FORT WAYNE, Ind., Aug. 09, 2023 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) (the “Company”) today announced that it plans to report results for the second quarter ended July 29, 2023 at 8:00 a.m. Eastern Time on Wednesday, August 30, 2023.
The Company will host a conference call to discuss its financial results at 9:30 a.m. Eastern Time that same day. A live webcast of the conference call will be available on the Investor Relations section of the Company’s website, www.verabradley.com. Alternatively, interested parties may dial into the call at (888) 394-8218, and enter the access code 1990839. A replay will be available shortly after the conclusion of the call and remain available through September 13, 2023. To access the recording, listeners should dial (844) 512-2921, and enter the access code 1990839.
ABOUT VERA BRADLEY, INC.
Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally connected, and multi-generational female customer bases; alignment as causal, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.
Vera Bradley, based in Fort Wayne, Indiana, is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand is known for its innovative designs, iconic patterns, and brilliant colors that inspire and connect women unlike any other brand in the global marketplace.
In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a digitally native, highly engaging lifestyle brand founded in 2010 by friends Paul Goodman and Griffin Thall. Pura Vida has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories. The Company acquired the remaining 25% of Pura Vida in January 2023.
August 9, 2023 – Vancouver, Canada – Century Lithium Corp. (TSXV:LCE) (OTCQX: CYDVF) (Frankfurt: C1Z) (Century Lithium or the Company) is pleased to report successful progress in its collaboration with Koch Technology Solutions (KTS), a Koch Engineered Solutions (KES) company. As reported previously (see April 17, 2023, news release) Century Lithium and KTS are working together on the application of KTS’s Li-ProTM system at Century’s Lithium Extraction Facility (Pilot Plant) in Amargosa Valley, Nevada, USA.
“Century Lithium is delighted to see the progress made in our collaboration with Koch Technology Solutions” stated Bill Willoughby, President, and CEO of Century Lithium. “Our team, with KTS’s input has successfully incorporated and operated the equipment at our Pilot Plant with significantly improved results.”
Since October 2021, Century Lithium has been continuously testing the extraction of lithium from the claystone found at its 100%-owned Clayton Valley Lithium Project (Project) in Nevada utilizing a chloride-based leaching process. Testing of the Li-ProTM system was conducted to evaluate potential improvements in the direct lithium extraction (DLE) area of the Pilot Plant.
Adam Sackett, President of Koch Technology Solutions, added, “The steady state results generated onsite with the Koch Technology Solutions Li-Pro™ Direct Lithium Extraction process has hit all our key milestones for the Century pilot program. We are excited to move towards engineering and executing a Li-Pro™ installation with commercial process guarantees.”
With the integration of KTS’s DLE process, the grades of the intermediate lithium solution produced at the Pilot Plant have increased to the highest levels to date, with an average grade of 7.5 grams/liter (g/l) (7,500 parts per million) lithium. These lithium concentrations are four times higher than previously generated, with sodium concentrations almost an order of magnitude lower.
Highlights To Date
Successful installation and operation of Koch’s Li-ProTM DLE process
Li-ProTM plant achieved steady state using Century Lithium’s chloride leaching process
Manufacture intermediate solutions with lithium grades of 7 to 8 g/l concentrations with average lithium to sodium ratios of 0.9 to 1.1
No observed degradation of media or accumulation of deleterious elements
Operational Results
Since the installation of KTS’s DLE equipment, Century Lithium has focused on improvements related to the operational aspects of the Pilot Plant and adjustments to the final flowsheet. These improvements were well supported through the development and incorporation of KTS’s DLE equipment at the Pilot Plant.
Century Lithium, with the support of KTS, has identified techniques to improve lithium recovery within the DLE area while minimizing deleterious elements in the final solutions. Collaboration between Century Lithium and Koch staff is very productive, generating ideas and changes that have resulted in the complete removal of calcium and magnesium, and marked reduction of sodium and potassium in the product solutions.
Qualified Person
Todd Fayram, MMSA-QP is the qualified person as defined by National Instrument 43-101 and has approved the technical information in this release.
About Century Lithium Corp.
Century Lithium Corp. (formerly Cypress Development Corp.) is an advanced stage lithium company, focused on developing its 100%-owned Clayton Valley Lithium Project in west-central Nevada, USA. Century Lithium is currently in the pilot stage of testing on material from its lithium-bearing claystone deposit at its Lithium Extraction Facility in Amargosa Valley, Nevada and progressing towards completing a Feasibility Study and permitting, with the goal of becoming a domestic producer of lithium for the growing electric vehicle and battery storage market.
ON BEHALF OF CENTURY LITHIUM CORP. WILLIAM WILLOUGHBY, PhD., PE President & Chief Executive Officer
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS RELEASE.
This release includes certain statements that may be deemed to be “forward-looking statements”. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could,” “scheduled,” and other similar words. All statements in this release, other than statements of historical facts, that address events or developments that management of the Company expects, are forward-looking statements. Although management believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results or developments may differ materially from those in the forward-looking statements. The Company undertakes no obligation to update these forward-looking statements if management’s beliefs, estimates or opinions, or other factors, should change. Factors that could cause actual results to differ materially from those in forward-looking statements, include market prices, exploration, and development successes, continued availability of capital and financing, and general economic, market or business conditions. Please see the public filings of the Company at www.sedar.com for further information.
TORONTO, Aug. 09, 2023 (GLOBE NEWSWIRE) — Labrador Gold Corp. (TSX.V:LAB | OTCQX:NKOSF | FNR: 2N6) (“LabGold” or the “Company”) is pleased to announce results from recent drilling targeting the highly prospective Appleton Fault Zone. The drilling is part of the Company’s ongoing 100,000 metre diamond drilling program at its 100% owned Kingsway Project.
Highlights of follow up drilling at Pristine include an intersection of 11.98g/t Au over 6 metres from 91 metres (64 metres vertical) including 30.61g/t over 2.33 metres and 82.2g/t over 0.75 metres that contained 77 grains of visible gold in Hole K-22-270. All mineralization drilled to date at Pristine occurs above 86 metres vertical depth and extends over a strike length of approximately 160 metres.
Further results from first stage drilling at DropKick include 1.15g/t Au over 12.4 metres from 190.25 metres including 7.74g/t Au over 0.3 metres in hole K-23-231 and 1.46g/t Au over 6.75 metres from 162.25 metres including 3.72g/t Au over 2.15 metres in Hole K-23-251.
Ongoing drilling at Big Vein returned 1.10g/t Au over 9.3 metres from 195 metres, including 1.49g/t over 5.3 metres in Hole K-23-246 and 1.47g/t Au over 6.55 metres from 107.88 metres in hole K-23-237.
“Today’s result of high-grade, near surface gold mineralization at Pristine validates our belief that there is more to be found at Pristine. It is also the third discovery along the Appleton Fault Zone, after Big Vein and Dropkick, to produce such high grades associated with visible gold. Following our initial discovery of near surface visible gold at Pristine announced in May 2022, we did not intersect similar high-grades to those seen at Big Vein. As a result, we returned our focus to expanding Big Vein along strike and at depth and have successfully defined mineralization there over a 720-metre strike length.” said Roger Moss, President and CEO of Labrador Gold Corp. “With near surface mineralization at Pristine now drilled over an approximate 160 metre strike length and the potential for high grades demonstrated, we are looking forward to receiving the permit to drill The Gap between Pristine and Big Vein, a distance of approximately 700 metres, as we continue to focus our drilling along the very prospective Appleton Fault Zone.”
Hole ID
From (m)
To (m)
Interval (m)
Au (g/t)
Zone
K-23-270
91.00
97.00
6.00
11.98
Pristine
including
92.97
95.30
2.33
30.61
including
94.00
94.75
0.75
82.20
K-23-251
162.25
169.00
6.75
1.46
DropKick
including
166.45
168.60
2.15
3.72
including
167.00
168.60
1.60
4.48
K-23-250
152.40
152.80
0.40
6.87
Big Vein
K-23-246
195.00
204.30
9.30
1.10
Big Vein
including
199.00
204.30
5.30
1.49
K-23-240
75.22
75.63
0.41
1.82
DropKick
86.00
90.72
4.72
1.16
including
86.00
88.68
2.68
1.51
K-23-237
93.00
120.00
27.00
0.63
Big Vein
including
107.88
114.43
6.55
1.47
K-23-234
100.55
101.90
1.35
1.02
DropKick
116.00
117.00
1.00
1.26
K-23-231
190.25
202.65
12.40
1.15
Dropkick
including
197.45
201.60
4.15
1.78
including
201.30
201.60
0.30
7.74
K-23-230
16.00
19.30
3.30
0.41
Big Vein
K-23-229
nsv
Big Vein SW
K-23-228
91.55
91.85
0.30
1.18
DropKick
122.35
123.15
0.80
2.63
K-23-226
nsv
Big Vein SW
Table 1. Summary of assay results. All intersections are downhole length as there is insufficient Information to calculate true width.
Figure 1. Plan map of Pristine showing significant intersections.
Figure 2. Visible gold in drill core from Hole K-23-270. A total of 77 gold grains were observed.
Figure 3. Interval of visible gold mineralization in Hole K-23-270
Almost 83,000 metres have been drilled to date out of the planned 100,000 metre program. Assays are pending for samples from approximately 8,877 metres of core.
The Company has approximately $12 million in cash and is well funded to carry out the remaining 17,000 metres of the planned drill program as well as further exploration to add to the current pipeline of drill targets on the property.
Hole ID
Easting
Northing
Elevation
Azimuth
Inclination
Total Depth
K-23-270
661930
5436075
52.0
315
45
187
K-23-251
663167
5438130
58.2
140
65
229
K-23-250
661554
5435471
53.0
125
70
320
K-23-246
661272
5435093
62.4
145
45
250
K-23-240
663365
5438261
60.2
140
45
128
K-23-237
661352
5435080
45.8
145
45
280
K-23-234
663304
5438259
55.9
140
45
266
K-23-231
663303
5438259
56.3
140
65
260
K-23-230
661737
5435329
44.7
20
45
208
K-23-229
661133
5434768
42.9
140
45
173
K-23-228
663348
5438353
54.7
140
65
126.2
K-23-226
661176
5434794
42.3
140
45
528
Table 2. Drill hole collar details
QA/QC
True widths of the reported intersections have yet to be calculated. Assays are uncut. Samples of HQ split core are securely stored prior to shipping to Eastern Analytical Laboratory in Springdale, Newfoundland for assay. Eastern Analytical is an ISO/IEC17025 accredited laboratory. Samples are routinely analyzed for gold by standard 30g fire assay with atomic absorption finish as well as by ICP-OES for an additional 34 elements. Samples containing visible gold are assayed by metallic screen/fire assay, as are any samples with fire assay results greater than 1g/t Au. The company submits blanks and certified reference standards at a rate of approximately 5% of the total samples in each batch. Approximately 5% of sample pulps are submitted to Bureau Veritas, an ISO 17025 accredited Laboratory in Vancouver, BC for check assays..
Qualified Person
Roger Moss, PhD., P.Geo., President and CEO of LabGold, a Qualified Person in accordance with Canadian regulatory requirements as set out in NI 43-101, has read and approved the scientific and technical information that forms the basis for the disclosure contained in this release.
The Company gratefully acknowledges the Newfoundland and Labrador Ministry of Natural Resources’ Junior Exploration Assistance (JEA) Program for its financial support for exploration of the Kingsway property.
About Labrador Gold Labrador Gold is a Canadian based mineral exploration company focused on the acquisition and exploration of prospective gold projects in Eastern Canada.
Labrador Gold’s flagship property is the 100% owned Kingsway project in the Gander area of Newfoundland. The three licenses comprising the Kingsway project cover approximately 12km of the Appleton Fault Zone which is associated with numerous gold occurrences in the region. Infrastructure in the area is excellent located just 18km from the town of Gander with road access to the project, nearby electricity and abundant local water. LabGold is drilling a projected 100,000 metres targeting high-grade epizonal gold mineralization along the Appleton Fault Zone with encouraging results. The Company has approximately $12 million in working capital and is well funded to carry out the planned program.
The Hopedale property covers much of the Florence Lake greenstone belt that stretches over 60 km. The belt is typical of greenstone belts around the world but has been underexplored by comparison. Work to date by Labrador Gold show gold anomalies in rocks, soils and lake sediments over a 3 kilometre section of the northern portion of the Florence Lake greenstone belt in the vicinity of the known Thurber Dog gold showing where grab samples assayed up to 7.8g/t gold. In addition, anomalous gold in soil and lake sediment samples occur over approximately 40 km along the southern section of the greenstone belt (see news release dated January 25 th 2018 for more details). Labrador Gold now controls approximately 40km strike length of the Florence Lake Greenstone Belt.
The Company has 170,009,979 common shares issued and outstanding and trades on the TSX Venture Exchange under the symbol LAB.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release .
Forward-Looking Statements: This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions are intended to identify forward-looking statements. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties. Many factors could cause our actual results to differ materially from the statements made, including those factors discussed in filings made by us with the Canadian securities regulatory authorities. Should one or more of these risks and uncertainties, such as actual results of current exploration programs, the general risks associated with the mining industry, the price of gold and other metals, currency and interest rate fluctuations, increased competition and general economic and market factors, occur or should assumptions underlying the forward looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, or expected. We do not intend and do not assume any obligation to update these forward-looking statements, except as required by law. Shareholders are cautioned not to put undue reliance on such forward-looking statements.
