Market Newsdesk

November 16, 2020 7:44 am

Tyson Foods Reports Strong Fourth Quarter and Fiscal 2020 Results

Company Remains Focused on Worker Health and Safety, Long Term Growth

SPRINGDALE, Ark., Nov. 16, 2020 (GLOBE NEWSWIRE) — Tyson Foods, Inc. (NYSE: TSN), one of the world’s largest food companies and a recognized leader in protein with leading brands including Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, ibp and State Fair, today reported the following results:

(in millions, except per share data)	Fourth Quarter				Twelve Months Ended
	2020		2019		2020		2019
Sales	$	11,460	$	10,884	$	43,185	$	42,405
Operating Income	1,012		604		3,114		2,827

Net Income	695		372		2,150		2,035
Less: Net Income Attributable to Noncontrolling Interests	3		3		10		13
Net Income Attributable to Tyson	$	692	$	369	$	2,140	$	2,022

Net Income Per Share Attributable to Tyson	$	1.90	$	1.01	$	5.86	$	5.52

Adjusted¹ Sales	$	10,641	$	10,884	$	42,366	$	42,405

Adjusted¹ Operating Income	$	961	$	686	$	3,116	$	2,977

Adjusted¹ Net Income Per Share Attributable to Tyson	$	1.81	$	1.21	$	5.64	$	5.46

¹ Adjusted sales, adjusted operating income and adjusted net income per share attributable to Tyson (Adjusted EPS) are non-GAAP financial measures and are explained and reconciled to a comparable GAAP measure at the end of this release. Adjusted sales, adjusted operating income and adjusted EPS for the fourth quarter and twelve months of fiscal 2020 are presented on a 13-week and 52-week basis, respectively.

Fiscal 2020 Highlights

GAAP EPS of $5.86, up 6% from prior year; Adjusted EPS of $5.64 (52-week basis), up 3% from prior year
GAAP operating income of $3,114 million, up 10% from prior year; Adjusted operating income of $3,116 million (52-week basis), up 5% from prior year
Total
Company GAAP operating margin of 7.2%; Adjusted operating margin of 7.4% (52-week basis)
Generated approximately $3.9 billion of operating cash flows
Results negatively impacted by approximately $540 million of direct incremental expenses related to COVID-19

Fourth Quarter Highlights

GAAP EPS of $1.90, up 88% from prior year; Adjusted EPS of $1.81 (13-week basis), up 50% from prior year
GAAP operating i
ncome of $1,012 million, up 68% from prior year; Adjusted operating income of $961 million (13-week basis), up 40% from prior year
Total Company GAAP operating margin of 8.8%; Adjusted operating margin of 9.0% (13-week basis)
Liquidity of $3.2 billion at O
ctober 3, 2020
Reduced total debt by $690 million
Results negatively impacted by approximately $200 million of direct incremental expenses related to COVID-19

“Our business performed well and delivered strong fourth quarter and full-year results,” said Dean Banks, President & CEO of Tyson Foods. “Our team members, agricultural partners, and customers have shown resilience. This has enabled us to maintain and accelerate our efforts to provide global consumers with a safe and accessible food supply.”

“While we will continue to face pandemic-related challenges in fiscal 2021, we’re settling the business down to be focused on executing our long-term strategy while generating strong returns for shareholders. I’m excited for the opportunities ahead for this great company, and am certain we have the people, products, and strategies in place to drive future growth.”

SEGMENT RESULTS (in millions)

Sales
(for the fourth quarter and twelve months ended October 3, 2020, and September 28, 2019)
	Fourth Quarter										Twelve Months Ended
							Volume		Avg. Price								Volume		Avg. Price
	2020			2019			Change		Change		2020			2019			Change		Change
Beef	$	4,272		$	3,861		11.8	%	(1.2	)%	$	15,742		$	15,828		(4.5	)%	4.0	%
Pork	1,368			1,258			15.2	%	(6.4	)%	5,128			4,932			1.8	%	2.2	%
Chicken	3,433			3,447			1.9	%	(2.3	)%	13,234			13,300			0.1	%	(0.6	)%
Prepared Foods	2,277			2,153			1.6	%	4.2	%	8,532			8,418			(1.9	)%	3.3	%
Internat ional/Other	491			513			(3.5	)%	(1.0	)%	1,856			1,289			50.1	%	(6.1	)%
Intersegment Sales	(381		)	(348		)	n/a		n/a		(1,307		)	(1,362		)	n/a		n/a
Total	$	11,460		$	10,884		5.9	%	(0.6	)%	$	43,185		$	42,405		0.7	%	1.1	%

Operating Income (Loss)
(for the fourth quarter and twelve months ended October 3, 2020, and September 28, 2019)
	Fourth Quarter									Twelve Months Ended
						Operating Margin										Operating Margin
	2020			2019		2020		2019		2020			2019			2020		2019
Beef	$	516		$	376	12.1	%	9.7	%	$	1,686		$	1,107		10.7	%	7.0	%
Pork	174			26		12.7	%	2.1	%	565			263			11.0	%	5.3	%
Chicke n	86			90		2.5	%	2.6	%	122			621			0.9	%	4.7	%
Prepared Foods	249			104		10.9	%	4.8	%	743			843			8.7	%	10.0	%
Intern ational/Other	(13		)	8		n/a		n/a		(2		)	(7		)	n/a		n/a
Total	$	1,012		$	604	8.8	%	5.5	%	$	3,114		$	2,827		7.2	%	6.7	%

Note: On June 3, 2019, we acquired the Thai and European operations of BRF S.A. The post-acquisition results from operations of these businesses are included in International/Other for segment presentation. On November 30, 2018, we acquired Keystone Foods. The post-acquisition results from operations of this business are included in our Chicken segment for Keystone’s domestic operations and results for operations of Keystone’s International business are included in International/Other for segment presentation.

Adjusted Segment Results (in millions)

Adjusted Sales (Non-GAAP)
(for the fourth quarter and twelve months ended October 3, 2020, and September 28, 2019)
	Fourth Quarter										Twelve Months Ended
							Adjusted Volume		Adjusted Avg. Price								Adjusted Volume		Adjusted Avg. Price
	2020			2019			Change		Change		2020			2019			Change		Change
Beef	$	3,966		$	3,861		3.8	%	(1.1	)%	$	15,436		$	15,828		(6.5	)%	4.0	%
Pork	1,270			1,258			6.9	%	(5.9	)%	5,030			4,932			(0.2	)%	2.2	%
Chicken	3,188			3,447			(5.4	)%	(2.1	)%	12,989			13,300			(1.7	)%	(0.6	)%
Prepared Foods	2,114			2,153			(5.6	)%	3.8	%	8,369			8,418			(3.7	)%	3.1	%
International/Other	456			513			(10.4	)%	(0.9	)%	1,821			1,289			47.7	%	(6.5	)%
Intersegment Sales	(353		)	(348		)	n/a		n/a		(1,279		)	(1,362		)	n/a		n/a
Total	$	10,641		$	10,884		(1.6	)%	(0.6	)%	$	42,366		$	42,405		(1.3	)%	1.2	%

Adjusted Operating Income (Loss) (Non-GAAP)
(for the fourth quarter and twelve months ended October 3, 2020, and September 28, 2019)
	Fourth Quarter									Twelve Months Ended
						Adjusted Operating Margin (Non-GAAP)								Adjusted Operating Margin (Non-GAAP)
	2020			2019		2020		2019		2020		2019		2020		2019
Beef	$	483		$	407	12.2	%	10.5	%	$	1,659	$	1,139	10.7	%	7.2	%
Pork		162			27	12.8	%	2.1	%		555		264	11.0	%	5.4	%
Chicken		91			95	2.9	%	2.8	%		148		655	1.1	%	4.9	%
Prepared Foods		236			149	11.2	%	6.9	%		752		902	9.0	%	10.7	%
International/Other		(11	)		8	n/a		n/a			2		17	n/a		n/a
Total	$	961		$	686	9.0	%	6.3	%	$	3,116	$	2,977	7.4	%	7.0	%

Note: Adjusted sales, adjusted operating income and adjusted operating margin are non-GAAP financial measures and are explained and reconciled to comparable GAAP measures at the end of this release. Adjusted sales, adjusted operating income, adjusted volume change, adjusted average price change and adjusted operating margin for the fourth quarter and twelve months of fiscal 2020 are presented on a 13-week and 52-week basis, respectively.

Adjusted sales (due to the impact of the additional week in the fourth quarter of fiscal 2020), adjusted operating income and adjusted operating margin are presented as supplementary measures in the evaluation of our business that are not required by, or presented in accordance with, GAAP. We use adjusted sales, adjusted operating income and adjusted operating margin as internal performance measurements and as criteria for evaluating our performance relative to that of our peers. We believe adjusted sales, adjusted operating income and adjusted operating margin are meaningful to our investors to enhance their understanding of our financial performance and are frequently used by securities analysts, investors and other interested parties to compare our performance with the performance of other companies that report adjusted sales, adjusted operating income and adjusted operating margin. Further, we believe that adjusted sales, adjusted operating income and adjusted operating margin are useful measures because they improve comparability of results of operations from period to period. Adjusted sales, adjusted operating income and adjusted operating margin should not be considered as substitutes for sales, operating income, operating margin or any other measure of operating performance reported in accordance with GAAP. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Our calculation of adjusted sales, adjusted operating income and adjusted operating margin may not be comparable to similarly titled measures reported by other companies.

COVID-19 Expenses

We incurred direct incremental expenses associated with the impact of COVID-19 totaling approximately $200 million and $540 million for the fourth quarter and twelve months of fiscal year 2020, respectively. These direct incremental expenses primarily included team member costs associated with worker health and availability and production facility downtime, including direct costs for personal protection equipment, production facility sanitization, COVID-19 testing, donations, product downgrades and rendered product, partially offset by CARES Act credits. Other indirect costs associated with COVID-19 are not reflected in this amount, including costs associated with raw materials, distribution and transportation, plant underutilization and reconfiguration, premiums paid to cattle producers and pricing discounts.

Summary of Segment Results

Beef – Sales volume increased 11.8%, or increased 3.8% after removing the impact of an additional week, for the fourth quarter of fiscal 2020 primarily due to a fire that caused the temporary closure of a production facility during the fourth quarter of fiscal 2019. Sales volume decreased 4.5%, or decreased 6.5% after removing the impact of an additional week, for fiscal 2020 due to lower production throughput associated with the impact of COVID-19 during portions of fiscal 2020 and a reduction in live cattle harvest capacity as a result of a fire that caused the temporary closure of a production facility for the majority of the first quarter of fiscal 2020. Average sales price decreased in the fourth quarter of fiscal 2020 associated with increased availability of live cattle supply and lower livestock cost. Average sales price increased in fiscal 2020 as beef demand remained strong amid supply disruptions related to the impact of COVID-19. Operating income increased primarily due to market conditions, including COVID-19 disruptions, which increased the spread between preexisting contractual agreements and the cost of fed cattle, and the impact of an additional week in fiscal 2020, partially offset by price reductions offered to customers, as well as production inefficiencies and direct incremental expenses related to COVID-19. Additionally, the fourth quarter of fiscal 2019 was impacted by $31 million of net incremental costs from the production facility fire.
Pork – Sales volume increased 15.2%, or increased 6.9% after removing the impact of an additional week, for the fourth quarter of fiscal 2020 due to strong demand for our pork products and increased domestic availability of live hogs. Sales volume increased 1.8%, or decreased slightly after removing the impact of an additional week, for fiscal 2020, due to strong demand for our pork products and increased domestic availability of live hogs, offset by lower production throughput associated with COVID-19 during portions of fiscal 2020. Average sales price in the fourth quarter of fiscal 2020 decreased associated with lower livestock costs. Average sales price in fiscal 2020 increased as pork demand remained strong amid supply disruptions related to the impact of COVID-19, partially offset by lower livestock costs. Operating income increased primarily due to market conditions, including COVID-19 disruptions, which increased the spread between preexisting contractual agreements and the cost of live hogs, and the impact of an additional week in fiscal 2020, partially offset by production inefficiencies and direct incremental expenses related to COVID-19.
Chicken – Sales volume increased 1.9%, or decreased 5.4% after removing the impact of an additional week, for fourth quarter of fiscal 2020, and increased slightly, or decreased 1.7% after removing the impact of an additional week, for fiscal 2020 primarily due to lower production throughput associated with the impact of COVID-19 during portions of fiscal 2020 and lower foodservice demand, partially offset by increased retail demand. Average sales price decreased primarily due to weaker chicken pricing as a result of market conditions. Operating income decreased primarily from market conditions, unfavorable product mix, as well as production inefficiencies and direct incremental expenses related to COVID-19. Operating income was also impacted by approximately $45 million of net derivative gains in the fourth quarter of fiscal 2020 and approximately $70 million of net losses in the fourth quarter of 2019, in addition to approximately $50 million of decreased feed ingredient costs in the fourth quarter of fiscal 2020 as compared to the fourth quarter of fiscal 2019. For fiscal 2020, net derivative results and feed ingredient costs were relatively flat as compared to fiscal 2019. Operating income was further impacted by $34 million and $21 million in restructuring costs incurred in fiscal 2020 and fiscal 2019, respectively.
Prepared Foods – Sales volume increased 1.6%, or decreased 5.6% after removing the impact of an additional week, for fourth quarter of fiscal 2020, and decreased 1.9%, or decreased 3.7% after removing the impact of an additional week, for fiscal 2020 as growth in volume across the retail channel was offset by a reduction in the foodservice channel related to reduced demand and lower production throughput due to the impact of COVID-19 during portions of fiscal 2020. Average sales price increased in the fourth quarter and for fiscal 2020 due to favorable product mix associated with the surge in retail demand, and for fiscal 2020, the pass through of increased raw material costs. Operating income increased in the fourth quarter of fiscal 2020 due to favorable product mix associated with strong demand for retail products and the impact of an additional week, partially offset by the impacts of reduced foodservice sales. Operating income decreased in fiscal 2020 primarily due to increased operating costs, including a $105 million increase in net raw material costs and derivative losses, as well as production inefficiencies and direct incremental expenses related to COVID-19, partially offset by reduced promotional spend. Operating income was also impacted by $28 million and $18 million in restructuring costs incurred in fiscal 2020 and fiscal 2019, respectively. Additionally, operating income in the fourth quarter of fiscal 2019 was further impacted by a $41 million impairment from a planned divestiture of a business.

