Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television and radio operations to reach Hispanic consumers across the United States, as well as the border markets of Mexico. Entravision owns and/or operates 53 primary television stations and is the largest affiliate group of both the top-ranked Univision television network and Univision’s TeleFutura network, with television stations in 20 of the nation’s top 50 Hispanic markets. The Company also operates one of the nation’s largest groups of primarily Spanish-language radio stations, consisting of 48 owned and operated radio stations.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Non Deal Road Show highlights. This report highlights a recent NDR with Christopher Young, the Chief Financial Officer of Entravision. We believe that the investor meetings reinforced our favorable investment thesis for the company; its above average revenue and cash flow prospects, the looming influx of high margin Political advertising, its attractive outlook for its Digital businesses, large cash position, free cash flow generation, and compelling stock valuation, which offers an impressive current 5.5% annualized dividend yield.
Focus on margins. The company plans to focus on improving margins in its Digital business and is in the process of right sizing its Digital business by reducing staffing levels and reorganizing commissions. Its plan is to return Digital margins from the current 5% to the upper single digits to 10%.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
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.
2QFY24. Net revenue of $128.2 million, compared to $130.4 million in 2Q23, below our and consensus estimates of $132 million and $130.90 million, respectively. Net income of $9.3 million, or $0.30/sh ($0.33/sh adjusted) compared to a loss of $29.8 million, or a loss of $0.95/sh (adjusted EPS of $0.08). We had forecasted net income of $3.4 million, or $0.11/sh.
Programs Impacting Bottom Line. While Vera Bradley has yet to see overall positive revenue increases, actions taken by management and the elimination of the post COVID operating environment are positively impacting margins and the bottom line. 2Q24 gross margin improved to 56.2% from an adjusted 52.0% last year, while SG&A as a percentage of revenue fell to 45.5% versus 49.1%, both adjusted for one-time items.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
Oil prices are near flat on the month but have recently been rising. Meanwhile, the energy sector itself, relative to the overall market, is outperforming in a way that is getting attention as we move to September. Are the drivers of performance solidly in place to keep crude oil prices strong? Will the energy sector continue to benefit from factors impacting oil? We lay out factors impacting future price movements below.
Credit for the recent strength in oil has been given in part to the Saudi Arabian production cuts that began in July when the Saudi’s voluntarily lowered production by one million barrels a day starting in July. This quickly strengthened prices, which then fell off as concerns over China’s weakening economy, and global economies in general, grew. China is the world’s second-largest consumer of crude oil.
The U.S. has seen strong economic reports recently. The market is still reacting poorly to “good” news. This reaction also played into the direction of stocks and commodity prices. U.S. economic activity readings raised expectations for further monetary policy tightening by the Federal Reserve. The idea of heightened activity lifted U.S. Treasury yields and, along with them, the U.S. dollar. During the last week in August, weaker U.S. labor data served to ease some of the rise in yields.
Adding to the strength, this week, the Energy Information Administration (EIA) on Wednesday reported that U.S. commercial crude inventories fell by 10.6 million barrels for the week ending Aug. 25. That was the third straight weekly decline reported by the agency and the largest since the week ended July 28. U.S. commercial crude inventories have fallen by almost 34 million barrels over the past five weeks.
Inventories are now only 1.1% higher than the same week last year, even with over 100 million barrels having been released from the U.S. Strategic Petroleum Reserve during the 12 months.
A reversal to the upside after crude fell last week below support at $78 a barrel also coincided with the formation of what technicians refer to as a golden cross, this is when the 50-day moving average crosses above the 200-day moving average from below. This got the attention of commodity traders.
Source: EIA
Overall, the price paid per barrel of oil has been range-bound through 2023. The extended production cuts by Saudi Arabia and Russia were largely offset by fears about China’s economy flailing; it had been expected it would rebound strongly after pandemic lockdowns were lifted. Oil consumption did not rise as expected.
Source: EIA
There is also increasing indications the United States is relaxing sanctions on crude exports from Iran and Venezuela to keep prices from rising too much and in exchange for diplomatic objectives. The U.S. is the number one oil consumer.
Given still low inventories and a need to replenish the U.S. Strategic Oil Reserves there are market participants that remain bullish on oil prices and the energy sector. There are others that are more cautious, despite Saudi production cuts, as the chart above indicates, consumption recently fell below the level of production.
Take Away
Oil prices have been in a tight range all year. Better stock market performance from energy producers has in part been because of easing of rules concerning fossil fuels, and headway made on green energy projects. Consumption will increase and fall based on economic activity. Where the U.S. economy and global economy are headed is faced with more cross-currents than usual. Added supply to the U.S. may come from countries we don’t currently trade with. Those spigots can not be turned on quickly. This leaves oil and energy with a current trend upward but challenges down the road.
Company Teams Up with Customers To Support More Than 900 Title I Public Schools
BOCA RATON, Fla.–(BUSINESS WIRE)–Aug. 30, 2023– Office Depot today announced that nearly $1.7 million was raised leveraging its retail footprint to help more than 900 Title I public schools get brand new school supplies, classroom furniture, tech and more, just in time for the new school year.
The company partnered with Round It Up America® to enable every Office Depot and OfficeMax store to raise funds to support a Title I public elementary, middle or high school in the store’s local community. As result of this program, nearly $1.7 million was raised from April through June of this year. Stores will continue to support the same local schools through December to help them restock and refresh the supplies they need, well after the start of the new school year.
Some local beneficiary schools will have the chance to participate in free VIP school shopping events to pick up furniture, supplies and more, to help create more comfortable and productive learning environments for students. Others will create wish lists detailing the items they need most, which will then be delivered to them at the school or available for pick up at their local Office Depot or OfficeMax store.
“We’re proud to host this education donation drive in our Office Depot and OfficeMax stores to help connect teachers and staff at Title I schools with the additional resources they need,” said Kevin Moffitt, executive vice president of The ODP Corporation and president of Office Depot. “Thanks to our customers’ generous support of this program, extra supplies, new classroom furniture, tech and more will be directed to hundreds of schools to help encourage a successful new school year.”
The program is an integral part of Office Depot’s Imagine Success™ platform, created to help teachers, parents, students, home office workers and small business owners alike fuel their passions, power their potential and achieve their goals.
Start Proud!® Program
The company also helps to support education through The ODP Corporation’s Start Proud!® program, and recently announced that over $2.5 million worth of school supplies and equipment would be provided to students and teachers at Title I public elementary schools across the country.
Give Back to Schools Program
And students, parents and teachers who shop online at officedepot.com or in Office Depot and OfficeMax stores can help to support the local school of their choice with any qualifying purchase. Shoppers can simply provide the name or Give Back To Schools ID number of their desired school at checkout (in store or online) and their designated school will receive 5% back in credits for free supplies, through the Give Back to Schools program.
Office Depot, LLC, an operating company of The ODP Corporation, is a leading specialty retailer providing innovative products and services delivered through a fully integrated omnichannel platform of Office Depot and OfficeMax retail stores and an award-winning online presence, OfficeDepot.com, to support the productivity and organization of its small business, home office and education clients. Office Depot is committed to enabling its clients’ success, strengthening local communities and providing equal opportunities for all. For more information, visit officedepot.com, download the Office Depot app on your iPhone or Android and follow @officedepot on Facebook, Twitter, Instagram and TikTok.
Office Depot is a trademark of The Office Club, LLC. OfficeMax is a trademark of OMX, Inc. ODP and ODP Business Solutions are trademarks of ODP Business Solutions, LLC. Veyer is a trademark of Veyer, LLC. Varis is a trademark of Varis, Inc. Any other product or company names mentioned herein are the trademarks of their respective owners.
Net income totaled $9.3 million, or $0.30 per diluted share; non-GAAP net income totaled $10.2 million, or $0.33 per diluted share
Balance sheet strengthens, with cash and cash equivalents of $48.5 million, no debt, and year-over-year inventories down 22.4%
FORT WAYNE, Ind., Aug. 30, 2023 (GLOBE NEWSWIRE) — Vera Bradley, Inc. (Nasdaq: VRA) today announced its financial results for the second quarter and six months ended July 29, 2023.
In this release, Vera Bradley, Inc. or “the Company” refers to the entire enterprise and includes both the Vera Bradley and Pura Vida brands. Vera Bradley on a stand-alone basis refers to the Vera Bradley brand.
