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.
New Agreement. On Wednesday, Bit Digital finalized an agreement with Coinmint for 6 megawatts (MW) of incremental hosting capacity to power its miners, with the facility located in Massena, New York. The agreements brings the Company’s total contracted hosting capacity with Coinmint to approximately 46 MW, and has an initial one-year term with automatic three-month renewals.
New Machines. To fill the new capacity, Bit Digital purchased 2,340 S19k Pro mining units for $3.4 million, or approximately $13/TH. These mining units represent approximately 260PH/s with an average efficiency of 23 J/TH. The Company expects the miners to be delivered to the facility and hashing by the end of February 2024. We believe that more hosting agreements and purchases are to follow, given the Company’s goal of doubling its active mining fleet to approximately 6.0EH/s during 2024.
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.
For more than 45 years, 1-800-Flowers.com has offered truly original floral arrangements, plants and unique gifts to celebrate birthdays, anniversaries, everyday occasions, and seasonal holidays, and to deliver comfort during times of grief. Backed by a caring team obsessed with service, 1-800-Flowers.com provides customers thoughtful ways to express themselves and connect with the most important people in their lives. 1-800-Flowers.com is part of the 1-800-FLOWERS.COM, Inc. family of brands. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.
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.
Adj. EBITDA exceeds expectations. The company had a solid Q2, even though revenue of $822.1 million was below our estimate of $830.1 million. Adj. EBITDA of $130.1 beat our estimate of $127.9 million, by 1.7%. Notably, the company’s cost reduction efforts and easing commodity costs have driven year-over-year gross margin improvement for 5 consecutive quarters.
Favorable margin outlook. The company reported strong gross margins of 43% in Q2, an improvement of 230 basis points from the prior year period. The favorable gross margin improvement was driven by lower in-bound shipping, labor and commodity costs. Notably, the company has made significant progress in returning gross margins to pre-pandemic levels in the low 40% range. Management indicated that there is still opportunities for moderating commodity prices.
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.
The latest jobs report for January 2024 has exceeded expectations, showcasing the robustness of the U.S. economy despite recent high-profile layoffs. The key indicators demonstrate strong job creation, surpassing both estimates and revised figures from the previous month.
Key Figures
In January 2024, the U.S. economy generated an impressive 353,000 nonfarm payroll jobs, well above the Dow Jones estimates of 185,000. This figure also outpaced the revised December 2023 data, which reported 333,000 jobs created. The unemployment rate for January 2024 remained steady at 3.7%, surpassing the estimated 3.8%, indicating a stable job market. Average hourly earnings exhibited substantial growth, surging by 0.6%, doubling the estimates. Year-over-year, wages have increased by 4.5%, exceeding the forecasted 4.1%. Significant contributors to January’s job growth include Professional and Business Services (74,000 jobs), Health Care (70,000), Retail Trade (45,000), Government (36,000), Social Assistance (30,000), and Manufacturing (23,000). Despite the overall positive report, there were slight declines. The labor force participation rate dipped to 62.5%, down 0.1% from December 2023, and average weekly hours worked decreased slightly to 34.1.
Resilience Amidst Recent High-Profile Layoffs
This comes in the midst of many high-profile layoffs. UPS announced 12,000 job cuts amidst lower package volume. iRobot announced 350 layoffs following a failed acquisition by Amazon. Levi Strauss announced they will layoff between 10 and 15% of their workers. Microsoft, following their major Activision Blizzard acquisition, announced 1900 layoffs in their gaming division. Citi Group announced that they will lay off 20,000 employees over the next two years. But, as of this most recent report, it appears these layoffs have not significantly impacted the overall employment landscape.
The Federal Reserve’s Perspective
The strong job numbers prompt speculation about potential Federal Reserve actions. Fed Chair Jerome Powell emphasized the current strength of the labor market, stating that the Fed is looking for a balance and robust growth. Powell noted that the Fed doesn’t require a significant softening in the labor market to consider rate cuts but is keen on seeing continued strong growth and decreasing inflation.
The Federal Reserve, in its recent meeting, maintained benchmark short-term borrowing costs and hinted at potential rate cuts in the future. However, such cuts are contingent on further signs of cooling inflation. The central bank remains focused on addressing the impact of high inflation on consumers rather than adhering to a specific growth mandate.
January’s jobs report underscores the resilience of the U.S. economy, outperforming expectations in key indicators. While high-profile layoffs have made headlines, the overall labor market remains robust. The Federal Reserve’s cautious optimism and potential future rate adjustments indicate a nuanced approach to maintaining economic balance.
The biotech sector is witnessing a dynamic start to the year 2024, with companies such as Alto Neuroscience (ANRO) and Fractyl Health (GUTS) surpassing expectations in their initial public offerings (IPOs).
Alto Neuroscience’s Upsized IPO
Alto Neuroscience today announced the pricing of its upsized IPO, offering 8,040,000 shares of common stock at $16.00 per share. The aggregate gross proceeds are estimated to be approximately $128.6 million. This figure exceeds Alto’s earlier projection of $89 million to $103 million, showcasing strong investor confidence. The shares, traded under the ticker symbol ANRO, are set to commence trading on the NYSE, with the offering expected to close on February 6.