Operational Excellence and Disciplined Capital Allocation Drive Solid Operating Performance and Strong EPS Growth
Second Quarter Revenue of $1.9 Billion with GAAP EPS of $0.87; Adjusted EPS of $0.99
GAAP Operating Income of $46 Million; GAAP Net Income of $34 Million; Adjusted EBITDA of $86 Million
Repurchased $31 Million of Shares in the Second Quarter of 2023
Updates Full-Year 2023 Guidance
BOCA RATON, Fla.–(BUSINESS WIRE)–Aug. 9, 2023– The ODP Corporation (“ODP,” or the “Company”) (NASDAQ:ODP), a leading provider of products, services, and technology solutions to businesses and consumers, today announced results for the second quarter ended July 1, 2023.
Consolidated (in millions, except per share amounts)
2Q23
2Q22
YTD23
YTD22
Selected GAAP and Non-GAAP measures:
Sales
$1,908
$2,034
$4,016
$4,212
Sales change from prior year period
(6)%
(5)%
Operating income
$46
$28
$141
$104
Adjusted operating income (1)
$53
$54
$152
$143
Net income from continuing operations
$34
$20
$107
$75
Diluted earnings per share from continuing operations
$0.87
$0.39
$2.61
$1.49
Adjusted net income from continuing operations (1)
$39
$39
$114
$104
Adjusted earnings per share from continuing operations (fully diluted)(1)
$0.99
$0.79
$2.80
$2.06
Adjusted EBITDA (1)
$86
$91
$217
$216
Operating Cash Flow from continuing operations
$(8)
$(114)
$149
$(84)
Free Cash Flow(2)
$(31)
$(135)
$97
$(127)
Adjusted Free Cash Flow (3)
$(30)
$(121)
$103
$(106)
Second Quarter 2023 Summary(1)(2)(3)
Total reported sales of $1.9 billion, down 6% versus the prior year, primarily due to lower sales in its Office Depot consumer division, largely driven by 68 fewer retail locations in service compared to the prior year, as well as lower retail and online consumer traffic and transactions
GAAP operating income of $46 million and net income from continuing operations of $34 million, or $0.87 per diluted share, versus $28 million and $20 million, or $0.39 per diluted share, respectively in the prior year
Adjusted operating income of $53 million, compared to $54 million in the second quarter of 2022; adjusted EBITDA of $86 million, compared to $91 million in the second quarter of 2022
Adjusted net income from continuing operations of $39 million, or adjusted diluted earnings per share from continuing operations of $0.99, versus $39 million or $0.79, respectively in the prior year
Operating cash flow from continuing operations of ($8 million) and adjusted free cash flow of ($30 million), versus $(114 million) and $(121 million), respectively in the prior year
Repurchased 724 thousand shares for $31 million in the second quarter of 2023
$1.1 billion of total available liquidity including $335 million in cash and cash equivalents at quarter end
“Our continued focus on operational excellence and disciplined capital allocation drove solid operating results and a strong increase in earnings per share,” said Gerry Smith, chief executive officer of The ODP Corporation. “ODP Business Solutions led the way, expanding its margin profile and driving an impressive year-over-year increase in operating income. Veyer added new third-party business, remaining on-track to more than double external EBITDA in 2023, and Varis continues to onboard customers and incorporate feedback and new features onto its platform. While the weaker macroeconomic environment and somewhat sluggish consumer activity created top-line headwinds in our consumer business during the quarter, Office Depot continued to provide a superior customer experience and we are encouraged by our expanded assortment, which positions us well for the upcoming back-to-school selling season.”
“Combining our solid operating performance with our continued disciplined capital allocation, which included repurchasing about $31 million of our shares in the quarter, we drove an impressive 25% year-over-year increase in adjusted earnings per share in the second quarter,” Smith continued.
“Our low-cost business model, multiple routes to market, and strong balance sheet have us well positioned to continue navigating the ongoing challenging macroeconomic conditions. Moving ahead, we will continue to drive operational excellence across our four business units and prioritize capital allocation, remaining squarely focused on driving value for our shareholders,” Smith concluded.
Consolidated Results
Reported (GAAP) Results
Total reported sales for the second quarter of 2023 were $1.9 billion, a decrease of 6% compared with the same period last year. This was driven primarily by lower sales in its consumer division, Office Depot, primarily due to 68 fewer stores in service compared to last year related to planned store closures, as well as lower retail and online consumer traffic. Sales at ODP Business Solutions Division were flat year over year, as increases in sales for paper and certain adjacency categories, and flexible pricing strategies, were largely offset by lower sales in product categories including ink, toner, office supplies and personal protective equipment. Additionally, Veyer provided strong logistics support for the ODP Business Solutions and Office Depot Divisions, and began to capture additional demand for its supply chain and procurement solutions among other third-party customers.
The Company reported operating income of $46 million in the second quarter of 2023, up 64% compared to operating income of $28 million in the prior year period. Operating results in the second quarter of 2023 included $7 million of charges. These charges consisted primarily of $6 million associated with non-cash asset impairments largely related to the operating lease right-of-use (ROU) assets associated with the Company’s retail store locations. Net income from continuing operations was $34 million, or $0.87 per diluted share in the second quarter of 2023, up from $20 million, or $0.39 per diluted share in the second quarter of 2022.
Adjusted (non-GAAP) Results(1)
Adjusted results for the second quarter of 2023 exclude charges and credits totaling $7 million as described above and the associated tax impacts.
Second quarter of 2023 adjusted EBITDA was $86 million compared to $91 million in the prior year period. This included depreciation and amortization of $29 million and $34 million in the second quarters of 2023 and 2022, respectively
Second quarter of 2023 adjusted operating income was $53 million compared to $54 million in the second quarter of 2022
Second quarter of 2023 adjusted net income from continuing operations was $39 million, or $0.99 per diluted share, compared to $39 million, or $0.79 per diluted share, in the second quarter of 2022, an increase of 25% on a per share basis
Division Results
ODP Business Solutions Division
Leading B2B distribution solutions provider serving small, medium and enterprise level companies with an annual trailing-twelve-month revenue in excess of $4 billion
Reported sales were $1.0 billion in the second quarter of 2023, flat compared to the same period last year, as return to the office trends and flexible pricing strategies were offset by higher levels of unemployment and other macroeconomic factors
Drove strong sales in paper and adjacency categories, including furniture, cleaning and breakroom supplies, and copy and print services
Total adjacency category sales, including cleaning and breakroom, furniture, technology, and copy and print, were 44% of total ODP Business Solutions’ sales
Continued strong pipeline and signed renewed business in excess of $100 million in customer agreements
Operating income was $45 million in the second quarter of 2023, up 25% over the same period last year, related primarily to higher gross margins. As a percentage of sales, operating income margin was 4.5%, up 100 basis points compared to the same period last year
Office Depot Division
Leading provider of retail consumer and small business products and services distributed via Office Depot and OfficeMax retail locations and an award-winning eCommerce presence
Reported sales were $0.9 billion in the second quarter of 2023, down 13% compared to the prior year period partially due to 68 fewer retail outlets in service associated with planned store closures, as well as lower demand relative to last year in certain product categories and lower online sales. The Company closed 7 retail stores in the quarter and had 952 stores at quarter end. Sales were down approximately 8% on a comparable store basis
Store traffic and demand relative to last year was negatively impacted by the recovery from the pandemic as a greater percentage of customers returned to the office, as well as weaker macroeconomic activity and higher unemployment
Operating income was $35 million in the second quarter of 2023, compared to operating income of $49 million during the same period last year. As a percentage of sales, operating income was 4%, or down approximately 90 basis points compared to the same period last year. This result was primarily driven by the flow through impact from lower sales and impacts related to inflation
Veyer Division
Veyer is a supply chain, distribution, procurement and global sourcing operation, supporting Office Depot and ODP Business Solutions, as well as other third-party customers. Assets and capabilities of Veyer include approximately 9 million square feet of infrastructure; ~100 facilities (distribution centers, cross-docks, and direct import centers); a large private fleet of vehicles; and next-day delivery to 98.5% of US population
In the second quarter of 2023, Veyer provided strong support for its internal customers, ODP Business Solutions and Office Depot, as well as for its third-party customers, generating sales of $1.3 billion
Operating income was $6 million in the second quarter of 2023, down from $8 million in the prior year period related to lower sales in Office Depot
In the quarter relative to last year, sales and EBITDA generated from third party customers was up nearly 62% and over 141%, respectively, resulting in sales of approximately $10 million and EBITDA of $3 million in the quarter
Varis Division
Varis is a tech-enabled B2B indirect procurement marketplace launched in the fourth quarter of 2022, which provides buyers and suppliers a seamless way to transact through the platform’s consumer-like buying experience and advanced spend management tools
Successfully launched the platform in the fourth quarter of 2022; onboarding new customers, incorporating feedback, and adding new features to the platform
Varis generated revenues in the quarter of $2 million, an increase of $1 million compared to the second quarter of 2022
Operating loss was $14 million, compared to an operating loss of $16 million in the second quarter of 2022, primarily driven by lower employee related costs and as the division continued to invest in its business and worked to onboard customers
Share Repurchases
The Company continued to execute under its previously announced $1 billion share repurchase authorization, available through year-end 2025. During the second quarter of 2023, the Company repurchased 724 thousand shares for $31 million. Since the inception of the authorization beginning in November 2022, the Company has repurchased approximately 8.3 million shares for $387 million.
The number of shares to be repurchased in the future and the timing of such transactions will depend on a variety of factors, including market conditions, regulatory requirements, and other corporate considerations. The current authorization could be suspended or discontinued at any time as determined by the Board of Directors.
Balance Sheet and Cash Flow
As of July 1, 2023, ODP had total available liquidity of approximately $1.1 billion, consisting of $335 million in cash and cash equivalents and $811 million of available credit under the Third Amended Credit Agreement. Total debt was $181 million.
For the second quarter of 2023, cash used by operating activities of continuing operations was $8 million, which included $1 million in restructuring and other spend, compared to cash used by operating activities of continuing operations of $114 million in the second quarter of the prior year, which included $14 million in restructuring and other spend. The year-over-year improvement in operating cash flow largely related to stronger operating results, prudent inventory management, and timing of certain working capital items.
Capital expenditures in the second quarter of 2023 were $23 million versus $21 million in the prior year period, reflecting continuing growth investments in the Company’s digital transformation, distribution network, and eCommerce capabilities. Adjusted Free Cash outflow(3) was $30 million in the second quarter of 2023, a significant improvement compared to $121 million outflow in the prior year period.
“I would like to thank our entire team for their continued efforts on carefully managing inventory and other working capital items, which resulted in significantly stronger year-over-year cash flow in the quarter,” said Anthony Scaglione, executive vice president and chief financial officer of The ODP Corporation. “As we move into the second half of the year, we will maintain our disciplined approach and focus on managing operating costs, maximizing cash flow in our business, and optimizing our capital allocation plan,” Scaglione added.
Updated 2023 Expectations
“We remain cautiously optimistic about the second half of the year and are excited about the opportunity to continue driving operational excellence and delivering strong value for our shareholders,” said Smith. “While we recognize that the challenging macroeconomic environment is causing somewhat sluggish consumer activity and market disruptions, we’re enthusiastic about our strong position and are focused on driving the assets we control to deliver long-term profitable growth. Through executing along our three horizons strategy, driving our four business unit model, and remaining focused on prudently deploying capital to maximize shareholder value, we’re on a path to unlocking ODP’s potential, creating a compelling value proposition for all of our stakeholders.”
The Company’s full year guidance for 2023 included in this release includes non-GAAP measures, such as adjusted EBITDA, Adjusted Operating Income, Adjusted Earnings per Share and Adjusted Free Cash Flow. These measures exclude charges or credits not indicative of core operations, which may include but not be limited to merger integration expenses, restructuring charges, acquisition-related costs, executive transition costs, asset impairments and other significant items that currently cannot be predicted without unreasonable efforts. The exact amount of these charges or credits are not currently determinable but may be significant. Accordingly, the Company is unable to provide equivalent GAAP measures or reconciliations from GAAP to non-GAAP for these financial measures without unreasonable effort.
The Company is updating its full year guidance for 2023 as follows:
Previous 2023 Guidance
Updated 2023 Guidance
Sales
$8.0 – $8.4 billion
Revised to approximately $8 billion
Adjusted EBITDA
$400 – $430 million
Affirmed
Adjusted Operating Income
$270 – $300 million
Affirmed
Adjusted Earnings per Share(*)
$4.50 – $5.10 per share
Revised to $5.00 – $5.30 per share
Adjusted Free Cash Flow(**)
$200 – $230 million
Affirmed
Capital Expenditures
$100 – $120 million
Affirmed
*Adjusted Earnings per Share (EPS) guidance for 2023 excludes potential discrete (tax) items that may affect quarter to quarter fluctuations and includes expected impact from share repurchases
**Adjusted Free Cash Flow is defined as cash flows from operating activities less capital expenditures excluding cash charges associated with the Company’s Maximize B2B Restructuring and expenses incurred in connection with our previously planned separation of the consumer business and re-alignment
“We delivered solid performance in the first half of the year and remain in a strong capital position with our low-cost business model mindset,” said Scaglione. “While we’re cautious on the state of the consumer and general macroeconomic conditions, our continued focus on operational excellence has us well positioned to continue driving solid results for the balance of the year. Our updated guidance assumes stabilization in overall economic trends in the second half of 2023 and reflects our expectations for revenue trends given first half performance, confirming the low end of our previous full-year revenue guidance range, while reaffirming all other operating metrics and increasing our earnings per share guidance given our strong performance to date, lower than expected interest and tax expense, and continued share buyback activity,” Scaglione added.
