Great Lakes Dredge & Dock Corporation is the largest provider of dredging services in the United States. In addition, Great Lakes is fully engaged in expanding its core business into the rapidly developing offshore wind energy industry. The Company has a long history of performing significant international projects. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 131-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free® (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.
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.
Strong Performance. Limited drydockings during the quarter and record backlog led the charge in a strong first quarter. The Galveston Island, the Company’s new hopper dredge, also started operations during the quarter, contributing to the performance. The record backlog, consisting mostly of capital projects which carry higher margin, provides Great Lakes with revenue visibility throughout the fiscal year and improved margins, in our view.
Improved Environment. With the passage of the budget, the overall dredging environment has improved, in our view. We expect to see an uptick in project awards in the second and third quarters, with a couple of major capital projects to be included. Great Lakes is well positioned to win its fair share of the awards.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*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.
Office Depot, Inc., together with its subsidiaries, supplies a range of office products and services. It offers merchandise, such as general office supplies, computer supplies, business machines and related supplies, and office furniture through its chain of office supply stores under the Office Depot, Foray, Ativa, Break Escapes, Worklife, and Christopher Lowell brand names. The company also provides graphic design, printing, reproduction, mailing, shipping, and other services through design, print, and ship centers. It has operations throughout North America, Europe, Asia, and Central America. The company also sells its products and services through direct mail catalogs, contract sales force, Internet sites, and retail stores, through a mix of company-owned operations, joint ventures, licensing and franchise agreements, alliances, and other arrangements. As of December 31, 2008, Office Depot operated 1,267 North American retail division office supply stores and 162 international division retail stores, as well as participated under licensing and merchandise arrangements in 98 stores. The company was founded in 1986 and is based in Boca Raton, Florida.
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.
1Q24 Results. Net sales were $1.87 billion, down from $2.11 billion in 1Q23 and slightly below our $1.95 billion estimate. A challenging overall economic environment and 56 fewer Office Depot stores, y-o-y, drove the revenue contraction. Adjusted EBITDA totaled $82 million, down from $131 million and below our $123 million estimate. Net income declined to $15 million, or $0.40/sh, from $72 million, or $1.71/sh. We had forecasted $64 million, or $1.72/sh.
A Decision on Varis. Put out the “For Sale” sign. Responding to shareholder suggestions, among other things, management and the Board came to the decision to sell the Varis unit, which just has not begun to generate revenue as originally anticipated. While waiting for the sale to occur, the operating costs of Varis have been reduced by approximately one-third.
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.
Electrical Systems. ES was star performer in the quarter, as increased pricing in the segment geared the segment towards positive growth. However, with two of its core end markets seeing a flat to declining demand in 2024, we expect some muted performance of the segment for the year. Management continues to focus on business wins for the segment and new facilities to supports its growth. The ES remains on a path to become the Company’s largest.
Optimization. Management continues to focus on finding ways to optimize the business and to improve profitability. The Company has rightsized some of its labor due to rising labor costs in Mexico and management has discussed offsetting cost pressure with customers. Alongside these, management has a focus on its supply chain and is looking to optimize its freight and logistics costs. The Company still has levers to pull to achieve higher optimization and cost reduction, in our view.
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.
Beasley Broadcast Group, Inc. owns and operates 61 stations (47 FM and 14 AM) in 15 large- and mid-size markets in the United States. Approximately 20 million consumers listen to the Company’s radio stations weekly over-the-air, online and on smartphones and tablets, and millions regularly engage with the Company’s brands and personalities through digital platforms such as Facebook, Twitter, text messaging, digital and web applications and email. The Overwatch League’s Houston Outlaws esports team is a wholly owned subsidiary. The Company also owns BeasleyXP, a national esports content hub, and AXLR-R8, a Rocket League Championship Series team, in its esports portfolio. For more information, please visit www.bbgi.com.
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.
Mixed Q1 results. The company reported Q1 revenue of $54.4 million, in line with our estimate of $55.1 million. Adj. EBITDA in the quarter was $0.7 million, which was below our estimate of $1.4 million. While operating results were mixed in the quarter, the company is focused on cost reductions. Additionally, national advertising was up 1.1% in Q1, which is a development we view favorably.
Q2 pacings softer, but…Management indicated that Q2 advertising pacings are down in the low single digits, a little more than our modest 2.1 % decline estimate. Notably, the company largely will mitigate the revenue variance with cost cutting initiatives, which is expected to save $6.8 million in costs this 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.
In a remarkable turn of events, the collapsed cryptocurrency exchange FTX has proposed a bankruptcy reorganization plan that could see nearly all of its customers fully repaid for their lost funds – and then some. According to a court filing released on Wednesday, FTX estimates it owes creditors around $11.2 billion, but has managed to recover between $14.5 billion and $16.3 billion to distribute.
The proposed plan states that customers whose claims amount to $50,000 or less, which accounts for around 98% of FTX’s creditors, will receive approximately 118% of their allowed claim amount. This means these customers would get all of their money back, plus an additional 18% payout on top.
This development comes as an incredible lifeline for the many retail investors and traders who had their funds frozen when FTX collapsed into bankruptcy in November 2022 amid fraud allegations against its founder Sam Bankman-Fried. At the time, new CEO John Ray III bluntly stated it was one of the most catastrophic corporate failures he’d seen in 40 years of restructuring experience.
So how did FTX manage to raise over $14 billion to repay creditors after such a spectacular implosion? The answer lies in a series of strategic asset sales and recovering investments made by the exchange and Bankman-Fried’s hedge fund Alameda Research.
One of the biggest windfalls came from selling most of FTX’s stake in artificial intelligence company Anthropic, which is backed by Amazon. That divestment alone netted FTX close to $900 million. The exchange also monetized various other venture investments and digital asset holdings.
However, FTX faced a significant hurdle – a large sum of cryptocurrency that went simply missing from the exchange after its bankruptcy. This denied them the ability to benefit from the massive price appreciation that leading cryptocurrencies like Bitcoin have seen since November, which is up over 270%.
As John Ray III noted, the company had to “look to other sources of recoverable value to repay creditors” beyond just holding crypto assets. Their aggressive asset sales and recovery efforts seem to have paid off.
While undoubtedly positive news for FTX’s customers, the proposed bankruptcy plan still requires approval from the court overseeing the case. The plan release also reminded that Sam Bankman-Fried was convicted on seven criminal counts related to FTX’s collapse and received a 25-year prison sentence.
If approved, the FTX bankruptcy would represent one of the most successful cryptocurrency exchange restructurings to date in terms of customer reimbursement. It’s a glimmer of hope amidst an industry still reeling from a crisis of consumer confidence following FTX and other high-profile blowups in 2022.