Second Quarter Comments
Jackie Ardrey, Chief Executive Officer of the Company, noted, “Our transformational efforts continue to bear fruit and are the result of the hard work of our associates across the country. We are very pleased with the meaningful year-over-year improvement in second quarter earnings, driven by significant gross margin expansion and successful expense reduction efforts. During the quarter, we carefully managed our debt-free balance sheet, adding to our cash position while continuing to strategically improve our inventory position.
“One of our key goals this year is to stabilize revenues. We continue to make progress on that front, with second quarter consolidated revenues of $128.2 million only modestly below last year.”
“Total second quarter revenues for the Vera Bradley brand were down 1.2% from last year,” Ardrey commented. “Vera Bradley Direct revenue declines resulted from store closures over the last year, while we saw a small comparable store gain in our full line stores. The successful return of the Vera Bradley Annual Outlet Sale offset weakness we experienced in our factory outlet stores in addition to compensating for the elimination of one online outlet sale during the quarter. The remainder of our e-commerce sales continued to perform well. Lastly, Vera Bradley Indirect revenues were up slightly to last year.
“Pura Vida year-over-year sales declined 3.6%, primarily related to a shortfall in wholesale revenues, which we believe will improve in the second half of the year. Store sales remained strong, and we began to realize the benefits of changes in our performance-based marketing program.
“In general, at both brands, customers have responded enthusiastically to our collaborations and to our product offerings when they are innovative and trend-right, even as they have been more selective in their discretionary spending in light of the current macro environment.”
Ardrey continued, “We are taking strategic actions to stabilize and steadily grow Pura Vida’s revenues and to reverse the trends in Vera Bradley’s factory outlet stores through a thorough, multi-pronged approach, including potential pricing adjustments and targeted marketing initiatives aimed to drive traffic and average order size. Our team is focused on generating long-term revenue increases, expanding gross margin, and ensuring strong financial discipline and cost control, which we expect will drive long-term profitable growth.”
Ardrey added, “We continue to make meaningful progress on Project Restoration, focusing on four key pillars of the business for each brand – Consumer, Brand, Product, and Channel. Through the first half of Fiscal 2024, we have progressed as expected. We anticipate execution of Project Restoration will drive this long-term profitable growth and deliver value to our shareholders.”
Summary of Financial Performance for the Second Quarter
Consolidated net revenues totaled $128.2 million compared to $130.4 million in the prior year second quarter ended July 30, 2022.
For the current year second quarter, Vera Bradley, Inc.’s consolidated net income totaled $9.3 million, or $0.30 per diluted share. These results included $0.9 million of net after tax charges, comprised of $0.6 million for the amortization of definite-lived intangible assets, $0.2 million of consulting fees primarily associated with strategic initiatives, and $0.1 million of severance charges. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated second quarter net income totaled $10.2 million, or $0.33 per diluted share.
For the prior year second quarter, Vera Bradley, Inc.’s consolidated net loss totaled ($29.8) million, or ($0.95) per diluted share. These results included $32.2 million of net after tax charges, comprised of $18.2 million of Pura Vida goodwill and intangible asset impairment charges, $4.7 million of inventory adjustments associated with the exit of certain technology products and the write-off of excess mask inventory, $4.7 million of severance charges and other employee costs, $2.3 million of consulting fees associated with cost savings initiatives and CEO search, $0.9 million of purchase order cancellation fees for spring 2023 goods, $0.6 million of store impairment charges, $0.5 million of intangible asset amortization, and $0.3 million of goodMRKT exit costs. On a non-GAAP basis, Vera Bradley, Inc.’s prior year consolidated second quarter net income totaled $2.4 million, or $0.08 per diluted share.
Summary of Financial Performance for the Six Months
Consolidated net revenues totaled $222.5 million for the current year six months ended July 29, 2023, compared to $228.8 million in the prior year six month period ended July 30, 2022.
For the current year six months, Vera Bradley, Inc.’s consolidated net income totaled $4.6 million, or $0.15 per diluted share. These results included $3.0 million of net after tax charges, comprised of $1.5 million of severance charges, $1.1 million for the amortization of definite-lived intangible assets, and $0.4 million of consulting and professional fees primarily associated with strategic initiatives. On a non-GAAP basis, Vera Bradley, Inc.’s consolidated net income for the six months totaled $7.6 million, or $0.24 per diluted share.
For the prior year six months, Vera Bradley, Inc.’s consolidated net loss totaled ($36.7) million, or ($1.15) per diluted share. These results included $33.1 million of net after tax charges, comprised of $18.2 million of Pura Vida goodwill and intangible asset impairment charges, $4.7 million of inventory adjustments associated with the exit of certain technology products and the write-off of excess mask inventory, $4.7 million of severance charges and other employee costs, $2.4 million of consulting fees associated with cost savings initiatives and CEO search, $1.0 million of store and right-of-use asset impairment charges, $0.9 million of purchase order cancellation fees for spring 2023 goods, $0.9 million of intangible asset amortization, and $0.3 million of goodMRKT exit costs. On a non-GAAP basis, Vera Bradley, Inc.’s prior year consolidated net loss for the six months totaled ($3.6) million, or ($0.11) per diluted share.
Non-GAAP Numbers
The current year non-GAAP second quarter and six-month income statement numbers referenced below exclude the previously outlined severance charges, intangible asset amortization, and consulting and professional fees. The prior year non-GAAP second quarter and six-month income statement numbers referenced below exclude the previously outlined goodwill and intangible asset impairment charges, inventory adjustments, severance charges and other employee costs, consulting fees, store and right-of-use asset impairment charges, purchase order cancellation fees, intangible asset amortization, and goodMRKT exit costs.
Second Quarter Details
Current year second quarter Vera Bradley Direct segment revenues totaled $85.7 million, a 1.5% decrease from $87.0 million in the prior year second quarter. Comparable sales declined 5.3% in the second quarter, primarily driven by weakness in the factory outlet channel. The Company permanently closed 19 full-line and two factory outlet stores and opened three factory outlet stores over the last twelve months. This year, the Direct segment revenues included sales from the Vera Bradley Annual Outlet sale, which was not held last year.
Vera Bradley Indirect segment revenues totaled $17.4 million, a 0.2% increase over $17.3 million in the prior year second quarter.
Pura Vida segment revenues totaled $25.1 million, a 3.6% decrease from $26.0 million in the prior year, reflecting a decline in sales to wholesale accounts and a modest decline in ecommerce sales, partially offset by new store growth resulting in non-comparable retail store sales.
Second quarter consolidated gross profit totaled $72.0 million, or 56.2% of net revenues, compared to $60.5 million, or 46.4% of net revenues, in the prior year. On a non-GAAP basis, prior year gross profit totaled $67.8 million, or 52.0% of net revenues. The current year gross profit rate compared to the prior year non-GAAP rate was favorably impacted by lower year-over-year inbound and outbound freight expense and the sell-through of previously-reserved inventory, partially offset by an increase in promotional activity. Prior year gross profit was materially impacted by high inbound and outbound freight expense and deleverage of overhead costs.
Second quarter consolidated SG&A expense totaled $59.4 million, or 46.3% of net revenues, compared to $74.0 million, or 56.8% of net revenues, in the prior year. On a non-GAAP basis, consolidated SG&A expense totaled $58.3 million, or 45.5% of net revenues, compared to $64.0 million, or 49.1% of net revenues, in the prior year. Vera Bradley’s current year non-GAAP SG&A expenses were lower than the prior year primarily due to Company-wide cost reduction initiatives across various areas of the enterprise.
The Company’s second quarter consolidated operating income totaled $12.9 million, or 10.0% of net revenues, compared to an operating loss of ($42.8) million, or (32.8%) of net revenues, in the prior year second quarter. On a non-GAAP basis, the Company’s current year consolidated operating income totaled $14.0 million, or 10.9% of net revenues, compared to $3.9 million, or 3.0% of net revenues, in the prior year.
By segment:
Vera Bradley Direct operating income was $20.6 million, or 24.1% of Direct net revenues, compared to $10.0 million, or 11.5% of Direct net revenues, in the prior year. On a non-GAAP basis, prior year Direct operating income totaled $16.2 million, or 18.6% of Direct revenues.
