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Sonos Reports Record Fourth Quarter and Fiscal 2020 Results

Sonos reaches inflection point demonstrating the power and profitability of its business model

SANTA BARBARA, Calif.–(BUSINESS WIRE)–
Sonos, Inc. (Nasdaq: SONO) today reported record fourth quarter and fiscal 2020 results.

Fourth Quarter 2020 Financial Highlights (unaudited)

• GAAP net income increased to $18.4 million from ($29.6) million last year; non-GAAP net income excluding stock-based compensation, restructuring and legal and transaction related fees increased to $40.7 million from ($16.6) million last year
• GAAP diluted earnings per share (EPS) increased to $0.15 from ($0.28) last year; non-GAAP diluted earnings per share (EPS) excluding stock-based compensation, restructuring, and legal and transaction related fees increased to $0.33 from ($0.15) last year
• Adjusted EBITDA increased to $46.4 million from ($2.8) million last year; excluding the effect of tariffs, adjusted EBITDA increased to $48.9 million
• Adjusted EBITDA margin increased to 13.7% from (0.9%) last year; excluding the effect of tariffs, adjusted EBITDA margin increased to 14.4%
• Gross margin increased 530 basis points to 47.5%; excluding the effect of tariffs, gross margin increased 560 basis points to 48.3%
• Revenue increased 16% year-over-year to $339.8 million; excluding the impact of the 14th week, revenue increased approximately 7% year-over-year
• Direct-to-consumer revenue increased 67% year-over-year

Fiscal 2020 Financial Highlights (unaudited)

• GAAP net loss increased to ($20.1) million from ($4.8) million last year; non-GAAP net income excluding stock-based compensation, restructuring, and legal and transaction related fees increased to $79.2 million from $41.8 million last year
• GAAP diluted loss per share increased to ($0.18) from ($0.05) last year; non-GAAP diluted earnings per share (EPS) excluding stock-based compensation, restructuring, and legal and transaction related fees increased to $0.67 from $0.37 last year
• Adjusted EBITDA increased 22% to a record $108.5 million; excluding the effect of tariffs, adjusted EBITDA increased 56% to $140.9 million
• Adjusted EBITDA margin increased 120 basis points to record 8.2%; excluding the effect of tariffs, adjusted EBITDA margin increased 350 basis points to 10.6%
• Gross margin increased 130 basis points to 43.1%; excluding the effect of tariffs, gross margin increased 370 basis points to a record of 45.6%
• Revenue increased 5% to $1.326 billion; excluding the impact of the 53rd week in fiscal 2020, revenue increased approximately 3%
• Direct-to-consumer revenue increased 84% and represented a record 21% of total revenue compared to 12% last year
• Cash flows from operating activities of $162.0 million compared to $120.6 million last year
• Free cash flow of $129.0 million compared to $97.4 million last year

Sonos CEO Patrick Spence commented, “We reached an inflection point in the fourth quarter that demonstrates the power and profitability of our model. As our customers recognize, Sonos products operate seamlessly together, with more products improving the experience. That’s why year in and year out, our existing customers add more products to their systems – every new household that we gain starts that cycle anew. Fiscal 2020 was the 15th year in a row we grew total households by at least 20%, while our existing customers once again showed strong repurchase habits, accounting for a record 41% of total product registrations. We deliver a consistent cadence of new, innovative products and services, and we have only started the process of realizing the lifetime value of our customers, both old and new.”

“In fiscal 2020, we delivered a record 8.2% adjusted EBITDA margin, or 10.6% excluding the effect of tariffs, and we project delivering 12% to 14% adjusted EBITDA margins next year, which is ahead of our prior targets,” continued Mr. Spence.

Mr. Spence concluded, “As we look ahead, we are focused on delivering innovative new products and services that customers love, strengthening our direct-to-consumer efforts, and supporting our incredible partnerships. We believe we are well positioned to deliver strong profit margins, cash flow, revenue growth and increased shareholder value over the long-term.”

Fiscal 2020 Company Highlights

• Launched three new products including Arc, our premium smart soundbar replacing Playbar; Five, our most powerful speaker and replacing Play:5; and Sub (Gen 3), featuring the same iconic design and bold bass as its predecessor
• Launched Sonos S2, a powerful new app and operating system
• Announced multifaceted innovative marketing campaign with Disney, celebrating the widely anticipated premiere of the second season of “The Mandalorian”
• Introduced Sonos Radio, a free, ad-supported radio service available in the Sonos app
• Total households increased 20% to 10.9 million in fiscal 2020 on top of 22% growth last year
• Existing households accounted for 41% of new product registrations in fiscal 2020 up from 37% last year
• Added record 1.8 million net new households in fiscal 2020
• Average number of registered products per household at 2.9 in fiscal 2020
• Listening hours increased 33% in fiscal 2020 compared to 29% growth last year

Fiscal 2021 Outlook

• Adjusted EBITDA in the range of $170 million to $205 million, representing growth in the range of 57% to 89%, or 21% to 46% excluding the effect of tariffs in fiscal 2020
• Adjusted EBITDA margin in the range of 12% to 14%, representing a 380 to 580 basis point improvement year-over-year, or 140 to 340 basis points excluding the effect of tariffs in fiscal 2020
• Gross margin in the range of 45.3% to 45.8%, representing a 220 to 270 basis point improvement year-over-year; excluding the effect of tariffs in fiscal 2020, gross margin roughly flat year-over-year. This includes minimal impact from ongoing tariffs and no impact from the potential tariff refund.
• Revenue in the range of $1.44 billion to $1.5 billion, representing growth in the range of 11% to 15% from fiscal 2020 on a comparable 52-week basis and 9% to 13% on as reported basis
• Direct-to-consumer revenue as a percentage of total revenue similar to fiscal 2020

Virtual Investor Event – Tuesday, March 9, 2021

Sonos will host a virtual investor event on Tuesday, March 9, 2021 highlighting its long-term strategic priorities and targets. Further details to come.

Supplemental Earnings Presentation

The Company has posted a supplemental earnings presentation accompanying its fourth quarter and fiscal 2020 results to the Earnings Reports section of its investor relations website at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports.

Conference Call, Webcast and Transcript

The Company will host a webcast of its conference call and Q&A related to its fourth quarter and fiscal 2020 results on November 18, 2020 at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Participants may access the live webcast in listen-only mode on the Sonos investor relations website at https://investors.sonos.com/news-and-events/default.aspx. The conference call may also be accessed by dialing (833) 921-1637 with conference ID 7717309. Participants outside the U.S. can access the call by dialing (236) 714-2128 using the same conference ID.

An archived webcast of the conference call and a transcript of the company’s prepared remarks and Q&A session will also be available at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports following the call.

Consolidated Statements of Operations and Comprehensive Income (Loss)
(unaudited, dollars in thousands, except share and per share amounts)
	Three Months Ended								Twelve Months Ended
	October 3, 2020				September 28, 2019				October 3, 2020			September 28, 2019
Revenue	$	339,837			$	294,160			$	1,326,328		$	1,260,823
Cost of revenue		178,301				169,889				754,372			733,480
Gross profit		161,536				124,271				571,956			527,343
Operating expenses
Research and development		54,783				49,644				214,672			171,174
Sales and marketing		58,338				70,894				263,539			247,599
General and administrative		32,986				28,565				120,978			102,871
Total operating expenses		146,107				149,103				599,189			521,644
Operating income (loss)		15,429				(24,832	)			(27,233	)		5,699
Other income (expense), net
Interest income		43				1,416				1,998			4,349
Interest expense		(300	)			(584	)			(1,487	)		(2,499	)
Other income (expense), net		3,273				(4,985	)			6,639			(8,625	)
Total other income (expense), net		3,016				(4,153	)			7,150			(6,775	)
Income (loss) before provision for income taxes		18,445				(28,985	)			(20,083	)		(1,076	)
Provision for income taxes		34				615				32			3,690
Net income (loss)		18,411				(29,600	)			(20,115	)		(4,766	)
Net income (loss) attributable to common stockholders
Basic		18,411				(29,600	)			(20,115	)		(4,766	)
Diluted		18,411				(29,600	)			(20,115	)		(4,766	)
Net income (loss) per share attributable to common stockholders
Basic	$	0.17			$	(0.28	)		$	(0.18	)	$	(0.05	)
Diluted	$	0.15			$	(0.28	)		$	(0.18	)	$	(0.05	)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders
Basic		111,148,110				107,130,076				109,807,154			103,783,006
Diluted		122,598,225				107,130,076				109,807,154			103,783,006
Total comprehensive income (loss)
Net income (loss)		18,411				(29,600	)			(20,115	)		(4,766	)
Change in foreign currency translation adjustment		(1,095	)			1,107				(1,826	)		1,613
Comprehensive income (loss)	$	17,316			$	(28,493	)		$	(21,941	)	$	(3,153	)