The ODP Corporation will webcast a call with financial analysts and investors on August 9, 2023, at 9:00 am Eastern Time, which will be accessible to the media and the general public. To listen to the conference call via webcast, please visit The ODP Corporation’s Investor Relations website at investor.theodpcorp.com. A replay of the webcast will be available approximately two hours following the event.
(1)
As presented throughout this release, adjusted results represent non-GAAP financial measures and exclude charges or credits not indicative of core operations and the tax effect of these items, which may include but not be limited to merger integration, restructuring, acquisition costs, and asset impairments. Reconciliations from GAAP to non-GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.
(2)
As used in this release, Free Cash Flow is defined as cash flows from operating activities less capital expenditures. Free Cash Flow is a non-GAAP financial measure and reconciliations from GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.
(3)
As used in this release, Adjusted Free Cash Flow is defined as Free Cash Flow excluding cash charges associated with the Company’s Maximize B2B Restructuring, and expenses incurred in connection with our previously planned separation of the consumer business and re-alignment. Adjusted Free Cash Flow is a non-GAAP financial measure and reconciliations from GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.
About The ODP Corporation
The ODP Corporation (NASDAQ:ODP) is a leading provider of products, services, and technology solutions through an integrated business-to-business (B2B) distribution platform and omni-channel presence, which includes world-class supply chain and distribution operations, dedicated sales professionals, a B2B digital procurement solution, online presence, and a network of Office Depot and OfficeMax retail stores. Through its operating companies Office Depot, LLC; ODP Business Solutions, LLC; Veyer, LLC; and Varis, Inc, The ODP Corporation empowers every business, professional, and consumer to achieve more every day. For more information, visit theodpcorp.com.
This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, the potential impacts on our business due to the unknown severity and duration of the COVID-19 pandemic, or state other information relating to, among other things, the Company, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “expectations”, “outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of the Company’s control. There can be no assurances that the Company will realize these expectations or that these beliefs will prove correct, and therefore investors and stakeholders should not place undue reliance on such statements.
Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, highly competitive office products market and failure to differentiate the Company from other office supply resellers or respond to decline in general office supplies sales or to shifting consumer demands; competitive pressures on the Company’s sales and pricing; the risk that the Company is unable to transform the business into a service-driven, B2B platform that such a strategy will not result in the benefits anticipated; the risk that the Company will not be able to achieve the expected benefits of its strategic plans, including its strategic shift to maintain all of its businesses under common ownership; the risk that the Company may not be able to realize the anticipated benefits of acquisitions due to unforeseen liabilities, future capital expenditures, expenses, indebtedness and the unanticipated loss of key customers or the inability to achieve expected revenues, synergies, cost savings or financial performance; the risk that the Company is unable to successfully maintain a relevant omni-channel experience for its customers; the risk that the Company is unable to execute the Maximize B2B Restructuring Plan successfully or that such plan will not result in the benefits anticipated; failure to effectively manage the Company’s real estate portfolio; loss of business with government entities, purchasing consortiums, and sole- or limited- source distribution arrangements; failure to attract and retain qualified personnel, including employees in stores, service centers, distribution centers, field and corporate offices and executive management, and the inability to keep supply of skills and resources in balance with customer demand; failure to execute effective advertising efforts and maintain the Company’s reputation and brand at a high level; disruptions in computer systems, including delivery of technology services; breach of information technology systems affecting reputation, business partner and customer relationships and operations and resulting in high costs and lost revenue; unanticipated downturns in business relationships with customers or terms with the suppliers, third-party vendors and business partners; disruption of global sourcing activities, evolving foreign trade policy (including tariffs imposed on certain foreign made goods); exclusive Office Depot branded products are subject to additional product, supply chain and legal risks; product safety and quality concerns of manufacturers’ branded products and services and Office Depot private branded products; covenants in the credit facility; general disruption in the credit markets; incurrence of significant impairment charges; retained responsibility for liabilities of acquired companies; fluctuation in quarterly operating results due to seasonality of the Company’s business; changes in tax laws in jurisdictions where the Company operates; increases in wage and benefit costs and changes in labor regulations; changes in the regulatory environment, legal compliance risks and violations of the U.S. Foreign Corrupt Practices Act and other worldwide anti-bribery laws; volatility in the Company’s common stock price; changes in or the elimination of the payment of cash dividends on Company common stock; macroeconomic conditions such as higher interest rates and future declines in business or consumer spending; increases in fuel and other commodity prices and the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; catastrophic events, including the impact of weather events on the Company’s business; the discouragement of lawsuits by shareholders against the Company and its directors and officers as a result of the exclusive forum selection of the Court of Chancery, the federal district court for the District of Delaware or other Delaware state courts by the Company as the sole and exclusive forum for such lawsuits; and the impact of the COVID-19 pandemic on the Company’s business. The foregoing list of factors is not exhaustive. Investors and shareholders should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update or revise any forward-looking statements.
THE ODP CORPORATION GAAP to Non-GAAP Reconciliations (Unaudited)
We report our results in accordance with accounting principles generally accepted in the United States (“GAAP”). We also review certain financial measures excluding impacts of transactions that are not related to our core operations (“non-GAAP”). Management believes that the presentation of these non-GAAP financial measures enhances the ability of its investors to analyze trends in its business and provides a means to compare periods that may be affected by various items that might obscure trends or developments in its business. Management uses both GAAP and non-GAAP measures to assist in making business decisions and assessing overall performance. Non-GAAP measures help to evaluate programs and activities that are intended to attract and satisfy customers, separate from expenses and credits directly associated with Merger, restructuring, and certain similar items. Certain non-GAAP measures are also used for short and long-term incentive programs.
Our measurement of these non-GAAP financial measures may be different from similarly titled financial measures used by others and therefore may not be comparable. These non-GAAP financial measures should not be considered superior to the GAAP measures, but only to clarify some information and assist the reader. We have included reconciliations of this information to the most comparable GAAP measures in the tables included within this material.
Free cash flow is a non-GAAP measure, which we define as cash flows from operating activities less capital expenditures. We believe that free cash flow is an important indicator that provides additional perspective on our ability to generate cash to fund our strategy and expand our distribution network. Adjusted free cash flow is also a non-GAAP measure, which we define as free cash flow excluding cash charges associated with the Company’s Maximize B2B Restructuring, and the previously planned separation of the consumer business and re-alignment.
DENVER, Aug. 8, 2023 /CNW/ – Schwazze, (OTCQX: SHWZ) (NEO: SHWZ) (“Schwazze” or the “Company”), a multi-state operating cannabis company with assets in Colorado and New Mexico, announces the grand opening of its medical and recreational dispensary, R.Greenleaf Hobbs, which opened on Saturday, August 5, 2023. The new store is located at 1901 Joe Harvey Blvd #130 in Hobbs, NM 88240. Store operating hours are 8a to 11p Monday through Saturday; 8a to 8p on Sunday.
The R.Greenleaf Hobbs store opening continues the Company’s expansion throughout New Mexico and comes on the heels of eight additional R.Greenleaf store openings since Schwazze’s acquisition of the retail banner in February 2022. This opening along with the recent acquisition of Everest brings Schwazze’s total number of New Mexico retail dispensaries to 33. All locations serve the needs of medical patients as well as recreational adult-use consumers.
“We are excited to be a part of the growing cannabis community in New Mexico and to open an additional R.Greenleaf dispensary in the state. The team has been hard at work preparing to serve our customers in and around the city of Hobbs offering a wide variety of quality products serviced by dedicated, knowledgeable staff,” said Ken Bair, Senior Vice President of New Mexico Retail.
Since April 2020, Schwazze has acquired, opened, or announced the planned acquisition of 62 cannabis retail dispensaries (bannered as Star Buds, Emerald Fields, R. Greenleaf, Standing Akimbo, and Everest) as well as eight cultivation facilities and three manufacturing plants across Colorado and New Mexico. In May 2021, Schwazze launched its Biosciences division, and in August 2021 it commenced home delivery services in Colorado.
About Schwazze
Schwazze (OTCQX: SHWZ NEO: SHWZ) is building a premier vertically integrated regional cannabis company with assets in Colorado and New Mexico and will continue to take its operating system to other states where it can develop a differentiated regional leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company’s leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices.
Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc. Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.
Forward-Looking Statements
This press release contains “forward-looking statements.” Such statements may be preceded by the words “plan,” “will,” “may,” “continue,” “predicts,” or similar words. Forward-looking statements are not guarantees of future events or performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual events and results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; (v) difficulties in securing regulatory approval to market our products and product candidates; (vi) our ability to successfully execute our growth strategy in Colorado and outside the state, (vii) our ability to consummate the acquisition described in this press release or to identify and consummate future acquisitions that meet our criteria, (viii) our ability to successfully integrate acquired businesses, including the acquisition described in this press release, and realize synergies therefrom, (ix) the ongoing COVID-19 pandemic, * the timing and extent of governmental stimulus programs, and (xi) the uncertainty in the application of federal, state and local laws to our business, and any changes in such laws. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
Revenue of $977.9 million, up 10.2% y/y on a pro forma basis
Awarded significant bookings of $2.1 billion, driving backlog +10% sequentially to $13.0 billion
Reported operating income of $34.3 million; adjusted operating income1 of $70.5 million
Adjusted EBITDA1 of $76.4 million with a margin1 of 7.8%
Diluted EPS of $0.06; adjusted diluted EPS1 of $1.01
Improved net debt to EBITDA1 leverage ratio ~0.4x to 3.48x
2023 Guidance:
Increasing mid-point of 2023 revenue, adjusted EBITDA1, and adjusted diluted EPS1 guidance
MCLEAN, Va., Aug. 8, 2023 /PRNewswire/ — V2X, Inc. (NYSE:VVX) announced second quarter 2023 financial results.
“V2X reported strong results in the second quarter with revenue increasing 10.2% year-over-year, on a pro forma basis,” said Chuck Prow, President and Chief Executive Officer of V2X. “Adjusted EBITDA1 for the quarter was $76.4 million and 7.8% margin resulting from solid revenue volume and benefits from program performance. Bookings activity in the quarter was strong at $2.1 billion in awards to V2X. This yielded total backlog of $13.0 billion, representing 10% growth sequentially. Our new business and recompete wins in addition to scope expansion on existing programs bolster our backlog position and set us up for positive momentum leading into 2024. Furthermore, with over $5 billion in bids under evaluation and a 12-month pipeline of ~$19 billion, the outlook for V2X remains robust.”
“Revenue growth in the quarter was generated by continued expansion on existing programs, contribution from new awards, as well as success in securing recompete wins late last year and in early 2023,” said Mr. Prow. “Our teams continued to further drive momentum by successfully expanding work scope on our core programs. Several notable wins late last year and in the first half of 2023 have also helped to push revenue growth. We continue to experience growth in the Pacific or INDOPACOM, and see significant long-term opportunity to further support increasing mission requirements in the region.”
Mr. Prow continued, “We were successful in capturing several key new business pursuits during the quarter. First, we were awarded a $100 million five-year task order with the Department of State to provide logistics support internationally. This represents our most substantive and strategic win with the Department of State and is the culmination of a multi-year client engagement and targeted growth campaign. Our agility and high level of readiness to support mission requirements was a key strategic differentiator for V2X in this award. Looking ahead, we see significant opportunity to leverage our comprehensive capabilities and footprint to further support the global missions of this important client. I am also pleased to announce that we are seeing results executing our sell through business model, which is leveraging our highly technical, development, integration, production, and modernization capabilities. During the quarter, V2X finalized three separate efforts with new clients that utilize our engineering, integration and manufacturing capabilities. We were also awarded an engineering development and prototyping effort with a new client that we believe will lead to new proprietary products with enduring follow-on business.”
“In addition to new awards, during the second quarter, we were awarded over $520 million in recompetes,” said Mr. Prow. “This includes an eight-year, $328 million contract with Naval Facilities Systems Command (NAVFAC) Southeast in support of the Naval Station at Guantanamo Bay. This contract includes all aspects of infrastructure sustainment, including the application of our unique converged solutions. We also secured a five-year recompete contract valued at over $122 million with NAVAIR Fleet Readiness Center Southwest for depot level maintenance support services. Transition to the new contract started in early July. These two recompete wins, along with our first quarter win of Naval Test Wing Pacific reflect the realization of our deliberate growth-oriented client campaign. These efforts are yielding growth, which further diversify our client portfolio. We are thrilled to have been selected for these important programs and remain focused on helping the Navy succeed with the missions that they serve.”
Mr. Prow concluded, “We are harnessing the combined solutions of V2X and are seeing momentum that we believe will drive growth and create value. For example, V2X’s robust modernization and sustainment capabilities are a significant differentiator and we are making excellent progress leveraging our engineering and manufacturing center of excellence. This includes opportunities such as modernizing and improving the effectiveness of the F-16 Fighting Falcon and further expanding our proprietary Gateway Mission Router 1000 across various platforms to provide cutting edge situational awareness in support of the DoD’s Joint All Domain Command and Control (JADC2) effort.”
Second Quarter 2023 Results
On July 5, 2022 (“Closing Date”), Vectrus, Inc. (“Vectrus”) completed its merger (the “Merger”) with Vertex Aerospace Services Holding Corp. (“Vertex”), thereby forming V2X, Inc. Second quarter 2022 “reported results” reflect the contributions of Vectrus from April 1, 2022, through June 30, 2022, unless otherwise noted. Comparisons to historical periods are relative to legacy Vectrus results, unless otherwise noted.