Vera Bradley Indirect operating income was $6.2 million, or 35.7% of Indirect net revenues, compared to $3.9 million, or 22.6% of Indirect net revenues, in the prior year. On a non-GAAP basis, prior year Indirect operating income totaled $4.9 million, or 28.4% of Indirect net revenues.
Pura Vida’s operating income was $4.0 million, or 15.9% of Pura Vida net revenues, compared to an operating loss of ($28.5) million, or (109.6%) of Pura Vida net revenues, in the prior year. On a non-GAAP basis, Pura Vida’s operating income was $4.8 million, or 19.2% of Pura Vida net revenues, compared to $2.6 million, or 9.8% of Pura Vida net revenues, in the prior year.
Details for the Six Months
Vera Bradley Direct segment revenues for the current year six-month period totaled $144.6 million, a 2.7% decrease from $148.6 million in the prior year. Comparable sales declined 4.5% for the six months. This year, the Direct segment revenues included sales from the Vera Bradley Annual Outlet sale, which was not held last year.
Vera Bradley Indirect segment revenues for the six months totaled $32.7 million, a 4.6% decrease from $34.3 million last year. Prior year revenues reflected a large one-time key account order that was not repeated in the current year.
Pura Vida segment revenues totaled $45.2 million, a 1.5% decrease from $45.9 million in the prior year, reflecting a decline in sales to wholesale accounts and a modest decline in ecommerce sales, partially offset by new store growth resulting in non-comparable retail store sales.
Consolidated gross profit for the six months totaled $123.8 million, or 55.6% of net revenues, compared to $113.0 million, or 49.4% of net revenues, in the prior year. On a non-GAAP basis, prior year gross profit totaled $120.3 million, or 52.6% of net revenues. The current year gross profit rate compared to the prior year non-GAAP rate was favorably impacted by lower year-over-year inbound and outbound freight expense and the sell-through of previously-reserved inventory, partially offset by an increase in promotional activity.
For the six months, consolidated SG&A expense totaled $117.9 million, or 53.0% of net revenues, compared to $135.0 million, or 59.0% of net revenues, in the prior year. On a non-GAAP basis, current year consolidated SG&A expense totaled $113.9 million, or 51.2% of net revenues, compared to $123.4 million, or 53.9% of net revenues, in the prior year. Vera Bradley’s current year non-GAAP SG&A expenses were lower than the prior year primarily due Company-wide cost reduction initiatives across various areas of the enterprise.
For the six months, the Company’s consolidated operating income totaled $6.5 million, 2.9% of net revenues, compared to an operating loss of ($51.1) million, or (22.3%) of net revenues, in the prior year six-month period. On a non-GAAP basis, the Company’s current year consolidated operating income was $10.5 million, or 4.7% of net revenues, compared to an operating loss of ($2.9) million, or (1.2%) of net revenues, in the prior year.
By segment:
Vera Bradley Direct operating income was $28.0 million, or 19.3% million of Direct net revenues, compared to $15.5 million, or 10.5% of Direct net revenues, in the prior year. On a non-GAAP basis, current year Direct operating income was $28.3 million, or 19.6% of Direct net revenues, compared to $21.7 million, or 14.6% of Direct net revenues, in the prior year.
Vera Bradley Indirect operating income was $10.9 million, or 33.3% of Indirect net revenues, compared to $9.4 million, or 27.4% of Indirect net revenues, in the prior year. On a non-GAAP basis, prior year Indirect operating income totaled $10.4 million, or 30.3% of Indirect net revenues.
Pura Vida’s operating income was $5.6 million, or 12.3% of Pura Vida net revenues, compared to an operating loss of ($27.5) million, or (59.9%) of Pura Vida net revenues, in the prior year. On a non-GAAP basis, Pura Vida’s operating income was $7.1 million, or 15.7% of Pura Vida net revenues, compared to $4.4 million, or 9.5% of Pura Vida net revenues, in the prior year.
Balance Sheet
Net capital spending for the six months ended July 29, 2023 totaled $1.7 million compared to $4.4 million in the prior year.
Cash and cash equivalents as of July 29, 2023 totaled $48.5 million compared to $38.3 million at the end of last year’s second quarter. The Company had no borrowings on its $75 million asset-based lending (“ABL”) facility at quarter end.
Subsequent to quarter end, the Company completed renegotiation of its ABL agreement, and the modifications, among other things, convert the interest calculation from LIBOR (London Interbank Offer Rate) to SOFR (Secured Overnight Financing Rate) as well as enhance the Company’s future ability to expand the ABL if necessary. Management believes that its access to liquidity and capital is sufficient to address needs in the foreseeable future.
Total quarter-end inventory was $139.3 million, compared to $179.6 million at the end of the second quarter last year.
During the second quarter, the Company repurchased approximately $683,000 of its common stock (120,220 shares at an average price of $5.68), bringing the total repurchased for the six months to approximately $1.4 million (248,320 shares at an average price of $5.70). The Company has $26.3 million remaining under its $50.0 million repurchase authorization that expires in December 2024.
Forward Outlook
Management is updating certain components of guidance for the fiscal year ending February 3, 2024 (“Fiscal 2024”) based on first half performance, Company initiatives underway, and current macroeconomic trends and expectations. The Company has narrowed the guidance range for diluted earnings per share.
Excluding net revenues, all forward-looking guidance numbers referenced below are non-GAAP. The prior year income statement numbers exclude the previously disclosed charges for goodwill and intangible asset impairment; net inventory and purchase order-related adjustments; severance, retention, and stock-based retirement compensation; consulting and professional fees primarily associated with cost savings initiatives, the CEO search, and strategic initiatives; amortization of definite-lived intangible assets; store and right-of-use asset impairment charges; new CEO sign-on bonus and relocation; and goodMRKT exit costs. Current year guidance excludes any similar charges.
For Fiscal 2024, the Company’s updated expectations are as follows:
Consolidated net revenues of $490 to $500 million. Net revenues totaled $500.0 million in Fiscal 2023.
A consolidated gross profit percentage of 53.0% to 53.8% compared to 51.4% in Fiscal 2023. The Fiscal 2024 gross profit rate is expected to be favorably impacted by lower year-over-year freight expense, cost reduction initiatives, and the sell-through of previously-reserved inventory, partially offset by an increase in promotional activity.
Consolidated SG&A expense of $237 to $243 million compared to $245.3 million in Fiscal 2023. An expected decline in SG&A expense is being driven by Company-wide cost reduction initiatives, partially offset by restoring short-term and long-term incentive compensation to more normalized levels and incremental marketing investment intended to accelerate customer file growth.
Consolidated operating income of $24 to $28 million compared to $12.3 million in Fiscal 2023.
Free cash flow of between $40 and $45 million compared to a cash usage of $21.7 million in Fiscal 2023.
Consolidated diluted EPS of $0.57 to $0.65 based on diluted weighted-average shares outstanding of approximately 31.0 million and an effective tax rate of approximately 28%. Diluted EPS totaled $0.24 last year.
Net capital spending of approximately $5 million compared to $8.2 million in the prior year, reflecting investments associated with new Vera Bradley factory outlet stores and technology and logistics enhancements.
Disclosure Regarding Non-GAAP Measures
The Company’s management does not, nor does it suggest that investors should, consider the supplemental non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies.
The Company believes that the non-GAAP measures presented in this earnings release, including free cash flow (cash usage); gross profit; selling, general, and administrative expenses; operating income (loss); net income (loss); net income (loss) attributable and available to Vera Bradley, Inc.; and diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders, along with the associated percentages of net revenues, are helpful to investors because they allow for a more direct comparison of the Company’s year-over-year performance and are consistent with management’s evaluation of business performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures can be found in the Company’s supplemental schedules included in this earnings release.
Call Information
A conference call to discuss results for the second quarter is scheduled for today, Wednesday, August 30, 2023, at 9:30 a.m. Eastern Time. A broadcast of the call will be available via Vera Bradley’s Investor Relations section of its website, www.verabradley.com. Alternatively, interested parties may dial into the call at (888) 394-8218, and enter the access code 1990839. A replay will be available shortly after the conclusion of the call and remain available through September 13, 2023. To access the recording, listeners should dial (844) 512-2921, and enter the access code 1990839.