Condensed Consolidated Balance Sheets
(unaudited, dollars in thousands, except par values)
	As of
	October 3, 2020			September 28, 2019
Assets
Current assets:
Cash and cash equivalents	$	407,100		$	338,641
Restricted cash		191			179
Accounts receivable, net of allowances		54,935			102,743
Inventories		180,830			219,784
Prepaids and other current assets		17,321			17,762
Total current assets		660,377			679,109
Property and equipment, net		60,784			78,139
Operating lease right-of-use assets		42,342			–
Goodwill		15,545			1,005
Intangible assets, net		26,394			13
Deferred tax assets		1,800			1,154
Other noncurrent assets		8,809			2,185
Total assets	$	816,051		$	761,605
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	250,328		$	251,941
Accrued expenses		45,049			69,856
Accrued compensation		44,517			41,142
Short-term debt		6,667			8,333
Deferred revenue, current		15,304			13,654
Other current liabilities		31,150			17,548
Total current liabilities		393,015			402,474
Operating lease liabilities, noncurrent		50,360			–
Long-term debt		18,251			24,840
Deferred revenue, noncurrent		47,085			42,795
Deferred tax liabilities		2,434			–
Other noncurrent liabilities		7,067			10,568
Total liabilities		518,212			480,677
Stockholders’ equity:
Common stock, $0.001 par value		114			110
Treasury stock		(20,886	)		(13,498	)
Additional paid-in capital		548,993			502,757
Accumulated deficit		(228,492	)		(208,377	)
Accumulated other comprehensive loss		(1,890	)		(64	)
Total stockholders’ equity:		297,839			280,928
Total liabilities and stockholders’ equity:	$	816,051		$	761,605

Condensed Consolidated Statements of Cash Flows
(unaudited, dollars in thousands)
	Twelve Months Ended
	October 3, 2020			September 28, 2019
Cash flows from operating activities
Net loss	$	(20,115	)	$	(4,766	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization		36,426			36,415
Impairment and abandonment charges		14,174			–
Stock-based compensation expense		57,610			46,575
Other		5,710			2,713
Deferred income taxes		(567	)		(268	)
Foreign currency transaction (gain) loss		(4,143	)		4,035
Changes in operating assets and liabilities:
Accounts receivable, net		49,593			(32,078	)
Inventories		38,010			(31,796	)
Other assets		(5,749	)		(7,605	)
Accounts payable and accrued expenses		(24,440	)		85,878
Accrued compensation		1,088			8,231
Deferred revenue		4,754			6,165
Other liabilities		9,635			7,137
Net cash provided by operating activities		161,986			120,636
Cash flows from investing activities
Purchases of property and equipment and intangible assets		(33,035	)		(23,222	)
Cash paid for acquisition, net of acquired cash		(36,289	)		–
Net cash used in investing activities		(69,324	)		(23,222	)
Cash flows from financing activities
Repayments of borrowings		(8,333	)		(6,667	)
Payments for repurchase of common stock under share repurchase program		(50,015	)		–
Payments for repurchase of common stock related to equity awards		(11,029	)		(2,426	)
Proceeds from exercise of common stock options		42,286			31,574
Payments of offering costs		–			(585	)
Net cash provided by (used in) financing activities		(27,091	)		21,896
Effect of exchange rate changes on cash, cash equivalents and restricted cash		2,900			(1,610	)
Net increase in cash, cash equivalents and restricted cash		68,471			117,700
Cash, cash equivalents and restricted cash
Beginning of period		338,820			221,120
End of period	$	407,291		$	338,820
Supplemental disclosure
Cash paid for interest	$	1,647		$	2,517
Cash paid for taxes, net of refunds	$	783		$	3,570
Cash paid for amounts included in the measurement of lease liabilities	$	17,194		$	–
Supplemental disclosure of non-cash investing and financing activities
Purchases of property and equipment, accrued but not paid	$	3,911		$	11,687
Right-of-use assets obtained in exchange for lease liabilities	$	77,416		$	–

Reconciliation of Net Income (Loss) to Adjusted EBITDA
(unaudited, dollars in thousands)
	Three Months Ended								Twelve Months Ended
	October 3, 2020				September 28, 2019				October 3, 2020				September 28, 2019
Net income (loss)	$	18,411			$	(29,600	)		$	(20,115	)		$	(4,766	)
Add (deduct):
Depreciation and amortization		8,733				9,012				36,426				36,415
Stock-based compensation expense		15,971				13,049				57,610				46,575
Interest income		(43	)			(1,416	)			(1,998	)			(4,349	)
Interest expense		300				584				1,487				2,499
Other (income) expense, net		(3,273	)			4,985				(6,639	)			8,625
Provision for income taxes		34				615				32				3,690
Restructuring and related charges		125				–				26,285				–
Legal and transaction related costs (1)		6,170				–				15,455				–
Adjusted EBITDA	$	46,428			$	(2,771	)		$	108,543			$	88,689
Revenue	$	339,837			$	294,160			$	1,326,328			$	1,260,823
Adjusted EBITDA margin		13.7	%			(0.9	)%			8.2	%			7.0	%
(1) Legal and transaction related costs consist of expenses related to our intellectual property (“IP”) litigation against Alphabet Inc. and Google LLC as well as legal and transaction costs associated with our recent acquisition activity, which we do not consider representative of our underlying operating performance.

Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow
(unaudited, dollars in thousands)
	Year Ended
	October 3, 2020			September 28, 2019
Cash flows provided by operating activities	$	161,986		$	120,636
Less: purchases of property and equipment and intangible assets		(33,035	)		(23,222	)
Free cash flow	$	128,951		$	97,414

Revenue by Product Category
(unaudited, dollars in thousands)
	Three Months Ended					Twelve Months Ended
	October 3, 2020		September 28, 2019			October 3, 2020			September 28, 2019
Sonos speakers	$	254,874	$	217,526		$	1,034,813		$	1,008,422
Sonos system products		67,901		49,686			218,788			187,172
Partner products and other revenue		17,062		26,948			72,727			65,229
Total revenue	$	339,837	$	294,160		$	1,326,328		$	1,260,823

Revenue by Geographical Region
(unaudited, dollars in thousands)
	Three Months Ended					Twelve Months Ended
	October 3, 2020		September 28, 2019			October 3, 2020			September 28, 2019
Americas	$	199,549	$	157,540		$	755,874		$	678,224
Europe, Middle East and Africa (“EMEA”)		117,076		101,248			470,883			484,785
Asia Pacific (“APAC”)		23,212		35,372			99,571			97,814
Total revenue	$	339,837	$	294,160		$	1,326,328		$	1,260,823

Stock-based Compensation
(unaudited, in thousands)
	Three Months Ended						Twelve Months Ended
	October 3, 2020			September 28, 2019			October 3, 2020		September 28, 2019
Cost of revenue		239			284			1,106		985
Research and development		6,742			4,851			23,439		17,643
Sales and marketing		3,701			3,549			14,359		12,965
General and administrative		5,289			4,365			18,706		14,982
Total stock-based compensation expense	$	15,971		$	13,049		$	57,610	$	46,575

Restructuring and Related Costs(1)
(unaudited, in thousands)
	Three Months Ended			Twelve Months Ended
	October 3, 2020			October 3, 2020
Research and development	$	125		$	5,074
Sales and marketing		–			19,788
General and administrative		–			1,423
Total restructuring and related costs	$	125		$	26,285
(1) On June 23, 2020, the Company initiated a restructuring plan as part of its efforts to reduce operating expenses and preserve liquidity due to the uncertainty and challenges stemming from the COVID-19 pandemic. As part of the 2020 restructuring plan, the Company eliminated approximately 12% of its global headcount and closed its New York retail store and six satellite offices. The Company believes these initiatives will better align resources to provide further operating flexibility and more efficiently position the business for its long-term strategy. The Company expects activities under the 2020 restructuring plan to be substantially complete in the first quarter of fiscal 2021.

