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Release – V2X Announces Strong First Quarter 2023 Results

Posted on May 10, 2023May 10, 2023 by aweinsoff@channelchek.com

Research News and Market Data on VVX

Company Release – 5/9/2023

First Quarter 2023 Highlights:

Revenue of $943.5 million, up 12.0% y/y on a pro forma basis
Continued expansion in the Pacific driving strong revenue growth of ~300% y/y
Awarded new contracts valued at ~$600 million and secured ~$250 million in recompetes
Reported operating income of $30.6 million; adjusted operating income¹ of $62.6 million
Adjusted EBITDA¹ of $68.0 million with a margin¹ of 7.2%
Diluted EPS of ($0.57); adjusted diluted EPS¹ of $0.80

2023 Guidance:

Reiterating full-year 2023 guidance

MCLEAN, Va., May 9, 2023 /PRNewswire/ — V2X, Inc. (NYSE:VVX) announced first quarter 2023 financial results.

“V2X reported an excellent start to the year with revenue increasing 12.0% year-over-year, on a pro forma basis during the first quarter,” said Chuck Prow, President and Chief Executive Officer of V2X. “Adjusted EBITDA for the quarter was $68.0 million or a 7.2% margin and reflects a benefit from strong revenue volume and program productivity. The pace of award activity is improving and was exemplified by approximately $600 million in new business awarded to V2X. With over $4 billion in bids under evaluation and a robust backlog of ~$12 billion, the outlook for V2X remains solid.”

“Revenue growth in the quarter was generated by continued expansion on existing programs, contribution from new awards, as well as success in securing recompete wins late last year and in early 2023,” said Mr. Prow. “Our teams continued to drive momentum with several notable wins in the quarter. This has been achieved while successfully expanding on our core programs. Importantly, we continue to experience significant growth in the Pacific or INDOPACOM, with our presence and footprint in the region proving to be a key channel to support increasing mission requirements.”

Mr. Prow continued, “Our growth activities during the quarter were robust. In March, we were awarded two strategically important new business contracts. Firstly, we were the successful bidder on the Naval Test Wing Pacific contract valued at $440 million over seven years, which further builds on the services V2X is providing under the $880 million Naval Test Wing Atlantic program. This effort to support the critical test and evaluation activities performed by the Naval Test Wing Pacific leveraged V2X’s proprietary and innovative technology-based solution, AMMO^®, and demonstrates our commitment to maintaining high levels of mission readiness. We are honored to be selected to support the Navy’s preeminent organization for flight testing and flight test support of the latest systems. Secondly, V2X was also awarded a three-year, approximately $100 million contract to provide critical cybersecurity support services to a government client. This is a key win for V2X in the cyber and IT support domain and leverages our core mission of intersecting our technology and operations capabilities.”

“In addition, during the first quarter, we were awarded over $250 million in recompetes,” said Mr. Prow. “This includes a five-year, $142 million contract with Naval Air Systems Command (NAVAIR) PMA 281 in support of mission planning systems. PMA-281 is responsible for the acquisition and life cycle management of a range of mission planning, control system and execution tools that are developed and integrated in partnership with other services, and foreign nation partners. This recompete win with the Navy represents successful execution on this deliberate client engagement campaign. We also secured a five-year recompete contract valued at over $90 million with a National Security client. Transition to the new contract is complete and I’d like to thank our team for their exceptional performance and dedication to this important client.”

Mr. Prow concluded, “The significant momentum in harnessing combined V2X solutions offers an opportunity to deliver growth with access to pursuits that would not have been achievable in the past. We remain focused on delivering on our strategy to drive growth by creating more value in our core markets with converged solutions, increasing market share where our operational knowledge sets us apart, and expanding mission capabilities into adjacent markets.”

First Quarter 2023 Results

On July 5, 2022 (“Closing Date”), Vectrus, Inc. (“Vectrus”) completed its merger (“the Merger”) with Vertex Aerospace Services Holding Corp. (“Vertex”), thereby forming V2X, Inc. First quarter 2022 “reported results” reflect the contributions of Vectrus from January 1, 2022, through March 31, 2022, unless otherwise noted. Comparisons to historical periods are relative to legacy Vectrus results, unless otherwise noted.

Revenue of $943.5 million, up 12.0% y/y on a pro forma basis
Operating income of $30.6 million, including merger and integration related costs of $9.4 million, and amortization of acquired intangible assets of $22.6 million
Adjusted operating income¹ of $62.6 million
Adjusted EBITDA¹ of $68.0 million with a 7.2% adjusted EBITDA margin¹
Diluted EPS of ($0.57)
Adjusted diluted EPS¹ of $0.80
Net debt as of March 31, 2023 of $1,288.6 million
Total backlog as of March 31, 2023 of $11.8 billion

“Our first quarter financial results were a strong start to the year,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “Pro forma revenue increased 12.0% year-over-year to $943.5 million. Revenue growth was driven by momentum in the Pacific, expansion on existing programs, and the contribution from new business wins awarded in 2022 and 2023. Notably, revenue from the Pacific increased approximately 300% year-over-year and 18% sequentially, reflecting our agile readiness position to support the increased operational tempo of mission exercises in the region.”