Outlook

For fiscal 2021, USDA indicates domestic protein production (beef, pork, chicken and turkey) should increase approximately 1% from fiscal 2020 levels. The following is a summary of the outlook for each of our segments, as well as an outlook for revenues, capital expenditures, net interest expense, liquidity, tax rate and dividends for fiscal 2021. On an adjusted basis, we anticipate the Beef and Pork segments will remain strong, although not at fiscal 2020 levels, and we believe the Chicken and Prepared Foods segments will likely strengthen in fiscal 2021 as compared to fiscal 2020.²

COVID-19 – We continue to proactively manage the company and its operations through this global pandemic. Given the nature of our business, demand for food and protein may shift amongst sales channels and experience disruptions, but over time we expect worldwide demand to continue to increase. We are experiencing multiple challenges related to the pandemic. These challenges are anticipated to increase our operating costs and negatively impact our volumes into fiscal 2021. We cannot currently predict the ultimate impact that COVID-19 will have on our short- and long-term demand, as it will depend on, among other things, the severity and duration of the COVID-19 crisis. Our liquidity is expected to be adequate to continue to run our operations and meet our obligations as they become due.
Beef – USDA projects domestic production will increase approximately 2% in fiscal 2021 as compared to a COVID-19 impacted fiscal 2020. For fiscal 2021, we also expect sufficient supplies in regions where we operate our plants.
Pork – USDA projects relatively flat to slightly increased domestic production in fiscal 2021 as compared to a COVID-19 impacted fiscal 2020.
Chicken – USDA projects a relatively flat to slightly increased outlook for chicken production in fiscal 2021 as compared to fiscal 2020.
Prepared Foods – We will continue to be responsive to changes in consumer behavior as a result of the impacts of COVID-19 as we move into fiscal 2021.
International/Other – We expect improved results from our foreign operations in fiscal 2021.
Revenue – We expect sales to be $42 billion to $44 billion for fiscal 2021.
Capital Expenditures – For fiscal 2021, we expect capital expenditures to be approximately $1.2 billion to $1.4 billion. Capital expenditures include spending for capacity expansion, growth, safety, animal well-being, infrastructure replacements and upgrades, and operational improvements that are expected to result in production and labor efficiencies, yield improvements and sales channel flexibility.
Net Interest Expense – We expect net interest expense to approximate $440 million for fiscal 2021.
Liquidity – We expect total liquidity, which was approximately $3.2 billion at October 3, 2020, to remain above our minimum liquidity target of $1.0 billion.
Tax Rate – We currently expect our adjusted effective tax rate to be around 23% in fiscal 2021.
Dividends – Effective November 13, 2020, the Board of Directors increased the quarterly dividend previously declared on August 6, 2020, to $0.445 per share on our Class A common stock and $0.4005 per share on our Class B common stock. The increased quarterly dividend is payable on December 15, 2020, to shareholders of record at the close of business on December 1, 2020. The Board also declared a quarterly dividend of $0.445 per share on our Class A common stock and $0.4005 per share on our Class B common stock, payable on March 15, 2021, to shareholders of record at the close of business on March 1, 2021. We anticipate the remaining quarterly dividends in fiscal 2021 will be $0.445 and $0.4005 per share of our Class A and Class B stock, respectively. This results in an annual dividend rate in fiscal 2021 of $1.78 for Class A shares and $1.602 for Class B shares, or a 6% increase compared to the fiscal 2020 annual dividend rate.

² The Company is not able to reconcile its full-year fiscal 2021 adjusted results to its fiscal 2021 projected GAAP results because certain information necessary to calculate such measure on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Therefore, because of the uncertainty and variability of the nature of the amount of future adjustments, which could be significant, the Company is unable to provide a reconciliation of this measure without unreasonable effort. Adjusted measures should not be considered a substitute for operating margin or any other measures of financial performance reported in accordance with GAAP. Investors should rely primarily on the Company’s GAAP results and use non-GAAP financial measures only supplementally in making investment decisions.

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)

	Three Months Ended						Twelve Months Ended
	October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019
Sales	$	11,460		$	10,884		$	43,185		$	42,405
Cost of Sales	9,850			9,745			37,801			37,383
Gross Profit	1,610			1,139			5,384			5,022

Selling, General and Administrative	598			535			2,270			2,195
Operating Income	1,012			604			3,114			2,827
Other (Income) Expense:
Interest income	(1		)	(2		)	(10		)	(11		)
Interest expense	124			123			485			462
Other, net	2			17			(131		)	(55		)
Total Other (Income) Expense	125			138			344			396
Income before Income Taxes	887			466			2,770			2,431
Income Tax Expense	192			94			620			396
Net Income	695			372			2,150			2,035
Less: Net Income Attributable to Noncontrolling Interests	3			3			10			13
Net Income Attributable to Tyson	$	692		$	369		$	2,140		$	2,022
Weighted Average Shares Outstanding:
Class A Basic	292			293			293			293
Class B Basic	70			70			70			70
Diluted	364			367			365			366
Net Income Per Share Attributable to Tyson:
Class A Basic	$	1.95		$	1.03		$	6.02		$	5.67
Class B Basic	$	1.76		$	0.93		$	5.41		$	5.10
Diluted	$	1.90		$	1.01		$	5.86		$	5.52
Dividends Declared Per Share:
Class A	$	0.420		$	0.375		$	1.725		$	1.575
Class B	$	0.378		$	0.338		$	1.553		$	1.418

Sales Growth	5.3		%				1.8		%
Margins: (Percent of Sales)
Gross Profit	14.0		%	10.5		%	12.5		%	11.8		%
Operating Income	8.8		%	5.5		%	7.2		%	6.7		%
Net Income Attributable to Tyson	6.0		%	3.4		%	5.0		%	4.8		%
Effective Tax Rate	21.6		%	20.2		%	22.4		%	16.3		%

TYSON FOODS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In millions)

(Unaudited)

	October 3, 2020		September 28, 2019
Assets
Current Assets:
Cash and cash equivalents	$	1,420	$	484
Accounts receivable, net	1,952		2,173
Inventories	4,144		4,108
Other current assets	367		404
Total Current Assets	7,883		7,169
Net Property, Plant and Equipment	7,596		7,282
Goodwill	10,899		10,844
Intangible Assets, net	6,774		7,037
Other Assets	1,589		765
Total Assets	$	34,741	$	33,097

Liabilities and Shareholders’ Equity
Current Liabilities:
Current debt	$	548	$	2,102
Accounts payable	1,876		1,926
Other current liabilities	1,810		1,485
Total Current Liabilities	4,234		5,513
Long-Term Debt	10,791		9,830
Deferred Income Taxes	2,391		2,356
Other Liabilities	1,728		1,172

Total Tyson Shareholders’ Equity	15,465		14,082
Noncontrolling Interests	132		144
Total Shareholders’ Equity	15,597		14,226

Total Liabilities and Shareholders’ Equity	$	34,741	$	33,097

TYSON FOODS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Twelve Months Ended
	October 3, 2020			September 28, 2019
Cash Flows From Operating Activities:
Net income	$	2,150		$	2,035
Depreciation and amortization	1,192			1,098
Deferred income taxes	45			92
Gain on dispositions of businesses	—			(17		)
Impairment of assets	48			94
Stock-based compensation expense	89			77
Other, net	(124		)	(20		)
Net changes in operating assets and liabilities	474			(846		)
Cash Provided by Operating Activities	3,874			2,513

Cash Flows From Investing Activities:
Additions to property, plant and equipment	(1,199		)	(1,259		)
Purchases of marketable securities	(105		)	(64		)
Proceeds from sale of marketable securities	87			63
Acquisitions, net of cash acquired	—			(2,462		)
Proceeds from sale of business	29			170
Acquisition of equity investments	(183		)	—
Other, net	(52		)	88
Cash Used for Investing Activities	(1,423		)	(3,464		)

Cash Flows From Financing Activities:
Proceeds from issuance of debt	1,609			4,634
Payments on debt	(1,212		)	(3,208		)
Borrowings on revolving credit facility	1,210			1,135
Payments on revolving credit facility	(1,280		)	(1,065		)
Proceeds from issuance of commercial paper	14,272			17,722
Repayments of commercial paper	(15,271		)	(17,327		)
Purchases of Tyson Class A common stock	(207		)	(252		)
Dividends	(601		)	(537		)
Stock options exercised	30			99
Other, net	(18		)	(30		)
Cash (Used for) Provided by Financing Activities	(1,468		)	1,171
Effect of Exchange Rate Changes on Cash	(1		)	(6		)
Increase in Cash and Cash Equivalents and Restricted Cash	982			214
Cash and Cash Equivalents and Restricted Cash at Beginning of Year	484			270
Cash and Cash Equivalents and Restricted Cash at End of Period	1,466			484
Less: Restricted Cash at End of Period	46			—
Cash and Cash Equivalents at End of Period	$	1,420		$	484

TYSON FOODS, INC.

EBITDA Reconciliations

(In millions)

(Unaudited)

	Twelve Months Ended
	October 3, 2020			September 28, 2019

Net income	$	2,150		$	2,035
Less: Interest income	(10		)	(11		)
Add: Interest expense	485			462
Add: Income tax expense	620			396
Add: Depreciation	900			819
Add: Amortization (a)	278			267
EBITDA	$	4,423		$	3,968

Adjustments to EBITDA:
Add: Restructuring and related charges	75			41
Add: Beef production facility fire costs, net of insurance proceeds	1			31
Add/(Less): Loss/(Gain) from pension plan terminations	(116		)	15
Add: Keystone purchase accounting and acquisition related costs (b)	—			37
Add: Impairment associated with the divestiture of a business	—			41
Less: Gain on sale of investment	—			(55		)
Less: Impact of additional week (c)	(96		)	—
Total Adjusted EBITDA (52-week basis)	$	4,287		$	4,078

Total gross debt	$	11,339		$	11,932
Less: Cash and cash equivalents	(1,420		)	(484		)
Less: Short-term investments	—			(1		)
Total net debt	$	9,919		$	11,447

Ratio Calculations:
Gross debt/EBITDA	2.6x			3.0x
Net debt/EBITDA	2.2x			2.9x

Gross debt/Adjusted EBITDA	2.6x			2.9x
Net debt/Adjusted EBITDA	2.3x			2.8x

Excludes the amortization of debt issuance and debt discount expense of $14 million and $12 million for the twelve months ended October 3, 2020 and September 28, 2019, respectively, as it is included in interest expense.
Keystone acquisition and integration costs for fiscal year 2019 included $11 million of purchase accounting adjustments and $26 million of acquisition related costs.
The estimated impact to adjusted EBITDA of the additional week in fiscal 2020 was calculated as fourth quarter EBITDA (14-week basis) of $1,322 (which is comprised of fourth quarter 14-week basis net income of $695 million, less interest income of $1 million, plus interest expense of $124 million, plus income tax expense of $192 million, plus depreciation and amortization of $312 million which excludes the amortization of debt issuance and debt discount expense of $4 million for the three months ended October 3, 2020, as it is included in interest expense) plus fourth quarter restructuring and related charges of $23 million, divided by 14 weeks.