Use of Non-GAAP Measures

We have provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles (“U.S. GAAP”), including adjusted EBITDA, adjusted EBITDA margin, free cash flow, gross margin excluding the effect of tariffs, adjusted EBITDA excluding the effect of tariffs, adjusted EBITDA margin excluding the effect of tariffs, revenue excluding the 14th week, revenue excluding the 53rd week, net income (loss) excluding stock-based compensation, restructuring, and legal and transaction related fees, and diluted earnings per share (EPS) excluding stock-based compensation, restructuring, and legal and transaction related fees. These non-GAAP financial measures are not based on any standardized methodology prescribed by U.S. GAAP and are not necessarily comparable to similarly titled measures presented by other companies. We use these non-GAAP financial measures to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in these non-GAAP financial measures. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to a key financial metric used by our management in its financial and operational decision-making. Non-GAAP financial measures should not be considered in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of these financial measures to their nearest U.S. GAAP financial equivalents provided in the financial statement tables above. We define adjusted EBITDA as net income (loss) adjusted to exclude the impact of depreciation, stock-based compensation expense, interest income, interest expense, other income (expense), income taxes and other items that we do not consider representative of our underlying operating performance. We define adjusted EBITDA margin as adjusted EBITDA divided by revenue. We calculate gross margin excluding the effect of tariffs as gross profit dollars removing the effect of tariffs imposed on goods imported to the U.S. from China divided by revenue. We define free cash flow as defined as net cash from operations less purchases of property and equipment and intangible assets. We calculate adjusted EBITDA excluding the effect of tariffs as net income (loss) excluding the effect of tariffs imposed on goods manufactured in China and adjusted to exclude the impact of depreciation, stock-based compensation expense, interest income, interest expense, other income (expense), income taxes and other items that we do not consider representative of our underlying operating performance. We calculate non-GAAP net income excluding stock-based compensation, restructuring and legal and transaction related fees as net income less stock-based compensation, restructuring fees and legal and transaction related fees. We calculate non-GAAP diluted earnings per share (EPS) excluding stock-based compensation, restructuring, and legal and transaction related fees as net income less stock-based compensation, restructuring costs and legal and transaction related fees divided by our number of shares at fiscal year end. We do not provide a reconciliation of forward-looking non-GAAP financial measures to their comparable GAAP financial measures because we cannot do so without unreasonable effort due to unavailability of information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, we do so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for items such as stock-based compensation, which is inherently difficult to predict with reasonable accuracy. Stock-based compensation expense is difficult to estimate because it depends on our future hiring and retention needs, as well as the future fair market value of our common stock, all of which are difficult to predict and subject to constant change. In addition, for purposes of setting annual guidance, it would be difficult to quantify stock-based compensation expense for the year with reasonable accuracy in the current quarter. As a result, we do not believe that a GAAP reconciliation would provide meaningful supplemental information about our outlook.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding our outlook for the fiscal year ended October 2, 2021, our long-term focus, financial, growth and business strategies and opportunities, growth metrics and targets, new products, software, services and partnerships, profitability and gross margins, our restructuring efforts, our tariff expense and other factors affecting variability in our financial results. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors, including, but not limited to the duration and impact of the COVID-19 pandemic and related mitigation efforts on our industry; changes in general economic or market conditions that could affect consumer income and overall consumer spending; our ability to successfully introduce new products and services and maintain the success of our existing products; the success of our efforts to expand our direct-to-consumer channel; the success of our financial, growth and business strategies; our ability to accurately forecast consumer demand for our products and manage our inventory in response to changing demands; and the other risk factors set forth under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 27, 2020 and our other filings filed with the Securities and Exchange Commission (the “SEC”), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this letter, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events. Sonos and Sonos product names are trademarks or registered trademarks of Sonos, Inc. All other product names and services may be trademarks or service marks of their respective owners.

About Sonos

Sonos (Nasdaq: SONO) is one of the world’s leading sound experience brands. As the inventor of multi-room wireless home audio, Sonos innovation helps the world listen better by giving people access to the content they love and allowing them to control it however they choose. Known for delivering an unparalleled sound experience, thoughtful home design aesthetic, simplicity of use and an open platform, Sonos makes the breadth of audio content available to anyone. Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

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Investor Contact

Cammeron McLaughlin

[email protected]

Press Contact

Tom Lodge

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Entertainment Consumer Electronics Technology General Entertainment Audio/Video Mobile/Wireless Software

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Keysight Technologies Reports Fourth Quarter 2020 Results

Achieved Record Orders, Revenue, Gross Margin, Operating Margin, Free Cash Flow

Announces $750 Million Share Repurchase Program

SANTA ROSA, Calif.–(BUSINESS WIRE)–
Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the fourth fiscal quarter of 2020 ended October 31, 2020.

“Keysight delivered an outstanding quarter and finish to our fiscal year, driven by strong execution and broad-based demand for our differentiated solutions. Despite COVID-related macro challenges, it was a record year for orders, gross margin, operating margin, earnings per share and free cash flow,” said Ron Nersesian, Keysight’s Chairman, President and CEO. “Our people and culture are a competitive differentiator and, in the face of unprecedented challenges, Keysight exits this year stronger than ever, and well-positioned to capitalize on our growth opportunities ahead.”

Fourth Quarter Financial Summary

• Revenue grew 9 percent to reach $1.22 billion, when compared with $1.12 billion last year. Non-GAAP revenue grew 7 percent on a core basis, which excludes the impact of foreign currency changes and revenue associated with businesses acquired or divested within the last twelve months.
• GAAP net income was $217 million, or $1.15 per share, compared with $195 million, or $1.02 per share, in the fourth quarter of 2019.
• Non-GAAP net income was $305 million, or $1.62 per share, compared with $254 million, or $1.33 per share in the fourth quarter of 2019.
• Keysight acquired approximately 2.2 million shares in the open market at an average share price of $96.55, for a total consideration of $215 million, exhausting the $500 million share repurchase authorization from May 2019.
• As of October 31, 2020, cash and cash equivalents totaled $1.76 billion.

Fiscal Year 2020 Financial Summary

• Revenue declined 2 percent over last year and totaled $4.22 billion. Non-GAAP revenue declined 3 percent on a core basis.
• GAAP net income was $627 million, or $3.31 per share, compared with $621 million, or $3.25 per share in fiscal 2019. Non-GAAP net income was $919 million, or $4.85 per share, compared with $902 million, or $4.72 per share in fiscal 2019.
• Keysight acquired approximately 4.3 million shares in the open market at an average share price of $95.90, for a total consideration of $410 million during fiscal year 2020, exhausting the $500 million share repurchase authorization from May 2019.

Reporting Segments

• Communications Solutions Group (CSG)

CSG reported revenue of $901 million in the fourth quarter, up 8 percent over last year, driven by continued strength in next-generation commercial communications technologies and increased global aerospace defense and government investment.

• Electronic Industrial Solutions Group (EISG)

EISG reported revenue of $319 million in the fourth quarter, up 12 percent over last year, driven by strength in our broad portfolio of products that serve the general electronics market and continued strong demand for semiconductor measurement solutions.

Share Repurchase Program

Keysight also announced today that its Board of Directors authorized a new share repurchase program for up to $750 million of its common stock. The new repurchase program is effective immediately. Shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions or other means. The repurchase authorization may be commenced, suspended or discontinued at any time at the company’s discretion.

Outlook

Keysight’s first fiscal quarter of 2021 revenue is expected to be in the range of $1.14 billion to $1.16 billion. Non-GAAP earnings per share for the first fiscal quarter of 2021 are expected to be in the range of $1.32 to $1.38, which exclude items that pertain to future events and are not currently estimable with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP amounts has been provided. Further information is discussed in the section titled “Use of Non-GAAP Financial Measures” below.

Webcast

Keysight’s management will present more details about its fourth quarter FY2020 financial results and its first quarter FY2021 outlook on a conference call with investors today at 1:30 p.m. PT. This event will be webcast in listen-only mode. Listeners may log on to the call at www.investor.keysight.com under the “Upcoming Events” section and select “Q4 2020 Keysight Technologies Inc. Earnings Conference Call” to participate or dial +1 833-968-2178 (U.S. only) or +1 778-560-2837 (International) and enter passcode 7488342. The webcast will remain on the company site for 90 days.

Forward-Looking Statements

This communication contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The words “expect,” “intend,” “will,” “should,” “forecast,” and similar expressions, as they relate to the company, are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could significantly affect the expected results and are based on certain key assumptions of Keysight’s management and on currently available information. Due to such uncertainties and risks, no assurances can be given that such expectations or assumptions will prove to have been correct, and readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Keysight undertakes no responsibility to publicly update or revise any forward-looking statement. The forward-looking statements contained herein include, but are not limited to, information and future guidance on the company’s goals, revenues, financial condition, earnings, impacts of US export control regulations, and operations that involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, government mandated shutdowns, disruption in the supply chain, and labor shortages caused by pandemic conditions; changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing; order cancellations; increased trade tensions and tightening of export control regulations.

In addition to the risks above, other risks that Keysight faces include those detailed in Keysight’s filings with the Securities and Exchange Commission on Keysight’s quarterly report on Form 10-Q for the period ended July 31, 2020.

Segment Data

Segment data reflects the results of our reportable segments under our management reporting system. Segment revenue excludes the impact of fair value adjustments to acquisition-related deferred revenue balances. Segment data are provided on page 6 of the attached tables.

Use of Non-GAAP Financial Measures

In addition to financial information prepared in accordance with U.S. GAAP (“GAAP”), this document also contains certain non-GAAP financial measures based on management’s view of performance, including:

• Non-GAAP Core Revenue
• Non-GAAP Net Income
• Non-GAAP Net Income per share
• Free Cash Flow

Income per share is based on weighted average diluted share count. See the attached supplemental schedules for reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure for the three months ended October 31, 2020 and fiscal year 2020. Following the reconciliations is a discussion of the items adjusted from our non-GAAP financial measures and the company’s reasons for including or excluding certain categories of income or expenses from our non-GAAP results.