About Vera Bradley, Inc.
Vera Bradley, Inc. operates two unique lifestyle brands – Vera Bradley and Pura Vida. Vera Bradley and Pura Vida are complementary businesses, both with devoted, emotionally-connected, and multi-generational female customer bases; alignment as casual, comfortable, affordable, and fun brands; positioning as “gifting” and socially-connected brands; strong, entrepreneurial cultures; a keen focus on community, charity, and social consciousness; multi-channel distribution strategies; and talented leadership teams aligned and committed to the long-term success of their brands.
Vera Bradley, based in Fort Wayne, Indiana, is a leading designer of women’s handbags, luggage and other travel items, fashion and home accessories, and unique gifts. Founded in 1982 by friends Barbara Bradley Baekgaard and Patricia R. Miller, the brand is known for its innovative designs, iconic patterns, and brilliant colors that inspire and connect women unlike any other brand in the global marketplace.
In July 2019, Vera Bradley, Inc. acquired a 75% interest in Creative Genius, Inc., which also operates under the name Pura Vida Bracelets (“Pura Vida”). Pura Vida, based in La Jolla, California, is a digitally native, highly-engaging lifestyle brand founded in 2010 by friends Paul Goodman and Griffin Thall. Pura Vida has a differentiated and expanding offering of bracelets, jewelry, and other lifestyle accessories. The Company acquired the remaining 25% of Pura Vida in January 2023.
The Company has three reportable segments: Vera Bradley Direct (“VB Direct”), Vera Bradley Indirect (“VB Indirect”), and Pura Vida. The VB Direct business consists of sales of Vera Bradley products through Vera Bradley Full-Line and Factory Outlet stores in the United States, www.verabradley.com, Vera Bradley’s online outlet site, and the Vera Bradley annual outlet sale in Fort Wayne, Indiana. The VB Indirect business consists of sales of Vera Bradley products to approximately 1,700 specialty retail locations throughout the United States, as well as select department stores, national accounts, third party e-commerce sites, and third-party inventory liquidators, and royalties recognized through licensing agreements related to the Vera Bradley brand. The Pura Vida segment consists of sales of Pura Vida products through the Pura Vida websites, www.puravidabracelets.com, www.puravidabracelets.ca, and www.puravidabracelets.eu; through the distribution of its products to wholesale retailers and department stores; and through its Pura Vida retail stores.
Website Information
We routinely post important information for investors on our website www.verabradley.com in the “Investor Relations” section. We intend to use this webpage as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of our website, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our webpage is not incorporated by reference into, and is not a part of, this document.
Investors and other interested parties may also access the Company’s most recent Corporate Responsibility and Sustainability Report outlining its ESG (Environmental, Social, and Governance) initiatives at https://verabradley.com/pages/corporate-responsibility.
Vera Bradley Safe Harbor Statement
Certain statements in this release are “forward-looking statements” made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or design associates or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brands; possible inability to successfully implement the Company’s long-term strategic plans; possible inability to successfully open new stores, close targeted stores, and/or operate current stores as planned; incremental tariffs or adverse changes in the cost of raw materials and labor used to manufacture our products; possible adverse effects resulting from a significant disruption in our distribution facilities; or business disruption caused by pandemics. Risks, uncertainties, and assumptions also include the possibility that Pura Vida acquisition benefits may not materialize as expected and that Pura Vida’s business may not perform as expected. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended January 28, 2023. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.
Liabilities, Redeemable Noncontrolling Interest, and Shareholders’ Equity
Current liabilities:
Accounts payable
$
21,605
$
20,350
$
43,722
Accrued employment costs
12,965
14,312
16,018
Short-term operating lease liabilities
19,587
19,714
19,768
Other accrued liabilities
13,496
12,723
21,526
Income taxes payable
528
558
374
Total current liabilities
68,181
67,657
101,408
Long-term operating lease liabilities
66,718
74,664
84,015
Other long-term liabilities
82
90
157
Total liabilities
134,981
142,411
185,580
Redeemable noncontrolling interest
–
10,712
23,491
Shareholders’ equity:
Additional paid-in-capital
111,663
109,718
107,941
Retained earnings
279,204
274,629
297,623
Accumulated other comprehensive loss
(69
)
(105
)
(135
)
Treasury stock
(134,279
)
(132,864
)
(131,279
)
Total shareholders’ equity of Vera Bradley, Inc.
256,519
251,378
274,150
Total liabilities, redeemable noncontrolling interest, and shareholders’ equity
$
391,500
$
404,501
$
483,221
Vera Bradley, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Thirteen Weeks Ended
Twenty-Six Weeks Ended
July 29, 2023
July 30, 2022
July 29, 2023
July 30, 2022
Net revenues
$
128,172
$
130,371
$
222,534
$
228,830
Cost of sales
56,156
69,854
98,769
115,799
Gross profit
72,016
60,517
123,765
113,031
Selling, general, and administrative expenses
59,405
74,042
117,911
134,956
Impairment of goodwill and intangible assets
–
29,338
–
29,338
Other income, net
260
42
631
209
Operating income (loss)
12,871
(42,821
)
6,485
(51,054
)
Interest expense, net
12
36
44
76
Income (loss) before income taxes
12,859
(42,857
)
6,441
(51,130
)
Income tax expense (benefit)
3,605
(5,956
)
1,866
(7,519
)
Net income (loss)
9,254
(36,901
)
4,575
(43,611
)
Less: Net loss attributable to redeemable noncontrolling interest
–
(7,134
)
–
(6,870
)
Net income (loss) attributable to Vera Bradley, Inc.
$
9,254
$
(29,767
)
$
4,575
$
(36,741
)
Basic weighted-average shares outstanding
30,901
31,429
30,847
32,051
Diluted weighted-average shares outstanding
31,139
31,429
31,208
32,051
Basic net income (loss) per share available to Vera Bradley, Inc. common shareholders
$
0.30
$
(0.95
)
$
0.15
$
(1.15
)
Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders
$
0.30
$
(0.95
)
$
0.15
$
(1.15
)
Vera Bradley, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Twenty-Six Weeks Ended
July 29, 2023
July 30, 2022
Cash flows from operating activities
Net income (loss)
$
4,575
$
(43,611
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation of property, plant, and equipment
4,070
4,371
Amortization of operating right-of-use assets
10,501
10,621
Goodwill and intangible asset impairment
–
29,338
Other impairment charges
–
1,351
Amortization of intangible assets
1,458
1,537
Provision for doubtful accounts
17
(119
)
Stock-based compensation
1,601
1,444
Deferred income taxes
2,102
(5,419
)
Other non-cash loss, net
40
–
Changes in assets and liabilities:
Accounts receivable
(1,856
)
(4,793
)
Inventories
2,974
(34,676
)
Prepaid expenses and other assets
1,107
348
Accounts payable
1,403
12,759
Income taxes
(899
)
4,652
Operating lease liabilities, net
(10,552
)
(12,910
)
Accrued and other liabilities
(566
)
7,989
Net cash provided by (used in) operating activities
15,975
(27,118
)
Cash flows from investing activities
Purchases of property, plant, and equipment
(1,727
)
(4,391
)
Cash paid for business acquisition
(10,000
)
–
Net cash used in investing activities
(11,727
)
(4,391
)
Cash flows from financing activities
Tax withholdings for equity compensation
(942
)
(1,410
)
Repurchase of common stock
(1,415
)
(16,477
)
Distributions to redeemable noncontrolling interest
–
(613
)
Net cash used in financing activities
(2,357
)
(18,500
)
Effect of exchange rate changes on cash and cash equivalents
36
(106
)
Net increase (decrease) in cash and cash equivalents
$
1,927
$
(50,115
)
Cash and cash equivalents, beginning of period
46,595
88,436
Cash and cash equivalents, end of period
$
48,522
$
38,321
Vera Bradley, Inc.
Second Quarter Fiscal 2024
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended July 29, 2023
(in thousands, except per share amounts)
(unaudited)
Thirteen Weeks Ended
As Reported
Other Items
Non-GAAP (Excluding Items)
Gross profit
$
72,016
$
–
$
72,016
Selling, general, and administrative expenses
59,405
1,101
1
58,304
Operating income (loss)
12,871
(1,101
)
13,972
Income (loss) before income taxes
12,859
(1,101
)
13,960
Income tax expense (benefit)
3,605
(157
)
2
3,762
Net income (loss)
9,254
(944
)
10,198
Less: Net loss attributable to redeemable noncontrolling interest
–
–
–
Net income (loss) attributable to Vera Bradley, Inc.
