)
Net cash (used in) provided by financing activities from continuing operations	(1,322,386)		784,199
Net change in cash, cash equivalents, and restricted cash from continuing operations	(1,298,232)		805,337

MACQUARIE INFRASTRUCTURE CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS – (continued) (Unaudited) ($ in Thousands)

	Quarter Ended March 31,
	2021		2020
Cash flows provided by (used in) discontinued operations:
Net cash provided by operating activities	$	—	$	48,688
Net cash used in investing activities	—		(55,023)
Net cash used in discontinued operations	—		(6,335)
Effect of exchange rate changes on cash and cash equivalents	—		(792)
Net change in cash, cash equivalents, and restricted cash	(1,298,232)		798,210
Cash, cash equivalents, and restricted cash, beginning of period	1,839,220		358,565
Cash, cash equivalents, and restricted cash, end of period	$	540,988	$	1,156,775
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities:
Accrued purchases of property and equipment from continuing operations	$	3,902	$	5,081
Accrued purchases of property and equipment from discontinued operations	—		18,583
Leased assets obtained in exchange for new operating lease liabilities from continuing operations	787		4,886
Taxes paid, net, from continuing operations	660		1,405
Taxes paid, net, from discontinued operations	—		1,410
Interest paid, net, from continuing operations	16,570		17,308
Interest paid, net, from discontinued operations	—		4,026

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

	As of March 31,
	2021		2020
Cash and cash equivalents	$	529,639	$	1,131,685
Restricted cash – current	11,349		926
Cash, cash equivalents, and restricted cash included in assets held for sale	—		24,164
Total of cash, cash equivalents, and restricted cash shown in the consolidated condensed statements of cash flows	$	540,988	$	1,156,775

MACQUARIE INFRASTRUCTURE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS – MD&A

	Quarter Ended March 31,				Change Favorable/(Unfavorable)
	2021		2020		$	%
	($ In Thousands, Except Share and Per Share Data) (Unaudited)
Revenue
Service revenue	$	209,604	$	223,997	(14,393)	(6)
Product revenue	54,587		60,462		(5,875)	(10)
Total revenue	264,191		284,459		(20,268)	(7)
Costs and expenses
Cost of services	82,233		94,663		12,430	13
Cost of product sales	34,756		41,934		7,178	17
Selling, general and administrative	77,012		87,583		10,571	12
Fees to Manager – related party	5,552		7,356		1,804	25
Depreciation and amortization	27,519		30,531		3,012	10
Total operating expenses	227,072		262,067		34,995	13
Operating income	37,119		22,392		14,727	66
Other income (expense)
Interest income	161		468		(307)	(66)
Interest expense⁽¹⁾	(18,619)		(26,705)		8,086	30
Other income (expense), net	502		(146)		648	NM
Net income (loss) from continuing operations before income taxes	19,163		(3,991)		23,154	NM
Provision for income taxes	(5,366)		(2,997)		(2,369)	(79)
Net income (loss) from continuing operations	13,797		(6,988)		20,785	NM

Discontinued Operations
Net income from discontinued operations before income taxes	—		24,545		(24,545)	(100)
Provision for income taxes	—		(6,330)		6,330	100
Net income from discontinued operations	—		18,215		(18,215)	(100)
Net income	13,797		11,227		2,570	23

Net income (loss) from continuing operations	13,797		(6,988)		20,785	NM
Less: net income (loss) attributable to noncontrolling interests	597		(75)		(672)	NM
Net income (loss) from continuing operations attributable to MIC	13,200		(6,913)		20,113	NM
Net income from discontinued operations	—		18,215		(18,215)	(100)
Net income from discontinued operations attributable to MIC	—		18,215		(18,215)	(100)
Net income attributable to MIC	$	13,200	$	11,302	1,898	17
Basic income (loss) per share from continuing operations attributable to MIC	$	0.15	$	(0.08)	0.23	NM
Basic income per share from discontinued operations attributable to MIC	—		0.21		(0.21)	(100)
Basic income per share attributable to MIC	$	0.15	$	0.13	0.02	15
Weighted average number of shares outstanding: basic	87,411,455		86,686,972		724,483	1


NM — Not meaningful.

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

MACQUARIE INFRASTRUCTURE CORPORATION

RECONCILIATION OF CONSOLIDATED NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

	Quarter Ended March 31,				Change Favorable/(Unfavorable)
	2021		2020		$	%
	($ In Thousands) (Unaudited)
Net income (loss) from continuing operations	$	13,797	$	(6,988)
Interest expense, net⁽¹⁾	18,458		26,237
Provision for income taxes	5,366		2,997
Depreciation and amortization	27,519		30,531
Fees to Manager – related party	5,552		7,356
Other non-cash expense, net⁽²⁾	1,958		4,331
EBITDA excluding non-cash items – continuing operations	$	72,650	$	64,464	8,186	13

EBITDA excluding non-cash items – continuing operations	$	72,650	$	64,464
Interest expense, net⁽¹⁾	(18,458)		(26,237)
Non-cash interest expense, net⁽¹⁾	5,403		7,667
Provision for current income taxes	(3,209)		(4,820)
Changes in working capital	(16,393)		10,466
Cash provided by operating activities – continuing operations	39,993		51,540
Changes in working capital	16,393		(10,466)
Maintenance capital expenditures	(3,664)		(5,714)
Free cash flow – continuing operations	$	52,722	$	35,360	17,362	49



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

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

MACQUARIE INFRASTRUCTURE CORPORATION

RECONCILIATION OF SEGMENT NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW

Atlantic Aviation
	Quarter Ended March 31,		Change Favorable/(Unfavorable)
	2021	2020	Change Favorable/(Unfavorable)
	$	$	$	%
	($ In Thousands) (Unaudited)
Service revenue	209,604	223,997	(14,393)	(6)
Cost of services (exclusive of depreciation and amortization shown separately below)	82,233	94,663	12,430	13
Gross margin	127,371	129,334	(1,963)	(2)
Selling, general and administrative expenses	61,586	64,140	2,554	4
Depreciation and amortization	23,300	26,579	3,279	12
Operating income	42,485	38,615	3,870	10
Interest expense, net⁽¹⁾	(10,730)	(18,876)	8,146	43
Other expense, net	(18)	(72)	54	75
Provision for income taxes	(8,596)	(5,479)	(3,117)	(57)
Net income	23,141	14,188	8,953	63
*Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:*
Net income	23,141	14,188
Interest expense, net⁽¹⁾	10,730	18,876
Provision for income taxes	8,596	5,479
Depreciation and amortization	23,300	26,579
Other non-cash expense, net⁽²⁾	1,569	813
EBITDA excluding non-cash items	67,336	65,935	1,401	2

EBITDA excluding non-cash items	67,336	65,935
Interest expense, net⁽¹⁾	(10,730)	(18,876)
Non-cash interest expense, net⁽¹⁾	943	5,159
Provision for current income taxes	(4,480)	(8,577)
Changes in working capital	1,916	15,667
Cash provided by operating activities	54,985	59,308
Changes in working capital	(1,916)	(15,667)
Maintenance capital expenditures	(2,550)	(3,045)
Free cash flow	50,519	40,596	9,923	24



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

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

MIC Hawaii

	Quarter Ended March 31,		Change Favorable/(Unfavorable)
	2021	2020	Change Favorable/(Unfavorable)
	$	$	$	%
	($ In Thousands) (Unaudited)
Product revenue	54,587	60,462	(5,875)	(10)
Cost of product sales (exclusive of depreciation and amortization shown separately below)	34,756	41,934	7,178	17
Gross margin	19,831	18,528	1,303	7
Selling, general and administrative expenses	5,677	6,322	645	10
Depreciation and amortization	3,748	3,624	(124)	(3)
Operating income	10,406	8,582	1,824	21
Interest expense, net⁽¹⁾	(1,304)	(2,775)	1,471	53
Other expense, net	(336)	(112)	(224)	(200)
Provision for income taxes	(2,367)	(1,775)	(592)	(33)
Net income	6,399	3,920	2,479	63
Less: net income (loss) attributable to noncontrolling interests	597	(75)	(672)	NM
Net income attributable to MIC	5,802	3,995	1,807	45
*Reconciliation of net income to EBITDA excluding non-cash items and a reconciliation of cash provided by operating activities to Free Cash Flow:*
Net income	6,399	3,920
Interest expense, net⁽¹⁾	1,304	2,775
Provision for income taxes	2,367	1,775
Depreciation and amortization	3,748	3,624
Other non-cash (income) expense, net⁽²⁾	(256)	3,113
EBITDA excluding non-cash items	13,562	15,207	(1,645)	(11)

EBITDA excluding non-cash items	13,562	15,207
Interest expense, net⁽¹⁾	(1,304)	(2,775)
Non-cash interest (income) expense, net⁽¹⁾	(231)	1,003
Provision for current income taxes	(1,516)	(2,123)
Changes in working capital	(1,696)	(5,086)
Cash provided by operating activities	8,815	6,226
Changes in working capital	1,696	5,086
Maintenance capital expenditures	(1,114)	(2,669)
Free cash flow	9,397	8,643	754	9


NM — Not meaningful.