About Keysight Technologies

Keysight Technologies, Inc. (NYSE: KEYS) is a leading technology company that helps enterprises, service providers and governments accelerate innovation to connect and secure the world. Keysight’s solutions optimize networks and bring electronic products to market faster and at a lower cost with offerings from design simulation, to prototype validation, to manufacturing test, to optimization in networks and cloud environments. Customers span the worldwide communications ecosystem, aerospace and defense, automotive, energy, semiconductor and general electronics end markets. Keysight generated revenues of $4.2B in fiscal year 2020. More information is available at www.keysight.com.

Additional information about Keysight Technologies is available in the newsroom at www.keysight.com/go/news and on Facebook, LinkedIn, Twitter and YouTube.

Source: IR-KEYS

KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
	Three months ended
	October 31,								Percent
		2020				2019			Inc/(Dec)
Orders	$	1,231			$	1,194			3%
Net revenue	$	1,220			$	1,120			9%
Costs and expenses:
Cost of products and services		464				455			2%
Research and development		193				176			9%
Selling, general and administrative		287				286			–
Other operating expense (income), net		(2	)			(5	)		(70)%
Total costs and expenses		942				912			3%
Income from operations		278				208			34%
Interest income		–				6			–
Interest expense		(19	)			(20	)		(3)%
Other income (expense), net		7				9			(27)%
Income before taxes		266				203			31%
Provision for income taxes		49				8			486%
Net Income	$	217			$	195			11%
Net income per share:
Basic	$	1.17			$	1.04
Diluted	$	1.15			$	1.02
Weighted average shares used in computing net income per share:
Basic		186				187
Diluted		188				191
Page 1

KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
	Year ended
	October 31,								Percent
		2020				2019			Inc/(Dec)
Orders	$	4,528			$	4,441			2%
Net revenue	$	4,221			$	4,303			(2)%
Costs and expenses:
Cost of products and services		1,688				1,769			(5)%
Research and development		715				688			4%
Selling, general and administrative		1,097				1,155			(5)%
Other operating expense (income), net		(44	)			(20	)		118%
Total costs and expenses		3,456				3,592			(4)%
Income from operations		765				711			8%
Interest income		11				23			(51)%
Interest expense		(78	)			(80	)		(3)%
Other income (expense), net		63				61			2%
Income before taxes		761				715			6%
Provision for income taxes		134				94			42%
Net Income	$	627			$	621			1%
Net income per share:
Basic	$	3.35			$	3.31
Diluted	$	3.31			$	3.25
Weighted average shares used in computing net income per share:
Basic		187				188
Diluted		189				191
Page 2

KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions, except par value and share amounts)
(Unaudited)
PRELIMINARY
	October 31,				October 31,
		2020				2019
ASSETS
Current assets:
Cash and cash equivalents	$	1,756			$	1,598
Accounts receivable, net		606				668
Inventory		757				705
Other current assets		255				244
Total current assets		3,374				3,215
Property, plant and equipment, net		595				576
Operating lease right-of-use assets		182				–
Goodwill		1,537				1,209
Other intangible assets, net		361				490
Long-term investments		61				46
Long-term deferred tax assets		740				755
Other assets		368				332
Total assets	$	7,218			$	6,623
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	224			$	253
Employee compensation and benefits		289				278
Deferred revenue		391				334
Income and other taxes payable		64				55
Operating lease liabilities		43				–
Other accrued liabilities		70				83
Total current liabilities		1,081				1,003
Long-term debt		1,789				1,788
Retirement and post-retirement benefits		362				357
Long-term deferred revenue		175				176
Long-term operating lease liabilities		149				–
Other long-term liabilities		365				295
Total liabilities		3,921				3,619
Stockholders’ Equity:
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding		–				–
Common stock; $0.01 par value; 1 billion shares authorized; 196 million shares at October 31, 2020, and 194 million shares at October 31, 2019, issued		2				2
Treasury stock at cost; 10.7 million shares at October 31, 2020 and 6.5 million shares at October 31, 2019		(752	)			(342	)
Additional paid-in-capital		2,110				2,013
Retained earnings		2,536				1,909
Accumulated other comprehensive loss		(599	)			(578	)
Total stockholders’ equity		3,297				3,004
Total liabilities and equity	$	7,218			$	6,623
Page 3

KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
PRELIMINARY
	Year ended
	October 31,
		2020				2019
Cash flows from operating activities:
Net income	$	627			$	621
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		104				96
Amortization		222				212
Share-based compensation		92				82
Deferred tax expense (benefit)		41				(2	)
Excess and obsolete inventory-related charges		29				27
Gain on insurance proceeds received for damage to property, plant and equipment		(32	)			–
Other non-cash expense (income), net		(10	)			(3	)
Changes in assets and liabilities:
Accounts receivable		75				(26	)
Inventory		(73	)			(92	)
Accounts payable		(33	)			13
Employee compensation and benefits		2				–
Deferred revenue		41				112
Income taxes payable		5				(16	)
Retirement and post-retirement benefits		(108	)			(37	)
Other assets and liabilities		34				11
Net cash provided by operating activities(a)		1,016				998
Cash flows from investing activities:
Investments in property, plant and equipment		(117	)			(120	)
Acquisition of businesses and intangible assets, net of cash acquired		(357	)			(88	)
Insurance proceeds received for damage to property, plant and equipment		32				–
Proceeds from sale of investments		–				7
Other investing activities		–				5
Net cash used in investing activities		(442	)			(196	)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans		58				67
Payment of taxes related to net share settlement of equity awards		(53	)			(26	)
Treasury stock repurchases		(411	)			(159	)
Proceeds from issuance of long-term debt		–				500
Debt issuance costs		–				(4	)
Repayment of debt		(7	)			(500	)
Net cash used in financing activities		(413	)			(122	)
Effect of exchange rate movements		6				3
Net increase in cash, cash equivalents and restricted cash		167				683
Cash, cash equivalents and restricted cash at beginning of year		1,600				917
Cash, cash equivalents and restricted cash at end of year	$	1,767			$	1,600
(a) Cash payments included in operating activities:
Income tax payments, net	$	(84	)		$	(103	)
Interest payment on senior notes	$	(75	)		$	(76	)
Page 4

KEYSIGHT TECHNOLOGIES, INC.
RECONCILIATION OF NON-GAAP CORE REVENUE
(In millions)
(Unaudited)
PRELIMINARY
	Year-over-year compare										Year-over-year compare
	Q4’20				Q4’19			Percent Inc/(Dec)			FY20				FY19			Percent Inc/(Dec)
Revenue	$	1,220			$	1,120		9	%		$	4,221			$	4,303		(2	)%
Amortization of acquisition-related balances		–				2						–				9
Non-GAAP Revenue	$	1,220			$	1,122		9	%		$	4,221			$	4,312		(2	)%
Adjustments:
Revenue from acquisitions or divestitures included in segment results		(10	)			–						(29	)			–
Currency impacts		(10	)			–						(5	)			–
Non-GAAP Core Revenue	$	1,200			$	1,122		7	%		$	4,187			$	4,312		(3	)%
Non-GAAP core revenue excludes impact of currency and revenue from acquisitions or divestitures closed within the last twelve months.
Please refer last page for details on the use of non-GAAP financial measures.
Page 5

KEYSIGHT TECHNOLOGIES, INC.
SEGMENT RESULTS INFORMATION
(In millions, except where noted)
(Unaudited)
PRELIMINARY
Communications Solutions Group(a)									YoY
	Q4’20				Q4’19				% Chg
Revenue	$	901			$	838			8	%
Gross margin, %		66.3	%			64.3	%
Income from operations	$	261			$	211
Operating margin, %		29	%			25	%
Electronic Industrial Solutions Group									YoY
	Q4’20				Q4’19				% Chg
Revenue	$	319			$	284			12	%
Gross margin, %		64.7	%			62.4	%
Income from operations	$	97			$	79
Operating margin, %		30	%			28	%
(a) Restated for the organizational change to manage our Ixia Solutions Group within our Communications Solutions Group effective Q1’20.
Net revenue for Communications Solutions Group excludes the impact of amortization of acquisition-related balances of $2 million for Q4’19. Segment revenue and income from operations are consistent with the respective non-GAAP measures as discussed on last page.
Page 6

KEYSIGHT TECHNOLOGIES, INC.
NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
	Three months ended												Year ended
	October 31,												October 31,
	2020					2019							2020							2019
	Net Income		Diluted EPS			Net Income			Diluted EPS				Net Income			Diluted EPS				Net Income			Diluted EPS
GAAP Net income	$	217	$	1.15		$	195		$	1.02			$	627		$	3.31			$	621		$	3.25
Non-GAAP adjustments:
Amortization of acquisition-related balances		57		0.30			60			0.31				224			1.18				224			1.17
Share-based compensation		20		0.10			16			0.08				93			0.49				82			0.43
Acquisition and integration costs		1		0.01			5			0.03				12			0.07				11			0.06
Northern California wildfire-related impacts		–		–			–			–				(32	)		(0.17	)			–			–
Restructuring and related costs		1		0.01			2			0.01				5			0.03				9			0.05
Others		1		0.01			2			0.01				(19	)		(0.11	)			(16	)		(0.09	)
Adjustment for taxes (a)		8		0.04			(26	)		(0.13	)			9			0.05				(29	)		(0.15	)
Non-GAAP Net income	$	305	$	1.62		$	254		$	1.33			$	919		$	4.85			$	902		$	4.72
Weighted average shares outstanding – diluted		188					191							189							191
(a) For both the three and twelve months ended October 31, 2020 and 2019, management uses a non-GAAP effective tax rate 12%.
Historical amounts are reclassified to conform with current presentation.
Please refer last page for details on the use of non-GAAP financial measures.
Page 7

