Market Newsdesk

April 29, 2021 6:03 am

LKQ Corporation Announces Results for First Quarter 2021

First quarter revenue of
$3.2 billion (up 5.7% ye
ar-over-year)
Parts and services organic revenue increased
0.6% (2.2% on a per day basis)
Diluted EPS
¹
of $0.88 (up 83.3%); adjusted diluted EPS
¹
of $0.94 (up 64.9%)
First quarter Segment EBITDA margin of 19.9% for North America
Europe first quarter Segment EBITDA margin up 390 basis points to 9.6%
First quarter Segment EBITDA margin of 13.4% for Specialty
First quarter operating cash flow of $523 million (up 169% YoY); free cash flow of $481 million (up 220% YoY)
Net leverage down t
o 1.4x EB
ITDA
2021 outlook raised

CHICAGO, April 29, 2021 (GLOBE NEWSWIRE) — LKQ Corporation (Nasdaq:LKQ) today reported first quarter 2021 results that reflect strength for the Company in a number of key metrics including overall profitability, segment margins and free cash flow.

“We significantly exceeded our expectations for the quarter as our segment teams continue to embrace operational excellence and execute on our key initiatives. Our North America team delivered a 19.9% Segment EBITDA margin in the first quarter, the highest level in the Company’s history. Additionally, our Specialty team delivered its highest quarterly organic revenue growth at 30.9% and first quarter Segment EBITDA margin of 13.4%. I am also pleased with the Europe Segment EBITDA margin of 9.6% in the quarter, a year-over-year improvement of 390 basis points. This level of performance gives us confidence regarding the progress of our 1 LKQ Europe program and our team’s ability to achieve the longer-term margin targets we set forth in 2019,” noted Dominick Zarcone, President and Chief Executive Officer.

First Quarter 2021 Financial Results

Revenue for the first quarter of 2021 was $3.2 billion, an increase of 5.7% as compared to $3.0 billion in the first quarter of 2020. For the first quarter of 2021, parts and services organic revenue increased 0.6% (2.2% on a per day basis), while the net impact of acquisitions and divestitures decreased revenue 0.6% and foreign exchange rates increased revenue 4.2%, for a total parts and services revenue increase of 4.2%. The organic revenue growth for the quarter reflects the annualization of the initial pandemic impact last March. Through February, organic parts and services revenue was 4.4% lower on a per day basis, primarily as a result of mobility restrictions from COVID-19. In March 2021, compared to a lower prior year period, organic parts and services revenue grew by 15.7% on a per day basis. Other revenue grew 27.0% in the first quarter of 2021, driven by higher scrap steel and precious metals prices.

Net income¹ for the first quarter of 2021 was $266 million as compared to $146 million for the same period in 2020, an increase of 81.9%. Diluted earnings per share¹ for the first quarter was $0.88 as compared to $0.48 for the same period of 2020, an increase of 83.3%.

On an adjusted basis, net income¹ in the first quarter was $286 million compared to $176 million in the same period of 2020, a 62.4% increase. Adjusted diluted earnings per share¹ for the first quarter was $0.94 as compared to $0.57 for the same period of 2020, a 64.9% increase.

¹References in this release to Net income and Diluted earnings per share, and the corresponding adjusted figures, reflect amounts from continuing operations attributable to LKQ stockholders.

Cash Flow and Balance Sheet

Cash flow from operations totaled $523 million during the first quarter of 2021, up 169% from a year ago. Free cash flow in the quarter totaled $481 million, up 220% year-over-year. We made $83 million of net repayments on borrowings during the first quarter. As of March 31, 2021, our balance sheet reflected net debt of $2.1 billion, down from $2.6 billion as of December 31, 2020. Net leverage, as defined in our credit facility, decreased to 1.4x EBITDA.

On April 1, 2021, we used a portion of the available liquidity to redeem the €750 million 3.625% Senior Notes due 2026. The redemption was financed by lower cost revolver borrowings and cash on hand.

During the first quarter of 2021, S&P Global and Moody’s upgraded our credit ratings to BB+ and Ba1, respectively.

In the first quarter of 2021, we repurchased approximately 1.5 million shares of our common stock. Since initiating our plan in late October 2018, we have repurchased 18.8 million shares for a total of $526 million.

2021 Outlook

Varun Laroyia, Executive Vice President and Chief Financial Officer commented, “I want to thank our team for driving our operational excellence initiatives to deliver yet another outstanding outcome in the quarter. Based on this strong start to the year and with confidence in our operating strengths and execution of our strategies, we are raising our 2021 outlook on profitability and free cash flow.”

For 2021, management is anticipating the following revised outlook:

Full year parts and services revenue growth expected
- Q2 growth on a light comparable period, followed by gradual recovery in the second half of the year
- Two fewer selling days in North America, one each in Q1 and Q4
Diluted EPS attributable to LKQ stockholders in the range of $2.68 to $2.88 ^(a)
Adjusted diluted EPS attributable to LKQ stockholders in the range of $3.00 to $3.20 ^(a)(^b)

Free cash flow in the range of $850 million to $950 million ^(b)

^(a)
Amounts reflect continuing operations

^(b)
Non-GAAP measure. See the table accompanying this release that reconciles the forecasted U.S. GAAP measure to the forecasted adjusted measure, which is non-GAAP.

Our outlook for the full year 2021 is based on current conditions and recent trends, and it assumes current U.S. federal tax legislation remains unchanged, exchange rates for the Canadian dollar, euro, and pound sterling hold near recent levels, and the price of scrap and precious metals trend lower in the second half of the year. Our outlook is also based on management’s current expectations regarding the recovery from the coronavirus outbreak. Changes in these conditions may impact our ability to achieve the estimates. Adjusted figures exclude (to the extent applicable) the impact of restructuring and acquisition related expenses; amortization expense related to acquired intangibles; excess tax benefits and deficiencies from stock-based payments; losses on debt extinguishment; impairment charges; and gains and losses related to acquisitions or divestitures (including changes in the fair value of contingent consideration liabilities).

Non-GAAP Financial Measures

This release contains and management’s presentation on the related conference call will refer to non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. Included with this release are reconciliations of each non-GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP.

Conference Call Details

LKQ will host a conference call and webcast on April 29, 2021 at 8:00 a.m. Eastern Time (7:00 a.m. Central Time) with members of senior management to discuss the Company’s results. To access the investor conference call, please dial (833) 236-5754. International access to the call may be obtained by dialing (647) 689-4182. The investor conference call will require you to enter conference ID: 2377197#.

Webcast and Presentation Details

The audio webcast and accompanying slide presentation can be accessed at (www.lkqcorp.com) in the Investor Relations section.

A replay of the conference call will be available by telephone at (800) 585-8367 or (416) 621-4642 for international calls. The telephone replay will require you to enter conference ID: 2377197#. An online replay of the audio webcast will be available on the Company’s website. Both formats of replay will be available through May 13, 2021. Please allow approximately two hours after the live presentation before attempting to access the replay.

About LKQ Corporation

LKQ Corporation (www.lkqcorp.com) is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. LKQ has operations in North America, Europe and Taiwan. LKQ offers its customers a broad range of OE recycled and aftermarket parts, replacement systems, components, equipment, and services to repair and accessorize automobiles, trucks, and recreational and performance vehicles.

Forward Looking Statements

Statements and information in this press release and on the related conference call, including our outlook for 2021, as well as remarks by the Chief Executive Officer and other members of management, that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are made pursuant to the “safe harbor” provisions of such Act.

Forward-looking statements include, but are not limited to, statements regarding our outlook, guidance, expectations, beliefs, hopes, intentions and strategies. These statements are subject to a number of risks, uncertainties, assumptions and other factors including those identified below.

All forward-looking statements are based on information available to us at the time the statements are made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should not place undue reliance on our forward-looking statements. Actual events or results may differ materially from those expressed or implied in the forward-looking statements. The risks, uncertainties, assumptions and other factors that could cause actual events or results to differ from the events or results predicted or implied by our forward-looking statements include the factors set forth below, and other factors discussed in our filings with the SEC, including those disclosed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 and in our subsequent Quarterly Reports on Form 10-Q. These reports are available on our investor relations website at lkqcorp.com and on the SEC website at sec.gov.

These factors include the following (not necessarily in order of importance):

effects on our business from the disruption to economic activity caused by the COVID-19 pandemic, including a substantial decrease in the demand for our products and services, interruptions to supply chains, and the inability of customers to pay for products and services;
employment-related issues arising from the COVID-19 pandemic, including employment law claims resulting from the layoffs and furloughs of employees to reduce costs during the period of decreased demand, increased healthcare costs, workforce shortages, and health and safety issues at the workplace;
changes in economic, political and social conditions in the U.S. and other countries in which we are located or do business, including the U.K. withdrawal from the European Union (also known as Brexit), and the impact of these changes on our businesses, the demand for our products and our ability to obtain financing for operations;
increasing competition in the automotive parts industry, including parts sold on online marketplaces and the potential competitive advantage to original equipment manufacturers (“OEMs”) with “connected car” technology, as well as the various efforts by OEMs to restrict or prohibit the sale of aftermarket or recycled parts;
changes to our business relationships with insurance companies or changes by insurance companies to their business practices relating to the use of our products as well as changes in the level of acceptance and promotion of alternative automotive parts by insurance companies and vehicle repairers;
restrictions or prohibitions on selling or importing aftermarket products through enforcement by OEMs or governmental agencies of intellectual property rights or import laws;
variations in the number of vehicles manufactured and sold, vehicle accident rates, miles driven, and the age profile of vehicles in accidents, the increase of accident avoidance systems being installed in vehicles, the potential loss of sales of certain mechanical parts due to the rise of electric vehicle sales, or changes in the demand for our products and the supply of our inventory due to severity of weather and seasonality of weather patterns;
fluctuations in the prices of fuel, scrap metal and other commodities;
changes in our relationships with our suppliers, disruption to our supply of inventory, or the misconduct, performance failures or negligence of our third party vendors or service providers could increase our expenses, impede our ability to serve our customers, or expose us to liability; as well as price increases, interruptions or disruptions to the supply of vehicle parts from aftermarket suppliers and vehicles from salvage auctions;
if our goodwill or other intangible assets become impaired, or there are declines in the values of our assets, including as a result of the effects of the COVID-19 pandemic on our business, we may incur significant charges to our pre-tax income;
product liability claims by the end users of our products or claims by other parties who we have promised to indemnify for product liability matters and costs associated with recalls of the products we sell;
our ability to identify acquisition candidates at reasonable prices and our ability to successfully divest underperforming businesses and our ability to integrate, realize expected synergies, and successfully operate acquired companies and any companies acquired in the future, and the risks associated with these companies;
our ability to satisfy our debt obligations and to operate within the limitations imposed by financing arrangements, including the possibility of not satisfying one or more of the financial covenants in our credit facility or the terms of the indentures governing our senior notes;
our senior notes are subject to risks that could affect the value of the notes, require holders of the notes to return payments received from us or the guarantors, or affect our ability to repurchase the notes upon a change of control or pursuant to an asset sale offer;
our ability to obtain financing on acceptable terms to finance our growth;
changes in laws or regulations affecting our business;
our operations are subject to environmental regulations and we may incur costs relating to environmental matters;
our bylaws provide that the courts in the State of Delaware are the exclusive forums for substantially all disputes between us and our stockholders;
changes to applicable U.S. and foreign tax laws, changes to interpretations of tax laws, and changes in our mix of earnings among the jurisdictions in which we operate;
the implementation of a border tax or tariff on imports and the negative impact on our business due to the amount of inventory we import;
governmental agencies may refuse to grant or renew our operating licenses and permits for our salvage, self service and refurbishing businesses;
loss of key management personnel may affect our ability to successfully manage our business and achieve our objectives;
the risks associated with operating in foreign jurisdictions, including foreign laws and economic and political instabilities and currency fluctuations in the U.S. dollar, pound sterling and euro versus other currencies;
additional unionization efforts, new collective bargaining agreements, and work stoppages;
our ability to develop and implement the operational and financial systems needed to manage our operations; and interruptions, outages or breaches of our operational systems, security systems, or infrastructure as a result of attacks on, or malfunctions of, our systems;
costs of complying with laws relating to the security of personal information;
business interruptions affecting our distribution centers, computer systems and the availability of inventory;
problems with our fleet of trucks and other vehicles could affect our business;
potential losses of our right to operate at key locations if we are not able to negotiate lease renewals or due to environmental issues; and
disruptions to the management and operations of our business and the uncertainties caused by activist investors.

Contact:

Joseph P. Boutross – Vice President, Investor Relations
LKQ Corporation
(312) 621-2793
[email protected]

LKQ CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated

Statements of Income, with Supplementary Data

(In thousands, except per share data)

	Three Months Ended March 31,
	2021					2020
				% of Revenue ⁽¹⁾					% of Revenue ⁽¹⁾		$ Change			% Change
Revenue	$	3,170,786		100.0	%	$	3,000,935		100.0	%	$	169,851		5.7	%
Cost of goods sold	1,877,235			59.2	%	1,787,023			59.5	%	90,212			5.0	%
Restructuring expenses – cost of goods sold	(163		)	(0.0	%)	36			0.0	%	(199		)	n/m
Gross margin	1,293,714			40.8	%	1,213,876			40.4	%	79,838			6.6	%
Selling, general and administrative expenses	848,565			26.8	%	899,811			30.0	%	(51,246		)	(5.7	%)
Restructuring and acquisition related expenses	7,885			0.2	%	6,970			0.2	%	915			13.1	%
Impairment of net assets held for sale and (gain on disposal of business)	15			0.0	%	(249		)	(0.0	%)	264			n/m
Depreciation and amortization	65,801			2.1	%	65,495			2.2	%	306			0.5	%
Operating income	371,448			11.7	%	241,849			8.1	%	129,599			53.6	%
Other expense (income):
Interest expense, net of interest income	24,179			0.8	%	25,931			0.9	%	(1,752		)	(6.8	%)
Loss on debt extinguishment	—			0.0	%	12,751			0.4	%	(12,751		)	n/m
Other income, net	(6,213		)	(0.2	%)	(3,622		)	(0.1	%)	(2,591		)	71.5	%
Total other expense, net	17,966			0.6	%	35,060			1.2	%	(17,094		)	(48.8	%)
Income from continuing operations before provision for income taxes	353,482			11.1	%	206,789			6.9	%	146,693			70.9	%
Provision for income taxes	92,969			2.9	%	60,411			2.0	%	32,558			53.9	%
Equity in earnings of unconsolidated subsidiaries	5,819			0.2	%	516			0.0	%	5,303			n/m
Income from continuing operations	266,332			8.4	%	146,894			4.9	%	119,438			81.3	%
Net loss from discontinued operations	—			0.0	%	(915		)	(0.0	%)	915			n/m
Net income	266,332			8.4	%	145,979			4.9	%	120,353			82.4	%
Less: net income attributable to continuing noncontrolling interest	419			0.0	%	740			0.0	%	(321		)	(43.4	%)
Less: net income attributable to discontinued noncontrolling interest	—			0.0	%	103			0.0	%	(103		)	n/m
Net income attributable to LKQ stockholders	$	265,913		8.4	%	$	145,136		4.8	%	$	120,777		83.2	%

Basic earnings per share: ⁽²⁾
Income from continuing operations	$	0.88				$	0.48				$	0.40		83.3	%
Net loss from discontinued operations	—					(0.00		)			0.00			n/m
Net income	0.88					0.48					0.40			83.3	%
Less: net income attributable to continuing noncontrolling interest	0.00					0.00					(0.00		)	n/m
Less: net income attributable to discontinued noncontrolling interest	—					0.00					(0.00		)	n/m
Net income attributable to LKQ stockholders	$	0.88				$	0.47				$	0.41		87.2	%

Diluted earnings per share: ⁽²⁾
Income from continuing operations	$	0.88				$	0.48				$	0.40		83.3	%
Net loss from discontinued operations	—					(0.00		)			0.00			n/m
Net income	0.88					0.48					0.40			83.3	%
Less: net income attributable to continuing noncontrolling interest	0.00					0.00					(0.00		)	n/m
Less: net income attributable to discontinued noncontrolling interest	—					0.00					(0.00		)	n/m
Net income attributable to LKQ stockholders	$	0.88				$	0.47				$	0.41		87.2	%

Weighted average common shares outstanding:
Basic	303,043					306,238					(3,195		)	(1.0	%)
Diluted	303,765					306,757					(2,992		)	(1.0	%)

(1) The sum of the individual percentage of revenue components may not equal the total due to rounding.
(2) The sum of the individual earnings per share amounts may not equal the total due to rounding.