9,254
(944
)
10,198
Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders
$
0.30
$
(0.03
)
$
0.33
Vera Bradley Direct segment operating income
$
20,621
$
–
$
20,621
Vera Bradley Indirect segment operating income
$
6,204
$
–
$
6,204
Pura Vida segment operating income (loss)
$
4,000
$
(808
)
3
$
4,808
Unallocated corporate expenses
$
(17,954
)
$
(293
)
4
$
(17,661
)
1Items include $729 for the amortization of definite-lived intangible assets; $293 for certain professional fees and consulting fees associated with strategic initiatives; and $79 for severance charges
2Related to the tax impact of the items mentioned above
3Related to $729 for the amortization of definite-lived intangible assets and $79 for severance charges
4Related to certain professional fees and consulting fees for strategic initiatives
Vera Bradley, Inc.
Second Quarter Fiscal 2023
GAAP to Non-GAAP Reconciliation Thirteen Weeks Ended July 30, 2022
(in thousands, except per share amounts)
(unaudited)
Thirteen Weeks Ended
As Reported
Other Items
Non-GAAP (Excluding Items)
Gross profit (loss)
$
60,517
$
(7,276
)
1
$
67,793
Selling, general, and administrative expenses
74,042
10,076
2
63,966
Impairment of goodwill and intangible assets
29,338
29,338
–
Operating (loss) income
(42,821
)
(46,690
)
3,869
(Loss) Income before income taxes
(42,857
)
(46,690
)
3,833
Income tax (benefit) expense
(5,956
)
(6,760
)
3
804
Net (loss) income
(36,901
)
(39,930
)
3,029
Less: Net (loss) income attributable to redeemable noncontrolling interest
(7,134
)
(7,771
)
637
Net (loss) income attributable to Vera Bradley, Inc.
(29,767
)
(32,159
)
2,392
Diluted net (loss) income per share available to Vera Bradley, Inc. common shareholders
$
(0.95
)
$
(1.02
)
$
0.08
Vera Bradley Direct segment operating income (loss)
$
10,044
$
(6,173
)
4
$
16,217
Vera Bradley Indirect segment operating income (loss)
$
3,918
$
(994
)
5
$
4,912
Pura Vida segment operating (loss) income
$
(28,534
)
$
(31,085
)
6
$
2,551
Unallocated corporate expenses
$
(28,249
)
$
(8,438
)
7
$
(19,811
)
1Items include $6,142 for inventory adjustments associated with the exit of certain technology products and the goodMRKT brand, as well as excess mask products and $1,134 for PO cancellation fees
2Items include $5,714 for severance charges; $2,755 for consulting fees associated with cost savings initiatives and CEO search; $768 for the amortization of definite-lived intangible assets; $759 for store impairment charges; and $80 for goodMRKT brand exit costs
3Related to the tax impact of the charges mentioned above, as well as goodwill and intangible asset impairment charges
4Related to $5,097 related to an allocation for certain inventory adjustments and PO cancellation fees; $759 for store impairment charges; $302 for goodMRKT brand exit costs; and $15 for severance charges
5Related to an allocation for certain inventory adjustments and PO cancellation fees
6Related to $29,338 of goodwill and intangible asset impairment charges; $963 for inventory adjustments associated with mask products; $768 for the amortization of definite-lived intangible assets; and $16 for severance charges
7Related to $5,683 for severance charges and $2,755 for consulting fees associated with cost savings initiatives and CEO search
Vera Bradley, Inc.
GAAP to Non-GAAP Reconciliation Twenty-Six Weeks Ended July 29, 2023
(in thousands, except per share amounts)
(unaudited)
Twenty-Six Weeks Ended
As Reported
Other Items
Non-GAAP (Excluding Items)
Gross profit
$
123,765
$
–
$
123,765
Selling, general, and administrative expenses
117,911
4,001
1
113,910
Operating income (loss)
6,485
(4,001
)
10,486
Income (loss) before income taxes
6,441
(4,001
)
10,442
Income tax expense (benefit)
1,866
(1,013
)
2
2,879
Net income (loss)
4,575
(2,988
)
7,563
Less: Net loss attributable to redeemable noncontrolling interest
–
–
–
Net income (loss) attributable to Vera Bradley, Inc.
4,575
(2,988
)
7,563
Diluted net income (loss) per share available to Vera Bradley, Inc. common shareholders
$
0.15
$
(0.10
)
$
0.24
Vera Bradley Direct segment operating income (loss)
$
27,961
$
(342
)
3
$
28,303
Vera Bradley Indirect segment operating income
$
10,910
$
–
$
10,910
Pura Vida segment operating income (loss)
$
5,562
$
(1,537
)
4
$
7,099
Unallocated corporate expenses
$
(37,948
)
$
(2,122
)
5
$
(35,826
)
1Items include $2,068 for severance charges; $1,458 for the amortization of definite-lived intangible assets; and $475 for certain professional fees and consulting fees associated with strategic initiatives
2Related to the tax impact of the items mentioned above
3Related to severance charges
4Related to $1,458 for the amortization of definite-lived intangible assets and $79 for severance charges
5Items include $1,647 for severance charges and $475 associated with certain professional fees and consulting fees for strategic initiatives
Vera Bradley, Inc.
GAAP to Non-GAAP Reconciliation Twenty-Six Weeks Ended July 30, 2022
(in thousands, except per share amounts)
(unaudited)
Twenty-Six Weeks Ended
As Reported
Other Items
Non-GAAP (Excluding Items)
Gross profit (loss)
$
113,031
$
(7,276
)
1
$
120,307
Selling, general, and administrative expenses
134,956
11,587
2
123,369
Impairment of goodwill and intangible assets
29,338
29,338
–
Operating loss
(51,054
)
(48,201
)
(2,853
)
Loss before income taxes
(51,130
)
(48,201
)
(2,929
)
Income tax benefit
(7,519
)
(7,135
)
3
(384
)
Net loss
(43,611
)
(41,066
)
(2,545
)
Less: Net (loss) income attributable to redeemable noncontrolling interest
(6,870
)
(7,963
)
1,093
Net loss attributable to Vera Bradley, Inc.
(36,741
)
(33,103
)
(3,638
)
Diluted net loss per share available to Vera Bradley, Inc. common shareholders
$
(1.15
)
$
(1.03
)
$
(0.11
)
Vera Bradley Direct segment operating income (loss)
$
15,547
$
(6,173
)
4
$
21,720
Vera Bradley Indirect segment operating income (loss)
$
9,397
$
(994
)
5
$
10,391
Pura Vida segment operating (loss) income
$
(27,478
)
$
(31,854
)
6
$
4,376
Unallocated corporate expenses
$
(48,520
)
$
(9,180
)
7
$
(39,340
)
1Items include $6,142 for inventory adjustments associated with the exit of certain technology products and the goodMRKT brand, as well as excess mask products and $1,134 for PO cancellation fees
2Items include $5,714 for severance charges; $2,905 for consulting fees associated with cost savings initiatives and CEO search; $1,537 for the amortization of definite-lived intangible assets; $1,351 for store and right-of-use asset impairment charges; and $80 for goodMRKT brand exit costs
3Related to the tax impact of the charges mentioned above, as well as goodwill and intangible asset impairment charges
4Related to $5,097 related to an allocation for certain inventory adjustments and PO cancellation fees; $759 for store impairment charges; $302 for goodMRKT brand exit costs; and $15 for severance charges
5Related to an allocation for certain inventory adjustments and PO cancellation fees
6Related to $29,338 of goodwill and intangible asset impairment charges; $963 for inventory adjustments associated with mask products; $1,537 for the amortization of definite-lived intangible assets; and $16 for severance charges
7Related to $5,683 for severance charges; $2,905 for consulting fees associated with cost savings initiatives and CEO search; and $592 for a right-of-use asset impairment charge
Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURE™ and VPURE+™ products, which are sourced from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing a titanium dioxide pigment plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo’s VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world’s highest quality vanadium, Largo’s strategic business plan is based on two pillars: 1.) leading vanadium supplier with an outlined growth plan and 2.) U.S.-based energy storage business support a low carbon future.