Of course, repayment is just one step in FTX’s long road to reorganization. Serious questions remain around tightening regulatory oversight and restoring trust in centralized crypto trading platforms. But for its customers at least, this plan could provide closure and make them remarkably whole after a near-total wipeout.
The artificial intelligence revolution is rapidly reshaping industries across the globe, and Microsoft is doubling down with a massive $3.3 billion investment in Wisconsin. This multi-year commitment aims to transform the state into an AI innovation hub while positioning Microsoft as a preeminent leader in the generative AI market forecast to drive trillions in economic value creation.
At the core of Microsoft’s plans lies the construction of a cutting-edge $3.3 billion datacenter campus in Mount Pleasant, set to bolster the tech giant’s cloud computing muscle and AI capabilities. This modern facility, expected to be operational by 2026, will create thousands of new construction jobs over the next couple of years. More importantly, it will act as a launchpad for companies nationwide to access the latest AI cloud services and applications for driving efficiencies and growth across industries.
Microsoft isn’t just building physical infrastructure – it’s cultivating an entire ecosystem to proliferate AI adoption and expertise. A centerpiece is the establishment of the country’s inaugural manufacturing-focused AI Co-Innovation Lab. Housed at the University of Wisconsin-Milwaukee, this state-of-the-art facility will connect 270 local businesses directly with Microsoft’s AI experts. By 2030, the lab’s mission is to collaboratively design, prototype, and implement tailored AI solutions for 135 Wisconsin manufacturers and other participating companies.
This bold co-innovation strategy brings together key players like the startup fund TitletownTech, backed by the iconic Green Bay Packers franchise. Such partnerships could catalyze cross-pollination of ideas, talent, and domain expertise to keep Microsoft’s AI offerings razor-sharp and industry-relevant.
Perhaps most crucial is the workforce development component underpinning Microsoft’s Wisconsin roadmap. An overarching AI skilling initiative aims to train over 100,000 state residents in generative AI fundamentals by 2030 across industries. Specialized programs will also cultivate 3,000 accredited AI software developers and 1,000 cross-trained business leaders prepared to strategically harness AI capabilities.
The commitment extends beyond the technological aspects, with Microsoft earmarking funds for education, digital access, and community enrichment initiatives. A new 250-megawatt solar project and $20 million community fund for underserved areas demonstrate its intent for environmentally sustainable, inclusive growth.
From an investor’s perspective, Microsoft’s sweeping $3.3 billion investment could prove transformative on multiple fronts. It bolsters the company’s cloud infrastructure prowess while planting a strategic foothold in a resurgent manufacturing and innovation hub. This dynamic interplay could accelerate enterprise adoption of Microsoft’s AI offerings amid stiffening competition from rivals like Google, Amazon, and emerging AI startups.
Arguably more pivotal are the calculated workforce development and ecosystem-building initiatives underpinning this program. By nurturing a robust talent pipeline and collaborative networks spanning businesses, academic institutions, and community stakeholders, Microsoft is cultivating an AI market flywheel effect propelling its long-term competitive advantages.
The AI revolution’s socioeconomic impacts are poised to be transformative and profoundly disruptive over the coming decade. Generative AI alone could create trillions in annual economic value by 2030, according to some estimates. For investors, Microsoft’s multibillion-dollar Wisconsin commitment signals its intent to be an indispensable catalyst driving this seismic technological shift.
No investment of this scale and scope is without risk. Technological transitions breed uncertainty, and AI development remains a volatile, hyper-competitive battlefield. However, Microsoft’s holistic approach balancing infrastructure, innovation, talent, and sustainable growth principles could position it as an AI powerhouse for the modern era.
As the world inches toward an AI-driven future, all eyes should monitor how this Middle American heartland evolves into an unlikely nexus shaping the revolutionary capabilities poised to redefine sectors from manufacturing to healthcare, finance and beyond over the coming years.
NEW YORK, May 8, 2024 /PRNewswire/ — Bit Digital, Inc. (Nasdaq: BTBT) (“Bit Digital” or the “Company”), a sustainable platform for digital assets and artificial intelligence (“AI”) infrastructure headquartered in New York, announced today that it will release its First Quarter 2024 results on Wednesday, May 15, 2024, after the stock market closes. Senior management will host a live webcast and conference call to review the results on Thursday, May 16, 2024, at 10 a.m. ET.
To register for the earnings call, please click here. Additionally, participants can join the conference call by dialing 1-855-303-0072 (passcode: 951267).
The Company will issue a press release regarding First Quarter 2024 earnings prior to the conference call. The press release will be posted on the Bit Digital website at www.bit-digital.com.
About Bit Digital
Bit Digital, Inc. is a sustainable platform for digital assets and artificial intelligence (“AI”) infrastructure headquartered in New York City. Our bitcoin mining operations are located in the US, Canada, and Iceland. The Company has established a business line, Bit Digital AI, that offers specialized cloud-infrastructure services for artificial intelligence applications. For additional information, please contact ir@bit-digital.com or visit our website at www.bit-digital.com.
Investor Notice
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under “Risk Factors” in Item 3.D of our most recent Annual Report on Form 20-F for the fiscal year ended December 31, 2023. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or bitcoin hash rate may also materially affect the future performance of Bit Digital’s production of bitcoin. Actual operating results will vary depending on many factors including network difficulty rate, total hash rate of the network, the operations of our facilities, the status of our miners, and other factors.
Safe Harbor Statement
This press release may contain certain “forward-looking statements” relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
MustGrow has received the California Department of Food Agriculture approval to commence sales of TerraSanteTM, an organic biofertility product, in California.
Additionally, MustGrow has received organic certification from California’s Organic Input Material (OIM) Program.
Mustard-derived TerraSanteTMfocuses on soil microbiome health, nutrient/water use efficiencies, and plant yields.
SASKATOON, Saskatchewan, Canada, May 8, 2024 – MustGrow Biologics Corp. (TSXV:MGRO) (OTC:MGROF) (FRA:0C0) (the “Company” or “MustGrow”) is pleased to announce receipt of the California Department of Food Agriculture registration approval for its mustard plant-based TerraSanteTM, an organic biofertility product. MustGrow’s TerraSanteTM has also received organic certification from California’s Organic Input Material (OIM) Program, a specific California requirement beyond MustGrow’s existing Organic OMRI Listed® certifications in Oregon and Washington State.