For the quarter, the Company reported operating income of $30.6 million and adjusted operating income¹ of $62.6 million. Adjusted EBITDA¹ was $68.0 million with a margin of 7.2%. First quarter diluted EPS was ($0.57), due primarily to merger and integration related costs, loss on extinguishment of debt, amortization of acquired intangible assets, and interest expense. Adjusted diluted EPS¹ for the quarter was $0.80 cents.

Ms. Lynch continued, “In the first quarter, V2X successfully enhanced its capital structure through a lower cost credit facility with greater liquidity. The new $750 million credit facility eliminated the second lien term loan B, the incremental portion of the first lien term loan B, and the asset-based loan revolver and was replaced with a lower cost $500 million revolver and a $250 million term loan A. In order to manage interest rate risk and uncertainty, the Company also entered into interest rate swaps, converting 30% of its variable-rate term loan debt into fixed rate-debt. I would like to thank our banking partners for their support and trust in our business. At the end of the quarter, our net consolidated indebtedness to EBITDA¹ (net leverage ratio) was 3.8x. We are focused on reducing debt and expect that our leverage ratio will show further improvement in 2023.”

“Net cash used in operating activities for the quarter was $38.5 million. Adjusted net cash used in operating activities¹ was $23.4 million, which adds back $13.4 million of CARES Act related payments and $1.7 million of M&A and integration costs,” said Ms. Lynch. “Cash flow followed our normal seasonal pattern and we expect operating cash flow to ramp to our previously communicated guidance.”

Total backlog as of March 31, 2023, was $11.8 billion and funded backlog was $2.6 billion. The trailing twelve-month book-to-bill was 1.4x.

Reiterating 2023 Guidance

Ms. Lynch concluded, “I am pleased with our strong start to the year. Our teams continue to work together seamlessly, making notable progress on integration milestones while driving results across the board. We have made great strides in harmonizing our processes, technology, and applications, which is allowing us to deliver on our commitments. As such, the Company is reiterating its guidance for 2023.” Guidance for 2023 remains as follows:

$ millions, except for per share amounts	2023 Guidance			2023 Mid-Point
Revenue	$3,800	To	$3,900	$3,850
Adjusted EBITDA¹	$290	To	$310	$300
Adjusted Diluted Earnings Per Share¹	$3.80	To	$4.30	$4.05
Adjusted Net Cash Provided by Operating Activities ¹	$115.0	To	$135.0	$125.0

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 2023 Conference Call

Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, May 9, 2023. U.S.-based participants may dial in to the conference call at 888-886-7786, while international participants may dial 416-764-8658. A live webcast of the conference call as well as an accompanying slide presentation will be available here: https://app.webinar.net/4AayJaN5XPr

A replay of the conference call will be posted on the V2X website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through May 23, 2023, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 30124902.

Presentation slides that will be used in conjunction with the conference call will also be made available online in advance at https://investors.vectrus.com/. V2X recognizes its website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with its obligations under the U.S. Securities and Exchange Commission (“SEC”) Regulation FD.

Footnotes:
¹ See “Key Performance Indicators and Non-GAAP Financial Measures” for descriptions and reconciliations.

About V2X

V2X is a leading provider of critical mission solutions and support to defense clients globally, formed by the 2022 Merger of Vectrus and Vertex to build on more than 120 combined years of successful mission support. The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training and technology markets to national security, defense, civilian and international clients. Our global team of approximately 15,000 employees brings innovation to every point in the mission lifecycle, from preparation, to operations, to sustainment, as it tackles the most complex challenges with agility, grit, and dedication.

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, all the statements and items listed under “Reiterating 2023 Guidance” above and other assumptions contained therein for purposes of such guidance, other statements about our 2023 performance outlook, revenue, contract opportunities, and any discussion of future operating or financial performance.

Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “could,” “potential,” “continue” or similar terminology. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management.

These forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. For a discussion of some of the risks and uncertainties that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the SEC.

We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Key Performance Indicators and Non-GAAP Measures

The primary financial performance measures we use to manage our business and monitor results of operations are revenue trends and operating income trends. Management believes that these financial performance measures are the primary drivers for our earnings and net cash from operating activities. Management evaluates its contracts and business performance by focusing on revenue, operating income, and operating margin. Operating income represents revenue less both cost of revenue and selling, general and administrative (SG&A) expenses. Cost of revenue consists of labor, subcontracting costs, materials, and an allocation of indirect costs, which includes service center transaction costs. SG&A expenses consist of indirect labor costs (including wages and salaries for executives and administrative personnel), bid and proposal expenses and other general and administrative expenses not allocated to cost of revenue. We define operating margin as operating income divided by revenue.