EBITDA is defined as net income before interest, income taxes, depreciation and amortization. Net debt to EBITDA (Adjusted EBITDA) represents the ratio of our debt, net of cash, cash equivalents and short-term investments, to EBITDA (and to Adjusted EBITDA). EBITDA, Adjusted EBITDA, net debt to EBITDA and net debt to Adjusted EBITDA are presented as supplemental financial measurements in the evaluation of our business. Adjusted EBITDA is a tool intended to assist our management and investors in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations on an ongoing basis.

We believe the presentation of these financial measures helps management and investors to assess our operating performance from period to period, including our ability to generate earnings sufficient to service our debt, enhances understanding of our financial performance and highlights operational trends. These measures are widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies; however, the measurements of EBITDA (and Adjusted EBITDA) and net debt to EBITDA (and to Adjusted EBITDA) may not be comparable to those of other companies, which may limit their usefulness as comparative measures. EBITDA (and Adjusted EBITDA) and net debt to EBITDA (and to Adjusted EBITDA) are not measures required by or calculated in accordance with generally accepted accounting principles (GAAP) and should not be considered as substitutes for net income or any other measure of financial performance reported in accordance with GAAP or as a measure of operating cash flow or liquidity. EBITDA (and Adjusted EBITDA) is a useful tool for assessing, but is not a reliable indicator of, our ability to generate cash to service our debt obligations because certain of the items added to net income to determine EBITDA (and Adjusted EBITDA) involve outlays of cash. As a result, actual cash available to service our debt obligations will be different from EBITDA (and Adjusted EBITDA). Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions.

TYSON FOODS, INC.

EPS Reconciliations

(In millions, except per share data)

(Unaudited)

	Fourth Quarter										Twelve Months Ended
	Pretax Impact					EPS Impact					Pretax Impact						EPS Impact
	2020			2019		2020			2019		2020			2019			2020			2019

Reported net income per share attributable to Tyson						$	1.90		$	1.01							$	5.86		$	5.52

Add: Restructuring and related charges	$	23		$	10	0.05			0.02		$	75		$	41		0.16			0.08

Add: Beef production facility fire costs, net of insurance proceeds	$	—		$	31	—			0.06		$	1		$	31		—			0.06

Less: Gain on sale of investment	$	—		$	—	—			—		$	—		$	(55	)	—			(0.11		)

Less: Recognition of previously unrecognized tax benefit	$	—		$	—	—			—		$	—		$	—		—			(0.29		)

Add: Keystone purchase accounting and acquisition related costs (a)	$	—		$	—	—			—		$	—		$	37		—			0.08

Add/(Less): Loss/(Gain) from pension plan terminations	$	—		$	15	—			0.03		$	(116	)	$	15		(0.24		)	0.03

Add: Impairment associated with the divestiture of a business	$	—		$	41	—			0.09		$	—		$	41		—			0.09

Less: Impact of additional week (b)	$	(65	)	$	—	(0.14		)	—		$	(65	)	$	—		(0.14		)	—

Adjusted net income per share attributable to Tyson						$	1.81		$	1.21							$	5.64		$	5.46

Keystone purchase accounting and acquisition related costs for the twelve months of fiscal 2019 included an $11 million purchase accounting adjustment for the fair value step-up of inventory and $26 million of acquisition related costs.
The estimated Pretax Impact of the additional week in the fourth quarter and twelve months of fiscal 2020 was calculated by dividing the sum of the fourth quarter’s Adjusted operating income (loss) prior to adjustment for additional week (refer to Operating Income Reconciliation) net of Total Other (Income) Expense by 14 weeks.

Adjusted net income per share attributable to Tyson (Adjusted EPS) is presented as a supplementary measure of our financial performance that is not required by, or presented in accordance with, GAAP. We use Adjusted EPS as an internal performance measurement and as one criterion for evaluating our performance relative to that of our peers. We believe Adjusted EPS is meaningful to our investors to enhance their understanding of our financial performance and is frequently used by securities analysts, investors and other interested parties to compare our performance with the performance of other companies that report Adjusted EPS. Further, we believe that Adjusted EPS is a useful measure because it improves comparability of results of operations from period to period. Adjusted EPS should not be considered a substitute for net income per share attributable to Tyson or any other measure of financial performance reported in accordance with GAAP. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Our calculation of Adjusted EPS may not be comparable to similarly titled measures reported by other companies.

TYSON FOODS, INC.

Operating Income Reconciliation

(In millions)

(Unaudited)

Adjusted Operating Income (Loss)
(for the fourth quarter ended October 3, 2020)
	Beef			Pork			Chicken			Prepared Foods			International /Other			Total
Reported operating income (loss)	$	516		$	174		$	86		$	249		$	(13	)	$	1,012
Add: Restructuring and related charges	4			1			12			5			1			23
Adjusted operating income (loss) prior to adjustment for additional week	$	520		$	175		$	98		$	254		$	(12	)	$	1,035
Less: Estimated impact of additional week (a)	(37		)	(13		)	(7		)	(18		)	1			(74		)
Adjusted operating income (loss)	$	483		$	162		$	91		$	236		$	(11	)	$	961

Adjusted Operating Income
(for fourth quarter ended September 28, 2019)
	Beef		Pork		Chicken		Prepared Foods		International /Other		Total
Reported operating income	$	376	$	26	$	90	$	104	$	8	$	604
Add: Restructuring and related charges	—		1		5		4		—		10
Add: Beef production facility fire costs	31		—		—		—		—		31
Add: Impairment associated with the planned divestiture of a business	—		—		—		41		—		41
Adjusted operating income	$	407	$	27	$	95	$	149	$	8	$	686

Adjusted Operating Income (Loss)
(for the twelve months ended October 3, 2020)
	Beef			Pork			Chicken			Prepared Foods			International /Other			Total
Reported operating income (loss)	$	1,686		$	565		$	122		$	743		$	(2	)	$	3,114
Add: Restructuring and related charges	9			3			33			27			3			75
Add: Beef production facility fire costs, net of insurance proceeds	1			—			—			—			—			1
Adjusted operating income prior to adjustment for additional week	$	1,696		$	568		$	155		$	770		$	1		$	3,190
Less: Estimated impact of additional week (a)	(37		)	(13		)	(7		)	(18		)	1			(74		)
Adjusted operating income	$	1,659		$	555		$	148		$	752		$	2		$	3,116

(a)The estimated impact of the additional week in the fourth quarter and twelve months of fiscal 2020 was calculated by dividing the fourth quarter’s Adjusted operating income (loss) prior to adjustment for additional week by 14 weeks.

Adjusted Operating Income (Loss)
(for the twelve months ended September 28, 2019)
	Beef		Pork		Chicken		Prepared Foods		International /Other			Total
Reported operating income (loss)	$	1,107	$	263	$	621	$	843	$	(7	)	$	2,827
Add: Restructuring and related charges	1		1		21		18		—			41
Add: Keystone purchase accounting and acquisition related costs	—		—		13		—		24			37
Add: Beef production plant fire costs	31		—		—		—		—			31
Add: Impairment associated with the planned divestiture of a business	—		—		—		41		—			41
Adjusted operating income	$	1,139	$	264	$	655	$	902	$	17		$	2,977

Adjusted operating income is presented as a supplementary measure of our operating performance that is not required by, or presented in accordance with, GAAP. We use adjusted operating income as an internal performance measurement and as one criterion for evaluating our performance relative to that of our peers. We believe adjusted operating income is meaningful to our investors to enhance their understanding of our operating performance and is frequently used by securities analysts, investors and other interested parties to compare our performance with the performance of other companies that report adjusted operating income. Further, we believe that adjusted operating income is a useful measure because it improves comparability of results of operations from period to period. Adjusted operating income should not be considered as a substitute for operating income or any other measure of operating performance reported in accordance with GAAP. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Our calculation of adjusted operating income may not be comparable to similarly titled measures reported by other companies.

TYSON FOODS, INC.

Sales Reconciliations

(In millions)

(Unaudited)

Adjusted Sales (Non-GAAP) Reconciliation
(for the fourth quarter and twelve months ended October 3, 2020)
	Fourth Quarter									Twelve Months Ended
	Reported Sales			Impact of additional week (a)			Adjusted Sales			Reported Sales			Impact of additional week (a)			Adjusted Sales
Beef	$	4,272		$	(306	)	$	3,966		$	15,742		$	(306	)	$	15,436
Pork	1,368			(98		)	1,270			5,128			(98		)	5,030
Chicken	3,433			(245		)	3,188			13,234			(245		)	12,989
Prepared Foods	2,277			(163		)	2,114			8,532			(163		)	8,369
International/Other	491			(35		)	456			1,856			(35		)	1,821
Intersegment Sales	(381		)	28			(353		)	(1,307		)	28			(1,279		)
Total	$	11,460		$	(819	)	$	10,641		$	43,185		$	(819	)	$	42,366

(a) The estimated impact of the additional week in the fourth quarter and twelve months of fiscal 2020 was calculated by dividing the fourth quarter’s reported sales by 14 weeks.

Adjusted sales is presented as a supplementary measure of our financial performance that is not required by, or presented in accordance with, GAAP. We use adjusted sales as an internal performance measurement and as one criterion for evaluating our performance relative to that of our peers. We believe adjusted sales is meaningful to our investors to enhance their understanding of our financial performance and is frequently used by securities analysts, investors and other interested parties to compare our performance with the performance of other companies that report adjusted sales. Further, we believe that adjusted sales is a useful measure because it improves comparability of results of operations from period to period when a fiscal year results in a 53-week accounting cycle. Adjusted sales should not be considered as a substitute for sales or any other measure of financial performance reported in accordance with GAAP. Investors should rely primarily on our GAAP results and use non-GAAP financial measures only supplementally in making investment decisions. Our calculation of adjusted sales may not be comparable to similarly titled measures reported by other companies.

Tyson Foods, Inc. (NYSE: TSN) is one of the world’s largest food companies and a recognized leader in protein. Founded in 1935 by John W. Tyson and grown under three generations of family leadership, the company has a broad portfolio of products and brands like Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, Aidells®, ibp® and State Fair®. Tyson Foods innovates continually to make protein more sustainable, tailor food for everywhere it’s available and raise the world’s expectations for how much good food can do. Headquartered in Springdale, Arkansas, the company had 139,000 team members at October 3, 2020. Through its Core Values, Tyson Foods strives to operate with integrity, create value for its shareholders, customers, communities and team members and serve as a steward of the animals, land and environment entrusted to it. Visit www.tysonfoods.com.

A conference call to discuss the Company’s financial results will be held at 9 a.m. Eastern Monday, November 16, 2020. We encourage participants to pre-register for the conference call using the following link: https://dpregister.com/sreg/10149135/db42c360cc. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call has started. Those without internet access or who are unable to pre-register may dial-in by calling toll free 1-844-890-1795 or international toll 1-412-717-9589.

To listen to the live webcast, an archived replay or to view the accompanying slides, go to the company’s investor website at http://ir.tyson.com. The webcast also can be accessed by using the direct link https://event.on24.com/wcc/r/2625854/02A14D145C84899874277F9AD1565916. A telephone replay of the call will be available until December 16, 2020, toll free at 1-877-344-7529, international toll 1-412-317-0088 or Canada toll free 855-669-9658. The replay access code is 10149135. Financial information, such as this news release, as well as other supplemental data, can be accessed from the Company’s web site at http://ir.tyson.com. To download Tyson Foods’ free investor relations app, which offers access to SEC filings, news releases, transcripts, webcasts and presentations, please visit the App Store for iPhone and iPad or Google Play for Android mobile devices.