TerraSanteTM product sales are now authorized to commence in California. The registration and certification are an important step in MustGrow’s commercialization strategy with BioAg Product Strategies to develop and commercialize MustGrow’s soil amendment and biofertility technologies, including TerraSanteTM. In addition to California, and recently-awarded Oregon and Washington State, MustGrow expects to continue its efforts towards further state-level registrations in other pertinent U.S. states.
BioAg Product Strategies owner, Tim Lichatowich, remarked, “There has been tremendous buzz surrounding TerraSanteTM since recent state registrations were awarded. TerraSanteTM has a lot of the characteristics in a product that producers are looking for, making it an exciting advancement for organic, sustainable, and regenerative agriculture in California.”
MustGrow’s TerraSanteTM product complements the Company’s existing biocontrol programs in preplant soil fumigation, postharvest food preservation, and bioherbicide, which are currently under development with four global partners: Bayer, Sumitomo Corporation, Janssen PMP, and NexusBioAg.
The Market Opportunity in California
Over a third of U.S. vegetables and nearly three-quarters of U.S. fruits and nuts are grown in California. In 2022, the market value of agricultural products sold in California totaled $59.0 billion USD, up $13.8 billion USD from 2017. Relevant categories for TerraSanteTM include:
Grapes — $5.54 billion
Almonds — $3.52 billion
Lettuce — $3.15 billion
Strawberries — $2.68 billion
Pistachios — $1.86 billion
Tomatoes — $1.46 billion
Carrots — $1.11 billion
(all USD)(1)
California organic product sales totaled $14.0 billion USD in 2021, an increase of 16.4 percent from the prior year. Organic production encompasses over 2.13 million acres in the state.(2) MustGrow believes its TerraSanteTM organic biofertility product will position California farmers to meet increasing demand for organic, local, and healthy produce.
TerraSanteTM for Soil and Ecological Health
MustGrow’s soil amendment and biofertility development programs focus on soil microbiome health, nutrient and water use efficiencies, and plant yields. Soil is a farmer’s most valuable asset, and MustGrow’s mustard plant-based technologies are being developed with the intention to improve not only the health of the soil, but also the surrounding ecological environment.
As an organic biofertilizer in soluble mixable form, TerraSanteTM contains nutritious plant proteins and carbohydrates that feed soil microbes, potentially improving beneficial microbial activity and ensuring long-term sustainable soil health. These targeted micro-communities have been shown to work to improve nutrient availability, which can potentially increase plant vigor and yields, while reducing plant stress. TerraSanteTM has the potential to improve crop nutrient uptake and, hence, overall crop performance. There are no artificial additives or preservatives used during its manufacturing.
MustGrow is an agriculture biotech company developing organic biocontrol and biofertility products by harnessing the natural defense mechanism and organic materials of the mustard plant to sustainably protect the global food supply and help farmers feed the world. MustGrow and its leading global partners — Bayer, Janssen PMP (pharmaceutical division of Johnson & Johnson), Sumitomo Corporation, and Univar Solutions’ NexusBioAg — are developing mustard-based organic solutions for applications in biocontrol to potentially replace harmful synthetic chemicals in preplant soil treatment and weed control, to postharvest disease control and food preservation. Bayer has a commercial agreement to develop and commercialize MustGrow’s biocontrol soil applications in Europe, Africa, and the Middle East. Concurrently, with new formulations derived from food-grade mustard, the Company is pursuing the adoption and use of its first registered biofertility and OMRI Listed® product, TerraSanteTM, in key U.S. states. Over 150 independent tests have been completed, validating MustGrow’s safe and effective approach to crop and food protection and yield enhancements. Pending regulatory approval, MustGrow’s patented liquid technologies could be applied through injection, standard drip or spray equipment, improving functionality and performance features. MustGrow has approximately 51.6 million basic common shares issued and outstanding and 54.1 million shares fully diluted. For further details, please visit www.mustgrow.ca.
Contact Information
Corey Giasson Director & CEO Phone: +1-306-668-2652 info@mustgrow.ca
MustGrow Forward-Looking Statements
Certain statements included in this news release constitute “forward-looking statements” which involve known and unknown risks, uncertainties and other factors that may affect the results, performance or achievements of MustGrow.
Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “estimates”, “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”, “occur” or “be achieved”. Examples of forward-looking statements in this news release include, among others, statements MustGrow makes regarding: the commencement of TerraSanteTM product sales in California; the progress of state-level registrations of TerraSanteTM products in other pertinent U.S. states; whether the TerraSanteTM product will position California farmers to meet increasing demand for organic, local, and healthy produce; whether MustGrow’s organic biofertility product will complement the Company’s existing biocontrol programs in preplant soil fumigation, postharvest food preservation, and bioherbicide; and whether targeted micro-communities can increase plant vigor and yields, while reducing plant stress; and the potential for TerraSanteTM to improve crop nutrient uptake and, hence, overall crop performance. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of MustGrow to differ materially from those discussed in such forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, MustGrow. Important factors that could cause MustGrow’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include market receptivity to investor relations activities as well as those risks described in more detail in MustGrow’s Annual Information Form for the year ended December 31, 2023 and other continuous disclosure documents filed by MustGrow with the applicable securities regulatory authorities which are available at www.sedar.com. Readers are referred to such documents for more detailed information about MustGrow, which is subject to the qualifications, assumptions and notes set forth therein.
This release does not constitute an offer for sale of, nor a solicitation for offers to buy, any securities in the United States.
Neither the TSXV, nor their Regulation Services Provider (as that term is defined in the policies of the TSXV), nor the OTC Markets has approved the contents of this release or accepts responsibility for the adequacy or accuracy of this release.
Conference Call and Webcast Today, May 8, 2024 at 11:00 a.m. ET 877-407-4018 or 201-689-8471, conference ID 13746158 or www.bbgi.com
Replay information provided below
NAPLES, Fla., May 08, 2024 (GLOBE NEWSWIRE) — Beasley Broadcast Group, Inc. (Nasdaq: BBGI) (“Beasley” or the “Company”), a multi-platform media company, today announced operating results for the three-month period ended March 31, 2024. For further information, the Company has posted a presentation to its website regarding the first quarter highlights and accomplishments that management will review on today’s conference call.
First Quarter Financial Highlights
In millions, except per share data
Three Months Ended March 31,
2024
2023
Net revenue
$54.4
$57.8
Operating income (loss)
(1.1
)
0.4
Net income (loss)1
0.0
(3.5
)
Net income (loss) per diluted share1
$0.00
($0.12
)
Adjusted EBITDA (non-GAAP)
0.7
2.6
1 Net income (loss) and net income (loss) per diluted share in the three months ended March 31, 2024 include a $6.0 million gain on sale of an investment in Broadcast Music, Inc.