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Largo announced that its Board has initiated a review and evaluation of strategic alternatives for Largo Clean Energy. LCE represents Largo’s interest in energy storage investments including the Vanadium Redox Flow Battery (VRFB). VRFBs have the potential to store energy at the utility grid level for longer periods that lithium batteries. LCE was formed in 2020 with the acquisition of assets and patents owned by VionX Energy for $3.862 million. The division has completed a 3 MWH test project in Massachusetts and is near completion of a 6.1 MWH battery for Enel Green Power in Spain. Strategic alternatives for LCE could include the sale, merger, or other financial arrangements with other parties interested in vanadium batteries.
Would Largo consider selling LCE outright? Largo has a unique corporate structure that includes mining (Largo Production), LCE, and its investment in publicly-traded vanadium units (Large Physical Vanadium). Through its involvement in all three units, it hopes to promote the development of VRFBs. Increased adoption of VRFBs would greatly enhance the demand for vanadium. We believe Largo remains committed to promoting VRFBs but would be willing to sell LCE, or a partial interest in LCE, if it were to find a partner sharing an equal commitment.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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.
U.S. Department of Health Recommends Marijuana Reclassification – Boosts Cannabis Stocks
A letter with far-reaching implications for the cannabis industry has prompted double-digit gains for companies in the marijuana industry, both large and small. Making further headway toward a less restrictive federal government, the U.S. Department of Health and Human Services (HHS) has taken another step in reshaping the legal landscape of cannabis in the United States. In the latest move, as reported by Bloomberg News, the HHS has urged for the relaxation of restrictions on marijuana, this marks a potential turning point for the developing cannabis industry.
A Letter with Far-Reaching Implications
The letter written by U.S. Assistant Secretary for Health, Rachel Levine, to Anne Milgram, the Administrator of the Drug Enforcement Administration (DEA), has heightened anticipation for meaningful changes in marijuana’s classification. Currently categorized as a Schedule I drug under the Controlled Substances Act, marijuana’s potential reclassification to Schedule III, as proposed by Levine, could have far-reaching implications.
Divergent State Laws and Federal Stance
The ongoing contradiction between federal and state marijuana laws has long posed challenges for both cannabis businesses and users. Although around 40 U.S. states have embraced various forms of marijuana legalization, the federal stance remains staunchly prohibitive, creating a perplexing legal labyrin
A Presidential Push for Review
The DEA’s confirmation of receiving the HHS letter aligns with President Joe Biden’s call for a comprehensive review of marijuana’s classification. The administration’s objective to base its decisions on evidence and expert evaluations underscores a commitment to an impartial and well-informed process.
White House spokesperson Karine Jean-Pierre emphasized, “The administration’s process is an independent process led by HHS, led by the Department of Justice and guided by evidence … we will let that process move forward.”
Market Reaction and Future Prospects
The market response to this potentially pivotal development is what one might expect. Medicine Man Technologies, operating under the name Schwazze (SHWZ) is a vertically integrated cannabis company with roots in Colorado. Schwazze stock price jumped 18% on the news. Jushi (JUSHF) is a premium brand provider of cannabis products operating in Florida, Ohio, and Colorado. Jushi Holdings Inc. rose 34% once word of the letter spread through the markets. Charlottes Web (CWBHF), another Colorado-based company involved in farming, manufacturing, marketing, and selling hemp-derived cannabidiol (CBD) wellness products, was lifted by more than 12%.
Take a moment to learn more about Schwazze, a leading vertically integrated cannabis holding company with a portfolio consisting of top-tier licensed brands spanning cultivation, extraction, infused-product manufacturing, dispensary operations, consulting, and a nutrient line.
The sharp reaction reflects tangible market optimism regarding the potential reshaping of the legal framework surrounding cannabis.
DEA’s Next Steps
The DEA, wields the final authority to determine drug scheduling under the Controlled Substances Act, it is set to initiate a comprehensive review process. HHS’s scientific and medical evaluation will serve as a crucial input in this review, potentially leading to a revision in marijuana’s classification.
Awaiting Further Insights
As this significant reevaluation unfolds, industry stakeholders, advocates, and the general public await further insights into the potential impacts of any regulatory shift. The eventual outcome could mark a defining moment in the trajectory of cannabis legalization, and ability for companies in the industry to have all the advantages non-marijuana companies enjoy.
The evolving dynamics in the cannabis sector warrant close observation by interested investors as the regulatory landscape continues to transform.
Why Small Lithium Developers and Producers May Become Stars By Mid-Decade
Lithium demand isn’t going away; in fact, it is likely to skyrocket. While most people link future EV sales forecasts with Lithium-ion battery growth, the increased use of li-ion batteries goes well beyond electric vehicle production. Some highly regarded analysts are now predicting a difficult lithium deficit as early as 2025. If demand outstrips supply that quickly, prices of the mineral will be under extreme upward pressure. If the accelerating demand unfolds as expected, investors looking to get ahead of the curve may want to increase their exposure to lithium investments soon. Below is a background on current forecasts and ideas to explore.
Background
The Fitch subsidiary, Business Monitor International (BMI), is a research unit of the parent company best known for its rating service. BMI has a team of over 300 analysts who specialize in a variety of industries, including energy, mining, and technology. The company’s research is used by businesses to make informed decisions about their operations. BMI now estimates that China’s lithium demand for EVs will grow by an average of 20.4% each year between 2023 and 2032. However, current estimates for the country’s lithium output are only expected to grow by 6% over the same period. This means that China will need to import massive amounts of lithium just to meet its growth in EV production.
At the same time, the global demand for lithium is also expected to grow significantly. Some informed projections are that global demand for lithium will reach over 3 million metric tons (tonne) by 2030. As a comparison, this is up from 540,000 metric tons in 2021.
There are currently just 101 lithium mines in the world, and many of these mining operations are nearing the end of their lifespan. In addition, the permitting process for new lithium mines can be lengthy and complex. This is slowing the development of new lithium production facilities. Consequently, the growing demand for lithium, which is already seen as straining global supply, may become substantially more challenging over the next 18 months.
More demand relative to supply is the most basic recipe for higher prices. As a result of the supply constraints, lithium prices are expected to remain high in the coming years. Lithium carbonate prices surged to a record of almost 600,000 yuan per tonne in November 2022.
Source: Google Finance
The EV industry is working to address the lithium supply deficit, but it is the producers that are working to be more efficient and productive. Some companies are developing new ways to extract lithium from brines, which are salty water bodies that contain lithium. Other companies are working to recycle lithium-ion batteries. However, lithium is a finite resource, and an approaching supply deficit shows no signs of being fixed soon. In the meantime the EV industry and others will compete for what is what is being produced, which could drive up prices.
What This Means for Investors
Investors who are interested in the lithium market should take note of the projections for the growing supply/demand imbalance. Lithium mining companies, especially smaller pure-plays on the demand for lithium, may have the highest percentage benefit from higher prices. Three such companies are listed below with links to further information and data relevant to the company.
Century Lithium Corp. (LCE:CA) is a Canadian-based advanced-stage lithium Company, focused on developing its 100%-owned Clayton Valley Lithium Project in the U.S. (Nevada). Century Lithium is actively testing material from its lithium-bearing claystone deposit at its Lithium Extraction Facility while moving toward the completion of a Feasibility Study, with the goal to become a domestic producer of lithium for the growing electric vehicle and battery storage market.
Mark Reichamn, Noble Capital Markets senior research analyst for natural resources, published a research note explaining a collaboration between Century Lithium and Koch Technology Solutions (KTS) where lithium is being recovered from leach solution.
Noble rates the shares of Century Lithium Corp. as outperform.
LithiumBank Resources Corp. (LBNKF) is an exploration and development company focused on lithium-enriched brine projects in Western Canada where low-carbon-impact, rapid DLE technology is used. LithiumBank currently holds over 3.77 million acres of mineral titles, 3.44M acres in Alberta and 326K acres in Saskatchewan. LithiumBank is advancing and de-risking several projects in parallel of the Boardwalk Lithium Brine Project.
Mark Reichman, of Noble Capital Markets put out a research note this month explaining LithiumBank’s reasons for selling three of its projects.