Forward-Looking Statements

Certain information in this report constitutes forward-looking statements. Such forward-looking statements include, but are not limited to, current views and estimates of our outlook for fiscal 2021, other future economic circumstances, industry conditions in domestic and international markets, our performance and financial results (e.g., debt levels, return on invested capital, value-added product growth, capital expenditures, tax rates, access to foreign markets and dividend policy). These forward-looking statements are subject to a number of factors and uncertainties that could cause our actual results and experiences to differ materially from anticipated results and expectations expressed in such forward-looking statements. We wish to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Among the factors that may cause actual results and experiences to differ from anticipated results and expectations expressed in such forward-looking statements are the following: (i) the outbreak of the COVID-19 global pandemic and associated responses has had, and is expected to continue to have, an adverse impact on our business and operations; (ii) our ability to make effective acquisitions or joint ventures and successfully integrate newly acquired businesses into existing operations; (iii) the effectiveness of our financial fitness program; (iv) the implementation of an enterprise resource planning system; (v) access to foreign markets together with foreign economic conditions, including currency fluctuations, import/export restrictions and foreign politics; (vi) cyber incidents, security breaches or other disruptions of our information technology systems; (vii) risks associated with our failure to consummate favorable acquisition transactions or integrate certain acquisitions’ operations; (viii) the Tyson Limited Partnership’s ability to exercise significant control over the Company; (ix) fluctuations in the cost and availability of inputs and raw materials, such as live cattle, live swine, feed grains (including corn and soybean meal) and energy; (x) market conditions for finished products, including competition from other global and domestic food processors, supply and pricing of competing products and alternative proteins and demand for alternative proteins; (xi) outbreak of a livestock disease (such as African swine fever (ASF), avian influenza (AI) or bovine spongiform encephalopathy (BSE)), which could have an adverse effect on livestock we own, the availability of livestock we purchase, consumer perception of certain protein products or our ability to access certain domestic and foreign markets; (xii) changes in consumer preference and diets and our ability to identify and react to consumer trends; (xiii) effectiveness of advertising and marketing programs; (xiv) significant marketing plan changes by large customers or loss of one or more large customers; (xv) our ability to leverage brand value propositions; (xvi) changes in availability and relative costs of labor and contract farmers and our ability to maintain good relationships with team members, labor unions, contract farmers and independent producers providing us livestock; (xvii) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (xviii) compliance with and changes to regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws, agricultural laws and occupational, health and safety laws; (xix) adverse results from litigation; (xx) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xxi) impairment in the carrying value of our goodwill or indefinite life intangible assets; (xxii) our participation in multiemployer pension plans; (xxiii) volatility in capital markets or interest rates; (xxiv) risks associated with our commodity purchasing activities; (xxv) the effect of, or changes in, general economic conditions; (xxvi) impacts on our operations caused by factors and forces beyond our control, such as natural disasters, fire, bioterrorism, pandemics or extreme weather; (xxvii) failure to maximize or assert our intellectual property rights; (xxviii) effects related to changes in tax rates, valuation of deferred tax assets and liabilities, or tax laws and their interpretation; and (xxix) those factors listed under Item 1A. “Risk Factors” in this report and Part I, Item 1A. “Risk Factors” included in our Annual Report filed on Form 10-K for the year ended October 3, 2020.

Media Contact: Gary Mickelson, 479-290-6111
Investor Contact: Jon Kathol, 479-290-4235

Source: Tyson Foods, Inc.
Category: IR, Newsroom

November 16, 2020 7:38 am

Ansys Executives to Present at Upcoming Investor Conferences

PITTSBURGH, Nov. 16, 2020 (GLOBE NEWSWIRE) — ANSYS, Inc. (NASDAQ: ANSS), announced today that it will have executives presenting virtually at two upcoming investor conferences.

Maria Shields, Senior Vice President, CFO will participate in a moderated discussion at the RBC Capital Markets 2020 Technology, Internet, Media and Telecommunications Conference on November 18, 2020 at 1:20 p.m. ET.

Ajei Gopal, President & CEO of ANSYS, Inc. will participate in a moderated discussion at the Nasdaq 43rd Investor Conference on December 2, 2020 at 8:30 a.m. ET.

A live audio webcast and archive of the presentations will be available at: https://investors.ansys.com/events-and-presentations/events-calendar/default.aspx

/
Forward-Looking Statements

Statements made on the webcast are as of the date of the webcast and Ansys does not assume any obligation to update any statements made live or the archived webcast. Matters discussed may include forward-looking statements about Ansys’s anticipated financial results and growth, as well as about the development of products and markets, which are based on current plans and assumptions. Actual results in future periods may differ materially from those expectations due to a number of risks and uncertainties, including those described from time to time in reports filed by Ansys with the U.S. Securities and Exchange Commission, including Ansys’s most recent reports on Form 10-K and 10-Q.

/
About Ansys

If you’ve ever seen a rocket launch, flown on an airplane, driven a car, used a computer, touched a mobile device, crossed a bridge or put on wearable technology, chances are you’ve used a product where Ansys software played a critical role in its creation. Ansys is the global leader in engineering simulation. Through our strategy of Pervasive Engineering Simulation, we help the world’s most innovative companies deliver radically better products to their customers. By offering the best and broadest portfolio of engineering simulation software, we help them solve the most complex design challenges and create products limited only by imagination. Founded in 1970, Ansys is headquartered south of Pittsburgh, Pennsylvania, U.S.A. Visit www.ansys.com for more information.

Ansys and any and all ANSYS, Inc. brand, product, service and feature names, logos and slogans are registered trademarks or trademarks of ANSYS, Inc. or its subsidiaries in the United States or other countries. All other brand, product, service and feature names or trademarks are the property of their respective owners.

ANSS–F

/ Contacts
Investors	Annette N. Arribas, IRC	Media	Mary Kate Joyce
	724.820.3700		724.820.4368
	[email protected]		[email protected]

November 16, 2020 7:35 am

GFL Environmental Inc. Announces Proposed Private Offering of Senior Notes

PR Newswire

VAUGHAN, ON, Nov. 16, 2020 /PRNewswire/ – GFL Environmental Inc. (NYSE: GFL), (TSX: GFL) (“GFL”) today announced that it is planning to commence, subject to market and other conditions, a private offering of US$400.0 million in aggregate principal amount of senior notes due 2028 (the “Notes”). GFL intends to use the net proceeds from the offering of the Notes (the “Notes Offering”), together with borrowings under GFL’s revolving credit facility, to redeem all of GFL’s outstanding US$405,000,000 aggregate principal amount of 7.000% Senior Notes due 2026 (the “2026 Unsecured Notes”) and to pay related fees, premiums and accrued and unpaid interest on the 2026 Unsecured Notes.

The Notes being offered by GFL in the Notes Offering have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Notes are being offered only to qualified institutional buyers under Rule 144A and outside the United States in compliance with Regulation S under the Securities Act. In Canada, the Notes are to be offered and sold on a private placement basis in certain provinces of Canada.

This release shall not constitute an offer to sell or a solicitation of an offer to buy any security, nor shall there be any offer, solicitation or sale of any security in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful.

About GFL

GFL, headquartered in Vaughan, Ontario, is the fourth largest diversified environmental services company in North America, providing a comprehensive line of non-hazardous solid waste management, infrastructure & soil remediation and liquid waste management services through its platform of facilities throughout Canada and in 27 states in the United States. Across its organization, GFL has a workforce of more than 13,000 employees and provides its broad range of environmental services to more than 135,000 commercial and industrial customers and its solid waste collection services to more than 4 million households.

Forward-Looking Information

This release includes certain “forward-looking statements”, including statements relating to the potential for an offering and issuance of the Notes by GFL and the use of proceeds therefrom. In some cases, but not necessarily in all cases, forward-looking statements can be identified by the use of forward looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management’s current beliefs, expectations, estimates and projections regarding future events and operating performance. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by GFL as of the date of this release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include, but are not limited to, the “Risk Factors” section of the Company’s final prospectus relating to its initial public offering dated March 2, 2020 and the Company’s other periodic filings with the SEC and the securities commissions or similar regulatory authorities in Canada. These factors are not intended to represent a complete list of the factors that could affect GFL. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. GFL undertakes no obligation to publicly update any forward-looking statement, except as required by applicable securities laws.

For more information, contact:

Patrick Dovigi

Founder and CEO
905-326-0101
[email protected]

View original content to download multimedia:http://www.prnewswire.com/news-releases/gfl-environmental-inc-announces-proposed-private-offering-of-senior-notes-301173562.html

SOURCE GFL Environmental Inc.

November 16, 2020 7:34 am

Dundee Precious Metals Announces Investment in Velocity Minerals Ltd.

TORONTO, Nov. 16, 2020 (GLOBE NEWSWIRE) — Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or “the Company”) today announced that it has entered into an investment agreement (the “Agreement”) with Velocity Minerals Ltd. (TSXV: VLC) (“Velocity”) to invest up to C$7 million in Velocity on a private placement basis. DPM is expected to purchase up to 14 million common shares of Velocity at a price of C$0.50 per share. Upon closing the transaction, DPM is expected to own approximately 9.99% of Velocity’s issued and outstanding common shares on a non-diluted basis.

Velocity is a gold exploration and development company focused on southeastern Bulgaria. Velocity has a 70% interest in the Tintyava prospecting licence, which includes the Rozino gold project (“Rozino”), located approximately 40 kilometres by road from DPM’s Ada Tepe mine. Velocity’s 70% interest in Rozino is held through a joint venture arrangement with a local third party. On October 15, 2020, Velocity filed a pre-feasibility technical report on Rozino which contained a probable mineral reserve estimate (effective as at August 30, 2020) at a 0.5 g/t gold cut-off grade of 11.8 Mt at 1.22 g/t gold for 465,000 ounces.¹ Velocity also has option agreements to earn a 70% interest in the Obichnik and Makedontsi gold projects; and an option agreement to earn a 100% interest in the Iglika project.

“We are pleased to be investing in further gold exploration in southeastern Bulgaria through our equity financing in Velocity,” said David Rae, President and CEO of Dundee Precious Metals. “Given our strong presence and capabilities in the region, we believe that we are uniquely positioned to support Velocity as a strategic shareholder.”

The Agreement contains certain rights and restrictions customary for these types of transactions. Subject to approval of the TSX Venture Exchange and other closing conditions, the transaction is expected to close on or about November 24, 2020. All securities issued in connection with the transaction will be subject to a hold period of four months and one day in Canada.

About Dundee Precious Metals Inc.

Dundee Precious Metals Inc. is a Canadian based, international gold mining company engaged in the acquisition of mineral properties, exploration, development, mining and processing of precious metals. The Company’s operating assets include the Chelopech operation, which produces a gold-copper concentrate containing gold, copper and silver and a pyrite concentrate containing gold, located east of Sofia, Bulgaria; the Ada Tepe operation, which produces a gold concentrate containing gold and silver, located in southern Bulgaria; and the Tsumeb smelter, a complex copper concentrate processing facility located in Namibia. DPM also holds interests in a number of developing gold and exploration properties located in Canada, Serbia and Ecuador, including its 9.4% interest in Sabina Gold & Silver Corp. and its 19.4% interest in INV Metals Inc.

For further information please contact:

David Rae

President and Chief Executive Officer
Tel: (416) 365-5092
[email protected]

Jennifer Cameron

Director, Investor Relations
Tel: (416) 219-6177
[email protected]

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward looking statements” or “forward looking information” (collectively, “Forward Looking Statements”) that involve a number of risks and uncertainties. Forward Looking Statements are statements that are not historical facts and are generally, but not always, identified by the use of forward looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “outlook”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or that state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms or similar expressions. The Forward Looking Statements in this news release relate to, among other things: the closing of the transaction, the expected ownership level of the Company in Velocity following the closing of the transaction, the future support of Velocity and Velocity’s mineral reserve estimate. Forward Looking Statements are based on certain key assumptions and the opinions and estimates of management, as of the date such statements are made, and they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any other future results, performance or achievements expressed or implied by the Forward Looking Statements. Such risks include, without limitation, there being no assurance that the transaction will be completed, uncertainties inherent to mineral reserve estimates, risks and uncertainties with respect to conducting business in Bulgaria and other risks identified by the Company in its continuous disclosure documents filed at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in Forward Looking Statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that Forward Looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company’s Forward Looking Statements reflect current expectations regarding future events and speak only as of the date hereof. Unless required by securities laws, the Company undertakes no obligation to update Forward Looking Statements if circumstances or management’s estimates or opinions should change. Accordingly, readers are cautioned not to place undue reliance on Forward Looking Statements.

____________________

¹ Source: Rozino Gold Project Pre-Feasibility Technical Report, dated October 14, 2020, available on Velocity’s profile at www.sedar.com, which includes additional information, including assumptions and parameters relating to the pre-feasibility study and the mineral reserve estimate.