The substantial funds raised will propel Alto’s research and development efforts, primarily supporting the advancement of its lead asset, ALTO-100. This oral small molecule inhibitor of BDNF is currently undergoing a Phase II study for major depressive disorder. Additionally, the IPO proceeds will contribute to the progress of Alto’s other depression asset, ALTO-300, and the Phase I PDE4 asset, ALTO-101, targeted at neurodegenerative and neuropsychiatric conditions.
Fractyl Health’s Successful Debut
In a parallel success story, Fractyl Health has announced the pricing of its IPO, offering 7,333,333 shares of common stock at $15.00 per share. The total gross proceeds amount to approximately $110.0 million, surpassing the initial expectation of $99 million. Fractyl Health, trading under the ticker symbol GUTS on the Nasdaq Global Market, is scheduled to debut on Friday, with the IPO closing on February 6.
The lead product candidate for Fractyl, named Revita, is an outpatient endoscopic procedural therapy utilizing hydrothermal ablation to remodel the dysfunctional duodenal lining and restore metabolic health. Revita is currently in a pivotal study for insulin-treated type 2 diabetes, with anticipated data release in the fourth quarter of 2024.
Mark your calendars! Don’t miss Noble Capital Markets’ Emerging Growth Virtual Healthcare Equity Conference on April 17-18. This exclusive virtual event connects investors with 50 leading public biotech, healthcare services, and medical device companies. Presenting company slots are available…Read More
Positive Industry Trends
Alto Neuroscience and Fractyl Health’s successful IPOs follow in the footsteps of CG Oncology, which recently announced an upsized IPO of $380 million, and ArriVent Biopharma, following suit with its own $175 million offering. These developments underscore the current investor enthusiasm and optimism surrounding biotech companies, indicating a positive trajectory for the sector in 2024.
The robust performance of Alto Neuroscience and Fractyl Health in the IPO market exemplifies the strong start for the biotech sector in 2024. These successful offerings not only provide these companies with the necessary capital for their innovative projects but also reflect a broader trend of confidence and interest from investors in the biotech industry. As the year progresses, these companies and their groundbreaking initiatives will undoubtedly be closely watched by industry insiders and investors alike.
TROY, Mich., Feb. 01, 2024 (GLOBE NEWSWIRE) — Kelly, a leading global specialty talent solutions provider, will release its fourth-quarter earnings before the market opens on Thursday, February 15, 2024. In conjunction with its fourth-quarter earnings release, Kelly will publish a financial presentation on the Investor Relations page of its public website and will host a conference call at 9 a.m. ET.
The call may be accessed in one of the following ways:
Via the Telephone (877) 692-8955 (toll free) or (234) 720-6979 (caller paid) Enter access code 5728672 After the prompt, please enter “#”
A recording of the conference call will be available after 1:30 p.m. ET on February 15, 2024, at (866) 207-1041 (toll-free) and (402) 970-0847 (caller-paid). The access code is 5856971#. The recording will also be available at kellyservices.com during this period.
About Kelly
Kelly Services, Inc. (Nasdaq: KELYA, KELYB) helps companies recruit and manage skilled workers and helps job seekers find great work. Since inventing the staffing industry in 1946, we have become experts in the many industries and local and global markets we serve. With a network of suppliers and partners around the world, we connect more than 450,000 people with work every year. Our suite of outsourcing and consulting services ensures companies have the people they need, when and where they are needed most. Headquartered in Troy, Michigan, we empower businesses and individuals to access limitless opportunities in industries such as science, engineering, technology, education, manufacturing, retail, finance, and energy. Revenue in 2022 was $5.0 billion. Learn more at kellyservices.com.
Reports Revenues of $822.1 million and Net Income of $62.9 million, or $0.97 per share, which Includes a Non-Cash Impairment Charge of $19.8 million
Adjusted Net Income (1) was $82.7 million, or $1.27 per share
Gross Profit Margin Improves 230 basis points to 43.3%, Marking the Fifth Consecutive Quarter of Year-Over-Year Gross Profit Margin Expansion
Generates Adjusted EBITDA (1) of $130.1 million
Updates Fiscal 2024 Revenue Guidance
(1) Refer to “Definitions of Non-GAAP Financial Measures” and the tables attached at the end of this press release for reconciliation of non-GAAP results to applicable GAAP results.)
JERICHO, N.Y.–(BUSINESS WIRE)– 1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS), a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships, today reported results for its fiscal 2024 second quarter ended December 31, 2023.
Fiscal 2024 Second Quarter Highlights
Total consolidated revenues decreased 8.4% to $822.1 million, compared with total consolidated revenues of $897.9 million in the prior year period. E-commerce revenue declined 6.6% to $738.4 million.
Gross profit margin increased 230 basis points to 43.3%, compared with 41.0% in the prior year period. The gross profit margin expansion was led by improvements across the Company’s three business segments, which benefited from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts.
