Author: Admin

Developer

Coinbase’s Armstrong and ARK Invest’s Wood Talk Crypto

Posted on by Admin 


Image: Brian Armstrong, Cathie Wood (Milken Institute)


ARK’s Cathie Wood and Coinbase’s Brian Armstrong Talk About Crypto’s Outlook

ARK Invest’s founder and CEO took part in a panel discussion titled, Conversations with Crypto Pioneers. The discussion was held at the Milken Institute’s 2022 Global Conference and included Brian Armstrong who is the CEO and co-founder of Coinbase (COIN). When it comes to Bitcoin and other cryptos, both CEOs are strong advocates. What Ms. Wood and Mr. Armstrong had to share ought to be of great interest to investors whose wallets have shrunk with the recent weakness in this asset class.

According to Armstrong one billion people around the world will use cryptocurrency technology in one way or another by the end of the 2020s. Crypto has started to enter the mainstream over the past few years. Armstrong said, about 200 million people worldwide have used crypto. Institutional investors are increasingly embracing digital currencies in their portfolios, and some retirement savers may soon see Bitcoin as an option in their 401(k) plans.

Wood believes the rate of crypto adoption in the U.S. is slow because of regulatory uncertainty; she said, “I would’ve expected more clarity,” and added. “Basically we’ve come at this from a negative point of view, and I’ve seen other countries come at it from a positive point of view. If we’re not lucky, regulatory arbitrage is going to take the market away from us.”

“This is a new asset class, and you have to have a point of view,” Wood said.

Armstrong seems at odds with the official point of view of regulators and others in Washington. He’s not overly optimistic, noting a recent executive order from President Biden that calls for protections from the crypto industry’s potential innovations. And last month, the White House outlined a national policy to address the risks and benefits of digital assets and their underlying technology.

Securities and Exchange Commission (SEC) Chairman Gary Gensler has been cautious when it comes to regulating cryptos. He has said that many tokens traded on crypto exchanges are likely securities. As securities, they would require more disclosures from both the tokens as well as the platforms that are not now registered security exchanges. Coinbase is a cryptocurrency exchange.

“I think this is a very bipartisan issue,” said Armstrong, “The majority of people I met with in Congress, 50% or more, are now pro-crypto, they believe that this is a net good for society.” About one in five Americans have now used crypto or tried it in some way, Armstrong said, and the number is growing quickly. “That’s a massive voting group. It’s quickly becoming very politically unpopular to be anti-crypto,” according to Armstrong.

Both CEOs noted the application of blockchain technology in everyday life goes well beyond digital coins.

The Coinbase CEO sees use cases for the technology in social media. He was asked about his view on Elon Musk’s takeover of Twitter, to which he said the company has a huge opportunity to become a leader in decentralized social media, where users’ online identity and content aren’t owned by one particular platform, but by users themselves through a decentralized ledger. It would mean anyone could use all the information on Twitter and display it in various ways. “Essentially, it democratized access to [social-media content], and I think that’s one of the directions Twitter could go,” Armstrong said. “I imagine that there are a number of startups and other companies that will be building competing decentralized social media products if [Twitter doesn’t.]”

Both Armstrong and Wood agree crypto and blockchain technology could spur growth around the world over the next decade. The world will see a substantial portion of GDP coming from the crypto economy in 10 to 20 years, similar to e-commerce, the two agreed. “People think they might have missed the opportunity when they see Bitcoin at $70,000, but we are in fairly early days,” Wood advised.

With recent moves in financial assets, particularly crypto, those that held since last year are hurting. Bitcoin prices are down 20% year to date and 40% below their peak reached in November 2021. ARK Invest’s CEO who’s funds own crypto and crypto-related assets, was an early investor in digital assets and blockchain technology. Coinbase is the fifth-largest holding of the ARK Innovation exchange-traded fund (ARKK), the company’s flagship product.

Paul Hoffman

Managing Editor, Channelchek

Suggested Content



The Sources of Deflationary Pressure According to Cathie Wood

Why Michael Burry has Better Opportunity Than Cathie Wood




Metaverse: Is The Future Real? – Panel Presentation from NobleCon18

Voyager Digital (VYGVF) NobleCon18 Presentation Replay

Sources

https://milkeninstitute.org/video/crypto-pioneers-conversations

https://milkeninstitute.org/events/global-conference-2022/overview

https://www.youtube.com/watch?v=vSo5r4y8Gpo

https://www.barrons.com/articles/bitcoin-crypto-adoption-global-gdp-coinbase-ark-51651619611?mod=grayscale

Stay up to date. Follow us:

 

Release – Vectrus Announces Solid First Quarter Results

Posted on by Admin



Vectrus Announces Solid First Quarter Results

Research, News, and Market Data on Vectrus

Company Release – 5/10/2022

  • Q1 revenue +5.2% Y/Y to $456.5 million
  • Operating income of $5.2 million; Adjusted EBITDA margin1 of 4.0%
  • Q1 fully diluted EPS of $0.24; Adjusted diluted EPS1 of $1.01
  • Several key wins expand and solidify work with Army, Navy, and National Security clients
  • Reiterating revenue and adjusted diluted EPS1 guidance

COLORADO SPRINGS, Colo., May 10, 2022 /PRNewswire/ — Vectrus, Inc. (NYSE:VEC) announced first quarter 2022 financial results.

“Vectrus reported solid first quarter results driven by the continued expansion into LOGCAP V and our focus on diversification to new clients and markets,” said Chuck Prow, Chief Executive Officer of Vectrus.

“During the quarter, revenue grew 5% year-over-year and 9% sequentially to $456 million. Revenue growth was driven by the continued phase-in of LOGCAP V, high op-tempo in the regions we operate in support of ongoing world affairs, as well as the progress made in executing growth in our core programs,” said Prow.  “With a continued focus on the needs of our clients, the Vectrus team supported several important missions during the quarter, including assisting the DoD with the establishment of a water supply system and water remediation efforts in Hawaii.  In addition, we demonstrated our ability to transition quickly and recently became fully operational on LOGCAP V Kwajalein, approximately a month and a half ahead of schedule. We also leveraged our process-oriented phase in system and in a short period of time, achieved full operations at Ft. Benning following our December 2021 $250 million award.  We are proud of this achievement and look forward to providing world class maintenance, transportation, and supply services for the US Army’s Maneuver Training Center over the next five years.”

“Notably, late in the first quarter Vectrus was awarded a strategically important task order to provide support for the U.S. Air Force in Europe as part of the European Deterrence Initiative,” said Prow. “While currently small in value, this contingency task is providing mission critical services to our Air Force client in Europe. This effort exemplifies our global positioning and rapid response capabilities supporting our clients’ most challenging and important missions.”

Prow continued, “Adjusted EBITDA for the quarter was $18.2 million or 4.0% margin as we work through program efficiencies in the early phases of LOGCAP V implementation. Additionally, LOGCAP V is generating higher revenue volume with a greater amount of material and pass-through content that has a different margin complexion.”

“We are continuing our positive momentum working with the Navy and during the first quarter were selected to complete the final phases of application development for the 5G Naval Base Coronado Smart Warehouse, which is demonstrative of our ability to provide converged solutions and operational technologies to clients,” said Prow. “We were also recently awarded the follow-on contract for Spectrum Management with the Navy valued at $60 million. This award continues more than 30 years of support to the Navy in solving afloat electromagnetic interference and compatibility challenges for the fleet.  Furthermore, Vectrus won a position on a $250 million five-year IDIQ vehicle that provides rapid development, prototyping, and systems integration to the Navy, Joint, and coalition forces worldwide utilizing numerous platforms and integrated capabilities. Vectrus will focus on embarkable systems that include cyber hardening, new technology insertion and retrofit of existing systems. In addition, we won an effort as subcontractor performing electromagnetic test and evaluation engineering. These are key wins that demonstrate our capabilities in engineering and operational technology, and our commitment to delivering a more integrated and comprehensive suite of solutions in support of the converged environment,” Prow elaborated.

Prow continued, “Vectrus has worked diligently over the past several years to expand its presence with national security clients and, during the first quarter our teams were successful in securing several wins that enhance our footprint in the intelligence community.”  

Prow concluded, “Our first quarter results demonstrate Vectrus’ realization and execution of our strategy to strengthen and grow the business through outstanding program execution, capability expansion, and diversification of our geographic and client footprint.”

First Quarter 2022 Results

First quarter 2022 revenue of $456.5 million was up $22.5 million year-on-year.  “Revenue grew 5.2% year over year boosted by our transition to full operational capability on LOGCAP V programs in Iraq and Kuwait late last year, and Kwajalein this year. In addition, revenue benefitted from transitioning Ft Benning and volume associated with rapid response and contingency efforts,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “This revenue growth was impressive given the headwinds associated with the withdrawal of the US military from Afghanistan,” added Lynch.  Operating income was $5.2 million or 1.1% margin.  This includes M&A and integration related expenses of $9.1 million and amortization of acquired intangible assets of $2.3 million which were incurred in the quarter.

Adjusted operating income1 was $16.6 million or 3.6% margin.  Adjusted EBITDA1 was $18.2 million or 4.0% margin as compared to $20.7 million or 4.8% in the prior year.  “The year-on-year margin change was influenced by the significant amount of revenue and contracts that are in the early stages of their lifecycle.  We believe margin on these contracts will improve over time as we apply our process improvement and Enterprise Vectrus initiatives. In addition, as we continue to support our LOGCAP V clients’ supply chain needs, we are experiencing an increase in material and pass-through content which carries a lower margin. In aggregate, on average and over time we expect to see improvement in the margin profile as we drive operational efficiencies and diversify into higher margin scopes of work,” said Lynch.