KEYSIGHT TECHNOLOGIES, INC.
FREE CASH FLOW
(In millions)
(Unaudited)
PRELIMINARY
	Q4’20				FY20
Net cash provided by operating activities	$	338			$	1,016
Less: Investments in property, plant and equipment		(30	)			(117	)
Free cash flow	$	308			$	899
Free cash flow includes net cash provided by operating activities adjusted for investments in property, plant & equipment.
Please refer last page for details on the use of non-GAAP financial measures.
Page 8

Non-GAAP Financial Measures

Management uses both GAAP and non-GAAP financial measures to analyze and assess the overall performance of the business, to make operating decisions and to forecast and plan for future periods. We believe that our investors benefit from seeing our results “through the eyes of management” in addition to seeing our GAAP results. This information enhances investors’ understanding of the continuing performance of our business and facilitates comparison of performance to our historical and future periods.

Our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies, including industry peer companies, limiting the usefulness of these measures for comparative purposes.

These non-GAAP measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP. The discussion below presents information about each of the non-GAAP financial measures and the company’s reasons for including or excluding certain categories of income or expenses from our non-GAAP results. In future periods, we may exclude such items and may incur income and expenses similar to these excluded items. Accordingly, adjustments for these items and other similar items in our non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual.

Non-GAAP Revenue includes recognition of acquired deferred revenue that was written down to fair value in purchase accounting. Management believes that excluding fair value purchase accounting adjustments more closely correlates with the ordinary and ongoing course of the acquired company’s operations and facilitates analysis of revenue growth and business trends.

Non-GAAP Core Revenue is non-GAAP revenue (see Non-GAAP Revenue above) excluding the impact of foreign currency changes and revenue associated with businesses acquired and divested within the last twelve months. We exclude the impact of foreign currency changes as currency rates can fluctuate based on factors that are not within our control and can obscure revenue growth trends. As the nature, size and number of acquisitions can vary significantly from period to period and as compared to our peers, we exclude revenue associated with recently acquired businesses to facilitate comparisons of revenue growth and analysis of underlying business trends.

Free cash flow includes net cash provided by operating activities adjusted for investments in property, plant & equipment.

Non-GAAP Income from Operations, Non-GAAP Net Income and Non-GAAP Diluted EPS may include the following types of adjustments:

• Acquisition-related Items: We exclude the impact of certain items recorded in connection with business combinations from our non-GAAP financial measures that are either non-cash or not normal, recurring operating expenses due to their nature, variability of amounts and lack of predictability as to occurrence or timing. These amounts may include non-cash items such as the amortization of acquired intangible assets and amortization of items associated with fair value purchase accounting adjustments, including recognition of acquired deferred revenue (see Non-GAAP Revenue above). We also exclude other acquisition and integration costs associated with business acquisitions that are not normal recurring operating expenses, including amortization of amounts paid to redeem acquires’ unvested stock-based compensation awards, and legal, accounting and due diligence costs. We exclude these charges to facilitate a more meaningful evaluation of our current operating performance and comparisons to our past operating performance.

• Share-based Compensation Expense: We exclude share-based compensation expense from our non-GAAP financial measures because share-based compensation expense can vary significantly from period to period based on the company’s share price, as well as the timing, size and nature of equity awards granted. Management believes the exclusion of this expense facilitates the ability of investors to compare the company’s operating results with those of other companies, many of which also exclude share-based compensation expense in determining their non-GAAP financial measures.

• Northern California wildfire-related impacts and Other Items: We exclude certain other significant income or expense items that may occur occasionally and are not normal, recurring, cash operating, from our non-GAAP financial measures. Such items are evaluated on an individual basis based on both quantitative and qualitative factors and generally represent items that we would not anticipate occurring as part of our normal business on a regular basis. While not all-inclusive, examples of certain other significant items excluded from non-GAAP financial measures would include net unrealized gains on equity investments still held, and significant non recurring events like realized gains or losses associated with our employee benefit plans, costs and recoveries related to unusual disaster like Northern California wildfires, gain on sale of assets and small divestitures, etc.

• Restructuring and Related Costs: We exclude incremental expenses associated with restructuring initiatives, usually aimed at material changes in the business or cost structure. Such costs may include employee separation costs, asset impairments, facility-related costs, contract termination fees, and costs to move operations from one location to another. These activities can vary significantly from period to period based on the timing, size and nature of restructuring plans; therefore, we do not consider such costs to be normal, recurring operating expenses. We believe that these costs do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of the company’s current operating performance or comparisons to our operating performance in other periods.

• Estimated Tax Rate: We utilize a consistent methodology for long-term projected non-GAAP tax rate. When projecting this long-term rate, we exclude any tax benefits or expenses that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. Additionally, we evaluate our current long-term projections, current tax structure and other factors, such as existing tax positions in various jurisdictions and key tax holidays in major jurisdictions where Keysight operates. This tax rate could change in the future for a variety of reasons, including but not limited to significant changes in geographic earnings mix including acquisition activity, or fundamental tax law changes in major jurisdictions where Keysight operates. The above reasons also limit our ability to reasonably estimate the future GAAP tax rate and provide a reconciliation of the expected non-GAAP earnings per share for the first fiscal quarter of 2021 to the GAAP equivalent.

Management recognizes these items can have a material impact on our cash flows and/or our net income. Our GAAP financial statements, including our Condensed Consolidated Statement of Cash Flows, portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded costs are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the Condensed Consolidated Statement of Operations prepared in accordance with GAAP. The non-GAAP measures focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance.

Page 9

View source version on businesswire.com: https://www.businesswire.com/news/home/20201118005980/en/

EDITORIAL CONTACT:

Denise Idone

+ 1 941-888-2388

[email protected]

INVESTOR CONTACT:

Jason Kary

+1 707-577-6916

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Semiconductor Data Management Technology Telecommunications Networks Hardware

MEDIA:

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Startek is the Employer of Choice at the Australian Business Awards 2020

GREENWOOD VILLAGE, Colo. & MELBOURNE, Australia–(BUSINESS WIRE)–
Startek (NYSE: SRT), a global provider of customer experience management solutions, has been recognized as an ‘Employer of Choice’ (EOC) in The Australian Business Awards 2020. The Employer of Choice category recognises workplaces for maximising the potential of their workforce through exemplary HR policies and practices.

Now in their fifteenth year, The Australian Business Awards (ABA) are an annual all-encompassing recognition program that recognises organisations that demonstrate the core values of business and product innovation, technological achievement and employee engagement via a set of comprehensive award categories.

“This Employer of Choice recognition emphasises our commitment to creating opportunities for growth and development for our people,” said Rajiv Ahuja, President of Startek. “Our inclusive culture, wide range of differentiated developmental opportunities, and in-depth career growth programmes are key to our success not just as an employer, but as a business overall. It is indeed a proud moment for our teams in Australia—it is truly a testament to our people management practices, thus making us a workplace of choice.”

At Startek, the culture is the sum of five strong pillars of Collaboration & Connection, Empowerment & Accountability, Exploration, Purpose-Driven, and Growth & Development.

“Fifty-four organisations have been selected in this year’s ABA Employer of Choice Awards. These organisations have demonstrated adaptability in the workplace by utilising flexible and new ways of working and learning,” said Ms Tara Johnston, Program Director. “Leading organisations have begun to implement an entirely new working environment that breaks down communication barriers, positioning organisations to harness the talent within their organisation, transform the employee experience and position businesses to be more resilient,” Ms Johnston added.

The assessment process included submission of HR best practices in the areas of recruitment, engagement, retention, organisational culture, leadership commitment, people development, health & safety, performance management and recognition, followed by a stringent jury assessment.

With over 700 engagement specialists in Australia, Startek is committed to increasing its presence in the country. The company serves diverse industry segments such as BFSI, Automotive, Retail and Energy & Utilities. Startek has embraced the future of work, with a hybrid model of brick-and-mortar and cloud-enabled Work from Home (WFH) solutions. Through its StarCloud technology, Startek is proving a unified, secured & scalable solution for collaboration, task reporting, detection, monitoring & accountability for WFH.