Operating expenses increased $11.8 million from the prior year period, including a $19.8 million non-cash impairment charge in the Consumer Floral and Gifts segment related to the Personalization Mall trademark. Excluding the impact of this charge and the appreciation or depreciation of investments in the Company’s non-qualified compensation plan, operating expenses declined $10.8 million as compared with the prior year period to $242.0 million.
Net income for the quarter was $62.9 million, or $0.97 per diluted share, which includes a non-cash impairment charge of $19.8 million or $0.30 per diluted share. Adjusted Net Income1 was $82.7 million, or $1.27 per diluted share. In the prior year period, Net income was $82.5 million, or $1.27 per diluted share.
Adjusted EBITDA1 for the quarter was $130.1 million, as compared with Adjusted EBITDA1 of $131.4 million in the prior year period.
“Our second quarter earnings came in line with our expectations, as our gross profit margin recovery and expense optimization efforts helped offset a softer than anticipated consumer environment,” said Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc. “This was our fifth consecutive quarter of gross margin expansion, and we are well on our path to returning to our historical mean annual gross margin rate in the low 40s percent range. Our gross profit margin is benefiting from a reversion to the mean of certain commodity costs combined with our Work Smarter initiatives that are centered on operating more efficiently and provide a benefit to both our gross profit margin and operating expenses.”
“We are maintaining our full year Adjusted EBITDA estimate, as our Work Smarter initiatives that are contributing to our gross profit margin and operating margin are expected to continue to mitigate a softer topline environment,” continued Mr. McCann. “Our quarter-over-quarter sales trends continue to move in the right direction and our Relationship Innovation and Work Smarter initiatives are having a clear and direct impact on our business, which we expect to only be further buoyed as the broader consumer discretionary environment improves.”
Segment Results
The Company provides Fiscal 2024 second quarter selected financial results for its Gourmet Foods and Gift Baskets, Consumer Floral and Gifts, and BloomNet segments in the tables attached to this release and as follows:
Gourmet Foods and Gift Baskets: Revenues for the quarter were $540.0 million, declining 8.2% compared with $588.4 million in the prior year period. Gross profit margin expanded 220 basis points to 43.2%, compared with 41.0% percent in the prior year period, benefiting from lower freight costs, lower labor costs, a decline in certain commodity costs, as well as the Company’s inventory optimization efforts. Segment contribution margin1 declined by $5.4 million to $118.2 million, compared with segment contribution margin1 of $123.5 million in the prior year period, primarily due to the revenue decline.
Consumer Floral & Gifts: Revenues for the quarter were $254.8 million, declining 8.0% compared with $277.0 million in the prior year period. Gross profit margin expanded 230 basis points to 42.8%, compared with 40.5% percent in the prior year period, improving on lower freight and labor costs. Segment contribution margin1 excluding the impairment charge was $30.4 million, compared with segment contribution margin1 of $27.9 million in the prior year period.
BloomNet: Revenues for the quarter were $27.2 million, declining 17.1% compared with $32.9 million in the prior year period. Revenue was impacted by the lower order volume processed by BloomNet. Gross profit margin was 47.6%, compared with 42.2% in the prior year period, primarily reflecting product mix and lower freight costs. Segment contribution margin1 was $9.1 million, compared with $9.3 million in the prior year period.
Company Guidance
The Company is updating its Fiscal 2024 guidance to reduce its revenue outlook for the full year, while maintaining its Adjusted EBITDA and Free Cash Flow expectations, as the improvement in gross profit margin and the company’s expense optimization efforts are expected to mitigate the softer than anticipated revenue improvement.
As a result, the Company now expects Fiscal 2024:
total revenues on a percentage basis to decline in a range of 7% to 9%, as compared with the prior year;
Adjusted EBITDA1 to be in a range of $95 million to $100 million; and
Free Cash Flow1 to be in a range of $60 million to $65 million.
Conference Call
The Company will conduct a conference call to discuss the above details and attached financial results today, February 1, 2024, at 8:00 a.m. (ET). The conference call will be webcast from the Investors section of the Company’s website at www.1800flowersinc.com. A recording of the call will be posted on the Investors section of the Company’s website within two hours of the call’s completion. A telephonic replay of the call can be accessed beginning at 2:00 p.m. (ET) today through February 8, 2024, at: (US) 1-877-344-7529; (Canada) 855-669-9658; (International) 1-412-317-0088; enter conference ID #: 4402294.
Definitions of non-GAAP Financial Measures:
We sometimes use financial measures derived from consolidated financial information, but not presented in our financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these are considered “non-GAAP financial measures” under the U.S. Securities and Exchange Commission rules. Non-GAAP financial measures referred to in this document are either labeled as “non-GAAP” or designated as such with a “1”. See below for definitions and the reasons why we use these non-GAAP financial measures. Where applicable, see the Selected Financial Information below for reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. Reconciliations for forward-looking figures would require unreasonable efforts at this time because of the uncertainty and variability of the nature and amount of certain components of various necessary GAAP components, including, for example, those related to compensation, tax items, amortization or others that may arise during the year, and the Company’s management believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The lack of such reconciling information should be considered when assessing the impact of such disclosures.