Fully diluted EPS for the first quarter of 2022 was $0.24 as compared to $1.02 in the prior year.  Fully diluted EPS in the quarter included the aforementioned M&A and integration related costs.  Adjusted diluted EPS1 was $1.01 in the quarter as compared to $1.20 in the prior year. The change in adjusted diluted EPS
1 was primarily due to the above-mentioned change in Adjusted EBITDA1.

Cash used in operating activities through April 1, 2022, was $26.4 million, compared to net cash used in operating activities of $21.7 million through the first quarter of 2021. Cash used in operating activities was negatively impacted in the current quarter by an approximately $8.0 million repayment of CARES Act tax deferrals and $2 million of merger related payments.

Net debt on April 1, 2022, was $96.8 million, down $41.9 million from April 2, 2021.  Total debt on April 1, 2022, was $119.8 million, down $57.2 million from $177.0 million on April 2, 2021. Cash at quarter-end was $23.0 million.  Total consolidated indebtedness to consolidated EBITDA1 (total leverage ratio) was 1.4x compared to 2.0x at the same time last year.

Total backlog as of April 1, 2022, was $4.5 billion representing almost 2.5x the company’s estimated 2022 revenue mid-point.  Funded backlog was $0.8 billion.  The trailing twelve-month book-to-bill was 1.0x as of April 1, 2022.

2022 Guidance

Lynch continued, “In light of our solid first quarter performance, we are reiterating our full-year 2022 guidance ranges for revenue and adjusted EBITDA, adjusted diluted EPS, and net cash provided by operating activities, excluding M&A related activities.”

Due to the merger activities with Vertex, the company is not providing GAAP guidance or a reconciliation of forward-looking measures including adjusted diluted EPS to GAAP diluted EPS or adjusted EBITDA margin to GAAP net income due to the difficulty in forecasting the transaction timing and quantifying certain amounts that are necessary for such reconciliation.  Reconciliations to the closest corresponding U.S. GAAP measures are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures. The variability of such charges could potentially have a significant impact on our future U.S. GAAP financial results.

 

$ millions, except for EBITDA margins
and per share amounts

2021
Actual

2022 Guidance

2022 Mid-Point

2022 Mid-Point vs
2021

Revenue

$1,784

$1,820

to

$1,860

$1,840

3.1 %

Adjusted EBITDA Margin

4.7 %

4.5 %

to

4.7%

4.6 %

(10) bps

Adjusted Diluted Earnings Per Share

$4.77

$4.57

to

$4.93

$4.74

(0.6) %

Net Cash Provided by Operating Activities

$61.3

$50.00

to

$53.50

$51.75

(15.6) %

 

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. 

First Quarter 2022 Conference Call

Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, May 10, 2022. U.S.-based participants may dial in to the conference call at 844-825-9789, while international participants may dial 412-317-5180. A live webcast of the conference call as well as an accompanying slide presentation will be available on the Vectrus Investor Relations website at https://app.webinar.net/b4KdmrqJ7En.

A replay of the conference call will be posted on the Vectrus website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through May 24, 2022, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 10166668.    

Footnotes:

1 See “Key Performance Indicators and Non-GAAP Financial Measures” for reconciliation.

About Vectrus

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

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 in the table in “2022 Guidance” above and other assumptions contained therein for purposes of such guidance, other statements about our 2021 performance outlook, five-year growth plan, revenue, DSO, contract opportunities, the potential impact of COVID-19, and any discussion of future operating or financial performance.

Whenever used, words such as “may,” “are considering,” “will,” “likely,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “could,” “potential,” “continue,” “goal” or similar terminology are forward-looking statements. These statements are based on the beliefs and assumptions of our management 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. For a discussion of some of the risks and important factors 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 U.S. Securities and Exchange Commission.

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.

 

VECTRUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

Three Months Ended

April 1,

April 2,

(In thousands, except per share data)

2022

2021

Revenue

$      456,471

$      434,004

Cost of revenue

419,275

393,648

Selling, general, and administrative expenses

31,959

23,823

Operating income

5,237

16,533

Interest expense, net

(1,681)

(1,932)

Income from operations before income taxes

3,556

14,601

Income tax expense

701

2,553

Net income

$          2,855

$        12,048

Earnings per share

     Basic

$            0.24

$            1.03

     Diluted

$            0.24

$            1.02

Weighted average common shares outstanding – basic

11,759

11,648

Weighted average common shares outstanding – diluted

11,902

11,827

 

 

VECTRUS, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

April 1,

December 31,

(In thousands, except per share information)

2022

2021

Assets

  Current assets

     Cash and cash equivalents

$                   22,999

$                   38,513

     Receivables

377,571

348,605

     Prepaid expenses

25,923

21,160

     Other current assets

11,083

15,062

  Total current assets

437,576

423,340

     Property, plant, and equipment, net

24,049

23,758

     Goodwill

321,734

321,734

     Intangible assets, net

64,281

66,582

     Right-of-use assets

42,074

43,651

     Other non-current assets

9,876

10,394

  Total non-current assets

462,014

466,119

Total Assets

$                 899,590

$                 889,459

Liabilities and Shareholders’ Equity

  Current liabilities

     Accounts payable

$                 234,713

$                 212,533

     Compensation and other employee benefits

59,059

80,284

     Short-term debt

10,400

10,400

     Other accrued liabilities

55,421

55,031

  Total current liabilities

359,593

358,248

     Long-term debt, net

108,392

94,246

       Deferred tax liability

32,620

32,214

       Operating lease liability

33,167

34,536

       Other non-current liabilities

11,643

20,128

Total non-current liabilities

185,822

181,124

Total liabilities

545,415

539,372

     Commitments and contingencies (Note 10)

     Shareholders’ Equity

     Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding

—

—

     Common stock; $0.01 par value; 100,000 shares authorized; 11,805 and 11,738 shares issued and outstanding
     as of April 1, 2022 and December 31, 2021, respectively                                      

118

117

     Additional paid in capital

89,590

88,116

     Retained earnings

270,609

267,754

    Accumulated other comprehensive loss

(6,142)

(5,900)

Total shareholders’ equity

354,175

350,087

Total Liabilities and Shareholders’ Equity

$                 899,590

$                 889,459

 

 

VECTRUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

April 1,

April 2,

(In thousands)

2022

2021

Operating activities

     Net income

$                2,855

$              12,048

Adjustments to reconcile net income to net cash provided by operating activities:

     Depreciation expense

1,591

1,548

     Amortization of intangible assets

2,301

2,450

     (Gain) Loss on disposal of property, plant, and equipment

(16)

43

     Stock-based compensation

2,558

2,622

     Amortization of debt issuance costs

204

232

Changes in assets and liabilities:

     Receivables

(29,898)

(46,544)

     Prepaid expenses

(4,849)

(3,137)

     Other assets

4,520

(648)

     Accounts payable

22,693

42,054

     Deferred taxes

—

2,716

     Compensation and other employee benefits

(21,138)

(22,818)

     Other liabilities

(7,202)

(12,295)

     Net cash used in operating activities

(26,381)

(21,729)

  Investing activities

  Purchases of capital assets and intangibles

(2,195)

(2,611)

  Proceeds from the disposition of assets

17

—

  Net cash used in investing activities

(2,178)

(2,611)

  Financing activities

  Repayments of long-term debt

(2,600)

(2,000)

  Proceeds from revolver

217,000

110,000

  Repayments of revolver

(200,000)

(110,000)

  Proceeds from exercise of stock options

—

113

  Payment of debt issuance costs

(458)

—

Payments of employee withholding taxes on share-based compensation

(1,626)

(2,184)

Net cash provided by (used in) financing activities

12,316

(4,071)

Exchange rate effect on cash

729

(191)

Net change in cash, cash equivalents and restricted cash

(15,514)

(28,602)

Cash, cash equivalents and restricted cash-beginning of year

38,513

68,727

Cash, cash equivalents and restricted cash-end of period

$              22,999

$              40,125

Supplemental disclosure of cash flow information:

Interest paid

$                1,513

$                1,371

Income taxes paid

$                     66

$                    (97)

Purchase of capital assets on account

$                       5

$                  (132)

 

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 operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, and organic 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 operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, and organic revenue, however, are not measures of financial performance under GAAP and should not be considered a substitute for operating income, operating margin, net income, and diluted earnings per share as determined in accordance with GAAP.  Definitions and reconciliations of these items are provided below.

  • 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, such as M&A, integration and related costs, LOGCAP V pre-operational legal costs, and amortization of acquired intangible assets that impact current results but are not related to our ongoing operations.
  • Adjusted operating margin is defined as adjusted operating income 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, such as M&A, integration and related costs, LOGCAP V pre-operational legal costs, and amortization of acquired intangible assets that impact current results but are not related to our ongoing operations.
  • Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted average diluted common shares outstanding.
  • EBITDA is defined as operating income, adjusted to exclude depreciation and amortization.
  • Adjusted EBITDA is defined as EBITDA, adjusted to exclude items that may include, but are not limited to, significant charges or credits and unusual and infrequent non-operating items, such as M&A, integration and related costs, LOGCAP V pre-operational legal costs that impact current results but are not related to our ongoing operations.
  • EBITDA margin is defined as EBITDA divided by revenue.
  • Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue.
  • Organic revenue is defined as revenue, adjusted to exclude revenue from acquired companies.