November 16, 2020 7:34 am

Dicerna Announces Positive Updated Data From Phase 1 Trial of RG6346 for Treatment of Chronic Hepatitis B Virus (HBV) Infection at AASLD’s The Liver Meeting® Digital Experience™ 2020

Dicerna Announces Positive Updated Data From Phase 1 Trial of RG6346 for Treatment of Chronic Hepatitis B Virus (HBV) Infection at AASLD’s The Liver Meeting^® Digital Experience™ 2020

– Data Presentations Show Treatment With Up to Four Monthly Doses of RG6346 Resulted in Substantial and Durable Reductions in HBsAg Levels Lasting Up to One Year After Last Dose –

– RG6346 Was Shown to be Safe and Well Tolerated in This Trial –

LEXINGTON, Mass.–(BUSINESS WIRE)–Dicerna Pharmaceuticals, Inc. (Nasdaq: DRNA) (the “Company” or “Dicerna”), a leading developer of investigational ribonucleic acid interference (RNAi) therapeutics, today announced positive updated data from its Phase 1 double-blind, placebo-controlled, proof-of-concept trial of RG6346, an investigational GalXC™ RNAi therapeutic that Dicerna is developing in collaboration with Roche for the treatment of chronic hepatitis B virus (HBV) infection. The data, presented in a late-breaker poster and oral session at The Liver Meeting^®Digital Experience™ 2020 hosted by the American Association for the Study of Liver Diseases (AASLD), expand upon the interim results presented by the Company in August 2020 and demonstrate that four monthly doses of RG6346 treatment resulted in substantial and durable reductions in biomarkers of HBV disease activity as measured by reductions in hepatitis B surface antigen (HBsAg) levels lasting up to one year following the last dose. RG6346 was also shown to have a favorable safety and tolerability profile in the trial.

In trial participants who were treated with four monthly doses of RG6346 added to nucleos(t)ide (NUC) antiviral therapy (Group C), 11 of 12 (92%) had mean HBsAg reductions from baseline greater than 1.0 log₁₀ IU/mL by Day 112 (one month after last dose). Seven of the 12 participants (58%) also achieved HBsAg levels below 100 IU/mL – a level that is associated with a reduced risk of progression to cirrhosis and hepatocellular carcinoma. Durability of HBsAg reductions was observed up to Day 448 (one year after the last dose). Among participants eligible to continue in long-term follow-up after the dosing period in the longest-observed cohort (1.5 mg/kg; n=3), the mean reduction in HBsAg from baseline was 1.40 log₁₀ IU/mL at Day 448; one of these participants maintained greater than a 2.0 log₁₀ IU/mL reduction in HBsAg level from baseline at Day 448.

“We are pleased by the magnitude and sustainability of HBsAg suppression with RG6346 seen in our latest Phase 1 results, lasting up to one year after the last dose administered,” said Shreeram Aradhye, M.D., Executive Vice President and Chief Medical Officer at Dicerna. “RNAi is a modality that holds significant promise in HBsAg suppression, and the results we have seen thus far with RG6346 are very encouraging, suggesting it could be a strong foundation for a combination therapy approach with the potential to achieve functional cures in people with chronic HBV infection.”

Additional data highlights from Group C participants treated with RG6346 plus NUC therapy (data cutoff October 2020) included:

75% (9 of 12) experienced HBsAg reductions of ≥1.5 log₁₀ IU/mL.
At Day 112, the mean reduction in HBsAg was 1.39 (SE 0.19) log₁₀ IU/mL for the 1.5 mg/kg cohort (n=4); 1.80 (SE 0.28) log₁₀ IU/mL for the 3.0 mg/kg cohort (n=4); and 1.64 (SE 0.30) log₁₀ IU/mL for the 6.0 mg/kg cohort (n=4).
The maximum HBsAg reduction from baseline was 2.7 log₁₀ IU/mL in a participant given 3.0 mg/kg of RG6346.
83% (10 of 12) entered conditional follow-up. Participants were eligible to enter the conditional follow-up period if they had HBsAg reductions from baseline of ≥1.0 log₁₀ IU/mL at the end of the treatment period.
67% (8 of 12) entered conditional follow-up and had ≥1.0 log₁₀ IU/mL HBsAg reduction from baseline at the last observed time point, which ranged from Day 140 to Day 448.
Similar mean maximum HBsAg log₁₀ IU/mL reductions were observed independent of hepatitis B e-antigen status (HBeAg levels are an indicator of active HBV replication and high infectivity).

In three of six NUC-naïve participants treated with a single 3.0 mg/kg dose of RG6346 (Group B), transient alanine aminotransferase (ALT) elevations, or flares (defined in the study protocol as more than three times baseline or post-baseline nadir value and more than seven times the upper limit of normal), were observed during the treatment period. These were associated with concomitant viral marker reductions and preserved liver function, suggesting beneficial treatment-induced immune-mediated responses to HBV. No protocol-defined ALT flares were observed in Group C (NUC-suppressed) participants, most likely reflecting therapeutic NUC suppression and further demonstrating RG6346 safety in combination therapy for HBV.

No serious adverse events (SAEs) were reported for participants treated with RG6346, and there were no dose-limiting toxicities or safety-related discontinuations. The most commonly reported adverse events were mild or moderate injection-site events. There were no dose-exposure or regimen-dependent increases in frequency or severity of adverse events, safety lab values, electrocardiogram readings or vital signs.

“The data presented show for the first time the depth of HBsAg reduction achieved by all treated patients during the full RG6346 treatment period, as well as post-dose duration of HBsAg knockdown lasting up to one year,” commented Man-Fung Yuen, D.Sc., M.D., Ph.D., Chief of the Division of Gastroenterology & Hepatology and Deputy Head of the Department of Medicine at Queen Mary Hospital at The University of Hong Kong, and investigator in the Phase 1 proof-of-concept trial. “The substantial and durable HBsAg knockdown seen to date in this trial, together with evidence suggestive of beneficial ALT flare immune responses in participants naïve to antiviral therapy, demonstrate RG6346’s significant potential as a viable RNAi therapy for the treatment of chronic HBV infection. With supportive safety and tolerability data, I am encouraged by the potential for this investigational therapy to induce functional cures in patients as a part of a combination treatment regimen.”

“We continue to be very encouraged by results seen with RG6346,” said John Young, Global Head of Infectious Diseases at Roche Pharma Early Research & Development. “The level and duration of HBV surface antigen reduction with RG6346 treatment, as well as decreases in viral DNA, suggest the potential for strong synergy as part of a combination regimen for HBV. We look forward to the further characterization of RG6346 as part of a combination therapeutic approach in a planned Phase 2 trial.”

The results of this Phase 1 trial will be presented live on Nov. 16, 2020 at 2:20 p.m. ET during the Late-Breaking Oral Session 2 by Dr. Yuen. The poster and slides will also be made available on the Events & Presentations page of Dicerna’s corporate website after their presentation at the conference.

About the RG6346 Phase 1 Proof-of-Concept Trial

The RG6346 Phase 1 proof-of-concept trial comprises three groups of adult participants: Group A, composed of 30 healthy volunteers who received single RG6346 doses up to 12.0 mg/kg (completed 2019); Group B, composed of nine participants who were newly diagnosed with chronic HBV and naive to any NUC antiviral therapy, randomized 5:3¹ to a single 3.0 mg/kg dose of RG6346 or placebo, respectively (completed early 2020); and Group C, composed of 18 participants who were diagnosed with chronic HBV and actively receiving NUC therapy, randomized 2:1 to four monthly doses of 1.5, 3.0 or 6.0 mg/kg of RG6346 or placebo, respectively. The last participant visit in the double-blind period up to Day 112 for Group C occurred in October 2020. Participants in Groups B and C were eligible to enter an extended follow-up observation period if they achieved an HBsAg reduction from baseline of ≥1.0 log₁₀ IU/mL at the end of the treatment period (12 weeks/85 days for Group B; 16 weeks/112 days for Group C).

About Chronic Hepatitis B Virus (HBV) Infection

Hepatitis B virus (HBV) is the world’s most common serious liver infection and affects an estimated 292 million people worldwide.² According to the Hepatitis B Foundation, 30 million people become newly infected with HBV each year, and it is estimated that more than 880,000 people die annually from hepatitis B and related complications such as liver cancer.³

About RG6346

RG6346 is an investigational GalXC™ RNAi therapeutic candidate in development in collaboration with Roche for the treatment of chronic hepatitis B virus (HBV) infection. Dicerna is currently conducting a Phase 1 proof-of-concept trial of RG6346 in adult patients with non-cirrhotic chronic HBV infection. Current therapies for HBV, such as nucleos(t)ide analogs, can provide long-term viral suppression if taken continuously, but they rarely lead to long-term functional cures, as measured by the clearance of HBV surface antigen (HBsAg) and sustained HBV deoxyribonucleic acid (DNA) suppression in patient plasma or blood. By contrast, RG6346 is designed to employ RNAi to knock down selectively specific genes involved in the creation of HBV messenger RNA (mRNA) and the entry of the virus into liver cells. Preclinical data have demonstrated greater than 99.9% reduction in circulating HBsAg, as observed in mouse models of HBV infection. Unlike current therapies that typically provide long-term suppression of the virus, we believe RG6346 has the potential to provide a functional cure as part of a combination regimen for patients living with chronic HBV.

About the GalXC™ RNAi Technology Platform

Dicerna’s proprietary RNA interference (RNAi) technology platform, called GalXC™, aims to advance the development of next-generation RNAi-based therapies designed to silence disease-driving genes in the liver. GalXC-based compounds enable subcutaneous delivery of RNAi therapies that are designed to bind specifically to receptors on liver cells, leading to internalization and access to the RNAi machinery within the cells. The GalXC approach seeks to optimize the activity of the RNAi pathway so that it operates in the most specific and potent fashion.

About Dicerna Pharmaceuticals, Inc.

Dicerna Pharmaceuticals, Inc. (Nasdaq: DRNA) is a biopharmaceutical company focused on discovering, developing and commercializing medicines that are designed to leverage ribonucleic acid interference (RNAi) to silence selectively genes that cause or contribute to disease. Using our proprietary RNAi technology platform called GalXC™, Dicerna is committed to developing RNAi-based therapies with the potential to treat both rare and more prevalent diseases. By silencing disease-causing genes, Dicerna’s GalXC platform has the potential to address conditions that are difficult to treat with other modalities. Initially focused on hepatocytes, Dicerna has continued to innovate and is exploring new applications of its RNAi technology beyond the liver, targeting additional tissues and enabling new therapeutic applications. In addition to our own pipeline of core discovery and clinical candidates, Dicerna has established collaborative relationships with some of the world’s leading pharmaceutical companies, including Novo Nordisk A/S, Roche, Eli Lilly and Company, Alexion Pharmaceuticals, Inc., Boehringer Ingelheim International GmbH and Alnylam Pharmaceuticals, Inc. Between Dicerna and our collaborative partners, we currently have more than 20 active discovery, preclinical or clinical programs focused on rare, cardiometabolic, viral, chronic liver and complement-mediated diseases, as well as neurodegeneration and pain. At Dicerna, our mission is to interfere – to silence genes, to fight disease, to restore health. For more information, please visit www.dicerna.com.

Cautionary Note on Forward-Looking Statements

This press release includes forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Examples of forward-looking statements include, among others, statements we make regarding: Phase 1 proof-of-concept data for RG6346, an investigational GalXC™ RNAi treatment candidate for chronic hepatitis B virus (HBV) infection in development with Roche. The process by which investigational therapies, such as RG6346, could potentially lead to an approved product is long and subject to highly significant risks. Applicable risks and uncertainties include those relating to Dicerna’s clinical research and other risks identified under the heading “Risk Factors” included in the Company’s most recent filings on Forms 10-K and 10-Q and in other future filings with the Securities and Exchange Commission. These risks and uncertainties include, among others, the cost, timing and results of preclinical studies and clinical trials and other development activities by us and our collaborative partners; the likelihood of Dicerna’s clinical programs being executed on timelines provided and reliance on the Company’s contract research organizations and predictability of timely enrollment of subjects and patients to advance Dicerna’s clinical trials; the reliance of Dicerna on contract manufacturers to supply its products for research and development and the risk of supply interruption from a contract manufacturer; the potential for future data to alter initial and preliminary results of early-stage clinical trials; the impact of the ongoing COVID-19 pandemic on our business operations, including the conduct of our research and development activities; the regulatory review and unpredictability of the duration and results of the regulatory review of Investigational New Drug applications (INDs) and Clinical Trial Applications (CTAs) that are necessary to continue to advance and progress the Company’s clinical programs; the timing, plans and reviews by regulatory authorities of marketing applications such as New Drug Applications (NDAs) and comparable foreign applications for one or more of Dicerna’s product candidates; the ability to secure, maintain and realize the intended benefits of collaborations with partners; market acceptance for approved products and innovative therapeutic treatments; competition; the possible impairment of, inability to obtain, and costs to obtain intellectual property rights; possible safety or efficacy concerns that could emerge as new data are generated in R&D; and general business, financial, and accounting risks and litigation. The forward-looking statements contained in this press release reflect Dicerna’s current views with respect to future events, and Dicerna does not undertake and specifically disclaims any obligation to update any forward-looking statements.