Revenue of $977.9 million, up 10.2% y/y on a pro forma basis
Operating income of $34.3 million, including merger and integration related costs of $13.6 million, and amortization of acquired intangible assets of $22.6 million
Adjusted operating income1 of $70.5 million
Adjusted EBITDA1 of $76.4 million with a 7.8% adjusted EBITDA margin1
Diluted EPS of $0.06
Adjusted diluted EPS1 of $1.01
Net debt as of June 30, 2023 of $1,176.6 million
Total backlog as of June 30, 2023 of $13.0 billion
“Our financial results for the second quarter were impressive across the board,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “Pro forma revenue increased 10.2% year-over-year to $977.9 million. Revenue growth was achieved via expansion on existing programs, the contribution from new business wins awarded in late 2022 and securing key recompete programs in the first half of 2023. Advancing and protecting our core in addition to growth through new pursuit wins is fundamental to V2X delivering on its commitments. To date in 2023, we have witnessed an acceleration of deliverables that were originally contemplated to be recognized in the second half of the year. The results this quarter represent achievement of expanding in our core markets and capturing new business with approximately $900 million in new contract awards in the first half of 2023.”
For the quarter, the Company reported operating income of $34.3 million and adjusted operating income1 of $70.5 million. Adjusted EBITDA1 was $76.4 million with a margin of 7.8%. First quarter diluted EPS was $0.06, due primarily to merger and integration related costs, amortization of acquired intangible assets, and interest expense. Adjusted diluted EPS1 for the quarter was $1.01.
Ms. Lynch continued, “At the end of the quarter, net debt for V2X was $1,176.6 million, a $112 million reduction from the prior quarter. Net consolidated indebtedness to EBITDA1 (net leverage ratio) was 3.48x, representing a ~0.4x improvement over the prior quarter. We remain focused on reducing debt and expect that our leverage ratio will continue to improve in the second half of 2023.”
“Net cash provided by operating activities for the quarter was $116.6 million. Adjusted net cash provided by operating activities1 was $10.9 million, adding back $7.3 million of M&A and integration costs, and removing the contribution of the master accounts receivable purchase or “MARPA” facility of $113 million,” said Ms. Lynch.
Total backlog as of June 30, 2023, was $13.0 billion, increasing approximately $1.2 billion over last quarter reflecting successful expansion on existing programs along with significant new contract and recompete awards. Funded backlog was $3.1 billion. The trailing twelve-month book-to-bill was 1.3x.
2023 Guidance
Ms. Lynch concluded, “I am pleased with our results this quarter and for the first half of the year. Our teams continue to work together seamlessly, making notable progress on integration milestones while driving results across the board. As such, the Company is raising the mid-point of its 2023 revenue, adjusted EBITDA1, and adjusted diluted EPS1 guidance.” Guidance for 2023 is as follows:
$ millions, except for per share amounts
2023 Guidance (Updated)
2023 Mid-Point (Updated)
Revenue
$3,850
$3,950
$3,900
Adjusted EBITDA1
$295
$310
$303
Adjusted Diluted Earnings Per Share1
$3.85
$4.30
$4.08
Adjusted Net Cash Provided by Operating Activities 1
$115
$135
$125
Forward-looking statements are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below.
Second Quarter 2023 Conference Call
Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, August 8, 2023. U.S.-based participants may dial in to the conference call at 877-506-6380, while international participants may dial 412-542-4198. A live webcast of the conference call as well as an accompanying slide presentation will be available here: https://app.webinar.net/lZEXpEOLx9J
A replay of the conference call will be posted on the V2X website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through August 22, 2023, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 10179631.
Presentation slides that will be used in conjunction with the conference call will also be made available online in advance on the “investors” section of the company’s website at https://gov2x.com. V2X recognizes its website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with its obligations under the U.S. Securities and Exchange Commission (“SEC”) Regulation FD.
Footnotes: 1 See “Key Performance Indicators and Non-GAAP Financial Measures” for descriptions and reconciliations.
About V2X
V2X builds smart solutions designed to integrate physical and digital infrastructure – from base to battlefield – by aligning people, actions, and outputs. Formed by the merger of Vectrus and Vertex, we bring a combined 120 years of successful mission support. Our lifecycle solutions improve security, streamline logistics, and enhance readiness.
The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training, and technology markets to national security, defense, civilian and international clients. Our global team of approximately 15,000 employees brings innovation to every point in the mission lifecycle, from preparation to operations, to sustainment, as it tackles the most complex challenges with agility, grit, and dedication.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, all the statements and items listed under “2023 Guidance” above and other assumptions contained therein for purposes of such guidance, other statements about our 2023 performance outlook, revenue, contract opportunities, and any discussion of future operating or financial performance.
Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “could,” “potential,” “continue” or similar terminology. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management.
These forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. For a discussion of some of the risks and uncertainties that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the SEC.
We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Key Performance Indicators and Non-GAAP Measures
The primary financial performance measures we use to manage our business and monitor results of operations are revenue trends and operating income trends. Management believes that these financial performance measures are the primary drivers for our earnings and net cash from operating activities. Management evaluates its contracts and business performance by focusing on revenue, operating income, and operating margin. Operating income represents revenue less both cost of revenue and selling, general and administrative (SG&A) expenses. Cost of revenue consists of labor, subcontracting costs, materials, and an allocation of indirect costs, which includes service center transaction costs. SG&A expenses consist of indirect labor costs (including wages and salaries for executives and administrative personnel), bid and proposal expenses and other general and administrative expenses not allocated to cost of revenue. We define operating margin as operating income divided by revenue.
We manage the nature and amount of costs at the program level, which forms the basis for estimating our total costs and profitability. This is consistent with our approach for managing our business, which begins with management’s assessing the bidding opportunity for each contract and then managing contract profitability throughout the performance period.
In addition to the key performance measures discussed above, we consider adjusted net income, adjusted diluted earnings per share, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted operating cash flow, and pro forma revenue to be useful to management and investors in evaluating our operating performance, and to provide a tool for evaluating our ongoing operations. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives. We provide this information to our investors in our earnings releases, presentations, and other disclosures.
Adjusted net income, adjusted diluted earnings per share, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted operating cash flow, and pro forma revenue, however, are not measures of financial performance under GAAP and should not be considered a substitute for financial measures determined in accordance with GAAP. Definitions and reconciliations of these items are provided below.
Pro forma revenue is defined as the combined results of our operations for the three months ended June 30, 2023 and July 1, 2022 as if the Merger had occurred on January 1, 2021.
Adjusted operating income is defined as operating income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration, and related costs.
Adjusted EBITDA is defined as operating income, adjusted to exclude depreciation and amortization of intangible assets, and items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration, and related costs.
Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue.
Adjusted net income is defined as net income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration and related costs, amortization of acquired intangible assets, amortization of debt issuance costs, and loss on extinguishment of debt.
Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted average diluted common shares outstanding.
Cash interest, net is defined as interest expense, net adjusted to exclude amortization of debt issuance costs.
Adjusted operating cash flow is defined as net cash provided by (or used in) operating activities adjusted to exclude infrequent non-operating items, such as M&A payments and related costs.
In this document, the Company presents certain forward-looking non-GAAP metrics. The Company does not provide outlook on a GAAP basis because the items that the Company excludes from GAAP to calculate the comparable non-GAAP measure can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company’s routine operating activities. Additionally, management does not forecast many of the excluded items for internal use and therefore cannot create or rely on outlook done on a GAAP basis. The occurrence, timing, and amount of any of the items excluded from GAAP to calculate non-GAAP measures could significantly impact the Company’s fiscal 2023 GAAP results.
President and Chief Operating Officer Thomas Tedford Appointed Chief Executive Officer Effective October 1, 2023; Boris Elisman to Continue as Executive Chairman Before Retiring in the first half of 2024
LAKE ZURICH, Ill,–(BUSINESS WIRE)– ACCO Brands Corporation (NYSE: ACCO) (the “Company” or “ACCO Brands”), one of the world’s largest suppliers of select categories of branded academic, consumer and business products, today announced its Board of Directors has appointed the Company’s President and Chief Operating Officer, Thomas Tedford, as CEO effective October 1, 2023. Mr. Tedford has also been elected a member of the board effective that date. Mr. Tedford will succeed ACCO Brands current CEO, Boris Elisman, who will continue as Executive Chairman until his retirement in the first half of 2024. He has notified the Board that he will not stand for reelection at the 2024 stockholders’ meeting.
“The appointment of Tom as ACCO Brands next CEO is part of a succession plan that Boris and the Board have been preparing over the past few years,” stated Lead Independent Director, Thomas Kroeger. “We have worked closely with Tom and have full confidence in his commitment to creating value for our shareholders. He brings deep knowledge of our industry, our customers, the overall Company, and its operating segments to his new role. Tom has worked closely with Boris and the Board in developing and executing on the Company’s strategic transformation and will continue to do so, assuring a smooth and seamless transition of leadership and positioning us for profitable growth.”
“On behalf of everyone at ACCO Brands, we would like to thank Boris for his exemplary leadership and dedicated service as CEO. Boris’s innumerable contributions during his 18-year tenure, the last 10 leading the Company as CEO, have successfully expanded the growth opportunities for the Company,” Mr. Kroger concluded.
Mr. Elisman said, “During my tenure at ACCO Brands, the Company and the industry have undergone significant changes and I am proud of our teams’ accomplishments during this period. Having worked closely with Tom for many years, I know the company is in great hands to continue to progress and accelerate profitable growth. It has been my privilege to lead this great company, and I look forward to continuing to serve as Executive Chairman to ensure a smooth transition.”
Mr. Tedford commented, “It is an honor to have the opportunity to lead ACCO Brands and our talented team of dedicated employees as we build upon the current momentum in our business. Boris has been a great mentor and a tremendous leader. I have worked with him for more than a decade and appreciate his leadership and bold actions to transform ACCO Brands. I look forward to continuing to work closely with Boris to complete this leadership transition.”
“I am grateful for the support of our Board of Directors and am excited to work with them and our executive leadership team. I believe there are immense opportunities to enhance our leadership position in key categories, grow through share gains and new innovative product solutions, optimize our supply chain, and improve our margin profile as we remain focused on delivering shareholder value and customer satisfaction. Near-term we are committed to prioritizing our free cash flow towards supporting our dividend and debt reduction,” added Mr. Tedford.
Thomas Tedford Bio
Mr. Tedford joined ACCO Brands in 2010 and was named President and Chief Operating Officer in 2021. From 2011 to 2021, Mr. Tedford served first as Executive Vice President and President of ACCO Brands Americas ultimately becoming Executive Vice President and President, ACCO Brands, North America. During his tenure, he successfully led the operational, cultural and leadership integrations of key strategic acquisitions, the introduction of new products and the development of new markets. Prior to joining ACCO Brands, Mr. Tedford had 15 years of progressive sales, sales leadership, marketing, operational and executive management experience, operating in highly competitive and demanding industries. Mr. Tedford has expertise addressing complex challenges, optimizing performance, developing growth strategies, innovating product solutions, and building high-performing teams.
About ACCO Brands Corporation
ACCO Brands, the Home of Great Brands Built by Great People, designs, manufactures and markets consumer and end-user products that help people work, learn, play, and thrive. Our widely recognized brands include AT-A-GLANCE®, Five Star®, Kensington®, Leitz®, Mead®, PowerA®, Swingline®, Tilibra® and many others. More information about ACCO Brands Corporation (NYSE: ACCO) can be found at www.accobrands.com.
IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (the “company”) (Nasdaq: SALM) released its results for the three and six months ended June 30, 2023.
Second Quarter 2023 Results
For the three months ended June 30, 2023 compared to the three months ended June 30, 2022:
Consolidated
Total revenue decreased 4.2% to $65.8 million from $68.7 million;
Total operating expenses increased 13.9% to $69.9 million from $61.4 million;
Operating expenses, excluding stock-based compensation expense, debt modification costs, gains and losses on the sale or disposition of assets, impairments, depreciation expense and amortization expense (1) increased 5.2% to $63.1 million from $60.0 million;
The company had an operating loss of $4.1 million as compared to operating income of $7.3 million;
The company had a net loss of $7.1 million, or $0.26 net loss per share, compared to net income of $9.1 million, or $0.33 net income per diluted share;
EBITDA (1) decreased to $(0.6) million from $14.5 million; and
Adjusted EBITDA (1) decreased 77.2% to $2.7 million from $11.7 million.
Broadcast
Net broadcast revenue decreased 5.3% to $49.7 million from $52.5 million;
Station Operating Income (“SOI”) (1) decreased 43.5% to $6.2 million from $10.9 million;
Same Station (1) net broadcast revenue decreased 5.8% to $49.4 million from $52.4 million; and
Same Station SOI (1) decreased 37.7% to $6.8 million from $10.9 million.
Digital Media
Digital media revenue increased 0.5% to $10.9 million from $10.8 million; and
Digital Media Operating Income (1) decreased 27.5% to $1.8 million from $2.5 million.
Publishing
Publishing revenue decreased 3.5% to $5.2 million from $5.4 million; and
Publishing Operating Loss (1) increased to $0.8 million from $6,000.
Included in the results for the three months ended June 30, 2023 are:
A $1.8 million ($1.4 million, net of tax, or $0.05 per share) impairment charge to the value of goodwill in Townhall;
A $1.1 million ($0.8 million, net of tax, or $0.03 per share) impairment charge to the value of broadcast licenses in Portland and San Francisco;
A $0.1 million ($0.1 million, net of tax) net loss on the disposition of assets; and
A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expense of stock options.