Noble rates the shares of Century Lithium Corp. as outperform.
Piedmont Lithium Inc, (PLL) is a lithium-based company focused on the development of its Piedmont Lithium Project located within the Carolina TinSpodumene Belt (”TSB”) and along trend to the Hallman Beam and Kings Mountain mines.
Piedmont has been in the news recently for having received a partial prepayment of $31.6 million for the sale of 15,000 dry metric tonnes of lithium concentrate under its offtake deal with North American Lithium (NAL). According to news reported by Reuters, its CEO Keith Phillips expects sales from Piedmont shipments to help fund strategic initiatives while reducing the company’s need to raise capital in the equity markets. Piedmont said the prepayment increased its cash position to about $100 million.
A video discussion with Piedmont’s CEO Keith Phillips taken in March 2023 as part of Channelchek’s Takeaway Series is a great way to become familiar with the projects and strategies this “Made in the USA” lithium developer is involved with.
Take Away
A lithium supply deficit is expected to emerge as early as 2025, according to analysts at BMI. The deficit is being driven by the growing demand for lithium-ion batteries for electric vehicles. Investors who are looking to understand the plans of small lithium developers and producers should visit the Company Data / Quotes tab on Channelchek and use the search bars to begin exploring.
RICHMOND, Va.–(BUSINESS WIRE)– Bowlero Corp. (NYSE: BOWL) (“Bowlero” or the “Company”), the global leader in bowling entertainment, will report financial results for the fourth quarter and full year 2023 on Monday, September 11, 2023 before the U.S. stock market opens. Management will discuss the results via webcast at 10:00 AM ET on the same day.
The live webcast, replay and results presentation will be available in the Events & Presentations section of the Bowlero Investor Relations website at https://ir.bowlerocorp.com/overview/default.aspx.
About Bowlero Corp.
Bowlero Corp. is the global leader in bowling entertainment, media, and events. With more than 325 bowling centers across North America, Bowlero Corp. serves more than 30 million guests each year through a family of brands that includes Bowlero and AMF. In 2019, Bowlero Corp. acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., please visit BowleroCorp.com.
Company to Provide Updates on Multiple Phase 2 Clinical Trials
for its Next-Generation COVID-19 Vaccine and Cancer Immunotherapy Programs
ATLANTA, GA, August 29, 2023 – GeoVax Labs, Inc. (Nasdaq: GOVX), a biotechnology company developing immunotherapies and vaccines against cancers and infectious diseases, is pleased to announce that it has been invited to present at the Emerging Growth Conference on September 6, 2023. This live, interactive online event will give existing shareholders and the investment community the opportunity to interact with the Company’s Chairman and CEO, David Dodd, in real time.
Please register here to ensure you are able to attend the conference and receive any updates that are released.
Following his presentation, Mr. Dodd will open the floor for questions. Please submit your questions in advance to Questions@EmergingGrowth.com or ask your questions during the event and Mr. Dodd will do his best to get through as many of them as possible.
About the Emerging Growth Conference
The Emerging Growth Conference is an effective way for public companies to present and communicate their new products, services and other major announcements to the investment community. The conference focus and coverage includes companies in a wide range of growth sectors, with strong management teams, innovative products & services, focused strategy, execution, and the overall potential for long term growth. Its audience includes potentially tens of thousands of individual and institutional investors, as well as investment advisors and analysts. All sessions are conducted through video webcasts and take place in the Eastern time zone.
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 three Phase 2 clinical trials, GEO-CM04S1 is being evaluated as a primary 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, and as a booster vaccine in patients with chronic lymphocytic leukemia (CLL). 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.
Original CookieCakeFranchiseExpands Florida Footprint
LOS ANGELES, Aug. 29, 2023 (GLOBE NEWSWIRE) — Great American Cookies, the Original Cookie Cake franchise, announces its return to the Orlando market with a new location. Situated in the Orlando International Premium Outlets, the latest store marks another successful Nestlé® Toll House® Café by Chip® conversion by FAT Brands, the parent company of Great American Cookies. The cookie chain has plans to continue its growth in Orlando with new locations set to open later this year.
“We are beyond excited for Great American Cookies to re-enter the Orlando market and offer our signature Cookie Cakes and Cookies to the community once again,” said Allison Lauenstein, President of the QSR Division at FAT Brands Inc. “Our brand has a rich history of creating memorable moments with our freshly baked CookieCakes, and we can’t wait to continue that tradition in Orlando.”
Since 1977, Great American Cookies has baked up a reputation for not only being the creator of the Original Cookie Cake, but also for its famous chocolate chip cookie recipe. Other craveable menu items include Brownies and Double Doozies™, delectable icing sandwiched between two cookies.
The new Great American Cookies Orlando store is located at 4955 International Dr., Unit 1C 02, Orlando, FL. 32819, and is open Monday through Sunday, 11 a.m. to 8 p.m.
About FAT (Fresh. Authentic. Tasty.) Brands FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 17 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit www.fatbrands.com.
About Great American Cookies Founded on a family chocolate chip cookie recipe in 1977, Great American Cookies believes that pure, simple delight is part of living a full life. Serving the Original Cookie Cake, fresh baked cookies in a variety of flavors, brownies, and Double Doozies™, we promise to treat you to bites of bliss that prove how sweet life can be. With 400 bakeries across the country and internationally in Bahrain, Guam, Saudi Arabia, and treats available to ship right to your door, the sweet spot is always close to home. For more information, visit www.greatamericancookies.com.
HOUSTON, Aug. 29, 2023 /PRNewswire/ — Direct Digital Holdings, Inc. (Nasdaq: DRCT) (“Direct Digital Holdings” or the “Company”), a leading advertising and marketing technology platform operating through its companies Colossus Media, LLC (“Colossus SSP”), Huddled Masses LLC (“Huddled Masses”) and Orange142, LLC (“Orange142”), today announced that the Company has commenced an offer to purchase (the “Offer”) all of its outstanding publicly traded warrants (the “Warrants”) to purchase shares of its Class A common stock, par value $0.001 per share, at a purchase price of $1.20 in cash, without interest. The purpose of the Offer is to reduce the number of shares of Class A common stock that would become outstanding upon the exercise of Warrants, thus simplifying, and providing investors and potential investors with greater certainty as to, Direct Digital Holdings’ capital structure.
Direct Digital Holdings is also soliciting consents (the “Consent Solicitation”) to amend the Warrant Agreement, dated as of February 15, 2022 (the “Warrant Agreement”), by and between Direct Digital Holdings and Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC (the “Transfer Agent”), which governs all of the Warrants, to permit Direct Digital Holdings to redeem each outstanding Warrant for $0.35 in cash, without interest, which is approximately 71% less than the price applicable to the Offer (such amendment, the “Warrant Amendment”). Pursuant to the terms of the Warrant Agreement, the adoption of the Warrant Amendment will require the consent of holders of at least a majority of the outstanding Warrants. In order to tender the Warrants in the Offer and receive $1.20 in cash for each of their Warrants, holders of the Warrants are required to consent to the Warrant Amendment. The Offer will be open until one minute after 11:59 p.m., Eastern Time, on September 26, 2023, unless extended or earlier terminated by Direct Digital Holdings (the “Expiration Date”). Tendered Warrants may be withdrawn by holders at any time prior to the Expiration Date. The Company’s obligation to complete the Offer is conditioned on the tender of more than 50% of the outstanding Warrants.
The Offer and Consent Solicitation are being made pursuant to an Offer to Purchase dated August 29, 2023, and Schedule TO, dated August 29, 2023, each of which will be filed with the Securities and Exchange Commission (“SEC”) and more fully set forth the terms and conditions of the Offer and Consent Solicitation.
The Company’s Class A common stock and Warrants are listed on The Nasdaq Stock Market LLC under the symbols “DRCT” and “DRCTW,” respectively. As of August 29, 2023, a total of 3,217,800 Warrants were outstanding.
Stifel, Nicolaus & Company, Incorporated has been appointed as the Dealer Manager for the Offer and Consent Solicitation, D.F. King, Co., Inc. (“D.F. King”) has been appointed as the Information Agent for the Offer and Consent Solicitation, and Equiniti Trust Company, LLC has been appointed as the Depositary for the Offer and Consent Solicitation. All questions concerning tender procedures and requests for additional copies of the offer materials, including the letter of transmittal and consent should be directed to D.F. King.