About Startek

Startek is a global provider of tech-enabled business process management solutions. The company provides omni-channel customer experience, digital transformation, and technology services to some of the finest brands globally. Startek is committed to impacting clients’ business outcomes by focusing on enhancing customer experience and digital & AI enablement across all touch points and channels. Startek has more than 40,000 CX experts spread across 46 delivery campuses in 13 countries. The company services over 250 clients across a range of industries such as Banking and Financial Services, Insurance, Technology, Telecom, Healthcare, Travel & Hospitality, Ecommerce, Consumer Goods, Retail, and Energy & Utilities. To learn more about Startek’s global solutions, please visit www.startek.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201118005913/en/

Media Relations

Danveer Bhasin

Startek

+91-993-013-5788

[email protected]

KEYWORDS: Australia/Oceania Australia United States North America Colorado

INDUSTRY KEYWORDS: Data Management Professional Services Technology Software Human Resources

MEDIA:

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QIAGEN Collaborates with BioNTech on Companion Diagnostics Development for HPV-associated Squamous Cell Carcinoma of the Head and Neck

• QIAGEN and BioNTech to develop tissue-based therascreen® test covering a panel of HPV genotypes, paired with investigational treatment BNT113, to identify patients whose cancers are caused by HPV infections
• QIAGEN to pursue global regulatory approvals, including Premarket Approval from FDA for companion diagnostics
• Collaboration leverages QIAGEN´s global reach and market-leading position in companion diagnostics and HPV testing

HILDEN, Germany & GERMANTOWN, Md.–(BUSINESS WIRE)–
QIAGEN N.V. (NYSE: QGEN; Frankfurt Prime Standard: QIA) today announced a strategic collaboration with BioNTech SE (Nasdaq: BNTX) to develop and commercialize a tissue-based companion diagnostic – to be used with investigational cancer treatment BNT113 – which identifies patients with squamous cell carcinoma of the head and neck (SCCHN) that are caused by specific infections by human papilloma virus (HPV).

The assay will detect the presence of HPV genotypes and will be developed on QIAGEN´s RGQ MDx platform, a member of the QIAsymphony family of products.

QIAGEN plans to expand the panel for use across HPV-driven cancers such as cervical cancer and other cancers, in order to provide a universal HPV companion diagnostic (CDx) for QIAGEN’s pharmaceutical partners.

Head and neck squamous cell carcinoma is the sixth most common cancer. Every year, there are more than 650,000 cases leading to 330,000 deaths, according to a 2018 global cancer study. These numbers are expected to double by 2035, according to the World Health Organization. The incidence of HPV-related SCCHN has significantly increased in recent years.

QIAGEN established the global HPV testing market over two decades ago. More than 100 million women have been tested for HPV infections using QIAGEN´s portfolio of HPV products, including hybrid capture, genotyping, and methylation tests.

Please find the full press release here

View source version on businesswire.com: https://www.businesswire.com/news/home/20201118005908/en/

QIAGEN

Investor Relations

John Gilardi

+49 2103 29 11711

Phoebe Loh

+49 2103 29 11457

e-mail: [email protected]

Public Relations

Thomas Theuringer

+49 2103 29 11826

Robert Reitze

+49 2103 29 11676

e-mail: [email protected]

KEYWORDS: Switzerland United States Austria North America Europe Germany Maryland

INDUSTRY KEYWORDS: Science Other Science Biotechnology Research Pharmaceutical Oncology Health Medical Devices

MEDIA:

Posted on November 18, 2020 4:08 pm

Kala Pharmaceuticals Reports Inducement Grant Under NASDAQ Listing Rule 5635(c)(4)

Kala Pharmaceuticals Reports Inducement Grant Under NASDAQ Listing Rule 5635(c)(4)

WATERTOWN, Mass.–(BUSINESS WIRE)–
Kala Pharmaceuticals, Inc. (NASDAQ:KALA), today announced that the Company granted non-statutory stock options to new employees as inducement awards outside the Company’s 2017 Equity Incentive Plan in accordance with NASDAQ Listing Rule 5635(c)(4).

The Company granted stock options to purchase up to an aggregate of 34,500 shares of Kala Pharmaceuticals common stock to four new employees. The stock options were granted on November 13, 2020. The grants were approved by the Compensation Committee and were made as an inducement material to each employee entering into employment with Kala Pharmaceuticals in accordance with NASDAQ Listing Rule 5635(c)(4). The option awards have an exercise price of $7.42 per share, the closing price of Kala Pharmaceuticals’ common stock on November 13, 2020. The options have a ten-year term and vest over four years, with 25% of the original number of shares vesting on the first anniversary of the applicable employee’s new hire date and the remainder vesting in equal monthly installments over the following three years. Vesting of each option is subject to such employee’s continued service with Kala Pharmaceuticals through the applicable vesting dates.

About Kala Pharmaceuticals, Inc.

Kala is a biopharmaceutical company focused on the discovery, development, and commercialization of innovative therapies for diseases of the eye. Kala has applied its AMPPLIFY^® mucus penetrating particle Drug Delivery Technology to a corticosteroid, loteprednol etabonate (LE), designed for ocular applications, resulting in the October 2020 approval of EYSUVIS^TM (loteprednol etabonate ophthalmic suspension) 0.25% for the short-term (up to two weeks) treatment of signs and symptoms of dry eye disease and the January 2019 launch of INVELTYS^® (loteprednol etabonate ophthalmic suspension) 1% for the treatment of post-operative inflammation and pain following ocular surgery.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201118005060/en/

Investor Contacts:

Loraine Spreen

[email protected]

857-277-4842

Hannah Deresiewicz

[email protected]

212-362-1200

KEYWORDS: United States North America Massachusetts

INDUSTRY KEYWORDS: Health Surgery Clinical Trials Pharmaceutical Optical Biotechnology

MEDIA:

Posted on November 18, 2020 4:08 pm

PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Fourth Quarter and Fiscal Year Ended September 30, 2020

NEW YORK, Nov. 18, 2020 (GLOBE NEWSWIRE) — PennantPark Floating Rate Capital Ltd. (NASDAQ: PFLT) (TASE: PFLT) announced today financial results for the fourth quarter and fiscal year ended September 30, 2020.

HIGHLIGHTS

Quarter ended September 30, 2020
($ in millions, except per share amounts)

Assets and Liabilities:
Investment portfolio (1)	$	1,086.9
PSSL investment portfolio	$	393.0
Net assets	$	477.3
GAAP net asset value per share	$	12.31
Increase in GAAP net asset value per share		1.2	%
Adjusted net asset value per share (2)	$	11.81
Increase in adjusted net asset value per share (2)		3.2	%
Credit Facility	$	299.0
2023 Notes	$	129.3
2031 Asset-Backed Debt	$	224.9
Regulatory Debt to Equity		1.48x
Regulatory Net Debt to Equity (3)		1.35x
GAAP Net Debt to Equity (4)		1.25x
Yield on debt investments at quarter-end		7.3	%

	Quarter Ended September 30, 20 20			Year Ended September 30, 20 20
Operating Results:
Net investment income	$	10.3		$	43.4
GAAP net investment income per share	$	0.27		$	1.12
Distributions declared per share	$	0.285		$	1.14
Portfolio Activity:
Purchases of investments	$	15.3		$	436.7
Sales and repayments of investments	$	49.7		$	396.9
Number of new portfolio companies invested	1			19
Number of existing portfolio companies invested	9			95
Number of ending portfolio companies	102			102

^{________________________}

(1)	Includes investments in PennantPark Senior Secured Loan Fund I LLC, or PSSL, an unconsolidated joint venture, totaling $165.3 million, at fair value.
(2)	This is a non-GAAP financial measure. The Company believes that this number provides useful information to investors and management because it reflects the Company’s financial performance excluding the impact of the $19.5 million unrealized loss on our multi-currency senior secured revolving credit facility, as amended and restated, with Truist Bank (formerly SunTrust Bank) and other lenders, or the Credit Facility, and our 4.3% Series A notes due 2023, or the 2023 Notes. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.
(3)	This is a non-GAAP financial measure. The Company believes that this number provides useful information to investors and management because it reflects the Company’s financial performance net of $57.5 million of cash and equivalents. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.
(4)	This is a non-GAAP financial measure. The Company believes that this number provides useful information to investors and management because it reflects the Company’s financial performance including the impact of the $19.5 million unrealized loss on the Credit Facility and the 2023 Notes net of $57.5 million of cash and equivalents. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

CONFERENCE CALL AT 10:00 A.M. EST ON
NOVEMBER
19
,
2020

PennantPark Floating Rate Capital Ltd. (“we,” “our,” “us” or the “Company”) will host a conference call at 10:00 a.m. (Eastern Standard Time) on Thursday, November 19, 2020 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (888) 394-8218 approximately 5-10 minutes prior to the call. International callers should dial (323) 701-0225. All callers should reference conference ID #1987679 or PennantPark Floating Rate Capital Ltd. An archived replay of the call will be available through December 3, 2020 by calling toll-free (888) 203-1112. International callers please dial (719) 457-0820. For all phone replays, please reference conference ID #1987679.