Included in the results for the three months ended June 30, 2022 are:
A $6.9 million ($5.1 million, net of tax, or $0.19 per diluted share) net gain on the disposition of assets reflects a $6.5 million pre-tax gain on the sale of land used in the company’s Denver, Colorado broadcast operations and a $0.5 million pre-tax gain on the sale of the company’s radio stations in Louisville, Kentucky that was offset by losses from various fixed asset disposals;
A $3.9 million ($2.9 million, net of tax, or $0.11 per share) impairment charge to the value of broadcast licenses in Columbus, Dallas, Greenville, Honolulu, Orlando, Portland, and Sacramento;
A $0.1 million ($0.1 million, net of tax) goodwill impairment charge; and
A $0.1 million ($0.1 million, net of tax) non-cash compensation charge related to the expense of stock options.
Per share numbers are calculated based on 27,216,787 diluted weighted average shares for the three months ended June 30, 2023, and 27,570,881 diluted weighted average shares for the three months ended June 30, 2022.
Year to Date 2023 Results
For the six months ended June 30, 2023 compared to the six months ended June 30, 2022:
Consolidated
Total revenue decreased 1.5% to $129.3 million from $131.3 million;
Total operating expenses increased 15.6% to $137.5 million from $119.0 million;
Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, debt modification costs, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (1) increased 8.2% to $125.2 million from $115.7 million;
The company had an operating loss of $8.3 million as compared to operating income of $12.3 million;
The company recognized $3.9 million in film distribution income from an unconsolidated equity investment in the six months ended June 30, 2022;
The company had a net loss of $12.2 million, or $0.45 net loss per share, compared to net income of $10.9 million, or $0.39 net income per diluted share;
EBITDA (1) decreased to $(1.2) million from $22.7 million; and
Adjusted EBITDA (1) decreased 78.1% to $4.1 million from $18.5 million.
Broadcast
Net broadcast revenue decreased 2.8% to $98.0 million from $100.9 million;
SOI (1) decreased 44.9% to $11.7 million from $21.2 million;
Same station (1) net broadcast revenue decreased 3.2% to $97.5 million from $100.8 million; and
Same station SOI (1) decreased 39.6% to $12.8 million from $21.2 million.
Digital media
Digital media revenue increased 1.3% to $21.4 million from $21.1 million; and
Digital media operating income (1) decreased 23.1% to $3.4 million from $4.4 million.
Publishing
Publishing revenue increased 6.1% to $9.9 million from $9.3 million; and
Publishing Operating Loss (1) increased 156.5% to $1.5 million from $0.6 million.
Included in the results for the six months ended June 30, 2023 are:
A $3.2 million ($2.4 million, net of tax, or $0.09 per share) impairment charge to the value of broadcast licenses in Miami, Portland and San Francisco;
A $1.8 million ($1.4 million, net of tax, or $0.05 per share) impairment charge to the value of goodwill in Townhall;
A $0.1 million loss on the early retirement of long-term debt associated with the 2024 Notes; and
A $0.2 million ($0.1 million, net of tax, or $0.01 per share) non-cash compensation charge related to the expense of stock options.
Included in the results for the six months ended June 30, 2022 are:
A $8.6 million ($6.4 million, net of tax, or $0.23 per diluted share) net gain on the disposition of assets relates primarily to the $6.5 million pre-tax gain on the sale of land used in the company’s Denver, Colorado broadcast operations, the $1.8 million pre-tax gain on sale of land used in the company’s Phoenix, Arizona broadcast operations, and $0.5 million pre-tax gain on the sale of the company’s radio stations in Louisville, Kentucky offset by various fixed asset disposals;
A $3.9 million ($2.9 million, net of tax, or $0.11 per share) impairment charge to the value of broadcast licenses in Columbus, Dallas, Greenville, Honolulu, Orlando, Portland, and Sacramento;
A $0.1 million ($0.1 million, net of tax) goodwill impairment charge;
A $0.2 million ($0.2 million, net of tax, or $0.01 per share) charge for debt modification costs; and
A $0.2 million ($0.1 million, net of tax) non-cash compensation charge related to the expense of stock options.
Per share numbers are calculated based on 27,216,787 diluted weighted average shares for the six months ended June 30, 2023, and 27,590,644 diluted weighted average shares for the six months ended June 30, 2022.
Balance Sheet
As of June 30, 2023, the company had $159.4 million outstanding on the 7.125% senior secured notes due 2028 (“2028 Notes”) and $22.6 million outstanding on the ABL facility.
Effective June 30, 2023, the company was not in compliance with its fixed charge coverage ratio. On August 7, 2023 the company signed a forbearance whereby the bank agreed not to exercise remedies on the default during the month of August. Additionally, the notional amount of the revolver was reduced from $30.0 million to $25.0 million with a minimum availability of $1.0 million. Finally, the interest rate associated with the revolver increased by two percentage points effective July 1, 2023 through the date of the forbearance amendment.
Acquisitions and Divestitures
The following transactions were completed since April 1, 2023:
On July 21, 2023 the company closed the sale of radio station KNTS-AM in Seattle, Washington for $0.2 million.
On July 13, 2023 the company closed the sale of radio station KLFE-AM in Seattle, Washington for $0.5 million. Radio station KLFE-AM was being programmed under a Time Brokerage Agreement (“TBA”) as of August 1, 2022.
On May 25, 2023, the company entered into a rental income purchase agreement with a related party to sell the assignment of the rents from its Greenville, South Carolina radio transmitter site for $3.5 million commencing on June 1, 2023 resulting in a pre-tax gain of $3.3 million.
Pending transactions:
On June 29, 2023 the company entered into an agreement to sell radio station KSAC-FM in Sacramento, California for $1.0 million subject to approval of the Federal Communications Commission (“FCC”). Radio station KSAC-FM will begin being programmed under a TBA on August 1, 2023. Based on its plan to sell the station, the company recorded an estimated pre-tax loss on the sale of assets of $3.3 million at June 30, 2023, reflecting the sales price as compared to the carrying value of the assets and the estimated cost to sell. The company expects to close the sale in the fourth quarter of this year.
Conference Call Information
The company will host a teleconference to discuss its results on August 8, 2023 at 4:00 p.m. Central Time. To access the teleconference, please dial (888) 770-7291, and then ask to be joined into the Salem Media Group Second Quarter 2023 call or listen via the investor relations portion of the company’s website, located at investor.salemmedia.com. A replay of the teleconference will be available through August 22, 2023 and can be heard by dialing (800) 770-2030, passcode 2413416 or on the investor relations portion of the company’s website, located at investor.salemmedia.com.
Follow us on Twitter @SalemMediaGrp.
Third Quarter 2023 Outlook
For the third quarter of 2023, the company is projecting total revenue to decline between 3% and 5% from the third quarter 2022 total revenue of $66.9 million. Excluding the impact of the 2022 political revenue, the company would project total revenue to decline between 1% and 3%. The company is also projecting operating expenses before gains or losses on the sale or disposal of assets, stock-based compensation expense, legal settlement, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (“Recurring Operating Expenses”) to be between a decrease of 1% and increase of 2% compared to the third quarter of 2022 Recurring Operating Expenses of $60.8 million.
A reconciliation of Recurring Operating Expenses (a non-GAAP measure) to the most directly comparable GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the potential high variability, complexity and low visibility with respect to the charges excluded from this non-GAAP financial measure, in particular, the change in the estimated fair value of earn-out consideration, impairments and gains or losses from the disposition of fixed assets. The company expects the variability of the above charges may have a significant, and potentially unpredictable, impact on its future GAAP financial results.
About Salem Media Group, Inc.
Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc. at www.salemmedia.com, Facebook and Twitter.
Forward-Looking Statements
Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated as a result of certain risks and uncertainties, including but not limited to the ability of the company to close and integrate announced transactions, market acceptance of the company’s radio station formats, competition from new technologies, inflation and other adverse economic conditions, and other risks and uncertainties detailed from time to time in the company’s reports on Forms 10-K, 10-Q, 8-K and other filings filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The company undertakes no obligation to update or revise any forward-looking statements to reflect new information, changed circumstances or unanticipated events.
(1)
Regulation G
Management uses certain non-GAAP financial measures defined below in communications with investors, analysts, rating agencies, banks and others to assist such parties in understanding the impact of various items on its financial statements. The company uses these non-GAAP financial measures to evaluate financial results, develop budgets, manage expenditures and as a measure of performance under compensation programs.
The company’s presentation of these non-GAAP financial measures should not be considered as a substitute for or superior to the most directly comparable financial measures as reported in accordance with GAAP.
Regulation G defines and prescribes the conditions under which certain non-GAAP financial information may be presented in this earnings release. The company closely monitors EBITDA, Adjusted EBITDA, Station Operating Income (“SOI”), Same Station net broadcast revenue, Same Station broadcast operating expenses, Same Station Operating Income, Digital Media Operating Income, Publishing Operating Loss, and operating expenses excluding gains or losses on the disposition of assets, stock-based compensation, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation and amortization, all of which are non-GAAP financial measures. The company believes that these non-GAAP financial measures provide useful information about its core operating results, and thus, are appropriate to enhance the overall understanding of its financial performance. These non-GAAP financial measures are intended to provide management and investors a more complete understanding of its underlying operational results, trends and performance.
The company defines Station Operating Income (“SOI”) as net broadcast revenue minus broadcast operating expenses. The company defines Digital Media Operating Income as net Digital Media Revenue minus Digital Media Operating Expenses. The company defines Publishing Operating Loss as net Publishing Revenue minus Publishing Operating Expenses. The company defines EBITDA as net income before interest, taxes, depreciation, and amortization. The company defines Adjusted EBITDA as EBITDA before gains or losses on the disposition of assets, before debt modification costs, before changes in the estimated fair value of contingent earn-out consideration, before impairments, before net miscellaneous income and expenses, before (gain) loss on early retirement of long-term debt and before non-cash compensation expense. SOI, Digital Media Operating Income, Publishing Operating Loss, EBITDA and Adjusted EBITDA are commonly used by the broadcast and media industry as important measures of performance and are used by investors and analysts who report on the industry to provide meaningful comparisons between broadcasters. SOI, Digital Media Operating Income, Publishing Operating Loss, EBITDA and Adjusted EBITDA are not measures of liquidity or of performance in accordance with GAAP and should be viewed as a supplement to and not a substitute for or superior to its results of operations and financial condition presented in accordance with GAAP. The company’s definitions of SOI, Digital Media Operating Income, Publishing Operating Loss, EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures reported by other companies.
The company defines Same Station net broadcast revenue as broadcast revenue from its radio stations and networks that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. The company defines Same Station broadcast operating expenses as broadcast operating expenses from its radio stations and networks that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. The company defines Same Station SOI as Same Station net broadcast revenue less Same Station broadcast operating expenses. Same Station operating results include those stations that the company owns or operates in the same format on the first and last day of each quarter, as well as the corresponding quarter of the prior year. Same Station operating results for a full calendar year are calculated as the sum of the Same Station operating results for each of the four quarters of that year. The company uses Same Station operating results, a non-GAAP financial measure, both in presenting its results to stockholders and the investment community, and in its internal evaluations and management of the business. The company believes that Same Station operating results provide a meaningful comparison of period over period performance of its core broadcast operations as this measure excludes the impact of new stations, the impact of stations the company no longer owns or operates, and the impact of stations operating under a new programming format. The company’s presentation of Same Station operating results is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The company’s definition of Same Station operating results is not necessarily comparable to similarly titled measures reported by other companies.
For all non-GAAP financial measures, investors should consider the limitations associated with these metrics, including the potential lack of comparability of these measures from one company to another.
The Supplemental Information tables that follow the condensed consolidated financial statements provide reconciliations of the non-GAAP financial measures that the company uses in this earnings release to the most directly comparable measures calculated in accordance with GAAP. The company uses non-GAAP financial measures to evaluate financial performance, develop budgets, manage expenditures, and determine employee compensation. The company’s presentation of this additional information is not to be considered as a substitute for or superior to the directly comparable measures as reported in accordance with GAAP.
The company defines EBITDA (1) as net income before interest, taxes, depreciation, and amortization. The table below presents a reconciliation of EBITDA (1) to Net Income (Loss), the most directly comparable GAAP measure. EBITDA (1) is a non-GAAP financial performance measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP. The company defines Adjusted EBITDA (1) as EBITDA (1) before gains or losses on the disposition of assets,before debt modification costs, before changes in the estimated fair value of contingent earn-out consideration, before impairments, before net miscellaneous income and expenses, before (gain) loss on early retirement of long-term debt, and before non-cash compensation expense. The table below presents a reconciliation of Adjusted EBITDA (1) to Net Income (Loss), the most directly comparable GAAP measure. Adjusted EBITDA (1) is a non-GAAP financial performance measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.
Reported net sales of $494 million, with gross margin expanding 450 basis points
Operating income of $55 million, flat to prior year; adjusted operating income of $66 million grew 14% year over year
EPS of $0.27; adjusted EPS of $0.38, above Company’s outlook
Net operating cash outflow improved $59 million year to date driven by improved working capital management
Maintains full year 2023 adjusted EPS outlook of $1.08 to $1.12
Raises full year 2023 free cash flow outlook to at least $110 million
Lowered end of year consolidated leverage ratio outlook
August 08, 2023 04:00 PM Eastern Daylight Time
LAKE ZURICH, Ill.–(BUSINESS WIRE)–ACCO Brands Corporation (NYSE: ACCO) today announced its second quarter and first six-month results for the period ended June 30, 2023.