¹One additional subject was enrolled in Group B (total n=9) to replace a subject determined to be ineligible after the study dose had been administered.

² Polaris Observatory Collaborators. Global prevalence, treatment, and prevention of hepatitis B virus infection in 2016: a modelling study. The Lancet Gastroenterology and Hepatology. 2018;3(6):383-403.

³ Hepatitis B Foundation. Facts and Figures. Available at: http://www.hepb.org/what-is-hepatitis-b/what-is-hepb/facts-and-figures/. Accessed on Oct. 25, 2020.

GalXC™ is a trademark of Dicerna Pharmaceuticals, Inc.

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November 16, 2020 7:33 am

Just in time opening of new UPS hub readies Canada for its holiday shipping peak

Canada NewsWire

MISSISSAUGA, ON, Nov. 16, 2020 /CNW/ – “It’s like watching a child taking its first steps,” are the words that come to mind when Gordon Reed is asked how he feels about seeing UPS Canada’s largest package sorting and delivery facility up and running. As the director for special projects in UPS’s industrial engineering department, Gordon has spent a lot of work and long hours getting the massive, 850,000 square foot facility in Caledon, Ontario online. “This project is close to my heart and our whole team is so proud that we could get this facility operational in time when it is most needed.”

The new hub has begun operations in anticipation for the annual increase in volume that will start around Cyber Week and continue through January 2021. Part of a $500 millionCanada investment plan announced in 2018, the facility features advanced scanning and sortation technology, integrated with data-driven tools to increase efficiency and reliability for UPS’s customers in one of the fastest growing provinces in Canada.

“This year has not been without its challenges and we want to make sure we do our part to reduce the stress of the coming holidays as much as possible for all Canadians,” said Dominic Porporino, president of UPS Canada. “We anticipate a record breaking holiday season, but this new hub – our flagship facility – and the dedicated people that operate it, are ready to serve Canadians when they need it the most. It is a testament to our company’s purpose of keeping the world moving forward by delivering what matters.”

To further help successfully deliver the holidays this year, UPS expects to hire over 100,000 seasonal employees globally. In Canada, more than 5,000 new employees will be hired to provide additional support. Full and part-time positions will be filled and many past seasonal hires have landed permanent jobs at UPS.

Earlier this year, UPS also opened a 180,000 square foot expansion at its Montreal facility and, in November 2018, the company unveiled a new facility in Kanata, Ontario and has expanded its package centres in Brampton and London, Ontario and Edmonton, Alberta.

To prepare your business for the busy holiday season or plan your online shopping, visit ups.com to view the UPS Canada Holiday calendar.

About UPS

UPS (NYSE: UPS) is a global leader in logistics, offering a broad range of solutions including transporting packages and freight; facilitating international trade, and deploying advanced technology to more efficiently manage the world of business. Headquartered in Atlanta, UPS serves more than 220 countries and territories worldwide. UPS’s international expansion took its first steps north and entered the Canadian market on February 28, 1975. Over the past four decades, UPS in Canada has expanded to approximately 12,000 employees serving Canada from coast-to-coast. Headquartered in Mississauga, Ontario, UPS Canada operates a delivery fleet of over 3,000 (package cars, tractors, trailers and shifters) of which more than 41% run on alternative fuels. Today, UPS is customer first, people led, innovation driven. UPS was awarded America’s Best Customer Service company for Shipping and Delivery services by Newsweek magazine; Forbes Most Valuable Brand in Transportation; and top rankings on the JUST 100 list for social responsibility, the Dow Jones Sustainability World Index, and the Harris Poll Reputation Quotient, among other prestigious rankings and awards. The company can be found on the web at ups.com or pressroom.ups.com and its corporate blog can be found at ups.com/longitudes The company’s sustainability eNewsletter, UPS Horizons, can be found at ups.com/sustainabilitynewsletter. To get UPS news direct, follow @UPS_News on Twitter. To ship with UPS, visit ups.com/ship.

SOURCE UPS Canada Ltd.

November 16, 2020 7:33 am

Specialty Chemical Company China XD Plastics Announces Third Quarter 2020 Financial Results

– Revenue of $290.1 million –

PR Newswire

HARBIN, China, Nov. 16, 2020 /PRNewswire/ — China XD Plastics Company Limited (NASDAQ: CXDC) (“China XD,” the “Company” or “we”), one of China’s leading specialty chemical companies engaged in the development, manufacture and sale of polymer composite materials primarily for automotive applications, today announced its financial results for the third quarter ended September 30, 2020.

Third Quarter 2020 Financial Highlights

Revenue was $290.1 million, a decrease of 22.3% YoY and an increase of 2.4% sequentially
Gross profit was $34.6 million, a decrease of 42.4% YoY and a decrease of 13.3% sequentially
Gross margin was 11.9%, decrease of 4.2% YoY and a decrease of 2.2% sequentially
Net loss was $38.0 million, compared to net income of $17.0 million in the same period last year and net income of $17.6 million sequentially
EBITDA was negative $0.07 million, a decrease of 100.2% YoY and a decrease of 100.2% sequentially. A description of the adjustments from GAAP net loss to EBITDA is detailed in the table captioned “Reconciliation of GAAP and Non-GAAP Results” following this press release.
Total volume shipped was 83,855 metric tons, down 8.9% YoY and an increase of 48.4% sequentially

Third Quarter 2020 Results

Revenues

Revenues were US$290.1 million in the third quarter ended September 30, 2020, a decrease of US$83.1 million, or 22.3%, compared to US$373.2 million in the same period of last year. This was due to the decrease of 8.9% in sales volume and a decrease of 16.5% in the average RMB selling price of our products, as compared with those of the same period of last year, partially offset by an appreciation of RMB against USD by 1.8%.

(i) Domestic market

For the three-month period ended September 30, 2020, revenue from domestic market decreased by US$62.4 million or 17.7% compared with that in the same period of last year, as a result of (i) a decrease of 6.6% in sales volume; and (ii) a decrease of 13.8% in the average RMB selling price of our products, as compared with those of last year; partially offset by (iii) an appreciation of RMB against USD by 1.1%.

According to the China Association of Automobile Manufacturers, automobile production and sales in China decreased by 6.7% and 6.9%, respectively, for the first nine months of 2020 as compared to the same period of 2019.

The weakening in macroeconomic conditions since the outbreak of COVID-19 pandemic in January 2020 continued to exacerbate auto business environment. The Company’s business was negatively impacted and has generated lower revenue. Thanks to our positive efforts to expand our customer bases and to meet their new requirements, the Company has begun to recover slowly after May 2020. We had increase in sales by 43.9% in Southwest China and 19.3% in East China, except a decrease in sales by 71.2% in Northeast China, 45.7% in Central China , 27.7% in North China and 0.8% in South China for the three-month period ended September 30, 2020 as compared to the same period of 2019.

As for the RMB selling price, the decrease of 13.8% was mainly due to Company’s marketing strategy to offer discount sales to receive more orders in order to accelerate inventory turnover and replenish operating funds in domestic market during the three-month period ended September 30, 2020.

(ii) Overseas market

For the three-month period ended September 30, 2020, revenues from overseas market US$0.2 million as compared to US$20.9 million of the same period of 2019. The Dubai facility was temporarily shut down since late February and has not resumed its operation till the current period, which has negatively impacted operations in Dubai facility.

Premium products (PA66, PA6, POM, PPO, Plastic Alloy and PLA) in total accounted for 85.3% of revenues from sales of finished goods in the third quarter of 2020, compared to 86.7% in the prior year period. The Company continued to shift production mix from traditional lower-end products such as PP to higher-end products such as PA66 and PA6, primarily due to (i) greater growth potential of advanced modified plastics in luxury automobile models in China, (ii) the stronger demand as a result of promotion by the Chinese government for clean energy vehicles and (iii) better quality demand from and consumer recognition of higher-end cars made by automotive manufacturers from Chinese and Germany joint ventures, Sino-U.S. and Sino-Japanese joint ventures, which manufacturers tend to use more and higher-end modified plastics in quantity per vehicle in China.

Gross profit was US$34.6 million in the third quarter ended September 30, 2020, compared to US$60.1 million in the same period of 2019, representing a decrease of US$25.5 million or 42.4%. Our gross margin decreased to 11.9% during the third quarter ended September 30, 2020 from 16.1% during the same quarter of 2019 primarily due to more sales of higher-end products and more sales of semi-finished goods during the third quarter of 2019, and the increased cost for idle capacity as a result of shutdown.

General and administrative (G&A) expenses were US$11.0 million for the quarter ended September 30, 2020 compared to US$6.0 million in the same period in 2019, representing an increase of 83.3%, or US$5.0 million. The increase was primarily due to the US$4.19 million of share based compensation cost recognized in the third quarter of 2020.

Provision for doubtful accounts was US$6.8 million for the quarter ended September 30, 2020 compared to nil in the same period of 2019. As of September 30, 2020, accounts receivable of US$2.0 million from the Company’s two customers in UAE and US$4.8 million from the Company’s customer in PRC was overdue for more than 12 months. Based on assessment of the collectability of the amounts due from the customers, the Company provided an allowance for doubtful accounts of US$6.8 million for the period ended September 30, 2020.

Provision for long-term prepayments to equipment and construction suppliers was US$21.8 million for the quarter ended September 30, 2020 compared to nil in the same period of 2019. On October 20, 2016, Sichuan Xinda entered into an equipment purchase agreement purchase contract with Peaceful for a total consideration of RMB89.8 million (equivalent to US$12.7 million), and on May 31, 2019, Dubai Xinda entered into an equipment purchase contract with Peaceful for a total consideration of US$18.8 million to purchase production and testing equipment. As of September 30, 2020, Peaceful failed to deliver the equipments under the purchase agreements. Based on the assessment of the realizability of the prepayments, the Company recognized a provision of US$21.8 million for the period ended September 30, 2020.

Research and development expenses were US$4.4 million in the quarter ended September 30, 2020 compared with US$19.9 million in the same period in 2019, representing a decrease of US$15.5 million, or 77.9%. This decrease was due to (i) a decrease of US$14.9 million in raw materials consumption, (ii) a decrease of US$0.4 million in depreciation, and (iii) a decrease of US$0.2 million in salary and welfare for R&D personnel. As of September 30, 2020, the number of ongoing research and development projects was 347.

Total operating income was negative US$9.7 million in the third quarter ended September 30, 2020 compared to US$33.8 million in the same period of 2019, representing a decrease of 128.7% or US$43.5 million. This decrease is primarily due to the lower gross profit and the higher operating expenses.

Net interest expenses were US$22.3 million for the three-month period ended September 30, 2020, compared to US$16.7 million in the same period of 2019, representing a increase of 33.5% or US$5.6 million, primarily due to (i) the increase of average loan interest rate from 4.70% of the same period in 2019 to 6.41% for the three-month period ended September 30, 2020 and (ii) the increase of average short-term and long-term loan balance in the amount of US$1,326.3 million for the three-month period ended September 30, 2020 compared to US$915.6 million of the same period in 2019.

The effective income tax rates for the three-month periods ended September 30, 2020 and 2019 were negative 4.5% and 24.8%, respectively. The decrease of effective income tax rate was primarily due to the increased loss before income taxes from Dubai Xinda and decreased income before taxes from HLJ Xinda Group and Sichuan Xinda.

Net loss was US$38.0 million in the third quarter of 2020 compared to a net income of US$17.0 million in the same quarter of 2019, representing a decrease of US$55.0 million, or 323.5%. Basic and diluted losses per share for the third quarter of 2020 were both US$0.56, compared to US$0.25 earnings per share per share for the same period of 2019.

The average number of shares used in the computation of basic and diluted earnings per share for the three months ended September 30, 2020 was 67.9 million, compared to 51.8 million shares for earnings per share in the prior year period.

Earnings before interest, tax, depreciation and amortization (EBITDA) was negative $0.07 million for the third quarter of 2020, compared of $54.6 million for the same period of 2019, representing a decrease of $54.7 million, or 100.2%. For a detailed reconciliation of EBITDA, a non-GAAP measure, to its nearest GAAP equivalent, please see the financial tables at the end of this release.