 

Adjusted Net Income, Adjusted Diluted Earnings Per
Share (Non-GAAP Measures)

($K, except per share data)

Three Months
Ended April 1,
2022, As
Reported

M&A,
Integration

and Related
Costs

LOGCAP V
Pre-Operational

Legal Costs

Amortization
of Acquired
Intangible

Assets

Three Months
Ended April 1,
2022 –
Adjusted

Revenue

$         456,471

$                       —

$                     —

$                     —

$        456,471

Growth

5.2 %

5.2    %

Operating income

$             5,237

$                  9,068

$                     —

$               2,301

$          16,606

Operating margin

1.1 %

3.6 %

Interest expense, net

$            (1,681)

$                       —

$                     —

$                     —

$           (1,681)

Income from operations before income taxes

$             3,556

$                  9,068

$                     —

$               2,301

$          14,925

Income tax expense

$                701

$                  1,787

$                     —

$                  453

$            2,941

Income tax rate

19.7 %

19.7 %

Net income

$             2,855

$                  7,281

$                     —

$               1,848

$          11,984

Weighted average common shares outstanding, diluted

11,902

11,902

Diluted earnings per share

$               0.24

$                    0.61

$                     —

$                 0.16

$              1.01

EBITDA (Non-GAAP Measures)

($K)

Three Months
Ended April 1,
2022, As
Reported

M&A,
Integration

and Related
Costs

LOGCAP V
Pre-Operational

Legal Costs

Amortization
of Acquired
Intangible

Assets

Three Months
Ended April 1,
2022 –
Adjusted

Operating Income

$            5,237

$                  9,068

$                     —

$               2,301

$         16,606

Add:

Depreciation and amortization

$            3,892

$                       —

$                     —

$              (2,301)

$           1,591

EBITDA

$            9,129

$                  9,068

$                     —

$                     —

$         18,197

EBITDA Margin

2.0 %

4.0 %

 

 

Adjusted Net Income, Adjusted Diluted Earnings Per
Share (Non-GAAP Measures)

($K, except per share data)

Three Months
Ended April 2,
2021

As Reported

M&A,
Integration and
Related

Costs

LOGCAP V
Pre-Operational

Legal Costs

Amortization
of Acquired
Intangible

Assets

Three Months
Ended April 2,
2021 –
Adjusted

Revenue

$        434,004

$                     —

$                     —

$                     —

$       434,004

Operating income

$          16,533

$                     —

$                   157

$                2,450

$         19,140

Operating margin

3.8 %

4.4 %

Interest expense, net

$           (1,932)

$                     —

$                     —

$                      —

$          (1,932)

Income from operations before income taxes

$          14,601

$                     —

$                   157

$                2,450

$         17,208

Income tax expense

$            2,553

$                     —

$                     27

$                   428

$           3,008

Income tax rate

17.5 %

17.5 %

Net income

$          12,048

$                     —

$                   130

$                2,022

$         14,200

Weighted average common shares outstanding, diluted

11,827

11,827

Diluted earnings per share

$              1.02

$                     —

$                 0.01

$                  0.17

$             1.20

EBITDA (Non-GAAP Measures)

($K)

Three Months
Ended April 2,
2021

As Reported

M&A,
Integration and
Related

Costs

LOGCAP V
Pre-Operational

Legal Costs

Amortization
of Acquired
Intangible

Assets

Three Months
Ended April 2, 2021 –
Adjusted

Operating Income

$          16,533

$                     —

$                   157

$                2,450

$         19,140

Add:

Depreciation and amortization

$            3,998

$                     —

$                      —

$               (2,450)

$           1,548

EBITDA

$          20,531

$                     —

$                   157

$                      —

$         20,688

EBITDA Margin

4.7 %

4.8 %

 

SUPPLEMENTAL INFORMATION

Revenue by client branch, contract type, contract relationship, and geographic region for the periods presented below was as follows: 

Three Months Ended

April 1,

April 2,

(In thousands)

2022

%

2021

%

Army

$    280,113

61 %

$    257,349

59 %

Air Force

61,474

13 %

78,170

18 %

Navy

75,217

17 %

56,427

13 % %

Other

39,667

9 %

42,058

10 %

Total revenue

$    456,471

$    434,004

Revenue by Contract Type

Three Months Ended

April 1,

April 2,

(In thousands)

2022

%

2021

%

Cost-plus and cost-reimbursable

$    311,094

68 %

$    290,230

67 %

Firm-fixed-price

128,004

28 %

128,757

30 %

Time and material

17,373

4 %

15,017

3 %

Total revenue

$    456,471

$    434,004

Revenue by Contract Relationship

Three Months Ended

April 1,

April 2,

(In thousands)

2022

%

2021

%

Prime contractor

$    427,093

94 %

$    403,262

93 %

Subcontractor

29,378

6 %

30,742

7 %

Total revenue

$    456,471

$    434,004

Revenue by Geographic Region

Three Months Ended

April 1,

April 2,

(In thousands)

2022

%

2021

%

Middle East

$    235,754

52 %

$    240,013

55 %

United States

167,980

37 %

149,811

35 %

Europe

36,531

7 %

40,623

9 %

Asia

16,206

4 %

3,557

1 %

Total revenue

$    456,471

$    434,004

 

CONTACT:

Vectrus
Mike Smith, CFA
719-637-5773

michael.smith@vectrus.com

 

 

 

CisionView original content to download multimedia:https://www.prnewswire.com/news-releases/vectrus-announces-solid-first-quarter-results-301544306.html

SOURCE Vectrus, Inc.

Release – Salem Media Group, Inc. Announces First Quarter 2022 Total Revenue of $62.6 Million

Posted on by Admin



Salem Media Group, Inc. Announces First Quarter 2022 Total Revenue of $62.6 Million

Research, News, and Market Data on Salem Media

IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (NASDAQ: SALM) released its results for the three months ended March 31, 2022.

First Quarter 2022 Results

For the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021:

Consolidated

  • Total revenue increased 5.5% to $62.6 million from $59.4 million;
  • Total operating expenses increased 4.8% to $57.6 million from $55.0 million;
  • Operating expenses, excluding gains or losses on the disposition of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense (1) increased 8.4% to $55.8 million from $51.4 million;
  • Operating income increased 14.2% to $5.0 million from $4.4 million;
  • Net income increased 438.4% to $1.7 million, or $0.06 net income per diluted share from $0.3 million, or $0.01 net income diluted per share;
  • EBITDA (1) increased 8.6% to $8.2 million from $7.5 million;
  • Adjusted EBITDA (1) decreased 13.6% to $6.8 million from $7.9 million; and
  • Net cash used by operating activities decreased 53.1% to $4.3 million from $9.2 million.

Broadcast

  • Net broadcast revenue increased 10.0% to $48.4 million from $44.0 million;
  • Station Operating Income (“SOI”) (1) decreased 3.7% to $10.3 million from $10.7 million;
  • Same Station (1) net broadcast revenue increased 9.4% to $48.1 million from $44.0 million; and
  • Same Station SOI (1) decreased 5.0% to $10.3 million from $10.9 million.

Digital Media

  • Digital media revenue increased 7.1% to $10.3 million from $9.6 million; and
  • Digital Media Operating Income (1) increased 93.1% to $1.8 million from $0.9 million.

Publishing

  • Publishing revenue decreased 31.8% to $3.9 million from $5.7 million; and
  • Publishing Operating Loss (1) was $0.6 million compared to Publishing Operating Income (1) of $0.5 million.

Included in the results for the quarter ended March 31, 2022 are:

  • A $1.7 million ($1.3 million, net of tax, or $0.05 per diluted share) net gain on the disposition of assets relates primarily to the gain on sale of land in Phoenix, Arizona offset by various fixed asset disposals; and
  • A $0.2 million ($0.2 million, net of tax, or $0.01 per share) charge for debt modification costs; and
  • A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.

Included in the results for the quarter ended March 31, 2021 are:

  • A $0.3 million ($0.2 million, net of tax, or $0.01 per share) net loss on the disposition of assets recorded upon the closing of the sale of radio station WKAT-AM and an FM translator in Miami, Florida; and
  • A $0.1 million non-cash compensation charge ($0.1 million, net of tax) related to the expensing of stock options.

Per share numbers are calculated based on 27,610,407 diluted weighted average shares for the quarter ended March 31, 2022, and 27,138,773 diluted weighted average shares for the quarter ended March 31, 2021.

Balance Sheet

As of March 31, 2022, the company had $114.7 million outstanding on the 7.125% senior secured notes due 2028 (“2028 Notes”), $57.7 million outstanding on 6.75% senior secured notes due 2024 (“2024 Notes”), and no outstanding balance on the ABL Facility.

Acquisitions and Divestitures

The following transactions were completed since January 1, 2022:

  • On May 2, 2022, the company acquired websites and related assets of Retirement Media for $0.2 million in cash.
  • The company invested $3.5 million, for a total investment to date of $4.5 million, in a Limited Liability Company “LLC” that will own, distribute, and market a motion picture.
  • On February 15, 2022, the company closed on the acquisition of radio station WLCC-AM and an FM translator in the Tampa, Florida market for $0.6 million of cash.
  • On January 10, 2022, the company closed on the sale of 4.5 acres of land in Phoenix, Arizona for $2.0 million in cash.