EBITDA and Adjusted EBITDA:
We define EBITDA as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA adjusted for the impact of stock-based compensation, Non-Qualified Plan Investment appreciation/depreciation, and for certain items affecting period-to-period comparability. See Selected Financial Information for details on how EBITDA and Adjusted EBITDA were calculated for each period presented. The Company presents EBITDA and Adjusted EBITDA because it considers such information meaningful supplemental measures of its performance and believes such information is frequently used by the investment community in the evaluation of similarly situated companies. The Company uses EBITDA and Adjusted EBITDA as factors to determine the total amount of incentive compensation available to be awarded to executive officers and other employees. The Company’s credit agreement uses EBITDA and Adjusted EBITDA to determine its interest rate and to measure compliance with certain covenants. EBITDA and Adjusted EBITDA are also used by the Company to evaluate and price potential acquisition candidates. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Some of the limitations are: (a) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, the Company’s working capital needs; (b) EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debts; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future and EBITDA does not reflect any cash requirements for such capital expenditures. EBITDA and Adjusted EBITDA should only be used on a supplemental basis combined with GAAP results when evaluating the Company’s performance.
Segment Contribution Margin and Adjusted Segment Contribution Margin
We define Segment Contribution Margin as earnings before interest, taxes, depreciation, and amortization, before the allocation of corporate overhead expenses. Adjusted Segment Contribution Margin is defined as Segment Contribution Margin adjusted for certain items affecting period-to-period comparability. See Selected Financial Information for details on how Segment Contribution Margin and Adjusted Segment Contribution Margin were calculated for each period presented. When viewed together with our GAAP results, we believe Segment Contribution Margin and Adjusted Segment Contribution Margin provide management and users of the financial statements meaningful information about the performance of our business segments. Segment Contribution Margin and Adjusted Segment Contribution Margin are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. The material limitation associated with the use of Segment Contribution Margin and Adjusted Segment Contribution Margin is that they are an incomplete measure of profitability as they do not include all operating expenses or non-operating income and expenses. Management compensates for this limitation when using these measures by looking at other GAAP measures, such as Operating Income and Net Income.
Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share:
We define Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share as Net Income (Loss) and Net Income (Loss) Per Common Share adjusted for certain items affecting period-to-period comparability. See Selected Financial Information below for details on how Adjusted Net Income (Loss) Per Common Share and Adjusted or Comparable Net Income (Loss) Per Common Share were calculated for each period presented. We believe that Adjusted Net Income (Loss) and Adjusted or Comparable Net Income (Loss) Per Common Share are meaningful measures because they increase the comparability of period-to-period results. Since these are not measures of performance calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, GAAP Net Income (Loss) and Net Income (Loss) Per Common share, as indicators of operating performance and they may not be comparable to similarly titled measures employed by other companies.
Free Cash Flow:
We define Free Cash Flow as net cash provided by operating activities less capital expenditures. The Company considers Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of fixed assets, which can then be used to, among other things, invest in the Company’s business, make strategic acquisitions, strengthen the balance sheet, and repurchase stock or retire debt. Free Cash Flow is a liquidity measure that is frequently used by the investment community in the evaluation of similarly situated companies. Since Free Cash Flow is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. A limitation of the utility of Free Cash Flow as a measure of financial performance is that it does not represent the total increase or decrease in the Company’s cash balance for the period.
About 1-800-FLOWERS.COM, Inc.
1-800-FLOWERS.COM, Inc. is a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce business platform features an all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, PersonalizationMall.com®, Shari’s Berries®, FruitBouquets.com®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge across our portfolio of brands, 1-800-FLOWERS.COM, Inc. strives to deepen relationships with customers. The Company also operates BloomNet®, an international floral and gift industry service provider offering a broad-range of products and services designed to help members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; and Alice’s Table®, a lifestyle business offering fully digital floral, culinary and other experiences to guests across the country. 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies, and was named to the Fortune 1000 list in 2022. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS. For more information, visit 1800flowersinc.com or follow @1800FLOWERSInc on Twitter.
FLWS–COMP FLWS-FN
Special Note Regarding Forward Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company’s current expectations or beliefs concerning future events and can generally be identified using statements that include words such as “estimate,” “expects,” “project,” “believe,” “anticipate,” “intend,” “plan,” “foresee,” “forecast,” “likely,” “should,” “will,” “target” or similar words or phrases. These forward-looking statements are subject to risks, uncertainties, and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results expressed or implied in the forward-looking statements, including, but not limited to, statements regarding the Company’s ability to achieve its guidance for the full Fiscal year; the Company’s ability to leverage its operating platform and reduce its operating expense ratio; its ability to successfully integrate acquired businesses and assets; its ability to successfully execute its strategic initiatives; its ability to cost effectively acquire and retain customers; the outcome of contingencies, including legal proceedings in the normal course of business; its ability to compete against existing and new competitors; its ability to manage expenses associated with sales and marketing and necessary general and administrative and technology investments; its ability to reduce promotional activities and achieve more efficient marketing programs; and general consumer sentiment and industry and economic conditions that may affect levels of discretionary customer purchases of the Company’s products. The Company undertakes no obligation to publicly update any of the forward-looking statements, whether because of new information, future events or otherwise, made in this release or in any of its SEC filings. Consequently, you should not consider any such list to be a complete set of all potential risks and uncertainties. For a more detailed description of these and other risk factors, refer to the Company’s SEC filings, including the Company’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q.