Financial Condition

As of September 30, 2020, the Company had US$385.2 million in the total amount of cash and cash equivalents, restricted cash and time deposits, representing an increase of US$156.8 million or 68.7% as compared to US$228.4 million as of December 31, 2019, mainly due to the financing activity cash inflows. As of September 30, 2020, working capital was US$307.5 million (current assets minus current liabilities) and the current ratio (current assets divided by current liabilities) was 1.2, as compared to the current ratio of 1.0 as of December 31, 2019. Stockholders’ equity as of September 30, 2020 was US$877.3 million, increased by 4.8% as compared to US$836.4 million as of December 31, 2019, primarily due to the increase of US$48.0 million noncontrolling interests.

Prepaid expenses and other current assets increased by 113.2% or US$194.5 million primarily because (i) receivables due from third parties increased by US$278.2 million, partially offset by (ii) a decrease of US$42.6 million of receivables from Hong Kong Grand Royal Trading Co., Ltd., and (iii) a decrease of US$40.0 million of advances to suppliers for purchasing raw materials. The aggregate short-term and long-term bank loans increased by 39.5% due to using the line of credits to support operating and investing activities in HLJ Xinda Group and Sichuan Xinda. We define the manageable debt level as the sum of aggregate short-term and long-term loans over total assets.

Recent Development

On November 5, 2020, the Company held a special meeting of stockholders, at which the Company’s stockholders voted, among other things, in favor of the proposal to adopt the previously announced agreement and plan of merger (the “Merger Agreement”), dated as of June 15, 2020, by and among the Company, Faith Dawn Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“Parent”), and Faith Horizon Inc., a Nevada corporation and wholly owned subsidiary of Parent (“Merger Sub”), providing for the merger of the Merger Sub with and into the Company, with the Company continuing as the surviving corporation and as a wholly-owned subsidiary of Parent (the “Merger”).

The Merger remains subject to various customary closing conditions as set forth in the Merger Agreement. If and when completed, the proposed merger would result in the Company becoming a privately-held company and the common stock of the Company would no longer be listed on the NASDAQ Global Market or any other stock exchange, and price quotations with respect to shares of Company common stock in the public market will no longer be available

Financial Guidance and Business Outlook

As a result of the outbreak of COVID-19 in the PRC, China Auto Industry production and sales drastically decreased by 6.7% and 6.9% for the first nine months of 2020, according to the China Association of Automobile Manufacturers. It has a ripple effect and impact throughout China auto supply chain, including the Company.

Due to the fact that the Company had temporarily closed some of its manufacturing facilities and offices in the PRC in accordance with the requirement of the PRC government, the ongoing COVID-19 pandemic has an ongoing material adverse effect on our business operations. In light of these circumstances and continuing uncertainties, the Company will not be able to forecast its financial guidance for fiscal 2020 until further notice.

About Non-GAAP Financial Measure

To supplement the Company’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), the Company uses in this press release the following measure defined as non-GAAP financial measures by the United States Securities and Exchange Commission: EBITDA. The presentation of the non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on this non-GAAP financial measure, please see the table captioned “Reconciliation of GAAP and non-GAAP Results” set forth at the end of this press release. The Company’s management believes that this adjusted measure provides investors with a better understanding of how the results relate to the Company’s historical performance. This adjusted measure should not be considered an alternative to net income (loss), or any other measure of financial performance presented in accordance with U.S. GAAP, and is not necessarily comparable to a similarly titled measure of any other company. The accompanying tables have more details on the reconciliation between non-GAAP financial measure and its most directly comparable GAAP financial measure.

About China XD Plastics Company Limited

China XD Plastics Company Limited, through its wholly-owned subsidiaries, develops, manufactures and sells polymer composites materials, primarily for automotive applications. The Company’s products are used in the exterior and interior trim and in the functional components of 31 automobile brands manufactured in China, including without limitation, Audi, Mercedes Benz, BMW, Toyota, Buick, Chevrolet, Mazda, Volvo, Ford, Citroen, Jinbei and VW Passat, Golf, Jetta, etc. The Company’s wholly-owned research center is dedicated to the research and development of polymer composites materials and benefits from its cooperation with well-known scientists from prestigious universities in China. As of September 30, 2020, 644 of the Company’s products have been certified for use by one or more of the automobile manufacturers in China. For more information, please visit the Company’s English website at http://chinaxd.irpass.com/, and the Chinese website at http://www.xdholding.com.

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company’s growth potential in international markets; the effectiveness and profitability of the Company’s product diversification strategy; the impact of the Company’s product mix shift to more advanced products and related pricing policies; the effectiveness, profitability, and the marketability of the Company’s ongoing mix shift to more advanced products; the prospect of the Company’s facilities in various regions. These forward-looking statements can be identified by terminology such as “will,” “expect,” “project,” “anticipate,” “forecast,” “plan,” “believe,” “estimate” and similar statements. Forward-looking statements involve inherent risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the global economic uncertainty, the fluctuation in automotive sales and productions, the development of Company’s expansion plans, the slowdown of China’s automotive industry, the concentration of the Company’s distributors, customers and suppliers, and other risks detailed in the Company’s filings with the Securities and Exchange Commission and available on its website at http://www.sec.gov. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.

– Financial Tables Follow –

CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2020		December 31, 2019
	US$		US$
ASSETS
Current assets:
Cash and cash equivalents		7,602,873		17,201,775
Restricted cash		176,430,796		211,231,244
Time deposits		201,171,789		–
Accounts receivable, net of allowance for doubtful accounts		149,802,760		222,072,053
Inventories		749,370,184		642,509,534
Prepaid expenses and other current assets		366,344,216		171,848,122
Total current assets		1,650,722,618		1,264,862,728
Property, plant and equipment, net		856,810,772		830,319,716
Long-term prepayments to equipment and construction suppliers		460,192,667		495,570,421
Operating lease right-of-use assets, net		43,866,789		44,149,955
Other non-current assets		1,290,637		979,428
Total assets		3,012,883,483		2,635,882,248

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term bank loans, including current portion of long-term bank loans		795,499,641		680,174,859
Bills payable		359,333,930		400,671,063
Accounts payable		50,305,643		57,458,673
Amounts due to related parties		25,021,305		26,251,919
Income taxes payable		27,766,272		26,458,837
Operating lease liabilities, current		1,639,613		1,388,555
Accrued expenses and other current liabilities		83,629,216		86,550,388
Total current liabilities		1,343,195,620		1,278,954,294
Long-term bank loans, excluding current portion		602,953,010		322,456,413
Deferred income		90,559,854		92,639,620
Operating lease liabilities, non-current		14,156,674		14,429,434
Other non-current liabilities		84,685,855		91,028,376
Total liabilities		2,135,551,013		1,799,508,137

Stockholders’ equity:
Series B preferred stock		100		100
Common stock, US$0.0001 par value, 500,000,000 shares authorized, 70,548,841 shares issued, 66,948,841 shares outstanding as of September 30, 2020 and December 31, 2019, respectively		7,057		6,697
Treasury stock, 21,000 shares at cost		(92,694)		(92,694)
Additional paid-in capital		188,396,687		184,208,447
Retained earnings		688,463,772		720,159,368
Accumulated other comprehensive loss		(47,489,720)		(67,907,807)
Total equity attributable to China XD Plastics Company Limited		829,285,202		836,374,111
Noncontrolling interest		48,047,268		–
Total stockholders’ equity		877,332,470		836,374,111
Commitments and contingencies		–		–
Total liabilities and stockholders’ equity		3,012,883,483		2,635,882,248

CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three-Month Period Ended September 30,		Nine-Month Period Ended September 30,
	2020	2019	2020	2019
	US$	US$	US$	US$

Revenues	290,054,815	373,159,091	718,116,480	1,137,698,978
Cost of revenues	(255,491,692)	(313,044,518)	(638,423,810)	(961,994,051)
Gross profit	34,563,123	60,114,573	79,692,670	175,704,927

Selling expenses	(368,188)	(431,070)	(530,248)	(956,300)
General and administrative expenses	(10,963,304)	(5,999,123)	(20,670,460)	(20,539,101)
Provision for doubtful accounts	(6,755,683)	–	(6,755,683)	–
Provision for long-term prepayments to equipment and construction suppliers	(21,836,662)	–	(21,836,662)	–
Research and development expenses	(4,388,573)	(19,908,789)	(14,033,493)	(39,522,696)
Total operating expenses	(44,312,410)	(26,338,982)	(63,826,546)	(61,018,097)

Operating income	(9,749,287)	33,775,591	15,866,124	114,686,830

Interest income	622,371	338,033	963,419	1,228,169
Interest expense	(22,926,549)	(17,036,345)	(56,757,282)	(46,595,864)
Foreign currency exchange gains (losses)	(6,840,717)	4,065,890	(4,650,295)	4,975,637
Gains on disposal of a subsidiary	–	–	–	518,491
Government grant	2,444,278	1,405,284	13,669,488	5,111,437
Total non-operating expense, net	(26,700,617)	(11,227,138)	(46,774,670)	(34,762,130)

Income before income taxes	(36,449,904)	22,548,453	(30,908,546)	79,924,700

Income tax expense	(1,623,473)	(5,583,240)	(627,514)	(11,867,455)

Net income (loss)	(38,073,377)	16,965,213	(31,536,060)	68,057,245
Net income attributable to noncontrolling interest	159,536	–	159,536	–
Net income (loss) attributable to China XD Plastics Company Limited	(38,232,913)	16,965,213	(31,695,596)	68,057,245

Earnings (loss) per common share:
Basic and diluted	(0.56)	0.25	(0.47)	1.02

Net Income (loss)	(38,073,377)	16,965,213	(31,536,060)	68,057,245

Other comprehensive income (loss)
Foreign currency translation adjustment, net of nil income taxes	32,755,595	(22,690,259)	20,578,345	(24,732,543)

Comprehensive income (loss)	(5,317,782)	(5,725,046)	(10,957,715)	43,324,702
Comprehensive income attributable to noncontrolling interest	319,794	–	319,794	–
Comprehensive income (loss) attributable to China XD Plastics Company Limited	(5,637,576)	(5,725,046)	(11,277,509)	43,324,702

CHINA XD PLASTICS COMPANY LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine-Month Period Ended September 30,
	2020		2019
	US$		US$
Cash flows from operating activities:
Net cash (used in) provided by operating activities		(234,697,237)		(183,155,418)

Cash flows from investing activities:
Purchase of time deposits		(195,963,439)		–
Purchase of and deposits for property, plant and equipment		(20,573,681)		(54,255,192)
Refund of prepayment for building purchase		–		15,810,261
Net proceeds from sales of a subsidiary		–		7,296,921
Net cash used in investing activities		(216,537,120)		(31,148,010)

Cash flows from financing activities:
Proceeds from bank borrowings		728,358,842		1,647,171,688
Repayments of bank borrowings		(370,292,671)		(1,569,203,033)
Capital injection from noncontrolling interests		46,487,677		–
Proceeds from interest-free advances from related parties		1,258,743		79,969,718
Repayments of interest-free advances from related parties		(3,069,331)		(68,543,743)
Payments of issuance cost for syndicated loans		(126,012)		–
Net cash provided by (used in) financing activities		402,617,248		89,394,630

Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash		4,217,759		(6,926,300)
Net (decrease) increase in cash, cash equivalents and restricted cash		(44,399,350)		(131,835,098)

Cash, cash equivalents and restricted cash at beginning of period		228,433,019		366,991,840
Cash, cash equivalents and restricted cash at end of period		184,033,669		235,156,742

Supplemental disclosure of cash flow information:
Interest paid, net of capitalized interest		50,809,802		46,534,262
Income taxes paid		4,428,462		7,951,724
Non-cash investing activities:
Accrual for purchase of equipment and construction included in accrued expenses and other current liabilities		6,124,869		1,794,800
Non-cash financing activities:
Conversion of Series D preferred stock to common stock		–		97,576,465

Reclassification of mandatorily redeemable noncontrolling interest to noncontrolling interest		47,723,235		–


The following table shows a reconciliation of cash, cash equivalents and restricted cash on the condensed consolidated balance sheets to that presented in the above condensed consolidated statements of cash flows.