Pending transactions:

  • On August 31, 2021, the company entered into an agreement to sell 9.3 acres of land in the Denver area for $8.2 million. The company expects to close this sale in the second quarter of 2022 and plans to continue broadcasting both KRKS-AM and KBJD-AM from this site.
  • On June 2, 2021, the company entered into an agreement to acquire radio station KKOL-AM in Seattle, Washington for $0.5 million. The company paid $0.1 million in cash into an escrow account and began operating the station under a Local Marketing Agreement on June 7, 2021. The company expects the transaction to close in the latter half of 2022.
  • On February 5, 2020, the company entered into an Asset Purchase Agreement with Word Broadcasting to sell radio stations WFIA-AM, WFIA-FM and WGTK-AM in Louisville, Kentucky for $4.0 million with credits applied from amounts previously paid, including a portion of the monthly fees paid under a Time Brokerage Agreement (“TBA”). Due to changes in debt markets, the transaction was not funded, and it is uncertain when, or if, the transaction will close. Word Broadcasting continues to program the stations under a TBA that began in January 2017.

Conference Call Information

Salem will host a teleconference to discuss its results on May 10, 2022 at 3:00 p.m. Central Time. To access the teleconference, please dial (877) 524-8416, and then ask to be joined into the Salem Media Group First Quarter 2022 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 May 24, 2022 and can be heard by dialing (877) 660-6853, passcode 13727921 or on the investor relations portion of the company’s website, located at investor.salemmedia.com.

Follow us on Twitter @SalemMediaGrp.

Second Quarter 2022 Outlook

For the second quarter of 2022, the company is projecting total revenue to increase between 6% and 8% from second quarter 2021 total revenue of $63.8 million. The company is also projecting operating expenses before gains or losses on the sale or disposal of assets, stock-based compensation expense, changes in the estimated fair value of contingent earn-out consideration, impairments, depreciation expense and amortization expense to increase between 7% and 10% compared to the second quarter of 2021 non-GAAP operating expenses of $55.0 million.

A reconciliation of non-GAAP operating expenses, excluding gains
or losses on the disposition of assets, stock-based compensation expense,
changes in the estimated fair value of contingent earn-out consideration,
impairments, depreciation expense and amortization expense 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 Salem to close and integrate announced transactions, market acceptance of Salem’s radio station formats, competition from new technologies, adverse economic conditions, and other risks and uncertainties detailed from time to time in Salem’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. Salem 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 Income (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 Income (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 changes in the estimated fair value of contingent
earn-out consideration, before impairments, before net miscellaneous income and
expenses, before gain on bargain purchase, before (gain) loss on early
retirement of long-term debt and before non-cash compensation expense. SOI,
Digital Media Operating Income, Publishing Operating Income (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 Income (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 Income (Loss), EBITDA and Adjusted
EBITDA are not necessarily comparable to similarly titled measures reported by
other companies.

The company defines Adjusted Free Cash Flow as Adjusted EBITDA
less cash paid for capital expenditures, less cash paid for income taxes, and
less cash paid for interest. The company considers Adjusted Free Cash Flow to
be a liquidity measure that provides useful information to management and
investors about the amount of cash generated by its operations after cash paid
for capital expenditures, cash paid for income taxes and cash paid for
interest. A limitation of Adjusted Free Cash Flow as a measure of liquidity is
that it does not represent the total increase or decrease in its cash balance
for the period. The company uses Adjusted Free Cash Flow, a non-GAAP liquidity
measure, both in presenting its results to stockholders and the investment
community, and in its internal evaluation and management of the business. The
company’s presentation of Adjusted Free Cash Flow 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
Adjusted Free Cash Flow is 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-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 are 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.

Salem Media Group, Inc.

Condensed Consolidated Statements of
Operations

(in thousands, except share and per share
data)

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2021

 

2022

 

 

(Unaudited)

Net broadcast revenue

 

$

44,048

 

 

$

48,432

 

Net digital media revenue

 

 

9,619

 

 

 

10,300

 

Net publishing revenue

 

 

5,686

 

 

 

3,877

 

Total revenue

 

 

59,353

 

 

 

62,609

 

Operating expenses:

 

 

 

 

 

 

Broadcast operating expenses

 

 

33,343

 

 

 

38,121

 

Digital media operating expenses

 

 

8,673

 

 

 

8,473

 

Publishing operating expenses

 

 

5,205

 

 

 

4,467

 

Unallocated corporate expenses

 

 

4,288

 

 

 

4,810

 

Change in the estimated fair value of contingent earn-out consideration

 

 

—

 

 

 

(5

)

Debt modification costs

 

 

—

 

 

 

228

 

Depreciation and amortization

 

 

3,170

 

 

 

3,276

 

Net (gain) loss on the disposition of assets

 

 

318

 

 

 

(1,735

)

Total operating expenses

 

 

54,997

 

 

 

57,635

 

Operating income

 

 

4,356

 

 

 

4,974

 

Other income (expense):

 

 

 

 

 

 

Interest income

 

 

1

 

 

 

—

 

Interest expense

 

 

(3,926

)

 

 

(3,394

)

Loss on early retirement of long-term debt

 

 

—

 

 

 

(53

)

Net miscellaneous income and (expenses)

 

 

22

 

 

 

1

 

Net income before income taxes

 

 

453

 

 

 

1,528

 

Provision for (benefit from) income taxes

 

 

130

 

 

 

(211

)

Net income

 

$

323

 

 

$

1,739

 

 

 

 

 

 

 

 

Basic earnings per share Class A and Class B common stock

 

$

0.01

 

 

$

0.06

 

Diluted earnings per share Class A and Class B common stock

 

$

0.01

 

 

$

0.06

 

 

 

 

 

 

 

Basic weighted average Class A and Class B common stock shares outstanding

 

 

26,736,639

 

 

 

27,177,375

 

Diluted weighted average Class A and Class B common stock shares outstanding

 

 

27,138,773

 

 

 

27,610,407

 

 

Salem Media Group, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

March 31, 2022

 

 

 

 

 

 

(Unaudited)

Assets

 

 

 

 

 

 

Cash

 

$

1,785

 

$

—

Accounts receivable, net

 

 

25,663

 

 

28,000

Other current assets

 

 

14,066

 

 

15,330

Property and equipment, net

 

 

79,339

 

 

80,262

Operating and financing lease right-of-use assets

 

 

43,665

 

 

45,985

Intangible assets, net

 

 

346,438

 

 

346,294

Deferred financing costs

 

 

843

 

 

793

Other assets

 

 

4,313

 

 

6,994

Total assets

 

$

516,112

 

$

523,658

 

 

 

 

 

 

 

Liabilities and
Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

$

51,455

 

$

57,031

Long-term debt

 

 

170,581

 

 

168,300

Operating and financing lease liabilities, less current portion

 

 

42,273

 

 

44,777

Deferred income taxes

 

 

67,012

 

 

67,007

Other liabilities

 

 

6,580

 

 

6,393

Stockholders’ Equity

 

 

178,211

 

 

180,150

Total liabilities
and stockholders’ equity

 

$

516,112

 

$

523,658

 

SALEM MEDIA GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF
STOCKHOLDERS’ EQUITY

(Dollars in thousands, except share and per
share data)

 

 

 

Class A

 

Class B

 

 

 

 

 

 

 

 

 

Common Stock

 

Common Stock

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paid-In

 

Accumulated

 

Treasury

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Deficit

 

Stock

 

Total

Stockholders’
equity, December 31, 2020

23,447,317

 

$

227

 

5,553,696

 

$

56

 

$

247,025

 

$

(78,023

)

 

$

(34,006

)

 

$

135,279

Stock-based compensation

—

 

 

—

 

—

 

 

—

 

 

78

 

 

—

 

 

 

—

 

 

 

78

Options exercised

185,782

 

 

2

 

—

 

 

—

 

 

390

 

 

—

 

 

 

—

 

 

 

392

Net income

—

 

 

—

 

—

 

 

—

 

 

—

 

 

323

 

 

 

—

 

 

 

323

Stockholders’
equity,

March 31, 2021

23,633,099

 

$

229

 

5,553,696

 

$

56

 

$

247,493

 

$

(77,700

)

 

$

(34,006

)

 

$

136,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

Class B

 

 

 

 

 

 

 

 

 

Common Stock

 

Common Stock

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paid-In

 

Accumulated

 

Treasury

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Deficit

 

Stock

 

Total

Stockholders’
equity, December 31, 2021

23,922,974

 

$

232

 

5,553,696

 

$

56

 

$

248,438

 

$

(36,509

)

 

$

(34,006

)

 

$

178,211

Stock-based compensation

—

 

 

—

 

—

 

 

—

 

 

106

 

 

—

 

 

 

—

 

 

 

106

Options exercised

40,913

 

 

—

 

—

 

 

—

 

 

94

 

 

—

 

 

 

—

 

 

 

94

Lapse in restricted shares

14,854

 

 

—

 

—

 

 

—

 

 

—

 

 

—

 

 

 

—

 

 

 

—

Net income

—

 

 

—

 

—

 

 

—

 

 

—

 

 

1,739

 

 

 

—

 

 

 

1,739

Stockholders’
equity, March 31, 2022

23,978,741

 

$

232

 

5,553,696

 

$

56

 

$

248,638

 

$

(34,770

)

 

$

(34,006

)

 

$

180,150

 

SALEM MEDIA GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS

(Dollars in thousands)

(Unaudited)

 

Three Months Ended

March 31,

 

2021

 

2022

OPERATING ACTIVITIES

 

 

 