We manage the nature and amount of costs at the program level, which forms the basis for estimating our total costs and profitability. This is consistent with our approach for managing our business, which begins with management’s assessing the bidding opportunity for each contract and then managing contract profitability throughout the performance period.

In addition to the key performance measures discussed above, we consider adjusted net income, adjusted diluted earnings per share, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted operating cash flow, and pro forma revenue to be useful to management and investors in evaluating our operating performance, and to provide a tool for evaluating our ongoing operations. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives. We provide this information to our investors in our earnings releases, presentations, and other disclosures.

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

Pro forma revenue is defined as the combined results of our operations for the three months ended March 31, 2023 and April 1, 2022 as if the Merger had occurred on January 1, 2021.
Adjusted operating income is defined as operating income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration, and related costs.
Adjusted EBITDA is defined as operating income, adjusted to exclude depreciation and amortization of intangible assets, and items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration, and related costs.
Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue.
Adjusted net income is defined as net income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration and related costs, amortization of acquired intangible assets, amortization of debt issuance costs, and loss on extinguishment of debt.
Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted average diluted common shares outstanding.
Cash interest, net is defined as interest expense, net adjusted to exclude amortization of debt issuance costs.
Adjusted operating cash flow is defined as net cash provided by (or used in) operating activities adjusted to exclude infrequent non-operating items, such as M&A payments and related costs.

In this document, the Company presents certain forward-looking non-GAAP metrics. The Company does not provide outlook on a GAAP basis because the items that the Company excludes from GAAP to calculate the comparable non-GAAP measure can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company’s routine operating activities. Additionally, management does not forecast many of the excluded items for internal use and therefore cannot create or rely on outlook done on a GAAP basis. The occurrence, timing and amount of any of the items excluded from GAAP to calculate non-GAAP could significantly impact the Company’s fiscal 2023 GAAP results.

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SOURCE V2X, Inc.

Salem Media Group (SALM) – Looking Beyond The Investment Year

Posted on May 10, 2023May 10, 2023 by cpereira@noblefcm.com

Wednesday, May 10, 2023

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.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Patrick McCann, Research Associate, Noble Capital Markets, Inc.

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

In-line Q1 results. The company reported Q1 revenue of $63.5 million, beating our estimate of $62 million by 2.4%. Revenue in the quarter was driven by slightly better than expected broadcast and publishing revenues. Adj. EBITDA of $1.4 million was largely in line with our estimate of $1.7 million.

Sizeable cost reductions. The company eliminated $5 million in annualized costs in the first quarter. The savings were included in management issued guidance for Q2 and full year 2023, and are expected to have an equal impact in each quarter moving forward. We believe that the company is managing cash flow while investing in its Digital businesses and into Salem News.

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*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.

Orion Group Holdings (ORN) – Post Call Commentary and Updated Models

Posted on May 10, 2023May 10, 2023 by cpereira@noblefcm.com

Wednesday, May 10, 2023

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

Disappointing 1Q23. Management was disappointed with 1Q23 results, but a number of negative impacts were out of their hands, such as weather and customer delays, impacting production rates and profitability. However, these projects are not lost, just pushed to the right.

But Improvements Being Made. The most significant is a return to profitability for the Concrete segment in March, its first profitable month in two years. As the unfavorable Central Texas business continues to fall off, we expect further profitability improvement for the Concrete business.

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

Lee Enterprises (LEE) – Focused On A Growing Digital Future

Posted on May 10, 2023May 10, 2023 by cpereira@noblefcm.com

Wednesday, May 10, 2023

Lee Enterprises, Incorporated provides local news, information, and advertising primarily in midsize markets in the United States. It publishes 49 daily newspapers, as well as offers 300 weekly newspapers and specialty publications in 23 states. The company also provides online advertising and services; and online infrastructure and online publishing services for approximately 1,500 daily and weekly newspapers and shoppers. In addition, it offers commercial printing services. The company has a strategic alliance with Yahoo!, Inc. to provide its classified employment advertising customer base the opportunity to post job listings and other employment products on Yahoo!�s HotJobs national platform. Lee Enterprises, Incorporated was founded in 1890 and is based in Davenport, Iowa.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

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

Post quarterly review. The company delivered a solid fiscal second quarter in spite of heavy economic headwinds and secular pressure on its print legacy business. Notably, its Digital businesses performed well, and its digital subscriber growth continues to lead the industry. We believe that the company will be able to achieve its FY 2023 revenue and adj. EBITDA guidance given its attention to costs.

Reiterates guidance. Management reiterated its previously issued FY 2023 guidance of $270 to $285 million in digital revenues, $94 to $100 million in adj. EBITDA, 632,000 digital subscribers and cash costs in the range of $610 to $620 million. While management did not provide guidance for print revenues, we are flowing through Q2 operating results to our full year 2023 forecast.