“Our top priority entering 2023 was to restore our margin profile, and I’m pleased to report that we have made great progress on that front in the first half. Second quarter and year-to-date gross margin expanded 450 and 360 basis points, respectively, due to greater traction from our pricing, productivity and restructuring initiatives. This has yielded much better than expected adjusted EPS. The higher operating profits experienced through the first six months give us confidence in our full year 2023 outlook for adjusted EPS and free cash flow. While we are pleased with the strong start of the year, we are more cautious on the second half demand environment. With improved working capital management, we are well positioned to end the year with a lower leverage ratio than previously expected. We remain committed to supporting our quarterly dividend and reducing debt with our strong cash flow” said Boris Elisman, Chairman and Chief Executive Officer of ACCO Brands.
“Our results reflect the resilience of our brands and the transformative actions undertaken to expand our product categories, broaden our geographic reach, bring innovative new consumer-centric products to market and streamline our cost structure. We remain confident that our strategy has us positioned to deliver sustainable organic growth as global economies improve,” concluded Mr. Elisman.
Second Quarter Results
Net sales declined 5.3 percent to $493.6 million from $521.0 million in 2022. Adverse foreign exchange reduced sales by $0.8 million, or 0.2 percent. Comparable sales fell 5.1 percent. Both reported and comparable sales declines were due to reduced volume, reflecting a more challenging macroeconomic environment, especially in our EMEA segment, and weaker global sales of computer accessories.
Operating income was $55.2 million versus $55.4 million in 2022. In 2022, operating income benefitted from income related to a change in the value of the PowerA contingent earnout of $9.4 million, partially offset by $1.9 million in restructuring charges. Adjusted operating income increased 14 percent to $66.2 million from $58.1 million in the prior year. This increase reflects improved gross margin from the effect of cumulative global pricing and cost reduction actions, partially offset by negative fixed cost leverage and higher SG&A expense primarily due to an increase in incentive compensation.
The Company reported net income of $26.4 million, or $0.27 per share, compared with prior year net income of $39.4 million, or $0.40 per share. Reported net income in 2023 reflects higher interest, tax and non-operating pension expenses. Reported net income in 2022 benefited from the items noted above in operating income. Adjusted net income was $36.5 million, or $0.38 per share, compared with $36.0 million, or $0.37 per share in 2022. Adjusted net income reflects the increase in adjusted operating income, partially offset by higher interest and non-operating pension expenses.
Business Segment Results
ACCO Brands North America – Secondquarter segment net sales of $292.6 million decreased 4.6 percent versus the prior year. Adverse foreign exchange reduced sales by 0.5 percent. Comparable sales of $294.2 million were down 4.1 percent. Both decreases reflect softer demand from business and retail customers due to a weaker macroeconomic environment and lower volumes for computer accessories. These factors more than offset stronger pricing, and volume growth in gaming accessories. Timing for some back-to-school sales was earlier than anticipated.
Second quarter operating income in North America was $55.1 million versus $50.7 million a year earlier, and adjusted operating income was $60.7 million compared to $57.2 million a year ago. Both increases reflect the benefit of pricing and cost actions and favorable mix, which more than offset the impact of lower sales and negative fixed cost leverage.
ACCO Brands EMEA – Secondquarter segment net sales of $125.7 million decreased 8.8 percent versus the prior year. Favorable foreign exchange increased sales by 0.3 percent. Comparable sales of $125.3 million decreased 9.1 percent versus the prior-year period. Both reported and comparable sales declines reflect reduced demand due to a weaker environment in the region and lower volumes for technology accessories. This more than offset the effect of cumulative pricing actions.
Second quarter operating income in EMEA was $5.7 million versus a loss of $1.5 million a year earlier, and adjusted operating income was $9.5 million compared to $2.1 million a year ago. The increases in both reported operating income and adjusted operating income reflect improved gross margins from the cumulative effect of price increases and cost savings actions more than offsetting negative fixed cost leverage.
ACCO Brands International – Secondquarter segment sales of $75.3 million decreased 1.6 percent versus the prior year. Favorable foreign exchange increased sales by 0.7 percent. Comparable sales of $74.8 million decreased 2.3 percent versus the year-ago period. Both sales decreases reflect lower volumes due to weaker economies in Asia and Australia, mostly offset by growth in Latin America.
Second quarter operating income in the International segment was $6.7 million versus $6.3 million a year earlier, with the increase due to lower restructuring expense. Adjusted operating income was $8.3 million compared to $8.6 million a year ago.
Six Month Results
Net sales decreased 6.9 percent to $896.2 million from $962.6 million in 2022. Adverse foreign exchange reduced sales by $11.4 million, or 1.2 percent. Comparable sales decreased 5.7 percent. Both reported and comparable sales declines reflect lower volume, especially in EMEA and North America due to the challenging macroeconomic environment, lower sales of technology accessories, and the timing of back-to-school shipments and lower channel inventory compared to a year ago. These more than offset the benefit of price increases across all segments, and volume growth in Latin America.
Operating income of $65.3 million compares to operating income of $62.2 million in 2022, which included a benefit of $6.8 million related to a change in the value of the PowerA contingent earnout. Adjusted operating income of $90.5 million increased from $80.7 million last year. Both reported and adjusted operating income increases reflect the benefit of global price increases and cost reduction initiatives, partially offset by higher SG&A expense primarily due to increased incentive compensation.
Net income was $22.7 million, or $0.23 per share, compared with net income of $36.7 million, or $0.37 per share, in 2022. Reported net income in 2023 reflects higher interest, tax and non-operating pension expenses. Reported net income in 2022 benefitted from the items noted above in operating income. Adjusted net income was $45.0 million, compared with $46.4 million in 2022, and adjusted earnings per share were $0.47 for both year periods. Adjusted net income reflects the increase in adjusted operating income offset by higher interest and non-operating pension expenses.
Capital Allocation and Dividend
Year to date, the Company improved its operating cash outflow by $58.6 million to $39.3 million versus $97.9 million in the prior year, driven primarily by improved working capital management. Adjusted free cash flow improved by $50.1 million and was an outflow of $45.4 million versus an outflow of $95.5 million a year earlier. Adjusted free cash flow in 2022 excludes the contingent earnout payment.
On August 1, 2023, ACCO Brands announced that its board of directors declared a regular quarterly cash dividend of $0.075 per share. The dividend will be paid on September 12, 2023, to stockholders of record at the close of business on August 22, 2023.
Full Year 2023 and Third Quarter Outlook
The Company is updating its full year 2023 outlook and providing a 3Q outlook. For the full year, reported sales are expected to be down 1 percent to 3 percent, including a 1.5 percent positive impact from foreign exchange. The Company is also maintaining its full year adjusted EPS outlook to be in the range of $1.08 to $1.12. Mid-teen growth in adjusted operating income is expected to be partially offset by higher interest and non-cash non-operating pension expenses. The Company is raising its 2023 free cash flow outlook to at least $110 million and expects to end the year with a consolidated leverage ratio of 3.3x to 3.5x, lower than previously expected.
In the third quarter, reported sales are expected to be flat to down 3 percent, which includes approximately a 4 percent positive impact from foreign exchange. Adjusted EPS is expected to be in the range of $0.21 to $0.24, which compares to $0.25 of adjusted EPS in the prior-year third quarter.
Webcast
At 8:30 a.m. ET on August 9, 2023, ACCO Brands Corporation will host a conference call to discuss the Company’s second quarter 2023 results. The call will be broadcast live via webcast. The webcast can be accessed through the Investor Relations section of www.accobrands.com. The webcast will be in listen-only mode and will be available for replay following the event.
About ACCO Brands Corporation
ACCO Brands, the Home of Great Brands Built by Great People, designs, manufactures and markets consumer and end-user products that help people work, learn, play and thrive. Our widely recognized brands include AT-A-GLANCE®, Five Star®, Kensington®, Leitz®, Mead®, PowerA®, Swingline®, Tilibra® and many others. More information about ACCO Brands Corporation (NYSE: ACCO) can be found at www.accobrands.com.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided certain non-GAAP financial information in this earnings release to aid investors in understanding the Company’s performance. Each non-GAAP financial measure is defined and reconciled to its most directly comparable GAAP financial measure in the “About Non-GAAP Financial Measures” section of this earnings release.
Forward-Looking Statements
Statements contained herein, other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, strategies, business operations and similar matters, results of operations, liquidity and financial condition, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management based on information available to us at the time such statements are made. These statements, which are generally identifiable by the use of the words “will,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “forecast,” “project,” “plan,” and similar expressions, are subject to certain risks and uncertainties, are made as of the date hereof, and we undertake no duty or obligation to update them. Because actual results may differ materially from those suggested or implied by such forward-looking statements, you should not place undue reliance on them when deciding whether to buy, sell or hold the Company’s securities.
Our outlook is based on certain assumptions, which we believe to be reasonable under the circumstances. These include, without limitation, assumptions regarding the impact of the war in Ukraine; the impact of inflation and global economic uncertainties, fluctuations in foreign currency exchange rates and acquisitions; and the other factors described below.
Among the factors that could cause our actual results to differ materially from our forward-looking statements are: our ability to successfully execute our restructuring plans and realize the benefits of our productivity initiatives; our ability to obtain additional price increases and realize longer-term cost reductions; the ongoing impact of the COVID-19 pandemic; a relatively limited number of large customers account for a significant percentage of our sales; issues that influence customer and consumer discretionary spending during periods of economic uncertainty or weakness; risks associated with foreign currency exchange rate fluctuations; challenges related to the highly competitive business environment in which we operate; our ability to develop and market innovative products that meet consumer demands and to expand into new and adjacent product categories that are experiencing higher growth rates; our ability to successfully expand our business in emerging markets and the exposure to greater financial, operational, regulatory, compliance and other risks in such markets; the continued decline in the use of certain of our products; risks associated with seasonality; the sufficiency of investment returns on pension assets, risks related to actuarial assumptions, changes in government regulations and changes in the unfunded liabilities of a multi-employer pension plan; any impairment of our intangible assets; our ability to secure, protect and maintain our intellectual property rights, and our ability to license rights from major gaming console makers and video game publishers to support our gaming accessories business; continued disruptions in the global supply chain; risks associated with inflation and other changes in the cost or availability of raw materials, transportation, labor, and other necessary supplies and services and the cost of finished goods; risks associated with outsourcing production of certain of our products, information technology systems and other administrative functions; the failure, inadequacy or interruption of our information technology systems or its supporting infrastructure; risks associated with a cybersecurity incident or information security breach, including that related to a disclosure of personally identifiable information; our ability to grow profitably through acquisitions; our ability to successfully integrate acquisitions and achieve the financial and other results anticipated at the time of acquisition, including planned synergies; risks associated with our indebtedness, including limitations imposed by restrictive covenants, our debt service obligations, and our ability to comply with financial ratios and tests; a change in or discontinuance of our stock repurchase program or the payment of dividends; product liability claims, recalls or regulatory actions; the impact of litigation or other legal proceedings; our failure to comply with applicable laws, rules and regulations and self-regulatory requirements, the costs of compliance and the impact of changes in such laws; our ability to attract and retain qualified personnel; the volatility of our stock price; risks associated with circumstances outside our control, including those caused by public health crises, such as the occurrence of contagious diseases, severe weather events, war, terrorism and other geopolitical incidents; and other risks and uncertainties described in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, and in other reports we file with the Securities and Exchange Commission.
About Non-GAAP Financial Measures
We explain below how we calculate each of our non-GAAP financial measures and a reconciliation of our current period and historical non-GAAP financial measures to the most directly comparable GAAP financial measures follows.
We use our non-GAAP financial measures both to explain our results to stockholders and the investment community and in the internal evaluation and management of our business. We believe our non-GAAP financial measures provide management and investors with a more complete understanding of our underlying operational results and trends, facilitate meaningful period-to-period comparisons and enhance an overall understanding of our past and future financial performance.
Our non-GAAP financial measures exclude certain items that may have a material impact upon our reported financial results such as restructuring charges, transaction and integration expenses associated with material acquisitions, the impact of foreign currency exchange rate fluctuations and acquisitions, unusual tax items, goodwill impairment charges, and other non-recurring items that we consider to be outside of our core operations. These measures should not be considered in isolation or as a substitute for, or superior to, the directly comparable GAAP financial measures and should be read in connection with the Company’s financial statements presented in accordance with GAAP.
Our non-GAAP financial measures include the following:
Comparable Sales : Represents net sales excluding the impact of material acquisitions, if any, with current-period foreign operation sales translated at prior-year currency rates. We believe comparable sales are useful to investors and management because they reflect underlying sales and sales trends without the effect of material acquisitions and fluctuations in foreign exchange rates and facilitate meaningful period-to-period comparisons. We sometimes refer to comparable sales as comparable net sales.
Adjusted Selling, General and Administrative (SG&A) Expenses : Represents selling, general and administrative expenses excluding transaction and integration expenses related to material acquisitions. We believe adjusted SG&A expenses are useful to investors and management because they reflect underlying SG&A expenses without the effect of expenses related to acquiring and integrating acquisitions that we consider to be outside our core operations and facilitate meaningful period-to-period comparisons.
Adjusted Operating Income/Adjusted Income Before Taxes/Adjusted Net Income/Adjusted Net Income Per Diluted Share:Represents operating income, income before taxes, net income, and net income per diluted share excluding restructuring and goodwill impairment charges, the amortization of intangibles, the amortization of the step-up in value of inventory, the change in fair value of contingent consideration, transaction and integration expenses associated with material acquisitions, non-recurring items in interest expense or other income/expense such as expenses associated with debt refinancing, a bond redemption, or a pension curtailment, and other non-recurring items as well as all unusual and discrete income tax adjustments, including income tax related to the foregoing. We believe these adjusted non-GAAP financial measures are useful to investors and management because they reflect our underlying operating performance before items that we consider to be outside our core operations and facilitate meaningful period-to-period comparisons. Senior management’s incentive compensation is derived, in part, using adjusted operating income and adjusted net income per diluted share, which is derived from adjusted net income. We sometimes refer to adjusted net income per diluted share as adjusted earnings per share or adjusted EPS.