Net income

$

323

 

 

$

1,739

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Non-cash stock-based compensation

 

78

 

 

 

106

 

Depreciation and amortization

 

3,170

 

 

 

3,276

 

Amortization of deferred financing costs

 

213

 

 

 

247

 

Non-cash lease expense

 

2,161

 

 

 

2,202

 

Provision for bad debts

 

(295

)

 

 

(209

)

Deferred income taxes

 

188

 

 

 

(5

)

Change in the estimated fair value of contingent earn-out consideration

 

—

 

 

 

(5

)

Loss on early retirement of long-term debt

 

—

 

 

 

53

 

Net (gain) loss on the disposition of assets

 

318

 

 

 

(1,735

)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable and unbilled revenue

 

2,549

 

 

 

(2,229

)

Inventories

 

(93

)

 

 

(411

)

Prepaid expenses and other current assets

 

(750

)

 

 

(748

)

Accounts payable and accrued expenses

 

2,490

 

 

 

4,024

 

Operating lease liabilities

 

(2,497

)

 

 

(1,852

)

Contract liabilities

 

1,122

 

 

 

136

 

Deferred rent income

 

170

 

 

 

(58

)

Other liabilities

 

29

 

 

 

—

 

Income taxes payable

 

21

 

 

 

(218

)

Net cash provided by operating activities

 

9,197

 

 

 

4,313

 

INVESTING ACTIVITIES

 

 

 

 

 

Cash paid for capital expenditures net of tenant improvement allowances

 

(1,859

)

 

 

(3,439

)

Capital expenditures reimbursable under tenant improvement allowances and trade agreements

 

—

 

 

 

(40

)

Deposit on broadcast assets and radio station acquisitions

 

(100

)

 

 

—

 

Purchases of broadcast assets and radio stations

 

—

 

 

 

(540

)

Investment in LLC

 

—

 

 

 

(2,000

)

Proceeds from sale of long-lived assets

 

3,501

 

 

 

2,001

 

Other

 

(238

)

 

 

(858

)

Net cash provided by (used in) investing activities

 

1,304

 

 

 

(4,876

)

FINANCING ACTIVITIES

 

 

 

 

 

Payments to repurchase 2024 Notes

 

—

 

 

 

(2,531

)

Proceeds from borrowings under ABL Facility

 

16

 

 

 

6,257

 

Payments on ABL Facility

 

(5,016

)

 

 

(6,257

)

Proceeds from borrowings under PPP Loans

 

11,195

 

 

 

—

 

Payments of debt issuance costs

 

(3

)

 

 

—

 

Proceeds from the exercise of stock options

 

392

 

 

 

94

 

Payments on financing lease liabilities

 

(16

)

 

 

(16

)

Book overdraft

 

—

 

 

 

1,231

 

Net cash provided by (used in) financing activities

 

6,568

 

 

 

(1,222

)

Net increase (decrease) in cash and cash equivalents

 

17,069

 

 

 

(1,785

)

Cash and cash equivalents at beginning of year

 

6,325

 

 

 

1,785

 

Cash and cash equivalents at end of period

$

23,394

 

 

$

—

 

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 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, 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.

Salem Media Group, Inc.

Supplemental Information

(in thousands)

Three Months Ended

March 31,

2021

 

2022

(Unaudited)

Net income

$

323

$

1,739

Plus interest expense, net of capitalized interest

3,926

3,394

Plus provision for (benefit from) income taxes

130

(211)

Plus depreciation and amortization

3,170

3,276

Less interest income

 

(1)

 

—

EBITDA

$

7,548

$

8,198

Less net (gain) loss on the disposition of assets

318

(1,735)

Less change in the estimated fair value of contingent

earn-out consideration

 

 

—

 

 

(5)

Plus debt modification costs

 

 

—

 

 

228

Plus loss on early retirement of long-term debt

—

53

Plus net miscellaneous income and expenses

 

 

(22)

 

 

(1)

Plus non-cash stock-based compensation

 

78

 

106

Adjusted EBITDA

$

7,922

$

6,844

The company defines Adjusted Free Cash Flow (1) as Adjusted EBITDA (1) less cash paid for capital expenditures, less cash paid for income taxes, and less cash paid for interest. The company considers Adjusted Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by its operations after cash paid for capital expenditures, cash paid for income taxes and cash paid for interest. A limitation of Adjusted Free Cash Flow as a measure of liquidity is that it does not represent the total increase or decrease in its cash balance for the period. The company uses Adjusted Free Cash Flow, a non-GAAP liquidity measure, both in presenting its results to stockholders and the investment community, and in its internal evaluation and management of the business. The company’s presentation of Adjusted Free Cash Flow 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 Adjusted Free Cash Flow is not necessarily comparable to similarly titled measures reported by other companies.

The table below presents a reconciliation of Adjusted Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP measure. Adjusted Free Cash Flow is a non-GAAP liquidity measure that is not to be considered a substitute for or superior to the directly comparable measures reported in accordance with GAAP.

Salem Media Group, Inc.

Supplemental Information

(in thousands)

 

Three Months Ended

March 31,

2021

2022

(Unaudited)

Net cash provided by operating activities

$

9,197

 

$

4,313

 

Non-cash stock-based compensation

(78

)

(106

)

Depreciation and amortization

(3,170

)

(3,276

)

Amortization of deferred financing costs

(213

)

(247

)

Non-cash lease expense

 

 

(2,161

)

 

 

(2,202

)

Provision for bad debts

295

 

209

 

Deferred income taxes

(188

)

5

 

Change in the estimated fair value of contingent earn- out consideration

 

 

—

 

 

 

5

 

Net (gain) loss on the disposition of assets

(318

)

1,735

 

Loss on early retirement of long-term debt

—

 

(53

)

Changes in operating assets and liabilities:

 

Accounts receivable and unbilled revenue

(2,549

)

2,229

 

Inventories

93

 

411

 

Prepaid expenses and other current assets

750

 

748

 

Accounts payable and accrued expenses

(2,490

)

(4,024

)

Contract liabilities

(1,122

)

(136

)

Operating lease liabilities (deferred rent)

2,497

 

1,852

 

Deferred rent income

 

 

(170

)

 

 

58

 

Other liabilities

 

 

(29

)

 

 

—

 

Income taxes payable

 

 

(21

)

 

 

218

 

Net income

$

323

 

$

1,739

 

Plus interest expense, net of capitalized interest

3,926

 

3,394

 

Plus provision for (benefit from) income taxes

130

 

(211

)

Plus depreciation and amortization

3,170

 

3,276

 

Less interest income

 

(1

)

 

—

 

EBITDA

$

7,548

 

$

8,198

 

Plus net (gain) loss on the disposition of assets

318

 

(1,735

)

Plus change in the estimated fair value of contingent earn-out consideration

 

 

—

 

 

 

(5

)

Plus debt modification costs

 

 

—

 

 

 

228

 

Plus loss on early retirement of long-term debt

—

 

53

 

Plus net miscellaneous income and expenses

 

 

(22

)

 

 

(1

)

Plus non-cash stock-based compensation

 

78

 

 

106

 

Adjusted EBITDA

$

7,922

 

$

6,844

 

Less net cash paid for capital expenditures (1)

(1,859

)

(3,439

)

Plus cash received (paid for) taxes

79

 

(12

)

Less cash paid for interest, net of capitalized interest

 

(53

)

 

(65

)

Adjusted Free Cash Flow

$

6,089

 

$

3,328

(1) Net cash paid for capital expenditures reflects actual cash payments net of cash reimbursements under tenant improvement allowances and net of property and equipment acquired in trade transactions.

 

 

Selected Debt Data

Outstanding at

Applicable Interest Rate

March 31, 2022

Senior Secured Notes due 2028 (1)

$

114,731,000

7.125%

Senior Secured Notes due 2024 (2)

$

57,674,000

6.750%

(1) $114.7 million notes with semi-annual interest payments at an annual rate of 7.125%.

(2) $57.7 million notes with semi-annual interest payments at an annual rate of 6.750%.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220506005535/en/

Evan D. Masyr
Executive Vice President and Chief
Financial Officer
(805) 384-4512
evan@salemmedia.com

Source: Salem Media Group, Inc.


Tonix Pharmaceuticals (TNXP) – 1Q22 Reported With Clinical Milestones Review

Posted on by Admin

Tuesday, May 10, 2022

Tonix Pharmaceuticals (TNXP)
1Q22 Reported With Clinical Milestones Review

Tonix is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics and diagnostics to treat and prevent human disease and alleviate suffering. Tonix’s portfolio is composed of immunology, rare disease, infectious disease, and central nervous system (CNS) product candidates. Tonix’s immunology portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-15001 which is a humanized monoclonal antibody targeting CD40-ligand being developed for the prevention of allograft and xenograft rejection and for the treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the second half of 2022. Tonix’s rare disease portfolio includes TNX-29002 for the treatment of Prader-Willi syndrome. TNX-2900 has been granted Orphan-Drug Designation by the FDA. Tonix’s infectious disease pipeline includes a vaccine in development to prevent smallpox and monkeypox called TNX-8013, next-generation vaccines to prevent COVID-19, and an antiviral to treat COVID-19. Tonix’s lead vaccine candidates for COVID-19 are TNX-1840 and TNX-18504, which are live virus vaccines based on Tonix’s recombinant pox vaccine (RPV) platform. TNX-35005 (sangivamycin, i.v. solution) is a small molecule antiviral drug to treat acute COVID-19 and is in the pre-IND stage of development. TNX-102 SL6, (cyclobenzaprine HCl sublingual tablets), is a small molecule drug being developed to treat Long COVID, a chronic post-acute COVID-19 condition. Tonix expects to initiate a Phase 2 study in Long COVID in the second quarter of 2022. The Company’s CNS portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Tonix’s lead CNS candidate, TNX-102 SL, is in mid-Phase 3 development for the management of fibromyalgia with a new Phase 3 study launched in the second quarter of 2022. Finally, TNX-13007 is a biologic designed to treat cocaine intoxication that is expected to start a Phase 2 trial in the second quarter of 2022. TNX-1300 has been granted Breakthrough Therapy Designation by the FDA.