Note: The following tables are an integral part of this press release without which the information presented in this press release should be considered incomplete.
(a) Segment performance is measured based on segment contribution margin or segment Adjusted EBITDA, reflecting only the direct controllable revenue and operating expenses of the segments, both of which are non-GAAP measurements. As such, management’s measure of profitability for these segments does not include the effect of corporate overhead, described above, depreciation and amortization, other income (net), and other items that we do not consider indicative of our core operating performance.
(b) Corporate expenses consist of the Company’s enterprise shared service cost centers, and include, among other items, Information Technology, Human Resources, Accounting and Finance, Legal, Executive and Customer Service Center functions, as well as Stock-Based Compensation. In order to leverage the Company’s infrastructure, these functions are operated under a centralized management platform, providing support services throughout the organization. The costs of these functions, other than those of the Customer Service Center, which are allocated directly to the above categories based upon usage, are included within corporate expenses as they are not directly allocable to a specific segment.
NEW ALBANY, Ohio, Feb. 01, 2024 (GLOBE NEWSWIRE) — Commercial Vehicle Group (CVG) (NASDAQ: CVGI), a global leader in the design and manufacturing of electrical systems, vehicle components and accessories, plastic products and robotic assemblies, today announced that it has sold its FinishTEK business to Rowmark LLC, effective January 31, 2024.
Based in Dalton, Ga., FinishTEK, is a hydrographic and paint decorator with 95,000 square feet of specialized manufacturing and warehouse space and 30 employees. FinishTEK was part of CVG’s Vehicle Solutions segment serving Tier 1 suppliers and OEM manufacturers in a wide variety of industries, including powersports, heavy-duty truck, appliance, automotive, turf, construction, and agriculture. Rowmark, based in Findlay, Ohio, is a leading manufacturer of engravable sheet plastic for the awards, engraving and signage markets.
James Ray, President and CEO of CVG, stated, “As part of our strategy to drive revenue growth, primarily in our electrical systems business and improve our margins, we continually evaluate our portfolio of businesses and product lines for strategic fit and continued investment. This is a positive transaction for both companies and continues to optimize CVG’s portfolio toward its core growth businesses.”
CVG and Rowmark are committed to a smooth transition for our customers, suppliers, and the employees. The terms of the agreement were not disclosed.
About FinishTEK
FinishTEK was founded in 1993 as Daltek Inc. It was acquired by Commercial Vehicle Group in 2012 and renamed FinishTEK. FinishTEK is a hydrographic and paint decorator specializing in plastics decorating and finishing. It offers customers a wide variety of cost-effective finishes in hydrographics, paint, and UV hard coating.
About CVG
At CVG, we deliver real solutions to complex design, engineering and manufacturing problems while creating positive change for our customers, industries, and communities we serve. Information about CVG and its products is available at www.cvgrp.com.
Investor Relations Contact: Ross Collins or Stephen Poe Alpha IR Group CVGI@alpha-ir.com
Further Debt Reduction and Strong Start to Fiscal Year
ATLANTA, Jan. 31, 2024 (GLOBE NEWSWIRE) — DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading provider of science research and development, systems engineering and integration, and digital transformation and cyber security solutions to federal agencies, today announced financial results for its fiscal first quarter ended December 31, 2023.
First Quarter Highlights
First quarter revenue was $97.9 million in fiscal 2024 versus $72.7 million in fiscal 2023, reflecting the impact from the Company’s December 2022 acquisition.
Earnings were $2.2 million, or $0.15 per diluted share, for the fiscal 2024 first quarter versus $1.5 million, or $0.11 per diluted share, for the first quarter of fiscal 2023, reflecting higher income from operations offset by increased interest expense
Earnings before interest, taxes, depreciation and amortization (“EBITDA”) were $11.1 million for the fiscal 2024 first quarter as compared to $6.3 million in the fiscal 2023 first quarter.
Total debt at the end of the first quarter was $174.4 million compared to $179.4 million at the end of the fiscal 2023 fourth quarter, reflecting $5 million of voluntary prepayments during the quarter.
Contract backlog was $653.5 million as of December 31, 2023, versus $704.8 million at the end of the fiscal 2023 fourth quarter.