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

Information Services Group (III) – Starting the New Year Right

Posted on May 10, 2023May 10, 2023 by cpereira@noblefcm.com

Wednesday, May 10, 2023

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 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 additional information, visit www.ISG-One.com

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

Seeing More Demand. ISG’s momentum has continued to build and this quarter realized an all time high in revenue, as demand for digital services, especially cost optimization, is providing ISG with a nice tailwind through the economic environment. Companies continue to invest in digital to maintain and build competitive advantage. The client base now exceeds 900.

Record Revenue. ISG reported an all-time record revenue of $78 million, exceeding guidance and our estimate of $74 million. Recurring revenue, driven by double-digit growth in the GovernX and risk management business, reached a record $33 million, up 27% y-o-y.

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

Commercial Vehicle Group, Inc. (CVGI) – An Unexpected CEO Transition

Posted on May 10, 2023May 10, 2023 by cpereira@noblefcm.com

Wednesday, May 10, 2023

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

CEO Stepping Down. Yesterday, CVG announced CEO Harold Bevis is resigning from his role as President and CEO, as well as a Board member, effective May 19th to become CEO of another company. The Company noted Mr. Bevis’ resignation did not result from any disagreement with the Company on any matter.

Interim CEO. Current Chairman of the Board Robert Griffin will step into an interim CEO role. On the Board since 2005, Mr. Griffin worked closely with Mr. Bevis in designing and implementing the Company’s strategy. Mr. Griffin has an extensive financial background, including as Head of Investment Banking for Barclays Capital. Other Board members with a more operational and manufacturing background will assist Mr. Griffin. CVG will be in good hands during the transition, in our view.

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

What If US Debt Ceiling Wrangling Ends Badly

Posted on May 10, 2023May 10, 2023 by phoffman@channelchek.com

US Debt Default Could Trigger Dollar’s Collapse – and Severely Erode America’s Political and Economic Might

Congressional leaders at loggerheads over a debt ceiling impasse sat down with President Joe Biden on May 9, 2023, as the clock ticks down to a potentially catastrophic default if nothing is done by the end of the month.

Republicans, who regained control of the House of Representatives in November 2022, are threatening not to allow an increase in the debt limit unless they get spending cuts and regulatory rollbacks in return, which they outlined in a bill passed in April 2023. In so doing, they risk pushing the U.S. government into default.

It feels a lot like a case of déjà vu all over again.

Brinkmanship over the debt ceiling has become a regular ritual – it happened under the Clinton administration in 1995, then again with Barack Obama as president in 2011, and more recently in 2021.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of, Michael Humphries, Deputy Chair of Business Administration, Touro University.

Image: An 11 year-old sampling of possibilities from the RPC (June 19, 2012)

As an economist, I know that defaulting on the national debt would have real-life consequences. Even the threat of pushing the U.S. into default has an economic impact. In August 2021, the mere prospect of a potential default led to an unprecedented downgrade of the the nation’s credit rating, hurting America’s financial prestige as well as countless individuals, including retirees.

And that was caused by the mere specter of default. An actual default would be far more damaging.

Dollar’s Collapse

Possibly the most serious consequence would be the collapse of the U.S. dollar and its replacement as global trade’s “unit of account.” That essentially means that it is widely used in global finance and trade.

Day to day, most Americans are likely unaware of the economic and political power that goes with being the world’s unit of account. Currently, more than half of world trade – from oil and gold to cars and smartphones – is in U.S. dollars, with the euro accounting for around 30% and all other currencies making up the balance.

As a result of this dominance, the U.S. is the only country on the planet that can pay its foreign debt in its own currency. This gives both the U.S. government and American companies tremendous leeway in international trade and finance.

No matter how much debt the U.S. government owes foreign investors, it can simply print the money needed to pay them back – although for economic reasons, it may not be wise to do so. Other countries must buy either the dollar or the euro to pay their foreign debt. And the only way for them to do so is to either to export more than they import or borrow more dollars or euros on the international market.

The U.S. is free from such constraints and can run up large trade deficits – that is, import more than it exports – for decades without the same consequences.

For American companies, the dominance of the dollar means they’re not as subject to the exchange rate risk as are their foreign competitors. Exchange rate risk refers to how changes in the relative value of currencies may affect a company’s profitability.

Since international trade is generally denominated in dollars, U.S. businesses can buy and sell in their own currency, something their foreign competitors cannot do as easily. As simple as this sounds, it gives American companies a tremendous competitive advantage.

If Republicans push the U.S. into default, the dollar would likely lose its position as the international unit of account, forcing the government and companies to pay their international bills in another currency.

Loss of Political Power Too

The dollar’s dominance means trade must go through an American bank at some point. This is one important way it gives the U.S. tremendous political power, especially to punish economic rivals and unfriendly governments.