LKQ CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

	March 31, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	590,194		$	312,154
Receivables, net	1,252,374			1,073,389
Inventories	2,392,714			2,414,612
Prepaid expenses and other current assets	218,664			233,877
Total current assets	4,453,946			4,034,032
Property, plant and equipment, net	1,204,643			1,248,703
Operating lease assets, net	1,373,238			1,353,124
Intangible assets:
Goodwill	4,515,634			4,591,569
Other intangibles, net	777,372			814,219
Equity method investments	170,729			155,224
Other noncurrent assets	169,895			163,662
Total assets	$	12,665,457		$	12,360,533
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,228,524		$	932,406
Accrued expenses:
Accrued payroll-related liabilities	202,333			208,718
Refund liability	104,534			102,148
Other accrued expenses	356,126			334,890
Other current liabilities	104,510			130,021
Current portion of operating lease liabilities	200,637			221,811
Current portion of long-term obligations	239,962			58,497
Total current liabilities	2,436,626			1,988,491
Long-term operating lease liabilities, excluding current portion	1,219,267			1,197,963
Long-term obligations, excluding current portion	2,471,730			2,812,641
Deferred income taxes	285,584			291,421
Other noncurrent liabilities	369,546			374,640
Commitments and contingencies
Redeemable noncontrolling interest	24,077			24,077
Stockholders’ equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 321,170,573 shares issued and 302,370,072 shares outstanding at March 31, 2021; 320,867,602 shares issued and 303,553,000 shares outstanding at December 31, 2020	3,212			3,208
Additional paid-in capital	1,449,667			1,444,584
Retained earnings	5,041,953			4,776,040
Accumulated other comprehensive loss	(126,122		)	(99,009		)
Treasury stock, at cost; 18,800,501 shares at March 31, 2021 and 17,314,602 shares at December 31, 2020	(526,084		)	(469,105		)
Total Company stockholders’ equity	5,842,626			5,655,718
Noncontrolling interest	16,001			15,582
Total stockholders’ equity	5,858,627			5,671,300
Total liabilities and stockholders’ equity	$	12,665,457		$	12,360,533

LKQ CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)

	Three Months Ended
	March 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	266,332		$	145,979
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	71,597			71,379
Stock-based compensation expense	7,792			7,968
Loss on debt extinguishment	—			12,751
Other	(9,202		)	(2,970		)
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Receivables, net	(197,594		)	(63,938		)
Inventories	(13,469		)	(7,522		)
Prepaid income taxes/income taxes payable	(20,694		)	41,585
Accounts payable	331,383			(27,170		)
Other operating assets and liabilities	86,367			16,501
Net cash provided by operating activities	522,512			194,563
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(41,779		)	(44,538		)
Proceeds from disposals of property, plant and equipment	7,601			5,528
Acquisitions, net of cash acquired	(2,385		)	(7,220		)
Proceeds from disposal of businesses, net of cash sold	5,944			1,763
Investments in unconsolidated subsidiaries	(2,824		)	(405		)
Net cash used in investing activities	(33,443		)	(44,872		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Early-redemption premium	—			(9,498		)
Repayment of U.S. Notes (2023)	—			(600,000		)
Borrowings under revolving credit facilities	1,287,810			460,186
Repayments under revolving credit facilities	(1,392,004		)	(134,674		)
Repayments under term loans	(4,375		)	(4,375		)
Borrowings under receivables securitization facility	—			111,300
Repayments under receivables securitization facility	—			(12,900		)
Borrowings (repayments) of other debt, net	25,574			(49,481		)
Settlement of derivative instruments, net	(56,804		)	—
Purchase of treasury stock	(56,979		)	(88,006		)
Other financing activities, net	(11,717		)	(7,291		)
Net cash used in financing activities	(208,495		)	(334,739		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2,534		)	(11,746		)
Net increase (decrease) in cash, cash equivalents and restricted cash	278,040			(196,794		)
Cash, cash equivalents and restricted cash of continuing operations, beginning of period	312,154			528,387
Add: Cash, cash equivalents and restricted cash of discontinued operations, beginning of period	—			6,470
Cash, cash equivalents and restricted cash of continuing and discontinued operations, beginning of period	312,154			534,857
Cash, cash equivalents and restricted cash, end of period	$	590,194		$	338,063

The following unaudited tables compare certain third party revenue categories:

	Three Months Ended
	March 31,
	2021		2020		$ Change			% Change
	(In thousands)
Included in Unaudited Condensed Consolidated
Statements of Income of LKQ Corporation
North America	$	1,018,437	$	1,107,342	$	(88,905	)	(8.0	%)
Europe	1,455,370		1,357,969		97,401			7.2	%
Specialty	457,959		347,406		110,553			31.8	%
Parts and services	2,931,766		2,812,717		119,049			4.2	%
Other	239,020		188,218		50,802			27.0	%
Total	$	3,170,786	$	3,000,935	$	169,851		5.7	%

Revenue changes by category for the three months ended March 31, 2021 vs. 2020:

	Revenue Change Attributable to:
	Organic ⁽¹⁾		Acquisition and Divestiture		Foreign Exchange		Total Change ⁽²⁾
North America	(8.4	%)	0.0	%	0.4	%	(8.0	%)
Europe	0.3	%	(1.4	%)	8.3	%	7.2	%
Specialty	30.9	%	0.4	%	0.5	%	31.8	%
Parts and services	0.6	%	(0.6	%)	4.2	%	4.2	%
Other	26.6	%	—	%	0.4	%	27.0	%
Total	2.3	%	(0.6	%)	4.0	%	5.7	%

⁽¹⁾ We define organic revenue growth as total revenue growth from continuing operations excluding the effects of acquisitions and divestitures (i.e., revenue generated from the date of acquisition to the first anniversary of that acquisition, net of reduced revenue due to the disposal of businesses) and foreign currency movements (i.e., impact of translating revenue at prior period exchange rates). Organic revenue growth includes incremental sales from both existing and new (i.e., opened within the last twelve months) locations and is derived from expanding business with existing customers, securing new customers and offering additional products and services. We believe that organic revenue growth is a key performance indicator as this statistic measures our ability to serve and grow our customer base successfully.

⁽²⁾ The sum of the individual revenue change components may not equal the total percentage change due to rounding.

The following unaudited table reconciles revenue growth for parts & services to constant currency revenue growth for the same measure:

	Three Months Ended
	March 31, 2021
	Consolidated		Europe
Parts & Services
Revenue growth as reported	4.2	%	7.2	%
Less: Currency impact	4.2	%	8.3	%
Revenue growth at constant currency	0.0	%	(1.1	%)

We have presented the growth of our revenue on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP financial measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency revenue information provides valuable supplemental information regarding our growth, consistent with how we evaluate our performance, as this statistic removes the translation impact of exchange rate fluctuations, which are outside of our control and do not reflect our operational performance. Constant currency revenue results are calculated by translating prior year revenue in local currency using the current year’s currency conversion rate. This non-GAAP financial measure has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Our use of this term may vary from the use of similarly-named measures by other issuers due to the potential inconsistencies in the method of calculation and differences due to items subject to interpretation. In addition, not all companies that report revenue growth on a constant currency basis calculate such measure in the same manner as we do and, accordingly, our calculations are not necessarily comparable to similarly-named measures of other companies and may not be appropriate measures for performance relative to other companies.

The following unaudited table compares revenue and Segment EBITDA by reportable segment:

	Three Months Ended
	March 31,
	2021					2020
(In thousands)				% of Revenue					% of Revenue
Revenue
North America	$	1,249,693				$	1,290,195
Europe	1,463,453					1,363,594
Specialty	458,939					348,582
Eliminations	(1,299		)			(1,436		)
Total revenue	$	3,170,786				$	3,000,935
Segment EBITDA
North America	$	249,167		19.9	%	$	211,438		16.4	%
Europe	140,958			9.6	%	78,262			5.7	%
Specialty	61,482			13.4	%	32,232			9.2	%
Total Segment EBITDA	$	451,607		14.2	%	$	321,932		10.7	%

We have presented Segment EBITDA solely as a supplemental disclosure that offers investors, securities analysts and other interested parties useful information to evaluate our segment profit and loss and underlying trends in our ongoing operations. We calculate Segment EBITDA as EBITDA excluding restructuring and acquisition related expenses (which includes restructuring expenses recorded in Cost of goods sold); change in fair value of contingent consideration liabilities; other gains and losses related to acquisitions, equity method investments or divestitures; equity in losses and earnings of unconsolidated subsidiaries; equity investment mark to market adjustments; and impairment charges. EBITDA, which is the basis for Segment EBITDA, is calculated as net income attributable to LKQ stockholders excluding discontinued operations and discontinued noncontrolling interest, depreciation, amortization, interest (which includes gains and losses on debt extinguishment) and income tax expense. Our chief operating decision maker, who is our Chief Executive Officer, uses Segment EBITDA as the key measure of our segment profit or loss. We use Segment EBITDA to compare profitability among our segments and evaluate business strategies. This financial measure is included in the metrics used to determine incentive compensation for our senior management. We also consider Segment EBITDA to be a useful financial measure in evaluating our operating performance, as it provides investors, securities analysts and other interested parties with supplemental information regarding the underlying trends in our ongoing operations. Segment EBITDA includes revenue and expenses that are controllable by the segment. Corporate general and administrative expenses are allocated to the segments based on usage, with shared expenses apportioned based on the segment’s percentage of consolidated revenue. Refer to the table on the following page for a reconciliation of net income to EBITDA and Segment EBITDA.

The following unaudited table reconciles Net Income to EBITDA and Segment EBITDA:

	Three Months Ended
	March 31,
	2021			2020
(In thousands)
Net income	$	266,332		$	145,979
Less: net income attributable to continuing noncontrolling interest	419			740
Less: net income attributable to discontinued noncontrolling interest	—			103
Net income attributable to LKQ stockholders	265,913			145,136
Subtract:
Net loss from discontinued operations	—			(915		)
Net income attributable to discontinued noncontrolling interest	—			(103		)
Net income from continuing operations attributable to LKQ stockholders	265,913			146,154
Add:
Depreciation and amortization	65,801			65,495
Depreciation and amortization – cost of goods sold	5,615			5,085
Depreciation and amortization – restructuring expenses ⁽¹⁾	181			799
Interest expense, net of interest income	24,179			25,931
Loss on debt extinguishment	—			12,751
Provision for income taxes	92,969			60,411
EBITDA	454,658			316,626
Subtract:
Equity in earnings of unconsolidated subsidiaries	5,819			516
Equity investment mark to market adjustments	4,739			—
Add:
Restructuring and acquisition related expenses ⁽¹⁾	7,704			6,171
Restructuring expenses – cost of goods sold	(163		)	(4		)
Impairment of net assets held for sale and (gain on disposal of business)	15			(249		)
Change in fair value of contingent consideration liabilities	(49		)	(96		)
Segment EBITDA	$	451,607		$	321,932

Net income from continuing operations attributable to LKQ stockholders as a percentage of revenue	8.4		%	4.9		%

EBITDA as a percentage of revenue	14.3		%	10.6		%

Segment EBITDA as a percentage of revenue	14.2		%	10.7		%

⁽¹⁾The sum of these two captions represents the total amount that is reported in Restructuring and acquisition related expenses in the Unaudited Condensed Consolidated Statements of Income.

We have presented EBITDA solely as a supplemental disclosure that offers investors, securities analysts and other interested parties useful information to evaluate our operating performance and the value of our business. We calculate EBITDA as net income attributable to LKQ stockholders excluding discontinued operations and discontinued noncontrolling interest, depreciation, amortization, interest (which includes gains and losses on debt extinguishment) and income tax expense. We believe EBITDA provides insight into our profitability trends and allows management and investors to analyze our operating results with the impact of continuing noncontrolling interest and without the impact of discontinued noncontrolling interest, discontinued operations, depreciation, amortization, interest (which includes gains and losses on debt extinguishment) and income tax expense. We believe EBITDA is used by investors, securities analysts and other interested parties in evaluating the operating performance and the value of other companies, many of which present EBITDA when reporting their results.

EBITDA and Segment EBITDA should not be construed as alternatives to operating income, net income or net cash provided by operating activities, as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report EBITDA or Segment EBITDA information calculate EBITDA or Segment EBITDA in the same manner as we do and, accordingly, our calculations are not necessarily comparable to similarly-named measures of other companies and may not be appropriate measures for performance relative to other companies.

The following unaudited table reconciles Net Income and Diluted Earnings per Share to Adjusted Net Income from Continuing Operations Attributable to LKQ Stockholders and Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders, respectively:

	Three Months Ended
	March 31,
	2021			2020
(In thousands, except per share data)
Net income	$	266,332		$	145,979
Less: net income attributable to continuing noncontrolling interest	419			740
Less: net income attributable to discontinued noncontrolling interest	—			103
Net income attributable to LKQ stockholders	265,913			145,136
Subtract:
Net loss from discontinued operations	—			(915		)
Net income attributable to discontinued noncontrolling interest	—			(103		)
Net income from continuing operations attributable to LKQ stockholders	265,913			146,154
Adjustments – continuing operations attributable to LKQ stockholders:
Amortization of acquired intangibles	20,440			24,419
Restructuring and acquisition related expenses	7,885			6,970
Restructuring expenses – cost of goods sold	(163		)	36
Change in fair value of contingent consideration liabilities	(49		)	(96		)
Loss on debt extinguishment	—			12,751
Impairment of net assets held for sale and (gain on disposal of business)	15			(249		)
Excess tax benefit from stock-based payments	(570		)	(711		)
Tax effect of adjustments	(7,448		)	(13,172		)
Adjusted net income from continuing operations attributable to LKQ stockholders	$	286,023		$	176,102

Weighted average diluted common shares outstanding	303,765			306,757

Diluted earnings per share from continuing operations attributable to LKQ stockholders
Reported	$	0.88		$	0.48

Adjusted	$	0.94		$	0.57

We have presented Adjusted Net Income and Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders as we believe these measures are useful for evaluating the core operating performance of our continuing business across reporting periods and in analyzing our historical operating results. We define Adjusted Net Income and Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders as Net Income and Diluted Earnings per Share adjusted to eliminate the impact of continuing and discontinued noncontrolling interest, discontinued operations, restructuring and acquisition related expenses, amortization expense related to all acquired intangible assets, gains and losses on debt extinguishment, the change in fair value of contingent consideration liabilities, other gains and losses related to acquisitions, equity method investments or divestitures, impairment charges, excess tax benefits and deficiencies from stock-based payments and any tax effect of these adjustments. The tax effect of these adjustments is calculated using the effective tax rate for the applicable period or for certain discrete items the specific tax expense or benefit for the adjustment. Given the variability and volatility of the amount and frequency of costs related to acquisitions, management believes that these costs are not normal operating expenses and should be adjusted in our calculation of Adjusted Net Income from Continuing Operations Attributable to LKQ Stockholders. Our adjustment of the amortization of all acquisition-related intangible assets does not exclude the amortization of other assets, which represents expense that is directly attributable to ongoing operations. Management believes that the adjustment relating to amortization of acquisition-related intangible assets supplements the GAAP information with a measure that can be used to assess the comparability of operating performance. The acquired intangible assets were recorded as part of purchase accounting and contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. These financial measures are used by management in its decision making and overall evaluation of our operating performance and are included in the metrics used to determine incentive compensation for our senior management. Adjusted Net Income and Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders should not be construed as alternatives to Net Income or Diluted Earnings per Share as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report measures similar to Adjusted Net Income and Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders calculate such measures in the same manner as we do and, accordingly, our calculations are not necessarily comparable to similarly-named measures of other companies and may not be appropriate measures for performance relative to other companies.