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

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

Corporate and Other

	Quarter Ended March 31,		Change Favorable/(Unfavorable)
	2021	2020	Change Favorable/(Unfavorable)
	$	$	$	%
	($ In Millions) (Unaudited)
Selling, general and administrative expenses	9,749	17,121	7,372	43
Fees to Manager – related party	5,552	7,356	1,804	25
Depreciation and amortization	471	328	(143)	(44)
Operating loss	(15,772)	(24,805)	9,033	36
Interest expense, net⁽¹⁾	(6,424)	(4,586)	(1,838)	(40)
Other income, net	856	38	818	NM
Benefit for income taxes	5,597	4,257	1,340	31
Net loss	(15,743)	(25,096)	9,353	37
*Reconciliation of net loss to EBITDA excluding non-cash items and a reconciliation of cash used in operating activities to Free Cash Flow:*
Net loss	(15,743)	(25,096)
Interest expense, net⁽¹⁾	6,424	4,586
Benefit for income taxes	(5,597)	(4,257)
Fees to Manager – related party	5,552	7,356
Depreciation and amortization	471	328
Other non-cash expense, net⁽²⁾	645	405
EBITDA excluding non-cash items	(8,248)	(16,678)	8,430	51

EBITDA excluding non-cash items	(8,248)	(16,678)
Interest expense, net⁽¹⁾	(6,424)	(4,586)
Non-cash interest expense, net⁽¹⁾	4,691	1,505
Benefit for current income taxes	2,787	5,880
Changes in working capital	(16,613)	(115)
Cash used in operating activities	(23,807)	(13,994)
Changes in working capital	16,613	115
Free cash flow	(7,194)	(13,879)	6,685	48



NM — Not meaningful.

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

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

MACQUARIE INFRASTRUCTURE CORPORATION

RECONCILIATION OF NET INCOME (LOSS) TO EBITDA EXCLUDING NON-CASH ITEMS AND A RECONCILIATION FROM CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW

	For the Quarter Ended March 31, 2021
	Atlantic Aviation	MIC Hawaii	Corporate and Other	Total Continuing Operations	Discontinued Operations	Total
	($ in Thousands) (Unaudited)
Net income (loss)	23,141	6,399	(15,743)	13,797	—	13,797
Interest expense, net⁽¹⁾	10,730	1,304	6,424	18,458	—	18,458
Provision (benefit) for income taxes	8,596	2,367	(5,597)	5,366	—	5,366
Depreciation and amortization	23,300	3,748	471	27,519	—	27,519
Fees to Manager – related party	—	—	5,552	5,552	—	5,552
Other non-cash expense (income), net⁽²⁾	1,569	(256)	645	1,958	—	1,958
EBITDA excluding non-cash items	67,336	13,562	(8,248)	72,650	—	72,650
EBITDA excluding non-cash items	67,336	13,562	(8,248)	72,650	—	72,650
Interest expense, net⁽¹⁾	(10,730)	(1,304)	(6,424)	(18,458)	—	(18,458)
Non-cash interest expense (income), net⁽¹⁾	943	(231)	4,691	5,403	—	5,403
(Provision) benefit for current income taxes	(4,480)	(1,516)	2,787	(3,209)	—	(3,209)
Changes in working capital	1,916	(1,696)	(16,613)	(16,393)	—	(16,393)
Cash provided by (used in) operating activities	54,985	8,815	(23,807)	39,993	—	39,993
Changes in working capital	(1,916)	1,696	16,613	16,393	—	16,393
Maintenance capital expenditures	(2,550)	(1,114)	—	(3,664)	—	(3,664)
Free Cash Flow	50,519	9,397	(7,194)	52,722	—	52,722

	For the Quarter Ended March 31, 2020
	Atlantic Aviation	MIC Hawaii	Corporate and Other	Total Continuing Operations	Discontinued Operations	Total
	($ in Thousands) (Unaudited)
Net income (loss)	14,188	3,920	(25,096)	(6,988)	18,215	11,227
Interest expense, net⁽¹⁾	18,876	2,775	4,586	26,237	15,299	41,536
Provision (benefit) for income taxes	5,479	1,775	(4,257)	2,997	6,330	9,327
Depreciation and amortization	26,579	3,624	328	30,531	34,480	65,011
Fees to Manager – related party	—	—	7,356	7,356	—	7,356
Other non-cash expense, net⁽²⁾	813	3,113	405	4,331	3,323	7,654
EBITDA excluding non-cash items	65,935	15,207	(16,678)	64,464	77,647	142,111
EBITDA excluding non-cash items	65,935	15,207	(16,678)	64,464	77,647	142,111
Interest expense, net⁽¹⁾	(18,876)	(2,775)	(4,586)	(26,237)	(15,299)	(41,536)
Non-cash interest expense, net⁽¹⁾	5,159	1,003	1,505	7,667	5,530	13,197
(Provision) benefit for current income taxes	(8,577)	(2,123)	5,880	(4,820)	(2,107)	(6,927)
Changes in working capital	15,667	(5,086)	(115)	10,466	(17,083)	(6,617)
Cash provided by (used in) operating activities	59,308	6,226	(13,994)	51,540	48,688	100,228
Changes in working capital	(15,667)	5,086	115	(10,466)	17,083	6,617
Maintenance capital expenditures	(3,045)	(2,669)	—	(5,714)	(5,615)	(11,329)
Free Cash Flow	40,596	8,643	(13,879)	35,360	60,156	95,516



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

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

View original content:http://www.prnewswire.com/news-releases/mic-reports-first-quarter-2021-financial-and-operational-results-301282799.html

SOURCE Macquarie Infrastructure Corporation

May 4, 2021 7:05 am

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

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

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

PR Newswire

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

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

PYC Therapeutics’ Poster Presentations at ARVO 2021:

“RNA therapeutics in the treatment of retinal disease – delivering the potential”

Poster #: 3545248
Session Date/Time: May 3, 2021 from 11:15 a.m. to 1:00 p.m. ET
Session Title: Drug Delivery and Gene Therapy
Lead Author: Professor Sue Fletcher, PhD
Key Highlights:

PYC’s lead cell-penetrating peptide (CPP) conjugation to a reporter antisense oligomer (AO) and evaluation in healthy subject and patient-derived retinal pigmented epithelium showed efficient cargo delivery and target engagement and 6-fold lower cytotoxicity than the competitor cell penetrating peptide (CPP).
In vivo studies show that the lead CPP traffics the AO through the vitreous, delivering the cargo to the neural retina and retinal pigment epithelium, with no evidence of retinal damage, resulting in enhanced reporter exon skipping.

“Modulation of CNOT3 expression using antisense oligomers to treat retinitis pigmentosa 11”

Poster #: 3541690
Session Date/Time: May 3, 2021 from 11:15 a.m. to 1.00 p.m. ET
Session Title: Drug Delivery and Gene Therapy
Lead Author: Janya Grainok, MSc, PYC Ocular program Group Leader
Key Highlights:

Modulating expression levels of CNOT3, a negative regulator of PRPF31, enhanced PRPF31 protein levels and can reverse the cellular disease phenotype in RP11 patient-derived cell models.
Antisense oligonucleotides (AOs) are effective modulators of CNOT3 expression and function with the ability to increase PRPF31 transcription from the unaffected allele to an expected therapeutic level.