For example, when former President Donald Trump imposed economic sanctions on Iran, he denied the country access to American banks and to the dollar. He also imposed secondary sanctions, which means that non-American companies trading with Iran were also sanctioned. Given a choice of access to the dollar or trading with Iran, most of the world economies chose access to the dollar and complied with the sanctions. As a result, Iran entered a deep recession, and its currency plummeted about 30%.

President Joe Biden did something similar against Russia in response to its invasion of Ukraine. Limiting Russia’s access to the dollar has helped push the country into a recession that’s bordering on a depression.

No other country today could unilaterally impose this level of economic pain on another country. And all an American president currently needs is a pen.

Rivals Rewarded

Another consequence of the dollar’s collapse would be enhancing the position of the U.S.‘s top rival for global influence: China.

While the euro would likely replace the dollar as the world’s primary unit of account, the Chinese yuan would move into second place.

If the yuan were to become a significant international unit of account, this would enhance China’s international position both economically and politically. As it is, China has been working with the other BRIC countries – Brazil, Russia and India – to accept the yuan as a unit of account. With the other three already resentful of U.S. economic and political dominance, a U.S. default would support that effort.

They may not be alone: Recently, Saudi Arabia suggested it was open to trading some of its oil in currencies other than the dollar – something that would change long-standing policy.

Severe Consequences

Beyond the impact on the dollar and the economic and political clout of the U.S., a default would be profoundly felt in many other ways and by countless people.

In the U.S., tens of millions of Americans and thousands of companies that depend on government support could suffer, and the economy would most likely sink into recession – or worse, given the U.S. is already expected to soon suffer a downturn. In addition, retirees could see the worth of their pensions dwindle.

The truth is, we really don’t know what will happen or how bad it will get. The scale of the damage caused by a U.S. default is hard to calculate in advance because it has never happened before.

But there’s one thing we can be certain of. If the threat of default is taken too far, the U.S. and Americans will suffer tremendously.

How Family Offices are Reallocating Portfolios

Posted on May 10, 2023May 10, 2023 by phoffman@channelchek.com

A New Report Indicates How the Uber Wealthy Have Adjusted Investments

What are the uber-wealthy investing in? Goldman Sachs just released its annual Family Office Investment Insight Report titled Eyes on the Horizon. The report presents the perspectives of 166 investment decision-makers at family offices. This is interesting because the still turbulent investment climate has shifted dramatically over 12 months, and comparisons of family office (FO) portfolio construction with last year indicate the mindset of the FOs they entrust to implement large investment portfolios.

Who was Surveyed

A family office is a private wealth management firm that provides investment management, financial planning, tax and estate planning, and other services to ultra-high-net-worth families. Family offices are typically set up by families with assets of at least $100 million.

The Goldman report pulls information from FOs across the globe. It includes 57% in the Americas, 21% in Europe, and 22% in Asia-Pacific. Within the survey, 72% reported a net worth in excess of a billion.

What was Discovered

Family offices continue to concentrate on secular growth themes that could withstand economic cycles and create value over time: Worldwide, 43% of FOs believe that information technology is overweighted in their holdings, 34% of family offices plan to lighten up on healthcare.

Family offices still allocate a significant amount of money to alternatives. Of their average holdings 44% are made up of real estate, infrastructure, hedge funds, and private credit. While the markets are different behaving differently, the long-term view held by most is that they intend to roughly maintain their allocations over the next 12 months. The average allocation to private equity increased from 24% to 26%, compare this against the public market allocation, which declined from 31% to 28%.

For those that anticipate larger reallocations, several family offices anticipate expanding their investments in private credit, private real estate, and private infrastructure.

The hold-the-course mindset, focusing on long-term growth themes, also applies to geographic allocations, with a strong focus on U.S. markets. The U.S. represents 63%, and “other developed nations” average 21% of holdings. Interestingly, the report reveals that 41% of Asia Pacific offices included in the report expect to increase allocations to the U.S. in the next 12 months.

Despite the high inflation being experienced globally, 12% of portfolios are in cash and cash equivalents. This capital is expected to be deployed in non-cash investments by 35% of the respondents.

One clue as to where this may go is the finding that 39% of family offices plan to up their allocation in fixed income. In comparison to the start of last year, yields on fixed income investments are currently much higher.

In the category of digital assets, both cryptocurrencies and other blockchain-derived financial investments, 32% of FOs are currently invested here. This is a much deeper plunge into this asset class than had been reported in 2021 when just 16% held cryptocurrencies. However, a large portion is still uninvested in digital assets, and they don’t expect to be over the coming 12 months. This percentage of uninvested in digital assets that don’t intend to be has jumped from 39% to 62%. Those that had replied a year earlier that they might be interested in digital in the coming year was much higher at 45%. The current survey now has that expectation at 12%.

A full 42% of family offices don’t use traditional investment leverage.