The following unaudited table reconciles Forecasted Net Income and Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders to Forecasted Adjusted Net Income from Continuing Operations Attributable to LKQ Stockholders and Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders, respectively:

	Forecasted
	Fiscal Year 2021
	Minimum Outlook			Maximum Outlook
(In millions, except per share data)
Net income from continuing operations attributable to LKQ stockholders	$	813		$	874
Adjustments:
Amortization of acquired intangibles	78			78
Restructuring expenses	30			30
Loss on debt extinguishment	24			24
Other adjustments	(1		)	(1		)
Tax effect of adjustments	(35		)	(35		)
Adjusted net income from continuing operations attributable to LKQ stockholders	$	909		$	970

Weighted average diluted common shares outstanding	303			303

Diluted earnings per share from continuing operations attributable to LKQ stockholders:
U.S. GAAP	$	2.68		$	2.88
Non-GAAP (Adjusted)	$	3.00		$	3.20

We have presented forecasted Adjusted Net Income and forecasted Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders in our financial outlook. Refer to the discussion of Adjusted Net Income and Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders for details on the calculation of these non-GAAP financial measures. In the calculation of forecasted Adjusted Net Income and forecasted Adjusted Diluted Earnings per Share from Continuing Operations Attributable to LKQ Stockholders, we included estimates of income from continuing operations attributable to LKQ stockholders, amortization of acquired intangibles for the full fiscal year 2021, restructuring expenses under previously announced plans, the loss on debt extinguishment related to the April 1, 2021 redemption of the Euro Notes 2026 and the related tax effect; we included for all other components the amounts incurred through March 31, 2021.

The following unaudited table reconciles Net Cash Provided by Operating Activities to Free Cash Flow:

	Three Months Ended
	March 31,
	2021		2020
(In thousands)
Net cash provided by operating activities	$	522,512	$	194,563
Less: purchases of property, plant and equipment	41,779		44,538
Free cash flow	$	480,733	$	150,025

We have presented free cash flow solely as a supplemental disclosure that offers investors, securities analysts and other interested parties useful information to evaluate our liquidity. We calculate free cash flow as net cash provided by operating activities, less purchases of property, plant and equipment. We believe free cash flow provides insight into our liquidity and provides useful information to management and investors concerning our cash flow available to meet future debt service obligations and working capital requirements, make strategic acquisitions and repurchase stock. We believe free cash flow is used by investors, securities analysts and other interested parties in evaluating the liquidity of other companies, many of which present free cash flow when reporting their results. This financial measure is included in the metrics used to determine incentive compensation for our senior management. Free cash flow should not be construed as an alternative to net cash provided by operating activities, as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report free cash flow information calculate free cash flow in the same manner as we do and, accordingly, our calculation is not necessarily comparable to similarly-named measures of other companies and may not be an appropriate measure for liquidity relative to other companies.

The following unaudited table reconciles Forecasted Net Cash Provided by Operating Activities to Forecasted Free Cash Flow:

	Forecasted
	Fiscal Year 2021
	Minimum Outlook		Maximum Outlook
(In thousands)
Net cash provided by operating activities	$	1,075,000	$	1,200,000
Less: purchases of property, plant and equipment	225,000		250,000
Free cash flow	$	850,000	$	950,000

We have presented forecasted free cash flow in our financial outlook. Refer to the paragraph above for details on the calculation of free cash flow.

The following unaudited tables reconcile Gross Margin to Adjusted Gross Margin:

Consolidated Adjusted Gross Margin	Three Months Ended
	March 31,
	2021			2020
(In thousands)
Gross margin	$	1,293,714		$	1,213,876
Add: Restructuring expenses – cost of goods sold	(163		)	36
Adjusted gross margin	$	1,293,551		$	1,213,912

Gross margin %	40.8		%	40.4		%

Adjusted gross margin %	40.8		%	40.5		%

North America Adjusted Gross Margin	Three Months Ended
	March 31,
	2021			2020
(In thousands)
Gross margin	$	599,491		$	611,614
Add: Restructuring expenses – cost of goods sold	(163		)	36
Adjusted gross margin	$	599,328		$	611,650

Gross margin %	48.0		%	47.4		%

Adjusted gross margin %	48.0		%	47.4		%

We have presented adjusted gross margin solely as a supplemental disclosure that offers investors, securities analysts and other interested parties useful information to evaluate the operating performance of our continuing business across reporting periods and in analyzing our historical operating results. We calculate adjusted gross margin as gross margin plus restructuring expenses recorded in cost of goods sold. We believe adjusted gross margin provides insight into our operating performance and provides useful information to management and investors concerning our gross margins. We believe adjusted gross margin is used by investors, securities analysts and other interested parties in evaluating the operating performance of other companies, many of which present adjusted gross margin when reporting their results. Adjusted gross margin should not be construed as an alternative to gross margin, as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report adjusted gross margin information calculate adjusted gross margin in the same manner as we do and, accordingly, our calculation is not necessarily comparable to similarly-named measures of other companies and may not be an appropriate measure for performance relative to other companies.

The following unaudited table reconciles Total Debt to Net Debt:

	March 31, 2021		December 31, 2020
(In thousands)
Current portion of long-term obligations	$	239,962	$	58,497
Long-term obligations, excluding current portion	2,471,730		2,812,641
Total debt, net of debt issuance costs	2,711,692		2,871,138
Add: Debt issuance costs	23,330		25,538
Total debt	2,735,022		2,896,676
Less: Cash and cash equivalents	590,194		312,154
Net debt	$	2,144,828	$	2,584,522

We have presented net debt solely as a supplemental disclosure that offers investors, securities analysts and other interested parties useful information to evaluate our liquidity and financial position. We calculate net debt as total debt less cash and cash equivalents. We believe net debt provides insight into our liquidity and provides useful information to management and investors concerning our financial position. We believe net debt is used by investors, securities analysts and other interested parties in evaluating the liquidity and financial position of other companies, many of which present net debt when reporting their results. Net debt should not be construed as an alternative to total debt, as determined in accordance with accounting principles generally accepted in the United States. In addition, not all companies that report net debt information calculate net debt in the same manner as we do and, accordingly, our calculation is not necessarily comparable to similarly-named measures of other companies and may not be an appropriate measure for performance relative to other companies.

April 29, 2021 6:03 am

Generac Reports Record First Quarter 2021 Results

2021 outlook substantially increased due to broad-based strength across the business driven by further acceleration of residential product demand, recovering C&I markets, and strong operational execution

WAUKESHA, Wis., April 29, 2021 (GLOBE NEWSWIRE) — Generac Holdings Inc. (NYSE: GNRC) (“Generac” or the “Company”), a leading global designer and manufacturer of energy technology solutions and other power products, today reported financial results for its first quarter ended March 31, 2021 and provided an update on its outlook for the full year 2021.

First Quarter 2021 Highlights

Net sales increased 70% to a record $807 million during the first quarter of 2021 as compared to $476 million in the prior-year first quarter. Core sales growth, which excludes both the impact of acquisitions and foreign currency, increased approximately 67%.
- Residential product sales more than doubled to $542 million as compared to $258 million last year, representing a 110% increase.
- Commercial & Industrial (“C&I”) product sales increased 18% to $202 million as compared to $172 million in the prior year.
Net income attributable to the Company during the first quarter was $149 million, or $2.33 per share, as compared to $44 million, or $0.68 per share, for the same period of 2020.
Adjusted net income attributable to the Company, as defined in the accompanying reconciliation schedules, was a record $153 million, or $2.38 per share, as compared to $55 million, or $0.87 per share, in the first quarter of 2020.
Adjusted EBITDA before deducting for noncontrolling interests, as defined in the accompanying reconciliation schedules, was a record $214 million, or 26.5% of net sales, as compared to $86 million, or 18.1% of net sales, in the prior year.
Cash flow from operations was $153 million, a record for the first quarter of a year, as compared to $11 million in the prior year. Free cash flow, as defined in the accompanying reconciliation schedules, was a record for a first quarter of $126 million as compared to ($1 million) for 2020. The substantially higher cash flow was primarily due to higher net income and a lower level of working capital investment in the current year quarter, which was partially offset by higher capital expenditures relative to the prior year quarter.
The Company is increasing its full-year 2021 net sales guidance to now be approximately 40 to 45% growth compared to the prior year, which is an increase from the 25 to 30% previously expected. Adjusted EBITDA margin, before deducting for non-controlling interests, is now expected to be approximately 24.5 to 25.5%, which is an increase from the 24.0 to 25.0% previously expected.

“Our first quarter results continue to demonstrate the power of Generac’s business model and the fantastic execution by our team as our revenue grew at a tremendous 70% rate to over $800 million, driving a significant increase in adjusted EBITDA margins. The revenue performance represents an all-time record despite the seasonally lower first-quarter time period,” said Aaron Jagdfeld, President and Chief Executive Officer. “Growth was broad based led by a dramatic increase for home standby generators that more than doubled compared to prior year given the powerful mega trends that are driving incredible demand for these products.”

Jagdfeld continued, “Shipments of our PWRcell^® energy storage systems also grew at a significant rate as compared to the prior year, and with the considerable momentum we have in the marketplace, we are increasing our outlook for these products for the remainder of the year. Shipments of C&I products returned to growth in the quarter, increasing at a strong rate as demand is recovering at a faster pace than previously expected across a number of markets and geographies. With the impact from the major outages in Texas along with further capacity expansion actions for home standby, and with demand strengthening broadly across the rest of the business, we are substantially increasing our full year revenue and earnings outlook for 2021.”

Additional First Quarter 2021 Consolidated Highlights

Gross profit margin improved 370 basis points to 39.9% compared to 36.2% in the prior-year first quarter. The increase was primarily driven by favorable sales mix from significantly higher shipments of residential products, along with improved pricing and overhead absorption from higher sales volumes. These favorable impacts were partially offset by the onset of higher input costs primarily relating to raw materials, labor, freight and logistics costs.

Operating expenses increased $23.2 million, or 21.2%, as compared to the first quarter of 2020. The increase was primarily driven by higher variable expenses from the significant increase in sales volumes, higher employee costs and incentive compensation, and the impact of acquisitions. These increases were partially offset by a reduction in controllable operating expenses.

Provision for income taxes for the current year quarter was $35.4 million, or an effective tax rate of 19.1%, as compared to $9.4 million, or a 17.9% effective tax rate, for the prior year. The increase in effective tax rate was primarily due to the significant increase in the mix of domestic pretax income in the current year.

Business Segment Results

Domestic Segment

Domestic segment sales increased 84.2% to $692.7 million as compared to $376.0 million in the prior year quarter, with the impact of acquisitions contributing approximately 2.0% of the revenue growth for the quarter. The core sales growth was primarily driven by a significant increase in shipments of residential products highlighted by home standby and portable generators. In addition, PWRcell^® energy storage systems experienced healthy growth as the Company continues to expand in the clean energy market, and shipments of chore products also improved at a strong rate as compared to the prior year. This was supplemented by a return to growth for C&I products which was led by a substantial increase in shipments to telecom national account customers compared to the prior year.

Adjusted EBITDA for the segment was $207.1 million, or 29.9% of net sales, as compared to $82.8 million in the prior year, or 22.0% of net sales. This margin increase was driven by favorable sales mix, improved pricing and higher operating leverage from the substantial revenue growth for the segment during the quarter.

International Segment

International segment sales increased 14.8% to $114.7 million as compared to $99.9 million in the prior year quarter. Core sales, which excludes the favorable impact of currency, increased 9.6% compared to the prior year. The growth for the segment was due to an increase in market activity primarily in the European region that is now recovering from the impact of the COVID-19 pandemic which began during the first quarter of the prior year.

Adjusted EBITDA for the segment, before deducting for noncontrolling interests, was $7.1 million, or 6.2% of net sales, as compared to $3.3 million, or 3.3% of net sales, in the prior year. The improvement in margin was due to the combination of favorable sales mix, improved operating leverage on the higher sales volumes, and a reduction in certain controllable operating expenses.

Updated 2021 Outlook

The major outages in Texas during the first quarter have led to an acceleration in demand and backlog for home standby generators from the already elevated levels that existed prior to this event. This has resulted in a further increase in capacity expansion plans and is leading to a significant increase in the shipment outlook for these products for the full-year 2021. Also contributing to the improved outlook for residential products is a notable increase in portable generator shipments, along with higher demand for PWRcell^® energy storage systems due to further progress in building out distribution partners in this overall expanding market. The outlook for C&I products has also improved considerably due to a broad based rebound in demand highlighted by a significant pickup in activity from telecom national account customers, and overall stronger outlooks for domestic and international markets.

As a result of these factors, the Company is increasing its full-year 2021 net sales growth guidance to now be approximately 40 to 45% compared to the prior year, which includes only approximately 2% of favorable impact from acquisitions and foreign currency. This is an increase from the as-reported growth guidance of 25 to 30% previously expected.

Net income margin, before deducting for non-controlling interests, is now expected to be approximately 16.0 to 17.0% for the full-year 2021, which is an increase from the prior expectation of between 15.0 to 16.0%. The corresponding adjusted EBITDA margin is now expected to be approximately 24.5 to 25.5%, which is an increase from the 24.0 to 25.0% previously expected.

Operating and free cash flow generation is still expected to be strong, with the conversion of adjusted net income to free cash flow expected to be approximately 90%.

Conference Call and Webcast

Generac management will hold a conference call at 10:00 a.m. EDT on Thursday, April 29, 2021 to discuss first quarter 2021 operating results. The conference call can be accessed by dialing (866) 415-3113 (domestic) or +1 (678) 509-7544 (international) and entering passcode 6997523.

The conference call will also be webcast simultaneously on Generac’s website (http://www.generac.com), accessed under the Investor Relations link. The webcast link will be made available on the Company’s website prior to the start of the call within the Events section of the Investor Relations website.

Following the live webcast, a replay will be available on the Company’s website. A telephonic replay will also be available approximately two hours after the call and can be accessed by dialing (855) 859-2056 (domestic) or +1 (404) 537-3406 (international) and entering passcode 6997523. The telephonic replay will be available for 7 days.

About Generac

Founded in 1959, Generac is a leading global designer and manufacturer of a wide range of energy technology solutions and other power products. As an industry leader serving residential, light commercial, and industrial markets, Generac’s products and solutions are available globally through a broad network of independent dealers, distributors, retailers, e-commerce partners, wholesalers and equipment rental companies, as well as sold direct to certain end user customers.

Forward-looking Information

Certain statements contained in this news release, as well as other information provided from time to time by Generac Holdings Inc. or its employees, may contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Forward-looking statements give Generac’s current expectations and projections relating to the Company’s financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “forecast,” “project,” “plan,” “intend,” “believe,” “confident,” “may,” “should,” “can have,” “likely,” “future,” “optimistic” 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.

Any such forward looking statements are not guarantees of performance or results, and involve risks, uncertainties (some of which are beyond the Company’s control) and assumptions. Although Generac believes any forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Generac’s actual financial results and cause them to differ materially from those anticipated in any forward-looking statements, including:

frequency and duration of power outages impacting demand for our products;
availability, cost and quality of raw materials and key components from our global supply chain and labor needed in producing our products;
the impact on our results of possible fluctuations in interest rates, foreign currency exchange rates, commodities, product mix and regulatory tariffs;
the possibility that the expected synergies, efficiencies and cost savings of our acquisitions will not be realized, or will not be realized within the expected time period;
the risk that our acquisitions will not be integrated successfully;
the duration and scope of the impacts of the COVID-19 pandemic are uncertain and may or will continue to adversely affect our operations, supply chain, and distribution for certain of our products and services;
difficulties we may encounter as our business expands globally or into new markets;
our dependence on our distribution network;
our ability to invest in, develop or adapt to changing technologies and manufacturing techniques;
loss of our key management and employees;
increase in product and other liability claims or recalls;
failures or security breaches of our networks, information technology systems, or connected products; and
changes in environmental, health and safety, or product compliance laws and regulations affecting our products, operations, or customer demand.

Should one or more of these risks or uncertainties materialize, Generac’s actual results may vary in material respects from those projected in any forward-looking statements. In the current environment, some of the above factors have materialized and may or will continue to be impacted by the COVID-19 pandemic, which may cause actual results to vary from these forward-looking statements. A detailed discussion of these and other factors that may affect future results is contained in Generac’s filings with the U.S. Securities and Exchange Commission (“SEC”), particularly in the Risk Factors section of the 2020 Annual Report on Form 10-K and in its periodic reports on Form 10-Q. Stockholders, potential investors and other readers should consider these factors carefully in evaluating the forward-looking statements.

Any forward-looking statement made by Generac in this press release speaks only as of the date on which it is made. Generac undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Metrics

Core Sales

The Company references core sales to further supplement Generac’s condensed consolidated financial statements presented in accordance with U.S. GAAP. Core sales excludes the impact of acquisitions and fluctuations in foreign currency translation. Management believes that core sales facilitates easier and more meaningful comparison of net sales performance with prior and future periods.