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

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

Forward looking statements

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

CONTACTS:

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

MEDIA
Leo Vartorella
Argot Partners
[email protected]

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SOURCE PYC Therapeutics

May 4, 2021 7:05 am

Virtu Announces First Quarter 2021 Results

Authorizes Additional $300 Million Share Repurchase

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

First Quarter 2021:

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

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

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

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

Financial Results

First Quarter 2021:

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

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

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

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

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

Operating Segment Information

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

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

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

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

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

Total revenues by segment

(in thousands, unaudited)

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

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

(in thousands, unaudited)

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

Financial Condition

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

Expansion of Share Repurchase Program

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

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

Earnings Conference Call Information

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

Website Information

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

Non-GAAP Financial Measures and Other Items

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

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

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

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

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

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

Virtu Financial, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended March 31,
(in thousands, except share and per share data)	2021			2020

Revenues:
Trading income, net	$	812,743		$	802,466
Interest and dividends income	6,997			26,516
Commissions, net and technology services	191,649			170,744
Other, net	1,183			895
Total revenues	1,012,572			1,000,621

Operating Expenses:
Brokerage, exchange, clearance fees and payments for order flow, net	259,332			173,818
Communication and data processing	51,690			55,027
Employee compensation and payroll taxes	104,771			170,358
Interest and dividends expense	24,028			41,440
Operations and administrative	25,655			27,130
Depreciation and amortization	16,778			17,360
Amortization of purchased intangibles and acquired capitalized software	18,077			18,958
Termination of office leases	1,221			276
Debt issue cost related to debt refinancing, prepayment and commitment fees	1,755			4,171
Transaction advisory fees and expenses	(14		)	188
Financing interest expense on long-term borrowings	19,492			25,670
Total operating expenses	522,785			534,396

Income before income taxes and noncontrolling interest	489,787			466,225
Provision for income taxes	80,555			77,987
Net income	$	409,232		$	388,238

Noncontrolling interest	(169,827		)	(167,169		)

Net income available for common stockholders	$	239,405		$	221,069

Earnings per share:
Basic	$	1.91		$	1.80
Diluted	$	1.89		$	1.80

Weighted average common shares outstanding
Basic	122,062,555			119,757,158
Diluted	123,389,238			119,788,475

Comprehensive income:
Net income	$	409,232		$	388,238
Other comprehensive income
Foreign exchange translation adjustment, net of taxes	(3,676		)	(10,396		)
Net change in unrealized cash flow hedges gains (losses), net of taxes	21,906			(55,602		)
Comprehensive income	$	427,462		$	322,240
Less: Comprehensive income attributable to noncontrolling interest	(177,616		)	(138,523		)
Comprehensive income available for common stockholders	$	249,846		$	183,717

Virtu Financial, Inc. and Subsidiaries

Reconciliation to Non-GAAP Operating Data (Unaudited)

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

	Three Months Ended March 31,
(in thousands, except percentages)	2021			2020

Reconciliation of Trading income, net to Adjusted Net Trading Income
Trading income, net	$	812,743		$	802,466
Commissions, net and technology services	191,649			170,744
Interest and dividends income	6,997			26,516
Brokerage, exchange, clearance fees and payments for order flow, net	(259,332		)	(173,818		)
Interest and dividends expense	(24,028		)	(41,440		)
Adjusted Net Trading Income	$	728,029		$	784,468

Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Net income (loss)	409,232			388,238
Financing interest expense on long-term borrowings	19,492			25,670
Debt issue cost related to debt refinancing, prepayment and commitment fees	1,755			4,171
Depreciation and amortization	16,778			17,360
Amortization of purchased intangibles and acquired capitalized software	18,077			18,958
Provision for income taxes	80,555			77,987
EBITDA	$	545,889		$	532,384

Severance	2,020			4,200
Transaction advisory fees and expenses	(14		)	188
Termination of office leases	1,221			276
Other	2,831			6,910
Share based compensation	12,778			25,744
Adjusted EBITDA	$	564,725		$	569,702

Selected Operating Margins
Net Income Margin (1)	56.2		%	49.5		%
EBITDA Margin (2)	75.0		%	67.9		%
Adjusted EBITDA Margin (3)	77.6		%	72.6		%

1 Calculated by dividing net income by Adjusted Net Trading Income.
2 Calculated by dividing EBITDA by Adjusted Net Trading Income.
3 Calculated by dividing Adjusted EBITDA by Adjusted Net Trading Income.

Virtu Financial, Inc. and Subsidiaries

Reconciliation to Non-GAAP Operating Data (Unaudited)

(Continued)

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

	Three Months Ended March 31,
(in thousands, except share and per share data)	2021			2020

Reconciliation of Net Income to Normalized Adjusted Net Income
Net income	$	409,232		$	388,238
Provision for income taxes	80,555			77,987
Income before income taxes and noncontrolling interest	$	489,787		$	466,225
Amortization of purchased intangibles and acquired capitalized software	18,077			18,958
Debt issue cost related to debt refinancing, prepayment and commitment fees	1,755			4,171
Severance	2,020			4,200
Transaction advisory fees and expenses	(14		)	188
Termination of office leases	1,221			276
Other	2,831			6,910
Share based compensation	12,778			25,744
Normalized Adjusted Net Income before income taxes	$	528,455		$	526,672
Normalized provision for income taxes (1)	126,829			126,401
Normalized Adjusted Net Income	$	401,626		$	400,271

Weighted Average Adjusted shares outstanding (2)	196,950,931			195,016,686

Normalized Adjusted EPS	$	2.04		$	2.05

(1) Reflects U.S. federal, state, and local income tax rate applicable to corporations of approximately 24% for 2021 and 24% for 2020.
(2) Assumes that (1) holders of all vested and unvested non-vesting Virtu Financial Units (together with corresponding shares of the Company’s Class C common stock, par value $0.00001 per share (the “Class C Common Stock”)) have exercised their right to exchange such Virtu Financial Units for shares of Class A Common Stock on a one-for-one basis, (2) holders of all Virtu Financial Units (together with corresponding shares of the Company’s Class D common stock, par value $0.00001 per share (the “Class D Common Stock”)) have exercised their right to exchange such Virtu Financial Units for shares of the Company’s Class B common stock, par value $0.00001 per share (the “Class B Common Stock”) on a one-for-one basis, and subsequently exercised their right to convert the shares of Class B Common Stock into shares of Class A Common Stock on a one-for-one basis. Includes additional shares from dilutive impact of options, restricted stock units and restricted stock awards outstanding under the Amended and Restated 2015 Management Incentive Plan and the Amended and Restated ITG 2007 Equity Plan during the three months ended March 31, 2021 and 2020 as well as warrants issued in connection with the Founder Member Loan during the three months ended March 31, 2020.

Virtu Financial, Inc. and Subsidiaries

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands, except share data)	March 31, 2021		December 31, 2020

Assets
Cash and cash equivalents	$	899,041	$	889,559
Cash and securities segregated under regulations and other	122,792		117,446
Securities borrowed	1,384,134		1,425,016
Securities purchased under agreements to resell	36,071		22,866
Receivables from broker-dealers and clearing organizations	1,656,347		1,684,006
Receivables from customers	515,519		214,478
Trading assets, at fair value	3,906,041		3,115,731
Property, equipment and capitalized software, net	109,697		113,590
Operating lease right-of-use assets	252,027		268,864
Goodwill	1,148,926		1,148,926
Intangibles (net of accumulated amortization)	436,422		454,499
Deferred taxes	183,035		193,070
Other assets	240,580		317,747
Total assets	10,890,632		9,965,798

Liabilities and equity
Liabilities
Short-term borrowings, net	240,444		64,686
Securities loaned	1,191,615		948,256
Securities sold under agreements to repurchase	410,164		461,235
Payables to broker-dealers and clearing organizations	1,079,808		876,446
Payables to customers	347,184		118,826
Trading liabilities, at fair value	2,984,733		2,923,708
Tax receivable agreement obligations	271,165		271,165
Accounts payable and accrued expenses and other liabilities	386,328		491,818
Operating lease liabilities	298,890		315,340
Long-term borrowings, net	1,636,221		1,639,280
Total liabilities	8,846,552		8,110,760

Total equity	2,044,080		1,855,038

Total liabilities and equity	$	10,890,632	$	9,965,798

	As of March 31, 2021
Ownership of Virtu Financial LLC Interests:	Interests		%
Virtu Financial, Inc. – Class A Common Stock and Restricted Stock Units	124,807,253		64.0		%
Non-controlling Interests (Virtu Financial LLC)	70,226,922		36.0		%
Total Virtu Financial LLC Interests	195,034,175		100.0		%

About Virtu Financial, Inc.

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

Cautionary Note Regarding Forward-Looking Statements

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

CONTACT

Investor & Media Relations
Andrew Smith
[email protected]

May 4, 2021 7:05 am

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

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

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

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

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

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

Acuant Experiences Record Growth

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

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

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

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

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

About Acuant

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

Media Contact
Malini Gujral
[email protected]

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

May 4, 2021 7:05 am

Exterran Corporation Announces First Quarter 2021 Results

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

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

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

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

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

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

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

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

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

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

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

Contract Operations Segment

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

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

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

Aftermarket Services Segment

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

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

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

Product Sales Segment

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

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

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

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

Conference Call Information

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

About Exterran Corporation

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

For more information, contact:

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

Non-GAAP and Other Financial Information

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

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

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

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

Forward-Looking Statements

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

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

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

EXTERRAN CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

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

Basic and diluted net loss per common share:
Loss from continuing operations per common share	$	(0.88	)	$	(1.03	)	$	(0.49	)
Income (loss) from discontinued operations per common share	(0.03		)	0.01			(0.07		)
Net loss per common share	$	(0.91	)	$	(1.02	)	$	(0.56	)

Weighted average common shares outstanding used in net loss per common share:
Basic and diluted	32,950			32,832			32,653

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

EXTERRAN CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	March 31, 2021		December 31, 2020
ASSETS