Actual Change in Allocation

According to the Goldman Sachs report, providing venture capital is a popular among family offices worldwide. The lowest percentage of family offices with VC investments are from Europe, this compares with 86% in the Americas, and 91 in Asia Pacific.

Looking Forward

Private credit is a small part of the average family office portfolio at only 3%. What is noteworthy is that 30% of respondents said they expect to increase their allocation here in the next year. One reason this may be attractive to them is that the rates paid on these arrangements typically resets as interest rates move up or down.

“Sustainable” investments, particularly carbon transition related holdings, account for 39% of respondents that are focused on sustainable strategic investments. Among these, 48% invest directly in companies that they expect will have a positive environmental impact. The regulatory climate provides tailwinds for this investment category.

Expected Change in Allocation (Future)

Family office allocation to alternative investments is higher than the average household. The long-term time horizon, due diligence capabilities, and lower liquidity needs makes the higher allocation unsurprising. The turbulent economic environment has, for some, made this asset class more compelling. Private markets have been characterized by historically higher returns with less specific valuation changes.

Take Away

Family offices are private wealth management firms that provide customized services to ultra-high-net-worth families. Reviewing how teams of financial and investment professionals shift allocations at FOs is worth reviewing for a number of reasons. Chief among them is they control large sums of cash, so opportunities they are moving out of or into can help solidify market trends. There is also, of course, the tendency for investors to look a little closer when they see a professional or successful investor involved. This can at times, provide seeds for ideas on what to do within one’s own portfolio.

Some of the investments used by family offices require one to be an accredited investor. Do you know if you’re considered by the SEC as an accredited investor, one good way to know is by clicking here to get answers.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.gsam.com/content/dam/pwm/direct-links/us/en/PDF/onegs_familyoffice_eyesonthehorizon.pdf?sa=n&rd=n

Release – Tonix Pharmaceuticals Announces 1-for-6.25 Reverse Stock Split

Posted on May 9, 2023May 9, 2023 by aweinsoff@channelchek.com

Research News and Market Data on TNXP

May 09, 2023 1:00pm EDTDownload as PDF

CHATHAM, N.J., May 09, 2023 (GLOBE NEWSWIRE) — Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP) (Tonix or the Company), a clinical-stage biopharmaceutical company, today announced that it will effect a 1-for-6.25 reverse stock split of its outstanding common stock. This will be effective for trading purposes as of the commencement of trading on May 10, 2023.

The reverse stock split was previously approved by the Board of Directors of Tonix in accordance with Nevada law, under which no stockholder approval is required, and is intended to increase the per share trading price of Tonix’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market (Rule 5550(a)(1)). Tonix’s common stock will continue to trade on the NASDAQ Capital Market under the symbol “TNXP” and under a new CUSIP number, 890260854. As a result of the reverse stock split, every six and one-quarter pre-split shares of common stock outstanding will become one share of common stock. The reverse stock split will also proportionately reduce the number of shares of authorized common stock from 1 billion to 160 million shares. The reverse split will also apply to common stock issuable upon the exercise of Tonix’s outstanding warrants and stock options.

Tonix’s transfer agent, VStock Transfer LLC, which is also acting as the exchange agent for the reverse split, will provide instructions to shareholders regarding the process for exchanging share certificates. Any fractional shares of common stock resulting from the reverse stock split will be rounded up to the nearest whole post-split share and no shareholders will receive cash in lieu of fractional shares.

Tonix Pharmaceuticals Holding Corp.^*

Tonix is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics to treat and prevent human disease and alleviate suffering. Tonix’s portfolio is composed of central nervous system (CNS), rare disease, immunology and infectious disease product candidates. Tonix’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 (cyclobenzaprine HCl sublingual tablet), is in mid-Phase 3 development for the management of fibromyalgia with topline data expected in the fourth quarter of 2023. TNX-102 SL is also being developed to treat Long COVID, a chronic post-acute COVID-19 condition. Enrollment in a Phase 2 study has been completed, and topline results are expected in the third quarter of 2023. TNX-1900 (intranasal potentiated oxytocin), in development for chronic migraine, is currently enrolling with topline data expected in the fourth quarter of 2023. TNX-601 ER (tianeptine hemioxalate extended-release tablets), a once-daily formulation being developed as a treatment for major depressive disorder (MDD), is also currently enrolling with interim data expected in the fourth quarter of 2023. TNX-1300 (cocaine esterase) is a biologic designed to treat cocaine intoxication and has been granted Breakthrough Therapy designation by the FDA. A Phase 2 study of TNX-1300 is expected to be initiated in the third quarter of 2023. Tonix’s rare disease portfolio includes TNX-2900 (intranasal potentiated oxytocin) for the treatment of Prader-Willi syndrome. TNX-2900 has been granted Orphan Drug designation by the FDA. Tonix’s immunology portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-1500, which is a humanized monoclonal antibody targeting CD40-ligand (CD40L or CD154) being developed for the prevention of allograft rejection and for the treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the third quarter of 2023. Tonix’s infectious disease pipeline includes TNX-801, a vaccine in development to prevent smallpox and mpox, for which a Phase 1 study is expected to be initiated in the second half of 2023. TNX-801 also serves as the live virus vaccine platform or recombinant pox vaccine platform for other infectious diseases. The infectious disease portfolio also includes TNX-3900 and TNX-4000, classes of broad-spectrum small molecule oral antivirals.