Net revenue during the three months ended March 31, 2024 decreased 5.9% to $54.4 million, primarily reflecting a year-over-year decline in audio advertising and other revenue due to Beasley’s Wilmington station and esports divestitures as well as ongoing softness in the commercial advertising business, partially offset by growth in digital and political advertising revenue.
Beasley reported an operating loss of $1.1 million in the first quarter of 2024 compared to operating income of $0.4 million in the first quarter of 2023, largely reflecting the year-over-year decrease in net revenue.
Beasley reported net income of approximately $8,000, or $0.00 per diluted share, in the three months ended March 31, 2024, compared to a net loss of $3.5 million, or $0.12 per diluted share, in the three months ended March 31, 2023. The year-over-year improvement was primarily due to the $6.0 million gain on sale of an investment in Broadcast Music, Inc. holdings and lower interest expense.
Adjusted EBITDA (a non-GAAP financial measure) was $0.7 million in the first quarter of 2024 compared to $2.6 million in the first quarter of 2023. The year-over-year decrease is primarily attributable to lower net revenue compared to the prior year period.
Please refer to the “Calculation of Adjusted EBITDA” and “Reconciliation of Net Income (Loss) to Adjusted EBITDA” tables at the end of this release.
Commenting on the financial results, Caroline Beasley, Chief Executive Officer, said, “Beasley continues to advance our core initiatives, which are focused on driving revenue and cash flow, including our digital transformation, revenue diversification and expense management initiatives. We expect digital to account for between 20% and 25% of total revenue in 2024, driven by the ongoing growth and success of our premium content creation and digital services. On the new business front, our dedicated sales teams are leveraging the tremendous audience reach and engagement of our platform to attract new advertisers.
“In summary, Beasley’s underlying fundamentals—mainly, our local audio and digital platforms and audience engagement—remain strong. We are proud of our teams’ steadfast commitment to delivering exceptional content and services to our listeners, advertisers, online users and sports fans, and remain confident that the actions we are taking to transform our company and strengthen our balance sheet, are laying the foundation for future growth and success.”
First Quarter 2024 Highlights
Revenue from new customers grew 53% year over year
Generated $548,000 in political revenue
Local revenue, including digital packages sold locally, accounted for 69% of Total Revenue
Digital revenue grew 10% year-over-year, or 20% year-over-year on a same station basis, to $11,000,000
Digital revenue accounted for 20% of total company revenue
38% of our total audience listens via the company’s digital platforms
Conference Call and Webcast Information The Company will host a conference call and webcast today, May 8, 2024, at 11:00 a.m. ET to discuss its financial results and operations. To access the conference call, interested parties may dial 877-407-4018 or 201-689-8471, conference ID 13746158 (domestic and international callers). Participants can also listen to a live webcast of the call at the Company’s website at www.bbgi.com. Please allow 15 minutes to register and download and install any necessary software. Following its completion, a replay of the webcast can be accessed for five days on the Company’s website, www.bbgi.com.
Questions from analysts, institutional investors and debt holders may be e-mailed to ir@bbgi.com at any time up until 9:00 a.m. ET on Wednesday, May 8, 2024. Management will answer as many questions as possible during the conference call and webcast (provided the questions are not addressed in their prepared remarks).
About Beasley Broadcast Group Beasley Broadcast Group, Inc. (www.bbgi.com) was founded in 1961 by George G. Beasley and owns 57 AM and FM stations in 13 large- and mid-size markets in the United States. Beasley radio stations reach over 30 million unique consumers weekly over-the-air, online and on smartphones and tablets, and millions regularly engage with the Company’s brands and personalities through digital platforms such as Facebook, Twitter, text, apps and email. For more information, please visit www.bbgi.com.
For further information, or to receive future Beasley Broadcast Group news announcements via e-mail, please contact Beasley Broadcast Group, at 239-263-5000 or email@bbgi.com, or Joseph Jaffoni, JCIR, at 212-835-8500 or bbgi@jcir.com.
Definitions EBITDA is defined as net income (loss) before interest income or expense, income tax expense or benefit, depreciation, and amortization.
Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain, non-operating or other items that we believe are not indicative of the performance of our ongoing operations, such as impairment losses, other income or expense, or equity in earnings of unconsolidated affiliates. See “Reconciliation of Net Income (Loss) to Adjusted EBITDA” for additional information.
Adjusted EBITDA can also be calculated as net revenue less operating and corporate expenses. We define operating expenses as cost of services and selling, general and administrative expenses. Corporate expenses include general and administrative expenses and certain other income and expense items not allocated to the operating segments.
Adjusted EBITDA is a measure widely used in the media industry. The Company recognizes that because Adjusted EBITDA is not calculated in accordance with GAAP, it is not necessarily comparable to similarly titled measures employed by other companies. However, management believes that Adjusted EBITDA provides meaningful information to investors because it is an important measure of how effectively we operate our business and assists investors in comparing our operating performance with that of other media companies.
Same station revenue excludes revenue from all divestitures and other operations that were exited in the prior 12 months.
New business revenue is defined as revenue from an advertiser that has not advertised in the prior 13 months before the start of the current quarter.
Note Regarding Forward-Looking Statements Statements in this release that are “forward-looking statements” are based upon current expectations and assumptions and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as “looking ahead,” “intends,” “believes,” “expects,” “seek,” “will,” “should” or variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain. Key risks are described in the Company’s reports filed with the Securities and Exchange Commission (“SEC”) including its annual report on Form 10-K and quarterly reports on Form 10-Q. Readers should note that forward-looking statements are subject to change and to inherent risks and uncertainties and may be impacted by several factors, including:
our ability to comply with the continued listing standards of the Nasdaq Capital Market;
risk from social and natural catastrophic events;
external economic forces and conditions that could have a material adverse impact on our advertising revenues and results of operations;
the ability of our stations to compete effectively in their respective markets for advertising revenues;
our ability to develop compelling and differentiated digital content, products and services;
audience acceptance of our content, particularly our audio programs;
our ability to respond to changes in technology, standards and services that affect the audio industry;
our dependence on federally issued licenses subject to extensive federal regulation;
actions by the FCC or new legislation affecting the audio industry;
increases to royalties we pay to copyright owners or the adoption of legislation requiring royalties to be paid to record labels and recording artists;
our dependence on selected market clusters of stations for a material portion of our net revenue;
credit risk on our accounts receivable;
the risk that our FCC licenses and/or goodwill could become impaired;
our substantial debt levels and the potential effect of restrictive debt covenants on our operational flexibility and ability to pay dividends;
the potential effects of hurricanes on our corporate offices and stations;
the failure or destruction of the internet, satellite systems and transmitter facilities that we depend upon to distribute our programming;
disruptions or security breaches of our information technology infrastructure and information systems;
the loss of key personnel;
our ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto and their impact on our financial condition and results of operations;
the fact that our Company is controlled by the Beasley family, which creates difficulties for any attempt to gain control of our Company; and
other economic, business, competitive, and regulatory factors affecting our businesses, including those set forth in our filings with the SEC.