Management Discussion
“Even with the government operating under a Continuing Resolution for a prolonged period of time, DLH has successfully navigated this period of uncertainty with a high degree of customer satisfaction and solid underlying results,” said Zach Parker, DLH President and Chief Executive Officer. “Revenue rose year-over-year, reflecting our strategic acquisition, while we bid on numerous new opportunities enabled by our robust technology platform. Slower-than-expected release of bidding opportunities and decisions on contract awards across multiple fronts is clearly a challenge, but we remain focused on targeting as many avenues for growth acceleration as possible within our target markets. We believe award momentum should build throughout this fiscal year, and our innovative solutions and services are expected to benefit from wide bipartisan support. In the meantime, we continue to pay down our outstanding debt using our strong cash generation. As we face some headwinds in the award environment, we are resolute in our efforts to capitalize on the exceptional performance of our employees, our technology-enabled platforms, and our robust capabilities to expand and grow our contract portfolio.”
Results for the Three Months Ended December 31, 2023
Revenue for the first quarter of fiscal 2024 was $97.9 million versus $72.7 million in fiscal 2023, with the year-over-year increase largely from the December 2022 acquisition. The decrease in revenue from the fiscal 2023 fourth quarter is primarily due to the seasonal decrease in billable hours as compared to the three months ended September 30, 2023.
Income from operations was $6.8 million versus $3.9 million in the fiscal 2023 first quarter and, as a percentage of revenue, the Company reported operating margin of 7.0% in fiscal 2024 first quarter versus 5.4% in the prior-year period.
Interest expense was $4.7 million in the fiscal first quarter of 2024 versus $1.8 million in the prior-year period, reflecting higher debt outstanding due to acquisition activity and increased market interest rates. Income before income taxes was $2.2 million for the first quarter this year versus $2.1 million in fiscal 2023, representing 2.2% and 2.9% of revenue, respectively, for each period.
For the three months ended December 31, 2023 and 2022, respectively, DLH recorded a $0.01 million and $0.5 million provision for income tax expense, respectively. The Company reported net income of approximately $2.2 million, or $0.15 per diluted share, for the first quarter of fiscal 2024 versus $1.5 million, or $0.11 per diluted share, for the first quarter of fiscal 2023. As a percentage of revenue for the first quarter of fiscal 2024 and 2023, net income was 2.2% and 2.1%, respectively, reflecting higher income from operations, offset by increased interest expense.
On a non-GAAP basis, EBITDA for the three months ended December 31, 2023, was approximately $11.1 million versus $6.3 million in the prior-year period, or 11.3% and 8.7% of revenue, respectively, reflecting principally the impact of the December 2022 acquisition and the increased operating leverage on general and administrative expenses.
Key Financial Indicators
During the first quarter of fiscal 2024, DLH generated $5.1 million in operating cash. As of December 31, 2023, the Company had cash of $0.1 million and debt outstanding under its credit facilities of $174.4 million versus cash of $0.2 million and debt outstanding of $179.4 million as of September 30, 2023. The Company expects to reduce its total debt balance to between $157.0 million and $153.0 million by the end of fiscal 2024.
As of December 31, 2023, total backlog was approximately $653.5 million, including funded backlog of approximately $132.3 million and unfunded backlog of $521.2 million.
Conference Call and Webcast Details
DLH management will discuss first quarter results and provide a general business update, including current competitive conditions and strategies, during a conference call beginning at 10:00 AM Eastern Time tomorrow, February 1, 2024. Interested parties may listen to the conference call by dialing 888-347-5290 or 412-317-5256. Presentation materials will also be posted on the Investor Relations section of the DLH website prior to the commencement of the conference call.
A digital recording of the conference call will be available for replay two hours after the completion of the call and can be accessed on the DLH Investor Relations website or by dialing 877-344-7529 and entering the conference ID 1843140.
About DLH
DLH (NASDAQ: DLHC) enhances technology, public health, and cyber security readiness missions through science, technology, cyber, and engineering solutions and services. Our experts solve some of the most complex and critical missions faced by federal customers, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 3,200 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to innovative solutions to improve the lives of millions. For more information, visit www.DLHcorp.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or DLH`s future financial performance. Any statements that refer to expectations, projections or other characterizations of future events or circumstances or that are not statements of historical fact (including without limitation statements to the effect that the Company or its management “believes”, “expects”, “anticipates”, “plans”, “intends” and similar expressions) should be considered forward looking statements that involve risks and uncertainties which could cause actual events or DLH’s actual results to differ materially from those indicated by the forward-looking statements. Forward-looking statements in this release include, among others, statements regarding estimates of future revenues, operating income, earnings and cash flow. These statements reflect our belief and assumptions as to future events that may not prove to be accurate. Our actual results may differ materially from such forward-looking statements made in this release due to a variety of factors, including: the risk that we will not realize the anticipated benefits ofacquisitions (including anticipated future financial performance and results); the diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations; the inability to retain employees and customers; contract awards in connection with re-competes for present business and/or competition for new business; our ability to manage our debt obligations; compliance with bank financial and other covenants; changes in client budgetary priorities; government contract procurement (such as bid and award protests, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the impact of inflation and higher interest rates; and other risks described in our SEC filings. For a discussion of such risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s periodic reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, as well as subsequent reports filed thereafter. The forward-looking statements contained herein are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry and business.
Such forward-looking statements are made as of the date hereof and may become outdated over time. The Company does not assume any responsibility for updating forward-looking statements, except as may be required by law.