Adjusted Income Tax Expense/Rate:Represents income tax expense/rate excluding the tax effect of the items that have been excluded from adjusted income before taxes, unusual income tax items such as the impact of tax audits and changes in laws, significant reserves for cash repatriation, excess tax benefits/losses, and other discrete tax items. We believe our adjusted income tax expense/rate is useful to investors because it reflects our baseline income tax expense/rate before benefits/losses and other discrete items that we consider to be outside our core operations and facilitates meaningful period-to-period comparisons.
Adjusted EBITDA: Represents net income excluding the effects of depreciation, stock-based compensation expense, amortization of intangibles, the change in fair value of contingent consideration, interest expense, net, other (income) expense, net, and income tax expense, the amortization of the step-up in value of inventory, transaction and integration expenses associated with material acquisitions, restructuring and goodwill impairment charges, non-recurring items in interest expense or other income/expense such as expenses associated with debt refinancing, a bond redemption, or a pension curtailment and other non-recurring items. We believe adjusted EBITDA is useful to investors because it reflects our underlying cash profitability and adjusts for certain non-cash charges, and items that we consider to be outside our core operations and facilitates meaningful period-to-period comparisons.
Free Cash Flow/Adjusted Free Cash Flow: Free cash flow represents cash flow from operating activities less cash used for additions to property, plant and equipment. Adjusted free cash flow represents free cash flow, less cash payments made for contingent earnouts, plus cash proceeds from the disposition of assets. We believe free cash flow and adjusted free cash flow are useful to investors because they measure our available cash flow for paying dividends, funding strategic material acquisitions, reducing debt, and repurchasing shares.
Consolidated Leverage Ratio: Represents balance sheet debt, plus debt origination costs and less any cash and cash equivalents divided by adjusted EBITDA. We believe that consolidated leverage ratio is useful to investors since the company has the ability to, and may decide to use, a portion of its cash and cash equivalents to retire debt.
We also provide forward-looking non-GAAP comparable sales, adjusted earnings per share, free cash flow, adjusted free cash flow, adjusted EBITDA, and adjusted tax rate, and historical and forward-looking consolidated leverage ratio. We do not provide a reconciliation of these forward-looking and historical non-GAAP measures to GAAP because the GAAP financial measure is not currently available and management cannot reliably predict all the necessary components of such non-GAAP measures without unreasonable effort or expense due to the inherent difficulty of forecasting and quantifying certain amounts that are necessary for such a reconciliation, including adjustments that could be made for restructuring, integration and acquisition-related expenses, the variability of our tax rate and the impact of foreign currency fluctuation and material acquisitions, and other charges reflected in our historical results. The probable significance of each of these items is high and, based on historical experience, could be material.
Christopher McGinnis Investor Relations (847) 796-4320
Company-Owned Cookie Dough FacilityNow Serving Fatburgerand Johnny Rockets
LOS ANGELES, Aug. 08, 2023 (GLOBE NEWSWIRE) — FAT (Fresh. Authentic. Tasty.) Brands Inc., parent company of Fatburger, Johnny Rockets and 15 other restaurant concepts, today announces the rollout of cookie offerings at burger portfolio restaurants nationwide – Fatburger, Johnny Rockets and Elevation Burger.
The sweet menu rollout is a strategic optimization that leverages FAT Brands’ company-owned manufacturing facility, which produces cookie dough and pretzel mix for sister portfolio brands Great American Cookies and Pretzelmaker. Elevation Burger completed its cookie roll-out earlier in April of this year.
“For both Fatburger and Johnny Rockets, we see these additions as a way to further build and enhance our dessert programs,” said Taylor Fischer, Vice President of Marketing of FAT Brands’ Fast Casual Division. “Playing into synergies is at the core of FAT Brands’ DNA. We are thrilled to be able to tap into our cookie dough facility to provide more delicious offerings for our fans.”
For more information or to find a Fatburger near you, please visit www.Fatburger.com. For more information or to find a Johnny Rockets near you, please visit www.JohnnyRockets.com.
About FAT (Fresh. Authentic. Tasty.) Brands
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast-casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.
About Fatburger
An all-American, Hollywood favorite, Fatburger is a fast-casual restaurant serving big, juicy, tasty burgers, crafted specifically to each customer’s liking. With a legacy spanning 70 years, Fatburger’s extraordinary quality and taste inspire fierce loyalty amongst its fan base, which includes a number of A-list celebrities and athletes. Featuring a contemporary design and ambience, Fatburger offers an unparalleled dining experience, demonstrating the same dedication to serving gourmet, homemade, custom-built burgers as it has since 1952 – The Last Great Hamburger Stand™.
About Johnny Rockets
Founded in 1986 on iconic Melrose Avenue in Los Angeles, Johnny Rockets is a world-renowned, international restaurant franchise that offers high quality, innovative menu items including Certified Angus Beef® cooked-to-order hamburgers, veggie burgers, chicken sandwiches, crispy fries and rich, delicious hand-spun shakes and malts. With over 325 locations in over 25 countries around the globe, this dynamic lifestyle brand offers friendly service and upbeat music contributing to the chain’s signature atmosphere of relaxed, casual fun. For more information, visit www.johnnyrockets.com.
TORONTO, ON / ACCESSWIRE / August 8, 2023 / GameSquare Holdings, Inc. (“GameSquare“, or the “Company“) (NASDAQ:GAME)(TSXV:GAME) announced today that it expects to release its second quarter 2023 financial results after the close of business on Monday, August 14, 2023. A copy of the news release will be available on the investor website.
Shareholders, investors, interested parties, and media are encouraged to join the Company’s earnings call via webcast on Monday, August 14, 2023, at 5:00 pm ET. The call will be hosted by Justin Kenna, GameSquare’s CEO and will be joined by other members of GameSquare’s management team. Please join the call at https://services.choruscall.ca/links/gamesquare2023q2.html.
About GameSquare Holdings, Inc.
GameSquare Holdings, Inc. (NASDAQ:GAME | TSXV:GAME) is a vertically integrated, digital media, entertainment and technology company that connects global brands with gaming and youth culture audiences. GameSquare’s end-to-end platform includes GCN, a digital media company focused on gaming and esports audiences, Cut+Sew (Zoned), a gaming and lifestyle marketing agency, USA, Code Red Esports Ltd., a UK based esports talent agency, Complexity Gaming, a leading esports organization, Fourth Frame Studios, a creative production studio, Mission Supply, a merchandise and consumer products business, Frankly Media, programmatic advertising, Stream Hatchet, live streaming analytics, and Sideqik a social influencer marketing platform. www.gamesquare.com
Media and Investor Relations Andrew Berger Phone: (216) 464-6400 Email: [email protected]
Forward-Looking Information This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the Company’s future performance and revenue; continued growth and profitability; the Company’s ability to execute its business plan; and the proposed use of net proceeds of the Offering. These forward-looking statements are provided only to provide information currently available to us and are not intended to serve as and must not be relied on by any investor as, a guarantee, assurance or definitive statement of fact or probability. Forward-looking statements are necessarily based upon a number of estimates and assumptions which include, but are not limited to: the Company being able to grow its business and being able to execute on its business plan, the Company being able to complete and successfully integrate acquisitions, the Company being able to recognize and capitalize on opportunities and the Company continuing to attract qualified personnel to supports its development requirements. These assumptions, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the Company’s ability to achieve its objectives, the Company successfully executing its growth strategy, the ability of the Company to obtain future financings or complete offerings on acceptable terms, failure to leverage the Company’s portfolio across entertainment and media platforms, dependence on the Company’s key personnel and general business, economic, competitive, political and social uncertainties including impact of the COVID-19 pandemic and any variants. These risk factors are not intended to represent a complete list of the factors that could affect the Company which are discussed in the Company’s most recent MD&A. 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. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. GameSquare assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
First dual coronavirus-norovirus oral antiviral isscheduledfor Phase 1 in healthy volunteers
In vitro studies show broad-spectrum activity against noroviruses including GII.4 pandemic strains
No approved treatments or vaccines for norovirus infection
BOTHELL, Wash., Aug. 08, 2023 (GLOBE NEWSWIRE) — Cocrystal Pharma, Inc. (Nasdaq: COCP) (“Cocrystal” or the “Company”), a clinical-stage biopharmaceutical company dedicated to developing novel small molecule antiviral therapeutics, announces the selection of its novel, oral, broad-spectrum 3CL protease inhibitor CDI-988 as a potential oral therapy for norovirus. The randomized, double-blind, placebo-controlled Phase 1 study of CDI-988 is approved by Australia Human Research Ethics Committees (HREC). The study is designed to access the safety, tolerability and pharmacokinetics of CDI-988.
With no approved treatments or vaccines, norovirus represents a significant unmet medical need. It is a highly contagious infection and is the most common cause of acute gastroenteritis, accounting for nearly one in five cases. According to the Centers for Disease Control and Prevention (CDC), an estimated 685 million cases and an estimated 200,000 deaths are attributed to norovirus each year worldwide with an estimated societal cost of $60 billion. About 200 million cases are reported among children under five years of age, leading to an estimated 50,000 child deaths every year. Among 30 known genotypes of human norovirus, nearly 60% of outbreaks are attributable to genogroup II, genotype 4 (GII.4) strains, which have caused periodic human pandemics since 1996.
CDI-988 was specifically designed and developed as a broad-spectrum antiviral inhibitor using Cocrystal’s proprietary structure-based drug discovery platform technology. It targets a highly conserved region in the active site of coronaviruses, noroviruses and other 3CL viral proteases. Cocrystal previously selected CDI-988 to investigate as an oral treatment for COVID-19 and is approved to conduct a Phase 1 study in Australia, following approval by that country’s Human Research Ethics Committee (HREC). In recent preclinical in vitro studies, CDI-988 showed potent broad-spectrum antiviral activity against a panel of pandemic GII.4 norovirus proteases and a favorable pharmacokinetic property targeting the gastrointestinal tract.
“In preclinical testing CDI-988 showed significant activity against seven different pandemic strains of norovirus, and we are enthusiastic about developing this compound as a dual broad-spectrum antiviral inhibitor,” said Sam Lee, PhD, Cocrystal President and co-CEO. “CDI-988 further validates our proprietary structure-based drug-discovery platform technology and contributes to our robust product pipeline. Our approach is to develop an effective targeted oral treatment for acute and chronic gastroenteritis caused by norovirus, as well as for potential use in addressing future pandemic norovirus outbreaks.”
“Given the recent increase in norovirus cases and the lack of approved treatments or vaccines, we continue to see a significant opportunity for our broad-spectrum antiviral CDI-988,” said James Martin, Cocrystal CFO and co-CEO. “There has been a sharp rise in norovirus outbreaks worldwide since 1996 with the emergence of the GII.4 strain. Already in 2023, 13 outbreaks on cruise ships have been reported, the largest number of such infections in a decade.”
About Norovirus Human noroviruses are highly contagious, constantly evolving, extremely stable in the environment and associated with debilitating illness. Symptoms include vomiting and diarrhea, with or without nausea and abdominal cramps. Norovirus infection can be much more severe and prolonged in specific risk groups including infants, children and people with immunodeficiency. In the United States alone, noroviruses are responsible for an estimated 21 million cases of acute gastroenteritis annually, including 109,000 hospitalizations, 465,000 emergency department visits and nearly 900 deaths, according to the CDC. The National Institutes of Health (NIH) estimates the annual burden to the U.S. at $10.6 billion. Outbreaks occur most commonly in semi-closed communities such as nursing homes, hospitals, cruise ships, schools, disaster relief sites and military settings.
About Cocrystal Pharma, Inc. Cocrystal Pharma, Inc. is a clinical-stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication process of influenza viruses, coronaviruses (including SARS-CoV-2 and noroviruses) and hepatitis C viruses. Cocrystal employs unique structure-based technologies and Nobel Prize-winning expertise to create first- and best-in-class antiviral drugs. For further information about Cocrystal, please visit www.cocrystalpharma.com.
Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the initiation and characteristics of a Phase 1 study for CDI-988 and the potential efficacy and clinical benefits of such product candidate. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events. Some or all of the events anticipated by these forward-looking statements may not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include, but are not limited to, regulatory approval to commence the planned trial, risks relating to the Australian economy, manufacturing and research delays arising labor shortages and other factors, the ability of our Clinical Research Organization partner to recruit volunteers for, and to proceed with, the Phase 1 clinical study for CDI-988, and general risks arising from conducting a clinical trial. Further information on our risk factors is contained in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
REDUCES TOTAL DEBT BY $34.1 MILLION INCREASES 2023 FULL YEAR GUIDANCE
Reduces Total Debt by $34.1 Million
Increases 2023 Full Year Guidance
BRENTWOOD, Tenn., Aug. 07, 2023 (GLOBE NEWSWIRE) — CoreCivic, Inc. (NYSE: CXW) (the Company) announced today its financial results for the second quarter of 2023.
Damon T. Hininger, CoreCivic’s President and Chief Executive Officer, said, “Our second quarter financial results were better than our forecast and we are increasing our financial outlook for the year. We are increasing our financial outlook despite the challenging labor market, above average inflation and a higher interest rate environment. During the second quarter, we continued to execute on our long-term capital allocation strategy of reducing debt by repurchasing $21.0 million of our 8.25% Senior Notes that are scheduled to mature on April 15, 2026, through open market purchases.”