Our actual performance and results could differ materially because of these factors and other factors discussed in our SEC filings, including but not limited to our annual reports on Form 10-K or quarterly reports on Form 10-Q, copies of which can be obtained from the SEC, www.sec.gov, or our website, www.bbgi.com. All information in this release is as of May 8, 2024, and we undertake no obligation to update the information contained herein to actual results or changes to our expectations, except as required by law.
First Quarter Revenue of $1.9 Billion with GAAP EPS of $0.40; Adjusted EPS of $1.05
GAAP Operating Income of $18 Million; Net Income of $15 Million; Adjusted EBITDA of $82 Million
Accelerating Project Core to Maximize In-Year Cost Savings with Future Annualized Run-Rate Cost Savings in Excess of $100 Million
Driving Operational Excellence and Remaining On-Track to Meet 2024 Guidance Despite Challenging Macroeconomic and Business Environment Impacting Top-Line Results
Board of Directors Approved Held-For-Sale Plan for Varis Business Unit
Company Repurchased Approximately $90 Million of Shares Year to Date
BOCA RATON, Fla.–(BUSINESS WIRE)–May 8, 2024– The ODP Corporation (“ODP,” or the “Company”) (NASDAQ:ODP), a leading provider of products, services, and technology solutions to businesses and consumers, today announced results for the first quarter ended March 30, 2024.
Consolidated (in millions, except per share amounts)
1Q24
1Q23
Selected GAAP and Non-GAAP measures:
Sales
$1,871
$2,108
Sales change from prior year period
(11)%
Operating income
$18
$95
Adjusted operating income (1)
$51
$99
Net income from continuing operations
$15
$72
Diluted earnings per share from continuing operations
$0.40
$1.71
Adjusted net income from continuing operations (1)
$40
$75
Adjusted earnings per share from continuing operations (fully diluted) (1)
$1.05
$1.78
Adjusted EBITDA (1)
$82
$131
Operating Cash Flow from continuing operations
$38
$157
Free Cash Flow (2)
$3
$128
Adjusted Free Cash Flow (3)
$7
$133
First Quarter 2024 Summary(1)(2)(3)
Total reported sales of $1.9 billion, down 11% versus the prior year on a reported basis. The decrease in reported sales is largely related to lower sales in its Office Depot Division, primarily due to 56 fewer retail locations in service compared to the previous year and reduced transactions, as well as lower sales in its ODP Business Solutions Division
GAAP operating income of $18 million and net income from continuing operations of $15 million, or $0.40 per diluted share, versus $95 million and $72 million, respectively, or $1.71 per diluted share, in the prior year
Adjusted operating income of $51 million, compared to $99 million in the first quarter of 2023; adjusted EBITDA of $82 million, compared to $131 million in the first quarter of 2023
Adjusted net income from continuing operations of $40 million, or adjusted diluted earnings per share from continuing operations of $1.05, versus $75 million or $1.78, respectively, in the prior year period
Operating cash flow from continuing operations of $38 million and adjusted free cash flow of $7 million, versus $157 million and $133 million, respectively, in the prior year period
Repurchased 957 thousand shares at a cost of $50 million in the first quarter of 2024; Repurchased a total of approximately $90 million of shares when including purchases in quarter and post quarter through the current date
$971 million of total available liquidity including $282 million in cash and cash equivalents at quarter end
“This quarter, we launched and are accelerating our Project Core initiatives positioning us to offset the impact of an ongoing challenging macroeconomic and business environment,” said Gerry Smith, chief executive officer of The ODP Corporation. “Despite our slower than expected start to the year, we remain confident in our operational excellence approach and committed to achieving our guidance for the full year 2024, as we utilize our strong foundation and accelerate the broad execution of Project Core.”
“During the quarter, more cautious spending activity and ongoing delays in the onboarding of new customers at ODP Business Solutions impacted their performance, while reduced consumer activity affected Office Depot’s revenue results. Despite this, we remain encouraged by our ongoing success in winning new enterprise customers through the flexibility of our service platform and strength of our balance sheet. Additionally, Veyer demonstrated continued momentum by attracting new third-party customers and continuing to drive growth in external EBITDA. Furthermore, we maintained our focus on capital allocation and increased the pace of share repurchases, buying back approximately $90 million of our stock since the beginning of the year. We expect to execute under this plan at similar levels or higher as we move through the balance of the year,” added Smith.
“Given the slower than expected start to the year and our continued commitment to our low-cost business model, we are accelerating our plans for Project Core throughout the balance of the year, generating higher in-year cost savings and future annualized run-rate savings in excess of $100 million. Additionally, we have arrived at the strategic decision to pursue a sale of Varis, which our Board of Directors have approved. Concurrently, we have reduced the operating cost of Varis to further refine their focus, while continuing to support new and existing customers. Through the acceleration of Project Core, the additional cost efficiencies we are driving now and in the second half of the year have positioned us to increase guidance for adjusted EBITDA and adjusted EPS,” Smith continued.
“Despite the top-line challenges, we remain encouraged about the future and we’re confident in our operational excellence approach and position of strength. We will continue to focus on driving our low-cost business model, leveraging our multiple routes to market, and executing on our capital allocation plan,” Smith concluded.
Consolidated Results
Reported (GAAP) Results
Total reported sales for the first quarter of 2024 were $1.9 billion, a decrease of 11% compared with the same period last year. This result was driven primarily by lower sales in its consumer division, Office Depot, primarily due to 56 fewer stores in service compared to last year related to planned store closures, as well as lower retail and online consumer traffic and transactions. Sales at ODP Business Solutions Division were also down compared to last year, largely driven by weaker economic activity and more cautious spending among business customers, as well as continued challenges related to the pace of onboarding new customers. Meanwhile, Veyer provided strong logistics support for the ODP Business Solutions and Office Depot Divisions and continued to capture additional sales for its supply chain and procurement solutions among other third-party customers.