Current assets:
Cash and cash equivalents	$	42,575	$	40,318
Restricted cash	4,078		3,410
Accounts receivable, net	188,401		198,028
Inventory	107,533		109,837
Contract assets	32,301		32,642
Other current assets	21,907		19,810
Current assets associated with discontinued operations	25,955		25,325
Total current assets	422,750		429,370
Property, plant and equipment, net	695,164		733,222
Long-term contract assets	19,324		33,563
Operating lease right of use assets	24,180		25,428
Deferred income taxes	6,824		8,866
Intangible and other assets, net	77,157		71,436
Long-term assets associated with discontinued operations	1,608		1,606
Total assets	$	1,247,007	$	1,303,491

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable, trade	$	52,288	$	60,078
Accrued liabilities	108,548		94,404
Contract liabilities	97,753		100,123
Current operating lease liabilities	6,228		6,340
Current liabilities associated with discontinued operations	7,016		13,707
Total current liabilities	271,833		274,652
Long-term debt	569,766		562,325
Deferred income taxes	1,073		1,014
Long-term contract liabilities	65,580		80,499
Long-term operating lease liabilities	28,826		29,868
Other long-term liabilities	44,162		57,159
Long-term liabilities associated with discontinued operations	1,062		2,142
Total liabilities	982,302		1,007,659
Total stockholders’ equity	264,705		295,832
Total liabilities and stockholders’ equity	$	1,247,007	$	1,303,491

EXTERRAN CORPORATION
UNAUDITED SUPPLEMENTAL INFORMATION
(In thousands, except percentages)

	Three Months Ended
	March 31, 2021			December 31, 2020			March 31, 2020
Revenues:
Contract operations	$	81,014		$	84,011		$	94,788
Aftermarket services	25,120			29,909			27,909
Product sales	30,030			37,779			38,097
	$	136,164		$	151,699		$	160,794

Segment Adjusted Gross margin:
Contract operations	$	57,670		$	58,383		$	63,328
Aftermarket services	5,108			5,530			6,728
Product sales	4,457			5,262			(834		)
Total Adjusted Gross margin	$	67,235		$	69,175		$	69,222

Segment Adjusted Gross margin percentage:
Contract operations	71		%	69		%	67			%
Aftermarket services	20		%	18		%	24			%
Product sales	15		%	14		%	(2		)	%

Selling, general and administrative	$	32,631		$	28,357		$	33,560
% of revenue	24		%	19		%	21			%

EBITDA, as adjusted	$	33,054		$	38,762		$	34,247
% of revenue	24		%	26		%	21			%

Capital expenditures	$	7,199		$	9,759		$	16,807

Revenue by Geographical Regions:
North America	$	6,325		$	12,977		$	8,976
Latin America	60,618			64,497			76,797
Middle East and Africa	57,179			48,315			55,713
Asia Pacific	12,042			25,910			19,308
Total revenues	$	136,164		$	151,699		$	160,794

	As of
	March 31, 2021			December 31, 2020			March 31, 2020
Contract Operations Backlog:
Contract operations services	$	1,227,654		$	1,100,929		$	1,352,627

Product Sales Backlog:
Compression equipment	$	12,562		$	10,218		$	72,637
Processing and treating equipment	403,718			425,292			465,535
Other product sales	28,781			29,835			40,066
Total product sales backlog	$	445,061		$	465,345		$	578,238

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

EXTERRAN CORPORATION
UNAUDITED NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)

	Three Months Ended
	March 31, 2021			December 31, 2020			March 31, 2020
Non-GAAP Financial Information—Reconciliation of total gross margin to Total adjusted gross margin:
Revenues	$	136,164		$	151,699		$	160,794
Cost of sales (excluding depreciation and amortization expense)	68,929			82,524			91,572
Depreciation and amortization⁽¹⁾	40,835			42,618			30,446
Total gross margin	26,400			26,557			38,776
Depreciation and amortization⁽¹⁾	40,835			42,618			30,446
Total adjusted gross margin ⁽²⁾	$	67,235		$	69,175		$	69,222

Non-GAAP Financial Information—Reconciliation of Net loss to EBITDA, as adjusted:
Net loss	$	(29,873	)	$	(33,377	)	$	(18,304	)
(Income) loss from discontinued operations, net of tax	873			(561		)	2,231
Depreciation and amortization	42,499			44,156			31,951
Impairments	—			9,953			—
Restructuring and other charges	624			—			207
Interest expense	9,964			9,603			9,953
Gain on extinguishment of debt	—			(147		)	—
(Gain) loss on currency exchange rate remeasurement of intercompany balances	1,511			(298		)	(1,121		)
Provision for income taxes	7,456			9,433			9,330
EBITDA, as adjusted⁽³⁾	$	33,054		$	38,762		$	34,247

Non-GAAP Financial Information—Reconciliation of Net loss to Adjusted net loss from continuing operations:
Net loss	$	(29,873	)	$	(33,377	)	$	(18,304	)
(Income) loss from discontinued operations, net of tax	873			(561		)	2,231
Loss from continuing operations	(29,000		)	(33,938		)	(16,073		)
Adjustment for items:
Impairments	—			9,953			—
Restructuring and other charges	624			—			207
Gain on extinguishment of debt	—			(147		)	—
Tax impact of adjustments ⁽⁴⁾	—			(98		)	—
Adjusted net loss from continuing operations ⁽⁵⁾	$	(28,376	)	$	(24,230	)	$	(15,866	)

Diluted loss from continuing operations per common share	$	(0.88	)	$	(1.03	)	$	(0.49	)
Adjustment for items, after-tax, per diluted common share	0.02			0.29			—
Diluted adjusted net loss from continuing operations per common share ^{(5) (6)}	$	(0.86	)	$	(0.74	)	$	(0.49	)

⁽¹⁾Represents the portion only attributable to cost of sales.

⁽²⁾Management evaluates the performance of each of the Company’s segments based on adjusted gross margin. Total adjusted gross margin, a non-GAAP measure, is included as a supplemental disclosure because it is a primary measure used by our management to evaluate the results of revenue and cost of sales (excluding depreciation and amortization expense), which are key components of our operations. Management believes total adjusted gross margin is important supplemental information for investors because it focuses on the current performance of our operations and excludes the impact of the prior historical costs of the assets acquired or constructed that are utilized in those operations, the indirect costs associated with our SG&A activities, the impact of our financing methods, restructuring and other charges, gain on extinguishment of debt and income taxes. In addition, the inclusion of depreciation and amortization expense may not accurately reflect the costs required to maintain and replenish the operational usage of our assets and therefore may not portray the costs from current operating activity.

⁽³⁾Management believes EBITDA, as adjusted, is an important measure of operating performance because it allows management, investors and others to evaluate and compare our core operating results from period to period by removing the impact of our capital structure (interest expense from outstanding debt), asset base (depreciation and amortization), our subsidiaries’ capital structure (non-cash gains or losses from foreign currency exchange rate changes on intercompany obligations), tax consequences, impairment charges, restructuring and other charges, expensed acquisition costs, gain on extinguishment of debt and other items. Management uses EBITDA, as adjusted, as supplemental measures to review current period operating performance, comparability measures and performance measures for period to period comparisons. In addition, the Company’s compensation committee has used EBITDA, as adjusted, in evaluating the performance of the Company and management and in evaluating certain components of executive compensation, including performance-based annual incentive programs.

⁽⁴⁾The tax impacts of adjustments were based on the Company’s statutory tax rates applicable to each item in the appropriate taxing jurisdictions. Using statutory tax rates for presentation of the non-GAAP measures allows a consistent basis for investors to understand financial performance of the Company across historical periods. The overall effective tax rate on adjustments was impacted by the inability to recognize tax benefits from charges in jurisdictions that are in cumulative-loss positions.

⁽⁵⁾Management believes adjusted net income (loss) from continuing operations and diluted adjusted net income (loss) from continuing operations per common share provides useful information to investors because it allows management, investors and others to evaluate and compare our core operating results from period to period by removing the impact of impairment charges, restructuring and other charges, expensed acquisition costs, gain on extinguishment of debt and other items not appropriately reflective of our core business.

⁽⁶⁾ Diluted adjusted net income (loss) from continuing operations per common share, was computed using the two-class method to determine the net income (loss) per share for each class of common stock and participating security (certain of our restricted stock and restricted stock units) according to participation rights in undistributed earnings.

May 4, 2021 7:05 am

Wedge Supports Hyper-Growth Journey with New Funding

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

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

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

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

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

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

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

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

About Wedge

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

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

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

May 4, 2021 7:05 am

CN Proposal Continues to Garner Positive Momentum

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

letters

of support for CN since it made its proposal

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

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

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

	In the two weeks since Canadian National Railway Company (“CN”) publicly announced its proposal for a combination with Kansas City Southern (“KCS”), over 700 stakeholders have submitted letters publicly expressing their support for the proposed transaction. In this filing, CN adds 100 letters to the 620 support statements that were filed last week in CN-4, CN-9, and CN-10.¹

	66 of these letters explicitly support the proposed combination of KCS and CN, for reasons that echo the 620 letters that CN has previously submitted. Customers are responding to the pro-competitive benefits of a transaction that would provide better service options, promote growth, and create a seamless, integrated North American railway that can compete head-to-head with trucks for north-south movements.