PORTFOLIO AND INVESTMENT ACTIVITY

“We are pleased with the strong performance of our portfolio over the last few quarters, despite challenging economic conditions,” said Arthur Penn, Chairman and CEO. “We believe that the combination of solid portfolio performance, several significant equity positions of high growth companies as well as continuing optimization of financing should bolster our NAV and Net Investment Income over time.”

As of September 30, 2020, our portfolio totaled $1,086.9 million and consisted of $968.6 million of first lien secured debt (including $125.4 million in PSSL), $29.9 million of second lien secured debt and $88.4 million of preferred and common equity (including $39.9 million in PSSL). Our debt portfolio consisted of 99% variable-rate investments. As of September 30, 2020, we had three portfolio companies on non-accrual, representing 2.1% and 1.8% of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $29.9 million. Our overall portfolio consisted of 102 companies with an average investment size of $10.7 million, had a weighted average yield on debt investments of 7.3%, and was invested 89% in first lien secured debt (including 12% in PSSL), 3% in second lien secured debt and 8% in preferred and common equity (including 4% in PSSL). As of September 30, 2020, 97% of the investments held by PSSL were first lien secured debt. For more information on how the COVID-19 pandemic has affected our business and results of operations, see our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, including “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – COVID-19 Developments” and “Item 1A. Risk Factors” therein.

As of September 30, 2019, our portfolio totaled $1,081.7 million and consisted of $944.9 million of first lien secured debt (including $122.2 million in PSSL), $34.4 million of second lien secured debt and $102.4 million of preferred and common equity (including $50.0 million in PSSL). Our debt portfolio consisted of 99% variable-rate investments. As of September 30, 2019, we had one portfolio company on non-accrual, representing 0.4% and zero of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $3.5 million. Our overall portfolio consisted of 95 companies with an average investment size of $11.4 million, had a weighted average yield on debt investments of 8.7%, and was invested 87% in first lien secured debt (including 11% in PSSL), 3% in second lien secured debt and 10% in preferred and common equity (including 5% in PSSL). As of September 30, 2019, 97% of the investments held by PSSL were first lien secured debt.

For the three months ended September 30, 2020, we invested $15.3 million in one new and nine existing portfolio companies with a weighted average yield on debt investments of 7.8%. Sales and repayments of investments for the same period totaled $49.7 million. This compares to the three months ended September 30, 2019, in which we invested $140.6 million in six new and 23 existing portfolio companies with a weighted average yield on debt investments of 8.5%. Sales and repayments of investments for the same period totaled $127.1 million.

For the year ended September 30, 2020, we invested $436.7 million in 19 new and 95 existing portfolio companies with a weighted average yield on debt investments of 8.0%. Sales and repayments of investments for the same period totaled $396.9 million.

For the year ended September 30, 2019, we invested $640.1 million in 28 new and 83 existing portfolio companies with a weighted average yield on debt investments of 8.8%. Sales and repayments of investments for the same period totaled $527.3 million.

PennantPark
Senior Secured Loan Fund I LLC

As of September 30, 2020, PSSL’s portfolio totaled $393.0 million, consisted of 45 companies with an average investment size of $8.7 million and had a weighted average yield on debt investments of 6.8%. As of September 30, 2019, PSSL’s portfolio totaled $488.5 million, consisted of 45 companies with an average investment size of $10.9 million and had a weighted average yield on debt investments of 7.6%.

For the three months ended September 30, 2020, PSSL did not make any investments. PSSL’s sales and repayments of investments for the same period totaled $69.9 million. For the three months ended September 30, 2019, PSSL invested $52.6 million (including $31.8 million purchased from the Company) in five new and three existing portfolio companies with a weighted average yield on debt investments of 7.8%. PSSL’s sales and repayments of investments for the same period totaled $31.8 million.

For the year ended September 30, 2020, PSSL invested $87.1 million (of which $86.7 million was purchased from the Company) in 11 new and two existing portfolio companies with a weighted average yield on debt investments of 7.4%. PSSL’s sales and repayments of investments for the same period totaled $172.6 million.

For the year ended September 30, 2019, PSSL invested $228.6 million (of which $89.6 million was purchased from the Company) in 16 new and 16 existing portfolio companies with a weighted average yield on debt investments of 8.1%. PSSL’s sales and repayments of investments for the same period totaled $159.9 million.

RECENT DEVELOPMENTS

Subsequent to September 30, 2020, our portfolio company, Cano Health, LLC (ITC Rumba, LLC), entered into a business combination agreement with Jaws Acquisition Corp (“JWS”), a special purpose acquisition vehicle, and other parties, subject to certain closing conditions, with an expected closing late first quarter or early second quarter 2021. Based on the closing stock price of JWS on November 13, 2020, our $2.3 million common stock fair valuation as of September 30, 2020 would increase to an estimated $9.0 million, which includes a combination of cash and stock, assuming the transaction closes based on the agreed terms. This would represent a net asset value increase of $0.17 per share, as of November 13, 2020. Our shares are owned by a limited partnership controlled by the financial sponsor and are subject to customary lock up restrictions. As a result, the fair value on December 31, 2020, may likely include an illiquidity discount not in the public trading values indicated above. There can be no assurance that the implied value of our equity interest will be representative of the value ultimately realized on our equity investment.

RESULTS OF OPERATIONS

Set forth below are the results of operations for the years ended September 30, 2020 and 2019.

Investment Income

Investment income for the three months ended September 30, 2020 and 2019 was $21.8 million and $23.9 million, respectively, and was primarily attributable to $19.3 million and $22.1 million from first lien secured debt and $2.5 million and $1.8 million from other investments, respectively.

Investment income for the year ended September 30, 2020 was $95.5 million and was attributable to $86.8 million from first lien secured debt and $8.7 million from other investments. The increase in investment income over the prior year was primarily due to the growth of our portfolio, partially offset by a decline in LIBOR.

Investment income for the year ended September 30, 2019 was $92.9 million and was attributable to $84.0 million from first lien secured debt and $8.9 million from other investments.

Expenses

Expenses for the three months ended September 30, 2020 and 2019 totaled $10.3 million and $12.5 million, respectively. Base management fee totaled $2.8 million and $2.7 million, incentive fee totaled $2.1 million and $2.5 million, debt related interest and expenses totaled $5.5 million and $6.3 million, general and administrative expenses totaled $1.0 million and $1.0 million and provision for taxes totaled $0.1 million and zero, respectively, for the same periods.

Expenses for the years ended September 30, 2020 and 2019 totaled $52.1 million and $47.5 million, respectively. Base management fee for the same periods totaled $11.4 million and $10.2 million, incentive fee totaled $9.3 million and $6.2 million (including zero on realized gains and $(1.4) million on net unrealized gains accrued but not payable), debt related interest and expenses totaled $27.1 million and $27.1 million (including $4.5 million in Credit Facility amendment fees), general and administrative expenses totaled $3.9 million and $4.0 million and provision for taxes totaled $0.4 million and zero, respectively, for the same periods. The increase in expenses compared to the prior year was primarily due to the growth of our portfolio which resulted in higher Management Fees in the current year.

Net Investment Income

Net investment income totaled $10.3 million, or $0.27 per share, and $11.4 million, or $0.29 per share, for the three months ended September 30, 2020 and 2019, respectively.

Net investment income totaled $43.4 million, or $1.12 per share, and $45.5 million, or $1.17 per share, for the years ended September 30, 2020 and 2019, respectively. The decrease in net investment income compared to the prior year was primarily due to higher Management Fees due to growth of our portfolio, partially offset by higher investment income in the current year.

Net Realized Gains or Losses

Sales and repayments of investments for the three months ended September 30, 2020 and 2019 totaled $49.7 million and $127.1 million, respectively. Net realized losses totaled $4.7 million and $15.0 million for the same periods, respectively.

Sales and repayments of investments for the years ended September 30, 2020 and 2019 totaled $396.9 million and $527.3 million, respectively. Net realized losses totaled $12.7 million and $31.4 million for the same periods, respectively. The change in realized gains/losses was primarily due to changes in the market conditions of our investments and the values at which they were realized.

Unrealized Appreciation or Depreciation on Investments, the Credit Facility and the 2023 Notes

For the three months ended September 30, 2020 and 2019, we reported a net change in unrealized appreciation on investments of $19.9 million and $10.6 million, respectively. For the years ended September 30, 2020 and 2019, we reported net change in unrealized depreciation on investments of $26.5 million and $2.6 million, respectively. As of September 30, 2020 and 2019, our net unrealized depreciation on investments totaled $29.9 million and $3.5 million, respectively. The net change in unrealized appreciation/depreciation on our investments for the year ended September 30, 2020 compared to the prior year was primarily due to changes in the capital market conditions as well as the financial performance of certain portfolio companies primarily driven by the market disruption caused by the COVID-19 pandemic and the uncertainty surrounding its continued adverse economic impact. For more information on how the COVID-19 pandemic has affected our business and results of operations, see our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, including “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – COVID-19 Developments” and “Item 1A. Risk Factors” therein.