The Company reported GAAP operating income of $18 million in the first quarter of 2024, down compared to GAAP operating income of $95 million in the prior year period. Operating results in the first quarter of 2024 included $33 million of charges, primarily related to $27 million in net merger and restructuring expenses and $6 million non-cash asset impairment primarily related to the operating lease right-of-use (ROU) assets associated with the Company’s retail store locations. Net income from continuing operations was $15 million, or $0.40 per diluted share in the first quarter of 2024, down compared to net income from continuing operations of $72 million, or $1.71 per diluted share in the first quarter of 2023.
Adjusted (non-GAAP) Results(1)
Adjusted results for the first quarter of 2024 exclude charges and credits totaling $33 million as described above and the associated tax impacts.
First quarter 2024 adjusted EBITDA was $82 million compared to $131 million in the prior year period. This included depreciation and amortization of $29 million and $30 million in the first quarter of 2024 and 2023, respectively
First quarter 2024 adjusted operating income was $51 million, down compared to $99 million in the first quarter of 2023
First quarter 2024 adjusted net income from continuing operations was $40 million, or $1.05 per diluted share, compared to $75 million, or $1.78 per diluted share, in the first quarter of 2023, a decrease of 41% on a per share basis
Division Results
ODP Business Solutions Division
Leading B2B distribution solutions provider serving small, medium and enterprise level companies with an annual trailing-twelve-month revenue of $3.8 billion.
Reported sales were $0.9 billion in the first quarter of 2024, down 8% compared to the same period last year. The decrease in sales was related primarily to weaker macroeconomic conditions, more cautious business spending, and lower sales of technology products and supplies
Total adjacency category sales, including cleaning and breakroom, furniture, technology, and copy and print, were 43% of total ODP Business Solutions’ sales
Continued strong pipeline and new customer additions
Operating income was $30 million in the first quarter of 2024, down 23% compared to the same period last year on a reported basis. As a percentage of sales, operating income margin was 3%, down 60 basis points compared to the same period last year
Office Depot Division
Leading provider of retail consumer and small business products and services distributed via Office Depot and OfficeMax retail locations and an award-winning eCommerce presence.
Reported sales were $0.9 billion in the first quarter of 2024, down 14% compared to the prior year on a reported basis. Lower sales were partially driven by 56 fewer retail outlets in service associated with planned store closures, as well as lower demand relative to last year in major product categories and lower online sales. Additionally, certain interruptions related to inclement weather further impacted sales during the back-to-business season. The Company closed 13 retail stores in the quarter and had 903 stores at quarter end. Sales were down 10% on a comparable store basis
Store and online traffic were lower year over year due to a greater percentage of customers having returned to the office post pandemic, as well as weaker macroeconomic activity
Operating income was $50 million in the first quarter of 2024, compared to operating income of $85 million during the same period last year, driven primarily by the flow through impact from lower sales. As a percentage of sales, operating income was 5%, down 240 basis points compared to the same period last year
Veyer Division
Nationwide supply chain, distribution, procurement and global sourcing operation supporting Office Depot and ODP Business Solutions, as well as third-party customers. Veyer’s assets and capabilities include 8 million square feet of infrastructure through a network of distribution centers, cross-docks, and other facilities throughout the United States; a global sourcing presence in Asia; a large private fleet of vehicles; and next-day delivery to 98.5% of US population.
In the first quarter of 2024, Veyer provided strong support for its internal customers, ODP Business Solutions and Office Depot, as well as its third-party customers, generating sales of $1.2 billion
Operating income was $9 million in the first quarter of 2024, compared to $15 million in the prior year period driven by the flow through impact of lower sales to internal customers partially offset by higher sales of services to external third-party customers
In the first quarter of 2024, sales and EBITDA generated from third party customers increased 29% and 40% respectively, resulting in sales of $9 million and EBITDA of $3 million
Varis Division
Tech-enabled B2B indirect procurement marketplace launched in the fourth quarter of 2022, which provides buyers and suppliers a seamless way to transact through the platform’s consumer-like buying experience and advanced spend management tools.
Continued work with customers, incorporating feedback and adding new features and capabilities to the platform
Generated revenues in the first quarter of 2024 of $2 million, flat compared to the first quarter of 2023
Operating loss was $14 million in the first quarter of 2024, an improvement over the prior year, with further run-rate savings after cost actions implemented since the beginning of the year
Share Repurchases
The Company continued to execute under its previously announced $1 billion share repurchase authorization valid through March 31, 2027. During the first quarter of 2024, the Company repurchased 957 thousand shares at a cost of $50 million. Since the end of the first quarter 2024, the Company repurchased additional shares for approximately $40 million.
“Through our balanced capital allocation strategy, we are investing in the future of our business while continuing to enhance value for shareholders by accelerating the pace of share repurchases under our buyback authorization,” stated Anthony Scaglione, executive vice president and chief financial officer of The ODP Corporation. “We have come out of the gate strong, repurchasing approximately $90 million of our stock, and moving forward, we expect to maintain or increase this pace of share repurchases in the near term, while also enhancing our focus and driving our low-cost business model through Project Core.”
The number of shares to be repurchased under the authorization in the future and the timing of such transactions will depend on a variety of factors, including market conditions, regulatory requirements, and other corporate considerations. The new authorization could be suspended or discontinued at any time as determined by the Board of Directors.
Balance Sheet and Cash Flow
As of March 30, 2024, ODP had total available liquidity of approximately $971 million, consisting of $282 million in cash and cash equivalents and $689 million of available credit under the Third Amended Credit Agreement. Total debt was $125 million.
For the first quarter of 2024, cash generated by operating activities of continuing operations was $38 million, which included $4 million in restructuring spend, compared to cash provided by operating activities of continuing operations of $157 million in the first quarter of the prior year, which included $5 million in restructuring and other spend. The year-over-year change in operating cash flow is largely related to the timing of certain working capital items.
Capital expenditures in the first quarter of 2024 were $35 million versus $27 million in the prior year period, reflecting continued growth investments in the Company’s digital transformation, distribution network, and eCommerce capabilities. Adjusted Free Cash Flow(3) was $7 million in the first quarter of 2024, compared to $133 million in the prior year period.
Accelerating Project Core and Maximizing In-Year and Run-Rate Savings
As the Company previously announced, Project Core is a plan designed to create further efficiencies in its business, focused on driving enhanced operating results and increasing shareholder returns through an expanded share repurchase program. This broad-based plan includes cost improvement actions across the entire enterprise, including all routes to market, Varis, procurement, IT and shared services, encompassing the entirety of ODP’s enterprise, optimizing its organizational structure to support future growth of the business. As part of this effort, the Company conducted a thorough review of strategic options for its Varis business unit. As a result, its Board of Directors has approved a plan to sell the Varis business, with activities commencing immediately.