^*All of Tonix’s product candidates are investigational new drugs or biologics and none has been approved for any indication.

This press release and further information about Tonix can be found at www.tonixpharma.com.

Forward Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; delays and uncertainties caused by the global COVID-19 pandemic; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 13, 2023, and periodic reports filed with the SEC on or after the date thereof. All of Tonix’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.

Contacts

Jessica Morris (corporate)
Tonix Pharmaceuticals
investor.relations@tonixpharma.com
(862) 904-8182

Maddie Stabinski (media)
Russo Partners
Madeline.Stabinski@russopartnersllc.com
(212) 845-4273

Peter Vozzo (investors)
ICR Westwicke
peter.vozzo@westwicke.com
(443) 213-0505

Source: Tonix Pharmaceuticals Holding Corp.

Released May 9, 2023

Release – CVG Announces CEO Transition and Reaffirms 2023 Outlook And Long-Term Strategy

Posted on May 9, 2023May 9, 2023 by aweinsoff@channelchek.com

Research News and Market Data on CVGI

MAY, 09, 2023

NEW ALBANY, Ohio, May 09, 2023 (GLOBE NEWSWIRE) — CVG (NASDAQ: CVGI), a diversified industrial products and services company, announced yesterday that Harold Bevis is resigning from his role as President and Chief Executive Officer of the Company and as a member of the Company’s Board of Directors (the “Board”) effective May 19, 2023 to become chief executive officer of another company. Mr. Bevis’ resignation did not result from any disagreement with the Company on any matter, including any matter relating to its operations, policies or practices.

Robert C. Griffin, the Chairman of the Board, is expected to be elected by the Board as the Company’s interim President and Chief Executive Officer, effective May 19, 2023. Mr. Griffin along with the Board of Directors has served as a Director since 2005 and has worked closely alongside Harold in designing and implementing the Company’s strategy.

“Harold has set CVG on the right path for future growth and we’re grateful for his contributions,” Mr. Griffin said. “The board and I are eager now to find the right leader who will continue our momentum as a business and drive us into the future.”

Mr. Griffin will serve as interim President and Chief Executive Officer until his successor is chosen. The Company is in the process of conducting a comprehensive search for a permanent President and Chief Executive Officer and will name Mr. Griffin’s successor at the completion of the search.

In announcing the management changes noted above, the Company today reaffirmed its commitment to its strategic goals and improvement in its results for 2023.

As disclosed in its first quarter results and discussed on its first quarter conference call on May 4, 2023, the Company:

will continue its focus on price and cost which allowed it to deliver significant margin expansion in the first quarter;
believes its first quarter margin performance is sustainable for fiscal 2023 given the current vehicle production outlook;
believes based on the current revenue run rate, combined with new wins that are still ramping up, it is on track to deliver its 2027 revenue target of $1.5 billion; and
will continue to focus on price and inflation management, and cost reduction as it works toward achieving a 9% EBITDA margin target by 2027.

Mr. Griffin stated, “The Board is pleased with the Company’s first quarter performance and reaffirms our commitment to the Company’s strategic direction as discussed on its first quarter call on May 4, 2023. We believe we have a solid balance sheet, a business winning culture, and strong leadership team that positions us well to execute on our strategy. The Board looks forward to working with the management team to continue our positive momentum throughout this transition.”

Robert C. Griffin Biography

Mr. Griffin, 75, has served as a member of the Board since July 2005, and was elected Chairman in 2019. Mr. Griffin’s career spanned over 25 years in the financial sector until he retired from Barclays Capital, where from June 2000 to March 2002 he was Head of Investment Banking, Americas and a member of the Management Committee. Prior to joining Barclays Capital, Mr. Griffin was a member of the Executive Committee for the Montgomery Division of Banc of America Securities and held a number of positions with Bank of America, including Group Executive Vice President and Head of Global Debt Capital Raising and as a Senior Management Council Member. Since 2005, he has served on a number of boards, both public and private, including during the last five years, the boards of the following public companies: The J.G. Wentworth Company (ending in 2018), and Builders FirstSource, Inc. (ending in 2019).