Robert LeBoyer, Vice President, Research Analyst, Life Sciences , Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Tonix Reported 1Q22.  Tonix reported a loss of $26.4 million or $(0.05) per share for 1Q22 and gave several development updates.  The Phase 2 trial testing TNX-102 SL in Long COVID is expected to begin in 2Q22, and the Phase 3 RESILIENT study in fibromyalgia has begun enrollment.  The company also reiterated plans to start three new Phase 2 trials from its CNS platform by YE2022. The cash balance at the end of the quarter was $140.4 million.

The Product Pipeline Continues To Make Progress.  Tonix has begun patient enrollment in the Phase 3 RESILIENT study testing TNX-102 SL in fibromyalgia.  This study has a target enrollment of 470 patients with an interim analysis expected in 1Q23.  If successful, the study would provide data for an application for FDA approval.  Separately, the IND to begin a Phase 2 study testing TNX-102 SL in Long COVID became effective, with enrollment expected to begin during 2Q22.…

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Asset Classes that Perform Best and Worst with Negative Real Interest Rates

Posted on by Admin 


Image Credit: Kim Alaniz (Flickr)


With Negative Real Rates, What Sectors Have Historically Outperformed?

The “real interest rate,” is defined as the net amount earned less inflation on an interest bearing security. Real rates are now at a low the country hasn’t experienced since just after World War II. In fact, with the recent Consumer Price Index (CPI) spike to 8.5% from a year earlier, inflation is 6% to 7% higher than one year US treasury levels. This means the real return is a negative 6% to 7%.

When the more conservative investor using interest-bearing securities begins to see inflation outpacing their investments, as they are now (in most cases), they recognize their assets are losing buying power. Their investments are not paying enough to keep up with price rises and certainly not growing so they can be able to buy more later with their savings. These simpler investors, by holding on to treasury securities, CDs, or corporate bonds, are losing ground, this loss of usable wealth begins to cause investors to move down the risk curve.

Putting on Risk

Dr. Horstmeyer is a professor of finance at George Mason University’s Business School in Fairfax, Va. He and his team decided to collect hard data on this phenomenon and see how different asset classes perform when real interest rates turn negative and stay negative for a while.

What they found with their look back is that when real interest rates turn negative, the asset classes considered riskiest (emerging-markets stocks, small-caps, etc.) had done extremely well in the first half of the inflation/interest rate cycle. During this period, they outperform what’s considered safer assets by over 1.5 percentage points a month. Stretched out over several months with compounding, the investors have done well.

The performance benefit reverses to a degree for those invested in these assets into the second half of the cycle. On average, the riskier assets have underperformed by over a percentage point (monthly) in the second half of a negative-real-rate cycle. This does not suggest the investors fared worse by adding risk to their portfolio; it may indicate that many investors were prudent and did not let greed keep them in the riskier securities. The later investors exiting lost ground from earlier gains.

The Research

To investigate what happened in the past, Professor Horstmeyer and his research assistants Jaehee Lee and Natalia Palacios gathered interest-rate data (based on T-bills), inflation data, and mutual-fund-return statistics for various asset classes over the past 50 years. They examined periods since 1971 when real interest rates turned negative and stayed negative for more than a month.

The group identified seven periods like this – the average period length is 2.5 years. For each period, they labeled the first half and the second half. The researchers then compared performance; first half compared to second.


What Investors Should Note

They reported two findings that investors should be aware of. First, during the first half of a negative-rate cycle, the riskiest mutual funds performed best. Emerging-markets funds, US small-cap funds and international-stock funds averaged 1.96%, 1.13%, and 1.03% returns a month, respectively. This average monthly return is far superior to all other equities and far better than the average bond fund, which had average returns of 0.35% a month during this period.

Half-Way Point

The additional performance reversed as the cycles matured. In the second halves, the riskiest funds underperformed. For example, emerging-markets funds lost an average of 1.13% a month. So while investors were seeking risk in the first half, it appears they eventually faded away from it the longer as the US remained with a negative real interest-rate environment.

Where are We Now

According to their findings which is based on historical averages, the current negative-rate cycle began in the second quarter of 2020. This could mean, if the 50 year pattern holds true, many investors have shifted over to riskier assets already. Since we are still sitting with negative real rates in the cycle, approaching the third year, it’s impossible to know yet where the first half ends and the second begins. Thus, even if we haven’t fully hit the point where investors move out of riskier positions, judging by historical length and data, we’re likely close.

Paul Hoffman

Managing Editor, Channelchek

Suggested Content



Russell Reconstitution 2022, What Investors Should Know

Is the Index Bubble Michael Burry Warned About Still Looming?




Leveraged and Inverse ETFs Contain Extra Costs for Buy-and-Hold Investors

In Nine Years, Nearly All Boomers Will Have Retired, Is This Good for Stock Pickers?

Sources

https://www.bls.gov/cpi/#:~:text=CPI%20for%20all%20items%20rises,12%20months%2C%20not%20seasonally%20adjusted

https://www.wsj.com/articles/investment-negative-interest-rates-11651781476?mod=hp_jr_pos1

 

Stay up to date. Follow us:

 

Gevo (GEVO) – First quarter results meet expectations, but real story is plant progression

Posted on by Admin

Tuesday, May 10, 2022

Gevo (GEVO)
First quarter results meet expectations, but real story is plant progression

Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel, and diesel fuel, that when burned have potential to yield net-zero greenhouse gas emissions when measured across the full lifecycle of the products. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their lifecycle). Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, Gevo’s technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients. Gevo’s ability to penetrate the growing low-carbon fuels market depends on the price of oil and the value of abating carbon emissions that would otherwise increase greenhouse gas emissions. Gevo believes that its proven, patented, technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low carbon products such as gasoline components, jet fuel, and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion-dollar business.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Gevo reported revenues of $0.2m versus $0.1m, operating income of ($16.0m) versus ($9.9m) and net income of ($15.7m) versus ($10.1m). Results were in line with our expectations. The company’s cash position is solid at $413 million, and the company is already planning out its financing for plant development. Plans call for the combined use of nonrecourse project financing, corporate debt and shareholder investments.

Projects are moving forward. In January, Gevo announced it had begun the process of bringing its dairy manure-based project online in order to apply for credits. The credits could contribute $16-$20 million annually, and management is prepared for timing issues between production and receipt of credits. In March, it signed several “take-or-pay” agreements with airlines to provide jet fuel made from ethanol at its Net Zero One plant. In total, Gevo has contracts for 200m gallons of fuel annually and has stated a goal of delivering 1 billion gallons of fuel by 2030. Plant operations are on track, although management indicated it has used up some of the slack assumed in its timeline. …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

RCI Hospitality Holdings (RICK) – Momentum Continues to Build

Posted on by Admin

Tuesday, May 10, 2022

RCI Hospitality Holdings (RICK)
Momentum Continues to Build

With more than 50 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas-Fort Worth, Houston, Miami, Minneapolis, Denver, St. Louis, Charlotte, Pittsburgh, Raleigh, Louisville, and other markets operate under brand names such as Rick’s Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars Club, Tootsie’s Cabaret, and Scarlett’s Cabaret. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

2Q22 Results. Revenue hit a record $63.7 million, up 3.0% sequentially and up 44.6% y-o-y. Omicron cut quarterly revenue by an estimated $2 million. We had projected $65.3 million of revenue. Net income was $11.0 million, or $1.15 per share, compared to $6.1 million, or $0.68 per share last year. We were at $11.6 million, or $1.22 per share.

Club Acquisitions and Growth. RCI just acquired another South Florida club for $16 million, or 4.1x club EBITDA and is under contract to purchase a club in Ft. Worth, TX. In addition, the rebranded Louisiana club was opened in March and the reformatted San Antonio club will open in the third quarter.  …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Release – Flotek Announces Shareholder Approval of $2 Billion+ Long Term Contract

Posted on by Admin



Flotek Announces Shareholder Approval of $2 Billion+ Long Term Contract

Research, News, and Market Data on Flotek Industries

HOUSTON, May 10, 2022 – Flotek Industries, Inc. (“Flotek” or the “Company”) (NYSE: FTK), a leader in technology-driven specialty green chemistry solutions, today announced that Flotek’s shareholders overwhelmingly approved the previously-announced agreement with ProFrac Holdings, LLC (“ProFrac”) to expand the existing long-term supply agreement with one of ProFrac’s affiliates.
 

The results from yesterday’s meeting indicate that approximately 98.5% of the votes cast by Flotek common stock voted in favor of the proposal to approve the transactions contemplated by the agreement with ProFrac.  The full results of the vote are available in a Current Report on Form 8-K filed with Securities & Exchange Commission on May 9, 2022.
 

The transactions are expected to close expeditiously, subject to usual and customary closing conditions.
 