For the three months ended September 30, 2020 and 2019, our Credit Facility and 2023 Notes had a net change in unrealized depreciation of $8.6 million and $0.4 million, respectively. For the years ended September 30, 2020 and 2019, our Credit Facility and the 2023 Notes had a net change in unrealized depreciation (appreciation) of $14.2 million and less than $(0.1) million, respectively. As of September 30, 2020 and 2019, our net unrealized depreciation on our Credit Facility and the 2023 Notes totaled $18.8 million and $4.7 million, respectively. The net change in unrealized depreciation for the year ended September 30, 2020 compared to the prior year was primarily due to changes in the capital markets.

Net Change in Net Assets Resulting from Operations

Net change in net assets resulting from operations totaled $17.0 million, or $0.44 per share, and $7.4 million, or $0.19 per share, for the three months ended September 30, 2020 and 2019, respectively.

Net change in net assets resulting from operations totaled $18.4 million, or $0.47 per share, and $11.4 million, or $0.29 per share, for the years ended September 30, 2020 and 2019, respectively. The decrease in net assets from operations for the year ended September 30, 2020 compared to the prior year was primarily due to depreciation of the portfolio primarily driven by the market disruption caused by the COVID-19 pandemic and the uncertainty surrounding its continued adverse economic impact.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resources are derived primarily from proceeds of securities offerings, debt capital and cash flows from operations, including investment sales and repayments, and income earned. Our primary use of funds from operations includes investments in portfolio companies and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives. For more information on how the COVID-19 pandemic may impact our ability to comply with the covenants of the Credit Facility, see our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, including “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – COVID-19 Developments” and “Item 1A. Risk Factors” therein.

The annualized weighted average cost of debt for the years ended September 30, 2020 and 2019, inclusive of the fee on the undrawn commitment on the Credit Facility, amendment costs and debt issuance costs, was 3.7% and 5.3%, respectively (excluding amendment and debt issuance costs, such amounts are 3.7% and 4.4%, respectively). As of September 30, 2020 and 2019, we had $211.4 million and $254.7 million of unused borrowing capacity under our Credit Facility, respectively, subject to leverage and borrowing base restrictions.

As of September 30, 2020 and 2019, PennantPark Floating Rate Funding I, LLC, or Funding I, had $308.6 million and $265.3 million of outstanding borrowings under the Credit Facility, respectively. The Credit Facility had a weighted average interest rate of 2.2% and 4.1%, exclusive of the fee on undrawn commitments, as of September 30, 2020 and 2019, respectively.

As of September 30, 2020 and 2019, we had cash equivalents of $57.5 million and $63.3 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to take advantage of market opportunities.

Our operating activities used cash of $4.9 million for the year ended September 30, 2020, and our financing activities used cash of $0.9 million for the same period. Our operating activities used cash primarily for our investment activities and our financing activities used cash primarily for paying down our Credit Facility and paying distributions to stockholders.

Our operating activities used cash of $121.4 million for the year ended September 30, 2019, and our financing activities provided cash of $111.7 million for the same period. Our operating activities used cash primarily for our investment activities and our financing activities provided cash primarily from the issuance of 2031 Asset-Backed Debt.

DISTRIBUTIONS

During both years ended September 30, 2020 and 2019, we declared distributions of $1.14 per share for total distributions of $44.2 million. We monitor available net investment income to determine if a return of capital for tax purposes may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, stockholders will be notified of the portion of those distributions deemed to be a tax return of capital. Tax characteristics of all distributions will be reported to stockholders subject to information reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports filed with the Securities and Exchange Commission, or the SEC.

AVAILABLE INFORMATION

The Company makes available on its website its annual report on Form 10-K filed with the SEC and stockholders may find the report on its website at www.pennantpark.com.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS O
F ASSETS AND LIABILITIES

	September 30, 2020				September 30, 2019
Assets
Investments at fair value
Non-controlled, non-affiliated investments (cost—$915,874,757 and $886,955,156, respectively)	$	910,552,309			$	889,113,264
Non-controlled, affiliated investments (cost—$21,964,181 and $23,645,693, respectively)		11,086,834				20,430,565
Controlled, affiliated investments (cost—$179,112,500 and $174,562,500, respectively)		165,289,324				172,163,080
Total of investments (cost—$1,116,951,438 and $1,085,172,349 , respectively)		1,086,928,467				1,081,706,909
Cash and cash equivalents (cost—$57,534,421 and $63,367,237, respectively)		57,511,928				63,337,728
Interest receivable		3,673,502				3,892,292
Receivable for investments sold		—				2,997,546
Prepaid expenses and other assets		173,318				441,337
Total assets		1,148,287,215				1,152,375,812
Liabilities
Distributions payable		3,683,347				3,683,347
Payable for investments purchased		3,800,000				12,033,794
Credit Facility payable, at fair value (cost—$308,598,500 and $265,307,500, respectively)		299,047,275				263,988,583
2023 Notes payable, at fair value (par—$138,579,858 and $138,579,858, respectively)		129,295,008				135,240,084
2031 Asset-Backed Debt, net (par—$228,000,000 and $228,000,000, respectively)		224,866,334				224,321,845
Interest payable on debt		3,601,479				3,275,481
Base management fee payable		2,776,477				2,728,019
Performance-based incentive fee payable		2,071,622				2,532,205
Accrued other expenses		1,875,281				1,514,943
Total liabilities		671,016,823				649,318,301
Commitments and contingencies
Net assets
Common stock, 38,772,074 and 38,772,074 shares issued and outstanding, respectively     Par value $0.001 per share and 100,000,000 shares authorized		38,772				38,772
Paid-in capital in excess of par value		538,151,528				538,632,828
Distributable income		(60,919,908	)			(35,614,089	)
Total net assets	$	477,270,392			$	503,057,511
Total liabilities and net assets	$	1,148,287,215			$	1,152,375,812
Net asset value per share	$	12.31			$	12.97

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended September 30,
	2020				2019				2018
Investment income:
From non-controlled, non-affiliated investments:
Interest	$	73,250,887			$	69,319,954			$	62,469,275
Other income		3,565,134				3,497,784				2,244,895
From non-controlled, affiliated investments:
Interest		882,934				1,237,675				—
Other income		36,170				127,734				—
From controlled, affiliated investments:
Interest		11,801,245				12,464,035				5,302,909
Dividend		5,950,000				6,300,000				2,187,500
Total investment income		95,486,370				92,947,182				72,204,579
Expenses:
Base management fee		11,428,302				10,209,566				8,351,653
Performance-based incentive fee		9,300,311				6,204,112				2,399,249
Interest and expenses on debt		27,108,452				22,540,098				14,359,908
Administrative services expenses		1,400,000				1,550,000				2,000,000
Other general and administrative expenses		2,464,306				2,464,306				2,460,582
Expenses before amendment costs, debt issuance costs and provision for taxes		51,701,371				42,968,082				29,571,392
Credit Facility amendment costs and debt issuance costs		—				4,517,292				10,869,098
Provision for taxes		400,000				—				800,000
Total expenses		52,101,371				47,485,374				41,240,490
Net investment income		43,384,999				45,461,808				30,964,089
Realized and unrealized (loss) gain on investments and debt:
Net realized loss on:
Non-controlled, non-affiliated investments		(6,998,886	)			(18,802,365	)			(2,327,118	)
Controlled and non-controlled, affiliated investments		(5,683,145	)			(12,621,504	)			—
Net realized loss on investments		(12,682,031	)			(31,423,869	)			(2,327,118	)
Net change in unrealized (depreciation) appreciation on:
Non-controlled, non-affiliated investments		(7,390,333	)			2,640,050				(3,857,170	)
Controlled and non-controlled, affiliated investments		(19,076,975	)			(5,245,396	)			960,087
Debt depreciation (appreciation)		14,177,384				(16,487	)			7,750,334
Net change in unrealized (depreciation) appreciation on investments and debt		(12,289,924	)			(2,621,833	)			4,853,251
Net realized and unrealized (loss) gain from investments and debt		(24,971,955	)			(34,045,702	)			2,526,133
Net increase in net assets resulting from operations	$	18,413,044			$	11,416,106			$	33,490,222
Net increase in net assets resulting from operations per common share	$	0.47			$	0.29			$	0.87
Net investment income per common share	$	1.12			$	1.17			$	0.81

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

PennantPark Investment Advisers, LLC is a leading middle market credit platform, which has approximately $3.5 billion of assets under management. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark Investment Advisers, LLC is headquartered in New York and has offices in Chicago, Houston and Los Angeles.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results, and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the SEC as well as changes in the economy and risks associated with possible disruption in the Company’s operations or the economy generally due to terrorism, natural disasters or pandemics such as COVID-19. The Company undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

We may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations.

CONTACT:

Aviv Efrat
PennantPark Floating Rate Capital Ltd.
(212) 905-1000
www.pennantpark.com