Adjusted EBITDA

The computation of adjusted EBITDA attributable to the Company and adjusted EBITDA margin is based on the definition of EBITDA contained in Generac’s credit agreement dated as of May 31, 2013, as amended. To supplement the Company’s condensed consolidated financial statements presented in accordance with U.S. GAAP, Generac provides a summary to show the computation of adjusted EBITDA, which excludes the impact of noncontrolling interests, taking into account certain charges and gains that were recognized during the periods presented.

Adjusted Net Income

To further supplement Generac’s condensed consolidated financial statements presented in accordance with U.S. GAAP, the Company provides a summary to show the computation of adjusted net income attributable to the Company. Adjusted net income attributable to the Company is defined as net income before noncontrolling interests and provision for income taxes adjusted for the following items: cash income tax expense, amortization of intangible assets, amortization of deferred financing costs and original issue discount related to the Company’s debt, intangible impairment charges, certain transaction costs and other purchase accounting adjustments, losses on extinguishment of debt, business optimization expenses, certain other non-cash gains and losses, and adjusted net income attributable to non-controlling interests.

Free Cash Flow

In addition, we reference free cash flow to further supplement Generac’s condensed consolidated financial statements presented in accordance with U.S. GAAP. Free cash flow is defined as net cash provided by operating activities, plus proceeds from beneficial interests in securitization transactions, less expenditures for property and equipment, and is intended to be a measure of operational cash flow taking into account additional capital expenditure investment into the business.

The presentation of this additional information is not meant to be considered in isolation of, or as a substitute for, results prepared in accordance with U.S. GAAP. Please see the accompanying Reconciliation Schedules and our SEC filings for additional discussion of the basis for Generac’s reporting of Non-GAAP financial measures, which includes why the Company believes these measures provide useful information to investors and the additional purposes for which management uses the non-GAAP financial information.

SOURCE: Generac Holdings Inc.

CONTACT:
Michael W. Harris
Vice President – Corporate Development & Investor Relations
(262) 506-6064
[email protected]

Generac Holdings Inc.
Condensed Consolidated Statements of Comprehensive Income
(U.S. Dollars in Thousands, Except Share and Per Share Data)
(Unaudited)

	Three Months Ended March 31,
		2021			2020

Net sales	$	807,434		$	475,915
Costs of goods sold		485,620			303,595
Gross profit		321,814			172,320

Operating expenses:
Selling and service		68,424			55,139
Research and development		22,388			18,649
General and administrative		32,899			27,889
Amortization of intangibles		8,979			7,781
Total operating expenses		132,690			109,458
Income from operations		189,124			62,862

Other (expense) income:
Interest expense		(7,723	)		(9,053	)
Investment income		603			960
Other, net		3,309			(1,914	)
Total other expense, net		(3,811	)		(10,007	)

Income before provision for income taxes		185,313			52,855
Provision for income taxes		35,368			9,444
Net income		149,945			43,411
Net income (loss) attributable to noncontrolling interests		952			(1,049	)
Net income attributable to Generac Holdings Inc.	$	148,993		$	44,460

Net income attributable to common shareholders per common share – basic:	$	2.39		$	0.69
Weighted average common shares outstanding – basic:		62,478,734			62,126,481

Net income attributable to common shareholders per common share – diluted:	$	2.33		$	0.68
Weighted average common shares outstanding – diluted:		64,099,073			63,283,737

Comprehensive income attributable to Generac Holdings Inc.	$	153,816		$	(3,098	)

Generac Holdings Inc.
Condensed Consolidated Balance Sheets
(U.S. Dollars in Thousands, Except Share and Per Share Data)
(Unaudited)

	March 31,			December 31,
		2021			2020
Assets
Current assets:
Cash and cash equivalents	$	744,814		$	655,128
Accounts receivable, less allowance for credit losses		428,702			374,906
Inventories		644,576			603,317
Prepaid expenses and other assets		39,515			36,382
Total current assets		1,857,607			1,669,733

Property and equipment, net		345,563			343,936

Customer lists, net		46,476			49,205
Patents and technology, net		80,250			86,727
Other intangible assets, net		9,182			9,932
Tradenames, net		145,074			146,159
Goodwill		849,294			855,228
Deferred income taxes		1,360			1,497
Operating lease and other assets		87,332			73,006
Total assets	$	3,422,138		$	3,235,423

Liabilities and stockholders’ equity
Current liabilities:
Short-term borrowings	$	26,534		$	39,282
Accounts payable		387,933			330,247
Accrued wages and employee benefits		46,736			63,036
Other accrued liabilities		245,009			204,812
Current portion of long-term borrowings and finance lease obligations		4,053			4,147
Total current liabilities		710,265			641,524

Long-term borrowings and finance lease obligations		841,516			841,764
Deferred income taxes		122,196			115,769
Operating lease and other long-term liabilities		160,338			179,955
Total liabilities		1,834,315			1,779,012

Redeemable noncontrolling interest		63,254			66,207

Stockholders’ equity:

Common stock, par value $0.01, 500,000,000 shares authorized, 72,205,746 and 72,024,329 shares issued at March 31, 2021 and December 31, 2020, respectively		723			721
Additional paid-in capital		534,303			525,541
Treasury stock, at cost		(358,362	)		(332,164	)
Excess purchase price over predecessor basis		(202,116	)		(202,116	)
Retained earnings		1,581,681			1,432,565
Accumulated other comprehensive loss		(31,499	)		(34,254	)
Stockholders’ equity attributable to Generac Holdings Inc.		1,524,730			1,390,293
Noncontrolling interests		(161	)		(89	)
Total stockholders’ equity		1,524,569			1,390,204
Total liabilities and stockholders’ equity	$	3,422,138		$	3,235,423

Generac Holdings Inc.
Condensed Consolidated Statements of Cash Flows
(U.S. Dollars in Thousands)
(Unaudited)

	Three Months Ended March 31,
		2021			2020
Operating activities
Net income	$	149,945		$	43,411
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation		9,258			8,335
Amortization of intangible assets		8,979			7,781
Amortization of original issue discount and deferred financing costs		646			642
Deferred income taxes		1,702			1,571
Share-based compensation expense		5,448			4,574
Loss (gain) on disposal of assets		(3,979	)		–
Other non-cash charges		281			416
Net changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(56,710	)		(5,687	)
Inventories		(45,833	)		(48,145	)
Other assets		(1,773	)		(6,017	)
Accounts payable		56,769			12,817
Accrued wages and employee benefits		(15,812	)		(18,125	)
Other accrued liabilities		63,014			12,976
Excess tax benefits from equity awards		(19,392	)		(3,203	)
Net cash provided by operating activities		152,543			11,346

Investing activities
Proceeds from sale of property and equipment		5			–
Proceeds from sale of investment		4,902			–
Proceeds from beneficial interests in securitization transactions		712			618
Expenditures for property and equipment		(27,469	)		(12,894	)
Net cash used in investing activities		(21,850	)		(12,276	)

Financing activities
Proceeds from short-term borrowings		32,215			20,694
Repayments of short-term borrowings		(43,979	)		(25,526	)
Repayments of long-term borrowings and finance lease obligations		(1,604	)		(1,176	)
Payment of contingent acquisition consideration		(3,750	)		(4,000	)
Taxes paid related to equity awards		(35,901	)		(7,666	)
Proceeds from the exercise of stock options		13,011			1,590
Net cash used in financing activities		(40,008	)		(16,084	)

Effect of exchange rate changes on cash and cash equivalents		(999	)		1,587

Net increase (decrease) in cash and cash equivalents		89,686			(15,427	)
Cash and cash equivalents at beginning of period		655,128			322,883
Cash and cash equivalents at end of period	$	744,814		$	307,456

Generac Holdings Inc.
Segment Reporting and Product Class Information
(U.S. Dollars in Thousands)
(Unaudited)

	Net Sales
	Three Months Ended March 31,
Reportable Segments		2021		2020
Domestic	$	692,738	$	376,030
International		114,696		99,885
Total net sales	$	807,434	$	475,915

Product Classes
Residential products	$	542,149	$	257,619
Commercial & industrial products		202,391		172,066
Other		62,894		46,230
Total net sales	$	807,434	$	475,915

	Adjusted EBITDA
	Three Months Ended March 31,
		2021		2020
Domestic	$	207,073	$	82,775
International		7,121		3,250
Total adjusted EBITDA (1)	$	214,194	$	86,025

(1) See reconciliation of Adjusted EBITDA to Net income attributable to Generac Holdings Inc. on the following reconciliation schedule.

Generac Holdings Inc.
Reconciliation Schedules
(U.S. Dollars in Thousands, Except Share and Per Share Data)
(Unaudited)

Net income to Adjusted EBITDA reconciliation
	Three Months Ended March 31,
		2021			2020

Net income attributable to Generac Holdings Inc.	$	148,993		$	44,460
Net income (loss) attributable to noncontrolling interests		952			(1,049	)
Net income		149,945			43,411
Interest expense		7,723			9,053
Depreciation and amortization		18,237			16,116
Provision for income taxes		35,368			9,444
Non-cash write-down and other adjustments (1)		(3,868	)		2,284
Non-cash share-based compensation expense (2)		5,448			4,574
Transaction costs and credit facility fees (3)		914			234
Business optimization and other charges (4)		159			512
Other		268			397
Adjusted EBITDA		214,194			86,025
Adjusted EBITDA attributable to noncontrolling interests		2,192			(102	)
Adjusted EBITDA attributable to Generac Holdings Inc.	$	212,002		$	86,127

(1) Includes gains/losses on disposals of assets and investments, unrealized mark-to-market adjustments on commodity contracts, and certain foreign currency related adjustments. A full description of these and the other reconciliation adjustments contained in these schedules is included in Generac’s SEC filings.

(2) Represents share-based compensation expense to account for stock options, restricted stock and other stock awards over their respective vesting periods.

(3) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, together with certain fees relating to our senior secured credit facilities.

(4) Represents severance and other non-recurring restructuring charges related to the consolidation of certain of our facilities.


Net income to Adjusted net income reconciliation
	Three Months Ended March 31,
		2021			2020

Net income attributable to Generac Holdings Inc.	$	148,993		$	44,460
Net income (loss) attributable to noncontrolling interests		952			(1,049	)
Net income		149,945			43,411
Provision for income taxes		35,368			9,444
Income before provision for income taxes		185,313			52,855
Amortization of intangible assets		8,979			7,781
Amortization of deferred finance costs and original issue discount		646			642
Transaction costs and other purchase accounting adjustments (5)		689			40
(Gain)/loss attributable to business or asset dispositions (6)		(3,991	)		–
Business optimization and other charges (4)		159			512
Adjusted net income before provision for income taxes		191,795			61,830
Cash income tax expense (7)		(37,868	)		(7,345	)
Adjusted net income		153,927			54,485
Adjusted net income (loss) attributable to noncontrolling interests		1,223			(581	)
Adjusted net income attributable to Generac Holdings Inc.	$	152,704		$	55,066

Adjusted net income attributable to Generac Holdings Inc. per common share – diluted:	$	2.38		$	0.87
Weighted average common shares outstanding – diluted:		64,099,073			63,283,737

(5) Represents transaction costs incurred directly in connection with any investment, as defined in our credit agreement, equity issuance or debt issuance or refinancing, and certain purchase accounting adjustments.

(6) Represents gains and losses attributable to the disposition of a business or assets occurring in other than ordinary course, as defined in our credit agreement.

(7) Amount for the three months ended March 31, 2021 is based on an anticipated cash income tax rate of approximately 20.5% for the full year ending 2021. Amount for the three months ended March 31, 2020 is based on an anticipated cash income tax rate at the time of approximately 14% for the full year ended 2020. Cash income tax expense for the respective periods is based on the projected taxable income and corresponding cash tax rate for the full year after considering the effects of current and deferred income tax items, and is calculated for each respective period by applying the derived cash tax rate to the period’s pretax income.

Free Cash Flow Reconciliation
	Three Months Ended March 31,
		2021			2020

Net cash provided by operating activities	$	152,543		$	11,346
Proceeds from beneficial interests in securitization transactions		712			618
Expenditures for property and equipment		(27,469	)		(12,894	)
Free cash flow	$	125,786		$	(930	)

April 29, 2021 6:03 am

A record start to 2021

A record start to 2021

Luxembourg
,
April 29
,
20
2
1
–
Millicom is pleased to announce its first quarter 2021 results. Please find below links to the Q1 2021 Earnings Release, and IAS 34 Interim Condensed Consolidated Financial Statements.

Millicom Chief Executive Officer Mauricio Ramos commented:

“
Our operational focus and strategic investments over the past year are paying off. After an incredibly strong Q1, we now have more customers, and we are generating more revenue, more EBITDA and more OCF than we did one year ago, before the start of the pandemic. We did not just recover; we are now above pre-COVID levels on most of our operational and financial KPIs.

During the quarter, we added 166,000 customers in Home, by far our best quarterly result ever, and we added 1.1 million customers in Mobile, our strongest Q1 performance in a decade. As a result, service revenue, EBITDA and OCF accelerated in Q1, and the quarter ended on a very positive note, with Latam service revenue growth exceeding 5.5% in March.

Strategically, we announced that we have signed agreements to dispose of our remaining operations in Africa. The Tanzania sale was the culmination of a structured and competitive process with multiple bidders. We are very pleased with the outcome, and plan to use the proceeds to reduce our net debt. Our strong Q1 and these disposals give us increased flexibility to resume share buybacks later this year.”

Q
1
20
2
1
Earnings Release [Attachment]
IAS 34 Interim
Condensed Consolidated
Financial Statements [Attachment]

Video conference
details

Millicom will host a video conference for the global financial community on April 29, 2021 at 14:00 (Stockholm) / 13:00 (London) / 08:00 (Miami).

Registration for the live event is required and is already available at the following link. After registering, you will receive a confirmation email containing details about joining the video conference. If you would like to ask a question during the video conference, please notify the Investor Relations team by sending an email to [email protected] after the start of the event.

To listen to the conference via telephone, please use one of the following numbers and enter the Webinar ID: 829 3020 3271. Please dial a number based on your location:

US: +1 929 205 6099 Sweden: +46 850 539 728
UK: +44 330 088 5830 Luxembourg: +352 342 080 9265

Additional international numbers are available at the following link.

Replay information:

A replay of the event will be available on the Mi l licom website.

-END-

For further information, please contact

Press:
Vivian Kobeh, Director Corporate Communications
+1-786-628-5300
[email protected]

Yocasta Valdez, Group Manager Digital Media & Communications
+1-305-929-5417
[email protected]

Investors:
Michel Morin, VP Investor Relations
+1 786-628-5270
[email protected]

Sarah Inmon, Investor Relations Manager
+1 786-628-5303
[email protected]

About Millicom

Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile services dedicated to emerging markets in Latin America and Africa. Millicom sets the pace when it comes to providing high-speed broadband and innovation around The Digital Lifestyle® services through its principal brand, TIGO. As of December 31, 2020, Millicom operating subsidiaries and joint ventures employed more than 21,000 people and provided mobile services to approximately 55 million customers, with a cable footprint of more than 12 million homes passed. Founded in 1992, Millicom International Cellular S.A. is headquartered in Luxembourg.

Regulatory Statement

This information was prior to this release inside information and is information that Millicom is obliged to make public pursuant to the EU Market Abuse Regulation. This information was submitted for publication, through the agency of the contact person set out above, at 1
2
:00 CET on
April 29
, 2021.

Attachments

April 29, 2021 6:03 am

Amphastar Pharmaceuticals to Release First Quarter Earnings and Hold Conference Call on May 6th, 2021

RANCHO CUCAMONGA, Calif., April 29, 2021 (GLOBE NEWSWIRE) — Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) announced that the Company will release results for its first quarter of 2021 ended March 31, 2021, after the market closes on Thursday, May 6th, 2021, and will hold a conference call to discuss its financial results at 2:00 p.m. Pacific Time.

To access the conference call, dial toll free (877) 876-9177, for international calls, dial (785) 424-1672, five minutes before the conference.

The call can also be accessed on the Investors page on the Company’s website www.amphastar.com.

Amphastar is a bio-pharmaceutical company that focuses primarily on developing, manufacturing, marketing and selling technically challenging generic and proprietary injectable, inhalation, and intranasal products as well as insulin API products. Most of the Company’s products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers.