The Company is accelerating its efforts under Project Core, working to maximize the in-year and full year run-rate savings enhancing its future operating position. Considering the acceleration of Project Core, the Company now expects to realize in year savings of approximately $50 million, excluding Varis, and annualized savings of over $100 million when fully implemented. Restructuring and related charges associated with these actions, excluding Varis, are now estimated to be in the range of $40 million to $50 million and are expected to be substantially incurred throughout 2024. The Company expects to begin reducing costs in the second quarter of 2024, with most of these actions expected to be completed over the following 12 months.
“Aligned with our low-cost business model mindset, our decision to accelerate Project Core will enable us to maximize in-year and future run-rate cost savings,” said Smith.
2024 Guidance
“Despite our slow start to the year, we remain confident in our operational excellence approach and enthusiastic about the opportunities in our business to drive long-term value while remaining focused on prudently deploying capital to the benefit of shareholders,” said Smith. “As we continue to move forward into 2024, we remain cautious regarding the macroeconomic and business environment, and we will remain focused on executing upon our strategy through Project Core, meeting our near term commitments, and positioning ODP for long-term success.”
“While macroeconomic and general business conditions posed challenges in the quarter and we expect these conditions to persist in the near term, our team’s continued focus on driving our low-cost model, enhanced by our acceleration and focused nature of Project Core, have positioned us to update our operational guidance for 2024,” Scaglione added.
The Company is updating its full year guidance for 2024 as follows:
Previous FY 2024 Guidance(1)
Updated FY 2024 Guidance(1)
Sales
Decline of 2% – 5%
Affirmed Lower End
Adjusted EBITDA(1)
$410 million – $430 million
Increased to $430 million – $450 million
Adjusted Operating Income(1)
$280 million – $300 million
Increased to $320 million – $340 million
Adjusted Earnings per Share (fully diluted)(*)(1)
$5.60 – $5.80 per share
Increased to $6.30 – $6.60 per share
Adjusted Free Cash Flow(1)(3)
Greater than $200 million
Affirmed
*Adjusted Earnings per Share (fully diluted) (EPS) guidance for 2024 excludes potential discrete (tax) items that may affect quarter to quarter fluctuations and includes expected impact from share repurchases
The Company’s full year guidance for 2024 includes non-GAAP measures, such as Adjusted EBITDA, Adjusted Operating Income, Adjusted Earnings per Share (fully diluted) and Adjusted Free Cash Flow. These measures exclude charges or credits not indicative of core operations, which may include but not be limited to restructuring charges, capital expenditures, acquisition-related costs, executive transition costs, asset impairments and other significant items that currently cannot be predicted without unreasonable efforts. The exact amount of these charges or credits are not currently determinable but may be significant. Accordingly, the Company is unable to provide equivalent GAAP measures or reconciliations from GAAP to non-GAAP for these financial measures.
“Our revenue guidance assumes stabilization of macroeconomic and business conditions, as well as continued store footprint consolidation and improving overall omni-channel trends at Office Depot. Additionally, our guidance assumes growth at ODP Business Solutions in the second half of the year, and continued expansion at Veyer. With the Board’s decision, going forward, Varis will be classified as held for sale and we are moving to complete that transaction in the very near term. Our adjusted EPS outlook assumes higher interest expense associated with projected ABL borrowings along with a more normalized tax rate for the balance of the year. While our guidance assumes incremental improvement in the overall macroeconomic environment throughout 2024, we remain cautious on the state of the overall US economy, primarily workforce employment and the consumer, as well as international trade policies and agreements that could further impact the level of consumer and business confidence,” Scaglione added.
The ODP Corporation will webcast a call with financial analysts and investors on May 8, 2024, at 9:00 am Eastern Time, which will be accessible to the media and the general public. To listen to the conference call via webcast, please visit The ODP Corporation’s Investor Relations website at investor.theodpcorp.com. A replay of the webcast will be available approximately two hours following the event.
(1)
As presented throughout this release, adjusted results represent non-GAAP financial measures and exclude charges or credits not indicative of core operations and the tax effect of these items, which may include but not be limited to merger integration, restructuring, acquisition costs, and asset impairments. Reconciliations from GAAP to non-GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.
(2)
As used in this release, Free Cash Flow is defined as cash flows from operating activities less capital expenditures. Free Cash Flow is a non-GAAP financial measure and reconciliations from GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.
(3)
As used in this release, Adjusted Free Cash Flow is defined as Free Cash Flow excluding cash charges associated with the Company’s Project Core Restructuring, and related expenses Adjusted Free Cash Flow is a non-GAAP financial measure and reconciliations from GAAP financial measures can be found in this release as well as on the Company’s Investor Relations website at investor.theodpcorp.com.
About The ODP Corporation
The ODP Corporation (NASDAQ:ODP) is a leading provider of products, services, and technology solutions through an integrated business-to-business (B2B) distribution platform and omni-channel presence, which includes supply chain and distribution operations, dedicated sales professionals, a B2B digital procurement solution, online presence, and a network of Office Depot and OfficeMax retail stores. Through its operating companies ODP Business Solutions, LLC; Office Depot, LLC; Veyer, LLC; and Varis, Inc, The ODP Corporation empowers every business, professional, and consumer to achieve more every day. For more information, visit theodpcorp.com.