Hininger continued, “The post-pandemic environment is creating new challenges for a number of our government partners, particularly as a result of the expiration of the Public Health Emergency for COVID-19 that occurred in May, which ended the Title 42 closure of the southern border. Specifically, certain government agencies are experiencing an increase in the need for correctional and detention capacity. We believe the significant investments we have made in our workforce have positioned us well to meet these emerging needs.”
Financial Highlights – Second Quarter 2023
Total revenue of $463.7 million
CoreCivic Safety revenue of $421.7 million
CoreCivic Community revenue of $28.4 million
CoreCivic Properties revenue of $13.6 million
Net Income of $14.8 million
Diluted earnings per share of $0.13
Adjusted Diluted EPS of $0.12
Normalized Funds From Operations per diluted share of $0.33
Adjusted EBITDA of $72.1 million
Second Quarter 2023 Financial Results Compared With Second Quarter 2022
Net income in the second quarter of 2023 totaled $14.8 million, or $0.13 per diluted share, compared with net income in the second quarter of 2022 of $10.6 million, or $0.09 per diluted share. Adjusted for special items, adjusted net income in the second quarter of 2023 was $13.6 million, or $0.12 per diluted share (Adjusted Diluted EPS), compared with adjusted net income in the second quarter of 2022 of $16.2 million, or $0.13 per diluted share. Special items for each period are presented in detail in the calculation of Adjusted Net Income and Adjusted Diluted EPS in the Supplemental Financial Information following the financial statements presented herein.
The special items in the prior year quarter contributed to the increase in net income per share of $0.04. The $0.01 per share decline in Adjusted Diluted EPS occurred in part due to the expiration of our contract with the Federal Bureau of Prisons (BOP) at the McRae Correctional Facility on November 30, 2022, and ongoing labor market pressures, including above average wage inflation, and higher staffing levels. Despite the expiration of the contract with the BOP at the McRae facility, a facility we sold to the state of Georgia in 2022, our renewal rate on owned and controlled facilities remains high at 94% over the previous five years. We believe our renewal rate on existing contracts remains high due to a variety of reasons including the aged and constrained supply of available beds within the U.S. correctional system, our ownership of the majority of the beds we operate, the value our government partners place in the wide range of recidivism-reducing programs we offer to those in our care, and the cost effectiveness of the services we provide.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $71.8 million in the second quarter of 2023, compared with $71.1 million in the second quarter of 2022. Adjusted EBITDA was $72.1 million in the second quarter of 2023, compared with $78.8 million in the second quarter of 2022. Adjusted EBITDA decreased from the prior year quarter primarily due to the previously mentioned labor market pressures across our facility portfolio, including above average wage inflation and higher staffing levels in anticipation of increased occupancy, and the expiration of our BOP contract at the McRae Correctional Facility in November 2022. EBITDA at the McRae Correctional Facility was $2.4 million during the second quarter of 2022.
Although labor market pressures continue to be more difficult than historical norms, we have experienced improvements in the number of applicants at many of our facilities which has allowed us to achieve higher staffing levels in the second quarter of 2023 than in the prior year quarter. We believe the investments in staffing we made during the pandemic have positioned us to manage the increased number of residents we began to experience in the second quarter of 2023. On May 11, 2023, all remaining COVID-19 related health policies expired, most notably occupancy restrictions on our facilities and Title 42, a policy that denied entry at the United States border to asylum-seekers and anyone crossing the border without proper documentation or authority in an effort to contain the spread of COVID-19. Since the end of Title 42, the number of individuals in the custody of U.S. Immigration and Customs Enforcement (ICE) has increased 43%. We have experienced a similar increase within our facilities under contract with ICE, which we believe was possible because of our investments in staffing. Since May 11, 2023, through July 31, 2023, ICE detention populations within our facilities have increased by 2,573, or 45%. Despite the difficult labor market, we have been able to reduce certain labor-related expenses, such as registry nursing, temporary wage incentives, and travel, each of which moderated during the second quarter of 2023. We believe we can further reduce these expenses as the tight labor market continues to alleviate, which we expect will take additional time.
Funds From Operations (FFO) was $39.0 million, or $0.34 per diluted share, in the second quarter of 2023, compared to $34.3 million, or $0.28 per diluted share, in the second quarter of 2022. Normalized FFO, which excludes special items, was $37.8 million, or $0.33 per diluted share, in the second quarter of 2023, compared with $40.7 million, or $0.34 per diluted share, in the second quarter of 2022. Normalized FFO was impacted by the same factors that affected Adjusted EBITDA.
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, their corresponding per share amounts, are measures calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP). Please refer to the Supplemental Financial Information and the note following the financial statements herein for further discussion and reconciliations of these measures to net income, the most directly comparable GAAP measure.
Business Update
New Lease Agreement with the State of Oklahoma at the Davis Correctional Facility. On June 14, 2023, we announced that we entered into a lease agreement with the Oklahoma Department of Corrections (ODOC) for the company-owned 1,670-bed Davis Correctional Facility, which we currently report in our CoreCivic Safety segment and operate under a management contract with the ODOC. The management contract was scheduled to expire on June 30, 2023. However, effective July 1, 2023, the Company entered into a 90-day contract extension for the management contract, after which time operations of the Davis facility will transfer from CoreCivic to the ODOC in accordance with the new lease agreement. We incurred a facility net operating loss of $0.9 million and $1.5 million for the three and six months ended June 30, 2023, respectively. Annual lease revenue under the new lease agreement will be $7.5 million during the base term, which we expect will generate margins consistent with the average margin we report in our Properties segment. The new lease agreement includes a base term commencing October 1, 2023, with a scheduled expiration date of June 30, 2029, and unlimited two-year renewal options. Upon commencement of the new lease agreement, the Davis facility will be reported in our CoreCivic Properties segment.
Share Repurchases
On May 12, 2022, our Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $150.0 million of our common stock. On August 2, 2022, our Board of Directors authorized an increase in our share repurchase program of up to an additional $75.0 million in shares of our common stock, or a total of up to $225.0 million. During the three and six months ended June 30, 2023, we repurchased 0.1 million and 2.6 million shares of our common stock, respectively, at an aggregate purchase price of $0.7 million and $25.6 million, respectively, and in each case excluding fees, commissions and other costs related to the repurchases. Since the share repurchase program was authorized, through June 30, 2023, we have repurchased a total of 9.2 million shares at an aggregate price of $100.1 million under this share repurchase program, excluding fees, commissions and other costs related to the repurchases.
As of June 30, 2023, we had $124.9 million remaining under the share repurchase program authorized by the Board of Directors. Additional repurchases of common stock will be made in accordance with applicable securities laws and may be made at management’s discretion within parameters set by the Board of Directors from time to time in the open market, through privately negotiated transactions, or otherwise. The share repurchase program has no time limit and does not obligate us to purchase any particular amount of our common stock. The authorization for the share repurchase program may be terminated, suspended, increased or decreased by our Board of Directors in its discretion at any time.
Debt Repayments
During the second quarter of 2023, we reduced our total debt balance by $34.1 million, or $24.5 million, net of the change in cash, increasing out total debt repaid for the six months ended June 30, 2023, to $72.7 million, net of the change in cash. During the second quarter of 2023, we purchased $21.0 million of our 8.25% Senior Notes in open market purchases, reducing the outstanding balance of the 8.25% Senior Notes to $593.1 million. We have no debt maturities until the 8.25% Senior Notes mature in April 2026.
During 2023, we expect to invest $68.0 million to $71.0 million in capital expenditures, consisting of $36.0 million to $37.0 million in maintenance capital expenditures on real estate assets, $25.0 million to $26.0 million for maintenance capital expenditures on other assets and information technology, and $7.0 million to $8.0 million for other capital investments.
Supplemental Financial Information and Investor Presentations
We have made available on our website supplemental financial information and other data for the second quarter of 2023. Interested parties may access this information through our website at http://ir.corecivic.com/ under “Financial Information” of the Investors section. We do not undertake any obligation and disclaim any duties to update any of the information disclosed in this report.
Management may meet with investors from time to time during the third quarter of 2023. Written materials used in the investor presentations will also be available on our website beginning on or about August 28, 2023. Interested parties may access this information through our website at http://ir.corecivic.com/ under “Events & Presentations” of the Investors section.
Conference Call, Webcast and Replay Information
We will host a webcast conference call at 10:00 a.m. central time (11:00 a.m. eastern time) on Tuesday, August 8, 2023, which will be accessible through the Company’s website at www.corecivic.com under the “Events & Presentations” section of the “Investors” page. To participate via telephone and join the call live, please register in advance here https://register.vevent.com/register/BI245ce05fd4c64a6ead7845124358177d. Upon registration, telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number and a unique passcode.
About CoreCivic
CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and one of the largest prison operators in the United States. We have been a flexible and dependable partner for government for 40 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.
Forward-Looking Statements
This press release contains statements as to our beliefs and expectations of the outcome of future events that are “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include, but are not limited to, the risks and uncertainties associated with: (i) changes in government policy, legislation and regulations that affect utilization of the private sector for corrections, detention, and residential reentry services, in general, or our business, in particular, including, but not limited to, the continued utilization of our correctional and detention facilities by the federal government, including as a consequence of the United States Department of Justice, or DOJ, not renewing contracts as a result of President Biden’s Executive Order on Reforming Our Incarceration System to Eliminate the Use of Privately Operated Criminal Detention Facilities, or the Private Prison EO, impacting utilization primarily by the BOP and the United States Marshals Service, and the impact of any changes to immigration reform and sentencing laws (we do not, under longstanding policy, lobby for or against policies or legislation that would determine the basis for, or duration of, an individual’s incarceration or detention); (ii) our ability to obtain and maintain correctional, detention, and residential reentry facility management contracts because of reasons including, but not limited to, sufficient governmental appropriations, contract compliance, negative publicity and effects of inmate disturbances; (iii) changes in the privatization of the corrections and detention industry, the acceptance of our services, the timing of the opening of new facilities and the commencement of new management contracts (including the extent and pace at which new contracts are utilized), as well as our ability to utilize available beds; (iv) general economic and market conditions, including, but not limited to, the impact governmental budgets can have on our contract renewals and renegotiations, per diem rates, and occupancy; (v) fluctuations in our operating results because of, among other things, changes in occupancy levels; competition; contract renegotiations or terminations; inflation and other increases in costs of operations, including a continuing rise in labor costs; fluctuations in interest rates and risks of operations; (vi) the impact resulting from the termination of Title 42, the federal government’s policy to deny entry at the United States southern border to asylum-seekers and anyone crossing the southern border without proper documentation or authority in an effort to contain the spread of the coronavirus and related variants, or COVID-19; (vii) our ability to successfully identify and consummate future development and acquisition opportunities and realize projected returns resulting therefrom; (viii) our ability to have met and maintained qualification for taxation as a real estate investment trust, or REIT, for the years we elected REIT status; and (ix) the availability of debt and equity financing on terms that are favorable to us, or at all. Other factors that could cause operating and financial results to differ are described in the filings we make from time to time with the Securities and Exchange Commission.
We take no responsibility for updating the information contained in this press release following the date hereof to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events or for any changes or modifications made to this press release or the information contained herein by any third-parties, including, but not limited to, any wire or internet services.
NOTE TO SUPPLEMENTAL FINANCIAL INFORMATION
Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO, and, where appropriate, their corresponding per share metrics are non-GAAP financial measures. The Company believes that these measures are important operating measures that supplement discussion and analysis of the Company’s results of operations and are used to review and assess operating performance of the Company and its properties and their management teams. The Company believes that it is useful to provide investors, lenders and securities analysts disclosures of its results of operations on the same basis that is used by management.
FFO, in particular, is a widely accepted non-GAAP supplemental measure of performance of real estate companies, grounded in the standards for FFO established by the National Association of Real Estate Investment Trusts (NAREIT). NAREIT defines FFO as net income computed in accordance with GAAP, excluding gains (or losses) from sales of property and extraordinary items, plus depreciation and amortization of real estate and impairment of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures calculated to reflect funds from operations on the same basis. As a company with extensive real estate holdings, we believe FFO and FFO per share are important supplemental measures of our operating performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs and other real estate operating companies, many of which present FFO and FFO per share when reporting results. EBITDA, Adjusted EBITDA, and FFO are useful as supplemental measures of performance of the Company’s properties because such measures do not take into account depreciation and amortization, or with respect to EBITDA, the impact of the Company’s tax provision and financing strategies. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), this accounting presentation assumes that the value of real estate assets diminishes at a level rate over time. Because of the unique structure, design and use of the Company’s properties, management believes that assessing performance of the Company’s properties without the impact of depreciation or amortization is useful. The Company may make adjustments to FFO from time to time for certain other income and expenses that it considers non-recurring, infrequent or unusual, even though such items may require cash settlement, because such items do not reflect a necessary or ordinary component of the ongoing operations of the Company. Normalized FFO excludes the effects of such items. The Company calculates Adjusted Net Income by adding to GAAP Net Income expenses associated with the Company’s debt repayments and refinancing transactions, and certain impairments and other charges that the Company believes are unusual or non-recurring to provide an alternative measure of comparing operating performance for the periods presented.
Other companies may calculate Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO differently than the Company does, or adjust for other items, and therefore comparability may be limited. Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO, and Normalized FFO and, where appropriate, their corresponding per share measures are not measures of performance under GAAP, and should not be considered as an alternative to cash flows from operating activities, a measure of liquidity or an alternative to net income as indicators of the Company’s operating performance or any other measure of performance derived in accordance with GAAP. This data should be read in conjunction with the Company’s consolidated financial statements and related notes included in its filings with the Securities and Exchange Commission.
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