Forward Looking Statements

All statements in this press release that are not historical are forward-looking statements. These statements are not historical facts but rather are based on Amphastar’s historical performance and its current expectations, estimates, and projections regarding Amphastar’s business, operations, and other similar or related factors. Words such as “may,” “might,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expect,” “intend,” “plan,” “project,” “believe,” “estimate,” and other similar or related expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict and, in some cases, beyond Amphastar’s control. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in Amphastar’s filings with the Securities and Exchange Commission, including in the Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 15, 2021. You can locate these reports through the Company’s website at http://ir.amphastar.com and on the SEC’s website at www.sec.gov. The forward-looking statements in this release speak only as of the date of the release. Amphastar undertakes no obligation to revise or update information or any forward-looking statements in this press release to reflect events or circumstances in the future, even if new information becomes available or if subsequent events cause Amphastar’s expectations to change.

Contact:

Bill Peters
Chief Financial Officer
(909) 476-3416

April 29, 2021 6:03 am

Overstock Announces First Quarter 2021 Financial Results

First quarter net revenue growth of 94% year over year to $660 million

First quarter income from continuing operations of $26 million, an increase of $40 million year over year

SALT LAKE CITY, April 29, 2021 (GLOBE NEWSWIRE) — Overstock.com, Inc. (NASDAQ:OSTK) today reported financial results for the quarter ended March 31, 2021.

First Quarter 2021 Financial Highlights, from continuing operations

•	Total net revenue was $660 million, an increase of 94% year over year
•	Gross profit was $154 million or 23.3% of total net revenue, an increase of 141 basis points year over year
•	Income from continuing operations was $26 million, an improvement of $40 million year over year
•	Diluted earnings per share was $0.56, an improvement of $0.90 year over year
•	Adjusted EBITDA (non-GAAP) was $34 million, an improvement of $40 million year over year
•	YTD net cash provided by operating activities was $74 million, an improvement of $76 million year over year
•	YTD free cash flow (non-GAAP) improved $76 million year over year
•	At the end of the first quarter, cash and cash equivalents totaled $535 million

“On the heels of a record 2020, Overstock continues to execute consistently and delivered strong results for the first quarter of 2021,” said Overstock CEO Jonathan Johnson. “Our strong momentum reflects our purposeful and strategic focus on our home business and the operational changes we’ve made and continue to put in place. For the first quarter, our net revenue increased by 94%, and our active customers nearly doubled again. Our focus on improving the customer experience and making our brand vision of ‘Dream Homes for All’ a reality is paying off. In addition, our strategic partnership with Pelion Venture Partners for oversight of Medici Ventures’ blockchain assets closed ahead of schedule and we believe it will provide the portfolio companies the opportunities they need to succeed. We have had another great quarter of profitable market share growth! We believe Overstock is well positioned to sustain this profitable path through 2021 and beyond. I look forward to providing a full update on our first quarter performance during our earnings call.”

First Quarter 2021 Operational Highlights

•	Active customers reached 9.9 million as of March 31, 2021, an increase of 92% year over year
•	LTM net revenue per active customer was $283 as of March 31, 2021, an increase of 3.7% year over year
•	Orders delivered in the first quarter of 2021 were 3.6 million, an increase of 66% year over year
•	Average order value was $183 for the first quarter of 2021, an increase of 17% year over year
•	Orders per active customer, measured as LTM orders divided by active customers, was 1.66 for the first quarter of 2021, compared to 1.70 for the first quarter of 2020
•	Orders placed on a mobile device were 50.1% of gross merchandise sales in the first quarter 2021, an increase of 380 basis points year over year

Partnership with Pelion Venture Partners

On April 23, 2021, ahead of schedule, Overstock closed its blockchain fund transaction with Pelion Venture Partners, a third-party venture capital firm with a proven track record of successfully investing in early-stage companies, to oversee Medici Ventures’ blockchain assets. “I expect Pelion, which will oversee the portfolio and make follow-on investment decisions, will take these companies to the next level and help guide them to economic success. Overstock will now focus on its core e-commerce business, which continues to achieve tremendous revenue, profits and market share growth,” noted Johnson. In connection with the transaction, Medici Ventures, Overstock’s wholly owned blockchain-focused subsidiary, was converted to a limited partnership (the “Fund”). Overstock is the sole limited partner of the Fund, and Pelion acts as the general partner of the Fund. Pelion now has sole authority and responsibility for the Fund’s investment decisions and in exercising all shareholder rights the Fund holds in the portfolio companies. The Fund has an eight-year lifespan and a total capital commitment of $45 million. The Fund will return invested capital to Overstock first and then apportion profits on successful exits as outlined in the Fund’s Limited Partnership Agreement.

Financial Reporting Presentation in Accordance with the Pelion Transaction

Medici Ventures’ blockchain businesses met the criteria to be reported as held for sale and discontinued operations as of March 31, 2021. Accordingly, we have classified the related assets and liabilities as held for sale in our consolidated balance sheets and the related operating results as discontinued operations in our consolidated statements of operations, for all periods presented. As a result of the transaction, Overstock has reorganized its remaining businesses into a single reportable operating segment, Retail. Corporate-related overhead costs are included in Retail continuing operations.

Earnings Webcast Information

Overstock will hold a conference call and webcast to discuss its first quarter 2021 financial results on Thursday, April 29, 2021, at 8:30 a.m. ET. To access the live webcast and presentation slides, go to http://investors.overstock.com. To listen to the conference call via telephone, dial (877) 673-5346 and enter conference ID 5898642 when prompted. Participants outside the U.S. or Canada who do not have Internet access should dial +1 (724) 498-4326, then enter the conference ID provided above.

A replay of the conference call will be available at http://investors.overstock.com, starting two hours after the live call has ended. An audio replay of the webcast will be available via telephone starting at 11:30 a.m. ET on Thursday, April 29, 2021, through 11:30 a.m. ET on Thursday, May 13, 2021. To listen to the recorded webcast by phone, dial (855) 859-2056, then enter the conference ID provided above. Outside the U.S. or Canada, dial +1 (404) 537-3406 and enter the conference ID provided above.

Questions may be emailed in advance of the call to [email protected].

About Overstock.com

Overstock.com, Inc. (Common Stock (NASDAQ:OSTK) / Series A-1 Preferred Stock (tZERO ATS:OSTKO) / Series B Preferred Stock (OTCQX:OSTBP)) is an online retailer and technology company based in Salt Lake City, Utah. Its leading e-commerce website sells a broad range of new home products at low prices, including furniture, décor, area rugs, bedding and bath, home improvement, and more. The online shopping site, which is visited by tens of millions of customers a month, also features a marketplace providing customers access to millions of products from third-party sellers. In 2014, Overstock was the first major retailer to accept cryptocurrency as a form of payment and continues to do so. Overstock regularly posts information about the Company and other related matters on the Newsroom and Investor Relations pages on its website, Overstock.com.

O, Overstock.com, O.com, Club O, and Worldstock are registered trademarks of Overstock.com, Inc. Other service marks, trademarks and trade names which may be referred to herein are the property of their respective owners.

Cautionary Note Regarding Forward-Looking Statements

This press release and the April 29, 2021 conference call and webcast to discuss our financial results may contain forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements include all statements other than statements of historical fact, including forecasts of trends, statements regarding expectations with respect to the performance of Pelion in managing the Fund. These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including but not limited to, the duration of the COVID-19 pandemic and its ultimate impact on our business and results of operations, adverse tax, regulatory or legal developments, and competition, including how such factors will be impacted at such time as the pandemic subsides throughout the country and globally. Other risks and uncertainties include, among others, the inherent risks associated with the businesses that Medici Ventures and tZERO are pursuing, our continually evolving business model, and difficulties we may have with our infrastructure, our fulfillment partners or our payment processors, including cyber-attacks or data breaches affecting us or any of them, and difficulties we may have with our search engine optimization results. More information about factors that could potentially affect our financial results are included in our Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission on February 26, 2021, and in our subsequent filings with the Securities and Exchange Commission. The Form 10-K and our subsequent filings with the Securities and Exchange commission identify important factors that could cause our actual results to differ materially from those contained in or contemplated by our projections, estimates and other forward-looking statements.

Contacts

Investor Relations:
Alexis Callahan
801-947-5126
[email protected]

Media Relations:
Megan Herrick
801-947-3564
[email protected]

Overstock.com, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except per share data)
	March 31, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	534,776		$	495,425
Restricted cash	1,232			1,197
Accounts receivable, net	38,518			22,867
Inventories	6,711			6,243
Prepaids and other current assets	23,019			22,879
Current assets held for sale	—			34,129
Total current assets	604,256			582,740
Property and equipment, net	110,804			113,767
Goodwill	6,160			6,160
Operating lease right-of-use assets	15,450			17,297
Other long-term assets, net	3,692			4,095
Long-term assets held for sale	153,362			106,155
Total assets	$	893,724		$	830,214
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	135,383		$	109,759
Accrued liabilities	130,093			123,646
Unearned revenue	96,308			72,165
Operating lease liabilities, current	4,837			5,152
Other current liabilities	3,372			2,935
Current liabilities held for sale	—			13,924
Total current liabilities	369,993			327,581
Long-term debt, net	40,505			41,334
Operating lease liabilities, non-current	11,572			13,206
Other long-term liabilities	3,680			4,082
Long-term liabilities held for sale	19,034			7,685
Total liabilities	444,784			393,888
Stockholders’ equity:
Preferred stock, $0.0001 par value, authorized shares – 5,000
Series A-1, issued and outstanding – 4,204 and 4,204	—			—
Series B, issued and outstanding – 357 and 357	—			—
Common stock, $0.0001 par value, authorized shares – 100,000
Issued shares – 46,589 and 46,331
Outstanding shares – 43,000 and 42,768	4			4
Additional paid-in capital	951,615			970,873
Accumulated deficit	(509,140		)	(525,233		)
Accumulated other comprehensive loss	(549		)	(553		)
Treasury stock at cost – 3,589 and 3,563	(78,048		)	(71,399		)
Equity attributable to stockholders of Overstock.com, Inc.	363,882			373,692
Equity attributable to noncontrolling interests	85,058			62,634
Total stockholders’ equity	448,940			436,326
Total liabilities and stockholders’ equity	$	893,724		$	830,214

Overstock.com, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except per share data)
	Three months ended March 31,
	2021			2020
Net revenue	$	659,861		$	339,598
Cost of goods sold	506,337			265,392
Gross profit	153,524			74,206
Operating expenses
Sales and marketing	73,538			36,345
Technology	30,523			27,281
General and administrative	22,871			23,885
Total operating expenses	126,932			87,511
Operating income (loss)	26,592			(13,305		)
Interest expense, net	(155		)	(11		)
Other expense, net	(226		)	(287		)
Income (loss) from continuing operations before income taxes	26,211			(13,603		)
Provision for income taxes	193			163
Income (loss) from continuing operations	26,018			(13,766		)
Loss from discontinued operations, net of tax	(10,126		)	(5,799		)
Net income (loss)	15,892			(19,565		)
Less: Net loss attributable to noncontrolling interests—discontinued operations	(201		)	(3,232		)
Net income (loss) attributable to stockholders of Overstock.com, Inc.	$	16,093		$	(16,333	)
Net income (loss) per share of common stock:
Net income (loss) attributable to common shares—basic
Continuing operations	$	0.57		$	(0.34	)
Discontinued operations	(0.23		)	(0.06		)
Total	$	0.34		$	(0.40	)
Net income (loss) attributable to common shares—diluted
Continuing operations	$	0.56		$	(0.34	)
Discontinued operations	(0.23		)	(0.06		)
Total	$	0.33		$	(0.40	)
Weighted average shares of common stock outstanding:
Basic	42,885			40,158
Diluted	43,320			40,158

Overstock.com, Inc. Consolidated Statements of Cash Flows (Unaudited) (in thousands)
	Three months ended March 31,
	2021			2020
Cash flows from operating activities:
Consolidated net income (loss)	$	15,892		$	(19,565	)
Loss from discontinued operations, net of income taxes	10,126			5,799
Adjustments to reconcile consolidated net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	5,146			5,569
Non-cash operating lease cost	1,320			1,431
Stock-based compensation to employees and directors	2,305			2,681
Other non-cash adjustments	638			429
Changes in operating assets and liabilities:
Accounts receivable, net	(15,651		)	(6,902		)
Inventories	(468		)	1,162
Prepaids and other current assets	447			1,566
Other long-term assets, net	(448		)	457
Accounts payable	25,589			(1,708		)
Accrued liabilities	6,693			(3,663		)
Unearned revenue	24,143			12,903
Operating lease liabilities	(1,379		)	(1,626		)
Other long-term liabilities	(269		)	(180		)
Net cash provided by (used in) continuing operating activities	74,084			(1,647		)
Net cash used in discontinued operating activities	(12,353		)	(10,580		)
Net cash provided by (used in) operating activities	61,731			(12,227		)
Cash flows from investing activities:
Expenditures for property and equipment	(2,395		)	(2,638		)
Other investing activities, net	(367		)	(99		)
Net cash used in continuing investing activities	(2,762		)	(2,737		)
Net cash provided by (used in) discontinued investing activities	5,737			(3,262		)
Net cash provided by (used in) investing activities	2,975			(5,999		)
Cash flows from financing activities:
Payments on long-term debt	(551		)	—
Proceeds from long-term debt	—			47,500
Proceeds from sale of common stock, net of offering costs	—			2,848
Payments of taxes withheld upon vesting of restricted stock	(7,292		)	(1,686		)
Other financing activities, net	(1		)	(2,325		)
Net cash provided by (used in) continuing financing activities	(7,844		)	46,337
Net cash provided by discontinued financing activities	2,085			912
Net cash provided by (used in) financing activities	(5,759		)	47,249
Net increase in cash, cash equivalents, and restricted cash	58,947			29,023
Cash, cash equivalents, and restricted cash, beginning of period, inclusive of cash balances classified as held for sale	519,181			114,898
Cash, cash equivalents, and restricted cash, end of period, inclusive of cash balances classified as held for sale	578,128			143,921
Less: Cash, cash equivalents, and restricted cash held for sale	42,120			15,440
Cash, cash equivalents, and restricted cash, end of period	$	536,008		$	128,481

Supplemental Operational Data

We measure our business using operational metrics, in addition to the financial metrics shown above and the non-GAAP financial measures explained below. We believe these metrics provide investors with additional information regarding our financial results, including indicators of our growth, customers’ purchasing patterns, and the mix of products purchased by our customers.

Active customers represents the total number of unique customers who have made at least one purchase during the prior twelve-month period. This metric captures both the inflow of new customers and the outflow of existing customers who have not made a purchase during the prior twelve-month period.

LTM net revenue per active customer represents total net revenue in a twelve-month period divided by the total number of active customers for the same twelve-month period.

Orders delivered represents the total number of orders delivered in any given period, including orders that may eventually be returned. As we ship a large volume of packages through multiple carriers, actual delivery dates may not always be available, and in those circumstances we estimate delivery dates based on historical data.

Average order value is defined as total net revenue in any given period divided by the total number of orders delivered in that period.

Orders per active customer is defined as orders delivered in a twelve-month period divided by active customers for the same twelve-month period.

The following table provides key operating metrics for the Retail business:
(in thousands, except for LTM net revenue per active customer, average order value and orders per active customer)

	Three months ended March 31,
	2021	2020
Active customers	9,938	5,170
LTM net revenue per active customer	283	273
Orders delivered	3,608	2,174
Average order value	183	156
Orders per active customer	1.66	1.70

Non-GAAP Financial Measures and Reconciliations

We are providing certain non-GAAP financial measures in this release and related earnings conference call, including Adjusted EBITDA and Free cash flow. We use these non-GAAP measures internally in analyzing our financial results at both the consolidated and segment level and we believe they are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance in the same manner as our management and board of directors. We have provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures in this earnings release. These Non-GAAP financial measures should be used in addition to and in conjunction with the results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

Adjusted EBITDA is a non-GAAP financial measure that is calculated as income (loss) from continuing operations before depreciation and amortization, stock-based compensation, interest and other income (expense), provision (benefit) for income taxes, and special items. We believe the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis. Exclusion of items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or non-recurring.

Free cash flow is a non-GAAP financial measure that is calculated as net cash provided by or used in operating activities reduced by expenditures for property and equipment. We believe free cash flow is a useful measure to evaluate the cash impact of the continuing operations of the business including purchases of property and equipment which are a necessary component of our ongoing operations.