The Company uses EBITDA and EBITDA as a percent of revenue as supplemental non-GAAP measures of performance. We define EBITDA as net income excluding (i) interest expense, (ii) Provision for income tax expense and (iii) depreciation and amortization. EBITDA as a percent of revenue is EBITDA for the measurement period divided by revenue for the same period.
These non-GAAP measures of performance are used by management to conduct and evaluate its business during its review of operating results for the periods presented. Management and the Company’s Board utilize these non-GAAP measures to make decisions about the use of the Company’s resources, analyze performance between periods, develop internal projections and measure management performance. We believe that these non-GAAP measures are useful to investors in evaluating the Company’s ongoing operating and financial results and understanding how such results compare with the Company’s historical performance. EBITDA is not a recognized measurement under accounting principles generally accepted in the United States, or GAAP, and when analyzing our performance investors should (i) evaluate adjustments in our reconciliation to the nearest GAAP financial measures and (ii) use non-GAAP measures in addition to, and not as an alternative to, measures of our operating results as defined under GAAP.
Health insurer Cigna announced Wednesday it is divesting its Medicare Advantage, Medicare Part D, and other Medicare operations to Health Care Service Corporation (HCSC) in a $3.7 billion cash deal.
Cigna said the sale will streamline its business to focus on growing its health services and benefits platforms. Proceeds will also fund share repurchases, with the transaction expected to be accretive to adjusted earnings per share in 2025.
Refocusing the Portfolio
The sale includes Cigna’s Medicare Advantage plans, Medicare Part D prescription drug plans, Cigna Supplemental Benefits, and the CareAllies health support services unit.
With HCSC taking over these businesses, Cigna can direct more investment and resources toward expanding its Evernorth health services division and Cigna Healthcare commercial health benefits segment.
Evernorth provides pharmacy benefits management, specialty pharmacy, and health technology solutions. Cigna Healthcare offers employer-sponsored group health plans as well as individual plans.
While Cigna sees Medicare as an attractive market, the segment required outsized focus and capital relative to its size within Cigna’s broader portfolio. The sale unlocks value and simplifies operations.
Gaining Scale and Capabilities
For HCSC, the transaction accelerates growth in Medicare, where the company has over 1 million members currently across 7 states. Adding Cigna’s Medicare customers and capabilities will expand HCSC’s geographic reach and enhance its product portfolio.
The businesses being acquired generated around $5.5 billion in 2022 revenues for Cigna. So the deal provides HCSC with meaningful membership and revenue growth in Medicare and immediate scale.
Cigna built a significant presence in Medicare through organic growth and acquisitions like HealthSpring in 2011. HCSC gains these customer relationships and infrastructure with the purchase.
Focusing on What Cigna Does Best
Cigna has been optimizing its portfolio under CEO David Cordani to concentrate on its core competencies. Last year, Cigna sold its international life, accident, and supplemental benefits businesses.
The Medicare sale continues this strategic focus on areas where Cigna has differentiated capabilities and growth opportunities. Evernorth provides unique pharmacy solutions and analytics. Cigna Healthcare leverages the company’s strong employer and health plan expertise.
The transaction value of $3.7 billion represents about 10 times Medicare Advantage customer revenue and 16 times Medicare Part D customer revenue. This appears a solid price for Cigna to unlock capital from non-core assets.
Financial Benefits Cigna expects the deal will be 5-10% accretive to adjusted EPS in 2025 once completed. The company reaffirmed its 2024 outlook and long-term 10-13% annual EPS growth target.
Proceeds from the divestiture will primarily fund share buybacks, representing an attractive return of capital for investors. Cigna previously had around $7.5 billion remaining on its buyback authorization.
The deal is expected to close in the first quarter of 2025 after securing necessary regulatory clearances. There is no financing condition, providing transaction certainty.
Overall, the sale highlights Cigna’s disciplined portfolio approach to drive shareholder value. Consolidating its focus while monetizing Medicare strengthens Cigna’s growth trajectory in targeted segments. For HCSC, the deal accelerates its diversification into a key government market.
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms, and systems for United States National Security related customers, allies, and commercial enterprises. Kratos is changing the way breakthrough technologies for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research, and streamlined development processes. At Kratos, affordability is a technology, and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training and combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.kratosdefense.com.
Joe Gomes, 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.
More UAS Business. Hot on the heels of the Sounding Rocket 4 ID/IQ award from last Friday, the Department of Defense announced, after the market close Tuesday, Kratos Unmanned Aerial Systems (UAS) was awarded a $57.67 million modification to a previously awarded firm-fixed-price contract.
Details. This modification exercises options to procure full rate production Lot Five of the BQM-177A Surface Launched Aerial Targets. Specifically, this modification provides for the production and delivery of 70 BQM-177A Surface Launched Aerial Targets and 70 Rocket-Assisted Takeoff attachment kits, as well as associated technical and administrative data in support of weapons system test, and evaluation and fleet training for the Navy.
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 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.
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.