About Flotek
Industries, Inc.
Flotek Industries, Inc. creates solutions to reduce the environmental impact of energy on air, water, land and people.  A technology-driven, specialty green chemistry and data company, Flotek helps customers across industrial, commercial, and consumer markets improve their Environmental, Social, and Governance performance. Flotek’s Chemistry Technologies segment develops, manufactures, packages, distributes, delivers, and markets high-quality cleaning, disinfecting and sanitizing products for commercial, governmental and personal consumer use.  Additionally, Flotek empowers the energy industry to maximize the value of their hydrocarbon streams and improve return on invested capital through its real-time data platforms and green chemistry technologies.  Flotek serves downstream, midstream, and upstream customers, both domestic and international.  Flotek is a publicly traded company headquartered in Houston, Texas, and its common shares are traded on the New York Stock Exchange under the ticker symbol “FTK.”  For additional information, please visit www.flotekind.com.

Forward-Looking
Statements
Certain statements set forth in this press release constitute forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) regarding Flotek Industries, Inc.’s business, financial condition, results of operations and prospects.  Words such as will, continue, expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this press release.  Although forward-looking statements in this press release reflect the good faith judgment of management, such statements can only be based on facts and factors currently known to management.  Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements.  Further information about the risks and uncertainties that may impact the company are set forth in the Company’s most recent filing with the Securities and Exchange Commission on Form 10-K (including, without limitation, in the “Risk Factors” section thereof), and in the Company’s other SEC filings and publicly available documents.  Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect, any event or circumstance that may arise after the date of this press release.

 

Contact:
Investor Relations
E: ir@flotekind.com
P: (713) 726-5322

Release – Information Services Group Announces First-Quarter 2022 Results and Increases Dividend by 33%

Posted on by Admin



Information Services Group Announces First-Quarter 2022 Results and Increases Dividend by 33%

Research, News, and Market Data on Information Services Group

  • Reports
    GAAP revenues of $73 million, an all-time quarterly high, exceeding
    guidance
  • Reports
    net income of $5 million, GAAP EPS of $0.10 and adjusted EPS of $0.12, all
    first-quarter records
  • Reports
    record adjusted EBITDA of $11 million, exceeding guidance
  • Increases
    quarterly dividend by 33%, to $0.04 per share, effective with dividend
    payable June 17 to record holders as of June 3
  • Sets
    second-quarter 2022 guidance: revenues between $73 million and $75 million
    and adjusted EBITDA of between $10 million and $11 million

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, today announced record financial results, including its highest quarterly revenues ever, for the first quarter ended March 31, 2022.

“ISG has begun 2022 in record fashion,” said Michael P. Connors, chairman and CEO. “We delivered our highest quarterly revenues ever, at $73 million, up 12 percent in constant currency, along with record profitability. Our growth to start the year continues our outstanding financial performance since the launch of our ISG NEXT operating model in 2020, underscoring our business momentum and supporting our decision to raise our quarterly dividend by 33 percent.”

Connors noted ISG also generated double-digit growth in recurring revenues, especially from its subscription research and platform businesses.

“Our strong performance reflects demand for our data, insights and advice, as clients continue to invest in technology to enable greater efficiency and faster growth. Our solution-centric approach and ISG iFlex delivery model allows us to serve specific client needs with greater delivery flexibility,” Connors said.

Connors said ISG sees market momentum continuing in 2022. “Demand continues to be strong, despite rising enterprise costs related to global inflation, continuing supply chain disruptions, geopolitical concerns, higher energy costs and high demand for tech talent,” he said.

During the first quarter, ISG continued to expand its ISG GovernX® platform business with the acquisition of automated contracting solution Agreemint. The AI-powered contracting platform brings important new capabilities to the market-leading GovernX vendor compliance and risk management solution and will be used by ISG to add value to future platform solutions now in development.

First-Quarter 2022 Results

Reported revenues for the first quarter were a record $72.6 million, up 9 percent versus last year and up 12 percent in constant currency. Currency translation negatively impacted reported revenues by $1.9 million versus the prior year. Reported revenues were $41.4 million in the Americas, up 9 percent versus the prior year; $23.5 million in Europe, up 3 percent versus the prior year on a reported basis and up 10 percent in constant currency, and $7.7 million in Asia Pacific, up 34 percent versus the prior year on a reported basis and up 40 percent in constant currency.

ISG reported first-quarter operating income of $7.7 million, up 54 percent from $5.0 million in the first quarter of 2021. The firm also reported record first-quarter net income and fully diluted income per share of $4.9 million and $0.10, respectively, versus net income of $3.4 million and earnings per share of $0.07 in the prior year. Net income margin (calculated by dividing net income by reported revenues) increased to 6.8 percent, from 5.1 percent in the first quarter of 2021.

Adjusted net income (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) for the first quarter was $6.4 million, or $0.12 per share on a fully diluted basis, compared with adjusted net income of $5.5 million, or $0.10 per share on a fully diluted basis, in the prior year’s first quarter.

First-quarter adjusted EBITDA (a non-GAAP measure defined below under “Non-GAAP Financial Measures”) reached a record $10.6 million, up 23 percent from the first quarter last year. Adjusted EBITDA margin (a non-GAAP measure calculated by dividing adjusted EBITDA by reported revenues) was 15 percent, up more than 165 basis points from the prior year.

Other Financial and Operating Highlights

ISG generated $4.1 million of cash from operations in the first quarter, versus $12.1 million in the prior year. The firm’s cash balance totaled $43.7 million at March 31, 2022, down from $47.5 million at the end of the prior year. During the first quarter, ISG repurchased $5.5 million of shares and paid down $1.1 million of debt. As of March 31, 2022, ISG had $73.4 million in debt outstanding, compared with $77.7 million at the end of the first quarter last year. At 1.8 times, the firm’s gross-debt-to-adjusted-EBITDA ratio (a non-GAAP measure calculated by dividing outstanding debt by adjusted EBITDA) was at a record low at March 31, 2022.

2022 Second-Quarter Revenue and Adjusted
EBITDA Guidance

“For the second quarter, ISG is targeting revenues of between $73 million and $75 million and adjusted EBITDA of between $10 million and $11 million,” said Connors. “We will continue to monitor the macroeconomic environment, including the impact of inflation and other factors, and adjust our business plans accordingly.”

Quarterly Dividend

The ISG Board of Directors approved a 33 percent increase in the quarterly dividend, from $0.03 per share to $0.04 per share, effective with the next quarterly dividend, payable on June 17, 2022, to shareholders of record on June 3, 2022.

Conference Call

ISG has scheduled a call for 9 a.m., U.S. Eastern Time, Tuesday, May 10, 2022, to discuss the company’s first-quarter results. The call can be accessed by dialing 1-800-304-0389; or, for international callers, by dialing +1 313-209-5140. The access code is 6633167. A recording of the conference call will be accessible on ISG’s website (www.isg-one.com) for approximately four weeks following the call.

Forward-Looking Statements

This communication contains “forward-looking statements” which represent the current expectations and beliefs of management of ISG concerning future events and their potential effects. Statements contained herein including words such as “anticipate,” “believe,” “contemplate,” “plan,” “estimate,” “target,” “expect,” “intend,” “will,” “continue,” “should,” “may,” and other similar expressions, are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Those risks relate to inherent business, economic and competitive uncertainties and contingencies relating to the businesses of ISG and its subsidiaries including without limitation: (1) failure to secure new engagements or loss of important clients; (2) ability to hire and retain enough qualified employees to support operations; (3) ability to maintain or increase billing and utilization rates; (4) management of growth; (5) success of expansion internationally; (6) competition; (7) ability to move the product mix into higher margin businesses; (8) general political and social conditions such as war, political unrest and terrorism; (9) healthcare and benefit cost management; (10) ability to protect ISG and its subsidiaries’ intellectual property or data and the intellectual property or data of others; (11) currency fluctuations and exchange rate adjustments; (12) ability to successfully consummate or integrate strategic acquisitions; (13) outbreaks of diseases, including coronavirus, or similar public health threats or fear of such an event; and (14) engagements may be terminated, delayed or reduced in scope by clients. Certain of these and other applicable risks, cautionary statements and factors that could cause actual results to differ from ISG’s forward-looking statements are included in ISG’s filings with the U.S. Securities and Exchange Commission. ISG undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

Non-GAAP Financial Measures

ISG reports all financial information required in accordance with U.S. generally accepted accounting principles (GAAP). In this release, ISG has presented both GAAP financial results as well as non-GAAP information for the three months ended March 31, 2022, and March 31, 2021. ISG believes that evaluating its ongoing operating results will be enhanced if it discloses certain non-GAAP information. These non-GAAP financial measures exclude non-cash and certain other special charges that many investors believe may obscure the user’s overall understanding of ISG’s current financial performance and the Company’s prospects for the future. ISG believes that these non-GAAP measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance.

ISG provides adjusted EBITDA (defined as net income plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, interest accretion associated with contingent consideration, acquisition-related costs, and severance, integration and other expense), adjusted net income (defined as net income plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, interest accretion associated with contingent consideration, acquisition-related costs, and severance, integration and other expense, on a tax-adjusted basis), adjusted net income per diluted share, adjusted EBITDA margin, and selected financial data on a constant currency basis which are non-GAAP measures that the Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations, which management believes are not indicative of ISG’s core operations. These non-GAAP measures are used by ISG to evaluate the Company’s business strategies and management’s performance.

We evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP financial measure, excludes the impact of year-over-year fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our results of operations, thereby facilitating period-to-period comparisons of our business performance and is consistent with how management evaluates the Company’s performance. We calculate constant currency percentages by converting our current and prior-periods local currency financial results using the same point in time exchange rates and then compare the adjusted current and prior period results. This calculation may differ from similarly titled measures used by others and, accordingly, the constant currency presentation is not meant to be a substitution for recorded amounts presented in conformity with GAAP, nor should such amounts be considered in isolation.

Management believes this information facilitates comparison of underlying results over time. Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the forward-looking non-GAAP estimates contained herein to the corresponding GAAP measures is not being provided, due to the unreasonable efforts required to prepare it.

About ISG

ISG (Information Services Group) (Nasdaq: 
III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

Information Services Group, Inc.

Condensed Consolidated Statement of Income and
Comprehensive Income

(unaudited)

(in thousands, except per share amounts)

 

Three Months Ended March 31,

 

2022

 

 

 

2021

 

 

Revenues

$

72,563

 

$

66,571

 

Operating expenses

Direct costs and expenses for advisors

 

 

43,955

 

 

 

41,156

 

Selling, general and administrative

 

19,587

 

 

19,040

 

Depreciation and amortization

 

1,289

 

 

1,360

 

Operating income

 

7,732

 

 

5,015

 

Interest income

 

45

 

 

71

 

Interest expense

 

(563

)

 

(643

)

Foreign currency transaction gain (loss)

 

24

 

 

(11

)

 

Income before taxes

 

7,238

 

 

4,432

 

Income tax provision

 

2,308

 

 

1,008

 

Net income

$

4,930

 

$

3,424

 

 

Weighted average shares
outstanding:

Basic

 

48,526

 

 

48,504

 

Diluted

 

51,326

 

 

52,313

 

 

Earnings per share:

Basic

$

0.10

 

$

0.07

 

Diluted

$

0.10

 

$

0.07

 

 

Information Services Group, Inc.

Reconciliation from GAAP to Non-GAAP

(unaudited)

(in thousands, except per share amounts)

 

Three Months Ended March 31,

 

2022

 

 

 

2021

 

 

Net income

$

4,930

 

$

3,424

 

Plus:

Interest expense (net of interest income)

 

518

 

 

572

 

Income taxes

 

2,308

 

 

1,008

 

Depreciation and amortization

 

1,289

 

 

1,360

 

Interest accretion associated with contingent consideration

 

–

 

 

32

 

Acquisition-related costs (1)

 

10

 

 

(45

)

Severance, integration and other expense

 

110

 

 

135

 

Foreign currency transaction (gain) loss

 

(24

)

 

11

 

Non-cash stock compensation

 

1,503

 

 

2,148

 

Adjusted EBITDA

$

10,644

 

$

8,645

 

 

Net income

$

4,930

 

$

3,424

 

Plus:

Non-cash stock compensation

 

1,503

 

 

2,148

 

Intangible amortization

 

528

 

 

714

 

Interest accretion associated with contingent consideration

 

–

 

 

32

 

Acquisition-related costs (1)

 

10

 

 

(45

)

Severance, integration and other expense

 

110

 

 

135

 

Foreign currency transaction (gain) loss

 

(24

)

 

11

 

Tax effect (2)

 

(681

)

 

(958

)

Adjusted net income

$

6,376

 

$

5,461

 

 

Weighted average shares
outstanding:

Basic

 

48,526

 

 

48,504

 

Diluted

 

51,326

 

 

52,313

 

 

Adjusted earnings per share:

Basic

$

0.13

 

$

0.11

 

Diluted

$

0.12

 

$

0.10

 

 

 

(1)

Consists of expenses from acquisition-related costs and non-cash fair value adjustments on pre-acquisition contract liabilities.

(2)

Marginal tax rate of 32%, reflecting U.S. federal income tax rate of 21% plus 11% attributable to U.S. states and foreign jurisdictions.

 

Information Services Group, Inc.

Selected Financial Data

Constant Currency Comparison

 

Three Months

Three Months

Three Months

Constant

Ended

Three Months

Constant

Ended

Ended

currency

March 31, 2022

Ended

currency

March 31, 2021

March 31, 2022

impact

Adjusted

March 31, 2021

impact

Adjusted

Revenue

$

72,563

$

1,237

$

73,800

$

66,571

$

(722)

$

65,849

Operating income

$

7,732

$

234

$

7,966

$

5,015

$

(272)

$

4,743

Adjusted EBITDA

$

10,644

$

242

$

10,886

$

8,645

$

(279)

$

8,366

 

Source: Information Services Group, Inc.

Eagle Bulk Shipping (EGLE) – Quarterly Results In Line With Expectations

Posted on by Admin

Monday, May 09, 2022

Eagle Bulk Shipping (EGLE)
Quarterly Results In Line With Expectations

Eagle Bulk Shipping Inc. (“Eagle”) is a US-based drybulk owner-operator focused on the Supramax/Ultramax mid-size asset class, which ranges from 50,000 and 65,000 deadweight tons in size; these vessels are equipped with onboard cranes allowing for the self-loading and unloading of cargoes, a feature which distinguishes them from the larger classes of drybulk vessels and provides for greatly enhanced flexibility and versatility- both with respect to cargo diversity and port accessibility. The Company transports a broad range of major and minor bulk cargoes around the world, including coal, grain, ore, pet coke, cement, and fertilizer. Eagle operates out of three offices, Stamford (headquarters), Singapore, and Hamburg, and performs all aspects of vessel management in-house including: commercial, operational, technical, and strategic.

Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Eagle Bulk Shipping reported 2022-1Q results generally in line with expectations. Revenues, net were $184.4 million versus $93.4 million for the same period last year and in line with our $182.4 million estimate. Adjusted EBITDA (excluding unrealized derivative value changes) was $85.0 million versus our $88.1 million estimate. Adjusted net income was $64.5 million ($3.97 per diluted share) versus $9.3 million ($0.80) last year and in line with our estimate of $64.3 million ($4.00). The consensus analyst estimate was $3.97.

Charter rates are high. The company achieved a TCE rate of $27,407/day in the quarter, benefitting from a sharp run up in shipping rates last fall. Eagle is well protected against any decline in rates having locked in 83% of available days fixed at an average TCE rate of $29,300. CEO Gary Vogel indicated that “the demand growth for minor bulks remains healthy and continues to outpace demand for the broader drybulk market.” Disruptions caused by the war in Ukraine have resulted in longer voyage distances and higher rates….

This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

CoreCivic, Inc. (CXW) – Headwinds Lead to Miss but Still See Upside

Posted on by Admin

Monday, May 09, 2022

CoreCivic, Inc. (CXW)
Headwinds Lead to Miss but Still See Upside

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 believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for nearly 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.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Behind the Miss. There were a number of items with the most significant being the La Palma transition, both the cost of implementing the transition as well as a faster drawn down of the existing ICE population than was anticipated, and a challenging labor market where CoreCivic has implemented above average wage increases.

But Significant Upside Potential. Due to the COVID regulations, CoreCivic’s occupancy levels remain well below historical norms. A return to pre-COVID occupancy levels, or about an additional 8,000 detainees, could add some $40-$50 million to EBITDA. Given the expectations for a border surge once Title 42 is lifted, we do not think this is a stretch….

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Kratos Defense & Security (KTOS) – A CR Impacted Quarter, but Future is Brighter

Posted on by Admin

Monday, May 09, 2022

Kratos Defense & Security (KTOS)
A CR Impacted Quarter, but Future is Brighter

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms, and systems for United States National Security related customers, allies, and commercial enterprises. Kratos is changing the way breakthrough technologies for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research, and streamlined development processes. At Kratos, affordability is a technology, and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training and combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.kratosdefense.com.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

1Q22 Results. Revenue of $196.2 million, up 1.0% y-o-y, and came in at the mid-point of the $190-$200 million guidance. Revenue from acquisitions offset CR related impacts and the decline in the Training business. Adjusted EBITDA came in at $13.8 million, above guidance, versus $18.1 million a year ago. GAAP EPS loss was $0.12, adjusted EPS net income was $0.04.

Brighter Days? With the Continuing Resolution behind us, it appears there is a high potential for new awards. On the call, CEO DeMarco stated “We have now received or have been informed that we will receive several large new contracts in our unmanned systems and our satellite business, including our new software based OpenSpace products.”…

This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Gray Television (GTN) – Plowing Through The Noise

Posted on by Admin

Monday, May 09, 2022

Gray Television (GTN)
Plowing Through The Noise

Gray Television is a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets in the United States. Our television stations serve 113 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 80 markets with the top-rated television station and 100 markets with the first and/or second highest rated television station. We also own video program companies Raycom Sports, Tupelo Honey, PowerNation Studios and Third Rail Studios.

Michael Kupinski, Director of Research, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Exceeds expectations. The company blew through our revenue and adj. EBITDA estimates in its first quarter. Revenues increased a strong 9.8% to $827.0 million, nicely above our $793.0 million estimate, and above its previous guidance. Adj. EBITDA was a solid $251.0 million, up 8.2%, and above our $212.0 million estimate. 

Core and Retransmission revenue trends favorable. The Q1 upside revenue variance was driven by better than expected Core advertising (up 4% versus guidance of 3% to 5%) and better Retransmission revenue, in part related to a true-up. The company expects solid Retrans revenue of $385 million to $390 million in Q2, better than our original estimate. Management indicated that subscriber counts appear stable. …

This Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.