Important Additional Information Has Been Filed with the SEC
Copies of the Schedule TO and Offer to Purchase will be available free of charge at the website of the SEC at www.sec.gov. Requests for documents may also be directed to D.F. King at (866) 796-1290 (toll-free) or drct@dfking.com.
This announcement is for informational purposes only and shall not constitute an offer to purchase or a solicitation of an offer to sell the Warrants. The Offer and Consent Solicitation are being made only through the Schedule TO and Offer to Purchase, and the complete terms and conditions of the Offer and Consent Solicitation are set forth in the Schedule TO and Offer to Purchase.
Holders of the Warrants are urged to read the Schedule TO and Offer to Purchase carefully before making any decision with respect to the Offer and Consent Solicitation because they contain important information, including the various terms of, and conditions to, the Offer and Consent Solicitation.
None of Direct Digital Holdings, any of its management or its board of directors, or the Dealer Manager or the Information Agent or Depositary or any other person makes any recommendation as to whether or not Warrant holders should tender Warrants for exchange in the Offer or consent to the Warrant Amendment in the Consent Solicitation. Warrant holders must make their own decision as to whether to tender their Warrants and, if so, how many Warrants to tender.
About Direct Digital Holdings
Direct Digital Holdings (Nasdaq: DRCT), owner of operating companies Colossus SSP, Huddled Masses, and Orange 142, brings state-of-the-art sell- and buy-side advertising platforms together under one umbrella company. Direct Digital Holdings’ sell-side platform, Colossus SSP, offers advertisers of all sizes extensive reach within general market and multicultural media properties. The Company’s subsidiaries Huddled Masses and Orange142 deliver significant ROI for middle market advertisers by providing data-optimized programmatic solutions at scale for businesses in sectors that range from energy to healthcare to travel to financial services. Direct Digital Holdings’ sell- and buy-side solutions manage on average over 136,000 clients monthly, generating approximately 250 billion impressions per month across display, CTV, in-app and other media channels.
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of federal securities laws, including the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and which are subject to certain risks, trends and uncertainties.
As used below, “we,” “us,” and “our” refer to the Company. We use words such as “could,” “would,” “may,” “might,” “will,” “expect,” “likely,” “believe,” “continue,” “anticipate,” “estimate,” “intend,” “plan,” “project” and other similar expressions to identify forward-looking statements, but not all forward-looking statements include these words. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements.
All of our forward-looking statements involve estimates and uncertainties that could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Our forward-looking statements are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, many factors could affect our actual operating and financial performance and cause our performance to differ materially from the performance expressed in or implied by the forward-looking statements, including, but not limited to: our dependence on the overall demand for advertising, which could be influenced by economic downturns; any slow-down or unanticipated development in the market for programmatic advertising campaigns; the effects of health epidemics; operational and performance issues with our platform, whether real or perceived, including a failure to respond to technological changes or to upgrade our technology systems; any significant inadvertent disclosure or breach of confidential and/or personal information we hold, or of the security of our or our customers’, suppliers’ or other partners’ computer systems; any unavailability or non-performance of the non-proprietary technology, software, products and services that we use; unfavorable publicity and negative public perception about our industry, particularly concerns regarding data privacy and security relating to our industry’s technology and practices, and any perceived failure to comply with laws and industry self-regulation; restrictions on the use of third-party “cookies,” mobile device IDs or other tracking technologies, which could diminish our platform’s effectiveness; any inability to compete in our intensely competitive market; any significant fluctuations caused by our high customer concentration; our limited operating history, which could result in our past results not being indicative of future operating performance; any violation of legal and regulatory requirements or any misconduct by our employees, subcontractors, agents or business partners; any strain on our resources, diversion of our management’s attention or impact on our ability to attract and retain qualified board members as a result of being a public company; our dependence, as a holding company, on receiving distributions from Direct Digital Holdings, LLC to pay our taxes, expenses and dividends; the satisfaction of the conditions to the Offer, including the minimum tender condition; and other factors and assumptions discussed in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and other sections of our filings with the Securities and Exchange Commission that we make from time to time. Should one or more of these risks or uncertainties materialize or should any of these assumptions prove to be incorrect, our actual operating and financial performance may vary in material respects from the performance projected in these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking statement contained in this press release to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances, and we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company”) (TSX: LGO) (NASDAQ: LGO) today announces that its Board of Directors (the “Board”) has initiated a review and evaluation of strategic alternatives with the intent to unlock and fully maximize the value of Largo Clean Energy Corp. (“LCE”).
The comprehensive review and evaluation process will include consideration of a full range of strategic, business, and financial alternatives, including, but not limited to, evaluating and completing financing transactions at the LCE subsidiary level, mergers and acquisitions of LCE with other battery companies and partnership opportunities with well-established energy system producers who are interested in entering the vanadium battery sector with the unique elements that Largo offers to this industry.
Daniel Tellechea, Interim CEO and Director of Largo commented: “Largo is commencing a comprehensive and thorough review of strategic alternatives to accelerate and enhance the distinctive value proposition LCE presents for vanadium batteries and the long duration energy storage sector. We believe several strategic opportunities exist in the market today that would benefit from LCE’s unique characteristics, and a formal process for comparing these alternatives is expected to deliver maximum value for all shareholders in a timely manner. These characteristics include: i) LCE’s access to the innovative Largo Physical Vanadium Corp. (“LPV”) (TSXV:VAND, OTCQX:VANAF) structure, which is expected to significantly reduce vanadium battery costs for customers, ii) LCE’s U.S.-based manufacturing capabilities, which may be eligible for significant fiscal incentives, grants and benefits, and iii) LCE’s patented vanadium flow battery stack technology and electrolyte purification technology.”
He continued: “We believe the strategic review process announced today could also accelerate the prospects for deployment of vanadium units owned by LPV in batteries, which we consider provides a major improvement in the cost-competitiveness of LCE against other battery technologies and other vanadium flow battery competitors. With the start of this process underway, the Company also remains committed to delivering on its set targets for the year in a safe and responsible manner.”
There can be no assurance that this process will result in any specific strategic plan or financial transaction and the Company does not plan to provide updates on the status of the review unless there are material developments to report.
Gallatin Capital LLC (“Gallatin”) is advising on securities transactions and Castle Grove Capital, LLC (“Castle Grove Capital”) is providing consulting services in support of the strategic review and evaluation process. Inquiries regarding the process may be directed to Myron Manternach, a registered representative of Gallatin and the President of Castle Grove Capital.
About Largo
Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURE™ and VPURE+™ products, which are sourced from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing an ilmenite concentrate plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo’s VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world’s highest quality vanadium, Largo’s strategic business plan is based on two pillars: 1.) leading vanadium supplier with an outlined growth plan and 2.) U.S.-based energy storage business to support a low carbon future.
Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.
Cautionary Statement on Forward-looking Information:
This press release contains forward-looking information under applicable securities legislation, (“forward-looking information”). Forward‐looking information in this press release includes, but is not limited to, statements with respect to LCE’s strategic review, the expectation that the strategic review will deliver maximum value for all shareholders, the timeliness of the strategic review, access to LPV’s structure, the ability to reduce vanadium battery costs for customers, eligibility for fiscal incentives, grants and benefits, the deployment of vanadium units and other benefits that may arise from the strategic review and/or LPV. Forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All information contained in this news release, other than statements of current and historical fact, is forward looking information.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedarplus.caand www.sec.govfrom time to time. Such risks and uncertainties include, without limitation: the ability to obtain, in a timely manner, all necessary regulatory, stock exchange, shareholder and other third-party approvals to consummate any transactions contemplated by the strategic review; the risk of any disruptions to the Company’s business and operations; competition; conflict in eastern Europe; changes in interest rates, inflation, foreign exchange rates, and the other risks involved in the mining and long-term battery storage industries and capital markets. Forward-looking information are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-looking information. Largo does not undertake to update any forward-looking information, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo’s annual and interim MD&A which also apply.
Trademarks are owned by Largo Inc.
For further information, please contact:
Investor Relations Alex Guthrie Senior Manager, External Relations +1.416.861.9778 aguthrie@largoinc.com