This communication may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations, cash flow or financial condition, the potential impacts on our business due to the unknown severity and duration of the COVID-19 pandemic, or state other information relating to, among other things, the Company, based on current beliefs and assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as “anticipate,” “believe,” “plan,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “expectations”, “outlook,” “intend,” “may,” “possible,” “potential,” “predict,” “project,” “propose” or other similar words, phrases or expressions, or other variations of such words. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of the Company’s control. There can be no assurances that the Company will realize these expectations or that these beliefs will prove correct, and therefore investors and stakeholders should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, highly competitive office products market and failure to differentiate the Company from other office supply resellers or respond to decline in general office supplies sales or to shifting consumer demands; competitive pressures on the Company’s sales and pricing; the risk that the Company is unable to transform the business into a service-driven, B2B platform that such a strategy will not result in the benefits anticipated; the risk that the Company will not be able to achieve the expected benefits of its strategic plans, including a potential sale of Varis and benefits related to Project Core; the risk that the Company may not be able to realize the anticipated benefits of acquisitions due to unforeseen liabilities, future capital expenditures, expenses, indebtedness and the unanticipated loss of key customers or the inability to achieve expected revenues, synergies, cost savings or financial performance; the risk that the Company is unable to successfully maintain a relevant omni-channel experience for its customers; the risk that the Company is unable to execute the Maximize B2B Restructuring Plan successfully or that such plan will not result in the benefits anticipated; failure to effectively manage the Company’s real estate portfolio; loss of business with government entities, purchasing consortiums, and sole- or limited- source distribution arrangements; failure to attract and retain qualified personnel, including employees in stores, service centers, distribution centers, field and corporate offices and executive management, and the inability to keep supply of skills and resources in balance with customer demand; failure to execute effective advertising efforts and maintain the Company’s reputation and brand at a high level; disruptions in computer systems, including delivery of technology services; breach of information technology systems affecting reputation, business partner and customer relationships and operations and resulting in high costs and lost revenue; unanticipated downturns in business relationships with customers or terms with the suppliers, third-party vendors and business partners; disruption of global sourcing activities, evolving foreign trade policy (including tariffs imposed on certain foreign made goods); exclusive Office Depot branded products are subject to additional product, supply chain and legal risks; product safety and quality concerns of manufacturers’ branded products and services and Office Depot private branded products; covenants in the credit facility; general disruption in the credit markets; incurrence of significant impairment charges; retained responsibility for liabilities of acquired companies; fluctuation in quarterly operating results due to seasonality of the Company’s business; changes in tax laws in jurisdictions where the Company operates; increases in wage and benefit costs and changes in labor regulations; changes in the regulatory environment, legal compliance risks and violations of the U.S. Foreign Corrupt Practices Act and other worldwide anti-bribery laws; volatility in the Company’s common stock price; changes in or the elimination of the payment of cash dividends on Company common stock; macroeconomic conditions such as higher interest rates and future declines in business or consumer spending; increases in fuel and other commodity prices and the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; unexpected claims, charges, litigation, dispute resolutions or settlement expenses; catastrophic events, including the impact of weather events on the Company’s business; the discouragement of lawsuits by shareholders against the Company and its directors and officers as a result of the exclusive forum selection of the Court of Chancery, the federal district court for the District of Delaware or other Delaware state courts by the Company as the sole and exclusive forum for such lawsuits; and the impact of the COVID-19 pandemic on the Company’s business. The foregoing list of factors is not exhaustive. Investors and shareholders should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission. The Company does not assume any obligation to update or revise any forward-looking statements.
As concerns over excessive screen time’s effects on kids escalate, the debate around regulating underage social media usage is intensifying – with major investing implications. The recent Florida law restricting online activity for those under 14 is just the beginning of a broader regulatory reckoning that could fundamentally disrupt platforms’ business models.
At the heart of the issue is big tech’s reliance on attention-grabbing, addictive algorithms to maximize engagement and ad revenue. Social media giants like Meta (NASDAQ: META) that own Facebook, Instagram, and WhatsApp have been criticized for tactics some argue exploit youths’ developmental vulnerabilities for profit.
Multiple studies link excessive social media use to disrupted sleep, lower self-esteem, cyberbullying, depression and more in young users. The long-term impacts remain largely unknown. But public pressures are mounting for these companies to better safeguard kids’ wellbeing over relentless growth.
From an investing standpoint, implementing robust parental controls and age verification mechanisms won’t come cheap. Significant compliance costs from stricter age-based targeting rules could compress Meta and peers’ profit margins, at least temporarily. Their scale across billions of users also makes effective content moderation extremely challenging.
As the regulatory tide shifts with bipartisan support for reining in big tech, new rules seem inevitable. Major changes to restrict underage social media engagement could be highly disruptive for growth trajectories if companies are forced to sacrifice lucrative younger audiences.
Instituting stronger guardrails proactively may let incumbents get ahead of even harsher regulatory crackdowns down the road. But their interim earnings could certainly take a hit from product reinventions reprioritizing child safety over engagement-driven profits.
Analysts expect this youth social media regulation debate will be a hot topic at upcoming consumer and tech investor conferences. With both policymakers and the public increasingly scrutinizing potential harms to kids, social platforms face intensifying pressures.
Some investors view any guardrails on big tech’s ability to monetize younger demographics as an existential risk to business models predicated on constant user growth. For companies like Meta that have operated with minimal oversight, preparing for a future of tighter digital reins on underage users is now prudent risk management.
Conversely, those with a longer-term outlook see upcoming regulatory requirements as valuations repressing near-term earnings overshoots. Any share price dips from compliance costs could actually present compelling entry points. Responsible corporate reforms demonstrating a willingness to evolve with the times could bolster brand equity and customer loyalty over the long haul.
Ultimately, the rapidly evolving online landscape demands new frameworks beyond the antiquated Children’s Online Privacy Protection Act established in the Web 1.0 era. Whether through new federal legislation, FTC action, or a combination, transformative change is coming to minors’ social media experiences. Well-prepared companies insulating ethical practices into their models now could emerge as winners, while those digging in their heels may face an existential reckoning down the road.
Investors should make plans to attend events like Noble Capital Markets Consumer, Communications, Media & Technology Conference scheduled for June, to dive deeper into these critical issues shaping the future of the social media industry and the AI revolution. With potential regulatory bombshells looming, having an informed perspective will be key for constructing a winning investment thesis in this pivotal sector.
For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.
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.
Off on the Right Foot. V2X delivered solid first quarter results, starting 2024 off on the right foot. Revenue, adjusted EBITDA, and adjusted earnings all came in above our estimates. OpTempo remains elevated in CENTOM and INDOPACOM given the recent events occurring in those areas, driving V2X results.
1Q24. Revenue of $1.0 billion was up 7.1% y-o-y, driven by 22% growth in the Middle East and 7% growth in the Pacific. We had forecasted $950 million in revenue for 1Q. Adjusted EBITDA for the quarter totaled $69.1 million, or a 6.8% margin, and up from $68 million in 1Q23. Adjusted net income was $28.6 million, or EPS of $0.90, compared to $25.1 million, or EPS of $0.80 last year. We had estimated $24.8 million, or $0.77/sh.
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 GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
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.
1Q Results. Total revenues decreased to $605.7 million from $608.2 million last year. We estimated revenue of $604 million. Net income for the quarter was $22.7 million, or $0.17 per diluted share, compared to $28.0 million, or $0.22, in the previous year. Adjusted EBITDA totaled $117.6 million compared to $130.9 million last year. We estimated net income of $23.6 million, or $0.19 per share, and adjusted EBITDA of $120 million.
ICE Populations. For 1Q24, GEO experienced average ICE pops in the 13,000 range, with that number carrying over into the second quarter. After a dip beginning in late March, overall ICE pops have rebounded back to the 37,000 level, according to GEO management. With the typical seasonal increase in crossings, it is possible numbers could trend up to the 41,500 bed authorized level.
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.