	34 of the enclosed letters specifically focus on CN’s request that the Board approve its voting trust agreement, and ask the Board to approve that proposed voting trust. Many voting trust letters are from stakeholders who support the ultimate transaction. Others are from customers who are still evaluating the proposed combination, but who wholeheartedly support CN’s use of a voting trust. For example, the Chemours Company does not yet take a position on an ultimate CN-KCS combination, but it “unequivocally supports approval of CN’s voting trust” and urges the Board to grant CN’s request for simultaneous review of CP’s and CN’s voting trusts to “ensure a level playing field.”²

	CN looks forward to continued conversations with our customers and other interested parties about the proposed CN-KCS combination and why it presents the best solution for the continued growth, development and prosperity of the North American economy.

		Respectfully submitted,

	Sean Finn	/s/ Raymond A. Atkins
	Olivier Chouc	Raymond A. Atkins
	CN	Terence M. Hynes
	935 de La Gauchetière Street West,	Matthew J. Warren
	16th Floor	Sidley Austin LLP
	Montreal, QC H3B 2M9	1501 K Street, N.W.
	CANADA	Washington, DC 20005
		(202) 736-8000
	Kathryn J. Gainey	[email protected]
	CN
	601 Pennsylvania Ave, NW
	Suite 500, North Building
	Washington, DC 20004
	[email protected]

	Counsel for Canadian National Railway Company, Grand Trunk Corporation, and CN’s Rail Operating Subsidiaries

	Dated: May 3, 2021

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

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

About CN

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

Forward Looking Statements

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

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

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

No Offer or Solicitation

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

Additional Information and Where to Find It

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

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

Participants

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

Contacts:

Media	Investment Community
Canada	Paul Butcher
Mathieu Gaudreault	Vice-President
CN Media Relations & Public Affairs	Investor Relations
(514) 249-4735	(514) 399-0052
[email protected]	[email protected]

Longview Communications & Public Affairs
Martin Cej
(403) 512-5730
[email protected]

United States
Brunswick Group
Jonathan Doorley / Rebecca Kral
(917) 459-0419 / (917) 818-9002
[email protected]
rkral@bruns wickgroup.com

May 4, 2021 7:05 am

Red White & Bloom Releases Update and Advises on Timing of Filing Annual Audited Financial Statements and Management’s Discussion and Analysis

TORONTO, May 04, 2021 (GLOBE NEWSWIRE) — Red White & Bloom Brands Inc. (CSE: RWB and OTC: RWBYF) (“RWB” or the “Company”) previously announced that it did not file its audit in advance of the April 30, 2021 deadline. The Company anticipates filing its 2020 audited financial statements on or before May 31, 2021. As a result of today’s announcement, RWB is providing certain 2020 and subsequent financial results:

Certain highlights for 2020 and subsequent to the year end:

System wide product sales¹ for the Company, which excludes RWB Michigan, RWB Florida and RWB Illinois, in the fourth quarter of 2020 were approximately CDN $26.5 million, an increase of 218% over the third quarter and the first full quarter post-closing of the Platinum Vape (“PV”) acquisition;
RWB closed its acquisition of Acreage Florida, Inc. which included an approximate 114,000 SF facility for cultivation and 8 leased stores. RWB Florida is licensed to operate medical marijuana dispensaries (MMTCs), a processing facility, and a cultivation facility;
RWB closed on the acquisition of PV, which is licensed in the State of California and has products available in Michigan and Oklahoma with agreements in place to expand to Arizona;
RWB closed on the acquisition of Mid-American Growers, owners of 3.6 million square foot glass greenhouse in the State of Illinois. The Company has since entered into a definitive agreement to purchase one of only 21 cannabis licenses and operations in Illinois, for consideration of approximately US$45 million;
RWB has funded US$75 million to PharmaCo, a Michigan based licensed operator that has acquired 18 provisioning centers (dispensaries) and multiple cultivation centers. PharmaCo sales in 2020 were approximately CDN $70 million with 8 stores operating as of the end of 2020;
RWB has submitted its applications to regulators in the state of Michigan to complete the acquisition of all the assets of PharmaCo, the closing of which is fully funded;
The Company has raised in excess of US$110 million, in both debt and equity, between January 1, 2020 and April 30, 2021;
The Company has completed, or has definitive agreements for, the acquisition of THC licensed entities in Michigan, Illinois, Florida, California, and Massachusetts;
Total consideration for completed and pending mergers and acquisitions exceeds US$250 million;
Once all acquisitions are closed, RWB, and RWB brands will be available in 6 of the top 10 states in the US, measured by cannabis revenue, with sales in 2020 exceeding $8.8B.

Management Commentary

“Despite our frustration with the delay in releasing our results for 2020, we are thrilled with what we have accomplished over the year, and the first few months of 2021. I see a company that has grown from being an arm’s-length investor in Michigan, to a footprint that will see RWB deploy its house of brand strategy in six of the most coveted cannabis markets in the United States,” said Brad Rogers, Chief Executive Officer and Chairman of RWB. “When I reflect on the foundation we’ve set for this company to build on, including our brand strategy, I see a unique approach to the market. In the last 16 months or so we went public, raised over a hundred million dollars, entered into agreements for over a quarter billion dollars of acquisitions, and closed over half of those already. We have a strategy to rapidly build scale in two of the best limited-license markets in the US, and our previous investments in Michigan have already achieved this. In our brand portfolio, we see PV expanding quickly and decisively, while High Times has sold out every time its released in Michigan.”

Mr. Rogers concluded: “I am incredibly proud of the work our team has accomplished in 2020 and subsequently. Together, we will continue to stay focused on going deeper in our core states, the judicious deployment of capital, and growing our business.”

¹System wide product sales is a financial measure that is not determined or defined in accordance with the International Financial Reporting Standards, as issued by the International Accounting Standards Board (“IFRS”). System-wide product sales represents the sum of direct sales and indirect sales of PV branded products as well as hemp and CBD sales. It does not include PharmaCo, RWB Illinois or RWB Florida results.

About Red White & Bloom Brands Inc.
The Company is positioning itself to be one of the top three multi-state cannabis operators active in the U.S. legal cannabis and hemp sector. RWB is predominantly focusing its investments on the major US markets, including Michigan, Illinois, Massachusetts, Arizona and California with respect to cannabis, and the US and internationally for hemp-based CBD products.

For more information about Red White & Bloom Brands Inc., please contact:

Tyler Troup, Managing Director

Circadian Group IR
[email protected]

Visit us on the web: www.RedWhiteBloom.com

Follow us on social media:

Twitter: @rwbbrands
Facebook: @redwhitebloombrands
Instagram: @redwhitebloombrands

Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.

FORWARD LOOKING INFORMATION

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company’s current expectations. When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. There is no assurance that these transactions will yield results in line with management expectations. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: risks associated with the implementation of the Company’s business plan and matters relating thereto, risks associated with the cannabis industry, competition, regulatory change, the need for additional financing, reliance on key personnel, market size, and the volatility of the Company’s common share price and volume. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.

There are a number of important factors that could cause the Company’s actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others, risks related to the Company’s proposed business, such as failure of the business strategy and government regulation; risks related to the Company’s operations, such as additional financing requirements and access to capital, reliance on key and qualified personnel, insurance, competition, intellectual property and reliable supply chains; risks related to the Company and its business generally; risks related to regulatory approvals. The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. While the Company may elect to, it does not undertake to update this information at any particular time.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.

May 4, 2021 7:05 am

Corsair Gaming Reports Record First Quarter 2021 Financial Results

Reports Record First Quarter Revenue and Profit; Raises Full-Year Guidance

FREMONT, Calif., May 04, 2021 (GLOBE NEWSWIRE) — Corsair Gaming, Inc. (NASDAQ:CRSR) (“Corsair”), a leading global provider and innovator of high-performance gear for gamers and content creators, today announced financial results for the first quarter ended March 31, 2021.