The following table reflects the reconciliation of Adjusted EBITDA to income (loss) from continuing operations (in thousands):

	Three months ended March 31,
	2021			2020

Income (loss) from continuing operations	$	26,018		$	(13,766	)
Depreciation and amortization	5,146			5,569
Stock-based compensation	2,305			2,681
Interest expense, net	155			11
Other expense, net	226			287
Provision for income taxes	193			163
Special items (see table below)	(187		)	(1,486		)
Adjusted EBITDA	$	33,856		$	(6,541	)

Special items:
Special legal charges (1)	$	(187	)	$	(2,501	)
Severance	—			1,015
	$	(187	)	$	(1,486	)

(1) — Includes amounts associated with the resolution for and adjustments to various legal contingencies.

The following table reflects the reconciliation of Free cash flow to Net cash provided by (used in) continuing operating activities (in thousands):

	Three months ended March 31,
	2021			2020
Net cash provided by (used in) continuing operating activities	$	74,084		$	(1,647	)
Expenditures for property and equipment	(2,395		)	(2,638		)
Free cash flow	$	71,689		$	(4,285	)

April 29, 2021 6:03 am

InspireMD Appoints Acclaimed Interventional Cardiologist Kenneth Rosenfield, MD as Chair of its Newly Formed Scientific Advisory Board

TEL AVIV, Israel, April 29, 2021 (GLOBE NEWSWIRE) — InspireMD, Inc. (NYSE American: NSPR), developer of the CGuard™ Embolic Prevention System (EPS) for the prevention of the stroke caused by carotid artery disease, today announces the formation of its Scientific Advisory Board with its newly appointed chair, acclaimed interventional cardiologist, Kenneth Rosenfield, M.D.

The Company intends for the Scientific Advisory Board to provide guidance and direction on clinical need, technology advancements and planning for the Company’s growth and strategic direction.

Kenneth Rosenfield, M.D., is the Section Head for Vascular Medicine and Intervention and chairs the Acute Myocardial Infarction (STEMI) Committee for the cardiac cath lab at Massachusetts General Hospital. Dr. Rosenfield specializes in complex cardiac and vascular interventions. He is past-president and a Master of SCAI, prior ACC Governor for Massachusetts, recipient of the AHA Laennec Master Clinician Award, and the distinguished Mason Sones Award. Dr. Rosenfield has spearheaded the development of less-invasive therapies for patients with coronary and vascular disease, both at MGH and nationally, including treatment of Carotid, Kidney, and Leg artery narrowing using stents and other novel devices. He designed and served as national principal or co-principal investigator for numerous landmark clinical trials, including the Asymptomatic Carotid Trial (ACT 1), the SUPERB SFA stent trial, the LEVANT 2 and TRANSCEND drug-coated balloon trials, and the NIH BEST CLI trial. A pioneer in carotid stenting, Dr. Rosenfield placed the first carotid stents in New England and has been deeply involved in virtually every major investigational carotid stent initiative. He further led the effort to define qualifications, training and standards for carotid stenting, and initiated the effort to create a carotid registry that ultimately folded into the NIH CREST 2 trial as the CREST 2 Registry.

“InspireMD’s DNA is built on research and development and advancing new technologies — such as our MicroNet® mesh used with our CGuard® EPS device — into the market. As our pipeline evolves and expands, we recognize the value that the esteemed physicians on this newly formed scientific advisory board bring toward validating and guiding our efforts toward the highest levels of clinical utility, physician acceptance and patient outcomes,” commented InspireMD’s CEO, Marvin Slosman. “Dr. Rosenfield has been a pioneer in cardiovascular medicine and true supporter of CGuard EPS. We are thrilled to have his support as we develop and launch new products into the market, while building the global reach for CGuard EPS in the U.S. and Asian markets. We welcome him as the Chair of our Scientific Advisory Board and look forward to naming members and establishing this important strategic board to guide our success.”

“I firmly believe that CGuard EPS will establish a new standard of care in the treatment of carotid artery disease, based on a deep clinical body of evidence and its unique and proprietary design. The opportunity to improve patient outcomes with carotid stenting is exciting and, with the momentum of the upcoming C-Guardian Trial and focus on the U.S. and other global markets, the future for carotid stenting is very bright. It is a privilege to work with management and thought leaders in the industry to provide feedback, direction, and support of the plans of InspireMD.” added Dr. Rosenfield.

About The CGuard® EPS
The CGuard® Embolic Protection System is an advanced platform solution designed to deliver the flexibility of the traditional open-cell stent with advanced protection from peri-procedural and post-procedural embolic events caused by plaque prolapse through the stent strut that can lead to stroke. CGuard’s unique MicroNet® technology mitigates the prolapse and associated embolization and has shown superior clinical outcomes for patients against alternative carotid stent types, conventional and next-generation double-layer stents, as well as invasive procedures such as endarterectomy, a major surgical procedure. InspireMD’s CGuard™ has created a new dimension in the protected treatment of carotid artery disease and has the potential to establish a new standard of care for the management of carotid artery disease and stroke prevention.

About InspireMD, Inc.
InspireMD seeks to utilize its proprietary MicroNet® technology to make its products the industry standard for carotid stenting by providing outstanding acute results and durable, stroke-free, long-term outcomes. For more information, visit www.inspiremd.com. InspireMD routinely posts information that may be important to investors in the Investors section of its website.

Forward-looking Statements
This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) market acceptance of our existing and new products, (ii) negative clinical trial results or lengthy product delays in key markets, (iii) an inability to secure regulatory approvals for the sale of our products, (iv) the impact of the COVID-19 pandemic on our manufacturing, sales, business plan and the global economy, (v) intense competition in the medical device industry from much larger, multinational companies, (vi) product liability claims, (vii) product malfunctions, (viii) our limited manufacturing capabilities and reliance on subcontractors for assistance, (ix) insufficient or inadequate reimbursement by governmental and other third party payers for our products, (x) our efforts to successfully obtain and maintain intellectual property protection covering our products, which may not be successful, (xi) legislative or regulatory reform of the healthcare system in both the U.S. and foreign jurisdictions, (xii) our reliance on single suppliers for certain product components, (xiii) the fact that we will need to raise additional capital to meet our business requirements in the future and that such capital raising may be costly, dilutive or difficult to obtain and (xiv) the fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.

Investor Contacts:

Craig Shore
Chief Financial Officer
InspireMD, Inc.
888-776-6804
[email protected]

April 29, 2021 6:03 am

GBT Tokenize achieved viable Kirlian Electrophotography techniques conclusions

Moving into investigation of possible health related correlations

SAN DIEGO, April 29, 2021 (GLOBE NEWSWIRE) — GBT Technologies Inc. (OTC PINK: GTCH) (“GBT”, or the “Company”), announced that GBT Tokenize (“GBT/Tokenize) achieved viable Kirlian Electrophotography techniques conclusions and is now investigating possible health related correlations and application implementations. The Kirlian techniques potentially aimed for inclusion within its qTerm device, are based on the phenomenon known as electrical coronal discharge. Images that are taken using these techniques present a colorful so-called aura which can be interpreted in a variety of ways. The human body emits various radiations such as electromagnetic radiation, infrared, low level visible light and ultraviolet radiation. All these emissions are part of the human energy field, also called the biofield. This human biofield carries unique information which may be useful for diagnosing or predicting early health conditions and symptoms. GBT’s research is focused on the investigation of Kirlian images with the use of machine learning technology to possibly detect early disease symptoms. GBT’s research within this domain included imaging analytics and graphical experiments in attempt to achieve findings to correlate auras with possible medical symptoms. Using advanced imaging algorithms, Kirlian images were analyzed for patterns, associated colors and shapes. Kirlian imaging produces features such as graphical protuberances, halos, and discharge patterns, which were analyzed and categorized as a possible criterion. GBT believes it has reached viable graphical results and will now move into checking possible health related correlations and implementations. GBT plans to further experiment to analyze energy fields generated by living organs and based on future conclusions will evaluate the implementation of such techniques within its qTerm human vitals product to provide further vital health information.

“We believe we have reached a viable conclusion with our Kirlian electrophotography imaging research and intend to now move to check correlations possibilities for detecting early disease symptoms or conditions. It is believed that Kirlian images of a living tissue produce energy level called auras. We graphically analyzed these images and reached some consistent findings. We plan to further investigate the possibility to determine about the identification of onset health issues that are reflected by image’s colors and patterns. An AI engine will be further analyzing unique patterns with the goal of finding association with health symptoms. We will look for full and partial similarities, repetitions, or atypical auras patterns. Each image will be digitized and pixelized to categorize patterns/colors and to get a comparative analysis between images. We will investigate body’s organs radiations, their graphical representation, and possible connection with health-related topics. Upon further research and conclusions, we intend to evaluate possible implementation of such technology within our qTerm device to enable further health related advice. Our goal is to use this research to offer an extraordinary vital health related information that may benefit individuals, scientists, and physicians.” Said Danny Rittman, the Company’s CTO.

There is no guarantee that the Company will be successful in researching, developing or implementing this system. In order to successfully implement this system, the Company will need to raise adequate capital to support its research and, if successfully researched, developed and granted regulatory approval, the Company would need to enter into a strategic relationship with a third party that has experience in manufacturing, selling and distributing this product. There is no guarantee that the Company will be successful in any or all of these critical steps.

About Us

GBT Technologies, Inc. (OTC PINK: GTCH) (“GBT”) (http://gbtti.com) is a development stage company which considers itself a native of Internet of Things (IoT), Artificial Intelligence (AI) and Enabled Mobile Technology Platforms used to increase IC performance. GBT has assembled a team with extensive technology expertise and is building an intellectual property portfolio consisting of many patents. GBT’s mission, to license the technology and IP to synergetic partners in the areas of hardware and software. Once commercialized, it is GBT’s goal to have a suite of products including smart microchips, AI, encryption, Blockchain, IC design, mobile security applications, database management protocols, with tracking and supporting cloud software (without the need for GPS). GBT envisions this system as a creation of a global mesh network using advanced nodes and super performing new generation IC technology. The core of the system will be its advanced microchip technology; technology that can be installed in any mobile or fixed device worldwide. GBT’s vision is to produce this system as a low cost, secure, private-mesh-network between any and all enabled devices. Thus, providing shared processing, advanced mobile database management and sharing while using these enhanced mobile features as an alternative to traditional carrier services.

Forward-Looking Statements

Certain statements contained in this press release may constitute “forward-looking statements”. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors as disclosed in our filings with the Securities and Exchange Commission located at their website ( http://www.sec.gov). In addition to these factors, actual future performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates, economic conditions, governmental and public policy changes, the Company’s ability to raise capital on acceptable terms, if at all, the Company’s successful development of its products and the integration into its existing products and the commercial acceptance of the Company’s products. The forward-looking statements included in this press release represent the Company’s views as of the date of this press release and these views could change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of the press release.

Contact:
Dr. Danny Rittman, CTO
[email protected]

April 29, 2021 6:03 am

Radware and Netsync Team Up to Offer Cloud DDoS Protection Service to State, Local and Education Agencies

MAHWAH, N.J. and HOUSTON, April 29, 2021 (GLOBE NEWSWIRE) — Radware® (NASDAQ: RDWR), a leading provider of cyber security and application delivery solutions, and Netsync today announced that they are bringing Radware’s Cloud DDoS Protection Service to State, Local and Education (SLED) agencies in the U.S. as part of Netsync’s offerings.

Radware’s mitigation service, which will be sold under the Netsync brand, provides enterprise-grade DDoS protection in the cloud and delivers the most accurate detection and shortest time to protection from today’s most dynamic and constantly evolving DDoS threats. Radware has extensively trained Netsync staff on the product, so that they can be trusted security advisors to customers.

“Maintaining network security while also preserving communication and the free exchange of information presents educational and government institutions with a unique set of obstacles,” said Raffi Kesten, Chief Business Officer, Radware. “The combination of Netsync’s unmatched expertise in SLED markets, with our own DDoS mitigation expertise, will give organizations confidence that they can maintain 24×7 access to online services, and that their data will be safeguarded.”

“We’re excited to collaborate with Radware on this mutual initiative,” said Mark Lynd, Head of Digital Business – CISSP, ISSAP & ISSMP at Netsync. “Radware was the obvious party to collaborate with because it offers the widest security coverage with automated zero-day DDoS attack protection, and it’s the only cloud SSL-attack protection solution that maintains user data confidentiality.”

About Netsync

Netsync is a comprehensive technology solutions and services provider with extensive experience integrating next-gen infrastructure solutions to digitally transform organizations, including Enterprise, State and Local, Education, Financial, Healthcare, and Energy customers. As a premier distribution channel of Radware, Cisco Gold Master Partner, Okta Select, and Dell/EMC Platinum Partner, Netsync is reimagining the way we do business, building a digital future for clients today and our children tomorrow.

About Radware
Radware® (NASDAQ: RDWR), is a global leader of cyber security and application delivery solutions for physical, cloud, and software defined data centers. Its award-winning solutions portfolio secures the digital experience by providing infrastructure, application, and corporate IT protection and availability services to enterprises globally. Radware’s solutions empower enterprise and carrier customers worldwide to adapt to market challenges quickly, maintain business continuity and achieve maximum productivity while keeping costs down. For more information, please visit www.radware.com.

Radware encourages you to join our community and follow us on: Facebook, LinkedIn, Radware Blog, Twitter, YouTube, and Radware Mobile for iOS and Android.

©2021 Radware Ltd. All rights reserved. Any Radware products and solutions mentioned in this press release are protected by trademarks, patents and pending patent applications of Radware in the U.S. and other countries. For more details please see: https://www.radware.com/LegalNotice/. All other trademarks and names are property of their respective owners.

Safe Harbor Statement

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made herein that are not statements of historical fact, including statements about Radware’s plans, outlook, beliefs or opinions, are forward-looking statements. Generally, forward-looking statements may be identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could.” For example, when we say that our mitigation service will be sold under the Netsync brand and that Netsync’s staff can be trusted security advisors to customers, these are forward looking statements. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results, expressed or implied by such forward-looking statements, could differ materially from Radware’s current forecasts and estimates. Factors that could cause or contribute to such differences include, but are not limited to: the impact of global economic conditions and volatility of the market for our products; natural disasters and public health crises, such as the COVID-19 pandemic; our ability to expand our operations effectively; timely availability and customer acceptance of our new and existing solutions; risks and uncertainties relating to acquisitions or other investments; the impact of economic and political uncertainties and weaknesses in various regions of the world, including the commencement or escalation of hostilities or acts of terrorism; intense competition in the market for cyber security and application delivery solutions and in our industry in general and changes in the competitive landscape; changes in government regulation; outages, interruptions or delays in hosting services or our internal network system; compliance with open source and third-party licenses; the risk that our intangible assets or goodwill may become impaired; our dependence on independent distributors to sell our products; long sales cycles for our solutions; changes in foreign currency exchange rates; real or perceived shortcomings, defects or vulnerabilities in our solutions or if we or our end-users experience security breaches; the availability of components and manufacturing capacity; our reliance on a single managed security service provider to provide us with scrubbing center services; the ability of vendors to provide our hardware platforms and components for our main accessories; our ability to protect our proprietary technology; intellectual property infringement claims made by third parties; changes in tax laws; our ability to realize our investment objectives for our cash and liquid investments; our ability to attract, train and retain highly qualified personnel; and other factors and risks over which we may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting Radware, refer to Radware’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission (SEC) and the other risk factors discussed from time to time by Radware in reports filed with, or furnished to, the SEC. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable law, Radware undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made. Radware’s public filings are available from the SEC’s website at www.sec.gov or may be obtained on Radware’s website at

www.radware.com

.

Media Contacts:

Maureen Shaw
[email protected]

Investor Relations:

Yisca Erez
[email protected]

April 29, 2021 6:03 am

RadNet, Inc. Announces the Date of its First Quarter 2021 Financial Results Conference Call

LOS ANGELES, April 29, 2021 (GLOBE NEWSWIRE) — RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective diagnostic imaging services through a network of owned and operated outpatient imaging centers, announced today that it will host a conference call to discuss its first quarter 2021 financial results on Monday, May 10^th, 2021 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).

Investors are invited to listen to RadNet’s conference call by dialing 800-437-2398. International callers can dial 929-477-0577. There will also be simultaneous and archived webcasts available at http://public.viavid.com/index.php?id=144796. An archived replay of the call will also be available and can be accessed by dialing 844-512-2921 from the U.S., or 412-317-6671 for international callers, and using the passcode 2257200.