Company Contact

Andy Cheung
Chief Financial Officer
CVG
IR@cvgrp.com

Investor Relations Contact

Ross Collins or Stephen Poe
Alpha IR Group
CVGI@alpha-ir.com

About CVG

At CVG, we deliver real solutions to complex design, engineering and manufacturing problems across a range of global industries by innovating, constantly adding value, and treating our customer’s bottom line as if it were our own. Information about the Company and its products is available on the internet at www.cvgrp.com.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “will”, “should”, “could”, “would”, “project”, “continue”, “likely”, and similar expressions. In particular, this press release may contain forward-looking statements about the Company’s expectations for future periods with respect to its plans to improve financial results, the future of the Company’s end markets, including the short-term and long-term impact of the COVID-19 pandemic on our business, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company’s prospects in the wire harness, warehouse automation and electric vehicle markets, the Company’s initiatives to address customer needs, organic growth, the Company’s strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment and the Company’s financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including those included in the Company’s filings with the SEC. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements.

Source: Commercial Vehicle Group, Inc.

Release – GeoVax Labs to Participate in A.G.P.’s Virtual Healthcare Conference

Posted on May 9, 2023May 9, 2023 by aweinsoff@channelchek.com

Research News and Market Data on GOVX

Atlanta, GA, May 9, 2023 – GeoVax Labs, Inc. (Nasdaq: GOVX), a biotechnology company developing immunotherapies and vaccines against cancers and infectious diseases, today announced that it will participate in the Alliance Global Partners’ Virtual Healthcare Conference being held May 23-24, 2023.

During the event, the GeoVax management team will be conducting one-on-one investor meetings. To request a meeting with management please contact your appropriate A.G.P. representative or the conference management team at agpevents@allianceg.com.

About GeoVax

GeoVax Labs, Inc. is a clinical-stage biotechnology company developing novel therapies and vaccines for solid tumor cancers and many of the world’s most threatening infectious diseases. The company’s lead program in oncology is a novel oncolytic solid tumor gene-directed therapy, Gedeptin^®, presently in a multicenter Phase 1/2 clinical trial for advanced head and neck cancers. GeoVax’s lead infectious disease candidate is GEO-CM04S1, a next-generation COVID-19 vaccine targeting high-risk immunocompromised patient populations. Currently in two Phase 2 clinical trials, GEO-CM04S1 is being evaluated as a COVID-19 vaccine for immunocompromised patients such as those suffering from hematologic cancers and other patient populations for whom the current authorized COVID-19 vaccines are insufficient. In addition, GEO-CM04S1 is in a Phase 2 clinical trial evaluating the vaccine as a more robust, durable COVID-19 booster among healthy patients who previously received the mRNA vaccines. GeoVax has a leadership team who have driven significant value creation across multiple life science companies over the past several decades. For more information, visit our website: www.geovax.com.

Investor Relations Contact:

Rich Cockrell

CG Capital

404-736-3838

govx@cg.capital

Tonix Pharmaceuticals (TNXP) – Looking Forward To Late-Stage Data Presentations

Posted on May 9, 2023May 9, 2023 by cpereira@noblefcm.com

Tuesday, May 09, 2023

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, Senior Vice President, Equity Research Analyst, Biotechnology, Noble Capital Markets, Inc.

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

1Q23 Reported Within Expectations. Tonix reported a 1Q23 loss of $33.0 million or $(0.52) per share, consistent with our expectations of a loss of $34.8 million or $(0.57) per share. During the quarter, the company reported a shift in pipeline priorities toward its CNS programs and discontinuation of some early-stage programs. There are several clinical data presentations expected during 2H23 that we see as potential drivers of the stock in 2H23. The company ended the quarter with $72.0 million in cash.

Looking Forward To Phase 3 Results In Fibromyalgia. Data was presented for the completed RELIEF Phase 3, the first of the two studies needed for an NDA. The interim analysis for the Phase 3 RESILIANT trial has been cancelled, avoiding the “statistical penalty” for the early analysis as well as saving time and money. The RESILIANT data announcement is expected in 4Q23.

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

Orion Group Holdings (ORN) – A Quick Look into the First Quarter

Posted on May 9, 2023May 9, 2023 by cpereira@noblefcm.com

Tuesday, May 09, 2023

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , 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.

Results are In. Orion had contract revenues of $159.2 million, a 9% decrease from the prior year’s $174.9 million. We had revenue of $175 million. Gross profit was at $5.8 million or 3.7% of revenue, down from $12.8 million or 7.3% of revenue in the first quarter of 2022. The Company had a net loss of $12.6 million, or $0.07 per share, compared to a loss of $4.9 million, or $0.16 per share. Adjusted EBITDA was a negative $4.1 million, or (2.6)% margin compared to $5.2 million or 3.0% last year.

Credit Facility and Property Sale. The Company had reached an agreement with a private lender and expects to have a new ABL credit facility completed shortly. The facility consists of a $38 million term loan and revolving credit facility of $65 million and will be used to retire Orion’s existing credit facility and for general corporate purposes. As reported previously, Orion has a contract for the East West Jones properties in Texas, with the purchase price being $36 million. It is expected to close in the third quarter of 2023.

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