First Quarter 2021 Highlights

Net revenue was $529.4 million, an increase of 71.6% year-over-year. Gamer and creator peripherals segment net revenue was $175.9 million, an increase of 131.9% year-over-year. Gaming components and systems segment net revenue was $353.5 million, an increase of 51.9% year-over-year.
Gross profit was $160.3 million, an increase of 103.9% year-over-year, with gross margin of 30.3%, an improvement of 480 basis points year-over-year. Gamer and creator peripherals segment gross profit was $68.9 million, an increase of 211.1% year-over-year. Gaming components and systems segment gross profit was $91.5 million, an increase of 61.9% year-over-year.
Operating income was $67.3 million, an increase of 404.5% year-over-year.
Adjusted operating income was $80.4 million, an increase of 221.4% year-over-year.
Net income was $46.7 million, or $0.47 per diluted share, compared to net income of $1.2 million in the same period last year, or $0.01 per diluted share.
Adjusted net income was $58.2 million, or $0.58 per diluted share, an increase of 420.4% year-over-year compared to adjusted net income of $11.2 million in the same period last year, or $0.13 per diluted share.
Adjusted EBITDA was $80.4 million, an increase of 196.6% year-over-year, with adjusted EBITDA margin of 15.2%, an improvement of 640 basis points year-over-year.
As of March 31, 2021, we had cash and restricted cash of $125.6 million, $48.1 million capacity under our revolving credit facility and total long-term debt of $294.3 million.
Cash flows from operations was $27.8 million, which increased from $2.0 million in the same period last year.

Definitions of the non-GAAP financial measures used in this press release and reconciliations of such measures to their nearest GAAP equivalents are included below under the heading “Use and Reconciliation of Non-GAAP Financial Measures.”

“We are thrilled with our first quarter financial performance and strategic progress. End demand remained strong for our products and our new products such as the K65 mini RGB keyboard and Elgato’s new accessories debuted well. We introduced 29 new products in the first quarter and we expect this blistering pace of new product introduction to continue throughout the year with several brand new products still to come. Supplies of key components remain tight but we have been able to support our plans and will continue to work on this issue for the rest of the year. As a result of our stronger-than-expected first quarter performance and our current views for the rest of the year, we raised our 2021 annual guidance,” stated Andy Paul, Chief Executive Officer of Corsair.

“We were able to convert our strong financial performance in the first quarter into an opportunity to further strengthen our balance sheet. We reduced debt by an additional $28 million with outstanding principal now at $299 million and net debt at $177.3 million. We did this while growing quickly and leaving sufficient resources to help us grow further. We continue to evaluate growth opportunities while still expecting to further reduce our existing debt in 2021,” said Michael G. Potter, Chief Financial Officer of Corsair.

Financial Outlook

The Company is updating guidance for the full-year 2021 as indicated below:

Raising net revenue to be in the range of $1.9 billion to $2.1 billion from $1.8 billion to $1.95 billion.
Raising adjusted operating income to be in the range of $235 million to $255 million from $205 million to $220 million.
Raising adjusted EBITDA to be in the range of $245 million to $265 million from $215 million to $230 million.

Certain non-GAAP measures included in our financial outlook were not reconciled to the comparable GAAP financial measures because the GAAP measures are not accessible on a forward-looking basis. We are unable to reconcile these forward-looking non-GAAP financial measures to the most directly comparable GAAP measures without unreasonable efforts because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include stock-based compensation charges, public offering related charges, depreciation and amortization, severance, and other items. The unavailable information could have a significant impact on our GAAP financial results.

The foregoing forward-looking statements reflect our expectations as of today’s date. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. We do not intend to update our financial outlook until our next quarterly results announcement.

Please see “Use and Reconciliation of Non-GAAP Financial Measures” below for a discussion on how we calculate the non-GAAP measures presented herein and a reconciliation to the most directly comparable GAAP measure.

Recent Developments

On April 13, 2021, Corsair announced the launch of its Corsair One a200 gaming PC powered by the new AMD Ryzen™ 5000-series CPU and the Corsair One i200 powered by a new 11^th Gen Intel® Core™ CPU. These systems come equipped with NVIDIA® GeForce RTX™ 3080 and raise the bar for gaming and streaming-ready compact PCs.
On April 8, 2021, Corsair under its Elgato brand announced the release of Cam Link Pro, a powerful new PCIe capture card and video mixer that boasts four HDMI inputs to stream or record 4K or 1080p60 Full HD video from DSLR cameras, laptops, tablets, and any other devices that output a clean HDMI signal. From live broadcasting and editing to video conferencing and remote teaching, Cam Link Pro makes multicam production easy for content creators and professionals who engage with audiences online.
On April 8, 2021, Corsair launched three new products in its CHAMPION SERIES range of competition-grade peripherals, built for and tested by top eSports professionals. Headlining the new launches is the streamlined K70 RGB TKL Mechanical Gaming Keyboard, with 8,000Hz hyper-polling driven by CORSAIR AXON hyper-processing technology in a compact, tenkeyless design, enabling users to take pro performance to the next event. Two new CORSAIR gaming mice also enter the CHAMPION SERIES lineup: the SABRE RGB PRO and SABRE PRO. The first CORSAIR mice to also utilize AXON hyper-processing technology and 8,000Hz polling, the SABRE RGB PRO and SABRE PRO deliver lightning-fast inputs, along with a comfortable ergonomic shape and ultra-light weight for superior agility and control.
On March 31, 2021, Corsair launched a new pair of RGB gaming keyboards: the CORSAIR K55 RGB PRO and K55 RGB PRO XT. These latest entries in the K55 family offer dynamic RGB backlighting, and include six dedicated macro keys with Elgato Stream Deck software integration for one-button actions and shortcuts. The K55 RGB PRO features five zones of RGB lighting with six preset onboard lighting effects, while the K55 RGB PRO XT kicks things up a notch with per-key RGB backlighting, offering ten onboard lighting effects and near-limitless customization through CORSAIR iCUE software.
On March 16, 2021, Corsair launched a new series of 11th-Gen Intel®-powered VENGEANCE i7200 gaming PCs. Now equipped with a cutting-edge 11th Gen Intel® Core™ CPU, these powerful systems deliver blazing-fast frequencies and the processing power to push the limits of gaming, streaming, and more. Available in configurations with up to an Intel Core™ i9 11900K CPU, the new CORSAIR VENGEANCE i7200 Series can power through complex content creation, extreme gaming, and demanding applications with ease. Fantastic 3D rendering and content creation performance is driven by the incredible power of NVIDIA® GeForce RTX™ 3000-Series graphics, up to a GeForce RTX 3090, for amazingly lifelike visuals. NVIDIA DLSS 2.0 AI technology boosts frame rates, producing silky-smooth image quality even when playing at maximum detail at 4K settings. VENGEANCE i7200 systems are completed with a full array of award-winning CORSAIR components in an airflow-optimized CORSAIR 4000D AIRFLOW mid-tower case.
On March 16, 2021, Corsair launched its first 60% mechanical gaming keyboard, the CORSAIR K65 RGB MINI, alongside a full range of CORSAIR PBT DOUBLE-SHOT PRO Keycap Mod Kits to unlock a huge new range of keyboard personalization. Packing massive features into its impressively small size, the K65 RGB MINI boasts 100% CHERRY MX mechanical keyswitches, dynamic per-key RGB backlighting, CORSAIR AXON Hyper-Processing Technology with 8,000Hz polling, and a detachable USB Type-C cable. Launching alongside the K65 RGB MINI, the new CORSAIR PBT DOUBLE-SHOT PRO Keycap Mod Kits offer five additional colors with which to customize the K65 RGB MINI or compatible keyboard. Together, K65 RGB MINI and the new PBT DOUBLE-SHOT PRO Keycaps offer a powerful, personal, and portable CORSAIR keyboard experience in the smallest form-factor yet.
On March 4, 2021, Corsair under its Elgato brand launched two new product lines to help creators personalize their home studios and streaming setups – Elgato Light Strip and Elgato Wave Panels. Elgato Light Strip offers convenient app-controlled ambient lighting with RGBWW LEDs capable of displaying 16 million colors, with a wide brightness and color temperature range to create the perfect look for any setup. Elgato Wave Panels feature two-layer foam construction to reduce room echo and reverberation, easily mounting to the wall in modular hexagonal panels. With the release of both Elgato Light Strip and Wave Panels, content creators now have more options available to customize and set their studio apart from the rest.
On February 25, 2021, Corsair launched a new ultra-light gaming mouse, the KATAR PRO XT. At a weight of just 73g and equipped with a drag-reducing paracord cable, the KATAR PRO XT is extremely agile and well-suited for fast-paced FPS and MOBA gameplay. The KATAR PRO XT is also the first CORSAIR mouse to implement new CORSAIR QUICKSTRIKE buttons, pre-tensioned to reduce button travel to a minimum, meaning every click from the KATAR PRO XT registers faster than ever.
On February 16, 2021, Corsair announced the acquisition of Visuals by Impulse (VBI), a premium design platform for creators, which will join CORSAIR under its existing Elgato brand. Founded in 2015, VBI provides professional design for creators on Twitch, YouTube and Facebook Gaming. Streamers around the world use VBI overlays, alerts, and widgets to customize their broadcasts and grow their fanbases. VBI is a trusted partner for over 200,000 creators — and the industry’s go-to resource for free graphics, premium animations, and online streaming tools. Thanks to VBI technology and design, anyone can create stylish, personalized live-streaming content.