About RadNet, Inc.
RadNet, Inc. is the leading national provider of freestanding, fixed-site diagnostic imaging services in the United States based on the number of locations and annual imaging revenue. RadNet has a network of 331 owned and/or operated outpatient imaging centers. RadNet’s core markets include Arizona, California, Delaware, Maryland, New Jersey, and New York. In addition, RadNet provides radiology information technology solutions, and other related products and services to customers in the diagnostic imaging industry. Together with radiologists, and inclusive of full-time and per diem employees and technicians, RadNet has a total of approximately 8,300 employees. For more information, visit http://www.radnet.com.

CONTACTS:

RadNet, Inc.

Mark Stolper
Executive Vice President and Chief Financial Officer
310-445-2800

April 29, 2021 6:03 am

Willis Towers Watson Reports Strong First Quarter 2021 Earnings

Total revenue
¹
increased 5% to $2.6 billion with constant currency growth of 1% and organic growth of 4%
Diluted Earnings per Share were $5.63 for the quarter, up 140% over prior year
Adjusted Diluted Earnings per Share were $3.64 for the quarter, up 9% over prior year
Income from Operations was $452 million or 17.5% of revenue, up 290 basis points over prior year
Adjusted Operating Income was $579 million or 22.4% of revenue, up 110 basis points over prior year
The Company completed the transaction to sell its majority-owned subsidiary Miller

ARLINGTON, Va. and LONDON, April 29, 2021 (GLOBE NEWSWIRE) — Willis Towers Watson (NASDAQ: WLTW) (the “Company”), a leading global advisory, broking and solutions company, today announced financial results for the first quarter ended March 31, 2021.

“Willis Towers Watson had an encouraging start to the year with strong first quarter results,” said John Haley, Willis Towers Watson’s chief executive officer. “We are proud of our financial performance and our unwavering commitment to client service. We delivered revenue growth, meaningful margin expansion and strong earnings-per-share growth. Our results reflect both increased demand for our solutions, as well as our sustained focus on profitable growth. We continue to build upon our solid foundation and believe we are well-positioned to continue driving value for all our stakeholders. As always, I would like to thank all of our colleagues for their tremendous efforts this past quarter in support of our clients and each other.”

____________
¹ The revenue amounts included in this release are presented on a U.S. GAAP basis except where stated otherwise. The segment discussion is on an organic basis.

First Quarter Company Highlights

Revenue was $2.59 billion for the first quarter of 2021, an increase of 5% (1% increase constant currency and 4% increase organic) as compared to $2.47 billion for the same period in the prior year.

Income from operations for the first quarter was $452 million, or 17.5% of revenue, an increase of 290 basis points compared to the first quarter of the prior year. Adjusted operating income was $579 million, or 22.4% of revenue, an increase of 110 basis points compared to the first quarter of the prior year. Net income attributable to Willis Towers Watson for the first quarter of 2021 was $733 million, an increase of 140% from $305 million for the prior-year first quarter. For the quarter, diluted earnings per share were $5.63 and adjusted diluted earnings per share were $3.64. Net income attributable to Willis Towers Watson and diluted earnings per share for the first quarter of 2021 included pre-tax $24 million of transaction and integration expenses related to the pending business combination with Aon plc. The U.S. GAAP tax rate for the quarter was 11.5%, and the adjusted income tax rate for the quarter used in calculating adjusted diluted earnings per share was 20.5%.

Net income for the first quarter of 2021 was $736 million, or 28.4% of revenue, an increase from net income of $313 million, or 12.7% of revenue for the prior-year first quarter. Adjusted EBITDA for the first quarter of 2021 was $730 million, or 28.2% of revenue, an increase from Adjusted EBITDA of $680 million, or 27.6% of revenue. The first quarter is seasonally strong due to the renewal periods for some lines of business.

Cash flows used in operating activities were $128 million for the three months ended March 31, 2021, compared to cash flows from operating activities of $23 million for the prior-year first quarter. Free cash outflow for the quarters ended March 31, 2021 and 2020 was $165 million and $43 million, respectively. The decrease in year-over-year free cash flow was due to net legal settlement payments of approximately $185 million for the previously-announced Stanford and Willis/Towers Watson merger settlements and higher incentive compensation and benefit-related items of approximately $180 million. During the quarter ended March 31, 2021, the Company had no share repurchase activity.

Risks and Uncertainties Related to the COVID-19 Pandemic

The extent to which COVID-19 continues to impact our business and financial position will depend on future developments, which are difficult to predict, including the severity and scope of the COVID-19 pandemic as well as the types of measures imposed by governmental authorities to contain the virus or address its impact and the duration of those actions and measures. We continue to expect that the COVID-19 pandemic will negatively impact our revenue and operating results for 2021. During 2020 and through the first quarter of 2021, the COVID-19 pandemic had a negative impact on revenue growth, particularly in our businesses that are discretionary in nature, but otherwise it generally did not have a material impact on our overall results. Some of our discretionary, project-based businesses saw a reduction in demand, and additional negative impacts on our revenue and operating results may lag behind the developments thus far related to the COVID-19 pandemic. In light of the effects on our own business operations and those of our clients, suppliers and other third parties with whom we interact, the Company has considered, and will continue to consider, the impact of COVID-19 on our business, as appropriate, taking into account our business resilience and continuity plans, financial modeling and stress testing of liquidity and financial resources. For additional information on the risks posed by COVID-19, see additional disclosures in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.

Segment Highlights

Human Capital & Benefits

The Human Capital & Benefits (HCB) segment had revenue of $875 million, an increase of 3% (flat constant currency and flat organic) from $850 million in the prior-year first quarter. On an organic basis, Retirement revenue was flat with growth in Great Britain driven by funding and Guaranteed Minimum Pension (“GMP”) equalization work, offset by a decline in North America related to lower de-risking activity. Health and Benefits revenue was flat as continued expansion of our local portfolios and global benefits management appointments outside of North America was offset by a decline in North America due to prior-year book sales. Talent and Rewards revenue declined nominally with growth in our rewards offerings offset by lower project activity in our traditional survey and communications and change management offerings. Technology and Administrative Solutions revenue increased due to new project and client activity in Great Britain. The HCB segment had an operating margin of 25.2%, as compared to 25.0% for the prior-year first quarter.

Corporate Risk & Broking

The Corporate Risk & Broking (CRB) segment had revenue of $810 million, an increase of 10% (5% increase constant currency and 5% increase organic) from $739 million in the prior-year first quarter. On an organic basis, International and Great Britain led the segment with new business generation primarily in natural resources and Finex insurance lines. North America revenue also grew with strong renewals across all regions, again led by Finex. Revenue growth was partially offset by a decline in Western Europe, which primarily stemmed from challenges related to senior staff departures. The CRB segment had an operating margin of 20.0%, as compared to 17.2% for the prior-year first quarter.

Investment, Risk & Reinsurance

The Investment, Risk & Reinsurance (IRR) segment had revenue of $605 million, a decrease of 2% (5% decrease constant currency and 4% increase organic) from $615 million in the prior-year first quarter. On an organic basis, most lines of business contributed to the growth. Reinsurance growth was driven by new business wins and favorable renewal factors. An uptick in demand for advisory work led the revenue growth in both our Investment business and Insurance Consulting and Technology business, which was further aided by increased software sales. The growth was partially offset by a decline in Wholesale’s revenue as a result of headwinds across coverage lines coupled with a strategic shift in its operating model. The IRR segment had an operating margin of 47.9%, as compared to 45.1% for the prior-year first quarter.

In September 2020, the Company sold its Max Matthiessen business, and the sale of Miller, its wholesale insurance broking subsidiary, was completed on March 1, 2021 (see additional disclosures in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021).

Benefits Delivery & Administration

The Benefits Delivery & Administration (BDA) segment had revenue of $287 million, an increase of 24% (24% increase constant currency and 23% increase organic) from $231 million in the prior-year first quarter. BDA’s organic revenue increase was led by Individual Marketplace, primarily by TRANZACT, which generated revenue of $148 million in the first quarter with strong growth in Medicare Advantage sales. Benefits Outsourcing revenue also increased, driven by its expanded client base. The BDA segment had an operating margin of 2.5%, as compared to negative 4.7% for the prior-year first quarter.

Conference Call

The Company will host a live webcast and conference call to discuss the financial results for the first quarter. It will be held on Thursday, April 29, 2021, beginning at 9:00 a.m. Eastern Time, and can be accessed via the Internet at www.willistowerswatson.com. The replay of the call will be available shortly after the live call for a period of three months. A telephonic replay of the call will also be available for 24 hours at 404-537-3406, conference ID 4779887.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has more than 46,000 employees and services clients in more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

Willis Towers Watson Non-GAAP Measures

In order to assist readers of our consolidated financial statements in understanding the core operating results that Willis Towers Watson’s management uses to evaluate the business and for financial planning, we present the following non-GAAP measures: (1) Constant Currency Change, (2) Organic Change, (3) Adjusted Operating Income/Margin, (4) Adjusted EBITDA/Margin, (5) Adjusted Net Income, (6) Adjusted Diluted Earnings Per Share, (7) Adjusted Income Before Taxes, (8) Adjusted Income Taxes/Tax Rate and (9) Free Cash Flow.

We believe that these measures are relevant and provide useful information widely used by analysts, investors and other interested parties in our industry to provide a baseline for evaluating and comparing our operating performance, and in the case of free cash flow, our liquidity results.

Within these measures referred to as ‘adjusted’, we adjust for significant items which will not be settled in cash, or which we believe to be items that are not core to our current or future operations. Some of these items may not be applicable for the current quarter, however they are expected to be part of our full-year results. These items include the following:

Restructuring costs and transaction and integration expenses – Management believes it is appropriate to adjust for restructuring costs and transaction and integration expenses when they relate to a specific significant program with a defined set of activities and costs that are not expected to continue beyond a defined period of time, or significant acquisition-related transaction expenses. We believe the adjustment is necessary to present how the Company is performing, both now and in the future when the incurrence of these costs will have concluded.
Gains and losses on disposals of operations – Adjustment to remove the gain or loss resulting from disposed operations.
Pension settlement and curtailment gains and losses – Adjustment to remove significant pension settlement and curtailment gains and losses to better present how the Company is performing.
Abandonment of long-lived asset – Adjustment to remove the depreciation expense resulting from internally-developed software that was abandoned prior to being placed into service.
Provisions for significant litigation – We will include provisions for litigation matters which we believe are not representative of our core business operations. These amounts are presented net of insurance recovery receivables.
Tax effect of the CARES Act – Relates to the incremental tax expense impact, primarily from the Base Erosion and Anti-Abuse Tax (“BEAT”), generated from electing certain income tax provisions of the CARES Act.
Tax effects of internal reorganization – Relates to the U.S. income tax expense resulting from the completion of internal reorganizations of the ownership of certain businesses that reduced the investments held by our U.S.-controlled subsidiaries.

We evaluate our revenue on an as reported (U.S. GAAP), constant currency and organic basis. We believe presenting constant currency and organic information provides valuable supplemental information regarding our comparable results, consistent with how we evaluate our performance internally.

We consider Constant Currency Change, Organic Change, Adjusted Operating Income/Margin, Adjusted EBITDA/Margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Adjusted Income Before Taxes, Adjusted Income Taxes/Tax Rate and Free Cash Flow to be important financial measures, which are used to internally evaluate and assess our core operations and to benchmark our operating and liquidity results against our competitors. These non-GAAP measures are important in illustrating what our comparable operating and liquidity results would have been had we not incurred transaction-related and non-recurring items. Our non-GAAP measures and their accompanying definitions are presented as follows:

Constant Currency Change – Represents the year-over-year change in revenue excluding the impact of foreign currency fluctuations. To calculate this impact, the prior year local currency results are first translated using the current year monthly average exchange rates. The change is calculated by comparing the prior year revenue, translated at the current year monthly average exchange rates, to the current year as reported revenue, for the same period. We believe constant currency measures provide useful information to investors because they provide transparency to performance by excluding the effects that foreign currency exchange rate fluctuations have on period-over-period comparability given volatility in foreign currency exchange markets.

Organic Change – Excludes the impact of fluctuations in foreign currency exchange rates, as described above and the period-over-period impact of acquisitions and divestitures on current-year revenue. We believe that excluding transaction-related items from our U.S. GAAP financial measures provides useful supplemental information to our investors, and it is important in illustrating what our core operating results would have been had we not included these transaction-related items, since the nature, size and number of these translation-related items can vary from period to period.

Adjusted Operating Income/Margin – Income from operations adjusted for amortization, restructuring costs, transaction and integration expenses and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted operating income margin is calculated by dividing adjusted operating income by revenue. We consider adjusted operating income/margin to be important financial measures, which are used internally to evaluate and assess our core operations and to benchmark our operating results against our competitors.

Adjusted EBITDA/Margin – Net Income adjusted for provision for income taxes, interest expense, depreciation and amortization, restructuring costs, transaction and integration expenses, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted EBITDA Margin is calculated by dividing adjusted EBITDA by revenue. We consider adjusted EBITDA/margin to be important financial measures, which are used internally to evaluate and assess our core operations, to benchmark our operating results against our competitors and to evaluate and measure our performance-based compensation plans.

Adjusted Net Income – Net Income Attributable to Willis Towers Watson adjusted for amortization, restructuring costs, transaction and integration expenses, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results and the related tax effect of those adjustments and the tax effects of internal reorganizations. This measure is used solely for the purpose of calculating adjusted diluted earnings per share.

Adjusted Diluted Earnings Per Share – Adjusted Net Income divided by the weighted-average number of shares of common stock, diluted. Adjusted diluted earnings per share is used to internally evaluate and assess our core operations and to benchmark our operating results against our competitors.

Adjusted Income Before Taxes – Income from operations before income taxes adjusted for amortization, restructuring costs, transaction and integration expenses, gains and losses on disposals of operations and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results. Adjusted income before taxes is used solely for the purpose of calculating the adjusted income tax rate.

Adjusted Income Taxes/Tax Rate – Provision for income taxes adjusted for taxes on certain items of amortization, restructuring costs, transaction and integration expenses, gains and losses on disposals of operations, the tax effects of internal reorganizations, and non-recurring items that, in management’s judgment, significantly affect the period-over-period assessment of operating results, divided by adjusted income before taxes. Adjusted income taxes is used solely for the purpose of calculating the adjusted income tax rate. Management believes that the adjusted income tax rate presents a rate that is more closely aligned to the rate that we would incur if not for the reduction of pre-tax income for the adjusted items and the tax effects of internal reorganizations, which are not core to our current and future operations.

Free Cash Flow – Cash flows from operating activities less cash used to purchase fixed assets and software for internal use. Free Cash Flow is a liquidity measure and is not meant to represent residual cash flow available for discretionary expenditures. Management believes that free cash flow presents the core operating performance and cash-generating capabilities of our business operations.

These non-GAAP measures are not defined in the same manner by all companies and may not be comparable to other similarly titled measures of other companies. Non-GAAP measures should be considered in addition to, and not as a substitute for, the information contained within our condensed consolidated financial statements.

Reconciliations of these measures are included in the accompanying tables with the following exception.

The Company does not reconcile its forward-looking non-GAAP financial measures to the corresponding U.S. GAAP measures, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible; and because not all of the information, such as foreign currency impacts necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure, is available to the Company without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The Company provides non-GAAP financial measures that it believes will be achieved, however it cannot accurately predict all of the components of the adjusted calculations and the U.S. GAAP measures may be materially different than the non-GAAP measures.

Willis Towers Watson Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements and other forward-looking statements in this document by words such as “may”, “will”, “would”, “expect”, “anticipate”, “believe”, “estimate”, “plan”, “intend”, “continue”, or similar words, expressions or the negative of such terms or other comparable terminology. These statements include, but are not limited to, such things as our outlook, the impact of the COVID-19 pandemic on our business, our pending business combination with Aon plc, future capital expenditures, ongoing working capital efforts, future share repurchases, financial results (including our revenue), the impact of changes to tax laws on our financial results, existing and evolving business strategies and acquisitions and dispositions, demand for our services and competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, our ability to successfully manage ongoing organizational and technology changes, including investments in improving systems and processes, and plans and references to future successes, including our future financial and operating results, plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Willis Towers Watson’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature.