	September 30,
	2020		2019
	US$		US$

Cash and cash equivalents		7,602,873		10,509,402
Restricted cash		176,430,796		224,647,340
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows		184,033,669		235,156,742

CHINA XD PLASTICS COMPANY LIMITED
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(Amounts expressed in United States Dollars)

	Three-Month Period Ended
	September 30,
	2020	2019

Net income -GAAP	$ (38,073,377)	$ 16,965,213
Interest expense	22,926,549	17,036,345
Provision for income taxes	1,623,473	5,583,240
Depreciation and amortization expense	13,141,954	14,815,533
Amortization of operating lease right-of-use assets	314,503	159,068
EBITDA	(66,898)	54,559,399

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SOURCE China XD Plastics Company Limited

November 16, 2020 7:33 am

Yatra.com Announces Upcoming Year-end Conference Participation

PR Newswire

GURUGRAM, India and NEW YORK, Nov. 16, 2020 /PRNewswire/ — Yatra Online, Inc. (“Yatra”) (NASDAQ: YTRA) (OTCQX: YTROF), India’s leading Corporate Travel Services provider, today announced its participation in the following virtual conferences during November and December 2020.

Sidoti & Co Microcap Virtual Investor Conference on Thursday November 19, 2020. CEO Dhruv Shringi’s presentation will begin at 8:30am EST. A live webcast of the presentation will be available to the public at http://investors.yatra.com/. Management will also participate in virtual one-on-one meetings.

Benzinga Global Small Cap Conference on December 9, 2020. CEO Dhruv Shringi will be presenting at the conference. Management will also participate in virtual one-on-one meetings. A live webcast of the presentation will be available to the public at http://investors.yatra.com/.

A replay of all the webcasts will be available for 90 days following each presentation.

About Yatra Online, Inc.

Yatra Online, Inc. is the parent company of Yatra Online Pvt. Ltd. which is based in Gurugram, India and is India’s leading Corporate Travel services provider with over 700+ Corporate customers and one of India’s leading online travel companies and operates the website https://www.yatra.com/. The company provides information, pricing, availability, and booking facility for domestic and international air travel, domestic and international hotel bookings, holiday packages, buses, trains, in city activities, inter-city and point-to-point cabs, homestays and cruises. As a leading platform of accommodation options, Yatra provides real-time bookings for more than 103,000 hotels in India and over 1,500,000 hotels around the world.

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SOURCE Yatra Online, Inc.

November 16, 2020 7:33 am

Aerkomm Announces Filing of Quarterly Report on Form 10-Q for the Third Quarter of 2020

PR Newswire

FREMONT, Calif., Nov. 16, 2020 /PRNewswire/ — Aerkomm Inc. (“Aerkomm” or “the Company”) (Euronext Paris: AKOM; OTCQX: AKOM), a development stage service provider of In-Flight Entertainment and Connectivity solutions for the airline industry using Ka-band technology, today announced that on November 9, 2020, the Company filed its quarterly report on Form 10-Q for the quarter ended September 30, 2020 with the U.S. Securities and Exchange Commission (the “SEC”). The quarterly report is available in the “Regulatory” section of Aerkomm’s website at https://ir.aerkomm.com/quarterly-reports as well as on the SEC’s website at https://www.sec.gov/Archives/edgar/data/1590496/000121390020035939/0001213900-20-035939-index.htm.

About Aerkomm Inc.

Aerkomm Inc. (Euronext Paris: AKOM; OTCQX: AKOM), operating through its wholly owned subsidiary, Aircom Pacific, Inc., is a development stage service provider of in-flight entertainment and connectivity solutions for the airline industry. The Company strives to become a leading provider of a wide range of in-flight broadband entertainment and connectivity services, including Wi-Fi connectivity, cellular networks, movies, gaming, live television, and music. Aerkomm aims to reshape the market for in-flight entertainment and connectivity services by offering on-board connectivity to its airline partners and passengers for free, generating revenue through advertising and on-board transactions.

More information about Aerkomm is available at www.aerkomm.com.

Safe Harbor Statement

This release does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. This release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our periodic filings with the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended, as well as in our Registration Statement on Form S-1 filed with the SEC (SEC File No. 333-237942) on April 30, 2020, as amended to date. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” and “would” or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise.

Investor Relations Contact:

William Zima

ICR Inc.
[email protected]
+1 (203) 682-8233

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SOURCE Aerkomm Inc.

November 16, 2020 7:33 am

Biglari Capital Corp. Issues Statement On Why It Is Urgent To Add An Independent Nominee To Cracker Barrel Board Of Directors

PR Newswire

SAN ANTONIO, Texas, Nov. 16, 2020 /PRNewswire/ — Biglari Capital Corp. (together with its affiliates, “Biglari Capital”), one of the largest and longest-standing shareholders of Cracker Barrel Old Country Store, Inc. (the “Company” or “Cracker Barrel”) (NASDAQ:CBRL), beneficially owning approximately 8.7% of the Company’s outstanding common stock, today issued the following statement in support of its nominee for election to the Cracker Barrel board of directors (the “Board”) at the Company’s upcoming annual meeting of shareholders, scheduled for November 19, 2020.

For weeks now, Cracker Barrel has tried to mislead investors into believing the election of directors at its 2020 annual shareholders meeting is not about Cracker Barrel, but rather about Biglari Capital. But Biglari is not running for a Board seat, nor is any individual who has any relationship with Biglari Capital or is otherwise beholden to it in any way. Rather, we have nominated Raymond P. (“Rick”) Barbrick, a highly qualified restaurant industry executive with over 30 years of experience, whose independence has been affirmed by Institutional Shareholder Services Inc. (“ISS”).

Why Cracker Barrel needs a director with relevant restaurant experience

The Company has failed to achieve its three-year plan, failed to increase customer traffic, lagged in total shareholder return, and botched its investment in Punch Bowl Social, which cost shareholders over $137 million in eight months. It is inconceivable to us that, despite the ongoing downturn in its business, the Company has eschewed putting an experienced industry executive on the Board who could bring expertise to these matters. The four directors the Company has added in the past three years have absolutely no relevant expertise, including the two directors brought on after the Punch Bowl Social debacle, which, according to ISS, “exposed the lack of appropriate restaurant experience on the board.” [1]

Clearly, if the Company had directors with the right experience, then management would not have been allowed to run rampant with undisciplined spending on capital expenditures, acquisitions, and investments, which have all gone unchecked precisely because the Board lacks relevant restaurant expertise. It is not surprising that management wants to preserve the status quo, considering the current Board went out of its way to pay the Company’s executives bonuses when none was earned, eliminate the performance-vesting requirements of 2019 and 2020 equity awards, and gift CEO Sandy Cochran over $6 million in compensation in the midst of a global pandemic. It is time for these excesses to stop and for the Board to return its full attention to enhancing the core Cracker Barrel brand, overseen by a new director with extensive experience in both restaurant operations and capital allocation.

Why it is urgent to add a director with relevant experience

It is during crises such as the current pandemic that a company’s leaders must have the relevant skill set to navigate through key strategic decisions. Much as it would be absurd to fill an investment management company with directors lacking any financial market expertise, it is misguided to fill the board of a casual dining restaurant chain with directors possessing no casual dining expertise.

Adding to this urgency is the Board’s extreme mishandling of its initial investment in, and subsequent exit from, the Punch Bowl Social project. To be sure, we were opposed to the Punch Bowl Social investment, for we thought the price paid was sky-high and that entering into the nightlife business was a strategic mistake. But once the investment was made, through equity and debt positions, we thought the Board’s decision to exit Punch Bowl Social without becoming an unsecured creditor was also a poor demonstration of judgment, as it meant the Company would be unable to salvage any value from its investment. In an act of inexplicable recklessness, the Board determined to exit Punch Bowl Social before the passage of the CARES Act, when it was impossible to know what would be contained in it.

Yet what makes the current situation most urgent is that just weeks ago, the Board and management affirmed their intention to maintain their strategy of acquisitions in unrelated and untested concepts. CEO Sandy Cochran, in her October 1, 2020 letter to shareholders, insisted that Cracker Barrel will continue to “Extend our Brand by seeking opportunities where we can leverage our scale and expertise and either create or invest in other concepts.” Statements such as this should cause alarm in shareholders, as they further demonstrate the critical need for a director on the Board who can ask the right questions and hold management accountable for its actions, before the Board compounds its past errors and destroys even more value for shareholders. If the Board contemplates other acquisitions, shareholders should welcome a director with relevant experience who has navigated restaurant acquisitions and has no prior relationship with any other director.

Rick Barbrick, highly qualified independent Board nominee

Fortunately, we have done the work that the Company left undone and, through our own efforts, have identified and recruited an independent and highly qualified candidate, Rick Barbrick, to rectify what ISS called the “shortage of relevant restaurant industry experience on the board.” Mr. Barbrick has over 30 years of restaurant experience in casual dining and fast food businesses, most recently as President, Co-Chief Executive Officer, and Chief Operating Officer of the Briad Group, the owner-operator of one of the largest Wendy’s franchises in North America. Prior to March 2020, Briad was a TGI Fridays franchisee as well, and at one point was the largest TGI Fridays operator. Mr. Barbrick has also led and operated a number of restaurant concepts, including Avado Brands, Inc. (d/b/a Don Pablo’s Restaurant) (formerly NASDAQ: AVDO) and Bertucci’s. In fact, if he is elected at the upcoming annual meeting, Mr. Barbrick would be the only director on the Board who has experience in managing a freestanding restaurant chain.

Mr. Barbrick’s experience is ideally suited to Cracker Barrel’s primary strategic initiative to “enhance the core” because, in stark contrast to the incumbent directors, he has been involved in all operations of a restaurant company. Thus, he would know the right questions to ask in board deliberations, including those concerning capital allocation, succession planning, and other governance matters. As a leader of restaurant companies, Mr. Barbrick has:

Spearheaded Bertucci’s transformation from “pizzeria” to a full-service casual dining concept
Executed strategic plans, marketing and operating initiatives, menu enhancements, and the reimaging of units
Acquired and divested various restaurant companies
Evolved a corporate culture in which staff is highly motivated to attend to every detail of the restaurant environment and guest experience
Focused on creating community goodwill by partnering with local charities and building relationships to support the opening of new restaurants
Created unique family dining experiences

Based on his extended and accomplished career, including his work for a number of private equity sponsors, no one can plausibly deny that Mr. Barbrick would bring his own perspective and expertise to the Board, would work constructively with the other directors, and would serve as an independent voice for the benefit of all shareholders. It is without dispute that Mr. Barbrick has been a productive, rather than a disruptive, force on every board on which he has previously served.

Compare Mr. Barbrick’s experience with that of the Company’s nominee, Norman Johnson.
Mr. Johnson has:

Had absolutely no restaurant experience, having previously served as an executive of a filtration company and on the boards of a valve manufacturer and a provider of transportation and trucking services
Not been listed in the Company’s proxy statement as having any financial experience, despite Ms. Cochran’s claim that he is a “financial expert” serving on the audit committee
Been purported to have “intimate knowledge of…acquisitions and growth strategies,” yet has presided over a failed acquisition strategy that has caused substantial value destruction for shareholders
Overseen a Board “refreshment” process that appears to have been more about “who you know,” considering the backstory of Mr. Johnson’s own election to the Board back in 2012

The $5 Million Question

We nominated one individual with exactly the experience the Board desperately needs, which we thought would avoid a proxy contest. The question shareholders must ask is: Why is Cracker Barrel wasting more than $5 million of shareholders’ money simply to fight Mr. Barbrick’s candidacy? The Board’s unreasonableness has forced us into a proxy contest. We believe one Board seat not only sends the right message, but also changes the dynamics in the boardroom to avoid poor compensation plans, poor acquisition strategies, and poor expansion initiatives. But the Board would rather fight Mr. Barbrick’s nomination during a pandemic than expand the Board with an experienced restaurant executive. The Company would have you believe that its current directors already possess relevant backgrounds, but shareholders should see right through this hollow claim, just as ISS has: “The independent directors do possess substantial experience in the food service sector, just not with independent dining brands and diners who have come to venues primarily for a dining experience.” ISS also noted “they have only incidental and captive-dining expertise.”

The Company failed to bring in someone with relevant restaurant experience, we believe, because the Board did not know its importance. A similar breakdown occurred when it pursued and exited Punch Bowl Social, another governance failure from a lack of relevant restaurant experience on the Board. We identified a serious skill-set gap on the Board and then presented someone who has the expertise no other director on the Board possesses. There is no reason to give the Board a pass on its governance failures. The Board has had its opportunity to make the necessary changes — yet it has failed in its refreshment process.

Accordingly, as one of the Company’s largest shareholders, we urge our fellow shareholders to support the election of the highly qualified and independent restaurant executive Rick Barbrick to the Board and vote the GOLD proxy card today.

[1] Permission to quote ISS was neither sought nor obtained.

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SOURCE Biglari Capital Corp.