Conference Call and Webcast Information

We will host a conference call to discuss the first quarter 2021 financial results on May 4, 2021, at 5:30 a.m. PT. The conference call can be accessed live over the phone by dialing 1-877-407-0784, or for international callers 1-201-689-8560. A replay will be available from 8:30 a.m. PT on May 4, 2021 through May 11, 2021, by dialing 1-844-512-2921, or for international callers 1-412-317-6671. The replay passcode is 13718830.

The call will also be webcast live from our investor relations website at https://ir.corsair.com. Following completion of the call, a recorded replay of the webcast will be available on the website.

About Corsair Gaming, Inc.

Corsair Gaming, Inc. (NASDAQ:CRSR) is a leading global developer and manufacturer of high-performance gear and technology for gamers, content creators, and PC enthusiasts. From award-winning PC components and peripherals to premium streaming equipment and smart ambient lighting, Corsair delivers a full ecosystem of products that work together to enable everyone, from casual gamers to committed professionals, to perform at their very best.

Corsair also sells gear under our Elgato brand, which provides premium studio equipment and accessories for content creators, SCUF Gaming brand, which builds custom-designed controllers for competitive gamers, and ORIGIN PC brand, a builder of custom gaming and workstation desktop PCs and laptops.

Forward Looking Statements

Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, our estimated full year 2021 net revenue, adjusted operating income and adjusted EBITDA; our belief that our pace of new product introduction will continue throughout the year; whether we will be successful in managing inventory; whether we will be able to grow further; and whether we will continue to reduce our existing debt. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to: our ability to build and maintain the strength of our brand among gaming and streaming enthusiasts and our ability to continuously develop and successfully market new gear and improvements; the introduction and success of new third-party high-performance computer hardware, particularly graphics processing units and central processing units as well as sophisticated new video games; the risk that we are not able to compete with competitors and/or that the gaming industry, including streaming and eSports, does not grow as expected or declines; the loss or inability to attract and retain key management; delays or disruptions at our or third-parties’ manufacturing and distribution facilities; currency exchange rate fluctuations or international trade disputes resulting in our gear becoming relatively more expensive to our overseas customers or resulting in an increase in our manufacturing costs; the impact of the coronavirus on our business; general economic conditions that adversely effect, among other things, consumer confidence and spending; and the other factors described under the heading “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 to be filed with the Securities and Exchange Commission (SEC) on or about the date hereof and our subsequent filings with the SEC. Copies of each filing may be obtained from us or the SEC. All forward-looking statements reflect our beliefs and assumptions only as of the date of this press release. We undertake no obligation to update forward-looking statements to reflect future events or circumstances. Our results for the quarter ended March 31, 2021 are not necessarily indicative of our operating results for any future periods.

Use and Reconciliation of Non-GAAP Financial Measures

To supplement the financial results presented in accordance with GAAP, this earnings release presents certain non-GAAP financial information, including Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income Per Share. These are important financial performance measures for us, but are not financial measures as defined by GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation of or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income Per Share to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in such non-GAAP measures. Accordingly, we believe that Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income Per Share provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to the key financial metrics used by our management in our financial and operational decision-making. We also present these non-GAAP financial performance measures because we believe investors, analysts and rating agencies consider them useful in measuring our ability to meet our debt service obligations.

Our use of these terms may vary from that of others in our industry. These non-GAAP financial measures should not be considered as an alternative to revenues, operating income, net income, cash provided by operating activities or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. Reconciliations of these measures to the most directly comparable GAAP financial measures are presented in the attached schedules.

We calculate these non-GAAP financial measures as follows:

Adjusted operating income, non-GAAP, is determined by adding back to GAAP operating income the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisition, stock-based compensation, intangible asset amortization, certain acquisition-related and integration-related expenses, non-deferred costs associated with the IPO, secondary offering costs, and debt modification costs.
Adjusted net income, non-GAAP, is determined by adding back to GAAP net income the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisition, stock-based compensation, intangible asset amortization, certain acquisition-related and integration-related expenses, non-deferred costs associated with the IPO, secondary offering costs, debt modification costs, loss on extinguishment of debt, and the related tax effects of each of these adjustments.
Adjusted net income per diluted share, non-GAAP, is determined by dividing adjusted net income, non-GAAP by the respective weighted average shares outstanding, inclusive of the impact of other dilutive securities.
Adjusted EBITDA is determined by adding back to GAAP net income the acquisition accounting impact related to recognizing acquired inventory at fair value, change in fair value of contingent consideration for business acquisition, stock-based compensation, certain acquisition-related and integration-related expenses, non-deferred costs associated with the IPO, secondary offering costs, debt modification costs, intangible asset amortization, depreciation and amortization, interest expense (including loss on extinguishment of debt) and tax expense.
Adjusted EBITDA margin is determined by dividing adjusted EBITDA by net revenue for the respective periods.

We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view these non-GAAP financial measures in conjunction with the related GAAP financial measures.

Source: Corsair Gaming, Inc.

Investor Relations Contact:

Ronald van Veen
[email protected]
510-578-1407

Media Contact:

Adrian Bedggood
[email protected]
510-657-8747
+44-7989-258827

Corsair Gaming, Inc.

Condensed Combined Consolidated Statements of Operations

(Unaudited, in thousands, except per share amounts)

	Three Months Ended March 31,
	2021			2020
Net revenue	$	529,414		$	308,518
Cost of revenue		369,086			229,896
Gross profit		160,328			78,622
Operating expenses:
Sales, general and administrative		77,853			53,729
Product development		15,186			11,556
Total operating expenses		93,039			65,285
Operating income		67,289			13,337
Other (expense) income:
Interest expense		(4,946	)		(9,374	)
Other expense, net		(2,425	)		(63	)
Total other expense, net		(7,371	)		(9,437	)
Income before income taxes		59,918			3,900
Income tax expense		(13,195	)		(2,683	)
Net income	$	46,723		$	1,217
Net income per share:
Basic	$	0.51		$	0.01
Diluted	$	0.47		$	0.01
Weighted-average shares used to compute net income per share
Basic		91,951			84,079
Diluted		100,211			86,070

Corsair Gaming, Inc.

Segment Information

(Unaudited, in thousands, except percentages)

	Three Months Ended March 31,
	2021			2020
Net revenue:
Gamer and Creator Peripherals	$	175,912		$	75,861
Gaming Components and Systems		353,502			232,657
Total Net Revenue	$	529,414		$	308,518

Gross Margin:
Gamer and Creator Peripherals		39.1	%		29.2	%
Gaming Components and Systems		25.9	%		24.3	%
Total Gross Margin		30.3	%		25.5	%

Corsair Gaming, Inc.

Condensed Combined Consolidated Balance Sheets

(Unaudited, in thousands)

	March 31, 2021		December 31, 2020
Assets
Current assets:
Cash and restricted cash	$	125,351	$	133,338
Accounts receivable, net		304,174		293,629
Inventories		234,611		226,007
Prepaid expenses and other current assets		47,508		37,997
Total current assets		711,644		690,971
Property and equipment, net		15,320		16,475
Goodwill		314,089		312,760
Intangible assets, net		252,243		259,317
Restricted cash, noncurrent		231		230
Other assets		39,900		34,362
TOTAL ASSETS	$	1,333,427	$	1,314,115
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	272,251	$	299,636
Other liabilities and accrued expenses		227,019		205,745
Total current liabilities		499,270		505,381
Debt, net		294,254		321,393
Deferred tax liabilities		30,350		29,752
Other liabilities, noncurrent		21,846		20,199
TOTAL LIABILITIES		845,720		876,725
Stockholders’ Equity:
Common stock and additional paid-in capital		442,329		438,676
Retained earnings (accumulated deficit)		43,910		(2,813	)
Accumulated other comprehensive income		1,468		1,527
Total Stockholders’ Equity		487,707		437,390
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,333,427	$	1,314,115

Corsair Gaming, Inc.

Condensed Combined Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Three Months Ended March 31,
	2021			2020
Cash flows from operating activities:
Net income	$	46,723		$	1,217
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		3,076			1,105
Depreciation		2,436			2,158
Amortization of intangible assets		8,702			8,447
Debt issuance costs amortization		537			579
Loss on debt extinguishment		439			—
Deferred income taxes		(3,005	)		6
Other		1,316			502
Changes in operating assets and liabilities:
Accounts receivable		(13,416	)		37,432
Inventories		(13,508	)		145
Prepaid expenses and other assets		(4,419	)		6,312
Accounts payable		(26,988	)		(43,533	)
Other liabilities and accrued expenses		25,875			(12,370	)
Net cash provided by operating activities		27,768			2,000
Cash flows from investing activities:
Acquisition of business, net of cash acquired		(1,684	)		—
Payment of deferred and contingent consideration		(4,353	)		—
Purchase of property and equipment		(2,036	)		(1,847	)
Net cash used in investing activities		(8,073	)		(1,847	)
Cash flows from financing activities:
Repayment of debt		(28,000	)		(1,194	)
Payment of other offering costs		—			(115	)
Proceeds from exercise of stock options		185			—
Net cash used in financing activities		(27,815	)		(1,309	)
Effect of exchange rate changes on cash		134			(308	)
Net decrease in cash and restricted cash		(7,986	)		(1,464	)
Cash and restricted cash at the beginning of the period		133,568			51,947
Cash and restricted cash at the end of the period	$	125,582		$	50,483

Corsair Gaming, Inc.