New Article Discusses Uses and Contraindicated Patient Groups. An article in the Journal of the American College of Cardiology titled “When Direct Oral Anticoagulants Should Not Be Standard Treatment: JACC State-of-the-Art Review” summarized indications where DOAC drugs are commonly used, indications where they should not be used, and indications where efficacy is uncertain. The paper identifies conditions that tecarfarin is being developed to treat and supports the need we see for the drug.
DOAC Drugs Are Not For All Patients. The Direct Oral Anticoagulants (DOAC) drugs are anticoagulants that act on one specific protein in the clotting cascade. The class includes Eliquis (apixaban), Xarelto (rivaroxaban), Savaysa (edoxaban), and Pradaxa (dabigatran). Although these are effective in many conditions, some clinical trials have shown adverse findings and conditions where they should not be used.
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.
DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.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.
Results. Revenue in the first quarter was $97.9 million versus $72.7 million last year, but lower than our estimate of $101 million. Net income was at $2.2 million, or $0.15 per diluted share, compared to $1.5 million, or $0.11, in the prior year. EBITDA for the quarter was $11.1 million compared to $6.3 million last year. We had estimated EBITDA of $11.3 million, adjusted EBITDA of $11.8 million, and EPS of $0.12.
Other Key Indicators. DLH generated $5.1 million in operating cash for the quarter, with cash being at $0.1 million as of December 31, 2023. The Company backlog for the quarter was $653.5 million, including funded backlog of approximately $132.3 million and unfunded backlog of $521.2 million, versus $704.8 million in the prior year.
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.
Cardinal Health announced Wednesday that it will acquire Specialty Networks for $1.2 billion in cash, strengthening the healthcare giant’s services for specialty physician practices. Specialty Networks provides technology-enabled group purchasing, practice management solutions, and data analytics to over 11,500 specialty providers across key areas like urology, rheumatology, and gastroenterology.
The deal enhances Cardinal Health’s capabilities in strategically important specialty areas while expanding its platform serving independent physicians. Here are some key details on the acquisition:
Expanding Service Offerings
Specialty Networks gives Cardinal Health new clinical and economic services to offer specialty physicians and practices. Its analytics platform, PPS Analytics, taps into electronic medical records, imaging systems, and other data sources to generate insights improving patient care and outcomes.
Cardinal gains Specialty Networks’ expertise optimizing specialty practice operations and finance. And through group purchasing relationships Specialty Networks facilitates, Cardinal Health can provide access to discounted products and services.
The combined specialty offerings will aim to boost efficiency, revenues, and coordination of care for specialty providers. This strengthens Cardinal’s value proposition as a distribution and services partner.
Supporting Independent Physicians
A key aspect is Specialty Networks’ focus on independent and community-based specialty practices. With over 1,200 physician practice customers, it expands Cardinal’s reach and understanding of this critical healthcare segment.
The medical landscape is increasingly consolidated, making it more vital for Cardinal Health to support independent practices’ success. Specialty Networks’ experience and technology assets aid in this aim.
Cardinal Health can also leverage Specialty Networks’ physician expertise and relationships to accelerate development of its Navista Network. This network assists independent community oncologists with practice solutions and clinical trials access.
Mark your calendars! Don’t miss Noble Capital Markets’ Emerging Growth Virtual Healthcare Equity Conference on April 17-18. This exclusive virtual event connects investors with 50 leading public biotech, healthcare services, and medical device companies. Presenting company slots are available…Read More
Enhanced Analytics and Insights
Specialty Networks’ rich specialty patient data and analytics capabilities will enhance Cardinal’s offerings. Its PPS Analytics platform mines electronic records and images using artificial intelligence to generate diagnostic and treatment insights.
Cardinal gains access to millions of longitudinal specialty patient data points. This strengthens its real-world evidence and insights for biopharma partners on the safety, efficacy and use of therapies.
The specialty data and analytics also aid population health management and value-based care initiatives. And they support Cardinal’s direct provider services like improved medication adherence programs.
Driving Growth in Key Areas
Specialty Networks expands Cardinal’s presence and cross-selling opportunities in strategic specialty therapeutic areas:
Urology – large patient population with ongoing and acute care needs
Rheumatology – fast growing with new advanced treatments
Gastroenterology – increasing prevalence of GI diseases
These are growth priorities where Specialty Networks strengthens Cardinal’s advantages. The deal accelerates Cardinal’s specialty growth plans through enhanced resources and newly integrated offerings.
Strong Cultural and Strategic Fit
Cardinal Health and Specialty Networks share a mission to bring value to physician practices while improving patient outcomes. Keeping Specialty Networks’ management team intact ensures continuity of its culture and physician focus.
The companies also have experience collaborating, as Specialty Networks is already a Cardinal Health specialty GPO partner. This makes integration of the businesses more seamless.
The acquisition is expected to be accretive to Cardinal’s non-GAAP earnings per share within 12 months post closing. Specialty Networks gives Cardinal Health a stronger specialty platform and differentiated assets to better serve practices and patients. Combining specialized expertise and technologies, the deal creates benefits for physicians and Cardinal Health alike.