There are important risks, uncertainties, events and factors that could cause our actual results or performance to differ materially from those in the forward-looking statements contained herein, including the following: the risks relating to or arising from our pending business combination with Aon plc announced in March 2020, including, among others, risks relating to our ability to consummate the transaction, including on the terms of the business combination agreement, on the anticipated timeline, and/or with the required regulatory approvals, and risks related to potential divestitures; our ability to successfully establish, execute and achieve our global business strategy as it evolves; the risk that the COVID-19 pandemic substantially and negatively impacts the demand for our products and services and cash flows, and/or continues to materially impact our business operations, including increased demand on our information technology resources and systems and related risks of cybersecurity breaches or incidents; changes in demand for our services, including any decline in consulting services, defined benefit pension plans or the purchasing of insurance; changes in general economic, business and political conditions, including changes in the financial markets; significant competition that we face and the potential for loss of market share and/or profitability; the impact of seasonality and differences in timing of renewals; the failure to protect client data or breaches of information systems or insufficient safeguards against cybersecurity breaches or incidents; the risk of increased liability or new legal claims arising from our new and existing products and services, and expectations, intentions and outcomes relating to outstanding litigation; the risk of substantial negative outcomes on existing litigation or investigation matters; changes in the regulatory environment in which we operate, including, among other risks, the impact of pending competition law and regulatory investigations; various claims, government inquiries or investigations or the potential for regulatory action; our ability to make divestitures or acquisitions and our ability to integrate or manage such acquired businesses; our ability to successfully hedge against fluctuations in foreign currency rates; our ability to integrate direct-to-consumer sales and marketing solutions with our existing offerings and solutions; our ability to successfully manage ongoing organizational changes, including investments in improving systems and processes; disasters or business continuity problems; the impact of Brexit; our ability to successfully enhance our billing, collection and other working capital efforts, and thereby increase our free cash flow; the potential impact of the anticipated replacement of the London Interbank Offered Rate (‘LIBOR’); our ability to properly identify and manage conflicts of interest; reputational damage, including from association with third parties; reliance on third-party services; the loss of key employees; our ability to effectively apply technology, data and analytics changes for internal operations, maintaining industry standards and meeting client preferences; changes and developments in the insurance industry; our ability to comply with complex and evolving regulations related to data privacy and cyber security; doing business internationally, including the impact of exchange rates; compliance with extensive government regulation; the risk of sanctions imposed by governments, or changes to associated sanction regulations; changes and developments in the United States healthcare system, including those related to Medicare and any policy changes from the new Presidential administration and legislative actions from the current U.S. Congress; the inability to protect our intellectual property rights, or the potential infringement upon the intellectual property rights of others; the laws of Ireland being different from the laws of the United States and potentially affording less protections to the holders of our securities; fluctuations in our pension assets and liabilities; our capital structure, including indebtedness amounts, the limitations imposed by the covenants in the documents governing such indebtedness and the maintenance of the financial and disclosure controls and procedures of each; our ability to obtain financing on favorable terms or at all; adverse changes in our credit ratings; the impact of recent or potential changes to U.S. tax laws, including on our effective tax rate, and the enactment of additional, or the revision of existing, state, federal, and/or foreign regulatory and tax laws and regulations and any policy changes from the new Presidential administration and legislative actions from the current U.S. Congress; U.S. federal income tax consequences to U.S. persons owning at least 10% of our shares; changes in accounting principles, estimates or assumptions; fluctuation in revenue against our relatively fixed or higher than expected expenses; and our holding company structure potentially preventing us from being able to receive dividends or other distributions in needed amounts from our subsidiaries. The foregoing list of factors is not exhaustive and new factors may emerge from time to time that could also affect actual performance and results. These factors also include those described under “Risk Factors” in the company’s most recent 10-K filing and subsequent filings filed with the SEC, including definitive additional materials, the merger proxy statement and other filings generally applicable to significant transactions and related integrations that are or will be filed with the SEC. Copies are available online at http://www.sec.gov or www.willistowerswatson.com.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved.

Our forward-looking statements speak only as of the date made and we will not update these forward-looking statements unless the securities laws require us to do so. With regard to these risks, uncertainties and assumptions, the forward-looking events discussed in this document may not occur, and we caution you against unduly relying on these forward-looking statements.

Contact

INVESTORS
Claudia De La Hoz | [email protected]

WILLIS TOWERS WATSON

Supplemental Segment Information

(In millions of U.S. dollars)
(Unaudited)

REVENUE
						Components of Revenue Change⁽ⁱ⁾
	Three Months Ended March 31,				As Reported	Currency	Constant Currency	Acquisitions/	Organic
	2021		2020		% Change	Impact	Change	Divestitures	Change

Human Capital & Benefits	$	875	$	850	3%	3%	0%	0%	0%
Corporate Risk & Broking		810		739	10%	4%	5%	0%	5%
Investment, Risk & Reinsurance		605		615	(2)%	4%	(5)%	(9)%	4%
Benefits Delivery & Administration		287		231	24%	0%	24%	1%	23%
Segment Revenue		2,577		2,435	6%	3%	2%	(2)%	5%
Reimbursable expenses and other		13		31
Revenue	$	2,590	$	2,466	5%	4%	1%	(2)%	4%

⁽
ⁱ
⁾ Components of revenue change may not add due to rounding.

SEGMENT OPERATING INCOME/(LOSS)
⁽
ⁱ
⁾

	Three Months Ended March 31,
	2021		2020

Human Capital & Benefits	$	220	$	213
Corporate Risk & Broking		162		127
Investment, Risk & Reinsurance		290		277
Benefits Delivery & Administration		7		(11	)
Segment Operating Income	$	679	$	606

⁽
ⁱ
⁾Segment operating income/(loss) excludes certain costs, including amortization of intangibles, restructuring costs, transaction and integration expenses, certain litigation provisions, and to the extent that the actual expense based upon which allocations are made differs from the forecast/budget amount, a reconciling item will be created between internally allocated expenses and the actual expenses reported for U.S. GAAP purposes.

SEGMENT OPERATING MARGINS

	Three Months Ended March 31,
	2021	2020
Human Capital & Benefits	25.2%	25.0%
Corporate Risk & Broking	20.0%	17.2%
Investment, Risk & Reinsurance	47.9%	45.1%
Benefits Delivery & Administration	2.5%	-4.7%

RECONCILIATION OF SEGMENT OPERATING INCOME TO INCOME FROM OPERATIONS BEFORE INCOME TAXES

	Three Months Ended March 31,
	2021			2020

Segment Operating Income	$	679		$	606
Amortization		(103	)		(121	)
Transaction and integration expenses⁽ⁱ⁾		(24	)		(9	)
Unallocated, net⁽ⁱⁱ⁾		(100	)		(116	)
Income from Operations		452			360
Interest expense		(59	)		(61	)
Other income, net⁽ⁱⁱⁱ⁾		439			92
Income from operations before income taxes	$	832		$	391

⁽
ⁱ
⁾Includes mainly transaction costs related to the proposed Aon combination.
⁽ⁱⁱ⁾ Includes certain costs, primarily related to corporate functions which are not directly related to the segments, and certain differences between budgeted expenses determined at the beginning of the year and actual expenses that we report for U.S. GAAP purposes.
⁽ⁱⁱⁱ⁾Includes $359 million primarily resulting from the net gain on disposals of operations, mostly due to the disposal of our Miller business.

WILLIS TOWERS WATSON

Reconciliations of Non-GAAP Measures

(In millions of U.S. dollars, except per share data)
(Unaudited)

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON TO ADJUSTED DILUTED EARNINGS PER SHARE

	Three Months Ended March 31,
		2021			2020

Net Income attributable to Willis Towers Watson	$	733		$	305
Adjusted for certain items:
Abandonment of long-lived asset		—			35
Amortization		103			121
Transaction and integration expenses		24			9
Gain on disposal of operations		(359	)		—
Tax effect on certain items listed above⁽ⁱ⁾		(27	)		(35	)
Adjusted Net Income	$	474		$	435

Weighted-average shares of common stock, diluted		130			130

Diluted Earnings Per Share	$	5.63		$	2.34
Adjusted for certain items:⁽ⁱⁱ⁾
Abandonment of long-lived asset		—			0.27
Amortization		0.79			0.93
Transaction and integration expenses		0.18			0.07
Gain on disposal of operations		(2.76	)		—
Tax effect on certain items listed above⁽ⁱ⁾		(0.21	)		(0.27	)
Adjusted Diluted Earnings Per Share	$	3.64		$	3.34

⁽
ⁱ
⁾The tax effect was calculated using an effective tax rate for each item.
⁽ⁱⁱ⁾ Per share values and totals may differ due to rounding.

RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

	Three Months Ended March 31,
		2021				2020

Net Income	$	736		28.4%	$	313	12.7%
Provision for income taxes		96				78
Interest expense		59				61
Depreciation⁽ⁱ⁾		71				98
Amortization		103				121
Transaction and integration expenses		24				9
Gain on disposal of operations		(359	)			—
Adjusted EBITDA and Adjusted EBITDA Margin	$	730		28.2%	$	680	27.6%

⁽
ⁱ
⁾ Includes abandonment of long-lived asset of $35 million for the three months ended March 31, 2020.

RECONCILIATION OF INCOME FROM OPERATIONS TO ADJUSTED OPERATING INCOME

	Three Months Ended March 31,
		2021			2020

Income from operations	$	452	17.5%	$	360	14.6%
Adjusted for certain items:
Abandonment of long-lived asset		—			35
Amortization		103			121
Transaction and integration expenses		24			9
Adjusted operating income	$	579	22.4%	$	525	21.3%

RECONCILIATION OF GAAP INCOME TAXES/TAX RATE TO ADJUSTED INCOME TAXES/TAX
RATE

	Three Months Ended March 31,
		2021			2020
Income from operations before income taxes	$	832		$	391

Adjusted for certain items:
Abandonment of long-lived asset		—			35
Amortization		103			121
Transaction and integration expenses		24			9
Gain on disposal of operations		(359	)		—
Adjusted income before taxes	$	600		$	556

Provision for income taxes	$	96		$	78
Tax effect on certain items listed above⁽ⁱ⁾		27			35
Adjusted income taxes	$	123		$	113

U.S. GAAP tax rate		11.5	%		20.0	%
Adjusted income tax rate		20.5	%		20.4	%

⁽
ⁱ
⁾The tax effect was calculated using an effective tax rate for each item.

RECONCILIATION OF CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES TO FREE CASH FLOW

	Three Months Ended March 31,
		2021			2020
Cash flows (used in)/from operating activities	$	(128	)	$	23
Less: Additions to fixed assets and software for internal use		(37	)		(66	)
Free Cash Flow	$	(165	)	$	(43	)

It should be noted during the three months ended March 31, 2021, the Company paid approximately $185 million for the previously-announced Stanford and Willis/Towers Watson merger settlements and higher incentive compensation and benefit-related items of approximately $180 million.

WILLIS TOWERS WATSON

Condensed Consolidated Statements of Income

(In millions of U.S. dollars, except per share data)
(Unaudited)

	Three Months Ended March 31,
	2021			2020
Revenue	$	2,590		$	2,466

Costs of providing services
Salaries and benefits		1,523			1,394
Other operating expenses		417			484
Depreciation		71			98
Amortization		103			121
Transaction and integration expenses		24			9
Total costs of providing services		2,138			2,106

Income from operations		452			360

Interest expense		(59	)		(61	)
Other income, net		439			92

INCOME FROM OPERATIONS BEFORE INCOME TAXES		832			391

Provision for income taxes		(96	)		(78	)

NET INCOME		736			313

Income attributable to non-controlling interests		(3	)		(8	)

NET INCOME ATTRIBUTABLE TO WILLIS TOWERS WATSON	$	733		$	305


Earnings per share
Basic earnings per share	$	5.64		$	2.36
Diluted earnings per share	$	5.63		$	2.34

Weighted-average shares of common stock, basic		130			130
Weighted-average shares of common stock, diluted		130			130

WILLIS TOWERS WATSON

Condensed Consolidated Balance Sheets

(In millions of U.S. dollars, except share data)
(Unaudited)

	March 31,			December 31,
	2021			2020
ASSETS
Cash and cash equivalents	$	1,960		$	2,089
Fiduciary assets		15,911			15,160
Accounts receivable, net		2,569			2,555
Prepaid and other current assets		432			497
Total current assets		20,872			20,301
Fixed assets, net		951			1,014
Goodwill		10,986			11,204
Other intangible assets, net		2,878			3,043
Right-of-use assets		841			902
Pension benefits assets		991			971
Other non-current assets		1,113			1,096
Total non-current assets		17,760			18,230
TOTAL ASSETS	$	38,632		$	38,531
LIABILITIES AND EQUITY
Fiduciary liabilities	$	15,911		$	15,160
Deferred revenue and accrued expenses		1,526			2,161
Current debt		471			971
Current lease liabilities		147			152
Other current liabilities		965			888
Total current liabilities		19,020			19,332
Long-term debt		4,632			4,664
Liability for pension benefits		1,278			1,405
Deferred tax liabilities		576			561
Provision for liabilities		390			407
Long-term lease liabilities		857			918
Other non-current liabilities		305			312
Total non-current liabilities		8,038			8,267
TOTAL LIABILITIES		27,058			27,599
COMMITMENTS AND CONTINGENCIES
EQUITY ⁽ ⁱ ⁾
Additional paid-in capital		10,765			10,748
Retained earnings		3,075			2,434
Accumulated other comprehensive loss, net of tax		(2,311	)		(2,359	)
Treasury shares, at cost, 17,519 shares in 2021 and 2020		(3	)		(3	)
Total Willis Towers Watson shareholders’ equity		11,526			10,820
Non-controlling interests		48			112
Total Equity		11,574			10,932
TOTAL LIABILITIES AND EQUITY	$	38,632		$	38,531

_________
(i) Equity includes (a) Ordinary shares $0.000304635 nominal value; Authorized 1,510,003,775; Issued 128,974,389 (2021) and 128,964,579 (2020); Outstanding 128,974,389 (2021) and 128,964,579 (2020) and (b) Preference shares, $0.000115 nominal value; Authorized 1,000,000,000 and Issued none in 2021 and 2020.

WILLIS TOWERS WATSON

Condensed Consolidated Statements of Cash Flows

(In millions of U.S. dollars)
(Unaudited)

	Three Months Ended March 31,
	2021			2020
CASH FLOWS (USED IN)/FROM OPERATING ACTIVITIES
NET INCOME	$	736		$	313
Adjustments to reconcile net income to total net cash from operating activities:
Depreciation		71			98
Amortization		103			121
Non-cash lease expense		37			34
Net periodic benefit of defined benefit pension plans		(42	)		(46	)
Provision for doubtful receivables from clients		8			24
Provision for/(benefit from) deferred income taxes		10			(23	)
Share-based compensation		27			(1	)
Net gain on disposal of operations		(359	)		—
Non-cash foreign exchange gain		(2	)		(12	)
Other, net		(24	)		23
Changes in operating assets and liabilities, net of effects from purchase of subsidiaries:
Accounts receivable		(115	)		(46	)
Fiduciary assets		(1,784	)		(2,873	)
Fiduciary liabilities		1,784			2,873
Other assets		(15	)		7
Other liabilities		(556	)		(482	)
Provisions		(7	)		13
Net cash (used in)/from operating activities		(128	)		23

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
Additions to fixed assets and software for internal use		(37	)		(66	)
Capitalized software costs		(14	)		(15	)
Acquisitions of operations, net of cash acquired		—			(66	)
Net proceeds from sale of operations		696			—
Other, net		—			(15	)
Net cash from/(used in) investing activities		645			(162	)

CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES
Net borrowings on revolving credit facility		—			396
Repayments of debt		(508	)		(128	)
Proceeds from issuance of shares		1			3
Payments of deferred and contingent consideration related to acquisitions		(17	)		—
Dividends paid		(92	)		(84	)
Acquisitions of and dividends paid to non-controlling interests		(17	)		(1	)
Net cash (used in)/from financing activities		(633	)		186

(DECREASE)/INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(116	)		47
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(14	)		(36	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD ⁽ⁱ⁾		2,096			895
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD ⁽ⁱ⁾	$	1,966		$	906

_________
(i) As a result of the acquired TRANZACT collateralized facility, cash, cash equivalents and restricted cash included $6 million and $7 million of restricted cash at March 31, 2021 and December 31, 2020, respectively, which is included within prepaid and other current assets on our condensed consolidated balance sheets. There was $8 million of restricted cash held at March 31, 2020 and December 31, 2019.