GAAP to Non-GAAP Reconciliations

Non-GAAP Operating Income Reconciliations

(Unaudited, in thousands, except percentages)

	Three Months Ended March 31,
	2021			2020
Operating Income – GAAP	$	67,289		$	13,337
Acquisition accounting impact related to recognizing acquired inventory at fair value		–			421
Change in fair value of contingent consideration for business acquisition		72			–
Stock-based compensation		3,076			1,105
Intangible asset amortization		8,702			8,447
Acquisition-related and integration-related costs		208			976
Non-deferred IPO and secondary offering costs		1,031			438
Debt modification costs		–			288
Adjusted Operating Income – Non-GAAP	$	80,378		$	25,012
As a % of net revenue – GAAP		12.7	%		4.3	%
As a % of net revenue – Non-GAAP		15.2	%		8.1	%

Non-GAAP Net Income and Net Income Per Share Reconciliations

(Unaudited, in thousands, except per share amounts and percentages)

	Three Months Ended March 31,
	2021			2020
Net Income – GAAP	$	46,723		$	1,217
Acquisition accounting impact related to recognizing acquired inventory at fair value		–			421
Change in fair value of contingent consideration for business acquisition		72			–
Stock-based compensation		3,076			1,105
Intangible asset amortization		8,702			8,447
Acquisition-related and integration-related costs		208			976
Non-deferred IPO and secondary offering costs		1,031			438
Debt modification costs		–			288
Loss on debt extinguishment		439			–
Non-GAAP income tax adjustment		(2,089	)		(1,715	)
Adjusted Net Income – Non-GAAP	$	58,162		$	11,177

Diluted Net income per share:
GAAP	$	0.47		$	0.01
Adjusted, Non-GAAP	$	0.58		$	0.13

Shares used to compute diluted net income per share:
GAAP		100,211			86,070
Adjusted, Non-GAAP		100,211			86,070

Corsair Gaming, Inc.

Adjusted EBITDA Reconciliations

(Unaudited, in thousands, except percentages)

	Three Months Ended March 31,
	2021			2020
Net Income – GAAP	$	46,723		$	1,217
Acquisition accounting impact related to recognizing acquired inventory at fair value		–			421
Change in fair value of contingent consideration for business acquisition		72			–
Stock-based compensation		3,076			1,105
Acquisition-related and integration-related costs		208			976
Non-deferred IPO and secondary offering costs		1,031			438
Debt modification costs		–			288
Intangible asset amortization		8,702			8,447
Depreciation		2,436			2,158
Interest expense (includes loss on debt extinguishment)		4,946			9,371
Tax expense		13,195			2,683
Adjusted EBITDA – Non-GAAP	$	80,389		$	27,104

Adjusted EBITDA margin – Non-GAAP		15.2	%		8.8	%

May 4, 2021 7:05 am

Jushi Holdings Inc. Completes Acquisition of Two California Retail Dispensaries

Builds Depth in California Market with Second and Third, Strategically Located Retail Dispensaries in Palm Springs and Grover Beach, California

BOCA RATON, Fla., May 04, 2021 (GLOBE NEWSWIRE) — Jushi Holdings Inc. (“Jushi” or the “Company”) (CSE: JUSH) (OTCMKTS: JUSHF), a vertically integrated, multi-state cannabis operator, announced that it has closed on its previously announced acquisition of 100% of the equity of Organic Solutions of the Desert, LLC (“OSD”), an operating dispensary located in Palm Springs, California and approximately 78% of the equity of a retail license holder located in Grover Beach, California with the option to acquire the remaining equity in the future. Jushi will be implementing its best-in-class, customer focused retail approach that includes the introduction of its online reservation ordering platform and express pick-up options at the Palm Springs dispensary. The Company expects to complete the build out of the BEYOND / HELLO™ Grover Beach location in Q3 2021. The two new locations expand Jushi’s footprint beyond its first California dispensary, BEYOND / HELLO™ Santa Barbara, which opened in October 2020. Jushi also plans to add an additional California location in Culver City, which is expected to open by Q2 2022, subject to state and regulatory approvals.

“We are thrilled to close these acquisitions and build depth in California with our second and third retail locations in the state,” said Jim Cacioppo, Chief Executive Officer, Chairman and Founder of Jushi. “Palm Springs and Grover Beach offer premier locations for our expansion as we continue to build our strategic footprint and target limited license market opportunities within the state. We look forward to introducing our BEYOND / HELLO™ retail brand and experience to the locals and visitors of Palm Springs, Grover Beach and Culver City.”

Palm Springs Dispensary
With more than 14 million tourists per year, Palm Springs is an attractive market and luxury travel destination. Currently operating and conveniently located at 4765 E Ramon Road, one of the busiest streets in the city, OSD has been the leading revenue generator in the city of Palm Springs since the inception of Palm Springs adult-use cannabis program in 2017. OSD is well positioned across from Palm Springs International Airport (over 2.5 million travelers in 2019) and has ample dedicated parking spots. The location will be open Monday through Saturday from 9:00 a.m. to 6:00 p.m. and on Sunday from 10:00 a.m. to 6:00 p.m.

Grover Beach Dispensary

Grover Beach is located between Oceano and Pismo Beach, and approximately 80 miles north of the Company’s BEYOND / HELLO™ Santa Barbara location. Grover Beach is a limited license market with a maximum of four retail licenses permitted and, therefore, offers strong barriers to entry that align with the Company’s expansion strategy. Further, it is a prime location for delivery because the cities surrounding Grover Beach currently prohibit retail cannabis dispensaries and is bolstered by an annual tourist population of approximately 2.2 million. Upon completion of the build out of the new BEYOND / HELLO™ in Q3 2021, this location will be the fourth and final retail dispensary permitted in the city.

The Palm Springs and Grover Beach locations are expected to carry a variety of high-quality cannabis brands and products, including flower, extracts, edibles, vapes, topicals, tinctures, sublinguals, and merchandise. Expertly trained staff will also be available during normal store hours to help customers identify and select the best cannabis products with the goal of meeting their various needs and desires. The licensed storefronts are LGBTQ+ friendly and offer a standing 10% discount to seniors, veterans, and active military servicepeople with identification as well as will be ADA accessible. For more information, visit jushico.com/ or BEYOND / HELLO™ on Instagram and Facebook.

About Jushi Holdings Inc.

We are a vertically integrated cannabis company led by an industry-leading management team. In the United States, Jushi is focused on building a multi-state portfolio of branded cannabis assets through opportunistic acquisitions, distressed workouts, and competitive applications. Jushi strives to maximize shareholder value while delivering high-quality products across all levels of the cannabis ecosystem. For more information, please visit jushico.com or our social media channels, Instagram, Facebook, Twitter, and LinkedIn.

Forward-Looking Information and Statements

This press release contains certain “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current conditions but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, involve estimates, projections, plans, goals, forecasts, and assumptions that may prove to be inaccurate. As a result, actual results could differ materially from those expressed by such forward-looking statements and such statements should not be relied upon. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as “plans,” “expects” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” or “believes,” or variations of such words and phrases or may contain statements that certain actions, events or results “may,” “could,” “would,” “might” or “will be taken,” “will continue,” “will occur” or “will be achieved”.

By identifying such information and statements in this manner, the Company is alerting the reader that such information and statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such information and statements. In addition, in connection with the forward-looking information and forward-looking statements contained in this press release, the Company has certain expectations and has made certain assumptions. Expectations, assumptions, and risk factors are more fully described in the Company’s Management, Discussion and Analysis for the three months ended September 30, 2020, and other filings with securities and regulatory authorities which are available at www.sedar.com. Should one or more of these risks, uncertainties or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and the Company does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws. All subsequent written and oral forward-looking information and statements attributable to the Company or persons acting on its behalf is expressly qualified in its entirety by this notice.

Not for distribution to United States newswire services or for dissemination in the United States.

For further information, please contact:

Investor Relations Contact:

Michael Perlman
Executive Vice President of Investor Relations and Treasury
561-281-0247
[email protected]

Media Contact:

Ellen Mellody
MATTIO Communications
570-209-2947
[email protected]